Jack In The Box 2010 Annual Report Download - page 22

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Table of Contents
• Restaurant Closures. In the fourth quarter, we closed 40 underperforming Jack in the Box restaurants located primarily in the
Southeast and Texas resulting in a charge of $18.5 million, net of taxes, or $0.33 per diluted share. These closures are expected to
have a positive impact on future earnings and cash flows.
• New Unit Development. We continued to grow our brands with the opening of new company-operated and franchise restaurants.
In 2010, we opened 46 Jack in the Box locations, including several in our newer markets, and 36 Qdoba locations.
• Franchising Program. We refranchised 219 Jack in the Box restaurants, while Qdoba and Jack in the Box franchisees opened
37 restaurants in 2010. We remain on track to achieve our goal to increase the percentage of franchise ownership in the Jack in the
Box system to 70-80% by the end of fiscal year 2013, and we ended fiscal 2010 at 57% franchised.
• Credit Facility. During 2010, we entered into a new credit agreement consisting of a $400 million revolving credit facility and a
$200 million term loan, both with a five-year maturity.
• Share Repurchases. Pursuant to a share repurchase program authorized by our Board of Directors, we repurchased 4.9 million
shares of our common stock at an average price of $19.71 per share.

In 2010, we separated impairment and other charges, net from selling, general and administrative expenses in our consolidated
statements of earnings. Prior year amounts have been reclassified to conform to this new presentation.
The results of operations and cash flows for Quick Stuff, which was sold in 2009, are reflected as discontinued operations for all
periods presented. Refer to Note 2, , in the notes to our consolidated financial statements for more information.

The following table presents certain income and expense items included in our consolidated statements of earnings as a percentage of
total revenues, unless otherwise indicated:


  
Revenues:
Company restaurant sales 72.6% 80.0% 82.8%
Distribution sales 17.3% 12.2% 10.8%
Franchise revenues 10.1% 7.8% 6.4%
Total revenues 100.0% 100.0% 100.0%
Total operating costs and expenses, net:
Company restaurant costs:
Food and packaging (1) 31.8% 32.4% 33.3%
Payroll and employee benefits(1) 30.3% 29.7% 29.7%
Occupancy and other (1) 23.9% 21.7% 20.9%
Total company restaurant costs (1) 85.9% 83.8% 83.9%
Distribution costs (1) 100.4% 99.6% 99.3%
Franchise costs (1) 45.4% 40.6% 39.9%
Selling, general and administrative expenses 10.6% 10.5% 10.4%
Impairment and other charges, net 2.1% 0.9% 0.9%
Gains on the sale of company-operated restaurants, net (2.4)% (3.2)% (2.6)%
Earnings from operations 5.3% 9.4% 8.5%
Income tax rate (2) 33.8% 37.7% 37.3%
(1) As a percentage of the related sales and/or revenues.
(2) As a percentage of earnings from continuing operations and before income taxes.
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