GNC 2010 Annual Report Download - page 108

Table of Contents
GENERAL NUTRITION CENTERS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The composition of the Company's rental expense for all periods presented included the following components:
Successor Predecessor
Year Ended Year Ended March 16- January 1-
December 31, December 31, December 31, March 15,
2009 2008 2007 2007
(in thousands)
Retail stores:
Rent on long-term operating leases, net of sublease income $ 110,365 $ 109,199 $ 83,867 $ 20,887
Landlord related taxes 16,498 15,987 12,138 2,987
Common operating expenses 29,398 31,435 24,659 6,364
Percent rent 15,899 14,159 9,880 2,863
172,160 170,780 130,544 33,101
Truck fleet 4,740 4,363 3,441 904
Other 11,189 11,331 6,847 4,031
$ 188,089 $ 186,474 $ 140,832 $ 38,036
Minimum future obligations for non-cancelable operating leases with initial or remaining terms of at least one year in effect at
December 31, 2009 are as follows:
Company Franchise
Retail Retail Sublease
Stores Stores Other Income Total
(in thousands)
2010 $ 100,660 $ 21,421 $ 5,812 $ (21,421) $ 106,472
2011 83,393 17,312 5,025 (17,312) 88,418
2012 63,061 11,983 3,091 (11,983) 66,152
2013 46,572 6,702 2,318 (6,702) 48,890
2014 33,914 2,274 2,180 (2,274) 36,094
Thereafter 79,652 2,718 964 (2,718) 80,616
$ 407,252 $ 62,410 $ 19,390 $ (62,410) $ 426,642
NOTE 16. COMMITMENTS AND CONTINGENCIES
Litigation
The Company is engaged in various legal actions, claims and proceedings arising in the normal course of business, including claims
related to breach of contracts, products liabilities, intellectual property matters and employment-related matters resulting from the Company's
business activities. As with most actions such as these, an estimation of any possible and/or ultimate liability cannot always be determined. The
Company continues to assess the requirement to account for additional contingencies in accordance with the standard on contingencies. If the
Company is required to make a payment in connection with an adverse outcome in these matters, it could have a material impact on its
financial condition and operating results.
As a manufacturer and retailer of nutritional supplements and other consumer products that are ingested by consumers or applied to their
bodies, the Company has been and is currently subjected to various product liability claims. Although the effects of these claims to date have
not been material to the Company, it is possible that current and future product liability claims could have a material adverse impact on its
business or financial condition. The Company currently maintains product liability insurance with a deductible/retention of $3.0 million per claim
with an aggregate cap on retained loss of $10.0 million. The Company typically seeks and has obtained contractual indemnification from most
parties that supply raw materials for its products or that manufacture or market products it sells. The Company also typically seeks to be added,
and has been added, as an additional 102