Petsmart 2013 Annual Report Download - page 77

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PetSmart, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements — (Continued)
F-25
Operating and Capital Leases
We lease 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 two to four additional five-
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 2013, 2012, and
2011 was $331.3 million, $325.4 million, and $319.9 million, respectively. Additional rent included in those
amounts was not material.
At February 2, 2014, the future minimum annual rental commitments under all noncancelable leases were as
follows (in thousands):
Operating
Leases
Capital
Leases
2014 ....................................................................................................................... $ 325,830 $ 115,340
2015 ....................................................................................................................... 334,756 120,018
2016 ....................................................................................................................... 301,162 107,652
2017 ....................................................................................................................... 264,995 98,141
2018 ....................................................................................................................... 210,121 80,262
Thereafter .............................................................................................................. 491,633 204,548
Total minimum rental commitments...................................................................... $ 1,928,497 725,961
Less: amounts representing interest....................................................................... (207,477)
Present value of minimum lease payments ........................................................... 518,484
Less: current portion.............................................................................................. (66,887)
Long-term obligations ........................................................................................... $ 451,597
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 $0.7 million and $0.7 million in the Consolidated Balance Sheets as of
February 2, 2014, and February 3, 2013, respectively. In addition to the commitments scheduled above, we have
executed lease agreements with total minimum lease payments of $157.4 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 February 2,
2014, because we have not taken physical possession of the property.
Future minimum annual rental commitments have not been reduced by amounts expected to be received from
subtenants. At February 2, 2014, the future annual payments expected to be collected from subtenants were as
follows (in thousands):
2014................................................................................................................................................ $ 3,248
2015................................................................................................................................................ 3,289
2016................................................................................................................................................ 2,430
2017................................................................................................................................................ 1,542
2018................................................................................................................................................ 1,025
Thereafter ....................................................................................................................................... 1,367
$ 12,901