UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 19,April 12, 2020
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from ________to________.
Commission File Number: 1-9390
jack-20200412_g1.jpg
 ____________________________________________________

JACK IN THE BOX INC.
(Exact name of registrant as specified in its charter)
 _______________________________________________________________________________________
Delaware95-2698708
(State of Incorporation)(I.R.S. Employer Identification No.)
9330 Balboa Avenue
San Diego, California 92123
(Address of principal executive offices)
Registrant’s telephone number, including area code (858) 571-2121
   _______________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockJACKNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  þ    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes  þ    No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerþSmaller reporting company
Accelerated filerEmerging growth company
Non-accelerated filer
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes      No  þ
As of the close of business February 14,May 8, 2020, 22,630,77122,671,849 shares of the registrant’s common stock were outstanding.



JACK IN THE BOX INC. AND SUBSIDIARIES
INDEX
 
  Page
 PART I – FINANCIAL INFORMATION 
Item 1.
Condensed Consolidated Statements of Earnings
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.
Item 4.
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.Defaults of Senior Securities
Item 4.
Item 5.
Item 6.

1


PART I. FINANCIAL INFORMATION
 
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
January 19,
2020
September 29,
2019
April 12,
2020
September 29,
2019
ASSETSASSETSASSETS
Current assets:Current assets:Current assets:
CashCash$19,914  $125,536  Cash$132,161  $125,536  
Restricted cashRestricted cash18,372  26,025  Restricted cash37,023  26,025  
Accounts and other receivables, netAccounts and other receivables, net53,576  45,235  Accounts and other receivables, net66,331  45,235  
InventoriesInventories2,029  1,776  Inventories1,821  1,776  
Prepaid expensesPrepaid expenses13,665  9,015  Prepaid expenses18,460  9,015  
Current assets held for saleCurrent assets held for sale7,760  16,823  Current assets held for sale6,186  16,823  
Other current assetsOther current assets3,037  2,718  Other current assets3,970  2,718  
Total current assetsTotal current assets118,353  227,128  Total current assets265,952  227,128  
Property and equipment:Property and equipment:Property and equipment:
Property and equipment, at costProperty and equipment, at cost1,155,356  1,176,241  Property and equipment, at cost1,149,656  1,176,241  
Less accumulated depreciation and amortizationLess accumulated depreciation and amortization(793,851) (784,307) Less accumulated depreciation and amortization(793,435) (784,307) 
Property and equipment, netProperty and equipment, net361,505  391,934  Property and equipment, net356,221  391,934  
Other assets:Other assets:Other assets:
Operating lease right-of-use assetsOperating lease right-of-use assets884,213  —  Operating lease right-of-use assets903,010  —  
Intangible assets, netIntangible assets, net37  425  Intangible assets, net294  425  
GoodwillGoodwill46,747  46,747  Goodwill47,161  46,747  
Deferred tax assetsDeferred tax assets66,675  85,564  Deferred tax assets77,410  85,564  
Other assets, netOther assets, net212,783  206,685  Other assets, net211,205  206,685  
Total other assetsTotal other assets1,210,455  339,421  Total other assets1,239,080  339,421  
$1,690,313  $958,483  $1,861,253  $958,483  
LIABILITIES AND STOCKHOLDERS’ DEFICITLIABILITIES AND STOCKHOLDERS’ DEFICITLIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:Current liabilities:Current liabilities:
Current maturities of long-term debtCurrent maturities of long-term debt$13,786  $774  Current maturities of long-term debt$13,819  $774  
Current operating lease liabilitiesCurrent operating lease liabilities158,779  —  Current operating lease liabilities163,077  —  
Accounts payableAccounts payable23,467  37,066  Accounts payable47,867  37,066  
Accrued liabilitiesAccrued liabilities118,289  120,083  Accrued liabilities120,949  120,083  
Total current liabilitiesTotal current liabilities314,321  157,923  Total current liabilities345,712  157,923  
Long-term liabilities:Long-term liabilities:Long-term liabilities:
Long-term debt, net of current maturitiesLong-term debt, net of current maturities1,262,737  1,274,374  Long-term debt, net of current maturities1,368,446  1,274,374  
Long-term operating lease liabilities, net of current portionLong-term operating lease liabilities, net of current portion767,819  —  Long-term operating lease liabilities, net of current portion781,653  —  
Other long-term liabilitiesOther long-term liabilities186,589  263,770  Other long-term liabilities242,368  263,770  
Total long-term liabilitiesTotal long-term liabilities2,217,145  1,538,144  Total long-term liabilities2,392,467  1,538,144  
Stockholders’ deficit:Stockholders’ deficit:Stockholders’ deficit:
Preferred stock $0.01 par value, 15,000,000 shares authorized, NaN issuedPreferred stock $0.01 par value, 15,000,000 shares authorized, NaN issued—  —  Preferred stock $0.01 par value, 15,000,000 shares authorized, NaN issued—  —  
Common stock $0.01 par value, 175,000,000 shares authorized, 82,255,912 and 82,159,002 issued, respectively823  822  
Common stock $0.01 par value, 175,000,000 shares authorized, 82,318,622 and 82,159,002 issued, respectivelyCommon stock $0.01 par value, 175,000,000 shares authorized, 82,318,622 and 82,159,002 issued, respectively823  822  
Capital in excess of par valueCapital in excess of par value483,739  480,322  Capital in excess of par value489,847  480,322  
Retained earningsRetained earnings1,572,586  1,577,034  Retained earnings1,574,930  1,577,034  
Accumulated other comprehensive lossAccumulated other comprehensive loss(88,995) (140,006) Accumulated other comprehensive loss(133,220) (140,006) 
Treasury stock, at cost, 59,646,773 and 57,760,573 shares, respectivelyTreasury stock, at cost, 59,646,773 and 57,760,573 shares, respectively(2,809,306) (2,655,756) Treasury stock, at cost, 59,646,773 and 57,760,573 shares, respectively(2,809,306) (2,655,756) 
Total stockholders’ deficitTotal stockholders’ deficit(841,153) (737,584) Total stockholders’ deficit(876,926) (737,584) 
$1,690,313  $958,483  $1,861,253  $958,483  
See accompanying notes to condensed consolidated financial statements.
2


JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
Sixteen Weeks Ended QuarterYear-to-date
January 19,
2020
January 20,
2019
April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Revenues:Revenues:Revenues:
Company restaurant salesCompany restaurant sales$105,364  $102,832  Company restaurant sales$74,380  $76,682  $179,744  $179,514  
Franchise rental revenuesFranchise rental revenues96,084  83,890  Franchise rental revenues69,885  61,646  165,969  145,536  
Franchise royalties and otherFranchise royalties and other52,466  52,250  Franchise royalties and other37,764  38,410  90,230  90,660  
Franchise contributions for advertising and other servicesFranchise contributions for advertising and other services53,759  51,814  Franchise contributions for advertising and other services34,128  38,989  87,887  90,803  
307,673  290,786  216,157  215,727  523,830  506,513  
Operating costs and expenses, net:Operating costs and expenses, net:Operating costs and expenses, net:
Company restaurant costs (excluding depreciation and amortization):Company restaurant costs (excluding depreciation and amortization):Company restaurant costs (excluding depreciation and amortization):
Food and packagingFood and packaging31,348  29,616  Food and packaging22,237  21,676  53,585  51,292  
Payroll and employee benefitsPayroll and employee benefits31,890  30,274  Payroll and employee benefits24,261  22,768  56,151  53,042  
Occupancy and otherOccupancy and other15,958  16,013  Occupancy and other12,570  11,100  28,528  27,113  
Total company restaurant costsTotal company restaurant costs79,196  75,903  Total company restaurant costs59,068  55,544  138,264  131,447  
Franchise occupancy expenses (excluding depreciation and amortization)Franchise occupancy expenses (excluding depreciation and amortization)64,517  50,713  Franchise occupancy expenses (excluding depreciation and amortization)48,341  38,618  112,858  89,331  
Franchise support and other costsFranchise support and other costs4,676  2,845  Franchise support and other costs2,971  2,797  7,647  5,642  
Franchise advertising and other services expensesFranchise advertising and other services expenses55,224  54,270  Franchise advertising and other services expenses35,734  40,245  90,958  94,515  
Selling, general and administrative expensesSelling, general and administrative expenses28,248  24,083  Selling, general and administrative expenses24,203  17,585  52,451  41,668  
Depreciation and amortizationDepreciation and amortization16,728  17,169  Depreciation and amortization12,282  12,690  29,010  29,859  
Impairment and other charges, netImpairment and other charges, net(9,291) 7,698  Impairment and other charges, net716  1,125  (8,575) 8,823  
Gains on the sale of company-operated restaurantsGains on the sale of company-operated restaurants(1,575) (219) Gains on the sale of company-operated restaurants—  —  (1,575) (219) 
237,723  232,462  183,315  168,604  421,038  401,066  
Earnings from operationsEarnings from operations69,950  58,324  Earnings from operations32,842  47,123  102,792  105,447  
Other pension and post-retirement expenses, netOther pension and post-retirement expenses, net38,978  456  Other pension and post-retirement expenses, net512  343  39,490  799  
Interest expense, netInterest expense, net19,942  17,374  Interest expense, net15,409  13,276  35,351  30,650  
Earnings from continuing operations and before income taxesEarnings from continuing operations and before income taxes11,030  40,494  Earnings from continuing operations and before income taxes16,921  33,504  27,951  73,998  
Income tax expenseIncome tax expense3,133  9,373  Income tax expense5,458  8,374  8,591  17,747  
Earnings from continuing operationsEarnings from continuing operations7,897  31,121  Earnings from continuing operations11,463  25,130  19,360  56,251  
Earnings from discontinued operations, net of income taxes—  2,977  
(Losses) earnings from discontinued operations, net of income taxes(Losses) earnings from discontinued operations, net of income taxes—  (41) —  2,936  
Net earningsNet earnings$7,897  $34,098  Net earnings$11,463  $25,089  $19,360  $59,187  
Net earnings per share - basic:Net earnings per share - basic:Net earnings per share - basic:
Earnings from continuing operationsEarnings from continuing operations$0.33  $1.20  Earnings from continuing operations$0.50  $0.97  $0.83  $2.17  
Earnings from discontinued operationsEarnings from discontinued operations—  0.11  Earnings from discontinued operations—  —  —  0.11  
Net earnings per share (1)Net earnings per share (1)$0.33  $1.32  Net earnings per share (1)$0.50  $0.97  $0.83  $2.28  
Net earnings per share - diluted:Net earnings per share - diluted:Net earnings per share - diluted:
Earnings from continuing operationsEarnings from continuing operations$0.33  $1.19  Earnings from continuing operations$0.50  $0.96  $0.82  $2.15  
Earnings from discontinued operationsEarnings from discontinued operations—  0.11  Earnings from discontinued operations—  —  —  0.11  
Net earnings per share (1)Net earnings per share (1)$0.33  $1.31  Net earnings per share (1)$0.50  $0.96  $0.82  $2.26  
Cash dividends declared per common shareCash dividends declared per common share$0.40  $0.40  Cash dividends declared per common share$0.40  $0.40  $0.80  $0.80  
____________________________
(1)Earnings per share may not add due to rounding.
See accompanying notes to condensed consolidated financial statements.
3


JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In thousands)
(Unaudited)
Sixteen Weeks Ended QuarterYear-to-date
January 19,
2020
January 20,
2019
April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Net earningsNet earnings$7,897  $34,098  Net earnings$11,463  $25,089  $19,360  $59,187  
Cash flow hedges:Cash flow hedges:Cash flow hedges:
Net change in fair value of derivativesNet change in fair value of derivatives—  (7,167) Net change in fair value of derivatives—  (4,959) —  (12,126) 
Net loss reclassified to earningsNet loss reclassified to earnings—  479  Net loss reclassified to earnings—  134  —  613  
—  (6,688) —  (4,825) —  (11,513) 
Tax effectTax effect—  1,723  Tax effect—  1,244  —  2,967  
—  (4,965) —  (3,581) —  (8,546) 
Unrecognized periodic benefit costs:Unrecognized periodic benefit costs:Unrecognized periodic benefit costs:
Actuarial gains arising during the period28,583  —  
Actuarial losses arising during the periodActuarial losses arising during the period(61,090) —  (32,507) —  
Actuarial losses and prior service costs reclassified to earningsActuarial losses and prior service costs reclassified to earnings40,310  1,205  Actuarial losses and prior service costs reclassified to earnings1,362  904  41,672  2,109  
68,893  1,205  (59,728) 904  9,165  2,109  
Tax effectTax effect(17,882) (311) Tax effect15,503  (234) (2,379) (545) 
51,011  894  (44,225) 670  6,786  1,564  
Other comprehensive income (loss), net of taxes51,011  (4,071) 
Other comprehensive (loss) income, net of taxesOther comprehensive (loss) income, net of taxes(44,225) (2,911) 6,786  (6,982) 
Comprehensive income$58,908  $30,027  
Comprehensive (loss) incomeComprehensive (loss) income$(32,762) $22,178  $26,146  $52,205  
See accompanying notes to condensed consolidated financial statements.

4


JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Sixteen Weeks Ended Year-to-date
January 19,
2020
January 20,
2019
April 12,
2020
April 14,
2019
Cash flows from operating activities:Cash flows from operating activities:Cash flows from operating activities:
Net earningsNet earnings$7,897  $34,098  Net earnings$19,360  $59,187  
Earnings from discontinued operationsEarnings from discontinued operations—  2,977  Earnings from discontinued operations—  2,936  
Earnings from continuing operationsEarnings from continuing operations7,897  31,121  Earnings from continuing operations19,360  56,251  
Adjustments to reconcile net earnings to net cash provided by operating activities:Adjustments to reconcile net earnings to net cash provided by operating activities:Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortizationDepreciation and amortization16,728  17,169  Depreciation and amortization29,010  29,859  
Amortization of franchise tenant improvement allowances and otherAmortization of franchise tenant improvement allowances and other1,151  530  Amortization of franchise tenant improvement allowances and other1,765  1,137  
Deferred finance cost amortizationDeferred finance cost amortization1,755  704  Deferred finance cost amortization3,046  1,224  
Tax deficiency (excess tax benefit) from share-based compensation arrangements196  (50) 
Excess tax benefits from share-based compensation arrangementsExcess tax benefits from share-based compensation arrangements(77) (47) 
Deferred income taxesDeferred income taxes2,010  (783) Deferred income taxes6,783  3,955  
Share-based compensation expenseShare-based compensation expense3,184  1,909  Share-based compensation expense5,865  4,708  
Pension and postretirement expensePension and postretirement expense38,978  456  Pension and postretirement expense39,490  799  
(Gains) losses on cash surrender value of company-owned life insurance(3,374) 2,863  
Losses (gains) on cash surrender value of company-owned life insuranceLosses (gains) on cash surrender value of company-owned life insurance3,150  (1,336) 
Gains on the sale of company-operated restaurantsGains on the sale of company-operated restaurants(1,575) (219) Gains on the sale of company-operated restaurants(1,575) (219) 
(Gains) losses on the disposition of property and equipment, net(10,437) 635  
Gains on the disposition of property and equipment, netGains on the disposition of property and equipment, net(10,170) (138) 
Non-cash operating lease costsNon-cash operating lease costs(7,668) —  Non-cash operating lease costs(13,118) —  
Impairment charges and otherImpairment charges and other—  387  Impairment charges and other133  896  
Changes in assets and liabilities, excluding dispositions:
Changes in assets and liabilities, excluding acquisitions:Changes in assets and liabilities, excluding acquisitions:
Accounts and other receivablesAccounts and other receivables(5,619) (3,154) Accounts and other receivables(22,858) (11,658) 
InventoriesInventories(253) (232) Inventories28  (91) 
Prepaid expenses and other current assetsPrepaid expenses and other current assets(4,957) 6,224  Prepaid expenses and other current assets(10,350) 3,701  
Accounts payableAccounts payable(7,984) 6,365  Accounts payable20,660  (3,904) 
Accrued liabilitiesAccrued liabilities(1,558) (16,298) Accrued liabilities1,400  (6,532) 
Pension and postretirement contributionsPension and postretirement contributions(2,025) (2,111) Pension and postretirement contributions(3,582) (3,671) 
Franchise tenant improvement allowance distributionsFranchise tenant improvement allowance distributions(3,682) (3,247) Franchise tenant improvement allowance distributions(5,811) (6,697) 
OtherOther(80) (4,668) Other(4,222) (7,421) 
Cash flows provided by operating activitiesCash flows provided by operating activities22,687  37,601  Cash flows provided by operating activities58,927  60,816  
Cash flows from investing activities:Cash flows from investing activities:Cash flows from investing activities:
Purchases of property and equipmentPurchases of property and equipment(7,202) (11,183) Purchases of property and equipment(12,777) (18,191) 
Proceeds from the sale of property and equipmentProceeds from the sale of property and equipment20,618  270  Proceeds from the sale of property and equipment22,394  1,479  
Proceeds from the sale and leaseback of assetsProceeds from the sale and leaseback of assets17,373  —  Proceeds from the sale and leaseback of assets17,373  1,944  
Proceeds from the sale of company-operated restaurantsProceeds from the sale of company-operated restaurants1,575  133  Proceeds from the sale of company-operated restaurants1,575  133  
Collections on notes receivableCollections on notes receivable—  6,517  Collections on notes receivable—  6,491  
OtherOther1,036  —  
Cash flows provided by (used in) investing activitiesCash flows provided by (used in) investing activities32,364  (4,263) Cash flows provided by (used in) investing activities29,601  (8,144) 
Cash flows from financing activities:Cash flows from financing activities:Cash flows from financing activities:
Borrowings on revolving credit facilitiesBorrowings on revolving credit facilities—  114,298  Borrowings on revolving credit facilities111,376  189,736  
Repayments of borrowings on revolving credit facilitiesRepayments of borrowings on revolving credit facilities—  (117,300) Repayments of borrowings on revolving credit facilities(3,500) (180,800) 
Principal repayments on debtPrincipal repayments on debt(198) (10,907) Principal repayments on debt(3,640) (21,757) 
Debt issuance costsDebt issuance costs(216) (17) Debt issuance costs(216) (3,615) 
Dividends paid on common stockDividends paid on common stock(9,412) (10,305) Dividends paid on common stock(18,466) (20,615) 
Proceeds from issuance of common stockProceeds from issuance of common stock184  114  Proceeds from issuance of common stock3,559  243  
Repurchases of common stockRepurchases of common stock(155,576) (14,362) Repurchases of common stock(155,576) (14,362) 
Change in book overdraft—  9,234  
Payroll tax payments for equity award issuancesPayroll tax payments for equity award issuances(3,108) (2,498) Payroll tax payments for equity award issuances(4,442) (2,617) 
Cash flows used in financing activitiesCash flows used in financing activities(168,326) (31,743) Cash flows used in financing activities(70,905) (53,787) 
Net (decrease) increase in cash and restricted cash(113,275) 1,595  
Net increase (decrease) in cash and restricted cashNet increase (decrease) in cash and restricted cash17,623  (1,115) 
Cash and restricted cash at beginning of periodCash and restricted cash at beginning of period151,561  2,705  Cash and restricted cash at beginning of period151,561  2,705  
Cash and restricted cash at end of periodCash and restricted cash at end of period$38,286  $4,300  Cash and restricted cash at end of period$169,184  $1,590  

See accompanying notes to condensed consolidated financial statements.

