Under Armour 2015 Annual Report Download - page 50

Contractual Commitments and Contingencies
We lease warehouse space, office facilities, space for our brand and factory house stores and certain
equipment under non-cancelable operating and capital leases. The leases expire at various dates through 2028,
excluding extensions at our option, and contain various provisions for rental adjustments. In addition, this table
includes executed lease agreements for brand and factory house stores that we did not yet occupy as of
December 31, 2015. The operating leases generally contain renewal provisions for varying periods of time. Our
significant contractual obligations and commitments as of December 31, 2015 as well as significant agreements
entered into during the period after December 31, 2015 through the date of this report are summarized in the
following table:
Payments Due by Period
(in thousands) Total
Less Than
1 Year 1 to 3 Years 3 to 5 Years
More Than
5 Years
Contractual obligations
Long term debt obligations (1) $ 714,283 $ 54,922 $110,845 $548,516 $ —
Lease obligations (2) 717,074 84,620 166,478 151,140 314,836
Product purchase obligations (3) 1,537,915 1,537,915 — — —
Sponsorships and other (4) 858,543 126,488 276,198 166,483 289,374
Total $3,827,815 $1,803,945 $553,521 $866,139 $604,210
(1) Includes estimated interest payments based on applicable fixed and currently effective floating interest rates
as of December 31, 2015, timing of scheduled payments, and the term of the debt obligations. This does not
reflect the amendment to our credit facility in January 2016.
(2) Includes the minimum payments for lease obligations. The lease obligations do not include any contingent
rent expense we may incur at our brand and factory house stores based on future sales above a specified
minimum or payments made for maintenance, insurance and real estate taxes. Contingent rent expense was
$11.0 million for the year ended December 31, 2015.
(3) We generally place orders with our manufacturers at least three to four months in advance of expected
future sales. The amounts listed for product purchase obligations primarily represent our open production
purchase orders with our manufacturers for our apparel, footwear and accessories, including expected
inbound freight, duties and other costs. These open purchase orders specify fixed or minimum quantities of
products at determinable prices. The product purchase obligations also includes fabric commitments with
our suppliers, which secure a portion of our material needs for future seasons. The reported amounts exclude
product purchase liabilities included in accounts payable as of December 31, 2015.
(4) Includes sponsorships with professional teams, professional leagues, colleges and universities, individual
athletes, athletic events and other marketing commitments in order to promote our brand. Some of these
sponsorship agreements provide for additional performance incentives and product supply obligations. It is
not possible to determine how much we will spend on product supply obligations on an annual basis as
contracts generally do not stipulate specific cash amounts to be spent on products. The amount of product
provided to these sponsorships depends on many factors including general playing conditions, the number of
sporting events in which they participate and our decisions regarding product and marketing initiatives. In
addition, it is not possible to determine the performance incentive amounts we may be required to pay under
these agreements as they are primarily subject to certain performance based and other variables. The
amounts listed above are the fixed minimum amounts required to be paid under these sponsorship
agreements. Additionally, these amounts include minimum guaranteed royalty payments to endorsers and
licensors based upon a predetermined percent of sales of particular products.
The table above excludes a liability of $46.9 million for uncertain tax positions, including the related
interest and penalties, recorded in accordance with applicable accounting guidance, as we are unable to
reasonably estimate the timing of settlement. Refer to Note 10 to the Consolidated Financial Statements for a
further discussion of our uncertain tax positions.
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