What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-11-21 compared with 2023-11-21 · 377 added, 262 removed, 1311 unchanged (33% of the section changed)

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Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Based on an evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13(a)-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the Company’s fiscal year ended October 1, 2023, the Company’s Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial officer, respectively) have concluded that the Company’s disclosure controls and procedures were effective.

Based on an evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13(a)-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the Company’s fiscal year ended September 29, 2024, the Company’s Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial officer, respectively) have concluded that the Company’s disclosure controls and procedures were effective.

Changes in 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.

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended September 29, 2024 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.

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.

In making this assessment, management used the criteria set forth in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework.

Management has concluded that, as of October 1, 2023, the Company’s internal control over financial reporting was effective, at a reasonable assurance level, based on these criteria.

Management has concluded that, as of September 29, 2024, the Company’s internal control over financial reporting was effective, at a reasonable assurance level, based on these criteria.

The Company’s independent registered public accounting firm, KPMG LLP, has issued an audit report on the effectiveness of our internal control over financial reporting, which follows.

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We have audited Jack in the Box Inc.

and subsidiaries’ (the Company) 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.

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 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.

and subsidiaries’ (the Company) internal control over financial reporting as of September 29, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 29, 2024, 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 September 29, 2024 and October 1, 2023, the related consolidated statements of operations, comprehensive (loss) income, cash flows and stockholders’ deficit for each of the fifty-two week periods ended September 29, 2024, October 1, 2023 and October 2, 2022, and the related notes (collectively, the consolidated financial statements), and our report dated November 20, 2024 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

That portion of our definitive Proxy Statement appearing under the captions “Election of Directors,” “Director Qualifications and Biographical Information,” and “Committees of the Board” to be filed with the Commission pursuant to Regulation 14A within 120 days after October 1, 2023 and to be used in connection with our 2024 Annual Meeting of Stockholders is hereby incorporated by reference.

That portion of our definitive Proxy Statement appearing under the captions “Election of Directors,” “Director Qualifications and Biographical Information,” and “Committees of the Board” to be filed with the Commission pursuant to Regulation 14A within 120 days after September 29, 2024 and to be used in connection with our 2025 Annual Meeting of Stockholders is hereby incorporated by reference.

Information regarding our executive officers is set forth in Part I of this Report under the caption “Information about our Executive Officers.”

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EXECUTIVE COMPENSATION

That portion of our definitive Proxy Statement appearing under the caption “Executive Compensation,” “Director Compensation and Stock Ownership Requirements,” “Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report” to be filed with the Commission pursuant to Regulation 14A within 120 days after October 1, 2023 and to be used in connection with our 2024 Annual Meeting of Stockholders is hereby incorporated by reference.

That portion of our definitive Proxy Statement appearing under the caption “Executive Compensation,” “Director Compensation and Stock Ownership Requirements,” “Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report” to be filed with the Commission pursuant to Regulation 14A within 120 days after September 29, 2024 and to be used in connection with our 2025 Annual Meeting of Stockholders is hereby incorporated by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

That portion of our definitive Proxy Statement appearing under the caption “Security Ownership of Certain Beneficial Owners and Management” to be filed with the Commission pursuant to Regulation 14A within 120 days after October 1, 2023 and to be used in connection with our 2024 Annual Meeting of Stockholders is hereby incorporated by reference.

Information regarding equity compensation plans under which Company common stock may be issued as of October 1, 2023 is set forth in Item 5 of this Report.

That portion of our definitive Proxy Statement appearing under the caption “Security Ownership of Certain Beneficial Owners and Management” to be filed with the Commission pursuant to Regulation 14A within 120 days after September 29, 2024 and to be used in connection with our 2025 Annual Meeting of Stockholders is hereby incorporated by reference.

Information regarding equity compensation plans under which Company common stock may be issued as of September 29, 2024 is set forth in Item 5 of this Report.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

That portion of our definitive Proxy Statement appearing under the caption “Certain Relationships and Related Transactions” and “Directors’ Independence,” if any, to be filed with the Commission pursuant to Regulation 14A within 120 days after October 1, 2023 and to be used in connection with our 2024 Annual Meeting of Stockholders is hereby incorporated by reference.

That portion of our definitive Proxy Statement appearing under the caption “Certain Relationships and Related Transactions” and “Directors’ Independence,” if any, to be filed with the Commission pursuant to Regulation 14A within 120 days after September 29, 2024 and to be used in connection with our 2025 Annual Meeting of Stockholders is hereby incorporated by reference.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

That portion of our definitive Proxy Statement appearing under the caption “Independent Registered Public Accountants Fees and Services” to be filed with the Commission pursuant to Regulation 14A within 120 days after October 1, 2023 and to be used in connection with our 2024 Annual Meeting of Stockholders is hereby incorporated by reference.

That portion of our definitive Proxy Statement appearing under the caption “Independent Registered Public Accountants Fees and Services” to be filed with the Commission pursuant to Regulation 14A within 120 days after September 29, 2024 and to be used in connection with our 2025 Annual Meeting of Stockholders is hereby incorporated by reference.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

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10-Q 5/14/2020

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

3.2 Amended and Restated Bylaws of Jack in the Box Inc., effective as of November 14, 2024

8-K 11/20/2024

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 Ryan Ostrom and Jack in the Box Inc., dated December 30, 2020

10-Q 2/17/2021

10.2.21* Offer Letter by and between Steven Piano and Jack in the Box Inc., dated March 23, 2021

10-Q 5/12/2021

10.2.22* Offer Letter by and between Tony Darden and Jack in the Box Inc., dated May 11, 2021

8-K 5/17/2021

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

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

10.2.22* Offer Letter by and between Carl Mount and Jack in the Box Inc., dated July 18 , 2024

_____ Filed herewith

10.2.23* Dean Gordon Consulting Services Agreement, dated August 5, 2024

_____ Filed herewith

10.2.24* Offer Letter by and between Lance Tucker and Jack in the Box Inc., dated November 6 , 2024

8-K 11/12/2024

10.3* Amended and Restated Supplemental Executive Retirement 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-Q 8/10/2012

19.1 Insider Trading Policy

_____ Filed herewith

21.1 Subsidiaries of the Registrant

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Incentive Compensation Recoupment Policy

_____ Filed herewith

10-K 11/21/2023

101.INS iXBRL Instance Document

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JACK IN THE BOX INC.

/s/ BRIAN SCOTT

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

/s/ DAWN HOOPER

Interim Chief Financial Officer (principal financial officer)

November 20, 2024

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 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.

Each person whose signature appears below constitutes and appoints Darin Harris and Dawn Hooper, 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 20, 2024

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

/s/ DAWN HOOPER Interim Chief Financial Officer (principal financial officer and principal accounting officer) November 20, 2024

GOEBEL Director and Chairman of the Board November 20, 2024

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KLEINER Director November 20, 2024

/s/ ENRIQUE RAMIREZ MENA Director November 20, 2024

Enrique Ramirez Mena

/s/ MICHAEL W.

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MYERS Director November 20, 2024

TEHLE Director November 21, 2023

/s/ VIVIEN M.

