Foot Locker 2010 Annual Report Download - page 67

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14. Leases
The Company is obligated under operating leases for almost all of its store properties. Some of the store
leases contain renewal options with varying terms and conditions. Management expects that in the normal
course of business, expiring leases will generally be renewed or, upon making a decision to relocate, replaced by
leases on other premises. Operating lease periods generally range from 5 to 10 years. Certain leases provide for
additional rent payments based on a percentage of store sales. Most of the Company’s leases require the payment
of certain executory costs such as insurance, maintenance, and other costs in addition to the future minimum
lease payments. These costs, including the amortization of lease rights, totaled $131 million, $138 million, and
$147 million in 2010, 2009, and 2008, respectively. Included in the amounts below, are non-store expenses that
totaled $15 million in 2010, 2009, and 2008.
2010 2009 2008
(in millions)
Minimum rent ................................... $507 $514 $527
Contingent rent based on sales........................ 16 14 14
Sublease income ................................. (1) (2) (2)
$522 $526 $539
Future minimum lease payments under non-cancelable operating leases, net of future non-cancelable
operating sublease payments, are:
(in millions)
2011....................................................... $ 481
2012....................................................... 425
2013....................................................... 356
2014....................................................... 303
2015....................................................... 257
Thereafter ................................................... 596
Total operating lease commitments ................................... $2,418
15. Other Liabilities
2010 2009
(in millions)
Straight-line rent liability ................................... $100 $101
Pension benefits ......................................... 67 101
Income taxes ........................................... 28 29
Workers’ compensation and general liability reserves ................. 11 12
Postretirement benefits .................................... 11 11
Reserve for discontinued operations ............................ 8 8
Fair value of derivatives .................................... — 24
Other................................................. 20 11
$245 $297
16. Discontinued Operations
In 1997, the Company exited its Domestic General Merchandise segment. In 1998, the Company exited both
its International General Merchandise and Specialty Footwear segments. In 2001, the Company discontinued its
Northern Group segment. The remaining reserve balances at January 29, 2011 primarily represent lease
obligations, of which $1 million is expected to be utilized within twelve months and the remaining $8 million
thereafter. The balance at January 30, 2010 totaled $10 million, of which $2 million was classified as current and
$8 million was classified as non current. The majority of the reserve balance relates to the Domestic General
Merchandise segment as the leases extend many years.
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