GNC 2011 Annual Report Download - page 103

Table of Contents
NOTE 12. LONG-TERM DEBT / INTEREST (Continued)
In accordance with the terms of the Senior Subordinated Notes purchase agreement and the offering memorandum, these notes were required to be
exchanged for publicly registered exchange notes within 210 days after the sale of these notes. As required, these notes were registered and the exchange offer
was completed on September 28, 2007.
The Company expects to fund its operations through internally generated cash and, if necessary, from borrowings under the amount remaining available
under the Revolving Credit Facility. The Company expects its primary uses of cash in the near future will be debt service requirements, capital expenditures
and working capital requirements. The Company anticipates that cash generated from operations, together with amounts available under the Revolving Credit
Facility, will be sufficient to meet its future operating expenses, capital expenditures and debt service obligations as they become due. However, the
Company's ability to make scheduled payments of principal on, to pay interest on, or to refinance the Company's indebtedness and to satisfy the Company's
other debt obligations will depend on the Company's future operating performance, which will be affected by general economic, financial and other factors
beyond the Company's control. The Company believes that it has complied with the Company's covenant reporting and compliance in all material respects for
the year ended December 31, 2010.
Proposed Refinancing. On February 7, 2011, the Company announced that it intends to enter into, subject to market and other conditions, a financing
transaction with certain lenders. The Company currently expects to use the proceeds from the transaction, if consummated, to, among other things, refinance
its existing indebtedness. There can be no assurance that the Company will complete any such refinancing either on terms acceptable to it, or at all.
NOTE 13. OTHER LONG TERM LIABILITIES
Other long term liabilities at each respective period consisted of the following:
December 31,
2010 2009
(in thousands)
Fair value of interest rate swap agreements $ 3,074 $ 14,679
Liability for unrecognized tax benefits 8,720 6,776
Rent escalations 10,566 10,569
Other 11,590 7,496
Total $ 33,950 $ 39,520
NOTE 14. FINANCIAL INSTRUMENTS
At December 31, 2010 and 2009, the Company's financial instruments consisted of cash and cash equivalents, receivables, franchise notes receivable,
accounts payable, certain accrued liabilities and long-term debt. The carrying amount of cash and cash equivalents, receivables, accounts payable and accrued
liabilities approximates their fair value because of the short maturity of these instruments. Based on the interest rates currently available and their underlying
risk, the carrying value of the franchise notes receivable approximates their fair value. These fair values are reflected net of reserves, which are recognized
according to Company policy. The Company determined the estimated fair values of its debt by using currently available market information and estimates
and assumptions where appropriate. Accordingly, as considerable judgment is required to determine these estimates, changes in the assumptions or
methodologies may have an effect on
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