Jack In The Box 2013 Annual Report Download - page 30

Credit Facility — In November 2012, we replaced our existing credit facility with a new five-year $600.0 million senior credit facility. As of September
29, 2013, our credit facility comprised (i) a $400.0 million revolving credit facility and (ii) a term loan maturing on November 5, 2017, bearing interest at
London Interbank Offered Rate (“LIBOR”) plus 2.00%. As part of the credit agreement, we may 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 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. We can 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, could 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. We were in
compliance with all covenants as of September 29, 2013.
At September 29, 2013, we had $190.0 million outstanding under the term loan, borrowings under the revolving credit facility of $175.0 million and
letters of credit outstanding of $28.1 million. For additional information related to our credit facility, refer to Note 7, Indebtedness, of the notes to the
consolidated financial statements.
Interest Rate Swaps — 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 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 2.00% as of September 29, 2013, these agreements have an average pay rate of 1.54%,
yielding a fixed rate of 3.54%. For additional information related to our interest rate swaps, refer to Note 6, Derivative Instruments, of the notes to the
consolidated financial statements.
Repurchases of Common Stock — In November 2011, the Board of Directors (“Board”) approved a program, expiring November 2013 to repurchase up
to $100.0 million in shares of our common stock. This authorization was fully utilized in fiscal 2013. In November 2012 and August 2013, the Board
approved two new programs, each of which provide repurchase authorizations for up to an additional $100.0 million in shares of our common stock, expiring
November 2014 and November 2015, respectively. During fiscal 2013, we repurchased 4.0 million shares at an aggregate cost of $140.1 million. As of
September 29, 2013, there was $136.8 million remaining under the November 2012 and August 2013 authorizations.
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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.
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