Macy's 2008 Annual Report Download - page 71

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
9. Properties and Leases
January 31,
2009
February 2,
2008
(millions)
Land ........................................................ $ 1,764 $ 1,783
Buildings on owned land ........................................ 5,258 5,137
Buildings on leased land and leasehold improvements ................. 2,217 2,372
Fixtures and equipment .......................................... 6,608 6,777
Leased properties under capitalized leases ........................... 53 61
15,900 16,130
Less accumulated depreciation and amortization .................. 5,458 5,139
$10,442 $10,991
In connection with various shopping center agreements, the Company is obligated to operate certain stores
within the centers for periods of up to 20 years. Some of these agreements require that the stores be operated
under a particular name.
The Company leases a portion of the real estate and personal property used in its operations. Most leases
require the Company to pay real estate taxes, maintenance and other executory costs; some also require
additional payments based on percentages of sales and some contain purchase options. Certain of the Company’s
real estate leases have terms that extend for significant numbers of years and provide for rental rates that increase
or decrease over time. In addition, certain of these leases contain covenants that restrict the ability of the tenant
(typically a subsidiary of the Company) to take specified actions (including the payment of dividends or other
amounts on account of its capital stock) unless the tenant satisfies certain financial tests.
Minimum rental commitments (excluding executory costs) at January 31, 2009, for noncancellable leases
are:
Capitalized
Leases
Operating
Leases Total
(millions)
Fiscal year:
2009 ............................................................ $ 8 $ 235 $ 243
2010 ............................................................ 7 226 233
2011 ............................................................ 6 207 213
2012 ............................................................ 5 191 196
2013 ............................................................ 4 170 174
After 2013 ........................................................ 32 1,709 1,741
Total minimum lease payments ....................................... 62 $2,738 $2,800
Less amount representing interest ..................................... 27
Present value of net minimum capitalized lease payments .................. $35
Capitalized leases are included in the Consolidated Balance Sheets as property and equipment while the
related obligation is included in short-term ($4 million) and long-term ($31 million) debt. Amortization of assets
subject to capitalized leases is included in depreciation and amortization expense. Total minimum lease payments
shown above have not been reduced by minimum sublease rentals of approximately $83 million on operating
leases.
F-23