Harris Teeter 2009 Annual Report Download - page 48

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RUDDICK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
of goodwill. As a result of the interim goodwill impairment test, A&E recorded a non-cash impairment charge
related to all of the goodwill of its U.S. operating segment of $7,654,000 in the third quarter of fiscal 2009. A&E
also recorded related deferred tax benefits of $2,932,000. There were no goodwill impairment charges required
for fiscal 2008 or fiscal 2007.
LEASES
The Company leases certain equipment under agreements expiring during the next 6 years. Harris Teeter
leases most of its stores under leases that expire during the next 26 years. It is expected that such leases will be
renewed by exercising options or replaced by leases of other properties. Most store leases provide for additional
rentals based on sales, and certain store facilities are sublet under leases expiring during the next 9 years. Certain
leases also contain rent escalation clauses (step rents) that require additional rental amounts in the later years of
the term. Rent expense for the fiscal years was as follows (in thousands):
2009 2008 2007
Minimum, net of sublease income .................... $95,010 $85,693 $84,106
Contingent ....................................... 1,688 1,932 1,597
Tot al ........................................... $96,698 $87,625 $85,703
Future minimum lease commitments (excluding leases assigned - see below) and total minimum
sublease rental income to be received under non-cancelable subleases at September 27, 2009 were as follows
(in thousands):
Fiscal Year
Operating
Leases Subleases
Capital
Leases
2010 ......................................... $ 93,877 $ (2,209) $ 9,650
2011 ......................................... 95,760 (1,982) 10,667
2012 ......................................... 95,527 (1,791) 10,682
2013 ......................................... 97,082 (1,383) 10,696
2014 ......................................... 96,816 (1,124) 10,740
Later years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 988,740 (2,393) 149,918
Total minimum lease obligations (receivables) . . . . . . . $1,467,802 $(10,882) 202,353
Amount representing interest ......................................... (106,112)
Present value of net minimum obligation (included with long-term debt) . . . . . . $ 96,241
In connection with the closing of certain store locations, Harris Teeter has assigned leases to several
sub-tenants with recourse. These leases expire over the next 12 years and the future minimum lease payments
totaling $51,167,000 over this period have been assumed by these sub-tenants.
LONG-TERM DEBT
On December 20, 2007, the Company and eleven banks entered into a credit agreement that provides for
a five-year revolving credit facility in the aggregate amount of up to $350 million and a non-amortizing term
loan of $100 million due December 20, 2012. The credit agreement also provides for an optional increase of
the revolving credit facility by an additional amount of up to $100 million and two 1-year maturity extension
options, both of which require consent of the lenders. Outstanding borrowings under the credit agreement bear
interest at a variable rate based on a reference to: rates on federal funds transactions with members of the Federal
Reserve System or the prime rate in effect on the interest determination date; the LIBOR Market Index Rate; or,
the LIBOR Rate, each plus an applicable margin. The amount which may be borrowed from time to time and the