Chili's 2014 Annual Report Download - page 67

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(c) Commitments
As of June 25, 2014, future minimum lease payments on capital and operating leases were as follows (in
thousands):
Fiscal Year
Capital
Leases
Operating
Leases
2015 .................................................... $ 5,692 $111,314
2016 .................................................... 5,806 100,922
2017 .................................................... 5,709 78,358
2018 .................................................... 5,521 59,714
2019 .................................................... 5,202 35,238
Thereafter ............................................... 36,968 105,646
Total minimum lease payments(a) ........................ 64,898 $491,192
Imputed interest (average rate of 7%) ...................... (21,812)
Present value of minimum lease payments .................. 43,086
Less current installments ................................ (2,883)
$ 40,203
(a) Future minimum lease payments have not been reduced by minimum sublease rentals to
be received in the future under non-cancelable subleases. Sublease rentals are
approximately $35.5 million and $48.4 million for capital and operating subleases,
respectively.
10. FAIR VALUE DISCLOSURES
(a) Non-Financial Assets Measured on a Non-Recurring Basis
In fiscal 2014, long-lived assets with a carrying value of $5.8 million, primarily related to nine
underperforming restaurants, were written down to their fair value of $1.3 million resulting in an impairment
charge of $4.5 million. In fiscal 2013, long-lived assets with a carrying value of $5.6 million, primarily related to
three underperforming restaurants including the company-owned Chili’s in Brazil, were written down to their fair
value of $0.3 million resulting in an impairment charge of $5.3 million. We determined fair value based on
projected discounted future operating cash flows of the restaurants over their remaining service life using a risk
adjusted discount rate that is commensurate with the risk inherent in our current business model.
In fiscal 2014, we reviewed the transferable liquor licenses during our semi-annual impairment analysis and
determined there was no impairment. In fiscal 2013, one transferable liquor license with a carrying value of $0.3
million was written down to the fair value of $0.1 million resulting in an impairment charge of $0.2 million. We
determined fair value based on prices in the open market for licenses in same or similar jurisdictions.
All impairment charges related to underperforming restaurants and liquor licenses were included in other
gains and charges in the consolidated statement of comprehensive income for the periods presented.
During fiscal 2014, we completed the valuation of the reacquired franchise rights related to the Canada
acquisition and recorded the asset at an estimated fair value of $8.9 million in intangibles on the consolidated
balance sheet. In fiscal 2014, we reviewed the reacquired franchise rights during our annual impairment analysis
and determined there was no impairment.
F-31