Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Sep. 29, 2019 | Nov. 15, 2019 | Apr. 12, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 29, 2019 | ||
Entity File Number | 1-9390 | ||
Entity Registrant Name | JACK IN THE BOX INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 95-2698708 | ||
Entity Address, Address Line One | 9330 Balboa Avenue | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92123 | ||
City Area Code | 858 | ||
Local Phone Number | 571-2121 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | JACK | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2 | ||
Entity Common Stock, Shares Outstanding | 23,651,991 | ||
Entity Central Index Key | 0000807882 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --09-29 | ||
Documents Incorporated by Reference | Portions of the Proxy Statement to be filed with the Securities and Exchange Commission in connection with the 2020 Annual Meeting of Stockholders are incorporated by reference into Part III hereof. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 29, 2019 | Sep. 30, 2018 |
Current assets: | ||
Cash | $ 125,536 | $ 2,705 |
Restricted cash | 26,025 | 0 |
Accounts and other receivables, net | 45,235 | 57,422 |
Inventories | 1,776 | 1,858 |
Prepaid expenses | 9,015 | 14,443 |
Current assets held for sale | 16,823 | 13,947 |
Other current assets | 2,718 | 4,598 |
Total current assets | 227,128 | 94,973 |
Property and equipment, at cost: | ||
Land | 116,070 | 105,155 |
Buildings | 927,337 | 934,360 |
Restaurant and other equipment | 125,176 | 129,701 |
Construction in progress | 7,658 | 20,815 |
Property and equipment, at cost | 1,176,241 | 1,190,031 |
Less accumulated depreciation and amortization | (784,307) | (770,362) |
Property and equipment, net | 391,934 | 419,669 |
Other assets: | ||
Intangible assets, net | 425 | 600 |
Goodwill | 46,747 | 46,749 |
Deferred tax assets | 85,564 | 62,140 |
Other assets, net | 206,685 | 199,266 |
Total other assets | 339,421 | 308,755 |
Total assets | 958,483 | 823,397 |
Current liabilities: | ||
Current maturities of long-term debt | 774 | 31,828 |
Accounts payable | 37,066 | 44,970 |
Accrued liabilities | 120,083 | 106,922 |
Total current liabilities | 157,923 | 183,720 |
Long-term liabilities: | ||
Long-term debt, net of current maturities | 1,274,374 | 1,037,927 |
Other long-term liabilities | 263,770 | 193,449 |
Total long-term liabilities | 1,538,144 | 1,231,376 |
Stockholders’ deficit: | ||
Preferred stock $0.01 par value, 15,000,000 shares authorized, none issued | 0 | 0 |
Common stock $0.01 par value, 175,000,000 shares authorized, 82,159,002 and 82,061,661 issued, respectively | 822 | 821 |
Capital in excess of par value | 480,322 | 470,826 |
Retained earnings | 1,577,034 | 1,561,353 |
Accumulated other comprehensive loss | (140,006) | (94,260) |
Treasury stock, at cost, 57,760,573 and 56,325,632 shares, respectively | (2,655,756) | (2,530,439) |
Total stockholders’ deficit | (737,584) | (591,699) |
Total liabilities and stockholders' equity | $ 958,483 | $ 823,397 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 29, 2019 | Sep. 30, 2018 |
Stockholders’ deficit: | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 175,000,000 | 175,000,000 |
Common stock, shares issued | 82,159,002 | 82,061,661 |
Treasury stock at cost, shares | 57,760,573 | 56,325,632 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) $ in Thousands | 12 Months Ended | |||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | ||
Revenues | $ 950,107 | $ 869,690 | $ 1,097,291 | |
Operating costs and expenses, net: | ||||
Food and packaging | 97,699 | 128,947 | 206,653 | |
Payroll and employee benefits | 100,158 | 129,089 | 211,611 | |
Occupancy and other | 50,613 | 71,803 | 124,367 | |
Total company restaurant costs | 248,470 | 329,839 | 542,631 | |
Selling, general, and administrative expenses | 76,357 | 104,816 | 117,280 | |
Depreciation and amortization | 55,181 | 59,422 | 67,398 | |
Impairment and other charges, net | 12,455 | 18,418 | 13,169 | |
Gains on the sale of company-operated restaurants | (1,366) | (46,164) | (38,034) | |
Total operating costs and expenses | 747,884 | 636,243 | 851,878 | |
Earnings from operations | 202,223 | 233,447 | 245,413 | |
Other pension and post-retirement expenses, net | 1,484 | 1,833 | 3,360 | |
Interest expense, net | 84,967 | 45,547 | 38,148 | |
Earnings from continuing operations and before income taxes | 115,772 | 186,067 | 203,905 | |
Income taxes | 24,025 | 81,728 | 75,332 | |
Earnings from continuing operations | 91,747 | 104,339 | 128,573 | |
Earnings from discontinued operations, net of income taxes | 2,690 | 17,032 | 6,759 | |
Net earnings | $ 94,437 | $ 121,371 | $ 135,332 | |
Net earnings per share — basic: | ||||
Earnings from continuing operations (in usd per share) | $ 3.55 | $ 3.66 | $ 4.20 | |
Earnings from discontinued operations (in usd per share) | 0.10 | 0.60 | 0.22 | |
Net earnings per share (in usd per share) | [1] | 3.66 | 4.26 | 4.42 |
Net earnings per share — diluted: | ||||
Earnings from continuing operations (in usd per share) | 3.52 | 3.62 | 4.16 | |
Earnings from discontinued operations (in usd per share) | 0.10 | 0.59 | 0.22 | |
Net earnings per share (in usd per share) | [1] | 3.62 | 4.21 | 4.38 |
Cash dividends declared per common share (in usd per share) | $ 1.60 | $ 1.60 | $ 1.60 | |
Company restaurant sales | ||||
Revenues | $ 336,807 | $ 448,058 | $ 715,921 | |
Franchise | ||||
Revenues | 272,815 | 259,047 | 231,578 | |
Operating costs and expenses, net: | ||||
Total company restaurant costs | 12,110 | 11,593 | 8,811 | |
Franchise occupancy expenses (excluding depreciation and amortization) | 166,584 | 158,319 | 140,623 | |
Franchise advertising and other services expenses | 178,093 | 0 | 0 | |
Franchise royalties and other | ||||
Revenues | 169,811 | 162,585 | 149,792 | |
Franchise contributions for advertising and other services | ||||
Revenues | $ 170,674 | $ 0 | $ 0 | |
[1] | Earnings per share may not add due to rounding. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 94,437 | $ 121,371 | $ 135,332 |
Net change in fair value of derivatives | (23,625) | 18,769 | 19,768 |
Net loss reclassified to earnings | 24,328 | 3,455 | 5,070 |
Cash flow hedges, before tax | 703 | 22,224 | 24,838 |
Tax effect | (3,165) | (5,725) | (9,592) |
Cash flow hedges, net of tax | (2,462) | 16,499 | 15,246 |
Actuarial (losses) gains arising during the period | (62,377) | 31,478 | 49,025 |
Actuarial losses and prior service cost reclassified to earnings | 3,917 | 4,988 | 6,429 |
Unrecognized periodic benefit costs, before tax | (58,460) | 36,466 | 55,454 |
Tax effect | 15,176 | (9,544) | (21,418) |
Unrecognized periodic benefit costs, net of tax | (43,284) | 26,922 | 34,036 |
Foreign currency translation adjustments | 0 | 6 | (35) |
Tax effect | 0 | (2) | 13 |
Derecognition of foreign currency translation adjustments due to sale | 0 | 76 | 0 |
Other comprehensive income (loss), foreign currency transaction and translation gain (loss) arising during period, net of tax | 0 | 80 | (22) |
Other comprehensive (loss) income, net of taxes | (45,746) | 43,501 | 49,260 |
Comprehensive income | $ 48,691 | $ 164,872 | $ 184,592 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Cash flows from operating activities: | |||
Net earnings | $ 94,437 | $ 121,371 | $ 135,332 |
Earnings from discontinued operations | 2,690 | 17,032 | 6,759 |
Earnings from continuing operations | 91,747 | 104,339 | 128,573 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 55,181 | 59,422 | 67,398 |
Franchise tenant improvement allowance amortization and other | 1,983 | 862 | 121 |
Amortization of debt issuance costs | 3,121 | 2,803 | 3,487 |
Loss on debt extinguishment | 2,757 | 0 | 0 |
Loss on interest rate swap termination | 23,551 | 0 | 0 |
Excess tax benefits from share-based compensation arrangements | (113) | (2,031) | (4,232) |
Deferred income taxes | 4,100 | 25,352 | (16,074) |
Share-based compensation expense | 8,074 | 9,146 | 10,637 |
Pension and postretirement expense | 1,484 | 2,324 | 4,215 |
Gains on cash surrender value of company-owned life insurance | (4,475) | (2,280) | (2,424) |
Gains on the sale of company-operated restaurants | (1,366) | (46,164) | (38,034) |
(Gains) losses on the disposition of property and equipment | (6,244) | 1,627 | 2,891 |
Impairment charges and other | 5,414 | 2,505 | 1,815 |
Changes in assets and liabilities, excluding acquisitions and dispositions: | |||
Accounts and other receivables | 3,504 | 24,220 | (1,868) |
Inventories | 82 | 1,587 | 1,839 |
Prepaid expenses and other current assets | 8,728 | (9,432) | 12,718 |
Accounts payable | 4,524 | 4,890 | (3,359) |
Accrued liabilities | (7,505) | (38,329) | (16,654) |
Pension and postretirement contributions | (6,194) | (5,467) | (5,363) |
Franchise tenant improvement allowance disbursements | (10,593) | (14,893) | 0 |
Other | (9,355) | (16,426) | (11,997) |
Cash flows provided by operating activities | 168,405 | 104,055 | 133,689 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (47,649) | (37,842) | (38,970) |
Proceeds from the sale and leaseback of assets | 4,447 | 9,336 | 6,057 |
Proceeds from the sale of company-operated restaurants | 1,280 | 26,486 | 99,591 |
Collections on notes receivable | 16,759 | 54,453 | 1,500 |
Proceeds from the sale of property and equipment | 9,714 | 10,259 | 2,921 |
Other | 1,630 | 2,969 | (3,729) |
Cash flows (used in) provided by investing activities | (13,819) | 65,661 | 67,370 |
Cash flows from financing activities: | |||
Borrowings on revolving credit facilities | 229,798 | 757,100 | 747,900 |
Repayments of borrowings on revolving credit facilities | (960,220) | (523,700) | (533,300) |
Proceeds from issuance of debt | 1,300,000 | 0 | 0 |
Principal repayments on debt | (337,150) | (304,607) | (57,266) |
Debt issuance costs | (34,122) | (1,366) | 0 |
Payments related to termination of interest rate swaps | (23,551) | 0 | 0 |
Dividends paid on common stock | (41,179) | (45,412) | (48,925) |
Proceeds from issuance of common stock | 1,231 | 7,959 | 5,165 |
Repurchases of common stock | (137,654) | (325,634) | (334,361) |
Excess tax benefits from share-based compensation arrangements | 0 | 0 | 4,232 |
Payroll tax payments for equity award issuances | (2,883) | (7,719) | (9,240) |
Change in book overdraft | 0 | (2,150) | 2,151 |
Cash flows used in financing activities | (5,730) | (445,529) | (223,644) |
Cash flows provided by (used in) continuing operations | 148,856 | (275,813) | (22,585) |
Net cash provided by operating activities of discontinued operations | 0 | 4,823 | 47,388 |
Net cash provided by (used in) investing activities of discontinued operations | 0 | 266,125 | (34,031) |
Net cash used in financing activities of discontinued operations | 0 | (78) | (138) |
Net cash provided by discontinued operations | 0 | 270,870 | 13,219 |
Effect of exchange rate changes on cash | 0 | 6 | (22) |
Cash and restricted cash at beginning of year | 2,705 | 7,642 | 17,030 |
Cash and restricted cash at end of year | $ 151,561 | $ 2,705 | $ 7,642 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock |
Balance, shares at Oct. 02, 2016 | 81,598,524 | |||||
Balance at Oct. 02, 2016 | $ (217,206) | $ 816 | $ 432,564 | $ 1,399,721 | $ (187,021) | $ (1,863,286) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares issued under stock plans, including tax benefit (in shares) | 244,959 | |||||
Shares issued under stock plans, including tax benefit | 9,397 | $ 2 | 9,395 | |||
Share-based compensation | 11,416 | 11,416 | ||||
Dividends declared | (49,078) | 155 | (49,233) | |||
Purchases of treasury stock | (327,153) | (327,153) | ||||
Net earnings | 135,332 | 135,332 | ||||
Foreign currency translation adjustment | (22) | (22) | ||||
Effect of interest rate swaps, net | 15,246 | 15,246 | ||||
Effect of actuarial gains (losses) and prior service cost, net | 34,036 | 34,036 | ||||
Other | (98) | (98) | ||||
Balance, shares at Oct. 01, 2017 | 81,843,483 | |||||
Balance at Oct. 01, 2017 | (388,130) | $ 818 | 453,432 | 1,485,820 | (137,761) | (2,190,439) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares issued under stock plans, including tax benefit (in shares) | 218,178 | |||||
Shares issued under stock plans, including tax benefit | 8,207 | $ 3 | 8,204 | |||
Share-based compensation | 9,017 | 9,017 | ||||
Dividends declared | (45,514) | 173 | (45,687) | |||
Purchases of treasury stock | (340,000) | (340,000) | ||||
Net earnings | 121,371 | 121,371 | ||||
Foreign currency translation adjustment | 80 | 80 | ||||
Effect of interest rate swaps, net | 16,499 | 16,499 | ||||
Effect of actuarial gains (losses) and prior service cost, net | 26,922 | 26,922 | ||||
Other | (151) | (151) | ||||
Balance, shares at Sep. 30, 2018 | 82,061,661 | |||||
Balance at Sep. 30, 2018 | (591,699) | $ 821 | 470,826 | 1,561,353 | (94,260) | (2,530,439) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares issued under stock plans, including tax benefit (in shares) | 97,341 | |||||
Shares issued under stock plans, including tax benefit | 1,232 | $ 1 | 1,231 | |||
Share-based compensation | 8,074 | 8,074 | ||||
Dividends declared | (41,235) | 191 | (41,426) | |||
Purchases of treasury stock | (125,317) | (125,317) | ||||
Net earnings | 94,437 | 94,437 | ||||
Effect of interest rate swaps, net | (2,462) | (2,462) | ||||
Effect of actuarial gains (losses) and prior service cost, net | (43,284) | (43,284) | ||||
Balance, shares at Sep. 29, 2019 | 82,159,002 | |||||
Balance at Sep. 29, 2019 | $ (737,584) | $ 822 | $ 480,322 | $ 1,577,034 | $ (140,006) | $ (2,655,756) |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of operations — Founded in 1951, Jack in the Box Inc. (the “Company”) operates and franchises Jack in the Box ® quick-service restaurants. The Company operates as a single segment for reporting purposes. The following table summarizes the number of restaurants as of the end of each fiscal year: 2019 2018 2017 Company-operated 137 137 276 Franchise 2,106 2,100 1,975 Total system 2,243 2,237 2,251 References to the Company throughout these notes to the consolidated financial statements are made using the first person notations of “we,” “us,” and “our.” Basis of presentation — The accompanying 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”). On December 19, 2017, we entered into a definitive agreement to sell Qdoba Restaurant Corporation (“Qdoba”), a wholly owned subsidiary of the Company that operates and franchises more than 700 Qdoba Mexican Eats ® fast-casual restaurants, to certain funds managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, the “Buyer”). The sale was completed on March 21, 2018. For all periods presented in our consolidated statements of earnings, all sales, costs, expenses and income taxes attributable to Qdoba, except as related to the impact of the decrease in the federal statutory tax rate (see Note 11, Income Taxes) , have been aggregated under the caption “Earnings from discontinued operations, net of income taxes.” Refer to Note 10, Discontinued Operations , for additional information. Unless otherwise noted, amounts and disclosures throughout these notes to consolidated financial statements relate to our continuing operations. Reclassifications — We have reclassified certain items in the consolidated financial statements for prior periods to be comparable to the current year presentation. These reclassifications had no effect on previously reported net earnings. Fiscal year — Our fiscal year is 52 or 53 weeks ending the Sunday closest to September 30 . Comparisons throughout these notes to the consolidated financial statements refer to the 52 -week periods ended September 29, 2019 , September 30, 2018 and October 1, 2017 for fiscal years 2019 , 2018 , and 2017 , respectively. Principles of consolidation — The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and the accounts of any variable interest entities (“VIEs”) where we are deemed the primary beneficiary. All significant intercompany accounts and transactions are eliminated. The Financial Accounting Standards Board (“FASB”) authoritative guidance on consolidation requires the primary beneficiary of a VIE to consolidate that entity. The primary beneficiary of a VIE is an enterprise that has a controlling financial interest in the VIE. Controlling financial interest exists when an enterprise has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The primary entities in which we possess a variable interest are franchise entities, which operate our franchise restaurants. We do not possess any ownership interests in franchise entities. We have reviewed these franchise entities and determined that we are not the primary beneficiary of the entities and therefore, these entities have not been consolidated. Use of estimates — In preparing the 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. Restricted cash is comprised of certain cash balances required to be held in trust in connection with the Company’s securitized financing facility. 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. Refer to Note 7, Indebtedness , for additional information. Accounts and other receivables, net, is primarily comprised of receivables from franchisees, tenants, and credit card processors. Franchisee receivables primarily include rents, royalties, and marketing, sourcing and technology support fees associated with lease and franchise agreements, and notes issued in connection with refranchising transactions. Tenant receivables relate to subleased properties where we are on the master lease agreement. We accrue interest on notes receivable based on the contractual terms. The allowance for doubtful accounts is based on historical experience and a review of existing receivables. Changes in accounts and other receivables are classified as an operating activity in the consolidated statements of cash flows, except for changes in notes related to refranchising transactions, which are classified as an investing activity. Inventories consist principally of food, packaging, and supplies, and are valued at the lower of cost or market on a first-in, first-out basis. Assets held for sale typically includes the net book value of property and equipment we plan to sell within the next year. If the determination is made that we no longer expect to sell an asset within the next year, the asset is reclassified out of assets held for sale. Long-lived assets that meet the held for sale criteria are reported at the lower of their carrying value or fair value, less estimated costs to sell. At September 29, 2019 and September 30, 2018 , assets held for sale are primarily comprised of various excess properties that we do not intend to use for restaurant operations in the future, as well as one of our corporate headquarter buildings which we currently expect to sell by the first half of fiscal 2020. Property and equipment, net — Expenditures for new facilities and equipment, and those that substantially increase the useful lives of the property, are capitalized. Facilities leased under capital leases are stated at the present value of minimum lease payments at the beginning of the lease term, not to exceed fair value. Maintenance and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and gains or losses on the dispositions are reflected in results of operations. Buildings, equipment and leasehold improvements are generally depreciated using the straight-line method based on the estimated useful lives of the assets, over the initial lease term for certain assets acquired in conjunction with the lease commencement for leased properties, or the remaining lease term for certain assets acquired after the commencement of the lease for leased properties. In certain situations, one or more option periods may be used in determining the depreciable life of assets related to leased properties if we deem that an economic penalty would be incurred otherwise. In either circumstance, our policy requires lease term consistency when calculating the depreciation period, in classifying the lease and in computing straight-line rent expense. Building, leasehold improvement assets and equipment are assigned lives that range from 1 to 35 years. Depreciation expense related to property and equipment was $55.2 million , $59.4 million , and $67.4 million in fiscal year 2019 , 2018 , and 2017 , respectively. Impairment of long-lived assets — We evaluate our long-lived assets, such as property and equipment, for impairment on an annual basis or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. This review generally includes a restaurant-level analysis, except when we are actively selling a group of restaurants, in which case we perform our impairment evaluations at the group level. Impairment evaluations for individual restaurants may take into consideration a restaurant’s operating cash flows, the period of time since a restaurant has been opened or remodeled, refranchising expectations, if any, and the maturity of the related market, which are all significant unobservable inputs (“Level 3 Inputs”). Impairment evaluations for a group of restaurants take into consideration the group’s expected future cash flows and sales proceeds from bids received, if any, or fair market value based on, among other considerations, the specific sales and cash flows of those restaurants. If the assets of a restaurant or group of restaurants subject to our impairment evaluation are not recoverable based upon the forecasted, undiscounted cash flows, we recognize an impairment loss by the amount that the carrying value of the assets exceeds fair value. Refer to Note 9, Impairment and Other Charges, Net , for additional information. Goodwill and intangible assets — Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired, if any. We generally record goodwill in connection with the acquisition of restaurants from franchisees. Likewise, upon the sale of restaurants to franchisees, goodwill is decremented. The amount of goodwill written-off is determined as the fair value of the business disposed of as a percentage of the fair value of the reporting unit retained. If the business disposed of was never fully integrated into the reporting unit after its acquisition, and thus the benefits of the acquired goodwill were never realized, the current carrying amount of the acquired goodwill is written off. Goodwill and our other indefinite-lived intangible assets are evaluated for impairment annually during the fourth quarter, or more frequently if indicators of impairment are present. We first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit or indefinite-lived asset is less than its carrying amount. If the qualitative factors indicate that it is more likely than not that the fair value is less than the carrying amount, we perform a single-step impairment test. To perform our impairment analysis, we estimate the fair value of the reporting unit or indefinite-lived asset using Level 3 Inputs and compare it to the carrying value. If the carrying value exceeds the fair value, an impairment loss is recognized equal to the excess. Lease acquisition costs primarily represent the fair values of acquired lease contracts having contractual rents lower than fair market rents and are amortized on a straight-line basis over the remaining initial lease term. Reacquired franchise rights are recorded in connection with our acquisition of franchised restaurants and are amortized over the remaining contractual period of the franchise contract in which the right was granted. Refer to Note 4, Goodwill and Intangible Assets, Net , for additional information. Company-owned life insurance — We have purchased company-owned life insurance (“COLI”) policies to support our non-qualified benefit plans. The cash surrender values of these policies were $112.8 million and $109.9 million as of September 29, 2019 and September 30, 2018 , respectively, and are included in “Other assets, net”, in the accompanying consolidated balance sheets. Changes in cash surrender values are included in “Selling, general and administrative expenses” in the accompanying consolidated statements of earnings. These policies reside in an umbrella trust for use only to pay plan benefits to participants or to pay creditors if the Company becomes insolvent. Leases — We review all leases for capital or operating classification at their inception under the FASB authoritative guidance for leases. Our operations are primarily conducted under operating leases. Within the provisions of certain leases, there are rent holidays and escalations in payments over the base lease term, as well as renewal periods. The effects of the holidays and escalations have been reflected in rent expense on a straight-line basis over the expected lease term. Differences between amounts paid and amounts expensed are recorded as deferred rent. The lease term commences on the date when we have the right to control the use of the leased property. Certain leases also include contingent rent provisions based on sales levels, which are accrued at the point in time we determine that it is probable such sales levels will be achieved. Refer to Note 8, Leases , for additional information. Revenue recognition — “Company restaurant sales” include revenue recognized upon delivery of food and beverages to the customer at company-operated restaurants, which is when our obligation to perform is satisfied. Company restaurant sales exclude taxes collected from the Company’s customers. Company restaurant sales also include income for gift cards. Gift cards, upon customer purchase, are recorded as deferred income and are recognized in revenue as they are redeemed. “Franchise rental revenues” received from franchised restaurants based on fixed rental payments are recognized as revenue over the term of the lease. Rental revenue from properties owned and leased by the Company and leased or subleased to franchisees is recognized on a straight-line basis over the respective term of the lease. Certain franchise rents, which are contingent upon sales levels, are recognized in the period in which the contingency is met. “Franchise royalties and other” includes royalties and franchise and other fees received from franchisees. Royalties are based upon a percentage of sales of the franchised restaurant and are recognized as earned. Franchise royalties are billed on a monthly basis. Franchise fees when a new restaurant opens or at the start of a new franchise term are recorded as deferred revenue when received and recognized as revenue over the term of the franchise agreement. “Franchise contributions for advertising and other services” includes franchisee contributions to our marketing fund billed on a monthly basis and sourcing and technology fees, as required under the franchise agreements. Contributions to our marketing fund are based on a percentage of sales and recognized as earned. Sourcing and technology services are recognized when the goods or services are transferred to the franchisee. Gift cards — We sell gift cards to our customers in our restaurants and through selected third parties. The gift cards sold to our customers have no stated expiration dates and are subject to actual or potential escheatment rights in several of the jurisdictions in which we operate. We recognize income from gift cards when redeemed by the customer. While we will continue to honor all gift cards presented for payment, we may determine the likelihood of redemption to be remote for certain card balances due to, among other things, long periods of inactivity. In these circumstances, to the extent we determine there is no requirement for remitting balances to government agencies under unclaimed property laws, card balances may be recognized as a reduction to “Selling, general and administrative expenses” in the accompanying consolidated statements of earnings. Amounts recognized on unredeemed gift card balances was $0.5 million , $0.6 million , and $0.5 million in fiscal 2019 , 2018 , and 2017 , respectively. Pre-opening costs associated with the opening of a new restaurant consist primarily of property rent and employee training costs. Pre-opening costs associated with the opening of a restaurant that was closed upon acquisition consist primarily of labor costs, maintenance and repair costs, and property rent. Pre-opening costs are expensed as incurred in “Selling, general and administrative expenses” in the accompanying consolidated statements of earnings. Restaurant closure costs — All costs associated with exit or disposal activities are recognized when they are incurred. Restaurant closure costs, which are included in “Impairment and other charges, net”, and “Gains on the sale of company-operated restaurants” in the accompanying consolidated statements of earnings, primarily consist of future lease commitments, net, of anticipated sublease rentals, and expected ancillary costs. Self-insurance — We are self-insured for a portion of our workers’ compensation, general liability, employee medical and dental, and automotive claims. We utilize a paid-loss plan for our workers’ compensation, general liability, and automotive programs, which have predetermined loss limits per occurrence and in the aggregate. We establish our insurance liability (undiscounted) and reserves using independent actuarial estimates of expected losses for determining reported claims and as the basis for estimating claims incurred, but not reported. As of September 29, 2019 and September 30, 2018 , our estimated liability for general liability and workers’ compensation claims exceeded our self-insurance retention limits by $3.6 million and $3.7 million , respectively, which we expect our insurance providers to pay on our behalf in accordance with the contractual terms of our insurance policies. Advertising costs — We administer a marketing fund that includes contractual contributions. In fiscal 2019 , 2018 , and 2017 the marketing fund contributions from franchise and company-operated restaurants were approximately 5.0% of gross revenues, and the Company made incremental contributions to the marketing fund of $2.0 million , $6.2 million , and $0.5 million , respectively. Production costs of commercials, programming, and other marketing activities are charged to the marketing funds when the advertising is first used for its intended purpose, and the costs of advertising are charged to operations as incurred. When contributions of the marketing fund exceed the related advertising expenses, advertising costs are accrued up to the amount of revenues on an annual basis. Total contributions made by the Company, including incremental contributions, are included in “Selling, general, and administrative expenses” in the accompanying consolidated statements of earnings. In fiscal 2019 , 2018 , and 2017 advertising costs were $19.0 million , $28.8 million , and $36.5 million , respectively. Share-based compensation — We account for our share-based compensation under the FASB authoritative guidance on stock compensation , which generally requires, among other things, that all employee share-based compensation be measured using a fair value method and that the resulting compensation cost be recognized in the financial statements. Compensation expense for our share-based compensation awards is generally recognized on a straight-line basis over the shorter of the vesting period or the period from the date of grant to the date the employee becomes eligible to retire. Refer to Note 13, Share-based Employee Compensation , for additional information. Income taxes — Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We recognize interest and, when applicable, penalties related to unrecognized tax benefits as a component of our income tax provision. Authoritative guidance issued by the FASB prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Refer to Note 11, Income Taxes , for additional information. Derivative instruments — We have historically used interest rate swaps to hedge interest rate volatility under our senior credit facility. On July 2, 2019 , we terminated all interest rate swap agreements in anticipation of the securitization transaction. Prior to terminating the agreements, a ll derivatives were recognized on the consolidated balance sheets at fair value based upon quoted market prices. Changes in the fair values of derivatives were recorded in earnings or other comprehensive income (“OCI”), based on whether or not the instrument is designated as a hedge transaction. Gains or losses on derivative instruments that qualify for hedge designation were reported in OCI and reclassified to earnings in the period the hedged item affected earnings. When the underlying hedge transaction ceased to exist, the associated amount reported in OCI was reclassified to earnings at that time. Refer to Note 6, Derivative Instruments, for additional information. Contingencies — We recognize liabilities for contingencies when we have an exposure that indicates it is probable that an asset has been impaired or that a liability has been incurred and the amount of impairment or loss can be reasonably estimated. Our ultimate legal and financial liability with respect to such matters cannot be estimated with certainty and requires the use of estimates. When the reasonable estimate is a range, the recorded loss will be the best estimate within the range. We record legal settlement costs when those costs are probable and reasonably estimable. Refer to Note 16, Commitments, Contingencies and Legal Matters , for additional information. Effect of new accounting pronouncements adopted in fiscal 2019 — In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue Recognition - Revenue from Contracts with Customers (Topic 606) , which provides a comprehensive new revenue recognition model that requires an entity to recognize revenue in an amount that reflects the consideration the entity expects to receive for the transfer of promised goods or services to its customers. The standard also requires additional disclosure regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted the new standard on October 1, 2018 using the modified retrospective method, whereby the cumulative effect of this transition to applicable contracts with customers that were not completed as of October 1, 2018 was recorded as an adjustment to beginning retained earnings as of this date. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The new revenue recognition standard did not impact our recognition of restaurant sales, rental revenues, or royalties from franchisees. The new pronouncement changed the way initial fees from franchisees for new restaurant openings or new franchise terms are recognized. Under the previous revenue recognition guidance, initial franchise fees were recognized as revenue at the time when a new restaurant opened or at the start of a new franchise term. In accordance with the new guidance, the initial franchise services are not distinct from the continuing rights and services offered during the term of the franchise agreement and will therefore be treated as a single performance obligation together with the continuing rights and services. As such, initial fees received will be recognized over the franchise term and any unamortized portion will be recorded as deferred revenue in our consolidated balance sheet. An adjustment to opening retained earnings and a corresponding contract liability of approximately $50.3 million (of which $5.0 million was current and $45.3 million was long-term) was established on the date of adoption. A deferred tax asset of approximately $13.0 million related to this contract liability was also established on the date of adoption. The new standard also had an impact on transactions presented net and not included in our revenues and expenses such as franchisee contributions to and expenditures from our advertising fund, and sourcing and technology fee contributions from franchisees and the related expenses. We determined that we are the principal in these arrangements, and as such, contributions to and expenditures from the advertising fund, and sourcing and technology fees and expenditures are now reported on a gross basis within our consolidated statements of earnings. While this change materially impacted our gross amount of reported revenues and expenses, the impact was largely offsetting with no material impact to our reported net earnings. The following table summarizes the impacts of adopting ASC 606 on our consolidated financial statements as of and for the period ended September 29, 2019 (in thousands) : Adjustments As Reported Franchise Fees Marketing and Sourcing Fees Technology Support Fees Balances without Adoption Consolidated Statement of Earnings Fiscal Year Ended September 29, 2019 Franchise royalties and other $ 169,811 $ (3,745 ) $ — $ — $ 166,066 Franchise contributions for advertising and other services $ 170,674 $ — $ (161,873 ) $ (8,801 ) $ — Total revenues $ 950,107 $ (3,745 ) $ (161,873 ) $ (8,801 ) $ 775,688 Franchise advertising and other services expenses $ 178,093 $ — $ (161,873 ) $ (16,220 ) $ — Selling, general and administrative expenses $ 76,357 $ — $ — $ 7,419 $ 83,776 Total operating costs and expenses, net $ 747,884 $ — $ (161,873 ) $ (8,801 ) $ 577,210 Earnings from operations $ 202,223 $ (3,745 ) $ — $ — $ 198,478 Earnings from continuing operations and before income taxes $ 115,772 $ (3,745 ) $ — $ — $ 112,027 Income tax expense $ 24,025 $ (972 ) $ — $ — $ 23,053 Earnings from continuing operations $ 91,747 $ (2,773 ) $ — $ — $ 88,974 Net earnings $ 94,437 $ (2,773 ) $ — $ — $ 91,664 Consolidated Balance Sheet September 29, 2019 Prepaid expenses $ 9,015 $ 972 $ — $ — $ 9,987 Total current assets $ 227,128 $ 972 $ — $ — $ 228,100 Deferred tax assets $ 85,564 $ (12,958 ) $ — $ — $ 72,606 Other assets, net $ 206,685 $ 269 $ — $ — $ 206,954 Total other assets $ 339,421 $ (12,689 ) $ — $ — $ 326,732 Total assets $ 958,483 $ (11,717 ) $ — $ — $ 946,766 Accrued liabilities $ 120,083 $ (4,978 ) $ — $ — $ 115,105 Total current liabilities $ 157,923 $ (4,978 ) $ — $ — $ 152,945 Other long-term liabilities $ 263,770 $ (41,295 ) $ — $ — $ 222,475 Total long-term liabilities $ 1,538,144 $ (41,295 ) $ — $ — $ 1,496,849 Retained earnings $ 1,577,034 $ 34,556 $ — $ — $ 1,611,590 Total stockholders’ deficit $ (737,584 ) $ 34,556 $ — $ — $ (703,028 ) Total liabilities and stockholders’ deficit $ 958,483 $ (11,717 ) $ — $ — $ 946,766 The adoption of ASC 606 had no impact on our cash provided by or used in operating, investing or financing activities as previously reported in the accompanying consolidated statement of cash flows. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . This standard requires the presentation of the service cost component of net benefit cost to be in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. All other components of net benefit cost should be presented separately from the service cost component and outside of a subtotal of earnings from operations, or separately disclosed. We adopted this standard in the first quarter of fiscal 2019 applying the retrospective method. As a result of the adoption, 2018 and 2017 amounts of $1.8 million and $3.4 million , respectively, previously reported within “Selling, general, and administrative expenses” have been reclassified to a separate line under earnings from operations to conform to current year presentation. Effect of new accounting pronouncements to be adopted in future periods — In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (as subsequently amended by ASU 2018-01, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01) which requires a lessee to recognize assets and liabilities on the balance sheet for those leases classified as operating leases under previous guidance. Substantially all the Company’s operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right of use assets upon adoption, resulting in a significant increase in the assets and liabilities on our consolidated balance sheets. We do not expect the adoption of this guidance to have a material impact on our consolidated statements of earnings and statements of cash flows. We are required to adopt this standard in the first quarter of fiscal 2020 and have elected to utilize the alternative transition method, whereby an entity records a cumulative adjustment to opening retained earnings in the year of adoption without restating prior periods. We will elect the transition package of three practical expedients, which, among other items, permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We will also elect 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 certain classes of assets. We will not elect the use-of-hindsight practical expedient, and therefore will continue to utilize lease terms determined under the existing lease guidance. We are in the final phase of our adoption plan. We are substantially complete with our scoping analysis, data gathering process to ensure the completeness and accuracy of our current leasing portfolio, and testing of our existing leasing system for compliance with Topic 842, and are in the process of finalizing our accounting policies, processes, disclosures and internal controls over financial reporting. For our real estate operating leases, we expect the adoption of the new guidance will result in the recognition of approximately $950 million of operating lease liabilities based on the present value of the remaining minimum rental payments using discount rates as of the effective date. We expect to record corresponding right of use assets of approximately $900 million , based on the operating lease liabilities adjusted for certain lease related assets and liabilities and the impairment of certain right of use assets recognized as a cumulative effect adjustment in retained earnings as of the adoption date. We do not expect operating lease liabilities and right of use assets related to our other contracts to be material. 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 the consolidated statements of operations but will be presented gross upon adoption of the new guidance. As a result, we expect an increase in our annual revenues and expenses of approximately $5.0 million after adoption. We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements. |
Revenue
Revenue | 12 Months Ended |
Sep. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE Nature of products and services — We derive revenue from retail sales at Jack in the Box company-operated restaurants and rental revenue, royalties, advertising, and franchise and other fees from franchise-operated restaurants. Our franchise arrangements generally provide for an initial franchise fee of $50,000 per restaurant and generally require that franchisees pay royalty and marketing fees at 5% of gross sales. The agreement also requires franchisees to pay sourcing, technology support and other miscellaneous fees. Disaggregation of revenue — The following table disaggregates revenue by primary source for the fiscal year ended September 29, 2019 (in thousands) : 2019 Sources of revenue: Company restaurant sales $ 336,807 Franchise rental revenues 272,815 Franchise royalties 163,047 Marketing fees 157,969 Technology and sourcing fees 12,705 Franchise fees and other services 6,764 Total revenue $ 950,107 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 consolidated balance sheets. A summary of significant changes in our contract liabilities between the date of adoption (October 1, 2018) and September 29, 2019 is presented below (in thousands) : Deferred Franchise Fees Deferred franchise fees at October 1, 2018 $ 50,018 Revenue recognized during the period (5,173 ) Additions during the period 1,428 Deferred franchise fees at September 29, 2019 $ 46,273 The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied at the end of the period (in thousands) : 2020 $ 4,978 2021 4,880 2022 4,681 2023 4,527 2024 4,334 Thereafter 22,873 $ 46,273 |
Summary of Refranchisings, Fran
Summary of Refranchisings, Franchisee Development and Acquisitions | 12 Months Ended |
Sep. 29, 2019 | |
Summary Of Refranchisings, Franchisee Development And Acquisitions [Abstract] | |
Summary of Refranchisings, Franchisee Development and Acquisitions | SUMMARY OF REFRANCHISINGS, FRANCHISEE DEVELOPMENT AND ACQUISITIONS Refranchisings and franchisee development — The following table summarizes the number of restaurants sold to franchisees, the number of restaurants developed by franchisees, and gains recognized in each fiscal year ( dollars in thousands ): 2019 2018 2017 Restaurants sold to franchisees — 135 178 New restaurants opened by franchisees 19 11 18 Proceeds from the sale of company-operated restaurants: Cash (1) $ 1,280 $ 26,486 $ 99,591 Notes receivable — 70,461 — $ 1,280 $ 96,947 $ 99,591 Net assets sold (primarily property and equipment) $ — $ (21,329 ) $ (30,597 ) Lease commitment charges (2) — — (11,737 ) Goodwill related to the sale of company-operated restaurants (2 ) (4,663 ) (10,062 ) Other (3) 88 (24,791 ) (9,161 ) Gains on the sale of company-operated restaurants $ 1,366 $ 46,164 $ 38,034 ____________________________ (1) Amounts in 2019 , 2018 , and 2017 include additional proceeds of $1.3 million , $1.4 million , and $0.2 million related to the extension of the underlying franchise and lease agreements from the sale of restaurants in prior years. (2) Charges are for operating restaurant leases with lease commitments in excess of our sublease rental income. (3) Amounts in 2018 primarily represent $9.2 million of costs related to franchise remodel incentives, $8.7 million reduction of gains related to the modification of certain 2017 refranchising transactions, $2.3 million of maintenance and repair expenses and $3.7 million of other miscellaneous non-capital charges. Amounts in 2017 represent impairment of $4.6 million and equipment write-offs of $1.4 million related to restaurants closed in connection with the sale of the related markets, maintenance and repair charges, and other miscellaneous non-capital charges. Franchise acquisitions — In 2019 and 2018 we did not acquire any franchise restaurants. In 2017 we acquired 50 franchise restaurants. Of the 50 restaurants acquired, we took over 31 restaurants as a result of an agreement with an underperforming franchisee who was in violation of franchise and lease agreements with the Company. Under this agreement, the franchisee voluntarily agreed to turn over the restaurants. The acquisition of the additional 19 restaurants in 2017 was the result of a legal action filed in September 2013 against a franchisee, from which legal action we obtained a judgment in January 2017 granting us possession of the restaurants. Of the 50 restaurants acquired in 2017, we closed eight and sold 42 to franchisees. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Sep. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | GOODWILL AND INTANGIBLE ASSETS, NET The changes in the carrying amount of goodwill during fiscal 2019 and 2018 were as follows ( in thousands ): Balance at October 1, 2017 $ 51,412 Sale of company-operated restaurants to franchisees (4,663 ) Balance at September 30, 2018 46,749 Sale of company-operated restaurants to franchisees (2 ) Balance at September 29, 2019 $ 46,747 Intangible assets, net, consist of the following as of the end of each fiscal year ( in thousands ): 2019 2018 Gross carrying amount $ 6,692 $ 6,751 Less accumulated amortization (6,267 ) (6,151 ) Net carrying amount $ 425 $ 600 Amortized intangible assets include lease acquisition costs and reacquired franchise rights. Total amortization expense related to intangible assets was $0.1 million in fiscal 2019 , and $0.2 million in fiscal 2018 and 2017 . The following table summarizes, as of September 29, 2019 , the estimated amortization expense for each of the next five fiscal years ( in thousands ): 2020 $ 108 2021 $ 95 2022 $ 36 2023 $ 20 2024 $ 17 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Financial assets and liabilities — The following table presents the financial assets and liabilities measured at fair value on a recurring basis ( in thousands ): Total Quoted Prices in Active Markets for Identical Assets (3) (Level 1) Significant Other Observable Inputs (3) (Level 2) Significant Unobservable Inputs (3) (Level 3) Fair value measurements as of September 29, 2019: Non-qualified deferred compensation plan (1) $ 30,104 $ 30,104 $ — $ — Total liabilities at fair value $ 30,104 $ 30,104 $ — $ — Fair value measurements as of September 30, 2018: Non-qualified deferred compensation plan (1) $ 37,447 $ 37,447 $ — $ — Interest rate swaps (Note 6) (2) 703 — 703 — Total liabilities at fair value $ 38,150 $ 37,447 $ 703 $ — ____________________________ (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 consolidated balance sheets. (2) We entered into interest rate swaps to reduce our exposure to rising interest rates on our variable rate debt. The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models as reported by our counterparties. These valuation models use a discounted cash flow analysis on the cash flows of each derivative. The key inputs for the valuation models are quoted market prices, discount rates, and forward yield curves. The Company also considered its own nonperformance risk and the respective counter-party’s nonperformance risk in the fair value measurements. As further described in Note 6, Derivatives , the Company’s interest rate swaps were terminated on July 2, 2019 and settled in connection with our securitization transaction on July 8, 2019. (3) We did not have any transfers in or out of Level 1, 2, or 3. At September 29, 2019 , the fair value of our Class A-2 Notes was $1,344.3 million . 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 estimated fair values of our capital lease obligations approximated their carrying values as of September 29, 2019 . Non-financial assets and liabilities — Our non-financial instruments, which primarily consist of property and equipment, goodwill, and intangible assets, are reported at carrying value and are not required to be measured at fair value on a recurring basis. However, whenever events or changes in circumstances indicate that their carrying value may not be recoverable, non-financial instruments are assessed for impairment. If the carrying values are not fully recoverable, they are written down to fair value. In connection with management’s decision to discontinue a long-term technology project, an impairment charge of $3.5 million was recorded in the fourth quarter of 2019. Refer to Note 9, Impairment and Other Charges, Net, for additional information regarding impairment charges. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Sep. 29, 2019 | |
Derivative Instruments and Hedges, Assets [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS Interest rate swaps — We have used interest rate swaps to mitigate interest rate volatility with regard to variable rate borrowings under our senior credit facility. In June 2015, we entered into forward-starting interest rate swap agreements that effectively converted $500.0 million of our variable rate borrowings to a fixed rate from October 2018 through October 2022. These agreements were designated as cash flow hedges under the terms of the FASB authoritative guidance for derivatives and hedging. To the extent that they are effective in offsetting the variability of the hedged cash flows, changes in the fair values of the derivatives are not included in earnings, but are included in OCI. These changes in fair value were subsequently reclassified into net earnings as a component of interest expense as the hedged interest payments were made on our variable rate debt. Effective July 2, 2019 , the Company terminated all interest rate swap agreements in anticipation of the securitization transaction and related retirement of our senior credit facility (see Note 7, Indebtedness ). The fair value of the interest rate swaps at the termination date was $23.6 million , which was required to be paid in full on July 8, 2019. As a result of the decision to extinguish the senior credit facility, forecasted cash flows associated with the variable-rate debt interest payments were no longer considered to be probable. Consequently, unrealized losses in other comprehensive income at the termination date were immediately reclassified to “Interest expense, net” in the accompanying consolidated statement of earnings. Financial position — The following derivative instruments were outstanding as of the end of each fiscal year ( in thousands ): Balance Sheet Location Fair Value 2019 2018 Derivatives designated as hedging instruments: Interest rate swaps Accrued liabilities $ — $ (26 ) Interest rate swaps Other long-term liabilities — (1,266 ) Interest rate swaps Other assets, net — 589 Total derivatives (Note 5) $ — $ (703 ) Financial performance — The following table summarizes the accumulated OCI activity related to our interest rate swap derivative instruments in each fiscal year ( in thousands ): Location in Income 2019 2018 2017 (Loss) gain recognized in OCI N/A $ (23,625 ) $ 18,769 $ 19,768 Loss reclassified from accumulated OCI into net earnings Interest expense, net $ 24,328 $ 3,455 $ 5,070 Amounts reclassified from accumulated OCI into interest expense represent payments made to the counterparty for the effective portions of the interest rate swaps. During the fiscal years presented, our interest rate swaps had no hedge ineffectiveness. |
Indebtedness
Indebtedness | 12 Months Ended |
Sep. 29, 2019 | |
Debt Disclosure [Abstract] | |
Indebtedness | INDEBTEDNESS The detail of our long-term debt at the end of each fiscal year is as follows ( in thousands ): 2019 2018 Class A-2-I Notes $ 575,000 $ — Class A-2-II Notes 275,000 — Class A-2-III Notes 450,000 — Revolving credit facility — 730,422 Term loans — 336,360 Capital lease obligations 3,594 4,403 Total debt 1,303,594 1,071,185 Less current maturities of long-term debt, net of $0 and $1,008 of debt issuance costs, respectively (774 ) (31,828 ) Less unamortized debt issuance costs (28,446 ) (1,430 ) Long-term debt $ 1,274,374 $ 1,037,927 Securitized financing transaction — On July 8, 2019, Jack in the Box Funding, LLC (the “Master Issuer”), a limited-purpose, bankruptcy-remote, wholly owned indirect subsidiary of the Company, completed its securitization transaction and issued $575.0 million of its Series 2019-1 3.982% Fixed Rate Senior Secured Notes, Class A-2-I (the “Class A-2-I Notes”), $275.0 million of its Series 2019-1 4.476% Fixed Rate Senior Secured Notes, Class A-2-II (the “Class A-2-II Notes”) and $450.0 million of its 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”), in an offering exempt from registration under the Securities Act of 1933, as amended. In connection with the issuance of the Class A-2 Notes, the Master Issuer also 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. The Class A-2 Notes and the Variable Funding Notes are referred to collectively as the “Notes.” The Notes were issued in a privately placed securitization transaction pursuant to which certain of the Company’s revenue-generating assets, consisting principally of franchise-related agreements, real estate assets, and intellectual property and license agreements for the use of intellectual property, are held by the Master Issuer and certain other limited-purpose, bankruptcy remote, wholly owned indirect subsidiaries of the Company that act as Guarantors (as defined below) of the Notes and that have pledged substantially all of their assets, excluding certain real estate assets and subject to certain limitations, to secure the Notes. 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 5.0 x. As of September 29, 2019, the Company’s actual leverage ratio was under 5.0 x; accordingly, no principal payment on the Class A-2 Notes was required. 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. The Class A-2 Notes are secured by the collateral described below under “Guarantees and Collateral.” Variable Funding Notes — The Variable Funding Notes were issued under the Indenture and allow for drawings 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 September 29, 2019, $45.6 million of letters of credit were outstanding against the Variable Funding Notes, which relate primarily to interest reserves required under the Indenture. The Variable Funding Notes were undrawn at September 29, 2019. Guarantees and collateral — Pursuant to the Guarantee and Collateral Agreement, dated July 8, 2019 (the “Guarantee and Collateral Agreement”), among the Guarantors, in favor of the trustee, the Guarantors guarantee the obligations of the Master Issuer under the Indenture and related documents and secure the guarantee by granting a security interest in substantially all of their assets. The Notes are secured by a security interest in substantially all of the assets of the Master Issuer and the Guarantors (collectively, the “Securitization Entities”). The assets of the Securitization Entities include most of the revenue-generating assets of the Company and its subsidiaries, which principally consist of franchise-related agreements, certain company-operated restaurants, intellectual property and license agreements for the use of intellectual property. Upon certain trigger events, mortgages will be required to be prepared and recorded on the real estate assets. Covenants and restrictions — 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. 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 September 29, 2019, the Master Issuer had restricted cash of $26.0 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 Notes. Deferred financing costs — The Company incurred costs of approximately $33.0 million in connection with the securitization transaction. The costs related to our Class A-2 Notes are presented as a reduction in “Long-term debt, net of current maturities” and are being amortized over the Anticipated Repayment Dates, utilizing the effective interest rate method. The costs related to our Variable Funding Notes are presented within “Other assets, net” and are being amortized over the Anticipated Repayment Date of August 2026 using the straight-line method. As of September 29, 2019, the effective interest rates, including the amortization of debt issuance costs, were 4.541% , 4.798% , and 5.196% for the Class A-2-I Notes, Class A-2-II, Notes and Class A-2-III Notes, respectively. Amended credit facility — On May 1, 2019, we entered into the Fifth Amendment to the Credit Agreement (the “Fifth Amendment”). The Fifth Amendment extended the maturity date of both our term loan and revolving credit facility from March 19, 2020 to March 19, 2021. Fees of $1.3 million paid to third parties in connection with the Fifth Amendment were capitalized as deferred loan costs during the third quarter. The proceeds from the issuance of the Class A-2 Notes, were used to repay the remaining principal outstanding on the term loans and revolving credit facility. As a result, a loss on early extinguishment of debt of $2.8 million was recorded in fiscal 2019 , primarily consisting of the write-off of unamortized deferred financing costs related to the Credit Agreement, and is reflected in “Interest expense, net” in the consolidated statement of earnings. Maturities of long-term debt — Assuming repayment by the Anticipated Repayment Dates and based on the leverage ratio as of September 29, 2019 , principal payments on our long-term debt outstanding at September 29, 2019 for each of the next five fiscal years and thereafter are as follows ( in thousands ): 2020 $ 774 2021 795 2022 821 2023 575,846 2024 327 Thereafter 725,031 $ 1,303,594 |
Leases
Leases | 12 Months Ended |
Sep. 29, 2019 | |
Leases [Abstract] | |
Leases | LEASES As lessee — We lease restaurants and other facilities, which generally have renewal clauses of 1 to 20 years exercisable at our option. In some instances, these leases have provisions for contingent rentals based upon a percentage of defined revenues. Many of our restaurant and other facility leases also have rent escalation clauses and require the payment of property taxes, insurance, and maintenance costs. We also lease certain restaurant and office equipment. Minimum rental obligations are accounted for on a straight-line basis over the term of the initial lease, plus lease option terms for certain locations. The components of rent expense were as follows in each fiscal year ( in thousands ): 2019 2018 2017 Minimum rentals $ 184,587 $ 184,106 $ 185,696 Contingent rentals 2,255 2,221 2,419 Total rent expense 186,842 186,327 188,115 Less rental expense on subleased properties (170,651 ) (162,640 ) (145,728 ) Net rent expense $ 16,191 $ 23,687 $ 42,387 The following table presents as of September 29, 2019 , future minimum lease payments under capital and operating leases, including leases recorded as lease obligations ( in thousands ): Fiscal Year Capital Operating 2020 $ 879 $ 193,313 2021 879 186,226 2022 879 145,794 2023 864 117,753 2024 396 87,420 Thereafter 40 363,505 Total minimum lease payments 3,937 $ 1,094,011 Less amount representing interest, 3.40% weighted-average interest rate (343 ) Present value of obligations under capital leases 3,594 Less current portion (774 ) Long-term capital lease obligations $ 2,820 Assets recorded under capital leases are included in property and equipment, and consisted of the following at each fiscal year-end ( in thousands ): 2019 2018 Buildings $ 1,342 $ 3,217 Equipment 5,538 5,519 Less accumulated amortization (3,904 ) (4,621 ) $ 2,976 $ 4,115 Amortization of assets under capital leases is included in depreciation and amortization expense in the consolidated statements of earnings. As lessor — We lease or sublease restaurants to certain franchisees and others under agreements that generally provide for the payment of percentage rentals in excess of stipulated minimum rentals, usually for a period up to 20 years. Most of our leases have rent escalation clauses and renewal clauses of 5 to 20 years. The following table summarizes rents received under these agreements in each fiscal year ( in thousands ): 2019 2018 2017 Total rental income (1) $ 277,623 $ 264,432 $ 237,004 Contingent rentals $ 38,506 $ 35,148 $ 33,168 ________________________________________________ (1) Includes contingent rentals. The minimum rents receivable expected to be received under these non-cancelable operating leases and subleases, including leases recorded as lease obligations relating to continuing and discontinuing operations, and excluding contingent rentals, as of September 29, 2019 are as follows ( in thousands ): Fiscal Year 2020 $ 239,219 2021 255,315 2022 231,394 2023 224,605 2024 199,442 Thereafter 1,215,811 Total minimum future rent receivable $ 2,365,786 Assets held for lease and included in property and equipment consisted of the following at each fiscal year-end ( in thousands ): 2019 2018 Land $ 91,130 $ 89,256 Buildings 817,400 824,964 Equipment 537 611 909,067 914,831 Less accumulated depreciation (632,197 ) (607,900 ) $ 276,870 $ 306,931 |
Impairment and Other Charges, N
Impairment and Other Charges, Net | 12 Months Ended |
Sep. 29, 2019 | |
Restructuring and Related Activities [Abstract] | |
