Macy's 2009 Annual Report Download - page 70

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Minimum rental commitments (excluding executory costs) at January 30, 2010, for noncancellable leases
are:
Capitalized
Leases
Operating
Leases Total
(millions)
Fiscal year:
2010 ............................................................ $ 7 $ 228 $ 235
2011 ............................................................ 6 212 218
2012 ............................................................ 6 195 201
2013 ............................................................ 4 174 178
2014 ............................................................ 3 154 157
After 2014 ........................................................ 28 1,567 1,595
Total minimum lease payments ....................................... 54 $2,530 $2,584
Less amount representing interest ..................................... 25
Present value of net minimum capitalized lease payments .................. $29
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 ($25 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 $73 million on operating
leases.
The Company is a guarantor with respect to certain lease obligations associated with businesses divested by
May prior to the Merger. The leases, one of which includes potential extensions to 2070, have future minimum
lease payments aggregating approximately $420 million and are offset by payments from existing tenants and
subtenants. In addition, the Company is liable for other expenses related to the above leases, such as property
taxes and common area maintenance, which are also payable by existing tenants and subtenants. Potential
liabilities related to these guarantees are subject to certain defenses by the Company. The Company believes that
the risk of significant loss from the guarantees of these lease obligations is remote.
Rental expense consists of:
2009 2008 2007
(millions)
Real estate (excluding executory costs)
Capitalized leases –
Contingent rentals ..................................................$–$1$1
Operating leases –
Minimum rentals ................................................... 230 230 221
Contingent rentals .................................................. 15 16 18
245 247 240
Less income from subleases –
Operating leases ................................................... (16) (15) (14)
$229 $232 $226
Personal property – Operating leases ........................................... $ 12 $ 19 $ 15
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