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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 7, 2024
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from ________to________.
Commission File Number: 1-9390
jiblogo.jpg deltacologo.jpg
____________________________________________________
JACK IN THE BOX INC.
(Exact name of registrant as specified in its charter)
 _______________________________________________________________________________________
Delaware95-2698708
(State of Incorporation)(I.R.S. Employer Identification No.)
9357 Spectrum Center Blvd.
San Diego, California 92123
(Address of principal executive offices)

Registrant’s telephone number, including area code (858) 571-2121
_______________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockJACKNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  þ    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes  þ    No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerþSmaller reporting company☐
Accelerated filer☐Emerging growth company☐
Non-accelerated filer☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  ☐    No  þ
As of the close of business July 31, 2024, 19,125,981 shares of the registrant’s common stock were outstanding.


JACK IN THE BOX INC. AND SUBSIDIARIES
INDEX
 
  Page
 PART I – FINANCIAL INFORMATION 
Item 1.
Item 2.
Item 3.
Item 4.
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

1

PART I. FINANCIAL INFORMATION
ITEM 1.    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
July 7,
2024		October 1,
2023
ASSETS
Current assets:
Cash$21,646 $157,653 
Restricted cash29,112 28,254 
Accounts and other receivables, net86,228 99,678 
Inventories4,160 3,896 
Prepaid expenses12,121 16,911 
Current assets held for sale29,408 13,925 
Other current assets6,598 5,667 
Total current assets189,273 325,984 
Property and equipment:
Property and equipment, at cost1,271,679 1,258,589 
Less accumulated depreciation and amortization(851,443)(846,559)
Property and equipment, net420,236 412,030 
Other assets:
Operating lease right-of-use assets1,425,560 1,397,555 
Intangible assets, net10,873 11,330 
Trademarks283,500 283,500 
Goodwill161,645 329,986 
Other assets, net254,132 240,707 
Total other assets2,135,710 2,263,078 
$2,745,219 $3,001,092 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current maturities of long-term debt$29,999 $29,964 
Current operating lease liabilities160,852 142,518 
Accounts payable68,964 84,960 
Accrued liabilities178,686 302,178 
Total current liabilities438,501 559,620 
Long-term liabilities:
Long-term debt, net of current maturities1,705,927 1,724,933 
Long-term operating lease liabilities, net of current portion1,284,718 1,265,514 
Deferred tax liabilities19,105 26,229 
Other long-term liabilities142,781 143,123 
Total long-term liabilities3,152,531 3,159,799 
Stockholders’ deficit:
Preferred stock $0.01 par value, 15,000,000 shares authorized, none issued
— — 
Common stock $0.01 par value, 175,000,000 shares authorized, 82,819,241 and 82,645,814 issued, respectively
828 826 
Capital in excess of par value531,304 520,076 
Retained earnings1,853,118 1,937,598 
Accumulated other comprehensive loss(50,581)(51,790)
Treasury stock, at cost, 63,694,503 and 62,910,964 shares, respectively
(3,180,482)(3,125,037)
Total stockholders’ deficit(845,813)(718,327)
$2,745,219 $3,001,092 

See accompanying notes to condensed consolidated financial statements.
2

JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(In thousands, except per share data)
(Unaudited)
QuarterYear-to-date
July 7,
2024		July 9,
2023		July 7,
2024		July 9,
2023
Revenues:
Company restaurant sales$166,480 $198,516 $557,618 $671,311 
Franchise rental revenues89,125 86,248 288,147 278,598 
Franchise royalties and other55,293 54,970 183,707 185,342 
Franchise contributions for advertising and other services58,273 57,208 192,544 184,531 
369,171 396,942 1,222,016 1,319,782 
Operating costs and expenses, net:
Food and packaging46,251 58,556 156,297 199,799 
Payroll and employee benefits57,917 63,871 185,025 217,547 
Occupancy and other32,365 37,274 106,773 127,920 
Franchise occupancy expenses57,989 53,930 187,704 173,803 
Franchise support and other costs3,853 4,079 12,907 8,623 
Franchise advertising and other services expenses60,444 59,569 200,201 192,875 
Selling, general and administrative expenses 29,580 39,617 113,200 129,164 
Depreciation and amortization13,827 14,460 46,206 48,460 
Pre-opening costs851 182 1,918 667 
Goodwill impairment 162,624 — 162,624 — 
Other operating expenses (income), net5,641 7,656 16,343 5,135 
Losses (gains) on the sale of company-operated restaurants65 (5,794)1,384 (10,323)
471,407 333,400 1,190,582 1,093,670 
Earnings (loss) from operations(102,236)63,542 31,434 226,112 
Other pension and post-retirement expenses, net1,579 1,608 5,264 5,359 
Interest expense, net18,402 18,662 61,491 64,167 
Earnings (loss) before income taxes(122,217)43,272 (35,321)156,586 
Income taxes83 14,104 23,316 47,657 
Net earnings (loss)$(122,300)$29,168 $(58,637)$108,929 
Earnings (loss) per share:
Basic$(6.29)$1.42 $(2.98)$5.25 
Diluted$(6.26)$1.41 $(2.96)$5.22 
Cash dividends declared per common share
$0.44 $0.44 $1.32 $1.32 