Impairment and Other Charges, Net | IMPAIRMENT AND OTHER CHARGES, NET Impairment and other charges, net, in the accompanying consolidated statements of earnings is comprised of the following in each fiscal year ( in thousands ): 2019 2018 2017 Restructuring costs $ 8,455 $ 10,647 $ 3,631 Costs of closed restaurants and other 8,628 4,803 5,736 (Gains) losses on disposition of property and equipment, net (6,244 ) 1,627 2,891 Accelerated depreciation 1,616 1,130 911 Operating restaurant impairment charges — 211 — $ 12,455 $ 18,418 $ 13,169 Restructuring costs — Restructuring charges include costs resulting from the exploration of strategic alternatives (the “Strategic Alternatives Evaluation”) in 2019 , and a plan that management initiated to reduce our general and administrative costs. Restructuring charges in 2018 also include costs related to the evaluation of potential alternatives with respect to the Qdoba brand (the “Qdoba Evaluation”), which resulted in the Qdoba Sale. Refer to Note 10, Discontinued Operations, for information regarding the Qdoba Sale. The following is a summary of the costs incurred in connection with these activities during each fiscal year ( in thousands ): 2019 2018 2017 Employee severance and related costs $ 7,169 $ 7,845 $ 724 Strategic Alternatives Evaluation (1) 1,286 — — Qdoba Evaluation (2) — 2,211 2,592 Other — 591 315 $ 8,455 $ 10,647 $ 3,631 ___________________________________________ (1) Strategic Alternative Evaluation costs are primarily related to third party advisory services. (2) Qdoba Evaluation consulting costs are primarily related to third party advisory services and retention compensation. We currently expect to recognize severance and related costs of approximately $1.3 million in fiscal 2020 related to positions that have been identified for elimination. At this time, we do not expect any additional charges to be incurred related to additional positions that may be identified for elimination or our other restructuring activities. Total accrued severance costs related to our restructuring activities are included in “Accrued liabilities” and changed as follows during fiscal 2019 (in thousands) : Balance as of September 30, 2018 $ 5,309 Costs incurred 7,731 Accruals released (662 ) Cash payments (10,278 ) Balance as of September 29, 2019 $ 2,100 Costs of closed restaurants and other — Costs of closed restaurants in all years include future lease commitment charges and expected ancillary costs, net of anticipated sublease rentals, impairment and other costs associated with closed restaurants, and canceled project costs. During the fourth quarter of 2019 , the Company recorded a charge of $3.5 million related to the write-off of software development costs as a result of management’s decision to discontinue a long-term technology project. Accrued restaurant closing costs included in “Accrued liabilities” and “Other long-term liabilities” changed as follows during fiscal 2019 ( in thousands ): Balance as of September 30, 2018 $ 3,534 Adjustments (1) 590 Interest expense 1,292 Cash payments (3,591 ) Balance as of September 29, 2019 (2) (3) $ 1,825 ___________________________________________ (1) Adjustments relate primarily to revisions of certain sublease and cost assumptions. Our estimates related to our future lease obligations, primarily the sublease income we anticipate, are subject to a high degree of judgment and may differ from actual sublease income due to changes in economic conditions, desirability of the sites, and other factors. (2) The weighted-average remaining lease term related to these commitments is approximately four years . (3) This balance excludes $1.5 million of restaurant closing costs that are included in “Accrued liabilities” and “Other long-term liabilities”, which were initially recorded as losses on the sale of company-operated restaurants to franchisees in prior years. Accelerated depreciation — When a long-lived asset will be replaced or otherwise disposed of prior to the end of its estimated useful life, the useful life of the asset is adjusted based on the estimated disposal date and accelerated depreciation is recognized. In fiscal 2019 , accelerated depreciation primarily related to information technology and facility improvements. In fiscal 2018, accelerated depreciation was primarily related to the replacement of computer hardware, restaurant remodels, and exterior enhancements at our company-operated restaurants. In fiscal 2017, accelerated depreciation primarily related to restaurant remodels and the anticipated closure of three company-owned restaurants. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Sep. 29, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | DISCONTINUED OPERATIONS Qdoba — On December 19, 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 “Shares”). The Buyer completed the acquisition of Qdoba on March 21, 2018 (the “Qdoba Sale”) for an aggregate purchase price of approximately $298.5 million . We also entered into a Transition Services Agreement with the Buyer pursuant to which the Buyer received certain services (the “Services”) to enable it to operate the Qdoba business after the closing of the Qdoba Sale. The Services included information technology, finance and accounting, human resources, supply chain and other corporate support services. Under the Agreement, the Services were provided at cost for a period of up to 12 months, with two 3 -month extensions available for certain services. As of September 21, 2019, we are no longer providing transition services to Qdoba. In fiscal 2019 and 2018 we recorded $7.0 million and $7.9 million , respectively, related to the Services as a reduction of “Selling, general, and administrative expenses” in the consolidated statements of earnings. Further, in 2018, we entered into an Employee Agreement with the Buyer pursuant to which we continued to employ all Qdoba employees who work for the Buyer (the “Qdoba Employees”) from the date of closing of the Qdoba Sale through December 31, 2018. During the term of the Employee Agreement, we paid all wages and benefits of the Qdoba Employees and received reimbursement of these costs from the Buyer. From October 1, 2018 to December 31, 2018, we paid $35.4 million of Qdoba wages and benefits pursuant to the Employee Agreement. As the Qdoba Sale represented a strategic shift that had a major effect on our operations and financial results, in accordance with the provisions of FASB authoritative guidance on the presentation of financial statements, Qdoba results are classified as discontinued operations in our consolidated statements of earnings and our consolidated statements of cash flows for all periods presented. Income taxes — 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 . The following table summarizes the Qdoba results for each period ( in thousands, except per share data ): 2019 2018 2017 Company restaurant sales $ — $ 192,620 $ 436,558 Franchise revenues — 9,337 20,065 Company restaurant costs (excluding depreciation and amortization) — (166,122 ) (357,370 ) Franchise costs (excluding depreciation and amortization) — (2,338 ) (4,993 ) Selling, general and administrative expenses 174 (19,286 ) (36,706 ) Depreciation and amortization — (5,012 ) (21,500 ) Impairment and other charges, net (262 ) (2,305 ) (15,061 ) Interest expense, net — (4,787 ) (9,025 ) Operating (loss) earnings from discontinued operations before income taxes (88 ) 2,107 11,968 (Loss) gain on Qdoba Sale (85 ) 30,717 — (Loss) earnings from discontinued operations before income taxes (173 ) 32,824 11,968 Income tax benefit (expense) 2,863 (15,726 ) (4,518 ) Earnings from discontinued operations, net of income taxes $ 2,690 $ 17,098 $ 7,450 Net earnings per share from discontinued operations: Basic $ 0.10 $ 0.60 $ 0.24 Diluted $ 0.10 $ 0.59 $ 0.24 Selling, general and administrative expenses presented in the table above include corporate costs directly in support of Qdoba operations. All other corporate costs were classified in results of continuing operations. Our credit facility required us to make a mandatory prepayment (“Qdoba Prepayment”) on our term loan upon the closing of the Qdoba Sale, which was $260.0 million . Interest expense associated with our credit facility was allocated to discontinued operations based on our estimate of the mandatory prepayment that was made upon closing of the Qdoba Sale. Lease guarantees — While all operating leases held in the name of Qdoba were part of the Qdoba Sale, some of the leases remain guaranteed by the Company pursuant to one or more written guarantees (the “Guarantees”). In the event Qdoba fails to meet its payment and performance obligations under such guaranteed leases, we may be required to make rent and other payments to the landlord under the requirements of the Guarantees. Should we, as guarantor of the lease obligations, be required to make any lease payments due for the remaining term of the subject lease(s) subsequent to March 21, 2018, the maximum amount we may be required to pay is approximately $32.1 million as of September 29, 2019 . The lease terms extend for a maximum of approximately 16 more years as of September 29, 2019 , 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 continues to meet its obligations under these leases and there have not been 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 of September 29, 2019 as the likelihood of Qdoba defaulting on the assigned agreements was deemed to be less than probable. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income taxes consist of the following in each fiscal year ( in thousands ): 2019 2018 2017 Current: Federal $ 14,683 $ 51,454 $ 79,038 State 5,242 4,922 12,368 19,925 56,376 91,406 Deferred: Federal 3,750 23,462 (13,176 ) State 350 1,890 (2,898 ) 4,100 25,352 (16,074 ) Income tax expense from continuing operations $ 24,025 $ 81,728 $ 75,332 Income tax expense (benefit) from discontinued operations $ (2,863 ) $ 15,700 $ (4,119 ) A reconciliation of the federal statutory income tax rate to our effective tax rate for continuing operations is as follows: 2019 2018 2017 Income tax expense at federal statutory rate 21.0 % 24.5 % 35.0 % State income taxes, net of federal tax benefit 5.3 % 4.7 % 3.8 % One-time, non-cash impact of the Tax Act — % 17.5 % — % Stock compensation excess tax benefit (0.1 )% (1.1 )% — % Benefit of jobs tax credits, net of valuation allowance (0.3 )% (0.4 )% (0.4 )% Release of federal tax liability (0.6 )% — % — % Adjustment to state tax provision (0.9 )% — % — % Benefit related to COLIs (1.0 )% (0.4 )% (1.1 )% Termination of interest rate swaps (2.6 )% — % — % Other, net — % (0.9 )% (0.4 )% 20.8 % 43.9 % 36.9 % The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at each fiscal year-end are presented below ( in thousands ): 2019 2018 Deferred tax assets: Accrued defined benefit pension and postretirement benefits $ 46,918 $ 34,776 Deferred income 13,803 1,535 Impairment 9,981 11,388 Accrued insurance 7,133 8,994 Share-based compensation 5,415 4,936 Tax loss and tax credit carryforwards 5,327 7,458 Lease commitments related to closed or refranchised locations 3,786 4,696 Deferred interest deduction 3,188 — Other reserves and allowances 2,965 851 Accrued incentive compensation 2,617 2,055 Accrued compensation expense 1,092 2,034 Interest rate swaps — 181 Other, net 868 2,206 Total gross deferred tax assets 103,093 81,110 Valuation allowance (2,485 ) (3,554 ) Total net deferred tax assets 100,608 77,556 Deferred tax liabilities: Intangible assets (10,520 ) (10,492 ) Leasing transactions (3,822 ) (2,790 ) Property and equipment, principally due to differences in depreciation (128 ) (1,855 ) Other (574 ) (279 ) Total gross deferred tax liabilities (15,044 ) (15,416 ) Net deferred tax assets $ 85,564 $ 62,140 The Tax Act was enacted into law on December 22, 2017. The Tax Act included a reduction in the U.S. federal statutory corporate income tax rate (the “Tax Rate”) from 35% to 21% and introduced new limitations on certain business deductions. As a result, for the fiscal year ended September 30, 2018, we recognized a year-to-date, non-cash $32.5 million tax provision expense impact primarily related to the re-measurement of our deferred tax assets and liabilities due to the reduced Tax Rate. Deferred tax assets as of September 29, 2019 include state net operating loss carry-forwards of approximately $27.4 million expiring at various times between 2020 and 2038 . At September 29, 2019 , we recorded a valuation allowance of $2.5 million related to losses and state tax credits, which decreased from the $3.6 million at September 30, 2018 primarily due to the release of the valuation allowance on prior year net operating losses. We believe that it is more likely than not that these net operating loss and credit carry-forwards will not be realized and that all other deferred tax assets will be realized through future taxable income or alternative tax strategies. The major jurisdictions in which the Company files income tax returns include the United States and states in which we operate that impose an income tax. The federal statutes of limitations have not expired for fiscal years 2016 and forward. The statutes of limitations for California and Texas, which constitute the Company’s major state tax jurisdictions, have not expired for fiscal years 2015 and forward. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Sep. 29, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Plans | RETIREMENT PLANS We sponsor programs that provide retirement benefits to our employees. These programs include defined contribution plans, defined benefit pension plans, and postretirement healthcare plans. Defined contribution plans — We maintain a qualified savings plan pursuant to Section 401(k) of the Internal Revenue Code (“IRC”). The plan allows all employees who have satisfied the service requirements and reached age 21 to defer a percentage of their pay on a pre-tax basis. Beginning January 1, 2016, we match 100% of the first 4% of compensation deferred by the participant. A participant’s right to Company contributions vest immediately. Our contributions under this plan were $1.7 million in fiscal 2019 , and $2.2 million and $1.9 million in fiscal 2018 and 2017 , respectively. We also maintain an unfunded, non-qualified deferred compensation plan for key executives and other members of management whose compensation deferrals or company matching contributions to the qualified savings plan are limited due to IRC rules. Effective January 1, 2016, this non-qualified plan was amended to replace the company matching contribution with an annual restoration match that is intended to “restore” up to the full match for participants whose elective deferrals (and related company matching contributions) to the qualified savings plan were limited due to IRC rules. A participant’s right to the Company restoration match vests immediately. This plan allows participants to defer up to 50% of their salary and 85% of their bonus, on a pre-tax basis. In addition, to compensate executives who were hired or promoted into an eligible position prior to May 7, 2015 and who may no longer participate in our supplemental defined benefit pension plan, we also contribute a supplemental amount equal to 4% of an eligible employee’s salary and bonus for a period of 10 years in such eligible position. Our contributions under the non-qualified deferred compensation plan were $0.2 million in fiscal 2019 , and $0.2 million , and $0.5 million in fiscal 2018 and 2017 , respectively. Defined benefit pension plans — We sponsor two defined benefit pension plans, a “Qualified Plan” covering substantially all full-time employees hired prior to January 1, 2011, and an unfunded supplemental executive retirement plan (“SERP”) that provides certain employees additional pension benefits and was closed to new participants effective January 1, 2007 . In fiscal 2011, the Board of Directors approved changes to our Qualified Plan whereby participants will no longer accrue benefits effective December 31, 2015 . Benefits under both plans are based on the employees’ 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 an immediate lump sum or monthly annuity payment of their accrued benefit. The offering period began September 16, 2019 and ended on or around October 31, 2019. The participants that elect a lump sum benefit under the program will be paid in December 2019. The estimated impact of the bulk lump sum offering was taken into consideration in connection with the Qualified Plan’s fiscal year-end pension benefit obligation (“PBO”) measurement. The Company assumed a 40% participant acceptance rate which resulted in a $25.6 million reduction in the Company’s PBO as of September 29, 2019. In accordance with the FASB authoritative guidance for pension plans, the expected settlement loss related to the offering will be recorded in the period the lump sum payments are made (the first quarter of fiscal 2020). Postretirement healthcare plans — We also sponsor two healthcare plans, closed to new participants, that provide postretirement medical benefits to certain employees who have met minimum age and service requirements. The plans are contributory, with retiree contributions adjusted annually, and contain other cost-sharing features such as deductibles and coinsurance. Obligations and funded status — The following table provides a reconciliation of the changes in benefit obligations, plan assets, and funded status of our retirement plans for each fiscal year ( in thousands ): Qualified Plan SERP Postretirement Health Plans 2019 2018 2019 2018 2019 2018 Change in benefit obligation: Obligation at beginning of year $ 457,109 $ 493,767 $ 73,067 $ 78,401 $ 23,461 $ 25,660 Service cost — 1,743 — 490 — — Interest cost 19,825 19,463 3,080 2,894 997 955 Participant contributions — — — — 112 115 Actuarial loss (gain) 61,029 (37,872 ) 8,771 (4,686 ) 2,343 (1,720 ) Benefits paid (12,224 ) (10,949 ) (5,025 ) (4,032 ) (1,354 ) (1,563 ) Settlements (3,808 ) (9,043 ) — — — — Other — — — — 73 14 Obligation at end of year $ 521,931 $ 457,109 $ 79,893 $ 73,067 $ 25,632 $ 23,461 Change in plan assets: Fair value at beginning of year $ 456,127 $ 460,709 $ — $ — $ — $ — Actual return on plan assets 36,099 15,410 — — — — Participant contributions — — — — 112 115 Employer contributions — — 5,025 4,032 1,169 1,435 Benefits paid (12,224 ) (10,949 ) (5,025 ) (4,032 ) (1,354 ) (1,563 ) Settlements (3,808 ) (9,043 ) — — — — Other — — — — 73 13 Fair value at end of year $ 476,194 $ 456,127 $ — $ — $ — $ — Funded status at end of year $ (45,737 ) $ (982 ) $ (79,893 ) $ (73,067 ) $ (25,632 ) $ (23,461 ) Amounts recognized on the balance sheet: Current liabilities $ — $ — $ (5,371 ) $ (5,037 ) $ (1,379 ) $ (1,353 ) Noncurrent liabilities (45,737 ) (982 ) (74,522 ) (68,030 ) (24,253 ) (22,108 ) Total liability recognized $ (45,737 ) $ (982 ) $ (79,893 ) $ (73,067 ) $ (25,632 ) $ (23,461 ) Amounts in AOCI not yet reflected in net periodic benefit cost: Unamortized actuarial loss (gain), net $ 187,705 $ 139,195 $ 34,803 $ 27,239 $ 235 $ (2,267 ) Unamortized prior service cost — — 157 271 — — Total $ 187,705 $ 139,195 $ 34,960 $ 27,510 $ 235 $ (2,267 ) Other changes in plan assets and benefit obligations recognized in OCI: Net actuarial loss (gain) $ 51,263 $ (25,072 ) $ 8,771 $ (4,686 ) $ 2,343 $ (1,720 ) Amortization of actuarial (loss) gain (2,754 ) (3,331 ) (1,207 ) (1,538 ) 159 27 Amortization of prior service cost — — (115 ) (146 ) — — Total recognized in OCI 48,509 (28,403 ) 7,449 (6,370 ) 2,502 (1,693 ) Net periodic benefit (credit) cost and other losses (3,755 ) (3,673 ) 4,402 5,068 838 928 Total recognized in comprehensive income $ 44,754 $ (32,076 ) $ 11,851 $ (1,302 ) $ 3,340 $ (765 ) Amounts in AOCI expected to be amortized in fiscal 2020 net periodic benefit cost: Net actuarial loss $ 4,125 $ 1,652 $ 17 Prior service cost — 84 — Total $ 4,125 $ 1,736 $ 17 Additional year-end pension plan information — The PBO is the actuarial present value of benefits attributable to employee service rendered to date, including the effects of estimated future pay increases. The accumulated benefit obligation (“ABO”) also reflects the actuarial present value of benefits attributable to employee service rendered to date but does not include the effects of estimated future pay increases. Therefore, the ABO as compared to plan assets is an indication of the assets currently available to fund vested and nonvested benefits accrued through the end of the fiscal year. The funded status is measured as the difference between the fair value of a plan’s assets and its PBO. As of September 29, 2019 and September 30, 2018 , the Qualified Plan’s ABO exceeded the fair value of its plan assets. The SERP is an unfunded plan and, as such, had no plan assets as of September 29, 2019 and September 30, 2018 . The following sets forth the PBO, ABO, and fair value of plan assets of our pension plans as of the measurement date in each fiscal year ( in thousands ): 2019 2018 Qualified Plan: Projected benefit obligation $ 521,931 $ 457,109 Accumulated benefit obligation $ 521,931 $ 457,109 Fair value of plan assets $ 476,194 $ 456,127 SERP: Projected benefit obligation $ 79,893 $ 73,067 Accumulated benefit obligation $ 79,893 $ 73,067 Fair value of plan assets $ — $ — Net periodic benefit cost — The components of the fiscal year net periodic benefit cost were as follows ( in thousands ): 2019 2018 2017 Qualified Plan: Interest cost $ 19,825 $ 19,463 $ 19,889 Expected return on plan assets (26,334 ) (26,467 ) (26,811 ) Actuarial loss 2,754 3,331 4,455 Net periodic benefit credit $ (3,755 ) $ (3,673 ) $ (2,467 ) SERP: Service cost $ — $ 490 $ 855 Interest cost 3,080 2,894 2,850 Actuarial loss 1,207 1,538 1,659 Amortization of unrecognized prior service cost 115 146 153 Net periodic benefit cost $ 4,402 $ 5,068 $ 5,517 Postretirement health plans: Interest cost $ 997 $ 955 $ 1,003 Actuarial (gain) loss (159 ) (27 ) 162 Net periodic benefit cost $ 838 $ 928 $ 1,165 Changes in presentation —As discussed in Note 1, Nature of Operations and Summary of Significant Accounting Policies , we adopted ASU 2017-07 during the first quarter of 2019 using the retrospective method, which changed the financial statement presentation of service costs and the other components of net periodic benefit cost. The service cost component continues to be included in operating income; however, the other components are now presented in a separate line below earnings from operations captioned “Other pension and post-retirement expenses, net” in our consolidated statements of earnings. Further, in connection with the adoption, plan administrative expenses historically presented as a component of service cost are now presented as a component of expected return on plan assets. The prior year components of net periodic benefit costs and assumptions on the long-term rate of return on assets have been recast to conform to current year presentation. Prior service costs are amortized on a straight-line basis from date of participation to full eligibility. Unrecognized gains or losses are amortized using the “corridor approach” under which the net gain or loss in excess of 10% of the greater of the PBO or the market-related value of the assets, if applicable, is amortized. For our Qualified Plan, actuarial losses are amortized over the average future expected lifetime of all participants expected to receive benefits. For our SERP, actuarial losses are amortized over the expected remaining future lifetime for inactive participants, and for our postretirement health plans, actuarial losses are amortized over the expected remaining future lifetime of inactive participants expected to receive benefits. Assumptions — We determine our actuarial assumptions on an annual basis. In determining the present values of our benefit obligations and net periodic benefit costs as of and for the fiscal years ended September 29, 2019 , September 30, 2018 , and October 1, 2017 , we used the following weighted-average assumptions: 2019 2018 2017 Assumptions used to determine benefit obligations (1): Qualified Plan: Discount rate 3.36% 4.40% 3.99% SERP: Discount rate 3.24% 4.37% 3.80% Rate of future pay increases 3.50% 3.50% 3.50% Postretirement health plans: Discount rate 3.24% 4.38% 3.82% Assumptions used to determine net periodic benefit cost (2): Qualified Plan: Discount rate 4.40% 3.99% 3.85% Long-term rate of return on assets 5.85% 5.80% 6.19% SERP: Discount rate 4.37% 3.80% 3.60% Rate of future pay increases 3.50% 3.50% 3.50% Postretirement health plans: Discount rate 4.38% 3.82% 3.64% ____________________________ (1) Determined as of end of year. (2) Determined as of beginning of year. The assumed discount rates were determined by considering the average of pension yield curves constructed of a population of high-quality bonds with a Moody’s or Standard and Poor’s rating of “AA” or better whose cash flow from coupons and maturities match the year-by-year projected benefit payments from the plans. As benefit payments typically extend beyond the date of the longest maturing bond, cash flows beyond 30 years were discounted back to the 30th year and then matched like any other payment. The assumed expected long-term rate of return on assets is the weighted-average rate of earnings expected on the funds invested or to be invested to provide for the pension obligations. The long-term rate of return on assets was determined taking into consideration our projected asset allocation and economic forecasts prepared with the assistance of our actuarial consultants. The assumed discount rate and expected long-term rate of return on assets have a significant effect on amounts reported for our pension and postretirement plans. A quarter percentage point decrease in the discount rate and long-term rate of return used would have decreased fiscal 2019 earnings before income taxes by $0.5 million and $1.1 million , respectively. The assumed average rate of compensation increase is the average annual compensation increase expected over the remaining employment periods for the participating employees. For our Qualified Plan, no future pay increases were included in our benefit obligation assumptions as, effective December 31, 2015, our plan participants no longer accrue benefits. For measurement purposes, the weighted-average assumed health care cost trend rates for our postretirement health plans were as follows for each fiscal year: 2019 2018 2017 Healthcare cost trend rate for next year: Participants under age 65 7.00% 7.25% 7.50% Participants age 65 or older 6.50% 6.75% 7.00% Rate to which the cost trend rate is assumed to decline: Participants under age 65 4.50% 4.50% 4.50% Participants age 65 or older 4.50% 4.50% 4.50% Year the rate reaches the ultimate trend rate: Participants under age 65 2030 2030 2030 Participants age 65 or older 2028 2028 2028 The assumed healthcare cost trend rate represents our estimate of the annual rates of change in the costs of the healthcare benefits currently provided by our postretirement plans. The healthcare cost trend rate implicitly considers estimates of healthcare inflation, changes in healthcare utilization and delivery patterns, technological advances and changes in the health status of the plan participants. The healthcare cost trend rate assumption has a significant effect on the amounts reported. For example, a 1.0% change in the assumed healthcare cost trend rate would have the following effect on the fiscal 2019 net periodic benefit cost and end of year PBO ( in thousands ): 1% Point Increase 1% Point Decrease Total interest and service cost $ 106 $ (92 ) Postretirement benefit obligation $ 2,737 $ (2,365 ) Plan assets — Our investment philosophy is to (1) protect the corpus of the fund; (2) establish investment objectives that will allow the market value to exceed the present value of the vested and unvested liabilities over time; while (3) obtaining adequate investment returns to protect benefits promised to the participants and their beneficiaries. Our asset allocation strategy utilizes multiple investment managers in order to maximize the plan’s return while minimizing risk. We regularly monitor our asset allocation, and senior financial management and the Finance Committee of the Board of Directors review performance results quarterly. We continually review our target asset allocation for our Qualified Plan and when changes are made, we reallocate our plan assets over a period of time, as deemed appropriate by senior financial management, to achieve our target asset allocation. Our plan asset allocation at the end of fiscal 2019 and target allocations were as follows: 2019 Target Minimum Maximum Cash & cash equivalents 2% —% —% —% Domestic Equities 21% 23% 12% 32% International equity 20% 22% 12% 32% Core fixed funds 37% 32% 27% 37% High yield 2% 4% —% 8% Alternative investments 9% 8% —% 16% Real estate 9% 7% 2% 12% Real return bonds —% 4% —% 8% 100% 100% The Company measures its defined benefit plan assets and obligations as of the month-end date closest to its fiscal year end, which is a practical expedient under FASB authoritative guidance. The fair values of the Qualified Plan’s assets by asset category are as follows ( in thousands ): Total Quoted Prices in Active Markets for Identical (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Items Measured at Fair Value at September 30, 2019: Asset Category: Cash and cash equivalents (1) $ 10,110 $ — $ 10,110 $ — Equity: U.S (2) 99,124 99,124 — — International (3),(4) 94,953 47,262 — — Fixed income: Investment grade (5) 177,500 — 177,500 — High yield (6) 9,256 9,256 — — Alternatives (4),(7) 42,052 — — — Real estate (4),(8) 43,199 — — — $ 476,194 $ 155,642 $ 187,610 $ — Items Measured at Fair Value at September 30, 2018: Asset Category: Cash and cash equivalents (1) $ 2,901 $ — $ 2,901 $ — Equity: U.S (2) 104,424 104,424 — — International (3),(4) 100,340 49,857 — — Fixed income: Investment grade (5) 160,106 — 160,106 — High yield (6) 14,384 14,384 — — Alternatives (4),(7) 35,964 — — — Real estate (4),(8) 38,008 — — — $ 456,127 $ 168,665 $ 163,007 $ — _________________________ (1) Cash and cash equivalents are comprised of commercial paper, short-term bills and notes, and short-term investment funds, which are valued at quoted prices in active markets for similar securities. (2) U.S. equity securities are comprised of investments in common stock of U.S. companies for total return purposes. These investments are valued by the trustee at closing prices from national exchanges on the valuation date. (3) International equity securities are comprised of investments in common stock of companies located outside of the U.S for total return purposes. These investments are valued by the trustee at closing prices from national exchanges on the valuation date, or the values are adjusted as a result of market movements following the close of local trading using inputs to models that are observable either directly or indirectly. The portion of these investments that are measured at fair value using the net asset value per share practical expedient (see note 4 below) can be redeemed on a monthly basis. (4) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. (5) Investment grade fixed income consists of debt obligations either issued by the US government or have a rating of BBB- / Baa or higher assigned by a major credit rating agency. These investments are valued based on unadjusted quoted market prices (Level 1), or based on quoted prices in inactive markets, or whose values are based on models, but the inputs to those models are observable either directly or indirectly (Level 2). (6) High yield fixed income consists primarily of debt obligations that have a rating of below BBB- / Baa or lower assigned by a major credit rating agency. These investments are valued based on unadjusted quoted market prices. (7) Alternative investments consist primarily of an investment in asset classes other than stocks, bonds, and cash. Alternative investments can include commodities, hedge funds, private equity, managed futures, and derivatives. These investments are valued based on unadjusted quoted market prices and can be redeemed on a bi-monthly basis. (8) Real estate is investments in a real estate collective trust for purposes of total return. These investments are valued based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These investments can be redeemed on a quarterly basis. Future cash flows — Our policy is to fund our plans at or above the minimum required by law. As of the date of our last actuarial funding valuation, there was no minimum requirement. We do not anticipate making any contributions to our Qualified Plan in fiscal 2020 . Contributions expected to be paid in the next fiscal year, the projected benefit payments for each of the next five fiscal years, and the total aggregate amount for the subsequent five fiscal years are as follows ( in thousands ): Defined Benefit Pension Plans Postretirement Health Plans Estimated net contributions during fiscal 2020 $ 5,371 $ 1,401 Estimated future year benefit payments during fiscal years: 2020 $ 123,471 $ 1,401 2021 $ 18,371 $ 1,431 2022 $ 18,681 $ 1,476 2023 $ 19,135 $ 1,574 2024 $ 19,690 $ 1,607 2025-2029 $ 109,169 $ 8,242 We will continue to evaluate contributions to our Qualified Plan based on changes in pension assets as a result of asset performance in the current market and economic environment. Expected benefit payments are based on the same assumptions used to measure our benefit obligations at September 29, 2019 and include estimated future employee service, if applicable. |
Share-Based Employee Compensati
Share-Based Employee Compensation | 12 Months Ended |
