FISCAL 2003 CASH FLOWS Operating Activities Investing Activities Financing Activities DEBT Senior Credit Facility Credit Agreement 32 The Tranche A Term Loan facility and the Tranche B Term Loan facility were fully drawn on March 27, 2003. As of February 29, 2004, the Company has made $40.0 million of scheduled and required payments on the Tranche A Term Loan facility. In August 2003, the Company paid $100.0 million of the Tranche B Term Loan facility. In October 2003, the Company paid an addi- tional $200.0 million of the Tranche B Term Loan facility. As of February 29, 2004, the required annual repayments of the Tranche A Term Loan and the Tranche B Term Loan are as follows: In connection with the Hardy Acquisition, on January 16, 2003, the Company, certain subsidiaries of the Company, JPMorgan Chase Bank, as a lender and administrative agent (the “Administrative Agent”), and certain other lenders entered into a new cred- it agreement (as subsequently amended and restated as of March 19, 2003, the “March 2003 Credit Agreement”). In October 2003, the Company entered into a Second Amended and Restated Credit Agreement (the “October Credit Agreement”) that (i) refinanced the then outstanding principal balance under the Tranche B Term Loan facility on essentially the same terms as the Tranche B Term Loan facility under the March 2003 Credit Agreement, but at a lower Applicable Rate (as such term is defined in the October Credit Agreement) and (ii) otherwise restated the terms of the March 2003 Credit Agreement, as amended. The October Credit Agreement was further amended during February 2004 (the “Credit Agreement”). The March 2003 Credit Agreement provided for aggregate credit facilities of $1.6 billion consisting of a $400.0 million Tranche A Term Loan facility due in February 2008, an $800.0 mil- lion Tranche B Term Loan facility due in November 2008 and a $400.0 million Revolving Credit facility (including an Australian Dollar revolving sub-facility of up to A$10.0 million and a sub-facility for letters of credit of up to $40.0 million) which expires on February 29, 2008. Proceeds of the March 2003 Credit Agreement were used to pay off the Company’s obligations under its prior Senior Credit Facility, to fund a portion of the cash required to pay the former Hardy shareholders and to pay indebtedness out- standing under certain of Hardy’s credit facilities. The Company uses the remaining availability under the credit agreement to fund its working capital needs on an ongoing basis. Total debt outstanding as of February 29, 2004, amounted to $2,047.9 million, an increase of $782.4 million from February 28, 2003. The ratio of total debt to total capitalization decreased to 46.3% as of February 29, 2004, from 51.9% as of February 28, 2003. During June 1998, the Company’s Board of Directors authorized the repurchase of up to $100.0 million of its Class A Common Stock and Class B Common Stock. The repurchase of shares of common stock will be accomplished, from time to time, in manage- ment’s discretion and depending upon market conditions, through open market or privately negotiated transactions. The Company may finance such repurchases through cash generated from operations or through the senior credit facility. The repurchased shares will become treasury shares. As of May 14, 2004, the Company had purchased a total of 4,075,344 shares of Class A Common Stock at an aggregate cost of $44.9 million, or at an average cost of $11.01 per share. Of this total amount, no shares were repur- chased during Fiscal 2004, Fiscal 2003 or Fiscal 2002. Net cash used in financing activities for Fiscal 2003 was $161.5 million resulting primarily from $151.1 million of principal payments of long-term debt and $51.9 million of net repayments of notes payable. These debt payments were partially funded by $28.7 million of proceeds from employee stock option exercises and $10.0 million of proceeds from long-term debt which was used for the repayment of debt at one of the Company’s Chilean subsidiaries. Net cash used in investing activities for Fiscal 2003 was $72.0 million, which resulted primarily from $71.6 million of capital expenditures. Net cash provided by operating activities for Fiscal 2003 was $236.1 million, which resulted from $203.3 million of net income, plus $53.2 million of net noncash items charged to the Consolidated Statement of Income, less $20.4 million representing the net change in the Company’s operating assets and liabilities. The net noncash items consisted primarily of depreciation of property, plant and equipment and provision for deferred taxes, partially offset by a gain on changes in fair value of derivative instrument. The net change in operating assets and liabilities resulted primarily from an increase in inventories and a reduction in accrued excise taxes and adverse grape contracts partially offset by increases in accrued income taxes payable and accrued advertising and promo- tion expenses.