Urban Outfitters 2011 Annual Report Download - page 39

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payments as the direct operating costs fluctuate over the term of the lease. Additionally, there are
26 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 26 locations was approximately
$4,705 for fiscal 2011. 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 20 executed leases for stores not opened as of January 31, 2011.
(2) Our merchandise commitments are cancellable with no or limited recourse available to the vendor
until the merchandise shipping date.
(3) Includes construction contracts with contractors that are fully liquidated upon the completion of
construction, which is typically within 12 months.
(4) Tax contingencies include $798 that are classified as a current liability in the Company’s
Consolidated Balance Sheets as of January 31, 2011. Tax contingencies in the table above do not
show an existing liability of $10,580 because we cannot reasonably estimate in which future
periods these amounts will ultimately be settled. As a result, the $10,580 liability was classified
as a non-current liability in the Company’s Consolidated Balance Sheets as of January 31, 2011.
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) ............................. $51,397 $51,397 $ — $ — $ —
Standby letters of credit ....................... 4,081 4,081 — — —
Total commercial commitments ................. $55,478 $55,478 $ — $ — $ —
(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 fiscal years ended January 31, 2011, 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 January 2010, the Financial Accounting Standards Board (“FASB”) issued an accounting
standards update which amends fair value measurements and disclosures and aims to improve the
transparency of financial reporting of assets and liabilities measured at fair value. The update requires
new disclosures for transfers in and out of Level 1 and Level 2 and the basis for such transfers. Also
required are disclosures for activity in Level 3 including purchase, sale, issuance and settlement
37