Note 5 - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-leaseback Transactions
 12 Months Ended
Jun. 06, 2017
Notes to Financial Statements  
Property, Plant and Equipment Disclosure [Text Block]
5.
Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-Leaseback Transactions
 
Property and equipment, net, is comprised of the following (in thousands):
 
   
2017
    
2016
  
Land
  
$
180,520
     $
209,930
  
Buildings
  
 
366,566
      
398,984
  
Improvements
  
 
227,056
      
303,032
  
Restaurant equipment
  
 
192,217
      
222,646
  
Other equipment
  
 
71,851
      
82,204
  
Surplus properties*
  
 
17,139
      
4,354
  
Construction in progress and other
  
 
1,172
      
3,325
  
   
 
1,056,521
      
1,224,475
  
Less accumulated depreciation
  
 
473,424
      
553,225
  
Property and equipment, net
  
$
583,097
     $
671,250
  
 
* Surplus properties represent assets held for sale that are
not
classified as such in the Consolidated Balance Sheets as we do
not
expect to sell these assets within the next
12
months. These assets primarily consist of parcels of land upon which we have
no
intention to build restaurants, closed properties which include a building, and liquor licenses
not
needed for operations.
 
Included within the current assets section of our Consolidated Balance Sheets at
June 6, 2017
and
May 31, 2016
are amounts classified as assets held for sale totaling
$12.8
million and
$4.6
million, respectively. Assets held for sale primarily consist of
land and buildings of closed restaurants, parcels of land upon which we have
no
intention to build restaurants, and liquor licenses. In addition to Lime Fresh restaurants sold as discussed in Note
3
to the Consolidated Financial Statements, during fiscal years
 
2017,
2016,
and
2015
we sold surplus properties with carrying values of
$24.3
million,
$6.7
million, and
$9.5
million, respectively, at net gains of
$4.4
million,
$0.9
million, and
$1.7
million, respectively. Cash proceeds, net of broker fees, from these sales totaled
$28.7
million,
$7.6
million, and
$11.2
million, respectively.
 
We realized gains during fiscal year
2014
on the sale-leaseback transactions of
$0.8
million, which have been deferred and are being recognized on a straight-line basis over the initial terms of the leases. The current portion of the deferred gains on all sale-leaseback transactions to date was
$1.1
million as of both
June 6, 2017
and
May 31, 2016,
and is included in Accrued liabilities
– Rent and other in our Consolidated Balance Sheets. The long-term portion of the deferred gains on all sale-leaseback transactions to date was
$9.7
million and
$10.9
million as of
June 6, 2017
and
May 31, 2016,
respectively, and is included in Other deferred liabilities in our Consolidated Balance Sheets. Amortization of the deferred gains of
$1.1
million in each of fiscal year
June 6, 2017
and
May 31, 2016,
and 
June 2, 2015
is included within Other restaurant operating costs in our Consolidated Statements of Operations and Comprehensive Loss.
 
The following is a schedule by year of future minimum lease payments under operating leases that have initial lease terms in excess of
one
year as of
June 6, 2017 (
in thousands):
 
2018
   $
41,397
  
2019
    
38,117
  
2020
    
35,489
  
2021
    
33,153
  
2022
    
30,951
  
Subsequent years
    
327,308
  
Total minimum lease payments
   $
506,415
  
 
The amounts included in the table above include lease payments for certain optional renewal periods for which exercise is considered reasonably assured as well as operating leases totaling
$2.6
million as discussed below for which sublease income from franchisees or others is contractually required.
 
The following schedule shows the future minimum sub-lease payments contractually due for the next
five
years and thereafter under noncancellable sub-lease agreements as of
June 6, 2017 (
in thousands):
 
2018
   $
382
  
2019
    
285
  
2020
    
285
  
2021
    
291
  
2022
    
300
  
Subsequent years
    
1,019
  
Total minimum sub-lease payments
   $
2,562
  
 
The following table summarizes our minimum and contingent rent expense and our sublease rental income under our operating leases (in thousands):
 
   
2017
    
2016
    
2015
  
Minimum rent
  
$
38,922
     $
49,699
     $
50,489
  
Contingent rent
  
 
558
      
662
      
745
  
   
 
39,480
      
50,361
      
51,234
  
Sublease rental income
  
 
(572
)
    
(940
)
    
(504
)
   
$
38,908
     $
49,421
     $
50,730
  
 
The amounts shown for fiscal years
2017,
2016,
and
2015
above exclude rent expense of
$14.
2
million,
$3.6
million, and
$1.2
million, respectively, relating to lease reserves established for closed restaurants or dead sites, which is included within Closures and impairments expense in our Consolidated Statements of Operations and Comprehensive Loss.