Panera Bread 2011 Annual Report Download - page 45

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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. Certain 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, scheduled rent increases
during the lease terms, and/or rental payments commencing at a date other than the date of initial occupancy. As of December 27,
2011, 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):
Operating Leases (1) . . . . . . . . . . . . . . . .
Capital Lease Obligations (1) . . . . . . . . .
Purchase Obligations (2) . . . . . . . . . . . . .
Uncertain Tax Positions (3) . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total
$ 1,643,604
1,673
218,083
3,379
$ 1,866,739
Less than
1 year
$ 107,816
186
216,387
677
$ 325,066
1-3
years
$ 214,503
372
1,696
966
$ 217,537
3-5
years
$ 207,834
372
—
405
$ 208,611
More than
5 years
$ 1,113,451
743
—
1,331
$ 1,115,525
(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 27, 2011 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 27, 2011, we guaranteed operating leases of 25 franchisee or affiliate bakery-cafes, which we account for in
accordance with the accounting requirements for guarantees. These leases have terms expiring on various dates from January 31,
2012 to December 31, 2023 and have a potential amount of future rental payments of approximately $23.6 million as of
December 27, 2011. 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. Applicable franchisees continue to have
primary obligation for these operating leases. As of December 27, 2011, future commitments under these leases were as follows
(in thousands):
Subleases and Lease Guarantees (1) . . . . . . . . . . . . .
Total
$ 23,628
Less than
1 year
3,253
1-3
years
6,291
3-5
years
4,188
More than
5 years
9,896
(1) Represents aggregate minimum requirement — see Note 13 to the consolidated financial statements for further information
with respect to our lease guarantees.
Employee Commitments
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 to 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 27, 2011, the
total amount potentially owed employees under these Non-Compete Agreements was $16.5 million.