Dunkin' Donuts 2011 Annual Report Download - page 98

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Capital lease obligations exclude that portion of the minimum lease payments attributable to land, which are
classified separately as operating leases. Interest expense associated with the capital lease obligations is
computed using the incremental borrowing rate at the time the lease is entered into and is based on the amount of
the outstanding lease obligation. Depreciation on capital lease assets is included in depreciation expense in the
consolidated statements of operations. Interest expense related to capital leases for fiscal years 2011, 2010, and
2009 was $481 thousand, $505 thousand, and $493 thousand, respectively.
Included in the Company’s consolidated balance sheets are the following amounts related to assets leased to
others under operating leases, where the Company is the lessor (in thousands):
December 31,
2011
December 25,
2010
Land ...................................... $ 26,624 26,914
Buildings .................................. 38,472 37,680
Leasehold improvements ...................... 146,209 147,139
Store, production, and other equipment ........... 62 245
Construction in progress ...................... 823 1,403
212,190 213,381
Accumulated depreciation and amortization ....... (66,622) (58,341)
$145,568 155,040
Future minimum rental commitments to be paid and received by the Company at December 31, 2011 for all
noncancelable leases and subleases are as follows (in thousands):
Payments
Receipts
Subleases
Net
leases
Capital
leases
Operating
leases
Fiscal year:
2012 ................................................ $ 691 52,965 (60,251) (6,595)
2013 ................................................ 702 51,475 (59,164) (6,987)
2014 ................................................ 721 49,985 (58,150) (7,444)
2015 ................................................ 754 45,186 (56,942) (11,002)
2016 ................................................ 758 44,236 (56,653) (11,659)
Thereafter ............................................ 5,429 373,328 (390,432) (11,675)
Total minimum rental commitments ................... 9,055 $617,175 (681,592) (55,362)
Less amount representing interest ............................. 3,895
Present value of minimum capital lease obligations ....... $5,160
Rental expense under operating leases associated with franchised locations is included in occupancy expenses—
franchised restaurants in the consolidated statements of operations. Rental expense under operating leases for all
other locations, including corporate facilities and company-owned restaurants, is included in general and
administrative expenses, net, in the consolidated statements of operations. Total rental expense for all operating
leases consisted of the following (in thousands):
Fiscal year ended
December 31,
2011
December 25,
2010
December 26,
2009
Base rentals ............................ $52,214 53,704 51,819
Contingent rentals ....................... 4,510 4,093 3,711
$56,724 57,797 55,530
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