Jack In The Box 2011 Annual Report Download - page 31

Table of Contents
Capital Expenditures — The composition of capital expenditures in each year follows ( in thousands):
  
Jack in the Box:
New restaurants $ 13,248 $ 20,867 $ 46,078
Restaurant facility improvements 73,758 50,724 69,856
Other, including corporate 18,070 10,447 18,377
Qdoba 24,236 13,572 19,189
Total capital expenditures used in continuing operations $ 129,312 $ 95,610 $ 153,500
Our capital expenditure program includes, among other things, investments in new locations, restaurant remodeling, new equipment and information
technology enhancements. In 2011, capital expenditures increased $33.7 million compared with 2010 due primarily to higher spending associated with our
Jack in the Box restaurant re-image and new logo program, an increase in the number of new Qdoba restaurants developed, an increase in the number of Jack
in the Box restaurants rebuilt and the implementation of a new supply-chain system. These increases were partially offset by a reduction in spending related to
a decrease in the number of new Jack in the Box restaurants developed. In 2011, we substantially completed the re-imaging of our company-operated Jack in
the Box restaurants. In 2010, capital expenditures decreased $57.9 million due primarily to a decline in the number of new Jack in the Box and Qdoba
restaurants developed and the number of existing restaurants rebuilt, and lower spending related to our re-image program and network and system upgrades.
In fiscal 2012, capital expenditures are expected to be approximately $90-$100 million. We plan to open approximately 15 new Jack in the Box and 40 new
Qdoba company-operated restaurants in 2011.
Sale of Company-Operated Restaurants — We have continued to expand franchise ownership in the Jack in the Box system primarily through the sale
of company-operated restaurants to franchisees. The following table details proceeds received in connection with our refranchising activities (dollars in
thousands):
  
Number of restaurants sold to franchisees 332 219 194
Cash $ 119,275 $ 66,152 $ 94,927
Notes receivable 1,000 25,809 21,575
Total proceeds $ 120,275 $ 91,961 $ 116,502
Average proceeds $ 362 $ 420 $ 601
All fiscal years presented include financing provided to facilitate the closing of certain transactions. As of October 2, 2011, notes receivable related to
refranchisings were $11.3 million. We expect total proceeds of $35-$50 million from the sale of 80-120 Jack in the Box restaurants in 2012.
Assets Held for Sale and Leaseback — We use sale and leaseback financing to lower the initial cash investment in our Jack in the Box restaurants to the
cost of the equipment, whenever possible. The following table summarizes the cash flow activity related to sale and leaseback transactions in each year
(dollars in thousands):
  
Number of restaurants sold and leased back 15 46 9
Proceeds from sale of assets $ 28,536 $ 85,591 $ 13,772
Spending to acquire/purchase assets (31,798) (40,243) (50,596)
Net cash flows related to assets held for sale and leaseback $ (3,262) $ 45,348 $ (36,824)
As of October 2, 2011, we had investments of $51.8 million in approximately 55 operating and under-construction restaurant properties that we expect to
sell and lease back during fiscal 2012.
30