Jack In The Box 2010 Annual Report Download - page 56

Table of Contents
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$400.0 million revolving credit facility and (ii) a $200.0 million term loan with a five-year maturity, initially both with London
Interbank Offered Rate (“LIBOR”) plus 2.50As part of the credit agreement, we may also request the issuance of up to
$75.0 million in letters of credit, the outstanding amount of which reduces the net borrowing capacity under the agreement. The new
credit facility 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. At
October 3, 2010, we had borrowings under the revolving credit facility of $160.0 million, $197.5 million outstanding under the
term loan and letters of credit outstanding of $34.9 million. Loan origination costs associated with the new credit facility were
$9.5 million and are included as deferred costs in other assets, net in the accompanying consolidated balance sheet as of October 3,
2010. Deferred financing fees of $0.5 million related to the prior credit facility were written off and are included in interest expense,
net in the accompanying consolidated statements of earnings.
Collateral — The Company’s obligations under the new credit facility are secured by first priority liens and security interests in the
capital stock, partnership and membership interests owned by the Company and (or) its subsidiaries, and any proceeds thereof,
subject to certain restrictions set forth in the credit agreement. Additionally, there is a negative pledge on all tangible and intangible
assets (including all real and personal property) with customary exceptions as reflected in the credit agreement.
Covenants — 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. We were in compliance with all covenants at October 3, 2010.
Future cash payments — Scheduled principal payments on our long-term debt for each of the next five fiscal years are as follows
:

2011 $ 13,781
2012 21,137
2013 23,478
2014 53,430
2015 250,901
Total principal payments $ 362,727
We may make voluntary prepayments of the loans under the revolving credit facility and term loan at any time without premium or
penalty. Certain events such as asset sales, certain issuances of debt and insurance and condemnation recoveries may trigger a
mandatory prepayment.
Capitalized interest — We capitalize interest in connection with the construction of our restaurants and other facilities. Interest
capitalized in 2010, 2009 and 2008 was $0.3 million, $0.7 million and $0.9 million, respectively.
 
As lessee — We lease restaurants and other facilities, which generally have renewal clauses of 5 to 20 years exercisable at our
option. In some instances, our leases have provisions for contingent rentals based upon a percentage of defined revenues. Many of
our leases also have rent escalation clauses and require the payment of property taxes, insurance and maintenance costs. We also
lease certain restaurant, office and warehouse equipment, as well as various transportation equipment. Minimum rental obligations
are accounted for on a straight-line basis over the term of the initial lease.
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