Einstein Bros 2005 Annual Report Download - page 43

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http://www.sec.gov/Archives/edgar/data/949373/000110465906016136/a06-3178_110k.htm[9/11/2014 10:13:03 AM]
NEW WORLD RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Future Minimum Lease Payments
As of January 3, 2006, future minimum lease payments under capital and operating leases were as follows (in thousands of dollars):
Capital Operating
Fiscal year: Leases Leases
2006
$ 23
$ 23,973
2007
20
14,294
2008
10
8,011
2009
—
5,959
2010
—
3,766
2011 and thereafter
—
3,365
Total minimum lease payments
53
$ 59,368
Less imputed interest (average rate of 4.75%)
5
Present value of minimum lease payments
48
Less current installments
19
Future minimum rental payments, net
$ 29
12. OTHER LONG-TERM LIABILITIES
Other long-term liabilities consist of the following (in thousands of dollars):
January 3, December 28,
2006 2004
Vendor contractual agreements(a)
$ 7,175
$ 7,804
Guaranteed franchisee debt(b)
42
394
Deferred rent
1,234
1,480
Other
159
—
$ 8,610
$ 9,678
(a) A strategic supplier of ours provided advance funding in the amount of $10.0 million to us in 1996 as part of a contract to continue buying
products from the supplier. The contract terminates upon fulfillment of contractual purchase volumes. The accounting for this contract is to
recognize a reduction of cost of goods sold based on the volume of purchases of the vendor’ s product.
(b) In connection with our acquisition of Manhattan, we agreed to guarantee certain loans to franchisees made by two financial institutions. We
evaluate the fair value of such liability at each balance sheet date. As of January 3, 2006 and December 28, 2004, the fair value of the liability
reflected above is the probable and estimable loss related to such loans pursuant to agreements with the financial institutions regarding the
established caps on our obligation. This represents our best estimate of future pay-outs we will make under these guarantees.
13. 2003 DEBT REFINANCING AND EQUITY RECAPITALIZATION
During 2000 and 2001, we engaged in several financing transactions to acquire the bonds of Einstein/Noah Bagel Corp. (ENBC), which
declared Chapter 11 bankruptcy on April 27, 2000. In 2001, we completed the acquisition of substantially all of the assets (the Einstein
Acquisition) of ENBC and its
56
NEW WORLD RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
majority-owned subsidiary, Einstein/Noah Bagel Partners, L.P. which operated 2 brands: Einstein Bros. Bagels and Noah’ s New York Bagels. The
Einstein Acquisition in 2001 was accomplished by issuing a substantial amount of short-term debt and mandatorily redeemable preferred equity.