Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies

v2.4.1.9
Commitments and Contingencies
 12 Months Ended
Dec. 28, 2014
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 28, 2014, December 29, 2013, and December 30, 2012 are as follows (in thousands):
 
 
2014
 
2013
 
2012
Minimum rent
 
$
58,083

 
$
49,206

 
$
47,287

Contingent rent
 
2,239

 
2,164

 
1,861

Equipment rent under operating leases
 
895

 
990

 
788

 
 
$
61,217

 
$
52,360

 
$
49,936


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 was $4.6 million at the fiscal year ended December 28, 2014, December 29, 2013, and related accumulated depreciation was $2.8 million and $2.7 million, respectively. Rental income was immaterial for fiscal years 2014, 2013, and 2012.
Future minimum lease commitments and minimum rental income under all leases as of December 28, 2014 are as follows (in thousands):
 
 
Capital
Leases
 
Operating
Leases
 
Rental
Income
2015
 
$
1,003

 
$
65,779

 
$
150

2016
 
906

 
63,710

 
38

2017
 
900

 
60,333

 


2018
 
900

 
55,345

 


2019
 
900

 
49,219

 


Thereafter
 
6,550

 
192,306

 


Total
 
11,159

 
$
486,692

 
$
188

Less amount representing interest
 
(2,638
)
 
 

 
 

Present value of future minimum lease payments
 
8,521

 
 

 
 

Less current portion
 
(583
)
 
 

 
 

Long-term capital lease obligations
 
$
7,938

 
 

 
 


At the end of fiscal years 2014 and 2013, property and equipment included $21.7 million and $20.0 million of assets under capital lease, and $10.0 million and $8.6 million of related accumulated depreciation.
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.