Hibbett Sports 2011 Annual Report Download - page 49

45
At January 30, 2010, we had two unsecured credit facilities, which were renewable in August and November 2010.
The August facility allowed for borrowings up to $30.0 million at a rate equal to the higher of prime rate, the federal funds rate
plus 0.5% or LIBOR. The November facility allowed for borrowings up to $50.0 million at a rate of prime plus 2%. There were
110 days during the 52 weeks ended January 30, 2010, where we incurred borrowings against our credit facilities for an average
and maximum borrowing of $7.3 million and $13.9 million, respectively, at an average interest rate of 1.82%. At January 30,
2010, a total of $80.0 million was available to us from these facilities.
At January 31, 2009, we had two unsecured credit facilities, which were renewable in August and December 2009.
The facilities allowed for borrowings up to $30.0 million and $50.0 million, respectively, at a fixed rate, a rate based on prime or
LIBOR plus 0.375%, at our election. There were 348 days during the 52 weeks ended January 31, 2009, where we incurred
borrowings against our credit facilities for an average and maximum borrowing of $23.2 million and $47.1 million, respectively,
at an average interest rate of 2.85%. At January 31, 2009, a total of $80.0 million was available to us from these facilities.
NOTE 6. LEASES
We have entered into capital leases for certain property and technology hardware. At January 29, 2011, the total capital
lease obligation was $2.6 million, of which $0.3 million was classified as a short-term liability and included in short-term debt
and capital lease obligations and $2.3 million was classified as a long-term liability as obligations under capital leases in our
consolidated balance sheet. At January 30, 2010, the total capital lease obligation was $0.3 million, of which $0.1 million was
classified as a short-term liability and included in short-term debt and capital lease obligations and $0.2 million was classified as
a long-term liability as obligations under capital leases in our consolidated balance sheet. At January 31, 2009, we did not have
any capital lease obligations.
We lease the majority of our retail sporting goods stores under non-cancelable operating leases. Regardless of whether the
lease is classified as a capital lease or an operating lease, each has initial or remaining terms of more than one year. The leases
typically provide for terms of five to ten years with options to extend at our discretion. Many of our leases contain scheduled
increases in annual rent payments and the majority of our leases also require us to pay maintenance, insurance and real estate taxes.
Additionally, many of the lease agreements contain tenant improvement allowances, rent holidays and/or rent escalation clauses
(contingent rentals) based on net sales for the location. For purposes of recognizing incentives and minimum rental expenses on a
straight-line basis over the terms of the leases, we use the date of initial possession to begin amortization, which is generally when
we enter the space and begin to make improvements in preparation of our intended use.
Most of our retail store leases contain provisions that allow for early termination of the lease if certain pre-determined
annual sales levels are not met. Generally, these provisions allow the lease to be terminated between the third and fifth year of the
lease. Should the lease be terminated under these provisions, in some cases, the unamortized portion of any landlord allowances
related to that property would be payable to the landlord.
We also lease certain computer hardware, office equipment and transportation equipment under non-cancelable operating
leases having initial or remaining terms of more than one year.
In February 1996, we entered into a sale-leaseback transaction to finance our distribution center and office facilities. In
December 1999, the related operating lease was amended to include the Fiscal 2000 expansion of these facilities. The amended lease
rate is $0.9 million per year and can increase annually with the Consumer Price Index. This lease will expire in December 2014.
Future minimum lease payments under this non-cancelable lease aggregate approximately $3.4 million. The transaction is also
subject to quarterly financial covenants based on certain ratios. We have never been in violation of any financial covenant
requirement.
During the fiscal year ended January 29, 2011, we increased our lease commitments by a net of 31 retail stores, each
having initial lease termination dates between October 2013 and September 2021 as well as various office and transportation
equipment. At January 29, 2011, the future minimum lease payments under capital leases and the present value of such
payments, and the future minimum lease payments under our operating leases, excluding maintenance, insurance and real estate
taxes, including the net 31 operating leases added during Fiscal 2011, were as follows (in thousands):
Capital Operating Total
Fiscal 2012 540$ 42,609$ 43,149$
Fiscal 2013 366 36,368 36,734
Fiscal 2014 366 28,426 28,792
Fiscal 2015 366 20,546 20,912
Fiscal 2016 369 13,549 13,918
Thereafter 1,823 17,621 19,444
Total minimum lease payments 3,830 159,119 162,949
Less amount representing interest 1,273 - 1,273
Present value of total minimum lease payments 2,557$ 159,119$ 161,676$