5

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.BASIS OF PRESENTATION
Nature of operations — Founded in 1951, Jack in the Box Inc. (the “Company”) operates and franchises Jack in the Box® quick-service restaurants. The following table summarizes the number of restaurants as of the end of each period:
January 19,
2020
January 20,
2019
April 12,
2020
April 14,
2019
Company-operatedCompany-operated137  137  Company-operated144  137  
FranchiseFranchise2,107  2,104  Franchise2,102  2,103  
Total systemTotal system2,244  2,241  Total system2,246  2,240  
References to the Company throughout these notes to condensed consolidated financial statements are made using the first person notations of “we,” “us” and “our.”
Basis of presentation — The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).
These financial statements should be read in conjunction with the consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended September 29, 2019 (“2019 Form 10-K”). The accounting policies used in preparing these condensed consolidated financial statements are the same as those described in our 2019 Form 10-K with the exception of the new lease accounting standard adopted in fiscal 2020, which is described below.
In our opinion, all adjustments considered necessary for a fair presentation of financial condition and results of operations for these interim periods have been included. Operating results for one interim period are not necessarily indicative of the results for any other interim period or for the full year.
Segment reporting — The Company is comprised of 1 operating segment.
Fiscal year — Our fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. Fiscal years 2020 and 2019 include 52 weeks. Our first quarter includes 16-weeks and all other quarters include 12-weeks. All comparisons between 2020 and 2019 refer to the 16-weeks12-weeks (“quarter”) and 28-weeks (“year-to-date”) ended January 19,April 12, 2020 and January 20,April 14, 2019, respectively, unless otherwise indicated.
Use of estimates — In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management is required to make certain assumptions and estimates that affect reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingencies. In making these assumptions and estimates, management may from time to time seek advice and consider information provided by actuaries and other experts in a particular area. Actual amounts could differ materially from these estimates.
Risks and uncertainties — The Company is subject to risks and uncertainties as a result of the rapidly spreading outbreak of a novel strain of coronavirus (“COVID-19”). The extent of the impact of the COVID-19 pandemic on our business is highly uncertain and difficult to predict, as the response to the pandemic varies by state and municipalities within states. In the last five weeks of the quarter we experienced a significant reduction in guest traffic at our restaurants due to changes in consumer behavior as social distancing practices, dining room closures and other restrictions as have been mandated or encouraged by federal, state and local governments. During the COVID-19 impacted weeks, substantially all of our restaurants remained open, with dining rooms closed and all locations operating in an off-premise capacity, which represents close to 90% of the Company’s business historically, including drive-thru, third-party delivery, and carry-out.
Our operating results substantially depend upon our franchisees’ sales volumes, restaurant profitability, and financial stability. The financial impact of COVID-19 has had, and is expected to continue to have, an adverse effect on our franchisees’ liquidity and we are working closely with our franchisees to monitor and assist them with access to appropriate sources of liquidity in order to sustain their businesses throughout this crisis.
We cannot currently estimate the duration or future negative financial impact of the COVID-19 pandemic on our business. Ongoing material adverse effects of the COVID-19 pandemic on company-owned and franchised restaurants for an extended period could negatively affect our operating results, including reductions in revenue and cash flow and could impact our impairment assessments of accounts receivable, long-lived assets, operating lease assets, and/or goodwill.

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Advertising costs — We administer a marketing fund which includes contractual contributions. In 2020 and 2019, marketing fund contributions from franchise and company-operated restaurants were approximately 5.0% of gross revenues. revenues with the exception of our March and April 2020 marketing fees. In response to the economic burden associated with the COVID-19 pandemic, the Company reduced March marketing fees to 4.0% and postponed the collection of these fees over the course of 24 months. April marketing fees will range from 2% to 4% based on annualized sales volumes, and these fees will be collected over three months beginning October 2020.
In 2019, incremental contributions made by the Company were $2.0 million. There have been no0 incremental contributions made in 2020.
Total contributions made by the Company, including incremental contributions, are included in “Selling, general, and administrative expenses” in the accompanying condensed consolidated statements of earnings and for the quarter and year-to-date totaled $5.3$3.5 million and $7.2$8.9 million, respectively, in 2020 and $3.9 million and $11.1 million, respectively, in 2019.
Restricted cash In accordance with the terms of our securitized financing facility, certain cash balances are required to be held in trust. Such restricted cash primarily represents cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitments fees required for the Class A-2 Notes. As of April 12, 2020 and September 29, 2019, restricted cash balances were $37.0 million and $26.0 million, respectively. During the second quarter, with uncertainty surrounding COVID-19 events, and as a cautionary measure, we voluntarily elected to reserve quarterly interest and principal payments due in August 2020.
Effect of new accounting pronouncements adopted in fiscal 2020 — We adopted ASU 2016-02, Leases (Topic 842) (“ASC 842”) in the first quarter of 2020. The new guidance requires the recognition of lease liabilities, representing future minimum lease payments on a discounted basis, and corresponding right-of-use (“ROU”) assets on the balance sheet for most leases. The Company adopted the new guidance in the first quarter of 2020 using the alternative transition method; therefore, the comparative period has not been restated and continues to reported under the previous lease guidance.
We elected the transition package of three practical expedients, which, among other items, permitted us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We also elected the short-term lease recognition exemption for all leases that qualify, permitting us to not apply the recognition requirements of this standard to leases with a term of 12 months or less, and an accounting policy to not separate lease and non-lease components for underlying assets subject to real estate leases. As lessor, we elected for all classes of underlying leased assets to account for lease and non-lease components, primarily property taxes and maintenance, as a single lease component. We did not elect the use-of-hindsight practical expedient, and therefore continued to utilize lease terms determined under the existing lease guidance.

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The adoption had a material impact on our consolidated balance sheet. As a result of the adoption, we recognized operating lease assets and liabilities of $881$880.6 million and $931$931.0 million, respectively, at the date of adoption. The ROU assets were adjusted for certain lease-related assets and liabilities at adoption, primarily comprised of straight-line rent accruals of $29.0 million, incentives and unfavorable lease liabilities of $2.1 million, sublease loss and exit-related lease liabilities of $19.4 million, which were previously reported in “Accrued liabilities” and “Other long-term liabilities”, as well as favorable lease assets of $0.4 million, which were previously reported in “Intangible assets, net” in our condensed consolidated balance sheet. We also recorded a cumulative adjustment to opening retained earnings of $2.9 million, net of tax, as a result of the impairment of certain newly recognized ROU assets and derecognition of deferred gains and losses on sale-leaseback transactions upon transition to the new guidance.

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The effects of the changes made to the Company's condensed consolidated balance sheet as of September 29, 2019 for the adoption of the new lease guidance were as follows (in thousands):
Balance at September 29, 2019Adjustments due to ASC 842 adoptionBalance at September 30, 2019
Assets
Other assets:
Operating lease ROU assets$—  $880,564  $880,564  
Intangible assets, net$425  $(386) $39  
Deferred income taxes$85,564  $1,006  $86,570  
Liabilities and Stockholders’ Deficit
Current liabilities:
Current operating lease liabilities$—  $159,821  $159,821  
Accrued liabilities$120,083  $(4,702) $115,381  
Long-term liabilities:
Long-term operating lease liabilities, net of current portion$—  $770,818  $770,818  
Other long-term liabilities$263,770  $(41,883) $221,887  
Stockholders’ deficit:
Retained earnings$1,577,034  $(2,870) $1,574,164  

The accounting guidance for lessors remains largely unchanged from previous guidance, except for the presentation of certain lease costs that the Company passes through to lessees, including but not limited to, property taxes and maintenance. These costs are generally paid by the Company and reimbursed by the lessee. Historically, these costs have been recorded on a net basis in our condensed consolidated statements of earnings but are now presented gross upon adoption of the new guidance. As a result, we expect annual revenues and expenses reported in “Franchise rental revenues” and “Franchise occupancy expenses” to increase by approximately $37 million in fiscal 2020. Refer to Note 4, Leases, for further information on our leases and the impact on the Company’s accounting policies.
Effect of new accounting pronouncements to be adopted in future periods — In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which will replace the incurred loss methodology of recognizing credit losses on financial instruments that is currently required with a methodology that estimates the expected credit loss on financial instruments and reflects the net amount expected to be collected on the financial instrument. Application of the new guidance may result in the earlier recognition of credit losses as the new methodology will require entities to consider forward-looking information in addition to historical and current information used in assessing incurred losses. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, with early adoption permitted. The Company will be required to adopt the new guidance on a modified retrospective basis. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements and do not expect there to be a material impact upon adoption.
In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs in cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. Companies can choose to adopt the new guidance prospectively or retrospectively. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements and do not expect there to be a material impact upon adoption.

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

2.REVENUE
Nature of products and services — We derive revenue from retail sales at Jack in the Box company-operated restaurants and rental revenue, royalties, advertising, and franchise and other fees from franchise-operated restaurants.
Our franchise arrangements generally provide for an initial franchise fee of $50,000 per restaurant and generally require that franchisees pay royalty and marketing fees at 5% of gross sales. The agreement also requires franchisees to pay sourcing, technology and other miscellaneous fees.
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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Disaggregation of revenue — The following table disaggregates revenue by primary source (in thousands):
Sixteen Weeks Ended
January 19,
2020
January 20,
2019
Sources of revenue:
Company restaurant sales$105,364  $102,832  
Franchise rental revenues96,084  83,890  
Franchise royalties50,243  49,507  
Marketing fees48,835  47,863  
Technology and sourcing fees4,924  3,951  
Franchise fees and other services2,223  2,743  
Total revenue$307,673  $290,786  

QuarterYear-to-date
April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Sources of revenue:
Company restaurant sales$74,380  $76,682  $179,744  $179,514  
Franchise rental revenues69,885  61,646  165,969  145,536  
Franchise royalties36,049  37,148  86,292  86,655  
Marketing fees30,550  35,947  79,385  83,810  
Technology and sourcing fees3,578  3,042  8,502  6,993  
Franchise fees and other services1,715  1,262  3,938  4,005  
Total revenue$216,157  $215,727  $523,830  $506,513  
Contract liabilities — Our contract liabilities consist of deferred revenue resulting from initial fees received from franchisees for new restaurant openings or new franchise terms, which are generally recognized over the franchise term. We classify these contract liabilities as “Accrued liabilities” and “Other long-term liabilities” in our condensed consolidated balance sheets.
A summary of significant changes in our contract liabilities is presented below (in thousands):
Sixteen Weeks Ended
January 19,
2020
January 20,
2019
Deferred franchise fees at beginning of period$46,273  $50,018  
Revenue recognized during the period(1,632) (1,592) 
Additions during the period895  500  
Deferred franchise fees at end of period$45,536  $48,926  

Year-to-date
April 12,
2020
April 14,
2019
Deferred franchise fees at beginning of period$46,272  $50,018  
Revenue recognized(3,061) (2,745) 
Additions1,488  680  
Deferred franchise fees at end of period$44,699  $47,953  
The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied as of January 19,April 12, 2020 (in thousands):
Remainder of 2020$3,411  
20214,926  
20224,726  
20234,572  
20244,379  
Thereafter23,522  
$45,536  

Remainder of 2020$2,267  
20214,926  
20224,724  
20234,572  
20244,379  
Thereafter23,831  
$44,699  
We have applied the optional exemption, as provided for under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, which allows us to not disclose the transaction price allocated to unsatisfied performance obligations when the transaction price is a sales-based royalty.

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
3.SUMMARY OF REFRANCHISINGS AND FRANCHISEE DEVELOPMENT
Refranchisings and franchisee developmentFranchisees opened 11 new restaurantsThrough the second quarter in 2020 compared to 9 in the prior year, and closed 10 restaurants in fiscal 2020, compared to 5 in 2019. In both comparative periods2019, 0 company-operated restaurants were sold to franchisees. In 2020 and 2019, amounts presented in “Gains on the sale of company-operated restaurants” of $1.6 million and $0.2 million, respectively, pertain to meeting certain contingent consideration provisions included in the sale of restaurants in previous years. The following table summarizes the number of restaurants developed and closed by franchisees.
QuarterYear-to-date
April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
New restaurants opened by franchisees  16  11  
Franchisee restaurants closed(2) (3) (12) (8) 
Franchise acquisitions — During the second quarter of 2020, we acquired 8 franchise restaurants as a result of a legal action filed in October 2019 against a franchisee in which we obtained a judgment in January 2020 granting us the possession of the restaurants.
We account for the acquisition of franchised restaurants using the acquisition method of accounting for business combinations. The purchase price allocations were based on fair value estimates determined using significant unobservable inputs (Level 3). The goodwill recorded primarily relates to the sales growth potential of the market acquired and is expected to be deductible for income tax purposes.
Total consideration on the acquisition was $0.9 million, comprised of receivables that were eliminated in acquisition accounting.
The table below presents the allocation of the total purchase price to the fair value of assets acquired and liabilities assumed for the restaurants acquired (in thousands):
Inventory$73 
Property and equipment903 
Intangible assets263 
Other assets
Goodwill414 
Liabilities assumed(800)
Total consideration$859 

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
4.LEASES
Nature of leases — We own restaurant sites and we also lease restaurant sites from third parties. Some of these owned or leased sites are leased and/or subleased to franchisees. Initial terms of our real estate leases are generally 20 years, exclusive of options to renew, which are generally exercisable at our sole discretion for 1 to 20 years. In some instances, our leases have provisions for contingent rentals based upon a percentage of defined revenues. Many of our restaurants also have rent escalation clauses and require the payment of property taxes, insurance, and maintenance costs. Variable lease costs include contingent rent, cost-of-living index adjustments, and payments for additional rent such as real estate taxes, insurance and common area maintenance, which are excluded from the measurement of the lease liability. We also lease certain restaurant and office equipment with initial terms generally ranging from 3 to 8 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
As lessor, our leases and subleases primarily consist of restaurants that have been leased to franchisees subsequent to refranchising transactions. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. Revenues from leasing arrangements with our franchisees are presented in “Franchise rental revenues” in the accompanying condensed consolidated statements of earnings, and the related expenses are presented in “Franchise occupancy expenses.”
Significant assumptions and judgements — We evaluate the contracts entered into by the Company to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms.
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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The lease term and incremental borrowing rate for each lease requires judgement by management and can impact the classification of our leases as well as the value of our lease assets and liabilities. When determining the lease term, we consider option periods available, and include option periods in the measurement of the lease ROU asset and lease liability where the exercise is reasonably certain to occur. As our leases do not provide an implicit discount rate, we have determined it is appropriate to use our estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, in calculating our lease liabilities.
Rent Concessions as Lessee
In response to the pandemic, certain landlords have agreed to temporary rent concessions. These concessions generally relate to the deferral of certain rent payments for April, May and June until future periods and total approximately $13.4 million. We considered the FASB’s recent guidance regarding rent concessions related to the effects of the COVID-19 pandemic, and have elected to apply the temporary practical expedient to account for rent concessions as though enforceable rights and obligations for those concessions existed in the lease agreements. Therefore, we will not remeasure our lease ROU assets and liabilities, and as of April 12, 2020 have bifurcated our operating lease liabilities into the portion that remains subject to accretion of $940.0 million, and the portion that is related to April rent deferrals of $4.8 million.
Rent Concessions as Lessor
We postponed collection of approximately 40% of April rents due from our franchisees totaling approximately $9.1 million, to be collected over three months beginning July 2020. Furthermore, we passed on to our franchisees approximately $10.4 million of the rent concessions secured from our landlords for April, May and June.
Company as Lessee
Leased assets and liabilities consisted of the following as of January 19,April 12, 2020 (in thousands):
January 19,April 12,
2020
Assets:  
Operating lease ROU assets  $884,213903,010  
Finance lease ROU assets (1) 2,7422,689  
Total ROU assets  $886,955905,699  
Liabilities:  
Current operating lease liabilities   $158,779163,077  
Current finance lease liabilities (2) 786819  
Long term operating lease liabilities  767,819781,653  
Long-term finance lease liabilities (2) 2,6092,511  
Total lease liabilities  $929,993948,060  
____________________________
(1)Included in “Property and equipment, net” on our condensed consolidated balance sheet.
(2)Included in “Current maturities of long-term debt” and “Long-term debt, net of current maturities” on our condensed consolidated balance sheet.

