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FORM 10-K
60
NOTE 6 – LEASING
The following table identifies the future minimum lease payments under all of the Company’s operating and capital leases for each of
the next five years and in the aggregate as of December 31, 2013 (in thousands):
Operating Leases Capital Leases
Related Parties
Non-Related
Parties
Non-Related
Parties Total
2014 $ 4,555 $ 242,571 $ 77 $ 247,203
2015 4,621 228,364 26 233,011
2016 4,633 208,269 — 212,902
2017 4,405 186,686 — 191,091
2018 4,196 160,049 — 164,245
Thereafter 11,331 881,810 — 893,141
Total $ 33,741 $ 1,907,749 $ 103 $ 1,941,593
Capital lease agreements:
The Company assumed certain vehicle capital leases in the acquisition of CSK. The remaining vehicle capital lease agreements expired
on October 15, 2013. There were no future minimum lease payments under these vehicle capital leases as of December 31, 2013. The
present value of the future minimum lease payments under these vehicle capital leases totaled approximately $0.2 million at December
31, 2012, which were classified as long-term debt in the accompanying consolidated financial statements. The Company did not acquire
any additional vehicles under capital leases during the years ended December 31, 2013 or 2012.
The Company assumed certain building capital leases in the acquisition of CSK. The remaining building capital lease agreement will
expire on April 30, 2015. The present value of future minimum lease payments under this building capital lease totaled approximately
$0.1 million and $0.2 million at December 31, 2013 and 2012, respectively, which was classified as long-term debt in the accompanying
consolidated financial statements. The Company did not acquire any additional buildings under capital leases during the years ended
December 31, 2013 or 2012. See Note 15 for further information on the Company's related party operating leases.
Operating lease commitments:
The Company leases certain office space, retail stores, property and equipment under long-term, non-cancelable operating leases. Most
of these leases include renewal options and some include options to purchase, provisions for percentage rent based on sales and/or
incremental step increase provisions.
The future minimum lease payments under the Company’s operating leases, in the table above, do not include potential amounts for
percentage rent or other operating lease related costs and have not been reduced by expected future minimum sublease income. Expected
future minimum sublease income under non-cancelable subleases is approximately $15.8 million at December 31, 2013.
The following table summarizes the net rent expense amounts for the years ended December 31, 2013, 2012 and 2011:
For the Year Ended December 31,
2013 2012 2011
Minimum operating lease expense $ 247,039 $ 234,113 $ 226,158
Contingent rents 701 744 534
Other lease related occupancy costs 11,257 10,043 8,821
Total rent expense 258,997 244,900 235,513
Less: sublease income 4,105 4,031 4,616
Net rent expense $ 254,892 $ 240,869 $ 230,897
NOTE 7 – EXIT ACTIVITIES
The Company maintains reserves for closed stores and other properties that are no longer utilized in current operations.