Cover Page
Cover Page - shares | 6 Months Ended | |
Apr. 12, 2020 | May 08, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 12, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-9390 | |
Entity Registrant Name | JACK IN THE BOX INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-2698708 | |
Entity Address, Address Line One | 9330 Balboa Avenue | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92123 | |
City Area Code | 858 | |
Local Phone Number | 571-2121 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | JACK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 22,671,849 | |
Entity Central Index Key | 0000807882 | |
Current Fiscal Year End Date | --09-27 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 12, 2020 | Sep. 29, 2019 |
Current assets: | ||
Cash | $ 132,161 | $ 125,536 |
Restricted cash | 37,023 | 26,025 |
Accounts and other receivables, net | 66,331 | 45,235 |
Inventories | 1,821 | 1,776 |
Prepaid expenses | 18,460 | 9,015 |
Current assets held for sale | 6,186 | 16,823 |
Other current assets | 3,970 | 2,718 |
Total current assets | 265,952 | 227,128 |
Property and equipment: | ||
Property and equipment, at cost | 1,149,656 | 1,176,241 |
Less accumulated depreciation and amortization | (793,435) | (784,307) |
Property and equipment, net | 356,221 | 391,934 |
Other assets: | ||
Operating lease right-of-use assets | 903,010 | |
Intangible assets, net | 294 | 425 |
Goodwill | 47,161 | 46,747 |
Deferred tax assets | 77,410 | 85,564 |
Other assets, net | 211,205 | 206,685 |
Total other assets | 1,239,080 | 339,421 |
Total assets | 1,861,253 | 958,483 |
Current liabilities: | ||
Current maturities of long-term debt | 13,819 | 774 |
Current operating lease liabilities | 163,077 | |
Accounts payable | 47,867 | 37,066 |
Accrued liabilities | 120,949 | 120,083 |
Total current liabilities | 345,712 | 157,923 |
Long-term liabilities: | ||
Long-term debt, net of current maturities | 1,368,446 | 1,274,374 |
Long-term operating lease liabilities, net of current portion | 781,653 | |
Other long-term liabilities | 242,368 | 263,770 |
Total long-term liabilities | 2,392,467 | 1,538,144 |
Stockholders’ deficit: | ||
Preferred stock $0.01 par value, 15,000,000 shares authorized, none issued | 0 | 0 |
Common stock $0.01 par value, 175,000,000 shares authorized, 82,318,622 and 82,159,002 issued, respectively | 823 | 822 |
Capital in excess of par value | 489,847 | 480,322 |
Retained earnings | 1,574,930 | 1,577,034 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | (133,220) | (140,006) |
Treasury stock, at cost, 59,646,773 and 57,760,573 shares, respectively | (2,809,306) | (2,655,756) |
Total stockholders’ deficit | (876,926) | (737,584) |
Total liabilities and stockholders' equity | $ 1,861,253 | $ 958,483 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Apr. 12, 2020 | Sep. 29, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 175,000,000 | 175,000,000 |
Common stock, shares issued | 82,159,002 | |
Treasury stock at cost, shares | 59,646,773 | 57,760,573 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Earnings - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Apr. 12, 2020 | Apr. 14, 2019 | Apr. 12, 2020 | Apr. 14, 2019 | ||||
Revenues | $ 216,157 | $ 215,727 | $ 523,830 | $ 506,513 | |||
Operating costs and expenses, net: | |||||||
Food and packaging | 22,237 | 21,676 | 53,585 | 51,292 | |||
Payroll and employee benefits | 24,261 | 22,768 | 56,151 | 53,042 | |||
Occupancy and other | 12,570 | 11,100 | 28,528 | 27,113 | |||
Total company restaurant costs | 59,068 | 55,544 | 138,264 | 131,447 | |||
Selling, general and administrative expenses | 24,203 | 17,585 | 52,451 | 41,668 | |||
Depreciation and amortization | 12,282 | 12,690 | 29,010 | 29,859 | |||
Impairment and other charges, net | 716 | 1,125 | (8,575) | 8,823 | |||
Gains on the sale of company-operated restaurants | 0 | 0 | (1,575) | (219) | |||
Total operating costs and expenses | 183,315 | 168,604 | 421,038 | 401,066 | |||
Earnings from operations | 32,842 | 47,123 | 102,792 | 105,447 | |||
Other pension and post-retirement expenses, net | 512 | 343 | 39,490 | 799 | |||
Interest expense, net | 15,409 | 13,276 | 35,351 | 30,650 | |||
Earnings from continuing operations and before income taxes | 16,921 | 33,504 | 27,951 | 73,998 | |||
Income tax expense | 5,458 | 8,374 | 8,591 | 17,747 | |||
Earnings from continuing operations | 11,463 | 25,130 | 19,360 | 56,251 | |||
(Losses) earnings from discontinued operations, net of income taxes | 0 | (41) | 0 | 2,936 | |||
Net earnings | $ 11,463 | $ 25,089 | $ 19,360 | $ 59,187 | |||
Net earnings per share - basic: | |||||||
Earnings from continuing operations (in USD per share) | $ 0.50 | $ 0.97 | $ 0.83 | $ 2.17 | |||
Earnings from discontinued operations (in USD per share) | 0 | 0 | 0 | 0.11 | |||
Net earnings per share (in USD per share) | [1] | 0.50 | 0.97 | 0.83 | 2.28 | ||
Net earnings per share - diluted: | |||||||
Earnings from coninuing operations (in USD per share) | 0.50 | 0.96 | 0.82 | 2.15 | |||
Earnings from discontinued operations (in USD per share) | 0 | 0 | 0 | 0.11 | |||
Net earnings per share (in USD per share) | 0.50 | [1] | 0.96 | 0.82 | [1] | 2.26 | |
Cash dividends declared per common share (in USD per share) | $ 0.40 | $ 0.40 | $ 0.80 | $ 0.80 | |||
Company Restaurant Sales | |||||||
Revenues | $ 74,380 | $ 76,682 | $ 179,744 | $ 179,514 | |||
Franchise | |||||||
Revenues | 69,885 | 61,646 | 165,969 | 145,536 | |||
Franchise rental revenues | 69,885 | 61,646 | 165,969 | 145,536 | |||
Operating costs and expenses, net: | |||||||
Occupancy and other | 48,341 | 38,618 | 112,858 | 89,331 | |||
Total company restaurant costs | 2,971 | 2,797 | 7,647 | 5,642 | |||
Franchise advertising and other services expenses | 35,734 | 40,245 | 90,958 | 94,515 | |||
Royalty and Other | |||||||
Revenues | 37,764 | 38,410 | 90,230 | 90,660 | |||
Franchise contributions for advertising and other services | |||||||
Revenues | $ 34,128 | $ 38,989 | $ 87,887 | $ 90,803 | |||
[1] | Earnings per share may not add due to rounding. |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 12, 2020 | Apr. 14, 2019 | Apr. 12, 2020 | Apr. 14, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 11,463 | $ 25,089 | $ 19,360 | $ 59,187 |
Net change in fair value of derivatives | 0 | (4,959) | 0 | (12,126) |
Net loss reclassified to earnings | 0 | 134 | 0 | 613 |
Cash flow hedges, before tax | 0 | (4,825) | 0 | (11,513) |
Tax effect | 0 | 1,244 | 0 | 2,967 |
Cash flow hedges, net | 0 | (3,581) | 0 | (8,546) |
Actuarial losses arising during the period | (61,090) | 0 | (32,507) | 0 |
Actuarial losses and prior service costs reclassified to earnings | 1,362 | 904 | 41,672 | 2,109 |
Unrecognized periodic benefit costs | (59,728) | 904 | 9,165 | 2,109 |
Tax effect | 15,503 | (234) | (2,379) | (545) |
Unrecognized periodic benefit costs | (44,225) | 670 | 6,786 | 1,564 |
Other comprehensive (loss) income, net of taxes | (44,225) | (2,911) | 6,786 | (6,982) |
Comprehensive (loss) income | $ (32,762) | $ 22,178 | $ 26,146 | $ 52,205 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 12, 2020 | Apr. 14, 2019 | |
Cash flows from operating activities: | ||
Net earnings | $ 19,360 | $ 59,187 |
Earnings from discontinued operations | 0 | 2,936 |
Earnings from continuing operations | 19,360 | 56,251 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 29,010 | 29,859 |
Amortization of franchise tenant improvement allowances and other | 1,765 | 1,137 |
Deferred finance cost amortization | 3,046 | 1,224 |
Excess tax benefits from share-based compensation arrangements | (77) | (47) |
Deferred income taxes | 6,783 | 3,955 |
Share-based compensation expense | 5,865 | 4,708 |
Pension and postretirement expense | 39,490 | 799 |
Losses (gains) on cash surrender value of company-owned life insurance | 3,150 | (1,336) |
Gains on the sale of company-operated restaurants | (1,575) | (219) |
Gains on the disposition of property and equipment, net | (10,170) | (138) |
Non-cash operating lease costs | (13,118) | |
Impairment charges and other | 133 | 896 |
Changes in assets and liabilities, excluding acquisitions: | ||
Accounts and other receivables | (22,858) | (11,658) |
Inventories | 28 | (91) |
Prepaid expenses and other current assets | (10,350) | 3,701 |
Accounts payable | 20,660 | (3,904) |
Accrued liabilities | 1,400 | (6,532) |
Pension and postretirement contributions | (3,582) | (3,671) |
Franchise tenant improvement allowance distributions | (5,811) | (6,697) |
Other | (4,222) | (7,421) |
Cash flows provided by operating activities | 58,927 | 60,816 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (12,777) | (18,191) |
Proceeds from the sale of property and equipment | 22,394 | 1,479 |
Proceeds from the sale and leaseback of assets | 17,373 | 1,944 |
Proceeds from the sale of company-operated restaurants | 1,575 | 133 |
Collections on notes receivable | 0 | 6,491 |
Other | (1,036) | 0 |
Cash flows provided by (used in) investing activities | 29,601 | (8,144) |
Cash flows from financing activities: | ||
Borrowings on revolving credit facilities | 111,376 | 189,736 |
Repayments of borrowings on revolving credit facilities | (3,500) | (180,800) |
Principal repayments on debt | (3,640) | (21,757) |
Debt issuance costs | (216) | (3,615) |
Dividends paid on common stock | (18,466) | (20,615) |
Proceeds from issuance of common stock | 3,559 | 243 |
Repurchases of common stock | (155,576) | (14,362) |
Payroll tax payments for equity award issuances | (4,442) | (2,617) |
Cash flows used in financing activities | (70,905) | (53,787) |
Cash flows provided by (used in) continuing operations | 17,623 | (1,115) |
Cash and restricted cash at beginning of period | 151,561 | 2,705 |
Cash and restricted cash at end of period | $ 169,184 | $ 1,590 |
Supplemental Consolidated Balan
Supplemental Consolidated Balance Sheet Information | 6 Months Ended |
Apr. 12, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Consolidated Balance Sheet Information | SUPPLEMENTAL CONSOLIDATED BALANCE SHEET INFORMATION (in thousands) April 12, September 29, Accounts and other receivables, net: Trade $ 46,339 $ 36,907 Notes receivable 9,589 278 Income tax receivable 1,279 160 Other 14,410 10,855 Allowance for doubtful accounts (5,286) (2,965) $ 66,331 $ 45,235 Prepaid expenses: Prepaid income taxes $ 12,965 $ 579 Prepaid advertising 32 1,838 Other 5,463 6,598 $ 18,460 $ 9,015 Other assets, net: Company-owned life insurance policies $ 107,973 $ 112,753 Deferred rent receivable 49,152 49,333 Franchise tenant improvement allowance 29,536 26,925 Other 24,544 17,674 $ 211,205 $ 206,685 Accrued liabilities: Insurance $ 27,972 $ 27,888 Payroll and related taxes 20,808 31,095 Deferred franchise fees 4,951 4,978 Sales and property taxes 10,251 4,268 Gift card liability 2,196 2,036 Other 54,771 49,818 $ 120,949 $ 120,083 Other long-term liabilities: Defined benefit pension plans $ 147,295 $ 120,260 Deferred franchise fees 39,748 41,295 Straight-line rent accrual — 29,537 Other 55,325 72,678 $ 242,368 $ 263,770 |
Basis Of Presentation
Basis Of Presentation | 6 Months Ended |
Apr. 12, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation | BASIS OF PRESENTATION Nature of operations — Founded in 1951, Jack in the Box Inc. (the “Company”) operates and franchises Jack in the Box ® quick-service restaurants. The following table summarizes the number of restaurants as of the end of each period: April 12, April 14, Company-operated 144 137 Franchise 2,102 2,103 Total system 2,246 2,240 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 our Annual Report on Form 10-K for the fiscal year ended September 29, 2019 (“2019 Form 10-K”). The accounting policies used in preparing these condensed consolidated financial statements are the same as those described in our 2019 Form 10-K with the exception of the new lease accounting standard adopted in fiscal 2020, which is described below. 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. Segment reporting — The Company is comprised of one operating segment. Fiscal year — Our fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. Fiscal years 2020 and 2019 include 52 weeks. Our first quarter includes 16-weeks and all other quarters include 12-weeks. All comparisons between 2020 and 2019 refer to the 12-weeks (“quarter”) and 28-weeks (“year-to-date”) ended April 12, 2020 and April 14, 2019, 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. Risks and uncertainties — The Company is subject to risks and uncertainties as a result of the rapidly spreading outbreak of a novel strain of coronavirus (“COVID-19”). The extent of the impact of the COVID-19 pandemic on our business is highly uncertain and difficult to predict, as the response to the pandemic varies by state and municipalities within states. In the last five weeks of the quarter we experienced a significant reduction in guest traffic at our restaurants due to changes in consumer behavior as social distancing practices, dining room closures and other restrictions as have been mandated or encouraged by federal, state and local governments. During the COVID-19 impacted weeks, substantially all of our restaurants remained open, with dining rooms closed and all locations operating in an off-premise capacity, which represents close to 90% of the Company’s business historically, including drive-thru, third-party delivery, and carry-out. Our operating results substantially depend upon our franchisees’ sales volumes, restaurant profitability, and financial stability. The financial impact of COVID-19 has had, and is expected to continue to have, an adverse effect on our franchisees’ liquidity and we are working closely with our franchisees to monitor and assist them with access to appropriate sources of liquidity in order to sustain their businesses throughout this crisis. We cannot currently estimate the duration or future negative financial impact of the COVID-19 pandemic on our business. Ongoing material adverse effects of the COVID-19 pandemic on company-owned and franchised restaurants for an extended period could negatively affect our operating results, including reductions in revenue and cash flow and could impact our impairment assessments of accounts receivable, long-lived assets, operating lease assets, and/or goodwill. Advertising costs — We administer a marketing fund which includes contractual contributions. In 2020 and 2019, marketing fund contributions from franchise and company-operated restaurants were approximately 5.0% of gross revenues with the exception of our March and April 2020 marketing fees. In response to the economic burden associated with the COVID-19 pandemic, the Company reduced March marketing fees to 4.0% and postponed the collection of these fees over the course of 24 months. April marketing fees will range from 2% to 4% based on annualized sales volumes, and these fees will be collected over three months beginning October 2020. In 2019, incremental contributions made by the Company were $2.0 million. There have been no incremental contributions made in 2020. Total contributions made by the Company, including incremental contributions, 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 $3.5 million and $8.9 million, respectively, in 2020 and $3.9 million and $11.1 million, respectively, in 2019. Restricted cash — In accordance with the terms of our securitized financing facility, certain cash balances are required to be held in trust. Such restricted cash primarily represents cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitments fees required for the Class A-2 Notes. As of April 12, 2020 and September 29, 2019, restricted cash balances were $37.0 million and $26.0 million, respectively. During the second quarter, with uncertainty surrounding COVID-19 events, and as a cautionary measure, we voluntarily elected to reserve quarterly interest and principal payments due in August 2020. Effect of new accounting pronouncements adopted in fiscal 2020 — We adopted ASU 2016-02, Leases (Topic 842) (“ASC 842”) in the first quarter of 2020. The new guidance requires the recognition of lease liabilities, representing future minimum lease payments on a discounted basis, and corresponding right-of-use (“ROU”) assets on the balance sheet for most leases. The Company adopted the new guidance in the first quarter of 2020 using the alternative transition method; therefore, the comparative period has not been restated and continues to reported under the previous lease guidance. We elected the transition package of three practical expedients, which, among other items, permitted us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We also elected the short-term lease recognition exemption for all leases that qualify, permitting us to not apply the recognition requirements of this standard to leases with a term of 12 months or less, and an accounting policy to not separate lease and non-lease components for underlying assets subject to