Panera Bread 2010 Annual Report Download - page 48

Contractual Obligations and Other Commitments
We currently anticipate 95 to 105 system-wide bakery-cafe openings in fiscal 2011. We expect to fund our
capital expenditures principally through internally generated cash flow and available borrowings under our existing
credit facility, if needed.
In addition to our planned capital expenditure requirements, we have certain other contractual and committed
cash obligations. Our contractual cash obligations consist of noncancelable operating leases for our bakery-cafes,
fresh dough facilities and trucks, and support centers; purchase obligations primarily for certain commodities; and
uncertain tax positions. Lease terms for our trucks are generally for six to eight years. Lease terms for our bakery-
cafes, fresh dough facilities, and support centers are generally for ten years with renewal options at most locations
and generally require us to pay a proportionate share of real estate taxes, insurance, common area maintenance, 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 or changes in external indices. Certain of our 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. As of December 28, 2010, 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
Less than
1 Year
1-3
Years
3-5
Years
More than
5 Years
Operating Leases(1) .................... $1,006,350 $ 93,303 $189,010 $183,972 $540,065
Capital Lease Obligations(1) ............. 1,517 152 304 304 757
Purchase Obligations(2) ................. 190,929 186,560 3,869 500 —
Uncertain Tax Positions(3) ............... 2,896 1,354 1,116 378 48
Total............................. $1,201,692 $281,369 $194,299 $185,154 $540,870
(1) See Note 13 to the consolidated financial statements for further information with respect to our operating and
capital leases.
(2) Relates to certain commodity and service agreements where we are committed as of December 28, 2010 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 Arrangements
As of December 28, 2010, we guaranteed operating leases of 27 franchisee or affiliate bakery-cafes and one
location of our former Au Bon Pain division, which we account for in accordance with the accounting requirements
for guarantees. These leases have terms expiring on various dates from December 31, 2010 to December 31, 2023
and have a potential amount of future rental payments of approximately $24.3 million as of December 28, 2010. Our
obligation under these leases will generally 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 issuance of the accounting requirements
for guarantees and, unless modified, are exempt from its requirements. We have not recorded a liability for those
guarantees issued after the effective date of the accounting requirements because the fair value of each such lease
guarantee was determined by us to be insignificant based on analysis of the facts and circumstances of each such
lease and each such franchisee’s performance, and we did not believe it was probable we would be required to
perform under any guarantees at the time the guarantees were 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 obligation for
these operating leases. As of December 28, 2010, future commitments under these leases were as follows (in
thousands):
Total
Less than
1 Year
1-3
Years
3-5
Years
More than
5 Years
Subleases and Lease Guarantees(1) ................. $24,278 3,304 6,152 5,086 9,736
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