Safeway 2009 Annual Report Download - page 72

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SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note G: Lease Obligations
At year-end 2009, Safeway leased approximately 59% of its stores. Most leases have renewal options, typically with
increased rental rates during the option period. Certain of these leases contain options to purchase the property at
amounts that approximate fair market value.
As of year-end 2009, future minimum rental payments applicable to non-cancelable capital and operating leases with
remaining terms in excess of one year were as follows (in millions):
Capital
leases
Operating
leases
2010 $ 82.1 $ 467.9
2011 78.4 432.2
2012 76.0 400.0
2013 73.2 363.4
2014 70.6 331.6
Thereafter 568.9 2,226.5
Total minimum lease payments 949.2 $ 4,221.6
Less amounts representing interest (431.0)
Present value of net minimum lease payments 518.2
Less current obligations (31.6)
Long-term obligations $ 486.6
Future minimum lease payments under non-cancelable capital and operating lease agreements have not been reduced by
future minimum sublease rental income of $127.9 million.
Amortization expense for property under capital leases was $34.6 million in 2009, $38.8 million in 2008 and $41.7
million in 2007. Accumulated amortization of property under capital leases was $290.4 million at year-end 2009 and
$316.9 million at year-end 2008.
The following schedule shows the composition of total rental expense for all operating leases (in millions):
2009 2008 2007
Property leases:
Minimum rentals $445.0 $454.2 $436.5
Contingent rentals (1) 8.5 12.8 12.7
Less rentals from subleases (11.3) (9.9) (10.4)
442.2 457.1 438.8
Equipment leases 26.3 28.9 26.2
$468.5 $486.0 $465.0
(1) In general, contingent rentals are based on individual store sales.
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