What changed in this filing

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Item 9A. Controls and Procedures

2023-11-21 compared with 2022-11-22 · 223 added, 243 removed, 1350 unchanged (26% of the section changed)

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Changes in Internal Control Over Financial Reporting

There have been no significant changes in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended October 2, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

As previously announced, the Company acquired Del Taco Restaurants, Inc.

(“Del Taco”) in the second quarter of 2022, and was permitted to exclude the Del Taco segment from the 2022 assessment of internal control over financial reporting as that was the first year following the date of acquisition.

The Company has included the Del Taco’s internal controls within management’s assessment of the effectiveness of the Company’s internal control over financial reporting for fiscal year ended October 1, 2023.

There were no other changes in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended October 1, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

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Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

In accordance with guidance issued by the Securities and Exchange Commission, companies are permitted to exclude acquisitions from their first assessment of internal control over financial reporting following the date of acquisition.

Based on those guidelines, management’s assessment of the effectiveness of the Company’s internal control over financial reporting excluded Del Taco Restaurants, Inc.

(“Del Taco”), which the Company acquired in the second quarter of 2022.

See Note 3, Business Combination , to the consolidated financial statements for additional information on the Company’s acquisition of Del Taco.

We have included the financial results of this acquisition in the consolidated financial statements from the date of acquisition.

Del Taco represented approximately 39% of consolidated total assets as of October 2, 2022, and 22% of consolidated total revenues for the fiscal year ended October 2, 2022.

Management, under the oversight of our principal executive officer, principal financial officer, and Audit Committee, assessed the effectiveness of the Company’s internal control over financial reporting as of October 1, 2023.

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 1, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of October 2, 2022 and October 3, 2021, the related consolidated statements of earnings, comprehensive income, stockholders’ deficit, and cash flows for the fifty-two week period ended October 2, 2022, for the fifty-three week period ended October 3, 2021, and for the fifty-two week period ended September 27, 2020, and the related notes (collectively, the consolidated financial statements), and our report dated November 22, 2022 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Del Taco Restaurants, Inc.

during 2022, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of October 2, 2022, Del Taco Restaurants Inc.’s internal control over financial reporting associated with 39% of total assets and 22% of total revenues included in the consolidated financial statements of the Company as of and for the year ended October 2, 2022.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Del Taco Restaurants, Inc.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of October 1, 2023 and October 2, 2022, the related consolidated statements of earnings, comprehensive income, stockholders’ deficit, and cash flows for each of the fifty-two week periods ended October 1, 2023 and October 2, 2022, and for the fifty-three week period ended October 3, 2021, and the related notes (collectively, the consolidated financial statements), and our report dated November 21, 2023 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

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OTHER INFORMATION

During the last fiscal quarter, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

On August 15, 2023, the Company adopted a Rule 10b5-1 trading arrangement to repurchase shares of the Company’s common stock up to an aggregate purchase price of $30.0 million.

This Rule10b5-1 trading arrangement subsequently terminated on September 29, 2023.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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10-Q 5/14/2020

3.3 Amended and Restated Bylaws, dated May 12 , 202 2

10-Q 5/27/2022

3.2 Amended and Restated Bylaws of Jack in the Box Inc., effective as of August 3, 2023

4.1 Base Indenture, dated as of July 8, 2019, by and between Jack in the Box Funding, LLC, as Master Issuer, and Citibank, N.A., as Trustee and Securities Intermediary.

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10-K 11/18/2020

10.2.20* Offer Letter by and between Tim Mullany and Jack in the Box Inc., dated December 11, 2020

8-K 12/17/2020

10.2.20* Offer Letter by and between Ryan Ostrom and Jack in the Box Inc., dated December 30, 2020

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8-K 5/17/2021

10.2.23* Tim Mullany Separation and Release Agreement, dated February 2, 2023

10-Q 3/1/2023

10.2.24* Offer Letter by and between Brian Scott and Jack in the Box Inc., dated August 8, 2023

10.3* Amended and Restated Supplemental Executive Retirement Plan

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10.8.3* Form of Restricted Stock Unit Award Agreement for Non-Employee Director under the 2004 Stock Incentive Plan

_____ Filed herewith

10-K 11/22/2022

10.8.4* Form of Restricted Stock Unit Grant Agreement for Non-Employee Directors under the 2004 Stock Incentive Plan

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10-Q 2/19/2015

Number Description Form Filed with SEC

10.8.8* Form of Stock Option and Performance Share Award Agreement under the 2004 Stock Incentive Plan

10-Q 2/19/2015

Number Description Form Filed with SEC

10.8.9* Form of Time-Vesting Restricted Stock Unit Award Agreement under the 2004 Stock Incentive Plan

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10-K 11/23/2021

10.8.16* Jack in the Box, Inc Omnibus Incentive Plan, dated March 3, 2023

10-Q 5/17/2023

10.8.17* Restricted Stock Unit Award Grant Notice - Officer

10-Q 5/17/2023

10.8.18* Restricted Stock Unit Award Grant Notice - Non-Officer

10-Q 5/17/2023

10.8.19* Restricted Stock Unit Award Grant Notice - Director

10-Q 5/17/2023

10.8.20* Performance Stock Unit Award Grant Notice - Officer

10-Q 5/17/2023

10.8.21* Jack in the Box, Inc.

2023 Omnibus Incentive Plan - Option Grant Notice

10-Q 8/9/2023

10.10.2* Jack in the Box Inc.

Performance Incentive Plan, Effective February 13, 2016

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_____ Filed herewith

97.1 Jack in the Box Inc.

Incentive Compensation Recoupment Policy

_____ Filed herewith

101.INS iXBRL Instance Document

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JACK IN THE BOX INC.

/s/ TIM MULLANY

/s/ BRIAN SCOTT

Executive Vice President and Chief Financial Officer (principal financial officer)

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Each person whose signature appears below constitutes and appoints Darin Harris and Tim Mullany, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this report, and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes may do or cause to be done by virtue hereof.

Each person whose signature appears below constitutes and appoints Darin Harris and Brian Scott, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this report, and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes may do or cause to be done by virtue hereof.

Signature Title Date

/s/ DARIN HARRIS Chief Executive Officer and Director (principal executive officer) November 21, 2023

/s/ TIM MULLANY Executive Vice President and Chief Financial Officer (principal financial officer and principal accounting officer) November 22, 2022

/s/ BRIAN SCOTT Executive Vice President and Chief Financial Officer (principal financial officer and principal accounting officer) November 21, 2023

GOEBEL Director and Chairman of the Board November 21, 2023

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We have audited the accompanying consolidated balance sheets of Jack in the Box Inc.

and subsidiaries (the Company) as of October 2, 2022 and October 3, 2021, the related consolidated statements of earnings, comprehensive income, stockholders’ deficit, and cash flows for the fifty-two week period ended October 2, 2022, the fifty-three week period ended October 3, 2021, and the fifty-two week period ended September 27, 2020 and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of October 2, 2022 and October 3, 2021, and the results of its operations and its cash flows for the fifty-two week period ended October 2, 2022, for the fifty-three week period ended October 3, 2021, and for the fifty-two week period ended September 27, 2020, in conformity with U.S.

and subsidiaries (the Company) as of October 1, 2023 and October 2, 2022, the related consolidated statements of earnings, comprehensive income, stockholders’ deficit, and cash flows for each of the fifty-two week periods ended October 1, 2023 and October 2, 2022, and the fifty-three week period ended October 3, 2021, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of October 1, 2023 and October 2, 2022, and the results of its operations and its cash flows for each of the fifty-two week periods ended October 1, 2023 and October 2, 2022, and for the fifty-three week period ended October 3, 2021, in conformity with U.S.

generally accepted accounting principles.

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Fair Value of the Del Taco Trademarks

As discussed in Note 3 to the consolidated financial statements, on March 8, 2022, the Company acquired Del Taco Restaurants, Inc.

(Del Taco) in a business combination.

The purchase price was allocated to the fair value of the tangible and intangible assets acquired and liabilities assumed, with the excess recorded as goodwill.

For the trademarks specifically, the Company used the relief from royalty method of the income approach, which involved the use of key inputs and assumptions such as estimates of projected systemwide sales.

As a result of the transaction, the Company recorded trademarks with an acquisition-date fair value of $283.5 million.

We identified the evaluation of the acquisition-date fair value of the Del Taco trademarks as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate the revenue growth rates used to value the trademarks.

