| Accounting for Leases |
Note E: Accounting for Leases
Operating Leases
We lease store locations, distribution centers, customer care
centers, corporate facilities and certain equipment for original
terms ranging generally from 3 to 22 years. Certain leases contain
renewal options for periods up to 20 years. The rental payments for
our store leases are typically structured as either: minimum rent;
rent based on a percentage of store sales; minimum rent plus
additional rent based on a percentage of store sales; or rent based
on a percentage of store sales if a specified store sales threshold
or contractual obligation of the landlord has not been met.
Contingent rental payments, including rental payments that are
based on a percentage of sales, cannot be predicted with certainty
at the onset of the lease term. Accordingly, such contingent rental
payments are recorded as incurred each period and are excluded from
our calculation of deferred rent liability.
Total rent expense for all operating leases was as follows:
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|
|
|
|
|
|
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In thousands |
|
Fiscal 2015 |
|
|
Fiscal 2014 |
|
|
Fiscal 2013 |
|
|
Rent expense
|
|
$ |
224,564 |
|
|
$ |
215,221 |
|
|
$ |
201,727 |
|
|
Contingent rent expense
|
|
|
33,985 |
|
|
|
32,699 |
|
|
|
34,608 |
|
|
Rent expense before deferred lease incentive income
|
|
|
258,549 |
|
|
|
247,920 |
|
|
|
236,335 |
|
|
Deferred lease incentive income
|
|
|
(24,679 |
) |
|
|
(24,420 |
) |
|
|
(25,385 |
) |
|
Less: sublease rental income
|
|
|
(608 |
) |
|
|
(560 |
) |
|
|
(536 |
) |
|
Total rent expense1
|
|
$ |
233,262 |
|
|
$ |
222,940 |
|
|
$ |
210,414 |
|
| 1 |
Excludes all other
occupancy-related costs including depreciation, common area
maintenance, property taxes and utilities. |
The aggregate future minimum annual cash rental payments under
non-cancelable operating leases in effect at January 31, 2016
were as follows:
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|
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In thousands
|
|
|
Lease Commitments1 |
|
|
Fiscal 2016
|
|
|
$ 257,805 |
|
|
Fiscal 2017
|
|
|
242,036 |
|
|
Fiscal 2018
|
|
|
218,381 |
|
|
Fiscal 2019
|
|
|
197,055 |
|
|
Fiscal 2020
|
|
|
168,046 |
|
|
Thereafter
|
|
|
650,585 |
|
|
Total
|
|
|
$ 1,733,908 |
|
| 1 |
Projected cash payments include
only those amounts that are fixed and determinable as of the
reporting date and are not necessarily representative of future
expected rent expense. We currently pay rent for certain store
locations based on a percentage of store sales. As future store
sales cannot be predicted with certainty, projected payments for
these locations are based on minimum rent, which is generally
higher than rent based on a percentage of store sales. We incur
other lease obligation expenses, such as common area maintenance
and other executory costs, which are not fixed in nature and are
thus not included in the future projected cash payments reflected
above. In addition, projected cash payments do not include any
benefit from deferred lease incentive income, which is reflected
within “Total rent expense” above. |
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