RITE AID CORP | 2013 | FY |

12. Leases

        The Company leases most of its retail stores and certain distribution facilities under noncancellable operating and capital leases, most of which have initial lease terms ranging from 5 to 22 years. The Company also leases certain of its equipment and other assets under noncancellable operating leases with initial terms ranging from 3 to 10 years. In addition to minimum rental payments, certain store leases require additional payments based on sales volume, as well as reimbursements for taxes, maintenance and insurance. Most leases contain renewal options, certain of which involve rent increases. Total rental expense, net of sublease income of $8,536, $8,866, and $9,662, was $951,239, $976,892, and $965,665 in fiscal 2013, 2012, and 2011, respectively. These amounts include contingent rentals of $21,026, $22,659 and $23,336 in fiscal 2013, 2012, and 2011, respectively.

        During fiscal 2013, the Company sold two owned operating stores to independent third parties. Net proceeds from the sale were $6,355. Concurrent with these sales, the Company entered into agreements to lease the stores back from the purchasers over a minimum lease term of 12 to 20 years. The Company accounted for these leases as operating leases. The transactions resulted in a gain of $1,818 which is included in the gain on sale of assets, net for the fifty-two weeks ended March 2, 2013.

        During fiscal 2012, the Company sold two owned operating stores to independent third parties. Net proceeds from the sale were $6,038. Concurrent with these sales, the Company entered into agreements to lease the stores back from the purchasers over a minimum lease term of 7 to 10 years. The Company accounted for these leases as operating leases. The transactions resulted in a loss of $3,896 which is included in the gain on sale of assets, net for the fifty-three weeks ended March 3, 2012.

        During fiscal 2011, the Company had no sale-leaseback transactions.

        The net book values of assets under capital leases and sale-leasebacks accounted for under the financing method at March 2, 2013 and March 3, 2012 are summarized as follows:

        Following is a summary of lease finance obligations at March 2, 2013 and March 3, 2012:

        Following are the minimum lease payments for all properties under a lease agreement that will have to be made in each of the years indicated based on non-cancelable leases in effect as of March 2, 2013: