Jack In The Box 2008 Annual Report Download - page 62

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5. LEASES
As lessee — We lease restaurants and other facilities, which generally have renewal clauses of 5 to 20 years
exercisable at our option. In some instances, our leases have provisions for contingent rentals based upon a
percentage of defined revenues. Many of our leases also have rent escalation clauses and require the payment of
property taxes, insurance and maintenance costs. We also lease certain restaurant, office and warehouse equipment,
as well as various transportation equipment. Minimum rental obligations are accounted for on a straight-line basis
over the term of the initial lease.
The components of rent expense were as follows in each fiscal year (in thousands):
2008 2007 2006
Minimum rentals ................................... $199,903 $194,889 $191,772
Contingent rentals .................................. 3,444 3,942 3,765
Total rent expense .................................. 203,347 198,831 195,537
Less sublease rentals ................................ (50,004) (42,308) (33,776)
Net rent expense ................................... $153,343 $156,523 $161,761
Future minimum lease payments under capital and operating leases are as follows (in thousands):
Fiscal Year Capital
Leases Operating
Leases
2009 ..................................................... $ 3,487 $ 201,339
2010 ..................................................... 2,320 187,694
2011 ..................................................... 2,161 175,322
2012 ..................................................... 1,871 165,391
2013 ..................................................... 1,608 153,658
Thereafter ................................................. 7,326 967,525
Total minimum lease payments .................................. 18,773 $1,850,929
Less amount representing interest, 8.62% weighted average interest rate . . . (6,247)
Present value of obligations under capital leases ..................... 12,526
Less current portion .......................................... (2,276)
Long-term capital lease obligations ............................... $10,250
Total future minimum lease payments have not been reduced by minimum sublease rents of $726.2 million
expected to be recovered under our operating subleases.
Assets recorded under capital leases are included in property and equipment and consisted of the following at
each year-end (in thousands):
2008 2007
Buildings ................................................... $23,049 $ 23,112
Equipment .................................................. 20,227 20,247
43,276 43,359
Less accumulated amortization ................................... (33,875) (29,431)
$ 9,401 $ 13,928
Amortization of assets under capital leases is included in depreciation and amortization expense.
F-16
JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)