See accompanying notes to condensed consolidated financial statements.
3

JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
QuarterYear-to-date
July 7,
2024		July 9,
2023		July 7,
2024		July 9,
2023
Net earnings (loss)$(122,300)$29,168 $(58,637)$108,929 
Other comprehensive income:
Actuarial losses and prior service costs reclassified to earnings493 498 1,643 1,657 
Tax effect(130)(132)(434)(436)
Other comprehensive income (loss), net of taxes363 366 1,209 1,221 
Comprehensive income (loss)$(121,937)$29,534 $(57,428)$110,150 

See accompanying notes to condensed consolidated financial statements.

4

JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year-to-date
July 7,
2024		July 9,
2023
Cash flows from operating activities:
Net (loss) earnings$(58,637)$108,929 
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:
Depreciation and amortization46,206 48,460 
Amortization of franchise tenant improvement allowances and incentives3,967 3,295 
Deferred finance cost amortization3,722 3,915 
Excess tax deficiency from share-based compensation arrangements5 71 
Deferred income taxes(10,314)1,648 
Share-based compensation expense11,018 7,991 
Pension and post-retirement expense5,264 5,359 
Gains on cash surrender value of company-owned life insurance(11,776)(8,331)
Losses (gains) on the sale of company-operated restaurants1,384 (10,323)
Gains on acquisition of restaurants(2,357)— 
Losses (gains) on the disposition of property and equipment, net1,675 (9,155)
Impairment charges and other163,169 6,232 
Changes in assets and liabilities, excluding acquisitions:
Accounts and other receivables17,385 12,902 
Inventories(262)658 
Prepaid expenses and other current assets4,141 5,714 
Operating lease right-of-use assets and lease liabilities 6,191 5,357 
Accounts payable(16,720)(28,068)
Accrued liabilities(114,100)32,525 
Pension and post-retirement contributions(4,784)(4,674)
Franchise tenant improvement allowance and incentive disbursements(1,919)(2,745)
Other(3,995)2,311 
Cash flows provided by operating activities39,263 182,071 
Cash flows from investing activities:
Purchases of property and equipment(85,768)(56,669)
Proceeds from the sale of property and equipment10,899 25,174 
Proceeds from the sale and leaseback of assets4,413 3,673 
Proceeds from the sale of company-operated restaurants2,168 51,845 
Other— 1,465 
Cash flows (used in) provided by investing activities(68,288)25,488 
Cash flows from financing activities:
Repayments of borrowings on revolving credit facilities— (50,000)
Principal repayments on debt(22,288)(22,620)
Dividends paid on common stock(25,633)(27,198)
Proceeds from issuance of common stock2 263 
Repurchases of common stock(54,999)(60,431)
Payroll tax payments for equity award issuances(3,206)(1,593)
Cash flows used in financing activities(106,124)(161,579)
Net (decrease) increase in cash and restricted cash (135,149)45,980 
Cash and restricted cash at beginning of period185,907 136,040 
Cash and restricted cash at end of period$50,758 $182,020 

See accompanying notes to condensed consolidated financial statements.
5

JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(In thousands)
(Unaudited)
Number
of Shares		AmountCapital in
Excess of
Par Value		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Total
Balance at October 1, 2023
82,646 $826 $520,076 $1,937,598 $(51,790)$(3,125,037)$(718,327)
Shares issued under stock plans, including tax benefit107 1 — — — — 1 
Share-based compensation— — 4,820 — — — 4,820 
Dividends declared— — 74 (8,726)— — (8,652)
Purchases of treasury stock— — — — — (25,166)(25,166)
Net earnings— — — 38,683 — — 38,683 
Other comprehensive income— — — — 484 — 484 
Balance at January 21, 2024
82,753 $827 $524,970 $1,967,555 $(51,306)$(3,150,203)$(708,157)
Shares issued under stock plans, including tax benefit23 1 — — — — 1 
Share-based compensation— — 3,841 — — — 3,841 
Dividends declared— — 76 (8,591)— — (8,515)
Purchases of treasury stock— — — — — (15,133)(15,133)
Net earnings— — — 24,980 — — 24,980 
Other comprehensive income— — — — 362 — 362 
Balance at April 14, 2024
82,776 $828 $528,887 $1,983,944 $(50,944)$(3,165,336)$(702,621)
Shares issued under stock plans, including tax benefit43 — — — — — 
Share-based compensation— — 2,357 — — — 2,357 
Dividends declared— — 60 (8,526)— — (8,466)
Purchases of treasury stock— — — — — (15,146)(15,146)
Net earnings (loss)— — — (122,300)— — (122,300)
Other comprehensive income— — — — 363 — 363 
Balance at July 7, 2024
82,819 $828 $531,304 $1,853,118 $(50,581)$(3,180,482)$(845,813)
6

