Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies

v2.4.0.8
Commitments and Contingencies
 12 Months Ended
Dec. 29, 2013
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Commitments and Contingencies
Commitments
Leasing Activities—The Company leases land, buildings, and equipment used in its operations under operating leases. The Company's operating leases have remaining non-cancelable terms ranging from less than one year to more than 15 years. These leases generally contain renewal options which permit the Company to renew the leases at defined contractual rates or prevailing market rates. Certain equipment leases also include options to purchase equipment at the end of the lease term. Certain leases provide for contingent rents, which are determined as a percentage of adjusted restaurant sales in excess of specified levels. The Company records a contingent rent liability and the corresponding rent expense when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable. Certain lease agreements also require the Company to pay maintenance, insurance, and property tax costs. Rental expense related to land, building, and equipment leases for the fiscal year ended December 29, 2013, December 30, 2012 and December 25, 2011 are as follows (in thousands):
 
 
2013
 
2012
 
2011
Minimum rent
 
$
49,206

 
$
47,287

 
$
43,756

Contingent rent
 
2,164

 
1,861

 
1,821

Equipment rent under operating leases
 
990

 
788

 
748

 
 
$
52,360

 
$
49,936

 
$
46,325


The Company leases certain of its owned land, buildings, and equipment to outside parties under non-cancelable operating leases. Cost of the leased land, buildings and equipment at the end of fiscal years 2013 and 2012 was $4.6 million in both periods, and related accumulated depreciation was $2.7 million and $2.6 million, respectively. Rental income was immaterial for fiscal years 2013, 2012 and 2011.
Future minimum lease commitments and minimum rental income under all leases as of December 29, 2013 are as follows (in thousands):
 
 
Capital
Leases
 
Operating
Leases
 
Rental
Income
2014
 
$
1,308

 
$
52,595

 
$
150

2015
 
984

 
51,028

 
150

2016
 
906

 
48,208

 
38

2017
 
900

 
45,128

 


2018
 
900

 
40,407

 


Thereafter
 
7,450

 
153,513

 


Total
 
12,448

 
$
390,879

 
$
338

Less amount representing interest
 
(3,109
)
 
 

 
 

Present value of future minimum lease payments
 
9,339

 
 

 
 

Less current portion
 
(826
)
 
 

 
 

Long-term capital lease obligations
 
$
8,513

 
 

 
 


At the end of fiscal years 2013 and 2012, property and equipment included $20.0 million and $20.3 million of assets under capital lease, respectively, and $8.6 million and $7.3 million of related accumulated depreciation, respectively.
Contingencies
In the normal course of business, there are various claims in process, matters in litigation, and other contingencies. These include claims resulting from "slip and fall" accidents, employment related claims and claims alleging illness, injury or other food quality, health or operational issues. To date, no claims of these types of litigation, certain of which are covered by insurance policies, have had a material effect on the Company. While it is not possible to predict the outcome of these other suits, legal proceedings and claims with certainty, management is of the opinion that adequate provision for potential losses associated with these other matters has been made in the financial statements and that the ultimate resolution of these other matters will not have a material effect on the Company's financial position and results of operations.