Discontinued Operations

4 Months Ended

Jan. 22, 2017

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 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 FASB authoritative guidance on the presentation of financial statements, the results are reported as discontinued operations for all periods presented.

In 2017 and 2016, results of discontinued operations were immaterial to our condensed consolidated results of operations. Our liability for lease commitments related to our distribution centers is immaterial to our consolidated balance sheets as of January 22, 2017 and October 2, 2016. The lease commitment balance relates to one distribution center lease that expires in fiscal 2017 and is currently subleased at a loss.

2013 Qdoba Closures — During 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 predominantly located near those remaining in operation, we did not expect the majority of cash flows and sales lost from these closures to be recovered. In addition, we did not anticipate any ongoing involvement or significant direct cash flows from the closed stores. Therefore, in accordance with the provisions of the FASB authoritative guidance on the presentation of financial statements, the results of operations for these restaurants are reported as discontinued operations for all periods presented.

The following table summarizes the results related to the 2013 Qdoba Closures for each period (in thousands):

	Sixteen Weeks Ended
	January 22, 2017			January 17, 2016
Unfavorable lease commitment adjustments	$	(2,060	)	$	(1,006	)
Bad debt expense related to subtenants	389			(124		)
Broker commissions	(26		)	—
Ongoing facility related and other costs	(18		)	(38		)
Loss before income tax benefit	$	(1,715	)	$	(1,168	)

We do not expect the remaining costs to be incurred related to these closures to be material; however, our estimates related to our future lease obligations, primarily sublease income, 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.

Our liability for lease commitments related to the 2013 Qdoba Closures is included in accrued liabilities and other long-term liabilities in the accompanying condensed consolidated balance sheets and has changed as follows in 2017 (in thousands):

Balance as of October 2, 2016	$	2,943
Adjustments (1)	2,060
Cash payments	(1,123		)
Balance as of January 22, 2017 (2)	$	3,880

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(1) Adjustments relate to revisions to certain sublease assumptions due to changes in market conditions, as well as a charge to terminate two lease agreements, and includes interest expense.

(2) The weighted average remaining lease term related to these commitments is approximately three years.