NOTE D - 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 June 2, 2015, 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. Most of the operating leases have multiple renewal options, six of which will expire at various times

NOTE D – LEASED PROPERTY (continued)

over the next five years. One of the six expiring leases has a purchase option and four (including the one with the purchase option) 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 L – 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
	2015		2014		2013

	(in thousands)

Minimum rentals	$	1,081	$	1,110	$	1,095
Contingent payments		10		3		—
	$	1,091	$	1,113	$	1,095

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.


	Fiscal Year
	2015		2014

	(in thousands)

Restaurant property (land)	$	825	$	825
Delivery and other equipment leases		1,902		1,902
Less accumulated amortization		(934)		(657)
	$	1,793	$	2,070

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.

NOTE D – LEASED PROPERTY (continued)


	Capitalized Leases		Operating Leases

	(in thousands)

2016	$	390	$	1,025
2017		365		1,015
2018		237		986
2019		214		926
2020		1,179		890
2021 - 2033		74		7,865
Total		2,459	$	12,707
Amount representing interest		(525)
Present value of capital lease obligations		1,934
Portion due within one-year (included in accrued and other expenses in the consolidated balance sheet)		(278)
Long-term obligations (included in other long term obligations in the consolidated balance sheet)	$	1,656