URBN » Topics » 10. Commitments and Contingencies

These excerpts taken from the URBN 10-K filed Apr 1, 2009.

11. Commitments and Contingencies

Leases

The Company leases its stores under non-cancelable operating leases. The following is a schedule by year of the future minimum lease payments for operating leases with original terms in excess of one year:

 

Fiscal Year

    

2010

   $ 132,497

2011

     133,527

2012

     132,021

2013

     127,000

2014

     121,079

Thereafter

     440,062
      

Total minimum lease payments

   $ 1,086,186
      

Amounts noted above include commitments for 34 executed leases for stores not opened as of January 31, 2009. The majority of our leases allow for renewal options between five and ten years upon expiration of the initial lease term. The store leases generally provide for payment of direct operating costs including real estate taxes. Certain store leases provide for contingent rentals when sales exceed specified levels. Additionally, the Company has entered into store leases that require a percentage of total sales to be paid to landlords in lieu of minimum rent.

Rent expense consisted of the following:

 

     Fiscal Year Ended January 31,
     2009    2008    2007

Minimum and percentage rentals

   $ 112,907    $ 100,020    $ 73,058

Contingent rentals

     1,993      3,282      1,991
                    

Total

   $ 114,900    $ 103,302    $ 75,049
                    

The Company also has commitments for un-fulfilled purchase orders for merchandise ordered from our vendors in the normal course of business, which are liquidated within 12 months, of $302,961. The majority of the Company’s merchandise commitments are cancellable with no or limited recourse available to the vendor until merchandise shipping date. The Company also has commitments related to contracts with store construction contractors, fully liquidated upon the completion of construction, which is typically within 12 months, of $1,684.

 

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URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

Benefit Plan

Full and part-time U.S. based employees who are at least 18 years of age are eligible after six months of employment to participate in the Urban Outfitters 401(k) Savings Plan (the “Plan”). Under the Plan, employees can defer 1% to 25% of compensation as defined. The Company makes matching contributions in cash of $0.25 per employee contribution dollar on the first 6% of the employee contribution. The employees’ contribution is 100% vested while the Company’s matching contribution vests at 20% per year of employee service. The Company’s contributions were $1,090, $969 and $812 for fiscal years 2009, 2008 and 2007, respectively.

Contingencies

The Company is party to various legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

11. Commitments and Contingencies

STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%">Leases

The Company leases its stores
under non-cancelable operating leases. The following is a schedule by year of the future minimum lease payments for operating leases with original terms in excess of one year:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 


























































Fiscal Year

   

2010

  $132,497

2011

   133,527

2012

   132,021

2013

   127,000

2014

   121,079

Thereafter

   440,062
    

Total minimum lease payments

  $1,086,186
    

Amounts noted above include commitments for 34 executed leases for stores not opened as of
January 31, 2009. The majority of our leases allow for renewal options between five and ten years upon expiration of the initial lease term. The store leases generally provide for payment of direct operating costs including real estate taxes.
Certain store leases provide for contingent rentals when sales exceed specified levels. Additionally, the Company has entered into store leases that require a percentage of total sales to be paid to landlords in lieu of minimum rent.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Rent expense consisted of the following:

 


















































































   Fiscal Year Ended January 31,
   2009  2008  2007

Minimum and percentage rentals

  $112,907  $100,020  $73,058

Contingent rentals

   1,993   3,282   1,991
            

Total

  $114,900  $103,302  $75,049
            

The Company also has commitments for un-fulfilled purchase orders for merchandise ordered from our
vendors in the normal course of business, which are liquidated within 12 months, of $302,961. The majority of the Company’s merchandise commitments are cancellable with no or limited recourse available to the vendor until merchandise shipping
date. The Company also has commitments related to contracts with store construction contractors, fully liquidated upon the completion of construction, which is typically within 12 months, of $1,684.

STYLE="margin-top:0px;margin-bottom:0px"> 


F-28







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URBAN OUTFITTERS, INC.

