Jack In The Box 2015 Annual Report Download - page 58

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
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In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments when the Terms of an Award Provide That a Performance Target
Could Be Achieved after the Requisite Service Period, which requires a reporting entity to treat a performance target that affects vesting and that could be
achieved after the requisite service period as a performance condition. This standard is to be applied prospectively for annual and interim periods beginning
after December 15, 2015, with early adoption permitted. We early adopted this standard on September 29, 2014. This pronouncement did not have a material
impact on our consolidated financial statements.
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360):
Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which modifies the definition of discontinued operations to
include only disposals of an entity that represent strategic shifts that have or will have a major effect on an entity's operations and financial results. This ASU
also expands the disclosure requirements for disposals which meet the definition of a discontinued operation and requires entities to disclose information
about disposals of individually significant components that do not meet the definition of discontinued operations. The standard is effective prospectively for
annual and interim periods beginning after December 15, 2014, with early adoption permitted. We early adopted this standard on September 29, 2014. This
pronouncement did not have a material impact on our consolidated financial statements.

Distribution business — During fiscal 2012, we entered into an agreement with a third party distribution service provider pursuant to a plan approved by our
board of directors to sell our Jack in the Box distribution business. During the first quarter of fiscal 2013, we completed the transition of our distribution
centers. The operations and cash flows of the business have been eliminated and in accordance with the provisions of the FASB authoritative guidance on the
presentation of financial statements, the results are reported as discontinued operations for all periods presented.
The following table summarizes our distribution business results, which are included in discontinued operations for each fiscal year (in thousands):



Revenue
$ —
$ —
$ 37,743
Loss before income tax benefit
$ (703)
$ (1,276)
$ (6,446)
In 2015 and 2014, the loss includes $0.5 million and $0.9 million, respectively, related to insurance and other settlements and $0.2 million and $0.3 million,
respectively, related to our lease commitments. The loss in fiscal 2013 includes costs incurred to exit the distribution business consisting of $1.9 million for
accelerated depreciation of a long-lived asset disposed of upon completion of the transaction, $1.6 million (net of reversals for deferred rent of $0.4 million)
for future lease commitments, $1.2 million primarily related to costs incurred to terminate certain vendor contracts, and $1.3 million related to distribution
center specific workers’ compensation claims. The loss on the sale of the distribution business was not material to our results of operations.
Our liability for lease commitments related to our distribution centers is included in accrued liabilities and other long-term liabilities in the accompanying
consolidated balance sheets and was $0.2 million and $0.5 million as of September 27, 2015 and September 28, 2104, respectively. The lease commitment
balance as of September 27, 2015 relates to one distribution center subleased at a loss. 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.
2013 Qdoba Closures — During the third quarter of fiscal 2013, we closed 62 Qdoba restaurants. The decision to close these restaurants was based on a
comprehensive analysis that took into consideration levels of return on investment and other key operating performance metrics. Since the closed restaurants
were not predominantly located near those remaining in operation, we did not expect the majority of cash flows and sales lost from these closures to be
recovered. In addition, we did not anticipate any ongoing involvement or significant direct cash flows from the closed stores. Therefore, in accordance with
the provisions of the FASB authoritative guidance on the presentation of financial statements, the results of operations for these restaurants are reported as
discontinued operations for all periods presented.
F-13