Ross 2008 Annual Report Download - page 29

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Contractual Obligations
The table below presents our significant contractual obligations as of January 31, 2009:
Less than 1 1 – 3 3 – 5 After 5
($000) year years years years Total1
Contractual Obligations
Senior Notes $ — $ — $ — $ 150,000 $ 150,000
Interest payment obligations 9,667 19,335 19,335 59,863 108,200
Capital leases 389 325 — — 714
Operating leases:
Rent obligations 335,280 613,313 473,209 478,253 1,900,055
Synthetic leases 6,542 9,046 6,136 — 21,724
Other synthetic lease obligations 2,379 1,528 56,000 — 59,907
Purchase obligations 620,774 280 — — 621,054
Total contractual obligations $ 975,031 $ 643,827 $ 554,680 $ 688,116 $ 2,861,654
1 Pursuant to the guidelines of FIN 48, a $26.0 million reserve for unrecognized tax benefits is included in other long-term liabilities on the Company’s consolidated balance
sheet. These obligations are excluded from the schedule above as the timing of payments cannot be reasonably estimated.
Senior Notes. We have a Note Purchase Agreement with various institutional investors for $150 million of unsecured, senior
notes. The notes were issued in two series and funding occurred in December 2006. The Series A notes, issued for an
aggregate of $85 million, are due in December 2018, and bear interest at a rate of 6.38%. The Series B notes, issued for an
aggregate of $65 million, are due in December 2021, and bear interest at a rate of 6.53%. Interest on these notes is included in
Interest payment obligations in the table above.
Borrowings under these notes are subject to certain operating and financial covenants, including maintaining certain interest
coverage and other financial ratios. As of January 31, 2009, we were in compliance with these covenants.
Capital leases. The obligations under capital leases relate to distribution center equipment and have a term of two years.
Off-Balance Sheet Arrangements
Operating leases. We lease our two buying offices, our corporate headquarters, one distribution center, one trailer parking
lot, three warehouse facilities, and all but two of our store locations. Except for certain leasehold improvements and equipment,
these leased locations do not represent long-term capital investments.
We have lease arrangements for certain equipment in our stores for our point-of-sale (“POS”) hardware and software
systems. These leases are accounted for as operating leases for financial reporting purposes. The initial terms of these
leases are either two or three years, and we typically have options to renew the leases for two to three one-year periods.
Alternatively, we may purchase or return the equipment at the end of the initial or each renewal term. We have guaranteed
the value of the equipment of $3.9 million, at the end of the respective initial lease terms, which is included in Other
synthetic lease obligations in the table above.
We lease approximately 181,000 square feet of office space for our corporate headquarters in Pleasanton, California, under
several facility leases. The terms for these leases expire between 2010 and 2014 and contain renewal provisions.
We lease approximately 161,000 and 15,000 square feet of office space for our New York City and Los Angeles buying offices,
respectively. The lease terms for these facilities expire in 2015 and 2011, respectively. The lease term for the New York office
contains a renewal provision.