Jack In The Box 2010 Annual Report Download - page 29

Table of Contents
requires the payment of an annual commitment fee based on the unused portion of the credit facility. The credit facility’s interest rates and
the annual commitment rate are based on a financial leverage ratio, as defined in the credit agreement. We may make voluntary
prepayments of the loans under the revolving credit facility and term loan at any time without premium or penalty. Specific events, such
as asset sales, certain issuances of debt and insurance and condemnation recoveries, may trigger a mandatory prepayment.
We are subject to a number of customary covenants under our credit facility, including limitations on additional borrowings,
acquisitions, loans to franchisees, capital expenditures, lease commitments, stock repurchases, dividend payments and requirements to
maintain certain financial ratios.
At October 3, 2010, we had $197.5 million outstanding under the term loan, borrowings under the revolving credit facility of
$160.0 million and letters of credit outstanding of $34.9 million. For additional information related to our credit facility, refer to Note 7,
, of the notes to the consolidated financial statements.
 To reduce our exposure to rising interest rates under our credit facility, we consider interest rate swaps. In August
2010, we entered into two forward looking swaps that will effectively convert $100.0 million of our variable rate term loan to a fixed-rate
basis beginning September 2011 through September 2014. Based on the term loan’s applicable margin of 2.50% as of October 3, 2010,
these agreements would have an average pay rate of 1.54%, yielding a fixed rate of 4.04%. Previously, we held two interest rate swaps that
effectively converted $200.0 million of our variable rate term loan borrowings to a fixed-rate basis from March 2007 to April 1, 2010. For
additional information related to our interest rate swaps, refer to Note 6, , of the notes to the consolidated financial
statements.
 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 2010, we repurchased 4.9 million shares at an
aggregate cost of $97.0 million. During fiscal 2008, we repurchased 3.9 million shares at an aggregate cost of $100.0 million. As of
October 3, 2010, the aggregate remaining amount authorized and available under our credit agreement for repurchase was $3.0 million. In
November 2010, the Board of Directors approved a new program to repurchase, within the next year, up to $100.0 million in shares of
our common stock.
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, and Note 8, 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 October 3, 2010 ():

    

Credit facility term loan (1) $ 217,240 $ 17,925 $ 51,880 $ 147,435 $ -
Revolving credit facility (1) 181,180 4,459 8,918 167,803 -
Capital lease obligations 12,824 2,101 3,424 2,735 4,564
Operating lease obligations 1,901,022 219,414 405,462 356,770 919,376
Purchase commitments (2) 740,786 482,871 254,794 3,121 -
Benefit obligations (3) 61,465 16,428 9,091 9,111 26,835
Total contractual obligations $ 3,114,517 $ 743,198 $ 733,569 $ 686,975 $ 950,775

Stand-by letters of credit (4) $ 34,941 $ 34,941 $ - $ - $ -
28