Lumber Liquidators 2009 Annual Report Download - page 57

Lumber Liquidators Holdings, Inc.
Notes to Consolidated Financial Statements—(Continued)
(amounts in thousands, except share data and per share amounts)
inventory purchases, including the support of up to $5,000 for letters of credit, and for general operations. The Revolver is
secured by LLI’s inventory, has no mandated payment provisions and a fee of 0.125% per annum, subject to adjustment
based on certain financial performance criteria, on any unused portion of the Revolver. Amounts outstanding under the
Revolver would be subject to an interest rate of LIBOR (reset on the 10th of the month) plus 0.50%, subject to adjustment
based on certain financial performance criteria. The Revolver has certain defined covenants and restrictions, including the
maintenance of certain defined financial ratios. LLI is in compliance with these financial covenants at December 31, 2009.
Interest payments on capital leases totaled $2 and $4 in 2009 and 2008, respectively, and interest payments on capital
leases and previous borrowing totaled $679 in 2007.
NOTE 5. LEASES
The Company leases all store locations, the Corporate Headquarters and certain equipment. The store location leases are
operating leases and generally have five-year base periods with one or more five-year renewal periods.
The Founder is the sole owner of ANO LLC, DORA Real Estate Company, LLC and Wood on Wood Road, Inc., and he
has a 50% membership interest in BMT Holdings, LLC (collectively, “ANO and Related Companies”). As of December 31,
2009, the Company leased 25 of its locations from ANO and Related Companies representing 13.4% of the total number of
store leases in operation. As of December 31, 2008 and 2007, the Company leased 26 of its locations from ANO and Related
Companies representing 17.3% and 22.4% of the total number of store leases in operation, respectively. In addition, the
Company leases the Corporate Headquarters from ANO LLC under an operating lease with a base term running through
December 31, 2019.
Rental expense for 2009, 2008 and 2007 was $11,464, $9,276 and $6,853, respectively, with rental expense attributable
to ANO and Related Companies of $2,531, $2,505 and $2,529, respectively.
The future minimum rental payments under non-cancellable operating leases, segregating ANO and Related Companies
leases from all other operating leases, were as follows at December 31, 2009:
Operating Leases
ANO and Related Companies Store &
Other
Leases
Total
Operating
Leases
Store
Leases
Headquarters
Lease
2010 ............................................ $1,167 $ 1,064 $10,377 $12,608
2011 ............................................ 827 1,096 8,810 10,733
2012 ............................................ 550 1,129 7,668 9,347
2013 ............................................ 472 1,163 5,842 7,477
2014 ............................................ 188 1,198 4,141 5,527
Thereafter ........................................ 263 6,550 7,343 14,156
Total minimum lease payments ....................... $3,467 $12,200 $44,181 $59,848
NOTE 6. STOCK-BASED COMPENSATION
Stock-based compensation expense included in SG&A consisted of:
Year Ended December 31,
2009 2008 2007
Stock Options and Restricted Stock Awards ....................... $2,826 $ 2,840 $2,733
Variable Plan ............................................... — (2,960) 3,220
Regional Manager Plan ....................................... 129 129 258
Total ...................................................... $2,955 $ 9 $6,211
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