Red Lobster 2015 Annual Report Download - page 52

48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DARDEN
NOTE 14
LEASES
An analysis of rent expense incurred related to restaurants in continuing
operations is as follows:
Fiscal Year
(in millions) 2015 2014 2013
Restaurant minimum rent $167.0 $146.4 $125.8
Restaurant rent averaging expense 16.7 26.9 24.2
Restaurant percentage rent 7.7 6.6 6.0
Other 3.5 5.5 5.6
Total rent expense $194.9 $185.4 $161.6
Total rent expense included in discontinued operations was $6.2 million,
$36.2 million and $34.6 million for fiscal 2015, 2014 and 2013, respectively.
These amounts include restaurant minimum rent of $5.8 million, $33.0 million
and $31.8 million for fiscal 2015, 2014 and 2013, respectively.
The annual future lease commitments under capital lease obligations
and noncancelable operating and financing leases, including those related
to restaurants reported as discontinued operations, for each of the five fiscal
years subsequent to May 31, 2015 and thereafter is as follows:
(in millions)
Fiscal Year Capital Financing Operating
2016 $ 5.7 $ 6.6 $ 189.8
2017 5.9 6.8 180.1
2018 6.0 6.9 165.6
2019 6.1 7.0 147.2
2020 6.1 7.2 128.7
Thereafter 55.0 117.7 360.9
Total future lease commitments $ 84.8 $152.2 $1,172.3
Less imputed interest (at 6.5%), (various) (30.3) (76.9)
Present value of future lease commitments $ 54.5 $ 75.3
Less current maturities (2.4) (1.2)
Obligations under capital and financing
leases, net of current maturities $ 52.1 $ 74.1
During fiscal 2015 we began marketing selected properties for individual
sale-leaseback transactions through which we sell the assets at fair value and
subsequently lease them back. The resulting leases generally qualify and are
accounted for as operating leases. The operating leases that resulted from
the completed transactions are included in the above table.
NOTE 15
INTEREST, NET
The components of interest, net are as follows:
Fiscal Year
(in millions) 2015 2014 2013
Interest expense (1) $186.2 $134.0 $126.2
Imputed interest on capital and
financing leases 8.0 3.5 3.6
Capitalized interest (1.3) (2.6) (2.9)
Interest income (0.6) (0.6) (0.9)
Interest, net $192.3 $134.3 $126.0
(1) Interest expense in fiscal 2015 includes approximately $91.3 million of expenses associated
with the retirement of long-term debt. See Note 9 – Debt.
Capitalized interest was computed using our average borrowing rate.
Interest paid, net of amounts capitalized was as follows:
Fiscal Year
(in millions) 2015 2014 2013
Interest paid, net of
amounts capitalized (1) $142.8 $117.5 $112.6
(1) Interest paid in fiscal 2015 includes approximately $44.0 million of payments associated with
the retirement of long-term debt. See Note 9 - Debt.
NOTE 16
INCOME TAXES
Total income tax expense was allocated as follows:
Fiscal Year
(in millions) 2015 2014 2013
Earnings from continuing operations $ (21.1) $ (8.6) $ 36.7
Earnings from discontinued operations 344.8 32.3 72.7
Total consolidated income tax expense $323.7 $23.7 $109.4
The components of earnings from continuing operations before income
taxes and the provision for income taxes thereon are as follows:
Fiscal Year
(in millions) 2015 2014 2013
Earnings from continuing operations
before income taxes:
U.S. $172.5 $189.2 $278.0
Foreign 2.8 (14.6) (4.0)
Earnings from continuing operations
before income taxes $175.3 $174.6 $274.0
Income taxes:
Current:
Federal $ (12.7) $ 39.5 $ 26.1
State and local (15.4) 5.4 7.9
Foreign 6.9 3.0 3.5
Total current $ (21.2) $ 47.9 $ 37.5
Deferred (principally U.S.):
Federal $ — $ (43.7) $ 6.9
State and local 0.1 (12.8) (7.7)
Total deferred $ 0.1 $ (56.5) $ (0.8)
Total income taxes $ (21.1) $ (8.6) $ 36.7
Income taxes paid on a consolidated basis were as follows:
Fiscal Year
(in millions) 2015 2014 2013
Income taxes paid (1) $290.7 $90.0 $98.5
(1) Income taxes paid in fiscal 2015 were higher primarily as a result of the gain recognized on the
sale of Red Lobster.