Operating Leases

12 Months Ended

Dec. 31, 2013

OPERATING LEASES

The Company leases facilities for nine of its eleven OTB operations at Arlington. eight of Arlington's OTB operations are conducted at non-owned Illinois restaurants under licensing agreements with varying payment terms, including payment contingent on handle. These OTB operations are generally multi-year agreements, renewable with 90 days notice by either party. Arlington's ninth leased facility, Waukegan, operates as a traditional OTB under a lease which will expire in 2015. The Company has ten operating lease agreements for Fair Grounds OTBs, which expire in various years from 2014 through 2021. Finally, the Company has an operating lease agreement for its corporate offices which expires in 2023.

Future minimum operating lease payments are as follows, not including the variable portion of contingent leases and Arlington’s contingent licensing agreements (in thousands):



Year Ended December 31,
2014	$	8,024
2015	6,264
2016	4,805
2017	3,390
2018	2,483
Thereafter	5,130
Total	$	30,096

The Company also leases totalisator equipment, gaming equipment, audio/visual equipment and operates certain facilities that are partially contingent on handle, bandwidth usage or race days. Total annual rent expense for contingent lease payments, including totalisator equipment, audio/visual equipment, gaming equipment, land and facilities, was approximately $3.7 million, $3.6 million and $2.5 million for the years ended December 31, 2013, 2012 and 2011, respectively. The Company’s total rent expense for all operating leases, including the contingent lease payments, was approximately $20.2 million, $18.4 million and $19.9 million for the years ended December 31, 2013, 2012 and 2011, respectively. During 2013, the increase in total rent expense primarily reflects an increase in slot machine expense, which is attributable to the acquisitions of Riverwalk and Oxford. During 2012, the reduction in total rent expense reflects a migration in the Company's Racing Operations from totalisator services performed by a third-party to services provided by United Tote.

- Definition

The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.

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