Buffalo Wild Wings 2011 Annual Report Download - page 50

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50
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 25, 2011 and December 26, 2010
(Dollar amounts in thousands, except per-share amounts)
(6) Lease Commitments
We lease all of our restaurants and corporate offices under operating leases that have various expiration dates. Most of
these operating leases contain renewal options. In addition to base rents, leases typically require us to pay our share of
common area maintenance, insurance, real estate taxes, and other operating costs. Certain leases also include provisions for
contingent rentals based upon sales.
Future minimum rental payments due under noncancelable operating leases for existing restaurants and commitments
for restaurants under development as of December 25, 2011 were as follows:
Operating
leases
Restaurants
under
development
Fiscal year ending:
2012 $ 39,856
2,457
2013 38,795
3,699
2014 37,841
3,699
2015 36,530
3,699
2016 34,619
3,708
Thereafter
174,447
43,702
Total future minimum lease payments
$ 362,088
60,964
In 2011, 2010, and 2009, we rented office space under operating leases which, in addition to the minimum lease
payments, require payment of a proportionate share of the real estate taxes and building operating expenses. We also rent
restaurant space under operating leases, some of which, in addition to the minimum lease payments and proportionate share
of real estate and operating expenses, require payment of percentage rents based upon sales levels. Rent expense, excluding
our proportionate share of real estate taxes and building operating expenses, was as follows:
Fiscal Years Ended
December 25,
2011
December 26,
2010
December 27,
2009
Minimum rents
$ 36,647
30,438
27,042
Percentage rents
371
285
361
Total
$ 37,018
30,723
27,403
Equipment and auto leases
$ 452
536
495
(7) Derivative Instruments
We have used commodity derivatives to manage our exposure to price fluctuations. We may enter into options and
future contracts to reduce our risk of natural gas price fluctuations. These derivatives do not qualify for hedge accounting and
changes in fair value are included in current net income. These changes are classified as a component of restaurant operating
expenses. All changes in the fair value of these contracts are recorded in earnings in the period in which they occur. Net
losses of $1, $225, and $383 were recognized in fiscal 2011, 2010, and 2009, respectively. The fair value of our derivative
instruments as of December 26, 2010 was $86, and is a liability in accrued expenses in the accompanying consolidated
balance sheets. As of December 26, 2010 we were party to natural gas swap contracts with notional values of $249. As of
December 25, 2011, we had no outstanding natural gas swap contracts or other derivatives.