Panera Bread 2015 Annual Report Download - page 66

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PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
56
As of December 29, 2015, the Company classified as held for sale the assets and certain liabilities of 35 Company-owned bakery-
cafes the Company expects to sell during the next 12 months. During fiscal 2015, the Company recorded losses on assets held
for sale of $11.0 million. The Company classifies assets as held for sale and ceases depreciation of the assets when those assets
meet the held for sale criteria, as defined in GAAP. The following summarizes the financial statement carrying amounts of assets
and liabilities associated with the bakery-cafes classified as held for sale (in thousands):
December 29, 2015
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 738
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,462
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,499
Assets held for sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28,699
Deferred rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,410
Asset retirement obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535
Liabilities associated with assets held for sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,945
Assets held for sale were valued using Level 3 inputs, primarily representing information obtained from signed letters of
intent. Costs to sell are considered in the estimates of fair value for those assets included in assets held for sale in the Company's
Consolidated Balance Sheets.
The following summarizes activity associated with the refranchising initiative recorded in the caption entitled refranchising loss
in the Consolidated Statements of Income (in thousands):
For the fiscal year ended
December 29, 2015
Loss on assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,999
Impairment of long-lived assets and lease termination costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,461
Professional fees and severance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,088
Gain on sale of bakery-cafes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (440)
Refranchising loss (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,108
(1) The caption entitled refranchising loss in the Consolidated Statements of Cash Flows as a non-cash adjustment to reconcile
net income to net cash provided by operating activities includes only non-cash refranchising amounts.
Tatte Acquisition
On December 7, 2015, the Company acquired a 50.01% interest in Tatte Holdings, LLC (“Tatte”), for a cash contribution of $4.0
million (the “Tatte Acquisition”). Tatte is a bakery-cafe concept with five locations in the Boston area. The Company has evaluated
all of the applicable criteria for an entity subject to consolidation under the provisions of the variable interest model and has
concluded that Tatte is a VIE requiring consolidation.
The following summarizes the consolidated assets and liabilities of Tatte as of December 7, 2015, including the Company's
investment in Tatte, which is eliminated in consolidation (in thousands):