10-Q 1 jack-20240414.htm 10-Q jack-20240414
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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 April 14, 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 (858571-2121
_______________________________________________________________________________________
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 filerEmerging 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 May 8, 2024, 19,390,075 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)
April 14,
2024
October 1,
2023
ASSETS
Current assets:
Cash$20,197 $157,653 
Restricted cash28,780 28,254 
Accounts and other receivables, net102,664 99,678 
Inventories4,067 3,896 
Prepaid expenses8,020 16,911 
Current assets held for sale24,970 13,925 
Other current assets5,609 5,667 
Total current assets194,307 325,984 
Property and equipment:
Property and equipment, at cost1,267,469 1,258,589 
Less accumulated depreciation and amortization(850,333)(846,559)
Property and equipment, net417,136 412,030 
Other assets:
Operating lease right-of-use assets1,414,559 1,397,555 
Intangible assets, net11,254 11,330 
Trademarks283,500 283,500 
Goodwill329,583 329,986 
Other assets, net248,636 240,707 
Total other assets2,287,532 2,263,078 
$2,898,975 $3,001,092 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current maturities of long-term debt$30,049 $29,964 
Current operating lease liabilities158,326 142,518 
Accounts payable82,336 84,960 
Accrued liabilities168,973 302,178 
Total current liabilities439,684 559,620 
Long-term liabilities:
Long-term debt, net of current maturities1,712,360 1,724,933 
Long-term operating lease liabilities, net of current portion1,279,443 1,265,514 
Deferred tax liabilities26,808 26,229 
Other long-term liabilities143,301 143,123 
Total long-term liabilities3,161,912 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, 82,776,086 and 82,645,814 issued, respectively
828 826 
Capital in excess of par value528,887 520,076 
Retained earnings1,983,944 1,937,598 
Accumulated other comprehensive loss(50,944)(51,790)
Treasury stock, at cost, 63,422,351 and 62,910,964 shares, respectively
(3,165,336)(3,125,037)
Total stockholders’ deficit(702,621)(718,327)
$2,898,975 $3,001,092 

See accompanying notes to condensed consolidated financial statements.
2


JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
QuarterYear-to-date
April 14,
2024
April 16,
2023
April 14,
2024
April 16,
2023
Revenues:
Company restaurant sales$167,098 $202,604 $391,138 $472,795 
Franchise rental revenues85,826 83,520 199,022 192,350 
Franchise royalties and other55,084 53,982 128,414 130,372 
Franchise contributions for advertising and other services57,339 55,638 134,271 127,323 
365,347 395,744 852,845 922,840 
Operating costs and expenses, net:
Food and packaging45,914 59,310 110,046 141,243 
Payroll and employee benefits54,054 65,035 127,108 153,676 
Occupancy and other32,355 39,275 74,408 90,646 
Franchise occupancy expenses57,091 52,649 129,715 119,873 
Franchise support and other costs3,860 3,260 9,054 5,137 
Franchise advertising and other services expenses59,523 58,143 139,757 132,713 
Selling, general and administrative expenses 37,520 39,405 83,885 89,547 
Depreciation and amortization13,906 14,598 32,379 34,000 
Pre-opening costs602 154 1,067 485 
Other operating expenses (income), net5,267 2,980 10,437 (2,521)
Losses (gains) on the sale of company-operated restaurants1,065 (704)1,319 (4,529)
311,157 334,105 719,175 760,270 
Earnings from operations54,190 61,639 133,670 162,570 
Other pension and post-retirement expenses, net1,579 1,607 3,685 3,751 
Interest expense, net18,603 19,357 43,089 45,505 
Earnings before income taxes34,008 40,675 86,896 113,314 
Income taxes9,028 14,168 23,233 33,553 
Net earnings $24,980 $26,507 $63,663 $79,761 
Earnings per share:
Basic$1.27 $1.28 $3.22 $3.83 
Diluted$1.26 $1.27 $3.19 $3.81 
Cash dividends declared per common share
$0.44 $0.44 $0.88 $0.88 