real estate leases. As lessor, we elected for all classes of underlying leased assets to account for lease and non-lease components, primarily property taxes and maintenance, as a single lease component. We did not elect the use-of-hindsight practical expedient, and therefore continued to utilize lease terms determined under the existing lease guidance. The adoption had a material impact on our consolidated balance sheet. As a result of the adoption, we recognized operating lease assets and liabilities of $880.6 million and $931.0 million, respectively, at the date of adoption. The ROU assets were adjusted for certain lease-related assets and liabilities at adoption, primarily comprised of straight-line rent accruals of $29.0 million, incentives and unfavorable lease liabilities of $2.1 million, sublease loss and exit-related lease liabilities of $19.4 million, which were previously reported in “Accrued liabilities” and “Other long-term liabilities”, as well as favorable lease assets of $0.4 million, which were previously reported in “Intangible assets, net” in our condensed consolidated balance sheet. We also recorded a cumulative adjustment to opening retained earnings of $2.9 million, net of tax, as a result of the impairment of certain newly recognized ROU assets and derecognition of deferred gains and losses on sale-leaseback transactions upon transition to the new guidance. The effects of the changes made to the Company's condensed consolidated balance sheet as of September 29, 2019 for the adoption of the new lease guidance were as follows (in thousands) : Balance at September 29, 2019 Adjustments due to ASC 842 adoption Balance at September 30, 2019 Assets Other assets: Operating lease ROU assets $ — $ 880,564 $ 880,564 Intangible assets, net $ 425 $ (386) $ 39 Deferred income taxes $ 85,564 $ 1,006 $ 86,570 Liabilities and Stockholders’ Deficit Current liabilities: Current operating lease liabilities $ — $ 159,821 $ 159,821 Accrued liabilities $ 120,083 $ (4,702) $ 115,381 Long-term liabilities: Long-term operating lease liabilities, net of current portion $ — $ 770,818 $ 770,818 Other long-term liabilities $ 263,770 $ (41,883) $ 221,887 Stockholders’ deficit: Retained earnings $ 1,577,034 $ (2,870) $ 1,574,164 The accounting guidance for lessors remains largely unchanged from previous guidance, except for the presentation of certain lease costs that the Company passes through to lessees, including but not limited to, property taxes and maintenance. These costs are generally paid by the Company and reimbursed by the lessee. Historically, these costs have been recorded on a net basis in our condensed consolidated statements of earnings but are now presented gross upon adoption of the new guidance. As a result, we expect annual revenues and expenses reported in “Franchise rental revenues” and “Franchise occupancy expenses” to increase by approximately $37 million in fiscal 2020. Refer to Note 4, Leases , for further information on our leases and the impact on the Company’s accounting policies. Effect of new accounting pronouncements to be adopted in future periods — In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which will replace the incurred loss methodology of recognizing credit losses on financial instruments that is currently required with a methodology that estimates the expected credit loss on financial instruments and reflects the net amount expected to be collected on the financial instrument. Application of the new guidance may result in the earlier recognition of credit losses as the new methodology will require entities to consider forward-looking information in addition to historical and current information used in assessing incurred losses. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, with early adoption permitted. The Company will be required to adopt the new guidance on a modified retrospective basis. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements and do not expect there to be a material impact upon adoption. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs in cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. Companies can choose to adopt the new guidance prospectively or retrospectively. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements and do not expect there to be a material impact upon adoption. |
Revenue (Notes)
Revenue (Notes) | 6 Months Ended |
Apr. 12, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE Nature of products and services — We derive revenue from retail sales at Jack in the Box 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 of $50,000 per restaurant and generally require that franchisees pay royalty and marketing fees at 5% of gross sales. The agreement also requires franchisees to pay sourcing, technology and other miscellaneous fees. Disaggregation of revenue — The following table disaggregates revenue by primary source (in thousands) : Quarter Year-to-date April 12, April 14, April 12, April 14, Sources of revenue: Company restaurant sales $ 74,380 $ 76,682 $ 179,744 $ 179,514 Franchise rental revenues 69,885 61,646 165,969 145,536 Franchise royalties 36,049 37,148 86,292 86,655 Marketing fees 30,550 35,947 79,385 83,810 Technology and sourcing fees 3,578 3,042 8,502 6,993 Franchise fees and other services 1,715 1,262 3,938 4,005 Total revenue $ 216,157 $ 215,727 $ 523,830 $ 506,513 Contract liabilities — Our contract liabilities consist of deferred revenue resulting from initial fees received from franchisees for new restaurant openings or new franchise terms, which are generally recognized over the franchise term. We classify these contract liabilities as “Accrued liabilities” and “Other long-term liabilities” in our condensed consolidated balance sheets. A summary of significant changes in our contract liabilities is presented below (in thousands) : Year-to-date April 12, April 14, Deferred franchise fees at beginning of period $ 46,272 $ 50,018 Revenue recognized (3,061) (2,745) Additions 1,488 680 Deferred franchise fees at end of period $ 44,699 $ 47,953 The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied as of April 12, 2020 (in thousands) : Remainder of 2020 $ 2,267 2021 4,926 2022 4,724 2023 4,572 2024 4,379 Thereafter 23,831 $ 44,699 We have applied the optional exemption, as provided for under Accounting Standards Codification 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. |
Summary of Refranchisings and F
Summary of Refranchisings and Franchisee Development | 6 Months Ended |
Apr. 12, 2020 | |
Summary Of Refranchisings, Franchisee Development And Acquisitions [Abstract] | |
Summary of Refranchisings and Franchisee Development | SUMMARY OF REFRANCHISINGS AND FRANCHISEE DEVELOPMENT Refranchisings and franchisee development — Through the second quarter in 2020 and 2019, no company-operated restaurants were sold to franchisees. In 2020 and 2019, amounts presented in “Gains on the sale of company-operated restaurants” of $1.6 million and $0.2 million, respectively, pertain to meeting certain contingent consideration provisions included in the sale of restaurants in previous years. The following table summarizes the number of restaurants developed and closed by franchisees. Quarter Year-to-date April 12, April 14, April 12, April 14, New restaurants opened by franchisees 5 2 16 11 Franchisee restaurants closed (2) (3) (12) (8) Franchise acquisitions — During the second quarter of 2020, we acquired eight franchise restaurants as a result of a legal action filed in October 2019 against a franchisee in which we obtained a judgment in January 2020 granting us the possession of the restaurants. 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). The goodwill recorded primarily relates to the sales growth potential of the market acquired and is expected to be deductible for income tax purposes. Total consideration on the acquisition was $0.9 million, comprised of receivables that were eliminated in acquisition accounting. The table below presents the allocation of the total purchase price to the fair value of assets acquired and liabilities assumed for the restaurants acquired ( in thousand s): Inventory $ 73 Property and equipment 903 Intangible assets 263 Other assets 6 Goodwill 414 Liabilities assumed (800) Total consideration $ 859 |
Leases
Leases | 6 Months Ended |
Apr. 12, 2020 | |
Leases [Abstract] | |
Operating Leases, Lessee | LEASES Nature of leases — We own restaurant sites and we also lease 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. We also lease certain restaurant and office equipment with initial terms generally ranging from 3 to 8 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As lessor, our leases and subleases primarily consist of restaurants that have been leased to franchisees subsequent to refranchising transactions. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. 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.” Significant assumptions and judgements — We evaluate the contracts entered into by the Company to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms. The lease term and incremental borrowing rate for each lease requires judgement by management and can impact the classification of our leases as well as the value of our lease assets and liabilities. When determining the lease term, we consider option periods available, and include option periods in the measurement of the lease ROU asset and lease liability where the exercise is reasonably certain to occur. As our leases do not provide an implicit discount rate, we have determined it is appropriate to use our estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, in calculating our lease liabilities. Rent Concessions as Lessee In response to the pandemic, certain landlords have agreed to temporary rent concessions. These concessions generally relate to the deferral of certain rent payments for April, May and June until future periods and total approximately $13.4 million. We considered the FASB’s recent guidance regarding rent concessions related to the effects of the COVID-19 pandemic, and have elected to apply the temporary practical expedient to account for rent concessions as though enforceable rights and obligations for those concessions existed in the lease agreements. Therefore, we will not remeasure our lease ROU assets and liabilities, and as of April 12, 2020 have bifurcated our operating lease liabilities into the portion that remains subject to accretion of $940.0 million, and the portion that is related to April rent deferrals of $4.8 million. Rent Concessions as Lessor We postponed collection of approximately 40% of April rents due from our franchisees totaling approximately $9.1 million, to be collected over three months beginning July 2020. Furthermore, we passed on to our franchisees approximately $10.4 million of the rent concessions secured from our landlords for April, May and June. Company as Lessee Leased assets and liabilities consisted of the following as of April 12, 2020 ( in thousands ): April 12, Assets: Operating lease ROU assets $ 903,010 Finance lease ROU assets (1) 2,689 Total ROU assets $ 905,699 Liabilities: Current operating lease liabilities $ 163,077 Current finance lease liabilities (2) 819 Long term operating lease liabilities 781,653 Long-term finance lease liabilities (2) 2,511 Total lease liabilities $ 948,060 ____________________________ (1) Included in “Property and equipment, net” on our condensed consolidated balance sheet. (2) Included in “Current maturities of long-term debt” and “Long-term debt, net of current maturities” on our condensed consolidated balance sheet. The following table presents the components of our lease costs ( in thousands ): Quarter Year-to-date April 12, April 12, Lease costs: Finance lease cost: Amortization of ROU assets (1) $ 179 $ 413 Interest on lease liabilities (2) 28 61 Operating lease cost (3) 43,891 102,403 Short-term lease cost (3) 102 103 Variable lease cost (3)(4) 9,316 21,823 $ 53,516 $ 124,803 ____________________________ (1) Included in “Depreciation and amortization” in our condensed consolidated statement of earnings. (2) Included in “Interest expense, net” in our condensed consolidated statement of earnings. (3) Operating lease, short-term and variable lease costs associated with franchisees and company-operated restaurants are included in “Franchise occupancy expenses” and “Occupancy and other”, respectively, in our condensed consolidated statement of earnings. For our closed restaurants, these costs are included in “Impairment and other, net” and all other costs are included in “Selling, general and administrative expenses”. (4) Includes $8.6 million in the quarter and $20.2 million year-to-date of property taxes and common area maintenance costs which are reimbursed by sub-lessees. The following table presents supplemental information related to leases: April 12, Weighted-average remaining lease term (in years): Finance leases 3.6 Operating leases 8.2 Weighted-average discount rate: Finance leases 3.5 % Operating leases 4.0 % The following table presents as of April 12, 2020, the annual maturities of our lease liabilities ( in thousands ): Finance Leases Operating Leases Fiscal year: Remainder of 2020 (1) $ 443 $ 80,592 2021 (1) 906 205,534 2022 906 158,823 2023 901 131,362 2024 408 100,021 Thereafter 54 449,077 Total future lease payments (2) $ 3,618 $ 1,125,409 Less: imputed interest (288) (180,679) Present value of lease liabilities $ 3,330 $ 944,730 ____________________________ (1) The impact of rent concessions reduced 2020 operating leases maturities by $1.3 million and increased 2021 by $6.0 million. (2) Total future lease payments include non-cancellable commitments of $3.6 million for finance leases and $1,090 million for operating leases. The following table presents as of September 29, 2019, future minimum lease payments for non-cancellable leases ( in thousands ): Capital Leases Operating Leases Fiscal year: 2020 $ 879 $ 193,313 2021 879 186,226 2022 879 145,794 2023 864 117,753 2024 396 87,420 Thereafter 40 363,505 Total minimum lease payments $ 3,937 $ 1,094,011 Less: imputed interest (343) Present value of lease liability $ 3,594 The following table includes supplemental cash flow and non-cash information related to our lessee leases ( in thousands ): Year-to-date April 12, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 115,376 Operating cash flows from financing leases $ 61 Financing cash flows from financing leases $ 390 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 105,748 Financing leases $ 132 Sale leaseback transactions — In the first quarter of 2020, we completed a sale leaseback transaction of a multi-tenant commercial property in Los Angeles, California and leased back the parcel on which a company-operated restaurant is located. The Company received net proceeds of $17.4 million and recognized a $0.2 million loss on the sale. The initial term on the lease is 20 years and the lease has been accounted for as an operating lease. In the first quarter of 2020, we completed the sale of one of our corporate office buildings as we move forward with our previously announced consolidation of our headquarters. We entered into a lease with the buyer to leaseback the property for up to 18 months with an option to terminate earlier without penalty, upon providing a 90-day notice. The net proceeds received on the sale was $20.6 million and the lease has been accounted for as an operating lease. A gain on the sale of $10.8 million was recognized, and is presented within “Impairment and other charges, net” in our condensed consolidated statement of earnings. Company as Lessor The following table presents rental income ( in thousands ): Quarter Year-to-date April 12, 2020 April 12, 2020 Owned Properties Leased Properties Total Owned Properties Leased Properties Total Operating lease income - franchise $ 4,572 $ 50,123 $ 54,695 $ 10,667 $ 116,692 $ 127,359 Variable lease income - franchise 1,810 13,380 15,190 4,526 34,084 38,610 Franchise rental revenues $ 6,382 $ 63,503 $ 69,885 $ 15,193 $ 150,776 $ 165,969 Operating lease income - closed restaurants and other (1) $ — $ 1,470 $ 1,470 $ — $ 3,527 $ 3,527 ____________________________ (1) Primarily relates to closed restaurant properties included in “Impairment and other, net” in our condensed consolidated statement of earnings. The following table presents as of April 12, 2020, future minimum rental receipts for non-cancellable leases and subleases ( in thousands ): April 12, Fiscal year: Remainder of 2020 (1)(2) $ 106,892 2021 (2) 261,492 2022 232,748 2023 226,178 2024 201,003 Thereafter 1,250,834 Total minimum rental receipts $ 2,279,147 ____________________________ (1) Includes $9.1 million of postponed April rents to be repaid over three months beginning July 2020. (2) The impact of rent concessions passed on to franchisees reduced 2020 by $1.7 million and increased 2021 by $4.7 million. The following table presents as of September 29, 2019, future minimum rental receipts for non-cancellable leases and subleases ( in thousands ): September 29, Fiscal year: 2020 $ 239,219 2021 255,315 2022 231,394 2023 224,605 2024 199,442 Thereafter 1,215,811 Total minimum rental receipts $ 2,365,786 |
