Jack In The Box 2014 Annual Report Download - page 32

In 2013, operating cash flows increased $62.1 million compared with 2012 due primarily to reductions in working capital expenditures primarily related
to the outsourcing of our distribution business ($29.9 million), a decrease in payments for property rent related to fluctuations in the timing of payments for
the month of October ($25.1 million), as well as an increase in net income adjusted for non-cash items ($26.0 million). The impact of these increases in cash
flows were partially offset by a higher bonus payout in fiscal 2013 versus 2012 ($11.2 million) and an increase in income tax payments ($7.6 million).
. Cash flows used in investing activities increased $9.0 million in 2014 compared with 2013 due primarily to decreases in proceeds
from assets held for sale and leaseback and the sale of Jack in the Box restaurants to franchisees, partially offset by decreases in capital expenditures and cash
used to acquire assets held for sale and leaseback and franchise-operated restaurants. In 2013, cash flows used in investing activities decreased $47.6 million
compared with 2012 due primarily to decreases in cash used to acquire Qdoba franchise-operated restaurants and assets which were held for sale and
leaseback, as well as an increase in proceeds from assets held for sale and leaseback. The impact of these decreases in cash flows were partially offset by a
decrease in proceeds from the sale of Jack in the Box restaurants to franchisees and an increase in capital expenditures.
Capital Expenditures — The composition of capital expenditures in each year follows (in thousands):



Jack in the Box:
New restaurants
$ 3,533
$ 5,887
$ 12,984
Restaurant facility expenditures
22,680
40,670
32,961
Other, including corporate
11,919
8,664
10,634
$ 38,132
$ 55,221
$ 56,579
Qdoba:
New restaurants
$ 13,189
$ 22,672
$ 17,437
Other, including corporate
9,204
6,797
6,184
$ 22,393
$ 29,469
$ 23,621
Consolidated capital expenditures
$ 60,525
$ 84,690
$ 80,200
Our capital expenditure program includes, among other things, investments in new locations, restaurant remodeling, new equipment and information
technology enhancements. In 2014, capital expenditures decreased $24.2 million due primarily to a decrease in spending related to the exteriors of Jack in
the Box restaurants and new Qdoba restaurants, partially offset by an increase in spending for leasehold improvements related to Qdoba’s new corporate
support center. In 2013, capital expenditures increased $4.5 million compared with 2012 due primarily to an increase in spending related to the exteriors of
Jack in the Box restaurants as well as new Qdoba restaurants, partially offset by a decline in spending related to new Jack in the Box restaurants.
In fiscal 2015, capital expenditures are expected to be approximately $90-$100 million and we plan to open approximately 2 new Jack in the Box and 25-
30 new Qdoba company-operated restaurants.
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
37
81
97
Cash
$ 10,536
$ 30,619
$ 47,115
Notes receivable
—
—
1,200
Total proceeds
$ 10,536
$ 30,619
$ 48,315
As of September 28, 2014, we classified as assets held for sale $1.3 million relating to Jack in the Box operating restaurant properties that we expect to sell
to franchisees during the next 12 months and for which we have a signed letter of intent. Fiscal year 2012 includes financing provided to facilitate the
closing of certain transactions. As of September 28, 2014, notes receivable related to refranchisings were $0.7 million. We expect total proceeds from the sale
of Jack in the Box restaurants in 2015 to be minimal based on the number of remaining restaurants for sale.
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