Lowe's 1998 Annual Report Download - page 27

Note 4, Short-Term Borrowings and Lines of Credit:
The Company has a $300 million revolving credit facility with a syndicate of 11 banks. The facility has $100 million
expiring November 1999, with the remaining $200 million expiring November 2001. The facility is used to support the
Company’s commercial paper program and for short-term borrowings. Facility fees ranging from .06% to .075% are paid on
the unused amount of these facilities. The revolving credit facility contains certain restrictive covenants including maintenance
of specific financial ratios. There were no borrowings outstanding under this revolving credit facility as of January 29, 1999
or January 30, 1998.
Five banks have extended lines of credit aggregating $278.2 million for the purpose of issuing documentary letters of credit
and standby letters of credit. These lines do not have termination dates but are reviewed periodically. Commitment fees ranging
from .19% to .50% per annum are paid on the amounts of standby letters of credit used. At January 29, 1999, outstanding
letters of credit totaled $80.1 million.
A $100 million revolving credit and security agreement, expiring in September 1999 and renewable annually, is available
from a financial institution. Interest rates under this agreement are determined at the time of borrowing. Under the current
terms of the agreement, borrowings are based upon commercial paper rates plus 21 basis points. At January 29, 1999 and
January 30, 1998, respectively, there were $92.5 and $98.1 million outstanding under this credit and security agreement and
$132.1 and $105.3 million of the Company’s accounts receivable were pledged as collateral.
In addition, $80 million is available, on an unsecured basis, for the purpose of short-term borrowings on a bid basis
from various banks. These lines are uncommitted and are reviewed periodically by both the banks and the Company. There
were no borrowings outstanding under these lines of credit as of January 29, 1999 or January 30, 1998.
The weighted average interest rate on short-term borrowings outstanding at January 29, 1999 and January 30, 1998 was
4.96% and 5.73%, respectively.
Note 5, Long-Term Debt: Fiscal Year
of Final January 29, January 30,
Debt Category Interest Rates Maturity 1999 1998
(In Thousands)
Secured Debt1:
Industrial Revenue Bonds 2.85% to 6.25%* 2020 $ 2,536 $ 4,314
Industrial Revenue Bonds23.55%* 2005 900 2,700
Other Notes 3.87% to 9.50%*2006 7,826 2,501
Unsecured Debt:
Debentures 6.88%*2028 296,284 —
Medium Term Notes – Series A 6.50% to 8.20%*2022 238,999 238,992
Medium Term Notes3 – Series B 6.70% to 7.61%*2037 266,004 265,795
Senior Notes 6.38% 2005 99,282 99,177
Capital Leases 6.58% to 13.31%*2018 470,280 444,569
Total Long-Term Debt 1,382,111 1,058,048
Less Current Maturities 99,019 12,478
Long-Term Debt, Excluding
Current Maturities $1,283,092 $1,045,570
*Interest rate varies as a percentage of prime rate or other interest index. Interest rates shown are as of January 29, 1999.
Prime rate was 7.75% at January 29, 1999.
Debt maturities, exclusive of capital leases, for the next five fiscal years are as follows (in millions): 1999, $86.0; 2000,
$35.9; 2001, $16.6; 2002, $43.9; 2003, $0.9.
The Company’s debentures, senior notes and medium term notes contain certain financial covenants, including the
maintenance of specific financial ratios.
Notes:
1Real properties pledged as collateral for secured debt had net book values at January 29, 1999, as follows: industrial
revenue bonds – $11.5 million and other notes – $7.8 million.
2With certain restrictions, the floating rate demand industrial revenue bonds can be converted to a fixed interest rate based
on a fixed interest index at the Company’s option.
3Approximately 37% of these Medium Term Notes may be put at the option of the holder on either the tenth or twentieth
anniversary date of the issue.
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