Petsmart 2011 Annual Report Download - page 78

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PetSmart, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements — (Continued)
leases require payment of property taxes, utilities, common area maintenance, insurance and if annual sales at
certain stores exceed specified amounts, provide for additional rents. We also lease certain equipment under
operating leases and capital leases. Total operating lease expense incurred, net of sublease income, during 2011,
2010 and 2009 was $319.9 million, $302.4 million and $296.0 million, respectively. Additional rent included in
those amounts was not material.
At January 29, 2012, the future minimum annual rental commitments under all noncancelable leases were as
follows (in thousands):
Operating
Leases
Capital
Leases
2012 ........................................................ $ 305,090 $ 107,548
2013 ........................................................ 311,045 116,161
2014 ........................................................ 284,873 112,021
2015 ........................................................ 250,671 105,758
2016 ........................................................ 210,050 93,525
Thereafter ................................................... 535,606 289,648
Total minimum rental commitments ............................... $1,897,335 $ 824,661
Less: amounts representing interest ............................... (265,169)
Present value of minimum lease payments .......................... 559,492
Less: current portion ........................................... (54,219)
Long-term obligations .......................................... $505,273
The rental commitments schedule includes all locations for which we have the right to control the use of the
property and includes open stores, closed stores, stores to be opened in the future, distribution centers and corpo-
rate offices. We have recorded accrued rent of $1.0 million and $0.9 million in the Consolidated Balance Sheets
as of January 29, 2012, and January 30, 2011, respectively. In addition to the commitments scheduled above, we
have executed lease agreements with total minimum lease payments of $104.1 million. The typical lease term for
these agreements is 10 years. We do not have the right to control the use of the property under these leases as of
January 29, 2012 because we have not taken physical possession of the property.
Future minimum annual rental commitments have not been reduced by amounts expected to be received
from subtenants. At January 29, 2012, the future annual payments expected to be collected from subtenants are as
follows (in thousands):
2012 ..................................................................... $ 3,258
2013 ..................................................................... 3,270
2014 ..................................................................... 2,926
2015 ..................................................................... 2,940
2016 ..................................................................... 2,179
Thereafter ................................................................. 2,593
$17,166
Note 13 — Commitments and Contingencies
Advertising Purchase Commitments
As of January 29, 2012, we had advertising commitments of approximately $32.7 million in 2012.
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