Finance Leases, Lessee | LEASES Nature of leases — We own restaurant sites and we also lease 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. We also lease certain restaurant and office equipment with initial terms generally ranging from 3 to 8 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As lessor, our leases and subleases primarily consist of restaurants that have been leased to franchisees subsequent to refranchising transactions. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. 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.” Significant assumptions and judgements — We evaluate the contracts entered into by the Company to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms. The lease term and incremental borrowing rate for each lease requires judgement by management and can impact the classification of our leases as well as the value of our lease assets and liabilities. When determining the lease term, we consider option periods available, and include option periods in the measurement of the lease ROU asset and lease liability where the exercise is reasonably certain to occur. As our leases do not provide an implicit discount rate, we have determined it is appropriate to use our estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, in calculating our lease liabilities. Rent Concessions as Lessee In response to the pandemic, certain landlords have agreed to temporary rent concessions. These concessions generally relate to the deferral of certain rent payments for April, May and June until future periods and total approximately $13.4 million. We considered the FASB’s recent guidance regarding rent concessions related to the effects of the COVID-19 pandemic, and have elected to apply the temporary practical expedient to account for rent concessions as though enforceable rights and obligations for those concessions existed in the lease agreements. Therefore, we will not remeasure our lease ROU assets and liabilities, and as of April 12, 2020 have bifurcated our operating lease liabilities into the portion that remains subject to accretion of $940.0 million, and the portion that is related to April rent deferrals of $4.8 million. Rent Concessions as Lessor We postponed collection of approximately 40% of April rents due from our franchisees totaling approximately $9.1 million, to be collected over three months beginning July 2020. Furthermore, we passed on to our franchisees approximately $10.4 million of the rent concessions secured from our landlords for April, May and June. Company as Lessee Leased assets and liabilities consisted of the following as of April 12, 2020 ( in thousands ): April 12, Assets: Operating lease ROU assets $ 903,010 Finance lease ROU assets (1) 2,689 Total ROU assets $ 905,699 Liabilities: Current operating lease liabilities $ 163,077 Current finance lease liabilities (2) 819 Long term operating lease liabilities 781,653 Long-term finance lease liabilities (2) 2,511 Total lease liabilities $ 948,060 ____________________________ (1) Included in “Property and equipment, net” on our condensed consolidated balance sheet. (2) Included in “Current maturities of long-term debt” and “Long-term debt, net of current maturities” on our condensed consolidated balance sheet. The following table presents the components of our lease costs ( in thousands ): Quarter Year-to-date April 12, April 12, Lease costs: Finance lease cost: Amortization of ROU assets (1) $ 179 $ 413 Interest on lease liabilities (2) 28 61 Operating lease cost (3) 43,891 102,403 Short-term lease cost (3) 102 103 Variable lease cost (3)(4) 9,316 21,823 $ 53,516 $ 124,803 ____________________________ (1) Included in “Depreciation and amortization” in our condensed consolidated statement of earnings. (2) Included in “Interest expense, net” in our condensed consolidated statement of earnings. (3) Operating lease, short-term and variable lease costs associated with franchisees and company-operated restaurants are included in “Franchise occupancy expenses” and “Occupancy and other”, respectively, in our condensed consolidated statement of earnings. For our closed restaurants, these costs are included in “Impairment and other, net” and all other costs are included in “Selling, general and administrative expenses”. (4) Includes $8.6 million in the quarter and $20.2 million year-to-date of property taxes and common area maintenance costs which are reimbursed by sub-lessees. The following table presents supplemental information related to leases: April 12, Weighted-average remaining lease term (in years): Finance leases 3.6 Operating leases 8.2 Weighted-average discount rate: Finance leases 3.5 % Operating leases 4.0 % The following table presents as of April 12, 2020, the annual maturities of our lease liabilities ( in thousands ): Finance Leases Operating Leases Fiscal year: Remainder of 2020 (1) $ 443 $ 80,592 2021 (1) 906 205,534 2022 906 158,823 2023 901 131,362 2024 408 100,021 Thereafter 54 449,077 Total future lease payments (2) $ 3,618 $ 1,125,409 Less: imputed interest (288) (180,679) Present value of lease liabilities $ 3,330 $ 944,730 ____________________________ (1) The impact of rent concessions reduced 2020 operating leases maturities by $1.3 million and increased 2021 by $6.0 million. (2) Total future lease payments include non-cancellable commitments of $3.6 million for finance leases and $1,090 million for operating leases. The following table presents as of September 29, 2019, future minimum lease payments for non-cancellable leases ( in thousands ): Capital Leases Operating Leases Fiscal year: 2020 $ 879 $ 193,313 2021 879 186,226 2022 879 145,794 2023 864 117,753 2024 396 87,420 Thereafter 40 363,505 Total minimum lease payments $ 3,937 $ 1,094,011 Less: imputed interest (343) Present value of lease liability $ 3,594 The following table includes supplemental cash flow and non-cash information related to our lessee leases ( in thousands ): Year-to-date April 12, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 115,376 Operating cash flows from financing leases $ 61 Financing cash flows from financing leases $ 390 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 105,748 Financing leases $ 132 Sale leaseback transactions — In the first quarter of 2020, we completed a sale leaseback transaction of a multi-tenant commercial property in Los Angeles, California and leased back the parcel on which a company-operated restaurant is located. The Company received net proceeds of $17.4 million and recognized a $0.2 million loss on the sale. The initial term on the lease is 20 years and the lease has been accounted for as an operating lease. In the first quarter of 2020, we completed the sale of one of our corporate office buildings as we move forward with our previously announced consolidation of our headquarters. We entered into a lease with the buyer to leaseback the property for up to 18 months with an option to terminate earlier without penalty, upon providing a 90-day notice. The net proceeds received on the sale was $20.6 million and the lease has been accounted for as an operating lease. A gain on the sale of $10.8 million was recognized, and is presented within “Impairment and other charges, net” in our condensed consolidated statement of earnings. Company as Lessor The following table presents rental income ( in thousands ): Quarter Year-to-date April 12, 2020 April 12, 2020 Owned Properties Leased Properties Total Owned Properties Leased Properties Total Operating lease income - franchise $ 4,572 $ 50,123 $ 54,695 $ 10,667 $ 116,692 $ 127,359 Variable lease income - franchise 1,810 13,380 15,190 4,526 34,084 38,610 Franchise rental revenues $ 6,382 $ 63,503 $ 69,885 $ 15,193 $ 150,776 $ 165,969 Operating lease income - closed restaurants and other (1) $ — $ 1,470 $ 1,470 $ — $ 3,527 $ 3,527 ____________________________ (1) Primarily relates to closed restaurant properties included in “Impairment and other, net” in our condensed consolidated statement of earnings. The following table presents as of April 12, 2020, future minimum rental receipts for non-cancellable leases and subleases ( in thousands ): April 12, Fiscal year: Remainder of 2020 (1)(2) $ 106,892 2021 (2) 261,492 2022 232,748 2023 226,178 2024 201,003 Thereafter 1,250,834 Total minimum rental receipts $ 2,279,147 ____________________________ (1) Includes $9.1 million of postponed April rents to be repaid over three months beginning July 2020. (2) The impact of rent concessions passed on to franchisees reduced 2020 by $1.7 million and increased 2021 by $4.7 million. The following table presents as of September 29, 2019, future minimum rental receipts for non-cancellable leases and subleases ( in thousands ): September 29, Fiscal year: 2020 $ 239,219 2021 255,315 2022 231,394 2023 224,605 2024 199,442 Thereafter 1,215,811 Total minimum rental receipts $ 2,365,786 |
Operating Leases, Lessor | LEASES Nature of leases — We own restaurant sites and we also lease 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. We also lease certain restaurant and office equipment with initial terms generally ranging from 3 to 8 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As lessor, our leases and subleases primarily consist of restaurants that have been leased to franchisees subsequent to refranchising transactions. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. 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.” Significant assumptions and judgements — We evaluate the contracts entered into by the Company to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms. The lease term and incremental borrowing rate for each lease requires judgement by management and can impact the classification of our leases as well as the value of our lease assets and liabilities. When determining the lease term, we consider option periods available, and include option periods in the measurement of the lease ROU asset and lease liability where the exercise is reasonably certain to occur. As our leases do not provide an implicit discount rate, we have determined it is appropriate to use our estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, in calculating our lease liabilities. Rent Concessions as Lessee In response to the pandemic, certain landlords have agreed to temporary rent concessions. These concessions generally relate to the deferral of certain rent payments for April, May and June until future periods and total approximately $13.4 million. We considered the FASB’s recent guidance regarding rent concessions related to the effects of the COVID-19 pandemic, and have elected to apply the temporary practical expedient to account for rent concessions as though enforceable rights and obligations for those concessions existed in the lease agreements. Therefore, we will not remeasure our lease ROU assets and liabilities, and as of April 12, 2020 have bifurcated our operating lease liabilities into the portion that remains subject to accretion of $940.0 million, and the portion that is related to April rent deferrals of $4.8 million. Rent Concessions as Lessor We postponed collection of approximately 40% of April rents due from our franchisees totaling approximately $9.1 million, to be collected over three months beginning July 2020. Furthermore, we passed on to our franchisees approximately $10.4 million of the rent concessions secured from our landlords for April, May and June. Company as Lessee Leased assets and liabilities consisted of the following as of April 12, 2020 ( in thousands ): April 12, Assets: Operating lease ROU assets $ 903,010 Finance lease ROU assets (1) 2,689 Total ROU assets $ 905,699 Liabilities: Current operating lease liabilities $ 163,077 Current finance lease liabilities (2) 819 Long term operating lease liabilities 781,653 Long-term finance lease liabilities (2) 2,511 Total lease liabilities $ 948,060 ____________________________ (1) Included in “Property and equipment, net” on our condensed consolidated balance sheet. (2) Included in “Current maturities of long-term debt” and “Long-term debt, net of current maturities” on our condensed consolidated balance sheet. The following table presents the components of our lease costs ( in thousands ): Quarter Year-to-date April 12, April 12, Lease costs: Finance lease cost: Amortization of ROU assets (1) $ 179 $ 413 Interest on lease liabilities (2) 28 61 Operating lease cost (3) 43,891 102,403 Short-term lease cost (3) 102 103 Variable lease cost (3)(4) 9,316 21,823 $ 53,516 $ 124,803 ____________________________ (1) Included in “Depreciation and amortization” in our condensed consolidated statement of earnings. (2) Included in “Interest expense, net” in our condensed consolidated statement of earnings. (3) Operating lease, short-term and variable lease costs associated with franchisees and company-operated restaurants are included in “Franchise occupancy expenses” and “Occupancy and other”, respectively, in our condensed consolidated statement of earnings. For our closed restaurants, these costs are included in “Impairment and other, net” and all other costs are included in “Selling, general and administrative expenses”. (4) Includes $8.6 million in the quarter and $20.2 million year-to-date of property taxes and common area maintenance costs which are reimbursed by sub-lessees. The following table presents supplemental information related to leases: April 12, Weighted-average remaining lease term (in years): Finance leases 3.6 Operating leases 8.2 Weighted-average discount rate: Finance leases 3.5 % Operating leases 4.0 % The following table presents as of April 12, 2020, the annual maturities of our lease liabilities ( in thousands ): Finance Leases Operating Leases Fiscal year: Remainder of 2020 (1) $ 443 $ 80,592 2021 (1) 906 205,534 2022 906 158,823 2023 901 131,362 2024 408 100,021 Thereafter 54 449,077 Total future lease payments (2) $ 3,618 $ 1,125,409 Less: imputed interest (288) (180,679) Present value of lease liabilities $ 3,330 $ 944,730 ____________________________ (1) The impact of rent concessions reduced 2020 operating leases maturities by $1.3 million and increased 2021 by $6.0 million. (2) Total future lease payments include non-cancellable commitments of $3.6 million for finance leases and $1,090 million for operating leases. The following table presents as of September 29, 2019, future minimum lease payments for non-cancellable leases ( in thousands ): Capital Leases Operating Leases Fiscal year: 2020 $ 879 $ 193,313 2021 879 186,226 2022 879 145,794 2023 864 117,753 2024 396 87,420 Thereafter 40 363,505 Total minimum lease payments $ 3,937 $ 1,094,011 Less: imputed interest (343) Present value of lease liability $ 3,594 The following table includes supplemental cash flow and non-cash information related to our lessee leases ( in thousands ): Year-to-date April 12, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 115,376 Operating cash flows from financing leases $ 61 Financing cash flows from financing leases $ 390 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 105,748 Financing leases $ 132 Sale leaseback transactions — In the first quarter of 2020, we completed a sale leaseback transaction of a multi-tenant commercial property in Los Angeles, California and leased back the parcel on which a company-operated restaurant is located. The Company received net proceeds of $17.4 million and recognized a $0.2 million loss on the sale. The initial term on the lease is 20 years and the lease has been accounted for as an operating lease. In the first quarter of 2020, we completed the sale of one of our corporate office buildings as we move forward with our previously announced consolidation of our headquarters. We entered into a lease with the buyer to leaseback the property for up to 18 months with an option to terminate earlier without penalty, upon providing a 90-day notice. The net proceeds received on the sale was $20.6 million and the lease has been accounted for as an operating lease. A gain on the sale of $10.8 million was recognized, and is presented within “Impairment and other charges, net” in our condensed consolidated statement of earnings. Company as Lessor The following table presents rental income ( in thousands ): Quarter Year-to-date April 12, 2020 April 12, 2020 Owned Properties Leased Properties Total Owned Properties Leased Properties Total Operating lease income - franchise $ 4,572 $ 50,123 $ 54,695 $ 10,667 $ 116,692 $ 127,359 Variable lease income - franchise 1,810 13,380 15,190 4,526 34,084 38,610 Franchise rental revenues $ 6,382 $ 63,503 $ 69,885 $ 15,193 $ 150,776 $ 165,969 Operating lease income - closed restaurants and other (1) $ — $ 1,470 $ 1,470 $ — $ 3,527 $ 3,527 ____________________________ (1) Primarily relates to closed restaurant properties included in “Impairment and other, net” in our condensed consolidated statement of earnings. The following table presents as of April 12, 2020, future minimum rental receipts for non-cancellable leases and subleases ( in thousands ): April 12, Fiscal year: Remainder of 2020 (1)(2) $ 106,892 2021 (2) 261,492 2022 232,748 2023 226,178 2024 201,003 Thereafter 1,250,834 Total minimum rental receipts $ 2,279,147 ____________________________ (1) Includes $9.1 million of postponed April rents to be repaid over three months beginning July 2020. (2) The impact of rent concessions passed on to franchisees reduced 2020 by $1.7 million and increased 2021 by $4.7 million. The following table presents as of September 29, 2019, future minimum rental receipts for non-cancellable leases and subleases ( in thousands ): September 29, Fiscal year: 2020 $ 239,219 2021 255,315 2022 231,394 2023 224,605 2024 199,442 Thereafter 1,215,811 Total minimum rental receipts $ 2,365,786 |
Debt
Debt | 6 Months Ended |
Apr. 12, 2020 | |
Debt Disclosure [Abstract] | |
Indebtedness | INDEBTEDNESS Long-term debt as of April 12, 2020 and September 29, 2019 consisted of the following ( in thousands ): April 12, September 29, Class A-2-I Notes $ 573,563 $ 575,000 Class A-2-II Notes 274,313 275,000 Class A-2-III Notes 448,875 450,000 Class A-1 Variable Funding Notes 107,876 — Finance lease obligations 3,330 3,594 Total debt 1,407,957 1,303,594 Less current maturities of long-term debt (13,819) (774) Less unamortized debt issuance costs (25,692) (28,446) Long-term debt $ 1,368,446 $ 1,274,374 The Company’s outstanding debt consists of Series 2019-1 3.982% Fixed Rate Senior Secured Notes (the “Class A-2-I Notes”), Series 2019-1 4.476% Fixed Rate Senior Secured Notes, Class A-2-II (the “Class A-2-II Notes”), and Series 2019-1 4.970% Fixed Rate Senior Secured Notes, Class A-2-III (the “Class A-2-III Notes”) and together with the Class A-2-I Notes and the Class A-2-II Notes, (the “Class A-2 Notes”), issued by Jack in the Box Funding, LLC (the “Master Issuer”), a limited-purpose, bankruptcy-remote, wholly owned indirect subsidiary of the Company. In addition, the Master Issuer entered into a revolving financing facility of Series 2019-1 Variable Funding Senior Secured Notes, Class A-1 (the “Variable Funding Notes”), which allows for the drawing of up to $150.0 million under the Variable Funding Notes and the issuance of letters of credit. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Apr. 12, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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 ): Total Quoted Prices Significant Significant Fair value measurements as of April 12, 2020: Non-qualified deferred compensation plan (1) $ 25,261 $ 25,261 $ — $ — Total liabilities at fair value $ 25,261 $ 25,261 $ — $ — Fair value measurements as of September 29, 2019: Non-qualified deferred compensation plan (1) $ 30,104 $ 30,104 $ — $ — Total liabilities at fair value $ 30,104 $ 30,104 $ — $ — ____________________________ (1) We maintain 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. (2) We did not have any transfers in or out of Level 1, 2 or 3. The following table presents the carrying value and estimated fair value of our Class A-2 Notes as of April 12, 2020 and September 29, 2019 ( in thousands ): April 12, September 29, Carrying Amount Fair Value Carrying Amount Fair Value Class A-2 Notes $ 1,296,751 $ 1,170,896 $ 1,300,000 $ 1,344,300 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. The Company had $107.9 million of outstanding borrowings under its Variable Funding Notes. The fair value of this loan approximates carrying value due to the variable rate nature of these borrowings. Non-financial assets and liabilities — Our 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 2020, no material fair value adjustments were required. Refer to Note 8, Impairment and Other Charges, Net , for additional information regarding impairment charges. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Apr. 12, 2020 | |
Derivative Instruments and Hedges, Assets [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS Interest rate swaps — We have used interest rate swaps to mitigate interest rate volatility with regard to variable rate borrowings under our senior credit facility. In June 2015, we entered into forward-starting interest rate swap agreements that effectively converted $500.0 million of our variable rate borrowings to a fixed rate from October 2018 through October 2022. These agreements were designated as cash flow hedges under the terms of the FASB authoritative guidance for derivatives and hedging. Since they were effective in offsetting the variability of the hedged cash flows, changes in the fair values of the derivatives were not included in earnings, but were included in other comprehensive income (“OCI”). These changes in fair value were subsequently reclassified into net earnings as a component of interest expense as the hedged interest payments were made on our variable rate debt. Effective July 2, 2019, the Company terminated all interest rate swap agreements in anticipation of the securitization transaction and related retirement of our senior credit facility in the fourth quarter of 2019. During fiscal 2019, our interest rate swaps had no hedge ineffectiveness. Financial performance — The following table summarizes the OCI activity related to our interest rate swap derivative instruments and the amounts reclassified from accumulated OCI ( in thousands ): Location in Income Quarter Year-to-date April 14, April 14, Loss recognized in OCI N/A $ (4,959) $ (12,126) Loss reclassified from accumulated OCI into net earnings Interest expense, net $ 134 $ 613 |
Impairment and Other Charges, N
Impairment and Other Charges, Net | 6 Months Ended |
Apr. 12, 2020 | |
Restructuring and Related Activities [Abstract] | |
Impairment and Other Charges, Net | IMPAIRMENT AND OTHER CHARGES, NET Impairment and other charges, net in the accompanying condensed consolidated statements of earnings is comprised of the following ( in thousands ): Quarter Year-to-date April 12, April 14, April 12, April 14, Restructuring costs $ 118 $ 946 $ 1,163 $ 6,786 Costs of closed restaurants and other 331 383 432 1,249 Losses (gains) on disposition of property and equipment, net (1) 267 (714) (10,170) (138) Accelerated depreciation — 510 — 926 $ 716 $ 1,125 $ (8,575) $ 8,823 ____________________________ (1) In 2020, includes a $10.8 million gain related to the sale of one of our corporate office buildings. Refer to Note 4, Leases , for further information. Restructuring costs — Restructuring charges include costs resulting from the exploration of strategic alternatives (the “Strategic Alternatives Evaluation”) in 2019, which was concluded in the third quarter of 2019, and a plan that management initiated to reduce our general and administrative costs. The following is a summary of our restructuring costs (in thousands) : Quarter Year-to-date April 12, April 14, April 12, April 14, Employee severance and related costs $ 118 $ 642 $ 1,163 $ 5,148 Strategic Alternatives Evaluation (1) — 304 — 1,638 $ 118 $ 946 $ 1,163 $ 6,786 ____________________________ (1) Strategic Alternative Evaluation costs primarily relate to third party advisory services. We do not expect any significant severance and related costs for the remainder of fiscal 2020 related to these initiatives. Total accrued severance costs related to our restructuring activities are included in “Accrued liabilities” on our condensed consolidated balance sheets, and changed as follows during 2020 (in thousands) : Balance as of September 29, 2019 $ 2,100 Costs incurred 1,163 Cash payments (3,010) Balance as of April 12, 2020 $ 253 |
Income Taxes
Income Taxes | 6 Months Ended |
Apr. 12, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The income tax provisions reflect tax rates of 32.3% in the second quarter and 30.7% year-to-date, compared with 25.0% and 24.0%, respectively, in fiscal year 2019. The major components of the year-over-year change in tax rates were a decrease in operating earnings before income tax, an increase in the impact of non-deductible compensation for certain officers, an increase in losses from the market performance of insurance products used to fund certain non-qualified retirement plans which are excluded from taxable income, and an increase in non-deductible legal settlements. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual 2020 rate could differ from our current estimates. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in the U.S. on March 27, 2020. The CARES Act includes several U.S. income tax provisions related to, among other things, modifications to the net interest deduction limitations, and technical amendments regarding the income tax depreciation of qualified improvement property placed in service after December 31, 2017. The CARES Act is not expected to have a material impact on the Company’s financial results. |
Retirement Plans
Retirement Plans | 6 Months Ended |
Apr. 12, 2020 | |
Retirement Benefits [Abstract] | |
Retirement Plans | RETIREMENT PLANS Defined benefit pension plans — We sponsor 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. In the fourth quarter of 2019, the Company amended its Qualified Plan to add a limited lump sum payment window whereby certain terminated participants with a vested pension benefit could elect to receive either an immediate lump sum or a monthly annuity payment of their accrued benefit. The offering period began September 16, 2019 and ended October 31, 2019. The participants that elected a lump sum benefit under the program were paid in December 2019, which triggered settlement accounting. As a result of the offering, the Company’s Qualified Plan paid $122.3 million from its plan assets to those who accepted the offer, thereby reducing the plan’s pension benefit obligation (“PBO”). The transaction had no cash impact to the Company but did result in a non-cash settlement charge of $38.6 million in the first quarter of fiscal 2020. Routine lump sum payments made in the second quarter of fiscal 2020 resulted in a non-cash settlement charge of $0.3 million. Postretirement healthcare plans — We also sponsor two healthcare plans, closed to new participants, that provide postretirement 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 — The components of net periodic benefit cost in each period were as follows ( in thousands ): Quarter Year-to-date April 12, April 14, April 12, April 14, Defined benefit pension plans: Interest cost $ 3,669 $ 5,286 $ 8,745 $ 12,334 Expected return on plan assets (1) (4,706) (6,077) (11,362) (14,181) Pension settlements (2) 321 — 38,927 — Actuarial losses (2) 1,019 913 2,691 2,132 Amortization of unrecognized prior service costs (2) 19 27 45 62 Net periodic benefit cost $ 322 $ 149 $ 39,046 $ 347 Postretirement healthcare plans: Interest cost $ 187 $ 230 $ 435 $ 537 Actuarial losses (gains) (2) 3 (36) 9 (85) Net periodic benefit cost $ 190 $ 194 $ 444 $ 452 ___________________________ (1) Based on a return on asset, net of administrative expenses, assumption of 5.8% determined at the end of fiscal 2019, subsequently updated to 5.9% as of December 31, 2019 and 5.2% as of March 31, 2020, upon remeasurement of the Qualified Plan’s assets and PBO as required by settlement accounting. (2) Amounts were reclassified from accumulated OCI into net earnings as a component of “Other pension and post-retirement expenses, net.” Future cash flows — Our policy is to fund our plans at or above the minimum required by law. As of January 1, 2019, the date of our last actuarial funding valuation, there was no minimum contribution funding requirement. Details regarding 2020 contributions are as follows ( in thousands ): SERP Postretirement Net year-to-date contributions $ 2,857 $ 725 Remaining estimated net contributions during fiscal 2020 $ 2,514 $ 676 We continue 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. We do not anticipate making any contributions to our Qualified Plan in fiscal 2020. |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Apr. 12, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Deficit | STOCKHOLDERS’ DEFICIT Summary of changes in stockholders’ deficit — A reconciliation of the beginning and ending amounts of stockholders’ deficit is presented below ( in thousands ): Quarter Year-to-date April 12, April 14, April 12, April 14, Balance at beginning of period $ (841,153) $ (607,296) $ (737,584) $ (591,699) Shares issued under stock plans, including tax benefit 3,375 128 3,559 243 Share-based compensation expense 2,681 2,799 5,865 4,708 Dividends declared (9,067) (10,323) (18,492) (20,641) Purchases of treasury stock — — (153,550) — Net earnings 11,463 25,089 19,360 59,187 Other comprehensive income (loss), net of taxes (44,225) (2,911) 6,786 (6,982) Cumulative-effect from a change in accounting principle — — (2,870) (37,330) Balance at end of period $ (876,926) $ (592,514) $ (876,926) $ (592,514) Repurchases of common stock — The Company repurchased 1.9 million shares of its common stock in the first quarter of fiscal 2020 at an average price of $81.41 per share for an aggregate cost of $153.5 million. There were no repurchases of common stock in the second quarter of fiscal 2020. As of April 12, 2020, this leaves approximately $122.2 million remaining under share repurchase programs authorized by the Board of Directors, consisting of $22.2 million that expires in November 2020 and $100.0 million that expires in November 2021. Repurchases of common stock included in our condensed consolidated statement of cash flows for fiscal 2020 include $2.0 million related to repurchase transactions traded in the prior year but settled in 2020. Dividends — During 2020, the Board of Directors declared two cash dividends of $0.40 per common share which were paid on March 17, 2020 and December 20, 2019 to shareholders of record as of the close of business on March 3, 2020 and December 5, 2019, respectively, and totaled $18.5 million. Future dividends are subject to approval by our Board of Directors. |
Average Shares Outstanding
Average Shares Outstanding | 6 Months Ended |
Apr. 12, 2020 | |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |
Average Shares Outstanding | AVERAGE SHARES OUTSTANDING The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding ( in thousands ): Quarter Year-to-date April 12, April 14, April 12, April 14, Weighted-average shares outstanding – basic 22,803 25,943 23,339 25,922 Effect of potentially dilutive securities: Nonvested stock awards and units 85 190 144 203 Stock options — 10 — 10 Performance share awards 7 2 7 2 Weighted-average shares outstanding – diluted 22,895 26,145 23,490 26,137 Excluded from diluted weighted-average shares outstanding: Antidilutive 362 186 307 186 Performance conditions not satisfied at the end of the period 77 89 77 89 |
Contingencies and Legal Matters
Contingencies and Legal Matters | 3 Months Ended |
