Urban Outfitters 2010 Annual Report Download - page 36

On September 21, 2009, we amended our renewed and amended line of credit facility with
Wachovia Bank, National Association (the “Line”). This amendment adds additional subsidiary
borrowers and adds certain additional subsidiary guarantors. The Line is a three-year revolving credit
facility with an accordion feature allowing an increase in available credit up to $100.0 million at our
discretion, subject to a seven day request period. As of January 31, 2010, the credit limit under the
Line was $60.0 million. The Line contains a sub-limit for borrowings by our European subsidiaries
that are guaranteed by us. Cash advances bear interest at LIBOR plus 0.50% to 1.60% based on our
achievement of prescribed adjusted debt ratios. The Line subjects us to various restrictive covenants,
including maintenance of certain financial ratios and covenants such as fixed charge coverage and
adjusted debt. The covenants also include limitations on our capital expenditures, ability to repurchase
shares and the payment of cash dividends. As of January 31, 2010 we were in compliance with all
covenants under the Line. As of January 31, 2010, there were no borrowings under the Line.
Outstanding letters of credit and stand-by letters of credit under the Line totaled approximately $36.3
million as of January 31, 2010. The available credit, including the accordion feature under the Line
was $63.7 million as of January 31, 2010. We believe the renewed Line will satisfy our letter of credit
needs through fiscal 2011. We plan to renew the line during fiscal 2011 and expect the renewal will
satisfy our credit needs through fiscal 2011 and the foreseeable future. Wachovia Bank, National
Association was acquired by Wells Fargo, effective January 1, 2009. The Wells Fargo acquisition did
not affect the original line agreement.
We have entered into agreements that create contractual obligations and commercial
commitments. These obligations and commitments will have an impact on future liquidity and the
availability of capital resources. Accumulated cash and future cash from operations, as well as
available credit under our line of credit facility, are expected to fund such obligations and
commitments. The tables noted below present a summary of these obligations and commitments as of
January 31, 2010:
Contractual Obligations
Payments Due by Period (in thousands)
Description
Total
Obligations
Less Than
One
Year
One to
Three
Years
Three to
Five
Years
More Than
Five
Years
Operating leases (1) ................. $1,155,843 $139,562 $421,370 $242,101 $352,810
Purchase orders (2) ................. 221,985 221,985 — — —
Construction contracts (3) ............ 2,893 2,893 — — —
Tax Contingencies (4) ............... 710 710 — — —
Total contractual obligations ...... $1,381,431 $365,150 $421,370 $242,101 $352,810
(1) Includes store operating leases, which generally provide for payment of direct operating costs in
addition to rent. The obligation amounts shown above only reflect our future minimum lease
payments as the direct operating costs fluctuate over the term of the lease. Additionally, there are
22 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 22 locations was approximately
$3.3 million for fiscal 2010. 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 22 executed leases for stores not opened as of January 31, 2010.
34