Bed, Bath and Beyond 2004 Annual Report Download - page 24

BED BATH & BEYOND ANNUAL REPORT 2004
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7. TRANSACTIONS AND BALANCES WITH RELATED PARTIES
A. In fiscal 2002, the Company had an interest in certain life insurance policies on the lives of its Co-Chairmen and
their spouses. The beneficiaries of these policies were related to the aforementioned individuals. The Company’s
interest in these policies was equivalent to the net premiums paid by the Company. Since the Company is no
longer permitted to pay policy premiums due to restrictions in the Sarbanes-Oxley Act of 2002, the agreements
relating to the Company’s interest in the life insurance policies on the lives of its Co-Chairmen and their spouses
were terminated in fiscal 2003. Upon termination in fiscal 2003, the Co-Chairmen paid to the Company $5.4 mil-
lion, representing the total amount of premiums paid by the Company under the agreements and the Company
was released from its contractual obligation to make substantial future premium payments. In order to confer a
benefit to its Co-Chairmen in substitution for the aforementioned terminated agreements, the Company has
agreed to pay to the Co-Chairmen, at a future date, an aggregate amount of $4.2 million, which is included in
accrued expenses and other current liabilities as of February 26, 2005 and February 28, 2004.
B. The Company made charitable contributions to the Mitzi and Warren Eisenberg Family Foundation, Inc. (the
“Eisenberg Foundation”) and the Feinstein Family Foundation, Inc. (the “Feinstein Foundation”) in the aggregate
amount of $913,000 in fiscal 2002. The Eisenberg Foundation and the Feinstein Foundation are each not-for-profit
corporations of which Messrs. Eisenberg and Feinstein, the Co-Chairmen of the Company, and their family mem-
bers are the trustees and officers. The Company made no contributions in fiscal 2004 and 2003.
C. In fiscal 2004, the Company leased office and retail space from entities controlled by management of CTS. In fiscal
2003, the Company leased warehouse, office and retail space from such entities. Since the acquisition of Harmon
through November 15, 2004, the Company leased warehouse and office space from an entity controlled by man-
agement of Harmon. The Company paid such entities occupancy costs of approximately $6,902,000, $4,721,000 and
$461,000 in fiscal 2004, 2003 and 2002, respectively.
8. LEASES
The Company leases retail stores, as well as warehouses, office facilities and equipment, under agreements expiring
at various dates through 2041. Certain leases provide for contingent rents (which are based upon store sales exceed-
ing stipulated amounts and are immaterial in fiscal 2004, 2003 and 2002), scheduled rent increases and renewal
options. The Company is obligated under a majority of the leases to pay for taxes, insurance and common area main-
tenance charges.
As of February 26, 2005, future minimum lease payments under noncancelable operating leases are as follows:
Fiscal Year (in thousands) Amount
2005 $ 308,698
2006 322,034
2007 316,674
2008 308,370
2009 289,813
Thereafter 1,438,176
Total future minimum lease payments $2,983,765
Expenses for all operating leases were $288.9 million, $251.0 million and $219.8 million for fiscal 2004, 2003 and
2002, respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)