Ulta 2015 Annual Report Download - page 64

amended and restated the Loan and Security Agreement, dated as of August 31, 2010, by and among the
Company and the lenders. The Loan Agreement extended the maturity of the Company’s credit facility to
October 2016, provides maximum revolving loans equal to the lesser of $200,000 or a percentage of eligible
owned inventory, contains a $10,000 subfacility for letters of credit and allows the Company to increase the
revolving facility by an additional $50,000, subject to consent by each lender and other conditions. The Loan
Agreement contains a requirement to maintain a minimum amount of excess borrowing availability at all times.
On September 5, 2012, the Company entered into Amendment No. 1 to the Loan Agreement (the First
Amendment) with the lender group. The First Amendment updated certain administrative terms and conditions
and provides the Company greater flexibility to take certain corporate actions. There were no changes to the
revolving loan amounts available, interest rates, covenants or maturity date under terms of the Loan Agreement.
On December 6, 2013, the Company entered into Amendment No. 2 to the Loan Agreement (the Second
Amendment) with the lender group. The Second Amendment further extended the maturity of the facility to
December 2018. Substantially all of the Company’s assets are pledged as collateral for outstanding borrowings
under the facility. Outstanding borrowings will bear interest at the prime rate or London Interbank Offered Rate
plus 1.50% and the unused line fee is 0.20%.
As of January 30, 2016 and January 31, 2015, the Company had no borrowings outstanding under the credit
facility and the Company was in compliance with all terms and covenants of the agreement.
8. Fair value measurements
The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximates their
estimated fair values due to the short maturities of these instruments.
Fair value is measured using inputs from the three levels of the fair value hierarchy, which are described as
follows:
a. Level 1 — observable inputs such as quoted prices for identical instruments in active markets.
b. Level 2 — inputs other than quoted prices in active markets that are observable either directly or
indirectly through corroboration with observable market data.
c. Level 3 — unobservable inputs in which there is little or no market data, which would require the
Company to develop its own assumptions.
As of January 30, 2016 and January 31, 2015, the Company held financial liabilities of $7,491 and $5,574,
respectively, related to its non-qualified deferred compensation plan. The liabilities have been categorized as
Level 2 as they are based on third-party reported net asset values which are based primarily on quoted market
prices of underlying assets of the funds within the plan.
9. Investments
The Company’s short-term investments as of January 30, 2016 and January 31, 2015, consist of $130,000 and
$150,209, respectively, in certificates of deposit. These short-term investments are carried at cost, which
approximates fair value and are recorded in the Consolidated Balance Sheets in Short-term investments. The
contractual maturity of the Company’s investments was less than twelve months at January 30, 2016.
10. Share-based awards
Equity incentive plans
The Company has had a number of equity incentive plans over the years. The plans were adopted in order to
attract and retain the best available personnel for positions of substantial authority and to provide additional
incentive to employees, directors, and consultants to promote the success of the Company’s business. Incentive
compensation was awarded under the Amended and Restated Restricted Stock Option Plan until April 2002 and
under the 2002 Equity Incentive Plan through July 2007, at which time the 2007 Incentive Award Plan was
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