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Consolidated Balance Sheets

Consolidated Statements of Earnings

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income

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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 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.

and subsidiaries (the Company) as of September 29, 2024 and October 1, 2023, the related consolidated statements of operations, comprehensive (loss) income, cash flows, and stockholders’ deficit for each of the fifty-two week periods ended September 29, 2024, October 1, 2023 and October 2, 2022, 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 September 29, 2024 and October 1, 2023, and the results of its operations and its cash flows for each of the fifty-two week periods ended September 29, 2024, October 1, 2023 and October 2, 2022, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s 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, and our report dated November 21, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of September 29, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated November 20, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical Audit Matter

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.

(1) relates 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 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.

As discussed in Notes 1 and 5 to the consolidated financial statements, the goodwill balance as of September 29, 2024 was $25.4 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.

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The following are the primary 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 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 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.

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(In thousands, except share and per share data)

September 29,

2024 October 1,

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

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Pre-opening costs 3,182 1,385 1,110

Other operating expense (income), net 10,837 889 ( 3,382 )

Goodwill impairment 162,624 — —

Other operating expense, net 24,796 10,837 889

Gains on the sale of company-operated restaurants ( 3,255 ) ( 17,998 ) ( 3,878 )

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Income taxes 32,372 58,514 46,111

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

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

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

Net (loss) earnings $ ( 36,695 ) $ 130,826 $ 115,781

Net (loss) earnings per share — basic $ ( 1.87 ) $ 6.35 $ 5.46

Net (loss) earnings per share — diluted $ ( 1.87 ) $ 6.30 $ 5.45

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

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands)

2024 2023 2022

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

Net (loss) earnings $ ( 36,695 ) $ 130,826 $ 115,781

Other comprehensive income:

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

Actuarial (losses) gains arising during the period ( 9,856 ) 823 24,249

Amortization of actuarial losses and prior service cost reclassified to earnings 2,135 2,154 3,238

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Tax effect 2,036 ( 785 ) ( 7,215 )

Other comprehensive income, net of taxes 2,192 20,272 36,351

Comprehensive income $ 133,018 $ 136,053 $ 202,106

Other comprehensive (loss) income, net of taxes ( 5,685 ) 2,192 20,272

Comprehensive (loss) income $ ( 42,380 ) $ 133,018 $ 136,053

See accompanying notes to consolidated financial statements.

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Cash flows from operating activities:

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

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

Net (loss) earnings $ ( 36,695 ) $ 130,826 $ 115,781

Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:

Depreciation and amortization 59,776 62,287 56,100

Amortization of franchise tenant improvement allowances and incentives 4,998 4,647 4,446

Amortization of debt issuance costs 5,040 5,496 5,595

Deferred finance cost amortization 4,830 5,040 5,496

Loss on extinguishment of debt — — 7,700

Tax deficiency (excess tax benefits) from share-based compensation arrangements 71 123 ( 1,160 )

Excess tax deficiency from share-based compensation arrangements 51 71 123

Deferred income taxes ( 10,812 ) ( 11,989 ) 7,857

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( 3,255 ) ( 17,998 ) ( 3,878 )

Gains on the disposition of property and equipment ( 8,171 ) ( 30,533 ) ( 6,888 )

Gains on acquisition of restaurants ( 2,702 ) — —

Losses (gains) on the disposition of property and equipment, net 185 ( 8,171 ) ( 30,533 )

Impairment charges and other 171,415 6,217 8,219

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Other — 3,065 360

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

Cash flows (used in) provided by investing activities ( 69,371 ) 42,219 ( 578,588 )

Cash flows from financing activities:

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Cash flows (used in) provided by financing activities ( 131,185 ) ( 207,358 ) 478,178

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

Net (decrease) increase in cash and restricted cash ( 131,740 ) 49,867 62,472

Cash and restricted cash at beginning of year 185,907 136,040 73,568

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Loss Treasury

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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Purchases of treasury stock — — — — — ( 70,592 ) ( 70,592 )

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

Other comprehensive income — — — — 2,192 — 2,192

Balance at October 1, 2023 82,645,814 $ 826 $ 520,076 $ 1,937,598 $ ( 51,790 ) $ ( 3,125,037 ) $ ( 718,327 )

Net loss — — — ( 36,695 ) — — ( 36,695 )

Other comprehensive loss — — — — ( 5,685 ) — ( 5,685 )

Balance at September 29, 2024 82,825,851 $ 828 $ 533,818 $ 1,866,660 $ ( 57,475 ) $ ( 3,195,629 ) $ ( 851,798 )

See accompanying notes to consolidated financial statements.

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Refer to Note 3, Business Combination , for further details.

As of October 1, 2023, there were 142 company-operated and 2,044 franchise-operated Jack in the Box restaurants and 171 company-operated and 421 franchise-operated Del Taco restaurants.

As of September 29, 2024, there were 150 company-operated and 2,041 franchise-operated Jack in the Box restaurants and 133 company-operated and 461 franchise-operated Del Taco restaurants.

References to the Company throughout these notes to the consolidated financial statements are made using the first-person notations of “we,” “us,” and “our.”

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GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).

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 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 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.

In fiscal 2023, Del Taco operated on a fiscal year ending the Tuesday closest to September 30.

Beginning fiscal 2024, Del Taco’s fiscal year shifted to align with Jack in the Box.

As a result, Del Taco’s fiscal 2024 results include two fewer days.

Comparisons throughout these notes to the consolidated financial statements refer to the 52-week periods ended September 29, 2024, October 1, 2023, and October 2, 2022 for fiscal years 2024, 2023, and 2022.

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

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Such restricted cash primarily represents cash collections and cash reserves held by the trustee to be used for payments of quarterly interest and commitment fees required for the Class A-2 Notes and Variable Funding Notes.

As of October 1, 2023 and October 2, 2022, restricted cash balances were $ 28.3 million and $ 27.2 million, respectively.

As of September 29, 2024 and October 1, 2023, restricted cash balances were $ 29.4 million and $ 28.3 million, respectively.

Accounts and other receivables, net — Our accounts and other receivables, net is primarily comprised of receivables from franchisees, tenants, credit card processors, and insurance receivables.

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Balance as of end of period $ ( 4,512 ) $ ( 4,146 )

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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.

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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.

Hosted software implementation costs capitalized were $ 11.1 million and $ 7.9 million as of the end of fiscal year 2024 and 2023, respectively.

Related amortization expense for software implementation costs was $ 4.5 million, $ 5.0 million and $ 5.1 million during fiscal years 2024, 2023 and 2022, respectively.

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

Assets held for sale — Our assets held for sale typically includes property and restaurants we plan to sell within the next year, including amounts relating to i) company-owned restaurants to be refranchised, ii) operating restaurant properties which we intend to sell to franchisees and/or sell and leaseback with a third party, and iii) closed restaurant properties which we are marketing for sale.

If the determination is made that we no longer expect to sell an asset within the next year, the asset is reclassified out of assets held for sale.

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Maintenance and repairs are expensed as incurred.

When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and gains or losses on the dispositions are included in “Other operating expense (income), net” in the accompanying consolidated statements of earnings.

When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and gains or losses on the dispositions are included in “Other operating expense, net” in the accompanying consolidated statements of earnings.

Buildings, equipment, and leasehold improvements are generally depreciated using the straight-line method based on the estimated useful lives of the assets, over the initial lease term for certain assets acquired in conjunction with the lease commencement for leased properties, or the remaining lease term for certain assets acquired after the commencement of the lease for leased properties.

