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

3 Months Ended

Apr. 02, 2019

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
	April 2, 2019			April 3, 2018
Restaurant impairments (1)	$	189		$	598
Closure costs (1)	(39		)	554
Loss on disposal of assets and other	270			428
	$	420		$	1,580

_____________________________

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

During the first quarter of 2019, there were no restaurants identified as impaired, compared to one restaurant impairment during the first quarter of 2018. Both periods include ongoing equipment costs for restaurants previously impaired. Impairment is based on management’s current assessment of the expected future cash flows of a restaurant based on recent results and other specific market factors. Impairment expense is a Level 3 fair value measure and is determined by comparing the carrying value of restaurant assets to the estimated fair market value of the restaurant assets at resale value.

Closure costs in the first quarter of 2019 were comprised of a $0.3 million gain primarily relating to changes in the Company’s assessment of remaining operating lease terms, offset by $0.3 million of ongoing costs related to restaurants closed in previous years. The first quarter of 2018 included $0.6 million related to the ongoing costs of restaurants closed in previous years. These ongoing costs include adjustments to the liabilities to landlords as lease terminations occur.

These expenses are included in the “Restaurant impairments, closure costs and asset disposals” line in the Condensed Consolidated Statements of Operations.