DSW 2011 Annual Report Download - page 33

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Table of Contents
course of business.
The following table provides aggregated information about contractual obligations and other non-current liabilities as of January 28, 2012
(amounts
in thousands):
The amount related to uncertain tax positions as of January 28, 2012 was $2.7 million , including approximately $0.4 million
of accrued interest
and penalties. Uncertain tax positions are positions taken or expected to be taken on an income tax return that may result in additional payments to
tax authorities. We may not be required to settle these obligations and have excluded these obligations from the table as we are not able to
reasonably estimate the timing of the potential future payments, if any.
(4) On December 1, 2011, we adopted a plan amendment to terminate the Pension Plan with a proposed termination date of March 22, 2012. As the
timing of receiving the regulatory approval is uncertain and may not occur in fiscal 2012, we have continued to classify the pension liability in
other non-current liabilities.
We had outstanding letters of credit that totaled approximately $17.3 million as of January 28, 2012
. If certain conditions are met under these
arrangements, we would be required to satisfy the obligations in cash. Due to the nature of these arrangements and based on historical experience and
future expectations, we do not expect to make any significant payment outside of terms set forth in these arrangements.
As of January 28, 2012
, we have entered into various construction commitments, including capital items to be purchased for projects that were
under construction, or for which a lease has been signed. Our obligations under these commitments aggregated to approximately $4.9 million
as of
January 28, 2012 . In addition, as of January 28, 2012 , we have signed 22 lease agreements for new store locations opening in
fiscal 2012 and 2013
with total annual rent of approximately $16.7 million
. In connection with the new lease agreements, we expect to receive a total of approximately
$12.5 million of construction and tenant allowance reimbursements for expenditures at these locations.
Recent Accounting Pronouncements
Recent Accounting Pronouncements and their impact on DSW are disclosed in Note 2 to the Consolidated Financial Statements included in this
Annual Report on Form 10-K.
28
Payments due by Period
Contractual Obligations
Total
Less Than
1 Year
1 - 3
Years
3 -5
Years
More Than
5 Years
Operating lease obligations
(1)
$
1,017,486
$
149,886
$
291,117
$
239,020
$
337,463
Construction commitments
(2)
4,930
4,930
Purchase obligations
(3)
11,423
3,299
6,901
1,223
Pension
(4)
5,583
5,583
Total
$
1,039,422
$
163,698
$
298,018
$
240,243
$
337,463
(1)
Many of our operating leases require us to pay contingent rent based on sales, common area maintenance costs and real estate taxes. Contingent
rent, costs and taxes vary year by year and are based almost entirely on actual amounts incurred. As such, they are not included in the lease
obligations presented above. Other non-current liabilities of $113.8 million
are primarily comprised of deferred rent liabilities, construction and
tenant allowances, the unfunded pension liability and uncertain tax positions. Deferred rent, which is included in non-
current liabilities, is
excluded from this table as our payment obligations are included in the operating lease obligations. Construction and tenant allowances, which are
included in non-
current liabilities, are not contractual obligations as the balance represents cash allowances from landlords, which are deferred and
amortized on a straight-line basis over the noncancelable terms of the lease.
(2)
Construction commitments include capital items to be purchased for projects that were under construction, or for which a lease had been signed,
as of January 28, 2012 .
(3)
We are able to cancel many of our purchase obligations without payment or penalty, and we have excluded such obligations. One purchase
obligation of approximately $0.3 million is a service contract with a related party that expires in July 2014.