Sep. 29, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Share-Based Employee Compensation | SHARE-BASED EMPLOYEE COMPENSATION Stock incentive plans — We offer share-based compensation plans to attract, retain, and motivate key officers, employees, and non-employee directors to work toward the financial success of the Company. Our stock incentive plans are administered by the Compensation Committee of the Board of Directors and have been approved by the stockholders of the Company. The terms and conditions of our share-based awards are determined by the Compensation Committee for each award date and may include provisions for the exercise price, expirations, vesting, restriction on sales, and forfeitures, as applicable. We issue new shares to satisfy stock issuances under our stock incentive plans. Our Amended and Restated 2004 Stock Incentive Plan authorizes the issuance of up to 11,600,000 common shares in connection with the granting of stock options, stock appreciation rights, restricted stock purchase rights, restricted stock bonuses, restricted stock units, or performance units to key employees, directors, and other designated employees. There were 1,677,983 shares of common stock available for future issuance under this plan as of September 29, 2019 . We also maintain a deferred compensation plan for non-management directors under which those who are eligible to receive fees or retainers may choose to defer receipt of their compensation. The deferred amounts are converted to stock equivalents. The plan requires settlement in shares of our common stock based on the number of stock equivalents and dividend equivalents at the time of a participant’s separation from the Board of Directors. This plan provides for the issuance of up to 350,000 shares of common stock in connection with the crediting of stock equivalents. There were 143,122 shares of common stock available for future issuance under this plan as of September 29, 2019 . Compensation expense — The components of share-based compensation expense, included within “Selling, general, and administrative expenses” in our consolidated statement of earnings, in each fiscal year are as follows ( in thousands ): 2019 2018 2017 Nonvested stock units $ 5,458 $ 5,737 $ 5,873 Stock options 936 1,790 1,826 Performance share awards 1,417 1,236 2,580 Nonvested restricted stock awards — 33 88 Non-management directors’ deferred compensation 263 350 270 Total share-based compensation expense $ 8,074 $ 9,146 $ 10,637 Nonvested restricted stock units — Nonvested restricted stock units (“RSUs”) are generally issued to executives, non-management directors and certain other members of management and employees. Prior to fiscal 2011 , RSUs were granted to certain Executive and Senior Vice Presidents pursuant to our share ownership guidelines. These awards vest upon retirement or termination based on years of service. There were 60,272 of such RSUs outstanding as of September 29, 2019 . Beginning fiscal 2011 , we replaced the ownership share grants with time-vested RSUs for certain Vice Presidents and Officers that vest ratably over four to five years and have a 50% or 100% holding requirement on settled shares, which must be held until termination. There were 146,268 of such RSUs outstanding as of September 29, 2019 . RSUs issued to non-management directors and certain other employees vest 12 months from the date of grant, or upon termination of board service if the director or employee elects to defer receipt, and totaled 69,411 units outstanding as of September 29, 2019 . RSUs issued to certain other employees either cliff vest or vest ratably over three years and totaled 35,864 units outstanding as of September 29, 2019 . These awards are amortized to compensation expense over the estimated vesting period based upon the fair value of our common stock on the award date discounted by the present value of the expected dividend stream over the vesting period. The following is a summary of RSU activity for fiscal 2019 : Shares Weighted- Average Grant Date Fair Value RSUs outstanding at September 30, 2018 288,098 $ 64.57 Granted 93,686 $ 86.08 Released (55,642 ) $ 84.23 Forfeited (14,297 ) $ 94.00 RSUs outstanding at September 29, 2019 311,845 $ 66.18 As of September 29, 2019 , there was approximately $7.4 million of total unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted-average period of 2.2 years . The weighted-average grant date fair value of awards granted was $86.08 , $94.93 , and $102.42 in fiscal years 2019 , 2018 , and 2017 , respectively. In fiscal years 2019 , 2018 , and 2017 , the total fair value of RSUs that vested and were released was $4.7 million , $4.4 million , and $4.4 million , respectively. Stock options — Option grants have contractual terms of seven years and employee options vest over a three -year period. Options may vest sooner upon retirement from the Company for employees meeting certain age and years of service thresholds. All option grants provide for an option exercise price equal to the closing market value of the common stock on the date of grant. The following is a summary of stock option activity for fiscal 2019 : Shares Weighted- Weighted- Aggregate Intrinsic Value (in thousands) Options outstanding at September 30, 2018 287,618 $ 87.61 Granted — N/A Exercised (20,074 ) $ 61.28 Forfeited (303 ) $ 90.06 Expired (683 ) $ 104.95 Options outstanding at September 29, 2019 266,558 $ 89.54 4.25 $ 1,334 Options exercisable at September 29, 2019 176,179 $ 87.56 3.80 $ 1,307 Options exercisable and expected to vest at September 29, 2019 266,558 $ 89.54 4.25 $ 1,334 The aggregate intrinsic value in the table above is the amount by which the current market price of our stock on September 29, 2019 exceeds the weighted-average exercise price. We use a valuation model to determine the fair value of options granted that requires the input of highly subjective assumptions, including the expected volatility of the stock price. The following table presents the weighted-average assumptions used for stock option grants in each fiscal year, along with the related weighted-average grant date fair value: 2019 2018 2017 Risk-free interest rate N/A 2.4% 1.4% Expected dividends yield N/A 1.8% 1.5% Expected stock price volatility N/A 28.8% 29.0% Expected life of options (in years) N/A 3.40 3.50 Weighted-average grant date fair value N/A $18.49 $20.92 The risk-free interest rate was determined by a yield curve of risk-free rates based on published U.S. Treasury spot rates in effect at the time of grant and has a term equal to the expected life of the related options. The dividend yield assumption is based on the Company’s history and expectations of dividend payouts at the grant date. The expected stock price volatility in all years represents the Company’s historical volatility. The expected life of the options represents the period of time the options are expected to be outstanding and is based on historical trends. As of September 29, 2019 , there was approximately $0.6 million of total unrecognized compensation cost related to stock options grants that is expected to be recognized over a weighted-average period of 1 year . The total intrinsic value of stock options exercised was $0.5 million , $2.3 million , and $6.9 million in fiscal years 2019 , 2018 , and 2017 , respectively. Performance share awards — Performance share awards, granted in the form of stock units, represent a right to receive a certain number of shares of common stock based on the achievement of corporate performance goals and continued employment during the vesting period. Performance share awards issued to executives vest at the end of a three -year period and vested amounts may range from 0% to a maximum of 150% of targeted amounts depending on the achievement of performance measures at the end of a three -year period. If the awardee ceases to be employed by the Company prior to the last day of the performance period due to retirement, disability, or death, the performance share awards become vested pro-rata based on the number of full accounting periods the awardee was continuously employed by the Company. The expected cost of the shares is based on the fair value of our stock on the date of grant and is reflected over the vesting period with a reduction for estimated forfeitures. These awards may be settled in cash or shares of common stock at the election of the Company on the date of grant. It is our intent to settle these awards with shares of common stock. The following is a summary of performance share award activity for fiscal 2019 : Shares Weighted- Average Grant Date Fair Value Performance share awards outstanding at September 30, 2018 52,479 $ 83.21 Granted 45,113 $ 84.60 Issued (18,695 ) $ 83.56 Forfeited (687 ) $ 91.91 Performance adjustments (2,720 ) $ 97.51 Performance share awards outstanding at September 29, 2019 75,490 $ 83.40 As of September 29, 2019 , there was approximately $2.0 million of total unrecognized compensation cost related to performance share awards, which is expected to be recognized over a weighted-average period of 1.8 years. The weighted-average grant date fair value of awards granted was $84.60 , $97.02 , and $95.33 in fiscal years 2019 , 2018 , and 2017 , respectively. The total fair value of awards that became fully vested during fiscal years 2019 , 2018 , and 2017 was $2.1 million , $1.6 million , and $3.2 million , respectively. Nonvested stock awards — We previously issued nonvested stock awards (“RSAs”) to certain executives under our share ownership guidelines. Effective fiscal 2009 , we no longer issue RSA awards and replaced them with grants of RSUs. The RSAs vest, subject to the discretion of our Board of Directors in certain circumstances, upon retirement or termination based upon years of service. These awards are amortized to compensation expense over the estimated vesting period based upon the fair value of our common stock on the award date. As of September 29, 2019 , RSAs outstanding totaled 33,243 shares with a weighted-average grant date fair value of $26.47 per share. In fiscal 2019 , there were no releases of RSAs. Compensation cost related to RSAs was fully recognized during the prior year. Non-management directors’ deferred compensation — All awards outstanding under our directors’ deferred compensation plan are accounted for as equity-based awards and deferred amounts are converted into stock equivalents based on a per share price equal to the average of the closing price of our common stock for the 10 trading days immediately preceding the date the deferred compensation is credited to the director’s account. During fiscal years 2019 , 2018 , and 2017 no common stock was issued in connection with director retirements. The following is a summary of the stock equivalent activity for fiscal 2019 : Stock Equivalents Weighted- Average Grant Date Fair Value Stock equivalents outstanding at September 30, 2018 94,390 $ 36.35 Deferred directors’ compensation 3,277 $ 79.95 Dividend equivalents 2,338 $ 82.87 Stock equivalents outstanding at September 29, 2019 100,005 $ 38.87 |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Sep. 29, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Deficit | STOCKHOLDERS’ DEFICIT Repurchases of common stock — As of September 29, 2019 , there was approximately $175.7 million remaining under a Board-authorized stock buyback program, which expires in November 2020 . During fiscal 2019 , we repurchased 1.4 million shares at an aggregate cost of $125.3 million . Repurchases of common stock included in our consolidated statements of cash flows for fiscal 2019 and 2018 exclude $2.0 million and $14.4 million , respectively, related to repurchase transactions traded in the respective fiscal year that settled in the next applicable fiscal year. Repurchases of common stock for fiscal 2017 includes $7.2 million related to repurchase transactions traded in the prior fiscal year that settled in fiscal year 2017. Dividends — In fiscal 2019 , the Board of Directors declared four cash dividends of $0.40 per share totaling $41.4 million |
Average Shares Outstanding
Average Shares Outstanding | 12 Months Ended |
Sep. 29, 2019 | |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |
Average Shares Outstanding | AVERAGE SHARES OUTSTANDING Our basic earnings per share calculation is computed based on the weighted-average number of common shares outstanding. Our diluted earnings per share calculation is computed based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued. Potentially dilutive common shares include nonvested stock awards and units, stock options, and non-management director stock equivalents. Performance share awards are included in the average diluted shares outstanding each period if the performance criteria have been met at the end of the respective periods. The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding in each fiscal year ( in thousands ): 2019 2018 2017 Weighted-average shares outstanding — basic 25,823 28,499 30,630 Effect of potentially dilutive securities: Nonvested stock awards and units 211 240 182 Stock options 10 40 59 Performance share awards 24 28 43 Weighted-average shares outstanding — diluted 26,068 28,807 30,914 Excluded from diluted weighted-average shares outstanding: Antidilutive 186 150 76 Performance conditions not satisfied at the end of the period 65 44 53 |
Commitments, Contingencies and
Commitments, Contingencies and Legal Matters | 12 Months Ended |
Sep. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Legal Matters | COMMITMENTS, CONTINGENCIES AND LEGAL MATTERS Commitments — As of September 29, 2019 , we had unconditional purchase obligations during the next five fiscal years as follows ( in thousands ): 2020 $ 854,100 2021 465,600 2022 257,300 2023 155,300 2024 153,100 Total $ 1,885,400 These obligations primarily represent amounts payable under purchase contracts for goods related to system-wide restaurant operations. 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 a liability has been incurred 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. 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 . 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. We continue to believe that no additional losses are probable beyond this accrual and we cannot estimate a possible loss contingency or range of reasonably possible loss contingencies beyond this accrual. We plan to vigorously defend against this lawsuit. Nonetheless, an unfavorable resolution of this matter in excess of our current accrued loss contingencies could have a material adverse effect on our business, results of operations, liquidity, or financial condition. 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. The 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 . We intend to file an opposition to the motion in December 2019, and the hearing on the motions is scheduled for January 2020. As of September 29, 2019, we have recorded an accrual for legal settlement of $8.3 million within “Accrued liabilities” and a litigation insurance recovery receivable of $8.3 million , which represents the expected payment of the settlement by the Company’s insurance carriers, within “Accounts and other receivable, net” in our 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. 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. |
Supplemental Consolidated Cash
Supplemental Consolidated Cash Flow Information | 12 Months Ended |
Sep. 29, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Consolidated Cash Flow Information | SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION ( in thousands ) 2019 2018 2017 Cash paid during the year for: Income tax payments $ 14,906 $ 56,183 $ 92,678 Interest, net of amounts capitalized $ 46,227 $ 43,692 $ 33,857 Non-cash investing and financing transactions: Increase in notes receivable from the sale of company-operated restaurants $ — $ 70,461 $ — Increase in dividends accrued or converted to common stock equivalents $ 247 $ 276 $ 308 Decrease in equipment capital lease obligations from the sale of company-operated restaurants, closure of stores, and termination of equipment leases $ — $ 3,617 $ 5,631 Decrease in capital lease obligations from the termination of building leases $ 41 $ 271 $ 237 Equipment capital lease obligations incurred $ 20 $ 98 $ 924 Consideration for franchise acquisitions $ — $ — $ 13,809 (Decrease) increase in obligations for purchases of property and equipment $ (2,117 ) $ 822 $ 766 (Decrease) increase in obligations for treasury stock repurchases $ (12,337 ) $ 14,362 $ (7,208 ) |
Supplemental Consolidated Finan
Supplemental Consolidated Financial Statement Information | 12 Months Ended |
Sep. 29, 2019 | |
Supplemental Consolidated Financial Statement Information [Abstract] | |
Supplemental Consolidated Financial Statement Information | SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION ( in thousands ) September 29, September 30, Accounts and other receivables, net: Trade $ 36,907 $ 35,877 Notes receivable 278 11,480 Income tax receivable 160 5,637 Other 10,855 6,123 Allowance for doubtful accounts (2,965 ) (1,695 ) $ 45,235 $ 57,422 Prepaid expenses: Prepaid income taxes $ 579 $ 4,837 Prepaid advertising 1,838 4,318 Other 6,598 5,288 $ 9,015 $ 14,443 Other assets, net: Company-owned life insurance policies $ 112,753 $ 109,908 Deferred rent receivable 49,333 48,372 Franchise tenant improvement allowance 26,925 22,506 Other 17,674 18,480 $ 206,685 $ 199,266 Accrued liabilities: Insurance $ 27,888 $ 35,405 Payroll and related taxes 31,095 29,498 Sales and property taxes 4,268 4,555 Gift card liability 2,036 2,081 Percentage rent accrual 1,182 1,092 Deferred franchise fees 4,978 375 Other 48,636 33,916 $ 120,083 $ 106,922 Other long-term liabilities: Defined benefit pension plans $ 120,260 $ 69,012 Deferred franchise fees 41,295 — Straight-line rent accrual 29,537 31,762 Other 72,678 92,675 $ 263,770 $ 193,449 |
Unaudited Quarterly Results of
Unaudited Quarterly Results of Operations | 12 Months Ended |
Sep. 29, 2019 | |
Selected Quarterly Financial Information [Abstract] | |
Unaudited Quarterly Results of Operations | UNAUDITED QUARTERLY RESULTS OF OPERATIONS ( in thousands, except per share data ) 16 Weeks Ended 12 Weeks Ended Fiscal Year 2019 January 20, April 14, July 7, September 29, Revenues $ 290,786 $ 215,727 $ 222,359 $ 221,235 Earnings from operations $ 58,324 $ 47,123 $ 48,261 $ 48,515 Net earnings $ 34,098 $ 25,089 $ 13,189 $ 22,061 Net earnings per share: Basic $ 1.32 $ 0.97 $ 0.51 $ 0.86 Diluted $ 1.31 $ 0.96 $ 0.50 $ 0.85 16 Weeks 12 Weeks Ended Fiscal Year 2018 January 21, April 15, July 8, September 30, Revenues $ 294,463 $ 209,772 $ 187,983 $ 177,472 Earnings from operations $ 72,807 $ 46,820 $ 76,340 $ 35,647 Net earnings $ 12,190 $ 47,605 $ 45,307 $ 16,269 Net earnings per share: Basic $ 0.41 $ 1.64 $ 1.62 $ 0.61 Diluted $ 0.41 $ 1.62 $ 1.60 $ 0.60 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 29, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On November 15, 2019 , the Board of Directors declared a cash dividend of $0.40 per share, to be paid on December 20, 2019 to shareholders of record as of the close of business on December 5, 2019 . Future dividends will be subject to approval by our Board of Directors. On November 15, 2019, the Board of Directors authorized an additional $100.0 million |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Sep. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of operations | Nature of operations — Founded in 1951, Jack in the Box Inc. (the “Company”) operates and franchises Jack in the Box ® |
Basis of presentation | Basis of presentation — The accompanying 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”). On December 19, 2017, we entered into a definitive agreement to sell Qdoba Restaurant Corporation (“Qdoba”), a wholly owned subsidiary of the Company that operates and franchises more than 700 Qdoba Mexican Eats ® fast-casual restaurants, to certain funds managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, the “Buyer”). The sale was completed on March 21, 2018. For all periods presented in our consolidated statements of earnings, all sales, costs, expenses and income taxes attributable to Qdoba, except as related to the impact of the decrease in the federal statutory tax rate (see Note 11, Income Taxes) , have been aggregated under the caption “Earnings from discontinued operations, net of income taxes.” Refer to Note 10, Discontinued Operations , for additional information. Unless otherwise noted, amounts and disclosures throughout these notes to consolidated financial statements relate to our continuing operations. |
Reclassifications | Reclassifications |
Fiscal year | Fiscal year — Our fiscal year is 52 or 53 weeks ending the Sunday closest to September 30 . Comparisons throughout these notes to the consolidated financial statements refer to the 52 -week periods ended September 29, 2019 , September 30, 2018 and October 1, 2017 for fiscal years 2019 , 2018 , and 2017 |
Principles of consolidation | Principles of consolidation — The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and the accounts of any variable interest entities (“VIEs”) where we are deemed the primary beneficiary. All significant intercompany accounts and transactions are eliminated. The Financial Accounting Standards Board (“FASB”) authoritative guidance on consolidation requires the primary beneficiary of a VIE to consolidate that entity. The primary beneficiary of a VIE is an enterprise that has a controlling financial interest in the VIE. Controlling financial interest exists when an enterprise has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The primary entities in which we possess a variable interest are franchise entities, which operate our franchise restaurants. We do not possess any ownership interests in franchise entities. We have reviewed these franchise entities and determined that we are not the primary beneficiary of the entities and therefore, these entities have not been consolidated. |
Use of estimates | Use of estimates — In preparing the 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. |
Restricted cash | Restricted cash is comprised of certain cash balances required to be held in trust in connection with the Company’s securitized financing facility. 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. Refer to Note 7, Indebtedness , for additional information. |
Accounts and other receivables, net | Accounts and other receivables, net, is primarily comprised of receivables from franchisees, tenants, and credit card processors. Franchisee receivables primarily include rents, royalties, and marketing, sourcing and technology support fees associated with lease and franchise agreements, and notes issued in connection with refranchising transactions. Tenant receivables relate to subleased properties where we are on the master lease agreement. We accrue interest on notes receivable based on the contractual terms. The allowance for doubtful accounts is based on historical experience and a review of existing receivables. Changes in accounts and other receivables are classified as an operating activity in the consolidated statements of cash flows, except for changes in notes related to refranchising transactions, which are classified as an investing activity. |
Inventories | Inventories consist principally of food, packaging, and supplies, and are valued at the lower of cost or market on a first-in, first-out basis. |
Assets held for sale | Assets held for sale typically includes the net book value of property and equipment we plan to sell within the next year. If the determination is made that we no longer expect to sell an asset within the next year, the asset is reclassified out of assets held for sale. Long-lived assets that meet the held for sale criteria are reported at the lower of their carrying value or fair value, less estimated costs to sell. At September 29, 2019 and September 30, 2018 |
Property and equipment, at cost | Property and equipment, net — Expenditures for new facilities and equipment, and those that substantially increase the useful lives of the property, are capitalized. Facilities leased under capital leases are stated at the present value of minimum lease payments at the beginning of the lease term, not to exceed fair value. Maintenance and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and gains or losses on the dispositions are reflected in results of operations. |
Depreciation | Buildings, equipment and leasehold improvements are generally depreciated using the straight-line method based on the estimated useful lives of the assets, over the initial lease term for certain assets acquired in conjunction with the lease commencement for leased properties, or the remaining lease term for certain assets acquired after the commencement of the lease for leased properties. In certain situations, one or more option periods may be used in determining the depreciable life of assets related to leased properties if we deem that an economic penalty would be incurred otherwise. In either circumstance, our policy requires lease term consistency when calculating the depreciation period, in classifying the lease and in computing straight-line rent expense. Building, leasehold improvement assets and equipment are assigned lives that range from 1 to 35 years. Depreciation expense related to property and equipment was $55.2 million , $59.4 million , and $67.4 million in fiscal year 2019 , 2018 , and 2017 , respectively. |
Impairment of long-lived assets | Impairment of long-lived assets — We evaluate our long-lived assets, such as property and equipment, for impairment on an annual basis or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. This review generally includes a restaurant-level analysis, except when we are actively selling a group of restaurants, in which case we perform our impairment evaluations at the group level. Impairment evaluations for individual restaurants may take into consideration a restaurant’s operating cash flows, the period of time since a restaurant has been opened or remodeled, refranchising expectations, if any, and the maturity of the related market, which are all significant unobservable inputs (“Level 3 Inputs”). Impairment evaluations for a group of restaurants take into consideration the group’s expected future cash flows and sales proceeds from bids received, if any, or fair market value based on, among other considerations, the specific sales and cash flows of those restaurants. If the assets of a restaurant or group of restaurants subject to our impairment evaluation are not recoverable based upon the forecasted, undiscounted cash flows, we recognize an impairment loss by the amount that the carrying value of the assets exceeds fair value. Refer to Note 9, Impairment and Other Charges, Net , for additional information. |
Goodwill and intangible assets | Goodwill and intangible assets — Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired, if any. We generally record goodwill in connection with the acquisition of restaurants from franchisees. Likewise, upon the sale of restaurants to franchisees, goodwill is decremented. The amount of goodwill written-off is determined as the fair value of the business disposed of as a percentage of the fair value of the reporting unit retained. If the business disposed of was never fully integrated into the reporting unit after its acquisition, and thus the benefits of the acquired goodwill were never realized, the current carrying amount of the acquired goodwill is written off. Goodwill and our other indefinite-lived intangible assets are evaluated for impairment annually during the fourth quarter, or more frequently if indicators of impairment are present. We first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit or indefinite-lived asset is less than its carrying amount. If the qualitative factors indicate that it is more likely than not that the fair value is less than the carrying amount, we perform a single-step impairment test. To perform our impairment analysis, we estimate the fair value of the reporting unit or indefinite-lived asset using Level 3 Inputs and compare it to the carrying value. If the carrying value exceeds the fair value, an impairment loss is recognized equal to the excess. Lease acquisition costs primarily represent the fair values of acquired lease contracts having contractual rents lower than fair market rents and are amortized on a straight-line basis over the remaining initial lease term. Reacquired franchise rights are recorded in connection with our acquisition of franchised restaurants and are amortized over the remaining contractual period of the franchise contract in which the right was granted. Refer to Note 4, Goodwill and Intangible Assets, Net , for additional information. |
Company-owned life insurance | Company-owned life insurance — We have purchased company-owned life insurance (“COLI”) policies to support our non-qualified benefit plans. The cash surrender values of these policies were $112.8 million and $109.9 million as of September 29, 2019 and September 30, 2018 , respectively, and are included in “Other assets, net”, in the accompanying consolidated balance sheets. Changes in cash surrender values are included in “Selling, general and administrative expenses” in the accompanying consolidated statements of earnings. These policies reside in an umbrella trust for use only to pay plan benefits to participants or to pay creditors if the Company becomes insolvent. |
Leases | Leases — We review all leases for capital or operating classification at their inception under the FASB authoritative guidance for leases. Our operations are primarily conducted under operating leases. Within the provisions of certain leases, there are rent holidays and escalations in payments over the base lease term, as well as renewal periods. The effects of the holidays and escalations have been reflected in rent expense on a straight-line basis over the expected lease term. Differences between amounts paid and amounts expensed are recorded as deferred rent. The lease term commences on the date when we have the right to control the use of the leased property. Certain leases also include contingent rent provisions based on sales levels, which are accrued at the point in time we determine that it is probable such sales levels will be achieved. Refer to Note 8, Leases , for additional information. |
Revenue recognition | Revenue recognition — “Company restaurant sales” include revenue recognized upon delivery of food and beverages to the customer at company-operated restaurants, which is when our obligation to perform is satisfied. Company restaurant sales exclude taxes collected from the Company’s customers. Company restaurant sales also include income for gift cards. Gift cards, upon customer purchase, are recorded as deferred income and are recognized in revenue as they are redeemed. “Franchise rental revenues” received from franchised restaurants based on fixed rental payments are recognized as revenue over the term of the lease. Rental revenue from properties owned and leased by the Company and leased or subleased to franchisees is recognized on a straight-line basis over the respective term of the lease. Certain franchise rents, which are contingent upon sales levels, are recognized in the period in which the contingency is met. “Franchise royalties and other” includes royalties and franchise and other fees received from franchisees. Royalties are based upon a percentage of sales of the franchised restaurant and are recognized as earned. Franchise royalties are billed on a monthly basis. Franchise fees when a new restaurant opens or at the start of a new franchise term are recorded as deferred revenue when received and recognized as revenue over the term of the franchise agreement. “Franchise contributions for advertising and other services” includes franchisee contributions to our marketing fund billed on a monthly basis and sourcing and technology fees, as required under the franchise agreements. Contributions to our marketing fund are based on a percentage of sales and recognized as earned. Sourcing and technology services are recognized when the goods or services are transferred to the franchisee. Gift cards — We sell gift cards to our customers in our restaurants and through selected third parties. The gift cards sold to our customers have no stated expiration dates and are subject to actual or potential escheatment rights in several of the jurisdictions in which we operate. We recognize income from gift cards when redeemed by the customer. While we will continue to honor all gift cards presented for payment, we may determine the likelihood of redemption to be remote for certain card balances due to, among other things, long periods of inactivity. In these circumstances, to the extent we determine there is no requirement for remitting balances to government agencies under unclaimed property laws, card balances may be recognized as a reduction to “Selling, general and administrative expenses” in the accompanying consolidated statements of earnings. Amounts recognized on unredeemed gift card balances was $0.5 million , $0.6 million , and $0.5 million in fiscal 2019 , 2018 , and 2017 , respectively. |
Pre-opening costs | Pre-opening costs associated with the opening of a new restaurant consist primarily of property rent and employee training costs. Pre-opening costs associated with the opening of a restaurant that was closed upon acquisition consist primarily of labor costs, maintenance and repair costs, and property rent. Pre-opening costs are expensed as incurred in “Selling, general and administrative expenses” in the accompanying consolidated statements of earnings. |
Restaurant closure costs | Restaurant closure costs — All costs associated with exit or disposal activities are recognized when they are incurred. Restaurant closure costs, which are included in “Impairment and other charges, net”, and “Gains on the sale of company-operated restaurants” in the accompanying consolidated statements of earnings, primarily consist of future lease commitments, net, of anticipated sublease rentals, and expected ancillary costs. |
Self-insurance | Self-insurance — We are self-insured for a portion of our workers’ compensation, general liability, employee medical and dental, and automotive claims. We utilize a paid-loss plan for our workers’ compensation, general liability, and automotive programs, which have predetermined loss limits per occurrence and in the aggregate. We establish our insurance liability (undiscounted) and reserves using independent actuarial estimates of expected losses for determining reported claims and as the basis for estimating claims incurred, but not reported. As of September 29, 2019 and September 30, 2018 , our estimated liability for general liability and workers’ compensation claims exceeded our self-insurance retention limits by $3.6 million and $3.7 million , respectively, which we expect our insurance providers to pay on our behalf in accordance with the contractual terms of our insurance policies. |
Advertising costs | Advertising costs — We administer a marketing fund that includes contractual contributions. In fiscal 2019 , 2018 , and 2017 the marketing fund contributions from franchise and company-operated restaurants were approximately 5.0% of gross revenues, and the Company made incremental contributions to the marketing fund of $2.0 million , $6.2 million , and $0.5 million , respectively. Production costs of commercials, programming, and other marketing activities are charged to the marketing funds when the advertising is first used for its intended purpose, and the costs of advertising are charged to operations as incurred. When contributions of the marketing fund exceed the related advertising expenses, advertising costs are accrued up to the amount of revenues on an annual basis. Total contributions made by the Company, including incremental contributions, are included in “Selling, general, and administrative expenses” in the accompanying consolidated statements of earnings. In fiscal 2019 , 2018 , and 2017 advertising costs were $19.0 million , $28.8 million , and $36.5 million , respectively. |
Share-based compensation | Share-based compensation — We account for our share-based compensation under the FASB authoritative guidance on stock compensation , which generally requires, among other things, that all employee share-based compensation be measured using a fair value method and that the resulting compensation cost be recognized in the financial statements. Compensation expense for our share-based compensation awards is generally recognized on a straight-line basis over the shorter of the vesting period or the period from the date of grant to the date the employee becomes eligible to retire. Refer to Note 13, Share-based Employee Compensation , for additional information. |
Income taxes | Income taxes — Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We recognize interest and, when applicable, penalties related to unrecognized tax benefits as a component of our income tax provision. Authoritative guidance issued by the FASB prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Refer to Note 11, Income Taxes , for additional information. |
Derivative instruments | Derivative instruments — We have historically used interest rate swaps to hedge interest rate volatility under our senior credit facility. On July 2, 2019 , we terminated all interest rate swap agreements in anticipation of the securitization transaction. Prior to terminating the agreements, a ll derivatives were recognized on the consolidated balance sheets at fair value based upon quoted market prices. Changes in the fair values of derivatives were recorded in earnings or other comprehensive income (“OCI”), based on whether or not the instrument is designated as a hedge transaction. Gains or losses on derivative instruments that qualify for hedge designation were reported in OCI and reclassified to earnings in the period the hedged item affected earnings. When the underlying hedge transaction ceased to exist, the associated amount reported in OCI was reclassified to earnings at that time. Refer to Note 6, Derivative Instruments, |
Contingencies | Contingencies — We recognize liabilities for contingencies when we have an exposure that indicates it is probable that an asset has been impaired or that a liability has been incurred and the amount of impairment or loss can be reasonably estimated. Our ultimate legal and financial liability with respect to such matters cannot be estimated with certainty and requires the use of estimates. When the reasonable estimate is a range, the recorded loss will be the best estimate within the range. We record legal settlement costs when those costs are probable and reasonably estimable. Refer to Note 16, Commitments, Contingencies and Legal Matters , for additional information. |
Effect of new accounting pronouncements adopted in fiscal 2019 | Effect of new accounting pronouncements adopted in fiscal 2019 — In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue Recognition - Revenue from Contracts with Customers (Topic 606) , which provides a comprehensive new revenue recognition model that requires an entity to recognize revenue in an amount that reflects the consideration the entity expects to receive for the transfer of promised goods or services to its customers. The standard also requires additional disclosure regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted the new standard on October 1, 2018 using the modified retrospective method, whereby the cumulative effect of this transition to applicable contracts with customers that were not completed as of October 1, 2018 was recorded as an adjustment to beginning retained earnings as of this date. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The new revenue recognition standard did not impact our recognition of restaurant sales, rental revenues, or royalties from franchisees. The new pronouncement changed the way initial fees from franchisees for new restaurant openings or new franchise terms are recognized. Under the previous revenue recognition guidance, initial franchise fees were recognized as revenue at the time when a new restaurant opened or at the start of a new franchise term. In accordance with the new guidance, the initial franchise services are not distinct from the continuing rights and services offered during the term of the franchise agreement and will therefore be treated as a single performance obligation together with the continuing rights and services. As such, initial fees received will be recognized over the franchise term and any unamortized portion will be recorded as deferred revenue in our consolidated balance sheet. An adjustment to opening retained earnings and a corresponding contract liability of approximately $50.3 million (of which $5.0 million was current and $45.3 million was long-term) was established on the date of adoption. A deferred tax asset of approximately $13.0 million related to this contract liability was also established on the date of adoption. The new standard also had an impact on transactions presented net and not included in our revenues and expenses such as franchisee contributions to and expenditures from our advertising fund, and sourcing and technology fee contributions from franchisees and the related expenses. We determined that we are the principal in these arrangements, and as such, contributions to and expenditures from the advertising fund, and sourcing and technology fees and expenditures are now reported on a gross basis within our consolidated statements of earnings. While this change materially impacted our gross amount of reported revenues and expenses, the impact was largely offsetting with no material impact to our reported net earnings. The following table summarizes the impacts of adopting ASC 606 on our consolidated financial statements as of and for the period ended September 29, 2019 (in thousands) : Adjustments As Reported Franchise Fees Marketing and Sourcing Fees Technology Support Fees Balances without Adoption Consolidated Statement of Earnings Fiscal Year Ended September 29, 2019 Franchise royalties and other $ 169,811 $ (3,745 ) $ — $ — $ 166,066 Franchise contributions for advertising and other services $ 170,674 $ — $ (161,873 ) $ (8,801 ) $ — Total revenues $ 950,107 $ (3,745 ) $ (161,873 ) $ (8,801 ) $ 775,688 Franchise advertising and other services expenses $ 178,093 $ — $ (161,873 ) $ (16,220 ) $ — Selling, general and administrative expenses $ 76,357 $ — $ — $ 7,419 $ 83,776 Total operating costs and expenses, net $ 747,884 $ — $ (161,873 ) $ (8,801 ) $ 577,210 Earnings from operations $ 202,223 $ (3,745 ) $ — $ — $ 198,478 Earnings from continuing operations and before income taxes $ 115,772 $ (3,745 ) $ — $ — $ 112,027 Income tax expense $ 24,025 $ (972 ) $ — $ — $ 23,053 Earnings from continuing operations $ 91,747 $ (2,773 ) $ — $ — $ 88,974 Net earnings $ 94,437 $ (2,773 ) $ — $ — $ 91,664 Consolidated Balance Sheet September 29, 2019 Prepaid expenses $ 9,015 $ 972 $ — $ — $ 9,987 Total current assets $ 227,128 $ 972 $ — $ — $ 228,100 Deferred tax assets $ 85,564 $ (12,958 ) $ — $ — $ 72,606 Other assets, net $ 206,685 $ 269 $ — $ — $ 206,954 Total other assets $ 339,421 $ (12,689 ) $ — $ — $ 326,732 Total assets $ 958,483 $ (11,717 ) $ — $ — $ 946,766 Accrued liabilities $ 120,083 $ (4,978 ) $ — $ — $ 115,105 Total current liabilities $ 157,923 $ (4,978 ) $ — $ — $ 152,945 Other long-term liabilities $ 263,770 $ (41,295 ) $ — $ — $ 222,475 Total long-term liabilities $ 1,538,144 $ (41,295 ) $ — $ — $ 1,496,849 Retained earnings $ 1,577,034 $ 34,556 $ — $ — $ 1,611,590 Total stockholders’ deficit $ (737,584 ) $ 34,556 $ — $ — $ (703,028 ) Total liabilities and stockholders’ deficit $ 958,483 $ (11,717 ) $ — $ — $ 946,766 The adoption of ASC 606 had no impact on our cash provided by or used in operating, investing or financing activities as previously reported in the accompanying consolidated statement of cash flows. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . This standard requires the presentation of the service cost component of net benefit cost to be in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. All other components of net benefit cost should be presented separately from the service cost component and outside of a subtotal of earnings from operations, or separately disclosed. We adopted this standard in the first quarter of fiscal 2019 applying the retrospective method. As a result of the adoption, 2018 and 2017 amounts of $1.8 million and $3.4 million , respectively, previously reported within “Selling, general, and administrative expenses” have been reclassified to a separate line under earnings from operations to conform to current year presentation. Effect of new accounting pronouncements to be adopted in future periods — In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (as subsequently amended by ASU 2018-01, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01) which requires a lessee to recognize assets and liabilities on the balance sheet for those leases classified as operating leases under previous guidance. Substantially all the Company’s operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right of use assets upon adoption, resulting in a significant increase in the assets and liabilities on our consolidated balance sheets. We do not expect the adoption of this guidance to have a material impact on our consolidated statements of earnings and statements of cash flows. We are required to adopt this standard in the first quarter of fiscal 2020 and have elected to utilize the alternative transition method, whereby an entity records a cumulative adjustment to opening retained earnings in the year of adoption without restating prior periods. We will elect the transition package of three practical expedients, which, among other items, permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We will also elect 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 certain classes of assets. We will not elect the use-of-hindsight practical expedient, and therefore will continue to utilize lease terms determined under the existing lease guidance. We are in the final phase of our adoption plan. We are substantially complete with our scoping analysis, data gathering process to ensure the completeness and accuracy of our current leasing portfolio, and testing of our existing leasing system for compliance with Topic 842, and are in the process of finalizing our accounting policies, processes, disclosures and internal controls over financial reporting. For our real estate operating leases, we expect the adoption of the new guidance will result in the recognition of approximately $950 million of operating lease liabilities based on the present value of the remaining minimum rental payments using discount rates as of the effective date. We expect to record corresponding right of use assets of approximately $900 million , based on the operating lease liabilities adjusted for certain lease related assets and liabilities and the impairment of certain right of use assets recognized as a cumulative effect adjustment in retained earnings as of the adoption date. We do not expect operating lease liabilities and right of use assets related to our other contracts to be material. 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 the consolidated statements of operations but will be presented gross upon adoption of the new guidance. As a result, we expect an increase in our annual revenues and expenses of approximately $5.0 million after adoption. We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements. |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Number of Restaurants | The following table summarizes the number of restaurants as of the end of each fiscal year: 2019 2018 2017 Company-operated 137 137 276 Franchise 2,106 2,100 1,975 Total system 2,243 2,237 2,251 dollars in thousands ): 2019 2018 2017 Restaurants sold to franchisees — 135 178 New restaurants opened by franchisees 19 11 18 Proceeds from the sale of company-operated restaurants: Cash (1) $ 1,280 $ 26,486 $ 99,591 Notes receivable — 70,461 — $ 1,280 $ 96,947 $ 99,591 Net assets sold (primarily property and equipment) $ — $ (21,329 ) $ (30,597 ) Lease commitment charges (2) — — (11,737 ) Goodwill related to the sale of company-operated restaurants (2 ) (4,663 ) (10,062 ) Other (3) 88 (24,791 ) (9,161 ) Gains on the sale of company-operated restaurants $ 1,366 $ 46,164 $ 38,034 ____________________________ (1) Amounts in 2019 , 2018 , and 2017 include additional proceeds of $1.3 million , $1.4 million , and $0.2 million related to the extension of the underlying franchise and lease agreements from the sale of restaurants in prior years. (2) Charges are for operating restaurant leases with lease commitments in excess of our sublease rental income. (3) Amounts in 2018 primarily represent $9.2 million of costs related to franchise remodel incentives, $8.7 million reduction of gains related to the modification of certain 2017 refranchising transactions, $2.3 million of maintenance and repair expenses and $3.7 million of other miscellaneous non-capital charges. Amounts in 2017 represent impairment of $4.6 million and equipment write-offs of $1.4 million related to restaurants closed in connection with the sale of the related markets, maintenance and repair charges, and other miscellaneous non-capital charges. |
Summary of New Accounting Standard Impact | The following table summarizes the impacts of adopting ASC 606 on our consolidated financial statements as of and for the period ended September 29, 2019 (in thousands) : Adjustments As Reported Franchise Fees Marketing and Sourcing Fees Technology Support Fees Balances without Adoption Consolidated Statement of Earnings Fiscal Year Ended September 29, 2019 Franchise royalties and other $ 169,811 $ (3,745 ) $ — $ — $ 166,066 Franchise contributions for advertising and other services $ 170,674 $ — $ (161,873 ) $ (8,801 ) $ — Total revenues $ 950,107 $ (3,745 ) $ (161,873 ) $ (8,801 ) $ 775,688 Franchise advertising and other services expenses $ 178,093 $ — $ (161,873 ) $ (16,220 ) $ — Selling, general and administrative expenses $ 76,357 $ — $ — $ 7,419 $ 83,776 Total operating costs and expenses, net $ 747,884 $ — $ (161,873 ) $ (8,801 ) $ 577,210 Earnings from operations $ 202,223 $ (3,745 ) $ — $ — $ 198,478 Earnings from continuing operations and before income taxes $ 115,772 $ (3,745 ) $ — $ — $ 112,027 Income tax expense $ 24,025 $ (972 ) $ — $ — $ 23,053 Earnings from continuing operations $ 91,747 $ (2,773 ) $ — $ — $ 88,974 Net earnings $ 94,437 $ (2,773 ) $ — $ — $ 91,664 Consolidated Balance Sheet September 29, 2019 Prepaid expenses $ 9,015 $ 972 $ — $ — $ 9,987 Total current assets $ 227,128 $ 972 $ — $ — $ 228,100 Deferred tax assets $ 85,564 $ (12,958 ) $ — $ — $ 72,606 Other assets, net $ 206,685 $ 269 $ — $ — $ 206,954 Total other assets $ 339,421 $ (12,689 ) $ — $ — $ 326,732 Total assets $ 958,483 $ (11,717 ) $ — $ — $ 946,766 Accrued liabilities $ 120,083 $ (4,978 ) $ — $ — $ 115,105 Total current liabilities $ 157,923 $ (4,978 ) $ — $ — $ 152,945 Other long-term liabilities $ 263,770 $ (41,295 ) $ — $ — $ 222,475 Total long-term liabilities $ 1,538,144 $ (41,295 ) $ — $ — $ 1,496,849 Retained earnings $ 1,577,034 $ 34,556 $ — $ — $ 1,611,590 Total stockholders’ deficit $ (737,584 ) $ 34,556 $ — $ — $ (703,028 ) Total liabilities and stockholders’ deficit $ 958,483 $ (11,717 ) $ — $ — $ 946,766 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregation of revenue — The following table disaggregates revenue by primary source for the fiscal year ended September 29, 2019 (in thousands) : 2019 Sources of revenue: Company restaurant sales $ 336,807 Franchise rental revenues 272,815 Franchise royalties 163,047 Marketing fees 157,969 Technology and sourcing fees 12,705 Franchise fees and other services 6,764 Total revenue $ 950,107 |
Changes in Contract Assets and Liabilities | A summary of significant changes in our contract liabilities between the date of adoption (October 1, 2018) and September 29, 2019 is presented below (in thousands) : Deferred Franchise Fees Deferred franchise fees at October 1, 2018 $ 50,018 Revenue recognized during the period (5,173 ) Additions during the period 1,428 Deferred franchise fees at September 29, 2019 $ 46,273 |
Estimated Future Franchise Fees | The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied at the end of the period (in thousands) : 2020 $ 4,978 2021 4,880 2022 4,681 2023 4,527 2024 4,334 Thereafter 22,873 $ 46,273 |
Summary of Refranchisings, Fr_2
Summary of Refranchisings, Franchisee Development and Acquisitions (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Summary Of Refranchisings, Franchisee Development And Acquisitions [Abstract] | |
Number of Restaurants Sold to Franchisees and Developed by Franchisees and Gains Recognized | The following table summarizes the number of restaurants as of the end of each fiscal year: 2019 2018 2017 Company-operated 137 137 276 Franchise 2,106 2,100 1,975 Total system 2,243 2,237 2,251 dollars in thousands ): 2019 2018 2017 Restaurants sold to franchisees — 135 178 New restaurants opened by franchisees 19 11 18 Proceeds from the sale of company-operated restaurants: Cash (1) $ 1,280 $ 26,486 $ 99,591 Notes receivable — 70,461 — $ 1,280 $ 96,947 $ 99,591 Net assets sold (primarily property and equipment) $ — $ (21,329 ) $ (30,597 ) Lease commitment charges (2) — — (11,737 ) Goodwill related to the sale of company-operated restaurants (2 ) (4,663 ) (10,062 ) Other (3) 88 (24,791 ) (9,161 ) Gains on the sale of company-operated restaurants $ 1,366 $ 46,164 $ 38,034 ____________________________ (1) Amounts in 2019 , 2018 , and 2017 include additional proceeds of $1.3 million , $1.4 million , and $0.2 million related to the extension of the underlying franchise and lease agreements from the sale of restaurants in prior years. (2) Charges are for operating restaurant leases with lease commitments in excess of our sublease rental income. (3) Amounts in 2018 primarily represent $9.2 million of costs related to franchise remodel incentives, $8.7 million reduction of gains related to the modification of certain 2017 refranchising transactions, $2.3 million of maintenance and repair expenses and $3.7 million of other miscellaneous non-capital charges. Amounts in 2017 represent impairment of $4.6 million and equipment write-offs of $1.4 million related to restaurants closed in connection with the sale of the related markets, maintenance and repair charges, and other miscellaneous non-capital charges. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill during fiscal 2019 and 2018 were as follows ( in thousands ): Balance at October 1, 2017 $ 51,412 Sale of company-operated restaurants to franchisees (4,663 ) Balance at September 30, 2018 46,749 Sale of company-operated restaurants to franchisees (2 ) Balance at September 29, 2019 $ 46,747 |
Schedule of Intangible Assets | Intangible assets, net, consist of the following as of the end of each fiscal year ( in thousands ): 2019 2018 Gross carrying amount $ 6,692 $ 6,751 Less accumulated amortization (6,267 ) (6,151 ) Net carrying amount $ 425 $ 600 |
Estimated Amortization Expense | The following table summarizes, as of September 29, 2019 , the estimated amortization expense for each of the next five fiscal years ( in thousands ): 2020 $ 108 2021 $ 95 2022 $ 36 2023 $ 20 2024 $ 17 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the financial assets and liabilities measured at fair value on a recurring basis ( in thousands ): Total Quoted Prices in Active Markets for Identical Assets (3) (Level 1) Significant Other Observable Inputs (3) (Level 2) Significant Unobservable Inputs (3) (Level 3) Fair value measurements as of September 29, 2019: Non-qualified deferred compensation plan (1) $ 30,104 $ 30,104 $ — $ — Total liabilities at fair value $ 30,104 $ 30,104 $ — $ — Fair value measurements as of September 30, 2018: Non-qualified deferred compensation plan (1) $ 37,447 $ 37,447 $ — $ — Interest rate swaps (Note 6) (2) 703 — 703 — Total liabilities at fair value $ 38,150 $ 37,447 $ 703 $ — ____________________________ (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 consolidated balance sheets. (2) We entered into interest rate swaps to reduce our exposure to rising interest rates on our variable rate debt. The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models as reported by our counterparties. These valuation models use a discounted cash flow analysis on the cash flows of each derivative. The key inputs for the valuation models are quoted market prices, discount rates, and forward yield curves. The Company also considered its own nonperformance risk and the respective counter-party’s nonperformance risk in the fair value measurements. As further described in Note 6, Derivatives , the Company’s interest rate swaps were terminated on July 2, 2019 and settled in connection with our securitization transaction on July 8, 2019. (3) We did not have any transfers in or out of Level 1, 2, or 3. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Derivative Instruments and Hedges, Assets [Abstract] | |
Derivative Instruments Outstanding | The following derivative instruments were outstanding as of the end of each fiscal year ( in thousands ): Balance Sheet Location Fair Value 2019 2018 Derivatives designated as hedging instruments: Interest rate swaps Accrued liabilities $ — $ (26 ) Interest rate swaps Other long-term liabilities — (1,266 ) Interest rate swaps Other assets, net — 589 Total derivatives (Note 5) $ — $ (703 ) |
Gains or Losses Recognized on Interest Rate Swap Derivative Instrument | The following table summarizes the accumulated OCI activity related to our interest rate swap derivative instruments in each fiscal year ( in thousands ): Location in Income 2019 2018 2017 (Loss) gain recognized in OCI N/A $ (23,625 ) $ 18,769 $ 19,768 Loss reclassified from accumulated OCI into net earnings Interest expense, net $ 24,328 $ 3,455 $ 5,070 |
Indebtedness (Tables)
Indebtedness (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | The detail of our long-term debt at the end of each fiscal year is as follows ( in thousands ): 2019 2018 Class A-2-I Notes $ 575,000 $ — Class A-2-II Notes 275,000 — Class A-2-III Notes 450,000 — Revolving credit facility — 730,422 Term loans — 336,360 Capital lease obligations 3,594 4,403 Total debt 1,303,594 1,071,185 Less current maturities of long-term debt, net of $0 and $1,008 of debt issuance costs, respectively (774 ) (31,828 ) Less unamortized debt issuance costs (28,446 ) (1,430 ) Long-term debt $ 1,274,374 $ 1,037,927 |
Scheduled Principal Payments of Long-Term Debt | Maturities of long-term debt — Assuming repayment by the Anticipated Repayment Dates and based on the leverage ratio as of September 29, 2019 , principal payments on our long-term debt outstanding at September 29, 2019 for each of the next five fiscal years and thereafter are as follows ( in thousands ): 2020 $ 774 2021 795 2022 821 2023 575,846 2024 327 Thereafter 725,031 $ 1,303,594 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Leases [Abstract] | |
Components of Rent Expense | The components of rent expense were as follows in each fiscal year ( in thousands ): 2019 2018 2017 Minimum rentals $ 184,587 $ 184,106 $ 185,696 Contingent rentals 2,255 2,221 2,419 Total rent expense 186,842 186,327 188,115 Less rental expense on subleased properties (170,651 ) (162,640 ) (145,728 ) Net rent expense $ 16,191 $ 23,687 $ 42,387 |
Future Minimum Lease Payments for Capital and Operating Leases | The following table presents as of September 29, 2019 , future minimum lease payments under capital and operating leases, including leases recorded as lease obligations ( in thousands ): Fiscal Year Capital Operating 2020 $ 879 $ 193,313 2021 879 186,226 2022 879 145,794 2023 864 117,753 2024 396 87,420 Thereafter 40 363,505 Total minimum lease payments 3,937 $ 1,094,011 Less amount representing interest, 3.40% weighted-average interest rate (343 ) Present value of obligations under capital leases 3,594 Less current portion (774 ) Long-term capital lease obligations $ 2,820 |
Assets Recorded Under Capital Leases | Assets recorded under capital leases are included in property and equipment, and consisted of the following at each fiscal year-end ( in thousands ): 2019 2018 Buildings $ 1,342 $ 3,217 Equipment 5,538 5,519 Less accumulated amortization (3,904 ) (4,621 ) $ 2,976 $ 4,115 |
Schedule of Rental Income | The following table summarizes rents received under these agreements in each fiscal year ( in thousands ): 2019 2018 2017 Total rental income (1) $ 277,623 $ 264,432 $ 237,004 Contingent rentals $ 38,506 $ 35,148 $ 33,168 |
Minimum Rents Receivable Expected to be Received Under Non-Cancelable Operating Leases and Subleases | The minimum rents receivable expected to be received under these non-cancelable operating leases and subleases, including leases recorded as lease obligations relating to continuing and discontinuing operations, and excluding contingent rentals, as of September 29, 2019 are as follows ( in thousands ): Fiscal Year 2020 $ 239,219 2021 255,315 2022 231,394 2023 224,605 2024 199,442 Thereafter 1,215,811 Total minimum future rent receivable $ 2,365,786 |
Assets Held for Lease | Assets held for lease and included in property and equipment consisted of the following at each fiscal year-end ( in thousands ): 2019 2018 Land $ 91,130 $ 89,256 Buildings 817,400 824,964 Equipment 537 611 909,067 914,831 Less accumulated depreciation (632,197 ) (607,900 ) $ 276,870 $ 306,931 |
Impairment and Other Charges,_2
Impairment and Other Charges, Net (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Restructuring and Related Activities [Abstract] | |
Impairment and Disposal Costs Included in Impairment and Other Charges | Impairment and other charges, net, in the accompanying consolidated statements of earnings is comprised of the following in each fiscal year ( in thousands ): 2019 2018 2017 Restructuring costs $ 8,455 $ 10,647 $ 3,631 Costs of closed restaurants and other 8,628 4,803 5,736 (Gains) losses on disposition of property and equipment, net (6,244 ) 1,627 2,891 Accelerated depreciation 1,616 1,130 911 Operating restaurant impairment charges — 211 — $ 12,455 $ 18,418 $ 13,169 |
Restructuring and Related Costs | The following is a summary of the costs incurred in connection with these activities during each fiscal year ( in thousands ): 2019 2018 2017 Employee severance and related costs $ 7,169 $ 7,845 $ 724 Strategic Alternatives Evaluation (1) 1,286 — — Qdoba Evaluation (2) — 2,211 2,592 Other — 591 315 $ 8,455 $ 10,647 $ 3,631 ___________________________________________ (1) Strategic Alternative Evaluation costs are primarily related to third party advisory services. (2) Qdoba Evaluation consulting costs are primarily related to third party advisory services and retention compensation. |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve | Total accrued severance costs related to our restructuring activities are included in “Accrued liabilities” and changed as follows during fiscal 2019 (in thousands) : Balance as of September 30, 2018 $ 5,309 Costs incurred 7,731 Accruals released (662 ) Cash payments (10,278 ) Balance as of September 29, 2019 $ 2,100 |
Contract Termination | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve | Accrued restaurant closing costs included in “Accrued liabilities” and “Other long-term liabilities” changed as follows during fiscal 2019 ( in thousands ): Balance as of September 30, 2018 $ 3,534 Adjustments (1) 590 Interest expense 1,292 Cash payments (3,591 ) Balance as of September 29, 2019 (2) (3) $ 1,825 ___________________________________________ (1) Adjustments relate primarily to revisions of certain sublease and cost assumptions. Our estimates related to our future lease obligations, primarily the sublease income we anticipate, are subject to a high degree of judgment and may differ from actual sublease income due to changes in economic conditions, desirability of the sites, and other factors. (2) The weighted-average remaining lease term related to these commitments is approximately four years . (3) This balance excludes $1.5 million of restaurant closing costs that are included in “Accrued liabilities” and “Other long-term liabilities”, which were initially recorded as losses on the sale of company-operated restaurants to franchisees in prior years. |
Discontinued Operations Discont
Discontinued Operations Discontinued Operations (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Qdoba Results from Each Period | The following table summarizes the Qdoba results for each period ( in thousands, except per share data ): 2019 2018 2017 Company restaurant sales $ — $ 192,620 $ 436,558 Franchise revenues — 9,337 20,065 Company restaurant costs (excluding depreciation and amortization) — (166,122 ) (357,370 ) Franchise costs (excluding depreciation and amortization) — (2,338 ) (4,993 ) Selling, general and administrative expenses 174 (19,286 ) (36,706 ) Depreciation and amortization — (5,012 ) (21,500 ) Impairment and other charges, net (262 ) (2,305 ) (15,061 ) Interest expense, net — (4,787 ) (9,025 ) Operating (loss) earnings from discontinued operations before income taxes (88 ) 2,107 11,968 (Loss) gain on Qdoba Sale (85 ) 30,717 — (Loss) earnings from discontinued operations before income taxes (173 ) 32,824 11,968 Income tax benefit (expense) 2,863 (15,726 ) (4,518 ) Earnings from discontinued operations, net of income taxes $ 2,690 $ 17,098 $ 7,450 Net earnings per share from discontinued operations: Basic $ 0.10 $ 0.60 $ 0.24 Diluted $ 0.10 $ 0.59 $ 0.24 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of Income Taxes | Income taxes consist of the following in each fiscal year ( in thousands ): 2019 2018 2017 Current: Federal $ 14,683 $ 51,454 $ 79,038 State 5,242 4,922 12,368 19,925 56,376 91,406 Deferred: Federal 3,750 23,462 (13,176 ) State 350 1,890 (2,898 ) 4,100 25,352 (16,074 ) Income tax expense from continuing operations $ 24,025 $ 81,728 $ 75,332 Income tax expense (benefit) from discontinued operations $ (2,863 ) $ 15,700 $ (4,119 ) |