Apr. 12, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Legal Matters | CONTINGENCIES AND LEGAL MATTERS Legal matters — We assess 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 liability is adverse to the Company and the amount of the loss can be reasonably estimated. 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. We regularly review contingencies to determine the adequacy of the accruals and related disclosures. The ultimate amount of loss may differ from these estimates. As of April 12, 2020 and September 29, 2019, the Company had recorded aggregate liabilities of $14.2 million and $10.0 million, respectively, within “Accrued liabilities” on our condensed consolidated balance sheets, for all matters including those described below, that were probable and reasonably estimable. While we believe that additional losses beyond these accruals are reasonably possible, we cannot estimate a possible loss contingency or range of reasonably possible loss contingencies beyond these accruals. Gessele v. Jack in the Box Inc. — In August 2010, five former 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 the Company 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. In February 2019, plaintiff’s counsel reduced their earlier demand from $62.0 million to $42.0 million. In November 2019, the court issued a ruling on various dispositive motions, disallowing approximately $25.0 million in claimed damages. The parties participated in a voluntary mediation on March 16, 2020, but the matter did not settle. The plaintiff recently filed a motion for reconsideration of the court’s prior denial of class certification regarding meal and rest break claims. The Company has opposed the motion and will continue to vigorously defend against this lawsuit. Marquez v. Jack in the Box Inc. — In August 2017, a former employee filed a class action lawsuit in California state court and as a Private Attorney General Act (“PAGA”) representative suit alleging that the Company failed to provide all non-exempt California employees with compliant rest and meal breaks, overtime pay, accurate wage statements, and final pay upon termination of employment. On January 29, 2020, the parties participated in voluntary mediation and reached a tentative agreement to settle the case. The parties have executed a settlement agreement and submitted the settlement to the court for final approval. Ramirez v. Jack in the Box Inc. — On June 11, 2019, an unfavorable jury verdict was delivered in a wrongful termination lawsuit against the Company in Los Angeles Superior Court. Plaintiff in the case was a restaurant employee who was terminated in 2013. The jury’s verdict included $5.4 million in compensatory damages and $10.0 million in punitive damages. The Company filed post-trial motions with the trial judge for the purpose of setting aside or significantly reducing damages. These motions were granted, resulting in a reduction of damages from $15.4 million to $3.2 million. The plaintiff accepted the reduction. In October 2019, the plaintiff’s counsel filed a motion for attorney’s fees in the amount of $5.1 million. On January 9, 2020, the court issued its ruling awarding $3.9 million in attorney fees. As of April 12, 2020, we have recorded an accrual for legal settlement of $7.3 million within “Accrued liabilities” and a litigation insurance recovery receivable of $7.3 million, which represents the expected payment of the settlement by the Company’s insurance carriers, within “Accounts and other receivable, net” in our condensed consolidated balance sheet. Other legal matters — In addition to the matter 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 obligations. We record receivables from third party insurers when recovery has been determined to be probable. We believe that the ultimate determination of liability in connection with legal claims pending against us, if any, in excess of amounts already provided for such matters in the consolidated financial statements, will not have a material adverse effect on our business, our annual results of operations, liquidity or financial position; however, it is possible that our business, results of operations, liquidity, or financial condition could be materially affected in a particular future reporting period by the unfavorable resolution of one or more matters or contingencies during such period. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Apr. 12, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | DISCONTINUED OPERATIONS Qdoba — In December 2017, we entered into a stock purchase agreement (the “Qdoba Purchase Agreement”) with the Buyer to sell all issued and outstanding shares of Qdoba. The Buyer completed the acquisition of Qdoba on March 21, 2018 (the “Qdoba Sale”). We also entered into a Transition Services Agreement with the Buyer pursuant to which the Buyer received certain services (the “Services”) to enable it to operate the Qdoba business after the closing of the Qdoba Sale. The Services included information technology, finance and accounting, human resources, supply chain and other corporate support services. Under the Agreement, the Services were provided at cost for a period of up to 12 months, with two 3-month extensions available for certain services. As of September 21, 2019, we are no longer providing transition services to Qdoba. In 2019, we recorded $1.9 million in the quarter and $5.6 million year-to-date, in income related to the Services as a reduction of “Selling, general and administrative expenses” in the condensed consolidated statements of earnings. The following table presents Qdoba’s results of operations in periods which have been included in discontinued operations (in thousands, except per share data): Quarter Year-to-date April 14, April 14, Selling, general and administrative expenses $ 59 $ (243) Loss on Qdoba Sale — 85 (Losses) earnings from discontinued operations before income taxes (59) 158 Income tax benefit (1) 18 2,778 (Losses) earnings from discontinued operations, net of income taxes $ (41) $ 2,936 Basic and diluted earnings per share from discontinued operations: $ — $ 0.11 ____________________________ (1) In fiscal 2019, the Company entered into a bilateral California election with Quidditch Acquisition, Inc. to retroactively treat the divestment of Qdoba Restaurant Corporation on March 21, 2018 as a sale of assets instead of a stock sale for income tax purposes. This election reduced the Company’s fiscal year 2018 California tax liability on the divestment by $2.8 million. Lease guarantees — While all operating leases held in the name of Qdoba were part of the Qdoba Sale, some of the leases remain guaranteed by the Company pursuant to one or more written guarantees (the “Guarantees”). In the event Qdoba fails to meet its payment and performance obligations under such guaranteed leases, we may be required to make rent and other payments to the landlord under the requirements of the Guarantees. Should we, as guarantor of the lease obligations, be required to make any lease payments due for the remaining term of the subject leases, the maximum amount we may be required to pay is approximately $29.3 million as of April 12, 2020. The lease terms extend for a maximum of approximately 16 more years as of April 12, 2020, and we would remain a guarantor of the leases in the event the leases are extended for any established renewal periods. In the event that we are obligated to make payments under the Guarantees, 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. As of April 12, 2020, no amounts have been accrued relating to these guarantees as we do not believe any losses are probable. |
Supplemental Consolidated Cash
Supplemental Consolidated Cash Flow Information | 6 Months Ended |
Apr. 12, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Consolidated Cash Flow Information | SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION ( in thousands ) Year-to-date April 12, April 14, Non-cash investing and financing transactions: Decrease in obligations for treasury stock repurchases $ 2,025 $ 14,362 Decrease in obligations for purchases of property and equipment $ 1,247 $ 5,368 Increase in dividends accrued or converted to common stock equivalents $ 65 $ 121 Consideration for franchise acquisitions $ 859 $ — Decrease in finance lease obligations from the termination of equipment and building leases $ 24 $ 41 |
Basis Of Presentation (Policy)
Basis Of Presentation (Policy) | 6 Months Ended |
Apr. 12, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of operations | Nature of operations — Founded in 1951, Jack in the Box Inc. (the “Company”) operates and franchises Jack in the Box ® |
Basis of presentation | 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 our Annual Report on Form 10-K for the fiscal year ended September 29, 2019 (“2019 Form 10-K”). The accounting policies used in preparing these condensed consolidated financial statements are the same as those described in our 2019 Form 10-K with the exception of the new lease accounting standard adopted in fiscal 2020, which is described below. 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. |
Segment reporting | Segment reporting — The Company is comprised of one operating segment. |
Fiscal year | Fiscal year — Our fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. Fiscal years 2020 and 2019 include 52 weeks. Our first quarter includes 16-weeks and all other quarters include 12-weeks. All comparisons between 2020 and 2019 refer to the 12-weeks (“quarter”) and 28-weeks (“year-to-date”) ended April 12, 2020 and April 14, 2019, respectively, unless otherwise indicated. |
Use of estimates | 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. Risks and uncertainties — The Company is subject to risks and uncertainties as a result of the rapidly spreading outbreak of a novel strain of coronavirus (“COVID-19”). The extent of the impact of the COVID-19 pandemic on our business is highly uncertain and difficult to predict, as the response to the pandemic varies by state and municipalities within states. In the last five weeks of the quarter we experienced a significant reduction in guest traffic at our restaurants due to changes in consumer behavior as social distancing practices, dining room closures and other restrictions as have been mandated or encouraged by federal, state and local governments. During the COVID-19 impacted weeks, substantially all of our restaurants remained open, with dining rooms closed and all locations operating in an off-premise capacity, which represents close to 90% of the Company’s business historically, including drive-thru, third-party delivery, and carry-out. Our operating results substantially depend upon our franchisees’ sales volumes, restaurant profitability, and financial stability. The financial impact of COVID-19 has had, and is expected to continue to have, an adverse effect on our franchisees’ liquidity and we are working closely with our franchisees to monitor and assist them with access to appropriate sources of liquidity in order to sustain their businesses throughout this crisis. |
Advertising costs | Advertising costs — We administer a marketing fund which includes contractual contributions. In 2020 and 2019, marketing fund contributions from franchise and company-operated restaurants were approximately 5.0% of gross revenues with the exception of our March and April 2020 marketing fees. In response to the economic burden associated with the COVID-19 pandemic, the Company reduced March marketing fees to 4.0% and postponed the collection of these fees over the course of 24 months. April marketing fees will range from 2% to 4% based on annualized sales volumes, and these fees will be collected over three months beginning October 2020. In 2019, incremental contributions made by the Company were $2.0 million. There have been no incremental contributions made in 2020. Total contributions made by the Company, including incremental contributions, 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 $3.5 million and $8.9 million, respectively, in 2020 and $3.9 million and $11.1 million, respectively, in 2019. |
Effect of new accounting pronouncements adopted in fiscal 2020 | Effect of new accounting pronouncements adopted in fiscal 2020 — We adopted ASU 2016-02, Leases (Topic 842) (“ASC 842”) in the first quarter of 2020. The new guidance requires the recognition of lease liabilities, representing future minimum lease payments on a discounted basis, and corresponding right-of-use (“ROU”) assets on the balance sheet for most leases. The Company adopted the new guidance in the first quarter of 2020 using the alternative transition method; therefore, the comparative period has not been restated and continues to reported under the previous lease guidance. We elected the transition package of three practical expedients, which, among other items, permitted us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We also elected the short-term lease recognition exemption for all leases that qualify, permitting us to not apply the recognition requirements of this standard to leases with a term of 12 months or less, and an accounting policy to not separate lease and non-lease components for underlying assets subject to real estate leases. As lessor, we elected for all classes of underlying leased assets to account for lease and non-lease components, primarily property taxes and maintenance, as a single lease component. We did not elect the use-of-hindsight practical expedient, and therefore continued to utilize lease terms determined under the existing lease guidance. The adoption had a material impact on our consolidated balance sheet. As a result of the adoption, we recognized operating lease assets and liabilities of $880.6 million and $931.0 million, respectively, at the date of adoption. The ROU assets were adjusted for certain lease-related assets and liabilities at adoption, primarily comprised of straight-line rent accruals of $29.0 million, incentives and unfavorable lease liabilities of $2.1 million, sublease loss and exit-related lease liabilities of $19.4 million, which were previously reported in “Accrued liabilities” and “Other long-term liabilities”, as well as favorable lease assets of $0.4 million, which were previously reported in “Intangible assets, net” in our condensed consolidated balance sheet. We also recorded a cumulative adjustment to opening retained earnings of $2.9 million, net of tax, as a result of the impairment of certain newly recognized ROU assets and derecognition of deferred gains and losses on sale-leaseback transactions upon transition to the new guidance. The effects of the changes made to the Company's condensed consolidated balance sheet as of September 29, 2019 for the adoption of the new lease guidance were as follows (in thousands) : Balance at September 29, 2019 Adjustments due to ASC 842 adoption Balance at September 30, 2019 Assets Other assets: Operating lease ROU assets $ — $ 880,564 $ 880,564 Intangible assets, net $ 425 $ (386) $ 39 Deferred income taxes $ 85,564 $ 1,006 $ 86,570 Liabilities and Stockholders’ Deficit Current liabilities: Current operating lease liabilities $ — $ 159,821 $ 159,821 Accrued liabilities $ 120,083 $ (4,702) $ 115,381 Long-term liabilities: Long-term operating lease liabilities, net of current portion $ — $ 770,818 $ 770,818 Other long-term liabilities $ 263,770 $ (41,883) $ 221,887 Stockholders’ deficit: Retained earnings $ 1,577,034 $ (2,870) $ 1,574,164 The accounting guidance for lessors remains largely unchanged from previous guidance, except for the presentation of certain lease costs that the Company passes through to lessees, including but not limited to, property taxes and maintenance. These costs are generally paid by the Company and reimbursed by the lessee. Historically, these costs have been recorded on a net basis in our condensed consolidated statements of earnings but are now presented gross upon adoption of the new guidance. As a result, we expect annual revenues and expenses reported in “Franchise rental revenues” and “Franchise occupancy expenses” to increase by approximately $37 million in fiscal 2020. Refer to Note 4, Leases , for further information on our leases and the impact on the Company’s accounting policies. Effect of new accounting pronouncements to be adopted in future periods — In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which will replace the incurred loss methodology of recognizing credit losses on financial instruments that is currently required with a methodology that estimates the expected credit loss on financial instruments and reflects the net amount expected to be collected on the financial instrument. Application of the new guidance may result in the earlier recognition of credit losses as the new methodology will require entities to consider forward-looking information in addition to historical and current information used in assessing incurred losses. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, with early adoption permitted. The Company will be required to adopt the new guidance on a modified retrospective basis. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements and do not expect there to be a material impact upon adoption. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs in cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. Companies can choose to adopt the new guidance prospectively or retrospectively. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements and do not expect there to be a material impact upon adoption. |
Basis Of Presentation (Tables)
Basis Of Presentation (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Number of Restaurants | The following table summarizes the number of restaurants as of the end of each period: April 12, April 14, Company-operated 144 137 Franchise 2,102 2,103 Total system 2,246 2,240 |
