Panera Bread 2005 Annual Report Download - page 52

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46
7. Accrued Expenses
Accrued expenses consist of the following (in thousands):
December 27,
2005
December 25,
2004
Compensation and related employment taxes.............................................................................................. $ 20,104 $ 12,540
Capital expenditures .................................................................................................................................... 15,208 9,066
Unredeemed gift cards................................................................................................................................. 13,576 8,044
Insurance...................................................................................................................................................... 8,948 3,642
Income taxes ................................................................................................................................................ 3,338 3,606
Accrued advertising ..................................................................................................................................... 3,102 270
Rent.............................................................................................................................................................. 2,351 3,443
Accrued utilities........................................................................................................................................... 1,832 1,011
Taxes, other than income tax ....................................................................................................................... 1,338 1,680
Other ............................................................................................................................................................ 11,762 5,603
$ 81,559 $ 48,905
8. Line of Credit
On December 19, 2003, the Company entered into a $10.0 million unsecured revolving line of credit (revolver). The revolver
matures December 19, 2006 and has an interest rate of LIBOR plus 0.75% to 1.5% depending on the Company’s leverage ratio and
type of loan (resulting in interest rates of approximately 5.0% to 5.8% at December 27, 2005). The revolver contains restrictions
relating to future indebtedness, liens, investments, distributions, mergers, acquisitions, or sales of assets and certain leasing
transactions. The revolver also requires the maintenance of certain financial ratios and covenants. As of December 27, 2005, the
Company was in compliance with all financial ratios and covenants. At December 27, 2005, the Company had $9.8 million available
under the revolver with $0.2 million utilized by an outstanding letter of credit. The Company has not borrowed under its revolver in
any of the last three fiscal years.
9. Commitments and Contingent Liabilities
The Company is obligated under non-cancelable operating leases for its bakery-cafes, fresh dough facilities and trucks, and
administrative offices. Lease terms for its trucks are generally for five to seven years. Lease terms for its bakery-cafes, fresh dough
facilities, and administrative offices are generally for ten years with renewal options at certain locations and generally require the
Company to pay a proportionate share of real estate taxes, insurance, common area, and other operating costs. Many bakery-cafe
leases provide for contingent rental (i.e., percentage rent) payments based on sales in excess of specified amounts. Certain of the
Company’s lease agreements provide for scheduled rent increases during the lease terms or for rental payments commencing at a date
other than the date of initial occupancy.
Aggregate minimum requirements under non-cancelable operating leases, excluding contingent liabilities, as of December 27,
2005, were as follows (in thousands):
2006 ........................................................................................................................................................................................ $ 40,953
2007 ........................................................................................................................................................................................ 40,992
2008 ........................................................................................................................................................................................ 40,357
2009 ........................................................................................................................................................................................ 40,032
2010 ........................................................................................................................................................................................ 39,603
Thereafter................................................................................................................................................................................ 305,314
$ 507,251
Rental expense under operating leases was approximately $33.0 million, $24.7 million, and $21.0 million in 2005, 2004, and 2003,
respectively, which included contingent (i.e. percentage rent) payments of $0.8 million, $0.6 million, and $0.6 million, respectively.