Reconciliation of the Federal Statutory Income Tax Rate to Effective Tax Rate | A reconciliation of the federal statutory income tax rate to our effective tax rate for continuing operations is as follows: 2019 2018 2017 Income tax expense at federal statutory rate 21.0 % 24.5 % 35.0 % State income taxes, net of federal tax benefit 5.3 % 4.7 % 3.8 % One-time, non-cash impact of the Tax Act — % 17.5 % — % Stock compensation excess tax benefit (0.1 )% (1.1 )% — % Benefit of jobs tax credits, net of valuation allowance (0.3 )% (0.4 )% (0.4 )% Release of federal tax liability (0.6 )% — % — % Adjustment to state tax provision (0.9 )% — % — % Benefit related to COLIs (1.0 )% (0.4 )% (1.1 )% Termination of interest rate swaps (2.6 )% — % — % Other, net — % (0.9 )% (0.4 )% 20.8 % 43.9 % 36.9 % |
Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at each fiscal year-end are presented below ( in thousands ): 2019 2018 Deferred tax assets: Accrued defined benefit pension and postretirement benefits $ 46,918 $ 34,776 Deferred income 13,803 1,535 Impairment 9,981 11,388 Accrued insurance 7,133 8,994 Share-based compensation 5,415 4,936 Tax loss and tax credit carryforwards 5,327 7,458 Lease commitments related to closed or refranchised locations 3,786 4,696 Deferred interest deduction 3,188 — Other reserves and allowances 2,965 851 Accrued incentive compensation 2,617 2,055 Accrued compensation expense 1,092 2,034 Interest rate swaps — 181 Other, net 868 2,206 Total gross deferred tax assets 103,093 81,110 Valuation allowance (2,485 ) (3,554 ) Total net deferred tax assets 100,608 77,556 Deferred tax liabilities: Intangible assets (10,520 ) (10,492 ) Leasing transactions (3,822 ) (2,790 ) Property and equipment, principally due to differences in depreciation (128 ) (1,855 ) Other (574 ) (279 ) Total gross deferred tax liabilities (15,044 ) (15,416 ) Net deferred tax assets $ 85,564 $ 62,140 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Retirement Benefits [Abstract] | |
Reconciliation of Changes in Benefit Obligations, Plan Assets and Funded Status of Retirement Plans | The fair values of the Qualified Plan’s assets by asset category are as follows ( in thousands ): Total Quoted Prices in Active Markets for Identical (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Items Measured at Fair Value at September 30, 2019: Asset Category: Cash and cash equivalents (1) $ 10,110 $ — $ 10,110 $ — Equity: U.S (2) 99,124 99,124 — — International (3),(4) 94,953 47,262 — — Fixed income: Investment grade (5) 177,500 — 177,500 — High yield (6) 9,256 9,256 — — Alternatives (4),(7) 42,052 — — — Real estate (4),(8) 43,199 — — — $ 476,194 $ 155,642 $ 187,610 $ — Items Measured at Fair Value at September 30, 2018: Asset Category: Cash and cash equivalents (1) $ 2,901 $ — $ 2,901 $ — Equity: U.S (2) 104,424 104,424 — — International (3),(4) 100,340 49,857 — — Fixed income: Investment grade (5) 160,106 — 160,106 — High yield (6) 14,384 14,384 — — Alternatives (4),(7) 35,964 — — — Real estate (4),(8) 38,008 — — — $ 456,127 $ 168,665 $ 163,007 $ — _________________________ (1) Cash and cash equivalents are comprised of commercial paper, short-term bills and notes, and short-term investment funds, which are valued at quoted prices in active markets for similar securities. (2) U.S. equity securities are comprised of investments in common stock of U.S. companies for total return purposes. These investments are valued by the trustee at closing prices from national exchanges on the valuation date. (3) International equity securities are comprised of investments in common stock of companies located outside of the U.S for total return purposes. These investments are valued by the trustee at closing prices from national exchanges on the valuation date, or the values are adjusted as a result of market movements following the close of local trading using inputs to models that are observable either directly or indirectly. The portion of these investments that are measured at fair value using the net asset value per share practical expedient (see note 4 below) can be redeemed on a monthly basis. (4) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. (5) Investment grade fixed income consists of debt obligations either issued by the US government or have a rating of BBB- / Baa or higher assigned by a major credit rating agency. These investments are valued based on unadjusted quoted market prices (Level 1), or based on quoted prices in inactive markets, or whose values are based on models, but the inputs to those models are observable either directly or indirectly (Level 2). (6) High yield fixed income consists primarily of debt obligations that have a rating of below BBB- / Baa or lower assigned by a major credit rating agency. These investments are valued based on unadjusted quoted market prices. (7) Alternative investments consist primarily of an investment in asset classes other than stocks, bonds, and cash. Alternative investments can include commodities, hedge funds, private equity, managed futures, and derivatives. These investments are valued based on unadjusted quoted market prices and can be redeemed on a bi-monthly basis. (8) Real estate is investments in a real estate collective trust for purposes of total return. These investments are valued based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These investments can be redeemed on a quarterly basis. in thousands ): Qualified Plan SERP Postretirement Health Plans 2019 2018 2019 2018 2019 2018 Change in benefit obligation: Obligation at beginning of year $ 457,109 $ 493,767 $ 73,067 $ 78,401 $ 23,461 $ 25,660 Service cost — 1,743 — 490 — — Interest cost 19,825 19,463 3,080 2,894 997 955 Participant contributions — — — — 112 115 Actuarial loss (gain) 61,029 (37,872 ) 8,771 (4,686 ) 2,343 (1,720 ) Benefits paid (12,224 ) (10,949 ) (5,025 ) (4,032 ) (1,354 ) (1,563 ) Settlements (3,808 ) (9,043 ) — — — — Other — — — — 73 14 Obligation at end of year $ 521,931 $ 457,109 $ 79,893 $ 73,067 $ 25,632 $ 23,461 Change in plan assets: Fair value at beginning of year $ 456,127 $ 460,709 $ — $ — $ — $ — Actual return on plan assets 36,099 15,410 — — — — Participant contributions — — — — 112 115 Employer contributions — — 5,025 4,032 1,169 1,435 Benefits paid (12,224 ) (10,949 ) (5,025 ) (4,032 ) (1,354 ) (1,563 ) Settlements (3,808 ) (9,043 ) — — — — Other — — — — 73 13 Fair value at end of year $ 476,194 $ 456,127 $ — $ — $ — $ — Funded status at end of year $ (45,737 ) $ (982 ) $ (79,893 ) $ (73,067 ) $ (25,632 ) $ (23,461 ) Amounts recognized on the balance sheet: Current liabilities $ — $ — $ (5,371 ) $ (5,037 ) $ (1,379 ) $ (1,353 ) Noncurrent liabilities (45,737 ) (982 ) (74,522 ) (68,030 ) (24,253 ) (22,108 ) Total liability recognized $ (45,737 ) $ (982 ) $ (79,893 ) $ (73,067 ) $ (25,632 ) $ (23,461 ) Amounts in AOCI not yet reflected in net periodic benefit cost: Unamortized actuarial loss (gain), net $ 187,705 $ 139,195 $ 34,803 $ 27,239 $ 235 $ (2,267 ) Unamortized prior service cost — — 157 271 — — Total $ 187,705 $ 139,195 $ 34,960 $ 27,510 $ 235 $ (2,267 ) Other changes in plan assets and benefit obligations recognized in OCI: Net actuarial loss (gain) $ 51,263 $ (25,072 ) $ 8,771 $ (4,686 ) $ 2,343 $ (1,720 ) Amortization of actuarial (loss) gain (2,754 ) (3,331 ) (1,207 ) (1,538 ) 159 27 Amortization of prior service cost — — (115 ) (146 ) — — Total recognized in OCI 48,509 (28,403 ) 7,449 (6,370 ) 2,502 (1,693 ) Net periodic benefit (credit) cost and other losses (3,755 ) (3,673 ) 4,402 5,068 838 928 Total recognized in comprehensive income $ 44,754 $ (32,076 ) $ 11,851 $ (1,302 ) $ 3,340 $ (765 ) Amounts in AOCI expected to be amortized in fiscal 2020 net periodic benefit cost: Net actuarial loss $ 4,125 $ 1,652 $ 17 Prior service cost — 84 — Total $ 4,125 $ 1,736 $ 17 |
Fair Value of Plan Assets of Pension Plans | The following sets forth the PBO, ABO, and fair value of plan assets of our pension plans as of the measurement date in each fiscal year ( in thousands ): 2019 2018 Qualified Plan: Projected benefit obligation $ 521,931 $ 457,109 Accumulated benefit obligation $ 521,931 $ 457,109 Fair value of plan assets $ 476,194 $ 456,127 SERP: Projected benefit obligation $ 79,893 $ 73,067 Accumulated benefit obligation $ 79,893 $ 73,067 Fair value of plan assets $ — $ — |
Components of Net Periodic Benefit Cost | The components of the fiscal year net periodic benefit cost were as follows ( in thousands ): 2019 2018 2017 Qualified Plan: Interest cost $ 19,825 $ 19,463 $ 19,889 Expected return on plan assets (26,334 ) (26,467 ) (26,811 ) Actuarial loss 2,754 3,331 4,455 Net periodic benefit credit $ (3,755 ) $ (3,673 ) $ (2,467 ) SERP: Service cost $ — $ 490 $ 855 Interest cost 3,080 2,894 2,850 Actuarial loss 1,207 1,538 1,659 Amortization of unrecognized prior service cost 115 146 153 Net periodic benefit cost $ 4,402 $ 5,068 $ 5,517 Postretirement health plans: Interest cost $ 997 $ 955 $ 1,003 Actuarial (gain) loss (159 ) (27 ) 162 Net periodic benefit cost $ 838 $ 928 $ 1,165 |
Determining the Present Values of Benefit Obligations and net Periodic Benefit Costs | In determining the present values of our benefit obligations and net periodic benefit costs as of and for the fiscal years ended September 29, 2019 , September 30, 2018 , and October 1, 2017 , we used the following weighted-average assumptions: 2019 2018 2017 Assumptions used to determine benefit obligations (1): Qualified Plan: Discount rate 3.36% 4.40% 3.99% SERP: Discount rate 3.24% 4.37% 3.80% Rate of future pay increases 3.50% 3.50% 3.50% Postretirement health plans: Discount rate 3.24% 4.38% 3.82% Assumptions used to determine net periodic benefit cost (2): Qualified Plan: Discount rate 4.40% 3.99% 3.85% Long-term rate of return on assets 5.85% 5.80% 6.19% SERP: Discount rate 4.37% 3.80% 3.60% Rate of future pay increases 3.50% 3.50% 3.50% Postretirement health plans: Discount rate 4.38% 3.82% 3.64% ____________________________ (1) Determined as of end of year. (2) Determined as of beginning of year. |
Health Care Cost Trend Rates for Postretirement Health Plans | For measurement purposes, the weighted-average assumed health care cost trend rates for our postretirement health plans were as follows for each fiscal year: 2019 2018 2017 Healthcare cost trend rate for next year: Participants under age 65 7.00% 7.25% 7.50% Participants age 65 or older 6.50% 6.75% 7.00% Rate to which the cost trend rate is assumed to decline: Participants under age 65 4.50% 4.50% 4.50% Participants age 65 or older 4.50% 4.50% 4.50% Year the rate reaches the ultimate trend rate: Participants under age 65 2030 2030 2030 Participants age 65 or older 2028 2028 2028 |
Effect of Change in Assumed Health Care Cost Trend Rate | For example, a 1.0% change in the assumed healthcare cost trend rate would have the following effect on the fiscal 2019 net periodic benefit cost and end of year PBO ( in thousands ): 1% Point Increase 1% Point Decrease Total interest and service cost $ 106 $ (92 ) Postretirement benefit obligation $ 2,737 $ (2,365 ) |
Fair Values of Qualified Plan's Assets | Our plan asset allocation at the end of fiscal 2019 and target allocations were as follows: 2019 Target Minimum Maximum Cash & cash equivalents 2% —% —% —% Domestic Equities 21% 23% 12% 32% International equity 20% 22% 12% 32% Core fixed funds 37% 32% 27% 37% High yield 2% 4% —% 8% Alternative investments 9% 8% —% 16% Real estate 9% 7% 2% 12% Real return bonds —% 4% —% 8% 100% 100% |
Contributions Expected to be Paid in Next Fiscal Year and Projected Benefit Payments | Contributions expected to be paid in the next fiscal year, the projected benefit payments for each of the next five fiscal years, and the total aggregate amount for the subsequent five fiscal years are as follows ( in thousands ): Defined Benefit Pension Plans Postretirement Health Plans Estimated net contributions during fiscal 2020 $ 5,371 $ 1,401 Estimated future year benefit payments during fiscal years: 2020 $ 123,471 $ 1,401 2021 $ 18,371 $ 1,431 2022 $ 18,681 $ 1,476 2023 $ 19,135 $ 1,574 2024 $ 19,690 $ 1,607 2025-2029 $ 109,169 $ 8,242 |
Share-Based Employee Compensa_2
Share-Based Employee Compensation (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Components of Share-Based Compensation Expense | The components of share-based compensation expense, included within “Selling, general, and administrative expenses” in our consolidated statement of earnings, in each fiscal year are as follows ( in thousands ): 2019 2018 2017 Nonvested stock units $ 5,458 $ 5,737 $ 5,873 Stock options 936 1,790 1,826 Performance share awards 1,417 1,236 2,580 Nonvested restricted stock awards — 33 88 Non-management directors’ deferred compensation 263 350 270 Total share-based compensation expense $ 8,074 $ 9,146 $ 10,637 |
Summary of RSU Activity | The following is a summary of RSU activity for fiscal 2019 : Shares Weighted- Average Grant Date Fair Value RSUs outstanding at September 30, 2018 288,098 $ 64.57 Granted 93,686 $ 86.08 Released (55,642 ) $ 84.23 Forfeited (14,297 ) $ 94.00 RSUs outstanding at September 29, 2019 311,845 $ 66.18 |
Summary of Stock Option Activity | The following is a summary of stock option activity for fiscal 2019 : Shares Weighted- Weighted- Aggregate Intrinsic Value (in thousands) Options outstanding at September 30, 2018 287,618 $ 87.61 Granted — N/A Exercised (20,074 ) $ 61.28 Forfeited (303 ) $ 90.06 Expired (683 ) $ 104.95 Options outstanding at September 29, 2019 266,558 $ 89.54 4.25 $ 1,334 Options exercisable at September 29, 2019 176,179 $ 87.56 3.80 $ 1,307 Options exercisable and expected to vest at September 29, 2019 266,558 $ 89.54 4.25 $ 1,334 |
Schedule of Weighted-Average Assumptions | The following table presents the weighted-average assumptions used for stock option grants in each fiscal year, along with the related weighted-average grant date fair value: 2019 2018 2017 Risk-free interest rate N/A 2.4% 1.4% Expected dividends yield N/A 1.8% 1.5% Expected stock price volatility N/A 28.8% 29.0% Expected life of options (in years) N/A 3.40 3.50 Weighted-average grant date fair value N/A $18.49 $20.92 |
Summary of PSU Activity | The following is a summary of performance share award activity for fiscal 2019 : Shares Weighted- Average Grant Date Fair Value Performance share awards outstanding at September 30, 2018 52,479 $ 83.21 Granted 45,113 $ 84.60 Issued (18,695 ) $ 83.56 Forfeited (687 ) $ 91.91 Performance adjustments (2,720 ) $ 97.51 Performance share awards outstanding at September 29, 2019 75,490 $ 83.40 |
Summary of Stock Equivalent Activity | The following is a summary of the stock equivalent activity for fiscal 2019 : Stock Equivalents Weighted- Average Grant Date Fair Value Stock equivalents outstanding at September 30, 2018 94,390 $ 36.35 Deferred directors’ compensation 3,277 $ 79.95 Dividend equivalents 2,338 $ 82.87 Stock equivalents outstanding at September 29, 2019 100,005 $ 38.87 |
Average Shares Outstanding (Tab
Average Shares Outstanding (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |
Reconciliation of Basic Weighted-Average Shares Outstanding to Diluted Weighted-Average Shares Outstanding | The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding in each fiscal year ( in thousands ): 2019 2018 2017 Weighted-average shares outstanding — basic 25,823 28,499 30,630 Effect of potentially dilutive securities: Nonvested stock awards and units 211 240 182 Stock options 10 40 59 Performance share awards 24 28 43 Weighted-average shares outstanding — diluted 26,068 28,807 30,914 Excluded from diluted weighted-average shares outstanding: Antidilutive 186 150 76 Performance conditions not satisfied at the end of the period 65 44 53 |
Commitments, Contingencies an_2
Commitments, Contingencies and Legal Matters (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Unconditional Purchase Obligations | As of September 29, 2019 , we had unconditional purchase obligations during the next five fiscal years as follows ( in thousands ): 2020 $ 854,100 2021 465,600 2022 257,300 2023 155,300 2024 153,100 Total $ 1,885,400 |
Supplemental Consolidated Cas_2
Supplemental Consolidated Cash Flow Information (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Additional Information Related to Cash Flows | 2019 2018 2017 Cash paid during the year for: Income tax payments $ 14,906 $ 56,183 $ 92,678 Interest, net of amounts capitalized $ 46,227 $ 43,692 $ 33,857 Non-cash investing and financing transactions: Increase in notes receivable from the sale of company-operated restaurants $ — $ 70,461 $ — Increase in dividends accrued or converted to common stock equivalents $ 247 $ 276 $ 308 Decrease in equipment capital lease obligations from the sale of company-operated restaurants, closure of stores, and termination of equipment leases $ — $ 3,617 $ 5,631 Decrease in capital lease obligations from the termination of building leases $ 41 $ 271 $ 237 Equipment capital lease obligations incurred $ 20 $ 98 $ 924 Consideration for franchise acquisitions $ — $ — $ 13,809 (Decrease) increase in obligations for purchases of property and equipment $ (2,117 ) $ 822 $ 766 (Decrease) increase in obligations for treasury stock repurchases $ (12,337 ) $ 14,362 $ (7,208 ) |
Supplemental Consolidated Fin_2
Supplemental Consolidated Financial Statement Information (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Supplemental Consolidated Financial Statement Information [Abstract] | |
Schedule of Supplemental Consolidated Balance Sheet Information | September 29, September 30, Accounts and other receivables, net: Trade $ 36,907 $ 35,877 Notes receivable 278 11,480 Income tax receivable 160 5,637 Other 10,855 6,123 Allowance for doubtful accounts (2,965 ) (1,695 ) $ 45,235 $ 57,422 Prepaid expenses: Prepaid income taxes $ 579 $ 4,837 Prepaid advertising 1,838 4,318 Other 6,598 5,288 $ 9,015 $ 14,443 Other assets, net: Company-owned life insurance policies $ 112,753 $ 109,908 Deferred rent receivable 49,333 48,372 Franchise tenant improvement allowance 26,925 22,506 Other 17,674 18,480 $ 206,685 $ 199,266 Accrued liabilities: Insurance $ 27,888 $ 35,405 Payroll and related taxes 31,095 29,498 Sales and property taxes 4,268 4,555 Gift card liability 2,036 2,081 Percentage rent accrual 1,182 1,092 Deferred franchise fees 4,978 375 Other 48,636 33,916 $ 120,083 $ 106,922 Other long-term liabilities: Defined benefit pension plans $ 120,260 $ 69,012 Deferred franchise fees 41,295 — Straight-line rent accrual 29,537 31,762 Other 72,678 92,675 $ 263,770 $ 193,449 |
Unaudited Quarterly Results o_2
Unaudited Quarterly Results of Operations (Tables) | 12 Months Ended |
Sep. 29, 2019 | |
Selected Quarterly Financial Information [Abstract] | |
Quarterly Results of Operations | 16 Weeks Ended 12 Weeks Ended Fiscal Year 2019 January 20, April 14, July 7, September 29, Revenues $ 290,786 $ 215,727 $ 222,359 $ 221,235 Earnings from operations $ 58,324 $ 47,123 $ 48,261 $ 48,515 Net earnings $ 34,098 $ 25,089 $ 13,189 $ 22,061 Net earnings per share: Basic $ 1.32 $ 0.97 $ 0.51 $ 0.86 Diluted $ 1.31 $ 0.96 $ 0.50 $ 0.85 16 Weeks 12 Weeks Ended Fiscal Year 2018 January 21, April 15, July 8, September 30, Revenues $ 294,463 $ 209,772 $ 187,983 $ 177,472 Earnings from operations $ 72,807 $ 46,820 $ 76,340 $ 35,647 Net earnings $ 12,190 $ 47,605 $ 45,307 $ 16,269 Net earnings per share: Basic $ 0.41 $ 1.64 $ 1.62 $ 0.61 Diluted $ 0.41 $ 1.62 $ 1.60 $ 0.60 |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies (Summary of Number of Restaurants) (Details) - restaurant | Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 2,243 | 2,237 | 2,251 |
Company-operated | |||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 137 | 137 | 276 |
Franchise | |||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 2,106 | 2,100 | 1,975 |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 12 Months Ended | |||||
Sep. 29, 2019USD ($)restaurant | Sep. 30, 2018USD ($)restaurant | Oct. 01, 2017USD ($)restaurant | Oct. 02, 2016 | Oct. 01, 2018USD ($) | Dec. 19, 2017restaurant | |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of restaurants | restaurant | 2,243 | 2,237 | 2,251 | |||
Number of weeks per fiscal year | 52 | 52 | 52 | 53 | ||
Depreciation | $ 55,200 | $ 59,400 | $ 67,400 | |||
Amounts recognized on unredeemed gift card balances | 500 | 600 | 500 | |||
General liability and workers' comp estimated claims to be paid by insurance providers | $ 3,600 | 3,700 | ||||
Contractual contributions | 5.00% | |||||
Marketing Expense | $ 2,000 | 6,200 | 500 | |||
Marketing and advertising expense | 19,000 | 28,800 | 36,500 | |||
Cumulative effect of new accounting principle in period of adoption | $ (37,330) | |||||
Deferred tax assets | 85,564 | 62,140 | ||||
Pension cost reclassification | 1,484 | 1,833 | $ 3,360 | |||
Other Assets | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Cash surrender value of life insurance | $ 112,800 | $ 109,900 | ||||
Minimum | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment assigned lives | 1 year | |||||
Maximum | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment assigned lives | 35 years | |||||
Qdoba Brand Restaurant Operations | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of restaurants | restaurant | 700 | |||||
Franchise Fees | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Cumulative effect of new accounting principle in period of adoption | $ 50,300 | |||||
Contract liabilities current | 5,000 | |||||
Contract liabilities noncurrent | 45,300 | |||||
Deferred tax assets | $ 13,000 |
Nature of Operations and Summ_6
Nature of Operations and Summary of Significant Accounting Policies (Summary of New Accounting Standard Impact) (Details) - USD ($) $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | |||||||||
Sep. 29, 2019 | Jul. 07, 2019 | Apr. 14, 2019 | Sep. 30, 2018 | Jul. 08, 2018 | Apr. 15, 2018 | Jan. 20, 2019 | Jan. 21, 2018 | Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | Oct. 02, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | $ 221,235 | $ 222,359 | $ 215,727 | $ 177,472 | $ 187,983 | $ 209,772 | $ 290,786 | $ 294,463 | $ 950,107 | $ 869,690 | $ 1,097,291 | |
Selling, general and administrative expenses | 76,357 | 104,816 | 117,280 | |||||||||
Total operating costs and expenses, net | 747,884 | 636,243 | 851,878 | |||||||||
Earnings from operations | 48,515 | 48,261 | 47,123 | 35,647 | 76,340 | 46,820 | 58,324 | 72,807 | 202,223 | 233,447 | 245,413 | |
Earnings from continuing operations and before income taxes | 115,772 | |||||||||||
Income tax expense | 24,025 | 81,728 | 75,332 | |||||||||
Earnings from continuing operations | 91,747 | 104,339 | 128,573 | |||||||||
Net earnings | 22,061 | $ 13,189 | $ 25,089 | 16,269 | $ 45,307 | $ 47,605 | $ 34,098 | $ 12,190 | 94,437 | 121,371 | 135,332 | |
Prepaid expenses | 9,015 | 14,443 | 9,015 | 14,443 | ||||||||
Total current assets | 227,128 | 94,973 | 227,128 | 94,973 | ||||||||
Deferred tax assets | 85,564 | 62,140 | 85,564 | 62,140 | ||||||||
Other assets, net | 206,685 | 199,266 | 206,685 | 199,266 | ||||||||
Total other assets | 339,421 | 308,755 | 339,421 | 308,755 | ||||||||
Total assets | 958,483 | 823,397 | 958,483 | 823,397 | ||||||||
Accrued liabilities | 120,083 | 106,922 | 120,083 | 106,922 | ||||||||
Total current liabilities | 157,923 | 183,720 | 157,923 | 183,720 | ||||||||
Other long-term liabilities | 263,770 | 193,449 | 263,770 | 193,449 | ||||||||
Total long-term liabilities | 1,538,144 | 1,231,376 | 1,538,144 | 1,231,376 | ||||||||
Retained earnings | 1,577,034 | 1,561,353 | 1,577,034 | 1,561,353 | ||||||||
Total stockholders’ deficit | (737,584) | (591,699) | (737,584) | (591,699) | (388,130) | $ (217,206) | ||||||
Total liabilities and stockholders’ deficit | 958,483 | $ 823,397 | 958,483 | 823,397 | ||||||||
Franchise royalties and other | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | 169,811 | 162,585 | 149,792 | |||||||||
Franchise contributions for advertising and other services | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | 170,674 | 0 | 0 | |||||||||
Franchise | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | 272,815 | 259,047 | 231,578 | |||||||||
Franchise advertising and other services expenses | 178,093 | $ 0 | $ 0 | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | 775,688 | |||||||||||
Selling, general and administrative expenses | 83,776 | |||||||||||
Total operating costs and expenses, net | 577,210 | |||||||||||
Earnings from operations | 198,478 | |||||||||||
Earnings from continuing operations and before income taxes | 112,027 | |||||||||||
Income tax expense | 23,053 | |||||||||||
Earnings from continuing operations | 88,974 | |||||||||||
Net earnings | 91,664 | |||||||||||
Prepaid expenses | 9,987 | 9,987 | ||||||||||
Total current assets | 228,100 | 228,100 | ||||||||||
Deferred tax assets | 72,606 | 72,606 | ||||||||||
Other assets, net | 206,954 | 206,954 | ||||||||||
Total other assets | 326,732 | 326,732 | ||||||||||
Total assets | 946,766 | 946,766 | ||||||||||
Accrued liabilities | 115,105 | 115,105 | ||||||||||
Total current liabilities | 152,945 | 152,945 | ||||||||||
Other long-term liabilities | 222,475 | 222,475 | ||||||||||
Total long-term liabilities | 1,496,849 | 1,496,849 | ||||||||||
Retained earnings | 1,611,590 | 1,611,590 | ||||||||||
Total stockholders’ deficit | (703,028) | (703,028) | ||||||||||
Total liabilities and stockholders’ deficit | 946,766 | 946,766 | ||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Franchise royalties and other | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | 166,066 | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Franchise contributions for advertising and other services | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | 0 | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Franchise | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Franchise advertising and other services expenses | 0 | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Franchise Fees | Accounting Standards Update 2014-09 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | (3,745) | |||||||||||
Earnings from operations | (3,745) | |||||||||||
Earnings from continuing operations and before income taxes | (3,745) | |||||||||||
Income tax expense | (972) | |||||||||||
Earnings from continuing operations | (2,773) | |||||||||||
Net earnings | (2,773) | |||||||||||
Prepaid expenses | 972 | 972 | ||||||||||
Total current assets | 972 | 972 | ||||||||||
Deferred tax assets | (12,958) | (12,958) | ||||||||||
Other assets, net | 269 | 269 | ||||||||||
Total other assets | (12,689) | (12,689) | ||||||||||
Total assets | (11,717) | (11,717) | ||||||||||
Accrued liabilities | (4,978) | (4,978) | ||||||||||
Total current liabilities | (4,978) | (4,978) | ||||||||||
Other long-term liabilities | (41,295) | (41,295) | ||||||||||
Total long-term liabilities | (41,295) | (41,295) | ||||||||||
Retained earnings | 34,556 | 34,556 | ||||||||||
Total stockholders’ deficit | 34,556 | 34,556 | ||||||||||
Total liabilities and stockholders’ deficit | $ (11,717) | (11,717) | ||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Franchise Fees | Franchise royalties and other | Accounting Standards Update 2014-09 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | (3,745) | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Marketing and Sourcing Fees | Accounting Standards Update 2014-09 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | (161,873) | |||||||||||
Total operating costs and expenses, net | (161,873) | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Marketing and Sourcing Fees | Franchise contributions for advertising and other services | Accounting Standards Update 2014-09 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | (161,873) | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Marketing and Sourcing Fees | Franchise | Accounting Standards Update 2014-09 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Franchise advertising and other services expenses | (161,873) | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Technology Support Fees | Accounting Standards Update 2014-09 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | (8,801) | |||||||||||
Selling, general and administrative expenses | 7,419 | |||||||||||
Total operating costs and expenses, net | (8,801) | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Technology Support Fees | Franchise contributions for advertising and other services | Accounting Standards Update 2014-09 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenues | (8,801) | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Technology Support Fees | Franchise | Accounting Standards Update 2014-09 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Franchise advertising and other services expenses | $ (16,220) |
Nature of Operations and Summ_7
Nature of Operations and Summary of Significant Accounting Policies (Effect of New Accounting Pronouncements to be Adopted in Future Periods) (Details) - Forecast - Accounting Standards Update 2016-02 - USD ($) $ in Millions | 12 Months Ended | |
Sep. 27, 2020 | Sep. 30, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease liabilities | $ 950 | |
Right-of-use assets | $ 900 | |
Increase in revenues | $ 5 | |
Increase in expenses | $ 5 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) | 12 Months Ended |
Sep. 29, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Initial franchise fee | $ 50,000 |
Royalty and marketing fee, percent of gross sales | 5.00% |
Revenue (Disaggregation of Reve
Revenue (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
Sep. 29, 2019 | Jul. 07, 2019 | Apr. 14, 2019 | Sep. 30, 2018 | Jul. 08, 2018 | Apr. 15, 2018 | Jan. 20, 2019 | Jan. 21, 2018 | Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 221,235 | $ 222,359 | $ 215,727 | $ 177,472 | $ 187,983 | $ 209,772 | $ 290,786 | $ 294,463 | $ 950,107 | $ 869,690 | $ 1,097,291 |
Company restaurant sales | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 336,807 | 448,058 | 715,921 | ||||||||
Franchise rental revenues | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 272,815 | $ 259,047 | $ 231,578 | ||||||||
Franchise royalties | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 163,047 | ||||||||||
Marketing fees | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 157,969 | ||||||||||
Technology and sourcing fees | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 12,705 | ||||||||||
Franchise fees and other services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 6,764 |
Revenue (Contract Liabilities)
Revenue (Contract Liabilities) (Details) $ in Thousands | 12 Months Ended |
Sep. 29, 2019USD ($) | |
Movement in Deferred Revenue [Roll Forward] | |
Deferred franchise fees at October 1, 2018 | $ 50,018 |
Revenue recognized during the period | (5,173) |
Additions during the period | 1,428 |
Deferred franchise fees at September 29, 2019 | $ 46,273 |
Revenue (Estimated Future Franc
Revenue (Estimated Future Franchise Fees) (Details) $ in Thousands | Sep. 29, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 46,273 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-09-30 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | 4,978 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-09-28 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | 4,880 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-04 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | 4,681 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-03 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | 4,527 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-02 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | 4,334 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-09-30 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 22,873 |
Summary of Refranchisings, Fr_3
Summary of Refranchisings, Franchisee Development and Acquisitions (Number of Restaurants Sold to Franchisees and Developed by Franchisees and Gains Recognized) (Details) $ in Thousands | 12 Months Ended | |||
Sep. 29, 2019USD ($)restaurant | Sep. 30, 2018USD ($)restaurant | Oct. 01, 2017USD ($)restaurant | ||
Summary Of Refranchisings, Franchisee Development And Acquisitions [Line Items] | ||||
Restaurants sold to franchisees | restaurant | 0 | 135 | 178 | |
New restaurants opened by franchisees | restaurant | 19 | 11 | 18 | |
Cash | [1] | $ 1,280 | $ 26,486 | $ 99,591 |