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table presents the components of our lease cost components and other supplemental information related to our leasescosts (dollars in thousands):
Sixteen Weeks Ended
January 19,
2020
Lease costs: 
Finance lease cost: 
Amortization of ROU assets (1)$234 
Interest on lease liabilities (2)33 
Operating lease cost (3)58,512 
Short-term lease cost (3)
Variable lease cost (3)(4)12,507 
$71,287 
Weighted-average remaining lease term (in years):
Finance leases 3.9
Operating leases 8.0
Weighted-average discount rate: 
Finance leases 3.4 %
Operating leases 3.9 %
QuarterYear-to-date
April 12,
2020
April 12,
2020
Lease costs:  
Finance lease cost:  
Amortization of ROU assets (1) $179  $413  
Interest on lease liabilities (2) 28  61  
Operating lease cost (3) 43,891  102,403  
Short-term lease cost (3) 102  103  
Variable lease cost (3)(4) 9,316  21,823  
$53,516  $124,803  
____________________________
(1)Included in “Depreciation and amortization” in our condensed consolidated statement of earnings.
(2)Included in “Interest expense, net” in our condensed consolidated statement of earnings.
(3)Operating lease, short-term and variable lease costs associated with franchisees and company-operated restaurants are included in “Franchise occupancy expenses” and “Occupancy and other”, respectively, in our condensed consolidated statement of earnings. For our closed restaurants, these costs are included in “Impairment and other, net” and all other costs are included in “Selling, general and administrative expenses”.
(4)Includes $11.6$8.6 million in the quarter and $20.2 million year-to-date of property taxes and common area maintenance costs which are reimbursed by sub-lessees.
The following table presents supplemental information related to leases:
April 12,
2020
Weighted-average remaining lease term (in years):
Finance leases 3.6
Operating leases 8.2
Weighted-average discount rate: 
Finance leases 3.5 %
Operating leases 4.0 %
The following table presents as of January 19,April 12, 2020, future minimumthe annual maturities of our lease payments for non-cancellable leasesliabilities (in thousands):
Finance LeasesOperating LeasesFinance LeasesOperating Leases
Fiscal year:Fiscal year:Fiscal year:
Remainder of 2020(1)Remainder of 2020(1)$647  $130,553  Remainder of 2020(1)$443  $80,592  
2021(1)2021(1)879  193,874  2021(1)906  205,534  
20222022879  153,011  2022906  158,823  
20232023866  124,843  2023901  131,362  
20242024390  94,034  2024408  100,021  
ThereafterThereafter40  386,822  Thereafter54  449,077  
Total minimum lease payments$3,701  $1,083,137  
Total future lease payments (2)Total future lease payments (2)$3,618  $1,125,409  
Less: imputed interestLess: imputed interest(306) (156,539) Less: imputed interest(288) (180,679) 
Present value of lease liability$3,395  $926,598  
Present value of lease liabilitiesPresent value of lease liabilities$3,330  $944,730  
____________________________
(1)The impact of rent concessions reduced 2020 operating leases maturities by $1.3 million and increased 2021 by $6.0 million.
(2)Total future lease payments include non-cancellable commitments of $3.6 million for finance leases and $1,090 million for operating leases.

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table presents as of September 29, 2019, future minimum lease payments for non-cancellable leases (in thousands):
Capital LeasesOperating Leases
Fiscal year:
2020$879  $193,313  
2021879  186,226  
2022879  145,794  
2023864  117,753  
2024396  87,420  
Thereafter40  363,505  
Total minimum lease payments$3,937  $1,094,011  
Less: imputed interest(343) 
Present value of lease liability$3,594  

The following table includes supplemental cash flow and non-cash information related to our lessee leases (in thousands):
Sixteen Weeks EndedYear-to-date
January 19,April 12,
2020
Cash paid for amounts included in the measurement of lease liabilities:  
Operating cash flows from operating leases  $65,996115,376  
Operating cash flows from financing leases  $3361  
Financing cash flows from financing leases  $198390  
Right-of-use assets obtained in exchange for lease obligations:  
Operating leases  $51,311105,748  
Financing leases  $132  

Sale leaseback transactions — In the first quarter of 2020, we completed a sale leaseback transaction of a multi-tenant commercial property in Los Angeles, California and leased back the parcel on which a company-operated restaurant is located. The Company received net proceeds of $17.4 million and recognized a $0.2 million loss on the sale. The initial term on the lease is 20 years and the lease has been accounted for as an operating lease.
In the first quarter of 2020, we completed the sale of one of our corporate office buildings as we move forward with our previously announced consolidation of our headquarters. We entered into a lease with the buyer to leaseback the property for up to 18 months with an option to terminate earlier without penalty, upon providing a 90-day notice. The net proceeds received on the sale was $20.6 million and the lease has been accounted for as an operating lease. A gain on the sale of $10.8 million was recognized, during the quarter, and is presented within “Impairment and other charges, net” in our condensed consolidated statement of earnings.

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Company as Lessor
The following table presents rental income (in thousands):
Sixteen Weeks EndedQuarterYear-to-date
January 19, 2020April 12, 2020April 12, 2020
Owned PropertiesLeased PropertiesTotalOwned PropertiesLeased PropertiesTotalOwned PropertiesLeased PropertiesTotal
Operating lease income - franchise Operating lease income - franchise  $6,095  $66,568  $72,663  Operating lease income - franchise  $4,572  $50,123  $54,695  $10,667  $116,692  $127,359  
Variable lease income - franchise Variable lease income - franchise  2,716  20,704  23,420  Variable lease income - franchise  1,810  13,380  15,190  4,526  34,084  38,610  
Franchise rental revenues Franchise rental revenues  $8,811  $87,272  $96,083  Franchise rental revenues  $6,382  $63,503  $69,885  $15,193  $150,776  $165,969  
Operating lease income - closed restaurants and other (1)Operating lease income - closed restaurants and other (1) $—  $2,057  $2,057  Operating lease income - closed restaurants and other (1) $—  $1,470  $1,470  $—  $3,527  $3,527  
____________________________
(1)Primarily relates to closed restaurant properties included in “Impairment and other, net” in our condensed consolidated statement of earnings.
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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table presents as of January 19,April 12, 2020, future minimum rental receipts for non-cancellable leases and subleases (in thousands):
January 19,
2020
April 12,
2020
Fiscal year:Fiscal year:Fiscal year:
Remainder of 2020(2)Remainder of 2020(2)$159,654  Remainder of 2020(2)$106,892  
2021(2)2021(2)256,052  2021(2)261,492  
20222022232,129  2022232,748  
20232023225,488  2023226,178  
20242024200,425  2024201,003  
ThereafterThereafter1,237,167  Thereafter1,250,834  
Total minimum rental receipts Total minimum rental receipts  $2,310,915  Total minimum rental receipts  $2,279,147  
____________________________

(1)
Includes $9.1 million of postponed April rents to be repaid over three months beginning July 2020.
(2)The impact of rent concessions passed on to franchisees reduced 2020 by $1.7 million and increased 2021 by $4.7 million.
The following table presents as of September 29, 2019, future minimum rental receipts for non-cancellable leases and subleases (in thousands):
September 29,
2019
Fiscal year:
2020$239,219  
2021255,315  
2022231,394  
2023224,605  
2024199,442  
Thereafter1,215,811  
Total minimum rental receipts  $2,365,786  

5.INDEBTEDNESS
Long-term debt as of April 12, 2020 and September 29, 2019 consisted of the following (in thousands):
April 12,
2020
September 29,
2019
Class A-2-I Notes$573,563  $575,000  
Class A-2-II Notes274,313  275,000  
Class A-2-III Notes448,875  450,000  
Class A-1 Variable Funding Notes107,876  —  
Finance lease obligations3,330  3,594  
Total debt1,407,957  1,303,594  
Less current maturities of long-term debt(13,819) (774) 
Less unamortized debt issuance costs(25,692) (28,446) 
Long-term debt$1,368,446  $1,274,374  
The Company’s outstanding debt consists of Series 2019-1 3.982% Fixed Rate Senior Secured Notes (the “Class A-2-I Notes”), Series 2019-1 4.476% Fixed Rate Senior Secured Notes, Class A-2-II (the “Class A-2-II Notes”), and Series 2019-1 4.970% Fixed Rate Senior Secured Notes, Class A-2-III (the “Class A-2-III Notes”) and together with the Class A-2-I Notes and the Class A-2-II Notes, (the “Class A-2 Notes”), issued by Jack in the Box Funding, LLC (the “Master Issuer”), a limited-purpose, bankruptcy-remote, wholly owned indirect subsidiary of the Company. In addition, the Master Issuer entered into a revolving financing facility of Series 2019-1 Variable Funding Senior Secured Notes, Class A-1 (the “Variable Funding Notes”), which allows for the drawing of up to $150.0 million under the Variable Funding Notes and the issuance of letters of credit.
12
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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
As of April 12, 2020 and September 29, 2019, $41.1 million and $45.6 million, respectively, of letters of credit were pledged against the Variable Funding Notes. As of September 29, 2019, we had no outstanding borrowings under our Variable Funding Notes. During the second quarter of 2020, to secure our liquidity position and provide financial flexibility given the uncertain market conditions, we borrowed $107.9 million under the Variable Funding Notes. The Company may use the proceeds from the borrowings for working capital and general corporate purposes. As of April 12, 2020, remaining borrowing availability under our Variable Funding Notes was $1.1 million.
5.
6.FAIR VALUE MEASUREMENTS
Financial assets and liabilities — The following table presents our financial assets and liabilities measured at fair value on a recurring basis (in thousands):
Total      Quoted Prices
in Active
Markets for
Identical
Assets (2)
(Level 1)
Significant
Other
Observable
Inputs (2)
(Level 2)
Significant
Unobservable
Inputs (2)
(Level 3)
TotalQuoted Prices
in Active
Markets for
Identical
Assets (2)
(Level 1)
Significant
Other
Observable
Inputs (2)
(Level 2)
Significant
Unobservable
Inputs (2)
(Level 3)
Fair value measurements as of January 19, 2020:
Fair value measurements as of April 12, 2020:Fair value measurements as of April 12, 2020:
Non-qualified deferred compensation plan (1)Non-qualified deferred compensation plan (1)$29,857  $29,857  $—  $—  Non-qualified deferred compensation plan (1)$25,261  $25,261  $—  $—  
Total liabilities at fair valueTotal liabilities at fair value$29,857  $29,857  $—  $—  Total liabilities at fair value$25,261  $25,261  $—  $—  
Fair value measurements as of September 29, 2019:Fair value measurements as of September 29, 2019:Fair value measurements as of September 29, 2019:
Non-qualified deferred compensation plan (1)Non-qualified deferred compensation plan (1)$30,104  $30,104  $—  $—  Non-qualified deferred compensation plan (1)$30,104  $30,104  $—  $—  
Total liabilities at fair valueTotal liabilities at fair value$30,104  $30,104  $—  $—  Total liabilities at fair value$30,104  $30,104  $—  $—  
____________________________
(1)We maintain an unfunded defined contribution plan for key executives and other members of management. The fair value of this obligation is based on the closing market prices of the participants’ elected investments. The obligation is included in “Accrued liabilities” and “Other long-term liabilities” on our condensed consolidated balance sheets.
(2)We did not have any transfers in or out of Level 1, 2 or 3.
At January 19, 2020,The following table presents the carrying value and estimated fair value of our Class A-2 Notes was $1,300.0 millionas of April 12, 2020 and fair value was $1,332.0 million. September 29, 2019 (in thousands):
April 12,
2020
September 29,
2019
Carrying AmountFair ValueCarrying AmountFair Value
Class A-2 Notes$1,296,751  $1,170,896  $1,300,000  $1,344,300  
The fair value of the Class A-2 Notes was estimated using Level 2 inputs based on quoted market prices in markets that are not considered active markets. The estimatedCompany had $107.9 million of outstanding borrowings under its Variable Funding Notes. The fair valuesvalue of our finance lease obligations approximated theirthis loan approximates carrying values asvalue due to the variable rate nature of January 19, 2020.

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
these borrowings.
Non-financial assets and liabilities — Our non-financial instruments, which primarily consist of property and equipment, operating lease right-of-use assets, goodwill and intangible assets, are reported at carrying value and are not required to be measured at fair value on a recurring basis. However, on an annual basis, or whenever events or changes in circumstances indicate that their carrying value may not be recoverable, non-financial instruments are assessed for impairment. If applicable, the carrying values are written down to fair value.
In connection with our impairment reviews performed during 2020, no material fair value adjustments were required. Refer to Note 7,8, Impairment and Other Charges, Net, for additional information regarding impairment charges.

6.7.DERIVATIVE INSTRUMENTS
Interest rate swaps — We have used interest rate swaps to mitigate interest rate volatility with regard to variable rate borrowings under our senior credit facility. In June 2015, we entered into forward-starting interest rate swap agreements that effectively converted $500.0 million of our variable rate borrowings to a fixed rate from October 2018 through October 2022. These agreements were designated as cash flow hedges under the terms of the FASB authoritative guidance for derivatives and hedging. Since they were effective in offsetting the variability of the hedged cash flows, changes in the fair values of the derivatives were not included in earnings, but were included in other comprehensive income (“OCI”). These changes in fair value were subsequently reclassified into net earnings as a component of interest expense as the hedged interest payments were made on our variable rate debt.
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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Effective July 2, 2019, the Company terminated all interest rate swap agreements in anticipation of the securitization transaction and related retirement of our senior credit facility in the fourth quarter of 2019. During fiscal 2019, our interest rate swaps had no hedge ineffectiveness.
Financial performance — The following table summarizes the OCI activity related to our interest rate swap derivative instruments and the amounts reclassified from accumulated OCI (in thousands):
Location in IncomeSixteen Weeks Ended
January 20,
2019
Loss recognized in OCIN/A$(7,167)
Loss reclassified from accumulated OCI into net earningsInterest expense, net$479 
 Location in IncomeQuarterYear-to-date
April 14,
2019
April 14,
2019
Loss recognized in OCIN/A$(4,959) $(12,126) 
Loss reclassified from accumulated OCI into net earningsInterest expense, net$134  $613  

7.8.IMPAIRMENT AND OTHER CHARGES, NET
Impairment and other charges, net in the accompanying condensed consolidated statements of earnings is comprised of the following (in thousands):
Sixteen Weeks EndedQuarterYear-to-date
January 19,
2020
January 20,
2019
April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Restructuring costsRestructuring costs$1,045  $5,840  Restructuring costs$118  $946  $1,163  $6,786  
Costs of closed restaurants and otherCosts of closed restaurants and other101  866  Costs of closed restaurants and other331  383  432  1,249  
Losses (gains) on disposition of property and equipment, net (1)Losses (gains) on disposition of property and equipment, net (1)267  (714) (10,170) (138) 
Accelerated depreciationAccelerated depreciation—  416  Accelerated depreciation—  510  —  926  
(Gains) losses on disposition of property and equipment, net (1)(10,437) 576  
$(9,291) $7,698  $716  $1,125  $(8,575) $8,823  
____________________________
(1)In 2020, includes a $10.8 million gain related to the sale of one of our corporate office buildings. Refer to Note 4, Leases, for further information.

