GNC 2010 Annual Report Download - page 64

Table of Contents
Contractual Obligations
The following table summarizes our future minimum non-cancelable contractual obligations at December 31, 2009:
Payments due by period
Less than
(in millions) Total 1 year 1-3 years 4-5 years After 5 years
Long-term debt obligations (1) $ 1,061.8 $ 1.5 $ 11.7 $ 938.6 $ 110.0
Scheduled interest payments (2) 221.4 61.3 101.4 56.3 2.4
Operating lease obligations (3) 426.7 106.5 154.6 85.0 80.6
Purchase commitments (4)(5) 20.6 9.0 5.1 3.1 3.4
$ 1,730.5 $ 178.3 $ 272.8 $ 1,083.0 $ 196.4
(1) These balances consist of the following debt obligations: (a) $644.6 million for the Senior Credit Facility based on a variable interest rate;
(b) $300.0 million for our Senior Notes based on a variable interest rate; (c) $110.0 million for our Senior Subordinated Notes with a fixed
interest rate; and (d) $7.2 million for our mortgage with a fixed interest rate. Repayment of the Senior Credit Facility is based on the
current amortization schedule and does not take into account any unscheduled payments that may occur due to our future cash positions.
(2) The interest that will accrue on the long-term obligations includes variable rate payments, which are estimated using the associated
LIBOR index as of December 31, 2009. The Senior Credit Facility uses the three month LIBOR index while the Senior Notes uses the six
month LIBOR index. Also included in the scheduled interest payments is the activity associated with our interest rate swap agreements
which also use the three month LIBOR index and the six month LIBOR index.
(3) These balances consist of the following operating leases: (a) $407.3 million for company-owned retail stores; (b) $62.4 million for
franchise retail stores, which is offset by $62.4 million of sublease income from franchisees; and (c) $19.4 million relating to various
leases for tractors/trailers, warehouses, automobiles, and various equipment at our facilities.
(4) These balances consist of $6.8 million of advertising, $0.5 million in inventory commitments, $2.5 million of required spending for website
redesign and $10.8 million related to a management services agreement. In connection with the Merger, we entered into a management
services agreement with our parent, GNC Acquisition Holdings Inc., pursuant to which we agreed to pay an annual fee of $1.5 million in
consideration for certain management and advisory services. See Item 13, "Certain Relationships and Related Transactions —
Management Services Agreement."
(5) We are unable to make a reasonably reliable estimate as to when cash settlement with taxing authorities may occur for our unrecognized
tax benefits. Also, certain other long term liabilities, included in our consolidated balance sheet relate principally to the fair value of our
interest rate swap agreement, and rent escalation liabilities, and we are unable to estimate the timing of these payments. Therefore, these
long term liabilities are not included in the table above. See Note 5, "Income Taxes," and Note 14, "Other Long Term Liabilities," to the
Consolidated Financial Statements for additional information.
In addition to the obligations scheduled above, we have entered into employment agreements with certain executives that provide for
compensation and certain other benefits. Under certain circumstances, including a change of control, some of these agreements provide for
severance or other payments, if those circumstances would ever occur during the term of the employment agreement.
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