AutoZone 2014 Annual Report Download - page 98

28
Financial Commitments
The following table shows our significant contractual obligations as of August 30, 2014:
(in thousands)
Total
Contractual
Obligations
Payment Due by Period
Less than
1 year
Between
1-3 years
Between
3-5 years
Over
5 years
Debt
(1)
.................................................... $ 4,343,800 $ 1,393,800 $ 900,000 $ 250,000 $ 1,800,000
Interest payments
(2)
............................... 645,713 130,538 193,675 143,313 178,187
Operating leases
(3)
................................. 2,035,259 244,535 458,040 390,186 942,498
Capital leases
(4)
..................................... 122,825 36,505 63,989 22,331 –
Self-insurance reserves
(5)
..................... 203,577 74,010 60,029 23,423 46,115
Construction commitments ..................... 36,251 36,251 – – –
$ 7,387,425 $ 1,915,639 $ 1,675,733 $ 829,253 $ 2,966,800
(1) Debt balances represent principal maturities, excluding interest.
(2) Represents obligations for interest payments on long-term debt.
(3) Operating lease obligations are inclusive of amounts accrued within deferred rent and closed store
obligations reflected in our consolidated balance sheets.
(4) Capital lease obligations include related interest.
(5) Self-insurance reserves reflect estimates based on actuarial calculations. Although these obligations do not
have scheduled maturities, the timing of future payments are predictable based upon historical patterns.
Accordingly, we reflect the net present value of these obligations in our consolidated balance sheets.
We have pension obligations reflected in our consolidated balance sheets that are not reflected in the table above
due to the absence of scheduled maturities and the nature of the account. During fiscal 2014, we made
contributions of $16.9 million to the pension plan. We expect to make contributions of approximately $2.6
million during fiscal 2015; however a change to the expected cash funding may be impacted by a change in
interest rates or a change in the actual or expected return on plan assets.
As of August 30, 2014, our defined benefit obligation associated with our pension plans is $301.0 million and our
pension assets are valued at $243.4 million, resulting in a net pension obligation of $57.6 million. Amounts
recorded in Accumulated other comprehensive loss are $104.8 million at August 30, 2014. The balance in
Accumulated other comprehensive loss will be amortized into pension expense in the future, unless the losses are
recovered in future periods through actuarial gains.
Additionally, our tax liability for uncertain tax positions, including interest and penalties, was $33.5 million at
August 30, 2014. Approximately $514 thousand is classified as current liabilities and $33.0 million is classified
as long-term liabilities. We did not reflect these obligations in the table above as we are unable to make an
estimate of the timing of payments due to uncertainties in the timing and amounts of the settlement of these tax
positions.
Off-Balance Sheet Arrangements
The following table reflects outstanding letters of credit and surety bonds as of August 30, 2014:
(in thousands)
Total
Other
Commitments
Standby letters of credit .............................................................................................................
.
$ 135,944
Surety bonds ..............................................................................................................................
.
28,118
$ 164,062
A substantial portion of the outstanding standby letters of credit (which are primarily renewed on an annual basis)
and surety bonds are used to cover reimbursement obligations to our workers’ compensation carriers. There are no
additional contingent liabilities associated with these instruments as the underlying liabilities are already reflected
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