Jack In The Box 2014 Annual Report Download - page 64
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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
$ 72,143
$ 79,015
Buildings
689,056
684,288
Equipment
4,492
3,887
765,691
767,190
Less accumulated depreciation
(434,526)
(400,211)
$ 331,165
$ 366,979
Impairment and other charges, net in the accompanying consolidated statements of earnings is comprised of the following (in thousands):
Impairment charges
$ 570
$ 3,874
$ 3,112
Losses on disposition of property and equipment, net
2,876
3,645
5,904
Costs of closed restaurants (primarily lease obligations) and other
2,841
2,469
8,332
Restructuring costs
8,621
3,451
15,461
$ 14,908
$ 13,439
$ 32,809
Impairment charges — 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 2014 primarily reflect costs incurred in connection with closed restaurant properties. In 2013 and 2012 impairment
costs 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
$ 16,321
$ 20,677
Adjustments
2,024
1,752
Cash payments
(5,172)
(6,108)
Balance at end of year
$ 13,173
$ 16,321
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 fiscal 2015 and 2030.
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