Asset Impairment, Net

6 Months Ended

Nov. 23, 2014

Asset Impairment Charges [Abstract]

Asset Impairment, Net

Asset Impairment, Net

During the quarter and six months ended November 23, 2014, we recognized long-lived asset impairment charges of $39.7 million ($26.4 million net of tax) and $46.6 million ($30.7 million net of tax), respectively. Impairment charges resulted primarily from the carrying value of restaurant assets exceeding the estimated fair market value, which is based on projected cash flows. Of the total impairments, $28.3 million and $33.8 million for the quarter and six months ended November 23, 2014, respectively, related to restaurant impairments. During the quarter ended November 23, 2014, management identified eight Olive Garden locations and three Seasons 52 locations where the estimated useful life was significantly shortened based on a re-evaluation of expected lease renewals, leading to significant decreases in projected cash flows. We also recognized impairments of assets related to our lobster aquaculture project and a corporate airplane in connection with the closure of our aviation department. During the quarter and six months ended November 24, 2013, we recognized long-lived asset impairment charges of $0.2 million ($0.1 million net of tax) and $1.2 million ($0.7 million net of tax), respectively. Impairment charges resulted primarily from the carrying value of restaurant assets exceeding the estimated fair market value, which is based on projected cash flows. These costs are included in asset impairments, net as a component of earnings from continuing operations in the accompanying consolidated statements of earnings. Impairment charges were measured based on the amount by which the carrying amount of these assets exceeded their fair value. Fair value is generally determined based on appraisals or sales prices of comparable assets and estimates of future cash flows.