Red Lobster 2014 Annual Report Download - page 30

Notes to Consolidated Financial Statements
Darden
28 Darden Restaurants, Inc.
LAND, BUILDINGS AND EQUIPMENT, NET
Land, buildings and equipment are recorded at cost less accumulated
depreciation. Building components are depreciated over estimated useful
lives ranging from 7 to 40 years using the straight-line method. Leasehold
improvements, which are reflected on our consolidated balance sheets as a
component of buildings in land, buildings and equipment, net, are amortized
over the lesser of the expected lease term, including cancelable option periods,
or the estimated useful lives of the related assets using the straight-line
method. Equipment is depreciated over estimated useful lives ranging
from 2 to 10 years also using the straight-line method. See Note 5 – Land,
Buildings and Equipment, Net for additional information. Gains and losses on
the disposal of land, buildings and equipment are included in selling, general
and administrative expenses in our accompanying consolidated statements
of earnings. Depreciation and amortization expense from continuing operations
associated with buildings and equipment and losses on disposal of land,
buildings and equipment were as follows:
Fiscal Year
(in millions) 2014 2013 2012
Depreciation and amortization on
buildings and equipment $296.3 $271.0 $233.1
Losses on disposal of land,
buildings and equipment 2.8 5.0 3.5
CAPITALIZED SOFTWARE COSTS AND
OTHER DEFINITE-LIVED INTANGIBLES
Capitalized software, which is a component of other assets, is recorded at cost
less accumulated amortization. Capitalized software is amortized using the
straight-line method over estimated useful lives ranging from 3 to 10 years.
The cost of capitalized software and related accumulated amortization was
as follows:
May 25, May 26,
(in millions) 2014 2013
Capitalized software $132.6 $107.9
Accumulated amortization (70.9) (67.5)
Capitalized software, net of
accumulated amortization $ 61.7 $ 40.4
We have other definite-lived intangible assets, including assets related
to the value of below-market leases resulting from our acquisitions, that
are included as a component of other assets on our consolidated balance
sheets. We also have definite-lived intangible liabilities related to the value
of above-market leases resulting from our acquisitions, that are included in
other liabilities on our consolidated balance sheets. Definite-lived intangibles
are amortized on a straight-line basis over estimated useful lives of 1 to
20 years. The cost and related accumulated amortization was as follows:
May 25, May 26,
(in millions) 2014 2013
Other definite-lived intangibles $15.5 $19.1
Accumulated amortization (6.3) (7.6)
Other definite-lived intangible assets,
net of accumulated amortization $ 9.2 $11.5
May 25, May 26,
(in millions) 2014 2013
Below-market leases $29.2 $29.2
Accumulated amortization (9.6) (7.8)
Below-market leases, net of
accumulated amortization $19.6 $21.4
May 25, May 26,
(in millions) 2014 2013
Above-market leases $(21.4) $(21.4)
Accumulated amortization 4.9 3.5
Above-market leases, net of
accumulated amortization $(16.5) $(17.9)
Amortization expense from continuing operations associated with
capitalized software and other definite-lived intangibles included in
depreciation and amortization in our accompanying consolidated statements
of earnings was as follows:
Fiscal Year
(in millions) 2014 2013 2012
Amortization expense –
capitalized software $7.0 $6.3 $7.7
Amortization expense –
other definite-lived intangibles 1.1 1.0 0.5
Amortization expense from continuing operations associated with above-
and-below-market leases included in restaurant expenses as a component
of rent expense in our consolidated statements of earnings was as follows:
Fiscal Year
(in millions) 2014 2013 2012
Restaurant expense –
below-market leases $ 1.8 $ 1.8 $ 1.8
Restaurant expense –
above-market leases (1.4) (1.2) (0.5)
Amortization of capitalized software and other definite-lived
intangible assets will be approximately $9.9 million annually for fiscal 2015
through 2019.