Popeye's 2013 Annual Report Download - page 83

Popeyes Louisiana Kitchen, Inc.
Notes to Consolidated Financial Statements
For Fiscal Years 2013, 2012, and 2011 — (Continued)
67
The Company has established reserves with respect to the programs described above based on the estimated total
losses the Company will experience. At December 29, 2013,the Company’s insurance reserves of approximately $0.1
million were collateralized by letters of credit and/or cash deposits of $0.9 million.
Environmental Matters. The Company is subject to various federal, state and local laws regulating the discharge
of pollutants into the environment. The Company believes that it conducts its operations in substantial compliance with
applicable environmental laws and regulations. Certain of the Company’s current and formerly owned and/or leased
properties are known or suspected to have been used by prior owners or operators as retail gas stations, and a few of
these properties may have been used for other environmentally sensitive purposes. Certain of these properties previously
contained underground storage tanks (“USTs”), and some of these properties may currently contain abandoned USTs.
It is possible that petroleum products and other contaminants may have been released at these properties into the soil
or groundwater. Under applicable federal and state environmental laws, the Company, as the current or former owner
or operator of these sites, may be jointly and severally liable for the costs of investigation and remediation of any such
contamination, as well as any other environmental conditions at its properties that are unrelated to USTs. The Company
has obtained insurance coverage that it believes is adequate to cover any potential environmental remediation liabilities.
Foreign Operations. The Company’sinternational operations are limited to franchising activities. During 2013,
2012, and 2011, such operations represented approximately 10.9%, 11.2%, and 12.2%,of total franchise revenues,
respectively; and approximately 6.4%,6.9%, and 7.5%,of total revenues, respectively. At December 29, 2013,
approximately $1.3 million of the Company’s accounts receivable were related to its international franchise operations.
Significant Franchisee. During 2013,2012, and 2011, one domestic franchisee accounted for approximately 7.8%,
8.3%, and 8.3%, respectively of the Company’sroyalty revenues.
Geographic Concentrations. Of the Company’sdomestic company-operated and franchised restaurants, the
majority are located in the southern and southwestern United States. The Company’sinternational franchisees operate
in Korea, Indonesia, Canada, Turkey and various countries throughout Central America, Asia and Europe.
Note 16 — Other Expenses (Income), Net
(in millions) 2013 2012 2011
Disposals of property and equipment $0.4 $0.3 $0.5
Net gain on sale of assets (0.1)(0.9)(0.8)
Corporate support center relocation — — 0.8
Other — 0.1 —
$0.3 $(0.5) $ 0.5
During 2012, the net gain on sale of assets includes a$0.3 million gain on the sale of real estate to a franchisee and
the recognition of $0.5 million in deferred gains related to seven properties formerly leased to a franchisee.
During 2011, the net gain on sale of assets includes the sale of two properties to a franchisee for approximately $0.7
million and recognized a gain of $0.5 million.
The Company recognized $0.8 million in expense for the corporate support center relocation in 2011. This expense
was mainly for rent, legal fees and closing the previous service center.