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If the carrying amount of a long-lived asset group exceeds the sum of related undiscounted future cash flows, we recognize an impairment loss by the amount that the carrying value of the assets exceeds fair value.

Refer to Note 9, Other Operating Expense (Income), Net , for additional information.

Refer to Note 9, Other Operating Expense, Net , for additional information.

Goodwill and trademarks — Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired, if any.

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

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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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.

During the third quarter of 2024, we had performed quantitative tests over the Del Taco reporting unit noting that the fair value of the reporting unit was less than the carrying value, which resulted in an impairment of goodwill of $ 162.6 million.

Refer also to Note 5, Goodwill and Intangible Assets, in the notes to the consolidated financial statements for results of these tests and for additional information.

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

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Company-owned life insurance — We have purchased company-owned life insurance (“COLI”) policies to support our non-qualified benefit plans.

The cash surrender values of these policies were $ 113.2 million and $ 108.9 million as of October 1, 2023 and October 2, 2022, respectively, and are included in “Other assets, net”, in the accompanying consolidated balance sheets.

The cash surrender values of these policies were $ 129.7 million and $ 113.2 million as of September 29, 2024 and October 1, 2023, respectively, and are included in “Other assets, net”, in the accompanying consolidated balance sheets.

Changes in cash surrender values are included in “Selling, general and administrative expenses” in the accompanying consolidated statements of earnings.

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The consideration allocated to the loyalty points earned is deferred until the loyalty points are redeemed or expire.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

“Franchise rental revenues” received from franchised restaurants based on fixed rental payments are recognized as revenue over the term of the lease.

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We recognize income from gift cards when redeemed by the customer.

Deferred gift card income totaled $ 2.9 million and $ 4.1 million as of October 1, 2023 and October 2, 2022, respectively, and are included in “Accrued liabilities”, in the accompanying consolidated balance sheets.

Deferred gift card income totaled $ 2.7 million and $ 2.9 million as of September 29, 2024 and October 1, 2023, respectively, and are included in “Accrued liabilities” in the accompanying consolidated balance sheets.

While we will continue to honor all gift cards presented for payment, we may determine the likelihood of redemption to be remote for certain card balances due to, among other things, long periods of inactivity.

In these circumstances, to the extent we determine there is no requirement for remitting balances to government agencies under unclaimed property laws, card balances may be recognized as income in our consolidated statements of earnings.

Amounts recognized on unredeemed gift card balances were $ 0.8 million, $ 1.6 million, and $ 0.7 million in fiscal 2024, 2023, and 2022, respectively.

4 unchanged sentences

We establish our undiscounted insurance liability and reserves using independent actuarial estimates of expected losses based on a statistical analysis of historical claims data.

As of October 1, 2023, our estimated self-insurance liability was $ 31.3 million, and is included in “Accrued liabilities” in the accompanying consolidated balance sheet.

As of September 29, 2024 and October 1, 2023, our estimated self-insurance liability was $ 27.9 million and $ 31.3 million, respectively, and is included in “Accrued liabilities” in the accompanying consolidated balance sheet.

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

3 unchanged sentences

When contributions to the marketing fund exceed the related advertising expenses, advertising costs are accrued up to the amount of revenues on an annual basis since we are contractually obligated to spend these funds.

As of October 1, 2023 and October 2, 2022, additional amounts accrued were $ 10.3 million and $ 3.5 million, respectively, for this requirement.

Total contributions made by the Company are included in “Selling, general, and administrative expenses” in the accompanying consolidated statements of earnings.

In fiscal 2023, 2022, and 2021 advertising costs were $ 38.9 million, $ 32.6 million, and $ 19.6 million, respectively.

When advertising costs are greater than the contributions to the marketing fund resulting in a deficit, the excess costs are covered by marketing fund contributions in the following year.

As of September 29, 2024, and October 1, 2023, the Jack in the Box marketing fund ended the year with a surplus and the additional amounts accrued were $ 0.8 million and $ 9.5 million, respectively.

As of September 29, 2024, and October 1, 2023, the Del Taco marketing fund ended the year with a $ 0.8 million deficit and a $ 0.8 million surplus, respectively.

Total contributions made by the Company and marketing fund deficits, if any, are included in “Selling, general, and administrative expenses” in the accompanying consolidated statements of earnings.

In fiscal 2024, 2023, and 2022 consolidated advertising costs were $ 35.0 million, $ 38.9 million, and $ 32.6 million, respectively.

Share-based compensation — We account for our share-based compensation under the Financial Accounting Standards Board (“FASB”) authoritative guidance on stock compensation , which generally requires, among other things, that all employee share-based compensation be measured using a fair value method and that the resulting compensation cost be recognized in the financial statements.

1 unchanged sentence

Refer to Note 13, Share-based Employee Compensation , for additional information.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Income taxes — Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as tax loss and credit carryforwards.

16 unchanged sentences

The agreements also require franchisees to pay technology fees, as well as sourcing fees for Jack in the Box franchise agreements.

Disaggregation of revenue — The following table disaggregates revenue by segment and primary source for the fiscal year ended October 1, 2023 (in thousands) :

Disaggregation of revenue — The following table disaggregates revenue by segment and primary source for the fiscal year ended September 29, 2024 (in thousands) :

Jack in the Box Del Taco Total

2 unchanged sentences

Franchise royalties 198,377 31,714 230,091

Franchise advertising contributions 199,917 21,025 220,942

Marketing fees 197,900 26,258 224,158

Technology and sourcing fees 19,857 4,658 24,515

1 unchanged sentence

Total revenue $ 1,197,420 $ 373,886 $ 1,571,306

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table disaggregates revenue by segment and primary source for the fiscal year ended October 1, 2023 (in thousands) :

3 unchanged sentences

Franchise royalties 207,064 25,669 232,733

Franchise advertising contributions 183,076 10,907 193,983

Marketing fees 199,917 21,025 220,942

Technology and sourcing fees 16,073 3,907 19,980

1 unchanged sentence

Total revenue $ 1,195,311 $ 496,995 $ 1,692,306

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

The following table disaggregates revenue by segment and primary source for the fiscal year ended October 2, 2022 (in thousands) :

Jack in the Box Del Taco Total

2 unchanged sentences

Franchise royalties 188,902 13,414 202,316

Franchise advertising contributions 188,184 — 188,184

Marketing fees 183,076 10,907 193,983

Technology and sourcing fees 14,740 1,078 15,818

3 unchanged sentences

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

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

4 unchanged sentences

Deferred franchise and development fees at beginning of period $ 50,474 $ 46,449

Changes due to business combinations — 6,193

Revenue recognized during the period ( 5,854 ) ( 5,469 )

1 unchanged sentence

Deferred franchise and development fees at end of period $ 51,990 $ 50,474

As of October 1, 2023, approximately $ 8.1 million of development fees related to unopened stores are included in deferred revenue.

As of September 29, 2024, approximately $ 9.2 million of development fees related to unopened stores are included in deferred revenue.

Timing of revenue recognition is dependent upon the timing of store openings and are recognized over the franchise term at the date of opening.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied at the end of the period (in thousands) :

18 unchanged sentences

The Company recognized transaction costs of $ 12.3 million in fiscal 2022.

These costs were associated with advisory, legal, and consulting services and are presented in “Other operating expense (income), net” in the consolidated statement of earnings.

