Banana Republic 2014 Annual Report Download - page 39

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Contractual Cash Obligations
We are party to many contractual obligations involving commitments to make payments to third parties. The
following table provides summary information concerning our future contractual obligations as of January 31,
2015. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain of
these contractual obligations are reflected in the Consolidated Balance Sheet as of January 31, 2015, while
others are disclosed as future obligations.
Payments Due by Period
($ in millions) Less than 1
Year 1-3 Years 3-5 Years More Than 5 Years Total
Long-term debt (1) $ 21 $ 85 $ — $ 1,250 $ 1,356
Interest payments on long-term debt 75 149 150 107 481
Operating leases (2) 1,136 2,016 1,398 1,701 6,251
Purchase obligations and commitments (3) 3,984 107 10 10 4,111
Total contractual cash obligations $ 5,216 $ 2,357 $ 1,558 $ 3,068 $ 12,199
__________
(1) Represents principal maturities, excluding interest. See Note 5 of Notes to Consolidated Financial Statements.
(2) Excludes maintenance, insurance, taxes, and contingent rent obligations. See Note 12 of Notes to Consolidated Financial Statements
for discussion of our operating leases.
(3) Represents estimated open purchase orders to purchase inventory as well as commitments for products and services used in the
normal course of business.
There is $75 million of long-term liabilities recorded in lease incentives and other long-term liabilities in the
Consolidated Balance Sheet as of January 31, 2015 that is being excluded from the table above as the amount
relates to uncertain tax positions and we are not able to reasonably estimate the timing of the payments or the
amount by which the liability will increase or decrease over time.
Commercial Commitments
We have commercial commitments, not reflected in the table above, that were incurred in the normal course of
business to support our operations, including standby letters of credit of $21 million, surety bonds of $36 million,
and bank guarantees of $17 million outstanding (of which $11 million was issued under the unsecured revolving
credit facilities for our operations in foreign locations) as of January 31, 2015.
Other Cash Obligations Not Reflected in the Consolidated Balance Sheet (Off-Balance Sheet Arrangements)
The majority of our contractual obligations relate to operating leases for our stores. Future minimum lease
payments represent commitments under non-cancelable operating leases and are disclosed in the table above
with additional information provided in Item 8, Financial Statements and Supplementary Data, Note 12 of Notes to
Consolidated Financial Statements.
Our other off-balance sheet arrangements are disclosed in Item 8, Financial Statements and Supplementary Data,
Note 16 of Notes to Consolidated Financial Statements.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with GAAP requires management to adopt accounting
policies and make significant judgments and estimates to develop amounts reflected and disclosed in the financial
statements. In many cases, there are alternative policies or estimation techniques that could be used. We
maintain a thorough process to review the application of our accounting policies and to evaluate the
appropriateness of the many estimates that are required to prepare the financial statements of a large, global
corporation. However, even under optimal circumstances, estimates routinely require adjustment based on
changing circumstances and the receipt of new or better information.