Tech Data 2013 Annual Report Download - page 37

Table of Contents
Contractual Obligations
As of January 31, 2013, future payments of debt and amounts due under future minimum lease payments, including minimum commitments under
IT outsourcing agreements, are as follows (in thousands):
Fair value renewal and escalation clauses exist for a substantial portion of the operating leases included above. Purchase orders for the purchase of
inventory and other goods and services are not included in the table above. We are not able to determine the aggregate amount of such purchase
orders that represent contractual obligations, as purchase orders typically represent authorizations to purchase rather than binding agreements. For
the purposes of this table, contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally
binding on the Company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable
price provisions; and the approximate timing of the transaction. Our purchase orders are based on our current demand expectations and are fulfilled
by our vendors within short time horizons. We do not have significant non-cancelable agreements for the purchase of inventory or other goods
specifying minimum quantities or set prices that exceed our expected requirements for the next three months. We also enter into contracts for
outsourced services; however, the obligations under these contracts were not significant, other than the IT outsourcing agreement included above,
and the contracts generally contain clauses allowing for cancellation without significant penalty.
At January 31, 2013, we have $0.8 million recorded as a current liability for uncertain tax positions. We are not able to reasonably estimate the
timing of long-term payments, or the amount by which our liability will increase or decrease over time; therefore, the long-term portion of our
liability for uncertain tax position has not been included in the contractual obligations table above and is not material to our consolidated financial
statements (see Note 9 of Notes to Consolidated Financial Statements).
Off-Balance Sheet Arrangements
Synthetic Lease Facility
We have a synthetic lease facility (the “Synthetic Lease”) with a group of financial institutions under which we lease certain logistics centers and
office facilities from a third-party lessor, which was set to expire in June 2013. Properties leased under the Synthetic Lease are located in
Clearwater and Miami, Florida; Fort Worth, Texas; Fontana, California; Suwanee, Georgia; Swedesboro, New Jersey; and South Bend, Indiana.
The Synthetic Lease has been accounted for as an operating lease and rental payments are calculated at the applicable LIBOR rate plus a margin
based on our credit ratings.
The sum of future minimum lease payments under the Synthetic Lease at January 31, 2013, which are included in the future minimum lease
payments presented above, was approximately $0.8 million.
During June 2013, we renewed our existing Synthetic Lease with a new lease agreement that expires in June 2018 ("the 2013 Synthetic Lease").
The principal terms of the 2013 Synthetic Lease are substantially the same as the predecessor lease agreement. Upon not less than 30 days notice,
we may, at our option, purchase one or any combination of the properties, at an amount equal to each of the property's cost, as long as the lease
balance does not decrease below a defined amount. Upon not less than 270 days, nor more than 360 days, prior to the lease expiration, we may, at
our option, i) purchase a minimum of two of the properties, at an amount equal to each of the property's cost, ii) exercise the option to renew the
lease for a minimum of two of the properties or iii) exercise the option to remarket a minimum of two of the properties and cause a sale of the
properties. If we elect to remarket the
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Operating leases Capital lease Debt (1) Total
Fiscal year:
2014
$
55,300
$
793
$
180,100
$
236,193
2015
47,100
793
13,125
61,018
2016
39,600
751
13,125
53,476
2017
24,600
668
13,125
38,393
2018
20,500
668
359,385
380,553
Thereafter
35,600
4,459
0
40,059
Total payments
222,700
8,132
578,860
809,692
Less amounts representing interest
0
(1,889
)
(61,885
)
(63,774
)
Total principal payments
$
222,700
$
6,243
$
516,975
$
745,918
(1) Amounts include interest on $350 million Senior Notes calculated at the fixed rate of 3.75% per year and excludes estimated interest on the committed and uncommitted revolving
credit facilities as these facilities are at variable rates of interest.