Jamba Juice 2013 Annual Report Download - page 74

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TABLE OF CONTENTS
JAMBA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2013, JANUARY 1, 2013 AND
JANUARY 3, 2012
6. OTHER LONG-TERM ASSETS
As of December 31, 2013 and January 1, 2013, other long-term assets consisted of the following (in thousands):
December 31,
2013
January 1,
2013
Notes receivable $ 300 $ —
Deposits and other 898 846
Total $ 1,198 $ 846
As of December 31, 2013, the Company had a 15% investment in JJC Washington I, LLC, a joint venture with its franchisee in the
Washington, D.C. area, and accounts for its investment under the equity method. The Company has suspended recording losses on this
investment and will record equity earnings when the unrecognized equity losses are fully offset by unrecognized equity earnings.
7. TRADE CREDIT AGREEMENT
In 2012, the Company entered into a Trade Credit Agreement with a California advertising agency to provide product from the
Company’s wholly owned subsidiary, Talbott Teas, Inc. (“Talbott”), in exchange for future advertising credits (“trade credits”). The trade
credits will expire in November 2017. During fiscal 2013, the Company exchanged Talbott product for trade credits of $1.1 million. At
December 31, 2013, trade credits of approximately $0.9 million are remaining and are included on the consolidated balance sheets in
prepaid expenses and other current assets. These trade credits are charged to expense as they are used to purchase advertising services. The
transaction was recorded at the fair value of the Talbott products provided to the advertising agency on the date of the transaction. During
fiscal 2012 and fiscal 2011, the Company did not have trade credit agreements in place.
8. DEFERRED RENT AND OTHER LONG-TERM LIABILITIES
As of December 31, 2013 and January 1, 2013, other long-term liabilities consisted of the following (in thousands):
December 31,
2013
January 1,
2013
Deferred rent $ 4,033 $ 4,708
Deferred revenue 2,598 2,292
Construction allowance 1,359 1,871
Contingent consideration 553 894
Other liabilities 658 702
Total deferred rent and other long-term liabilities $ 9,201 $ 10,467
9. LEASE COMMITMENTS
The Company leases its office, retail stores, and some equipment under operating leases, with terms expiring through 2023. Most store
leases have an initial term of 10 years, with renewal options of up to 10 years and provide for payment of common area operating expenses
and real estate taxes. When the Company refranchises Company Stores, usually the franchisees become sublessees and the Company
continues to be obligated under the existing lease agreements for the remainder of the lease terms.
Rental expense, net of sublease income was $23.5 million in fiscal 2013, $23.5 million in fiscal 2012 and $24.8 million in fiscal 2011,
respectively, and was recorded in occupancy costs and general and administrative expenses in the statements of operations. The Company
recognized sublease income of $8.3 million in fiscal
F-17