Jack In The Box 2012 Annual Report Download - page 55
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As lessee — We lease restaurants and other facilities, which generally have renewal clauses of 5 to 20 years exercisable at our option. In some instances, our
leases have provisions for contingent rentals based upon a percentage of defined revenues. Many of our leases also have rent escalation clauses and require the
payment of property taxes, insurance and maintenance costs. We also lease certain restaurant, office and warehouse equipment, as well as various
transportation equipment. Minimum rental obligations are accounted for on a straight-line basis over the term of the initial lease.
The components of rent expense were as follows in each fiscal year ( in thousands):
Minimum rentals
$225,414
$223,034
$222,600
Contingent rentals
2,013
1,796
1,804
Total rent expense
227,427
224,830
224,404
Less rental expense on subleased properties
(130,275)
(109,300)
(83,340)
Net rent expense
$97,152
$115,530
$141,064
The following table presents as of September 30, 2012, future minimum lease payments under capital and operating leases as follows ( in thousands):
2013
$1,532
$227,768
2014
1,377
219,721
2015
1,260
203,849
2016
1,198
201,951
2017
1,071
167,969
Thereafter
2,104
743,487
Total minimum lease payments
8,542
$1,764,745
Less amount representing interest, 10.00% weighted average interest rate
(2,314)
Present value of obligations under capital leases
6,228
Less current portion
(952)
Long-term capital lease obligations
$5,276
Total future minimum lease payments of $1.1 billion included in the table above are expected to be recovered under our non-cancellable operating subleases.
Assets recorded under capital leases are included in property and equipment, and consisted of the following at each year-end ( in thousands):
Buildings
$19,431
$19,514
Less accumulated amortization
(14,499)
(13,517)
$4,932
$5,997
Amortization of assets under capital leases is included in depreciation and amortization expense.
As lessor — We lease or sublease restaurants to certain franchisees and others under agreements that generally provide for the payment of percentage rentals in
excess of stipulated minimum rentals, usually for a period of 20 years. Most of our leases have rent escalation clauses and renewal clauses of 5 to 20 years.
The following details rents received under these agreements in each fiscal year ( in thousands):
Total rental income (1)
$200,760
$166,937
$133,787
Contingent rentals
$16,341
$10,364
$7,721
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