Tech Data 2014 Annual Report Download - page 34

Table of Contents
Contractual Obligations
As of January 31, 2014, 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, 2014, we have $1.4 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 8 of Notes to Consolidated Financial Statements).
Off-Balance Sheet Arrangements
Synthetic Lease Facility
We have a synthetic lease facility with a group of financial institutions under which we lease certain logistics centers and office facilities from a
third-party lessor. In June 2013, we replaced the previous synthetic lease facility with a new lease agreement that expires in June 2018 (the
"Synthetic Lease"). 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 is accounted for as an operating lease
and rental payments are calculated at the applicable LIBOR rate plus a margin based on our credit ratings.
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 properties, we have guaranteed the lessor a percentage of the cost of
each property, in the aggregate amount of approximately $133.8 million. Future minimum lease payments under the Synthetic Lease are
approximately $2.7 million per year.
31
Operating leases Capital lease Debt (1) Total
Fiscal year:
2015
$
56,300
$
719
$
56,039
$
113,058
2016
47,900
700
13,125
61,725
2017
31,800
664
13,125
45,589
2018
28,500
664
358,271
387,435
2019
22,700
664
0
23,364
Thereafter
46,800
3,773
0
50,573
Total payments
234,000
7,184
440,560
681,744
Less amounts representing interest
0
(1,522
)
(47,646
)
(49,168
)
Total principal payments
$
234,000
$
5,662
$
392,914
$
632,576
(1) Amounts include interest on the 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.