Discontinued Operations

4 Months Ended

Jan. 19, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

Distribution business — During fiscal 2012, we entered into an agreement with a third party distribution service provider pursuant to a plan approved by our board of directors to sell our Jack in the Box distribution business. During the first quarter of fiscal 2013, we completed the transition of our distribution centers. The operations and cash flows of the business have been eliminated and in accordance with the provisions of the Accounting Standards Codification (“ASC”) 205, Presentation of Financial Statements, the results are reported as discontinued operations for all periods presented.

The following is a summary of our distribution business operating results, which are included in discontinued operations for each period (in thousands):

	January 19, 2014			January 20, 2013
Revenue	$	—		$	37,743
Operating loss before income tax benefit	$	(572	)	$	(5,262	)

The loss on the sale of the distribution business was not material to our results of operations in 2013. The operating loss in 2014 includes $0.4 million related to insurance settlements and $0.1 million for future lease commitments. Our liability for lease commitments related to our distribution centers is included in accrued liabilities and other long-term liabilities and has changed as follows during 2014 (in thousands):

Balance at beginning of period	$	1,318
Adjustments	79
Cash payments	(270		)
Balance at end of period	$	1,127

Qdoba restaurant closures — During the third quarter of fiscal 2013, we closed 62 Qdoba restaurants. The decision to close these restaurants was based on a comprehensive analysis that took into consideration levels of return on investment and other key operating performance metrics.

Since the closed locations were not located near those remaining in operation, we do not expect the majority of cash flows and sales lost from these closures to be recovered. In addition, there will not be any ongoing involvement or significant direct cash flows from the closed stores. Therefore, in accordance with the provisions of ASC 205, Presentation of Financial Statements, the results of operations for these restaurants are reported as discontinued operations for all periods presented.

The following is a summary of the results of operations related to the 2013 Qdoba Closures for each period (in thousands):

	January 19, 2014			January 20, 2013
Company restaurant sales	$	—		$	11,188
Operating loss before income tax benefit	$	(588	)	$	(3,510	)

In 2014, the operating loss includes $0.3 million for asset impairments, $0.3 million of ongoing facility related costs and $0.2 million of broker commissions, partially offset by favorable lease commitment adjustments of $0.3 million. We do not expect the remaining costs to be incurred related to this transaction to be material. Our liability for lease commitments related to the 2013 Qdoba closures is included in accrued liabilities and other long-term liabilities and has changed as follows during 2014 (in thousands):

Balance at beginning of period	$	10,712
Adjustments	(286		)
Cash payments	(3,395		)
Balance at end of period	$	7,031