Petsmart 2014 Annual Report Download - page 104

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Table of Contents
PetSmart, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements — (Continued)
We had $69.2 million and $69.8 million in outstanding letters of credit, issued for guarantees provided for insurance
programs, under our Stand-alone Letter of Credit Facility as of February 2, 2014, and February 3, 2013, respectively. We had
$71.2 million and $71.9 million in restricted cash on deposit as of February 2, 2014, and February 3, 2013, respectively.
Our Revolving Credit Facility and Stand-alone Letter of Credit Facility permit the payment of dividends if we are not in
default and payment conditions as defined in the agreement are satisfied. As of February 2, 2014, we were in compliance with
the terms and covenants of our Revolving Credit Facility and Stand-alone Letter of Credit Facility. The Revolving Credit
Facility and Stand-alone Letter of Credit Facility are secured by substantially all our financial assets.
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
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