Changes in this assumption could have a significant impact on the acquisition-date fair value of the trademarks.

The following are the primary audit procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition-date valuation process, including controls related to the development of the revenue growth rates.

We evaluated the Company’s revenue growth rates by comparing forecasted growth assumptions to those of Del Taco’s peers and industry reports, as well as historical results of Del Taco.

We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the terminal growth rate.

In addition, we performed sensitivity analyses over the Company’s revenue growth rates to assess the impact of the changes in those assumptions on the Company’s determination of fair value of the trademarks.

Identification of Potential Impairment Events of the Del Taco Long-Lived Assets

As discussed in Note 1 to the consolidated financial statements, the Company evaluates long-lived assets, such as property and equipment and operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable.

As of October 2, 2022, the Company had consolidated property and equipment, net and operating lease right of use assets of $418.2 million and $1,332.1 million, respectively, inclusive of the Del Taco long-lived assets.

We identified the identification of potential impairment events associated with the Del Taco brand restaurants long-lived assets as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate management’s identification of indicators of potential impairment including restaurant level operating results as well as other events or changes in circumstances of the restaurant.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.

Valuation of goodwill related to the Del Taco brand

As discussed in Notes 1 and 5 to the consolidated financial statements, the goodwill balance as of October 1, 2023 was $194.0 million related to the Del Taco brand.

Goodwill is evaluated for impairment annually during the third quarter of each year, or more frequently if indicators of impairment are present.

Goodwill is evaluated for impairment by determining whether the fair value of the Company’s reporting units exceed their carrying values.

The Company’s reporting units are their two restaurant brands, Jack in the Box and Del Taco.

We identified the evaluation of the goodwill impairment analysis for the Del Taco brand reporting unit as a critical audit matter.

Evaluating the estimated fair value of the reporting unit involved a high degree of subjective auditor judgment.

Specifically, the revenue growth rate assumptions used in estimating the fair value of the Del Taco brand reporting unit were challenging to evaluate as changes in these assumptions could have had a significant effect on the Company’s assessment of the impairment of the goodwill of that reporting unit.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design of an internal control related to the Company’s identification of impairment events of the Del Taco brand long-lived assets.

We assessed the Company’s identification of impairment indicators by:

• Inspecting operating results by restaurant to identify operating losses

• Testing the underlying restaurant-level operating results used in the impairment indicator assessment for a selection of restaurants

• Considering market conditions and economic trends

• Reading the board of directors meeting minutes for changes to the Company’s current operations and future operating plans.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s goodwill impairment assessment process, which included a control related to the review of the revenue growth rate assumptions used in the projected financial information.

We evaluated the reasonableness of the revenue growth rate assumptions for the Del Taco brand reporting unit by comparing the revenue growth rate assumptions to industry reports.

We also compared the Company’s revenue growth rate assumptions to historical revenue growth rate trends to assess the Company’s ability to accurately forecast.

In addition, we performed sensitivity analyses over the Company’s revenue growth rate assumptions to assess the impact any changes to those assumptions could have had on the Company’s fair value estimate.

We have served as the Company’s auditor since 1986.

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Goodwill 329,986 366,821

Deferred tax assets — 51,517

Other assets, net 240,707 226,569

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Income taxes 58,514 46,111 55,852

Earnings from continuing operations 115,781 165,755 89,394

Earnings from discontinued operations, net of income taxes — — 370

Net earnings $ 130,826 $ 115,781 $ 165,755

Net earnings per share — basic $ 6.35 $ 5.46 $ 7.40

Earnings from continuing operations $ 5.46 $ 7.40 $ 3.87

Earnings from discontinued operations — — 0.02

Net earnings per share (1) $ 5.46 $ 7.40 $ 3.88

Net earnings per share — diluted $ 6.30 $ 5.45 $ 7.37

Earnings from continuing operations $ 5.45 $ 7.37 $ 3.84

Earnings from discontinued operations — — 0.02

Net earnings per share (1) $ 5.45 $ 7.37 $ 3.86

Cash dividends declared per common share $ 1.76 $ 1.76 $ 1.68

________________________

(1) Earnings per share may not add due to rounding.

See accompanying notes to consolidated financial statements.

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Other comprehensive income:

Actuarial gains (losses) arising during the period 24,249 44,134 ( 4,875 )

Actuarial losses and prior service cost reclassified to earnings 3,238 4,931 44,616

Actuarial gains arising during the period 823 24,249 44,134

Amortization of actuarial losses and prior service cost reclassified to earnings 2,154 3,238 4,931

2,977 27,487 49,065

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Net earnings $ 130,826 $ 115,781 $ 165,755

Earnings from discontinued operations — — 370

Earnings from continuing operations 115,781 165,755 89,394

Adjustments to reconcile net earnings to net cash provided by operating activities:

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Pension and postretirement expense 6,967 303 881

Losses (gains) on cash surrender value of company-owned life insurance

(Gains) losses on cash surrender value of company-owned life insurance

( 7,346 ) 12,668 ( 12,753 )

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Other 3,065 360 2,626

Cash flows (used in) provided by investing activities ( 578,588 ) ( 20,929 ) 29,123

Cash flows provided by (used in) investing activities 42,219 ( 578,588 ) ( 20,929 )

Cash flows from financing activities:

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Payroll tax payments for equity award issuances ( 1,593 ) ( 1,223 ) ( 4,166 )

Cash flows provided by (used in) financing activities 478,178 ( 343,545 ) ( 87,289 )

Cash flows (used in) provided by financing activities ( 207,358 ) 478,178 ( 343,545 )

Net increase (decrease) in cash and restricted cash 49,867 62,472 ( 163,352 )

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Other comprehensive income — — — — 36,351 — 36,351

Cumulative-effect from a change in accounting principle — — — ( 2,870 ) — — ( 2,870 )

Balance at September 27, 2020 82,369,714 824 489,515 1,636,211 ( 110,605 ) ( 2,809,306 ) ( 793,361 )

Balance at October 3, 2021 82,536,059 825 500,441 1,764,412 ( 74,254 ) ( 3,009,306 ) ( 817,882 )

Shares issued under stock plans, including tax benefit 44,540 1 50 — — — 51

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Purchases of treasury stock — — — — — ( 25,000 ) ( 25,000 )

Fair value of assumed Del Taco RSAs attributable to pre-combination service — — 449 — — — 449

Net earnings — — — 115,781 — — 115,781

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Purchases of treasury stock — — — — — ( 90,731 ) ( 90,731 )

Fair value of assumed Del Taco RSAs attributable to pre-combination service — — 449 — — — 449

Net earnings — — — 130,826 — — 130,826

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Certain prior period information on the consolidated statement of earnings has been reclassified to conform to the current year presentation.

Fiscal year — The Company’s fiscal year is 52 or 53 weeks ending the Sunday closest to September 30.

Fiscal year — The Company’s fiscal year is the 52 or 53 weeks ending the Sunday closest to September 30.

Our Del Taco subsidiary operates on a fiscal year ending the Tuesday closest to September 30.

Comparisons throughout these notes to the consolidated financial statements refer to the 52-week period ended October 2, 2022 for the fiscal year 2022, and the 53-week and 52-week periods ended October 3, 2021 and September 27, 2020 for fiscal years 2021 and 2020, respectively .

Comparisons throughout these notes to the consolidated financial statements refer to the 52-week periods ended October 1, 2023 and October 2, 2022, for fiscal years 2023 and 2022, and the 53-week period ended October 3, 2021, for fiscal year 2021.

Principles of consolidation — The accompanying consolidated financial statements include the accounts of Jack in the Box Inc.

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Balance as of beginning of period $ ( 5,975 ) $ ( 6,292 )

Provision for expected credit losses ( 4,744 ) ( 770 )

Reversal (provision) for expected credit losses, net 1,788 ( 4,744 )

Write-offs charged against the allowance 41 5,061

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Inventories — Our inventories consist principally of food, packaging, and supplies, and are valued at the lower of cost or market on a first-in, first-out basis.

Internal-use Software Costs — The Company capitalizes costs incurred to implement software solely for its internal use, including (i) hosted applications used to deliver the Company's support services, and (ii) certain implementation costs incurred in a hosting arrangement that is a service contract when the preliminary project stage is complete, management with the relevant authority authorizes and commits to the funding of the software project, and it is probable the project will be completed and used to perform the intended function.

Software implementation costs are capitalized to either other current assets or other long-term assets on the Company's consolidated balance sheet and amortized over the estimated useful life of the developed software.

