Macy's 2013 Annual Report Download - page 62
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Table of Contents
Capitalized leases are included in the Consolidated Balance Sheets as property and equipment while the related obligation is included in short-term ( $2
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 $34 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 $334 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:
Real estate (excluding executory costs)
Capitalized leases –
Contingent rentals $ —
$ —
$ —
Operating leases –
Minimum rentals 256
248
242
Contingent rentals 22
21
19
278
269
261
Less income from subleases –
Operating leases (10)
(11)
(18)
$268
$258
$243
Personal property – Operating leases $11
$11
$10
Included as a reduction to the expense above is deferred rent amortization of $8 million, $7 million and $8 million for 2013, 2012 and 2011,
respectively, related to contributions received from landlords.
F-16