LEASED PROPERTY

Although the Company’s policy is to own the property on which it operates restaurants, the Company occupies certain of its restaurant facilities pursuant to lease agreements. As of May 28, 2013, the Company operated 15 Frisch's Big Boy restaurants on non-owned premises, 14 of which were classified as operating leases and one was a capital lease. One of the 14 operating leases was put into place in September 2012 for land on which a new Frisch's Big Boy restaurant opened in March 2013. Most of the operating leases have multiple renewal options, four of which will expire at various times over the next five years. While none of the four leases has a purchase options, all four have renewal options available.

The Company remains contingently liable under certain ground lease agreements relating to land on which seven of the Company's former Golden Corral restaurants are situated (see Other Contingencies in NOTE I – COMMITMENTS AND CONTINGENCIES).

Office space is occupied under an operating lease that expires during fiscal year 2023, at which time a purchase option becomes available to acquire the office property in fee simple title.

Rent expense under operating leases:



	Fiscal Year
	2013		2012		2011
	(in thousands)
Minimum rentals (a)	$	1,095	$	1,196	$	1,117
Contingent payments	—		—		—
	$	1,095	$	1,196	$	1,117


(a)	Does not includes amounts for Golden Corral recorded in discontinued operations: $595,000 in Fiscal Year 2012 and $618,000 in Fiscal Year 2011.

The ground lease for the Frisch's Big Boy restaurant that is classified as a capital lease requires the Company to purchase the land in fee simple title at any time between the 10th (2020) and 15th (2025) years of the lease. Delivery and other equipment is held under capitalized leases expiring during various periods extending into Fiscal Year 2021.

An analysis of the capitalized lease property is shown in the following table. Amortization of capitalized delivery equipment is based on the straight-line method over the primary terms of the leases.



	Asset Balances At
	Fiscal Year
	2013			2012
	(in thousands)
Restaurant property (land)	$	825		$	825
Delivery and other equipment leases	1,778			1,486
Less accumulated amortization	(397		)	(679		)
	$	2,206		$	1,632

Future minimum lease payments under capitalized leases and operating leases are summarized in the table below. The column for capitalized leases includes the requirement to acquire land (presently leased by the Company) in fee simple title as described above.



Fiscal year ending in:	Capitalized Leases			Operating Leases
	(in thousands)
2014	$	367		$	1,065
2015	367			943
2016	367			839
2017	342			853
2018	215			877
2019 - 2033	1,425			9,170
Total	3,083			$	13,747
Amount representing interest	(797		)
Present value of obligations	2,286
Portion due within one-year	(236		)
Long-term obligations	$	2,050