See accompanying notes to condensed consolidated financial statements.
3


JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
QuarterYear-to-date
April 14,
2024
April 16,
2023
April 14,
2024
April 16,
2023
Net earnings$24,980 $26,507 $63,663 $79,761 
Other comprehensive income:
Actuarial losses and prior service costs reclassified to earnings493 495 1,150 1,159 
Tax effect(131)(129)(304)(304)
Other comprehensive income, net of taxes362 366 846 855 
Comprehensive income $25,342 $26,873 $64,509 $80,616 

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
April 14,
2024
April 16,
2023
Cash flows from operating activities:
Net earnings$63,663 $79,761 
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization32,379 34,000 
Amortization of franchise tenant improvement allowances and incentives2,538 2,237 
Deferred finance cost amortization2,610 2,787 
Excess tax (benefits) deficiency from share-based compensation arrangements(49)142 
Deferred income taxes(2,326)1,496 
Share-based compensation expense8,661 5,932 
Pension and post-retirement expense3,685 3,751 
Gains on cash surrender value of company-owned life insurance(7,949)(8,007)
Losses (gains) on the sale of company-operated restaurants1,319 (4,529)
Gains on acquisition of restaurants(2,357) 
Losses (gains) on the disposition of property and equipment, net1,148 (8,615)
Impairment charges and other1,580 549 
Changes in assets and liabilities, excluding acquisitions:
Accounts and other receivables815 (1,456)
Inventories(170)(23)
Prepaid expenses and other current assets9,299 6,344 
Operating lease right-of-use assets and lease liabilities 9,392 8,561 
Accounts payable(396)(15,994)
Accrued liabilities(123,532)(7,043)
Pension and post-retirement contributions(3,288)(3,234)
Franchise tenant improvement allowance and incentive disbursements(1,460)(2,052)
Other(1,583)(499)
Cash flows (used in) provided by operating activities(6,021)94,108 
Cash flows from investing activities:
Purchases of property and equipment(61,071)(37,196)
Proceeds from the sale of property and equipment1,500 23,371 
Proceeds from the sale and leaseback of assets1,728 3,673 
Proceeds from the sale of company-operated restaurants1,989 18,417 
Other 1,465 
Cash flows (used in) provided by investing activities(55,854)9,730 
Cash flows from financing activities:
Repayments of borrowings on revolving credit facilities (50,000)
Principal repayments on debt(14,818)(15,088)
Dividends paid on common stock(17,167)(18,218)
Proceeds from issuance of common stock2  
Repurchases of common stock(40,000)(32,621)
Payroll tax payments for equity award issuances(3,072)(1,115)
Cash flows used in financing activities(75,055)(117,042)
Net decrease in cash and restricted cash (136,930)(13,204)
Cash and restricted cash at beginning of period185,907 136,040 
Cash and restricted cash at end of period$48,977 $122,836 

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)
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)

See accompanying notes to condensed consolidated financial statements.
6

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 April 14, 2024, there were 144 company-operated and 2,051 franchise-operated Jack in the Box restaurants and 166 company-operated and 429 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 28 weeks (“year-to-date”) ended April 14, 2024 and April 16, 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 $0.2 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 $7.8 million and $18.2 million, respectively, in 2024, and $9.2 million and $21.3 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.
7

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
April 14,
2024
April 16,
2023
Balance as of beginning of period$(4,146)$(5,975)
(Provision) reversal for expected credit losses (233)1,911 
Write-offs charged against the allowance6  
Balance as of end of period$(4,373)$(4,064)
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.
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.
8

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 April 14, 2024 (in thousands):
QuarterYear-to-date
Jack in the BoxDel TacoTotalJack in the BoxDel TacoTotal
Company restaurant sales$98,927 $68,171 $167,098 $230,984 $160,154 $391,138 
Franchise rental revenues79,618 6,208 85,826 185,196 13,826 199,022 
Franchise royalties45,414 7,314 52,728 106,737 16,768 123,505 
Marketing fees45,423 6,028 51,451 106,643 13,759 120,402 
Technology and sourcing fees4,757 1,131 5,888 10,899 2,970 13,869 
Franchise fees and other services2,123 233 2,356 4,143 766 4,909 
Total revenue$276,262 $89,085 $365,347 $644,602 $208,243 $852,845 
The following table disaggregates revenue by segment and primary source for the periods ended April 16, 2023 (in thousands):
QuarterYear-to-date
Jack in the BoxDel TacoTotalJack in the BoxDel TacoTotal
Company restaurant sales$95,489 $107,115 $202,604 $221,631 $251,164 $472,795 
Franchise rental revenues80,910 2,610 83,520 187,006 5,344 192,350 
Franchise royalties (1)46,401 5,657 52,058 113,970 12,591 126,561 
Marketing fees46,486 4,609 51,095 106,830 10,263 117,093 
Technology and sourcing fees3,875 668 4,543 8,844 1,386 10,230 
Franchise fees and other services1,671 253 1,924 3,468 343 3,811 
Total revenue$274,832 $120,912 $395,744 $641,749 $281,091 $922,840 
____________________________
(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
April 14,
2024
April 16,
2023
Deferred franchise and development fees at beginning of period$50,474 $46,449 
Revenue recognized (3,240)(2,934)
Additions 3,162 3,332 
Deferred franchise and development fees at end of period$50,396 $46,847 
As of April 14, 2024, approximately $8.6 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.
9

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 April 14, 2024 (in thousands):
Remainder of 2024
$2,431 
20255,100 
20264,770 
20274,432 
20283,811 
Thereafter21,283 
$41,827 
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
April 14,
2024
April 16,
2023
April 14,
2024
April 16,
2023
Restaurants sold to Jack in the Box franchisees   5 
Restaurants sold to Del Taco franchisees13  1316 
Proceeds from the sale of company-operated restaurants (1)$250 $808 $1,989 $18,417 
Net assets sold (primarily property and equipment)(608) (608)(4,093)
Goodwill related to the sale of company-operated restaurants(105) (105)(7,310)
Franchise fees(454) (454)(577)
Sublease liabilities, net(140) (140)(1,197)
Lease termination   (393)
Other (2)
(8)(104)(2,001)(318)
(Loss) gain on the sale of company-operated restaurants$(1,065)$704 $(1,319)$4,529 
____________________________
(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 April 14, 2024 and October 1, 2023 have carrying amounts of $25.0 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 (income), net, below in the notes to the condensed consolidated financial statement.
10

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
April 14,
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 second quarter of 2024, nor in the year-to-date periods ended April 16, 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 April 14, 2024 was as follows (in thousands):
Jack in the BoxDel TacoTotal
Balance at October 1, 2023
$136,027 $193,959 $329,986 
Sale of Del Taco company-operated restaurants to franchisees (105)(105)
Reclassified to assets held for sale (298)(298)
Balance at April 14, 2024
$136,027 $193,556 $329,583 
The net carrying amounts of intangible assets other than goodwill with definite lives are as follows (in thousands):
April 14,
2024
October 1,
2023
Gross AmountAccumulated AmortizationNet AmountGross AmountAccumulated AmortizationNet Amount
Definite-lived intangible assets:
Sublease assets$2,671 $(511)$2,160 $2,671 $(381)$2,290 
Franchise contracts9,895 (1,140)8,755 9,700 (850)8,850 
Reacquired franchise rights464 (125)339 297 (107)190 
$13,030 $(1,776)$11,254 $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 
11

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes, as of April 14, 2024, the estimated amortization expense for each of the next five fiscal years and thereafter (in thousands):
Remainder of 2024$444 
2025861 
2026838 
2027842 
2028782 
Thereafter7,487 
$11,254 

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.”
The following table presents rental income for the periods presented (in thousands):
QuarterYear-to-date
April 14,
2024
April 16,
2023
April 14,
2024
April 16,
2023
Operating lease income - franchise$59,445 $55,713 $137,694 $129,233 
Variable lease income - franchise26,123 27,744 60,721 62,979 
Amortization of sublease assets and liabilities, net258 63 607 138 
Franchise rental revenues$85,826 $83,520 $199,022 $192,350 
Operating lease income - closed restaurants and other (1)$1,859 $1,785 $4,171 $4,025 
____________________________
(1)Includes closed restaurant properties included in “Other operating expenses (income), net” in our condensed consolidated statements of earnings.
12

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
7.FAIR VALUE MEASUREMENTS
Financial assets and liabilitiesThe 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 April 14, 2024:
Non-qualified deferred compensation plan (1)$17,088 $17,088 $ $ 
Total liabilities at fair value$17,088 $17,088 $ $ 
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 April 14, 2024 and October 1, 2023 (in thousands):
April 14,
2024
October 1,
2023
Carrying AmountFair ValueCarrying AmountFair Value
Series 2019 Class A-2 Notes$703,250 $663,206 $706,875 $640,046 
Series 2022 Class A-2 Notes$1,056,000 $942,322 $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, in the notes to the condensed consolidated financial statements.

