Jack In The Box 2013 Annual Report Download - page 61
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Assets held for lease and included in property and equipment consisted of the following at each year-end ( in thousands):
Land
$79,015
$73,831
Buildings
684,288
643,113
Equipment
3,887
3,455
767,190
720,399
Less accumulated depreciation
(400,211)
(353,157)
$366,979
$367,242
Impairment and other charges, net in the accompanying consolidated statements of earnings is comprised of the following ( in thousands):
Impairment charges
$3,874
$3,112
$1,367
Losses on disposition of property and equipment, net
3,645
5,904
7,524
Costs of closed restaurants (primarily lease obligations) and other
2,469
8,332
3,655
Restructuring costs
3,451
15,461
—
$13,439
$32,809
$12,546
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. Impairment charges in 2013, 2012 and 2011 primarily represent charges to write down the carrying value of underperforming Jack in the
Box restaurants and Jack in the Box restaurants we intend to or have closed.
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 restaurant upgrade
programs, remodels and rebuilds, and other corporate roll-out initiatives. In 2013, losses on the disposition of property and equipment includes income of
$2.8 million from the resolution of four eminent domain matters involving Jack in the Box restaurants.
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 during each fiscal year ( in thousands):
Balance at beginning of year
$20,677
$21,657
Additions
—
546
Adjustments
1,752
5,241
Cash payments
(6,108)
(6,767)
Balance at end of year
$16,321
$20,677
In each fiscal year, adjustments primarily relate to revisions to certain sublease costs and assumptions due to changes in market conditions.
The future minimum lease payments and receipts for the next five fiscal years and thereafter are included in the amounts disclosed in Note 8, Leases. Our
obligations under the leases included in the above table expire at various dates between 2014 and 2030.
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