Safeway 2012 Annual Report Download - page 70

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SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
58
Note G: Lease Obligations
At year-end 2012, Safeway leased approximately 55% 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 2012, 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
2013 $ 75.5 $ 478.8
2014 72.9 455.4
2015 71.3 403.5
2016 66.0 360.2
2017 60.3 307.3
Thereafter 393.4 2,079.0
Total minimum lease payments 739.4 $ 4,084.2
Less amounts representing interest (291.6)
Present value of net minimum lease payments 447.8
Less current obligations (36.2)
Long-term obligations $411.6
Future minimum lease payments under non-cancelable capital and operating lease agreements have not
been reduced by future minimum sublease rental income of $164.7 million.
Amortization expense for property under capital leases was $30.0 million in 2012, $28.5 million in 2011 and
$29.8 million in 2010. Accumulated amortization of property under capital leases was $321.6 million at year-
end 2012 and $303.1 million at year-end 2011.
The following schedule shows the composition of total rental expense for all operating leases (in millions):
2012 2011 2010
Property leases:
Minimum rentals $ 458.7 $ 452.2 $ 447.9
Contingent rentals (1) 8.3 8.1 8.8
Less rentals from subleases (10.5) (9.0) (8.7)
456.5 451.3 448.0
Equipment leases 24.7 24.4 26.5
$ 481.2 $ 475.7 $ 474.5
(1) In general, contingent rentals are based on individual store sales.