Software implementation costs capitalized were $ 7.9 million and $ 10.7 million as of the end of fiscal year 2023 and 2022, respectively.

Related amortization expense for software implementation costs was $ 5.0 million, $ 5.1 million and $ 2.5 million during fiscal years 2023, 2022 and 2021, respectively.

Assets held for sale — Our assets held for sale typically includes property we plan to sell within the next year.

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Our two restaurant brands, Jack in the Box and Del Taco, are both operating segments and reporting units.

Goodwill is evaluated for impairment annually during the fourth quarter, or more frequently if indicators of impairment are present.

Goodwill is evaluated for impairment annually during the third quarter of each year, or more frequently if indicators of impairment are present.

We first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit or indefinite-lived asset is less than its carrying amount.

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We evaluate our indefinite-lived intangible assets for impairment on an annual basis or more often if an event occurs or circumstances change that indicate impairments might exist.

We perform our annual test for impairment of our indefinite-lived intangible assets during the fourth quarter.

We perform our annual test for impairment of our indefinite-lived intangible assets during the third quarter.

We may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is greater than its carrying value.

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Fair value is an estimate of the price a willing buyer would pay for the intangible asset and is estimated by discounting the expected future after-tax cash flows associated with the intangible asset.

During the fourth quarter of 2023, we performed a qualitative test for the fair value of the Jack in the Box reporting unit, noting that the fair value was substantially in excess of its respective carrying value.

During the fourth quarter of 2023, we also performed a qualitative tests over the Del Taco reporting unit and of the Del Taco indefinite-lived trademarks, noting that it was not more likely than not that the carrying value was greater than its fair value.

Recently, during the third quarter of 2023, we had performed quantitative tests over the Del Taco reporting unit and of the Del Taco indefinite-lived trademarks, and their fair values were in excess of their carrying values by approximately 9 % and 13 %, respectively, as of the testing date.

Intangible assets, net — Intangible assets primarily include franchise contracts, reacquired franchise rights and sublease assets.

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Advertising costs — We administer marketing funds at each of our restaurant brands that include contractual contributions.

In 2022, 2021 and 2020, marketing fund contributions from Jack in the Box franchise and company-operated restaurants were approximately 5.0 % of sales with the exception of our March 2020 and April 2020 marketing fees, which were temporarily reduced to 2 % to 4 %, respectively, in response to the economic burden associated with the COVID-19 pandemic.

In 2022, marketing fund contributions from Del Taco franchise and company-operated restaurants were approximately 4.0 % of sales.

In 2023, 2022 and 2021, marketing fund contributions from Jack in the Box franchise and company-operated restaurants were approximately 5.0 % of sales.

In 2023 and 2022, marketing fund contributions from Del Taco franchise and company-operated restaurants were approximately 4.0 % of sales.

Production costs of commercials, programming, and other marketing activities are charged to the marketing funds when the advertising is first used for its intended purpose, and the costs of advertising are charged to operations as incurred.

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The excess of purchase price over fair value of net assets acquired, including the amount assigned to identifiable intangible assets, is recorded as goodwill.

Effect of new accounting pronouncements adopted in fiscal 2022 — In October 2021 the FASB issued ASU 2021-08, Business Combinations - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805) .

This standard requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities from acquired contracts using the revenue recognition guidance under Accounting Standards Codification (“ASC”) Topic 606 in order to align the recognition of a contract liability with the definition of a performance obligation.

This approach differs from the current requirement to measure contract assets and contract liabilities acquired in a business combination at fair value.

We elected to early adopt this standard in the second quarter of 2022.

The adoption of ASU 2021-08 did not have a material impact on our consolidated financial statements.

Effect of new accounting pronouncements to be adopted in future periods — We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements.

Effect of accounting pronouncements adopted in 2023 and those to be adopted in future periods — We reviewed the accounting pronouncements adopted in 2023, as well as all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements.

Nature of products and services — We derive revenue from retail sales at Jack in the Box and Del Taco company-operated restaurants and rental revenue, royalties, advertising, and franchise and other fees from franchise-operated restaurants.

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Total revenue $ 1,151,188 $ 316,895 $ 1,468,083

The following table disaggregates revenue by segment and primary source for the fiscal ended September 27, 2020 (in thousands) :

The following table disaggregates revenue by segment and primary source for the fiscal ended October 3, 2021 (in thousands) :

Jack in the Box Del Taco Total

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Total revenue $ 1,143,670 $ — $ 1,143,670

In October 2022, a Jack in the Box franchise operator paid the Company $ 7.3 million in order to sell his restaurants to a new franchisee at the current standard royalty rate, which is lower than the royalty rate in the existing franchise agreements.

The payment represented the difference between the existing royalty rate and the new royalty rate based on projected future sales for the remaining term of the existing agreements.

The payment is non-refundable and not subject to any adjustments based on actual future sales.

The Company determined the transaction represented the termination of the existing agreement rather than the transfer of an agreement between franchisees.

As such, the $ 7.3 million was recognized in franchise royalty revenue during the first quarter of 2023.

Contract liabilities — 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.

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(2) Represents the closing indebtedness of Del Taco’s existing debt that was paid at the Closing Date by the Company.

Purchase price allocation — During the fourth quarter, we completed the accounting for the acquisition and recorded measurement period adjustments of $ 0.3 million attributable to new information obtained surrounding tax-related matters, certain tangible assets, and the settlement of a litigation matter that existed as of the acquisition date.

The final allocation of the purchase consideration, which includes measurement-period adjustments recorded in our third and fourth quarters of fiscal 2022, is as follows (in thousands) :

Initial Allocation of Consideration Measurement Period Adjustments October 2,

Purchase price allocation — The final allocation of the purchase consideration was as follows (in thousands) :

Total aggregate purchase consideration, net of $ 12,068 cash acquired

$ 581,241 $ — $ 581,241

Accounts and other receivables 4,583

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Restaurants sold to Jack in the Box franchisees 5 15 —

Restaurants sold to Del Taco franchisees 111 — —

Proceeds from the sale of company-operated restaurants (1) $ 85,221 $ 6,391 $ 1,827

Broker commissions ( 1,614 ) — —

Net assets sold (primarily property and equipment) ( 17,101 ) ( 1,565 ) —

Goodwill related to the sale of company-operated restaurants ( 35,544 ) ( 948 ) —

Franchise fees ( 3,086 ) — —

Sublease liabilities, net ( 8,559 ) — —

Lease termination ( 393 ) — —

Other (2) ( 926 ) — 2,376

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(1) Amounts in 2023, 2022, and 2021 include additional proceeds of $ 0.9 million, $ 1.4 million, and $ 1.8 million, respectively, related to the extension of the underlying franchise and lease agreements from the sale of restaurants in prior years.

(2) Amounts in 2021 and 2020 relate to adjustments to contingencies that were included in underlying franchise and lease agreements from the sale of restaurants in prior years.

Franchise acquisitions — In 2022, 2021, and 2020, we acquired thirteen , twenty , and eight franchise restaurants, respectively.

(2) Amount in 2023 is primarily related to charges for a restaurant that was closed due to refranchising the related market.

Amount in 2021 relate to adjustments to contingencies that were included in underlying franchise and lease agreements from the sale of restaurants in prior years.

Franchise acquisitions — In 2022 and 2021, we acquired 13 and 20 franchise restaurants, respectively.

There were no such acquisitions in 2023.

We account for the acquisition of franchised restaurants using the acquisition method of accounting for business combinations.

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The following table provides detail of the combined acquisitions in 2022, and 2021 ( dollars in thousands ):

2022 2021 2020

Restaurants acquired from franchisees 13 20 8

Restaurants acquired from Jack in the Box franchisees 13 20

Inventory $ — $ 258

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Assets held for sale — Assets classified as held for sale consisted of the following at each fiscal year-end ( in thousands ):

2022 October 3,

Jack in the Box restaurant properties held for sale (1) $ 14,151 $ —

Other property and equipment held for sale (2) 2,868 1,692

Jack in the Box restaurant properties (1) $ 11,097 $ 14,151

Other property and equipment (2) 766 2,868

Del Taco restaurants to be refranchised:

Property and equipment 771 —

Goodwill 1,291 —

Assets held for sale $ 13,925 $ 17,019

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(2) Consists primarily of owned properties of closed restaurants which we are actively marketing for sale.

Discontinued operations — There were no discontinued operations during 2022 and 2021.

