Jack In The Box 2008 Annual Report Download - page 63

As lessor — We lease or sublease restaurants to certain franchisees and others under agreements that generally
provide for the payment of percentage rentals in excess of stipulated minimum rentals, usually for a period of
20 years. Most of our leases have rent escalation clauses and renewal clauses of 5 to 20 years. Total rental revenue
was $88.6 million, $74.4 million and $58.8 million, including contingent rentals of $13.8 million, $13.9 million and
$11.7 million, in 2008, 2007 and 2006, respectively.
The minimum rents receivable expected to be received under these non-cancelable operating leases, excluding
contingent rentals, are as follows (in thousands):
Fiscal Year
2009 .............................................................. $ 79,773
2010 .............................................................. 78,466
2011 .............................................................. 74,794
2012 .............................................................. 72,055
2013 .............................................................. 69,982
Thereafter . . ........................................................ 804,217
Total minimum future rentals ............................................ $1,179,287
Assets held for lease consisted of the following at each year-end (in thousands):
2008 2007
Land ..................................................... $ 33,442 $ 29,716
Buildings .................................................. 194,344 160,858
Equipment ................................................. 4,329 4,172
232,115 194,746
Less accumulated depreciation .................................. (112,269) (89,535)
$ 119,846 $105,211
6. RESTAURANT CLOSING, IMPAIRMENT CHARGES AND OTHER
In 2008, we recorded impairment charges of $3.5 million primarily related to the write-down of the carrying
value of seven JACK IN THE BOX restaurants, which we continue to operate. We also recognized accelerated
depreciation and other costs on the disposition of property and equipment of $16.4 million primarily related to our
restaurant re-image program, which includes a major renovation of our restaurant facilities, a kitchen enhancement
project and normal ongoing capital maintenance activities.
In 2007, we recorded impairment charges of $1.3 million related to the closure of five JACK IN THE BOX
restaurants and the write-down of the carrying value of one JACK IN THE BOX restaurant, which we continued to
operate. We also recognized accelerated depreciation and other costs on the disposition of property and equipment
of $15.9 million primarily relating to our re-image program and capital maintenance activity.
In 2006, we recorded impairment charges of $1.6 million related to seven JACK IN THE BOX restaurants that we
closed or the lease expired, and we recorded impairment charges of $2.5 million to write-down the carrying value of
eight JACK IN THE BOX restaurants. We also recognized accelerated depreciation and other costs on the disposition of
property and equipment of $9.1 million primarily relating to our re-image program and capital maintenance activity.
These impairment charges, accelerated depreciation and other costs on the disposition of property and
equipment are included in selling, general and administrative expenses in the accompanying consolidated
statements of earnings.
F-17
JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)