Number
of Shares		AmountCapital in
Excess of
Par Value		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Total
Balance at October 2, 2022
82,581 $826 $508,323 $1,842,947 $(53,982)$(3,034,306)$(736,192)
Shares issued under stock plans, including tax benefit36 — — — — — — 
Share-based compensation— — 3,534 — — — 3,534 
Dividends declared— — 67 (9,221)— — (9,154)
Purchases of treasury stock— — — — — (14,999)(14,999)
Net earnings— — — 53,254 — — 53,254 
Other comprehensive income— — — — 489 — 489 
Balance at January 22, 2023
82,617 $826 $511,924 $1,886,980 $(53,493)$(3,049,305)$(703,068)
Shares issued under stock plans, including tax benefit12 — — — — — — 
Share-based compensation— — 2,398 — — — 2,398 
Dividends declared— — 73 (9,139)— — (9,066)
Purchases of treasury stock— — — — — (18,580)(18,580)
Net earnings— — — 26,507 — — 26,507 
Other comprehensive income— — — — 366 — 366 
Balance at April 16, 2023
82,629 $826 $514,395 $1,904,348 $(53,127)$(3,067,885)$(701,443)
Shares issued under stock plans, including tax benefit17 — 263 — — — 263 
Share-based compensation— — 2,059 — — — 2,059 
Dividends declared— — 72 (9,050)— — (8,978)
Purchases of treasury stock— — — — — (26,852)(26,852)
Net earnings— — — 29,168 — — 29,168 
Other comprehensive income— — — — 366 — 366 
Balance at July 9, 2023
82,646 $826 $516,789 $1,924,466 $(52,761)$(3,094,737)$(705,417)

See accompanying notes to condensed consolidated financial statements.
7
JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.BASIS OF PRESENTATION
Nature of operations — Jack in the Box Inc. (the “Company”), together with its consolidated subsidiaries, develops, operates, and franchises quick-service restaurants under the Jack in the Box® and Del Taco® restaurant brands.
On March 8, 2022, the Company acquired Del Taco Restaurants, Inc. (“Del Taco”) for cash according to the terms and conditions of the Agreement and Plan of Merger, dated as of December 5, 2021.
As of July 7, 2024, there were 144 company-operated and 2,051 franchise-operated Jack in the Box restaurants and 165 company-operated and 432 franchise-operated Del Taco restaurants.
References to the Company throughout these notes to condensed consolidated financial statements are made using the first person notations of “we,” “us” and “our.”
Basis of presentation — The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).
These financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended October 1, 2023 (“2023 Form 10-K”). The accounting policies used in preparing these condensed consolidated financial statements are the same as those described in our 2023 Form 10-K.
In our opinion, all adjustments considered necessary for a fair presentation of financial condition and results of operations for these interim periods have been included. Operating results for one interim period are not necessarily indicative of the results for any other interim period or for the full year.
Fiscal year — The Company’s fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. In fiscal 2023, Del Taco operated on a fiscal year ending the Tuesday closest to September 30. Beginning fiscal 2024, Del Taco’s fiscal year shifted to align with Jack in the Box. As a result, Del Taco’s fiscal 2024 results include two fewer days. Fiscal years 2024 and 2023 include 52 weeks. Our first quarter includes 16 weeks and all other quarters include 12 weeks. All comparisons between 2024 and 2023 refer to the 12 weeks (“quarter”) and 40 weeks (“year-to-date”) ended July 7, 2024 and July 9, 2023, respectively, unless otherwise indicated.
Use of estimates — In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management is required to make certain assumptions and estimates that affect reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingencies. In making these assumptions and estimates, management may from time to time seek advice and consider information provided by actuaries and other experts in a particular area. Actual amounts could differ materially from these estimates.
Advertising costs — The Company administers marketing funds at each of its restaurant brands that include contractual contributions. In 2024 and 2023, marketing fund contributions from Jack in the Box franchise and company-operated restaurants were approximately 5.0% of sales, and marketing fund contributions from Del Taco franchise and company-operated restaurants were approximately 4.0% of sales. Year-to-date incremental contributions made by the Company for both brands were $0.6 million in 2024, and less than $0.1 million in 2023, respectively.
Total contributions made by the Company are included in “Selling, general and administrative expenses” in the accompanying condensed consolidated statements of earnings and for the quarter and year-to-date totaled $8.2 million and $26.4 million, respectively, in 2024, and $9.0 million and $30.3 million, respectively in 2023.
Allowance for credit losses — The Company closely monitors the financial condition of our franchisees and estimates the allowance for credit losses based on the lifetime expected loss on receivables. These estimates are based on historical collection experience with our franchisees as well as other factors, including current market conditions and events. Credit quality is monitored through the timing of payments compared to predefined aging criteria and known facts regarding the financial condition of the franchisee or customer. Account balances are charged off against the allowance after recovery efforts have ceased.
8
JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes the activity in the allowance for doubtful accounts (in thousands):
Year-to-date
July 7,
2024		July 9,
2023
Balance as of beginning of period$(4,146)$(5,975)
(Provision) reversal for expected credit losses (233)1,833 
Write-offs charged against the allowance6 41 
Balance as of end of period$(4,373)$(4,101)
Business combinations — The Company accounts for acquisitions using the acquisition method of accounting. Accordingly, assets acquired and liabilities assumed are recorded at their estimated fair values at the acquisition date. The excess of purchase price over fair value of net assets acquired, including the amount assigned to identifiable intangible assets, is recorded as goodwill.
Goodwill and trademarks — Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired, if any. We generally record goodwill in connection with the acquisition of restaurants from franchisees or the acquisition of another business. Likewise, upon the sale of restaurants to franchisees, goodwill is decremented. The amount of goodwill written-off is determined as the fair value of the business disposed of as a percentage of the fair value of the reporting unit prior to the disposal. If the business disposed of was never fully integrated into the reporting unit after its acquisition, and thus the benefits of the acquired goodwill were never realized, the current carrying amount of the acquired goodwill is written off.
Goodwill is not amortized and has been assigned to reporting units for purposes of impairment testing. The Company’s two restaurant brands, Jack in the Box and Del Taco, are both operating segments and reporting units. Goodwill is evaluated for impairment by determining whether the fair value of our reporting units exceed their carrying values.
The Company tests goodwill and indefinite-lived intangible assets for impairment annually, or more frequently if events and circumstances warrant. The Company performs this testing during the third quarter of each year.
Our impairment analyses first includes a qualitative assessment to determine whether events or circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying value. Significant factors considered in this assessment include, but are not limited to, macro-economic conditions, market and industry conditions, cost considerations, the competitive environment, share price fluctuations, overall financial performance, and results of past impairment tests. If the qualitative factors indicate that it is more likely than not that the fair value is less than the carrying value, we perform a quantitative impairment test. Refer also to Note 5, Goodwill and Intangible Assets, in the notes to the condensed consolidated financial statements for results of these tests and for additional information.
Recent accounting pronouncements — In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure,” which updates reportable segment disclosure requirements. The ASU primarily requires enhanced disclosures about significant segment expenses and information used to assess segment performance and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact of adopting this pronouncement in our disclosures, and does not expect it to have a significant impact.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied on a prospective basis with the option to apply the standard retrospectively. The Company does not expect this pronouncement to have a significant impact.

