Macy's 2010 Annual Report Download - page 66

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
6. Properties and Leases
January 29,
2011
January 30,
2010
(millions)
Land ........................................................ $ 1,702 $ 1,719
Buildings on owned land ........................................ 5,148 5,160
Buildings on leased land and leasehold improvements ................. 2,227 2,232
Fixtures and equipment .......................................... 5,752 6,129
Leased properties under capitalized leases ........................... 33 49
14,862 15,289
Less accumulated depreciation and amortization .................. 6,049 5,782
$ 8,813 $ 9,507
In connection with various shopping center agreements, the Company is obligated to operate certain stores
within the centers for periods of up to twenty 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 29, 2011, for noncancellable leases
are:
Capitalized
Leases
Operating
Leases Total
(millions)
Fiscal year:
2011 ............................................................ $ 6 $ 245 $ 251
2012 ............................................................ 6 233 239
2013 ............................................................ 4 213 217
2014 ............................................................ 4 190 194
2015 ............................................................ 3 150 153
After 2015 ........................................................ 35 1,581 1,616
Total minimum lease payments ....................................... 58 $2,612 $2,670
Less amount representing interest ..................................... 25
Present value of net minimum capitalized lease payments .................. $33
Capitalized leases are included in the Consolidated Balance Sheets as property and equipment while the related
obligation is included in short-term ($3 million) and long-term ($30 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 $80 million on operating leases.
F-18