Safeway 2011 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 2011, Safeway leased approximately 58% 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 2011, 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
2012 $ 70.8 $ 478.9
2013 67.5 452.2
2014 65.1 421.5
2015 63.2 370.8
2016 59.9 328.7
Thereafter 432.6 2,219.5
Total minimum lease payments 759.1 $ 4,271.6
Less amounts representing interest (325.2)
Present value of net minimum lease payments 433.9
Less current obligations (29.2)
Long-term obligations $ 404.7
Future minimum lease payments under non-cancelable capital and operating lease agreements have not been reduced by
future minimum sublease rental income of $159.5 million.
Amortization expense for property under capital leases was $28.5 million in 2011, $29.8 million in 2010 and $34.6
million in 2009. Accumulated amortization of property under capital leases was $303.1 million at year-end 2011 and
$311.9 million at year-end 2010.
The following schedule shows the composition of total rental expense for all operating leases (in millions):
2011 2010 2009
Property leases:
Minimum rentals $452.2 $447.9 $445.0
Contingent rentals (1) 8.1 8.8 8.5
Less rentals from subleases (9.0) (8.7) (11.3)
451.3 448.0 442.2
Equipment leases 24.4 26.5 26.3
$475.7 $474.5 $468.5
(1) In general, contingent rentals are based on individual store sales.
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