Under Armour 2012 Annual Report Download - page 47

covenants, including those related to environmental matters, and other standard carve outs for a loan of this type.
The loan required certain minimum cash flows and financial results from the property, and if those requirements
were not met, additional reserves may have been required. The assumed loan required prior approval of the
lender for certain matters related to the property, including material leases, changes to property management,
transfers of any part of the property and material alterations to the property. The loan had an interest rate of
6.73%. In connection with the assumed loan, we incurred and capitalized $0.8 million in deferred financing
costs. In addition, we were required to set aside amounts in reserve and cash collateral accounts. As of
December 31, 2011, $2.0 million of restricted cash was included in prepaid expenses and other current assets,
and the remaining $3.0 million of restricted cash was included in other long term assets.
In December 2012, we repaid the remaining balance of the assumed nonrecourse loan of $37.7 million and
entered into a new $50.0 million recourse loan collateralized by the land, buildings and tenant improvements
comprising our corporate headquarters. The new loan has a seven year term and maturity date of December 2019.
The loan bears interest at one month LIBOR plus a margin of 1.50%, and allows for prepayment without penalty.
We are required to maintain the same leverage ratio and interest coverage ratio as set forth in our credit facility.
As of December 31, 2012, we were in compliance with these ratios. The loan contains a number of restrictions
that limit our ability, among other things, and subject to certain limited exceptions, to incur additional
indebtedness, pledge our assets as a security, guaranty obligations of third parties, make investments, undergo a
merger or consolidation, dispose of assets, or materially change our line of business. The loan requires prior
approval of the lender for certain matters related to the property, including transfers of any interest in the
property. In addition, the loan includes a cross default provision similar to the cross default provision in the credit
facility discussed above. We incurred and capitalized $1.0 million in deferred financing costs in connection with
the new $50.0 million loan and expensed $0.1 million of unamortized deferred financing costs related to the
assumed loan during the three months ended December 31, 2012.
Acquisitions
In July 2011, we acquired approximately 400.0 thousand square feet of office space comprising our
corporate headquarters for $60.5 million. The acquisition included land, buildings, tenant improvements and
third party lease-related intangible assets. As of December 31, 2012, 141.4 thousand square feet of the 400.0
thousand square feet acquired was leased to third party tenants with remaining lease terms ranging from 1 month
to 13.5 years. We intend to occupy additional space as it becomes available.
Contractual Commitments and Contingencies
We lease warehouse space, office facilities, space for our factory house and specialty stores and certain
equipment under non-cancelable operating and capital leases. The leases expire at various dates through 2023,
excluding extensions at our option, and contain various provisions for rental adjustments. In addition, this table
includes executed lease agreements for factory house stores that we did not yet occupy as of December 31, 2012.
The operating leases generally contain renewal provisions for varying periods of time. Our significant contractual
obligations and commitments as of December 31, 2012 as well as significant agreements entered into during the
period after December 31, 2012 through the date of this report are summarized in the following table:
Payments Due by Period
(in thousands) Total
Less Than
1 Year 1 to 3 Years 3 to 5 Years
More Than
5 Years
Contractual obligations
Long term debt obligations (1) $ 61,889 $ 9,132 $ 8,923 $ 4,000 $ 39,834
Operating lease obligations (2) 202,895 30,610 65,406 45,161 61,718
Product purchase obligations (3) 657,543 657,543 — — —
Sponsorships and other (4) 157,677 57,830 81,976 14,697 3,174
Total $1,080,004 $755,115 $156,305 $63,858 $104,726
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