CompUSA 2012 Annual Report Download - page 61

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 July 2030. 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, communications equipment, and machinery and equipment pursuant to capital lease obligations.
At December 31, 2012, the future minimum annual lease payments for capital leases and related and third-
party operating leases were as
follows (in millions):
Annual rent expense aggregated approximately $33.4 million, $30.8 million and $31.1 million in 2012, 2011 and 2010, respectively.
Included in rent expense was $0.9 million, $0.9 million and $0.9 million in 2012, 2011 and 2010, respectively, to related parties. Rent
expense is net of sublease income of $0.2 million, $0.2 million and $0.2 million for 2012, 2011 and 2010, respectively.
Other Matters
The Company and its subsidiaries are involved in various lawsuits, claims, investigations and proceedings including commercial,
employment, consumer, personal injury and health and safety law matters, which are being handled and defended in the ordinary course
of business. In addition, the Company is subject to various assertions, claims, proceedings and requests for indemnification concerning
intellectual property, including patent infringement suits involving technologies that are incorporated in a broad spectrum of products the
Company sells. The Company is also audited by (or has initiated voluntary disclosure agreements with) numerous governmental agencies
in various countries, including U.S. Federal and state authorities, concerning potential income tax, sales tax and unclaimed property
liabilities. These matters are in various stages of investigation, negotiation and/or litigation, and are being vigorously defended. In this
regard, the Company is being audited by the state of Texas regarding its claim that certain of the company’s consumer electronics e-
commerce sales are subject to sales tax in Texas; the Company is defending this matter, believes it has strong defenses, and has
established reserves for this matter. Although the Company does not expect, based on currently available information, that the outcome in
any of these matters, individually or collectively, will have a material adverse effect on its financial condition or results of operations, the
ultimate outcome is inherently unpredictable. Therefore, judgments could be rendered or settlements entered, that could adversely affect
the Company’s operating results or cash flows in a particular period. The Company routinely assesses all of its litigation and threatened
litigation as to the probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where it
assesses the likelihood of loss as probable and estimable.
Table of Contents
11.
COMMITMENTS, CONTINGENCIES AND OTHER MATTERS
Capital
Leases
Operating
Leases
Total
2013
$
3.3
$
28.5
$
31.8
2014
2.9
26.2
29.1
2015
2.5
25.6
28.1
2016
0.8
23.5
24.3
2017
0.2
23.0
23.2
2018
-
2022
63.3
63.3
2023
-
2027
26.1
26.1
Thereafter
17.2
17.2
Total minimum lease payments
9.7
233.4
243.1
Less: sublease rental income
0.1
0.1
Lease obligation net of subleases
9.7
$
233.3
243.0
Less: amount representing interest
1.6
Present value of minimum capital lease payments (including current portion of $2.8)
$
8.1
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