Restructuring costs — Restructuring charges include costs resulting from the exploration of strategic alternatives (the “Strategic Alternatives Evaluation”) in 2019, which was concluded in the third quarter of 2019, and a plan that management initiated to reduce our general and administrative costs.
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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following is a summary of our restructuring costs (in thousands):
Sixteen Weeks EndedQuarterYear-to-date
January 19,
2020
January 20,
2019
April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Employee severance and related costsEmployee severance and related costs$1,045  $4,506  Employee severance and related costs$118  $642  $1,163  $5,148  
Strategic Alternatives Evaluation (1)Strategic Alternatives Evaluation (1)—  1,334  Strategic Alternatives Evaluation (1)—  304  —  1,638  
$1,045  $5,840  $118  $946  $1,163  $6,786  
____________________________
(1) Strategic Alternative Evaluation costs primarily relate to third party advisory services.
We do not expect any significant severance and related costs for the remainder of fiscal 2020 related to these initiatives.
Total accrued severance costs related to our restructuring activities are included in “Accrued liabilities” on our condensed consolidated balance sheets, and changed as follows during 2020 (in thousands):

Balance as of September 29, 2019$2,100  
Costs incurred1,0191,163  
Cash payments(2,134)(3,010) 
Balance as of January 19,April 12, 2020$985253  

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
8.9.INCOME TAXES
The income tax provisions reflect tax rates of 28.4%32.3% in 2020the second quarter and 23.1%30.7% year-to-date, compared with 25.0% and 24.0%, respectively, in fiscal year 2019. The major components of the year- over-yearyear-over-year change in tax rates were a decrease in operating earnings before income tax, an adjustment related to state taxes recordedincrease in the first quarterimpact of 2019,non-deductible compensation for certain officers, an increase in the tax deficiency on stock compensation, partially offset by an increase in gainslosses from the market performance of insurance products used to fund certain non-qualified retirement plans which are excluded from taxable income.income, and an increase in non-deductible legal settlements. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual 2020 rate could differ from our current estimates.
The followingCoronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in the U.S. on March 27, 2020. The CARES Act includes several U.S. income tax provisions related to, among other things, modifications to the net interest deduction limitations, and technical amendments regarding the income tax depreciation of qualified improvement property placed in service after December 31, 2017. The CARES Act is not expected to have a summary ofmaterial impact on the components of each tax rate (dollars in thousands):
Sixteen Weeks Ended
January 19,
2020
January 20,
2019
Income tax expense at statutory rate$2,868  26.0 %$10,434  25.8 %
Stock compensation tax deficiency (excess tax benefit)196  1.8 %(50) (0.1)%
Company-owned life insurance policies(99) (0.9)%231  0.6 %
Adjustment to state tax provision—  — %(1,027) (2.6)%
Other168  1.5 %(215) (0.5)%
(1)$3,133  28.4 %$9,373  23.1 %
____________________________
(1)Percentages may not add due to rounding.Company’s financial results.

9.10.RETIREMENT PLANS
Defined benefit pension plans — We sponsor 2 defined benefit pension plans, a frozen “Qualified Plan” covering substantially all full-time employees hired prior to January 1, 2011, and an unfunded supplemental executive retirement plan (“SERP”) which provides certain employees additional pension benefits and was closed to new participants effective January 1, 2007. Benefits under both plans are based on the employee’s years of service and compensation over defined periods of employment.
In the fourth quarter of 2019, the Company amended its Qualified Plan to add a limited lump sum payment window whereby certain terminated participants with a vested pension benefit could elect to receive either an immediate lump sum or a monthly annuity payment of their accrued benefit. The offering period began September 16, 2019 and ended October 31, 2019. The participants that elected a lump sum benefit under the program were paid in December 2019, which triggered settlement accounting. As a result of the offering, the Company’s Qualified Plan paid $122.3 million from its plan assets to those who accepted the offer, thereby reducing the plan’s pension benefit obligation (“PBO”). The transaction had no cash impact to the Company but did result in a non-cash settlement charge of $38.6 million in the first quarter of fiscal 2020.

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Routine lump sum payments made in the second quarter of fiscal 2020 resulted in a non-cash settlement charge of $0.3 million.
Postretirement healthcare plans — We also sponsor 2 healthcare plans, closed to new participants, that provide postretirement medical benefits to certain employees who have met minimum age and service requirements. The plans are contributory, with retiree contributions adjusted annually, and they contain other cost-sharing features such as deductibles and coinsurance.
Net periodic benefit cost — The components of net periodic benefit cost in each period were as follows (in thousands): 
Sixteen Weeks EndedQuarterYear-to-date
January 19,
2020
January 20,
2019
April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Defined benefit pension plans:Defined benefit pension plans:Defined benefit pension plans:
Interest costInterest cost$5,076  $7,048  Interest cost$3,669  $5,286  $8,745  $12,334  
Expected return on plan assets (1)Expected return on plan assets (1)(6,656) (8,104) Expected return on plan assets (1)(4,706) (6,077) (11,362) (14,181) 
Pension settlement (2)38,606  —  
Actuarial loss (2)1,672  1,219  
Pension settlements (2)Pension settlements (2)321  —  38,927  —  
Actuarial losses (2)Actuarial losses (2)1,019  913  2,691  2,132  
Amortization of unrecognized prior service costs (2)Amortization of unrecognized prior service costs (2)26  35  Amortization of unrecognized prior service costs (2)19  27  45  62  
Net periodic benefit costNet periodic benefit cost$38,724  $198  Net periodic benefit cost$322  $149  $39,046  $347  
Postretirement healthcare plans:Postretirement healthcare plans:Postretirement healthcare plans:
Interest costInterest cost$248  $307  Interest cost$187  $230  $435  $537  
Actuarial loss (gain) (2) (49) 
Actuarial losses (gains) (2)Actuarial losses (gains) (2) (36)  (85) 
Net periodic benefit costNet periodic benefit cost$254  $258  Net periodic benefit cost$190  $194  $444  $452  
___________________________
(1)Based on a return on asset, net of administrative expenses, assumption of 5.8% determined at the end of fiscal 2019, subsequently updated to 5.9% as of December 31, 2019 and 5.2% as of March 31, 2020, upon remeasurement of the Qualified Plan’s assets and PBO as required by settlement accounting.
(2)Amounts were reclassified from accumulated OCI into net earnings as a component of “Other pension and post-retirement expenses, net.”
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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Future cash flows — Our policy is to fund our plans at or above the minimum required by law. As of January 1, 2019, the date of our last actuarial funding valuation, there was 0 minimum contribution funding requirement. Details regarding 2020 contributions are as follows (in thousands):
SERPPostretirement
Healthcare Plans
Net year-to-date contributions$1,639  $386  
Remaining estimated net contributions during fiscal 2020$3,732  $1,011  

SERPPostretirement
Healthcare Plans
Net year-to-date contributions$2,857  $725  
Remaining estimated net contributions during fiscal 2020$2,514  $676  
We continue to evaluate contributions to our Qualified Plan based on changes in pension assets as a result of asset performance in the current market and the economic environment. We do not anticipate making any contributions to our Qualified Plan in fiscal 2020.

16

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
10.11.STOCKHOLDERS’ DEFICIT
Summary of changes in stockholders’ deficit A reconciliation of the beginning and ending amounts of stockholders’ deficit is presented below (in thousands):
Sixteen Weeks Ended
January 19,
2020
January 20,
2019
Balance at beginning of period$(737,584) $(591,699) 
Shares issued under stock plans, including tax benefit184  115  
Share-based compensation3,184  1,909  
Dividends declared(9,425) (10,318) 
Purchases of treasury stock(153,550) —  
Net earnings7,897  34,098  
Other comprehensive income (loss), net of taxes51,011  (4,071) 
Cumulative-effect from a change in accounting principle(2,870) (37,330) 
Balance at end of period$(841,153) $(607,296) 

QuarterYear-to-date
April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Balance at beginning of period$(841,153) $(607,296) $(737,584) $(591,699) 
Shares issued under stock plans, including tax benefit3,375  128  3,559  243  
Share-based compensation expense2,681  2,799  5,865  4,708  
Dividends declared(9,067) (10,323) (18,492) (20,641) 
Purchases of treasury stock—  —  (153,550) —  
Net earnings11,463  25,089  19,360  59,187  
Other comprehensive income (loss), net of taxes(44,225) (2,911) 6,786  (6,982) 
Cumulative-effect from a change in accounting principle—  —  (2,870) (37,330) 
Balance at end of period$(876,926) $(592,514) $(876,926) $(592,514) 
Repurchases of common stock The Company repurchased 1.9 million shares of its common stock in the first quarter of fiscal 2020 at an average price of $81.41 per share for an aggregate cost of $153.5 million. There were no repurchases of common stock in the second quarter of fiscal 2020. As of January 19,April 12, 2020, this leaves approximately $122.2 million remaining under share repurchase programs authorized by the Board of Directors, consisting of $22.2 million that expires in November 2020 and $100.0 million that expires in November 2021.
Repurchases of common stock included in our condensed consolidated statement of cash flows for fiscal 2020 include $2.0 million related to repurchase transactions traded in the prior year but settled in 2020.
Dividends — During 2020, the Board of Directors declared a2 cash dividenddividends of $0.40 per common share totaling $9.4which were paid on March 17, 2020 and December 20, 2019 to shareholders of record as of the close of business on March 3, 2020 and December 5, 2019, respectively, and totaled $18.5 million. Future dividends are subject to approval by our Board of Directors.

18

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
11.12.AVERAGE SHARES OUTSTANDING
The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding (in thousands):
Sixteen Weeks EndedQuarterYear-to-date
January 19,
2020
January 20,
2019
April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Weighted-average shares outstanding – basicWeighted-average shares outstanding – basic23,741  25,907  Weighted-average shares outstanding – basic22,803  25,943  23,339  25,922  
Effect of potentially dilutive securities:Effect of potentially dilutive securities:Effect of potentially dilutive securities:
Nonvested stock awards and unitsNonvested stock awards and units181  208  Nonvested stock awards and units85  190  144  203  
Stock optionsStock options 11  Stock options—  10  —  10  
Performance share awardsPerformance share awards  Performance share awards    
Weighted-average shares outstanding – dilutedWeighted-average shares outstanding – diluted23,936  26,128  Weighted-average shares outstanding – diluted22,895  26,145  23,490  26,137  
Excluded from diluted weighted-average shares outstanding:Excluded from diluted weighted-average shares outstanding:Excluded from diluted weighted-average shares outstanding:
AntidilutiveAntidilutive224  186  Antidilutive362  186  307  186  
Performance conditions not satisfied at the end of the periodPerformance conditions not satisfied at the end of the period80  89  Performance conditions not satisfied at the end of the period77  89  77  89  

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
12.13.CONTINGENCIES AND LEGAL MATTERS
Legal matters — We assess contingencies, including litigation contingencies, to determine the degree of probability and range of possible loss for potential accrual in our financial statements. An estimated loss contingency is accrued in the financial statements if it is probable that liability is adverse to the Company and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable, assessing contingencies is highly subjective and requires judgments about future events. When evaluating litigation contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the availability of appellate remedies, insurance coverage related to the claim or claims in question, the presence of complex or novel legal theories, and the ongoing discovery and development of information important to the matter. In addition, damage amounts claimed in litigation against us may be unsupported, exaggerated, or unrelated to possible outcomes, and as such are not meaningful indicators of our potential liability or financial exposure. We regularly review contingencies to determine the adequacy of the accruals and related disclosures. The ultimate amount of loss may differ from these estimates. As of April 12, 2020 and September 29, 2019, the Company had recorded aggregate liabilities of $14.2 million and $10.0 million, respectively, within “Accrued liabilities” on our condensed consolidated balance sheets, for all matters including those described below, that were probable and reasonably estimable. While we believe that additional losses beyond these accruals are reasonably possible, we cannot estimate a possible loss contingency or range of reasonably possible loss contingencies beyond these accruals.
Gessele v. Jack in the Box Inc. — In August 2010, five former employees instituted litigation in federal court in Oregon alleging claims under the federal Fair Labor Standards Act and Oregon wage and hour laws. The plaintiffs alleged that the Company failed to pay non-exempt employees for certain meal breaks and improperly made payroll deductions for shoe purchases and for workers’ compensation expenses, and later added additional claims relating to timing of final pay and related wage and hour claims involving employees of a franchisee. In 2016, the court dismissed the federal claims and those relating to franchise employees. In June 2017, the court granted class certification with respect to state law claims of improper deductions and late payment of final wages. In February 2019, plaintiff’s counsel reduced their earlier demand from $62.0 million to $42.0 million. In November 2019, the court issued a ruling on various dispositive motions, disallowing approximately $25.0 million in claimed damages. We have accrued an amount that is not material to our consolidated financial statements relating to claims for which we believe a loss is both probable and estimable. While we believe that additional losses beyond this accrual are reasonably possible, we cannot estimate a possible loss contingency or range of reasonably possible loss contingencies beyond this accrual. The parties are participatingparticipated in a voluntary mediation on March 16, 2020. If2020, but the case doesmatter did not resolve at mediation, wesettle. The plaintiff recently filed a motion for reconsideration of the court’s prior denial of class certification regarding meal and rest break claims. The Company has opposed the motion and will continue to vigorously defend against this lawsuit.
Marquez v. Jack in the Box Inc. — In August 2017, a former employee filed a class action lawsuit in California state court and as a Private Attorney General Act (“PAGA”) representative suit alleging that the Company failed to provide all non-exempt California employees with compliant rest and meal breaks, overtime pay, accurate wage statements, and final pay upon termination of employment. On January 29, 2020, the parties participated in voluntary mediation and reached a tentative agreement to settle the case. The parties have executed a settlement agreement is subjectand submitted the settlement to documentation andthe court approval. During the first quarter of 2020, commensurate with the anticipated settlement, we recorded an accrual for legal settlement of $3.8 million.final approval.
19

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Ramirez v. Jack in the Box Inc. — On June 11, 2019, an unfavorable jury verdict was delivered in a wrongful termination lawsuit against the Company in Los Angeles Superior Court. Plaintiff in the case was a restaurant employee who was terminated in 2013. The jury’s verdict included $5.4 million in compensatory damages and $10.0 million in punitive damages. The Company filed post-trial motions with the trial judge for the purpose of setting aside or significantly reducing damages. These motions were granted, resulting in a reduction of damages from $15.4 million to $3.2 million. The plaintiff accepted the reduction. In October 2019, the plaintiff’s counsel filed a motion for attorney’s fees in the amount of $5.1 million. On January 9, 2020, the court issued its ruling awarding $3.9 million in attorney fees. As of January 19,April 12, 2020, we have recorded an accrual for legal settlement of $7.3 million within “Accrued liabilities” and a litigation insurance recovery receivable of $7.3 million, which represents the expected payment of the settlement by the Company’s insurance carriers, within “Accounts and other receivable, net” in our condensed consolidated balance sheet.
Other legal matters — In addition to the matter described above, we are subject to normal and routine litigation brought by former or current employees, customers, franchisees, vendors, landlords, shareholders or others. We intend to defend ourselves in any such matters. Some of these matters may be covered, at least in part, by insurance or other third party indemnity obligation.obligations. We record receivables from third party insurers when recovery has been determined to be probable. We believe that the ultimate determination of liability in connection with legal claims pending against us, if any, in excess of amounts already provided for such matters in the consolidated financial statements, will not have a material adverse effect on our business, our annual results of operations, liquidity or financial position; however, it is possible that our business, results of operations, liquidity, or financial condition could be materially affected in a particular future reporting period by the unfavorable resolution of one or more matters or contingencies during such period.