2.REVENUE
Nature of products and services — The Company derives revenue from retail sales at Jack in the Box and Del Taco company-operated restaurants and rental revenue, royalties, advertising, and franchise and other fees from franchise-operated restaurants.
Our franchise arrangements generally provide for an initial franchise fee per restaurant for a 20-year term, and generally require that franchisees pay royalty and marketing fees based upon a percentage of gross sales. The agreements also require franchisees to pay technology fees for both brands, as well as sourcing fees for Jack in the Box franchise agreements.
9
JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Disaggregation of revenue — The following table disaggregates revenue by segment and primary source for the periods ended July 7, 2024 (in thousands):
QuarterYear-to-date
Jack in the BoxDel TacoTotalJack in the BoxDel TacoTotal
Company restaurant sales$100,355 $66,125 $166,480 $331,339 $226,279 $557,618 
Franchise rental revenues82,154 6,971 89,125 267,350 20,797 288,147 
Franchise royalties46,490 7,287 53,777 153,227 24,055 177,282 
Marketing fees46,412 6,084 52,496 153,055 19,843 172,898 
Technology and sourcing fees5,006 771 5,777 15,905 3,741 19,646 
Franchise fees and other services1,332 184 1,516 5,475 950 6,425 
Total revenue$281,749 $87,422 $369,171 $926,351 $295,665 $1,222,016 
The following table disaggregates revenue by segment and primary source for the periods ended July 9, 2023 (in thousands):
QuarterYear-to-date
Jack in the BoxDel TacoTotalJack in the BoxDel TacoTotal
Company restaurant sales$96,820 $101,696 $198,516 $318,451 $352,860 $671,311 
Franchise rental revenues83,271 2,977 86,248 270,277 8,321 278,598 
Franchise royalties (1)47,373 6,130 53,503 161,343 18,721 180,064 
Marketing fees47,323 5,004 52,327 154,153 15,268 169,421 
Technology and sourcing fees4,037 844 4,881 12,881 2,230 15,111 
Franchise fees and other services1,387 80 1,467 4,855 422 5,277 
Total revenue$280,211 $116,731 $396,942 $921,960 $397,822 $1,319,782 
____________________________
(1)    In October 2022, a Jack in the Box franchise operator paid the Company $7.3 million to sell his restaurants to a new franchisee at the current standard royalty rate, which is lower than the royalty rate in the existing franchise agreements. The payment represented the difference between the royalty rates based on projected future sales for the remaining term of the existing agreements. The payment was non-refundable and not subject to any adjustments based on actual future sales. The Company determined the transaction represented the termination of the existing agreement rather than the transfer of an agreement between franchisees. As such, the $7.3 million was recognized in franchise royalty revenue during the first quarter of 2023.
Contract liabilities — Contract liabilities consist of deferred revenue resulting from initial franchise and development fees received from franchisees for new restaurant openings or new franchise terms, which are recognized over the franchise term. The Company classifies these contract liabilities as “Accrued liabilities” and “Other long-term liabilities” in our condensed consolidated balance sheets.
A summary of significant changes in contract liabilities is presented below (in thousands):
Year-to-date
July 7,
2024		July 9,
2023
Deferred franchise and development fees at beginning of period$50,471 $46,449 
Revenue recognized (4,490)(4,140)
Additions 4,243 6,665 
Deferred franchise and development fees at end of period$50,224 $48,974 
As of July 7, 2024, approximately $8.7 million of development fees related to unopened restaurants are included in deferred revenue. Timing of revenue recognition for development fees related to unopened restaurants is dependent upon the timing of restaurant openings and are recognized over the franchise term at the date of opening.
10
JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied as of July 7, 2024 (in thousands):
Remainder of 2024
$1,224 
20255,157 
20264,826 
20274,489 
20283,869 
Thereafter21,996 
$41,561 
The Company has applied the optional exemption, as provided for under ASC Topic 606, Revenue from Contracts with Customers, which allows us to not disclose the transaction price allocated to unsatisfied performance obligations when the transaction price is a sales-based royalty.

3.SUMMARY OF REFRANCHISINGS AND ASSETS HELD FOR SALE
Refranchisings — The following table summarizes the number of restaurants sold to franchisees and the loss or gain recognized (dollars in thousands):
QuarterYear-to-date
July 7,
2024		July 9,
2023		July 7,
2024		July 9,
2023
Restaurants sold to Jack in the Box franchisees— — — 5 
Restaurants sold to Del Taco franchisees— 50 1366 
Proceeds from the sale of company-operated restaurants (1)$178 $33,428 $2,168 $51,845 
Broker commissions— (1,014)— (1,014)
Net assets sold (primarily property and equipment)41 (6,705)(567)(10,798)
Goodwill related to the sale of company-operated restaurants— (14,194)(105)(21,503)
Franchise fees— (1,385)(454)(1,962)
Sublease liabilities, net— (3,580)(140)(4,777)
Lease termination— — — (393)
Other (2)
(284)(756)(2,286)(1,075)
(Loss) gain on the sale of company-operated restaurants$(65)$5,794 $(1,384)$10,323 
____________________________
(1)Amounts in 2024 and 2023 include additional proceeds received in connection with the extension of franchise and lease agreements from the sale of restaurants in prior years.
(2)Year-to-date amount in 2024 includes a $2.2 million impairment of assets in the first quarter of 2024 related to a Del Taco refranchising transaction that closed in the second quarter of 2024.
Assets held for sale — Assets classified as held for sale on our condensed consolidated balance sheets as of July 7, 2024 and October 1, 2023 have carrying amounts of $29.4 million and $13.9 million, respectively. These amounts relate to i) company-owned restaurants to be refranchised, ii) operating restaurant properties which we intend to sell to franchisees and/or sell and leaseback with a third party, and iii) closed restaurant properties which we are marketing for sale.

4.FRANCHISE ACQUISITIONS
Franchise acquisitions — During the first quarter of 2024, the Company acquired 9 Del Taco franchise restaurants for $86 thousand as part of two separate transactions, and recognized related gains of $2.4 million. This amount is recorded in “Other operating expenses (income), net” in the accompanying condensed consolidated statements of earnings. For further information, see Note 8, Other Operating Expenses, Net, below in the notes to the condensed consolidated financial statement.
11
JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes the number of restaurants acquired from franchisees and the gains recognized (dollars in thousands):
Year-to-date
July 7,
2024
Restaurants acquired from Jack in the Box franchisees— 
Restaurants acquired from Del Taco franchisees9 
Purchase price (1)$(86)
Closing and acquisition costs(43)
Property and equipment3,612 
Intangible assets167 
Operating lease right-of-use assets3,211 
Operating lease liabilities(4,505)
Gain on the acquisition of franchise-operated restaurants$2,357 
____________________________
(1)Comprised of outstanding receivables from franchisee forgiven upon acquisition.
The Company did not acquire any Jack in the Box or Del Taco franchise restaurants in the third quarter of 2024, nor in the year-to-date periods ended July 9, 2023.
We account for the acquisition of franchised restaurants using the acquisition method of accounting for business combinations. The purchase price allocations were based on fair value estimates determined using significant unobservable inputs (Level 3).

