Macy's 2011 Annual Report Download - page 55

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F-15
Minimum rental commitments (excluding executory costs) at January 28, 2012, for noncancellable leases are:
Capitalized
Leases Operating
Leases Total
(millions)
Fiscal year:
2012................................................................................................................. $ 6 $ 255 $ 261
2013................................................................................................................. 5 244 249
2014................................................................................................................. 5 224 229
2015................................................................................................................. 3 187 190
2016................................................................................................................. 3 168 171
After 2015 ....................................................................................................... 52 1,689 1,741
Total minimum lease payments....................................................................... 74 $ 2,767 $ 2,841
Less amount representing interest................................................................... 35
Present value of net minimum capitalized lease payments............................. $ 39
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 ($35 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 $54 million on operating leases.
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 $369 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:
2011 2010 2009
(millions)
Real estate (excluding executory costs)
Capitalized leases –
Contingent rentals............................................................................. $ — $ — $ —
Operating leases –
Minimum rentals............................................................................... 242 234 230
Contingent rentals............................................................................. 19 16 15
261 250 245
Less income from subleases –
Operating leases................................................................................ (18)(15)(16)
$ 243 $ 235 $ 229
Personal property – Operating leases.............................................................. $ 10 $ 10 $ 12
Included as a reduction to the expense above is deferred rent amortization of $8 million, $7 million and $7 million for
2011, 2010 and 2009, respectively, related to contributions received from landlords.