Jack In The Box 2011 Annual Report Download - page 64

Download and view the complete annual report

Please find page 64 of the 2011 Jack In The Box 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 89

  • 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

Table of Contents


Assets held for lease consisted of the following at each year-end (in thousands):
 
Land $ 63,839 $ 49,913
Buildings 583,168 410,823
Equipment 3,244 373
650,251 461,109
Less accumulated depreciation (298,801) (207,616)
$ 351,450 $ 253,493
 
Impairment — When events and circumstances indicate that our long-lived assets might be impaired and their carrying amount is greater than the
undiscounted cash flows we expect to generate from such assets, we recognize an impairment loss as the amount by which the carrying value exceeds the
fair value of the assets. We typically estimate fair value based on the estimated discounted cash flows of the related asset using marketplace participant
assumptions. In 2011, impairment charges primarily relate to certain excess Jack in the Box property and restaurants that we have closed or plan to
close. Impairment charges in 2010 and 2009 primarily represent charges to write-down the carrying value of certain underperforming Jack in the Box
restaurants, including in 2010, property and equipment impairment charges of $8.4 million related to the closure of 40 underperforming Jack in the Box
restaurants.
Disposition of property and equipment — We also recognize accelerated depreciation and other costs on the disposition of property and equipment.
When we decide to dispose of a long-lived asset, depreciable lives are adjusted based on the estimated disposal date and accelerated depreciation is
recorded. Other disposal costs primarily relate to gains or losses recognized upon the sale of closed restaurant properties, and charges from our ongoing
re-image and logo program and normal capital maintenance activities.
The following impairment and disposal costs are included in impairment and other charges, net in the accompanying consolidated statements of
earnings (in thousands):
  
Impairment charges $ 1,367 $ 12,970 $ 6,586
Losses on the disposition of property and equipment, net $ 7,650 $ 10,757 $ 11,418
Restaurant closing costs consist of future lease commitments, net of anticipated sublease rentals and expected ancillary costs, and are included in
impairment and other charges, net in the accompanying consolidated statements of earnings. Total accrued restaurant closing costs, included in accrued
liabilities and other long-term liabilities, changed as follows ( in thousands):
 
Balance at beginning of year $ 25,020 $ 4,234
Additions and adjustments 3,499 22,362
Cash payments (6,862) (1,576)
Balance at end of year $ 21,657 $ 25,020
F-20