5.GOODWILL AND INTANGIBLE ASSETS, NET
The changes in the carrying amount of goodwill during year-to-date period ended July 7, 2024 was as follows (in thousands):
Jack in the BoxDel TacoTotal
Goodwill$136,027 $193,959 $329,986 
Accumulated impairment losses— — — 
Balance at October 1, 2023
$136,027 $193,959 $329,986 
Impairment of goodwill— (162,624)(162,624)
Sale of Del Taco company-operated restaurants to franchisees— (105)(105)
Reclassified to assets held for sale(173)(5,439)(5,612)
Goodwill135,854 188,415 324,269 
Accumulated impairment losses— (162,624)(162,624)
Balance at July 7, 2024
$135,854 $25,791 $161,645 
As of the June 9, 2024 testing date, the balance of the Del Taco reporting unit goodwill was $194.0 million. During the third quarter of 2024, the Company identified triggering events that indicated the goodwill allocated to the Del Taco reporting unit might be impaired. The triggering events related to i) a recent negative trend in Del Taco same store sales, ii) lower margins due in part to lower sales and wage increases required in California effective April 1, 2024 under AB 1228, iii) unfavorable changes in the economic environment specifically impacting our industry, including inflation and interest rates, and iv) a sustained lower share price. As a result, the Company performed a quantitative test over the Del Taco reporting unit, noting that the fair value of the reporting unit was less than the carrying value, which resulted in an impairment of goodwill of $162.6 million.
The valuation used a blended approach with a discounted cash flow analysis in conjunction with a market approach. Assumptions and estimates used in determining fair value include future revenues, operating costs, new store openings, capital expenditures, a discount rate that approximates the Company’s weighted average cost of capital and a selection of comparable companies. The Company also performed a quantitative analysis over its indefinte-lived intangible trademark asset, as well as
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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
over its definite-lived intangible assets to determine whether any impairment would need to be recognized, noting none. The company also performed a quantitative analysis over its long-lived assets, noting impairment of $0.1 million, which was recorded in the quarter.

The Company determined that there was no such triggering event for the Jack in the Box reporting unit.
The net carrying amounts of intangible assets other than goodwill with definite lives are as follows (in thousands):
July 7,
2024		October 1,
2023
Gross AmountAccumulated AmortizationNet AmountGross AmountAccumulated AmortizationNet Amount
Definite-lived intangible assets:
Sublease assets$2,671 $(564)$2,107 $2,671 $(381)$2,290 
Franchise contracts9,700 (1,264)8,436 9,700 (850)8,850 
Reacquired franchise rights464 (134)330 297 (107)190 
$12,835 $(1,962)$10,873 $12,668 $(1,338)$11,330 
Indefinite-lived intangible assets:
Del Taco trademark$283,500 $— $283,500 $283,500 $— $283,500 
$283,500 $— $283,500 $283,500 $— $283,500 
The following table summarizes, as of July 7, 2024, the estimated amortization expense for each of the next five fiscal years and thereafter (in thousands):
Remainder of 2024$187 
2025816 
2026814 
2027826 
2028772 
Thereafter7,458 
$10,873 

6.LEASES
Nature of leases — The Company owns restaurant sites and also leases restaurant sites from third parties. Some of these owned or leased sites are leased and/or subleased to franchisees. Initial terms of our real estate leases are generally 20 years, exclusive of options to renew, which are generally exercisable at our sole discretion for 1 to 20 years. In some instances, our leases have provisions for contingent rentals based upon a percentage of defined revenues. Many of our restaurants also have rent escalation clauses and require the payment of property taxes, insurance, and maintenance costs. Variable lease costs include contingent rent, cost-of-living index adjustments, and payments for additional rent such as real estate taxes, insurance, and common area maintenance, which are excluded from the measurement of the lease liability.
As lessor, our leases and subleases primarily consist of restaurants that have been leased to franchisees in connection with refranchising transactions. Revenues from leasing arrangements with our franchisees are presented in “Franchise rental revenues” in the accompanying condensed consolidated statements of earnings, and the related expenses are presented in “Franchise occupancy expenses.”
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table presents rental income for the periods presented (in thousands):
QuarterYear-to-date
July 7,
2024		July 9,
2023		July 7,
2024		July 9,
2023
Operating lease income - franchise$59,767 $56,052 $197,461 $185,285 
Variable lease income - franchise28,618 29,857 89,339 92,836 
Amortization of sublease assets and liabilities, net740 339 1,347 477 
Franchise rental revenues$89,125 $86,248 $288,147 $278,598 
Operating lease income - closed restaurants and other (1)$1,755 $1,692 $5,926 $5,717 
____________________________
(1)Includes closed restaurant properties included in “Other operating expenses (income), net” in our condensed consolidated statements of earnings.
7.FAIR VALUE MEASUREMENTS
Financial assets and liabilities — The following table presents our financial assets and liabilities measured at fair value on a recurring basis (in thousands):
TotalQuoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Fair value measurements as of July 7, 2024:
Non-qualified deferred compensation plan (1)$17,879 $17,879 $— $— 
Total liabilities at fair value$17,879 $17,879 $— $— 
Fair value measurements as of October 1, 2023:
Non-qualified deferred compensation plan (1)$15,051 $15,051 $— $— 
Total liabilities at fair value$15,051 $15,051 $— $— 
____________________________
(1)The Company maintains an unfunded defined contribution plan for key executives and other members of management. The fair value of this obligation is based on the closing market prices of the participants’ elected investments. The obligation is included in “Accrued liabilities” and “Other long-term liabilities” on our condensed consolidated balance sheets.

