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Lease Agreements
 12 Months Ended
Dec. 31, 2014
Lease Agreements [Abstract]  
Lease Agreements

Note 17 – Lease Agreements

Most of our cinemas conduct their operations in leased facilities.  Sixteen of our twenty operating multiplexes in Australia, three of our eight cinemas in New Zealand, and all but one of our cinemas in the United States are in leased facilities.  These cinema leases have remaining terms inclusive of options of 1 to 37 years.  Certain of our cinema leases provide for contingent rentals based upon a specified percentage of theater revenue with a guaranteed minimum.  Substantially all of our leases require the payment of property taxes, insurance, and other costs applicable to the property.  We also lease office space and equipment under non-cancelable operating leases.  All of our leases are accounted for as operating leases and accordingly, we have no leases of facilities that require capitalization.

We determine the annual base rent expense of our cinemas by amortizing total minimum lease obligations on a straight-line basis over the lease terms.  Base rent expense and contingent rental expense under the operating leases totaled approximately $30.9 million and $1.2 million for 2014, respectively; $32.1 million and $1.3 million for 2013, respectively; and $32.6 million and $1.7 million for 2012, respectively.  Future minimum lease payments by year and, in the aggregate, under non-cancelable operating leases consisted of the following at December 31, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum Ground

 

Minimum Premises

 

Equipment

 

Total Minimum

 

 

Lease Payments

 

Lease Payments

 

Lease Payments

 

Lease Payments

2015

$
3,490 

$
27,597 

$
2,703 

$
33,790 

2016

 
3,526 

 
23,724 

 
2,694 

 
29,944 

2017

 
3,621 

 
20,730 

 
2,665 

 
27,016 

2018

 
3,629 

 
16,811 

 

--

 
20,440 

2019

 
3,691 

 
12,903 

 

--

 
16,594 

Thereafter

 
12,758 

 
51,666 

 

--

 
64,424 

Total minimum lease payments

$
30,715 

$
153,431 

$
8,062 

$
192,208 


Since approximately $62.5 million of our total minimum lease payments of $192.2 million as of December 31, 2014 consisted of lease obligations denominated in Australian and New Zealand dollars, the U.S dollar amounts of these obligations will fluctuate in accordance with the relative values of these currencies.  See Note 25 – Related Parties and Transactions for the amount of leases associated with any related party leases.

Digital Projection Equipment Lease

Effective December 1, 2012, we entered into a 5-year digital projection equipment lease obligation with Banc of America Leasing & Capital, LLC enabling us to convert substantially all of our U.S. cinemas to digital projection.  The equipment lease agreement requires that we make lease payments of $218,000 per month for the next 60 months after which we can either purchase the equipment at a market price or renew the lease for an undetermined length of time.  This lease qualifies as an operating lease and is recorded accordingly.