Red Lobster 1999 Annual Report Download - page 16

Notes
to Consolidated Financial Statements
37
The components of interest, net are as follows:
Fiscal Year
1999 1998 1997
Interest expense $ 21,015)$ 21,527)$ 23,336)
Capitalized interest (593) (1,018) (739)
Interest income (882) (425) (306)
Interest, net $ 19,540)$ 20,084)$ 22,291)
NOTE 13 – LEASES
An analysis of rent expense by property leased (all
of which are accounted for as operating leases) is
as follows:
Fiscal Year
1999 1998 1997
Restaurant minimum rent $ 38,866 $ 39,140)$ 40,616
Restaurant percentage rent 1,853 1,707)1,649
Restaurant equipment
minimum rent 8,511 3,465)
Restaurant rent
averaging expense 13 (121) 595
Transportation equipment 1,856 2,169)1,951
Office equipment 1,012 990)915
Office space 505 436)406
Warehouse space 215 217)235
Total rent expense $ 52,831 $ 48,003)$ 46,367
Minimum rental obligations are accounted for on a
straight-line basis over the term of the lease. Percentage
rent expense is generally based on sales levels or
changes in the Consumer Price Index. Most leases
require payment of property taxes, insurance and
maintenance costs in addition to the rent payments.
The annual non-cancelable future lease commitments
for each of the five years subsequent to May 30, 1999,
and thereafter are: $51,035 in 2000; $47,518 in 2001;
$43,940 in 2002; $36,981 in 2003; $24,729 in 2004; and
$89,869 thereafter, for a cumulative total of $294,072.
NOTE 14 – RETIREMENT PLANS
The Company has a defined benefit plan covering most
salaried employees and a group of hourly employees
with a frozen level of benefits. Benefits for salaried
employees are based on length of service and final
average compensation. The hourly plan provides a
monthly amount for each year of credited service. The
Company’s funding policy is consistent with the funding
requirements of federal law and regulations. Plan assets
consist principally of listed equity securities, corporate
obligations and U.S. government securities.
Components of net periodic benefit cost (income) are
as follows:
Fiscal Year
1999 1998 1997
Service cost $ 3,251)$ 2,576)$ 3,250)
Interest cost 5,243)4,699)4,686)
Expected return on
plan assets (10,247) (8,865) (8,318)
Amortization of unrecognized
transition asset (642) (642) (642)
Amortization of unrecognized
prior service cost (456) (456)
Recognized net actuarial loss 1,088)1,164)1,864)
Net periodic benefit
cost (income) $ (1,763) $ (1,524) $ 840)