The results of discontinued operations in 2020 pertain to the resolution of certain contingencies relating to our former Qdoba business which we sold in 2018.

GOODWILL AND INTANGIBLE ASSETS

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Jack in the Box Del Taco Total

Balance at September 27, 2020 $ 47,161 $ — $ 47,161

Acquisition of Jack in the Box franchise-operated restaurants 613 — 613

Balance at October 3, 2021 $ 47,774 $ — $ 47,774

4 unchanged sentences

Balance at October 2, 2022 136,099 230,722 366,821

Sale of Del Taco company-operated restaurants to franchisees — ( 35,472 ) ( 35,472 )

Sale of Jack in the Box company-operated restaurants to franchisees ( 72 ) — ( 72 )

Reclassified to assets held for sale — ( 1,291 ) ( 1,291 )

Balance at October 1, 2023 $ 136,027 $ 193,959 $ 329,986

The net carrying amounts of intangible assets are as follows ( in thousands ):

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The following table summarizes, as of October 1, 2023, the estimated amortization expense for each of the next five fiscal years ( in thousands ):

2028 and thereafter $ 8,112

Total $ 11,330

FAIR VALUE MEASUREMENTS

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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.

As of October 2, 2022, we had $ 50.0 million of outstanding borrowings under our Variable Funding Notes.

As of October 1, 2023, we did not have any outstanding borrowings under our Variable Funding Notes.

The fair value of these loans approximates their carrying value due to the variable rate nature of these borrowings.

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2023 October 2,

Series 2019-1 3.982% Fixed Rate Class A-2-I Notes

$ — $ 570,688

Series 2019-1 4.476 % Fixed Rate Class A-2-II Notes

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Series 2022-1 3.445 % Fixed Rate Class A-2-I Notes

533,500 544,500

Series 2022-1 4.136 % Fixed Rate Class A-2-II Notes

533,500 544,500

Series 2022-1 Variable Funding Notes, variable interest rate of 6.322 % at October 1, 2023

6 unchanged sentences

Interest payments on the 2022 Notes are payable on a quarterly basis.

The anticipated repayment dates of the 2022 Class A-2-I Notes and the Class A-2-II Notes are February 2027 and February 2032, respectively (the “Anticipated Repayment Dates”), unless earlier prepaid to the extent permitted under the indenture that will govern the 2022 Notes.

The anticipated repayment dates of the existing 2019-1 Class A-2-II Notes and the Class A-2-III Notes are August 2026 and August 2029, respectively.

The Company also entered into a revolving financing facility of Series 2022-1 Variable Funding Senior Secured Notes (the “Variable Funding Notes”), which permits borrowings up to a maximum of $ 150.0 million, subject to certain borrowing conditions, a portion of which may be used to issue letters of credit.

The Company’s existing revolving financing facility of Series 2019-1 Class A-1 Notes was terminated in connection with the transaction.

As of October 2, 2022, we had outstanding borrowings of $ 50.0 million and available borrowing capacity of $ 58.0 million under our 2022 Variable Funding Notes, net of letters of credits issued of $ 42.0 million.

The net proceeds of the sale of the 2022 Notes were used to repay in full of $ 570.7 million in aggregate outstanding principal amount of the Company’s Series 2019-1 Class A-2-I Notes, together with the applicable make-whole premium and unpaid interest, and was used to fund a portion of the Company’s acquisition of Del Taco Restaurants, Inc.

As of October 1, 2023, we did not have any outstanding borrowings and had available borrowing capacity of $ 100.5 million, net of letters of credits issued of $ 49.5 million.

As a result, the Company recorded a loss on early extinguishment of debt of $ 5.6 million during the second quarter of 2022, which was comprised of the write-off of certain deferred financing costs and a specified make-whole premium payment, and is presented in “Interest expense, net” in the consolidated statement of earnings.

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Exceeding the leverage ratio of 5.0 x does not violate any covenant related to the Class A-2 Notes.

Subsequent to closing the issuance of the 2022 Notes, the Company has had a leverage ratio of greater than 5.0 x and, accordingly, the Company resumed making the scheduled principal payments on its 2022 Notes and Series 2019-1 Notes beginning in the second quarter of 2022.

Subsequent to closing the issuance of the 2022 Notes, the Company has had a leverage ratio of greater than 5.0 x and, accordingly, the Company is making the scheduled principal payments on its 2022 Notes and Series 2019-1 Notes.

Variable Funding Notes — Depending on the type of borrowing under the Variable Funding Notes, interest on the Variable Funding Notes will be based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the London interbank offered rate for U.S.

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Revolving credit facility — In connection with the Del Taco acquisition, Del Taco’s existing debt of $ 115.2 million related to a Syndicated Credit Facility dated August 5, 2015, was repaid and extinguished on the Closing Date.

On the Closing Date, Del Taco entered into a new syndicated credit facility with an aggregate principal amount of up to $ 75.0 million, maturing on March 7, 2023.

The revolving credit facility, as amended, includes a limit of $ 20.0 million for letters of credit.

As of October 2, 2022, we had no outstanding borrowings and available borrowing capacity of $ 59.9 million under the facility, net of letters of credit of $ 15.1 million.

On the Closing Date, Del Taco entered into a new syndicated credit facility with an aggregate principal amount of up to $ 75.0 million, which now matures on March 1, 2024.

The Company capitalized $ 0.3 million of debt issuance costs, which are being amortized into interest expense over the expected term of the credit facility.

The revolving credit facility, as amended, included a limit of $ 20.0 million for letters of credit, all of which were cancelled as of October 1, 2023.

As of October 1, 2023, we had no outstanding borrowings and available borrowing capacity of $ 75.0 million under the facility.

Bridge commitment letter — In connection with the Merger Agreement, the Company secured commitments for a bridge financing facility in an amount of up to $ 600.0 million (the “Bridge Facility”).

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Less accumulated amortization ( 6,511 ) ( 6,047 )

$ 854 $ 1,698

The following table includes supplemental cash flow and non-cash information related to our lessee leases ( in thousands ):

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Right-of-use assets obtained in exchange for new financing lease obligations $ 5 $ 45

Sale and leaseback transactions — In fiscal 2022, we sold four restaurant properties in sale and leaseback transactions for net proceeds of $ 10.8 million and recorded total losses of $ 0.2 million.

Sale and leaseback transactions — In fiscal 2023, we sold one restaurant property in a sale and leaseback transaction for net proceeds of $ 3.7 million, and recorded total losses of less than $ 0.1 million.

The lease has been accounted for as an operating lease and contains an initial term of 20 years.

In fiscal 2022, we sold four restaurant properties in sale and leaseback transactions for net proceeds of $ 10.8 million, and recorded total losses of $ 0.2 million.

The leases have been accounted for as operating leases and contain initial terms of 16 years and 20 years.

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The leases have been accounted for as operating leases and contain an initial term of 20 years.

In fiscal 2020, we completed two sale and leaseback transactions of our restaurant properties with one occurring during the first quarter of 2020 and the other occurring during the third quarter of 2020.

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.

Under the other arrangement, we received net proceeds of $ 2.4 million on a restaurant property sold and recognized a loss of less than $ 0.1 million on the sale.

The initial term of the lease is 17 years and has been accounted for as an operating lease.

In fiscal 2020, we also completed the sale of one of our corporate office buildings as we moved 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 were $ 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 “Other operating expenses (income), net” in our consolidated statement of earnings.

Company as lessor — The following table presents rental income ( in thousands ):

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Variable lease income - franchise 12,700 108,010 120,710 12,418 96,002 108,420

Amortization of favorable and unfavorable lease contracts, net — 198 198 — — —

Amortization of sublease assets and liabilities, net — 684 684 — 198 198

Franchise rental revenues $ 30,505 $ 334,086 $ 364,591 $ 31,639 $ 308,752 $ 340,391

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2023 2022 2021

Acquisition, integration, and restructuring costs $ 20,081 $ 7 $ 1,168

Acquisition, integration and strategic initiatives $ 9,112 $ 20,081 $ 7

Costs of closed restaurants and other 4,786 4,290 1,907

Restaurant impairment charges 5,927 — —

Operating restaurant impairment charges 4,569 5,927 —

Accelerated depreciation 541 1,124 1,592

1 unchanged sentence

$ 10,837 $ 889 $ ( 3,382 )

Acquisition, integration, and restructuring costs — In 2022, costs incurred are related to the acquisition and integration of Del Taco, primarily associated with advisory, legal, and consulting services.

