Red Lobster 2000 Annual Report Download - page 41

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DARDEN RESTAURANTS
acquiring company having a value equal to two times
the exercise price of the right. The rights are redeemable
by the Company’s Board in certain circumstances and
expire on May 24, 2005.
Note 12
Interest, Net
The components of interest, net are as follows:
Fiscal Year
2000 1999 1998
Interest expense $24,999 $21,015 $21,527
Capitalized interest (1,910) (593) (1,018)
Interest income (701) (882) (425)
Interest, net $22,388 $19,540 $20,084
Capitalized interest was computed using the
Company’s borrowing rate. The Company paid $19,834,
$16,356 and $17,235 for interest (net of amount
capitalized) in 2000, 1999 and 1998, respectively.
Note 13
Leases
An analysis of rent expense incurred under operating
leases is as follows: Fiscal Year
2000 1999 1998
Restaurant minimum rent $38,818 $38,866 $39,140
Restaurant percentage rent 2,183 1,853 1,707
Restaurant equipment
minimum rent 8,267 8,511 3,465
Restaurant rent averaging
expense (473) 13 (121)
Transportation equipment 1,946 1,856 2,169
Office equipment 1,090 1,012 990
Office space 597 505 436
Warehouse space 227 215 217
Total rent expense $52,655 $52,831 $48,003
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 pay-
ment 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 28, 2000 and thereafter are:
$49,460 in 2001; $45,948 in 2002; $38,795 in 2003;
$27,519 in 2004; $22,215 in 2005; and $71,828 there-
after, for a cumulative total of $255,765.
Note 14
Retirement Plans
Substantially all of the Company’s employees are eligi-
ble to participate in a retirement plan. The Company’s
salaried employees are eligible to participate in a post-
retirement benefit plan.
DEFINED BENEFIT PLANS AND
POST-RETIREMENT BENEFIT PLAN
The Company sponsors defined benefit pension plans
for salaried employees with various benefit formulas and
a group of hourly employees with a frozen level of bene-
fits. The Company also sponsors a contributory plan
that provides health-care benefits to its salaried retirees.
38 DARDEN RESTAURANTS 2000 ANNUAL REPORT