MCS » Topics » 9. Commitments, License Rights and Contingencies

These excerpts taken from the MCS 10-K filed Aug 12, 2008.

9. Commitments, License Rights and Contingencies

Lease Commitments – The Company leases real estate under various noncancellable operating leases with an initial term greater than one year that contain multiple renewal options, exercisable at the Company’s option. The Company recognizes rent expense on a straight-line basis over the expected lease term, including cancelable option periods where failure to exercise such options would result in an economic penalty. Percentage rentals are based on the revenues at the specific rented property. Rent expense charged to operations under these leases was as follows:

Year ended
May 29, 2008
May 31, 2007
May 25, 2006
(in thousands)

Fixed minimum rentals
    $ 4,738   $ 2,957   $ 2,833  
Amortization of favorable lease right    334    354    676  
Percentage rentals    73    102    121  



    $ 5,145   $ 3,413   $ 3,630  




63


THE MARCUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

May 29, 2008

9. Commitments, License Rights and Contingencies (continued)

Aggregate minimum rental commitments under long-term operating leases, assuming the exercise of certain lease options, are as follows at May 29, 2008:

Fiscal Year
(in thousands)
2009     $ 5,908  
2010    6,161  
2011    6,112  
2012    6,051  
2013    6,052  
Thereafter    110,419  

    $ 140,703  

Commitments – The Company has commitments for the completion of construction at various properties totaling approximately $2,559,000 at May 29, 2008.

License Rights – The Company has license rights to operate three hotels using the Hilton trademark, one hotel using the Four Points by Sheraton trademark and one hotel using the InterContinental trademark. Under the terms of the licenses, the Company is obligated to pay fees based on defined gross sales.

Contingencies – The Company guarantees the debt of joint ventures and other entities totaling $4,648,000 at May 29, 2008. The debt of the joint ventures is collateralized by the real estate, buildings and improvements and all equipment of each joint venture. The Company does not anticipate these guarantees to be payable.

The Company has approximately five and one half-years remaining on a ten and one half-year office lease. On July 7, 2005, the lease was amended in order to exit leased office space for the Company’s former limited-service lodging division. To induce the landlord to amend the lease, the Company guaranteed the lease obligations of the new tenant of the relinquished space throughout the remaining term of the lease. The maximum amount of future payments the Company could be required to pay if the new tenant defaults on its lease obligations was approximately $2,446,000 as of May 29, 2008. The Company does not anticipate the lease obligation to become payable.

9. Commitments, License
Rights and Contingencies




Lease Commitments – The
Company leases real estate under various noncancellable operating leases with an initial
term greater than one year that contain multiple renewal options, exercisable at the
Company’s option. The Company recognizes rent expense on a straight-line basis over
the expected lease term, including cancelable option periods where failure to exercise
such options would result in an economic penalty. Percentage rentals are based on the
revenues at the specific rented property. Rent expense charged to operations under these
leases was as follows:
































































Year ended
May 29, 2008
May 31, 2007
May 25, 2006
(in thousands)

Fixed minimum rentals
    $ 4,738   $ 2,957   $ 2,833  
Amortization of favorable lease right    334    354    676  
Percentage rentals    73    102    121  



    $ 5,145   $ 3,413   $ 3,630  










63











THE MARCUS CORPORATION




NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (continued)




May 29, 2008





9. Commitments, License
Rights and Contingencies (continued)





Aggregate minimum rental commitments
under long-term operating leases, assuming the exercise of certain lease options, are as
follows at May 29, 2008:













































Fiscal Year
(in thousands)
2009     $ 5,908  
2010    6,161  
2011    6,112  
2012    6,051  
2013    6,052  
Thereafter    110,419  

    $ 140,703  






Commitments – The Company
has commitments for the completion of construction at various properties totaling
approximately $2,559,000 at May 29, 2008.




License Rights – The
Company has license rights to operate three hotels using the Hilton trademark, one hotel
using the Four Points by Sheraton trademark and one hotel using the InterContinental
trademark. Under the terms of the licenses, the Company is obligated to pay fees based on
defined gross sales.




Contingencies – The
Company guarantees the debt of joint ventures and other entities totaling $4,648,000 at
May 29, 2008. The debt of the joint ventures is collateralized by the real estate,
buildings and improvements and all equipment of each joint venture. The Company does not
anticipate these guarantees to be payable.




The Company has approximately five
and one half-years remaining on a ten and one half-year office lease. On July 7, 2005, the
lease was amended in order to exit leased office space for the Company’s former
limited-service lodging division. To induce the landlord to amend the lease, the Company
guaranteed the lease obligations of the new tenant of the relinquished space throughout
the remaining term of the lease. The maximum amount of future payments the Company could
be required to pay if the new tenant defaults on its lease obligations was approximately
$2,446,000 as of May 29, 2008. The Company does not anticipate the lease obligation to become payable.




This excerpt taken from the MCS 10-K filed Aug 14, 2007.

9. Commitments, License Rights and Contingencies

Lease Commitments – The Company leases real estate under various noncancellable operating leases with an initial term greater than one year that contain multiple renewal options, exercisable at the Company’s option. The Company recognizes rent expense on a straight-line basis over the expected lease term, including cancelable option periods where failure to exercise such options would result in an economic penalty. Percentage rentals are based on the revenues at the specific rented property. Certain sublease agreements include buyout incentives. Rent expense charged to operations under these leases was as follows:

Year ended
May 31, 2007
May 25, 2006
May 26, 2005
(in thousands)

Fixed minimum rentals
    $ 2,957   $ 2,833   $ 1,866  
Amortization of favorable lease right    354    676    --  
Percentage rentals    102    121    135  
Sublease rental income    --    --    (12 )



    $ 3,413   $ 3,630   $ 1,989  





59


THE MARCUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2007

9. Commitments, License Rights and Contingencies (continued)

Aggregate minimum rental commitments under long-term operating leases, assuming the exercise of certain lease options, are as follows at May 31, 2007:

Fiscal Year
(in thousands)

2008
    $ 3,521  
2009    3,562  
2010    3,678  
2011    3,634  
2012    3,529  
Thereafter    72,884  

    $ 90,808  

Commitments – The Company has commitments for the completion of construction at various properties and the purchase of various properties totaling approximately $7,075,000 at May 31, 2007.

