Lease Financing Obligations

The Company entered into sale-leaseback transactions in various years that did not qualify for sale-leaseback accounting and as a result were classified as financing transactions. Under the financing method, the assets remain on the consolidated balance sheet and proceeds received by the Company from these transactions are recorded as a financing liability. Payments under these leases are applied as payments of imputed interest and deemed principal on the underlying financing obligations.

These leases generally provide for an initial term of twenty years plus renewal options. The rent payable under such leases includes a minimum rent provision and in some cases, includes rent based on a percentage of sales. These leases also require payment of property taxes, insurance and utilities.

At December 29, 2013, payments required on lease financing obligations were as follows:



2014	$	102
2015	103
2016	104
2017	105
2018	106
Thereafter, through 2023	1,670
Total minimum lease payments	2,190
Less: Interest implicit in obligations	(990		)
Total lease financing obligations	$	1,200

The interest rate on lease financing obligations was 8.7% at December 29, 2013. Interest expense on lease financing obligations totaled $107 in each of the years ended December 29, 2013, December 30, 2012 and January 1, 2012.