Saks Fifth Avenue 2009 Annual Report Download - page 36

Table of Contents
CONTRACTUAL OBLIGATIONS
The contractual cash obligations at January 30, 2010 associated with the Company’s capital structure, as well as other contractual obligations are
illustrated in the following table:
Payments Due by Period
(Dollars in Millions) Within 1 year Years 2-3 Years 4-5 After Year 5 Total
Long-Term Debt, including interest $ 52 $ 179 $ 140 $ 274 $ 645
Capital Lease Obligations, including interest 11 22 21 45 99
Operating Leases 68 117 87 176 448
Purchase Obligations 391 20 18 — 429
Other Long-Term Liabilities 4 4 3 6 17
Total Contractual Cash Obligations $ 526 $ 342 $ 269 $ 501 $ 1,638
The Company’s purchase obligations principally consist of purchase orders for merchandise, store construction contract commitments, maintenance
contracts, and services agreements and amounts due under employment agreements. Amounts committed under open purchase orders for merchandise inventory
represent approximately $368.4 million of the purchase obligations within one year, a substantial portion of which are cancelable without penalty prior to a date
that precedes the vendor’s scheduled shipment date.
Other long-term liabilities consist of the Company’s liabilities related to its supplemental executive retirement plan (“SERP”) and long-term cash bonus
plan. Additionally, the Company is obligated to fund a cash balance pension plan. The Company’s current policy is to maintain at least the minimum funding
requirements specified by the Employee Retirement Income Security Act of 1974. The Company expects funding requirements for its pension plan of
approximately $1.4 million in 2010, which is included within other long-term liabilities in the foregoing table.
Other long-term liabilities excluded from the above table include deferred compensation obligations of $12.3 million as the timing of payments for this
obligation is subject to employee elections and other employment factors. Other long-term liabilities also excluded from the above table include non-cash
obligations for deferred rent and deferred property incentives. Other unrecorded obligations that have been excluded from the contractual obligations table
include contingent rent payments, property taxes, insurance payments, amounts that might come due under change-in-control provisions of employment
agreements, and common area maintenance costs.
Due to the uncertainty with respect to the timing of future cash flows associated with the Company’s unrecognized tax benefits at January 30, 2010, the
Company is unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authority. Therefore, $40.4 million of
unrecognized tax benefits have been excluded from the contractual obligations table above.
The Company has not entered into any off-balance sheet arrangements which would be reasonably likely to have a current or future material effect, such as
obligations under certain guarantees or contracts; retained or contingent interests in assets transferred to an unconsolidated entity or similar arrangements;
obligations under certain derivative arrangements; and obligations under material variable interests.
From time to time the Company has issued guarantees to landlords under leases of stores operated by its subsidiaries. Certain of these stores were sold in
connection with the sale of the Saks Department Store Group to Belk, Inc. in 2005 and the sale of the Northern Department Store Group to The Bon-Ton Stores,
Inc. in 2006. If
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Source: SAKS INC, 10-K, March 18, 2010 Powered by Morningstar® Document Research℠