Panera Bread 2008 Annual Report Download - page 49

December 30, 2008, we expect cash expenditures under these lease obligations, purchase obligations, and uncertain
tax positions to be as follows for the fiscal periods indicated (in thousands):
Total In 2009 2010-2011 2012-2013 After 2013
Operating Leases(1) ..................... $889,022 $ 77,115 $153,339 $151,390 $507,178
Purchase Obligations(2) .................. $ 53,633 39,838 13,420 375 —
Uncertain Tax Positions(3) ................ $ 4,323 2,216 1,630 477 —
Total .............................. $946,978 $119,169 $168,389 $152,242 $507,178
(1) See Note 13 to the consolidated financial statements for further information with respect to our operating leases.
(2) Relates to certain commodity and service agreements where we are committed as of December 30, 2008 to
purchase a fixed quantity over a contracted time period.
(3) See Note 14 to the consolidated financial statements for further information with respect to our uncertain tax
positions.
Off-Balance Sheet Arrangement — We account for certain guarantees in accordance with FIN No. 45,
Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebt-
edness to Others, an interpretation of FASB Statements No. 5, 57 and 107 and a rescission of FASB Interpretation
No. 34. We have guaranteed operating leases of 21 franchisee locations, and 12 locations of its former Au Bon Pain
division, or its franchisees. Also, our 51 percent owned Paradise subsidiary has guaranteed nine operating leases on
behalf of its franchisees. These leases have terms expiring on various dates from January 31, 2009 to December 31,
2023 and have a potential amount of future rental payments of approximately $35.8 million as of December 30,
2008. The obligation from these leases will generally continue to decrease over time as these operating leases
expire. We have not recorded a liability for certain of these guarantees as they arose prior to the adoption of
FIN No. 45 and, unless modified, are exempt from its requirements. There is no liability reflected for those
guarantees issued after FIN No. 45’s effective date as the fair value determined by the our analysis of each lease
guarantee and the facts and circumstances of the lease and the franchisee performance was insignificant, and we did
not believe it was probable we would be required to perform under any guarantees at the time the guarantee was
issued. We have not had to make any payments related to any of these guaranteed leases. Au Bon Pain or the
applicable franchisees continue to have primary liability for these operating leases. Future commitments as of
December 30, 2008 under these leases were as follows (in thousands):
Total In 2009 2010-2011 2012-2013 After 2013
Subleases and Lease Guarantees(1) .............. $35,805 $5,430 $7,219 $6,051 $17,105
(1) Represents aggregate minimum requirement — see Note 13 to the consolidated financial statements for further
information with respect to our operating leases.
We have Confidential and Proprietary Information and Non-Competition Agreements, referred to as Non-
Compete Agreements, with certain employees. These Non-Compete Agreements contain a provision whereby
employees would be due a certain number of weeks of their salary if their employment was terminated by us as
specified in the Non-Compete Agreement. We have not recorded a liability for these amounts potentially due
employees. Rather, we will record a liability for these amounts when an amount becomes due to an employee in
accordance with the appropriate authoritative literature. As of December 30, 2008, the total amount potentially
owed employees under these Non-Compete Agreements was $10.4 million.
In order to facilitate our opening of the first Panera Bread bakery-cafes in Canada, on September 10, 2008, our
Canadian subsidiary, Panera Bread ULC, as lender, entered into a Cdn. $3.5 million secured revolving credit facility
agreement with Millennium Bread Inc., referred to as Millennium, as borrower, and certain of its present and future
subsidiaries, which we refer to as Franchisee Guarantors, who have entered into franchise agreements with Panera
Bread ULC to operate three Panera Bread bakery-cafes in Canada. Advances under the credit agreement are subject
to a number of pre-conditions, including a requirement that Millennium must have first received and maintained a
certain level of cash equity contributions or subordinated loans from Millennium’s shareholders in relation to the
amount of advances requested by Millennium under the credit agreement. The borrowings under the credit
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