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Fair Value Measurements | 3 Months Ended
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Mar. 30, 2014
Fair Value Disclosures [Abstract] |
Fair value measurements | Fair Value Measurements Fair Value Measurements on a Recurring Basis The Company invested $8.7 million and $11.9 million of its excess cash in fixed income and money market funds classified as Cash and cash equivalents or restricted cash in its Consolidated Balance Sheets as of March 30, 2014 and December 31, 2013, respectively, at a net value of 1:1 for each dollar invested. The fair value of the investments in these funds is determined by using quoted prices for identical assets in an active market. As a result, the Company has determined that the inputs used to value these investments fall within Level 1 of the fair value hierarchy. The following tables present the Company’s fixed income and money market funds measured at fair value on a recurring basis as of March 30, 2014 and December 31, 2013, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):
| TOTAL MARCH 30, 2014 |  | LEVEL 1 |  | LEVEL 2 |  | LEVEL 3
Assets: |  |  |  |  |  |  |
Fixed income funds - cash equivalents | $ | 4,012 |  |  | $ | 4,012 |  |  | $ | — |  |  | $ | — |
Money market funds - cash equivalents | 4,553 |  |  | 4,553 |  |  | — |  |  | — |
Money market funds - restricted cash equivalents | 110 |  |  | 110 |  |  | — |  |  | — |
Total recurring fair value measurements | $ | 8,675 |  |  | $ | 8,675 |  |  | $ | — |  |  | $ | — |
| TOTAL DECEMBER 31, 2013 |  | LEVEL 1 |  | LEVEL 2 |  | LEVEL 3
Assets: |  |  |  |  |  |  |
Fixed income funds - cash equivalents | $ | 9,849 |  |  | $ | 9,849 |  |  | $ | — |  |  | $ | — |
Money market funds - cash equivalents | 1,988 |  |  | 1,988 |  |  | — |  |  | — |
Money market funds - restricted cash equivalents | 68 |  |  | 68 |  |  | — |  |  | — |
Total recurring fair value measurements | $ | 11,905 |  |  | $ | 11,905 |  |  | $ | — |  |  | $ | — |
In connection with the 2012 CMBS Loan, the Company entered into an interest rate cap with a notional amount of $48.7 million as a method to limit the volatility of the floating rate component of the first mortgage loan. This interest rate cap had a nominal fair market value at March 30, 2014 and December 31, 2013, respectively, and therefore was excluded from the applicable tables within this footnote. Fair Value Measurements on a Nonrecurring Basis In 2013, the Company completed an assessment of its restaurant base. As a result of this assessment, the Company decided to close 22 underperforming locations. In connection with this initiative, the Company incurred pre-tax asset impairment charges of approximately $18.7 million in the fourth quarter of 2013. During the thirteen weeks ended March 30, 2014, the Company recognized expenses of $4.9 million, which included direct costs associated with the restaurant closures and severance-related obligations, partially offset by the reversal of deferred rent liabilities. The following table presents the components of these charges and the line item within the Consolidated Statement of Operations and Comprehensive Income in which each component was recognized during the thirteen weeks ended March 30, 2014 (in thousands):
DESCRIPTION |  | LOCATION OF CHARGE IN THE CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME |  | AMOUNT
Restaurant closure expenses |  | Provision for impaired assets and restaurant closings |  | $ | 5,972 |
Severance and other liabilities |  | General and administrative |  | 1,035 |
Deferred rent liability write-off |  | Other restaurant operating |  | (2,078 | )
|  |  |  | $ | 4,929 |
During the thirteen weeks ended March 30, 2014, the Company recorded $6.1 million of impairment and restaurant closing expenses as a result of the fair value measurement on a nonrecurring basis of its long-lived assets held and used, which were primarily comprised of $6.0 million in charges associated with the restaurant closure initiative discussed above. The Company recorded $1.1 million of impairment charges as a result of the fair value measurement on a nonrecurring basis of its long-lived assets held and used during the three months ended March 31, 2013, primarily related to certain specifically identified restaurant locations that were closed or relocated. The impaired long-lived assets had $4.4 million of remaining fair value at March 31, 2013. Restaurant closure and related expenses of $0.8 million were recognized for the three months ended March 31, 2013. Impairment losses for long-lived assets held and used and restaurant closure expenses were recognized in Provision for impaired assets and restaurant closings in the Consolidated Statements of Operations and Comprehensive Income. The following table presents losses related to the Company’s assets and liabilities that were measured at fair value on a nonrecurring basis during the three months ended March 31, 2013 aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):
