XML 73 R18.htm IDEA: XBRL DOCUMENT v2.4.0.8
LONG-TERM LEASE OBLIGATIONS
 12 Months Ended
Dec. 31, 2013
LONG-TERM LEASE OBLIGATIONS  
LONG-TERM LEASE OBLIGATIONS

 

NOTE 10. LONG-TERM LEASE OBLIGATIONS

        The Company enters into operating leases covering its retail store locations. The Company is the primary lessor of the majority of all leased retail store locations and sublets the locations to individual franchisees. The leases generally provide for an initial term of between five and ten years, and may include renewal options for varying terms thereafter. The leases require minimum monthly rental payments and a pro rata share of landlord allocated common operating expenses. Most retail leases also require additional rentals based on a percentage of sales in excess of specified levels. According to the individual lease specifications, real estate taxes, insurance and other related costs may be included in the rental payment or charged in addition to rent. Other lease expenses relate to and include distribution facilities, transportation equipment, data processing equipment and automobiles.

        As the Company is the primary lessee for the majority of the franchise store locations, it is ultimately liable for the lease payments to the landlord. The Company makes the payments to the landlord directly, and then bills the franchisee for reimbursement of this cost. If a franchisee defaults on its sub-lease and its sub-lease is terminated, the Company has in the past converted, and expects in the future to, convert any such franchise store into a corporate store and fulfill the remaining lease obligation.

        The composition of the Company's rental expense included the following components:

 
   Year ended December 31,  
 
   2013   2012   2011  
 
   (in thousands)
  

Retail stores:

                    

Rent on long-term operating leases, net of sublease income

   $ 137,076   $ 126,411   $ 120,170  

Landlord related taxes

     19,552     18,399     16,940  

Common operating expenses

     34,978     33,589     31,969  

Percent rent

     23,943     23,276     20,824  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total retail stores rent expense

     215,549     201,675     189,903  

Truck fleet

     4,491     5,350     4,979  

Other

     13,484     13,401     11,883  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 233,524   $ 220,426   $ 206,765  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

        Rent on long-term operating leases is net of sublease income of $37.7 million, $35.7 million and $33.7 million for the years ended December 31, 2013, 2012 and 2011, respectively.

        Minimum future obligations for non-cancelable operating leases with initial or remaining terms of at least one year in effect at December 31, 2013 are as follows:

 
   Company
Retail
Stores		   Franchise
Retail
Stores		   Other   Sublease
Income		   Total  
 
   (in thousands)
  

2014

   $ 127,555   $ 27,619   $ 6,132   $ (27,619 ) $ 133,687  

2015

     108,798     23,519     5,371     (23,519 )   114,169  

2016

     92,707     19,186     4,051     (19,186 )   96,758  

2017

     70,412     13,735     2,956     (13,735 )   73,368  

2018

     44,528     7,259     1,382     (7,259 )   45,910  

Thereafter

     78,228     10,783     12,985     (10,783 )   91,213  
                       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

   $ 522,228   $ 102,101   $ 32,877   $ (102,101 ) $ 555,105  
                       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​