American Home Shield 2009 Annual Report Download - page 57

Table of Contents
The following table presents the Company's contractual obligations and commitments as of December 31, 2009.
(In millions) Total
Less than
1 Yr 1-3 Yrs 3-5 Yrs
More than
5 Yrs
Principal repayments* $ 4,041.4 $ 49.8 $ 65.2 $ 2,508.1 $ 1,418.3
Capital leases 19.4 14.5 2.6 1.0 1.3
Estimated interest payments(1) 1,589.2 264.0 470.2 388.6 466.4
Non-cancelable operating leases 221.2 58.4 82.7 40.8 39.3
Purchase obligations:
Supply agreements and other(2) 114.3 85.8 21.7 5.8 1.0
Outsourcing agreements(3) 217.4 49.1 91.4 51.3 25.6
Other long-term liabilities:*
Insurance claims 179.6 87.3 34.5 11.3 46.5
Discontinued Operations 7.0 2.8 1.6 0.5 2.1
Other, including deferred compensation trust 18.1 2.7 3.1 1.3 11.0
Total Amount $ 6,407.6 $ 614.4 $ 773.0 $ 3,008.7 $ 2,011.5
These items are reported in the Consolidated Statements of Financial Position
These amounts represent future interest payments related to the Company's existing debt obligations based on fixed and variable interest rates and
principal maturities specified in the associated debt agreements. Payments related to variable debt are based on applicable rates at December 31, 2009
plus the specified margin in the associated debt agreements for each period presented. The estimated debt balance (including capital leases) as of each
fiscal year end from 2010 through 2014 is $3,996.4 million, $3,960.5 million, $3,928.7 million, $3,899.3 million, and $1,419.6 million, respectively.
The weighted average interest rate (including interest rate swaps) on the estimated debt balances at each fiscal year end from 2010 through 2014 is
expected to be 6.3%, 6.0%, 5.3%, 5.3%, and 9.9%, respectively. See Note 14 of the Consolidated Financial Statements for the terms and maturities of
existing debt obligations.
These obligations include commitments for various products and services including, among other things, inventory purchases, telecommunications
services, marketing and advertising services and other professional services. Arrangements are considered purchase obligations if a contract specifies
all significant terms, including fixed or minimum quantities to be purchased, a pricing structure and approximate timing of the transactions. Most
arrangements are cancelable without a significant penalty and with short notice (usually 30-120 days) and amounts reflected above include the
minimum contractual obligation of the Company (inclusive of applicable cancellation penalties). For obligations with significant penalties associated
with termination, the minimum required expenditures over the term of the agreement have been included in the table above.
Outsourcing agreements include commitments for the purchase of certain outsourced services from third party vendors (see further discussion of the
Company's agreement with IBM below). Because these agreements are integral to the operations of the Company and due to termination provisions
contained in these agreements, the Company has concluded that it is appropriate to include the total anticipated costs over the life of the agreements in
the table above.
On December 11, 2008, the Company entered into an agreement with IBM pursuant to which IBM will provide information technology operations and
applications development services
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*
(1)
(2)
(3)