Urban Outfitters 2009 Annual Report Download - page 36

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payments as the direct operating costs fluctuate over the term of the lease. Additionally, there are
seven locations where a percentage of sales are paid in lieu of a fixed minimum rent that are not
reflected in the above table. Total rent expense related to these seven locations was approximately
$1.1 million for fiscal 2009. It is common for the lease agreements for our European locations to
adjust the minimum rental due to the current market rate multiple times during the term. The table
above includes our best estimate of the future payments for these locations. Amounts noted above
include commitments for 34 executed leases for stores not opened as of January 31, 2009.
(2) Our merchandise commitments are cancellable with no or limited recourse available to the vendor
until merchandise shipping date.
(3) Includes store construction contracts with contractors that are fully liquidated upon the
completion of construction, which is typically within 12 months.
Commercial Commitments
Description
Total
Amounts
Committed
Amount of Commitment Per Period
(in thousands)
Less
Than
One
Year
One
to
Three
Years
Three
to
Five
Years
More
Than
Five
Years
Line of credit (1) ................................ $32,969 $32,969 $— $— $—
Standby letters of credit ........................... 2,170 2,170 — — —
Total commercial commitments .................... $35,139 $35,139 $— $— $—
(1) Consists primarily of outstanding letter of credit commitments in connection with import
inventory purchases.
Off-Balance Sheet Arrangements
As of and for the three years ended January 31, 2009, except for operating leases entered into in
the normal course of business, we were not party to any material off-balance sheet arrangements that
are reasonably likely to have a current or future effect on our financial condition, revenues, expenses,
results of operations, liquidity, capital expenditures or capital resources.
Other Matters
Recently Issued Accounting Pronouncements
In November 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 141R
“Business Combinations”, which requires that all business combinations be accounted for by applying
the acquisition method. Under the acquisition method, the acquirer recognizes and measures the
identifiable assets acquired, the liabilities assumed, and any contingent consideration and contractual
contingencies, as a whole at their fair value as of the acquisition date. Under SFAS No. 141R, all
transaction costs are expensed as incurred. SFAS No. 141R rescinds EITF 93-7. Under EITF 93-7, the
effect of any subsequent adjustments to uncertain tax positions were generally applied to goodwill,
except for post-acquisition interest on uncertain tax positions, which was recognized as an adjustment
to income tax expense. Under SFAS No. 141R, all subsequent adjustments to these uncertain tax
positions that otherwise would have impacted goodwill will be recognized in the income statement.
The guidance in SFAS No. 141R will be applied prospectively to business combinations for which the
34