| MARCH 31, 2013 |  |
|  |  | REMAINING FAIR VALUE |  | THREE MONTHS ENDED MARCH 31, 2013
| CARRYING VALUE |  | LEVEL 1 |  | LEVEL 2 |  | LEVEL 3 |  | TOTAL LOSSES
Long-lived assets held and used | $ | 4,434 |  |  | $ | — |  |  | $ | 3,383 |  |  | $ | 1,051 |  |  | $ | 1,082 |
The Company used a third-party market appraisal (Level 2) and discounted cash flow models (Level 3) to estimate the fair value of the long-lived assets included in the table above. Projected future cash flows, including discount rate and growth rate assumptions, are derived from current economic conditions, expectations of management and projected trends of current operating results. The following table presents quantitative information related to the range of unobservable inputs used in the Company’s Level 3 fair value measurements for the impairment losses incurred for the three months ended March 31, 2013:
UNOBSERVABLE INPUT |  | THREE MONTHS ENDED MARCH 31, 2013
Weighted-average cost of capital |  | 9.5%
Long-term growth rates |  | 2.0%
Annual revenue growth rates (1) |  | 2.4% - 3.0%
________________
(1) | Weighted average of the annual revenue growth rates unobservable input range was 2.6%.
Interim Disclosures about Fair Value of Financial Instruments The Company’s non-derivative financial instruments at March 30, 2014 and December 31, 2013 consist of cash equivalents, restricted cash, accounts receivable, accounts payable and current and long-term debt. The fair values of cash equivalents, restricted cash, accounts receivable and accounts payable approximate their carrying amounts reported in the Consolidated Balance Sheets due to their short duration. The fair value of OSI’s senior secured term loan B facility is determined based on quoted market prices in inactive markets. The fair value of New PRP’s commercial mortgage-backed securities is based on assumptions derived from current conditions in the real estate and credit markets, changes in the underlying collateral and expectations of management. Fair value estimates for other notes payable are derived using a discounted cash flow approach. Discounted cash flow inputs primarily include cost of debt rates which are used to derive the present value factors for the determination of fair value. These inputs represent assumptions impacted by economic conditions and management expectations and may change in the future based on period-specific facts and circumstances. The following tables include the carrying value and fair value of the Company’s financial instruments at March 30, 2014 and December 31, 2013 aggregated by the level in the fair value hierarchy in which those measurements fall (in thousands):
|  | MARCH 30, 2014
|  |  |  | FAIR VALUE
|  | CARRYING VALUE |  | LEVEL 1 |  | LEVEL 2 |  | LEVEL 3
Senior secured term loan B facility (1) |  | $ | 925,000 |  |  | $ | — |  |  | $ | 922,688 |  |  | $ | — |
Mortgage loan (2) |  | 309,612 |  |  | — |  |  | — |  |  | 319,103 |
First mezzanine loan (2) |  | 85,862 |  |  | — |  |  | — |  |  | 85,862 |
Second mezzanine loan (2) |  | 86,519 |  |  | — |  |  | — |  |  | 87,384 |
Other notes payable (1) |  | 4,170 |  |  | — |  |  | — |  |  | 3,953 |
|  | DECEMBER 31, 2013
|  |  |  | FAIR VALUE
|  | CARRYING VALUE |  | LEVEL 1 |  | LEVEL 2 |  | LEVEL 3
Senior secured term loan B facility (1) |  | $ | 935,000 |  |  | $ | — |  |  | $ | 936,169 |  |  | $ | — |
Mortgage loan (2) |  | 311,644 |  |  | — |  |  | — |  |  | 318,787 |
First mezzanine loan (2) |  | 86,131 |  |  | — |  |  | — |  |  | 86,131 |
Second mezzanine loan (2) |  | 86,704 |  |  | — |  |  | — |  |  | 87,571 |
Other notes payable (1) |  | 6,186 |  |  | — |  |  | — |  |  | 5,912 |
_______________
(1) | Represents obligations of OSI.
(2) | Represents obligations of New PRP.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13537-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13504-108611 + Details
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