License Rights – The Company has license rights to operate three hotels using the Hilton trademark, one hotel using the Four Points by Sheraton trademark and one hotel using the InterContinental trademark. Under the terms of the licenses, the Company is obligated to pay fees based on defined gross sales.

Contingencies – The Company guarantees the debt of joint ventures and other entities totaling $4,835,000 at May 31, 2007. The debt of the joint ventures is collateralized by the real estate, buildings and improvements and all equipment of each joint venture. The Company does not anticipate these guarantees to be payable.

The Company has approximately six and one half years remaining on a ten and one half-year office lease. On July 7, 2005, the lease was amended in order to exit leased office space for the Company’s former limited-service lodging division. To induce the landlord to amend the lease, the Company guaranteed the lease obligations of the new tenant of the relinquished space throughout the remaining term of the lease. The maximum amount of future payments the Company could be required to pay if the new tenant defaults on its lease obligations was approximately $2,854,000 as of May 31, 2007.

This excerpt taken from the MCS 10-K filed Aug 8, 2006.

9. Commitments, License Rights and Contingencies

Lease Commitments – The Company leases real estate under various noncancellable operating leases with an initial term greater than one year that contain multiple renewal options, exercisable at the Company’s option. The Company recognizes rent expense on a straight-line basis over the expected lease term, including cancelable option periods where failure to exercise such options would result in an economic penalty. Percentage rentals are based on the revenues at the specific rented property. Certain sublease agreements include buyout incentives. Rent expense charged to operations under these leases was as follows:

Year Ended
May 25, 2006
May 26, 2005
May 27, 2004
(in thousands)

Fixed minimum rentals
    $ 2,833   $ 1,866   $ 1,750  
Amortization of favorable lease right    676    --    --  
Percentage rentals    121    135    137  
Sublease rental income    --    (12 )  (42 )



    $ 3,630   $ 1,989   $ 1,845  



Aggregate minimum rental commitments under long-term leases, assuming the exercise of certain lease options, are as follows at May 25, 2006:

Fiscal Year
(in thousands)
2007     $ 2,523  
2008    2,455  
2009    2,448  
2010    2,534  
2011    2,486  
Thereafter    52,795  

    $ 65,241  

Commitments – The Company has commitments for the completion of construction at various properties and the purchase of various properties totaling approximately $41,356,000 at May 25, 2006.

License Rights – The Company has license rights to operate two hotels using the Hilton trademark, one hotel using the Four Points by Sheraton trademark, one hotel using the Wyndham trademark, and one hotel using the Westin trademark. Under the terms of the licenses, the Company is obligated to pay fees based on defined gross sales.

Contingencies – The Company guarantees the debt of joint ventures and other entities totaling $5,034,000 at May 25, 2006. The debt of the joint ventures is collateralized by the real estate, buildings and improvements and all equipment of each joint venture.

58


THE MARCUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

May 25, 2006

9. Commitments, License Rights and Contingencies (continued)

The Company has approximately seven and one half years remaining on a ten and one half-year office lease. On July 7, 2005, the lease was amended in order to exit leased office space for the Company’s former limited-service lodging division. To induce the landlord to amend the lease, the Company guaranteed the lease obligations of the new tenant of the relinquished space throughout the remaining term of the lease. The maximum amount of future payments the Company could be required to pay if the new tenant defaults on its lease obligations was approximately $3,271,000 as of May 25, 2006.

This excerpt taken from the MCS 10-K filed Aug 9, 2005.

8. Commitments, License Rights and Contingencies

Lease Commitments – The Company leases real estate under various noncancellable operating leases with an initial term greater than one year that contain multiple renewal options, exercisable at the Company’s option. Percentage rentals are based on the revenues at the specific rented property. Certain sublease agreements include buyout incentives. Rent expense charged to operations under these leases was as follows:

Year ended
May 26, 2005
May 27, 2004
May 29, 2003
(in thousands)

Fixed minimum rentals
    $ 1,866   $ 1,750   $ 1,805  
Percentage rentals    135    137    142  
Sublease rental income    (12 )  (42 )  (42 )



    $ 1,989   $ 1,845   $ 1,905  



50


THE MARCUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. Commitments, License Rights and Contingencies (continued)

Aggregate minimum rental commitments under long-term leases, assuming the exercise of certain lease options, are as follows at May 26, 2005:

Fiscal Year
(in thousands)
2006     $2,734  
2007    2,634  
2008    2,558  
2009    2,483  
2010    2,561  
Thereafter    27,713  

    $40,683  

Commitments – The Company has commitments for the completion of construction at various properties and the purchase of various properties totaling approximately $6,289,000 at May 26, 2005.

License Rights – The Company has license rights to operate two hotels using the Hilton trademark and one hotel using the Four Points by Sheraton trademark. Under the terms of the licenses, the Company is obligated to pay fees based on defined gross sales.

Contingencies – The Company guarantees the debt of joint ventures and other entities totaling $5,261,000 at May 26, 2005. The debt of the joint ventures is collateralized by the real estate, buildings and improvements and all equipment of each joint venture.

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki