Redbox 2010 Annual Report Download - page 50

CONTRACTUAL PAYMENT OBLIGATIONS
A summary of our contractual commitments and obligations as of December 31, 2010 was as follows (in
thousands):
Contractual Obligation Total 2011
2012 and
2013
2014 and
2015
2016 and
beyond
Long-term debt and other ...................... $ 361,661 $208,250 $153,408 $ 3 $ 0
Contractual interest on long-term debt and other .... 00000
Capital lease obligations(1) ..................... 31,464 18,638 11,573 1,253 0
Operating lease obligations(1) ................... 55,809 7,468 13,141 9,243 25,957
Purchase obligations(1) ......................... 9,709 9,709 0 0 0
Asset retirement obligations .................... 7,3050007,305
Liability for uncertain tax positions .............. 1,821 0 71 91 1,659
DVD agreement obligations(1) ................... 1,446,166 454,030 699,900 292,236 0
Retailer revenue share obligations(1) .............. 125,083 45,200 70,518 9,365 0
Interest rate swaps ............................ 896 896 0 0 0
Total .................................. $2,039,914 $744,191 $948,611 $312,191 $34,921
(1) See Note 9: Commitments and Contingencies in our Notes to Consolidated Financial Statements.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements, that have or are reasonably likely to have a material current
or future effect on our financial condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.
For additional information see Note 9: Commitments and Contingencies in the Notes to Consolidated Financial
Statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Variable Rates of Interest and Interest Rate Swap
We are subject to the risk of fluctuating interest rates in the normal course of business, primarily as a result of our
revolving credit agreement with a syndicate of lenders led by Bank of America, N.A. and investment activities
that generally bear interest at variable rates. Because our investments have maturities of three months or less and
our credit facility interest rates are based upon either the LIBOR, prime rate or base rate plus an applicable
margin, we believe that the risk of material loss is low and that the carrying amount of these balances
approximates fair value.
Based on the balance of our outstanding revolving line of credit of $150.0 million as of December 31, 2010, an
increase or decrease in interest rates over the next year would affect our interest expense after our interest rate
swap arrangement expires on March 20, 2011. Since we entered into an interest rate swap with a notional amount
of $150.0 million in March 2008, we have hedged our interest rate risk. The interest rate swap converts our
variable one-month LIBOR rate financing into a fixed interest rate financing. The fixed interest rate swap
reduces the effect of fluctuations in the market interest rates. After the expiration of our interest rate swap
arrangement, an increase of 1% in the interest rate over the next year would increase our annual interest expense
by approximately $0.7 million, net of tax.
Foreign Exchange Rate Fluctuation
We are subject to the risk of foreign exchange rate fluctuation in the normal course of business as a result of our
operations in Europe, Canada, and Mexico.
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