Balance sheet Impact for the Adoption of New Lease Guidance | The effects of the changes made to the Company's condensed consolidated balance sheet as of September 29, 2019 for the adoption of the new lease guidance were as follows (in thousands) : Balance at September 29, 2019 Adjustments due to ASC 842 adoption Balance at September 30, 2019 Assets Other assets: Operating lease ROU assets $ — $ 880,564 $ 880,564 Intangible assets, net $ 425 $ (386) $ 39 Deferred income taxes $ 85,564 $ 1,006 $ 86,570 Liabilities and Stockholders’ Deficit Current liabilities: Current operating lease liabilities $ — $ 159,821 $ 159,821 Accrued liabilities $ 120,083 $ (4,702) $ 115,381 Long-term liabilities: Long-term operating lease liabilities, net of current portion $ — $ 770,818 $ 770,818 Other long-term liabilities $ 263,770 $ (41,883) $ 221,887 Stockholders’ deficit: Retained earnings $ 1,577,034 $ (2,870) $ 1,574,164 The accounting guidance for lessors remains largely unchanged from previous guidance, except for the presentation of certain lease costs that the Company passes through to lessees, including but not limited to, property taxes and maintenance. These costs are generally paid by the Company and reimbursed by the lessee. Historically, these costs have been recorded on a net basis in our condensed consolidated statements of earnings but are now presented gross upon adoption of the new guidance. As a result, we expect annual revenues and expenses reported in “Franchise rental revenues” and “Franchise occupancy expenses” to increase by approximately $37 million in fiscal 2020. Refer to Note 4, Leases , for further information on our leases and the impact on the Company’s accounting policies. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregation of revenue — The following table disaggregates revenue by primary source (in thousands) : Quarter Year-to-date April 12, April 14, April 12, April 14, Sources of revenue: Company restaurant sales $ 74,380 $ 76,682 $ 179,744 $ 179,514 Franchise rental revenues 69,885 61,646 165,969 145,536 Franchise royalties 36,049 37,148 86,292 86,655 Marketing fees 30,550 35,947 79,385 83,810 Technology and sourcing fees 3,578 3,042 8,502 6,993 Franchise fees and other services 1,715 1,262 3,938 4,005 Total revenue $ 216,157 $ 215,727 $ 523,830 $ 506,513 |
Changes in Contract Liabilities | A summary of significant changes in our contract liabilities is presented below (in thousands) : Year-to-date April 12, April 14, Deferred franchise fees at beginning of period $ 46,272 $ 50,018 Revenue recognized (3,061) (2,745) Additions 1,488 680 Deferred franchise fees at end of period $ 44,699 $ 47,953 |
Remaining Performance Obligation, Expected Timing of Satisfaction | The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied as of April 12, 2020 (in thousands) : Remainder of 2020 $ 2,267 2021 4,926 2022 4,724 2023 4,572 2024 4,379 Thereafter 23,831 $ 44,699 |
Summary of Refranchisings and_2
Summary of Refranchisings and Franchise Development (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Summary Of Refranchisings, Franchisee Development And Acquisitions [Abstract] | |
Schedule of Restaurants Developed and Closed | The following table summarizes the number of restaurants developed and closed by franchisees. Quarter Year-to-date April 12, April 14, April 12, April 14, New restaurants opened by franchisees 5 2 16 11 Franchisee restaurants closed (2) (3) (12) (8) |
Schedule of Franchise Acquisitions | The table below presents the allocation of the total purchase price to the fair value of assets acquired and liabilities assumed for the restaurants acquired ( in thousand s): Inventory $ 73 Property and equipment 903 Intangible assets 263 Other assets 6 Goodwill 414 Liabilities assumed (800) Total consideration $ 859 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Leases [Abstract] | |
Lessee, Supplemental Balance Sheet Information | Company as Lessee Leased assets and liabilities consisted of the following as of April 12, 2020 ( in thousands ): April 12, Assets: Operating lease ROU assets $ 903,010 Finance lease ROU assets (1) 2,689 Total ROU assets $ 905,699 Liabilities: Current operating lease liabilities $ 163,077 Current finance lease liabilities (2) 819 Long term operating lease liabilities 781,653 Long-term finance lease liabilities (2) 2,511 Total lease liabilities $ 948,060 ____________________________ (1) Included in “Property and equipment, net” on our condensed consolidated balance sheet. (2) Included in “Current maturities of long-term debt” and “Long-term debt, net of current maturities” on our condensed consolidated balance sheet. |
Lease Costs, Lessee | The following table presents the components of our lease costs ( in thousands ): Quarter Year-to-date April 12, April 12, Lease costs: Finance lease cost: Amortization of ROU assets (1) $ 179 $ 413 Interest on lease liabilities (2) 28 61 Operating lease cost (3) 43,891 102,403 Short-term lease cost (3) 102 103 Variable lease cost (3)(4) 9,316 21,823 $ 53,516 $ 124,803 ____________________________ (1) Included in “Depreciation and amortization” in our condensed consolidated statement of earnings. (2) Included in “Interest expense, net” in our condensed consolidated statement of earnings. (3) Operating lease, short-term and variable lease costs associated with franchisees and company-operated restaurants are included in “Franchise occupancy expenses” and “Occupancy and other”, respectively, in our condensed consolidated statement of earnings. For our closed restaurants, these costs are included in “Impairment and other, net” and all other costs are included in “Selling, general and administrative expenses”. (4) Includes $8.6 million in the quarter and $20.2 million year-to-date of property taxes and common area maintenance costs which are reimbursed by sub-lessees. The following table presents supplemental information related to leases: April 12, Weighted-average remaining lease term (in years): Finance leases 3.6 Operating leases 8.2 Weighted-average discount rate: Finance leases 3.5 % Operating leases 4.0 % The following table includes supplemental cash flow and non-cash information related to our lessee leases ( in thousands ): Year-to-date April 12, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 115,376 Operating cash flows from financing leases $ 61 Financing cash flows from financing leases $ 390 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 105,748 Financing leases $ 132 |
Operating Lease, Future Minimum Lease Payments | The following table presents as of April 12, 2020, the annual maturities of our lease liabilities ( in thousands ): Finance Leases Operating Leases Fiscal year: Remainder of 2020 (1) $ 443 $ 80,592 2021 (1) 906 205,534 2022 906 158,823 2023 901 131,362 2024 408 100,021 Thereafter 54 449,077 Total future lease payments (2) $ 3,618 $ 1,125,409 Less: imputed interest (288) (180,679) Present value of lease liabilities $ 3,330 $ 944,730 |
Finance Lease, Future Minimum Lease Payments | The following table presents as of April 12, 2020, the annual maturities of our lease liabilities ( in thousands ): Finance Leases Operating Leases Fiscal year: Remainder of 2020 (1) $ 443 $ 80,592 2021 (1) 906 205,534 2022 906 158,823 2023 901 131,362 2024 408 100,021 Thereafter 54 449,077 Total future lease payments (2) $ 3,618 $ 1,125,409 Less: imputed interest (288) (180,679) Present value of lease liabilities $ 3,330 $ 944,730 |
Future Minimum Rental Payments for Operating Leases under Topic 840 | The following table presents as of September 29, 2019, future minimum lease payments for non-cancellable leases ( in thousands ): Capital Leases Operating Leases Fiscal year: 2020 $ 879 $ 193,313 2021 879 186,226 2022 879 145,794 2023 864 117,753 2024 396 87,420 Thereafter 40 363,505 Total minimum lease payments $ 3,937 $ 1,094,011 Less: imputed interest (343) Present value of lease liability $ 3,594 |
Future Minimum Lease Payments for Capital Leases under Topic 840 | Capital Leases Operating Leases Fiscal year: 2020 $ 879 $ 193,313 2021 879 186,226 2022 879 145,794 2023 864 117,753 2024 396 87,420 Thereafter 40 363,505 Total minimum lease payments $ 3,937 $ 1,094,011 Less: imputed interest (343) Present value of lease liability $ 3,594 |
Lease Income | Company as Lessor The following table presents rental income ( in thousands ): Quarter Year-to-date April 12, 2020 April 12, 2020 Owned Properties Leased Properties Total Owned Properties Leased Properties Total Operating lease income - franchise $ 4,572 $ 50,123 $ 54,695 $ 10,667 $ 116,692 $ 127,359 Variable lease income - franchise 1,810 13,380 15,190 4,526 34,084 38,610 Franchise rental revenues $ 6,382 $ 63,503 $ 69,885 $ 15,193 $ 150,776 $ 165,969 Operating lease income - closed restaurants and other (1) $ — $ 1,470 $ 1,470 $ — $ 3,527 $ 3,527 ____________________________ |
Future Minimum Rental Receipts | The following table presents as of April 12, 2020, future minimum rental receipts for non-cancellable leases and subleases ( in thousands ): April 12, Fiscal year: Remainder of 2020 (1)(2) $ 106,892 2021 (2) 261,492 2022 232,748 2023 226,178 2024 201,003 Thereafter 1,250,834 Total minimum rental receipts $ 2,279,147 ____________________________ (1) Includes $9.1 million of postponed April rents to be repaid over three months beginning July 2020. (2) The impact of rent concessions passed on to franchisees reduced 2020 by $1.7 million and increased 2021 by $4.7 million. |
Future Minimum Rental Receipts for Noncancelable Leases under Topic 840 | The following table presents as of September 29, 2019, future minimum rental receipts for non-cancellable leases and subleases ( in thousands ): September 29, Fiscal year: 2020 $ 239,219 2021 255,315 2022 231,394 2023 224,605 2024 199,442 Thereafter 1,215,811 Total minimum rental receipts $ 2,365,786 |
Indebtedness (Tables)
Indebtedness (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt as of April 12, 2020 and September 29, 2019 consisted of the following ( in thousands ): April 12, September 29, Class A-2-I Notes $ 573,563 $ 575,000 Class A-2-II Notes 274,313 275,000 Class A-2-III Notes 448,875 450,000 Class A-1 Variable Funding Notes 107,876 — Finance lease obligations 3,330 3,594 Total debt 1,407,957 1,303,594 Less current maturities of long-term debt (13,819) (774) Less unamortized debt issuance costs (25,692) (28,446) Long-term debt $ 1,368,446 $ 1,274,374 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents our financial assets and liabilities measured at fair value on a recurring basis ( in thousands ): Total Quoted Prices Significant Significant Fair value measurements as of April 12, 2020: Non-qualified deferred compensation plan (1) $ 25,261 $ 25,261 $ — $ — Total liabilities at fair value $ 25,261 $ 25,261 $ — $ — Fair value measurements as of September 29, 2019: Non-qualified deferred compensation plan (1) $ 30,104 $ 30,104 $ — $ — Total liabilities at fair value $ 30,104 $ 30,104 $ — $ — ____________________________ (1) We maintain 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. (2) We did not have any transfers in or out of Level 1, 2 or 3. |
Carrying Value and Estimated Fair Value of Notes | The following table presents the carrying value and estimated fair value of our Class A-2 Notes as of April 12, 2020 and September 29, 2019 ( in thousands ): April 12, September 29, Carrying Amount Fair Value Carrying Amount Fair Value Class A-2 Notes $ 1,296,751 $ 1,170,896 $ 1,300,000 $ 1,344,300 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Derivative Instruments and Hedges, Assets [Abstract] | |
Gains or Losses Recognized on Interest Rate Swap Derivative Instruments | The following table summarizes the OCI activity related to our interest rate swap derivative instruments and the amounts reclassified from accumulated OCI ( in thousands ): Location in Income Quarter Year-to-date April 14, April 14, Loss recognized in OCI N/A $ (4,959) $ (12,126) Loss reclassified from accumulated OCI into net earnings Interest expense, net $ 134 $ 613 |
Impairment and Other Charges,_2
Impairment and Other Charges, Net (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Restructuring and Related Activities [Abstract] | |
Impairment, Disposition of Property and Equipment, Restaurant Closing Costs and Restructuring | Impairment and other charges, net in the accompanying condensed consolidated statements of earnings is comprised of the following ( in thousands ): Quarter Year-to-date April 12, April 14, April 12, April 14, Restructuring costs $ 118 $ 946 $ 1,163 $ 6,786 Costs of closed restaurants and other 331 383 432 1,249 Losses (gains) on disposition of property and equipment, net (1) 267 (714) (10,170) (138) Accelerated depreciation — 510 — 926 $ 716 $ 1,125 $ (8,575) $ 8,823 ____________________________ (1) In 2020, includes a $10.8 million gain related to the sale of one of our corporate office buildings. Refer to Note 4, Leases , for further information. |
Summary of Restructuring Costs | The following is a summary of our restructuring costs (in thousands) : Quarter Year-to-date April 12, April 14, April 12, April 14, Employee severance and related costs $ 118 $ 642 $ 1,163 $ 5,148 Strategic Alternatives Evaluation (1) — 304 — 1,638 $ 118 $ 946 $ 1,163 $ 6,786 ____________________________ (1) Strategic Alternative Evaluation costs primarily relate to third party advisory services. |
Schedule of Restructuring Reserve by Type of Cost | Total accrued severance costs related to our restructuring activities are included in “Accrued liabilities” on our condensed consolidated balance sheets, and changed as follows during 2020 (in thousands) : Balance as of September 29, 2019 $ 2,100 Costs incurred 1,163 Cash payments (3,010) Balance as of April 12, 2020 $ 253 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost in each period were as follows ( in thousands ): Quarter Year-to-date April 12, April 14, April 12, April 14, Defined benefit pension plans: Interest cost $ 3,669 $ 5,286 $ 8,745 $ 12,334 Expected return on plan assets (1) (4,706) (6,077) (11,362) (14,181) Pension settlements (2) 321 — 38,927 — Actuarial losses (2) 1,019 913 2,691 2,132 Amortization of unrecognized prior service costs (2) 19 27 45 62 Net periodic benefit cost $ 322 $ 149 $ 39,046 $ 347 Postretirement healthcare plans: Interest cost $ 187 $ 230 $ 435 $ 537 Actuarial losses (gains) (2) 3 (36) 9 (85) Net periodic benefit cost $ 190 $ 194 $ 444 $ 452 ___________________________ (1) Based on a return on asset, net of administrative expenses, assumption of 5.8% determined at the end of fiscal 2019, subsequently updated to 5.9% as of December 31, 2019 and 5.2% as of March 31, 2020, upon remeasurement of the Qualified Plan’s assets and PBO as required by settlement accounting. |
Schedule of Defined Benefit Plan Contribution | Details regarding 2020 contributions are as follows ( in thousands ): SERP Postretirement Net year-to-date contributions $ 2,857 $ 725 Remaining estimated net contributions during fiscal 2020 $ 2,514 $ 676 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders' Deficit | Summary of changes in stockholders’ deficit — A reconciliation of the beginning and ending amounts of stockholders’ deficit is presented below ( in thousands ): Quarter Year-to-date April 12, April 14, April 12, April 14, Balance at beginning of period $ (841,153) $ (607,296) $ (737,584) $ (591,699) Shares issued under stock plans, including tax benefit 3,375 128 3,559 243 Share-based compensation expense 2,681 2,799 5,865 4,708 Dividends declared (9,067) (10,323) (18,492) (20,641) Purchases of treasury stock — — (153,550) — Net earnings 11,463 25,089 19,360 59,187 Other comprehensive income (loss), net of taxes (44,225) (2,911) 6,786 (6,982) Cumulative-effect from a change in accounting principle — — (2,870) (37,330) Balance at end of period $ (876,926) $ (592,514) $ (876,926) $ (592,514) |
Average Shares Outstanding (Tab
Average Shares Outstanding (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |
Reconciliation Of Basic Weighted-Average Shares Outstanding To Diluted Weighted-Average Shares Outstanding | The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding ( in thousands ): Quarter Year-to-date April 12, April 14, April 12, April 14, Weighted-average shares outstanding – basic 22,803 25,943 23,339 25,922 Effect of potentially dilutive securities: Nonvested stock awards and units 85 190 144 203 Stock options — 10 — 10 Performance share awards 7 2 7 2 Weighted-average shares outstanding – diluted 22,895 26,145 23,490 26,137 Excluded from diluted weighted-average shares outstanding: Antidilutive 362 186 307 186 Performance conditions not satisfied at the end of the period 77 89 77 89 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following table presents Qdoba’s results of operations in periods which have been included in discontinued operations (in thousands, except per share data): Quarter Year-to-date April 14, April 14, Selling, general and administrative expenses $ 59 $ (243) Loss on Qdoba Sale — 85 (Losses) earnings from discontinued operations before income taxes (59) 158 Income tax benefit (1) 18 2,778 (Losses) earnings from discontinued operations, net of income taxes $ (41) $ 2,936 Basic and diluted earnings per share from discontinued operations: $ — $ 0.11 ____________________________ (1) In fiscal 2019, the Company entered into a bilateral California election with Quidditch Acquisition, Inc. to retroactively treat the divestment of Qdoba Restaurant Corporation on March 21, 2018 as a sale of assets instead of a stock sale for income tax purposes. This election reduced the Company’s fiscal year 2018 California tax liability on the divestment by $2.8 million. |
Supplemental Consolidated Cas_2
