Macy's 2010 Annual Report Download - page 67

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company is a guarantor with respect to certain lease obligations associated with The May Department
Stores Company and previously disposed subsidiaries or businesses. The leases, one of which includes potential
extensions to 2070, have future minimum lease payments aggregating approximately $389 million and are offset
by payments from existing tenants and subtenants. In addition, the Company is liable for other expenses related
to the above leases, such as property taxes and common area maintenance, which are also payable by existing
tenants and subtenants. Potential liabilities related to these guarantees are subject to certain defenses by the
Company. The Company believes that the risk of significant loss from the guarantees of these lease obligations is
remote.
Rental expense consists of:
2010 2009 2008
(millions)
Real estate (excluding executory costs)
Capitalized leases –
Contingent rentals ..................................................$–$–$1
Operating leases –
Minimum rentals ................................................... 234 230 230
Contingent rentals .................................................. 16 15 16
250 245 247
Less income from subleases –
Operating leases ................................................... (15) (16) (15)
$235 $229 $232
Personal property – Operating leases ........................................... $ 10 $ 12 $ 19
Included as a reduction to the expense above is deferred rent amortization of $7 million, $7 million and $6
million for 2010, 2009 and 2008, respectively, related to contributions received from landlords.
F-19