Long-Term Leases and Commitments

12 Months Ended

Feb. 28, 2013

Long-Term Leases and Commitments

NOTE 13 – LONG-TERM LEASES AND COMMITMENTS

The Corporation is committed under noncancelable operating leases for commercial properties (certain of which have been subleased) and equipment, terms of which are approximately 8 years. Rental expense under operating leases for the years ended February 28, 2013, February 29, 2012 and February 28, 2011 is as follows:

	2013			2012			2011
Gross rentals	$	66,840		$	30,641		$	33,452
Sublease rentals		(7,758	)		(11,332	)		(16,387	)
Net rental expense	$	59,082		$	19,309		$	17,065

At February 28, 2013, future minimum rental payments for noncancelable operating leases, net of aggregate future minimum noncancelable sublease rentals, are as follows:

Gross rentals:
2014	$	52,349
2015		48,736
2016		44,056
2017		39,303
2018		32,187
Later years		75,361
		291,992
Sublease rentals		(11,812	)
Net rentals	$	280,180

The sublease rentals in the table above are being paid by Schurman. These amounts relate to retail stores acquired by Schurman that are being subleased to Schurman. The failure of Schurman to operate the retail stores successfully could have a material adverse effect on the Corporation, because if Schurman is not able to comply with its obligations under the subleases, the Corporation remains contractually obligated, as primary lessee, under those leases.

The Corporation is currently negotiating lease terms with a number of landlords related to the Clinton Cards acquisition. As of February 28, 2013, the Corporation has completed 295 lease assignments. The estimated future minimum rental payments for noncancelable operating leases related to these lease assignments are $255,381. In addition, assuming that the remaining landlords consent to terms proposed by the Corporation and the Corporation is able to successfully complete assignments for all of the approximately 400 stores, the estimated future minimum rental payments for noncancelable operating leases will be approximately $105,000 higher, resulting in a total estimated future minimum rental payments for noncancelable operating leases of approximately $360,000 related to acquired stores. Subsequent to year-end, we have completed an additional 62 lease assignments. As such, the total number of lease assignments was 357 as of April 24, 2013.