Famous Footwear 2012 Annual Report Download - page 43

2012 BROWN SHOE COMPANY, INC. FORM 10-K 41
A decrease of 50 basis points in the weighted-average expected rate of return on plan assets would impact pension
expense by approximately $1.5 million. The actual return on plan assets in a given year may dier from the expected
long-term rate of return, and the resulting gain or loss is deferred and recognized into the plans’ expense over time.
• Discount rate – Discount rates used to measure the present value of our benet obligations for our pension and other
postretirement benefit plans are based on a yield curve constructed from a subset of high-quality bonds for which the
timing and amount of cash outflows approximate the estimated payouts of the plans. The weighted-average discount
rate selected to measure the present value of our benefit obligations under our pension and other postretirement benefit
plans was 4.5% for each. A decrease of 50 basis points in the weighted-average discount rate would have increased the
projected benefit obligation of the pension and other postretirement benefit plans by approximately $24.8 million and
$0.1 million, respectively.
See Note 5 to the consolidated financial statements for additional information related to our retirement and other benefit plans.
Impact of Prospective Accounting Pronouncements
Recent accounting pronouncements and their impact on the Company are described in Note 1 to the consolidated
financial statements.
OFF-BALANCE SHEET ARRANGEMENTS
At February 2, 2013, we were contingently liable for remaining lease commitments of approximately $0.2 million in the
aggregate, which relate to former retail locations that we exited in prior years. These obligations will continue to decline
over the next few years as leases expire. In order for us to incur any liability related to these lease commitments, the current
lessees would have to default.
CONTRACTUAL OBLIGATIONS
The table below sets forth our significant future obligations by time period. Further information on certain of these
commitments is provided in the notes to our consolidated financial statements, which are cross-referenced in this table.
Our obligations outstanding as of February 2, 2013, include the following:
Payments Due by Period
Less Than 1-3 3-5 More Than
($ millions) Total 1 Year Years Years 5 Years
Borrowings under Credit Agreement(1) . . . . . . . . . . . . . . . . . . . . . . . $ 105.0 $ 105.0 $ – $ – $ –
Long-term debt(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200.0 – – – 200.0
Interest on long-term debt(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92.6 14.2 28.5 28.5 21.4
Operating lease commitments(3) . . . . . . . . . . . . . . . . . . . . . . . . . . 654.5 150.2 233.8 136.8 133.7
Minimum license commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.5 8.2 7.3 – –
Purchase obligations(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 674.5 666.5 7.6 0.4 –
Obligations related to restructuring initiatives(5). . . . . . . . . . . . . . . . . . 2.7 2.7 – – –
Other(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4 1.5 3.2 3.6 3.1
Total(7) (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,756.2 $ 948.3 $ 280.4 $ 169.3 $ 358.2
(1) Interest on borrowings is at variable rates based on LIBOR or the prime rate, as defined in the Credit Agreement, plus a spread. The interest
rate and fees for letters of credit varies based upon the level of excess availability under the Credit Agreement. There is an unused line fee
payable on the excess availability under the facility and a letter of credit fee payable on the outstanding exposure under letters of credit.
Interest obligations, which are variable in nature, are not included in the table above. See Note 10 to the consolidated financial statements.
(2) Interest obligations in future periods have been reflected based on our $200.0 million principal value of Senior Notes and a fixed interest rate
of 7.125% as of fiscal year ended February 2, 2013. See Note 10 to the consolidated financial statements.
(3) A majority of our retail operating leases contain provisions that allow us to modify amounts payable under the lease or terminate the lease
in certain circumstances, such as experiencing actual sales volume below a defined threshold and/or co-tenancy provisions associated with
the facility. The contractual obligations presented in the table above reflect the total lease obligation, irrespective of our ability to reduce or
terminate rental payments in the future, as noted. See Note 11 to the consolidated financial statements.
(4) Purchase obligations include agreements to purchase goods or services that specify all significant terms, including quantity and price provisions.
(5) See Note 4 to the consolidated financial statements for further information related to these obligations.
(6) Includes obligations for our supplemental executive retirement plan and other postretirement benefits. See Note 5 to the consolidated
financial statements.
(7) Excludes liabilities of $1.1 million, established pursuant to the provisions of ASC 740, Income Taxes, due to their uncertain nature in timing of
payments. See Note 6 to the consolidated financial statements.
(8) Excludes liabilities of $1.4 million, $1.1 million and $4.7 million for our non-qualified deferred compensation plan, deferred compensation
plan for non-employee directors and restricted stock units for non-employee directors, respectively, due to the uncertain nature in timing of
payments. See Note 5 and Note 15 to the consolidated financial statements.