18

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
13.14.DISCONTINUED OPERATIONS
Qdoba — In December 2017, we entered into a stock purchase agreement (the “Qdoba Purchase Agreement”) with the Buyer to sell all issued and outstanding shares of Qdoba. The Buyer completed the acquisition of Qdoba on March 21, 2018 (the “Qdoba Sale”).
We also entered into a Transition Services Agreement with the Buyer pursuant to which the Buyer received certain services (the “Services”) to enable it to operate the Qdoba business after the closing of the Qdoba Sale. The Services included information technology, finance and accounting, human resources, supply chain and other corporate support services. Under the Agreement, the Services were provided at cost for a period of up to 12 months, with 2 3-month extensions available for certain services. As of September 21, 2019, we are no longer providing transition services to Qdoba. In 2019, we recorded $3.7$1.9 million in the quarter and $5.6 million year-to-date, in income related to the Services as a reduction of “Selling, general and administrative expenses” in the condensed consolidated statements of earnings.
The following table presents Qdoba’s results of operations in periods which have been included in discontinued operations (in thousands, except per share data):
Sixteen Weeks Ended
January 20,
2019
Selling, general and administrative expenses$(302)
Loss on Qdoba Sale85 
Earnings from discontinued operations before income taxes217 
Income tax benefit (1)2,760 
Earnings from discontinued operations, net of income taxes$2,977 
Basic and diluted earnings per share from discontinued operations:$0.11 
QuarterYear-to-date
April 14,
2019
April 14,
2019
Selling, general and administrative expenses$59  $(243) 
Loss on Qdoba Sale—  85  
(Losses) earnings from discontinued operations before income taxes(59) 158  
Income tax benefit (1)18  2,778  
(Losses) earnings from discontinued operations, net of income taxes$(41) $2,936  
Basic and diluted earnings per share from discontinued operations:$—  $0.11  
____________________________
(1)In fiscal 2019, the Company entered into a bilateral California election with Quidditch Acquisition, Inc. to retroactively treat the divestment of Qdoba Restaurant Corporation on March 21, 2018 as a sale of assets instead of a stock sale for income tax purposes. This election reduced the Company’s fiscal year 2018 California tax liability on the divestment by $2.8 million.
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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Lease guarantees —While all operating leases held in the name of Qdobawere part of the Qdoba Sale, some of the leases remain guaranteed by the Company pursuant to one or more written guarantees (the “Guarantees”). In the event Qdoba fails to meet its payment and performance obligations under such guaranteed leases, we may be required to make rent and other payments to the landlord under the requirements of the Guarantees. Should we, as guarantor of the lease obligations, be required to make any lease payments due for the remaining term of the subject leases, the maximum amount we may be required to pay is approximately $31.2$29.3 million as of January 19,April 12, 2020. The lease terms extend for a maximum of approximately 16 more years as of January 19,April 12, 2020, and we would remain a guarantor of the leases in the event the leases are extended for any established renewal periods. In the event that we are obligated to make payments under the Guarantees, we believe the exposure is limited due to contractual protections and recourse available in the lease agreements, as well as the Qdoba Purchase Agreement, including a requirement of the landlord to mitigate damages by re-letting the properties in default, and indemnity from the Buyer. Qdoba continuesAs of April 12, 2020, 0 amounts have been accrued relating to meet its obligations under these leases and there haveguarantees as we do not beenbelieve any events that would indicate that Qdoba will not continue to meet the obligations of the leases. As such, we have not recorded a liability for the Guarantees as the likelihood of Qdoba defaulting on the assigned agreements was deemed to be less thanlosses are probable.

14.15.SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION (in thousands)
Sixteen Weeks EndedYear-to-date
January 19,
2020
January 20,
2019
April 12,
2020
April 14,
2019
Non-cash investing and financing transactions:Non-cash investing and financing transactions:Non-cash investing and financing transactions:
Decrease in obligations for treasury stock repurchasesDecrease in obligations for treasury stock repurchases$2,025  $14,362  Decrease in obligations for treasury stock repurchases$2,025  $14,362  
Decrease in obligations for purchases of property and equipmentDecrease in obligations for purchases of property and equipment$2,377  $4,927  Decrease in obligations for purchases of property and equipment$1,247  $5,368  
Increase in dividends accrued or converted to common stock equivalentsIncrease in dividends accrued or converted to common stock equivalents$63  $58  Increase in dividends accrued or converted to common stock equivalents$65  $121  
Consideration for franchise acquisitionsConsideration for franchise acquisitions$859  $—  
Decrease in finance lease obligations from the termination of equipment and building leasesDecrease in finance lease obligations from the termination of equipment and building leases$—  $ Decrease in finance lease obligations from the termination of equipment and building leases$24  $41  

21
19

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
15.16.SUPPLEMENTAL CONSOLIDATED BALANCE SHEET INFORMATION (in thousands)
January 19,
2020
September 29,
2019
April 12,
2020
September 29,
2019
Accounts and other receivables, net:Accounts and other receivables, net:Accounts and other receivables, net:
TradeTrade$29,361  $36,907  Trade$46,339  $36,907  
Notes receivableNotes receivable375  278  Notes receivable9,589  278  
Income tax receivableIncome tax receivable1,279  160  Income tax receivable1,279  160  
Property taxes receivable17,713  32  
OtherOther9,970  10,823  Other14,410  10,855  
Allowance for doubtful accountsAllowance for doubtful accounts(5,122) (2,965) Allowance for doubtful accounts(5,286) (2,965) 
$53,576  $45,235  $66,331  $45,235  
Prepaid expenses:Prepaid expenses:Prepaid expenses:
Prepaid income taxesPrepaid income taxes$7,470  $579  Prepaid income taxes$12,965  $579  
Prepaid advertisingPrepaid advertising32  1,838  Prepaid advertising32  1,838  
OtherOther6,163  6,598  Other5,463  6,598  
$13,665  $9,015  $18,460  $9,015  
Other assets, net:Other assets, net:Other assets, net:
Company-owned life insurance policiesCompany-owned life insurance policies$116,127  $112,753  Company-owned life insurance policies$107,973  $112,753  
Deferred rent receivableDeferred rent receivable49,419  49,333  Deferred rent receivable49,152  49,333  
Franchise tenant improvement allowanceFranchise tenant improvement allowance28,702  26,925  Franchise tenant improvement allowance29,536  26,925  
OtherOther18,535  17,674  Other24,544  17,674  
$212,783  $206,685  $211,205  $206,685  
Accrued liabilities:Accrued liabilities:Accrued liabilities:
InsuranceInsurance$27,852  $27,888  Insurance$27,972  $27,888  
Payroll and related taxesPayroll and related taxes24,375  31,095  Payroll and related taxes20,808  31,095  
Deferred franchise feesDeferred franchise fees4,970  4,978  Deferred franchise fees4,951  4,978  
Sales and property taxesSales and property taxes8,731  4,268  Sales and property taxes10,251  4,268  
Gift card liabilityGift card liability2,443  2,036  Gift card liability2,196  2,036  
OtherOther49,918  49,818  Other54,771  49,818  
$118,289  $120,083  $120,949  $120,083  
Other long-term liabilities:Other long-term liabilities:Other long-term liabilities:
Defined benefit pension plansDefined benefit pension plans$88,455  $120,260  Defined benefit pension plans$147,295  $120,260  
Deferred franchise feesDeferred franchise fees40,566  41,295  Deferred franchise fees39,748  41,295  
Straight-line rent accrualStraight-line rent accrual—  29,537  Straight-line rent accrual—  29,537  
OtherOther57,568  72,678  Other55,325  72,678  
$186,589  $263,770  $242,368  $263,770  

22
16.SUBSEQUENT EVENTS
DividendsOn February 18, 2020, the Board of Directors declared a cash dividend of $0.40 per common share, to be paid on March 17, 2020 to shareholders of record as of the close of business on March 3, 2020.
20


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
All comparisons between 2020 and 2019 refer to the 16-weeks12-weeks (“quarter”) and 28-weeks (“year-to-date”) ended January 19,April 12, 2020 and January 20,April 14, 2019, respectively, unless otherwise indicated.
For an understanding of the significant factors that influenced our performance during 2020 and 2019, our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the condensed consolidated financial statements and related notes included in this Quarterly Report and our Annual Report on Form 10-K for the fiscal year ended September 29, 2019.
Our MD&A consists of the following sections:
Overview — a general description of our business and 2020 highlights.
Financial reporting — a discussion of changes in presentation, if any.
Results of operations — an analysis of our condensed consolidated statements of earnings for the periods presented in our condensed consolidated financial statements.
Liquidity and capital resources — an analysis of our cash flows including pension and postretirement health contributions, capital expenditures, sale of company-operated restaurants, franchise tenant improvement allowance distributions, share repurchase activity, dividends, known trends that may impact liquidity and the impact of inflation, if applicable.
Discussion of critical accounting estimates — a discussion of accounting policies that require critical judgments and estimates.
New accounting pronouncements — a discussion of new accounting pronouncements, dates of implementation and the impact on our consolidated financial position or results of operations, if any.
Cautionary statements regarding forward-looking statements — a discussion of the risks and uncertainties that may cause our actual results to differ materially from any forward-looking statements made by management.
We have included in our MD&A certain performance metrics that management uses to assess company performance and which we believe will be useful in analyzing and understanding our results of operations. These metrics include:
Changes in sales at restaurants open more than one year (“same-store sales”), system restaurant sales, franchised restaurant sales, and average unit volumes (“AUVs”). Same-store sales, restaurant sales, and AUVs are presented for franchised restaurants and on a system-wide basis, which includes company and franchise restaurants. Franchise sales represent sales at franchise restaurants and are revenues of our franchisees. We do not record franchise sales as revenues; however, our royalty revenues, marketing fees and percentage rent revenues are calculated based on a percentage of franchise sales. We believe franchise and system same-store sales, franchised and system restaurant sales, and AUV information are useful to investors as they have a direct effect on the Company’s profitability.
Adjusted EBITDA, which represents net earnings on a generally accepted accounting principles (“GAAP”) basis excluding earnings or losses from discontinued operations, income taxes, interest expense, net, gains or losses on the sale of company-operated restaurants, impairment and other charges, net, depreciation and amortization, amortization of tenant improvement allowances and other, and pension settlement charges. We are presenting Adjusted EBITDA because we believe that it provides a meaningful supplement to net earnings of the Company's core business operating results, as well as a comparison to those of other similar companies. Management believes that Adjusted EBITDA, when viewed with the Company's results of operations in accordance with GAAP and the accompanying reconciliations within MD&A, provides useful information about operating performance and period-over-period change, and provides additional information that is useful for evaluating the operating performance of the Company's core business without regard to potential distortions. Additionally, management believes that Adjusted EBITDA permits investors to gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made and debt is serviced.
Same-store sales, system restaurant sales, franchised restaurant sales, AUVs, and Adjusted EBITDA are not measurements determined in accordance with GAAP and should not be considered in isolation, or as an alternative to earnings from operations, or other similarly titled measures of other companies.

23
21


IMPACT OF COVID-19
As of May 8, 2020, substantially all of our restaurants remain open, with dining rooms closed and all locations operating in an off-premise capacity, which represents close to 90% of the Company’s business historically, including drive-thru, third-party delivery, and carry-out. While we navigate through this time of uncertainty, Jack in the Box remains committed to operating our restaurants with integrity, providing great guest service, and most importantly, protecting the health and safety of our employees and guests.
Our system same store sales decreased by 4.2% in the quarter; however, the outbreak did not materially impact the business until late in the quarter. Prior to the rise in “shelter-in-place” mandates and “social distancing” requirements across the country, same store sales increased 5.2% in the seven weeks ended March 8, 2020, compared to the 17.0% decrease in same store sales we experienced in the last five weeks of the quarter.
To mitigate the impact of COVID-19 on the Company, operations, franchisees and our employees, we have undertaken the following actions:
Implemented a short-term cash preservation strategy (refer to the Liquidity and Capital Resources section for further information).
Provided financial support to our franchisees in the form of a reduction and payment deferral of marketing fees, postponement of rent, and delayed remodel requirements and development agreements for at least six months.
Instituted a new emergency paid sick leave program at company-operated restaurants and have provided protective masks, gloves, sneeze guards and thermometers to all company-owned and franchised locations.
Given the level of volatility and uncertainty surrounding the future impact of COVID-19 on the broader US economy and specific impacts to our business, we have withdrawn our previously issued fiscal 2020 and long-term guidance. The Company will provide an update when it can reasonably estimate the impacts of the COVID-19 pandemic on business results.
OTHER RECENT DEVELOPMENTS
On April 16, 2020, we announced that Darin Harris has been appointed by our Board of Directors as Chief Executive Officer and will join the Board of Directors, both effective on the start of his employment no later than June 15, 2020. Our Board of Directors has also elected David Goebel to serve as non-executive Chairman of the Board, effective when Mr. Harris begins employment with the Company.
Mr. Harris takes over from Lenny Comma, who announced his intent to retire in December 2019 and has served as Chief Executive Officer and Chairman of the Board of Directors since 2014. Mr. Comma’s last day of employment will be effective upon Mr. Harris’ start date, at which time Mr. Comma will also leave the Board of Directors.
OVERVIEW
As of January 19,April 12, 2020, we operated and franchised 2,2442,246 Jack in the Box quick-service restaurants, primarily in the western and southern United States, including one in Guam.
The following summarizes the most significant events occurring year-to-date in fiscal 2020, and certain trends compared to a year ago:
System same-store sales System same-store sales are up 1.7% year-to-date as compared withdecreased by 4.2% in the prior year primarily due to menu price increases,quarter and 0.8% year-to-date. Company same-store sales decreased 4.1% in the quarter, driven by a 10.5% decrease in transactions, partially offset by changesaverage check growth of 6.4%. As previously disclosed, system-same store sales increased 5.2% in product mix and a decline in transactions.the seven weeks ended March 8, 2020, prior to any impacts from the COVID-19 pandemic.
Company restaurant operations Company restaurant costs as a percentage of company restaurant sales increased in 2020the quarter to 75.2%79.4% from 73.8%72.4% a year ago primarily due to higher costs for laborsales deleverage during COVID-19 impacted weeks and commodities.wage and commodity inflation.
Pension settlement —Franchise operations As previously announced, Excluding the impacts of ASC 842 described in connection with the Company’s pension plan de-risking strategy,Financial Reporting section below, our franchise operating results were impacted by a decrease in royalties and rent margins in the Company amended its pension planquarter and year-to-date, primarily due to offerlower franchise sales during COVID-19 impacted weeks, and a limited time lump sum payment option$2.0 million year-to-date increase in franchisee bad debt expense compared to certain eligible participants. The transaction resulted in a non-cash settlement charge of $38.6 million presented within “Other Pension and Post-Retirement Expenses” in our condensed consolidated statement of earnings.the prior year.
Sale of corporate office buildingSelling, general and administrative (“SG&A”) expenses - DuringSG&A increased by $6.6 million for the quarter we executed on our previously announced planned sale of one our corporate office buildings as we move forward with consolidating our corporate facilities. We recognized aand $10.8 million gainyear-to-date, largely due to unfavorable mark-to-market adjustments on investments supporting the sale which is presented in “ImpairmentCompany’s non-qualified retirement plans and Other Costs” in our condensed consolidated statement of earnings.
Return of cashhigher costs related to shareholders We returned cashlitigation matters compared to shareholders in the form of share repurchases and cash dividends. We repurchased 1.9 million shares of our common stock at an average price of $81.41, totaling $153.5 million. We also declared a quarterly cash dividend of $0.40 per common share totaling $9.4 million.prior year.
Adjusted EBITDA Adjusted EBITDA decreased in 2020 to $76.6$122.9 million from $83.0$144.2 million in 2019.
24



FINANCIAL REPORTING
In fiscal 2020, we adopted Accounting Standards Codification Topic 842, Leases (“ASC 842”), effective at the beginning of our fiscal year on a modified retrospective basis using the effective date transition method. Our consolidated financial statements reflect the application of ASC 842 guidance beginning in 2020, while our consolidated financial statements for prior periods were prepared under the guidance of a previously applicable accounting standard.
The most significant effects of this transition that affect comparability of our results of operations between 2020 and 2019 include the following:
Our transition to ASC 842 resulted in the gross presentation of property tax and maintenance expenses and related lessee reimbursements as “Franchise occupancy expenses” and “Franchise rental revenues”, respectively. These expenses and reimbursements were presented on a net basis under the previous accounting standard. Although there was no net impact to our consolidated statement of earnings from this change, the presentation resulted in total increases in “Franchise rental revenues” and “Franchise occupancy expenses” of $11.6 million.$8.6 million in the quarter and $20.2 million year-to-date.
ASC 842 also changed how lessees account for leases subleased at a loss. Under ASC 842, sublease income and lessee rent expense are recorded as franchise rent revenue and franchise occupancy costs as earned or incurred. As a result of this change, franchise revenues and franchise occupancy expenses increased $1.2by $0.9 million in the quarter and $2.1 million and $1.7$2.6 million, respectively, in 2020.year-to-date.