Supplemental Consolidated Cash Flow Information (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Additional Information Related To Cash Flows | Year-to-date April 12, April 14, Non-cash investing and financing transactions: Decrease in obligations for treasury stock repurchases $ 2,025 $ 14,362 Decrease in obligations for purchases of property and equipment $ 1,247 $ 5,368 Increase in dividends accrued or converted to common stock equivalents $ 65 $ 121 Consideration for franchise acquisitions $ 859 $ — Decrease in finance lease obligations from the termination of equipment and building leases $ 24 $ 41 |
Supplemental Consolidated Bal_2
Supplemental Consolidated Balance Sheet Information (Tables) | 6 Months Ended |
Apr. 12, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Supplemental Balance Sheet Disclosures | April 12, September 29, Accounts and other receivables, net: Trade $ 46,339 $ 36,907 Notes receivable 9,589 278 Income tax receivable 1,279 160 Other 14,410 10,855 Allowance for doubtful accounts (5,286) (2,965) $ 66,331 $ 45,235 Prepaid expenses: Prepaid income taxes $ 12,965 $ 579 Prepaid advertising 32 1,838 Other 5,463 6,598 $ 18,460 $ 9,015 Other assets, net: Company-owned life insurance policies $ 107,973 $ 112,753 Deferred rent receivable 49,152 49,333 Franchise tenant improvement allowance 29,536 26,925 Other 24,544 17,674 $ 211,205 $ 206,685 Accrued liabilities: Insurance $ 27,972 $ 27,888 Payroll and related taxes 20,808 31,095 Deferred franchise fees 4,951 4,978 Sales and property taxes 10,251 4,268 Gift card liability 2,196 2,036 Other 54,771 49,818 $ 120,949 $ 120,083 Other long-term liabilities: Defined benefit pension plans $ 147,295 $ 120,260 Deferred franchise fees 39,748 41,295 Straight-line rent accrual — 29,537 Other 55,325 72,678 $ 242,368 $ 263,770 |
Basis Of Presentation (Details)
Basis Of Presentation (Details) $ in Thousands | Sep. 30, 2019USD ($) | Apr. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Apr. 12, 2020USD ($)restaurant | Apr. 14, 2019USD ($)restaurant | Feb. 29, 2020 | Apr. 12, 2020USD ($)restaurantsegment | Apr. 14, 2019USD ($)restaurant | Sep. 29, 2019USD ($) |
Segment Reporting Information [Line Items] | ||||||||||
Number of restaurants | restaurant | 2,246 | 2,240 | 2,246 | 2,240 | ||||||
Number of operating segments | segment | 1 | |||||||||
Contractual obligation (percent) | 4.00% | 5.00% | ||||||||
Collection period for marketing fees | 24 months | |||||||||
Incremental Corporate Advertising Contributions | $ 0 | $ 2,000 | ||||||||
Marketing and advertising expense | $ 3,500 | $ 3,900 | 8,900 | 11,100 | ||||||
Restricted cash | 37,000 | 37,000 | $ 26,000 | |||||||
Straight-line rent accrual | $ 29,000 | |||||||||
Unfavorable lease liabilities | 2,100 | |||||||||
Exit-related lease liabilities | 19,400 | |||||||||
Favorable lease assets | 400 | |||||||||
Cumulative-effect from a change in accounting principle | $ (2,900) | $ 0 | $ 0 | $ (2,870) | $ (37,330) | |||||
Forecast | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Collection period for marketing fees | 3 months | |||||||||
Minimum | Subsequent Event | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Contractual obligation (percent) | 2.00% | |||||||||
Maximum | Subsequent Event | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Contractual obligation (percent) | 4.00% | |||||||||
Entity Operated Units | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Number of restaurants | restaurant | 144 | 137 | 144 | 137 | ||||||
Franchised Units | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Number of restaurants | restaurant | 2,102 | 2,103 | 2,102 | 2,103 |
Basis of Presentation - Leases
Basis of Presentation - Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Apr. 12, 2020 | Apr. 14, 2019 | Apr. 12, 2020 | Apr. 14, 2019 | Sep. 27, 2020 | Sep. 30, 2019 | Sep. 29, 2019 | |
Lessee, Lease, Description [Line Items] | |||||||
Operating lease liabilities | $ 944,730 | $ 944,730 | |||||
Right-of-use assets | 903,010 | 903,010 | $ 880,564 | ||||
Revenues | 216,157 | $ 215,727 | 523,830 | $ 506,513 | |||
Expenses | 183,315 | $ 168,604 | 421,038 | $ 401,066 | |||
Assets | |||||||
Intangible assets, net | 294 | 294 | 39 | $ 425 | |||
Deferred tax assets | 77,410 | 77,410 | 86,570 | 85,564 | |||
Liabilities and Stockholders’ Deficit | |||||||
Current operating lease liabilities | 163,077 | 163,077 | 159,821 | ||||
Accrued liabilities | 120,949 | 120,949 | 115,381 | 120,083 | |||
Long-term operating lease liabilities, net of current portion | 781,653 | 781,653 | 770,818 | ||||
Other long-term liabilities | 242,368 | 242,368 | 221,887 | 263,770 | |||
Retained earnings | $ 1,574,930 | $ 1,574,930 | 1,574,164 | $ 1,577,034 | |||
Accounting Standards Update 2016-02 | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Operating lease liabilities | 931,000 | ||||||
Right-of-use assets | 880,564 | ||||||
Assets | |||||||
Intangible assets, net | (386) | ||||||
Deferred tax assets | 1,006 | ||||||
Liabilities and Stockholders’ Deficit | |||||||
Current operating lease liabilities | 159,821 | ||||||
Accrued liabilities | (4,702) | ||||||
Long-term operating lease liabilities, net of current portion | 770,818 | ||||||
Other long-term liabilities | (41,883) | ||||||
Retained earnings | $ (2,870) | ||||||
Accounting Standards Update 2016-02 | Forecast | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Revenues | $ 37,000 | ||||||
Expenses | $ 37,000 |
Revenue Disaggregation of Reven
Revenue Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Apr. 12, 2020 | Apr. 14, 2019 | Apr. 12, 2020 | Apr. 14, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Initial franchise fee | $ 50,000 | |||
Royalty and marketing fee, percent of gross sales | 5.00% | |||
Revenues | $ 216,157,000 | $ 215,727,000 | $ 523,830,000 | $ 506,513,000 |
Company Restaurant Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 74,380,000 | 76,682,000 | 179,744,000 | 179,514,000 |
Franchise Rental Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 69,885,000 | 61,646,000 | 165,969,000 | 145,536,000 |
Franchise rental revenues | 69,885,000 | 61,646,000 | 165,969,000 | 145,536,000 |
Franchise Royalties | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 36,049,000 | 37,148,000 | 86,292,000 | 86,655,000 |
Marketing Fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 30,550,000 | 35,947,000 | 79,385,000 | 83,810,000 |
Technology and Sourcing Fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,578,000 | 3,042,000 | 8,502,000 | 6,993,000 |
Franchise Fees and Other Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,715,000 | $ 1,262,000 | $ 3,938,000 | $ 4,005,000 |
Revenue Changes in Contract Lia
Revenue Changes in Contract Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 12, 2020 | Apr. 14, 2019 | |
Movement in Deferred Revenue [Roll Forward] | ||
Deferred franchise fees at beginning of period | $ 46,272 | $ 50,018 |
Revenue recognized | (3,061) | (2,745) |
Additions | 1,488 | 680 |
Deferred franchise fees at end of period | $ 44,699 | $ 47,953 |
Revenue Estimated Future Franch
Revenue Estimated Future Franchise Fees (Details) $ in Thousands | Apr. 12, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 44,699 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-13 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | 2,267 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | 4,926 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | 4,724 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | 4,572 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | 4,379 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-09-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 23,831 |
Revenue Estimated Future Fran_2
Revenue Estimated Future Franchise Fees, Period (Details) | Apr. 12, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-13 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-09-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period |
Summary Of Refranchisings and_3
Summary Of Refranchisings and Franchisee Development (Number Of Restaurants Sold And Developed By Franchisees And Related Gains And Fees Recognized) (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2020USD ($) | Apr. 12, 2020USD ($)restaurant | Apr. 14, 2019USD ($)restaurant | Apr. 12, 2020USD ($)restaurant | Apr. 14, 2019USD ($)restaurant | |
Summary of Refranchisings, Franchise Development and Acquisitions [Line Items] | |||||
Number of Company-operated restaurants sold to franchisees | 0 | 0 | |||
Gains on the sale of company-operated restaurants | $ | $ 0 | $ 0 | $ (1,575) | $ (219) | |
Number of new restaurants opened by franchisees | 5 | 2 | 16 | 11 | |
Number of franchised restaurants closed | (2) | (3) | (12) | (8) | |
Franchise Acquisitions | |||||
Summary of Refranchisings, Franchise Development and Acquisitions [Line Items] | |||||
Consideration transferred | $ | $ 900 | ||||
Obtained Judgment | |||||
Summary of Refranchisings, Franchise Development and Acquisitions [Line Items] | |||||
Number of restaurants acquired from franchisees | 8 |
Summary of Refranchisings and_4
Summary of Refranchisings and Franchise Development (Franchises Acquired) (Details) - USD ($) $ in Thousands | Apr. 12, 2020 | Jan. 31, 2020 | Sep. 29, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 47,161 | $ 46,747 | |
Franchise Acquisitions | |||
Business Acquisition [Line Items] | |||
Inventory | $ 73 | ||
Property and equipment | 903 | ||
Intangible assets | 263 | ||
Other assets | 6 | ||
Goodwill | 414 | ||
Liabilities assumed | (800) | ||
Total consideration | $ 859 |
Leases (Details)
Leases (Details) $ in Thousands | Apr. 12, 2020USD ($) |
Lessee, Lease, Description [Line Items] | |
Initial term of operating lease | 20 years |
Amount of rent deferred under temporary rent concessions | $ 13,400 |
Lease liabilities subject to accretion | 940,000 |
Lease liabilities related to April rent deferrals | $ 4,800 |
Portion of April rents due from franchisees that has been postponed (percent) | 40.00% |
Portion of April rents due from franchisees that has been postponed | $ 9,100 |
Rent concessions secured from landlords passed on to franchisees | $ 10,400 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Renewal term of operating lease | 1 year |
Minimum | Restaurant and Office Equipment | |
Lessee, Lease, Description [Line Items] | |
Initial term of operating lease | 3 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Renewal term of operating lease | 20 years |
Maximum | Restaurant and Office Equipment | |
Lessee, Lease, Description [Line Items] | |
Initial term of operating lease | 8 years |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Apr. 12, 2020 | Sep. 30, 2019 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 903,010 | $ 880,564 |
Finance lease right-of-use asset | 2,689 | |
Total ROU assets | 905,699 | |
Current operating lease liabilities | 163,077 | 159,821 |
Current finance lease liabilities | 819 | |
Long-term operating lease liabilities, net of current portion | 781,653 | $ 770,818 |
Long-term finance lease liabilities | 2,511 | |
Total lease liabilities | $ 948,060 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Apr. 12, 2020USD ($) | Apr. 12, 2020USD ($) | |
Finance Lease Costs [Abstract] | ||
Amortization of ROU assets | $ 179 | $ 413 |
Interest on lease liabilities | 28 | 61 |
Operating lease cost | 43,891 | 102,403 |
Short-term lease cost | 102 | 103 |
Variable lease cost | 9,316 | 21,823 |
Lease cost, total | $ 53,516 | $ 124,803 |
Weighted-average remaining lease term (in years): | ||
Finance leases | 3 years 7 months 6 days | 3 years 7 months 6 days |
Operating leases | 8 years 2 months 12 days | 8 years 2 months 12 days |
Weighted-average discount rate: | ||
Finance leases | 3.50% | 3.50% |
Operating leases | 4.00% | 4.00% |
Variable lease cost, executory costs reimbursed by sub-lessees | $ 8,600 | $ 20,200 |
Leases Finance and Operating Le
Leases Finance and Operating Lease Payments (Details) - USD ($) $ in Thousands | Apr. 12, 2020 | Sep. 29, 2019 |
Finance Lease, Liability, Payment, Due [Abstract] | ||
Remainder of 2020 (1) | $ 443 | |
2021 (1) | 906 | |
2022 | 906 | |
2023 | 901 | |
2024 | 408 | |
Thereafter | 54 | |
Total minimum lease payments | 3,618 | |
Less: imputed interest | (288) | |
Present value of lease liabilities | 3,330 | $ 3,594 |
Decrease in operating lease maturities for remainder of year due to rent concessions | 1,300 | |
Increase in operating lease maturities in 2021 due to rent concessions in prior year | 6,000 | |
Noncancellable commitments for finance leases | 3,600 | |
Noncancellable commitments for operating leases | 1,090,000 | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
Remainder of 2020 (1) | 80,592 | |
2021 (1) | 205,534 | |
2022 | 158,823 | |
2023 | 131,362 | |
2024 | 100,021 | |
Thereafter | 449,077 | |
Total future lease payments (2) | 1,125,409 | |
Less: imputed interest | (180,679) | |
Present value of lease liabilities | $ 944,730 |
Leases Capital and Operating Le
Leases Capital and Operating Lease Payments under ASC 840 (Details) $ in Thousands | Sep. 29, 2019USD ($) |
Capital Lease Obligations [Abstract] | |
2020 | $ 879 |
2021 | 879 |
2022 | 879 |
2023 | 864 |
2024 | 396 |
Thereafter | 40 |
Total minimum lease payments | 3,937 |
Less: imputed interest | (343) |
Present value of lease liability | 3,594 |
Operating Leases [Abstract] | |
2020 | 193,313 |
2021 | 186,226 |
2022 | 145,794 |
2023 | 117,753 |
2024 | 87,420 |
Thereafter | 363,505 |
Total minimum lease payments | $ 1,094,011 |
Leases, Suplemental Cash Flow a
Leases, Suplemental Cash Flow and Non-cash Information (Details) - USD ($) $ in Thousands | 4 Months Ended | 6 Months Ended | |
Jan. 19, 2020 | Apr. 12, 2020 | Apr. 14, 2019 | |
Cash Paid for Amounts Included in the Measurement of Lease Liabilities [Abstract] | |||
Operating cash flows from operating leases | $ 115,376 | ||
Operating cash flows from financing leases | 61 | ||
Financing cash flows from financing leases | 390 | ||
Right-of-use Assets Obtained in Exchange for Lease Obligations [Abstract] | |||
Operating leases | 105,748 | ||
Financing leases | 132 | ||
Proceeds from the sale and leaseback of assets | $ 17,373 | $ 1,944 | |
Initial term of operating lease | 20 years | ||
Notice period for termination of lease without penalty | 90 days | ||
Multi-tenant Commercial Property | |||
Right-of-use Assets Obtained in Exchange for Lease Obligations [Abstract] | |||
Proceeds from the sale and leaseback of assets | $ 17,400 | ||
Gain (loss) on sale and leaseback transaction | $ (200) | ||
Initial term of operating lease | 20 years | ||
Principal Executive Offices | |||
Right-of-use Assets Obtained in Exchange for Lease Obligations [Abstract] | |||
Proceeds from the sale and leaseback of assets | $ 20,600 | ||
Gain (loss) on sale and leaseback transaction | $ 10,800 | ||
Initial term of operating lease | 18 months |
Leases, Operating Lease Income
Leases, Operating Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Apr. 12, 2020 | Apr. 12, 2020 | |
Lessor, Lease, Description [Line Items] | ||
Operating lease income - closed restaurants and other | $ 1,470 | $ 3,527 |
Owned Properties | ||
Lessor, Lease, Description [Line Items] | ||
Operating lease income - closed restaurants and other | 0 | 0 |
Leased Properties | ||
Lessor, Lease, Description [Line Items] | ||
Operating lease income - closed restaurants and other | 1,470 | 3,527 |
Franchise | ||
Lessor, Lease, Description [Line Items] | ||
Operating lease income - franchise | 54,695 | 127,359 |
Variable lease income - franchise | 15,190 | 38,610 |
Franchise rental revenues | 69,885 | 165,969 |
Franchise | Owned Properties | ||
Lessor, Lease, Description [Line Items] | ||
Operating lease income - franchise | 4,572 | 10,667 |
Variable lease income - franchise | 1,810 | 4,526 |
Franchise rental revenues | 6,382 | 15,193 |
Franchise | Leased Properties | ||
Lessor, Lease, Description [Line Items] | ||
Operating lease income - franchise | 50,123 | 116,692 |
Variable lease income - franchise | 13,380 | 34,084 |
Franchise rental revenues | $ 63,503 | $ 150,776 |
Leases Future Minimum Rental Re
Leases Future Minimum Rental Receipts (Details) $ in Thousands | Apr. 12, 2020USD ($) |
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract] | |
Remainder of 2020 (1)(2) | $ 106,892 |
2021 (2) | 261,492 |
2022 | 232,748 |
2023 | 226,178 |
2024 | 201,003 |
Thereafter | 1,250,834 |
Total minimum rental receipts | 2,279,147 |
Portion of April rents due from franchisees that has been postponed | 9,100 |
Decrease in expected rental receipts for the remainder of fiscal 2020 | 1,700 |
Increase in expected rental receipts in 2021 due to rent concessons in the prior year | $ 4,700 |
Leases Future Minimum Lease Pay
Leases Future Minimum Lease Payments Receivable under Topic 840 (Details) $ in Thousands | Sep. 29, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 239,219 |
2021 | 255,315 |
2022 | 231,394 |
2023 | 224,605 |
2024 | 199,442 |
Thereafter | 1,215,811 |
Total minimum rental receipts | $ 2,365,786 |
Indebtedness - Summary (Details
