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

9 Months Ended

Jul. 10, 2011

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

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

5. IMPAIRMENT, DISPOSITION OF PROPERTY AND EQUIPMENT, AND RESTAURANT CLOSING COSTS

Impairment — When events and circumstances indicate that our long-lived assets might be impaired and their carrying amount is greater than the undiscounted cash flows we expect to generate from such assets, we recognize an impairment loss as the amount by which the carrying value exceeds the fair value of the assets. We typically estimate fair value based on the estimated discounted cash flows of the related asset using marketplace participant assumptions. Impairment charges were not material in any period and primarily relate to certain excess Jack in the Box property and restaurants we have closed or plan to close, and in 2010 the write-down of certain underperforming Jack in the Box restaurants.

Disposition of property and equipment — We also recognize accelerated depreciation and other costs on the disposition of property and equipment. When we decide to dispose of a long-lived asset, depreciable lives are adjusted based on the estimated disposal date, and accelerated depreciation is recorded. Other disposal costs primarily relate to charges from our ongoing re-image program and normal capital maintenance activities.

The following impairment and disposal costs are included in impairment and other charges, net in the accompanying condensed consolidated statements of earnings (in thousands):

	Quarter				Year-to-Date
	July 10,		July 4,		July 10,		July 4,
	2011		2010		2011		2010
Impairment charges	$	517	$	2,580	$	1,684		$	4,083
Losses on the disposition of property and equipment, net	$	660	$	3,498	$	6,084		$	5,858

Restaurant closing costs consist of future lease commitments, net of anticipated sublease rentals and expected ancillary costs, and are included in impairment and other charges, net. Total accrued restaurant closing costs, included in accrued liabilities and other long-term liabilities, changed as follows (in thousands):

	Quarter						Year-to-Date
	July 10, 2011			July 4, 2010			July 10, 2011			July 4, 2010
Balance at beginning of period	$	22,163		$	5,230		$	25,020		$	4,234
Additions and adjustments		379			310			1,163			1,934
Cash payments		(1,661	)		(379	)		(5,302	)		(1,007	)
Balance at end of period	$	20,881		$	5,161		$	20,881		$	5,161

Additions and adjustments primarily relate to revisions to sublease and cost assumptions and, in 2010, the closure of one Jack in the Box restaurant in the quarter and four year-to-date.