Management’s Discussion and Analysis of Financial Condition and Results of Operations
Contracts and Commitments
The table below shows our payment obligations for long-term debt, capital leases, operating leases and purchase obligations for the next five years and beyond as of April 29, 2007 and the effects those obligations are expected to have on liquidity and cash flow in future periods:
| Payments Due By Period | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Contractual Obligations | Total | Less than 1 year |
1-3 years | 3-5 years | More than 5 years |
||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||
| 5% convertible senior subordinated debentures(1)(2) |
$ | 108,178 | $ | 5,000 | $ | 103,178 | $ | — | $ | — | |||||||||
| 6% convertible subordinated debentures(1)(3) | 349,001 | 9,075 | 18,150 | 18,150 | 303,626 | ||||||||||||||
| Other long-term debt (excluding capital lease obligations)(1) |
21,583 | 4,593 | 8,325 | 8,195 | 470 | ||||||||||||||
| Capital lease obligations(1) | 5,508 | 2,668 | 2,798 | 42 | — | ||||||||||||||
| Operating leases(4) | 9,115 | 3,082 | 4,282 | 1,751 | — | ||||||||||||||
| Other long-term liabilities: Deferred compensation and non-qualified retirement plans(1) |
40,380 | 5,223 | 8,525 | 4,781 | 21,851 | ||||||||||||||
| Insurance reserves | 53,189 | 18,629 | 34,560 | — | — | ||||||||||||||
| Warranty | 69,179 | 45,926 | 23,253 | — | — | ||||||||||||||
| Total | $ | 656,133 | $ | 94,196 | $ | 203,071 | $ | 32,919 | $ | 325,947 | |||||||||
(1) The 5% convertible senior subordinated debentures, 6% convertible subordinated debentures, long-term debt obligations, capital lease obligations and deferred compensation and non-qualified retirement plans include both principal and interest commitments for the periods presented. The interest commitment on the deferred compensation is based on an estimated average of the prime rate of 8.25%. The interest commitment on our 5% convertible senior subordinated debentures, our 6% convertible subordinated debentures, as well as other fixed rate debt included in other long term debt above are based on their stated rates. The interest commitment on the Bank of America term loan is based on the rate discussed in Note 12.
(2) Holders of the $100 million aggregate principal amount of the 5% convertible senior subordinated debentures due in 2023, which are more fully described in Note 13, have the ability, in whole or in part, to require us to repurchase these debentures as early as December 15, 2008, and the payment maturity above has been presented accordingly. We may, at our option, elect to pay the repurchase price in cash, common stock or a combination thereof.
(3) Includes $8.9 million of an obligation that represents the purchase by us of the common shares of the underlying trust. Our net obligation to third parties is reduced by a similar amount.
(4) Some of our facilities are leased under terms that range from monthly to five years. Also included in the above amounts are equipment leases. Management expects that in the normal course of business, leases will be renewed or replaced by other leases to support continuing operations.