Ross 2009 Annual Report Download - page 48

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Total stock-based compensation recognized in the Company’s consolidated Statements of Earnings for fiscal 2009, 2008, and
2007 is as follows:
Statements of Earnings Classification ($000) 2009 2008 2007
Cost of goods sold $ 11,912 $ 10,021 $ 10,736
Selling, general and administrative 13,834 12,554 14,429
Total $ 25,746 $ 22,575 $ 25,165
Note D: Debt
Revolving credit facilities. The Company has a $600 million revolving credit facility with an expiration date of July 2011
and interest pricing at LIBOR plus 45 basis points. This facility contains a $300 million sublimit for issuance of standby letters
of credit, of which $234.8 million was available at January 30, 2010. Interest is payable upon borrowing maturity but no less
than quarterly. Borrowing under this credit facility is subject to maintaining certain financial ratios. As of January 30, 2010 and
January 31, 2009, the Company had no borrowings outstanding under this facility and was in compliance with the covenants.
Senior Notes. The Company has two series of unsecured senior notes with various institutional investors for $150 million.
The Series A notes, totaling $85 million are due in December 2018 and bear interest at a rate of 6.38%. The Series B notes
totaling $65 million are due in December 2021 and bear interest at a rate of 6.53%. The fair value of these notes as of January
30, 2010 of approximately $164 million is estimated by obtaining comparable market quotes. Borrowings under these notes are
subject to certain covenants including interest coverage and other financial ratios. As of January 30, 2010, the Company was in
compliance with these covenants. The senior notes are subject to prepayment penalties for early payment of principal.
Letters of credit. The Company uses standby letters of credit to collateralize certain obligations related to its self-insured
workers’ compensation and general liability programs. The Company had $65.2 million and $60.4 million in standby letters of
credit at January 30, 2010 and January 31, 2009, respectively.
The Company also had $32.9 million and $16.7 million in trade letters of credit outstanding at January 30, 2010 and January 31,
2009, respectively.
Note E: Leases
The Company leases all but two of its store sites with original, non-cancelable terms that in general range from three to ten
years. Store leases typically contain provisions for three to four renewal options of five years each. Most store leases also
provide for minimum annual rentals and for payment of certain expenses. In addition, some store leases also have provisions for
additional rent based on a percentage of sales.
The Company has lease arrangements for certain equipment in its stores for its 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 the Company typically has options to renew the leases for two to three one-year periods.
Alternatively, the Company may purchase or return the equipment at the end of the initial or each renewal term. The Company’s
obligation under the residual value guarantee at the end of the respective lease terms is $2.6 million.