These costs were associated with advisory, legal, and consulting services and are presented in “Other operating expense, net” in the consolidated statement of operations.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Purchase consideration — The following summarizes the purchase consideration paid to Del Taco shareholders (in thousands, except per share data) :

34 unchanged sentences

Goodwill $ 319,722

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The excess of the total consideration over the tangible assets, identifiable intangible assets, and assumed liabilities is recorded as goodwill.

The goodwill of $ 319.7 million arising from the acquisition is primarily attributable to the market position and future growth potential of Del Taco for both company-operated and franchised restaurants related to future store openings, expansion into new markets, and expected synergies.

The goodwill of $ 319.7 million arising from the acquisition was primarily attributable to the market position and future growth potential of Del Taco for both company-operated and franchised restaurants related to future store openings, expansion into new markets, and expected synergies.

None of the goodwill resulting from the acquisition is deductible for tax purposes.

The goodwill arising from the Del Taco acquisition has been allocated to the Company’s reporting units as follows (in thousands ):

The goodwill arising from the Del Taco acquisition was allocated to the Company’s reporting units as follows (in thousands ):

Del Taco brand $ 230,722

1 unchanged sentence

Total acquisition date goodwill $ 319,722

Refer to Note 5, Goodwill and Intangible Assets , for further details and for the changes in the carrying amount of goodwill.

Identifiable intangible assets — The identifiable intangible assets acquired consist of trademarks, franchise and development agreements, and favorable subleases.

18 unchanged sentences

$ 118,000 $ 133,485

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The unaudited pro forma financial information for all periods presented includes the business combination accounting effects resulting from this acquisition, mainly including adjustments to reflect additional amortization expense from acquired intangibles, incremental depreciation expense from the fair value property and equipment, elimination of historical interest expense associated with both Del Taco’s and the Company’s historical indebtedness, additional interest expense associated with the new Del Taco revolving credit facility and the Company’s new borrowings as part of the refinancing to fund the acquisition, adjusted rent expense reflecting the acquired right-of-use assets and liabilities to their estimated acquisition-date values based upon valuation of related lease intangibles and remaining payments, as well as the fair value adjustments made to leasehold improvements, certain material non-recurring adjustments and the tax-related effects as though Del Taco was combined as of the beginning of fiscal 2021.

17 unchanged sentences

(1) Amounts in 2024, 2023, and 2022 include additional proceeds of $ 1.5 million, $ 0.9 million, and $ 1.4 million, respectively, related to the extension of the underlying franchise and lease agreements from the sale of restaurants in prior years.

(2) Amount in 2024 is primarily comprised of a $ 2.2 million loss on sale of assets related to a Del Taco refranchising transaction that closed in the second quarter of 2024.

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.

Franchise acquisitions — In 2024, Del Taco purchased 10 franchise-operated restaurants for $ 86 thousand as part of three separate transactions, and recognized related gains of $ 2.7 million.

In 2022, Jack in the Box acquired 13 franchise restaurants for total consideration of $ 0.3 million, comprised of franchise receivables owed to the Company as of the acquisition date.

There were no such acquisitions in 2023.

1 unchanged sentence

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.

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

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table provides detail of the combined acquisitions in the following periods ( dollars in thousands ):

2024 2023 2022

Restaurants acquired from Jack in the Box franchisees — — 13

Inventory $ — $ 258

Restaurants acquired from Del Taco franchisees 10 — —

Purchase price (1) ( 86 ) — ( 297 )

Closing and acquisition costs ( 31 ) — —

Property and equipment 3,945 — 540

Intangible assets 167 — 66

Other assets — 10

Goodwill — 613

Gains on the acquisition of franchise-operated restaurants ( 309 ) ( 340 )

Liabilities assumed — ( 277 )

Total consideration $ 297 $ 1,645

The total consideration of $ 0.3 million for the restaurants acquired in 2022 was comprised of franchise receivables owed to the Company as of the acquisition date.

During the first quarter of 2022, we finalized certain estimates impacting total purchase consideration for the 2021 restaurant acquisitions and recorded the resulting measurement period adjustments which increased goodwill by $ 0.3 million.

Operating lease right-of-use assets 3,479 — —

Operating lease liability ( 4,772 ) — —

Gain on the acquisition of franchise-operated restaurants $ 2,702 $ — $ 309

(1) The amounts related to outstanding receivables from franchisee forgiven upon acquisition

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

8 unchanged sentences

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

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

GOODWILL AND INTANGIBLE ASSETS

1 unchanged sentence

Jack in the Box Del Taco Total

Goodwill $ 136,099 $ 230,722 $ 366,821

Accumulated impairment losses — — —

Balance at October 2, 2022

Acquisition of Del Taco Restaurants, Inc.

136,099 230,722 366,821

Acquisition of Jack in the Box franchise-operated restaurants 273 — 273

Sale of Jack in the Box company-operated restaurants to franchisees ( 948 ) — ( 948 )

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

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

1 unchanged sentence

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

Goodwill 136,027 193,959 329,986

Accumulated impairment losses — — —

Balance at October 1, 2023

136,027 193,959 329,986

Impairment of goodwill — ( 162,624 ) ( 162,624 )

Sale of Del Taco company-operated restaurants to franchisees — ( 5,544 ) ( 5,544 )

Reclassified to assets held for sale ( 200 ) ( 409 ) ( 609 )

Goodwill 135,827 188,006 323,833

Accumulated impairment losses — ( 162,624 ) ( 162,624 )

Balance at September 29, 2024

$ 135,827 $ 25,382 $ 161,209

As of the June 9, 2024 testing date, the balance of the Del Taco reporting unit goodwill was $ 194.0 million.

During the third quarter of 2024, the Company identified triggering events that indicated the goodwill allocated to the Del Taco reporting unit might be impaired.

The triggering events related to i) a recent negative trend in Del Taco same store sales, ii) lower margins due in part to lower sales and wage increases required in California effective April 1, 2024 under AB 1228 and iii) unfavorable changes in the economic environment specifically impacting our industry, including inflation and interest rates.

As a result, the Company performed a quantitative test over the Del Taco reporting unit, noting that the fair value of the reporting unit was less than the carrying value, which resulted in an impairment of goodwill of $ 162.6 million.

The Company determined that there was no such triggering event for the Jack in the Box reporting unit during 2024.

In performing a quantitative test for impairment of goodwill for Del Taco, we primarily use the income approach method of valuation that includes the discounted cash flow method and the market approach that includes the guideline public company method to determine the fair value of the reporting unit.

Significant assumptions made by management to estimate fair value under the discounted cash flow method include future cash flow assumptions.

The Company also performed a quantitative analysis over its indefinite-lived intangible trademark asset, as well as over its definite-lived intangible assets to determine whether any impairment would need to be recognized, noting none.

In connection with the goodwill impairment test, the Company also performed a quantitative analysis over its long-lived assets, noting impairment of $ 0.1 million, which was recorded in the third quarter of 2024.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

September 29,

2024 October 1,

8 unchanged sentences

$ 283,500 $ — $ 283,500 $ 283,500 $ — $ 283,500

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

The following table summarizes, as of September 29, 2024, the estimated amortization expense for each of the next five fiscal years ( in thousands ):

2029 and thereafter 7,366

4 unchanged sentences

(Level 2) Significant

Fair value measurements as of October 1, 2023:

Fair value measurements as of September 29, 2024:

Non-qualified deferred compensation plan (1) $ 18,481 $ 18,481 $ — $ —

8 unchanged sentences

(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 October 1, 2023 and October 2, 2022 ( in thousands ):

The following table presents the carrying value and estimated fair value of our Class A-2 Notes as of September 29, 2024 and October 1, 2023 ( in thousands ):

September 29,

2024 October 1,

2 unchanged sentences

Series 2022 Class A-2 Notes $ 1,045,000 $ 975,507 $ 1,067,000 $ 903,056

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

As of September 29, 2024, we had $ 6.0 million of 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.

