Popeye's 2014 Annual Report Download - page 75

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Popeyes Louisiana Kitchen, Inc.
Notes to Consolidated Financial Statements
For Fiscal Years 2014, 2013, and 2012 — (Continued)
57
Note 10 — Leases
The Company leases property and equipment associated with its (1) corporate facilities; (2) forty-five of its company-operated
restaurants; (3) forty-six restaurant properties that are subleased to franchisees; and (4) and three properties that are subleased to
unrelated third parties.
At December 28, 2014, future minimum payments under capital and non-cancelable operating leases were as follows:
(in millions)
Capital
Leases
Operating
Leases
2015 $ 0.3 $ 7.7
2016 0.2 7.7
2017 0.2 7.5
2018 0.2 7.0
2019 0.3 6.8
Thereafter 4.7 111.0
Future minimum lease payments 5.9 147.7
Less amounts representing interest 3.7 —
$ 2.2 $ 147.7
During 2014, 2013, and 2012, rental expense was approximately $7.1 million, $6.0 million, and $5.9 million, respectively,
including contingent rentals of $0.2 million in 2012. There was no significant contingent rental expense in 2014 and 2013,
respectively. At December 28, 2014, the implicit rate of interest on capital leases ranged from 8.1% to 16.0%.
The Company leases twenty-four restaurant properties and subleases forty-six restaurant properties to franchisees. Our typical
restaurant leases and subleases to franchisees are triple net to the franchisee, requiring them to pay minimum rent or percentage
rent based on sales in excess of specified amounts or both minimum rent and percentage rent plus real estate taxes, maintenance
costs and insurance premiums. At December 28, 2014, the aggregate gross book value and net book value of owned properties
that were leased to franchisees was approximately $32.8 million and $29.6 million, respectively. During 2014, 2013, and 2012,
rental income from these leases and subleases was approximately $7.0 million, $5.4 million, and $4.3 million, respectively. At
December 28, 2014, future minimum rental income associated with these leases and subleases, are approximately $3.0 million in
2015, $2.6 million in 2016, $2.1 million in 2017, $1.6 million in 2018, $1.4 million in 2019, and $6.4 million thereafter.
Note 11 — Deferred Credits and Other Long-Term Liabilities
(in millions) 2014 2013
Deferred franchise revenues $ 3.7 $ 3.5
Deferred gains on unit conversions 0.8 1.0
Deferred rentals 7.6 7.4
Above-market rent obligations 2.5 2.6
Deferred income taxes 16.0 13.6
Other long-term liabilities 1.8 2.0
$ 32.4 $ 30.1
Note 12 — Common Stock
Share Repurchase Program. The Company’s Board of Directors has approved a share repurchase program. On August 29,
2014 the Board of Directors approved an additional $50.0 million for the share repurchase program. During 2014, 2013 and
2012, we repurchased and retired 891,931 shares, 504,295 shares and 741,228 shares of common stock for approximately $40.0
million, $19.9 million and $15.2 million, respectively.