CompUSA 2009 Annual Report Download - page 107

Download and view the complete annual report

Please find page 107 of the 2009 CompUSA annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

47
10. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS
Leases - The Company is obligated under operating lease agreements for the rental of certain office and warehouse facilities and
equipment which expire at various dates through October 2026. The Company currently leases its headquarters office/warehouse
facility in New York from an entity owned by the Company’ s three principal shareholders and senior executive officers. The
Company believes that these payments were no higher than would be paid to an unrelated lessor for comparable space. The
Company also acquires certain computer and communications equipment pursuant to capital lease obligations.
At December 31, 2009, the future minimum annual lease payments for capital leases and related and third-party operating leases
were as follows (in thousands):
Capital
Leases
Operating
Leases Total
2010 $ 1,145 $ 24,004 $ 25,149
2011 794 24,280 25,074
2012 329 22,793 23,122
2013 155 20,253 20,408
2014 16,367 16,367
2015-2019 66,413 66,413
2020-2024 11,767 11,767
Thereafter 2,428 2,428
Total minimum lease payments 2,423 188,305 190,728
Less: sublease rental income 354 354
Lease obligation net of subleases 2,423 $ 187,951 $ 190,374
Less amount representing interest 200
Present value of minimum capital lease payments
(including current portion of $1,029) $ 2,223
Annual rent expense aggregated approximately $27.1 million, $25.0 million and $14.8 million in 2009, 2008 and 2007,
respectively. Included in rent expense was $0.9 million, $0.9 million and $0.6 million in 2009, 2008 and 2007, respectively, to
related parties. Rent expense is net of sublease income of $0.1 million, $0.4 million and $0.9 million for 2009, 2008 and 2007,
respectively.
Litigation —
State of Florida, Office of the Attorney General
On September 4, 2009 the Office of the Attorney General, Department of Legal Affairs for the State of Florida filed a lawsuit
against OnRebate.com Inc, TigerDirect Inc. and Systemax Inc. in the Circuit Court of the Eleventh Judicial Court for Miami-
Dade County, Florida alleging deceptive and unfair trade practices under Florida law relating to the offering and processing of
customer rebates. The lawsuit seeks injunctive relief, damages, civil penalties and other equitable relief. The Company denies
the allegations in the lawsuit and intends to vigorously defend the case.
Other Matters
Systemax is a party to various pending legal proceedings and disputes arising in the normal course of business, including those
involving commercial, employment, tax and intellectual property related claims, none of which, in management’ s opinion, is
anticipated to have a material adverse effect on the consolidated financial statements.