2 unchanged sentences

If applicable, the carrying values are written down to fair value.

Refer to Note 9, Other Operating Expenses (Income), Net, for details on impairment charges recognized in 2023.

In connection with our impairment reviews performed during 2024, the Company impaired certain assets.

For further information, see Note 4, Summary of Refranchisings and Assets Held For Sale , Note 5, Goodwill and Intangible Assets, Net , and Note 9, Other Operating Expenses, Net in the notes to the consolidated financial statements.

The detail of our long-term debt at the end of each fiscal year is as follows ( in thousands ):

September 29,

2024 October 1,

7 unchanged sentences

522,500 533,500

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

Series 2022-1 Variable Funding Notes, variable interest rate of 6.788 % at September 29, 2024

Finance lease obligations and other debt 913 1,626

8 unchanged sentences

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.

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 of September 29, 2024, we had $ 6.0 million in outstanding borrowings and had available borrowing capacity of $ 94.5 million , net of letters of credits issued of $ 49.5 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.

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.

Additionally, in connection with the 2022 Notes, the Company capitalized $ 17.4 million of debt issuance costs, which are being amortized into interest expense over the Anticipated Repayment Dates, utilizing the effective interest rate method.

The costs related to our Variable Funding Notes are presented within “Other assets, net” and are being amortized over the Anticipated Repayment Date of February 2027 using the straight-line method.

As of October 1, 2023, the effective interest rates, including the amortization of debt issuance costs, were 4.851 %, 5.258 %, 3.796 %, and 4.347 % for the Series 2019-1 Class A-2-II Notes, Series 2019-1 Class A-2-III Notes, Series 2022-1 Class A-2-I Notes, and Series 2022-1 Class A-2-II Notes, respectively.

As of September 29, 2024, the effective interest rates, including the amortization of debt issuance costs, were 4.851 %, 5.258 %, 3.796 %, and 4.347 % for the Series 2019-1 Class A-2-II Notes, Series 2019-1 Class A-2-III Notes, Series 2022-1 Class A-2-I Notes, and Series 2022-1 Class A-2-II Notes, respectively.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The 2022 Notes were issued in a privately placed securitization transaction pursuant to which certain of the Company’s revenue-generating assets, consisting principally of franchise-related agreements, real estate assets, and intellectual property and license agreements for the use of intellectual property, are held by the Master Issuer and certain other limited-purpose, bankruptcy remote, wholly owned indirect subsidiaries of the Company that act as Guarantors of the Notes and that have pledged substantially all of their assets, excluding certain real estate assets and subject to certain limitations, to secure the Notes.

5 unchanged sentences

There is a scaled commitment fee on the unused portion of the Variable Funding Notes facility of between 50 and 100 basis points.

It is anticipated that the principal and interest on the Variable Funding Notes will be repaid in full on or prior to August 2027, subject to two one-year extensions at the option of the Company.

The principal and interest on the Variable Funding Notes were repaid in full in October 2024.

Following the anticipated repayment date (and any extensions thereof), additional interest will accrue equal to 5.00 % per annum.

4 unchanged sentences

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, which now matures on March 1, 2024.

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 February 28, 2025.

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.

The revolving credit facility, as amended, included a limit of $ 20.0 million for letters of credit, all of which were cancelled as of September 29, 2024.

As of September 29, 2024, 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”).

No amounts were drawn under the Bridge Facility, which was terminated as a result of our securitization refinancing transaction.

The Company expensed approximately $ 2.1 million for the unamortized issuance costs associated with this commitment which is presented in “Interest expense, net” in the consolidated statement of earnings.

Maturities of long-term debt — Assuming repayment by the Anticipated Repayment Dates and based on the leverage ratio as of October 1, 2023, principal payments on our long-term debt outstanding at October 1, 2023 for each of the next five fiscal years and thereafter are as follows ( in thousands ):

Maturities of long-term debt — Assuming repayment by the Anticipated Repayment Dates and based on the leverage ratio as of September 29, 2024, principal payments on our long-term debt outstanding at September 29, 2024 for each of the next five fiscal years and thereafter are as follows ( in thousands ):

2025 $ 35,880

Thereafter 467,638

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Nature of leases — We own restaurant sites and we also lease restaurant sites from third parties.

9 unchanged sentences

Revenues from leasing arrangements with our franchisees are presented in “Franchise rental revenues” in the accompanying consolidated statements of earnings, and the related expenses are presented in “Franchise occupancy expenses.”

Company as lessee — Leased assets and liabilities consisted of the following as of October 1, 2023 and October 2, 2022 (in thousands) :

Company as lessee — Leased assets and liabilities consisted of the following as of September 29, 2024 and October 1, 2023 (in thousands) :

September 29,

2024 October 1,

23 unchanged sentences

(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 consolidated statements of earnings.

For our closed restaurants, these costs are included in “Other operating expense (income), net” and all other costs are included in “Selling, general and administrative expenses.”

For our closed restaurants, these costs are included in “Other operating expense, net” and all other costs are included in “Selling, general and administrative expenses.”

(4) Includes $ 41.0 million, $ 39.9 million, and $ 38.2 million in 2024, 2023, and 2022, respectively, of property taxes and common area maintenance costs which are reimbursed by sub-lessees.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table presents supplemental information related to leases:

September 29,

2024 October 1,

5 unchanged sentences

Operating leases 5.9 % 5.5 %

The following table presents as of October 1, 2023, the annual maturities of our lease liabilities ( in thousands ):

The following table presents as of September 29, 2024, the annual maturities of our lease liabilities ( in thousands ):

Finance Leases Operating Leases

24 unchanged sentences

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

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.

Sale and leaseback transactions — In fiscal 2024, we sold one restaurant property in a sale and leaseback transaction for net proceeds of $ 1.7 million, and recorded a total loss 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 2023, we sold one restaurant property in a sale and leaseback transaction for net proceeds of $ 3.7 million, and recorded a total loss of less than $ 0.1 million.

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

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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.

In fiscal 2021, we sold two restaurant properties in sale and leaseback transactions for net proceeds of $ 3.9 million, and recorded total gains of less than $ 0.1 million.

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

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

6 unchanged sentences

________________________

(1) Primarily relates to closed restaurant properties included in “Other operating expense (income), net” in our consolidated statements of earnings.

The following table presents as of October 1, 2023, future minimum rental receipts for non-cancellable leases and subleases ( in thousands ):

2024 $ 240,756

(1) Primarily relates to closed restaurant properties included in “Other operating expense, net” in our consolidated statements of earnings.

