El Pollo Loco 2016 Annual Report Download - page 45

Download and view the complete annual report

Please find page 45 of the 2016 El Pollo Loco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 94

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94

General and Administrative Expenses
Generalandadministrativeexpensesarecomprisedofexpensesassociatedwithcorporateandadministrativefunctionsthatsupportthedevelopmentandoperations
ofourrestaurants,includingcompensationandbenefits,travelexpenses,stockcompensationcosts,legalandprofessionalfees,andotherrelatedcorporatecosts.
Alsoincludedarepre-openingcosts,andexpensesabovetherestaurantlevel,includingsalariesforfieldmanagement,suchasareaandregionalmanagers,and
franchisefieldoperationalsupport.
Franchise Expenses
Franchiseexpensesareprimarilycomprisedofrentexpensesincurredonpropertiesleasedbyusandthensublettofranchisees,andexpensesincurredinsupportof
franchiseeinformationtechnologysystems.
Depreciation and Amortization
Depreciationandamortizationprimarilyconsistofthedepreciationoffixedassets,includingleaseholdimprovementsandequipment.
Loss on Disposal of Assets
Lossondisposalofassetsincludesthelossondisposalofassetsrelatedtoretirementsandreplacementorwrite-offofleaseholdimprovementsorequipment.
Asset Impairment and Close-Store Reserves
Wereviewlong-livedassetssuchasproperty,equipment,andintangiblesonaunit-by-unitbasisforimpairmentwheneventsorcircumstancesindicateacarrying
valueoftheassetsthatmaynotberecoverable,andrecordanimpairmentchargewhenappropriate.Closurecostsincludenon-cashrestaurantchargessuchasup-
frontexpensingofunpaidrentremainingonthelifeofalease.
Interest Expense, Net
Interestexpense,net,consistsprimarilyofinterestonouroutstandingdebt.Debtissuancecostsareamortizedatcostoverthelifeoftherelateddebt.
Early Extinguishment of Debt
InOctober2013,werefinancedthe2011FinancingAgreementsbyenteringintothe2013CreditAgreements,whichincludedlongermaturitiesandlowerinterest
ratesthantheindebtednessthattheyreplaced.TheproceedsfromourIPOinJuly2014wereprimarilyusedtorepaythe2013SecondLienTermLoan.In
December2014,werefinancedourthen-existingdebt,replacingthe2013Revolverandthe2013FirstLienTermLoanwiththe2014Revolver.Asaresultofthe
2013Refinancing,therepaymentofthe2013SecondLienTermLoan,andthe2014Refinancing,inbothfiscal2014and2013weincurredchargesforprepayment
penaltiesandfees,callpremium,acceleratedaccretion,andwrite-offofdeferredfinancingcostsandfeesandofunamortizeddiscount.
Benefit (Provision) for Income Taxes
Benefit(provision)forincometaxesconsistsoffederalandstatetaxesonourincome.
42