2013 FORM 10-K 44  BUILD-A-BEAR WORKSHOP, INC.  In the normal course of business, the Company is subject to regular  examination by various taxing authorities for years not closed by  the statute of limitations, including an ongoing customs audit in the  United Kingdom in which the Company is contesting audit findings.  The Company accrues a liability for this type of contingency when  it believes that it is both probable that a liability has been incurred  and that it can reasonably estimate the amount of the loss. In 2012,  the Company received notification from the customs authority  that it intended to make an assessment for unpaid duty, penalties  and interest. The assessment was made in 2013. The Company  has appealed this determination and continues to believe that the  ultimate outcome of these matters will not have a material adverse  impact on the results of operations, liquidity or financial position  of the Company. However, if one or more of these examinations has  an unfavorable resolution, it is possible that the results of operation,  liquidity or financial position of the Company could be materially  affected in any particular period. Since the date of the notification in  the third quarter of fiscal 2012, the Company has been required to pay  the disputed duty, pending resolution of the appeal. As of December  28, 2013, $2.9 million had been paid in respect of the disputed duty  and is included in receivables in the Retail segment.  In the normal course of business, the Company is subject to certain  claims or lawsuits. Except as noted below, management is not aware  of any claims or lawsuits that may have a material adverse effect on  the consolidated financial position or results of operations of the  Company.  (b) Litigation  As of December 28, 2013, the Company has a bank line of credit that  provides borrowing capacity of $35 million. Borrowings under the  credit agreement are secured by our assets and a pledge of 65% of  the Company’s ownership interest in foreign subsidiaries. The credit  agreement contains various restrictions on indebtedness, liens,  guarantees, redemptions, mergers, acquisitions or sale of assets,  loans, transactions with affiliates, and investments. It prohibits the  Company from declaring dividends without the bank’s prior consent,  unless such payment of dividends would not violate any terms of the  credit agreement. The Company is also prohibited from repurchasing  shares of its common stock unless such purchase would not violate  any terms of the credit agreement; the Company may not use  proceeds of the line of credit to repurchase shares. Borrowings bear  interest at LIBOR plus 1.8%. Financial covenants include maintaining  a minimum tangible net worth, maintaining a minimum fixed charge  coverage ratio (as defined in the credit agreement) and not exceeding  a maximum funded debt to earnings before interest, depreciation and  amortization ratio. On January 22, 2014, the Company amended the  existing credit agreement, extending the term to December 31, 2015  and increasing the fixed charge coverage ratio. As of December 28,  2013: (i) the Company was in compliance with these covenants; (ii)  there were no borrowings under the line of credit; and (iii) there was  a standby letter of credit of approximately $1.1 million outstanding  under the credit agreement. Giving effect to this standby letter of  credit, there was approximately $33.9 million available for borrowing  under the line of credit.  (9) Long-Term Debt  Future minimum lease payments at December 28, 2013, were as  follows (in thousands):  2014 $ 43,551  2015 37,617  2016 28,809  2017 21,573  2018 15,889  Subsequent to 2018 53,330  $ 200,769  The following tax years remain open in the Company’s major taxing jurisdictions  as of December 28, 2013: The Company leases its retail stores and corporate offices under  agreements which expire at various dates through 2030. The majority  of leases contain provisions for base rent plus contingent payments  based on defined sales as well as scheduled escalations. Total office  and retail store base rent expense was $46.5 million, $48.2 million  and $48.2 million, and contingent rents were $1.3 million, $1.2 million  and $1.2 million for 2013, 2012 and 2011, respectively.  (a) Operating Leases  (10) Commitments and Contingencies  Notes to Consolidated Financial Statements  (continued) The following tax years remain open in the Company’s major taxing  jurisdictions as of December 28, 2013: The Company’s income before income taxes from domestic and foreign  operations (which include the United Kingdom, Canada, France and Ireland), are as follows (in thousands):  2013 2012 2011 Domestic $ (1,134) $ (11,550) $ (6,200) Foreign (984) (36,879) 3,548  Total $ (2,118) $ (48,429) $ (2,652) United States (Federal) 2010 through 2013 United Kingdom 2007 through 2013 Canada 2010 through 2013 Ireland 2008 through 2013