Whole Foods 2009 Annual Report Download - page 65

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(10) Leases
The Company is committed under certain capital leases for rental of equipment, buildings, and land and certain operating
leases for rental of facilities and equipment. These leases expire or become subject to renewal clauses at various dates from
2010 to 2054. Amortization of equipment under capital lease is included with depreciation expense.
Rental expense charged to operations under operating leases for fiscal years 2009, 2008 and 2007 totaled approximately
$281.9 million, $257.5 million and $201.0 million, respectively.
Minimum rental commitments and sublease rental income required by all noncancelable leases are approximately as follows
(in thousands):
Capital Operating Sublease
Fiscal year 2010 $ 2,066 $ 265,408 $ 6,481
Fiscal year 2011 2,066 287,365 5,802
Fiscal year 2012 2,087 304,124 5,395
Fiscal year 2013 2,084 308,214 4,840
Fiscal year 2014 2,098 310,911 4,015
Future fiscal years 28,639 4,174,296 12,692
39,040 $ 5,650,318 $ 39,225
Less amounts representing interest 20,391
Net present value of capital lease obligations 18,649
Less current installments 389
Long-term capital lease obligations, less current installments $ 18,260
The present values of future minimum obligations for capital leases shown above are calculated based on interest rates
determined at the inception of the lease, or upon acquisition of the original lease.
During fiscal years 2009, 2008 and 2007, we paid contingent rentals totaling approximately $9.4 million, $10.8 million and
$9.9 million, respectively. During fiscal year 2007, we recorded an asset retirement obligation associated with operating
leases totaling approximately $825,000. No asset retirement obligations associated with operating leases were incurred
during fiscal year 2009 or 2008. Sublease rental income totaled approximately $6.3 million, $5.4 million and $3.9 million
during fiscal years 2009, 2008 and 2007, respectively. John Mackey and Glenda Chamberlain, executive officers of the
Company, own approximately 51% and 2%, respectively, of BookPeople, Inc., a retailer of books and periodicals that is
unaffiliated with the Company, which leases retail space in Austin, Texas from the Company. The lease is set to expire or
become subject to its renewal clause in 2015. The lease provides for an aggregate annual minimum rent of approximately
$0.5 million, $0.5 million, and $0.4 million which the Company received in rental income in fiscal years 2009, 2008 and
2007, respectively.
(11) Income Taxes
Components of income tax expense attributable to continuing operations are as follows (in thousands):
2009 2008 2007
Current federal income tax $ 64,680 $ 62,835 $ 114,503
Current state income tax 23,974 22,906 34,138
Current foreign income tax 1,536 6,758 389
Total current tax 90,190 92,499 149,030
Deferred federal income tax 15,347 (1,086) (17,014)
Deferred state income tax (1,258) (1,589) (5,091)
Deferred foreign income tax (141) 2,171 (5,098)
Total deferred tax 13,948 (504) (27,203)
Total income tax expense $ 104,138 $ 91,995 $ 121,827
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