Pier 1 2014 Annual Report Download - page 46

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — PROPERTIES
Properties are summarized as follows at March 1, 2014 and March 2, 2013 (in thousands):
2014 2013
Land $ 535 $ 4,256
Buildings 8,087 12,394
Equipment, furniture, fixtures and other 303,822 306,094
Leasehold improvements 203,938 192,562
Computer software 85,157 112,755
Projects in progress 6,059 5,621
607,598 633,682
Less accumulated depreciation and amortization 424,246 483,067
Properties, net $183,352 $150,615
During fiscal 2014, the Company sold all remaining company-owned store locations including the buildings and accompanying
land for net proceeds of approximately $12,379,000. The Company also entered into lease agreements for each of these
locations. The leases have primary terms ranging from five years to ten years with renewal options and provisions similar to the
Company’s existing store leases. The related gain on the sale of the properties was approximately $7,338,000, the majority of
which was deferred and will be recognized over the expected lease term of each respective location. The remaining deferred
gain of $6,358,000 is primarily included in other noncurrent liabilities as of March 1, 2014.
NOTE 3 — OTHER ACCRUED LIABILITIES AND NONCURRENT LIABILITIES
The following is a summary of other accrued liabilities and noncurrent liabilities at March 1, 2014 and March 2, 2013 (in
thousands):
2014 2013
Accrued payroll and other employee-related liabilities $ 46,275 $ 60,867
Accrued taxes, other than income 27,200 22,608
Rent-related liabilities 6,946 9,973
Other 29,857 18,989
Other accrued liabilities $110,278 $112,437
2014 2013
Rent-related liabilities $ 23,444 $ 18,057
Deferred gains 7,573 4,788
Retirement benefits 42,050 37,502
Other 5,655 2,110
Other noncurrent liabilities $ 78,722 $ 62,457
NOTE 4 — LONG-TERM DEBT AND AVAILABLE CREDIT
Industrial Revenue Bonds — Long-term debt consisted entirely of industrial revenue bonds at March 1, 2014, and March 2,
2013. The Company’s industrial revenue bond loan agreements have been outstanding since fiscal 1987. Proceeds were used
to construct warehouse/distribution facilities. The loan agreements and related tax-exempt bonds mature in the year 2026. The
Company’s interest rates on the loans are based on the bond interest rates, which are market driven, reset weekly and are similar
to other tax-exempt municipal debt issues. The Company’s weighted average effective interest rate, including standby letter of
credit fees, was 1.9%, 2.4% and 2.7% for fiscal 2014, 2013 and 2012, respectively.
Revolving Credit Facility — The Company has a $350,000,000 secured revolving credit facility with a $100,000,000
accordion feature (“Revolving Credit Facility”). Provided that there is no default and no default would occur as a result thereof, the
42 PIER 1 IMPORTS, INC. 2014 Form 10-K