Restaurant Impairment, Closure Costs and Asset Disposals Restaurant Impairment, Closure Costs and Asset Disposals

9 Months Ended

Sep. 27, 2016

Property, Plant and Equipment Impairment or Disposal [Abstract]

Restaurant Impairment, Closure Costs and Asset Disposals

Restaurant Impairments, Closure Costs and Asset Disposals

The following table presents restaurant impairments, closure costs and asset disposals (in thousands):

	Fiscal Quarter Ended				Three Fiscal Quarters Ended
	September 27, 2016		September 29, 2015		September 27, 2016		September 29, 2015
Restaurant impairments (1)	$	79	$	16,213	$	10,620	$	22,157
Closure costs (1) (2)	642		16		1,729		52
Loss on disposal of assets and other (2)	1,562		250		2,198		606
	$	2,283	$	16,479	$	14,547	$	22,815

_____________________________

(1) Restaurant impairments and closure costs in all periods presented above include expenditures related to restaurants previously impaired or closed.

(2) The Company revised its classification of certain prior year closure costs and loss on disposal of assets and other expenses to conform with the current year presentation. Included in loss on disposal of assets and other for both the third quarter and first three quarters of 2016 is a $1.1 million charge to reduce capitalized labor and overhead as a result of the reduced growth for new restaurant development. Additionally the third quarter of 2016 and the first three quarters of 2016 include a $0.4 million gain from insurance proceeds received for property damage in excess of the loss recognized.

During the first three quarters of 2016, 12 restaurants were identified as impaired compared to 33 restaurants during the first three quarters of 2015, primarily related to management’s current assessment of the expected future cash flows of various restaurants based on recent results. Impairment expense is a Level 3 fair value measure and was determined by comparing the carrying value of restaurant assets to the estimated fair market value of the restaurant assets at resale value. The closure costs of $0.6 million recognized during the third quarter of 2016 and $1.7 million recognized during the first three quarters of 2016 are related to the ongoing costs of restaurants closed in the fourth quarter of 2015. These expenses are included in the “Restaurant impairments, closure costs and asset disposals” line in the Condensed Consolidated Statements of Operations.