Pottery Barn 2005 Annual Report Download - page 42

In March 2006, our Board of Directors authorized a stock repurchase program to acquire up to an additional
2,000,000 shares of our outstanding common stock. Stock repurchases under this program may be made through
open market and privately negotiated transactions at times and in such amounts as management deems
appropriate. The timing and actual number of shares repurchased will depend on a variety of factors, including
price, corporate and regulatory requirements, capital availability, and other market conditions. The stock
repurchase program does not have an expiration date and may be limited or terminated at any time without prior
notice.
Contractual Obligations
The following table provides summary information concerning our future contractual obligations as of
January 29, 2006.
Payments Due by Period
Dollars in thousands Fiscal 2006
Fiscal 2007
to Fiscal 2009
Fiscal 2010
to Fiscal 2011 Thereafter Total
Memphis-based distribution facilities obligation $ 1,369 $ 4,527 $ 2,875 $ 6,925 $ 15,696
Industrial development bonds 14,200 — — — 14,200
Capital leases 3,295 163 — — 3,458
Interest12,156 5,130 2,255 1,549 11,090
Operating leases2,3 178,846 507,500 281,918 539,533 1,507,797
Purchase obligations4588,051 8,248 — — 596,299
Total $787,917 $525,568 $287,048 $548,007 $2,148,540
1Represents interest expected to be paid on our long-term debt, industrial development bonds and capital leases.
2See discussion on operating leases in the “Off Balance Sheet Arrangements” section and Note E to our Consolidated
Financial Statements.
3Projected payments include only those amounts that are fixed and determinable as of the reporting date.
4Represents estimated commitments at year-end to purchase inventory and other goods and services in the normal course of
business to meet operational requirements.
Memphis-Based Distribution Facilities Obligation
At January 29, 2006, long-term debt of $15,696,000 consisted of bond-related debt pertaining to the
consolidation of our Memphis-based distribution facilities in accordance with FIN 46R. See discussion of the
consolidation of our Memphis-based distribution facilities at Note F to our Consolidated Financial Statements.
Industrial Development Bonds
In June 2004, in an effort to utilize tax incentives offered to us by the state of Mississippi, we entered into an
agreement whereby the Mississippi Business Finance Corporation issued $15,000,000 in long-term variable rate
industrial development bonds, the proceeds, net of debt issuance costs, of which were loaned to us to finance the
acquisition and installation of leasehold improvements and equipment located in our newly leased Olive Branch
distribution center (the “Mississippi Debt Transaction”). The bonds are marketed through a remarketing agent
and are secured by a letter of credit issued under our $300,000,000 line of credit facility. The bonds mature on
June 1, 2024. The bond rate resets each week based upon current market rates. The rate in effect at January 29,
2006 was 4.5%.
The bond agreement allows for each bondholder to tender their bonds to the trustee for repurchase, on demand,
with seven days advance notice. In the event the remarketing agent fails to remarket the bonds, the trustee will
draw upon the letter of credit to fund the purchase of the bonds. As of January 29, 2006, $14,200,000 remained
outstanding on these bonds and was classified as current debt. The bond proceeds are restricted for use in the
acquisition and installation of leasehold improvements and equipment located in our Olive Branch distribution
center. As of January 29, 2006, we had acquired and installed approximately $14,700,000 of leasehold
improvements and equipment associated with the facility.
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