The Company did not have any transfers in or out of Level 1, 2 or 3 for its financial liabilities.
The following table presents the carrying value and estimated fair value of our Class A-2 Notes as of July 7, 2024 and October 1, 2023 (in thousands):
July 7,
2024		October 1,
2023
Carrying AmountFair ValueCarrying AmountFair Value
Series 2019 Class A-2 Notes$701,438 $670,848 $706,875 $640,046 
Series 2022 Class A-2 Notes$1,050,500 $953,959 $1,067,000 $903,056 
The fair value of the Class A-2 Notes was estimated using Level 2 inputs based on quoted market prices in markets that are not considered active markets.
Non-financial assets and liabilities — The Company’s non-financial instruments, which primarily consist of property and equipment, operating lease right-of-use assets, goodwill and intangible assets, are reported at carrying value and are not required to be measured at fair value on a recurring basis. However, on an annual basis, or whenever events or changes in circumstances indicate that their carrying value may not be recoverable, non-financial instruments are assessed for impairment. If applicable, the carrying values are written down to fair value.
In connection with our impairment reviews performed during 2024, the Company impaired certain Del Taco assets. For further information, see Note 3, Summary of Refranchisings and Assets Held For Sale, Note 5, Goodwill and Intangible Assets, Net, and Note 8, Other Operating Expenses (Income), Net in the notes to the condensed consolidated financial statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
8.OTHER OPERATING EXPENSES (INCOME), NET
Other operating expenses (income), net in the accompanying condensed consolidated statements of earnings is comprised of the following (in thousands):
QuarterYear-to-date
July 7,
2024		July 9,
2023		July 7,
2024		July 9,
2023
Acquisition, integration, and strategic initiatives (1)$4,723 $2,463 $14,612 $5,359 
Costs of closed restaurants and other (2)160 1,272 1,792 4,017 
Operating restaurant impairment charges (3)136 4,395 136 4,395 
Accelerated depreciation95 66 485 519 
Gains on acquisition of restaurants (4)— — (2,357)— 
Losses (gains) on disposition of property and equipment, net (5)527 (540)1,675 (9,155)
    Other operating expenses (income), net$5,641 $7,656 $16,343 $5,135 
____________________________
(1)Acquisition, integration, and strategic initiatives are related to the acquisition and integration of Del Taco, as well as strategic consulting fees.
(2)Costs of closed restaurants and other generally includes ongoing costs associated with closed restaurants, cancelled project costs, and impairment charges as a result of our decision to close restaurants.
(3)In 2023, restaurant impairment charges related to underperforming Del Taco restaurants held for sale. 2024 impairment charges are related to one underperforming Del Taco restaurant.
(4)Relates to the gains on acquisition of 9 Del Taco restaurants.
(5)In 2024, loss on disposition of property and equipment primarily related to the lease termination and early closures of Del Taco restaurants. In 2023, gains on disposition of property and equipment primarily related to the sale of Jack in the Box restaurant properties to franchisees who were leasing the properties from us prior to the sale.

9.SEGMENT REPORTING
The Company’s principal business consists of developing, operating and franchising our Jack in the Box and Del Taco restaurant brands, each of which is considered a reportable operating segment. In 2024, our chief operating decision maker revised the method by which they determine performance and strategy for our segments. This change was made to reflect a shared-services model whereby each brand’s results of operations are assessed separately and do not include costs related to certain corporate functions which support both brands. This segment reporting structure reflects the Company’s current management structure, internal reporting method and financial information used in deciding how to allocate Company resources. Based upon certain quantitative thresholds, each operating segment is considered a reportable segment. This change to our segment reporting did not change our reporting units for goodwill.
The Company measures and evaluates our segments based on segment revenues and segment profit. The reportable segments do not include an allocation of the costs related to shared service functions, such as accounting/finance, human resources, audit services, legal, tax and treasury; nor do they include certain unallocated costs such share-based compensation. These costs are reflected in the caption “Shared services and unallocated costs.”
Our measure of segment profit excludes depreciation and amortization, share-based compensation, company-owned life insurance (“COLI”) gains, net of changes in our non-qualified deferred compensation obligation supported by these policies, acquisition, integration, and strategic initiatives, losses (gains) on the sale of company-operated restaurants, gains on acquisition of restaurants, and amortization of favorable and unfavorable leases and subleases, net.