The following table presents as of September 29, 2024, future minimum rental receipts for non-cancellable leases and subleases ( in thousands ):

September 29,

Thereafter 1,180,855

1 unchanged sentence

Assets held for lease and included in property and equipment consisted of the following at each fiscal year-end ( in thousands ):

September 29,

2024 October 1,

5 unchanged sentences

$ 166,084 $ 198,768

OTHER OPERATING EXPENSE (INCOME), NET

Other operating expense (income), net, in the accompanying consolidated statements of earnings is comprised of the following in each fiscal year ( in thousands ):

OTHER OPERATING EXPENSE, NET

Other operating expense, net, in the accompanying consolidated statements of earnings is comprised of the following in each fiscal year ( in thousands ):

2024 2023 2022

1 unchanged sentence

Costs of closed restaurants and other 2,975 4,786 4,599

Operating restaurant impairment charges 4,569 5,927 —

Restaurant impairment charges 8,008 4,569 5,927

Accelerated depreciation 699 541 1,124

Gains on disposition of property and equipment, net ( 8,171 ) ( 30,533 ) ( 6,888 )

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

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.

Gains on acquisition of restaurants ( 2,702 ) — ( 309 )

Losses (gains) on disposition of property and equipment, net 185 ( 8,171 ) ( 30,533 )

Other operating expenses, net $ 24,796 $ 10,837 $ 889

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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

Restaurant impairment charges — In 2024, impairment charges included $ 3.4 million relating to under-performing Jack in the Box restaurants currently held for use, $ 1.2 million relating to under-performing Jack in the Box restaurants to be closed, and $ 2.6 million relating to underperforming Del Taco restaurants.

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

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

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 2024, 2023 and 2022, accelerated depreciation primarily related to facility improvements, restaurant remodels, and information technology assets.

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.

Gains on acquisition of restaurants — In 2024, gains primarily relate to the gains on acquisition of Del Taco restaurants.

Refer also to Note 4, Summary of Refranchisings and Franchise Acquisitions, in the notes to the consolidated financial statements for results of these tests and for additional information.

Losses (gains) on disposition of property and equipment, net — In 2024, losses primarily relate to the disposal of other property and equipment for Del Taco, partially offset by gains primarily relating to the sale of Jack in the Box restaurant properties to franchisees who were leasing the properties from us prior to the sale.

In 2023, 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 2022, gains primarily relate to the sale of closed restaurant properties.

SEGMENT REPORTING

Our principal business consists of developing, operating and franchising our Jack in the Box and Del Taco restaurant brands, each of which we consider a reportable operating segment.

This segment reporting structure reflects our current management structure, internal reporting method and financial information used in deciding how to allocate our resources.

The Company’s principal business consists of developing, operating and franchising our Jack in the Box and Del Taco restaurant brands, each of which is considered a reportable operating segment.

In 2024, our chief operating decision maker revised the method by which they determine performance and strategy for our segments.

This change was made to reflect a shared-services model whereby each brand’s results of operations are assessed separately and do not include costs related to certain corporate functions which support both brands.

This segment reporting structure reflects the Company’s current management structure, internal reporting method and financial information used in deciding how to allocate Company resources.

Based upon certain quantitative thresholds, each operating segment is considered a reportable segment.

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 strategic initiatives, gains on the sale of company-operated restaurants, and amortization of favorable and unfavorable leases and subleases, net.

This change to our segment reporting did not change our reporting units for goodwill.

The Company measures and evaluates our segments based on segment revenues and segment profit.

The reportable segments do not include an allocation of the costs related to shared service functions, such as accounting/finance, human resources, audit services, legal, tax and treasury.

These costs are reflected in the caption “Shared services” below.

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, gains on acquisition of restaurants, and amortization of favorable and unfavorable leases and subleases, net.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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Revenues by segment:

Jack in the Box $ 1,195,311 $ 1,151,188 $ 1,143,670

Del Taco 496,995 316,895 —

Jack in the Box restaurant operations $ 1,197,420 $ 1,195,311 $ 1,151,188

Del Taco restaurant operations 373,886 496,995 316,895

Consolidated revenues $ 1,571,306 $ 1,692,306 $ 1,468,083

Segment operating profit:

Jack in the Box $ 308,548 $ 310,745 $ 327,157

Del Taco 30,491 27,981 —

Total segment operating profit $ 339,039 $ 338,726 $ 327,157

Segment profit reconciliation:

Jack in the Box segment profit $ 362,377 $ 381,171 $ 383,794

Del Taco segment profit 28,968 45,730 62,353

Shared services ( 77,138 ) ( 87,862 ) ( 107,730 )

$ 314,207 $ 339,039 $ 338,417

Depreciation and amortization 59,776 62,287 56,100

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Share-based compensation 13,471 11,205 7,122

Net COLI losses (gains) ( 5,953 ) 9,911 ( 9,141 )

Net COLI (gains) losses ( 14,390 ) ( 5,953 ) 9,911

Goodwill impairment 162,624 — —

Gains on the sale of company-operated restaurants ( 3,255 ) ( 17,998 ) ( 3,878 )

Gains on acquisition of restaurants ( 2,702 ) — ( 309 )

Amortization of favorable and unfavorable leases and subleases, net 516 1,633 1,120

Earnings from operations $ 82,536 $ 278,753 $ 248,270

Total capital expenditures by segment:

Jack in the Box $ 53,692 $ 31,601 $ 41,008

Del Taco 21,262 14,874 —

Total capital expenditures $ 74,954 $ 46,475 $ 41,008

Total depreciation and amortization by segment:

Jack in the Box $ 35,973 $ 39,895 $ 46,500

Del Taco 26,314 16,205 —

Total depreciation and amortization $ 62,287 $ 56,100 $ 46,500

We do not evaluate, manage or measure performance of segments using asset, interest income and expense, or income tax information;

We do not evaluate, manage or measure performance of segments using asset, pension or post-retirement expense, interest income and expense, or income tax information;

accordingly, this information by segment is not prepared or disclosed.

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Income tax expense from continuing operations $ 32,372 $ 58,514 $ 46,111

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

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Our expense (benefit) for income taxes differs from the amount computed by applying the U.S.

federal statutory rate to pre-tax income (loss).

The sources and tax effects of the differences are as follows (in thousands):

2024 2023 2022

Income tax expense at federal statutory rate 21.0 % 21.0 % 21.0 %

State income taxes, net of federal tax benefit 5.6 % 5.2 % 5.1 %

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

Pre-tax income (loss) $ ( 4,323 ) $ 189,340 $ 161,892

Income tax at federal statutory rate ( 908 ) 21.0 % 39,821 21.0 % 33,964 21.0 %

State income taxes, net of federal benefit ( 233 ) 5.4 % 10,587 5.6 % 8,437 5.2 %

Stock-based compensation expense 51 ( 1.2 ) % 71 — % 122 0.1 %

Tax credits, net of valuation allowance ( 340 ) 7.9 % ( 818 ) ( 0.4 ) % ( 906 ) ( 0.6 ) %

Nondeductible goodwill related to impairment 35,075 ( 811.5 ) % — — % — — %

Nondeductible goodwill related to the sale of company-operated restaurants 1,787 ( 41.3 ) % 9,280 4.9 % — — %

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Other, net 337 ( 7.8 ) % 332 0.2 % ( 442 ) ( 0.3 ) %

30.9 % 28.5 % 25.2 %

Effective tax rate $ 32,372 ( 748.9 ) % 58,514 30.9 % 46,111 28.5 %

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at each fiscal year-end are presented below ( in thousands ):

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Accrued incentive compensation 2,692 5,928

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

Capitalized research costs 1,443 1,943

Other reserves and allowances 1,144 1,627

Tax loss and tax credit carryforwards 387 1,956

Accrued compensation expense 1,254 1,259

Other reserves and allowances 1,241 1,144

Property and equipment, net of impairment 5,847 181

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Investment basis limitation — ( 6,191 )

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

Other ( 1,542 ) ( 1,701 )

Total gross deferred tax liabilities ( 468,451 ) ( 472,901 )

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

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.

