Kroger 2013 Annual Report Download - page 130

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A-57
NO T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S , CO N T I N U E D
(2) Reclassified from AOCI into merchandise costs and operating, general and administrative expense.
These components are included in the computation of net periodic pension expense (see Note 15 to the
Company’s Consolidated Financial Statements for additional details).
1 0 . L E A S E S A N D L E A S E - F I N A N C E D T R A N S A C T I O N S
While the Company’s current strategy emphasizes ownership of store real estate, the Company operates
primarily in leased facilities. Lease terms generally range from 10 to 20 years with options to renew for
varying terms. Terms of certain leases include escalation clauses, percentage rent based on sales or payment
of executory costs such as property taxes, utilities or insurance and maintenance. Rent expense for leases
with escalation clauses or other lease concessions are accounted for on a straight-line basis beginning with
the earlier of the lease commencement date or the date the Company takes possession. Portions of certain
properties are subleased to others for periods generally ranging from one to 20 years.
Rent expense (under operating leases) consists of:
2013 2012 2011
Minimum rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 706 $ 727 $ 715
Contingent payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 13 13
Tenant income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (106) (112) (109)
Total rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 613 $ 628 $ 619
Minimum annual rentals and payments under capital leases and lease-financed transactions for the five
years subsequent to 2013 and in the aggregate are:
Capital
Leases
Operating
Leases
Lease-
Financed
Transactions
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 62 $ 832 $ 6
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 770 7
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 708 7
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 634 8
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 563 8
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349 3,101 83
616 $6,608 $119
Less estimated executory costs included in capital leases . . . . . . . . . . . —
Net minimum lease payments under capital leases . . . . . . . . . . . . . . . . 616
Less amount representing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
Present value of net minimum lease payments under capital leases . . . $412
Total future minimum rentals under noncancellable subleases at February 1, 2014, were $217.