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JACK IN THE BOX INC. AND SUBSIDIARIES
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
April 14,
2024
April 16,
2023
April 14,
2024
April 16,
2023
Acquisition, integration, and strategic initiatives (1)$4,268 $1,259 $9,889 $2,896 
Costs of closed restaurants and other (2)773 560 1,632 2,745 
Accelerated depreciation88 185 125 453 
Gains on acquisition of restaurants (3)  (2,357) 
Losses (gains) on disposition of property and equipment, net (4)138 976 1,148 (8,615)
$5,267 $2,980 $10,437 $(2,521)
____________________________
(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)Relates to the gains on acquisition of 9 Del Taco restaurants.
(4)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
April 14,
2024
April 16,
2023
April 14,
2024
April 16,
2023
Revenues by segment:
Jack in the Box restaurant operations$276,262 $274,832 $644,602 $641,749 
Del Taco restaurant operations89,085 120,912 208,243 281,091 
Consolidated revenues$365,347 $395,744 $852,845 $922,840 
Segment profit reconciliation:
Jack in the Box segment profit$84,545 $84,648 $200,588 $213,428 
Del Taco segment profit9,646 12,271 20,387 28,507 
Shared services and unallocated costs(18,046)(17,747)$(43,249)$(46,275)
Depreciation and amortization13,906 14,598 32,379 34,000 
Acquisition, integration, and strategic initiatives4,268 1,259 9,889 2,896 
Share-based compensation3,841 2,398 8,661 5,932 
Net COLI gains(1,232)(844)(6,066)(6,568)
Losses (gains) on the sale of company-operated restaurants1,065 (704)1,319 (4,529)
Gains on acquisition of restaurants  (2,357) 
Amortization of favorable and unfavorable leases and subleases, net107 826 231 1,359 
Earnings from operations$54,190 $61,639 $133,670 $162,570 
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
The income tax provisions reflect an effective tax rate of 26.5% in the second quarter of fiscal 2024, as compared to 34.8% in the second quarter of the prior year, as well as 26.7% for the year-to-date period in 2024, compared with 29.6% in the same period in 2023. The major component of the year-over-year decrease in tax rates was a decrease in the impact of estimated disposals of non-deductible goodwill attributable to refranchising transactions.

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.
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.
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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Net periodic benefit cost (credit)The components of net periodic benefit cost (credit) in each period were as follows (in thousands): 
QuarterYear-to-date
April 14,
2024
April 16,
2023
April 14,
2024
April 16,
2023
Defined benefit pension plans:
Interest cost$4,380 $4,435 $10,219 $10,348 
Expected return on plan assets(3,458)(3,485)(8,067)(8,133)
Actuarial losses (1)701 707 1,634 1,651 
Amortization of unrecognized prior service costs (1)3 4 8 10 
Net periodic benefit cost $1,626 $1,661 $3,794 $3,876 
Post-retirement healthcare plans:
Interest cost$164 $162 $383 $377 
Actuarial gains (1)(211)(216)(492)(502)
Net periodic benefit credit$(47)$(54)$(109)$(125)
____________________________
(1)Amounts were reclassified from accumulated other comprehensive income into net earnings as a component of “Other pension and post-retirement expenses, net.”
Future cash flows — The Company’s policy is to fund our plans at or above the minimum required by law. As of the date of our last actuarial funding valuation, there was no minimum contribution funding requirement for the Qualified Plan. Details regarding 2024 contributions are as follows (in thousands):
SERPPost-Retirement
Healthcare Plans
Net year-to-date contributions$2,620 $668 
Remaining estimated net contributions during fiscal 2024$2,518 $437 
The Company continues to evaluate contributions to our Qualified Plan based on changes in pension assets as a result of asset performance in the current market and the economic environment. The Company does not anticipate making any contributions to our Qualified Plan in fiscal 2024.

