Sprouts Farmers Market 2013 Annual Report Download - page 127

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Table of Contents
term of the services agreement was September 1, 2007 through September 1, 2009 with automatic renewal for successive one-
year terms unless either party provides six months’ termination notice. During 2013, 2012 and 2011, fees and other expenses paid
to the service under the terms of the Services Agreement were $2.4 million, $2.7 million and $2.2 million, respectively. The
Company has an option to terminate the agreement early for a termination fee of $100,000. During 2013, the scope of services
provided by the outsourced service provider was reduced. Subsequent to December 29, 2013, the Company gave notice to the
service provider that it intends to not renew the services agreement.
As of December 30, 2012, $1.0 million of the Senior Subordinated Promissory Notes were held by certain members of senior
management of the Company. These amounts were subsequently repaid and no amounts remain outstanding as of December 29,
2013.
In connection with our Credit Facility, we paid an arrangement fee of $0.8 million to an affiliate of Apollo. Apollo Global
Securities, LLC, another affiliate of Apollo, was an underwriter of our IPO and secondary offering that closed on December 2, 2013,
and received fees of approximately $0.9 million and $1.0 million, respectively.
20. Commitments and Contingencies
Operating Lease Commitments
The Company’s leases include stores, office and warehouse buildings and delivery equipment. These leases had an average
remaining lease term of approximately 9 years as of December 29, 2013.
Rent expense charged to operations under operating leases in 2013, 2012 and 2011 totaled $64.7 million, $54.2 million and
$41.1 million, respectively. Rent expense includes $1.4 million, $0.9 million and $0.6 million of contingent rent for 2013, 2012 and
2011, respectively.
Future minimum lease obligations for operating leases with initial terms in excess of one year at December 29, 2013 are as
follows:
Capital and Financing Lease Commitments
The Company is committed under certain capital and financing leases for rental of buildings and equipment. These leases
expire or become subject to renewal clauses at various dates from 2013 to 2032.
122
2014
$
72,926
2015
82,405
2016
84,438
2017
82,643
2018
80,696
Thereafter
512,390
Total payments
$
915,498