Impairment and other charges, net (Tables)

4 Months Ended

Jan. 21, 2018

Restructuring and Related Activities [Abstract]

Impairment Disposition Of Property And Equipment, Restaurant Closing Costs And Resturcturing

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

	Sixteen Weeks Ended
	January 21, 2018		January 22, 2017
Costs of closed restaurants and other	$	1,375	$	1,839
Restructuring costs	358		183
Operating restaurant impairment charges (1)	291		—
Losses on disposition of property and equipment, net	183		530
Accelerated depreciation	50		102
	$	2,257	$	2,654

Impairment and other charges

Restructuring and Related Costs

Restructuring costs — Restructuring charges in 2018 and 2017 include costs resulting from a plan that management initiated in fiscal 2016 to reduce our general and administrative costs. This plan includes cost saving initiatives from workforce reductions and refranchising initiatives. Restructuring charges in 2018 also include costs related to the evaluation of potential alternatives with respect to the Qdoba brand (the “Qdoba Evaluation”), which resulted in the Board of Director’s approval to sell Qdoba. Refer to Note 2, Discounted Operations, for additional information regarding the Qdoba Sale.

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

	Sixteen Weeks Ended
	January 21, 2018			January 22, 2017
Qdoba Evaluation retention bonus	$	587		$	—
Qdoba Evaluation consulting costs (1)	226			—
Employee severance and related costs (2)	(456		)	92
Other	1			91
	$	358		$	183

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(1) Qdoba Evaluation consulting costs are primarily related to third party advisory services.

(2) 2018 reflects a reduction in severance and related costs due to a change in the number of employees to be terminated in connection with our restructuring activities.

Schedule of Restructuring Reserve by Type of Cost

Our liability for Qdoba lease commitments is included in current liabilities held for sale as of January 21, 2018 and is included in current and non-current liabilities held for sale as of October 1, 2017 in the accompanying condensed consolidated balance sheets and has changed as follows in 2018 (in thousands):

Balance as of October 1, 2017	$	2,473
Adjustments (1)	193
Cash payments	(800		)
Balance as of January 21, 2018 (2)	$	1,866

____________________________

(1) Adjustments relate to revisions to certain sublease assumptions due to changes in market conditions and includes interest expense.

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

Total accrued severance costs related to our restructuring activities are included in accrued liabilities and changed as follows during 2018 (in thousands):

Balance as of October 1, 2017	$	648
Adjustments (1)	(456		)
Cash payments	(150		)
Balance as of January 21, 2018	$	42

____________________________

(1) Adjustments in accrued severance costs are the result of the change in number of employees to be terminated in connection with our restructuring activities.

Impairment, Disposition, Closing Costs, and Restructuring

Impairment and other charges

Schedule of Restructuring Reserve by Type of Cost

Costs of closed restaurants and other — Costs of closed restaurants in 2018 and 2017 include future lease commitment charges and expected ancillary cost, net of anticipated sublease rentals. Costs in 2018 also include $0.5 million of additional impairment charges resulting from changes in market value from three previously closed restaurants.

Accrued restaurant closing costs, included in accrued liabilities and other long-term liabilities on our condensed consolidated balance sheets, changed as follows during 2018 (in thousands):

Balance as of October 1, 2017	$	6,175
Additions	135
Adjustments (1)	347
Interest expense	545
Cash payments	(1,592		)
Balance as of January 21, 2018 (2) (3)	$	5,610

___________________________

(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 $2.8 million of restaurant closing costs that are included in accrued liabilities and other long-term liabilities on our condensed consolidated balance sheets, which were initially recorded as losses on the sale of company-operated restaurants upon sale to Jack in the Box franchisees in prior years.