In 2020, costs incurred relate to a restructuring plan that management initiated to reduce our general and administrative costs, which was completed in 2020.

Restaurant closing costs — Cost of closed restaurants primarily include ongoing costs associated with closed restaurants and cancelled project costs.

Restaurant impairment charges — In 2022, impairment charges included $ 3.2 million related to nine Jack in the Box company-operated restaurants that were closed in connection with the sale of the related markets and $ 2.7 million related to Jack in the Box restaurants leased or subleased to franchisees for which the lease and franchise agreements were early terminated during the year.

Acquisition, integration and strategic initiatives — In 2023, costs incurred primarily related to severance, retention bonuses, strategic consulting fees and technology integration related to the acquisition of Del Taco.

In 2022, costs incurred primarily related to advisory, legal, and consulting services relating to the acquisition and integration of Del Taco.

Cost of closed restaurant — Cost of closed restaurants primarily include ongoing costs associated with closed restaurants and cancelled project costs.

Operating restaurant impairment charges — In 2023, impairment charges included $ 4.4 million relating to under-performing Del Taco restaurants currently held for use.

In 2022, impairment charges included $ 3.2 million related to nine Jack in the Box company-operated restaurants that were closed in connection with the sale of the related markets and $ 2.7 million related to Jack in the Box restaurants leased or subleased to franchisees for which the lease and franchise agreements were early terminated during the year.

Accelerated depreciation — When a long-lived asset will be replaced or otherwise disposed of prior to the end of its estimated useful life, the useful life of the asset is adjusted based on the estimated disposal date and accelerated depreciation is recognized.

In 2023, 2022 and 2021, accelerated depreciation primarily related to facility improvements, restaurant remodels, and information technology assets.

Gains on disposition of property and equipment, net — In 2022, gains primarily relate to the sale of Jack in the Box restaurant properties to franchisees who were leasing the properties from us prior to the sale.

Gains on disposition of property and equipment, net — In 2023 and 2022, gains primarily relate to the sale of Jack in the Box restaurant properties to franchisees who were leasing the properties from us prior to the sale.

In 2021, gains primarily relate to the sale of closed restaurant properties.

In 2020, gains primarily relate to the sale of one of our corporate buildings.

SEGMENT REPORTING

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We measure and evaluate our segments based on segment revenues and segment profit.

Our measure of segment profit excludes depreciation and amortization, share-based compensation, company-owned life insurance (“COLI”) gains/losses, net of changes in our non-qualified deferred compensation obligation supported by these policies, acquisition, integration, and restructuring expenses, gains on the sale of company-operated restaurants, and amortization of favorable and unfavorable leases and subleases, net.

Our measure of segment profit excludes depreciation and amortization, share-based compensation, company-owned life insurance (“COLI”) gains/losses, net of changes in our non-qualified deferred compensation obligation supported by these policies, acquisition, integration and strategic initiatives, gains on the sale of company-operated restaurants, and amortization of favorable and unfavorable leases and subleases, net.

The following table provides information related to our operating segments in each period ( in thousands ):

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Depreciation and amortization 62,287 56,100 46,500

Acquisition, integration, and restructuring costs 20,081 7 1,168

Acquisition, integration and strategic initiatives 9,112 20,081 7

Share-based compensation 11,205 7,122 4,048

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Income tax expense from continuing operations $ 58,514 $ 46,111 $ 55,852

Income tax expense from discontinued operations $ — $ — $ 144

A reconciliation of the federal statutory income tax rate to our effective tax rate for continuing operations is as follows:

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Stock compensation tax deficiency (excess tax benefit) — % 0.1 % ( 0.5 ) %

Benefit of jobs tax credits, net of valuation allowance ( 0.6 ) % ( 0.1 ) % ( 0.5 ) %

Benefit of tax credits, net of valuation allowance ( 0.4 ) % ( 0.6 ) % ( 0.1 ) %

Adjustment to state tax provision — % — % 0.7 %

Nondeductible goodwill related to the sale of company-operated restaurants 4.9 % — % — %

Nondeductible transaction costs — % 0.6 % — %

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Accrued defined benefit pension and postretirement benefits 18,896 19,090

Accrued legal settlements 15,158 2,378

Deferred income 15,137 13,524

Accrued legal settlements 11,099 15,158

Accrued insurance 8,086 8,339

Share-based compensation 6,139 5,094

Tax loss and tax credit carryforwards 4,399 3,129

Accrued incentive compensation 5,928 2,402

Tax loss and tax credit carryforwards 1,956 4,399

Capitalized research costs 1,943 —

Other reserves and allowances 1,144 1,627

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Intangible assets ( 84,969 ) ( 87,165 )

Property and equipment, principally due to differences in depreciation ( 5,656 ) —

Investment basis limitation ( 6,191 ) ( 6,010 )

Property and equipment, principally due to differences in depreciation — ( 5,656 )

Other ( 1,701 ) ( 1,408 )

1 unchanged sentence

Net deferred tax (liabilities) assets $ ( 26,229 ) $ ( 37,684 )

Deferred tax assets as of October 2, 2022 include federal and state gross net operating loss carryforwards of approximately $ 24.6 million, of which $ 19.2 million has an indefinite carryforward.

Deferred tax assets as of October 1, 2023 include state gross net operating loss carryforwards of approximately $ 12.4 million, of which $ 9.6 million has an indefinite carryforward.

The remainder will expire at various times between 2024 and 2042.

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The federal statutes of limitations have not expired for fiscal year 2020 and forward.

The statutes of limitations for California and Texas, which constitutes the Company's major state tax jurisdictions, have not expired for fiscal years 2018 and forward.

The statutes of limitations for California, which constitutes the Company's major state tax jurisdiction, have not expired for fiscal years 2018 and forward.

RETIREMENT PLANS

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Defined contribution plans — We maintain two qualified savings plans pursuant to Section 401(k) of the Internal Revenue Code (“IRC”).

The plans allows all employees who meet certain age and minimum service requirements to defer a percentage of their pay on a pre-tax basis.

Our contributions under these plans were $ 2.1 million in fiscal 2022, and $ 1.6 million in fiscal years 2021 and 2020, respectively.

The plans allow all employees who meet certain age and minimum service requirements to defer a percentage of their pay on a pre-tax basis.

Our contributions under these plans were $ 2.3 million, $ 2.1 million, and $ 1.6 million in each fiscal years 2023, 2022 and 2021, respectively.

We also maintain an unfunded, non-qualified deferred compensation plan for key executives and other members of management whose compensation deferrals or company matching contributions to the qualified savings plan are limited due to IRC rules.

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This plan allows participants to defer up to 50 % of their salary and 85 % of their bonus, on a pre-tax basis.

Our contributions under the non-qualified deferred compensation plan were less than $ 0.1 million in fiscal years 2022, and 2021, respectively and $ 0.3 million in 2020.

Our contributions under the non-qualified deferred compensation plan were $ 0.1 million in fiscal year 2023, and were less than $ 0.1 million in each fiscal years 2022 and 2021, respectively.

Defined benefit pension plans — We sponsor two defined benefit pension plans, a “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.

In fiscal 2011, the Board of Directors approved changes to our Qualified Plan whereby participants will no longer accrue benefits effective December 31, 2015.

In fiscal 2011, the Board of Directors approved changes to our Qualified Plan whereby participants no longer accrue benefits effective December 31, 2015.

Benefits under both plans are based on the employees’ years of service and compensation over defined periods of employment.

In the fourth quarter of fiscal 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.

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, third and fourth quarters of fiscal 2020 resulted in additional non-cash settlement charges totaling $ 0.6 million.

In the fourth quarter of fiscal 2023, the Company amended its Qualified Plan to purchase certain annuity contracts from a third-party company, relieving the Company of its related obligation for future payment (the “Annuity Purchase Agreement”).

As a result of the Annuity Purchase Agreement, the Company’s Qualified Plan paid $ 14.4 million from its plan assets to the third-party, thereby reducing the plan’s pension benefit obligation (“PBO”).

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.