Total proceeds from the sale of company-operated restaurants | 1,280 | 96,947 | 99,591 | |
Net assets sold (primarily property and equipment) | 0 | (21,329) | (30,597) | |
Lease commitment charges | [2] | 0 | 0 | (11,737) |
Goodwill related to the sale of company-operated restaurants | (2) | (4,663) | (10,062) | |
Other | [3] | 88 | (24,791) | (9,161) |
Gains on the sale of company-operated restaurants | 1,366 | 46,164 | 38,034 | |
Additional proceeds from the sale of a company-operated restaurant | 1,300 | 1,400 | 200 | |
Maintenance and repair expenses | 2,300 | |||
Other miscellaneous non-capital charges | 3,700 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Sale of Related Markets | ||||
Summary Of Refranchisings, Franchisee Development And Acquisitions [Line Items] | ||||
Impairment charges | 4,600 | |||
Equipment write-offs | $ 1,400 | |||
2017 Reacquired Franchise Restaurants | ||||
Summary Of Refranchisings, Franchisee Development And Acquisitions [Line Items] | ||||
Restaurants sold to franchisees | restaurant | 42 | |||
Reduction of gains related to modification | 8,700 | |||
Franchise Remodel Incentive | ||||
Summary Of Refranchisings, Franchisee Development And Acquisitions [Line Items] | ||||
Costs related to franchise remodel incentives | 9,200 | |||
Notes Receivable | ||||
Summary Of Refranchisings, Franchisee Development And Acquisitions [Line Items] | ||||
Notes receivable | $ 0 | $ 70,461 | $ 0 | |
[1] | Amounts in 2019 , 2018 , and 2017 include additional proceeds of $1.3 million , $1.4 million , and $0.2 million related to the extension of the underlying franchise and lease agreements from the sale of restaurants in prior years. | |||
[2] | Charges are for operating restaurant leases with lease commitments in excess of our sublease rental income. | |||
[3] | Amounts in 2018 primarily represent $9.2 million of costs related to franchise remodel incentives, $8.7 million reduction of gains related to the modification of certain 2017 refranchising transactions, $2.3 million of maintenance and repair expenses and $3.7 million of other miscellaneous non-capital charges. Amounts in 2017 represent impairment of $4.6 million and equipment write-offs of $1.4 million related to restaurants closed in connection with the sale of the related markets, maintenance and repair charges, and other miscellaneous non-capital charges. |
Summary of Refranchisings, Fr_4
Summary of Refranchisings, Franchisee Development and Acquisitions (Purchase Price Allocations on Franchise Acquisitions) (Details) - restaurant | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2017 | Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Summary Of Refranchisings, Franchisee Development And Acquisitions [Line Items] | ||||
Number of restaurants acquired from franchisees | 0 | 0 | 50 | |
Number of restaurants closed | 3 | |||
Number of restaurants sold to franchisees | 0 | 135 | 178 | |
2017 Reacquired Franchise Restaurants | ||||
Summary Of Refranchisings, Franchisee Development And Acquisitions [Line Items] | ||||
Number of restaurants closed | 8 | |||
Number of restaurants sold to franchisees | 42 | |||
Underperforming Franchisee | ||||
Summary Of Refranchisings, Franchisee Development And Acquisitions [Line Items] | ||||
Number of restaurants acquired from franchisees | 31 | |||
Obtained Judgment | ||||
Summary Of Refranchisings, Franchisee Development And Acquisitions [Line Items] | ||||
Number of restaurants acquired from franchisees | 19 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Total amortization expense | $ 0.1 | $ 0.2 | $ 0.2 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net (Changes in Carrying Amount of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 46,749 | ||
Sale of company-operated restaurants to franchisees | (2) | $ (4,663) | $ (10,062) |
Goodwill, ending balance | 46,747 | 46,749 | |
Jack in the box brand restaurant operations [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 46,749 | 51,412 | |
Sale of company-operated restaurants to franchisees | (4,663) | ||
Goodwill, ending balance | $ 46,747 | $ 46,749 | $ 51,412 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Sep. 30, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross carrying amount | $ 6,692 | $ 6,751 |
Less accumulated amortization | (6,267) | (6,151) |
Net carrying amount | $ 425 | $ 600 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net (Estimated Amortization Expense) (Details) $ in Thousands | Sep. 29, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 108 |
2021 | 95 |
2022 | 36 |
2023 | 20 |
2024 | $ 17 |
Fair Value Measurements (Financ
Fair Value Measurements (Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | $ 30,104 | $ 38,150 | |
Impairment charges of long-term technology project | 3,500 | ||
Quoted Prices in Active Markets for Identical (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [1] | 30,104 | 37,447 |
Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [1] | 0 | 703 |
Significant Other Observable Inputs (Level 2) | Class A-2 Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | 1,344,300 | ||
Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [1] | 0 | 0 |
Interest Rate Swaps | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [2] | 703 | |
Interest Rate Swaps | Quoted Prices in Active Markets for Identical (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | 0 | ||
Interest Rate Swaps | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [1],[2] | 703 | |
Interest Rate Swaps | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | 0 | ||
Non-qualified Deferred Compensation Plan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [3] | 30,104 | 37,447 |
Non-qualified Deferred Compensation Plan | Quoted Prices in Active Markets for Identical (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | [1],[3] | 30,104 | 37,447 |
Non-qualified Deferred Compensation Plan | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | 0 | 0 | |
Non-qualified Deferred Compensation Plan | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities at fair value | $ 0 | $ 0 | |
[1] | We did not have any transfers in or out of Level 1, 2, or 3 | ||
[2] | We entered into interest rate swaps to reduce our exposure to rising interest rates on our variable rate debt. The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models as reported by our counterparties. These valuation models use a discounted cash flow analysis on the cash flows of each derivative. The key inputs for the valuation models are quoted market prices, discount rates, and forward yield curves. The Company also considered its own nonperformance risk and the respective counter-party’s nonperformance risk in the fair value measurements. As further described in Note 6, Derivatives , the Company’s interest rate swaps were terminated on July 2, 2019 and settled in connection with our securitization transaction on July 8, 2019. | ||
[3] | (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 consolidated balance sheets. |
Derivative Instruments (Narrati
Derivative Instruments (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | Jun. 15, 2015 | |
Derivative [Line Items] | ||||
Payments to terminate derivative contract | $ 23,551,000 | $ 0 | $ 0 | |
Interest Rate Swaps | ||||
Derivative [Line Items] | ||||
Payments to terminate derivative contract | 23,600,000 | |||
Interest rate swaps hedge ineffectiveness | $ 0 | $ 0 | ||
Interest Rate Swap 1 | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | $ 500,000,000 |
Derivative Instruments (Derivat
Derivative Instruments (Derivative Instruments Outstanding) (Details) - Interest rate swaps - Derivatives designated as hedging instruments - USD ($) $ in Thousands | Sep. 29, 2019 | Sep. 30, 2018 |
Derivatives, Fair Value [Line Items] | ||
Total liabilities at fair value | $ 0 | $ (703) |
Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Total liabilities at fair value | 0 | (26) |
Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Total liabilities at fair value | 0 | (1,266) |
Other assets, net | ||
Derivatives, Fair Value [Line Items] | ||
Total assets at fair value | $ 0 | $ 589 |
Derivative Instruments (Gains o
Derivative Instruments (Gains or Losses Recognized on Interest Rate Swap Derivative Instrument) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Loss) gain recognized in OCI | $ (23,625) | $ 18,769 | $ 19,768 |
Loss reclassified from accumulated OCI into net earnings | 24,328 | 3,455 | 5,070 |
Interest rate swaps | Derivatives designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Loss) gain recognized in OCI | (23,625) | 18,769 | 19,768 |
Interest rate swaps | Interest expense, net | Derivatives designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Loss reclassified from accumulated OCI into net earnings | $ 24,328 | $ 3,455 | $ 5,070 |
Indebtedness (Schedule of Long-
Indebtedness (Schedule of Long-Term Debt) (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Sep. 30, 2018 |
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 0 | $ 730,422 |
Term loans | 0 | 336,360 |
Capital lease obligations | 3,594 | 4,403 |
Total debt | 1,303,594 | 1,071,185 |
Less current maturities of long-term debt, net of $0 and $1,008 of debt issuance costs, respectively | (774) | (31,828) |
Less unamortized debt issuance costs | (28,446) | (1,430) |
Long-term debt | 1,274,374 | 1,037,927 |
Current Maturities of Long-Term Debt | ||
Debt Instrument [Line Items] | ||
Term loan debt issuance cost | 0 | 1,008 |
Senior Notes | Class A-2-I Notes | ||
Debt Instrument [Line Items] | ||
Senior secured notes | 575,000 | 0 |
Senior Notes | Class A-2-II Notes | ||
Debt Instrument [Line Items] | ||
Senior secured notes | 275,000 | 0 |
Senior Notes | Class A-2-III Notes | ||
Debt Instrument [Line Items] | ||
Senior secured notes | $ 450,000 | $ 0 |
Indebtedness (Narrative) (Detai
Indebtedness (Narrative) (Details) | Jul. 08, 2019USD ($)extnsion_option | Sep. 29, 2019USD ($) | Sep. 30, 2018USD ($) | Oct. 01, 2017USD ($) | May 01, 2019USD ($) |
Debt Instrument [Line Items] | |||||
Loss on debt extinguishment | $ 2,757,000 | $ 0 | $ 0 | ||
Securitization Transaction | |||||
Debt Instrument [Line Items] | |||||
Deferred financing costs | $ 33,000,000 | ||||
Fifth Amendment | |||||
Debt Instrument [Line Items] | |||||
Deferred financing costs | $ 1,300,000 | ||||
Senior Notes | Class A-2-I Notes | |||||
Debt Instrument [Line Items] | |||||
Proceeds from issuance of secured debt | $ 575,000,000 | ||||
Interest rate | 3.982% | ||||
Effective interest rate | 4.541% | ||||
Senior Notes | Class A-2-II Notes | |||||
Debt Instrument [Line Items] | |||||
Proceeds from issuance of secured debt | $ 275,000,000 | ||||
Interest rate | 4.476% | ||||
Effective interest rate | 4.798% | ||||
Senior Notes | Class A-2-III Notes | |||||
Debt Instrument [Line Items] | |||||
Proceeds from issuance of secured debt | $ 450,000,000 | ||||
Interest rate | 4.97% | ||||
Effective interest rate | 5.196% | ||||
Senior Notes | Class A-2 Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 150,000,000 | ||||
Principal payments due if specified leverage ratio achieved | $ 0 | $ 0 | |||
Specified maximum leverage ratio | 5 | 5 | |||
Number of extensions for variable funding notes | extnsion_option | 2 | ||||
Length of extension period | 1 year | ||||
Interest rate after repayment date | 5.00% | ||||
Letters of credit outstanding, amount | $ 45,600,000 | ||||
Senior Notes | Maximum | Class A-2 Notes | |||||
Debt Instrument [Line Items] | |||||
Scaled commitment fee (percent) | 1000.00% | ||||
Senior Notes | Minimum | Class A-2 Notes | |||||
Debt Instrument [Line Items] | |||||
Scaled commitment fee (percent) | 500.00% | ||||
Master Issuer | |||||
Debt Instrument [Line Items] | |||||
Restricted cash | 26,000,000 | ||||
Interest expense, net | |||||
Debt Instrument [Line Items] | |||||
Loss on debt extinguishment | $ 2,800,000 |
Indebtedness (Scheduled Princip
Indebtedness (Scheduled Principal Payments of Long-Term Debt) (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Sep. 30, 2018 |
Debt Disclosure [Abstract] | ||
2020 | $ 774 | |
2021 | 795 | |
2022 | 821 | |
2023 | 575,846 | |
2024 | 327 | |
Thereafter | 725,031 | |
Total debt | $ 1,303,594 | $ 1,071,185 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | Sep. 29, 2019 |
Property Subject to or Available for Operating Lease [Line Items] | |
Lease term (in years) | 20 years |
Minimum | |
Property Subject to or Available for Operating Lease [Line Items] | |
Lease renewal option as lessee (in years) | 1 year |
Lease renewal option as lessor (in years) | 5 years |
Maximum | |
Property Subject to or Available for Operating Lease [Line Items] | |
Lease renewal option as lessee (in years) | 20 years |
Lease renewal option as lessor (in years) | 20 years |
Leases (Components of Rent Expe
Leases (Components of Rent Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Leases [Abstract] | |||
Minimum rentals | $ 184,587 | $ 184,106 | $ 185,696 |
Contingent rentals | 2,255 | 2,221 | 2,419 |
Total rent expense | 186,842 | 186,327 | 188,115 |
Less rental expense on subleased properties | (170,651) | (162,640) | (145,728) |
Net rent expense | $ 16,191 | $ 23,687 | $ 42,387 |
Leases (Future Minimum Lease Pa
Leases (Future Minimum Lease Payments for Capital and Operating Leases) (Details) $ in Thousands | Sep. 29, 2019USD ($) |
Capital Leased Assets [Line Items] | |
Capital Leases, 2020 | $ 879 |
Capital Leases, 2021 | 879 |
Capital Leases, 2022 | 879 |
Capital Leases, 2023 | 864 |
Capital Leases, 2024 | 396 |
Capital Leases, Thereafter | 40 |
Capital Leases, Total minimum lease payments | 3,937 |
Less amount representing interest, 3.40% weighted-average interest rate | (343) |
Present value of obligations under capital leases | 3,594 |
Less current portion | (774) |
Long-term capital lease obligations | 2,820 |
Operating Leases, 2020 | 193,313 |
Operating Leases, 2021 | 186,226 |
Operating Leases, 2022 | 145,794 |
Operating Leases, 2023 | 117,753 |
Operating Leases, 2024 | 87,420 |
Operating Leases, Thereafter | 363,505 |
Operating Leases, Total minimum lease payments | $ 1,094,011 |
Capital Lease Obligations | |
Capital Leased Assets [Line Items] | |
Weighted average interest rate | 3.40% |
Leases (Assets Recorded Under C
Leases (Assets Recorded Under Capital Leases) (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Sep. 30, 2018 |
Capital Leased Assets [Line Items] | ||
Less accumulated amortization | $ (3,904) | $ (4,621) |
Asset under capital leases, net | 2,976 | 4,115 |
Buildings | ||
Capital Leased Assets [Line Items] | ||
Asset under capital leases, gross | 1,342 | 3,217 |
Equipment | ||
Capital Leased Assets [Line Items] | ||
Asset under capital leases, gross | $ 5,538 | $ 5,519 |
Leases (Schedule of Rental Inco
Leases (Schedule of Rental Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | ||
Leases [Abstract] | ||||
Total rental income | [1] | $ 277,623 | $ 264,432 | $ 237,004 |
Contingent rentals | $ 38,506 | $ 35,148 | $ 33,168 | |
[1] | Includes contingent rentals |
Leases (Minimum Rents Receivabl
Leases (Minimum Rents Receivable Expected to be Received Under Non-Cancelable Operating Leases and Subleases) (Details) $ in Thousands | Sep. 29, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 239,219 |
2021 | 255,315 |
2022 | 231,394 |
2023 | 224,605 |
2024 | 199,442 |
Thereafter | 1,215,811 |
Total minimum future rent receivable | $ 2,365,786 |
Leases (Assets Held for Lease)
Leases (Assets Held for Lease) (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Sep. 30, 2018 |
Property Subject to or Available for Operating Lease [Line Items] | ||
Assets held for lease, gross | $ 909,067 | $ 914,831 |
Less accumulated depreciation | (632,197) | (607,900) |
Assets held for lease, net | 276,870 | 306,931 |
Land | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Assets held for lease, gross | 91,130 | 89,256 |
Buildings | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Assets held for lease, gross | 817,400 | 824,964 |
Equipment | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Assets held for lease, gross | $ 537 | $ 611 |
Impairment and Other Charges,_3
Impairment and Other Charges, Net (Impairment and Disposal Costs Included in Impairment and Other Charges) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Restructuring and Related Activities [Abstract] | |||
Restructuring costs | $ 8,455 | $ 10,647 | $ 3,631 |
Costs of closed restaurants and other | 8,628 | 4,803 | 5,736 |
(Gains) losses on disposition of property and equipment, net | (6,244) | 1,627 | 2,891 |
Accelerated depreciation | 1,616 | 1,130 | 911 |
Operating restaurant impairment charges | 0 | 211 | 0 |
Impairment and other charges, net | $ 12,455 | $ 18,418 | $ 13,169 |
Impairment and Other Charges,_4
Impairment and Other Charges, Net (Restructuring Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | ||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 8,455 | $ 10,647 | $ 3,631 | |
Expect to recognize severance and related costs | 1,300 | |||
Employee severance and related costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 7,169 | 7,845 | 724 | |
Strategic Alternatives Evaluation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | [1] | 1,286 | 0 | 0 |
Qdoba Evaluation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | [2] | 0 | 2,211 | 2,592 |
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 0 | $ 591 | $ 315 | |
[1] | Strategic Alternative Evaluation costs are primarily related to third party advisory services. | |||
[2] | Qdoba Evaluation consulting costs are primarily related to third party advisory services and retention compensation. |
Impairment and Other Charges,_5
Impairment and Other Charges, Net (Accrued Severance Costs) (Details) - Employee Severance $ in Thousands | 12 Months Ended |
Sep. 29, 2019USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at beginning of year | $ 5,309 |
Interest expense | 7,731 |
Accruals released | (662) |
Cash payments | (10,278) |
Balance at end of year | $ 2,100 |
Impairment and Other Charges,_6
Impairment and Other Charges, Net (Cost of Closed Restaurants) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 29, 2019USD ($) | Sep. 29, 2019USD ($) | Oct. 01, 2017restaurant | ||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment of software development cost | $ 3,500 | |||
Restructuring Reserve [Roll Forward] | ||||
Number of restaurants closed | restaurant | 3 | |||
Facility Closing | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of year | $ 3,534 | |||
Adjustments | [1] | 590 | ||
Interest expense | 1,292 | |||
Cash payments | (3,591) | |||
Balance at end of year | [2],[3] | 1,825 | $ 1,825 | |
Facility Closing | Weighted Average | ||||
Restructuring Reserve [Roll Forward] | ||||
Remaining lease term | 4 years | |||
Restaurant Closing Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Other accrued liabilities | $ 1,500 | $ 1,500 | ||
[1] | (1) Adjustments relate primarily to revisions of certain sublease and cost assumptions. Our estimates related to our future lease obligations, primarily the sublease income we anticipate, are subject to a high degree of judgment and may differ from actual sublease income due to changes in economic conditions, desirability of the sites, and other factors. | |||
[2] | (3) This balance excludes $1.5 million of restaurant closing costs that are included in “Accrued liabilities” and “Other long-term liabilities”, which were initially recorded as losses on the sale of company-operated restaurants to franchisees in prior years. | |||
[3] | The weighted-average remaining lease term related to these commitments is approximately four years |
Discontinued Operations (Narrat
Discontinued Operations (Narrative) (Details) $ in Millions | Mar. 21, 2018extnsion_option | Dec. 31, 2018USD ($) | Sep. 29, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 19, 2017USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal group, including discontinued operation, consideration | $ 298.5 | ||||
Discontinued operation, period of continuing involvement after disposal | 12 months | ||||
Discontinued operation, period of continuing involvement after disposal, number of extension options | extnsion_option | 2 | ||||
Discontinued operation, period of continuing involvement after disposal, service period extension option | 3 months | ||||
Other nonrecurring income | $ 7 | $ 7.9 | |||
Other nonrecurring expense | $ 35.4 | ||||
Disposal group, including discontinued operation, accrued income tax payable | $ 2.8 | ||||
Term Loan | Qdoba | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Repayments of debt | $ 260 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Income tax benefit (expense) | $ 2,863 | $ (15,700) | $ 4,119 |
Earnings from discontinued operations, net of income taxes | $ 2,690 | $ 17,032 | $ 6,759 |
Net earnings from discontinued operations, basic (in usd per share) | $ 0.10 | $ 0.60 | $ 0.22 |
Net earnings from discontinued operations, diluted (in usd per share) | $ 0.10 | $ 0.59 | $ 0.22 |
Qdoba | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Company restaurant sales | $ 0 | $ 192,620 | $ 436,558 |
Franchise revenues | 0 | 9,337 | 20,065 |
Company restaurant costs (excluding depreciation and amortization) | 0 | (166,122) | (357,370) |
Franchise costs (excluding depreciation and amortization) | 0 | (2,338) | (4,993) |
Selling, general and administrative expenses | 174 | (19,286) | (36,706) |
Depreciation and amortization | 0 | (5,012) | (21,500) |
Impairment and other charges, net | (262) | (2,305) | (15,061) |
Interest expense, net | 0 | (4,787) | (9,025) |
Operating (loss) earnings from discontinued operations before income taxes | (88) | 2,107 | 11,968 |
(Loss) gain on Qdoba Sale | (85) | 30,717 | 0 |
(Loss) earnings from discontinued operations before income taxes | (173) | 32,824 | 11,968 |
Income tax benefit (expense) | 2,863 | (15,726) | (4,518) |
Earnings from discontinued operations, net of income taxes | $ 2,690 | $ 17,098 | $ 7,450 |
Net earnings from discontinued operations, basic (in usd per share) | $ 0.10 | $ 0.60 | $ 0.24 |
Net earnings from discontinued operations, diluted (in usd per share) | $ 0.10 | $ 0.59 | $ 0.24 |
Discontinued Operations (Lease
Discontinued Operations (Lease Guarantee Details) (Details) $ in Millions | 12 Months Ended |
Sep. 29, 2019USD ($) | |
Lease Guarantee [Abstract] | |
Contractual obligation | $ 32.1 |
Qdoba guaranteed leases, remaining term | 16 years |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 29, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate reconciliation, change in deferred tax assets and liabilities, amount | $ 32,500 | |
State net operating loss carryforwards | $ 27,400 | |
Valuation allowance | $ 3,554 | $ 2,485 |
Income Taxes (Components of Inc
Income Taxes (Components of Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current, Federal | $ 14,683 | $ 51,454 | $ 79,038 |
Current, State | 5,242 | 4,922 | 12,368 |
Total Current | 19,925 | 56,376 | 91,406 |
Deferred, Federal | 3,750 | 23,462 | (13,176) |
Deferred, State | 350 | 1,890 | (2,898) |
Total Deferred | 4,100 | 25,352 | (16,074) |
Income tax expense from continuing operations | 24,025 | 81,728 | 75,332 |
Income tax expense (benefit) from discontinued operations | $ (2,863) | $ 15,700 | $ (4,119) |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of the Federal Statutory Income Tax Rate to Effective Tax Rate) (Details) | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense at federal statutory rate | 21.00% | 24.50% | 35.00% |
State income taxes, net of federal tax benefit | 5.30% | 4.70% | 3.80% |
One-time, non-cash impact of the Tax Act | 0.00% | 17.50% | 0.00% |
Stock compensation excess tax benefit | (0.10%) | (1.10%) | 0.00% |
Benefit of jobs tax credits, net of valuation allowance | (0.30%) | (0.40%) | (0.40%) |
Release of federal tax liability | (0.60%) | 0.00% | 0.00% |
Adjustment to state tax provision | (0.90%) | 0.00% | 0.00% |
Benefit related to COLIs | (1.00%) | (0.40%) | (1.10%) |
Termination of interest rate swaps | (2.60%) | 0.00% | 0.00% |
Other, net | 0.00% | (0.90%) | (0.40%) |
Effective tax rate | 20.80% | 43.90% | 36.90% |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Deferred Tax Liabilities) (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Sep. 30, 2018 |
Income Tax Disclosure [Abstract] | ||
Accrued defined benefit pension and postretirement benefits | $ 46,918 | $ 34,776 |
Deferred income | 13,803 | 1,535 |
Impairment | 9,981 | 11,388 |
Accrued insurance | 7,133 | 8,994 |
Share-based compensation | 5,415 | 4,936 |
Tax loss and tax credit carryforwards | 5,327 | 7,458 |
Lease commitments related to closed or refranchised locations | 3,786 | 4,696 |
Deferred interest deduction | 3,188 | 0 |
Other reserves and allowances | 2,965 | 851 |
Accrued incentive compensation | 2,617 | 2,055 |
Accrued compensation expense | 1,092 | 2,034 |
Interest rate swaps | 0 | 181 |
Other, net | 868 | 2,206 |
Total gross deferred tax assets | 103,093 | 81,110 |
Valuation allowance | (2,485) | (3,554) |
Total net deferred tax assets | 100,608 | 77,556 |
Intangible assets | (10,520) | (10,492) |
Leasing transactions | (3,822) | (2,790) |
Property and equipment, principally due to differences in depreciation | (128) | (1,855) |
Other | (574) | (279) |
Total gross deferred tax liabilities | (15,044) | (15,416) |
Net deferred tax assets | $ 85,564 | $ 62,140 |
Retirement Plans (Narrative) (D
Retirement Plans (Narrative) (Details) - USD ($) | Jan. 01, 2016 | Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Decrease in earnings before income taxes due to quarter percentage point decrease in discount rate | $ 500,000 | |||
Decrease in earnings before income taxes due to quarter percentage point decrease in long-term rate of return | 1,100,000 | |||
Minimum required contribution for retirement plans | $ 0 | |||
Qualified Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Estimated participation rate in limited lump sum payment program for terminated employees | 40.00% | |||
Reduction in Company's PBO from limited lump sum payment program for terminated employees | $ 25,600,000 | |||
Qualified Defined Contribution Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Minimum age of eligible employees | 21 years | |||
Employer matching contribution, percent of match | 100.00% | |||
Employer matching contribution, percent of employees' gross pay | 4.00% | |||
Defined contribution plan, Company contributions | $ 1,700,000 | $ 2,200,000 | $ 1,900,000 | |
Non-Qualified Deferred Compensation Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer matching contribution, percent of employees' gross pay | 4.00% | |||
Defined contribution plan, Company contributions | $ 200,000 | $ 200,000 | $ 500,000 | |
Maximum annual contributions per employee, percent | 50.00% | |||
Maximum annual contributions per employee, percent of bonus | 85.00% | |||
Period of years in executive position | 10 years |
Retirement Plans (Reconciliatio
Retirement Plans (Reconciliation of Changes in Benefit Obligations, Plan Assets and Funded Status of Retirement Plans) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value at beginning of year | $ 456,127 | ||
Fair value at end of year | 476,194 | $ 456,127 | |
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | |||
Net actuarial loss (gain) | 62,377 | (31,478) | $ (49,025) |
Total recognized in OCI | 58,460 | (36,466) | (55,454) |
Supplemental Employee Retirement Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Obligation at beginning of year | 73,067 | 78,401 | |
Service cost | 0 | 490 | 855 |
Interest cost | 3,080 | 2,894 | 2,850 |
Participant contributions | 0 | 0 | |
Actuarial loss (gain) | 8,771 | (4,686) | |
Benefits paid | (5,025) | (4,032) | |
Settlements | 0 | 0 | |
Other | 0 | 0 | |
Obligation at end of year | 79,893 | 73,067 | 78,401 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value at beginning of year | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Participant contributions | 0 | 0 | |
Employer contributions | 5,025 | 4,032 | |
Benefits paid | (5,025) | (4,032) | |
Settlements | 0 | 0 | |
Other | 0 | 0 | |
Fair value at end of year | 0 | 0 | 0 |
Funded status at end of year | (79,893) | (73,067) | |
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | |||
Current liabilities | (5,371) | (5,037) | |
Noncurrent liabilities | (74,522) | (68,030) | |
Total liability recognized | (79,893) | (73,067) | |
Unamortized actuarial loss (gain), net | 34,803 | 27,239 | |
Unamortized prior service cost | 157 | 271 | |
Total | 34,960 | 27,510 | |
Net actuarial loss (gain) | 8,771 | (4,686) | |
Amortization of actuarial (loss) gain | (1,207) | (1,538) | |
Amortization of prior service cost | (115) | (146) | |
Total recognized in OCI | 7,449 | (6,370) | |
Net periodic benefit (credit) cost and other losses | 4,402 | 5,068 | 5,517 |
Total recognized in comprehensive income | 11,851 | (1,302) | |
Net actuarial loss | 1,652 | ||
Prior service cost | 84 | ||
Total | 1,736 | ||
Postretirement Health Plans | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Obligation at beginning of year | 23,461 | 25,660 | |
Service cost | 0 | 0 | |
Interest cost | 997 | 955 | 1,003 |
Participant contributions | 112 | 115 | |
Actuarial loss (gain) | 2,343 | (1,720) | |
Benefits paid | (1,354) | (1,563) | |
Settlements | 0 | 0 | |
Other | 73 | 14 | |
Obligation at end of year | 25,632 | 23,461 | 25,660 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value at beginning of year | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Participant contributions | 112 | 115 | |
Employer contributions | 1,169 | 1,435 | |
Benefits paid | (1,354) | (1,563) | |
Settlements | 0 | 0 | |
Other | 73 | 13 | |
Fair value at end of year | 0 | 0 | 0 |
Funded status at end of year | (25,632) | (23,461) | |
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | |||
Current liabilities | (1,379) | (1,353) | |
Noncurrent liabilities | (24,253) | (22,108) | |
Total liability recognized | (25,632) | (23,461) | |
Unamortized actuarial loss (gain), net | 235 | (2,267) | |
Unamortized prior service cost | 0 | 0 | |
Total | 235 | (2,267) | |
Net actuarial loss (gain) | 2,343 | (1,720) | |
Amortization of actuarial (loss) gain | 159 | 27 | |
Amortization of prior service cost | 0 | 0 | |
Total recognized in OCI | 2,502 | (1,693) | |
Net periodic benefit (credit) cost and other losses | 838 | 928 | 1,165 |
Total recognized in comprehensive income | 3,340 | (765) | |
Net actuarial loss | 17 | ||
Prior service cost | 0 | ||
Total | 17 | ||
Qualified Pension Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Obligation at beginning of year | 457,109 | 493,767 | |
Service cost | 0 | 1,743 | |
Interest cost | 19,825 | 19,463 | 19,889 |
Participant contributions | 0 | 0 | |
Actuarial loss (gain) | 61,029 | (37,872) | |
Benefits paid | (12,224) | (10,949) | |
Settlements | (3,808) | (9,043) | |
Other | 0 | 0 | |
Obligation at end of year | 521,931 | 457,109 | 493,767 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value at beginning of year | 456,127 | 460,709 | |
Actual return on plan assets | 36,099 | 15,410 | |
Participant contributions | 0 | 0 | |
Employer contributions | 0 | 0 | |
Benefits paid | (12,224) | (10,949) | |
Settlements | (3,808) | (9,043) | |
Other | 0 | 0 | |
Fair value at end of year | 476,194 | 456,127 | 460,709 |
Funded status at end of year | (45,737) | (982) | |
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | |||
Current liabilities | 0 | 0 | |
Noncurrent liabilities | (45,737) | (982) | |
Total liability recognized | (45,737) | (982) | |
Unamortized actuarial loss (gain), net | 187,705 | 139,195 | |
Unamortized prior service cost | 0 | 0 | |
Total | 187,705 | 139,195 | |
Net actuarial loss (gain) | 51,263 | (25,072) | |
Amortization of actuarial (loss) gain | (2,754) | (3,331) | |
Amortization of prior service cost | 0 | 0 | |
Total recognized in OCI | 48,509 | (28,403) | |
Net periodic benefit (credit) cost and other losses | (3,755) | (3,673) | $ (2,467) |
Total recognized in comprehensive income | 44,754 | $ (32,076) | |
Net actuarial loss | 4,125 | ||
Prior service cost | 0 | ||
Total | $ 4,125 |
Retirement Plans (Fair Value of
Retirement Plans (Fair Value of Plan Assets of Pension Plans) (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 476,194 | $ 456,127 | |
Supplemental Employee Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Projected benefit obligation | 79,893 | 73,067 | $ 78,401 |
Accumulated benefit obligation | 79,893 | 73,067 | |
Fair value of plan assets | 0 | 0 | 0 |
Qualified Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Projected benefit obligation | 521,931 | 457,109 | 493,767 |
Accumulated benefit obligation | 521,931 | 457,109 | |
