DSCM » Topics » 8. Commitments and Contingencies

This excerpt taken from the DSCM 10-K filed Mar 13, 2009.

8. Commitments and Contingencies

STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%">Operating Leases

We lease
office, distribution center, and call center facilities under non-cancelable operating leases, which include fixed rental payments ending between 2009 and 2013. We have the option to extend some of these leases for one or two additional terms of
five years. In addition, we lease various office and IT equipment under operating leases. Total rent expense under operating leases was $3.7 million in 2008, $3.4 million in 2007, and $3.0 million in 2006.

STYLE="margin-top:0px;margin-bottom:0px"> 


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DRUGSTORE.COM, INC.

ALIGN="center">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

 


In August 2004, we entered into an operating lease for approximately 53,000 square feet for our
corporate headquarters. The lease expires on July 31, 2013, with two separate five-year renewal options that, if exercised, would extend the lease expiration to July 2023. In connection with the lease, we received landlord-provided incentives
of approximately $2.3 million in the form of tenant improvements, which have been recorded as additions to fixed assets and other current and long-term liabilities and are being amortized over the term of the lease. As of December 28, 2008 and
December 30, 2007, our long-term deferred rent liability totaled $1.0 million and $1.3 million, respectively, and our current deferred rent liability totaled $0.3 million.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">In connection with the lease arrangements for our corporate headquarters, we are required to provide a standby letter of credit to our landlord as a
security deposit, which will be renewed annually until the end of the lease term. The standby letter of credit is funded under our revolving line of credit and is not required to be secured with cash.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Future minimum commitments at December 28, 2008 are as follows:

 


























































Fiscal Year

  Operating Leases

2009

  $3,042

2010

   3,028

2011

   1,565

2012

   1,487

2013

   876

Thereafter

   —  
    

Total minimum payments

  $9,998
    
This excerpt taken from the DSCM 10-K filed Mar 14, 2008.

8. Commitments and Contingencies

STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%">Operating Leases

We lease
office, distribution center, and call center facilities under non-cancelable operating leases, which include fixed rental payments ending between 2008 and 2013. We have the option to extend some of these leases for one or more additional terms of
five years. In addition, we lease various office and IT equipment under operating leases. Total rent expense under operating leases was $3.4 million in 2007, $3.0 million for 2006, and $3.1 million for 2005.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">In June 2007, we entered into an operating lease for an inventory storage facility for approximately 85,000 square feet through February 2011.

In August 2004, we entered into an operating lease for approximately 53,000 square feet for our corporate headquarters. The lease expires
on July 31, 2013, with two separate five-year renewal options that, if exercised,

 


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DRUGSTORE.COM, INC.

ALIGN="center">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 



would extend the lease expiration to July 2023. In connection with the lease, we received landlord-provided incentives of approximately $2.3 million in the
form of tenant improvements, which have been recorded as additions to fixed assets and other current and long-term liabilities and are being amortized over the term of the lease. As of December 30, 2007 and December 31, 2006, our long-term
deferred rent liability totaled $1.3 million and $1.6 million, respectively, and our current deferred rent liability totaled $0.3 million.

SIZE="2">In connection with the lease arrangements for our corporate headquarters, we are required to provide a standby letter of credit as a security deposit, which will be renewed annually until the end of the lease term. The standby letter of
credit is funded under our revolving line of credit and is not required to be secured with cash.

Future minimum commitments at
December 30, 2007 are as follows:

 


























































Fiscal Year

  Operating Leases

2008

  $2,992

2009

   2,945

2010

   3,041

2011

   1,570

2012

   1,487

Thereafter

   876
    

Total minimum payments

  $12,911
    

EXCERPTS ON THIS PAGE:

10-K
Mar 13, 2009
10-K
Mar 14, 2008
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