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Long-Term Debt | 12 Months Ended
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Sep. 26, 2015
Long-Term Debt [Abstract] |
Long-Term Debt | 7. Long-Term Debt Long-term debt and short-term loans are summarized as follows:
|  | 2015 |  | 2014
Bonds payable: |  |  |  |  |  |
Senior notes, interest rate of 5.75%, maturing 2023 |  | $ | 700,000,000 |  | $ | 700,000,000
Recovery Zone Facility Bonds, maturing 2036 |  |  | 90,680,000 |  |  | 95,210,000
Outstanding line of credit, weighted average interest rate of 4.50% |  |  | 460,005 |  |  | 29,910,050
Notes payable: |  |  |  |  |  |
Real estate and equipment maturing 2016-2028: |  |  |  |  |  |
Due to banks, weighted average interest rate of 3.29% for 2015 and 3.01% for 2014 |  |  | 103,507,307 |  |  | 80,634,003
Due to other financial institutions, weighted average interest rate of 7.58% for 2015 and 4.09% for 2014 |  |  | 695,480 |  |  | 31,505,690
Total long-term debt |  |  | 895,342,792 |  |  | 937,259,743
Less current portion |  |  | 12,651,321 |  |  | 12,488,400
Long-term debt, net of current portion |  | $ | 882,691,471 |  | $ | 924,771,343
In June 2013, the Company issued $700.0 million aggregate principal amount of senior notes due in 2023 (the “Notes”) in a private placement. The Notes bear an interest rate of 5.75% per annum and were issued at par. Note proceeds were used to repay $575.0 million aggregate principal amount of senior notes maturing in 2017, $52.0 million of indebtedness outstanding under the Company’s line of credit, and to pay costs related to the offering of the Notes. Remaining Note proceeds were used for general corporate purposes, including capital expenditures. In connection with the repayment of the $575.0 million senior notes, the Company paid $27.8 million in debt extinguishment costs and expensed $15.3 million of unamortized loan costs. These amounts comprise the line item “Loss on early extinguishment of debt” on the Consolidated Statements of Income for the fiscal year ended September 28, 2013. The Company filed a registration statement with the Securities and Exchange Commission and exchanged the private placement notes with registered notes. The Company may redeem all or a portion of the Notes at any time on or after June 15, 2018 at the following redemption prices (expressed as percentages of the principal amount), if redeemed during the 12-month period beginning June 15 of the years indicated below:
Year |
2018 | 10 2.875%
2019 | 101.917%
2020 | 100.958%
2021 and thereafter | 100.000%
In connection with the offering of the Notes, the Company extended the maturity date of its $175.0 million line of credit (the “Line”) from December 29, 2015 to June 12, 2018 and modified certain interest rate options and covenants. At September 26, 2015, the Company had $0.5 million borrowing outstanding under the line of credit. The Line provides the Company with various interest rate options based on the prime rate, the Federal Funds Rate, or the London Interbank Offering Rate (“LIBOR”). The Line allows the Company to issue up to $30.0 million in unused letters of credit, of which $10.5 million of unused letters of credit were issued at September 26, 2015. The Company is not required to maintain compensating balances in connection with the Line. On December 29, 2010, the Company completed the funding of $99.7 million of Recovery Zone Facility Bonds (the “Bonds”) for: (A) acquisition, construction and equipping of an approximately 830,000 square foot new warehouse and distribution center to be located in Buncombe County, North Carolina (the “Project”), and (B) the payment of certain expenses incurred in connection with the issuance of the Bonds. The final maturity date of the Bonds is January 1, 2036. The Bonds were issued by the Buncombe County Industrial Facilities and Pollution Control Financing Authority and were purchased by certain financial institutions. Under a Continuing Covenant and Collateral Agency Agreement (the “Covenant Agreement”) between the financial institutions and the Company, the financial institutions would hold the Bonds until January 2, 2018, subject to certain events. Mandatory redemption of the Bonds by the Company in the annual amount of $4.5 million began on January 1, 2014. In connection with the offering of the Notes, the Company extended the maturity date of the Covenant Agreement from January 2, 2018 to June 30, 2021 and modified certain interest rate options and covenants. The Company may redeem the Bonds without penalty or premium at any time prior to June 30, 2021. Interest earned by bondholders on the Bonds is exempt from Federal and North Carolina income taxation. The interest rate on the Bonds is equal to one month LIBOR (adjusted monthly) plus a credit spread, adjusted to reflect the income tax exemption. The Company’s obligation to repay the Bonds is collateralized by the Project. Additional collateral was required in order to meet certain loan to value criteria in the Covenant Agreement. The Covenant Agreement incorporates substantially all financial covenants included in the Line. The Notes, the Bonds and the Line contain provisions that under certain circumstances would permit lending institutions to terminate or withdraw their respective extensions of credit to the Company. Included among the triggering factors permitting the termination or withdrawal of the Line to the Company are certain events of default, including both monetary and non-monetary defaults, the initiation of bankruptcy or insolvency proceedings, and the failure of the Company to meet certain financial covenants designated in its respective loan documents. The Company was in compliance with all financial covenants related to the Notes, the Bonds and Line at September 26, 2015. The Company’s long-term debt agreements generally have cross-default provisions which could result in the acceleration of payments due under the Company’s line of credit, Bond and Notes indenture in the event of default under any one instrument. At September 26, 2015, property and equipment with an undepreciated cost of approximately $260 million was pledged as collateral for long-term debt. Long-term debt and Line agreements contain various restrictive covenants requiring, among other things, minimum levels of net worth and maintenance of certain financial ratios. In addition, certain loan agreements containing provisions outlining minimum tangible net worth requirements restrict the ability of the Company to pay cash dividends in excess of the current annual per share dividends paid on the Company’s Class A and Class B Common Stock. Further, the Company is prevented from paying cash dividends at any time that it is in default under the indenture governing the Notes. In addition, the terms of the indenture may restrict the ability of the Company to pay additional cash dividends based on certain financial parameters. Components of interest costs are as follows:
|  | 2015 |  | 2014 |  | 2013
Total interest costs |  | $ | 47,378,270 |  | $ | 46,846,912 |  | $ | 59,598,030
Interest capitalized |  |  | (371,496) |  |  | (277,048) |  |  | (455,652)
Interest expense |  | $ | 47,006,774 |  | $ | 46,569,864 |  | $ | 59,142,378
Maturities of long-term debt at September 26, 2015 are as follows:
Fiscal Year |  |  |
2016 |  | $ | 12,651,321
2017 |  |  | 11,665,693
2018 |  |  | 49,979,075
2019 |  |  | 18,997,434
2020 |  |  | 16,025,453
Thereafter |  |  | 786,023,816
Total |  | $ | 895,342,792

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 22 -Article 5 + Details
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