ALIGN="center">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 


Benefit Plan

FACE="Times New Roman" SIZE="2">Full and part-time U.S. based employees who are at least 18 years of age are eligible after six months of employment to participate in the Urban Outfitters 401(k) Savings Plan (the “Plan”). Under the Plan,
employees can defer 1% to 25% of compensation as defined. The Company makes matching contributions in cash of $0.25 per employee contribution dollar on the first 6% of the employee contribution. The employees’ contribution is 100% vested while
the Company’s matching contribution vests at 20% per year of employee service. The Company’s contributions were $1,090, $969 and $812 for fiscal years 2009, 2008 and 2007, respectively.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%">Contingencies

The Company is party
to various legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash
flows.

These excerpts taken from the URBN 10-K filed Mar 28, 2008.

10. Commitments and Contingencies

Leases

The Company leases its stores under non-cancelable operating leases. The following is a schedule by year of the future minimum lease payments for operating leases with original terms in excess of one year:

 

Fiscal Year

    

2009

   $ 114,850

2010

     110,667

2011

     102,821

2012

     99,502

2013

     95,197

Thereafter

     394,708
      

Total minimum lease payments

   $ 917,745
      

Amounts noted above include commitments for 31 executed leases for stores not opened as of January 31, 2008. The majority of our leases allow for renewal options between five and ten years upon expiration of the initial lease term. The store leases generally provide for payment of direct operating costs including real estate taxes. Certain store leases provide for contingent rentals when sales exceed specified levels. Additionally, the Company has entered into store leases that require a percentage of total sales to be paid to landlords in lieu of minimum rent.

Rent expense consisted of the following:

 

     Fiscal Year Ended January 31,
     2008    2007    2006

Minimum and percentage rentals

   $ 100,020    $ 73,058    $ 61,603

Contingent rentals

     3,282      1,991      3,309
                    

Total

   $ 103,302    $ 75,049    $ 64,912
                    

The Company also has commitments for un-fulfilled purchase orders for merchandise ordered from our vendors in the normal course of business, which are liquidated within 12 months, of $54,107 and contracts with store construction contractors, fully liquidated upon the completion of construction, which is typically within 12 months, of $9,665.

Benefit Plan

Full and part-time U.S. based employees who are at least 18 years of age are eligible after six months of employment to participate in the Urban Outfitters 401(k) Savings Plan (the “Plan”). Under the Plan, employees can defer 1% to 25% of compensation as defined. The Company makes matching contributions in cash of $0.25 per employee contribution dollar on the first 6% of the employee contribution. The employees’ contribution is 100% vested while the Company’s matching contribution vests at 20% per year of employee service. The Company’s contributions were $969, $812 and $691 for fiscal years 2008, 2007 and 2006, respectively.

 

F-24


Table of Contents

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

Contingencies

The Company is party to various legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

10. Commitments and Contingencies

STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%">Leases

The Company leases its stores
under non-cancelable operating leases. The following is a schedule by year of the future minimum lease payments for operating leases with original terms in excess of one year:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 


























































Fiscal Year

   

2009

  $114,850

2010

   110,667

2011

   102,821

2012

   99,502

2013

   95,197

Thereafter

   394,708
    

Total minimum lease payments

  $917,745
    

Amounts noted above include commitments for 31 executed leases for stores not opened as of
January 31, 2008. The majority of our leases allow for renewal options between five and ten years upon expiration of the initial lease term. The store leases generally provide for payment of direct operating costs including real estate taxes.
Certain store leases provide for contingent rentals when sales exceed specified levels. Additionally, the Company has entered into store leases that require a percentage of total sales to be paid to landlords in lieu of minimum rent.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Rent expense consisted of the following:

 


















































































   Fiscal Year Ended January 31,
   2008  2007  2006

Minimum and percentage rentals

  $100,020  $73,058  $61,603

Contingent rentals

   3,282   1,991   3,309
            

Total

  $103,302  $75,049  $64,912
            

The Company also has commitments for un-fulfilled purchase orders for merchandise ordered from our
vendors in the normal course of business, which are liquidated within 12 months, of $54,107 and contracts with store construction contractors, fully liquidated upon the completion of construction, which is typically within 12 months, of $9,665.