Indebtedness - Summary (Details) - USD ($) $ in Thousands | Apr. 12, 2020 | Sep. 29, 2019 |
Debt Instrument [Line Items] | ||
Finance lease obligations | $ 3,330 | $ 3,594 |
Total debt | 1,407,957 | 1,303,594 |
Less current maturities of long-term debt | (13,819) | (774) |
Less unamortized debt issuance costs | (25,692) | (28,446) |
Long-term debt | 1,368,446 | 1,274,374 |
Senior Notes | Class A-2-I Notes | ||
Debt Instrument [Line Items] | ||
Notes | 573,563 | 575,000 |
Senior Notes | Class A-2-II Notes | ||
Debt Instrument [Line Items] | ||
Notes | 274,313 | 275,000 |
Senior Notes | Class A-2-III Notes | ||
Debt Instrument [Line Items] | ||
Notes | 448,875 | 450,000 |
Senior Notes | Class A-1 Variable Funding Notes | ||
Debt Instrument [Line Items] | ||
Notes | $ 107,876 | $ 0 |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) - Senior Notes - USD ($) | Apr. 12, 2020 | Sep. 29, 2019 |
Class A-2-I Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 3.982% | |
Notes | $ 573,563,000 | $ 575,000,000 |
Class A-2-II Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.476% | |
Notes | $ 274,313,000 | 275,000,000 |
Class A-2-III Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.97% | |
Notes | $ 448,875,000 | 450,000,000 |
Class A-1 Variable Funding Notes | ||
Debt Instrument [Line Items] | ||
Debt issuable under purchase agreement | 150,000,000 | |
Letters of credit outstanding | 41,100,000 | 45,600,000 |
Notes | 107,876,000 | $ 0 |
Remaining borrowings available | $ 1,100,000 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands | Apr. 12, 2020 | Sep. 29, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | $ 25,261 | $ 30,104 | |
Quoted Prices In Active Markets For Identical Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [1] | 25,261 | 30,104 |
Significant Other Observable Inputs (2) (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [1] | 0 | 0 |
Significant Unobservable Inputs (2) (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | 0 | 0 | |
Non Qualified Deferred Compensation Plan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [2] | 25,261 | 30,104 |
Non Qualified Deferred Compensation Plan | Quoted Prices In Active Markets For Identical Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [1],[2] | 25,261 | 30,104 |
Non Qualified Deferred Compensation Plan | Significant Other Observable Inputs (2) (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | 0 | 0 | |
Non Qualified Deferred Compensation Plan | Significant Unobservable Inputs (2) (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | $ 0 | $ 0 | |
[1] | We did not have any transfers in or out of Level 1, 2 or 3. | ||
[2] | We maintain 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. |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Estimated Fair Value of Notes (Details) - USD ($) $ in Thousands | Apr. 12, 2020 | Sep. 29, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | $ 1,407,957 | $ 1,303,594 |
Senior Notes | Class A-1 Variable Funding Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes | 107,876 | 0 |
Carrying Amount | Senior Notes | Class A-2 Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 1,296,751 | 1,300,000 |
Fair Value | Senior Notes | Class A-2 Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | $ 1,170,896 | $ 1,344,300 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) $ in Millions | Jun. 30, 2015USD ($) |
Interest Rate Swap 1 | |
Derivative [Line Items] | |
Derivative notional amount | $ 500 |
Derivative Instruments - Gains
Derivative Instruments - Gains or Losses Recognized on Interest Rate Swap Derivative Instruments (Details) - Derivatives Designated As Hedging Instrument - Interest Rate Swaps - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Apr. 14, 2019 | Apr. 14, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss recognized in OCI | $ (4,959) | $ (12,126) |
Interest Expense, Net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss reclassified from accumulated OCI into net earnings | $ 134 | $ 613 |
Impairment and Other Charges,_3
Impairment and Other Charges, Net - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 12, 2020 | Apr. 14, 2019 | Apr. 12, 2020 | Apr. 14, 2019 | |
Impairment, Disposition of Property and Equipment, and Restaurant Closing Costs [Line Items] | ||||
Restructuring costs | $ 118 | $ 946 | $ 1,163 | $ 6,786 |
Costs of closed restaurants and other | 331 | 383 | 432 | 1,249 |
Losses (gains) on disposition of property and equipment, net | (10,170) | (138) | ||
Accelerated depreciation | 0 | 510 | 0 | 926 |
Impairment and other charges | 716 | 1,125 | (8,575) | 8,823 |
Continuing Operations | ||||
Impairment, Disposition of Property and Equipment, and Restaurant Closing Costs [Line Items] | ||||
Losses (gains) on disposition of property and equipment, net | $ 267 | $ (714) | (10,170) | $ (138) |
Gain related to sale of property | $ 10,800 |
Impairment and Other Charges,_4
Impairment and Other Charges, Net - Restructuring Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Apr. 12, 2020 | Apr. 14, 2019 | Apr. 12, 2020 | Apr. 14, 2019 | ||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs | $ 118 | $ 946 | $ 1,163 | $ 6,786 | |||
Employee severance and related costs | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs | 118 | 642 | 1,163 | 5,148 | |||
Strategic Alternative Evaluation | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring costs | $ 0 | [1] | $ 304 | [1] | $ 0 | $ 1,638 | [1] |
[1] | Strategic Alternative Evaluation costs primarily relate to third party advisory services. |
Impairment and Other Charges,_5
Impairment and Other Charges, Net - Accrued severance (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 12, 2020 | Apr. 14, 2019 | Apr. 12, 2020 | Apr. 14, 2019 | |
Restructuring Reserve [Roll Forward] | ||||
Costs incurred | $ 118 | $ 946 | $ 1,163 | $ 6,786 |
Employee Severance and Related Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance as of September 29, 2019 | 2,100 | |||
Costs incurred | 118 | $ 642 | 1,163 | $ 5,148 |
Cash payments | (3,010) | |||
Balance as of April 12, 2020 | $ 253 | 253 | ||
Employee Severance & Other | ||||
Restructuring Reserve [Roll Forward] | ||||
Costs incurred | $ 1,163 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Apr. 12, 2020 | Apr. 14, 2019 | Apr. 12, 2020 | Apr. 14, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rates | 32.30% | 25.00% | 30.70% | 24.00% |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Details) | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Apr. 12, 2020USD ($) | Jan. 19, 2020USD ($) | Apr. 12, 2020healthcare_plandefined_benefit_plan | Jan. 01, 2019USD ($) | |
Retirement Benefits [Abstract] | ||||
Number of sponsored defined benefit pension plans | defined_benefit_plan | 2 | |||
Lump sum payments from Qualified Plan | $ 122,300,000 | |||
Pension settlement | $ 300,000 | $ 38,600,000 | ||
Number of postretirement health care plans | healthcare_plan | 2 | |||
Minimum required contribution for retirement plans | $ 0 |
Retirement Plans - Components o
Retirement Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Apr. 12, 2020 | Apr. 14, 2019 | Jan. 19, 2020 | Apr. 12, 2020 | Apr. 14, 2019 | Sep. 29, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Pension settlements | $ (300) | $ (38,600) | |||||||
Return on asset assumption (percent) | 5.20% | 5.90% | 5.80% | ||||||
Pension Plan | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Interest cost | 3,669 | $ 5,286 | $ 8,745 | $ 12,334 | |||||
Expected return on plan assets | (4,706) | (6,077) | (11,362) | (14,181) | |||||
Pension settlements | 321 | 0 | 38,927 | 0 | |||||
Actuarial loss (gain) | [1] | 1,019 | 913 | 2,691 | 2,132 | ||||
Amortization of unrecognized prior service cost | [1] | 19 | 27 | 45 | 62 | ||||
Net periodic benefit cost | 322 | 149 | 39,046 | 347 | |||||
Postretirement Healthcare Plans | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Interest cost | 187 | 230 | 435 | 537 | |||||
Actuarial loss (gain) | [1] | 3 | (36) | 9 | (85) | ||||
Net periodic benefit cost | $ 190 | $ 194 | $ 444 | $ 452 | |||||
[1] | Amounts were reclassified from accumulated OCI into net earnings as a component of “Other pension and post-retirement expenses, net |
Retirement Plans - Schedule of
Retirement Plans - Schedule of Future Cash Flows (Details) $ in Thousands | 6 Months Ended |
Apr. 12, 2020USD ($) | |
SERP | |
Defined Benefit Plan Disclosure [Line Items] | |
Net year-to-date contributions | $ 2,857 |
Remaining estimated net contributions during fiscal 2020 | 2,514 |
Postretirement Healthcare Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Net year-to-date contributions | 725 |
Remaining estimated net contributions during fiscal 2020 | $ 676 |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Changes in Equity (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Apr. 12, 2020 | Apr. 14, 2019 | Apr. 12, 2020 | Apr. 14, 2019 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance at beginning of period | $ (737,584) | $ (841,153) | $ (607,296) | $ (737,584) | $ (591,699) |
Shares issued under stock plans, including tax benefit | 3,375 | 128 | 3,559 | 243 | |
Share-based compensation expense | 2,681 | 2,799 | 5,865 | 4,708 | |
Dividends declared | (9,067) | (10,323) | (18,492) | (20,641) | |
Purchases of treasury stock | 0 | 0 | (153,550) | 0 | |
Net earnings | 11,463 | 25,089 | 19,360 | 59,187 | |
Other comprehensive income (loss), net of taxes | (44,225) | (2,911) | 6,786 | (6,982) | |
Cumulative-effect from a change in accounting principle | $ (2,900) | 0 | 0 | (2,870) | (37,330) |
Balance at end of period | $ (876,926) | $ (592,514) | $ (876,926) | $ (592,514) |
Stockholders' Deficit - Narrati
Stockholders' Deficit - Narrative (Details) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 12, 2020USD ($)$ / shares | Apr. 14, 2019USD ($)$ / shares | Apr. 12, 2020USD ($)dividend$ / sharesshares | Apr. 14, 2019USD ($)$ / shares | |
Equity, Class of Treasury Stock [Line Items] | ||||
Shares repurchased | shares | 1.9 | |||
Shares repurchased, average price per share (in USD per share) | $ / shares | $ 81.41 | |||
Repurchases of common stock | $ 0 | $ 0 | $ 153,550 | $ 0 |
Repurchase of common stock, remaining authorized amount | $ 122,200 | 122,200 | ||
Stock repurchase transactions initiated in prior year | $ 2,000 | |||
Number of cash dividends declared | dividend | 2 | |||
Cash dividend (in USD per share) | $ / shares | $ 0.40 | $ 0.40 | $ 0.80 | $ 0.80 |
Total cash dividends | $ 18,500 | |||
Amount Expiring in November 2020 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Repurchase of common stock, remaining authorized amount | $ 22,200 | 22,200 | ||
Amount Expiring in November 2021 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Repurchase of common stock, remaining authorized amount | $ 100,000 | $ 100,000 |
Average Shares Outstanding (Det
Average Shares Outstanding (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 12, 2020 | Apr. 14, 2019 | Apr. 12, 2020 | Apr. 14, 2019 | |
Average Shares Outstanding [Line Items] | ||||
Weighted-average shares outstanding – basic | 22,803 | 25,943 | 23,339 | 25,922 |
Weighted-average shares outstanding – diluted | 22,895 | 26,145 | 23,490 | 26,137 |
Excluded from diluted weighted-average shares outstanding, Antidilutive | 362 | 186 | 307 | 186 |
Excluded from diluted weighted-average shares outstanding, Performance conditions not satisfied at the end of the period | 77 | 89 | 77 | 89 |
Nonvested stock awards and units | ||||
Average Shares Outstanding [Line Items] | ||||
Effect of potentially dilutive securities | 85 | 190 | 144 | 203 |
Stock options | ||||
Average Shares Outstanding [Line Items] | ||||
Effect of potentially dilutive securities | 0 | 10 | 0 | 10 |
Performance share awards | ||||
Average Shares Outstanding [Line Items] | ||||
Effect of potentially dilutive securities | 7 | 2 | 7 | 2 |
Contingencies and Legal Matte_2
Contingencies and Legal Matters (Details) - USD ($) $ in Millions | Jan. 09, 2020 | Jun. 11, 2019 | Jan. 31, 2019 | Nov. 30, 2019 | Oct. 31, 2019 | Feb. 28, 2019 | Apr. 12, 2020 | Sep. 29, 2019 |
Loss Contingencies [Line Items] | ||||||||
Accrual of loss contingency | $ 14.2 | $ 10 | ||||||
Gessele v. Jack in the Box Inc. | ||||||||
Loss Contingencies [Line Items] | ||||||||
Alleged total potential damages | $ 62 | $ 42 | ||||||
Claimed damages disallowed by the court | $ 25 | |||||||
Ramirez v. Jack in the Box Inc. | ||||||||
Loss Contingencies [Line Items] | ||||||||
Net charge for estimated litigation liability | 7.3 | |||||||
Litigation insurance recovery receivable | $ 7.3 | |||||||
Ramirez v. Jack in the Box Inc. | Judicial Ruling | ||||||||
Loss Contingencies [Line Items] | ||||||||
Jury verdict for compensatory damages | $ 5.4 | |||||||
Jury verdict for punitive damages | 10 | |||||||
Plaintiff motion for attorney's fees, amount | $ 5.1 | |||||||
Attorney fees awarded | $ 3.9 | |||||||
Ramirez v. Jack in the Box Inc. | Judicial Ruling | Maximum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Damages awarded | 15.4 | |||||||
Ramirez v. Jack in the Box Inc. | Judicial Ruling | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Damages awarded | $ 3.2 |
Discontinued Operations - Qdoba
Discontinued Operations - Qdoba, Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |
Apr. 14, 2019USD ($) | Apr. 12, 2020extnsion_option | Apr. 14, 2019USD ($) | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Discontinued operation, period of continuing involvement after disposal | 12 months | ||
Discontinued operation, period of continuing involvement after disposal, number of extension options | extnsion_option | 2 | ||
Discontinued operation, period of continuing involvement after disposal, service period extension option | 3 months | ||
Other nonrecurring income | $ | $ 1.9 | $ 5.6 |
Discontinued Operations - Quart
Discontinued Operations - Quarterly Financial Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Apr. 14, 2019USD ($)$ / shares | Apr. 14, 2019USD ($)$ / shares | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal group, including discontinued operation, accrued income tax payable | $ 2,800 | $ 2,800 |
Qdoba | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Selling, general and administrative expenses | 59 | (243) |
Loss on Qdoba Sale | 0 | 85 |
(Losses) earnings from discontinued operations before income taxes | (59) | 158 |
Income tax benefit | 18 | 2,778 |
(Losses) earnings from discontinued operations, net of income taxes | $ (41) | $ 2,936 |
Basic and diluted earnings per share from discontinued operations (in USD per share) | $ / shares | $ 0 | $ 0.11 |
Discontinued Operations - Lease
Discontinued Operations - Lease Guarantees (Details) | 6 Months Ended |
Apr. 12, 2020USD ($) | |
Discontinued Operations and Disposal Groups [Abstract] | |
Lease guarantee | $ 29,300,000 |
Qdoba guaranteed leases, remaining term | 16 years |
Accrued amount related to guarantees | $ 0 |
Supplemental Consolidated Cas_3
Supplemental Consolidated Cash Flow Information (Additional Information Related To Cash Flows) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 12, 2020 | Apr. 14, 2019 | |
Supplemental Cash Flow Information [Abstract] | ||
Decrease in obligations for treasury stock repurchases | $ 2,025 | $ 14,362 |
Decrease in obligations for purchases of property and equipment | 1,247 | 5,368 |
Increase in dividends accrued or converted to common stock equivalents | 65 | 121 |
Consideration for franchise acquisitions | 859 | 0 |
Decrease in finance lease obligations from the termination of equipment and building leases | $ 24 | $ 41 |
Supplemental Consolidated Bal_3
Supplemental Consolidated Balance Sheet Information (Details) - USD ($) $ in Thousands | Apr. 12, 2020 | Sep. 30, 2019 | Sep. 29, 2019 |
Balance Sheet Related Disclosures [Abstract] | |||
Trade | $ 46,339 | $ 36,907 | |
Notes receivable | 9,589 | 278 | |
Income tax receivable | 1,279 | 160 | |
Other | 14,410 | 10,855 | |
Allowance for doubtful accounts | (5,286) | (2,965) | |
Accounts and other receivables, net | 66,331 | 45,235 | |
Prepaid income taxes | 12,965 | 579 | |
Prepaid advertising | 32 | 1,838 | |
Other | 5,463 | 6,598 | |
Prepaid expenses | 18,460 | 9,015 | |
Company-owned life insurance policies | 107,973 | 112,753 | |
Deferred rent receivable | 49,152 | 49,333 | |
Franchise tenant improvement allowance | 29,536 | 26,925 | |
Other | 24,544 | 17,674 | |
Other assets, net | 211,205 | 206,685 | |
Insurance | 27,972 | 27,888 | |
Payroll and related taxes | 20,808 | 31,095 | |
Deferred franchise fees | 4,951 | 4,978 | |
Sales and property taxes | 10,251 | 4,268 | |
Gift card liability | 2,196 | 2,036 | |
Other | 54,771 | 49,818 | |
Accrued liabilities | 120,949 | $ 115,381 | 120,083 |
Defined benefit pension plans | 147,295 | 120,260 | |
Deferred franchise fees, Noncurrent | 39,748 | 41,295 | |
Straight-line rent accrual | 0 | 29,537 | |
Other | 55,325 | 72,678 | |
Other long-term liabilities | $ 242,368 | $ 221,887 | $ 263,770 |