12.STOCKHOLDERS EQUITY AND REPURCHASES OF COMMON STOCK
Repurchases of common stock The Company repurchased 0.5 million shares of its common stock in the year-to-date period ended April 14, 2024 for an aggregate cost of $40.3 million, including applicable excise tax. As of April 14, 2024, there was $210.0 million remaining under share repurchase programs authorized by the Board of Directors which do not expire.
Dividends — Through April 14, 2024, the Board of Directors declared two cash dividends of $0.44 per common share totaling $17.3 million. Future dividends are subject to approval by our Board of Directors.

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
13.WEIGHTED AVERAGE SHARES OUTSTANDING
The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding (in thousands):
QuarterYear-to-date
April 14,
2024
April 16,
2023
April 14,
2024
April 16,
2023
Weighted-average shares outstanding – basic19,653 20,744 19,790 20,845 
Effect of potentially dilutive securities:
Nonvested stock awards and units119 119 146 101 
Performance share awards13  13  
Weighted-average shares outstanding – diluted19,785 20,864 19,949 20,946 
Excluded from diluted weighted-average shares outstanding:
Antidilutive31 27 20 26 
Performance conditions not satisfied at the end of the period136 105 136 105 

14.COMMITMENTS AND CONTINGENCIES
Legal matters — The Company assesses contingencies, including litigation contingencies, to determine the degree of probability and range of possible loss for potential accrual in our financial statements. An estimated loss contingency is accrued in the financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. As of April 14, 2024, the Company had accruals of $15.9 million for all of its legal matters in aggregate, presented within “Accrued liabilities” on our consolidated balance sheet. Because litigation is inherently unpredictable, assessing contingencies is highly subjective and requires judgments about future events. When evaluating litigation contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the availability of appellate remedies, insurance coverage related to the claim or claims in question, the presence of complex or novel legal theories, and the ongoing discovery and development of information important to the matter. In addition, damage amounts claimed in litigation against us may be unsupported, exaggerated, or unrelated to possible outcomes, and as such are not meaningful indicators of our potential liability or financial exposure. The Company regularly reviews contingencies to determine the adequacy of the accruals and related disclosures. The ultimate amount of loss may differ from these estimates. Any estimate is not an indication of expected loss, if any, or of the Company’s maximum possible loss exposure and the ultimate amount of loss may differ materially from these estimates in the near term.
Gessele v. Jack in the Box Inc. — In August 2010, five former Jack in the Box employees instituted litigation in federal court in Oregon alleging claims under the federal Fair Labor Standards Act and Oregon wage and hour laws. The plaintiffs alleged that Jack in the Box failed to pay non-exempt employees for certain meal breaks and improperly made payroll deductions for shoe purchases and for workers’ compensation expenses, and later added additional claims relating to timing of final pay and related wage and hour claims involving employees of a franchisee. In 2016, the court dismissed the federal claims and those relating to franchise employees. In June 2017, the court granted class certification with respect to state law claims of improper deductions and late payment of final wages. The parties participated in a voluntary mediation on March 16, 2020, but the matter did not settle. On October 24, 2022, a jury awarded plaintiffs approximately $6.4 million in damages and penalties. The Company continues to dispute liability and the damage award and both parties have filed appeals of the verdict. As of April 14, 2024, the Company has accrued the verdict amount above, as well as estimated pre-judgment and post-judgment interest and fee award, for an additional $9.0 million. These amounts are included within “Accrued liabilities” on our condensed consolidated balance sheet. The Company will continue to accrue for post-judgment interest until the matter is resolved.
Torrez — In March 2014, a former Del Taco employee filed a purported Private Attorneys General Act claim and class action alleging various causes of action under California’s labor, wage, and hour laws. The plaintiff generally alleges Del Taco did not appropriately provide meal and rest breaks and failed to pay wages and reimburse business expenses to its California non-exempt employees. On November 12, 2021, the court granted, in part, the plaintiff's motion for class certification. The parties participated in voluntary mediation on May 24, 2022 and June 3, 2022. On June 4, 2022, we entered into a Settlement Memorandum of Understanding which obligated the Company to pay a gross settlement amount of $50.0 million, for which in exchange we will be released from all claims by the parties. On August 8, 2023, the court issued its final approval of the settlement and on August 9, 2023 final judgement was entered. The Company made its first payment of half of the settlement amount on August 28, 2023. Payment of the second half was made on November 27, 2023. As of April 14, 2024, the Company does not have any further amounts accrued on our condensed consolidated balance sheet for this matter.
17