Fair value of plan assets | $ 476,194 | $ 456,127 | $ 460,709 |
Retirement Plans (Components of
Retirement Plans (Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Supplemental Employee Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | $ 3,080 | $ 2,894 | $ 2,850 |
Actuarial loss | 1,207 | 1,538 | 1,659 |
Service cost | 0 | 490 | 855 |
Amortization of unrecognized prior service cost | 115 | 146 | 153 |
Net periodic benefit (credit) cost | 4,402 | 5,068 | 5,517 |
Postretirement Health Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | 997 | 955 | 1,003 |
Actuarial loss | (159) | (27) | 162 |
Service cost | 0 | 0 | |
Net periodic benefit (credit) cost | 838 | 928 | 1,165 |
Qualified Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | 19,825 | 19,463 | 19,889 |
Expected return on plan assets | (26,334) | (26,467) | (26,811) |
Actuarial loss | 2,754 | 3,331 | 4,455 |
Service cost | 0 | 1,743 | |
Net periodic benefit (credit) cost | $ (3,755) | $ (3,673) | $ (2,467) |
Retirement Plans (Determining t
Retirement Plans (Determining the Present Values of Benefit Obligations and Net Periodic Benefit Costs) (Details) | 12 Months Ended | |||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | ||
Defined Benefit Plan Disclosure [Line Items] | ||||
Cash flow period extension | P30Y | |||
Supplemental Employee Retirement Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Assumptions used to determine benefit obligations, Discount rate | [1] | 3.24% | 4.37% | 3.80% |
Assumptions used to determine benefit obligations, Rate of future pay increases | [1] | 3.50% | 3.50% | 3.50% |
Assumptions used to determine net periodic benefit cost, Discount rate | [2] | 4.37% | 3.80% | 3.60% |
Assumptions used to determine net periodic benefit cost, Rate of future pay increases | [2] | 3.50% | 3.50% | 3.50% |
Postretirement Health Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Assumptions used to determine benefit obligations, Discount rate | [1] | 3.24% | 4.38% | 3.82% |
Assumptions used to determine net periodic benefit cost, Discount rate | [2] | 4.38% | 3.82% | 3.64% |
Qualified Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Assumptions used to determine benefit obligations, Discount rate | [1] | 3.36% | 4.40% | 3.99% |
Assumptions used to determine net periodic benefit cost, Discount rate | [2] | 4.40% | 3.99% | 3.85% |
Assumptions used to determine net periodic benefit cost, Long-term rate of return on assets | [2] | 5.85% | 5.80% | 6.19% |
[1] | Determined as of end of year | |||
[2] | Determined as of beginning of year |
Retirement Plans (Health Care C
Retirement Plans (Health Care Cost Trend Rates for Postretirement Health Plans) (Details) | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Participants under age 65 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Health care cost trend rate for next year | 7.00% | 7.25% | 7.50% |
Rate to which the cost trend rate is assumed to decline | 4.50% | 4.50% | 4.50% |
Year the rate reaches the ultimate trend rate | 2030 | 2030 | 2030 |
Participants age 65 or older | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Health care cost trend rate for next year | 6.50% | 6.75% | 7.00% |
Rate to which the cost trend rate is assumed to decline | 4.50% | 4.50% | 4.50% |
Year the rate reaches the ultimate trend rate | 2028 | 2028 | 2028 |
Retirement Plans (Effect of Cha
Retirement Plans (Effect of Change in Assumed Health Care Cost Trend Rate) (Details) $ in Thousands | 12 Months Ended |
Sep. 29, 2019USD ($) | |
Retirement Benefits [Abstract] | |
Total interest and service cost, 1% Point Increase | $ 106 |
Total interest and service cost, 1% Point Decrease | (92) |
Postretirement benefit obligation, 1% Point Increase | 2,737 |
Postretirement benefit obligation, 1% Point Decrease | $ (2,365) |
Retirement Plans (Schedule of P
Retirement Plans (Schedule of Plan Asset Allocation) (Details) | Sep. 29, 2019 |
Defined Benefit Plan Disclosure [Line Items] | |
Percentage of plan assets, equity securities | 100.00% |
Asset allocation, target, equity securities | 100.00% |
Cash & cash equivalents | |
Defined Benefit Plan Disclosure [Line Items] | |
Percentage of plan assets, equity securities | 2.00% |
Asset allocation, target, equity securities | 0.00% |
Domestic Equities | |
Defined Benefit Plan Disclosure [Line Items] | |
Percentage of plan assets, equity securities | 21.00% |
Asset allocation, target, equity securities | 23.00% |
International equity | |
Defined Benefit Plan Disclosure [Line Items] | |
Percentage of plan assets, equity securities | 20.00% |
Asset allocation, target, equity securities | 22.00% |
Core fixed funds | |
Defined Benefit Plan Disclosure [Line Items] | |
Percentage of plan assets, equity securities | 37.00% |
Asset allocation, target, equity securities | 32.00% |
High yield | |
Defined Benefit Plan Disclosure [Line Items] | |
Percentage of plan assets, equity securities | 2.00% |
Asset allocation, target, equity securities | 4.00% |
Alternative investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Percentage of plan assets, equity securities | 9.00% |
Asset allocation, target, equity securities | 8.00% |
Real estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Percentage of plan assets, equity securities | 9.00% |
Asset allocation, target, equity securities | 7.00% |
Real return bonds | |
Defined Benefit Plan Disclosure [Line Items] | |
Percentage of plan assets, equity securities | 0.00% |
Asset allocation, target, equity securities | 4.00% |
Minimum | Cash & cash equivalents | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 0.00% |
Minimum | Domestic Equities | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 12.00% |
Minimum | International equity | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 12.00% |
Minimum | Core fixed funds | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 27.00% |
Minimum | High yield | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 0.00% |
Minimum | Alternative investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 0.00% |
Minimum | Real estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 2.00% |
Minimum | Real return bonds | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 0.00% |
Maximum | Cash & cash equivalents | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 0.00% |
Maximum | Domestic Equities | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 32.00% |
Maximum | International equity | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 32.00% |
Maximum | Core fixed funds | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 37.00% |
Maximum | High yield | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 8.00% |
Maximum | Alternative investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 16.00% |
Maximum | Real estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 12.00% |
Maximum | Real return bonds | |
Defined Benefit Plan Disclosure [Line Items] | |
Asset allocation, target, equity securities | 8.00% |
Retirement Plans (Fair Values o
Retirement Plans (Fair Values of Qualified Plan's Assets) (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Sep. 30, 2018 | ||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | $ 476,194 | $ 456,127 | ||
Cash and cash equivalents | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 10,110 | 2,901 | ||
Domestic Equities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 99,124 | 104,424 | ||
International equity | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 94,953 | 100,340 | ||
Investment grade | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 177,500 | 160,106 | ||
High yield | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 9,256 | 14,384 | ||
Alternatives | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 42,052 | 35,964 | ||
Real estate | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 43,199 | 38,008 | ||
Quoted Prices in Active Markets for Identical (Level 1) | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 155,642 | 168,665 | ||
Quoted Prices in Active Markets for Identical (Level 1) | Cash and cash equivalents | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [1] | 0 | 0 | |
Quoted Prices in Active Markets for Identical (Level 1) | Domestic Equities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [2] | 99,124 | 104,424 | |
Quoted Prices in Active Markets for Identical (Level 1) | International equity | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [3],[4] | 47,262 | 49,857 | |
Quoted Prices in Active Markets for Identical (Level 1) | Investment grade | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [5] | 0 | 0 | |
Quoted Prices in Active Markets for Identical (Level 1) | High yield | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [6] | 9,256 | 14,384 | |
Quoted Prices in Active Markets for Identical (Level 1) | Alternatives | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [7] | 0 | [3] | 0 |
Quoted Prices in Active Markets for Identical (Level 1) | Real estate | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [3],[8] | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 187,610 | 163,007 | ||
Significant Other Observable Inputs (Level 2) | Cash and cash equivalents | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [1] | 10,110 | 2,901 | |
Significant Other Observable Inputs (Level 2) | Domestic Equities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [2] | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | International equity | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [3],[4] | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Investment grade | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [5] | 177,500 | 160,106 | |
Significant Other Observable Inputs (Level 2) | High yield | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [6] | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Alternatives | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [7] | 0 | [3] | 0 |
Significant Other Observable Inputs (Level 2) | Real estate | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [3],[8] | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Significant Unobservable Inputs (Level 3) | Cash and cash equivalents | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [1] | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Domestic Equities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [2] | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | International equity | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [3],[4] | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Investment grade | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [5] | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | High yield | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [6] | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Alternatives | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [7] | 0 | [3] | 0 |
Significant Unobservable Inputs (Level 3) | Real estate | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [3],[8] | $ 0 | $ 0 | |
[1] | Cash and cash equivalents are comprised of commercial paper, short-term bills and notes, and short-term investment funds, which are valued at quoted prices in active markets for similar securities. | |||
[2] | U.S. equity securities are comprised of investments in common stock of U.S. companies for total return purposes. These investments are valued by the trustee at closing prices from national exchanges on the valuation date. | |||
[3] | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. | |||
[4] | International equity securities are comprised of investments in common stock of companies located outside of the U.S for total return purposes. These investments are valued by the trustee at closing prices from national exchanges on the valuation date, or the values are adjusted as a result of market movements following the close of local trading using inputs to models that are observable either directly or indirectly. The portion of these investments that are measured at fair value using the net asset value per share practical expedient (see note 4 below) can be redeemed on a monthly basis. | |||
[5] | Investment grade fixed income consists of debt obligations either issued by the US government or have a rating of BBB- / Baa or higher assigned by a major credit rating agency. These investments are valued based on unadjusted quoted market prices (Level 1), or based on quoted prices in inactive markets, or whose values are based on models, but the inputs to those models are observable either directly or indirectly (Level 2). | |||
[6] | High yield fixed income consists primarily of debt obligations that have a rating of below BBB- / Baa or lower assigned by a major credit rating agency. These investments are valued based on unadjusted quoted market prices. | |||
[7] | Alternative investments consist primarily of an investment in asset classes other than stocks, bonds, and cash. Alternative investments can include commodities, hedge funds, private equity, managed futures, and derivatives. These investments are valued based on unadjusted quoted market prices and can be redeemed on a bi-monthly basis. | |||
[8] | Real estate is investments in a real estate collective trust for purposes of total return. These investments are valued based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These investments can be redeemed on a quarterly basis. |
Retirement Plans (Contributions
Retirement Plans (Contributions Expected to be Paid in Next Fiscal Year and Projected Benefit Payments) (Details) $ in Thousands | Sep. 29, 2019USD ($) |
Supplemental Employee Retirement Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated net contributions during fiscal 2020 | $ 5,371 |
Defined Benefit Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | 123,471 |
2021 | 18,371 |
2022 | 18,681 |
2023 | 19,135 |
2024 | 19,690 |
2025-2029 | 109,169 |
Postretirement Health Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated net contributions during fiscal 2020 | 1,401 |
2020 | 1,401 |
2021 | 1,431 |
2022 | 1,476 |
2023 | 1,574 |
2024 | 1,607 |
2025-2029 | $ 8,242 |
Share-Based Employee Compensa_3
Share-Based Employee Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards outstanding | 311,845 | 288,098 | |
Total unrecognized compensation cost related to stock options granted | $ 7.4 | ||
Weighted-average period for unrecognized compensation cost, (in years) | 2 years 2 months 12 days | ||
Weighted-average grant-date fair value of RSUs granted (in usd per share) | $ 86.08 | $ 94.93 | $ 102.42 |
Total fair value of awards vested | $ 4.7 | $ 4.4 | $ 4.4 |
Performance Share Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards outstanding | 75,490 | 52,479 | |
Vesting period | 3 years | ||
Total unrecognized compensation cost related to stock options granted | $ 2 | ||
Weighted-average period for unrecognized compensation cost, (in years) | 1 year 9 months 18 days | ||
Weighted-average grant-date fair value of RSUs granted (in usd per share) | $ 84.60 | ||
Total fair value of awards vested | $ 2.1 | $ 1.6 | $ 3.2 |
Weighted-average grant-date fair value of options granted (in usd per share) | $ 97.02 | $ 95.33 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Total unrecognized compensation cost related to stock options granted | $ 0.6 | ||
Weighted-average period for unrecognized compensation cost, (in years) | 1 year | ||
Weighted-average grant-date fair value of options granted (in usd per share) | $ 18.49 | $ 20.92 | |
Total intrinsic value of stock options exercised | $ 0.5 | $ 2.3 | $ 6.9 |
Nonvested Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards outstanding | 33,243 | ||
Deferred Compensation for Non Management Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards outstanding | 100,005 | 94,390 | |
Minimum | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Restricted stock units vested, percentage | 50.00% | ||
Minimum | Performance Share Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance share awards vesting rights, percentage | 0.00% | ||
Maximum | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Restricted stock units vested, percentage | 100.00% | ||
Maximum | Performance Share Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance share awards vesting rights, percentage | 150.00% | ||
Management | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards outstanding | 35,864 | ||
Vesting period | 3 years | ||
Non-Management Directors | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards outstanding | 69,411 | ||
Vesting period | 12 months | ||
Two Thousand Four Stock Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized | 11,600,000 | ||
Shares of common stock available for future issuance | 1,677,983 | ||
Deferred Compensation Plan for Non-Management Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized | 350,000 | ||
Shares of common stock available for future issuance | 143,122 | ||
Prior to Fiscal 2011 | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards outstanding | 60,272 | ||
Since Fiscal 2011 | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards outstanding | 146,268 |
Share-Based Employee Compensa_4
Share-Based Employee Compensation (Components of Share-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 8,074 | $ 9,146 | $ 10,637 |
Nonvested stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 5,458 | 5,737 | 5,873 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 936 | 1,790 | 1,826 |
Performance share awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 1,417 | 1,236 | 2,580 |
Nonvested restricted stock awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 0 | 33 | 88 |
Non-management directors’ deferred compensation | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 263 | $ 350 | $ 270 |
Share-Based Employee Compensa_5
Share-Based Employee Compensation (Summary of RSU Activity) (Details) - Nonvested stock units - $ / shares | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average period for unrecognized compensation cost, (in years) | 2 years 2 months 12 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | |||
Stock awards outstanding, Beginning balance, Shares | 288,098 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 93,686 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (55,642) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (14,297) | ||
Stock awards outstanding, Ending balance, Shares | 311,845 | 288,098 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Stock awards outstanding, Weighted-Average Grant Date Fair Value, Beginning balance (in usd per share) | $ 64.57 | ||
Granted, Weighted-Average Grant Date Fair Value (in usd per share) | 86.08 | $ 94.93 | $ 102.42 |
Released, Weighted-Average Grant Date Fair Value (in usd per share) | 84.23 | ||
Cancelled, Weighted-Average Grant Date Fair Value(in usd per share) | 94 | ||
Stock awards outstanding, Weighted-Average Grant Date Fair Value, Ending balance (in usd per share) | $ 66.18 | $ 64.57 | |
Non-Management Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 12 months | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | |||
Stock awards outstanding, Ending balance, Shares | 69,411 |
Share-Based Employee Compensa_6
Share-Based Employee Compensation (Summary of Stock Option Activity) (Details) - Stock options $ / shares in Units, $ in Thousands | 12 Months Ended |
Sep. 29, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Option grants contractual term | P7Y |
Vesting period | 3 years |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Options outstanding, shares, beginning balance | 287,618 |
Share, Granted | 0 |
Shares, Exercised | (20,074) |
Shares, Forfeited | (303) |
Shares, Expired | (683) |
Options outstanding, shares, ending balance | 266,558 |
Options exercisable, Shares | 176,179 |
Options exercisable and expected to vest, Shares | 266,558 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Options outstanding, Weighted Average Exercise Price, Beginning balance (in usd per share) | $ / shares | $ 87.61 |
Options outstanding, Weighted Average Exercise Price, Exercised (in usd per share) | $ / shares | 61.28 |
Options outstanding, Weighted Average Exercise Price, Forfeited (in usd per share) | $ / shares | 90.06 |
Options outstanding, Weighted Average Exercise Price, Expired (in usd per share) | $ / shares | 104.95 |
Options outstanding, Weighted Average Exercise Price, Ending balance (in usd per share) | $ / shares | 89.54 |
Options exercisable, Weighted Average Exercise Price (in usd per share) | $ / shares | 87.56 |
Options exercisable and expected to vest, Weighted Average Exercise Price (in usd per share) | $ / shares | $ 89.54 |
Options outstanding, Weighted Average Remaining Contractual Term, years | 4 years 3 months |
Options exercisable, Weighted Average Remaining Contractual Term, years | 3 years 9 months 18 days |
Options exercisable and expected to vest, Weighted Average Remaining Contractual Term, years | 4 years 3 months |
Options outstanding, Aggregate Intrinsic Value | $ | $ 1,334 |
Options exercisable, Aggregate Intrinsic Value | $ | 1,307 |
Options exercisable and expected to vest, Aggregate Intrinsic Value | $ | $ 1,334 |
Share-Based Employee Compensa_7
Share-Based Employee Compensation (Schedule of Weighted-Average Assumptions) (Details) - Stock options - $ / shares | 12 Months Ended | |
Sep. 30, 2018 | Oct. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.40% | 1.40% |
Expected dividends yield | 1.80% | 1.50% |
Expected stock price volatility | 28.80% | 29.00% |
Expected life of options (in years) | 3 years 4 months 24 days | 3 years 6 months |
Weighted-average grant date fair value | $ 18.49 | $ 20.92 |
Share-Based Employee Compensa_8
Share-Based Employee Compensation (Summary of PSU Activity) (Details) - Performance share awards | 12 Months Ended |
Sep. 29, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average period for unrecognized compensation cost, (in years) | 1 year 9 months 18 days |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | |
Stock awards outstanding, Beginning balance, Shares | shares | 52,479 |
Shares, Granted | shares | 45,113 |
Shares, Issued | shares | (18,695) |
Shares, Forfeited | shares | (687) |
Shares, Performance adjustments | shares | (2,720) |
Stock awards outstanding, Ending balance, Shares | shares | 75,490 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Stock awards outstanding, Weighted-Average Grant Date Fair Value, Beginning balance (in usd per share) | $ / shares | $ 83.21 |
Granted, Weighted-Average Grant Date Fair Value (in usd per share) | $ / shares | 84.60 |
Issued, Weighted-Average Grant Date Fair Value (in usd per share) | $ / shares | 83.56 |
Forfeited, Weighted- Average Grant Date Fair Value (in usd per share) | $ / shares | 91.91 |
Performance adjustments, Weighted- Average Grant Date Fair Value(in usd per share) | $ / shares | 97.51 |
Stock awards outstanding, Weighted-Average Grant Date Fair Value, Ending balance (in usd per share) | $ / shares | $ 83.40 |
Share-Based Employee Compensa_9
Share-Based Employee Compensation (Summary of Stock Equivalent Activity) (Details) | 12 Months Ended | ||
Sep. 29, 2019$ / sharesshares | Sep. 30, 2018$ / sharesshares | Oct. 01, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Deferred Compensation Arrangement with Individual, Common Stock Reserved for Future Issuance | 0 | 0 | 0 |
Deferred Compensation for Non Management Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | |||
Stock awards outstanding, Beginning balance, Shares | 94,390 | ||
Deferred directors’ compensation, Shares | 3,277 | ||
Stock awards outstanding, Ending balance, Shares | 100,005 | 94,390 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Stock awards outstanding, Weighted-Average Grant Date Fair Value, Beginning balance (in usd per share) | $ / shares | $ 36.35 | ||
Deferred directors' compensation, Weighted-Average Grant Date Fair Value (in usd per share) | $ / shares | 79.95 | ||
Stock awards outstanding, Weighted-Average Grant Date Fair Value, Ending balance (in usd per share) | $ / shares | $ 38.87 | $ 36.35 | |
Deferred Compensation for Non Management Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | |||
Dividend equivalents, Shares | 2,338 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Dividend equivalents, Weighted- Average Grant Date Fair Value (in usd per share) | $ / shares | 82.87 |
Share-Based Employee Compens_10
Share-Based Employee Compensation (Summary of RSA Activity) (Details) - Nonvested Stock Awards | 12 Months Ended |
Sep. 29, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested stock awards outstanding, Shares | 33,243 |
Shares, Granted | 0 |
Non vested stock awards outstanding, Weighted-Average Grant Date Fair Value, (in usd per share) | $ / shares | $ 26.47 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||
Sep. 29, 2019 | Jul. 07, 2019 | Apr. 14, 2019 | Jan. 20, 2019 | Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Stockholders' Equity Note [Abstract] | |||||||
Remaining amount under stock repurchase program | $ 175,700 | $ 175,700 | |||||
Shares repurchased | 1.4 | ||||||
Cost of shares repurchased | $ 125,317 | $ 340,000 | $ 327,153 | ||||
Stock repurchase transactions settled in subsequent fiscal year | $ 2,000 | $ 14,400 | |||||
Stock repurchase transactions initiated in prior fiscal year | $ 7,200 | ||||||
Cash dividends declared per common share (in usd per share) | $ 0.40 | $ 0.40 | $ 0.40 | $ 0.40 | $ 1.60 | $ 1.60 | $ 1.60 |
Dividends | $ 41,400 |
Average Shares Outstanding (Rec
Average Shares Outstanding (Reconciliation of Basic Weighted-Average Shares Outstanding to Diluted Weighted-Average Shares Outstanding) (Details) - shares shares in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Average Shares Outstanding [Line Items] | |||
Weighted-average shares outstanding — basic | 25,823 | 28,499 | 30,630 |
Weighted-average shares outstanding — diluted | 26,068 | 28,807 | 30,914 |
Antidilutive (in shares) | 186 | 150 | 76 |
Performance conditions not satisfied at the end of the period (in shares) | 65 | 44 | 53 |
Nonvested stock awards and units | |||
Average Shares Outstanding [Line Items] | |||
Effect of potentially dilutive securities (in shares) | 211 | 240 | 182 |
Stock options | |||
Average Shares Outstanding [Line Items] | |||
Effect of potentially dilutive securities (in shares) | 10 | 40 | 59 |
Performance share awards | |||
Average Shares Outstanding [Line Items] | |||
Effect of potentially dilutive securities (in shares) | 24 | 28 | 43 |
Commitments, Contingencies an_3
Commitments, Contingencies and Legal Matters (Schedule of Unconditional Purchase Obligations) (Details) $ in Thousands | Sep. 29, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Unconditional purchase obligations, 2020 | $ 854,100 |
Unconditional purchase obligations, 2021 | 465,600 |
Unconditional purchase obligations, 2022 | 257,300 |
Unconditional purchase obligations, 2023 | 155,300 |
Unconditional purchase obligations, 2024 | 153,100 |
Unconditional purchase obligations, Total | $ 1,885,400 |
Commitments, Contingencies an_4
Commitments, Contingencies and Legal Matters (Additional Information) (Details) - USD ($) $ in Millions | Jun. 11, 2019 | Jan. 31, 2019 | Oct. 31, 2019 | Feb. 28, 2019 | Sep. 29, 2019 | Sep. 29, 2019 |
Gessele v. Jack in the Box Inc. | ||||||
Loss Contingencies [Line Items] | ||||||
Damages sought | $ 62 | $ 42 | ||||
Ramirez v. Jack in the Box Inc. | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation charge recorded in period | $ 8.3 | |||||
Litigation insurance recovery receivable | $ 8.3 | |||||
Ramirez v. Jack in the Box Inc. | Judicial Ruling | ||||||
Loss Contingencies [Line Items] | ||||||
Compensatory damages awarded | $ 5.4 | |||||
Punitive damages awarded | $ 10 | |||||
Minimum | Ramirez v. Jack in the Box Inc. | Judicial Ruling | ||||||
Loss Contingencies [Line Items] | ||||||
Reduction in damages awarded | $ 3.2 | |||||
Maximum | Ramirez v. Jack in the Box Inc. | Judicial Ruling | ||||||
Loss Contingencies [Line Items] | ||||||
Reduction in damages awarded | $ 15.4 | |||||
Subsequent Event | Ramirez v. Jack in the Box Inc. | Judicial Ruling | ||||||
Loss Contingencies [Line Items] | ||||||
Plaintiff motion for attorney fees, amount | $ 5.1 |
Supplemental Consolidated Cas_3
Supplemental Consolidated Cash Flow Information (Additional Information Related to Cash Flows) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Supplemental Cash Flow Information [Abstract] | |||
Income tax payments | $ 14,906 | $ 56,183 | $ 92,678 |
Interest, net of amounts capitalized | 46,227 | 43,692 | 33,857 |
Increase in notes receivable from the sale of company-operated restaurants | 0 | 70,461 | 0 |
Increase in dividends accrued or converted to common stock equivalents | 247 | 276 | 308 |
Decrease in equipment capital lease obligations from the sale of company-operated restaurants, closure of stores, and termination of equipment leases | 0 | 3,617 | 5,631 |
Decrease in capital lease obligations from the termination of building leases | 41 | 271 | 237 |
Equipment capital lease obligations incurred | 20 | 98 | 924 |
Consideration for franchise acquisitions | 0 | 0 | 13,809 |
(Decrease) increase in obligations for purchases of property and equipment | (2,117) | 822 | 766 |
(Decrease) increase in obligations for treasury stock repurchases | $ (12,337) | $ 14,362 | $ (7,208) |
Supplemental Consolidated Fin_3
Supplemental Consolidated Financial Statement Information (Schedule of Supplemental Consolidated Balance Sheet Information) (Details) - USD ($) $ in Thousands | Sep. 29, 2019 | Sep. 30, 2018 |
Supplemental Consolidated Financial Statement Information [Abstract] | ||
Trade | $ 36,907 | $ 35,877 |
Notes receivable | 278 | 11,480 |
Income tax receivable | 160 | 5,637 |
Other | 10,855 | 6,123 |
Allowance for doubtful accounts | (2,965) | (1,695) |
Accounts and other receivables, net | 45,235 | 57,422 |
Prepaid income taxes | 579 | 4,837 |
Prepaid advertising | 1,838 | 4,318 |
Other | 6,598 | 5,288 |
Prepaid expense | 9,015 | 14,443 |
Company-owned life insurance policies | 112,753 | 109,908 |
Deferred rent receivable | 49,333 | 48,372 |
Franchise tenant improvement allowance | 26,925 | 22,506 |
Other | 17,674 | 18,480 |
Other assets, net | 206,685 | 199,266 |
Insurance | 27,888 | 35,405 |
Payroll and related taxes | 31,095 | 29,498 |
Sales and property taxes | 4,268 | 4,555 |
Gift card liability | 2,036 | 2,081 |
Percentage rent accrual | 1,182 | 1,092 |
Deferred franchise fees | 4,978 | 375 |
Other | 48,636 | 33,916 |
Accrued liabilities | 120,083 | 106,922 |
Defined benefit pension plans | 120,260 | 69,012 |
Deferred franchise fees | 41,295 | 0 |
Straight-line rent accrual | 29,537 | 31,762 |
Other | 72,678 | 92,675 |
Other long-term liabilities | $ 263,770 | $ 193,449 |
Unaudited Quarterly Results o_3
Unaudited Quarterly Results of Operations (Quarterly Results of Operations) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | |||||||||||
Sep. 29, 2019 | Jul. 07, 2019 | Apr. 14, 2019 | Sep. 30, 2018 | Jul. 08, 2018 | Apr. 15, 2018 | Jan. 20, 2019 | Jan. 21, 2018 | Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | ||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||
Revenues | $ 221,235 | $ 222,359 | $ 215,727 | $ 177,472 | $ 187,983 | $ 209,772 | $ 290,786 | $ 294,463 | $ 950,107 | $ 869,690 | $ 1,097,291 | |||
Earnings from operations | 48,515 | 48,261 | 47,123 | 35,647 | 76,340 | 46,820 | 58,324 | 72,807 | 202,223 | 233,447 | 245,413 | |||
Net earnings | $ 22,061 | $ 13,189 | $ 25,089 | $ 16,269 | $ 45,307 | $ 47,605 | $ 34,098 | $ 12,190 | $ 94,437 | $ 121,371 | $ 135,332 | |||
Net earnings per share, Basic (in usd per share) | $ 0.86 | $ 0.51 | $ 0.97 | $ 0.61 | $ 1.62 | $ 1.64 | $ 1.32 | $ 0.41 | $ 3.66 | [1] | $ 4.26 | [1] | $ 4.42 | [1] |
Net earnings per share, Diluted (in usd per share) | $ 0.85 | $ 0.50 | $ 0.96 | $ 0.60 | $ 1.60 | $ 1.62 | $ 1.31 | $ 0.41 | $ 3.62 | [1] | $ 4.21 | [1] | $ 4.38 | [1] |
[1] | Earnings per share may not add due to rounding. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Nov. 15, 2019 | Sep. 29, 2019 | Jul. 07, 2019 | Apr. 14, 2019 | Jan. 20, 2019 | Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 |
Subsequent Event [Line Items] | ||||||||
Cash dividends declared per common share (in usd per share) | $ 0.40 | $ 0.40 | $ 0.40 | $ 0.40 | $ 1.60 | $ 1.60 | $ 1.60 | |
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Cash dividends declared per common share (in usd per share) | $ 0.40 | |||||||
Stock buy-back program, authorized amount | $ 100,000,000 |
Uncategorized Items - fy201910-
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (37,330,000) |