Net deferred tax liabilities $ ( 13,612 ) $ ( 26,229 )

Deferred tax assets as of September 29, 2024 include state gross net operating loss carryforwards of approximately $ 11.4 million, of which $ 9.1 million has an indefinite carryforward.

The remainder will expire at various times between 2026 and 2042.

At October 1, 2023, we recorded a valuation allowance of $ 1.0 million related to state tax credits, which decreased from the $ 1.1 million at October 2, 2022 due to the release of the valuation allowance on California Enterprise Zone Credits.

We believe it is more likely than not that these credit carryforwards will not be realized and that all other deferred tax assets will be realized through future taxable income or alternative tax strategies.

At September 29, 2024, California Enterprise Zone Credit carryforwards expired, and the Company released $ 1.0 million of deferred tax assets and $ 1.0 million of valuation allowances thereto.

We believe it is more likely than not that all other deferred tax assets will be realized through future taxable income or alternative tax strategies.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The major jurisdictions in which the Company files income tax returns includes the United States and states in which we operate that impose an income tax.

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These programs include defined contribution plans, defined benefit pension plans, and postretirement healthcare plans.

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

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.

Defined contribution plans — At the beginning of fiscal year 2024, we maintained two qualified savings plans pursuant to Section 401(k) of the Internal Revenue Code (“IRC”);

the Jack in the Box Inc.

Easy$aver Plus Plan and the Del Taco Savings Plan.

Effective January 1, 2024, the Del Taco Savings Plan was merged into the Easy$aver Plus Plan so that now we maintain one qualified savings plan.

The plan 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 $ 3.3 million, $ 2.3 million, and $ 2.1 million in each fiscal years 2024, 2023 and 2022, respectively.

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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 $ 0.1 million in fiscal year 2023, and were less than $ 0.1 million in each fiscal years 2022 and 2021, respectively.

Our contributions under the non-qualified deferred compensation plan were $ 0.2 million in fiscal year 2024, $ 0.1 million in fiscal year 2023, and less than $ 0.1 million in fiscal year 2022.

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.

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The plans are contributory, with retiree contributions adjusted annually, and contain other cost-sharing features such as deductibles and coinsurance.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Obligations and funded status — The following table provides a reconciliation of the changes in benefit obligations, plan assets, and funded status of our retirement plans for each fiscal year ( in thousands ):

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Participant contributions — — — — 102 101

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

Actuarial loss (gain) 29,769 ( 13,792 ) 5,199 ( 1,287 ) 1,186 ( 383 )

Benefits paid ( 13,985 ) ( 14,884 ) ( 4,803 ) ( 5,240 ) ( 1,268 ) ( 1,145 )

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

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

Actual return on plan assets 41,281 465 — — — —

Participant contributions — — — — 102 101

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Net actuarial loss (gain) $ 2,416 $ 990 $ ( 778 )

Prior service cost — 14 —

Total $ 2,403 $ 646 $ ( 914 )

The net actuarial loss arising in the current year is primarily attributable to the impact of lower discount rates, partially offset by an increase in the actual return on plan assets.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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.

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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.

As of September 29, 2024 and October 1, 2023, 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 September 29, 2024 and October 1, 2023.

The following sets forth the PBO, ABO, and fair value of plan assets of our pension plans as of the measurement date in each fiscal year ( in thousands ):

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For our SERP, actuarial losses are amortized over the expected remaining future lifetime for inactive participants, and for our postretirement health plans, actuarial losses are amortized over the expected remaining future lifetime of inactive participants expected to receive benefits.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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 1, 2023, October 2, 2022, and October 3, 2021, 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 September 29, 2024, October 1, 2023, and October 2, 2022, we used the following weighted-average assumptions:

2024 2023 2022

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Discount rate 5.09 % 6.26 % 5.80 %

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

Postretirement health plans:

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Discount rate 6.26 % 5.80 % 2.99 %

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 2023, 2022 or 2021.

(2) There is no assumed rate of increase, as there are no active employees in any of the fiscal years presented.

(3) Determined as of beginning of year .

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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 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.

If the discount rate and expected rate of return on assets used were to decrease by 0.25 %, fiscal 2024 earnings before income taxes would have decreased by $ 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.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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.

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

Domestic equities 11 % 11 % 5 % 17 %

International equities 11 % 11 % 5 % 17 %

Core fixed funds 57 % 64 % 57 % 71 %

High yield 2 % 2 % — % 5 %

Alternative investments 4 % 4 % — % 8 %

Real estate 7 % — % — % 5 %

Real return bonds 7 % 7 % — % 14 %

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 %

The Company measures its defined benefit plan assets and obligations as of the month-end date closest to its fiscal year end, which is a practical expedient under FASB authoritative guidance.

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

(i.e., NAV Assets)

Quoted Prices

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

equity (7) 33,659 — 33,659 — —

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

Global equity (2) 30,879 30,879 — — —

Fixed income:

Investment grade (9) 193,426 — 20,138 173,288 —

High yield (10) 6,970 — 6,970 — —

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

Real estate (12) 22,761 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 $ —

1 unchanged sentence

(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.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(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.

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(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.

companies for total return purposes.

These investments are valued by the trustee at closing prices from national exchanges on the valuation date.

(8) International equity securities are comprised of investments in common stock of companies located outside of the U.S.

for total return purposes.

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 (“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.

government or have a rating of BBB- / Baa or higher assigned by a major credit rating agency.

These investments are valued based on unadjusted quoted market prices (Level 1), or based on quoted prices in inactive markets, or whose values are based on models, but the inputs to those models are observable either directly or indirectly (Level 2).

(10) High yield fixed income consists primarily of debt obligations that have a rating of below BBB- / Baa or lower assigned by a major credit rating agency.

These investments are valued based on unadjusted quoted market prices.

(11) Alternative investments consist primarily of an investment in asset classes other than stocks, bonds, and cash.

Alternative investments can include commodities, hedge funds, private equity, managed futures, and derivatives.

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

(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.

These investments can be redeemed on a quarterly basis.

Future cash flows — Our policy is to fund our plans at or above the minimum required by law.

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Estimated net contributions during fiscal 2025

$ 5,125 $ 1,139

Estimated future year benefit payments during fiscal years:

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We will 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 economic environment.

Expected benefit payments are based on the same assumptions used to measure our benefit obligations at October 1, 2023 and include estimated future employee service, if applicable.

Expected benefit payments are based on the same assumptions used to measure our benefit obligations at September 29, 2024 and include estimated future employee service, if applicable.

SHARE-BASED EMPLOYEE COMPENSATION

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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.

There were 1,987,156 shares of common stock available for future issuance under this plan as of September 29, 2024.

We also maintain a deferred compensation plan for non-management directors under which those who are eligible to receive fees or retainers may choose to defer receipt of their compensation.

