Aarons 2013 Annual Report Download - page 45

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Contractual Obligations and Commitments. The following table shows our approximate contractual obligations, including
interest, and commitments to make future payments as of December 31, 2013:
(In Thousands) Total Period Less Than 1 Year Period 1-3 Years Period 3-5 Years Period Over 5 Years
Debt, Excluding Capital Leases $ 128,250 $ 25,000 $ 53,250 $ 50,000 $ —
Capital Leases 14,454 2,529 5,505 4,014 2,406
Interest Obligations 22,591 5,632 10,341 6,588 30
Operating Leases 528,567 113,067 171,532 100,385 143,583
Purchase Obligations 35,448 19,197 16,251 — —
Retirement Obligations 9,306 4,215 3,837 1,206 48
Total Contractual Cash Obligations $ 738,616 $ 169,640 $ 260,716 $ 162,193 $ 146,067
The following table shows the Company’s approximate commercial commitments as of December 31, 2013:
(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 $ 105,030 $ 104,357 $ 673 $ — $ —
Purchase obligations are primarily related to certain advertising and marketing programs. We have no long-term commitments
to purchase merchandise nor do we have significant purchase agreements that specify minimum quantities or set prices that
exceed our expected requirements for three months.
Retirement obligations primarily represent future payments associated with the retirement of the Company's founder and
Chairman of the Board during the year ended December 2012 and the Chief Operating Officer during the year ended
December 31, 2013.
Deferred income tax liabilities as of December 31, 2013 were approximately $227.0 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.
Recent Accounting Pronouncements
Refer to Note 1 to the Company's consolidated financial statements for a discussion of recently issued accounting
pronouncements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of December 31, 2013, we had $125.0 million of senior unsecured notes outstanding at a fixed rate of 3.75%. We had no
balance outstanding under our revolving credit agreement indexed to the LIBOR (“London Interbank Offer Rate”) or the prime
rate, which exposes us to the risk of increased interest costs if interest rates rise. Based on our overall interest rate exposure at
December 31, 2013, a hypothetical 1.0% increase or decrease in interest rates would not be material.
We do not use any significant market risk sensitive instruments to hedge commodity, foreign currency or other risks, and hold
no market risk sensitive instruments for trading or speculative purposes.