25
22


RESULTS OF OPERATIONS
The following table presents certain income and expense items included in our condensed consolidated statements of earnings as a percentage of total revenues, unless otherwise indicated. Percentages may not add due to rounding.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS DATA
Sixteen Weeks Ended QuarterYear-to-date
January 19, 2020January 20, 2019 April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Revenues:Revenues:Revenues:
Company restaurant salesCompany restaurant sales34.2 %35.4 %Company restaurant sales34.4 %35.5 %34.3 %35.4 %
Franchise rental revenuesFranchise rental revenues31.2 %28.8 %Franchise rental revenues32.3 %28.6 %31.7 %28.7 %
Franchise royalties and otherFranchise royalties and other17.1 %18.0 %Franchise royalties and other17.5 %17.8 %17.2 %17.9 %
Franchise contributions for advertising and other servicesFranchise contributions for advertising and other services17.5 %17.8 %Franchise contributions for advertising and other services15.8 %18.1 %16.8 %17.9 %
Total revenuesTotal revenues100.0 %100.0 %Total revenues100.0 %100.0 %100.0 %100.0 %
Operating costs and expenses, net:Operating costs and expenses, net:Operating costs and expenses, net:
Company restaurant costs (excluding depreciation and amortization):Company restaurant costs (excluding depreciation and amortization):Company restaurant costs (excluding depreciation and amortization):
Food and packaging (1)Food and packaging (1)29.8 %28.8 %Food and packaging (1)29.9 %28.3 %29.8 %28.6 %
Payroll and employee benefits (1)Payroll and employee benefits (1)30.3 %29.4 %Payroll and employee benefits (1)32.6 %29.7 %31.2 %29.5 %
Occupancy and other (1)Occupancy and other (1)15.1 %15.6 %Occupancy and other (1)16.9 %14.5 %15.9 %15.1 %
Total company restaurant costs (1)Total company restaurant costs (1)75.2 %73.8 %Total company restaurant costs (1)79.4 %72.4 %76.9 %73.2 %
Franchise occupancy expenses (excluding depreciation and amortization) (2)67.1 %60.5 %
Franchise occupancy expenses (2)Franchise occupancy expenses (2)69.2 %62.6 %68.0 %61.4 %
Franchise support and other costs (3)Franchise support and other costs (3)8.9 %5.4 %Franchise support and other costs (3)7.9 %7.3 %8.5 %6.2 %
Franchise advertising and other services expenses (4)Franchise advertising and other services expenses (4)102.7 %104.7 %Franchise advertising and other services expenses (4)104.7 %103.2 %103.5 %104.1 %
Selling, general and administrative expensesSelling, general and administrative expenses9.2 %8.3 %Selling, general and administrative expenses11.2 %8.2 %10.0 %8.2 %
Depreciation and amortizationDepreciation and amortization5.4 %5.9 %Depreciation and amortization5.7 %5.9 %5.5 %5.9 %
Impairment and other charges, netImpairment and other charges, net(3.0)%2.6 %Impairment and other charges, net0.3 %0.5 %(1.6)%1.7 %
Gains on the sale of company-operated restaurantsGains on the sale of company-operated restaurants(0.5)%(0.1)%Gains on the sale of company-operated restaurants— %— %(0.3)%— %
Earnings from operationsEarnings from operations22.7 %20.1 %Earnings from operations15.2 %21.8 %19.6 %20.8 %
Income tax rate (5)Income tax rate (5)28.4 %23.1 %Income tax rate (5)32.3 %25.0 %30.7 %24.0 %
____________________________
(1)As a percentage of company restaurant sales.
(2)As a percentage of franchise rental revenues.
(3)As a percentage of franchise royalties and other.
(4)As a percentage of franchise contributions for advertising and other services.
(5)As a percentage of earnings from continuing operations and before income taxes.

2326


The following table summarizes changes in same-store sales for company-owned, franchised, and system-wide restaurants:
 Sixteen Weeks Ended
January 19, 2020January 20, 2019
Company2.9 %0.5 %
Franchise1.6 %(0.1)%
System1.7 %(0.1)%

 QuarterYear-to-date
April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Company(4.1)%0.6 %(0.1)%0.5 %
Franchise(4.2)%0.1 %(0.9)%— %
System(4.2)%0.2 %(0.8)%— %
The following table summarizes changes in the number and mix of company and franchise restaurants:
 20202019
 CompanyFranchiseTotalCompanyFranchiseTotal
Beginning of year137  2,106  2,243  137  2,100  2,237  
New—  11  11  —    
Closed—  (10) (10) —  (5) (5) 
End of period137  2,107  2,244  137  2,104  2,241  
% of system%94 %100 %%94 %100 %

 20202019
 CompanyFranchiseTotalCompanyFranchiseTotal
Beginning of year137  2,106  2,243  137  2,100  2,237  
New—  16  16  —  11  11  
Acquired from franchisees (8) —  —  —  —  
Closed(1) (12) (13) —  (8) (8) 
End of period144  2,102  2,246  137  2,103  2,240  
% of system%94 %100 %%94 %100 %
The following table summarizes restaurant sales for company-owned, franchised, and total system sales (in thousands):
Sixteen Weeks Ended QuarterYear-to-date
January 19, 2020January 20, 2019 April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Company-owned restaurant salesCompany-owned restaurant sales$105,364  $102,832  Company-owned restaurant sales$74,380  $76,682  $179,744  $179,514  
Franchised restaurant sales (1)Franchised restaurant sales (1)979,345  959,960  Franchised restaurant sales (1)695,926  721,350  1,675,271  1,681,310  
System sales (1)System sales (1)$1,084,709  $1,062,792  System sales (1)$770,306  $798,032  $1,855,015  $1,860,824  
____________________________
(1)Franchised restaurant sales represent sales at franchised restaurants and are revenues of our franchisees. System sales include company and franchised restaurant sales. We do not record franchised sales as revenues; however, our royalty revenues, marketing fees and percentage rent revenues are calculated based on a percentage of franchised sales. We believe franchised and system restaurant sales information is useful to investors as they have a direct effect on the Company's profitability.
Below is a reconciliation of Non-GAAP Adjusted EBITDA to the most directly comparable GAAP measure, net earnings (in thousands):
Sixteen Weeks EndedQuarterYear-to-date
January 19, 2020January 20, 2019April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Net earnings - GAAPNet earnings - GAAP$7,897  $34,098  Net earnings - GAAP$11,463  $25,089  $19,360  $59,187  
Earnings from discontinued operations, net of taxes—  (2,977) 
Losses (earnings) from discontinued operations, net of taxesLosses (earnings) from discontinued operations, net of taxes—  41  —  (2,936) 
Income tax expenseIncome tax expense3,133  9,373  Income tax expense5,458  8,374  8,591  17,747  
Interest expense, netInterest expense, net19,942  17,374  Interest expense, net15,409  13,276  35,351  30,650  
Pension settlement charge38,606  —  
Pension settlement chargesPension settlement charges321  —  38,927  —  
Gains on the sale of company-operated restaurantsGains on the sale of company-operated restaurants(1,575) (219) Gains on the sale of company-operated restaurants—  —  (1,575) (219) 
Impairment and other charges, netImpairment and other charges, net(9,291) 7,698  Impairment and other charges, net716  1,125  (8,575) 8,823  
Depreciation and amortizationDepreciation and amortization16,728  17,169  Depreciation and amortization12,282  12,690  29,010  29,859  
Amortization of franchise tenant improvement allowances and otherAmortization of franchise tenant improvement allowances and other1,151  530  Amortization of franchise tenant improvement allowances and other614  607  1,765  1,137  
Adjusted EBITDA - Non-GAAPAdjusted EBITDA - Non-GAAP$76,591  $83,046  Adjusted EBITDA - Non-GAAP$46,263  $61,202  $122,854  $144,248  

27
24


Company Restaurant Operations
The following table presents company restaurant sales and costs, and restaurant costs as a percentage of the related sales. Percentages may not add due to rounding (dollars in thousands):
 Sixteen Weeks Ended
 January 19, 2020January 20, 2019
Company restaurant sales$105,364  $102,832  
Company restaurant costs:
Food and packaging31,348  29.8 %29,616  28.8 %
Payroll and employee benefits31,890  30.3 %30,274  29.4 %
Occupancy and other15,958  15.1 %16,013  15.6 %
Total company restaurant costs$79,196  75.2 %$75,903  73.8 %

 QuarterYear-to-date
 April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Company restaurant sales$74,380  $76,682  $179,744  $179,514  
Company restaurant costs:
Food and packaging22,237  29.9 %21,676  28.3 %53,585  29.8 %51,292  28.6 %
Payroll and employee benefits24,261  32.6 %22,768  29.7 %56,151  31.2 %53,042  29.5 %
Occupancy and other12,570  16.9 %11,100  14.5 %28,528  15.9 %27,113  15.1 %
Total company restaurant costs$59,068  79.4 %$55,544  72.4 %$138,264  76.9 %$131,447  73.2 %
Company restaurant sales increased $2.5decreased $2.3 million, or 3.0% in 2020 versus the prior yearquarter due primarily due to menua decrease in traffic during COVID-19 impacted weeks, partially offset by changes in product mix, retail price increases and an increase in the number of company-operated restaurants related to the acquisition of eight restaurants from a franchisee during the quarter. Year-to-date, restaurant sales increased $0.2 million, or 0.1% versus a year ago due to an increase in the number of company-operated restaurants and retail price increases, which more than offset declines in traffic.
Same-store sales at company-operated restaurants increased 2.9%decreased 4.1% in the quarter and 0.1% year-to-date compared to a year ago. The following table summarizes the change in company-operated same store-sales versus a year ago:
Sixteen Weeks Ended
January 19,
2020
Average check (1)2.6 %
Transactions0.3 %
Change in same-store sales2.9 %
QuarterYear-to-date
April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Average check (1)6.4 %2.8 %4.2 %3.4 %
Transactions(10.5)%(2.2)%(4.3)%(2.9)%
Change in same-store sales(4.1)%0.6 %(0.1)%0.5 %
____________________________
(1)IncludesAmounts in 2020 include price increases of approximately 2.4% in the quarter and 2.6%. year-to-date. Amounts in 2019 include price increases of approximately 2.1% in the quarter and 2.3% year-to-date.
Food and packaging costs as a percentage of company restaurant sales increased to 29.9% in the quarter and 29.8% year-to-date in 2020 from 28.8% a year agocompared to 28.3% in the quarter and 28.6% year-to-date in 2019, due primarily to higher costs for ingredients and changes in product mix, partially offset by menu price increases. Commodity costs were upincreased in the quarter and year-to-date by approximately 4.9%4.4% and 4.7%, respectively, due primarily to increases in beef, cheese and cheese. Cheese increased most significantly by approximately 33% and beef, our most significant commodity, increased approximately 15% versus a year ago.beverages.
Payroll and employee benefit costs as a percentage of company restaurant sales increased to 30.3%32.6% in the quarter and 31.2% year-to-date in 2020 compared with 29.4% a year ago29.7% in the quarter and 29.5% year-to-date in 2019, due primarily to higher average wages resulting from wage inflation and a highly competitive labor market.market, maintaining pre-COVID-19 staffing levels during the COVID-19 impacted weeks, and sales deleverage in the quarter, and was partially offset by lower costs for incentive compensation.
Occupancy and other costs as a percentage of company restaurant sales, decreasedincreased to 16.9% in the quarter and 15.9% year-to-date in 2020 compared with 14.5% in the quarter and 15.1% from 15.6% a year ago due primarilyyear-to-date in 2019. Sales deleverage contributed to the increase in the quarter. Furthermore, in the quarter and year-to-date, the acquisition of eight restaurants with lower costs for maintenancethan average sales volumes, and repair expenses, partially offset by higher costs for repairs and maintenance, third party delivery fees, and utilities.utilities, drove occupancy and other costs higher as a percentage of company restaurant sales.

2528


Franchise Operations
The following table presents franchise revenues and costs in each period and other information we believe is useful in analyzing the change in franchise operating results (dollars in thousands):
 Sixteen Weeks Ended
 January 19,
2020
January 20,
2019
Franchise rental revenues$96,084  $83,890  
Royalties50,243  49,507  
Franchise fees and other2,223  2,743  
Franchise royalties and other52,466  52,250  
Franchise contributions for advertising and other services53,759  51,814  
Total franchise revenues$202,309  $187,954  
Franchise occupancy expenses (excluding depreciation and amortization)$64,517  $50,713  
Franchise support and other costs4,676  2,845  
Franchise advertising and other services expenses55,224  54,270  
Total franchise costs$124,416  $107,828  
Franchise costs as a percentage of total franchise revenues61.5 %57.4 %
Average number of franchise restaurants2,087  2,084  
Increase (decrease) in franchise-operated same-store sales1.6 %(0.1)%
Franchised restaurant sales$979,345  $959,960  
Franchised restaurant AUVs$469  $461  
Royalties as a percentage of total franchised restaurant sales5.1 %5.2 %

 QuarterYear-to-date
 April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Franchise rental revenues$69,885  $61,646  $165,969  $145,536  
Royalties36,049  37,148  86,292  86,655  
Franchise fees and other1,715  1,262  3,938  4,005  
Franchise royalties and other37,764  38,410  90,230  90,660  
Franchise contributions for advertising and other services34,128  38,989  87,887  90,803  
Total franchise revenues$141,777  $139,045  $344,086  $326,999  
Franchise occupancy expenses (excluding depreciation and amortization)$48,341  $38,618  $112,858  $89,331  
Franchise support and other costs2,971  2,797  7,647  5,642  
Franchise advertising and other services expenses35,734  40,245  90,958  94,515  
Total franchise costs$87,046  $81,660  $211,463  $189,488  
Franchise costs as a percentage of total franchise revenues61.4 %58.7 %61.5 %57.9 %
Average number of franchise restaurants2,085  2,085  2,086  2,085  
Decrease in franchise-operated same-store sales(4.2)%(0.9)%
Franchised restaurant sales$695,926  $721,350  $1,675,271  $1,681,310  
Franchised restaurant AUVs$334  $345  $803  $806  
Royalties as a percentage of total franchised restaurant sales5.2 %5.1 %5.2 %5.2 %
Franchise rental revenues increased $12.2$8.2 million, or 14.5%,13.4% in 2020the quarter and $20.4 million, or 14.0% year-to-date compared to the prior year, primarily from our adoption of ASC 842, which increased rental revenues $12.8 million.$9.5 million in the quarter and $22.3 million year-to-date, partially offset by a decrease in percentage rent revenue from lower franchise restaurant sales.
Franchise royalties and other increased $0.2decreased $0.6 million, or 1.7% in 2020the quarter and $0.4 million, or 0.5% year-to-date compared to the prior year, due primarily to an increasea decrease in franchise same-store sales driving royalties higher by approximately $1.7 million,lower, partially offset year-to-date by aan $0.8 million increase in franchise incentives recorded as a reduction of franchise royalties and a $0.5 million decrease in franchise fees and other.royalties.
Franchise contributions for advertising and other services increased $1.9decreased $4.9 million, or 12.5% in the quarter and $2.9 million, or 3.2% year-to-date compared to the prior year, primarily due to lower marketing contributions from our franchisees of $5.4 million in the quarter and $4.4 million year-to-date mainly as a result of a decrease in the contribution percentage and lower franchise restaurant sales, partially offset by an increase in technology fees charged to our franchisees and an increase in franchisee contributions to our marketing fund which are based on a percentage of their restaurant sales.franchisees.
Franchise occupancy expenses, principally rents, increased $13.8$9.7 million in 2020the quarter and $23.5 million year-to-date compared to the prior year, due primarily to the adoption of ASC 842, which increased franchise occupancy expenses by $13.3 million.$9.5 million in the quarter and $22.8 million year-to-date.
Franchise support and other costs increased $1.8$0.2 million in 2020the quarter and $2.0 million year-to-date compared to the prior year, due primarily toas a $1.9 millionresult of an increase in franchisee bad debt expense.
Franchise advertising and other service expenses increased $1.0decreased $4.5 million, or 11.2% in the quarter and $3.6 million, or 3.8% year-to-date compared to the prior year, due to a $0.9 million increasedecrease in marketing fund contributions from our franchisees.franchisees of $5.4 million in the quarter and $4.4 million year-to-date, partially offset by an increase in information technology costs.
Depreciation and Amortization
Depreciation and amortization decreased by $0.4 million in 2020 asthe quarter and $0.8 million year-to-date compared with the prior year, primarily due to our franchise building assets becoming fully depreciated in the current fiscal year.
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Selling, General and Administrative (“SG&A”) Expenses
The following table presents the change in 2020 SG&A expenses compared with the prior year (in thousands):
Sixteen Weeks Ended
January 19,
2020
Advertising$(1,873)
Incentive compensation (including share-based compensation and related payroll taxes)3,014 
Cash surrender value of COLI policies, net(3,506)
Litigation matters3,756 
Other (includes transition services income and savings related to our restructuring plan)2,774 
$4,165 

Increase / (Decrease)
QuarterYear-to-date
Advertising$(349) $(2,222) 
Incentive compensation (including share-based compensation and related payroll taxes)(2,373) 641  
Cash surrender value of COLI policies, net7,221  3,715  
Litigation matters1,917  5,799  
Other (includes transition services income and savings related to our restructuring plan)202  2,850  
$6,618  $10,783  
Advertising costs represent company contributions to our marketing fund and are generally determined as a percentage of company-operated restaurant sales. Advertising costs decreased $1.9$0.3 million in 2020the quarter and $2.2 million year-to-date compared to the prior year,year. In the quarter, the decrease was driven by a decrease in the contribution percentage and lower company-operated restaurant sales. Year-to-date the decrease was primarily due to a $2.0 million discretionary marketing fund contribution made by the Company in 2019.2019 that was non-recurring in 2020.
Incentive compensation increaseddecreased by $3.0$2.4 million in 2020 primarily due to an increase in performance-based stock compensation and annual incentives,the quarter mainly as a result of higherlower achievement levels compared to the prior year.year for performance-stock units and the Company’s annual incentive plan.
The cash surrender value of our company-owned life insurance (“COLI”) policies, net of changes in our non-qualified deferred compensation obligation supported by these policies, are subject to market fluctuations. The changes in market values had a positive impact of $2.1 million in 2020, compared to a negative impact of $1.4$7.2 million in the quarter and $3.7 million year-to-date, compared to the prior year.
Litigation matters increased by $3.8$1.9 million in the quarter and $5.8 million year-to-date, primarily due to costs accrued in 2020 on the expected settlement of an employeefor various employment litigation matter.matters. Refer to Note 12,13, Contingencies and Legal Matters, of the notes to the condensed consolidated financial statements for additional information regarding these charges.
Impairment and Other Charges, Net
Impairment and other charges, net is comprised of the following (in thousands):
Sixteen Weeks EndedQuarterYear-to-date
January 19, 2020January 20, 2019April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Restructuring costsRestructuring costs$1,045  $5,840  Restructuring costs$118  $946  $1,163  $6,786  
Costs of closed restaurants and otherCosts of closed restaurants and other101  866  Costs of closed restaurants and other331  383  432  1,249  
Losses (gains) on disposition of property and equipment, netLosses (gains) on disposition of property and equipment, net267  (714) (10,170) (138) 
Accelerated depreciationAccelerated depreciation—  416  Accelerated depreciation—  510  —  926  
(Gains) losses on disposition of property and equipment, net(10,437) 576  
$(9,291) $7,698  $716  $1,125  $(8,575) $8,823  

