Aarons 2012 Annual Report Download - page 48

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38
expensed as such fees and expenses are incurred. Some of the proceedings we are currently a party to are described in
Item 3, ―Legal Proceedings,‖ and in Note 8 to our Consolidated Financial Statements.
Accrued litigation expense decreased $41.7 million to $0 at December 31, 2012 substantially due to the Alford v.
Aarons Rents, Inc. et al. case previously discussed.
While we do not presently believe that any of the legal proceedings to which we are currently a party will ultimately
have a material adverse impact upon our business, financial position or results of operations, there can be no assurance
that we will prevail in all the proceedings we are party to, or that we will not incur material losses from them.
Contractual Obligations and Commitments. We have no long-term commitments to purchase merchandise. See Note 8
to the Consolidated Financial Statements for further information. The following table shows our approximate
contractual obligations, including interest, and commitments to make future payments as of December 31, 2012:
Contractual Obligations and Commitments
(In Thousands)
Total
Period Less
Than 1 Year
Period 1-3
Years
Period 3-5
Years
Period Over
5 Years
Credit Facilities, Excluding Capital
Leases
$
128,250
$
-
$ 53,250
$
50,000
$
25,000
Capital Leases
13,278
1,755
3,952
3,859
3,712
Interest Obligations
27,438
5,529
10,316
9,897
1,696
Operating Leases
547,893
110,244
174,803
100,744
162,102
Purchase Obligations
26,784
22,532
3,978
274
-
Retirement Charge
8,276
1,727
3,455
3,033
61
Total Contractual Cash Obligations
$
751,919
$
141,787
$ 249,754
$
167,807
$
192,571
The following table shows the Company’s approximate commercial commitments as of December 31, 2012:
(In Thousands)
Total
Amounts
Committed
Period Less
Than 1 Year
Period 1-3
Years
Period 3-5
Years
Period Over
5 Years
Guaranteed Borrowings of Franchisees
$
117,347
$
117,203
$
144
$
-
$
-
Purchase obligations are primarily related to certain advertising and marketing programs. We do not have significant
agreements for the purchase of lease merchandise or other goods specifying minimum quantities or set prices that
exceed our expected requirements for three months.
Deferred income tax liabilities as of December 31, 2012 were approximately $263.7 million. This amount is not
included in the total contractual obligations table because we believe this presentation would not be meaningful.
Deferred income tax liabilities are calculated based on temporary differences between the tax basis of assets and
liabilities and their respective book basis, which will result in taxable amounts in future years when the liabilities are
settled at their reported financial statement amounts. The results of these calculations do not have a direct connection
with the amount of cash taxes to be paid in any future periods. As a result, scheduling deferred income tax liabilities as
payments due by period could be misleading, because this scheduling would not relate to liquidity needs.