Benefit Plan

Full and
part-time U.S. based employees who are at least 18 years of age are eligible after six months of employment to participate in the Urban Outfitters 401(k) Savings Plan (the “Plan”). Under the Plan, employees can defer 1% to 25% of
compensation as defined. The Company makes matching contributions in cash of $0.25 per employee contribution dollar on the first 6% of the employee contribution. The employees’ contribution is 100% vested while the Company’s matching
contribution vests at 20% per year of employee service. The Company’s contributions were $969, $812 and $691 for fiscal years 2008, 2007 and 2006, respectively.

 


F-24







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URBAN OUTFITTERS, INC.

ALIGN="center">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 


Contingencies

FACE="Times New Roman" SIZE="2">The Company is party to various legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on the
Company’s financial position, results of operations or cash flows.

This excerpt taken from the URBN 10-K filed Mar 30, 2007.

10. Commitments and Contingencies

Leases

The Company leases its stores under non-cancelable operating leases. The following is a schedule by year of the future minimum lease payments for operating leases with original terms in excess of one year:

 

Fiscal Year

    

2008

   $ 92,280

2009

     95,008

2010

     89,598

2011

     77,963

2012

     74,234

Thereafter

     290,702
      

Total minimum lease payments

   $ 719,785
      

Amounts noted above include commitments for 27 executed leases for stores not opened as of January 31, 2007. The majority of our leases allow for renewal options between five and ten years upon expiration of the initial lease term. The store leases generally provide for payment of direct operating costs including real estate taxes. Certain store leases provide for contingent rentals when sales exceed specified levels. Additionally, the Company has entered into store leases that require a percentage of total sales to be paid to landlords in lieu of minimum rent.

Rent expense consisted of the following:

 

     Fiscal Year Ended January 31,
     2007    2006    2005

Minimum and percentage rentals

   $ 73,058    $ 61,603    $ 54,992

Contingent rentals

     1,991      3,309      2,329
                    

Total

   $ 75,049    $ 64,912    $ 57,321
                    

The Company also has commitments for un-fulfilled purchase orders for merchandise ordered from our vendors in the normal course of business, which are liquidated within 12 months, of $26,769 and contracts with store construction contractors, fully liquidated upon the completion of construction, which is typically within 12 months, of $4,922.

Benefit Plan

Full and part-time U.S. based employees who are at least 18 years of age are eligible after six months of employment to participate in the Urban Outfitters 401(k) Savings Plan (the “Plan”). Under the Plan, employees can defer 1% to 25% of compensation as defined. The Company makes matching contributions in cash of $0.25 per employee contribution dollar on the first 6% of the employee contribution. The employees’ contribution is 100% vested while the Company’s matching contribution vests at 20% per year of employee service. The Company’s contributions were $812, $691 and $527 for fiscal years 2007, 2006 and 2005, respectively.

 

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Table of Contents

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

Contingencies

The Company is party to various legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

This excerpt taken from the URBN 10-K filed Apr 12, 2006.

10. Commitments and Contingencies

Leases

The Company leases its stores under non-cancelable operating leases. The following is a schedule by year of the future minimum lease payments for operating leases with original terms in excess of one year:

 

Fiscal Year

    

2007

   $ 78,761

2008

     82,855

2009

     81,374

2010

     76,748

2011

     66,865

Thereafter

     287,176
      

Total minimum lease payments

   $ 673,779
      

Amounts noted above include commitments for twenty six executed leases for stores not opened as of January 31, 2006. The majority of our leases allow for renewal options between five and fifteen years upon expiration of the initial lease term. The store leases generally provide for payment of direct operating costs including real estate taxes. Certain store leases provide for contingent rentals when sales exceed specified levels. Additionally, the Company has entered into store leases that require a percentage of total sales to be paid to landlords in lieu of minimum rent.