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Participant contributions — — — — 101 92

Actuarial (gain) loss ( 114,999 ) ( 785 ) ( 14,830 ) ( 672 ) ( 4,062 ) ( 3,525 )

Actuarial gain ( 13,792 ) ( 114,999 ) ( 1,287 ) ( 14,830 ) ( 383 ) ( 4,062 )

Benefits paid ( 14,884 ) ( 14,218 ) ( 5,240 ) ( 5,677 ) ( 1,145 ) ( 1,204 )

Other — — — — 100 91

Settlements and other ( 14,389 ) — — — 41 100

Obligation at end of year $ 266,345 $ 293,342 $ 53,513 $ 56,891 $ 11,891 $ 12,577

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Fair value at beginning of year $ 303,951 $ 409,708 $ — $ — $ — $ —

Actual (loss) return on plan assets ( 91,539 ) 58,491 — — — —

Actual return (loss) on plan assets 465 ( 91,539 ) — — — —

Participant contributions — — — — 101 92

1 unchanged sentence

Benefits paid ( 14,884 ) ( 14,218 ) ( 5,240 ) ( 5,677 ) ( 1,145 ) ( 1,204 )

Other — — — — 100 91

Settlements and other ( 14,389 ) — — — 42 100

Fair value at end of year $ 275,143 $ 303,951 $ — $ — $ — $ —

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Other changes in plan assets and benefit obligations recognized in OCI:

Net actuarial gain $ ( 5,357 ) $ ( 39,936 ) $ ( 14,830 ) $ ( 672 ) $ ( 4,062 ) $ ( 3,526 )

Net actuarial loss (gain) $ 848 $ ( 5,357 ) $ ( 1,287 ) $ ( 14,830 ) $ ( 383 ) $ ( 4,062 )

Amortization of actuarial (loss) gain ( 2,349 ) ( 2,193 ) ( 718 ) ( 1,666 ) 932 640

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Total recognized in comprehensive income $ 1,811 $ ( 10,954 ) $ 1,862 $ ( 12,657 ) $ 317 $ ( 3,573 )

Amounts in AOCI expected to be amortized in fiscal 2023 net periodic benefit cost:

Amounts in AOCI expected to be amortized in next fiscal net periodic benefit cost:

Net actuarial loss (gain) $ 2,403 $ 632 $ ( 914 )

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Total $ 2,403 $ 646 $ ( 914 )

Additional year-end pension plan information — The PBO is the actuarial present value of benefits attributable to employee service rendered to date, including the effects of estimated future pay increases.

Additional year-end pension plan information — The PBO represents the actuarial present value of benefits attributable to employee service rendered to date, including the effects of estimated future pay increases.

The accumulated benefit obligation (“ABO”) also reflects the actuarial present value of benefits attributable to employee service rendered to date but does not include the effects of estimated future pay increases.

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The funded status is measured as the difference between the fair value of a plan’s assets and its PBO.

As of October 2, 2022 the Qualified Plan’s ABO was less than the fair value of its plan assets whereas as of October 3, 2021, the Qualified Plan’s ABO exceeded the fair value of its plan assets.

Since the Qualified Plan is frozen and the SERP has no active participants, the PBO and ABO are equal.

As of October 1, 2023 and October 2, 2022, respectively, the Qualified Plan’s ABO was less than the fair value of its plan assets.

The SERP is an unfunded plan and, as such, had no plan assets as of October 1, 2023 and October 2, 2022.

12 unchanged sentences

Expected return on plan assets ( 15,105 ) ( 18,103 ) ( 19,340 )

Pension settlements — — 39,218

Actuarial loss 2,349 2,193 3,510

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Assumptions — We determine our actuarial assumptions on an annual basis.

In determining the present values of our benefit obligations and net periodic benefit costs as of and for the fiscal years ended October 2, 2022, October 3, 2021, and September 27, 2020, we used the following weighted-average assumptions:

In determining the present values of our benefit obligations and net periodic benefit costs as of and for the fiscal years ended October 1, 2023, October 2, 2022, and October 3, 2021, we used the following weighted-average assumptions:

2023 2022 2021

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Discount rate 5.80 % 2.99 % 2.84 %

Rate of future pay increases (2) N/A N/A 3.50 %

Rate of future pay increases (2) N/A N/A N/A

Postretirement health plans:

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(1) Determined as of end of year.

(2) Rate is not applicable as there are no active employees as of fiscal year end 2020, 2021 and 2022.

(2) Rate is not applicable as there are no active employees as of fiscal year end 2023, 2022 or 2021.

(3) Determined as of beginning of year .

(4) Remeasurements were performed in the first, second, and third quarters of fiscal 2020 using 3.61 %, 3.38 %, and 3.13 % respectively.

(5) Remeasurements were performed in the first, second, and third quarters of fiscal 2020 using 5.9 %, 5.2 %, and 5.4 % respectively.

The assumed discount rates were determined by considering the average of pension yield curves constructed of a population of high-quality bonds with a Moody’s or Standard and Poor’s rating of “AA” or better whose cash flow from coupons and maturities match the year-by-year projected benefit payments from the plans.

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The assumed discount rate and expected long-term rate of return on assets have a significant effect on amounts reported for our pension and postretirement plans.

If the discount rate and long-term rate of return used were decreased by a quarter percentage point, fiscal 2022 earnings before income taxes would have decreased by $ 0.1 million and decreased by $ 1.0 million, respectively.

If the discount rate and expected rate of return on assets used were to decrease by 0.25 %, fiscal 2023 earnings before income taxes would have decreased by less than $ 0.1 million and decreased by $ 1.0 million, respectively.

For measurement purposes, the weighted-average assumed health care cost trend rates for our postretirement health plans were as follows for each fiscal year:

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The healthcare cost trend rate assumption has a significant effect on the amounts reported.

Plan assets — Our investment philosophy is to (1) protect the corpus of the fund;

(2) establish investment objectives that will allow the market value to exceed the present value of the vested and unvested liabilities over time;

while (3) obtaining adequate investment returns to protect benefits promised to the participants and their beneficiaries.

Plan assets — Our investment philosophy is to invest assets in a prudent manner to meet the obligation of providing benefits to Plan participants and their beneficiaries in accordance with the time horizon appropriate for the Plan while employing asset diversification to minimize the risk of large losses.

Our asset allocation strategy utilizes multiple investment managers in order to maximize the plan’s return while minimizing risk.

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We continually review our target asset allocation for our Qualified Plan and when changes are made, we reallocate our plan assets over a period of time, as deemed appropriate by senior financial management, to achieve our target asset allocation.

Our plan asset allocation at the end of fiscal 2022 and target allocations were as follows:

Our plan asset allocation at the end of each fiscal 2023 and 2022 and respective target allocations were as follows:

2023 Target Minimum Maximum

Cash & cash equivalents 1 % — % — % — %

Global equity 11 % 12 % 7 % 17 %

Alternative credit 10 % 9 % 4 % 14 %

Real assets 10 % 9 % 4 % 14 %

Liability-hedging assets 68 % 70 % 60 % 80 %

2022 Target Minimum Maximum

Cash & cash equivalents 1 % 1 % — % — %

Domestic equities 11 % 11 % 5 % 17 %

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The fair values of the Qualified Plan’s assets by asset category are as follows ( in thousands ):

Total Quoted Prices

Quoted Prices

(Level 1) Significant

(Level 2) Significant

Items Measured at Fair Value at September 30, 2022:

Asset Category:

Fair Value at September 30, 2023:

Cash and cash equivalents (1) $ 3,266 $ — $ — $ 3,266 $ —

(2) 33,659 33,659 — —

International (3),(4) 32,807 16,557 — —

Global equity (2) 30,879 30,879 — — —

Fixed income:

Investment grade (5) 193,426 20,138 173,288 —

High yield (6) 6,970 6,970 — —

Alternatives (4),(7) 12,061 — — —

Real estate (4),(8) 22,761 — — —

Liability-hedging assets (4) 184,085 77,653 — 106,432 —

Alternative credit (5) 28,378 28,378 — — —

Real assets (6) 28,535 28,535 — — —

$ 275,143 $ 165,445 $ — $ 109,698 $ —

Items Measured at Fair Value at September 30, 2021:

Asset Category:

Fair Value at September 30, 2022:

Cash and cash equivalents (1) $ 2,267 $ — $ — $ 2,267 $ —

(2) 66,921 66,921 — —

International (3),(4) 63,087 31,128 — —

equity (7) 33,659 — 33,659 — —

International equity (8) 32,807 16,250 16,557 — —

Fixed income:

1 unchanged sentence

High yield (10) 6,970 — 6,970 — —

Alternatives (4),(7) 26,519 — — —

Alternative investments (11) 12,061 12,061 — — —

Real estate (12) 22,761 22,761 — — —

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(1) Cash and cash equivalents are comprised of commercial paper, short-term bills and notes, and short-term investment funds, which are valued at quoted prices in active markets for similar securities.

