Lululemon 2011 Annual Report Download - page 72

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Table of Contents
12 COMMITMENTS AND CONTINGENCIES
The Company has obligations under operating leases for its office, distribution centers and corporate-owned store premises in Canada, the
United States, Australia, New Zealand and Hong Kong. As of January 29, 2012, the lease terms of various leases are from two to 10 years. A
substantial number of the Company’s leases for corporate-owned store premises include renewal options and certain of the Company’s leases
include rent escalation clauses, rent holidays and leasehold rental incentives. Certain of the Company’s leases for corporate-owned store
premises also include contingent rental payments based on sales volume. The Company is required to make deposits for rental payments
pursuant to certain lease agreements, which have been included in other non-current assets. Minimum annual basic rent payments excluding
other executory operating costs, pursuant to lease agreements are approximately as laid out in the table below. These amounts include
commitment in respect of corporate-owned stores that have not yet opened but for which lease agreements have been executed.
Rent expense for the years ended January 29, 2012, January 30, 2011, and January 31, 2010 was $67,117, $53,071, and $41,639,
respectively, under operating lease agreements, consisting of minimum rental expense of $43,795, $36,754, and $29,607, respectively, and
contingent rental amounts of $23,322, $16,317, and $12,032, respectively.
The Company is, from time to time, involved in routine legal matters incidental to its business. Management believes that the ultimate
resolution of any such current proceedings will not have a material adverse effect on the Company’s continued financial position, results of
operations or cash flows.
13 RELATED PARTY BALANCES AND TRANSACTIONS
The Company entered into the following transactions with related parties:
During the year ended January 30, 2011, the Company’s principal stockholder increased his interest from 50% to 100% in a company that
leases retail space to one corporate-owned store. Consulting fees were paid to a relative of our principal stockholder.
69
Fiscal Year
2012
$
46,020
2013
45,569
2014
44,915
2015
41,847
2016
37,129
Thereafter
55,303
January 29,
2012
January 30,
2011
January 30,
2011
Payments to related parties
Occupancy costs for one corporate
-
owned store
$
134
$
100
$
63
Consulting fees
$
305
$
31
$
120