Jack In The Box 2015 Annual Report Download - page 60

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

(3) In 2014, the loss on the anticipated sale of a Jack in the Box market relates to 25 company-operated restaurants of which we sold 20, and closed the remaining five, in the
second quarter of fiscal 2015.
Franchise acquisitions — We acquired seven, four and one Jack in the Box franchise restaurants in 2015, 2014 and 2013, respectively, and in 2013, we
acquired 13 Qdoba franchise restaurants. We account for the acquisition of franchised restaurants using the acquisition method of accounting for business
combinations. The purchase price allocations were based on fair value estimates determined using significant unobservable inputs (Level 3). The goodwill
recorded primarily relates to the sales growth potential of the markets acquired and is expected to be deductible for income tax purposes. The following table
provides detail of the combined acquisitions in each fiscal year (dollars in thousands):



Restaurants acquired from franchisees
7
4
14
Property and equipment
$ 646
$ 1,398
$ 3,030
Reacquired franchise rights
—
96
148
Goodwill
—
256
9,169
Gains on the acquisition of franchise-operated restaurants
(33)
—
—
Liabilities assumed
(613)
—
(283)
Total consideration
$ —
$ 1,750
$ 12,064

The changes in the carrying amount of goodwill during fiscal 2015 and 2014 by reportable segment were as follows (in thousands):




Balance at September 29, 2013
$ 48,391
$ 100,597
$ 148,988
Acquisition of franchised restaurants
256
—
256
Sale of company-operated restaurants to franchisees
(170)
—
(170)
Balance at September 28, 2014
48,477
100,597
149,074
Sale of company-operated restaurants to franchisees
(47)
—
(47)
Balance at September 27, 2015
$ 48,430
$ 100,597
$ 149,027
Intangible assets, net consist of the following as of the end of each fiscal year (in thousands):


Amortized intangible assets:
Gross carrying amount
$ 17,267
$ 17,272
Less accumulated amortization
(11,302)
(10,468)
Net carrying amount
5,965
6,804
Non-amortized intangible assets:
Trademark
8,800
8,800
Net carrying amount
$ 14,765
$ 15,604
Amortized intangible assets include acquired franchise contracts recorded in connection with our acquisition of Qdoba in 2003, lease acquisition costs and
reacquired franchise rights. The weighted-average life of these amortized intangible assets is approximately 27 years. Total amortization expense related to
intangible assets was $0.8 million, $0.9 million and $1.0 million in fiscal 2015, 2014 and 2013, respectively.
The following table summarizes, as of September 27, 2015, the estimated amortization expense for each of the next five fiscal years (in thousands):
2016 $ 784
2017 $ 736
2018 $ 692
2019 $ 645
2020 $ 621
F-15