American Home Shield 2010 Annual Report Download - page 53

Table of Contents
The following table presents the Company's contractual obligations and commitments as of December 31, 2010.
(In millions) Total
Less than
1 Yr 1-3 Yrs 3-5 Yrs
More than
5 Yrs
Principal repayments* $ 4,024.2 $ 47.8 $ 75.1 $ 3,544.2 $ 357.1
Capital leases 4.7 1.5 1.4 1.1 0.7
Estimated interest payments(1) 1,344.4 250.4 448.1 322.6 323.3
Non-cancelable operating leases(2) 196.4 52.7 77.6 36.0 30.1
Purchase obligations:
Supply agreements and other(3) 147.2 131.3 13.5 2.4 —
Outsourcing agreements(4) 161.5 45.3 58.9 57.3 —
Other long-term liabilities:*
Insurance claims 171.6 81.6 30.4 10.1 49.5
Discontinued Operations 3.7 0.8 1.0 0.3 1.6
Other, including deferred compensation trust(2) 15.7 2.2 2.2 1.9 9.4
Total Amount $ 6,069.4 $ 613.6 $ 708.2 $ 3,975.9 $ 771.7
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, 2010 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 2011 through 2015 is $3,979.6 million,
$3,934.8 million, $3,903.1 million, $1,421.1 million, and $357.9 million, respectively. The weighted average interest rate (including
interest rate swaps) on the estimated debt balances at each fiscal year end from 2011 through 2015 is expected to be 6.4%, 6.4%, 6.4%,
9.9%, and 7.3%, respectively. See Note 12 of the Consolidated Financial Statements for the terms and maturities of existing debt
obligations.
A portion of the Company's vehicle fleet and some equipment are leased through operating leases. The lease terms are non-cancelable
for the first twelve-month term, and then are month-to-month, cancelable at the Company's option. The amounts in Non-cancelable
operating leases exclude all prospective cancelable payments under these agreements. There are residual value guarantees by the
Company (ranging from 70 percent to 84 percent of the estimated terminal value at the inception of the lease depending on the
agreement) relative to these vehicles and equipment, which historically have not resulted in significant net payments to the lessors. The
fair value of the assets under all of the fleet and equipment leases is expected to substantially mitigate the Company's guarantee
obligations under the agreements. At December 31, 2010, the Company's residual value guarantees related to the leased assets totaled
$53.5 million for which the Company has recorded as a liability the estimated fair value of these guarantees of $1.1 million in the
Consolidated Statements of Financial Position. This liability has been included in Other long-term liabilities above.
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
*
(1)
(2)
(3)
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