Restructuring costsImpairment and other charges, net decreased by $4.8$0.4 million in 2020the quarter compared to the priora year primarily asago, driven by a result of lower severance expenses of $3.5$1.0 million as well as $1.3 million lower costs related toincrease in losses on the strategic alternative evaluation that was concluded on in the third quarter of 2019.
Gains on disposition of property and equipment due to an eminent domain gain in the prior year, partially offset by a decrease in restructuring costs as we conclude our restructuring initiative. Year-to-date, impairment and other charges, net increased by $11.0decreased $17.4 million primarily due to a $10.8 million gain related to the sale of one of our corporate office buildings in 2020.first quarter of the 2020, as well as $5.6 million decrease in restructuring costs.
Gains on the Sale of Company-Operated Restaurants
In 2020 and 2019, no company-operated restaurants were sold to franchisees. Gains on the sale of company-operated restaurants were $1.6 million in 2020 versus $0.2 million in the prior year. In both comparative periods the gains recognized pertain to meeting certain contingent consideration provisions included in restaurants sold in previous years.
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27


Other Pension and Post-Retirement Expenses, Net
Other pension and post-retirement expenses, net increased by $38.5$0.2 million in 2020the quarter and $39.5 million year-to-date versus athe prior year, ago, primarily due to a non-cash pension settlement charge of $38.6 millioncharges in 2020. Refer to Note 9,10, Retirement Plans, of the notes to the condensed consolidated financial statements for additional information regarding this charge.these charges.
Interest Expense, Net
Interest expense, net is comprised of the following (in thousands):
 Sixteen Weeks Ended
 January 19, 2020January 20, 2019
Interest expense$20,419  $17,612  
Interest income(477) (238) 
Interest expense, net$19,942  $17,374  

 QuarterYear-to-date
 April 12,
2020
April 14,
2019
April 12,
2020
April 14,
2019
Interest expense$15,458  $13,414  $35,877  $31,026  
Interest income(49) (138) (526) (376) 
Interest expense, net$15,409  $13,276  $35,351  $30,650  
Interest expense, net increased $2.6$2.1 million in 2020 versusthe quarter and $4.9 million year-to-date compared with a year ago, primarily due to a higher average borrowings compared to prior year, as well an increase in loan fee amortizationwhich contributed additional interest expense of $1.1 million.approximately $2.8 million and $6.1 million, respectively; partially offset by lower average interest rates.
Income Taxes
The tax rate in 2020 was 28.4%32.3% in the quarter and 30.7% year-to-date, compared with 23.1% a25.0% and 24.0% respectively, in fiscal year ago.2019. The major components of the change in tax rates were a decrease in operating earnings before income tax, an adjustment related to state taxes recordedincrease in the first quarterimpact of fiscal year 2019,non-deductible compensation for certain officers, an increase in the tax deficiency on 2020 stock compensation, partially offset by an increase in gainslosses from the market performance of insurance products used to fund certain non-qualified retirement plans which are excluded from taxable income.income, and an increase in non-deductible legal settlements. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual 2020 rate could differ from our current estimates. Refer to Note 8, Income Taxes, of the notes to the condensed consolidated financial statements for additional information regarding income taxes.


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LIQUIDITY AND CAPITAL RESOURCES
General
Our primary sources of short-term and long-term liquidity are expected to be cash flows from operations and available financing in place. On July 8, 2019, we completed a refinancing of our existing senior credit facility with a new securitized financing facility, comprised of $1.3 billion of senior fixed-rate term notes and $150.0 million of variable funding notes as further described below.
We generally reinvest available cash flows from operations to enhance existing restaurants, to reduce debt, to repurchase shares of our common stock, and to pay cash dividends. Our cash requirements consist principally of:
working capital;
capital expenditures;
income tax payments;
debt service requirements;
franchise tenant improvement allowance distributions; and
obligations related to our benefit plans.
Based upon current levels of operations and anticipated growth, we expect that cash flows from operations, combined with our securitized financing facility including our variable funding notes, will be sufficient to meet our capital expenditure, working capital and debt service requirements for at least the next twelve months and the foreseeable future.
As is common in the restaurant industry, we maintain relatively low levels of accounts receivable and inventories, and our vendors grant trade credit for purchases such as food and supplies. We also continually invest in our business through the addition of new units and refurbishment of existing units, which are reflected as long-term assets and not as part of working capital. As a result, we may at times maintain current liabilities in excess of current assets, which results in a working capital deficit. We generally reinvest available cash flows from operations to enhance existing restaurants, to reduce debt, to repurchase shares of our common stock, and to pay cash dividends. Our cash requirements consist principally of working capital, capital expenditures, income tax payments, debt service requirements, franchise tenant improvement allowance distributions, and obligations related to our benefit plans.
Our primary sources of short-term and long-term liquidity are expected to be cash flows from operations and available financing in place. On July 8, 2019, we completed a refinancing of our existing senior credit facility with a new securitized financing facility, comprised of $1.3 billion of senior fixed-rate term notes and $150.0 million of variable funding notes. During the second quarter of fiscal 2020, to secure our liquidity position and provide financial flexibility given the uncertain market conditions, we drew down on our Variable Funding Notes, which provided us $107.9 million of unrestricted cash. As of the end of our second quarter, the Company had $169.2 million of cash and restricted cash on its balance sheet.
In the context of an unprecedented global pandemic, we believe it is prudent to maintain maximum financial flexibility by preserving our capital and maintaining the Company’s healthy liquidity position. As a result, we have suspended our quarterly cash dividend and all share repurchase activity, significantly reduced capital expenditures to essential spend only, and have negotiated rent concessions with our landlords, which were passed on to our franchisees. Additional measures we have taken to ensure the financial health of our franchise operators include deferring approximately 40% of April rents, reducing and deferring March and April marketing fees to give operators more cash, and delaying remodel requirements and development agreements for at least six months.
We believe that our cash on hand, cash flow from operations, and the actions taken to mitigate the effects of the COVID-19 pandemic discussed above will provide us with adequate liquidity for the next twelve months and the foreseeable future.
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Cash Flows
The table below summarizes our cash flows from continuing operations (in thousands):
 Sixteen Weeks Ended
 January 19, 2020January 20, 2019
Total cash provided by (used in):
Operating activities$22,687  $37,601  
Investing activities32,364  (4,263) 
Financing activities(168,326) (31,743) 
Net cash flows$(113,275) $1,595  

 Year-to-date
 April 12,
2020
April 14,
2019
Total cash provided by (used in):
Operating activities$58,927  $60,816  
Investing activities29,601  (8,144) 
Financing activities(70,905) (53,787) 
Net cash flows$17,623  $(1,115) 
Operating Activities. Operating cash flows in the quarter decreased $14.9$1.9 million compared with a year ago, primarily due to unfavorable changes in working capital of $9.0 million and lower net income adjusted for non-cash items of $5.9 million.$13.4 million, partially offset by favorable changes in working capital of $11.5 million, primarily due to an increase in payables from both timing of payments and extending payment terms during the period; partially offset by lower collections on receivables as a result of postponing collections on marketing and rent payments from our franchisees.
Pension and Postretirement Contributions Our policy is to fund our pension plans at or above the minimum required by law. As of January 1, 2019, the date of our last actuarial funding valuation, there was no minimum contribution funding requirement for our qualified pension plan. We continue to evaluate contributions to our Qualified Plan based on changes in pension assets as a result of asset performance in the current market and the economic environment. We do not anticipate making any contributions to our Qualified Plan in fiscal 2020. In 2020, we contributed $2.0$3.6 million to our non-qualified pension plan and postretirement plans.
Investing Activities. Cash provided by investing activities increased by $36.6$37.7 million compared with a year ago, primarily due to higher proceeds from the sale and leaseback of assets of $17.4$15.4 million, higher proceeds from the sale of property and equipment of $20.3$20.9 million, and $4.0$5.4 million of lower capital expenditure spending, partially offset by $6.5 million of lower repayments received on notes issued in connection with 2018 refranchising transactions.
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Capital Expenditures The composition of capital expenditures in each period follows (in thousands):
 Sixteen Weeks Ended
 January 19, 2020January 20, 2019
Jack in the Box:
Restaurant facility expenditures$3,500  $7,346  
New restaurants—  1,301  
Other, including information technology1,552  2,525  
5,052  11,172  
Corporate Services:
Information technology1,760  11  
Other, including facility improvements390  —  
2,150  11  
Total capital expenditures$7,202  $11,183  

 Year-to-date
 April 12,
2020
April 14,
2019
Jack in the Box:
Restaurant facility expenditures$6,443  $9,780  
New restaurants—  1,452  
Other, including information technology1,967  6,586  
8,410  17,818  
Corporate Services:
Information technology2,926  373  
Other, including facility improvements1,441  —  
4,367  373  
Total capital expenditures$12,777  $18,191  
Our capital expenditure program includes, among other things, restaurant remodeling, information technology enhancements, and investments in new locations and equipment. Capital expenditures decreased by $4.0$5.4 million compared to a year ago primarily due to lower facility expenditures from restaurant remodels and technology initiatives; partially offset by higher spending on certain corporate technology initiatives in 2020.
Sale leaseback transactions — We use sale and leaseback financing to lower the initial cash investment in our restaurants to the cost of the equipment, whenever possible. In 2020, we completed a sale leaseback transaction of a multi-tenant commercial property in Los Angeles, California and leased back the parcel on which a company-operated restaurant is located. We received net proceeds on the transaction of $17.4 million during the quarter.first quarter of 2020 on this transaction.
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In 2020, we also completed the sale of one of our corporate office buildings as we move forward with our previously announced consolidation of our corporate facilitiesfacilities. We entered into a lease with the buyer to leaseback the property for up to a period of 18 months with an option of the Company to terminate the lease,earlier without penalty, upon providing a 90-day notice. We received net proceeds on the sale of $20.6 million duringon the quarter.sale.
Financing Activities. Cash flows used in financing activities increased by $136.6$17.1 million compared with a year ago, primarily due to ana net increase in borrowings under our revolving credit facilities of $98.9 million, lower principal repayments of $18.1 million as a result of our debt recapitalization completed in the prior year, and lower payments for debt issuance costs of $3.4 million; partially offset by higher stock repurchases of $141.2 million.
Repurchases of Common Stock The Company repurchased approximately 1.9 million shares of its common stock in the first quarter of fiscal 2020 at an average price of $81.41 per share for an aggregate cost of $153.5 million. Repurchases of common stock included in our condensed consolidated statement of cash flows for fiscal 2020 includes $2.0 million related to repurchase transactions traded in the prior year that settled in 2020.
This leaves approximately $122.2 million remaining under share repurchase programs authorized by the Company’s Board of Directors, consisting of $22.2 million that expires in November 2020 and lowerapproximately $100.0 million that expires in November 2021. As previously announced, we have temporarily paused our share repurchase program and did not buy back any shares in the second quarter.
Dividends — During 2020, the Board of Directors declared two quarterly cash book overdraftsdividends of $9.2 million, partially offset lower debt repayments$0.40 per common share totaling $18.5 million.
In addition to temporarily suspending our share repurchase program, on May 8, 2020, the Board of $13.7 million.Directors approved our voluntary election to temporarily suspend quarterly dividend payments. We will continue to monitor and revisit our capital allocation policies throughout the third quarter with the goal of reinstating dividends and share repurchases once we have more clarity around the scope and duration of the disruption caused by COVID-19.
Class A-2 Notes Interest and principal payments on the Class A-2 Notes are payable on a quarterly basis. In general, no principal payments will be required if a specified leverage ratio, which is a measure of outstanding debt to earnings before interest, taxes, depreciation, and amortization, adjusted for certain items (as defined in the Indenture), is less than or equal to 5.0x. At January 19, 2020, theThe Company’s actual leverage ratio exceeded 5.0x, and as a result, we will beare required to make quarterly principal payments of $3.25 million. The Company anticipates that we will be required to make quarterly principal payments on the Class A-2 Notes for the foreseeable future.
The legal final maturity date of the Class A-2 Notes is in August 2049, but it is expected that, unless earlier prepaid to the extent permitted under the Indenture, the anticipated repayment dates of the Class A-2-I Notes, the Class A-2-II Notes and the Class A-2-III Notes will be August 2023, August 2026 and August 2029, respectively (the “Anticipated Repayment Dates”). If the Master Issuer has not repaid or refinanced the Class A-2 Notes prior to the respective anticipated repayment date, additional interest will accrue pursuant to the Indenture. As of January 19,April 12, 2020, $1,300.0$1,296.8 million of borrowings were outstanding on the Class A-2 Notes.
Restricted Cash In accordance with the terms of the Indenture, certain cash accounts have been established with the Indenture trustee for the benefit of the note holders, and are restricted in their use. As of April 12, 2020, the Master Issuer had restricted cash of $37.0 million, which primarily represented cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitment fees required for the Class A-2 Notes. During the second quarter, as a cautionary measure, we voluntarily elected to reserve the third quarter’s principal and interest payments due in August 2020.
Variable Funding Notes The Variable Funding Notes were issued under the Indenture and allow for drawings of up to $150.0 million on a revolving basis and the issuance of letters of credit. Depending on the type of borrowing under the Variable Funding Notes, interest on the Variable Funding Notes will be based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the London interbank offered rate for U.S. Dollars or (iv) the lenders’ commercial paper funding rate plus any applicable margin, as set forth in the Variable Funding Note Purchase Agreement. 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 2024, subject to two one-year extensions at the option of the Company. Following the anticipated repayment date (and any extensions thereof), additional interest will accrue equal to 5.00% per annum. As of January 19,April 12, 2020 $42.1and September 29, 2019, $41.1 million and $45.6 million, respectively, of letters of credit were outstanding against the Variable Funding Notes. As of September 29, 2019, we had no outstanding borrowings under our Variable Funding Notes. During the second quarter of 2020, with uncertainty surrounding COVID-19 events, and as a cautionary measure, we borrowed $107.9 million under the Variable Funding Notes. The Company may use the proceeds from the borrowings for working capital and general corporate purposes. As of April 12, 2020, remaining borrowing availability under our Variable Funding Notes was $1.1 million.
3033


Variable Funding Notes, which relate primarily to interest reserves required under the Indenture. The Variable Funding Notes were undrawn at January 19, 2020.
Covenants and restrictions The Class A-2 Notes and the Variable Funding Notes (collectively referred to as the “Notes”) are subject to a series of covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Class A-2 Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the assets pledged as collateral for the Notes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. The Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain stated debt service coverage ratios, the sum of global gross sales for specified restaurants being below certain levels on certain measurement dates, certain manager termination events, an event of default, and the failure to repay or refinance the Class A-2 Notes on the applicable scheduled maturity date. The Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal, or other amounts due on or with respect to the Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments. As of January 19,April 12, 2020, we were in compliance with all of our debt covenant requirements and were not subject to any rapid amortization events.
In accordance with the Indenture, certain cash accounts have been established with the Indenture trustee for the benefit of the note holders, and are restricted in their use. As of January 19, 2020, the Master Issuer had restricted cash of $18.4 million, which primarily represented cash collections and cash reserves held by the trustee to be used for payments of principal, interest and commitment fees required for the Notes.
Repurchases of Common Stock The Company repurchased approximately 1.9 million shares of its common stock in the first quarter of fiscal 2020 at an average price of $81.41 per share for an aggregate cost of $153.5 million. This leaves approximately $122.2 million remaining under share repurchase programs authorized by its Board of Directors, consisting of $22.2 million remaining that expire in November 2020 and approximately $100.0 million remaining that expire in November 2021.
Repurchases of common stock included in our condensed consolidated statement of cash flows for fiscal 2020 includes $2.0 million related to repurchase transactions traded in the prior year that settled in 2020.
Dividends — During 2020, the Board of Directors declared a quarterly cash dividends of $0.40 per common share totaling $9.4 million. Future dividends are subject to approval by our Board of Directors.
Off-Balance Sheet Arrangements
We have entered into certain off-balance sheet contractual obligations and commitments in the ordinary course of business, which are recognized in our condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles. There has been no material change in these arrangements as disclosed in our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended September 29, 2019. We are not a party to any other off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources.

