DSW 2012 Annual Report Download - page 32

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The following table provides aggregated information about contractual obligations and other non-current liabilities as of
February 2, 2013:
Payments due by Period
Total Less Than 1 Year 1 - 3 Years 3 -5 Years More Than 5 Years
Contractual Obligations: (in thousands)
Operating lease obligations (1) $ 1,074,308 $ 160,790 $ 313,741 $ 239,158 $ 360,619
Construction commitments (2) 4,093 4,093 — — —
Purchase obligations (3) 8,561 3,406 4,719 436 —
Pension (4) 4,544 4,544 — — —
Deferred compensation (5) —————
Total $ 1,091,506 $ 172,833 $ 318,460 $ 239,594 $ 360,619
(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 $128.2 million are
primarily comprised of deferred rent liabilities, construction and tenant allowances 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.
The amount related to uncertain tax positions as of February 2, 2013 was $1.6 million, including approximately $0.3
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.
(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 February 2, 2013.
(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 $0.1 million is a service contract with a related party that expires in
July 2014.
(4) On December 1, 2011, we adopted a plan amendment to terminate the pension plan with a proposed termination date of
March 22, 2012. In the second quarter of fiscal 2012, we reclassified the non-current pension liability to a current liability,
accrued expenses, as we have been communicating with the regulatory authorities and expect the pension plan may settle
within the next twelve months.
(5) Deferred compensation obligations include commitments related to our non-qualified deferred compensation plan. The
timing of deferred compensation payouts is unknown as we have not made any payments under our plan. The current
balance in the plan is $1.6 million.
We had outstanding letters of credit that totaled approximately $14.0 million as of February 2, 2013. 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 February 2, 2013, 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 $4.1 million as of February 2, 2013. In addition, as of February 2, 2013, we have signed 20 lease
agreements for new store locations opening in fiscal 2013 and 2014 with total annual rent of approximately $9.8 million. In
connection with the new lease agreements, we expect to receive a total of approximately $12.4 million of construction and
tenant allowance reimbursements for expenditures at these locations.
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