Pier 1 2014 Annual Report Download - page 56

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the Company reversed a portion of its reserve for uncertain tax positions, resulting in the reversal of $2,758,000 of accrued
interest expense. Excluding this reversal of accrued interest in fiscal 2013, the Company recorded expenses of $536,000 related
to penalties and interest in fiscal 2014, compared to $1,119,000 and $711,000 in fiscal 2013 and 2012, respectively. The
Company had accrued penalties and interest of $1,787,000 and $2,035,000 at March 1, 2014 and March 2, 2013,
respectively.
NOTE 9 — COMMITMENTS AND CONTINGENCIES
Leases — At March 1, 2014, the Company had the following minimum lease commitments and future subtenant receipts in the
years indicated (in thousands):
Fiscal Year Operating
Leases Subtenant
Income
2015 $232,761 $485
2016 209,747 447
2017 183,606 447
2018 149,487 136
2019 113,598 46
Thereafter 323,632 —
Total lease commitments $1,212,831 $1,561
Rental expense incurred was $244,481,000, $231,481,000 and $223,188,000, including contingent rentals of $546,000,
$674,000 and $356,000, based upon a percentage of sales, and net of sublease incomes totaling $285,000, $278,000 and
$269,000 in fiscal 2014, 2013 and 2012, respectively.
During fiscal 2009, the Company sold its corporate headquarters building and accompanying land and entered into a lease
agreement to rent office space in the building. The lease will expire on June 30, 2022. The related gain on the sale of the
property was approximately $23,300,000. As of March 1, 2014, the Company’s remaining deferred gain was $3,336,000, and
will be recognized over the remaining original lease term. See Note 2 of the Notes to Consolidated Financial Statements for
additional discussion regarding store sale-leaseback transactions during fiscal 2014.
Legal matters — There were no significant legal matters in fiscal years 2014, 2013 or 2012.
There are various claims, lawsuits, inquiries and pending actions against the Company and its subsidiaries incident to the
operations of its business. The Company considers them to be ordinary and routine in nature. The Company maintains liability
insurance against most of these matters. It is the opinion of management, after consultation with counsel, that the ultimate
resolution of such matters will not have a material adverse effect, either individually or in aggregate, on the Company’s financial
position, results of operations or liquidity.
52 PIER 1 IMPORTS, INC. 2014 Form 10-K