Pottery Barn 2008 Annual Report Download - page 46

Contractual Obligations
The following table provides summary information concerning our future contractual obligations as of
February 1, 2009:
Payments Due by Period 1
Dollars in thousands Fiscal 2009
Fiscal 2010
to Fiscal 2012
Fiscal 2013
to Fiscal 2014 Thereafter Total
Mississippi industrial development bonds $ 13,150 $ — $ — $ — $ 13,150
Memphis-based distribution facilities
obligation 1,438 4,410 3,422 1,968 11,238
Capital leases 114 371 88 — 573
Interest 21,293 2,923 1,069 281 5,566
Operating leases 3,4 233,240 605,030 315,673 614,378 1,768,321
Purchase obligations 5339,302 4,875 — — 344,177
Total $588,537 $617,609 $320,252 $616,627 $2,143,025
1This table excludes $22.8 million of liabilities for unrecognized tax benefits under FIN 48, as we are not able to reasonably estimate when
cash payments for these liabilities will occur. This amount, however, has been recorded as a liability in the accompanying Consolidated
Balance Sheet as of February 1, 2009.
2Represents interest expected to be paid on our long-term debt, Mississippi industrial development bonds and our capital leases.
3See discussion on operating leases in the “Off Balance Sheet Arrangements” section and Note E to our Consolidated Financial Statements.
4Projected payments include only those amounts that are fixed and determinable as of the reporting date.
5Represents estimated commitments at year-end to purchase inventory and other goods and services in the normal course of business to meet
operational requirements.
Mississippi 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 Olive Branch, Mississippi
distribution center. 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 February 1, 2009 was 1.4%.
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 February 1, 2009, $13,150,000 remained
outstanding on these bonds and was classified as current debt. The bond proceeds were restricted for use in the
acquisition and installation of leasehold improvements and equipment located in our Olive Branch, Mississippi
distribution center.
Memphis-Based Distribution Facilities Obligation
As of February 1, 2009, total debt of $11,238,000 consisted entirely of bond-related debt pertaining to the
consolidation of our Memphis-based distribution facilities in accordance with FIN 46R, “Consolidation of
Variable Interest Entities.” See discussion of the consolidation of our Memphis-based distribution facilities at
Note F to our Consolidated Financial Statements.
Capital Leases
As of February 1, 2009, capital lease obligations of $573,000 consist primarily of leases for distribution center
equipment. As of February 3, 2008, we did not have any outstanding capital lease obligations.
Other Contractual Obligations
We have other liabilities reflected in our Consolidated Balance Sheets. The payment obligations associated with
these liabilities are not reflected in the table above due to the absence of scheduled maturities. The timing of
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