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table provides information related to our operating segments in each period (in thousands):
QuarterYear-to-date
July 7,
2024		July 9,
2023		July 7,
2024		July 9,
2023
Revenues by segment:
Jack in the Box restaurant operations$281,749 $280,211 $926,351 $921,960 
Del Taco restaurant operations87,422 116,731 295,665 397,822 
Consolidated revenues$369,171 $396,942 $1,222,016 $1,319,782 
Segment profit reconciliation:
Jack in the Box segment profit$86,573 $88,067 $287,295 $300,950 
Del Taco segment profit8,884 7,970 29,295 37,476 
Shared services and unallocated costs(17,128)(19,810)(60,535)(66,537)
Depreciation and amortization13,827 14,460 46,206 48,460 
Acquisition, integration, and strategic initiatives4,723 2,463 14,612 5,359 
Share-based compensation2,357 2,059 11,018 7,991 
Net COLI gains(3,223)(579)(9,289)(7,147)
Goodwill impairment162,624 — 162,624 — 
Losses (gains) on the sale of company-operated restaurants65 (5,794)1,384 (10,323)
Gains on acquisition of restaurants— — (2,357)— 
Amortization of favorable and unfavorable leases and subleases, net192 76 423 1,437 
(Loss) earnings from operations$(102,236)$63,542 $31,434 $226,112 
The Company does not evaluate, manage or measure performance of segments using asset, pension or post-retirement expense, interest income and expense, or income tax information; accordingly, this information by segment is not prepared or disclosed.

10.INCOME TAXES
Under GAAP, the Company ordinarily calculates its provision for income taxes at the end of each interim reporting period by computing an estimated annual effective tax rate adjusted for tax items that are discrete to each period. For the third quarter of fiscal year 2024, the Company calculated its interim tax provision based on actual year-to-date results because small changes in forecasted pre-tax book income led to large differences in the estimated annual effective tax rate.
For the third quarter and year-to-date of fiscal year 2024, the Company recorded income tax provisions of $0.1 million and $23.3 million, respectively, resulting in effective tax rates of negative 0.1% and negative 66.0%, respectively. The effective tax rates for such periods differed from the U.S. statutory tax rate primarily due to the impairment of non-deductible goodwill partially offset by the reversal of state deferred tax liabilities on basis difference of investments in subsidiaries and non-taxable gains from the market performance of insurance products used to fund certain non-qualified retirement plans.
For the third quarter and year-to-date of fiscal year 2023, the Company recorded income tax provisions of $14.1 million and $47.7 million, respectively, resulting in effective tax rates of 32.6% and 30.4%, respectively. The effective tax rates for such periods differed from the U.S. statutory tax rate primarily due to the impact of estimated disposals of non-deductible goodwill attributable to refranchising transactions partially offset by non-taxable gains from the market performance of insurance products used to fund certain non-qualified retirement plans.

11.RETIREMENT PLANS
Defined benefit pension plans — The Company sponsors two defined benefit pension plans, a frozen “Qualified Plan” covering substantially all full-time employees hired prior to January 1, 2011, and an unfunded supplemental executive retirement plan (“SERP”) which provides certain employees additional pension benefits and was closed to new participants effective January 1, 2007. Benefits under both plans are based on the employee’s years of service and compensation over defined periods of employment.
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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Post-retirement healthcare plans — The Company also sponsors two healthcare plans, closed to new participants, that provide post-retirement medical benefits to certain employees who have met minimum age and service requirements. The plans are contributory, with retiree contributions adjusted annually, and they contain other cost-sharing features such as deductibles and coinsurance.
Net periodic benefit cost (credit) — The components of net periodic benefit cost (credit) in each period were as follows (in thousands): 
QuarterYear-to-date
July 7,
2024		July 9,
2023		July 7,
2024		July 9,
2023
Defined benefit pension plans:
Interest cost$4,380 $4,434 $14,599 $14,782 
Expected return on plan assets(3,457)(3,486)(11,524)(11,619)
Actuarial losses (1)701 708 2,335 2,359 
Amortization of unrecognized prior service costs (1)3 5 11 15 
Net periodic benefit cost $1,627 $1,661 $5,421 $5,537 
Post-retirement healthcare plans:
Interest cost$164