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In 1998, the Company completed a $100 million senior unsecured note offering (“the Notes”), bearing a coupon rate of 7.13% with an effective rate of 7.22%. The Notes will mature on May 1, 2008, with interest on the Notes to be paid semi-annually. The Company used the net proceeds from the offering of approximately $99 million to repay amounts outstanding under the Company’s previous credit facility.
The Company has two subordinated lines of credit with banks providing up to an aggregate of $20 million of borrowings. In April 2003, the company entered into a $10.0 million revolving line of credit with a maturity date of April 2004. In May 2003, the Company extended the maturity date of an existing $10.0 million revolving line of credit originally obtained in August 2002 to May 2004. The lines of credit include customary financial and other covenants that require the maintenance of certain ratios identical to those included in the Company’s New Credit Facility. Borrowings under the lines of credit bear interest at rates established at the time of borrowing based on prime minus 175 basis points. As of December 31, 2003, approximately $2.6 million was outstanding pursuant to one of these lines of credit.
As of December 31, 2003, total long-term debt outstanding for the Company was $246.7 million, $23.8 million of which matures in the next twelve months.
Through December 31, 2003, the Company had repurchased 29.3 million shares of its common stock at a total cost of $514.8 million, including 2.9 million shares at a cost of $80.4 million during the year ended December 31, 2003. Subsequent to December 31, 2003 and through March 4, 2004, the Company repurchased 0.6 million shares of common stock at a total cost of $24.2 million.
In the fourth quarter 2003, we declared an initial cash dividend of $0.20 per share. Dividends declared in 2003 were $6.9 million. In the first quarter 2004, we declared a cash dividend of $0.20 per share payable on April 26, 2004 to shareholders of record on April 12, 2004. We expect dividends in 2004 to be approximately $27.5 million, subject to declaration by our board of directors.
The following table summarizes our contractual obligations as of December 31, 2003.
Contractual Obligations
| |
Payment due by period |
 |
|
| |
|
|
Less than |
|
|
|
|
More than |
| |
Total |
1 year |
1-3 years |
3-5 years |
5 years |
|
|
|
|
|
|
| |
(in millions) |
| Long-term debt |
$ |
246.7 |
|
$ |
23.8 |
|
$ |
122.9 |
|
$ |
99.9 |
|
$ |
0.1 |
|
| Operating lease obligations |
|
48.8 |
|
|
12.1 |
|
|
18.5 |
|
|
3.9 |
|
|
14.3 |
|
| Purchase obligations |
|
1.9 |
|
|
1.9 |
|
|
— |
|
|
— |
|
|
— |
|
| Other long-term liabilities |
|
40.2 |
|
|
— |
|
|
25.1 |
|
|
8.2 |
|
|
6.9 |
|
|
|
|
|
|
|
| Total contractual cash obligations |
$ |
337.6 |
|
$ |
37.8 |
|
$ |
166.5 |
|
$ |
112.0 |
|
$ |
21.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company believes that cash flows from operations and available financing capacity are adequate to meet expected future operating, investing and financing needs of the business.
Critical Accounting Policies
Our accounting policies comply with principles generally accepted in the United States. We have described below those policies that we believe are critical and require the use of complex judgment or significant estimates in their application. Additional discussion of these policies is included in Note 1 to our consolidated financial statements.
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