Jack In The Box 2009 Annual Report Download - page 29

Table of Contents
an additional mandatory prepayment. In connection with the sale of Quick Stuff in 2009, we estimate we will be required to make a term
loan prepayment of $21.0 million in February 2010, which will be applied to the remaining scheduled principal installments on a pro-rata
basis.
Interest Rate Swaps. To reduce our exposure to rising interest rates under our credit facility, we entered into two interest rate swaps
that effectively converted $200.0 million of our variable rate term loan borrowings to a fixed-rate basis until April 1, 2010. These
agreements have been designated as cash flow hedges with effectiveness assessed on changes in the present value of the term loan interest
payments. There was no hedge ineffectiveness in 2009 or 2008. Accordingly, changes in the fair value of the interest rate swap contracts
were recorded, net of taxes, as a component of accumulated other comprehensive loss in the Company’s consolidated balance sheets at the
end of each period.
Repurchases of Common Stock. In November 2007, the Board of Directors approved a program to repurchase up to
$200.0 million in shares of our common stock over three years expiring November 9, 2010. During fiscal 2008, we repurchased
3.9 million shares at an aggregate cost of $100.0 million. As of September 27, 2009, the aggregate remaining amount authorized and
available under our credit agreement for repurchase was $97.4 million.
In fiscal 2007, pursuant to a tender offer in December 2006, we accepted for purchase approximately 2.3 million shares of common
stock for a total cost of $143.3 million. All shares repurchased were subsequently retired. In fiscal 2007, we also repurchased 3.2 million
shares of stock for $220.1 million and 1.6 million shares for $100.0 million in connection with stock repurchase authorizations made by
our Board of Directors in 2006 and 2005, respectively.
Share-based Compensation. Proceeds from the issuance of common stock decreased $4.1 million in 2009 reflecting a decline in
the exercise of employee stock options compared with 2008, which also resulted in a corresponding decrease in tax benefits from share-
based compensation. As options granted are exercised, the Company will continue to receive proceeds and a tax deduction, but the amount
and the timing of these cash flows cannot be reliably predicted as option holders’ decisions to exercise options will be largely driven by
movements in the Company’s stock price.
Off-balance sheet arrangements. Other than operating leases, we are not a party to any off-balance sheet arrangements that have,
or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, results of
operations, liquidity, capital expenditures or capital resources. We finance a portion of our new restaurant development through sale-
leaseback transactions. These transactions involve selling restaurants to unrelated parties and leasing the restaurants back. Additional
information regarding our operating leases is available in Item 2, Properties, and Note 8, Leases, of the notes to the consolidated
financial statements.
Contractual obligations and commitments. The following is a summary of our contractual obligations and commercial
commitments as of September 27, 2009 (in thousands):


    

Credit facility term loan(1) $ 431,785 $ 74,212 $ 289,612 $ 67,961 $ —
Revolving credit facility(1) — — — — —
Capital lease obligations(1) 15,186 2,293 3,984 3,013 5,896
Operating lease obligations 1,850,492 203,673 381,886 339,703 925,230
Purchase commitments(2) 1,069,512 609,887 419,754 39,871 —
Benefit obligations(3) 56,036 27,996 5,655 5,790 16,595
Total contractual obligations $ 3,423,011 $918,061 $1,100,891 $456,338 $ 947,721

Stand-by letters of credit(4) $ 35,523 $ 35,523 $ — $ — $ —
28