Kaman

AR 13

Financials

Part II

Financials/Management's Discussion and Analysis of Financial Condition and Results of Operations/Contractual Obligations and Off-Balance Sheet Arrangements

Contractual Obligations

The following table summarizes certain of the Company's contractual obligations as of December 31, 2013:

Payments due by period (in millions)
Contractual Obligations Total Within 1 year 1-3 years 3-5 years More than 5
years
Long-term debt $ 167.6 $ 10.0 $ 20.0 $ 137.6 $ —
Convertible notes 115.0 115.0
Interest payments on debt (a) 40.5 11.6 17.3 9.8 1.8
Operating leases 64.3 20.7 25.9 8.9 8.8
Purchase obligations (b) 143.0 134.6 8.2 0.2
Other long-term obligations (c) 52.4 14.7 17.1 6.0 14.6
Planned funding of pension and SERP (d) 19.6 10.8 3.4 1.0 4.4
Total $ 602.4 $ 202.4 $ 91.9 $ 278.5 $ 29.6

Note: For more information refer to Note 12, Debt; Note 17, Commitments and Contingencies; Note 16, Other Long-Term Liabilities; Note 15, Pension Plans, and Note 14, Income Taxes in the Notes to Consolidated Financial Statements included in this Form 10-K.

  1. Interest payments on debt are calculated based on the applicable rate and payment dates for each instrument. For variable-rate instruments, interest rates and payment dates are based on management's estimate of the most likely scenarios for each relevant debt instrument.
  2. This category includes purchase commitments to suppliers for materials and supplies as part of the ordinary course of business, consulting arrangements and support services. Only obligations in the amount of at least $50,000 are included.
  3. This category includes obligations under the Company's long-term incentive plan, deferred compensation plan, environmental liabilities, acquisition holdbacks and unrecognized tax benefits.
  4. This category includes planned funding of the Company's SERP and qualified pension plan. Projected funding for the qualified pension plan beyond one year has not been included as there are several significant factors, such as the future market value of plan assets and projected investment return rates, which could cause actual funding requirements to differ materially from projected funding.

Off-Balance Sheet Arrangements

The following table summarizes our off-balance sheet arrangements:

Payments due by period (in millions)
Contractual Obligations Total Within 1 year 1-3 years 3-5 years More than 5
years
Acquisition earn-out (1) $ 3.5 $ 3.5 $ — $ — $ —
Total $ 3.5 $ 3.5 $ — $ — $ —
  1. The obligation to pay earn-out amounts depends upon the attainment of specific milestones by an aerospace operating unit acquired in 2002.

As of December 31, 2013, we had $36.8 million of outstanding standby letters of credit under the Credit Agreement, $30.3 million of which related to the New Zealand sales contract.