Pier 1 2009 Annual Report Download - page 37

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A summary of the Company’s contractual obligations and other commercial commitments as of
February 28, 2009 is listed below (in thousands):
Amount of Commitment per Period
Less Than 1 to 3 3 to 5 More Than
Total 1 Year Years Years 5 Years
Operating leases .................... $ 936,431 $225,496 $ 379,899 $240,921 $ 90,115
Purchase obligations(1) ............... 75,845 75,845 — — —
Convertible debt(2) .................. 165,000 — 165,000 — —
Standby letters of credit(3) ............. 48,599 48,599 — — —
Industrial revenue bonds(3) ............ 19,000 — — — 19,000
Interest on convertible debt(2) .......... 21,038 10,519 10,519 — —
Interest on industrial revenue bonds(4) .... 6,408 361 722 722 4,603
Interest and related fees on secured credit
facility(5) ........................ 4,431 1,363 2,727 341 —
Other obligations(6)(7) ................ 48,248 11,512 1,584 2,150 33,002
Total(8) ........................... $1,325,000 $373,695 $ 560,451 $244,134 $146,720
Liabilities recorded on the balance sheet . . $ 269,272
Commitments not recorded on the balance
sheet .......................... 1,055,728
Total ............................ $1,325,000
(1) As of February 28, 2009, the Company had approximately $75.8 million of outstanding purchase
orders, which were primarily related to merchandise inventory. Such orders are generally
cancelable at the discretion of the Company until the order has been shipped. The table above
excludes certain executory contracts for goods and services that tend to be recurring in nature and
similar in amount year over year and includes $16.2 million in merchandise letters of credit and
bankers’ acceptances.
(2) The Company’s convertible debt is subject to redemption in part or full on February 15, 2011, and
the above amounts assume the notes will be repaid or refinanced at that time. As of February 28,
2009, if all notes had remained outstanding until maturity in 2036, the total interest paid would
have been $273.7 million. Subsequent to year end, a foreign subsidiary of the Company purchased
approximately $78.9 million of the convertible debt for $27.4 million including interest, thereby
reducing the consolidated outstanding convertible debt to $86.1 million. If the remaining
$86.1 million in notes are held to maturity, the total interest paid would be approximately
$143.1 million. See Note 5 of the Notes to Consolidated Financial Statements for further discussion of
the Company’s convertible senior notes.
(3) The Company also has outstanding standby letters of credit totaling $19.4 million related to the
Company’s industrial revenue bonds. This amount is excluded from the table above as it is not
incremental to the Company’s total outstanding commitments.
(4) The interest rates on the Company’s industrial revenue bonds are variable and reset weekly. The
estimated interest payments included in the table were calculated based upon the rate in effect at
fiscal 2009 year end.
(5) Represents estimated commitment fees for trade and standby letters of credit, and unused fees on
the Company’s $325 million secured credit facility, which expires in May 2012, calculated based
upon balances and rates in effect at fiscal 2009 year end.
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