Petsmart 2010 Annual Report Download - page 75

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alone Letter of Credit Facility are secured by substantially all our personal property assets, our wholly owned
subsidiaries and certain real property.
Operating and Capital Leases
We lease substantially all our stores, distribution centers and corporate offices under noncancelable leases. The
terms of the store leases generally range from 10 to 15 years and typically allow us to renew for 2 to 4 additional
5-year terms. Store leases, excluding renewal options, expire at various dates through 2026. Generally, the leases
require payment of property taxes, utilities, common area maintenance, insurance and if annual sales at certain
stores exceed specified amounts, provide for additional rents. We also lease certain equipment under operating
leases and capital leases. Total operating lease expense incurred, net of sublease income, during 2010, 2009 and
2008 was $302.4 million, $296.0 million and $275.1 million, respectively. Additional rent included in those
amounts was not material.
At January 30, 2011, the future minimum annual rental commitments under all noncancelable leases were as
follows (in thousands):
Operating
Leases
Capital
Leases
2011 .................................................... $ 307,177 $ 99,888
2012 .................................................... 301,541 109,696
2013 .................................................... 279,320 108,781
2014 .................................................... 251,803 104,609
2015 .................................................... 214,550 98,478
Thereafter ................................................ 542,175 337,847
Total minimum rental commitments ............................. $1,896,566 $ 859,299
Less: amounts representing interest ............................. (292,470)
Present value of minimum lease payments ........................ 566,829
Less: current portion ........................................ (45,277)
Long-term obligations ....................................... $521,552
The rental commitments schedule includes all locations for which we have the right to control the use of the
property and includes open stores, closed stores, stores to be opened in the future, distribution centers and corporate
offices. We have recorded accrued rent of $0.9 million and $1.7 million in the Consolidated Balance Sheets as of
January 30, 2011, and January 31, 2010, respectively. In addition to the commitments scheduled above, we have
executed lease agreements with total minimum lease payments of $82.1 million. The typical lease term for these
agreements is 10 years. We do not have the right to control the use of the property under these leases as of
January 30, 2011 because we have not taken physical possession of the property.
F-25
PetSmart, Inc. and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)