 

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Table of Contents

URBAN OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

Rent expense consisted of the following:

 

     Fiscal Year Ended January 31,
     2006    2005    2004

Minimum and percentage rentals

   $ 61,603    $ 54,992    $ 43,810

Contingent rentals

     3,309      2,329      786
                    

Total

   $ 64,912    $ 57,321    $ 44,596
                    

The Company also has commitments for un-fulfilled purchase orders for merchandise ordered from our vendors in the normal course of business, which are liquidated within 12 months, of $151,137 and contracts with store construction contractors, fully liquidated upon the completion of construction, which is typically within 12 months, of $36,814. The Commitment for construction contracts also includes obligations in connection with the construction of our home office campus in the Philadelphia Navy Yard, which is expected to be complete by the end of the third quarter of fiscal 2007.

Benefit Plan

Full and part-time U.S. based employees who are at least 18 years of age are eligible after six months of employment to participate in the Urban Outfitters 401(k) Savings Plan (the “Plan”). Under the Plan, employees can defer 1% to 25% of compensation as defined. The Company makes matching contributions in cash of $0.25 per employee contribution dollar on the first 6% of the employee contribution. The employees’ contribution is 100% vested while the Company’s matching contribution vests at 20% per year of employee service. The Company’s contributions were $691, $527 and $401 for fiscal 2006, 2005 and 2004, respectively.

Contingencies

On March 26, 2004, an employee filed an employment related suit seeking class action status, unspecified monetary damages and equitable relief against Anthropologie, Inc., a subsidiary of the Company, in the Superior Court of California for Orange County. The complaint alleges that, under California law, the plaintiff and certain other employees were misclassified as employees exempt from overtime and seeks recovery of unpaid wages, penalties and damages. On October 6, 2005, the Superior Court granted the plaintiff’s motion for class certification. The Company believes the claim is frivolous and without merit and intends to defend it vigorously.

The Company is party to various other legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

This excerpt taken from the URBN 10-K filed Apr 18, 2005.

10. Commitments and Contingencies

 

Leases

 

The Company leases its stores under non-cancelable operating leases. The following is a schedule by year of the future minimum lease payments for operating leases with original terms in excess of one year:

 

Fiscal Year


    

2006

   $ 62,064

2007

     63,444

2008

     62,536

2009

     61,513

2010

     56,779

Thereafter

     215,155
    

Total minimum lease payments

   $ 521,491
    

 

Amounts noted above include commitments for nineteen executed leases for stores not opened as of January 31, 2005. The majority of our leases allow for renewal options between five and fifteen years upon expiration of the initial lease term. The store leases generally provide for payment of direct operating costs including real estate taxes. Certain store leases provide for contingent rentals when sales exceed specified levels. Additionally, the Company has entered into store leases that require a percentage of total sales to be paid to landlords in lieu of minimum rent.

 

Rent expense consisted of the following:

 

     Fiscal Year Ended January 31,

     2005

   2004

   2003

Minimum and percentage rentals

   $ 54,992    $ 43,810    $ 36,975

Contingent rentals

     2,329      786      797
    

  

  

Total

   $ 57,321    $ 44,596    $ 37,772
    

  

  

 

The Company also leases certain office equipment under a non-cancelable capital lease, which expires in April 2005. Principal payments remaining under this capital lease for fiscal 2006 are $60.

 

Benefit Plan

 

Full and part-time U.S. based employees who are at least 18 years of age are eligible after six months of employment to participate in the Urban Outfitters 401(k) Savings Plan (the “Plan”). Under the Plan, employees can defer 1% to 25% of compensation as defined. The Company makes matching contributions of $0.25 per employee contribution dollar on the first 6% of the employee contribution. The employees’ contribution is 100% vested while the Company’s matching contribution vests at 20% per year of employee service. The Company’s contributions were $527, $401 and $336 for fiscal 2005, 2004 and 2003, respectively.

 

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URBAN OUTFITTERS, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

Contingencies

 

On March 26, 2004, an employee filed an employment related suit seeking class action status, unspecified monetary damages and equitable relief against Anthropologie, Inc., a subsidiary of the Company, in the Superior Court of California for Orange County. The complaint alleges that, under California law, the plaintiff and certain other employees were misclassified as employees exempt from overtime and seeks recovery of unpaid wages, penalties and damages. The Company believes the claim is without merit and intends to defend it vigorously.

 

The Company is party to various other legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial position or results of operations.

 

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