2 unchanged sentences

This plan provides for the issuance of up to 350,000 shares of common stock in connection with the crediting of stock equivalents.

There were 142,918 shares of common stock available for future issuance under this plan as of October 1, 2023.

There were 106,576 shares of common stock available for future issuance under this plan as of September 29, 2024.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Compensation expense — The components of share-based compensation expense, included within “Selling, general, and administrative expenses” in our consolidated statements of earnings, in each fiscal year are as follows ( in thousands ):

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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.

RSUs issued to certain other employees either cliff vest or vest ratably over three years and totaled 151,952 units outstanding as of October 1, 2023.

There were 22,582 RSU’s vesting over four years , and 104,419 RSU’s vesting over three years , outstanding as of September 29, 2024.

RSUs issued to certain other employees either cliff vest or vest ratably over three years and totaled 177,267 units outstanding as of September 29, 2024.

These awards are amortized to compensation expense over the estimated vesting period based upon the fair value of our common stock on the award date discounted by the present value of the expected dividend stream over the vesting period.

3 unchanged sentences

RSUs outstanding at October 1, 2023

328,536 $ 70.97

Granted 204,908 $ 67.74

1 unchanged sentence

Forfeited ( 37,933 ) $ 70.70

RSUs outstanding at October 1, 2023 328,536 $ 70.97

As of October 1, 2023, there was approximately $ 11.8 million of total unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted-average period of 1.9 years.

RSUs outstanding at September 29, 2024

381,738 $ 69.59

As of September 29, 2024, there was approximately $ 11.8 million of total unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted-average period of 1.7 years.

The weighted-average grant date fair value of awards granted was $ 67.74 , $ 68.56 , and $ 78.28 in fiscal years 2024, 2023, and 2022, respectively.

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Options outstanding at October 1, 2023

Exercised ( 3,500 ) $ 75.23

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

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

The aggregate intrinsic value in the table above is the amount by which the current market price of our stock on October 1, 2023 exceeds the weighted-average exercise price.

28,950 $ 94.92

Expired ( 14,939 ) $ 104.95

Options outstanding at September 29, 2024

14,011 $ 84.23 1.12 $ —

Options exercisable at September 29, 2024

14,011 $ 84.23 1.12 $ —

The aggregate intrinsic value in the table above is the amount by which the current market price of our stock on September 29, 2024 exceeds the weighted-average exercise price.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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.

No stock option awards were granted in fiscal 2024, 2023, or 2022.

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.

As of September 29, 2024, there was no unrecognized compensation cost related to stock options grants.

There were no stock options exercised in fiscal year 2024.

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

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.

8 unchanged sentences

Performance share awards outstanding at October 1, 2023

107,174 $ 72.51

Granted 62,103 $ 70.19

1 unchanged sentence

Forfeited ( 4,162 ) $ 69.26

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

As of October 1, 2023, there was approximately $ 3.2 million of total unrecognized compensation cost related to performance share awards, which is expected to be recognized over a weighted-average period of 1.8 years.

Performance adjustments 9,974 $ 88.88

Performance share awards outstanding at September 29, 2024

145,167 $ 70.53

As of September 29, 2024, there was approximately $ 3.0 million of total unrecognized compensation cost related to performance share awards, which is expected to be recognized over a weighted-average period of 1.9 years.

The weighted-average grant date fair value of awards granted was $ 70.19 , $ 65.74 , and $ 78.95 in fiscal years 2024, 2023, and 2022, respectively.

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Immediately following the Merger, these replacement awards were modified to accelerate the remaining vesting period to be one year following the Closing Date, other than the awards already scheduled to vest on June 30, 2022.

The following is a summary of nonvested restricted stock awards for fiscal 2023:

Shares Weighted-

Average Grant

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

Issued ( 4,670 ) $ 82.33

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

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.

As of September 29, 2024, there was no unrecognized compensation cost related to nonvested stock awards.

The total fair value of awards that vested and were released during fiscal 2023 was $ 0.4 million.

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 2024, 2023, and 2022, 36,342 shares of common stock were issued in connection with a director retirement.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following is a summary of the stock equivalent activity for fiscal 2024:

2 unchanged sentences

Stock equivalents outstanding at October 1, 2023

122,981 $ 47.16

Deferred directors’ compensation 756 $ 69.40

Dividend equivalents 4,490 $ 60.33

Stock equivalents outstanding at October 1, 2023 122,981 $ 47.16

Stock distribution ( 36,342 ) $ 37.71

Stock equivalents outstanding at September 29, 2024

91,885 $ 61.53

STOCKHOLDERS’ DEFICIT

Repurchases of common stock — In fiscal 2024, the Company purchased 1.1 million shares of its common stock for an aggregate cost of $ 70.6 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.

As of September 29, 2024, there was $ 180.0 million remaining amount under share repurchase programs authorized by the Board of Directors which do not expire.

Dividends — In fiscal 2024, the Board of Directors declared four cash dividends of $ 0.44 , respectively, totaling $ 34.2 million.

19 unchanged sentences

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 .

Based on current pricing and ratio of usage at company-operated to franchised restaurants as of September 29, 2024, total food and beverage purchase requirements under these agreements is estimated to be approximately $ 89.9 million over the next six 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 $ 16.3 million over the next five years .

The Company’s unconditional purchase obligations on these contracts total approximately $ 10.6 million over the next four years .

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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

As of October 1, 2023, the Company had accruals of $ 40.9 million for all of its legal matters in aggregate, presented within “Accrued liabilities” on our consolidated balance sheet.

As of September 29, 2024, the Company had accruals of $ 16.2 million for all of its legal matters in aggregate, presented within “Accrued liabilities” on our consolidated balance sheet.

Because litigation is inherently unpredictable, assessing contingencies is highly subjective and requires judgments about future events.

12 unchanged sentences

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.

As of September 29, 2024, the Company has accrued the verdict amount above, as well as pre-judgment and post-judgment interest and an estimated fee award, for an additional $ 9.3 million.

These amounts are included within “Accrued liabilities” on our consolidated balance sheet as of September 29, 2024.

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

4 unchanged sentences

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.

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.

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

The Company made the full payments for the settlement amounts.

As of September 29, 2024, the Company has no further amounts accrued 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.

4 unchanged sentences

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.

As a result, the Company reversed the prior $ 8.0 million accrual, and as of September 29, 2024, 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.

3 unchanged sentences

We record receivables from third party insurers when recovery has been determined to be probable.

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Lease guarantees — We remain contingently liable for certain leases relating to our former Qdoba business which we sold in fiscal 2018.

Under the Qdoba Purchase Agreement, the buyer has indemnified the Company of all claims related to these guarantees.

As of October 1, 2023, the maximum potential liability of future undiscounted payments under these leases is approximately $ 21.7 million.

As of September 29, 2024, the maximum potential liability of future undiscounted payments under these leases is approximately $ 20.1 million.

The lease terms extend for a maximum of approximately 13 more years, and we would remain a guarantor of the leases in the event the leases are extended for any established renewal periods.

10 unchanged sentences

Consideration for franchise acquisitions $ — $ — $ 297

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

(Decrease) increase in obligations for purchases of property and equipment $ ( 2,482 ) $ 3,731 $ 1,637

JACK IN THE BOX INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION (in thousands)

September 29,

2024 October 1,

32 unchanged sentences

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