Pottery Barn 2009 Annual Report Download - page 46

Contractual Obligations
The following table provides summary information concerning our future contractual obligations as of
January 31, 2010:
Payments Due by Period1
Dollars in thousands Fiscal 2010
Fiscal 2011
to Fiscal 2013
Fiscal 2014
to Fiscal 2015 Thereafter Total
Memphis-based distribution facilities
obligation $ 1,461 $ 4,585 $ 3,754 $ — $ 9,800
Capital leases 126 333 — — 459
Interest2974 2,050 556 — 3,580
Operating leases3235,982 602,789 300,434 543,998 1,683,203
Purchase obligations4456,880 7,812 — — 464,692
Total $695,423 $617,569 $304,744 $543,998 $2,161,734
1This table excludes $20.9 million of liabilities for unrecognized tax benefits associated with uncertain tax positions 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 January 31, 2010.
2Represents interest expected to be paid on our long-term debt and our capital leases.
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
As of January 31, 2010, total debt of $9,800,000 consists entirely of bond-related debt pertaining to the
consolidation of our Memphis-based distribution facilities due to their related party relationship and our
obligation to renew the leases until the bonds are fully repaid. See discussion of the consolidation of our
Memphis-based distribution facilities at Note F to our Consolidated Financial Statements.
Capital Leases
As of January 31, 2010, capital lease obligations of $459,000 consist primarily of leases for distribution center
equipment.
Operating Leases
We lease store locations, distribution centers, customer care centers, corporate facilities and certain equipment for
original terms ranging generally from 2 to 22 years. Certain leases contain renewal options for periods up to 20
years. The rental payment requirements in our store leases are typically structured as either minimum rent,
minimum rent plus additional rent based on a percentage of store sales if a specified store sales threshold is
exceeded, or rent based on a percentage of store sales if a specified store sales threshold or contractual obligations
of the landlord has not been met. Contingent rental payments, including rental payments that are based on a
percentage of sales, cannot be predicted with certainty at the onset of the lease term. Accordingly, any contingent
rental payments are recorded as incurred each period when the sales threshold is probable and are excluded from our
calculation of deferred rent liability. See Notes A and E to our Consolidated Financial Statements.
We are party to a variety of contractual agreements under which we may be obligated to indemnify the other
party for certain matters. These contracts primarily relate to our commercial contracts, operating leases,
trademarks, intellectual property, financial agreements and various other agreements. Under these contracts, we
may provide certain routine indemnifications relating to representations and warranties or personal injury
matters. The terms of these indemnifications range in duration and may not be explicitly defined. Historically, we
have not made significant payments for these indemnifications. We believe that if we were to incur a loss in any
of these matters, the loss would not have a material effect on our financial condition or results of operations.
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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