RH, balance sheet: debt

US$ in thousands

	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
Convertible senior notes due 2024, net	—)	3,600)	—)	—)	—)	—)
Convertible senior notes due 2023, net	1,696)	9,389)	2,354)	—)	—)	—)
Convertible senior notes due 2020, net	—)	—)	—)	290,532)	—)	—)
Convertible senior notes due 2019, net	—)	—)	—)	—)	343,789)	—)
Current portion of term loans	25,000)	20,000)	—)	—)	—)	—)
Current finance lease liabilities	17,007)	15,511)	14,671)	9,188)	1,074)	471)
Current portion of equipment promissory notes	1,160)	13,625)	22,747)	22,009)	892)	6,033)
Asset based credit facility	—)	—)	—)	—)	57,500)	199,970)
Term loan B, net	1,936,529)	1,953,203)	—)	—)	—)	—)
Term loan B-2, net	469,245)	—)	—)	—)	—)	—)
Term loan, net	—)	—)	—)	—)	—)	79,499)
Real estate loans	17,909)	—)	—)	—)	—)	—)
Convertible senior notes due 2024, net	41,724)	184,461)	281,454)	264,982)	—)	—)
Convertible senior notes due 2023, net	—)	59,002)	282,956)	266,658)	249,151)	—)
Convertible senior notes due 2020, net	—)	—)	—)	—)	271,157)	252,994)
Convertible senior notes due 2019, net	—)	—)	—)	—)	—)	327,731)
Non-current finance lease liabilities	653,050)	560,550)	485,481)	442,988)	7,720)	7,509)
Non-current portion of equipment promissory notes, net	—)	1,129)	14,614)	31,053)	—)	—)
Total debt (carrying amount)	3,163,320)	2,820,470)	1,104,277)	1,327,410)	931,283)	874,207)

Download chart

Debt item	Description	The company
Total debt (carrying amount)	Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations.	RH total debt increased from 2021 to 2022 and from 2022 to 2023.

	Jan 28, 2023
Selected Financial Data (US$ in thousands)
Convertible senior notes due 2024	37,351)
Convertible senior notes due 2023	1,622)
Convertible senior notes due 2020	—)
Convertible senior notes due 2019	—)
Asset based credit facility	—)
Term loan B	1,961,056)
Term loan B-2	500,215)
Term loan	—)
Real estate loans	17,909)
Equipment promissory notes	1,160)
Finance lease liabilities	670,057)
Total debt (fair value)	3,189,370)
Financial Ratio
Debt, fair value to carrying amount ratio	1.01

Weighted-average interest rate on debt: 6.66%

Interest rate	Debt amount¹	Interest rate × Debt amount
6.88%	1,956,529)	134,609)
7.67%	474,245)	36,375)
4.56%	1,160)	53)
5.32%	670,057)	35,647)
Total	3,101,991)	206,684)
6.66%

¹ US$ in thousands

² Weighted-average interest rate = 100 × 206,684 ÷ 3,101,991 = 6.66%

RH, interest costs incurred

US$ in thousands

12 months ended:	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
Interest expense	151,730)	66,883)	70,648)	88,509)	75,908)	63,084)
Capitalized interest for capital projects	4,903)	12,208)	5,574)	4,930)	3,139)	3,304)
Interest costs incurred	156,633)	79,091)	76,222)	93,439)	79,047)	66,388)

Download chart

Debt item	Description	The company
Interest expense	Amount of the cost of borrowed funds accounted for as interest expense for debt.	RH interest expense decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Capitalized interest for capital projects	Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred.	RH capitalized interest for capital projects increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Interest costs incurred	Total interest costs incurred during the period and either capitalized or charged against earnings.	RH interest costs incurred increased from 2021 to 2022 and from 2022 to 2023.

	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
Selected Financial Data (US$ in thousands)
Net income	528,642)	688,546)	271,815)	220,375)	150,639)	2,180)
Add: Income tax expense	(91,358)	133,558)	104,598)	48,807)	30,514)	27,971)
Add: Interest expense	151,730)	66,883)	70,648)	88,509)	75,908)	63,084)
Earnings before interest and tax (EBIT)	589,014)	888,987)	447,061)	357,691)	257,061)	93,235)

Interest costs incurred	156,633)	79,091)	76,222)	93,439)	79,047)	66,388)
Financial Ratio With and Without Capitalized Interest
Interest coverage ratio (without capitalized interest)¹	3.88	13.29	6.33	4.04	3.39	1.48
Adjusted interest coverage ratio (with capitalized interest)²	3.76	11.24	5.87	3.83	3.25	1.40

2023 Calculations

¹ Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 589,014 ÷ 151,730 = 3.88

² Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 589,014 ÷ 156,633 = 3.76

Download chart

Solvency ratio	Description	The company
Adjusted interest coverage ratio	A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest).	RH adjusted interest coverage ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

RH (NYSE:RH)

Analysis of Debt