Staples 2012 Annual Report Download - page 111

B-15
STAPLES, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Revolving Credit Facility, we agree to pay a facility fee at rates that range from 0.15% to 0.35% per annum depending on our
credit rating and fixed charge coverage ratio. Amounts borrowed under the November 2014 Revolving Credit Facility may be
borrowed, repaid, and reborrowed from time to time until November 4, 2014.
The November 2014 Revolving Credit Facility is unsecured and ranks pari passu with our public notes and other
indebtedness and contains customary affirmative and negative covenants for credit facilities of this type. The November 2014
Revolving Credit Facility also contains financial covenants that require us to maintain a minimum fixed charge coverage ratio and
a maximum adjusted funded debt to total capitalization ratio.
Commercial Paper Program: Our commercial paper program ("Commercial Paper Program") allows us to issue up to
$1.0 billion of unsecured commercial paper notes ("Notes") from time to time. The November 2014 Revolving Credit Facility
serves as a backstop to the Commercial Paper Program. Maturities of the Notes vary but may not exceed 397 days from the date
of issue. During 2012 we borrowed under our Commercial Paper Program to support our seasonal working capital requirements.
In 2012, the weighted-average amount outstanding under the Commercial Paper Program was $7.3 million, with a weighted-
average interest rate of 0.4%. At the end of 2012, there were no outstanding borrowings under the Commercial Paper Program.
The maximum amount outstanding under the Commercial Paper Program during 2012 was $100.0 million.
Other Lines of Credit: We had $309.9 million in borrowing capacity under various other lines of credit as of February 2,
2013 with outstanding borrowings of $103.7 million and outstanding letters of credit of $0.2 million, leaving $206.0 million of
available credit at that date.
There were no instances of default during 2012 under any of our debt agreements.
We expect that our cash generated from operations, together with our current cash, funds available under our existing
credit agreements and other alternative sources of financing, will be sufficient to fund our capital expenditures for at least the next
twelve months.
Uses of Capital
As a result of our financial position, in addition to investing in our existing businesses and pursuing strategic acquisitions
and partnerships, we also expect to continue to return capital to our shareholders through a cash dividend program and our share
repurchase program. Depending on our credit metrics and our liquidity position, we may repurchase our public notes in the open
market or through privately negotiated transactions.
We expect a modest increase in capital spending in 2013 resulting from investments in our online businesses and our
other strategic growth initiatives. We are not planning to open a significant number of new stores in 2013, but will instead continue
to focus on improving the productivity of existing stores. We expect the source of funds for our capital expenditures to come from
operating cash flows.
While we have primarily grown organically, we may use capital to engage in strategic acquisitions or joint ventures in
markets where we currently have a presence and in new geographic markets that could become significant to our business in future
years. We do not expect to rely on acquisitions to achieve our targeted growth plans. We consider many types of acquisitions for
their strategic and other benefits.
We paid quarterly dividends of $0.11 per share on April 12, 2012, July 12, 2012, October 18, 2012 and December 12,
2012, resulting in a total dividend payment of $294.1 million or $0.44 per share in 2012. We paid quarterly dividends of $0.10
per share on April 14, 2011, July 14, 2011, October 13, 2011 and January 12, 2012, resulting in a total dividend payment for 2011
of $277.9 million or $0.40 per share. We paid quarterly dividends of $0.09 per share on April 15, 2010, July 15, 2010, October 24,
2010 and January 13, 2011, resulting in a total dividend payment for 2010 of $258.7 million or $0.36 per share. While it is our
intention to continue to pay quarterly cash dividends for 2013 and beyond, any decision to pay future cash dividends will be made
by our Board of Directors and will depend upon our earnings, financial condition and other factors.
From time to time, we repurchase our common stock pursuant to programs approved by our Board of Directors. On
September 13, 2011, we announced a new repurchase program that had been approved by the Board of Directors (the "2011
Repurchase Plan"). Under this plan, we are authorized to repurchase up to $1.5 billion of common stock in both open market and
privately negotiated transactions. The 2011 Repurchase Plan has no expiration date and may be suspended or discontinued at any
time. In 2012, we spent $449.2 million to repurchase 34.8 million shares under the 2011 Repurchase Plan. As of February 2,
2013, we have spent a total of $631.7 million to repurchase 47.4 million shares under the 2011 Repurchase Plan, and therefore,
the remaining repurchase authorization was $868.3 million as of that date. We consider several factors in determining whether
and when to execute share repurchases, including our current and projected operating results, capital expenditure requirements,
acquisitions or other strategic initiatives, our capacity for leverage, cost of borrowings and the market price of our common stock.