Pier 1 2010 Annual Report Download - page 35

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The Company’s bank facilities include a $300 million credit facility expiring in May 2012, which is
secured by the Company’s eligible merchandise inventory and third-party credit card receivables. As of
February 27, 2010, the Company had no outstanding borrowings and had utilized approximately $85.8 million in
letters of credit and bankers acceptances. If advances under the facility result in availability of less than $30.0
million, the Company will be required to comply with a fixed charge coverage ratio as stated in the agreement.
The Company does not anticipate falling below this minimum availability in the foreseeable future. As of
February 27, 2010, the Company’s calculated borrowing base was $229.3 million. This borrowing base
calculation is calculated using defined advance rates and commercially reasonable reserves. After excluding the
required minimum of $30.0 million and the $85.8 million in utilized letters of credit and bankers’ acceptances
from the borrowing base, $113.5 million remained available for cash borrowings. At the end of fiscal 2010, the
Company was in compliance with all required covenants stated in the agreement.
The Company does not currently anticipate paying cash dividends in fiscal 2011, and its dividend policy
in the near term will depend upon the earnings, financial condition and capital needs of the Company and other
factors deemed relevant by the Company’s Board of Directors. Under the terms of the Company’s secured credit
facility, the Company will not be restricted from paying certain dividends unless fundings on the line result in
availability over a specified period of time that is projected to be less than 35% of the lesser of either $300.0
million or the calculated borrowing base.
During fiscal 2010, the Company did not make any repurchases of shares of its outstanding common
stock other than 54,219 shares acquired from employees to satisfy tax withholding obligations that arose upon
vesting of restricted stock granted pursuant to approved plans. The Company does not currently have
authorization from its Board of Directors to repurchase shares of its common stock in the open market.
A summary of the Company’s contractual obligations and other commercial commitments as of
February 27, 2010 is listed below (in thousands):
Amount of Commitment per Period
Total
Less Than
1 Year
1to3
Years
3to5
Years
More Than
5 Years
Operating leases $ 789,360 $ 207,583 $ 347,315 $ 178,376 $ 56,086
Assets retirement obligation 2,196 212 773 932 279
Purchase obligations (1) 97,967 97,967 - - -
Convertible debt (2) 16,577 16,577 - - -
Interest on convertible debt (2) 1,036 1,036 - - -
Standby letters of credit (3) 55,050 55,050 - - -
Industrial revenue bonds (3) 19,000 - - - 19,000
Interest on industrial revenue
bonds (4) 732 44 87 87 514
Interest and related fees on
secured credit facility (5) 8,269 3,675 4,594 - -
Other obligations (6) (7) 46,236 12,368 2,589 9,875 21,404
Total (8) $ 1,036,423 $ 394,512 $ 355,358 $ 189,270 $ 97,283
Liabilities recorded on the balance sheet $ 107,855
Commitments not recorded on the balance sheet 928,568
Total $ 1,036,423
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