Jack In The Box 2008 Annual Report Download - page 34

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Cash Flows. The table below summarizes our cash flows from operating, investing and financing activities
for each of the past three fiscal years. The cash flows for our Quick Stuff discontinued operations are not material to
our consolidated statements of cash flows.
2008 2007 2006
(in thousands)
Total cash provided by (used in):
Operating activities . ............................. $172,384 $ 178,521 $204,101
Investing activities . ............................. (134,370) (130,053) (62,789)
Financing activities . ............................. (5,832) (266,672) (11,114)
Increase (decrease) in cash and cash equivalents .......... $ 32,182 $(218,204) $130,198
Operating Activities. In 2008, operating cash flow decreased $6.1 million to $172.4 million compared with a
year ago primarily due to the timing of working capital receipts and disbursements, including an increase in pension
contributions, partially offset by an increase in net earnings adjusted for non-cash items. In 2007, operating cash
flow decreased $25.6 million to $178.5 million compared with 2006 primarily due to an increase in income tax
payments.
Investing Activities. Cash flows used in investing activities were $134.4 million in 2008 compared to
$130.1 million in 2007 increasing primarily due to higher capital expenditures offset in part by an increase in
proceeds from the sale of company-operated restaurants to franchisees. Cash flows used in investing activities
increased in 2007 compared with 2006 primarily due to a decrease in proceeds from assets held for sale and
leaseback, higher capital expenditures and cash used in 2007 to acquire nine Qdoba restaurants previously operated
by franchisees.
Capital Expenditures. Our capital expenditure program includes, among other things, investments in new
locations, restaurant remodeling, new equipment, and information technology enhancements. We used cash of
$180.6 million for purchases of property and equipment in 2008 compared with $154.2 million in 2007 and
$150.0 million in 2006. The increase in capital expenditures in each year primarily relates to a kitchen enhancement
project, our on-going comprehensive re-image program and, in 2008, the purchase of our smoothie equipment. The
kitchen enhancements are expected to increase restaurant capacity for new product introductions while also
reducing utility expense using energy-efficient equipment. The re-image program is an important part of the chain’s
holistic brand-reinvention initiative and is intended to create a warm and inviting dining experience for JACK IN THE
BOX guests.
In fiscal 2009, capital expenditures are expected to be approximately $175.0-$185.0 million, including
investment costs related to the JACK IN THE BOX restaurant re-image program. We plan to open approximately 25 new
JACK IN THE BOX and 30 new Qdoba company-operated restaurants in 2009.
Sale of Company-Operated Restaurants. We have continued our strategy of selectively selling JACK IN THE
BOX company-operated restaurants to franchisees. In 2008, we generated cash proceeds and notes receivable of
$85.0 million from the sale of 109 restaurants compared with cash proceeds of $51.3 million in 2007 from the sale
of 76 restaurants and $54.4 million in 2006 from the sale of 82 restaurants. Fiscal 2008 includes $27.9 million of
short-term financing provided to facilitate the closing of our fourth quarter transactions, while franchisees
completed the loan process with their lenders.
Acquisition of Franchise-Operated Restaurants. In the third quarter of 2007, Qdoba acquired nine franchise-
operated restaurants for approximately $7.0 million in cash. The primary assets acquired include $2.5 million in net
property and equipment and $4.5 million in goodwill.
Financing Activities. Cash used in financing activities decreased $260.8 million to $5.8 million in 2008,
compared with 2007, primarily attributable to a decrease in share repurchases and proceeds from the issuance of
common stock, offset in part by a decrease in credit facility borrowings. Cash used in financing activities increased
in 2007, compared with 2006, due primarily to an increase in stock repurchases and term loan principal payments,
offset in part by proceeds received related to our new credit facility.
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