DISCUSSION OF CRITICAL ACCOUNTING ESTIMATES
Critical accounting estimates are those that we believe are most important for the portrayal of the Company’s financial condition and results, and that require management’s most subjective and complex judgments. Judgments and uncertainties regarding the application of these policies may result in materially different amounts being reported under various conditions or using different assumptions. There have been no material changes to the critical accounting estimates previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 29, 2019. 

NEW ACCOUNTING PRONOUNCEMENTS
Refer to Note 1, Basis of Presentation, of the notes to condensed consolidated financial statements.
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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of the federal securities laws.laws, including further impacts that COVID-19 pandemic may have on our future operations. Any statements contained herein that are not historical facts may be deemed to be forward-looking statements. Forward-looking statements may be identified by words such as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “forecast,” “goals,” “guidance,” “intend,” “plan,” “project,” “may,” “will,” “would”, “should” and similar expressions. These statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate. These estimates and assumptions involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. Factors that may cause our actual results to differ materially from any forward-looking statements include, but are not limited to:
The potential impacts to our business and operations resulting from the coronavirus COVID-19 pandemic.
We face significant competition in the food service industry and our inability to compete may adversely affect our business.
Changes in demographic trends and in customer tastes and preferences could cause sales and the royalties we receive from franchisees to decline.
Changes in consumer confidence and declines in general economic conditions could negatively impact our financial results.
Increases in food and commodity costs could decrease our profit margins or result in a modified menu, which could adversely affect our financial results.
Failure to receive scheduled deliveries of high quality food ingredients and other supplies could harm our operations and reputation.
We have a limited number of suppliers for our major products and rely on a distribution network with a limited number of distribution partners for the majority of our national distribution program in the United States. If our suppliers or distributors are unable to fulfill their obligations under their contracts, it could harm our operations.
Food safety and food-borne illness concerns may have an adverse effect on our business by reducing demand and increasing costs.
Negative publicity relating to our business or industry could adversely impact our reputation.
Our business could be adversely affected by increased labor costs.
Inability to attract, train and retain top-performing personnel could adversely impact our financial results or business.
We may not have the same resources as our competitors for marketing, advertising and promotion.
We may be adversely impacted by severe weather conditions, natural disasters, terrorist acts or civil unrest that could result in property damage, injury to employees and staff, and lost restaurant sales.
We may not achieve our development goals.
Our highly franchised business model presents a number of risks, and the failure of our franchisees to operate successful and profitable restaurants could negatively impact our business.
We are subject to financial and regulatory risks associated with our owned and leased properties and real estate development projects.
Changes to estimates related to our property, fixtures, and equipment or operating results that are lower than our current estimates at certain restaurant locations may cause us to incur impairment charges on certain long-lived assets, which may adversely affect our results of operations.
Our tax provision may fluctuate due to changes in expected earnings.
Activities related to our sale of Qdoba, and our refranchising, restructuring, and cost savings initiatives entail various risks and may negatively impact our financial results.
We are subject to the risk of cybersecurity breaches, intrusions, data loss, or other data security incidents.
If we fail to maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud. As a result, the Company’s stockholders could lose confidence in our financial results, which would harm our business and the value of the Company’s common shares.
We may not be able to adequately protect our intellectual property, which could harm the value of our brands and adversely affect our business.
Jack in the Box may be subject to risk associated with disagreements with key stakeholders, such as franchisees.
The securitized debt instruments issued by certain of our wholly-owned subsidiaries have restrictive terms, and any failure to comply with such terms could result in default, which could harm the value of our brand and adversely affect our business.
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We have a significant amount of debt outstanding. Such indebtedness, along with the other contractual commitments of our Company or its subsidiaries, could adversely affect our business, financial condition and results of operations, as well as the ability of certain of our subsidiaries to meet debt payment obligations.
The securitization transaction documents impose certain restrictions on our activities or the activities of our subsidiaries, and the failure to comply with such restrictions could adversely affect our business.
Changes in accounting standards may negatively impact our results of operations.
We are subject to increasing legal complexity and may be subject to claims or lawsuits that are costly to defend and could result in our payment of substantial damages or settlement costs.
Unionization activities or labor disputes may disrupt our operations and affect our profitability.
Increasing regulatory and legal complexity may adversely affect restaurant operations and our financial results.results; including federal, state, and local policies regarding mitigation strategies for controlling the coronavirus COVID-19 pandemic.
Our insurance may not provide adequate levels of coverage against claims.
Our quarterly results and, as a result, the price of our common stock, may fluctuate significantly and could fall below the expectations of securities analysts and investors due to various factors.
The price of our common stock may be adversely affected by investor response to our temporary suspension of dividends and our stock repurchase program.
Activities of activist stockholders could cause us to incur substantial costs, divert management’s attention and resources, and have an adverse effect on our business.
Governmental regulation may adversely affect our existing and future operations and results, including by harming our ability to profitably operate our restaurants.
The proliferation of federal, state, and local regulations increases our compliance risks, which in turn could adversely affect our business.
Legislation and regulations regarding our products and ingredients, including the nutritional content of our products, could impact customer preferences and negatively impact our financial results.
Failure to obtain and maintain required licenses and permits or to comply with food control regulations could lead to the loss of our food service licenses and, thereby, harm our business.
These and other factors are identified and described in more detail in our filings with the Securities and Exchange Commission, including, but not limited to: the “Discussion of Critical Accounting Estimates,” and other sections in this Form 10-Q and the “Risk Factors” section of our most recent Annual Report on Form 10-K for the fiscal year ended September 29, 2019 (“Form 10-K”). These documents may be read free of charge on the SEC’s website at www.sec.gov. Potential investors are urged to consider these factors, more fully described in our Form 10-K, carefully in evaluating any forward-looking statements, and are cautioned not to place undue reliance on the forward-looking statements. All forward-looking statements are made only as of the date issued, and we do not undertake any obligation to update any forward-looking statements.

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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ThereIn connection with the securitized refinancing completed on July 8, 2019, we are only exposed to interest rate risk on borrowings under our $150.0 million variable funding notes. During the second quarter of 2020, we borrowed $107.9 million under the variable funding notes, which remains outstanding as of April 12, 2020 and are subject to variable interest rates.
We are also exposed to the impact of commodity and utility price fluctuations. Many of the ingredients we use are commodities or ingredients that are affected by the price of other commodities, weather, seasonality, production, availability and various other factors outside our control. In order to minimize the impact of fluctuations in price and availability, we monitor the primary commodities we purchase and may enter into purchasing contracts and pricing arrangements when considered to be advantageous. However, certain commodities remain subject to price fluctuations. We are exposed to the impact of utility price fluctuations related to unpredictable factors such as weather and various other market conditions outside our control. Our ability to recover increased costs for commodities and utilities through higher prices is limited by the competitive environment in which we operate. We also could experience shortages of key ingredients if our suppliers need to close or restrict operations due to the impact of the COVID-19 pandemic. We have been nonot experienced any material changesdisruptions in our quantitative and qualitative market risks set forth in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K forsupply chains as of the fiscal year ended September 29, 2019.date of this report.

ITEM 4.  CONTROLS AND PROCEDURES
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Management, under the oversight of the Company’s Chief Executive Officer and Chief Financial Officer (its principal executive and principal financial officer, respectively), evaluated the effectiveness of the Company’s disclosure controls and procedures as defined in Rules 13-1-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by the Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective due to a material weakness in internal control over financial reporting that was disclosed in our Annual Report on Form 10-K for the fiscal year ended September 29, 2019.
Changes in Internal Control over Financial Reporting
During the fiscal quarter ended January 19, 2020, we adopted new guidance for lease accounting. We implemented internal controls to ensure we adequately evaluated leasing arrangements and properly assessed the impact of the new guidance to facilitate the adoption. Additionally, we implemented new business processes, internal controls, and modified information technology systems to assist in the ongoing application of the new guidance. There have been no other changes in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended January 19,April 12, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Remediation of Material Weakness
As previously described in Part II, Item 9A of our Annual Report on Form 10-K for the fiscal year ended September 29, 2019, we began implementing a remediation plan to address the material weakness mentioned above. The material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

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PART II. OTHER INFORMATION
There is no information required to be reported for any items under Part II, except as follows:

ITEM 1.  LEGAL PROCEEDINGS
See Note 12,13, Contingencies and Legal Matters, of the notes to the condensed consolidated financial statements for a discussion of our contingencies and legal matters.

ITEM 1A. RISK FACTORS
The risk factors set forth below contain material changes to the risk factors previously disclosed and included in our Annual Report on Form 10-K for the fiscal year ended September 29, 2019. When evaluating our business and our prospects, you should consider the risks and uncertainties described under Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended September 29, 2019, which we filed with the SEC on November 21, 2019, as updated in this Item 1A. You should also consider the risks and uncertainties discussed under the heading “Cautionary Statements Regarding Forward-Looking Statements” in Item 2 of this Quarterly Report on Form 10-Q. You should also refer to the other information set forth in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended September 29, 2019, including our financial statements and the related notes. These risks and uncertainties are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. If any of the risks or uncertainties actually occurs, our business and financial results could be harmed. In that case, the market price of our common stock could decline.
InabilityThe novel coronavirus (COVID-19) outbreak has disrupted and is expected to attract, traincontinue to disrupt our business, which has affected and retain top-performing personnel could adverselycontinue to materially affect our operations, financial condition and results of operations for an extended period of time.
The pandemic novel coronavirus (COVID-19) outbreak, federal, state and local government responses to COVID-19 and our responses to the outbreak have all disrupted and will continue to disrupt our business. In the United States, individuals are being encouraged to practice social distancing, restricted from gathering in groups, and in some areas, placed on complete restriction from non-essential movements outside of their homes. In response to the COVID-19 outbreak and these changing conditions, we previously announced that all company-owned and franchise-operated restaurants are operating in an off-premise capacity, including drive-thru, third-party delivery and carry-out. We have implemented a number of safety procedures, including implementing heightened sanitation requirements, practicing employee social distancing, and adhering to glove and mask protocol for all patrons and workers.
Our operating results substantially depend upon our franchisees’ sales volumes, restaurant profitability, and financial stability. The financial impact our financial results or business.
We believe that our continued success will depend, in part,of COVID-19 has had, and is expected to continue to have, an adverse effect on our abilityfranchisees’ liquidity. To ensure financial health of our valued franchise operators, we have reduced marketing fees and postponed collection of these marketing fees, postponed the collection of certain franchisee rental payments and delayed all fiscal 2020 franchise development agreements by at least six months and suspended other required capital investments. To the extent our franchisees experience financial distress, our operating results may be adversely impacted, potentially materially affecting our liquidity, financial condition, or results of operations.
As discussed in this report, we have a significant amount of debt outstanding and have recently drawn down on our Variable Funding Notes, which provided us $107.9 million of unrestricted cash, to attract and retain the services of skilled personnel, from our senior managementprovide additional security to our restaurant employees. The lossliquidity position and provide financial flexibility given uncertain market and economic conditions as a result of the servicesCOVID-19 pandemic. A material increase in our level of debt could have certain material adverse effects on us. If the business interruptions caused by COVID-19 last longer than we expect, we may need to seek other sources of liquidity. The COVID-19 outbreak is adversely affecting the availability of liquidity generally in the credit markets, and there can be no guarantee that additional liquidity will be readily available or available on favorable terms, especially the longer the COVID-19 outbreak lasts.
Our business could be further disrupted if any of our company or franchised restaurant employees are diagnosed with COVID-19 since this could require us or our inabilityfranchisees to attractquarantine some or all of a restaurant’s employees and retain,disinfect the restaurants facilities. If a significant percentage of our or our franchisees’ workforce is unable to work, whether because of illness, quarantine, limitations on travel or other government restrictions in connection with COVID-19, our results may be adversely impacted, potentially materially affecting our liquidity, financial condition, or results of operations.
Our suppliers could be adversely impacted by the COVID-19 outbreak. If our suppliers’ employees are unable to work, whether because of illness, quarantine, limitations on travel or other government restrictions in connection with COVID-19, we could face cost increases and/or shortages of food items or other supplies across our restaurants and our results could be adversely impacted by such personnelsupply interruptions.
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The equity markets in the United States have been extremely volatile due to the COVID-19 outbreak and our stock price has fluctuated significantly.
Additional government regulations or legislation as a result of COVID-19 in addition to decisions we have made and may make in the future relating to the compensation of and benefit offerings for our company-operated restaurant team members could also have a materialan adverse effect on our business. We believe good managerscannot predict the types of government regulations or legislation that may be passed relating to employee compensation as a result of the COVID-19 outbreak. We have implemented an emergency paid sick leave program at our company-operated restaurants and crew are a key part of our success,taken other compensation and we devote significant resourcesbenefit actions to recruiting and trainingsupport our restaurant managersteam members during the COVID-19 business interruption, but those actions may not be sufficient to compensate our team members for the entire duration of any business interruption resulting from COVID-19. Those team members might seek and crew. We aim to reduce turnover among our restaurant crews and managers in an effort to retain top performing employees and better realize our investment in training new employees. Any failure to do so may adversely impact our operating results by increasing training costs and making it more difficult to deliver outstanding customer service,find other employment during that interruption, which could have a material adverse effect onmaterially adversely affect our financial results.
On December 11, 2019, we announced that Lenny Comma, our Chief Executive Officer, intends to leave the Company and our Board has retained Spencer Stuart to assist us in identifying an individual to succeed Mr. Comma as Chairman and Chief Executive Officer. While our Board is confident in its ability to identifyproperly staff and attract a successor, there can be no assurancesreopen our restaurants with experienced team members when the business interruptions caused by COVID-19 abate or end.
The COVID-19 outbreak also may have the effect of when we will be ableheightening other risks disclosed in the Risk Factors section including in our Form 10-K filed on November 21, 2019, including, but not limited to, successfully attractthose related to consumer confidence, increase in food and retain a qualified candidate to serve as Chief Executive Officer. Our inability to identify, attractcommodity costs, supply chain interruptions, labor availability and retain such a qualified candidate could impede the further implementation of our business strategy, which could have a material adverse effect on our business. In addition, we previously announced that other key members of executive management have leftcost, cybersecurity incidents, increased indebtedness, regulatory and will be leaving the Company in early 2020. The loss of these key executives or any additional members of our executive management team or an inability to effectively plan forlegal complexity, and implement a succession plan for key management could negatively impact our business.governmental regulation.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Stock Repurchases InWe did not repurchase any shares of our common stock in the firstsecond quarter of 2020 we repurchased 1.9 million shares at an aggregate cost of $153.5 million.2020. As of January 19,April 12, 2020, there was approximately $22.2 million remaining under the Board-authorized stock buyback program which expires in November 2020 and approximately $100.0 million which expires in November 2021.
(a)
Total number of shares purchased
(b)
Average price paid per share
(c)
Total number of shares purchased as part of publicly announced programs
(d)
Maximum dollar value that may yet be purchased under these programs
$275,702,860  
September 30, 2019 - October 27, 2019338,792$88.47  338,792$246,164,247  
October 28, 2019 - November 24, 2019978,035$82.97  978,035$166,866,944  
November 25, 2019 - December 22, 2019569,373$78.45  569,373$122,153,031  
December 23, 2019 - January 19, 2020$—  $122,153,031  
Total1,886,2001,886,200

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ITEM 3.  DEFAULTS OF SENIOR SECURITIES
None.

ITEM 4.  MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5.  OTHER INFORMATION
Item 5.03. None.

Effective May 8, 2020, the Board of Directors approved the Amended and Restated Bylaws of the Company, which were updated to establish the roles and duties of the Chairman of the Board and Lead Director, and to provide that the Chairman of the Board, rather than the Chief Executive Officer, can call special meetings. The foregoing summary does not purport to be complete and is subject to, and qualified in its entirety by reference to, the complete copy of the Amended and Restated Bylaws, which has been filed as Exhibit 3.2, hereto and is hereby incorporated herein by reference. Interested parties should read the document in its entirety.
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ITEM 6.  EXHIBITS
NumberDescriptionFormFiled with SEC
10.2.11*3.1†  10-QFiled herewith
3.2 10-QFiled herewith
10.2.12*10.2.14*  10-QFiled herewith
10.2.13* 10-QFiled herewith
10.8.17*10.2.15*  10-Q8-KFiled herewithMarch 4, 2020
10.2.16* 8-KApril 16, 2020
10.2.17* 8-KApril 16, 2020
31.1  Filed herewith
31.2  Filed herewith
32.1  Filed herewith
32.2  Filed herewith
101.INS  XBRL Instance Document
101.SCH  XBRL Taxonomy Extension Schema Document
101.CAL  XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF  XBRL Taxonomy Extension Definition Linkbase Document
101.LAB  XBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
† Originally filed as Exhibit 3.1 to the registrant’s Annual Report on Form 10-K filed on December 2, 1999
*Management contract or compensatory plan

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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
JACK IN THE BOX INC.
By:
/S/    LANCE TUCKER       
 Lance Tucker
 Executive Vice President and Chief Financial Officer (principal financial officer)
(Duly Authorized Signatory)
Date: February 20,May 14, 2020
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