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
J&D Restaurant Group — On April 17, 2019, the trustee for a bankrupt former franchisee filed a complaint generally alleging the Company wrongfully terminated the franchise agreements and unreasonably denied two perspective purchasers the former franchisee presented. The parties participated in a mediation in April 2021, and again in December 2022, but the matter did not settle. The trial commenced on January 9, 2023 and on February 8, 2023, the jury returned a verdict finding the Company had not breached any contracts in terminating the franchise agreements or denying the proposed buyers. However, while the jury also found the Company had not violated the California Unfair Practices Act, it found for the plaintiff on the claim for breach of implied covenant of good faith and fair dealing, and awarded $8.0 million in damages. On May 9, 2023, the court granted the Company’s post-trial motion, overturning the jury verdict and ordering the plaintiff take nothing on its claims. As a result, the Company reversed the prior $8.0 million accrual, and as of April 14, 2024, the Company has no amounts accrued for this case on its condensed consolidated balance sheet. The Plaintiff has appealed the trial court’s post-trial rulings.
Other legal matters — In addition to the matters described above, we are subject to normal and routine litigation brought by former or current employees, customers, franchisees, vendors, landlords, shareholders, or others. We intend to defend ourselves in any such matters. Some of these matters may be covered, at least in part, by insurance or other third-party indemnity obligation. We record receivables from third party insurers when recovery has been determined to be probable.
Lease guarantees — We remain contingently liable for certain leases relating to our former Qdoba business which we sold in fiscal 2018. Under the Qdoba Purchase Agreement, the buyer has indemnified the Company of all claims related to these guarantees. As of April 14, 2024, the maximum potential liability of future undiscounted payments under these leases is approximately $21.0 million. The lease terms extend for a maximum of approximately 14 more years and we would remain a guarantor of the leases in the event the leases are extended for any established renewal periods. In the event of default, we believe the exposure is limited due to contractual protections and recourse available in the lease agreements, as well as the Qdoba Purchase Agreement, including a requirement of the landlord to mitigate damages by re-letting the properties in default, and indemnity from the Buyer. The Company has not recorded a liability for these guarantees as we believe the likelihood of making any future payments is remote.

15.SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION (in thousands)
Year-to-date
 April 14,
2024
April 16,
2023
Non-cash investing and financing transactions:
Increase in obligations for treasury stock repurchases$ $958 
Decrease in obligations for purchases of property and equipment$8,133 $3,603 
Increase in dividends accrued or converted to common stock equivalents$150 $140 
Right-of use assets obtained in exchange for operating lease obligations$113,647 $115,368 

18

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
16.SUPPLEMENTAL CONSOLIDATED BALANCE SHEET INFORMATION (in thousands)
April 14,
2024
October 1,
2023
Accounts and other receivables, net:
Trade$49,191 $93,660 
Notes receivable, current portion2,220 2,262 
Income tax receivable832 949 
Other54,794 6,953 
Allowance for doubtful accounts(4,373)(4,146)
$102,664 $99,678 
Property and equipment, net:
Land$94,650 $92,007 
Buildings972,189 968,221 
Restaurant and other equipment160,529 166,714 
Construction in progress40,101 31,647 
1,267,469 1,258,589 
Less accumulated depreciation and amortization(850,333)(846,559)
$417,136 $412,030 
Other assets, net:
Company-owned life insurance policies$121,154 $113,205 
Deferred rent receivable41,333 41,947 
Franchise tenant improvement allowance43,334 43,590 
Notes receivable, less current portion10,921 11,927 
Other31,894 30,038 
$248,636 $240,707 
Accrued liabilities:
Legal accruals$15,872 $40,877 
Income tax liabilities10,867 58,155 
Payroll and related taxes35,726 49,521 
Insurance30,917 31,349 
Sales and property taxes11,845 30,508 
Deferred rent income10,456 19,397 
Advertising924 15,597 
Deferred franchise and development fees6,189 5,952 
Other