(2) Global equity is comprised of investments in publicly traded common stocks and other equity-type securities issued by companies throughout the world, including convertible securities, preferred stock, rights and warrants.

(3) Certain investments that are measured at fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient are not categorized in the fair value hierarchy.

The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

(4) Liability-hedging assets are comprised of investments in fixed income securities or derivatives thereof that are intended to mitigate interest rate risk or reduce the interest rate duration mismatch between the assets and liabilities of the Plan.

(5) Alternative credit includes investments in a range of public and private credit securities, including below investment grade rated bonds and loans, securitized credit, and emerging market debt.

(6) Real assets are investments in public and private debt and equity investments, including but not limited to real estate, infrastructure, timberland and agriculture/farmland.

equity securities are comprised of investments in common stock of U.S.

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These investments are valued by the trustee at closing prices from national exchanges on the valuation date, or the values are adjusted as a result of market movements following the close of local trading using inputs to models that are observable either directly or indirectly.

The portion of these investments that are measured at fair value using the net asset value per share practical expedient (see note 4 below) can be redeemed on a monthly basis.

(4) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy.

The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

The portion of these investments that are measured at fair value using the net asset value (“NAV”) per share practical expedient can be redeemed on a monthly basis.

(9) Investment grade fixed income consists of debt obligations either issued by the U.S.

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These investments are valued based on unadjusted quoted market prices and can be redeemed on a bi-monthly basis.

(8) Real estate is investments in a real estate collective trust for purposes of total return.

(12) Real estate includes investments in a real estate collective trust for purposes of total return.

These investments are valued based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

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We issue new shares to satisfy stock issuances under our stock incentive plans.

Our Amended and Restated 2004 Stock Incentive Plan authorizes the issuance of up to 11,600,000 common shares in connection with the granting of stock options, stock appreciation rights, restricted stock purchase rights, restricted stock bonuses, restricted stock units, or performance units to our employees and directors.

There were 1,479,033 shares of common stock available for future issuance under this plan as of October 2, 2022.

In connection with the Merger Agreement, on the Closing Date, the Company assumed the Del Taco Restaurants, Inc.

2015 Omnibus Incentive Plan which authorized the issuance of common shares in connection with the granting of stock options, stock appreciation rights, restricted stock and restricted stock units, or performance awards to their employees, directors, and consultants.

Our Amended and Restated 2004 Stock Incentive Plan (“Prior Plan”) authorized the issuance of up to 11,600,000 common shares in connection with the granting of stock options, stock appreciation rights, restricted stock purchase rights, restricted stock bonuses, restricted stock units, or performance units to our employees and directors.

As of January 1, 2023, no additional awards were granted under the Prior Plan.

Our Jack in the Box Inc.

2023 Omnibus Incentive Plan (“Plan”) authorizes the issuance of up to 2,500,000 common shares plus Prior Plan returning shares in connection with outstanding awards as of January 6, 2023 that on or following such date are not issued, settled in cash, or fail to vest.

The Plan is intended to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company, and provide a means by which such persons may benefit from increases in value of the common stock.

The Plan provides for the granting of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, or performance stock awards, to our employees and directors.

There were 2,454,425 shares of common stock available for future issuance under this plan as of October 1, 2023.

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2023 2022 2021

Nonvested stock units $ 4,544 $ 2,969 $ 3,526

Nonvested restricted stock units $ 7,598 $ 4,544 $ 2,969

Stock options 4 19 25

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Nonvested restricted stock units — Nonvested restricted stock units (“RSUs”) are generally issued to employees and non-employee directors.

Grants to executive officers of time-vesting RSUs vest ratably over four years and are subject to a stock holding requirement of 50 % of after-tax net shares resulting from the vesting of RSUs and must be held until the multiple of base salary stock ownership is met.

There were 75,791 of such RSUs outstanding as of October 2, 2022.

Grants to executive officers of time-vesting RSUs vest ratably over four years or three years , are subject to a stock holding requirement of 50 % of after-tax net shares resulting from the vesting of RSUs, and must be held until the multiple of base salary stock ownership is met.

There were 38,772 RSU’s vesting over four years , and 54,561 RSU’s vesting over three years outstanding as of October 1, 2023.

RSUs issued to non-management directors vest 12 months from the date of grant, or upon termination of board service, including RSUs for which the director elected to defer receipt until termination of board service, and totaled 83,251 units outstanding as of October 1, 2023.

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In fiscal years 2023, 2022, and 2021, the total fair value of RSUs that vested and were released was $ 4.6 million, $ 2.5 million, and $ 4.3 million, respectively.

Modification of RSU awards — In fiscal 2020, we entered into a Retention, Transition and Separation Agreement with our former Chairman and Chief Executive Officer, which sets forth the terms of his transition and certain benefits he is eligible to receive, pro-rated through the duration of the transition period, which included vesting of his final tranche of unvested restricted stock units remaining under his November 2015 restricted stock unit award scheduled to vest in November 2020.

Consequently, 23,128 shares vested on his last day of employment on July 31, 2020.

This was accounted for as an equity award modification under ASC Topic 718, and as the fair value of the modified award was less than previously recognized compensation, no incremental compensation costs were recorded by the Company.

Stock options — Option grants have contractual terms of seven years and employee options vest over a three-year period.

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Options outstanding at October 2, 2022 32,450 $ 92.80

Granted — N/A

Exercised ( 3,500 ) $ 75.23

Forfeited — N/A

Expired — N/A

Options outstanding at October 1, 2023 28,950 $ 94.92 1.11 $ —

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We use a valuation model to determine the fair value of options granted that requires the input of highly subjective assumptions, including the expected volatility of the stock price.

The following table presents the weighted-average assumptions used for stock option grants in each fiscal year, along with the related weighted-average grant date fair value:

2021 (1) 2020

Risk-free interest rate N/A N/A 1.7 %

Expected dividends yield N/A N/A 2.1 %

Expected stock price volatility N/A N/A 28.1 %

Expected life of options (in years) N/A N/A 3.47

Weighted-average grant date fair value N/A N/A $ 13.97

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(1) No stock option awards were granted in fiscal 2022 or fiscal 2021.

The risk-free interest rate was determined by a yield curve of risk-free rates based on published U.S.

Treasury spot rates in effect at the time of grant and has a term equal to the expected life of the related options.

The dividend yield assumption is based on the Company’s history and expectations of dividend payouts at the grant date.

The expected stock price volatility in all years represents the Company’s historical volatility.

The expected life of the options represents the period of time the options are expected to be outstanding and is based on historical trends.

As of October 2, 2022, there was less than $ 0.1 million of total unrecognized compensation cost related to stock options grants that is expected to be recognized over a weighted-average period of 0.2 years.

The total intrinsic value of stock options exercised was less than $ 0.1 million, $ 1.6 million, and $ 0.7 million in fiscal years 2022, 2021, and 2020, respectively.

No stock option awards were granted in fiscal 2023, 2022, or 2021.

As of October 1, 2023, there was no unrecognized compensation cost related to stock options grants.

The total intrinsic value of stock options exercised was less than $ 0.1 million in fiscal years 2023 and 2022, respectively, and was $ 1.6 million in fiscal year 2021.

Performance share awards — Performance share awards, granted in the form of stock units, represent a right to receive a certain number of shares of common stock based on the achievement of corporate performance goals and continued employment during the vesting period.

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Forfeited ( 13,548 ) $ 77.54

Performance adjustments ( 632 ) $ 70.56

Performance share awards outstanding at October 1, 2023 107,174 $ 72.51

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Restricted stock awards outstanding at October 2, 2022 4,670 $ 82.33

Granted 21,152 $ 82.33

Issued ( 4,670 ) $ 82.33

Forfeited ( 8,114 ) $ 82.33

Restricted stock awards outstanding at October 1, 2023 — $ —

As of October 2, 2022, there was approximately $ 0.2 million of total unrecognized compensation cost related to nonvested stock awards, which is expected to be recognized over a weighted-average period of 0.4 years.

The weighted-average grant date fair value of awards granted was $ 82.33 in fiscal 2022.

The total fair value of awards that vested and were released during fiscal 2022 was $ 0.7 million.

As of October 1, 2023, there was no unrecognized compensation cost related to nonvested stock awards.

The total fair value of awards that vested and were released during fiscal years 2023 and 2022, was $ 0.4 million and $ 0.7 million, respectively.

