Express 2012 Annual Report Download - page 68

paid Golden Gate an annual management fee equal to the greater of (i) $2.0 million per fiscal year or (ii) 3% of
adjusted EBITDA of Express Holding. Additionally, the Company reimbursed Golden Gate for reasonable out-
of-pocket expenses incurred as a result of providing on-going advisory services. Effective May 12, 2010, the
Advisory Agreement with Golden Gate was terminated in connection with the Company’s conversion to a
corporation and IPO. The Company paid Golden Gate a one-time termination fee of $10.0 million in the second
quarter of 2010 in connection with the termination of the Advisory Agreement.
In 2010, the Company incurred the following charges from Golden Gate related to advisory fees, out-of-pocket
expenses, and the termination of the Advisory Agreement. These charges are included in other operating
(income) expense, net in the Consolidated Statements of Income and Comprehensive Income:
2010
(in thousands)
Advisory fees and out-of-pocket expenses
(including termination fee) ...................... $12,752
Transactions with Other Golden Gate Affiliates
The Company transacts with affiliates of Golden Gate for e-commerce warehouse and fulfillment services,
software license purchases, and consulting and software maintenance services. The 2012 related party activity
with affiliates of Golden Gate described in this note includes only those expenses incurred and income earned
through the date on which Golden Gate ceased to be a related party, which was May 31, 2012.
The Company incurred the following charges from affiliates of Golden Gate for various services, which are
included primarily in cost of goods sold, buying and occupancy costs in the Consolidated Statements of Income
and Comprehensive Income:
2012 2011 2010
(in thousands)
E-commerce warehouse and fulfillment ............... $8,755 $32,869 $18,780
Software licenses and consulting and software
maintenance services ............................ $ 91 $ 228 $ 323
The Company’s outstanding liability to other Golden Gate affiliates, included in accounts payable and accrued
expenses—related parties on the Consolidated Balance Sheets, was $6.0 million as of January 28, 2012.
The Company provides real estate services to certain Golden Gate affiliates. Income recognized during 2012,
2011, and 2010 was $0.2 million, $0.5 million and $0.4 million, respectively. As of January 28, 2012, the
Company’s receivable balance related to these services was $0.1 million.
Prior to the prepayments of the 14.5% Topco Term C Loan (“Term C Loan”) and 13.5% Topco Term B Loan
(“Term B Loan”), collectively referred to as the “Topco Credit Facility”, in February 2010 and May 2010,
respectively, an affiliate of Golden Gate was owed $50.0 million and $58.3 million, respectively. Total interest
expense on the Topco Credit Facility attributed to the Golden Gate affilates was $7.9 million in 2010. The
Company did not incur any interest expense under the Topco Credit Facility in 2012 or 2011 due to the
prepayments of the Topco Credit Facility in the first half of 2010.
During the first and second quarters of 2011, the Company repurchased $25.0 million and $24.2 million of
Senior Notes, respectively, in open market transactions. Of the $49.2 million of Senior Notes repurchased, $40.0
million were held by a Golden Gate affiliate, leaving $10.0 million of Senior Notes owned by a Golden Gate
affiliate outstanding as of January 28, 2012. Interest expense incurred on the Senior Notes attributable to the
Golden Gate affiliate was $0.3 million, $1.7 million and $4.0 million, during 2012, 2011, and 2010, respectively.
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