
6.	IMPAIRMENT AND OTHER CHARGES, NET

Impairment and other charges, net in the accompanying condensed consolidated statements of earnings is comprised of the following (in thousands):



	Quarter				Year-to-date
	July 9, 2017		July 3, 2016		July 9, 2017		July 3, 2016
Costs of closed restaurants and other (primarily lease obligations)	$	2,244	$	914	$	5,434	$	2,489
Restructuring costs	1,837		7,744		6,081		7,744
Losses on disposition of property and equipment, net	952		637		2,186		2,283
Accelerated depreciation	674		673		1,394		1,531
Restaurant impairment charges	505		551		505		551
	$	6,212	$	10,519	$	15,600	$	14,598

Restructuring costs — Restructuring charges in 2017 and 2016 are the result of a plan that management initiated in fiscal 2016 to reduce our general and administrative costs. This plan includes cost saving initiatives from workforce reductions, relocation and consolidation of our Qdoba corporate support center, refranchising initiatives, and the consolidation of information technology across both brands. Restructuring charges in 2017 also include costs related to the evaluation of potential alternatives with respect to the Qdoba brand (the “Qdoba Evaluation”).

The following is a summary of our restructuring costs (in thousands):



	Quarter				Year-to-date
	July 9, 2017		July 3, 2016		July 9, 2017		July 3, 2016
Qdoba Evaluation costs (1)	$	1,654	$	—	$	1,654	$	—
Employee severance and related costs	179		6,487		722		6,487
Facility closing costs (2)	—		847		2,908		847
Other (3)	4		410		797		410
	$	1,837	$	7,744	$	6,081	$	7,744

____________________________


(1)	Qdoba Evaluation costs are primarily comprised of third party consulting, legal services, and audit fees.

(2)

Year-to-date 2017 facility closing costs includes $2.9 million in costs for the accrual of the future lease commitment and expected ancillary costs, net of anticipated sublease rental, for our Qdoba corporate support center, which was offset by $0.9 million due to the reversal of the related tenant improvement allowance, and $0.3 million due to the reversal of the related straight-line rent expense. Year-to-date 2017, facility closing costs also includes $1.2 million of accelerated depreciation related to the relocation of our Qdoba corporate support center.


(3)	Other primarily represents employee relocation costs and moving expenses related to the relocation of our Qdoba corporate support center.

The following is a summary of our 2017 restructuring costs by operating segment (in thousands):



	Quarter				Year-to-date
	July 9, 2017		July 3, 2016		July 9, 2017		July 3, 2016
Jack in the Box restaurant operations	$	—	$	1,796	$	159	$	1,796
Shared services (1)	168		1,535		439		1,535
Qdoba restaurant operations (2)	1,669		4,413		5,483		4,413
	$	1,837	$	7,744	$	6,081	$	7,744

____________________________


(1)	Shared service functions consist primarily of accounting/finance, information technology, human resources, audit services, legal, tax and treasury.


(2)	Includes Qdoba Evaluation costs.

At this time, we are unable to estimate additional charges to be incurred.

Total accrued facility closing costs related to our restructuring activities, which are comprised of the future lease commitment and expected ancillary costs, net of anticipated sublease rental, are included in accrued liabilities and other long-term liabilities, and changed as follows during 2017 (in thousands):



Balance as of October 2, 2016	$	—
Additions	2,927
Interest expense	3
Cash payments	(212		)
Balance as of July 9, 2017	$	2,718

Total accrued severance costs related to our restructuring activities are included in accrued liabilities and changed as follows during 2017 (in thousands):



Balance as of October 2, 2016	$	4,198
Additions	722
Cash payments	(4,253		)
Balance as of July 9, 2017	$	667

Restaurant closing costs — Costs of closed restaurants primarily consist of future lease commitments and expected ancillary costs, net of anticipated sublease rentals. In 2017, restaurant closing costs include $0.5 million in property and equipment impairment charges and $0.5 million in future lease commitment charges related to the closure of three underperforming Jack in the Box restaurants acquired in the third quarter of 2017, as well as $0.4 million in equipment impairment charges resulting from the closure of one Qdoba restaurant in the second quarter of 2017.

Accrued restaurant closing costs, included in accrued liabilities and other long-term liabilities, changed as follows during 2017 (in thousands):



Balance as of October 2, 2016	$	7,231
Additions	482
Adjustments (1)	966
Interest expense	1,196
Cash payments	(3,501		)
Balance as of July 9, 2017 (2) (3)	$	6,374

___________________________


(1)	Adjustments relate primarily to revisions of certain sublease and cost assumptions. Our estimates related to our future lease obligations, primarily the sublease income we anticipate, are subject to a high degree of judgment and may differ from actual sublease income due to changes in economic conditions, desirability of the sites and other factors.


(2)	The weighted average remaining lease term related to these commitments is approximately 4 years.


(3)	This balance excludes $2.2 million of restaurant closing costs that are included in accrued liabilities and other long-term liabilities, which were initially recorded as losses on the sale of company-operated restaurants upon sale to Jack in the Box franchisees in prior years.

Accelerated depreciation — When a long-lived asset will be replaced or otherwise disposed of prior to the end of its estimated useful life, the useful life of the asset is adjusted based on the estimated disposal date and accelerated depreciation is recognized. In 2017, accelerated depreciation primarily relates to Jack in the Box and Qdoba restaurant remodels, as well as the anticipated closure of two Jack in the Box and three Qdoba company-operated restaurants. In 2016, accelerated depreciation was primarily related to expenses at Jack in the Box company-operated restaurants for exterior facility enhancements and the replacement of technology equipment.