El Pollo Loco 2016 Annual Report Download - page 45
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General and Administrative Expenses
Generalandadministrativeexpensesarecomprisedofexpensesassociatedwithcorporateandadministrativefunctionsthatsupportthedevelopmentandoperations
ofourrestaurants,includingcompensationandbenefits,travelexpenses,stockcompensationcosts,legalandprofessionalfees,andotherrelatedcorporatecosts.
Alsoincludedarepre-openingcosts,andexpensesabovetherestaurantlevel,includingsalariesforfieldmanagement,suchasareaandregionalmanagers,and
franchisefieldoperationalsupport.
Franchise Expenses
Franchiseexpensesareprimarilycomprisedofrentexpensesincurredonpropertiesleasedbyusandthensublettofranchisees,andexpensesincurredinsupportof
franchiseeinformationtechnologysystems.
Depreciation and Amortization
Depreciationandamortizationprimarilyconsistofthedepreciationoffixedassets,includingleaseholdimprovementsandequipment.
Loss on Disposal of Assets
Lossondisposalofassetsincludesthelossondisposalofassetsrelatedtoretirementsandreplacementorwrite-offofleaseholdimprovementsorequipment.
Asset Impairment and Close-Store Reserves
Wereviewlong-livedassetssuchasproperty,equipment,andintangiblesonaunit-by-unitbasisforimpairmentwheneventsorcircumstancesindicateacarrying
valueoftheassetsthatmaynotberecoverable,andrecordanimpairmentchargewhenappropriate.Closurecostsincludenon-cashrestaurantchargessuchasup-
frontexpensingofunpaidrentremainingonthelifeofalease.
Interest Expense, Net
Interestexpense,net,consistsprimarilyofinterestonouroutstandingdebt.Debtissuancecostsareamortizedatcostoverthelifeoftherelateddebt.
Early Extinguishment of Debt
InOctober2013,werefinancedthe2011FinancingAgreementsbyenteringintothe2013CreditAgreements,whichincludedlongermaturitiesandlowerinterest
ratesthantheindebtednessthattheyreplaced.TheproceedsfromourIPOinJuly2014wereprimarilyusedtorepaythe2013SecondLienTermLoan.In
December2014,werefinancedourthen-existingdebt,replacingthe2013Revolverandthe2013FirstLienTermLoanwiththe2014Revolver.Asaresultofthe
2013Refinancing,therepaymentofthe2013SecondLienTermLoan,andthe2014Refinancing,inbothfiscal2014and2013weincurredchargesforprepayment
penaltiesandfees,callpremium,acceleratedaccretion,andwrite-offofdeferredfinancingcostsandfeesandofunamortizeddiscount.
Benefit (Provision) for Income Taxes
Benefit(provision)forincometaxesconsistsoffederalandstatetaxesonourincome.
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