Non-management directors’ deferred compensation — All awards outstanding under our directors’ deferred compensation plan are accounted for as equity-based awards and deferred amounts are converted into stock equivalents based on a per share price equal to the average of the closing price of our common stock for the 10 trading days immediately preceding the date the deferred compensation is credited to the director’s account.

During fiscal 2023, 2022, and 2021, no shares of common stock were issued in connection with director retirements.

During fiscal 2020, 204 shares of common stock were issued in connection with director retirements with a fair value of less than $ 0.1 million.

The following is a summary of the stock equivalent activity for fiscal 2023:

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STOCKHOLDERS’ DEFICIT

Repurchases of common stock — In fiscal 2022, the Company purchased 0.3 million shares of its common stock for an aggregate cost of $ 25.0 million.

As of October 2, 2022, there was $ 175.0 million remaining amount under share repurchase programs authorized by the Board of Directors which expires in November 2023.

Repurchases of common stock — In fiscal 2023, the Company purchased 1.1 million shares of its common stock for an aggregate cost of $ 90.7 million, including applicable excise tax.

As of October 1, 2023, there was $ 85.0 million remaining amount under share repurchase programs authorized by the Board of Directors which expired on November 20, 2023.

Dividends — In fiscal 2023, the Board of Directors declared four cash dividends of $ 0.44 , respectively, totaling $ 36.2 million.

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COMMITMENTS AND CONTINGENCIES

Purchase commitments — Jack in the Box and Del Taco have long-term beverage supply agreements with certain major beverage vendors, which provide fountain products and marketing support funding to the Company and its franchisees.

These agreements require minimum purchases of fountain beverage syrup by the Company and its franchisees at agreed upon prices until the total volume commitments have been reached.

Based on current pricing and ratio of usage at company-operated to franchised restaurants as of October 2, 2022, total beverage purchase requirements under these agreements is estimated to be approximately $ 75.2 million over the next seven years .

Purchase commitments — Jack in the Box and Del Taco have long-term food and beverage supply agreements with certain major vendors, which provide food and fountain drink products and marketing support funding to the Company and its franchisees.

These agreements require minimum purchases by the Company and its franchisees at agreed upon prices until the total volume commitments have been reached.

Based on current pricing and ratio of usage at company-operated to franchised restaurants as of October 1, 2023, total food and beverage purchase requirements under these agreements is estimated to be approximately $ 131.9 million over the next five years .

We also have entered into various arrangements with vendors providing information technology services with no early termination fees.

The Company’s unconditional purchase obligations on these contracts total approximately $ 6.7 million over the next four years .

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.

The Company’s unconditional purchase obligations on these contracts total approximately $ 16.3 million over the next five years .

Legal matters — The Company assesses contingencies, including litigation contingencies, to determine the degree of probability and range of possible loss for potential accrual in our financial statements.

An estimated loss contingency is accrued in the financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

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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 Company regularly reviews contingencies to determine the adequacy of the accruals and related disclosures.

The ultimate amount of loss may differ from these estimates.

As of October 2, 2022, we estimate the aggregate range of reasonably possible losses, in excess of amounts accrued for these matters as of such date, to be up to approximately $ 6.5 million, excluding interest and attorney fees.

Any estimate is not an indication of expected loss, if any, or of the Company’s maximum possible loss exposure and the ultimate amount of loss may differ materially from these estimates in the near term.

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The parties participated in a voluntary mediation on March 16, 2020, but the matter did not settle.

On October 24, 2022, a jury awarded plaintiffs approximately $ 6.4 million in damages and penalties, in addition to interest and attorney fees to be determined by the court at a later date.

On October 24, 2022, a jury awarded plaintiffs approximately $ 6.4 million in damages and penalties.

The Company continues to dispute liability and the damage award and will defend against both through post-trial motions and all other available appellate remedies.

As of October 1, 2023, the Company has accrued the verdict amount above, as well as pre-judgment and post-judgement interest and an estimated fee award, for an additional $ 8.3 million.

These amounts are included within “Accrued liabilities” on our consolidated balance sheet as of October 1, 2023.

The Company will continue to accrue for post-judgment interest until the matter is resolved.

Torrez — In March 2014, a former Del Taco employee filed a purported Private Attorneys General Act claim and class action alleging various causes of action under California’s labor, wage, and hour laws.

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On June 4, 2022, we entered into a Settlement Memorandum of Understanding (the “Agreement”) which obligates the Company to pay a gross settlement amount of $ 50.0 million, for which in exchange we will be released from all claims by the parties.

The Agreement contains no admission of wrongdoing and is contingent upon various conditions, including, but not limited to, court approvals.

There can be no assurance that the Agreement will be approved by the court nor upheld if challenged on appeal.

As of October 2, 2022, the Company has accrued the settlement amount, included within “Accrued liabilities” on our consolidated balance sheet.

J&D Restaurant Group — On April 17, 2019, the trustee for a bankrupt former franchisee filed a complaint seeking to recover assets in the form of actual and exemplary damages for the bankruptcy trust and generally alleging the Company wrongfully terminated the franchise agreements and unreasonably denied two perspective purchasers that the former franchisee presented.

The parties participated in a mediation in April 2021, but the matter did not settle.

Trial in this matter is currently set for January 2023, with the parties scheduled to participate in another court ordered mediation in December 2022.

On August 8, 2023, the court issued its final approval of the settlement and on August 9, 2023 final judgement was entered.

The Company made its first payment of half of the settlement amount on August 28, 2023.

Payment of the second half is due on November 27, 2023.

As of October 1, 2023, the Company has accrued the remaining settlement amount of $ 25.5 million, which included within “Accrued liabilities” on its consolidated balance sheet.

J&D Restaurant Group — On April 17, 2019, the trustee for a bankrupt former franchisee filed a complaint generally alleging the Company wrongfully terminated the franchise agreements and unreasonably denied two perspective purchasers the former franchisee presented.

The parties participated in a mediation in April 2021, and again in December 2022, but the matter did not settle.

Trial commenced on January 9, 2023.

On February 8, 2023, the jury returned a verdict finding the Company had not breached any contracts in terminating the franchise agreements or denying the proposed buyers.

However, while the jury also found the Company had not violated the California Unfair Practices Act, it found for the plaintiff on the claim for breach of implied covenant of good faith and fair dealing, and awarded $ 8.0 million in damages.

On May 9, 2023, the court granted the Company’s post-trial motion, overturning the jury verdict and ordering the plaintiff take nothing on its claims.

As a result, the Company reversed the prior $ 8.0 million accrual, and as of October 1, 2023, the Company has no amounts accrued for this case on its consolidated balance sheet.

The Plaintiff has appealed the trial court’s post-trial rulings.

Other legal matters — In addition to the matters described above, we are subject to normal and routine litigation brought by former or current employees, customers, franchisees, vendors, landlords, shareholders, or others.

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Income tax payments $ 17,811 $ 33,819 $ 48,200

Interest, net of amounts capitalized $ 70,475 $ 60,413 $ 68,612

Interest payments $ 78,958 $ 70,475 $ 60,413

Non-cash investing and financing transactions:

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Consideration for franchise acquisitions $ — $ 297 $ 1,305

Increase (decrease) in obligations for purchases of property and equipment $ 1,637 $ 1,755 $ ( 2,696 )

Decrease in obligations for treasury stock repurchases $ — $ — $ ( 2,025 )

Increase in obligations for purchases of property and equipment $ 3,731 $ 1,637 $ 1,755

SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION (in thousands)

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Company-owned life insurance policies $ 113,205 $ 108,924

Deferred rent receivable 43,891 46,234

Franchise tenant improvement allowances 43,590 32,429

Deferred rent receivable 41,947 43,891

Notes receivable, less current portion 11,927 11,624

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Accrued liabilities:

Legal accruals $ 59,165 $ 7,540

Income tax liabilities $ 58,155 $ 6,338

Payroll and related taxes 49,521 43,837

Sales and property taxes 30,947 23,174

Legal accruals 40,877 59,165

Insurance 31,349 32,272

Sales and property taxes 30,508 30,947

Deferred rent income 19,397 18,525

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Future dividends will be subject to approval by our Board of Directors.

On November 16, 2023, the Board of Directors authorized a share repurchase program for up to $ 250.0 million of the Company’s common stock.

The size and timing of these repurchases will depend on pricing, market and economic conditions, legal and contractual requirements and other factors.

The share repurchase program has no expiration date and may be modified, suspended or discontinued at any time.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures