~~JACK IN THE BOX INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

SUMMARY OF REFRANCHISINGS, ~~FRANCHISEE~~FRANCHISE DEVELOPMENT AND ACQUISITIONS

~~Refranchisings and franchisee development~~Refranchisings and franchise development — The following is a summary of the number of Jack in the Box restaurants sold to franchisees, the number of restaurants developed by franchisees and the related gains and fees recognized (dollars in thousands):



	Quarter						Year-to-Date
	April 15, 2012			April 17, 2011			April 15, 2012			April 17, 2011
Restaurants sold to franchisees	37			26			37			114
New restaurants opened by franchisees	9			11			29			28

Initial franchise fees	$	1,770		$	1,640		$	2,490		$	5,879

Proceeds from the sale of company-operated restaurants (1)	$	20,715		$	5,505		$	21,964		$	49,588
Net assets sold (primarily property and equipment)	(5,754		)	(4,520		)	(5,833		)	(19,872		)
Goodwill related to the sale of company-operated restaurants	(604		)	(107		)	(652		)	(966		)
Other	(279		)	—			(279		)	—
Gains on the sale of company-operated restaurants (1)	$	14,078		$	878		$	15,200		$	28,750

____________________________


(1)	Amounts in 2012 include additional proceeds and gains of $0.9 million in the quarter and $2.1 million year-to-date recognized upon the extension of the ~~number of~~underlying franchise and lease agreements related to restaurants sold ~~and developed by franchisees and the related gains and fees recognized (~~~~dollars~~ in ~~thousands~~):a prior year.

Franchise acquisitions — During fiscal 2012 and 2011, we acquired Qdoba franchise restaurants in select markets where we believe there is continued opportunity for restaurant development. We account for the acquisition of franchised restaurants using the purchase method of accounting for business combinations. The purchase price allocations were based on fair value estimates determined using significant unobservable inputs (Level 3). The goodwill recorded primarily relates to the sales growth potential of the markets acquired. The following table provides detail of the combined allocations in each period (dollars in thousands):

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Number of restaurants sold to franchisees 26 30 114 53
Number of new restaurants opened by franchisees 11 7 28 19

Initial franchise fees $ 1,640 $ 1,562 $ 5,879 $ 2,975

Cash $ 5,505 $ 7,518 $ 49,588 $ 19,093
Notes receivable — — — 2,730

Total proceeds from the sale of company-operated restaurants 5,505 7,518 49,588 21,823
Net assets sold (primarily property and equipment) (4,520 ) (4,375 ) (19,872 ) (9,012 )
Goodwill related to the sale of company-operated restaurants (107 ) (156 ) (966 ) (444 )

Gains on the sale of company-operated restaurants $ 878 $ 2,987 $ 28,750 $ 12,367



	Year-to-Date
	April 15, 2012			April 17, 2011
Restaurants acquired from franchisees	36			22
Property and equipment	$	9,559		$	3,877
Reacquired franchise rights	461			232
Liabilities assumed	(108		)	(71		)
Goodwill	29,283			17,439
Total consideration	$	39,195		$	21,477

~~Franchise acquisitions~~— During the second quarter, we acquired 20 Qdoba franchise-operated restaurants in the Indianapolis market and two in Northern Florida, consistent with our strategy to opportunistically acquire franchise markets where we believe there is continued opportunity for restaurant development. The purchase price allocations were based on fair value estimates determined using significant unobservable inputs (Level 3). The following table provides detail of the allocations (~~in thousands~~):

Property and equipment $ 3,877
Reacquired franchise rights 232
Liabilities assumed (71 )
Goodwill 17,439

Total $ 21,477

~~The goodwill recorded relates primarily to the Indianapolis transaction and is largely attributable to the growth potential of the market.~~

FAIR VALUE MEASUREMENTS

~~Financial assets and liabilities~~~~— The following table presents the financial assets and liabilities measured at fair value on a recurring basis as of April 17, 2011 (~~~~in thousands~~):

Fair Value Measurements
Quoted Prices in Significant
Active Markets Other Significant
for Identical Observable Unobservable
Assets Inputs Inputs
Total (Level 1) (Level 2) (Level 3)

Interest rate swaps (Note 4) (1) $ 457 $ — $ 457 $ —
Non-qualified deferred compensation plan (2) (37,803 ) (37,803 ) — —

Total assets (liabilities) at fair value $ (37,346 ) $ (37,803 ) $ 457 $ —

Financial assets and liabilities — The following table presents the financial assets and liabilities measured at fair value on a recurring basis at the end of each period (in thousands):



	Total			Quoted Prices in Active Markets for Identical Assets (Level 1) (3)			Significant Other Observable Inputs (Level 2) (3)			Significant Unobservable Inputs (Level 3)
Fair value measurements as of April 15, 2012:
Interest rate swaps (Note 4) (1)	$	(2,604	)	$	—		$	(2,604	)	$	—
Non-qualified deferred compensation plan (2)	(38,107		)	(38,107		)	—			—
Total liabilities at fair value	$	(40,711	)	$	(38,107	)	$	(2,604	)	$	—
Fair value measurements as of October 2, 2011:
Interest rate swaps (Note 4) (1)	$	(2,682	)	$	—		$	(2,682	)	$	—
Non-qualified deferred compensation plan (2)	(34,288		)	(34,288		)	—			—
Total liabilities at fair value	$	(36,970	)	$	(34,288	)	$	(2,682	)	$	—

____________________________


(1)		We entered into interest rate swaps to reduce our exposure to rising interest rates on our variable debt. The fair ~~value~~values of our interest rate swaps isare based upon Level 2 inputs which include valuation models as reported by our counterparties. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves.


(2)		We maintain an unfunded defined contribution plan for key executives and other members of management excluded from participation in our qualified savings plan. The fair value of this obligation is based on the closing market prices of the participants’ elected investments.

(3)

~~The fair values~~We did not have any transfers in or out of ~~each of our long-term debt instruments are based on quoted market values, where available,~~Level 1 or on the amount of future cash flows associated with each instrument, discounted using our current borrowing rate for similar debt instruments of comparable maturity. The estimated fair values of our term loan and capital lease obligations approximated their carrying values as of April 17, 2011.Level 2.

~~JACK IN THE BOX INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~The fair values of each of our long-term debt instruments are based on quoted market values, where available, or on the amount of future cash flows associated with each instrument, discounted using our current borrowing rate for similar debt instruments of comparable maturity. The estimated fair values of our term loan and capital lease obligations approximated their carrying values as of April 15, 2012.

Non-financial assets and liabilities — The Company’s non-financial instruments, which primarily consist of property and equipment, goodwill and intangible assets, are reported at carrying value and are not required to be measured at fair value on a recurring basis. However, on a periodic basis (at least annually for goodwill and semi-annually for property and equipment) or whenever events or changes in circumstances indicate that their carrying value may not be recoverable, non-financial instruments are assessed for impairment. If applicable, the carrying values of the assets are written down to fair value.

In connection with our property and equipment impairment reviews during the 28-weeks ended April 15, 2012, six Jack in the Box restaurants determined to be underperforming or which we intend to close having a carrying amount of $2.1 million were written down to their implied fair value of $0.3 million, resulting in an impairment charge of $1.8 million. To determine fair value, we used the income approach, which assumes that the future cash flows reflect current market expectations. The future cash flows are generally based on the assumption that the highest and best use of the asset is to sell the store to a franchisee (market participant). These fair value measurements require significant judgment using Level 3 inputs, such as discounted cash flows, which are not observable from the market, directly or indirectly. Refer to Note 5, Impairment, Disposition of Property and Equipment, and Restaurant Closing Costs, for additional information regarding impairment charges.

~~Non-financial assets and liabilities~~— The Company’s non-financial instruments, which primarily consist of property and equipment, goodwill and intangible assets, are reported at carrying value and are not required to be measured at fair value on a recurring basis. However, on a periodic basis (at least annually for goodwill and semi-annually for property and equipment) or whenever events or changes in circumstances indicate that their carrying value may not be recoverable, non-financial instruments are assessed for impairment. If applicable, the carrying values of the assets are written down to fair value. In connection with our impairment review during fiscal 2011, no material fair value adjustments were required. Refer to Note 5,~~Impairment, Disposition of Property and Equipment, and Restaurant Closing Costs,~~~~for additional information regarding impairment charges.~~

DERIVATIVE INSTRUMENTS

Objectives and strategies — We are exposed to interest rate volatility with regard to our variable rate debt. To reduce our exposure to rising interest rates, in August 2010, we entered into two interest rate swap agreements that effectively convert $100.0 million of our variable rate term loan borrowings to a fixed-rate basis from September 2011 through September 2014.

Financial position — The following derivative instruments were outstanding as of the end of each period (in thousands):



	April 15, 2012				October 2, 2011
	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Interest rate swaps (Note 3)	Accrued liabilities	$	(2,604	)	Accrued liabilities	$	(2,682	)
Total derivatives		$	(2,604	)		$	(2,682	)

Financial performance — The following is a summary of the accumulated other comprehensive income (“OCI”) gain or loss activity related to our interest rate swap derivative instruments (in thousands):



	Location of Loss in Income	Quarter						Year-to-Date
	Location of Loss in Income	April 15, 2012			April 17, 2011			April 15, 2012			April 17, 2011
Gain/(loss) recognized in OCI (Note 9)	N/A	$	(214	)	$	(247	)	$	(619	)	$	1,190
Loss reclassified from accumulated OCI into income (Note 9)	Interest expense, net	$	299		$	—		$	697		$	—

Amounts reclassified from accumulated OCI into interest expense represent payments made to the counterparty for the effective portions of the interest rate swaps. During the periods presented, our interest rate swaps had no hedge ineffectiveness.

~~Objectives and strategies~~— We are exposed to interest rate volatility with regard to our variable rate debt. To reduce our exposure to rising interest rates, in August 2010, we entered into two interest rate swap agreements that will effectively convert $100.0 million of our variable rate term loan borrowings to a fixed-rate basis beginning September 2011 through September 2014. 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 2010. These agreements have been designated as cash flow hedges under the terms of the Financial Accounting Standards Board (“FASB”) authoritative guidance for derivatives and hedging. To the extent that they are effective in offsetting the variability of the hedged cash flows, changes in the fair value of the derivatives are not included in net earnings but are included in other comprehensive income (“OCI”). These changes in fair value are subsequently reclassified into net earnings as a component of interest expense as the hedged interest payments are made on our term debt.

We are also exposed to the impact of utility price fluctuations related to unpredictable factors such as weather and various other market conditions outside our control. From time to time, we enter into futures and option contracts to manage these fluctuations. These contracts have not been designated as hedging instruments under the FASB authoritative guidance for derivative instruments and hedging.

~~Financial position~~~~— The following derivative instruments were outstanding as of the end of each period~~~~(in thousands):~~

April 17, 2011 October 3, 2010
Balance Balance
Sheet Fair Sheet Fair
Location Value Location Value

Derivatives designated as hedging instruments:
Interest rate swaps (Note 3) Other current
assets $ 457 Accrued
liabilities $ (733 )

Total derivatives $ 457 $ (733 )

~~Financial performance~~~~— The following is a summary of the gains or losses recognized on our interest rate swap derivative instruments (Note 9) designated as cash flow hedges~~~~(in thousands):~~

Location of Quarter Year-to-Date
Loss April 17, April 11, April 17, April 11,
in Income 2011 2010 2011 2010

Gain/(loss) recognized in OCI N/A $ (247 ) $ (2 ) $ 1,190 $ (104 )

Gain/(loss) reclassified from accumulated OCI into income Interest
expense, net $ — $ (1,871 ) $ — $ (4,719 )

~~During 2011 and 2010, our interest rate swaps had no hedge ineffectiveness.~~

~~The following is a summary of the gains or losses recognized in income related to our derivative instruments not designated as hedging instruments~~~~(in thousands):~~

Location of Quarter Year-to-Date
Loss April 17, April 11, April 17, April 11,
in Income 2011 2010 2011 2010

Natural gas contracts Occupancy and other $ — $ (40 ) $ — $ (99 )

~~JACK IN THE BOX INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

IMPAIRMENT, DISPOSITION OF PROPERTY AND EQUIPMENT, AND RESTAURANT CLOSING COSTS

Impairment — When events and circumstances indicate that our long-lived assets might be impaired and their carrying amount is greater than the undiscounted cash flows we expect to generate from such assets, we recognize an impairment loss as the amount by which the carrying value exceeds the fair value of the assets. We typically estimate fair value based on the estimated discounted cash flows of the related asset using marketplace participant assumptions. Impairment charges in 2012 primarily represent charges to write down the carrying value of three underperforming Jack in the Box restaurants and three Jack in the Box restaurants we intend to or have closed.

Disposition of property and equipment — We also recognize accelerated depreciation and other costs on the disposition of property and equipment. When we decide to dispose of a long-lived asset, depreciable lives are adjusted based on the estimated disposal date, and accelerated depreciation is recorded. Other disposal costs primarily relate to charges from our ongoing re-image and logo program and normal capital maintenance activities.

The following impairment and disposal costs are included in impairment and other charges, net in the accompanying condensed consolidated statements of earnings (in thousands):



	Quarter				Year-to-Date
	April 15, 2012		April 17, 2011		April 15, 2012		April 17, 2011
Impairment charges	$	910	$	878	$	2,109	$	1,167
Losses on the disposition of property and equipment, net	$	1,775	$	2,628	$	2,858	$	5,424

Restaurant closing costs consist of future lease commitments, net of anticipated sublease rentals and expected ancillary costs, and are included in impairment and other charges, net in the accompanying condensed consolidated statements of earnings. Total accrued restaurant closing costs, included in accrued liabilities and other long-term liabilities, changed as follows (in thousands):



	Quarter						Year-to-Date
	April 15, 2012			April 17, 2011			April 15, 2012			April 17, 2011
Balance at beginning of period	$	21,228		$	23,938		$	21,657		$	25,020
Additions and adjustments	666			(21		)	1,912			784
Cash payments	(1,727		)	(1,754		)	(3,402		)	(3,641		)
Balance at end of quarter	$	20,167		$	22,163		$	20,167		$	22,163

Additions and adjustments in all periods primarily relate to revisions to certain sublease and cost assumptions.

~~Impairment~~— When events and circumstances indicate that our long-lived assets might be impaired and their carrying amount is greater than the undiscounted cash flows we expect to generate from such assets, we recognize an impairment loss as the amount by which the carrying value exceeds the fair value of the assets. We typically estimate fair value based on the estimated discounted cash flows of the related asset using marketplace participant assumptions. Impairment charges were not material in any period and primarily relate to certain excess Jack in the Box property and restaurants we have closed or plan to close. Additionally, these charges include the write-down of one underperforming Jack in the Box restaurant in the first quarter of 2010.

~~Disposition of property and equipment~~— We also recognize accelerated depreciation and other costs on the disposition of property and equipment. When we decide to dispose of a long-lived asset, depreciable lives are adjusted based on the estimated disposal date, and accelerated depreciation is recorded. Other disposal costs primarily relate to charges from our ongoing re-image program and normal capital maintenance activities.

~~The following impairment and disposal costs are included in impairment and other charges, net in the accompanying condensed consolidated statements of earnings (~~~~in thousands~~):

~~Restaurant closing costs~~consist of future lease commitments, net of anticipated sublease rentals and expected ancillary costs, and are included in impairment and other charges, net. Total accrued restaurant closing costs, included in accrued liabilities and other long-term liabilities, changed as follows (~~in thousands~~):

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Balance at beginning of period $ 23,938 $ 4,358 $ 25,020 $ 4,234
Additions and adjustments (21 ) 1,204 784 1,624
Cash payments (1,754 ) (332 ) (3,641 ) (628 )

Balance at end of period $ 22,163 $ 5,230 $ 22,163 $ 5,230

~~Additions and adjustments primarily relate to revisions to sublease and cost assumptions and, in 2010, the closure of two Jack in the Box restaurants in the quarter and three year-to-date.~~

INCOME TAXES

The income tax provisions reflect year-to-date effective tax rates of 34.2% in 2012 and 34.8% in 2011. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual 2012 rate could differ from our current estimates.

At April 15, 2012, our gross unrecognized tax benefits associated with uncertain income tax positions were $0.9 million, which if recognized would favorably impact the effective income tax rate. The gross unrecognized tax benefits increased by $0.3 million from the end of fiscal year 2011 based on a preliminary assessment of a state income tax audit. It is reasonably possible that changes to the gross unrecognized tax benefits will be required within the next twelve months due to the possible settlement of state tax audits.

The major jurisdictions in which the Company files income tax returns include the United States and states in which we operate that impose an income tax. The federal statutes of limitations have not expired for fiscal years 2008 and forward. The statutes of limitations for California and Texas, which constitute the Company’s major state tax jurisdictions, have not expired for fiscal years 2001 and 2007, respectively, and forward. Generally, the statutes of limitations for the other state jurisdictions have not expired for fiscal years 2008 and forward.

The income tax provisions reflect year-to-date effective tax rates of 34.8% in 2011 and 36.1% in 2010. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual 2011 rate could differ from our current estimates.

At April 17, 2011, our gross unrecognized tax benefits associated with uncertain income tax positions were $0.6 million, which if recognized would favorably impact the effective income tax rate. The gross unrecognized tax benefits remain unchanged from the beginning of the fiscal year. It is reasonably possible that changes to the gross unrecognized tax benefits will be required within the next twelve months. These changes relate to the possible settlement of state tax audits.

The major jurisdictions in which the Company files income tax returns include the United States and states in which we operate that impose an income tax. The federal statutes of limitations have not expired for tax years 2006 and forward. The statutes of limitations for California and Texas, which constitute the Company’s major state tax jurisdictions, have not expired for tax years 2000 and 2006, respectively, and forward. Generally, the statutes of limitations for the other state jurisdictions have not expired for tax years 2006 and forward.

~~JACK IN THE BOX INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

RETIREMENT PLANS

Defined benefit pension plans — We sponsor a defined benefit pension plan covering substantially all full-time employees which will no longer accrue benefits effective December 31, 2015, and was closed to new participants effective January 1, 2011. We also sponsor an unfunded supplemental executive retirement plan which provides certain employees additional pension benefits and which was closed to new participants effective January 1, 2007. Benefits under both plans are based on the employees’ years of service and compensation over defined periods of employment.

Postretirement healthcare plans — We sponsor healthcare plans that provide postretirement medical benefits to certain employees who meet minimum age and service requirements. The plans are contributory, with retiree contributions adjusted annually, and contain other cost-sharing features such as deductibles and coinsurance.

Net periodic benefit cost — The components of net periodic benefit cost were as follows in each period (in thousands):



	Quarter						Year-to-Date
	April 15, 2012			April 17, 2011			April 15, 2012			April 17, 2011
Defined benefit pension plans:
Service cost	$	2,175		$	2,490		$	5,075		$	5,809
Interest cost	5,225			4,980			12,191			11,620
Expected return on plan assets	(4,612		)	(4,784		)	(10,761		)	(11,163		)
Actuarial loss	2,864			2,266			6,683			5,289
Amortization of unrecognized prior service cost	100			113			233			263
Net periodic benefit cost	$	5,752		$	5,065		$	13,421		$	11,818
Postretirement healthcare plans:
Service cost	$	14		$	18		$	33		$	42
Interest cost	373			366			870			854
Actuarial loss	21			47			48			109
Amortization of unrecognized prior service cost	—			7			—			17
Net periodic benefit cost	$	408		$	438		$	951		$	1,022

Future cash flows — Our policy is to fund our plans at or above the minimum required by law. As of the date of our last actuarial funding valuation, there was no minimum requirement. Details regarding 2012 contributions are as follows (in thousands):



	Defined Benefit Pension Plans		Postretirement Healthcare Plans
Net year-to-date contributions	$	6,626	$	801
Remaining estimated net contributions during fiscal 2012	$	6,800	$	600

We will continue to evaluate contributions to our funded defined benefit pension plan based on changes in pension assets as a result of asset performance in the current market and economic environment.


8.	SHARE-BASED COMPENSATION

We offer share-based compensation plans to attract, retain and motivate key officers, employees and non-employee directors to work toward the financial success of the Company. In fiscal 2012, we granted the following share-based compensation awards in connection with our annual award grants in November:



	*~~Defined benefit pension plans~~*— We sponsor a defined benefit pension plan covering substantially all full-time employees. In September 2010, the Board of Directors approved changes to this plan whereby participants will no longer accrue benefits effective December 31, 2015, and the plan was closed to new participants effective January 1, 2011. This change was accounted for as a plan “curtailment” in accordance with the authoritative guidance issued by the FASB. We also sponsor an unfunded supplemental executive retirement plan which provides certain employees additional pension benefits and which was closed to new participants effective January 1, 2007. Benefits under both plans are based on the employees’ years of service and compensation over defined periods of employment.Shares
Stock options	485,057
Performance-vested stock awards	234,258
Nonvested stock units	83,552

The components of share-based compensation expense recognized in each period are as follows (in thousands):



	Quarter				Year-to-Date
	April 15, 2012		April 17, 2011		April 15, 2012		April 17, 2011
Stock options	$	785	$	1,174	$	1,975	$	2,686
Performance-vested stock awards	172		471		502		1,209
Nonvested stock awards	135		140		315		326
Nonvested stock units	293		348		615		578
Deferred compensation for non-mangement directors	155		173		155		173
Total share-based compensation expense	$	1,540	$	2,306	$	3,562	$	4,972

9. STOCKHOLDERS’ EQUITY

Repurchases of common stock— In May 2011, the Board of Directors approved a program to repurchase up to $100.0 million in shares of our common stock expiring November 2012. During the first quarter, we repurchased approximately 0.3 million shares at an aggregate cost of $6.4 million, completing the May 2011 authorization. In November 2011, the Board of Directors approved a new program to repurchase $100.0 million in shares of our common stock expiring November 2013. As of the end of the second quarter, $100.0 million remains available under this authorization.

Comprehensive income— Our total comprehensive income, net of taxes, was as follows (in thousands):



	Quarter						Year-to-Date
	April 15, 2012			April 17, 2011			April 15, 2012			April 17, 2011
Net earnings	$	21,632		$	6,802		$	33,582		$	39,203
Cash flow hedges:
Net change in fair value of derivatives	(214		)	(247		)	(619		)	1,190
Net loss reclassified to earnings	299			—			697			—
Total	85			(247		)	78			1,190
Tax effect	(33		)	95			(31		)	(454		)
	52			(152		)	47			736
Unrecognized periodic benefit costs:
Actuarial losses and prior service cost reclassified to earnings	2,985			2,433			6,964			5,678
Tax effect	(1,146		)	(929		)	(2,673		)	(2,168		)
	1,839			1,504			4,291			3,510
Total comprehensive income	$	23,523		$	8,154		$	37,920		$	43,449

Accumulated other comprehensive loss — The components of accumulated other comprehensive loss, net of taxes, were as follows at the end of each period (in thousands):



	April 15, 2012			October 2, 2011
Unrecognized periodic benefit costs, net of tax benefits of $56,070 and $58,743, respectively	$	(89,997	)	$	(94,288	)
Net unrealized losses related to cash flow hedges, net of tax benefits of $999 and $1,030, respectively	(1,605		)	(1,652		)
Accumulated other comprehensive loss, net	$	(91,602	)	$	(95,940	)

~~Postretirement healthcare plans~~— We sponsor healthcare plans that provide postretirement medical benefits to certain employees who meet minimum age and service requirements. The plans are contributory, with retiree contributions adjusted annually, and contain other cost-sharing features such as deductibles and coinsurance.

~~Net periodic benefit cost~~~~— The components of net periodic benefit cost were as follows in each period (~~~~in thousands~~):

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Defined benefit pension plans:

Service cost $ 2,490 $ 2,897 $ 5,809 $ 6,760
Interest cost 4,980 4,778 11,620 11,150
Expected return on plan assets (4,784 ) (4,087 ) (11,163 ) (9,538 )
Actuarial loss 2,266 2,575 5,289 6,008
Amortization of unrecognized prior service cost 113 136 263 317

Net periodic benefit cost $ 5,065 $ 6,299 $ 11,818 $ 14,697

Postretirement healthcare plans:

Service cost $ 18 $ 24 $ 42 $ 57
Interest cost 366 331 854 773
Actuarial loss 47 43 109 100
Amortization of unrecognized prior service cost 7 15 17 34

Net periodic benefit cost $ 438 $ 413 $ 1,022 $ 964

~~Future cash flows~~~~— Our policy is to fund our plans at or above the minimum required by law. Details regarding 2011 contributions are as follows (~~~~in thousands~~):

Defined
Benefit Postretirement
Pension Plans Healthcare Plans

Net year-to-date contributions $ 1,560 $ 912
Remaining estimated net contributions during fiscal 2011 $ 1,400 $ 300

~~We will continue to evaluate contributions to our defined benefit pension plans based on changes in pension assets as a result of asset performance in the current market and economic environment.~~

~~JACK IN THE BOX INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

~~SHARE-BASED EMPLOYEE COMPENSATION~~

We offer share-based compensation plans to attract, retain and motivate key officers, employees and non-employee directors to work toward the financial success of the Company. In fiscal 2011, we granted share-based compensation awards in each period as follows:

Quarter Year-to-Date
Weighted- Weighted-
Average Average
Grant Date Grant Date
Shares Fair Value Shares Fair Value

Stock options — $ — 444,890 $ 8.25
Performance-vested stock awards — $ — 220,343 $ 21.74
Nonvested stock units 7,622 $ 24.02 68,784 $ 20.49

~~The components of share-based compensation expense recognized in each period are as follows (~~~~in thousands~~):

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Stock options $ 1,174 $ 1,667 $ 2,686 $ 3,743
Performance-vested stock awards 471 341 1,209 712
Nonvested stock awards 140 440 326 643
Nonvested stock units 348 59 578 123
Deferred compensation for non-management directors 173 188 173 279

Total share-based compensation expense $ 2,306 $ 2,695 $ 4,972 $ 5,500

~~STOCKHOLDERS’ EQUITY~~

~~Preferred stock~~—~~We have 15,000,000 shares of preferred stock authorized for issuance at a par value of $0.01 per share. No preferred shares have been issued.~~

~~Repurchases of common stock~~—In November 2010, the Board of Directors approved a program to repurchase up to $100.0 million in shares of our common stock expiring November 2011. During 2011, we repurchased approximately 3.5 million shares at an aggregate cost of $75.0 million. As of April 17, 2011, the aggregate remaining amount authorized for repurchase was $25.0 million. In May 2011, the Board of Directors authorized a new program to repurchase up to $100.0 million in shares of our common stock expiring November 2012.

~~Comprehensive income~~—~~Our total comprehensive income, net of taxes, was as follows (~~~~in thousands~~):

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Net earnings $ 6,802 $ 17,680 $ 39,203 $ 41,928
Cash flow hedges:
Net change in fair value of derivatives (247 ) (2 ) 1,190 (104 )
Net loss reclassified to earnings — 1,871 — 4,719

Total (247 ) 1,869 1,190 4,615
Tax effect 95 (713 ) (454 ) (1,761 )

(152 ) 1,156 736 2,854
Unrecognized periodic benefit costs:
Actuarial losses and prior service cost reclassified to earnings 2,433 2,769 5,678 6,459
Tax effect (929 ) (1,056 ) (2,168 ) (2,465 )

1,504 1,713 3,510 3,994

Total comprehensive income $ 8,154 $ 20,549 $ 43,449 $ 48,776

~~JACK IN THE BOX INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

~~The components of accumulated other comprehensive loss, net of taxes, were as follows at the end of each period (~~~~in thousands~~):

April 17, October 3,
2011 2010

Unrecognized periodic benefit costs, net of tax benefits of $46,211 and $48,379, respectively $ (74,824 ) $ (78,334 )
Net unrealized gains (losses) related to cash flow hedges, net of tax benefit (expense) of ($174) and $280, respectively 283 (453 )

Accumulated other comprehensive loss, net $ (74,541 ) $ (78,787 )

10.

AVERAGE SHARES OUTSTANDING

Our basic earnings per share calculation is computed based on the weighted-average number of common shares outstanding. Our diluted earnings per share calculation is computed based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued. Potentially dilutive common shares include stock options, nonvested stock awards and units, non-management director stock equivalents and shares issuable under our employee stock purchase plan. Performance-vested stock awards are included in the weighted-average diluted shares outstanding each period if the performance criteria have been met at the end of the respective periods.

The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding (in thousands):



	Quarter		Year-to-Date
	April 15, 2012	April 17, 2011	April 15, 2012	April 17, 2011
Weighted-average shares outstanding – basic	43,937	50,183	43,896	51,265
Effect of potentially dilutive securities:
Stock options	470	456	403	460
Nonvested stock awards and units	264	214	261	210
Performance-vested stock awards	240	131	215	134
Weighted-average shares outstanding – diluted	44,911	50,984	44,775	52,069
Excluded from diluted weighted-average shares outstanding:
Antidilutive	3,092	3,054	2,975	2,968
Performance conditions not satisfied at the end of the period	351	366	351	366

Our basic earnings per share calculations are computed based on the weighted-average number of common shares outstanding. Our diluted earnings per share calculations are computed based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued. Potentially dilutive common shares include stock options, nonvested stock awards and units, non-management director stock equivalents and shares issuable under our employee stock purchase plan. Performance-vested stock awards are included in the weighted-average diluted shares outstanding each period if the performance criteria have been met at the end of the respective periods.

~~The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding (~~~~in thousands~~):

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Weighted-average shares outstanding — basic 50,183 54,972 51,265 55,711
Effect of potentially dilutive securities:
Stock options 456 569 460 532
Nonvested stock awards and units 214 178 210 177
Performance-vested stock awards 131 78 134 79

Weighted-average shares outstanding — diluted 50,984 55,797 52,069 56,499

Excluded from diluted weighted-average shares outstanding:
Antidilutive 3,054 3,225 2,968 3,102
Performance conditions not satisfied at the end of the period 366 244 366 244

11.

VARIABLE INTEREST ENTITIES (“VIEs”)

We formed Jack in the Box Franchise Finance, LLC (“FFE”) for the purpose of operating a franchisee lending program

which may provide up to $100.0 million to assist Jack in the Box franchisees in re-imaging their restaurants. We are the sole equity investor in FFE. The $100.0 million lending program is comprised of a $20.0 million commitment from the Company in the form of a capital note and an $80.0 million Senior Secured Revolving Securitization Facility (“FFE Facility”) entered into with a third party. The FFE Facility is a revolving loan and security agreement bearing a variable interest rate. The revolving period has been extended and is set to expire in June 2012. We may make additional contributions to FFE and FFE may incur additional borrowings under its credit facility during the extended lending period.

In January 2011, we formed an entity, Jack in the Box Franchise Finance, LLC (“FFE”), for the purpose of operating a franchisee lending program which will provide up to $100.0 million to assist franchisees in reimaging their restaurants. We are the sole equity investor in FFE. The $100.0 million lending program is comprised of a $20.0 million commitment from the Company in the form of a capital note and an $80.0 million Senior Secured Revolving Securitization Facility (“FFE Facility”) entered into with a third party. The FFE Facility is a 12-month revolving loan and security agreement bearing a variable interest rate. As of April 17, 2011, we have contributed $8.0 million to FFE, $6.7 million of which has been used to assist franchisees in reimaging their restaurants, and FFE has not borrowed against its third party revolving credit facility. We expect to make additional contributions of $5.0 — $10.0 million to FFE during the remainder of fiscal 2011.

We have determined that FFE is a VIE and that the Company is its primary beneficiary. We considered a variety of factors in identifying the primary beneficiary of FFE including, but not limited to, who holds the power to direct matters that most significantly impact FFE’s economic performance (such as determining the underwriting standards and credit management policies), as well as what party has the obligation to absorb the losses of FFE. Based on these considerations, we have determined that the Company is the primary beneficiary and have reflected the entity in the accompanying condensed consolidated financial statements.

We have determined that FFE is a variable interest entity (“VIE”) and that the Company is its primary beneficiary. The primary beneficiary of a VIE is an enterprise that has a controlling financial interest in the VIE. Controlling financial interest exists when an enterprise has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. We considered a variety of factors in identifying the primary beneficiary of FFE including, but not limited to, who holds the power to direct matters that most significantly impact FFE’s economic performance (such as determining the underwriting standards and credit management policies), as well as what party has the obligation to absorb the losses of FFE. Based on these considerations, we have determined that the Company is the primary beneficiary and have reflected the entity in the accompanying condensed consolidated financial statements.

FFE’s assets consolidated by the Company represent assets that can be used only to settle obligations of the consolidated VIE. Likewise, FFE’s liabilities consolidated by the Company do not represent additional claims on

~~JACK IN THE BOX INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

the Company’s general assets; rather they represent claims against the specific assets of FFE. The impact of FFE’s liabilities and net loss were not material to the Company’s condensed consolidated financial statements. The assets of FFE consisted of the following at April 17, 2011 (~~in thousands~~):

Cash $ 192
Other current assets (1) 804
Other assets, net (1) 6,808

Total assets $ 7,804

FFE’s assets consolidated by the Company represent assets that can be used only to settle obligations of the consolidated VIE. Likewise, FFE’s liabilities consolidated by the Company do not represent additional claims on the Company’s general assets; rather they represent claims against the specific assets of FFE. The impacts of FFE’s results were not material to the Company’s condensed consolidated statements of earnings or cash flows. The FFE’s balance sheet consisted of the following at the end of each period (in thousands):



	April 15, 2012			October 2, 2011
Cash	$	165		$	531
Other current assets (1)	2,330			2,086
Other assets, net (1)	13,077			12,292
Total assets	$	15,572		$	14,909

Current liabilities	$	470		$	140
Revolving credit facility	—			1,160
Other long-term liabilities (2)	15,608			14,046
Retained earnings	(506		)	(437		)
Total liabilities and stockholders’ equity	$	15,572		$	14,909

____________________________


(1)		Consists primarily of amounts due from ~~franchisees and $1.0 million~~franchisees.


(2)	Consists primarily of ~~deferred finance fees included~~the capital note contributions from Jack in ~~other assets, net.~~the Box which are eliminated in consolidation.

The Company’s maximum exposure to loss is equal to its outstanding contributions that are expected to range from $15.0-$17.0 million and represents estimated losses that would be incurred should all franchisees default on their loans without any consideration of recovery. To offset the credit risk associated with the Company’s variable interest in FFE, the Company holds a security interest in the assets of FFE subordinate and junior to all other obligations of FFE.

The Company’s maximum exposure to loss is equal to its outstanding contributions that are expected to range from $10.0 — $20.0 million and represents estimated losses that would be incurred should all franchisees default on their loans without any consideration of recovery. To offset the credit risk associated with the Company’s variable interest in FFE, the Company holds a security interest in the assets of FFE subordinate and junior to all other obligations of FFE.

12.

LEGAL MATTERS

The Company is subject to normal and routine litigation brought by former, current or prospective employees, customers, franchisees, vendors, landlords, shareholders or others. The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements. An estimated loss contingency is accrued in the financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable, assessing contingencies is highly subjective and requires judgments about future events. The Company regularly reviews contingencies to determine the adequacy of the accruals and related disclosures. The ultimate amount of loss may differ from these estimates. Although the Company currently believes that the ultimate outcome of these matters will not have a material adverse effect on the results of operations, liquidity or financial position of the Company, it is possible that the results of operations, liquidity or financial position of the Company could be materially affected in any particular future reporting period by the unfavorable resolution of one or more of these matters or contingencies.

The Company is subject to normal and routine legal proceedings, including litigation. We have reserves for certain of these legal proceedings; however, the outcomes of such proceedings are subject to inherent uncertainties. Based on current information, including our reserves and insurance coverage, management believes that the ultimate liability from all pending legal proceedings, individually and in the aggregate, will not have a material adverse effect on the Company’s operating results, financial position or liquidity.

13.

SEGMENT REPORTING

Reflecting the information currently being used in managing the Company as a two-branded restaurant operations business, our segments comprise results related to system restaurant operations for our Jack in the Box and Qdoba brands. This segment reporting structure reflects the Company’s current management structure, internal reporting method and financial information used in deciding how to allocate Company resources. Based upon certain quantitative thresholds, both

operating segments are considered reportable segments.

We measure and evaluate our segments based on segment earnings from operations. Summarized financial information concerning our reportable segments is shown in the following tables (in thousands):



	Quarter						Year-to-Date
	April 15, 2012			April 17, 2011			April 15, 2012			April 17, 2011
Revenues by segment:
Jack in the Box restaurant operations segment	$	299,418		$	335,318		$	682,076		$	797,649
Qdoba restaurant operations segment	67,066			48,455			142,329			104,155
Distribution operations	140,146			121,362			334,940			268,049
Consolidated revenues	$	506,630		$	505,135		$	1,159,345		$	1,169,853
Earnings from operations by segment:
Jack in the Box restaurant operations segment	$	33,510		$	12,973		$	55,647		$	67,175
Qdoba restaurant operations segment	3,869			1,795			6,043			2,884
Distribution operations	—			(527		)	—			(1,182		)
FFE operations	(44		)	(172		)	(100		)	(172		)
Consolidated earnings from operations	$	37,335		$	14,069		$	61,590		$	68,705
Total depreciation expense by segment:
Jack in the Box restaurant operations segment	$	18,035		$	19,005		$	42,328		$	44,667
Qdoba restaurant operations segment	3,970			2,932			8,752			6,462
Distribution operations	155			160			398			390
Consolidated depreciation expense	$	22,160		$	22,097		$	51,478		$	51,519

Interest income and expense, income taxes and total assets are not reported for our segments, in accordance with our method of internal reporting.



	April 15, 2012		October 2, 2011
Goodwill by segment:
Jack in the Box	$	48,529	$	49,181
Qdoba	85,974		56,691
Consolidated goodwill	$	134,503	$	105,872

Refer to Note 2, Summary of Refranchisings, Franchise Development and Acquisitions, for information regarding the segment changes in goodwill during 2012.

~~We measure and evaluate our segments based on segment earnings from operations. Summarized financial information concerning our reportable segments is shown in the following table (~~~~in thousands~~):

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Revenues by segment:

Jack in the Box restaurant operations segment $ 335,318 $ 403,361 $ 797,649 $ 934,610
Qdoba restaurant operations segment 48,455 35,583 104,155 81,034
Distribution operations 121,362 90,762 268,049 195,380

Consolidated revenues $ 505,135 $ 529,706 $ 1,169,853 $ 1,211,024

Earnings from operations by segment:

Jack in the Box restaurant operations segment $ 12,973 $ 29,311 $ 67,175 $ 71,245
Qdoba restaurant operations segment 1,795 1,992 2,884 4,507
Distribution operations and other (699 ) (153 ) (1,354 ) (871 )

Consolidated earnings from operations $ 14,069 $ 31,150 $ 68,705 $ 74,881

~~Interest income and expense, income taxes and total assets are not reported for our segments, in accordance with our method of internal reporting.~~

~~JACK IN THE BOX INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

14.

SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION(in thousands)



	Year-to-Date
	April 15, 2012		April 17, 2011
Cash paid during the quarter for:
Interest, net of amounts capitalized	$	11,089	$	7,068
Income tax payments	$	24,125	$	22,601

~~Additional information related to cash flows is as follows (~~~~in thousands~~):

Year-to-Date
April 17, April 11,
2011 2010

Cash paid during the year for:
Interest, net of amounts capitalized $ 7,068 $ 12,299
Income tax payments $ 22,601 $ 46,305

15.

SUPPLEMENTAL CONSOLIDATED BALANCE SHEET INFORMATION(in thousands)


	April 17,		October 3,
	2011		2010
					April 15, 2012		October 2, 2011
Other assets, net:
Goodwill	$	101,514	$	85,041
Company-owned life insurance policies		84,137		76,296	$	83,629	$	75,202
Other		108,341		92,794	141,639		141,411
					$	225,268	$	216,613
Accrued liabilities:
Payroll and related					$	47,662	$	40,438
Sales and property taxes					14,120		13,963
Advertising					18,405		21,899
Insurance					33,976		37,987
Other					55,068		53,200
	$	293,992	$	254,131	$	169,231	$	167,487
Other long-term liabilities:
Pension					$	144,739	$	144,860
Other					148,903		145,863
					$	293,642	$	290,723


16.	SUBSEQUENT EVENT

During fiscal 2012, the Company has been engaged in a comprehensive review of its overhead structure, including evaluating opportunities for outsourcing, restructuring of certain functions and workforce reductions. On April 23, 2012, the Company offered a voluntary early retirement program to eligible employees. The impact of the early retirement program on our condensed consolidated financial statements will depend on the number of employees that accept the early retirement offer.

	~~FUTURE APPLICATION OF~~
17.	NEW ACCOUNTING PRINCIPLES

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which was issued to update the language used in existing guidance to better align U.S. GAAP and IFRS fair value measurement guidance. This update also requires increased disclosure of quantitative and qualitative information about unobservable inputs used in a fair value measurement that is categorized within Level 3 of the fair value hierarchy. Other than requiring additional disclosures, adoption of this new guidance in the second quarter did not have a significant impact on our consolidated financial statements.

Any accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income, which was issued to enhance comparability between entities that report under U.S. GAAP and IFRS, and to provide a more consistent method of presenting non-owner transactions that affect an entity’s equity. ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders’ equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption of the new guidance is permitted, and full retrospective application is required.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption.


ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~GENERAL

~~GENERAL~~

All comparisons between ~~2011~~2012 and ~~2010~~2011 refer to the ~~12-week~~12-weeks (“quarter”) and ~~28-week~~28-weeks (“year-to-date”) ~~periods~~ ended April 15, 2012 and April 17, 2011 ~~and April 11, 2010,~~, respectively, unless otherwise indicated.

For an understanding of the significant factors that influenced our performance during the quarterly periods ended April 15, 2012 and April 17, 2011 ~~and April 11, 2010,~~, our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes included in this Quarterly Report and our Annual Report on Form 10-K for the fiscal year ended October ~~3, 2010.~~2, 2011.

Our MD&A consists of the following sections:

	•		*~~Overview~~*~~— a general description of our business and fiscal 2011 highlights.~~

	•		*~~Financial reporting~~*~~— a discussion of changes in presentation.~~

	•		*~~Results of operations~~*~~— an analysis of our consolidated statements of earnings for the periods presented in our condensed consolidated financial statements.~~

	•		*~~Liquidity and capital resources~~*~~— an analysis of our cash flows including capital expenditures, aggregate contractual obligations, share repurchase activity, known trends that may impact liquidity and the impact of inflation.~~

	•		*~~Discussion of critical accounting estimates~~*~~— a discussion of accounting policies that require critical judgments and estimates.~~

	•		*~~New accounting pronouncements~~*~~— a discussion of new accounting pronouncements, dates of implementation and impact on our consolidated financial position or results of operations, if any.~~

	•		*~~Cautionary statements regarding forward-looking statements~~*~~— a discussion of the risks and uncertainties that may cause our actual results to differ materially from any forward-looking statements made by management.~~

Overview — a general description of our business and fiscal 2012 highlights.

~~OVERVIEW~~

Results of operations — an analysis of our consolidated statements of earnings for the periods presented in our condensed consolidated financial statements.

Liquidity and capital resources — an analysis of our cash flows including capital expenditures, share repurchase activity, known trends that may impact liquidity and the impact of inflation.

Discussion of critical accounting estimates — a discussion of accounting policies that require critical judgments and estimates.

New accounting pronouncements — a discussion of new accounting pronouncements, dates of implementation and the impact on our consolidated financial position or results of operations, if any.

Cautionary statements regarding forward-looking statements — a discussion of the risks and uncertainties that may cause our actual results to differ materially from any forward-looking statements made by management.

OVERVIEW

As of April ~~17, 2011,~~15, 2012, we operated and franchised ~~2,220~~2,242 Jack in the Box quick-service restaurants, ~~(“QSR”),~~ primarily in the western and southern United States, and ~~549~~605 Qdoba Mexican Grill (“Qdoba”) fast-casual restaurants throughout the United States.

Our primary source of revenue is from retail sales at Jack in the Box and Qdoba company-operated restaurants. We also derive revenue from Jack in the Box and Qdoba franchise restaurants, including royalties (based upon a percent of sales), rents, franchise fees and distribution sales of food and packaging commodities. In addition, we recognize gains from the sale of company-operated restaurants to franchisees, which are presented as a reduction of operating costs and expenses, net in the accompanying condensed consolidated statements of earnings.

The following summarizes the most significant events occurring in fiscal ~~2011~~2012 and certain trends compared to a year ago:

•

~~Restaurant Sales~~—~~Sales at restaurants open more than one year (“same-store sales”) increased (decreased) as follows:~~

Restaurant Sales— Sales at restaurants open more than one year (“same-store sales”) increased (decreased) as follows:

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Jack in the Box:
Company 0.8 % (8.6 %) 1.2 % (10.1 %)
Franchise (0.3 %) (7.3 %) 0.4 % (9.4 %)
System 0.1 % (8.1 %) 0.7 % (9.9 %)
Qdoba system 6.0 % 3.1 % 6.2 % 0.4 %



	Quarter				Year-to-Date
	April 15, 2012		April 17, 2011		April 15, 2012		April 17, 2011
Jack in the Box:
Company	5.6	%	0.8	%	5.5	%	1.2	%
Franchise	3.6	%	(0.3	)%	3.1	%	0.4	%
System	4.2	%	0.1	%	3.8	%	0.7	%
Qdoba:
Company	3.8	%	5.1	%	3.7	%	5.5	%
Franchise	2.2	%	6.4	%	3.2	%	6.5	%
System	3.0	%	6.0	%	3.4	%	6.2	%

	•		*~~Commodity Costs~~*—Pressures from higher commodity costs continue to impact our business. Overall commodity costs at our Jack in the Box restaurants increased approximately 5.0% in the quarter and 3.4% year-to-date compared to a year ago. We expect our overall commodity costs to increase approximately 4.5-5.5% in fiscal 2011.

	•		*~~New Unit Development~~*—We continued to grow our brands with the opening of new company-operated and franchise restaurants. Year-to-date, we opened 16 Jack in the Box locations system-wide, including several in our newer markets, and 30 Qdoba locations.

	•		*~~Franchising Program~~*—We refranchised 114 Jack in the Box restaurants, while Qdoba and Jack in the Box franchisees opened a total of 28 restaurants year-to-date. We are ahead of our timeline to increase franchise ownership to 70-80% of the Jack in the Box system, and we were approximately 62%Commodity Costs— Commodity costs increased approximately 1.8% and 6.7%, at our Jack in the Box and Qdoba restaurants, respectively, in the quarter and 4.7% and 10.2%, respectively, year-to-date compared to a year ago. We expect our overall commodity costs to increase approximately 3%-4% in fiscal 2012. 16 New Unit Development— We continued to grow our brands with the opening of new company-operated and franchise-operated restaurants. Year-to-date, we opened 23 Jack in the Box locations and 23 Qdoba locations system-wide. Franchising Program— Qdoba and Jack in the Box franchisees opened a total of 29 restaurants year-to-date. Our Jack in the Box system was approximately 73% franchised at ~~the end of the second quarter.~~

	•		*~~Share Repurchases~~*—Pursuant to a share repurchase program authorized by our Board of Directors, we repurchased approximately 3.5 million shares of our common stock at an average price of $21.58 per share year-to-date, including the cost of brokerage fees.

	•		*~~Franchise Financing Entity~~*—We formed an entity, Jack in the Box Franchise Finance, LLC, for the purpose of operating a franchisee lending program used primarily to assist franchisees in reimaging their restaurants. During the quarter, FFE provided $6.7 million to franchisees. The impact of this entity on the Company’s condensed consolidated financial statements as of and for the period ended April 17, 2011 was not material.

~~FINANCIAL REPORTING~~

At the end of ~~fiscal 2010,~~the second quarter and we ~~separated impairment and other charges, net from selling, general and administrative expenses in our consolidated statements~~plan to further increase franchise ownership to approximately 80% over the next couple of ~~earnings. Prior year amounts have been reclassified to conform to this new presentation.~~years.

RESULTS OF OPERATIONS

The following table presents certain income and expense items included in our condensed consolidated statements of earnings as a percentage of total revenues, unless otherwise indicated. Percentages may not add due to rounding.

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Statement of Earnings Data:

Revenues:
Company restaurant sales 63.6 % 73.3 % 64.8 % 74.4 %
Distribution sales 24.0 % 17.1 % 22.9 % 16.1 %
Franchise revenues 12.4 % 9.6 % 12.3 % 9.5 %

100.0 % 100.0 % 100.0 % 100.0 %

Operating costs and expenses, net:
Company restaurant costs:
Food and packaging (1) 33.4 % 31.5 % 32.9 % 31.6 %
Payroll and employee benefits (1) 30.5 % 30.2 % 30.7 % 30.4 %
Occupancy and other (1) 23.8 % 23.1 % 24.0 % 23.3 %

Total company restaurant costs (1) 87.7 % 84.8 % 87.5 % 85.3 %

Distribution costs (1) 100.4 % 100.2 % 100.4 % 100.5 %
Franchise costs (1) 50.1 % 45.6 % 48.5 % 45.6 %
Selling, general and administrative expenses 10.4 % 10.3 % 10.2 % 10.4 %
Impairment and other charges, net 0.9 % 0.7 % 0.7 % 0.5 %
Gains on the sale of company-operated restaurants (0.2 %) (0.6 %) (2.5 %) (1.0 %)
Earnings from operations 2.8 % 5.9 % 5.9 % 6.2 %
Income tax rate (2) 32.8 % 35.2 % 34.8 % 36.1 %
CONSOLIDATED STATEMENTS OF EARNINGS DATA



	Quarter				Year-to-Date
	April 15, 2012		April 17, 2011		April 15, 2012		April 17, 2011
Revenues:
Company restaurant sales	57.4	%	63.6	%	56.5	%	64.8	%
Distribution sales	27.7	%	24.0	%	28.9	%	22.9	%
Franchise revenues	14.9	%	12.4	%	14.6	%	12.3	%
Total revenues	100.0	%	100.0	%	100.0	%	100.0	%
Operating costs and expenses, net:
Company restaurant costs:
Food and packaging (1)	32.6	%	33.4	%	33.1	%	32.9	%
Payroll and employee benefits (1)	29.3	%	30.5	%	29.5	%	30.7	%
Occupancy and other (1)	22.5	%	23.8	%	23.0	%	24.0	%
Total company restaurant costs (1)	84.5	%	87.7	%	85.6	%	87.5	%
Distribution costs (1)	100.0	%	100.4	%	100.0	%	100.4	%
Franchise costs (1)	50.2	%	50.1	%	51.8	%	48.5	%
Selling, general and administrative expenses	10.8	%	10.4	%	10.4	%	10.2	%
Impairment and other charges, net	1.0	%	0.9	%	0.8	%	0.7	%
Gains on the sale of company-operated restaurants	(2.8	)%	(0.2	)%	(1.3	)%	(2.5	)%
Earnings from operations	7.4	%	2.8	%	5.3	%	5.9	%
Income tax rate (2)	34.1	%	32.8	%	34.2	%	34.8	%

____________________________


(1)		As a percentage of the related sales and/or revenues.


(2)		As a percentage of earnings before income taxes.

The following table presents Jack in the Box and Qdoba company restaurant sales, costs and costs as a percentage of the related sales. Percentages may not add due to rounding.

SUPPLEMENTAL COMPANY-OPERATED RESTAURANTS STATEMENTS OF EARNINGS DATA

(dollars in thousands)



	Quarter								Year-to-Date
	April 15, 2012				April 17, 2011				April 15, 2012				April 17, 2011
Jack in the Box:
Company restaurant sales	$	227,828			$	276,981			$	522,181			$	664,056
Company restaurant costs:
Food and packaging	76,508		33.6	%	94,493		34.1	%	178,098		34.1	%	222,303		33.5	%
Payroll and employee benefits	67,819		29.8	%	85,309		30.8	%	155,389		29.8	%	205,397		30.9	%
Occupancy and other	48,209		21.2	%	63,205		22.8	%	112,499		21.5	%	152,935		23.0	%
Total company restaurant costs	$	192,536	84.5	%	$	243,007	87.7	%	$	445,986	85.4	%	$	580,635	87.4	%
Qdoba:
Company restaurant sales	$	62,975			$	44,261			$	132,724			$	94,096
Company restaurant costs:
Food and packaging	18,402		29.2	%	12,782		28.9	%	38,919		29.3	%	26,827		28.5	%
Payroll and employee benefits	17,438		27.7	%	12,689		28.7	%	37,680		28.4	%	27,117		28.8	%
Occupancy and other	17,284		27.4	%	13,188		29.8	%	37,936		28.6	%	28,867		30.7	%
Total company restaurant costs	$	53,124	84.4	%	$	38,659	87.3	%	$	114,535	86.3	%	$	82,811	88.0	%

The following table summarizes the year-to-date changes in the number of Jack in the Box and Qdoba ~~company-operated~~company and franchise restaurants:

April 17, 2011 April 11, 2010
Company Franchise Total Company Franchise Total

Jack in the Box:

Beginning of period 956 1,250 2,206 1,190 1,022 2,212
New 7 9 16 16 12 28
Refranchised (114 ) 114 — (53 ) 53 —
Acquired from franchisees — — — 1 (1 ) —
Closed (1 ) (1 ) (2 ) (1 ) (6 ) (7 )

End of period 848 1,372 2,220 1,153 1,080 2,233

% of system 38 % 62 % 100 % 52 % 48 % 100 %
Qdoba:

Beginning of period 188 337 525 157 353 510
New 11 19 30 3 7 10
Acquired from franchisees 22 (22 ) — — — —
Closed — (6 ) (6 ) — (15 ) (15 )

End of period 221 328 549 160 345 505

% of system 40 % 60 % 100 % 32 % 68 % 100 %
Consolidated:

Total system 1,069 1,700 2,769 1,313 1,425 2,738

% of system 39 % 61 % 100 % 48 % 52 % 100 %

~~Revenues~~



	April 15, 2012						April 17, 2011
	Company		Franchise		Total		Company		Franchise		Total
Jack in the Box:
Beginning of year	629		1,592		2,221		956		1,250		2,206
New	9		14		23		7		9		16
Refranchised	(37	)	37		—		(114	)	114		—
Closed	—		(2	)	(2	)	(1	)	(1	)	(2	)
End of period	601		1,641		2,242		848		1,372		2,220
% of system	27	%	73	%	100	%	38	%	62	%	100	%
Qdoba:
Beginning of year	245		338		583		188		337		525
New	8		15		23		11		19		30
Acquired from franchisees	36		(36	)	—		22		(22	)	—
Closed	—		(1	)	(1	)	—		(6	)	(6	)
End of period	289		316		605		221		328		549
% of system	48	%	52	%	100	%	40	%	60	%	100	%
Consolidated:
Total system	890		1,957		2,847		1,069		1,700		2,769
% of system	31	%	69	%	100	%	39	%	61	%	100	%

Revenues

As we continue to execute our refranchising strategy, which includes the sale of restaurants to franchisees, we expect the number of Jack in the Box company-operated restaurants and the related sales to ~~continually~~ decrease while revenues from franchise restaurants increase. As such, company restaurant sales decreased ~~$67.1~~$30.4 million, or ~~17.3%~~9.5%, in the quarter and ~~$142.2~~$103.2 million, or ~~15.8%~~13.6%, ~~year-to-date, reflecting the decline~~year-to-date. This decrease is due primarily to a decrease in the average number of Jack in the Box company-operated ~~restaurants. This decrease was~~restaurants, partially offset by ~~increases in same-store sales at Jack in the Box and Qdoba restaurants and~~ an increase in the number of Qdoba company-operated restaurants and increases in per-store average sales (“PSA”) at our Jack in the Box and Qdoba company-operated restaurants.

The following table represents the approximate impact of these increases (decreases) on company restaurant sales(in ~~thousands)~~thousands):

Quarter Year-to-Date
Reduction in the average number of Jack in the Box company-operated restaurants $ (101,100 ) $ (209,000 )
Jack in the Box per-store average (“PSA”) sales increase 21,200 44,400
Qdoba 12,800 22,400

Total decrease in restaurant sales $ (67,100 ) $ (142,200 )



	Quarter			Year-to-Date
Reduction in the average number of Jack in the Box restaurants	$	(83,500	)	$	(225,400	)
Jack in the Box PSA sales increase	34,400			83,500
Increase in the average number of Qdoba restaurants	15,400			32,800
Qdoba PSA sales increase	3,300			5,900
Total decrease in company restaurant sales	$	(30,400	)	$	(103,200	)

Same-store sales at Jack in the Box company-operated restaurants ~~grew 0.8%~~increased 5.6% in the quarter and ~~1.2%~~5.5% year-to-date ~~as follows:~~

Quarter Year-to-Date
Increase in transactions 0.1 % 0.7 %
Average check growth (1) 0.7 % 0.5 %
driven by a combination of price increases and transaction growth. Same-store sales at Qdoba company-operated restaurants increased 3.8% in the quarter and 3.7% year-to-date primarily driven by price increases. The following table summarizes the change in company-operated same-store sales:



	Quarter		Year-to-Date
Jack in the Box transactions	3.1	%	3.0	%
Jack in the Box average check (1)	2.5	%	2.5	%
Jack in the Box change in same-store sales	5.6	%	5.5	%
Qdoba change in same-store sales (2)	3.8	%	3.7	%

____________________________


(1)		Includes price increases of approximately ~~1.3%~~3.5% and 3.4% in the quarter and year-to-date, ~~compared with a year ago.~~respectively.


(2)	Includes price increases of approximately 4.2% and 4.1% in the quarter and year-to-date, respectively.

Distribution sales to Jack in the Box and Qdoba franchisees grew ~~$30.6~~$18.8 million in the quarter and ~~$72.7~~$66.9 million year-to-date from a year ago. ~~The~~This growth primarily reflects an increase ~~reflects a higher~~in the number of Jack in the Box franchise restaurants that purchase ingredients and supplies from our distribution centers, which contributed additional sales of approximately ~~$28.0~~$19.5 million and ~~$64.2~~$55.2 million, respectively. ~~Higher~~Increases in PSA volumes and higher commodity prices year-to-date also contributed to the increase in distribution sales. During the second quarter, Qdoba restaurants ceased using our distribution services. Distribution sales ~~in both periods.~~to Qdoba franchisees were not material to our results of operations for any period presented.

Franchise revenues increased ~~$11.9~~$13.2 million, or ~~23.5%~~21.0%, in the quarter and ~~$28.4~~$25.8 million, or ~~24.6%~~18.0%, year-to-date due primarily to ~~a 28.6% and 26.0%~~an increase in the average number of Jack in the Box franchise restaurants, which contributed additional royalties and rents of approximately ~~$12.6~~$10.9 million and ~~$26.4~~$29.4 million, respectively. ~~In addition,~~

~~year-to-date increases in the number of restaurants sold to and developed by franchisees resulted in higher revenues from initial franchise fees. These increases were~~Year-to-date, this increase was partially offset by an increase in re-image contributions to franchisees, which are recorded as a reduction of franchise ~~revenues.~~revenues, and a decrease in revenues from franchise fees and other driven primarily by a decline in the number of restaurants sold to franchisees. The following table reflects the detail of our franchise revenues in each period and other information we believe is useful in analyzing the change in franchise revenues (dollars in thousands):

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Royalties $ 25,120 $ 20,352 $ 56,345 $ 46,386
Rents 36,643 28,190 82,726 65,046
Re-image contributions to franchisees (1,435 ) (95 ) (2,715 ) (650 )
Franchise fees and other 2,203 2,196 7,296 4,467

Franchise revenues $ 62,531 $ 50,643 $ 143,652 $ 115,249

Increase (decrease) in Jack in the Box franchise-operated same-store sales (0.3 %) (7.3 %) 0.4 % (9.4 %)

Royalties as a percentage of estimated franchise restaurant sales:
Jack in the Box 5.3 % 5.3 % 5.3 % 5.3 %
Qdoba 5.0 % 5.0 % 5.0 % 5.0 %

Quarter Year-to-Date
April 15, 2012 April 17, 2011 April 15, 2012 April 17, 2011
Royalties $ 29,382
$ 25,120
$ 67,511
$ 56,345
Rents 44,427
36,643
104,094
82,726
Re-image contributions to franchisees (827 ) (1,435 ) (6,535 ) (2,715 )
Franchise fees and other 2,699
2,203
4,430
7,296
Franchise revenues $ 75,681
$ 62,531
$ 169,500
$ 143,652
% increase 21.0 %

18.0 %

Average number of franchise restaurants 1,929
1,690
1,933
1,648
% increase 14.1 % 17.3 %
Increase (decrease) in franchise-operated same-store sales:
Jack in the Box 3.6 % (0.3 )% 3.1 % 0.4 %
Qdoba 2.2 % 6.4 % 3.2 % 6.5 %
Royalties as a percentage of estimated franchise restaurant sales:
Jack in the Box 5.3 % 5.3 % 5.2 % 5.3 %
Qdoba 5.0 % 5.0 % 5.0 % 5.0 %

Operating Costs and Expenses

Food and packaging costs ~~increased~~decreased to ~~33.4%~~32.6% of company restaurant sales in the quarter and ~~32.9%~~increased to 33.1% year-to-date ~~from 31.5%~~compared with 33.4% and ~~31.6%~~32.9%, respectively, a year ago. ~~Overall~~In 2012, higher commodity costs ~~at our Jack in the Box restaurants increased approximately 5.0%~~were more than offset in the quarter and ~~3.4%~~partially offset year-to-date by the benefit of selling price increases, favorable product mix and a greater proportion of Qdoba company restaurants. Commodity costs increased as follows compared with the prior year:



	Quarter		Year-to-Date
Jack in the Box	1.8	%	4.7	%
Qdoba	6.7	%	10.2	%

Commodity cost increases were driven by higher costs for ~~beef, cheese, pork, dairy, shortening~~most commodities other than produce and ~~produce, partially offset by lower~~poultry. We expect overall commodity costs for ~~poultry~~fiscal 2012 to increase approximately 3%-4%. Beef represents the largest portion, or approximately 21%, of the Company’s overall commodity spend, and ~~bakery. Additionally,~~we typically do not enter into fixed price contracts for our beef needs. For the ~~unfavorable impact of product mix~~full year, we currently expect beef costs to increase approximately 5%-6%, and ~~promotions was partially offset by the benefit of~~most other major commodities to be higher ~~prices.~~in 2012 compared with last year.

Payroll and employee benefit costs ~~were 30.5%~~decreased to 29.3% of company restaurant sales in the quarter and ~~30.7%~~29.5% year-to-date, compared to ~~30.2%~~30.5% and ~~30.4%~~30.7%, respectively, in ~~2010,~~2011, reflecting the leverage from same-store sales increases and the benefits of refranchising. These decreases were offset in part by higher levels of ~~staffing designed to improve the guest experience. In addition, increases in unemployment taxes in several states in which we operate negatively impacted these costs.~~incentive compensation.

Occupancy and other costs ~~were 23.8%~~decreased to 22.5% of company restaurant sales in the quarter and ~~24.0%~~23.0% year-to-date compared with ~~23.1%~~23.8% and ~~23.3%~~24.0%, respectively, last year. The ~~higher~~lower percentage in ~~2011~~2012 is due primarily ~~relates~~ to ~~guest service initiatives~~the leverage from same-store sales increases, the benefits of refranchising, and lower repair and maintenance costs. These benefits were partially offset by higher fees associated with debit card transactions, PSA depreciation expense related to the Jack in the Box re-image program and PSA rent expense ~~as a percentage of sales~~ resulting from a greater proportion of company-operated Qdoba restaurants compared with last year. ~~These increases were partially offset by lower utilities expense.~~

Distribution costs increased ~~$30.9~~$18.3 million in the quarter and ~~$72.9~~$65.8 million year-to-date, primarily reflecting an increase in the related sales. ~~In the quarter, these costs were 100.4% of~~The 2012 supply chain agreement provides that any profits or losses related to our distribution sales in 2011 compared with 100.2% a year ago primarily reflecting lower PSA volumes. Year-to-date, these costs remained fairly consistent as a percentage of the related sales decreasing slightly to 100.4% from 100.5% last year.operations are shared by all company and franchise restaurants who utilize our distribution services.

Franchise costs, principally rents and depreciation on properties ~~leased~~we lease to Jack in the Box franchisees, increased ~~$8.2~~$6.7 million to ~~50.1%~~50.2% of the related revenues in the quarter and ~~$17.2~~$18.2 million to ~~48.5%~~51.8% year-to-date, from ~~45.6% of the related revenues in each period~~50.1% and 48.5%, respectively, a year ago. The ~~percentage~~ increase as a percent of revenues is primarily due to higher rent and depreciation ~~and rent~~ expense ~~as a greater proportion~~resulting from an increase in the percentage of ~~properties are leased~~locations that we lease to franchisees. Year-to-date, an increase in re-image contributions to franchisees and ~~the impact of higher re-image contributions, which were partially offset year-to-date by leverage from higher~~lower franchise fee ~~revenue.~~revenue also contributed to the percent of revenues increase.

The following table presents the change in selling, general and administrative (“SG&A”) expenses compared with the prior year (in thousands):

Increase/(Decrease)
Quarter Year-to-Date

Advertising $ (4,221 ) $ (6,734 )
Refranchising strategy (713 ) (5,058 )
Incentive compensation 1,651 3,717
Cash surrender value of COLI policies, net (599 ) (1,613 )
Pension and postretirement benefits (1,209 ) (2,821 )
Qdoba general and administrative 1,642 3,056
Hurricane Ike insurance proceeds in 2010 — 1,004
Other 1,326 2,534

$ (2,123 ) $ (5,915 )



	Increase / (Decrease)
	Quarter			Year-to-Date
Advertising	$	(2,533	)	$	(7,685	)
Refranchising strategy	(1,216		)	(2,376		)
Incentive compensation	1,869			1,690
Cash surrender value of COLI policies, net	163			81
Pension and postretirement benefits	657			1,532
Pre-opening costs	398			1,149
Qdoba general and administrative	1,200			2,075
Other	1,340			4,244
	$	1,878		$	710

Our refranchising strategy has resulted in a decrease in the number of Jack in the Box company-operated restaurants and the related overhead expenses to manage and support those ~~restaurants. As such,~~restaurants, including advertising costs, which are primarily contributions to our marketing fund determined as a percentage of restaurant ~~sales, decreased at Jack in the Box and were partially offset by~~sales. The higher ~~advertising expense at Qdoba due to sales growth and timing. The increase in our~~levels of incentive compensation ~~accruals in 2011 reflects the expected~~reflect an improvement in the ~~Company’s~~Company's results compared with performance goals. ~~Changes in the~~The cash surrender value of our company-owned life insurance (“COLI”) policies, net of changes in our non-qualified deferred compensation obligation supported by these policies, are subject to market ~~fluctuations and positively impacted SG&A by $1.3~~fluctuations. The changes in market values had a positive impact of $1.1 million in the quarter and ~~$4.4~~$4.3 million ~~year-to-date~~ year to date compared to ~~$0.7~~$1.3 million and ~~$2.8~~$4.4 million, respectively, a year ago. The ~~decrease~~increase in pension and

postretirement benefits expense principally relates to ~~changes to~~a decrease in the ~~Company’s pension plan whereby participants will no longer accrue benefits after December 31, 2015.~~discount rate as compared with a year ago. The increase in pre-opening costs primarily relates to higher expenses associated with restaurant openings in new Jack in the Box markets. Qdoba general and administrative costs isincreased primarily due to higher ~~pre-opening expenses and~~ overhead to support our growing number of company-operated ~~restaurant base.~~restaurants.

Impairment and other charges, net is comprised of the following(in ~~thousands)~~thousands):

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Impairment charges $ 878 $ 895 $ 1,167 $ 1,503
Losses on the disposition of property and equipment, net 2,628 1,178 5,424 2,360
Costs of closed restaurants (primarily lease obligations) and other 988 1,379 1,499 2,268

$ 4,494 $ 3,452 $ 8,090 $ 6,131



	Quarter				Year-to-Date
	April 15, 2012		April 17, 2011		April 15, 2012		April 17, 2011
Impairment charges	$	910	$	878	$	2,109	$	1,167
Losses on the disposition of property and equipment, net	1,775		2,628		2,858		5,424
Costs of closed restaurants (primarily lease obligations) and other	864		988		2,933		1,499
Restructuring costs	1,525		—		1,525		—
	$	5,074	$	4,494	$	9,425	$	8,090

Impairment and other charges, net increased ~~$1.0~~$0.6 million in the quarter and ~~$2.0~~$1.3 million year-to-date ~~from~~compared to a year ~~ago due primarily to losses associated with our ongoing re-image program, which is targeted to be completed by~~ago. These increases include severance costs of $1.5 million recorded in the ~~end~~second quarter of ~~2011, and the rollout of signage~~fiscal 2012 related to our restructuring activities. The year-to-date increase also includes higher costs associated with restaurants and facilities we have closed or plan to close and impairment charges related to under-performing Jack in the Box restaurants. These increases were partially offset by a decrease in costs in both periods related to our re-image and new ~~logo.~~logo program which was substantially completed during the first quarter of fiscal 2012.

Gains on the sale of company-operated restaurants to franchisees, net are detailed in the following table (dollars in thousands):

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Number of restaurants sold to franchisees 26 30 114 53

Gains on the sale of company-operated restaurants $ 878 $ 2,987 $ 28,750 $ 12,367

Average gain on restaurants sold $ 34 $ 100 $ 252 $ 233

~~Gains were impacted by~~



	Quarter				Year-to-Date
	April 15, 2012		April 17, 2011		April 15, 2012		April 17, 2011
Number of restaurants sold to franchisees	37		26		37		114
Gains on the sale of company-operated restaurants	$	14,078	$	878	$	15,200	$	28,750
Average gain on restaurants sold	$	380	$	34	$	411	$	252

In 2012, gains on the ~~number~~sale of company-operated restaurants include additional gains of $0.9 million in the quarter and $2.1 million year-to-date recognized upon the extension of the underlying franchise and lease agreements related to restaurants sold ~~and~~in a prior year. The lower average gains in the ~~specific~~prior year relate to the sale of a market with lower than average sales volumes and cash flows ~~of those restaurants, which affected~~in the ~~changes in average gains recognized.~~second quarter.

Interest Expense, Net

Interest expense, net is comprised of the following (in thousands):

Quarter Year-to-Date
April 17, April 11, April 17, April 11,
2011 2010 2011 2010

Interest expense $ 4,204 $ 4,125 $ 9,151 $ 9,897
Interest income (259 ) (252 ) (595 ) (589 )

Interest expense, net $ 3,945 $ 3,873 $ 8,556 $ 9,308



	Quarter						Year-to-Date
	April 15, 2012			April 17, 2011			April 15, 2012			April 17, 2011
Interest expense	$	5,152		$	4,204		$	11,756		$	9,151
Interest income	(618		)	(259		)	(1,165		)	(595		)
Interest expense, net	$	4,534		$	3,945		$	10,591		$	8,556

Interest expense, net increased ~~slightly~~$0.6 million in the quarter and ~~decreased $0.7~~$2.0 million year-to-date compared with ~~last year primarily reflecting lower average interest rates and borrowings compared to~~ a year ago ~~offset in the quarter by interest expense incurred in connection with FFE.~~primarily due to higher average borrowings.

Income Taxes

The tax rate ~~decreased to 32.8%~~in 2012 was 34.1% in the quarter and ~~34.8%~~34.2% year-to-date, compared with ~~35.2%~~32.8% and ~~36.1%~~34.8%, respectively, in ~~2010.~~the prior year. The ~~decreases are due primarily to the impact of~~changes in rates were impacted by the market performance of insurance investment products used to fund certain non-qualified retirement ~~plans.~~plans and estimated earnings. Changes in the cash value of the insurance products are not included in taxable income. We expect the fiscal year tax rate to be ~~approximately~~ 35%-36%. The ~~final~~ annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual rate could differ from our current estimates.

Net Earnings

Net earnings were ~~$6.8~~$21.6 million, or ~~$0.13~~$0.48 per diluted share, in the quarter compared with ~~$17.7~~$6.8 million, or ~~$0.32~~$0.13 per diluted share, a year ago. Year-to-date net earnings were ~~$39.2~~$33.6 million, or ~~$0.75~~$0.75 per diluted share, compared with ~~$41.9~~$39.2 million or ~~$0.74~~$0.75 per diluted share, a year ago.

LIQUIDITY AND CAPITAL RESOURCES

General

Our primary sources of short-term and long-term liquidity are expected to be cash flows from operations, the revolving bank credit facility, the sale ~~of company-operated restaurants to franchisees and the sale~~ and leaseback of certain restaurant ~~properties.~~properties and the sale of Jack in the Box company-operated restaurants to franchisees.

We generally reinvest available cash flows from operations to improve our restaurant facilities and develop new restaurants, to reduce debt and to repurchase shares of our common stock. Our cash requirements consist principally of:

	•		working capital;

	•		~~capital expenditures for new restaurant construction and restaurant renovations;~~

	•		~~income tax payments;~~

	•		~~debt service requirements; and~~

	•		~~obligations related to our benefit plans.~~

capital expenditures for new restaurant construction and restaurant renovations;

income tax payments;

debt service requirements; and

obligations related to our benefit plans.

Based upon current levels of operations and anticipated growth, we expect that cash flows from operations, combined with other financing alternatives in place or available, will be sufficient to meet our capital expenditure, working capital and debt service requirements for the foreseeable future.

As is common in the restaurant industry, we maintain relatively low levels of accounts receivable and inventories, and our vendors grant trade credit for purchases such as food and supplies. We also continually invest in our business through the addition of new units and refurbishment of existing units, which are reflected as long-term assets and not as part of working capital. As a result, we typically maintain current liabilities in excess of current assets, which results in a working capital deficit.

Cash and cash equivalents increased $4.1 million to $14.7 million at the end of the quarter from $10.6 million at the beginning of the fiscal year. This increase is primarily due to cash flows provided by operating activities, proceeds and collections of notes receivable from the sale of restaurants to franchisees, and borrowings under our revolving credit facility, offset in part by cash used to repurchase common stock, purchase property and equipment and acquire Qdoba franchise-operated restaurants. We generally reinvest available cash flows from operations to improve our restaurant facilities and develop new restaurants, to reduce debt and to repurchase shares of our common stock.

Cash Flows

The table below summarizes our cash flows from operating, investing and financing activities (in thousands):

Year-to-Date
April 17, April 11,
2011 2010

Total cash provided by (used in):
Operating activities:
Continuing operations $ 81,844 $ 26,646
Discontinued operations — (2,172 )
Investing activities (26,905 ) (5,944 )
Financing activities (50,834 ) (59,071 )

Increase (decrease) in cash and cash equivalents $ 4,105 $ (40,541 )



	Year-to-Date
	April 15, 2012			April 17, 2011
Total cash provided by (used in):
Operating activities	$	69,588		$	81,844
Investing activities	(64,592		)	(26,905		)
Financing activities	(5,112		)	(50,834		)
Net increase (decrease) in cash and cash equivalents	$	(116	)	$	4,105

Operating Activities.Operating cash flows ~~from continuing operations increased $55.2~~decreased $12.3 million compared with a year ago due primarily to increases in payments as follows: $9.5 million related to fluctuations in the timing of ~~property~~October rent payments; $4.3 million for bonuses; $4.1 million in pension contributions; and $4.0 million for interest expense. The impact of these higher payments ~~and a reduction~~were partially offset by an $8.4 million increase in ~~bonus and estimated~~net income ~~tax payments.~~adjusted for non-cash items.

Investing Activities.Cash used in investing activities increased ~~$21.0~~$37.7 million compared with a year ago due primarily to decreases in (1) proceeds from the sale of restaurants to franchisees, (2) proceeds from the sale and leaseback of restaurant properties and (3) collections of notes receivable related to prior years’ refranchising activities, as well as an increase in ~~capital expenditures and~~ cash used to acquire Qdoba franchise-operated ~~restaurants~~restaurants. The impact of these decreases in ~~2011,~~cash flows were partially offset by ~~an increase~~a decrease in capital expenditures.

Capital Expenditures— The composition of capital expenditures in each period follows (in thousands):



	Year-to-Date
	April 15, 2012		April 17, 2011
Jack in the Box:
New restaurants	$	7,527	$	3,905
Restaurant facility improvements	16,748		51,734
Other, including corporate	7,408		5,868
Qdoba	8,926		12,622
Total capital expenditures	$	40,609	$	74,129

Our capital expenditure program includes, among other things, investments in new locations, restaurant remodeling, new equipment and information technology enhancements. Capital expenditures decreased compared to a year ago due primarily to a decrease in spending related to our Jack in the ~~number~~Box restaurant re-image and new logo program. We expect fiscal 2012 capital expenditures to be approximately $85-$95 million. We plan to open approximately 15 Jack in the Box and 25-30 Qdoba company-operated restaurants in 2012.

Sale of Company-Operated Restaurants— The following table details proceeds received in connection with our refranchising activities in each period (dollars in thousands):



	Year-to-Date
	April 15, 2012		April 17, 2011
Number of restaurants sold to franchisees	37		114

Total proceeds	$	21,964	$	49,588
Average proceeds	$	594	$	435

We expect total proceeds of $40-$50 million from the sale of 80-120 Jack in the Box restaurants ~~sold~~in 2012. In certain instances, we may provide financing to ~~franchisees and collections~~facilitate the closing of certain transactions. As of April 15, 2012, notes ~~receivables~~receivable related to prior year ~~refranchising activity.~~refranchisings were $6.3 million.

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. ~~In 2011 we sold~~The following table summarizes the cash flow activity related to sale and ~~leased back 12 restaurants, generating proceeds of $21.8 million compared with 19 restaurants and $36.0 million a year ago.~~ leaseback transactions in each period (dollars in thousands):



	Year-to-Date
	April 15, 2012			April 17, 2011
Number of restaurants sold and leased back	5			12

Proceeds from sale of assets	$	9,312		$	21,811
Spending to acquire/purchase assets	(22,000		)	(15,142		)
Net cash flows related to assets held for sale and leaseback	$	(12,688	)	$	6,669

As of April ~~17, 2011,~~15, 2012, we had ~~cash~~ investments of ~~$51.3~~$62.5 million in 56approximately 44 operating ~~and under-construction~~or under construction restaurant properties that we expect to sell and leaseback during the next ~~twelve~~12 months.

~~Capital Expenditures —~~~~Our capital expenditure program includes, among other things, investments in new locations, restaurant remodeling, new equipment and information technology enhancements. The composition~~Acquisition of ~~capital expenditures in each period is as follows (~~~~in thousands~~):

Year-to-Date
April 17, April 11,
2011 2010

Jack in the Box:
New restaurants $ 3,905 $ 15,901
Restaurant facility improvements 51,734 17,769
Other, including corporate 5,868 4,482
Qdoba 12,622 4,480

Total capital expenditures $ 74,129 $ 42,632

~~Capital expenditures increased compared to a year ago due primarily to an increase in spending related to our Jack in the Box re-image program and new logo rollout, as well as new~~Franchise-Operated Restaurants— During 2012, we acquired Qdoba restaurants, partially offset by a decrease in spending for new Jack in the Box locations. We expect fiscal 2011 capital expenditures to be approximately $125-$135 million, including investment costs related to the Jack in the Box restaurant re-image program. We plan to open approximately 18 Jack in the Box and 25 Qdoba company-operatedfranchise restaurants in ~~2011.~~

~~Sale of Company-Operated Restaurants —~~~~We have~~select markets where we believe there is continued ~~to expand franchise ownership in the Jack in the Box system primarily through the sale of company-operated restaurants to franchisees.~~opportunity for restaurant development. The following table details ~~proceeds received in connection with our refranchising activities~~franchise-operated restaurant acquisition activity (dollars in ~~thousands)~~thousands):

Year-to-Date
April 17, April 11,
2011 2010

Number of restaurants sold to franchisees 114 53

Cash $ 49,588 $ 19,093
Notes receivable — 2,730

Total proceeds $ 49,588 $ 21,823

Average proceeds $ 435 $ 412

In certain instances, we may provide financing to facilitate the closing of certain transactions. As of April 17, 2011, the notes receivable balance related to prior year refranchisings was $10.9 million, $4.3 million of which is expected to be fully repaid by the end of the fiscal year. We expect total proceeds of $85-$95 million from the sale of 175-225 Jack in the Box restaurants in 2011.



	Year-to-Date
	April 15, 2012		April 17, 2011
Number of restaurants acquired from franchisees	36		22
Cash used to acquire franchise-operated restaurants	$	39,195	$	21,477

~~Acquisition of Franchise-Operated Restaurants —~~~~In 2011, we acquired 20 Qdoba franchise-operated restaurants in the Indianapolis market and two in Northern Florida for approximately $21.5 million.~~ The purchase ~~price was~~prices were primarily allocated ~~primarily~~ to ~~goodwill,~~ property and equipment, goodwill and reacquired franchise rights. For additional information, refer to Note 2,Summary of Refranchisings, ~~Franchisee~~Franchise Development and ~~Acquisitions~~~~, of the notes to the condensed consolidated financial statements.~~Acquisitions.

Financing Activities.Cash flows used in financing activities decreased ~~$8.2~~$45.7 million compared with a year ago primarily attributable to lower principal repayments on debt and an increase in borrowings under our revolving credit facility, offset in part by the change in our book overdraft related to the timing of working capital receipts and disbursements and an increasea decrease in cash used to repurchase shares of ~~the Company’s~~our common ~~stock.~~stock, partially offset by a decrease in borrowings under our credit facility.

Credit Facility—Our credit facility is comprised of (i) a $400.0 million revolving credit facility and (ii) a $200.0 million term loan maturing on June 29, 2015, ~~initially~~ both ~~with~~bearing interest at London Interbank Offered Rate (“LIBOR”) plus ~~2.50~~2.75%., as of April 15, 2012. 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 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 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. We were in compliance with all covenants as of April ~~17, 2011.~~15, 2012. Effective February 16, 2012, to provide additional financial flexibility due to the timing of refranchising transactions and the $33.0 million acquisition of Qdoba franchised restaurants completed in the second quarter of fiscal 2012, we amended our credit facility to temporarily increase the maximum financial leverage ratio to 2.50 to 1.00 from 2.25 to 1.00 through the third quarter of fiscal 2012.

At April ~~17, 2011,~~15, 2012, we had ~~$192.5~~$175.0 million outstanding under the term loan, borrowings under the revolving credit facility of ~~$207.0~~$300.0 million and letters of credit outstanding of ~~$35.8 million.~~$38.9 million.

~~Franchise Financing Entity~~FFE Credit Facility—FFE ~~has a $100.0 million lending program comprised of a $20.0 million commitment from the Company in the form of a capital note and~~entered into an $80.0 million Senior Secured Revolving Securitization Facility (“FFE Facility”) ~~entered into~~ with a third ~~party.~~party to assist in funding our franchisee lending program. The FFE Facility is a ~~12-month~~ revolving loan and security agreement bearing a variable interest rate. The revolving period has been extended and is set to expire in June 2012. As of April ~~17, 2011, we have contributed $8.0~~15, 2012, FFE had borrowings outstanding of $0.9 million ~~to FFE, $6.7 million of which has been used to assist franchisees in reimaging their restaurants, and FFE has not borrowed~~ against ~~its third party revolving credit~~this facility.

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~~forward-looking swaps that ~~will~~ effectively convert $100.0 million of our variable rate term loan to a fixed-rate basis ~~beginning~~from September 2011 through September 2014. Based on the term ~~loan~~loan’s applicable margin of ~~2.50%~~2.75% as of April ~~17, 2011,~~15, 2012, these agreements would have an average pay rate of 1.54%, yielding an “all-in” fixed rate of ~~4.04%~~4.29%. ~~From March 2007 to April 2010, we held two interest rate swaps that~~

~~effectively converted $200.0 million of our variable rate term loan borrowings to a fixed-rate basis.~~ For additional information related to our interest rate swaps, refer to Note 4,Derivative Instruments, of the notes to the condensed consolidated financial statements.

Repurchases of Common Stock—In ~~November 2010,~~May 2011, the Board of Directors approved a program to repurchase up to $100.0 million in shares of our common stock expiring November ~~2011.~~2012. During ~~2011,~~the first quarter, we repurchased approximately ~~3.5~~0.3 million shares at an aggregate cost of ~~$75.0 million. As of April 17,~~$6.4 million, completing the May 2011 ~~the aggregate remaining amount authorized for repurchase was $25.0 million.~~authorization. In ~~May~~November 2011, the Board of Directors ~~authorized~~approved a new program to repurchase ~~up to~~ $100.0 million in shares of our common stock expiring November ~~2012.~~2013. As of the end of the second quarter, $100.0 million remains available under this authorization.

Off-Balance Sheet Arrangements

~~Other than operating leases, we~~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.~~

DISCUSSION OF CRITICAL ACCOUNTING ESTIMATES

~~We have identified the following as our most critical~~Critical accounting estimates ~~which~~ are those ~~that~~the Company believes are most important tofor the portrayal of the Company’s financial condition and results and that require management’s most subjective and complex judgments. ~~Information~~Judgments and uncertainties regarding ~~our other significant~~the application of these policies may result in materially different amounts being reported under various conditions or using different assumptions. There have been no material changes to the critical accounting estimates ~~and policies is~~previously disclosed in ~~Note 1 of our most recent~~the Company’s Annual Report on Form 10-K ~~filed with~~for the ~~SEC.~~fiscal year ended October 2, 2011.

~~Long-lived Assets~~~~— Property, equipment~~NEW ACCOUNTING PRONOUNCEMENTS

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income, which was issued to enhance comparability between entities that report under U.S. GAAP and ~~certain~~IFRS, and to provide a more consistent method of presenting non-owner transactions that affect an entity’s equity. ASU 2011-05 eliminates the option to report other assets, including amortized intangible assets, are reviewed for impairment when indicators of impairment are present. This review generally includes a restaurant-level analysis, except when we are actively selling a group of restaurants, in which case we perform our impairment evaluations at the group level. Impairment evaluations for individual restaurants take into consideration a restaurant’s operating cash flows, the period of time since a restaurant has been opened or remodeled, refranchising expectationscomprehensive income and the maturity of the related market. Impairment evaluations for a group of restaurants take into consideration the group’s expected future cash flows and sales proceeds from bids received, if any, or fair market value based on, among other considerations, the specific sales and cash flows of those restaurants. If the assets of a restaurant or group of restaurants subject to our impairment evaluation are not recoverable based upon the forecasted, undiscounted cash flows, we recognize an impairment loss as the amount by which the carrying value of the assets exceeds fair value. Our estimates of cash flows used to assess impairment are subject to a high degree of judgment and may differ from actual cash flows due to, among other things, economic conditions or changes in operating performance.

~~Retirement Benefits~~— Our defined benefit and other postretirement plans’ costs and liabilities are determined using several statistical and other factors, which attempt to anticipate future events, including assumptions about the discount rate and expected return on plan assets. We determine and set our discount rate annually, with assistance from our actuaries, by considering the average of pension yield curves constructed of a population of high-quality bonds with a Moody’s or Standard and Poor’s rating of “AA” or better meeting certain other criteria. As of October 3, 2010, our discount rate was 5.82% for our defined benefit and postretirement benefit plans. Our expected long-term rate of return on assets is determined taking into consideration our projected asset allocation and economic forecasts prepared with the assistance of our actuarial consultants. As of October 3, 2010, our assumed expected long-term rate of return was 7.75% for our qualified defined benefit plan. The actuarial assumptions used may differ materially from actual results due to changing market and economic conditions, higher or lower turnover and retirement rates or longer or shorter life spans of participants. These differences may affect the amount of pension expense we record. A hypothetical 25 basis point reductionits components in the assumed discount rate and expected long-term rate of return on plan assets would have resulted in an estimated increase of $2.7 million and $0.7 million, respectively, in our fiscal 2011 pension and postretirement plan expense. We expect our pension and postretirement expense to decrease in fiscal 2011 principally due to the curtailment of our qualified plan, which will be partially offset by a decrease in our discount rate from 6.16% to 5.82%.

~~Self Insurance~~— We are self-insured for a portion of our losses related to workers’ compensation, general liability, automotive and health benefits. In estimating our self-insurance accruals, we utilize independent actuarial estimates of expected losses, which are based on statistical analysis of historical data. These assumptions are closely monitored and adjusted when warranted by changing circumstances. Should a greater amount of claims occur

~~compared to what was estimated or medical costs increase beyond what was expected, accruals might not be sufficient, and additional expense may be recorded.~~

~~Restaurant Closing Costs~~— Restaurant closing costs consist of net future lease commitments and expected ancillary costs. We record a liability for the net present value of any remaining lease obligations, less estimated sublease income, at the date we cease using a property. Subsequent adjustments to the liability as a resultstatement of changes in ~~estimates~~stockholders’ equity and requires an entity to present the total of ~~sublease~~ comprehensive

income, the components of net income and the components of other comprehensive income either in a single continuous statement or ~~lease cancellations are recorded~~ in ~~the period incurred. The estimates we make related to sublease income are subject to a high degree of judgment~~two separate but consecutive statements. This pronouncement is effective for fiscal years, and ~~may differ from actual sublease income due to changes in economic conditions, desirability~~interim periods within those years, beginning after December 15, 2011. Early adoption of the ~~sites~~new guidance is permitted, and ~~other factors.~~full retrospective application is required. This pronouncement is not expected to have a material impact on our consolidated financial statements upon adoption.

~~Share-based Compensation~~—We offer share-based compensation plans to attract, retain and motivate key officers, employees and non-employee directors to work toward the financial success of the Company. Share-based compensation cost for our stock option grants is estimated at the grant date based on the award’s fair-value as calculated by an option pricing model and is recognized as expense ratably over the requisite service period. The option pricing models require various highly judgmental assumptions, including volatility, forfeiture rates and expected option life. If any of the assumptions used in the model change significantly, share-based compensation expense may differ materially in the future from that recorded in the current period.

~~Goodwill and~~ Other ~~Intangibles~~— We also evaluate goodwill and non-amortizable intangible assets annually, or more frequently if indicators of impairment are present. If the determined fair values of these assets are less than the related carrying amounts, an impairment loss is recognized. The methods we use to estimate fair value include future cash flow assumptions, which may differ from actual cash flows due to, among other things, economic conditions or changes in operating performance. During the fourth quarter of fiscal 2010, we reviewed the carrying value of our goodwill and indefinite life intangible assets and determined that no impairment existed as of October 3, 2010.

~~Legal Accruals~~—The Company is subject to claims and lawsuits in the ordinary course of its business. A determination of the amount accrued, if any, for these contingencies is made after analysis of each matter. We continually evaluate such accruals and may increase or decrease accrued amounts, as we deem appropriate.

~~Income Taxes~~—We estimate certain components of our provision for income taxes. These estimates include, among other items, depreciation and amortization expense allowable for tax purposes, allowable tax credits, effective rates for state and local income taxes and the tax deductibility of certain other items. We adjust our effective income tax rate as additional information on outcomes or events becomes available. Our estimates are based on the best available information at the time that we prepare the income tax provision. We generally file our annual income tax returns several months after our fiscal year-end. Income tax returns are subject to audit by federal, state and local governments, generally years after the returns are filed. These returns could be subject to material adjustments or differing interpretations of the tax laws.

~~NEW ACCOUNTING PRONOUNCEMENTS~~

~~Any~~ accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the federal securities laws. Any statements contained herein that are not historical facts may be deemed to be forward-looking statements. Forward-looking statements ~~use~~may be identified by words such ~~words~~ as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “forecast,” “goals,” “guidance,” “intend,” “plan,” “project,” “may,” “will,” “would” and similar expressions. These statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate. These estimates and assumptions involve known and unknown risks, uncertainties, and other factors that are ~~subject to risks and uncertainties, which~~in some cases beyond our control. Factors that may cause our actual results to differ materially from ~~expectations. You should not rely unduly on forward-looking statements. All~~any forward-looking statements include, but are ~~made only as of the date issued. The estimates and assumptions underlying those forward-looking statements can and do change. We do~~ not ~~undertake any obligation~~limited to, ~~update any forward-looking statements. We caution the reader that the following important factors and~~ the important factors described in the “Discussion of Critical Accounting Estimates,” and in other sections in this Form 10-Q and in our most recent Annual Report on Form 10-K and other Securities and Exchange Commission filings, including:

Food service businesses such as ours may be materially and adversely affected by changes in consumer tastes or eating habits, and economic, political and socioeconomic conditions. Adverse economic conditions such as unemployment (particularly in California and Texas where our Jack in the Box restaurants are concentrated) may result in reduced restaurant traffic and sales and impose practical limits on pricing.

Our profitability depends in part on our ability to anticipate and react to changes in food costs and availability, fuel costs and other supply and distribution costs. As discussed in our MD&A under the caption “Operating Costs and Expenses,” commodity costs have increased significantly in the past year. While prices appear to be moderating, the risks of increased costs and continued volatility remain, which factors could negatively impact our margins as well as franchisee margins.

Multi-unit food service businesses such as ours can be materially and adversely affected by widespread negative publicity of any type, particularly regarding food quality or public health issues. Negative publicity regarding our brands or the restaurant industry in general could cause a decline in system restaurant sales and could have a material adverse effect on our financial condition and results of operations.

Food service businesses such as ours are subject to the risk that shortages or interruptions in supply could adversely affect the availability, quality and cost of ingredients.

Our business can be materially and adversely affected by severe weather conditions, which can result in lost restaurant sales and increased costs.

New restaurant development, which is critical to our long-term success, involves substantial risks, including availability of acceptable financing, cost overruns and the inability to secure suitable sites on acceptable terms.

Our growth strategy includes opening restaurants in new markets where we cannot assure that we will be able to successfully expand, attract customers or otherwise operate profitably.

The restaurant industry is highly competitive with respect to price, service, location, brand identification and the quality of food. We cannot assure that we will be able to effectively respond to aggressive competitors (including competitors with significantly greater financial resources); that our facility improvements will yield the desired return on investment; or that our new products, service initiatives or our overall strategies will be successful.

The cost of compliance with labor and other regulations could negatively affect our results of operations and financial condition. The increasing amount and complexity of federal, state and local governmental regulations applicable to ~~vary materially~~our industry may increase both our costs of compliance and our exposure to regulatory claims.

Should our advertising and promotion be less effective than our competitors, there could be a material adverse effect on our results of operations and financial condition.

We may not be able to achieve or maintain the ownership mix of franchisee to company-operated restaurants that we desire. Additionally, our ability to reduce operating costs through increased franchise ownership is subject to risks and uncertainties.

We cannot assure that franchisees and developers planning the opening of franchisee restaurants will have the ability or resources to open restaurants or be effective operators, remain aligned with our operations, promotional and capital-intensive initiatives, or successfully operate restaurants in a manner consistent with our standards. In addition, a

franchisee's unrelated business obligations could adversely affect a franchisee’s ability to make timely payments to us or adhere to our standards and project an image consistent with our brands.

The loss of key personnel could have a material adverse effect on our business.

A material failure or interruption of service or a breach in security of our computer systems could cause reduced efficiency in operations, loss of data or business interruptions.

Failure to comply with environmental laws could result in the imposition of severe penalties or restrictions on operations by governmental agencies or courts of law, which could adversely affect operations.

Our ability to repay expected borrowings under our credit facility and to meet our other debt or contractual obligations will depend upon our future performance and our cash flows from ~~those expressed~~operations, both of which are subject to prevailing economic conditions and financial, business and other known and unknown risks and uncertainties, certain of which are beyond our control.

Changes in ~~any forward-looking statement:~~

•		Any widespread publicity, whether or not based in fact, about public health issues or pandemics, or the prospect of such events, which negatively affects consumer perceptions about the health, safety or quality of food and beverages served at our restaurants may adversely affect our results.

•		Food service businesses such as ours may be materially and adversely affected by changes in national and regional political and economic conditions. Unstable economic conditions, including inflation, lower levels of consumer confidence, low levels of employment, decreased consumer spending and changes in discretionary spending priorities may adversely impact our sales, operating results and profits.

•		Costs may exceed projections, including costs for food ingredients, labor (including increases in minimum wage, workers’ compensation, healthcare and other insurance), fuel, utilities, real estate, insurance, equipment, technology and construction of new and remodeled restaurants. Inflationary pressures affecting the cost of commodities may adversely affect our food costs and our operating margins. Because a significant number of our restaurants are company-operated, we may have greater exposure to operating cost issues than if we were more heavily franchised.

•		~~Regulatory changes, such as the federal healthcare legislation or possible changes to labor or other laws and regulations, could result in increased operating costs.~~

•		There can be no assurances that new interior and exterior designs, kitchen enhancements or new equipment will foster increases in sales at remodeled restaurants and yield the desired return on investment.

•		There can be no assurances that our growth objectives in the regional markets in which we operate restaurants will be met or that new facilities will be profitable. Development delays, sales softness and restaurant closures may have a material adverse effect on our results of operations. The development and profitability of restaurants can be adversely affected by many factors, including the ability of the Company and its franchisees to select and secure suitable sites on satisfactory terms, costs of construction, and general business and economic conditions. In addition, tight credit marketsaccounting standards, policies or related interpretations by accountants or regulatory entities may negatively impact ~~the ability of franchisees to fulfill their restaurant development commitments.~~

•		There can be no assurances that we will be able to effectively respond to aggressive competition from numerous and varied competitors (some with significantly greater financial resources) in all areas of business, including new concepts, facility design, competition for labor, new product introductions, customer service initiatives, promotions (including value promotions) and discounting. Additionally, the trend toward convergence in grocery, deli, convenience store and other types of food services may increase the number of our competitors. Such increased competition could decrease the demand for our products and negatively affect our sales and profitability. Moreover, there can be no assurance of the success of any new products, initiatives or overall strategies that we choose to pursue.

•		The realization of gains from the sale of company-operated restaurants to existing and new franchisees depends upon various factors, including sales trends, cost trends and economic conditions. The financing market, including the cost and availability of borrowed funds and the terms required by lenders, can impact the ability of franchisee candidates to purchase franchises and can potentially impact the sales prices and number of franchises sold. The number of franchises sold and the amount of gain realized from the sale of an on-going business may not be consistent from quarter to quarter and may not meet expectations.

•		As the number of franchisees increases, our revenues derived from rents and royalties at franchise restaurants will increase, as well as the risk that revenues could be negatively impacted by defaults in payment of rents and royalties.

•		Franchisee business obligations may not be limited to the operation of Jack in the Box or Qdoba restaurants, making them subject to business and financial risks unrelated to the operation of their restaurants. These unrelated risks could adversely affect a franchisee’s ability to make full or timely payments to us.

•		The costs related to legal claims such as class actions involving employees, franchisees, shareholders or consumers, including costs related to potential settlement or judgments, may adversely affect our results.

•		~~Changes in accounting standards, policies or practices or related interpretations by auditors or regulatory entities, including changes in tax accounting or tax laws, may adversely affect our results.~~

•		The costs or exposures associated with maintaining the security of information and the use of cashless payments may exceed expectations. Such risks include increased investment in technology and costs of compliance with consumer protection and other laws.

•		Many factors affect the trading price of our stock, including factors over which we have no control, such as the current financial environment, government actions, reports on the economy as well as negative or positive announcements by competitors, regardless of whether the report relates directly to our business.

•		Significant demographic changes, adverse weather, political conditions such as terrorist activity or the effects of war, other significant events (particularly in California and Texas where nearly 70% of our Jack in the Box system restaurants are located), new legislation, governmental regulation, the possibility of unforeseen events affecting the food service industry in general and other factors over which we have no control can each adversely affect our results of operation.

~~This discussion of uncertainties is by no means exhaustive but is intended to highlight some important factors that may materially affect~~ our results.

We are subject to litigation which is inherently unpredictable and can result in unfavorable resolutions where the amount of ultimate loss may differ from our estimated loss contingencies, or impose other costs in defense of claims.

Potential investors are urged to consider these factors carefully in evaluating any forward-looking statements, and are cautioned not to place undue reliance on the forward-looking statements. All forward-looking statements are made only as of the date issued, and we do not undertake any obligation to update any forward-looking statements.

ITEM 3.~~QUANTITATIVE~~QUANITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary exposure to risks relating to financial instruments is changes in interest rates. Our credit facility, which is comprised of a revolving credit facility and a term loan, bears interest at an annual rate equal to the prime rate or LIBOR plus an applicable margin based on a financial leverage ratio. As of April ~~17, 2011,~~15, 2012, the applicable margin for the LIBOR-based revolving loans and term loan was set at ~~2.50%~~2.75%.

We use interest rate swap agreements to reduce exposure to interest rate fluctuations. In August 2010, we entered into two interest rate swap agreements that will effectively convert $100.0 million of our variable rate term loan borrowings to a fixed-rate basis beginning September 2011 through September 2014. Based on the term loan’s applicable margin of ~~2.50%~~2.75% as of April ~~17, 2011,~~15, 2012, these agreements would have an average pay rate of 1.54%, yielding an “all-in” fixed rate of ~~4.04%~~4.29%.

A hypothetical 100 basis point increase in short-term interest rates, based on the outstanding balance of our revolving credit facility and term loan at April ~~17, 2011,~~15, 2012, would result in an estimated increase of ~~$4.0~~$3.8 million in annual interest expense.

We are also exposed to the impact of commodity and utility price fluctuations related to unpredictable factors such as weather and various other market conditions outside our control. Our ability to recover increased costs through higher prices is limited by the competitive environment in which we operate. From time to time, we enter into futures and option contracts to manage these fluctuations. At April ~~17, 2011,~~15, 2012, we had no such contracts in place.

ITEM 4.CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

~~We maintain~~Based on an evaluation of the Company’s disclosure controls and procedures ~~that are designed to ensure that information required to be disclosed~~(as defined in ~~the reports that we file or submit under~~Rules 13a - 15 and 15d - 15 of the Securities Exchange Act of 1934, as ~~amended, is recorded, processed, summarized and reported within the time periods specified in the rules~~amended), as of the ~~Securities and Exchange Commission, and that such information is accumulated and communicated to management, including our~~end of the Company’s quarter ended April 15, 2012, the Company’s Chief Executive Officer and Chief Financial Officer ~~as appropriate, to allow timely decisions regarding required disclosures.~~

~~Under the supervision~~(its principal executive officer and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures, as such term is defined under Securities and Exchange Act Rules 13a-15(e). Based on this evaluation, our Chief Executive Officer and Chief Financial Officerprincipal financial officer, respectively) have concluded that ~~our~~the Company’s disclosure controls and procedures were ~~effective as of the end of the period covered by this quarterly report.~~effective.

Changes in Internal Control Over Financial Reporting

There have been no ~~significant~~ changes in the Company’s internal control over financial reporting that occurred during the ~~period covered by this Quarterly Report on Form 10-Q~~Company’s fiscal quarter ended April 15, 2012 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II.OTHER INFORMATION

There is no information required to be reported for any items under Part II, except as follows:

ITEM 1.LEGAL PROCEEDINGS

The Company is subject to normal and routine ~~legal proceedings, including litigation. We have reserves~~litigation brought by former, current or prospective employees, customers, franchisees, vendors, landlords, shareholders or others. The Company assesses contingencies to determine the degree of probability and range of possible loss for ~~certain~~potential accrual in its financial statements. An estimated loss contingency is accrued in the financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable, assessing contingencies is highly subjective and requires judgments about future events. The Company regularly reviews contingencies to determine the adequacy of the accruals and related disclosures. The ultimate amount of loss may differ from these ~~legal proceedings; however,~~estimates. Although the ~~outcomes of such proceedings are subject to inherent uncertainties. Based on current information, including our reserves and insurance coverage, management~~Company currently believes that the ultimate ~~liability from all pending legal proceedings, individually and in the aggregate,~~outcome of these matters will not have a material adverse effect on the ~~Company’s operating~~ results of operations, liquidity or financial position of the Company, it is possible that the results of operations, liquidity, or ~~liquidity.~~financial position of the Company could be materially affected in any particular future reporting period by the unfavorable resolution of one or more of these matters or contingencies.

ITEM 1A.RISK FACTORS

You should consider the risks and uncertainties described under Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended October ~~3, 2010,~~2, 2011, which we filed with the SEC on November ~~24, 2010,~~23, 2011, together with the risks and uncertainties discussed under the heading “Cautionary Statements Regarding Forward-Looking Statements” in Item 2 of this Quarterly Report on Form 10-Q when evaluating our business and our prospects. There have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended October 2, 2011. These risks and uncertainties are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. If any of the risks or uncertainties actually occurs, our business and financial results could be harmed. In that case, the market price of our common stock could decline. You should also refer to the other information set forth in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended October ~~3, 2010,~~2, 2011, including our financial statements and the related notes.

~~ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

~~Our credit agreement provides for $500.0 million for~~

ITEM 5. OTHER INFORMATION

Item 5.02(e) Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

The Compensation Committee (the “Committee”) of the potential payment of cash dividends and stock repurchases, subject to certain limitations based on our leverage ratio as defined in our credit agreement. As of April 17, 2011, the aggregate remaining amount authorized and available under our credit agreement was $378.0 million.

~~Dividends~~.~~We did not pay any cash or other dividends during the last two fiscal years and do not anticipate paying dividends in the foreseeable future.~~

~~Stock Repurchases~~.~~In November 2010, the~~Company’s Board of Directors has approved an amendment to the Company’s form of Revised Compensation and Benefits Assurance Agreement (the “Amended CIC Agreement”). The Committee had previously approved the Revised Compensation and Benefits Assurance Agreement in November 2009 (the “Prior CIC Agreement”), and had authorized the Company to enter into the Prior CIC Agreement with three of its executive officers, including Leonard A. Comma, President and Chief Operating Officer; Philip H. Rudolph, Executive Vice President, General Counsel and Secretary; and Mark H. Blankenship, Senior Vice President and Chief Administrative Officer. In connection with approving the form of Amended CIC Agreement, the Committee has authorized the Company to enter into the Amended CIC Agreement with Messrs. Comma, Rudolph and Blankenship, effective as of May 15, 2012.

Similar to the Prior CIC Agreement, the Amended CIC Agreement provides for compensation to the executive in the form of a ~~program~~lump sum payment and other benefits in the event of a qualifying termination of the executive within 24 months of the effective date of a “change in control” of the Company, as that term is defined in the agreement. The Amended CIC Agreement has a term of two years, which automatically renews for an additional two years unless either party to ~~repurchase up~~the agreement gives notice of an intent not to ~~$100.0 million in shares~~renew the agreement.

The Prior CIC Agreement provided that any payments to the executive that constituted “parachute payments” within the meaning of ~~our common stock expiring November 2011. As~~Section 280G of ~~April 17, 2011,~~the Internal Revenue Code (the “Code”) would be aggregated and reduced, if necessary, to the maximum amount of payments that could be paid to executive without giving rise to excise tax payments under Section 4999 of the Code (the “Excise Tax”). Under the Amended CIC Agreement, the executive will automatically receive the greater of (i) the aggregate ~~remaining~~parachute payments reduced to the maximum amount ~~authorized for repurchase was $25.0 million. The following table summarizes shares repurchased pursuant~~that would not subject the executive to the Excise Tax or (ii) the aggregate parachute payments, with the executive paying the Excise Tax and such other applicable federal, state and local income and employment taxes.

This summary of the Amended CIC Agreement is qualified in its entirety by reference to the form of Amended CIC Agreement attached as Exhibit 10.2.1 to this ~~program during the quarter ended April 17, 2011:~~report.

(c)
Total number
of shares (d)
(a) (b) purchased as Maximum dollar
Total number Average part of publicly value that may yet
of shares price paid announced be purchased under
purchased per share programs these programs
$   50,000,012
January 24, 2011 - February 20, 2011 — — — $   50,000,012
February 21, 2011 - March 20, 2011 696,800 $   22.19 696,800 $   34,523,720
March 21, 2011 - April 17, 2011 427,712 $   22.24 427,712 $   25,000,022

Total 1,124,512 $   22.21 1,124,512

~~In May 2011, the Board of Directors authorized a new program to repurchase up to $100.0 million in shares of our common stock expiring November 2012.~~

ITEM 6.EXHIBITS



Number	Description	~~Description~~Form	Filed with SEC
3.1		Restated Certificate of Incorporation, as amended, ~~which is incorporated herein by reference from the registrant’s Annual Report on Form 10-K for the fiscal year ended October 3, 1999.~~

~~3.1.1~~		~~Certificate of Amendment of Restated Certificate of Incorporation, which is incorporated herein by reference from the registrant’s Current Report on Form 8-K~~ dated September 21, ~~2007.~~
2007	10-K	11/20/2009
3.2		Amended and Restated Bylaws, ~~which are incorporated herein by reference from the registrant’s Current Report on Form 8-K~~ dated ~~May 11, 2010.~~April 9, 2012	8-K	4/10/2012
10.2.1 ~	Form of Revised Compensation and Benefits Assurance Agreement for certain officers
~~10.15(a)~~—		Memorandum of Understanding clarifying date of employment with Qdoba Restaurant Corporation, which is incorporated herein by reference from the registrant’s Quarterly Report on Form 10-Q for the quarter ended January 23, 2011.
		Filed herewith
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~
2002	—	Filed herewith
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~
2002	—	Filed herewith
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.~~
2002	—	Filed herewith
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.~~
2002	—	Filed herewith
101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

____________________________


~	Management contract or compensatory plan


*		In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.”

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	JACK IN THE BOX INC.

~~JACK IN THE BOX INC.~~ By:
~~By:~~	/~~S/ JERRY~~S/ JERRY P. ~~REBEL~~	REBEL
	Jerry P. Rebel
	Executive Vice President and Chief Financial Officer ~~(principal~~ (principal financial officer) (Duly Authorized Signatory)

Date: May ~~19, 2011~~17, 2012



DELAWARE		95-2698708

(State of Incorporation)		(I.R.S. Employer Identification No.)

9330 BALBOA AVENUE, SAN DIEGO, CA		92123

(Address of principal executive offices)		(Zip Code)



Large accelerated filerþ	þ	Accelerated filero	¨
Non-accelerated filero		~~Smaller reporting company~~¨o
				~~(Do~~ (Do not check if a smaller reporting company)	Smaller reporting company	¨



		Page
	~~Page~~PART I – FINANCIAL INFORMATION
~~PART I — FINANCIAL INFORMATION~~

Item 1.		Condensed Consolidated Financial Statements (Unaudited):

		Condensed Consolidated Balance Sheets		3

		Condensed Consolidated Statements of Earnings		4

		Condensed Consolidated Statements of Cash Flows		5

		Notes to Condensed Consolidated Financial Statements		6

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		15	16

Item 3.		Quantitative and Qualitative Disclosures About Market Risk		26

Item 4.		Controls and Procedures	26
	26PART II – OTHER INFORMATION

~~PART II — OTHER INFORMATION~~

Item 1.		Legal Proceedings		27

Item 1A.		Risk Factors		27
Item 5.	Other Information				27
~~Item 2.~~		~~Unregistered Sales of Equity Securities and Use of Proceeds~~		27

Item 6.		Exhibits		28

		Signature		29


	April 17,			October 3,
	2011			2010

ASSETS
Current assets:
Cash and cash equivalents	$	14,712		$	10,607
Accounts and other receivables, net		60,061			81,150
Inventories		36,830			37,391
Prepaid expenses		30,223			36,100
Deferred income taxes		46,328			46,185
Assets held for sale		51,349			59,897
Other current assets		3,882			3,592

Total current assets		243,385			274,922

Property and equipment, at cost		1,551,432			1,562,729
Less accumulated depreciation and amortization		(685,614	)		(684,690	)

Property and equipment, net		865,818			878,039
Other assets, net		293,992			254,131

	$	1,403,195		$	1,407,092


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	18,695		$	13,781
Accounts payable		68,900			101,216
Accrued liabilities		173,471			168,186

Total current liabilities		261,066			283,183

Long-term debt, net of current maturities		388,672			352,630
Other long-term liabilities		255,377			250,440
Deferred income taxes		41			376
Stockholders’ equity:
Preferred stock $0.01 par value, 15,000,000 shares authorized, none issued		—			—
Common stock $0.01 par value, 175,000,000 shares authorized, 74,812,157 and 74,461,632 issued, respectively		748			745
Capital in excess of par value		196,668			187,544
Retained earnings		1,021,623			982,420
Accumulated other comprehensive loss, net		(74,541	)		(78,787	)
Treasury stock, at cost, 25,116,010 and 21,640,400 shares, respectively		(646,459	)		(571,459	)

Total stockholders’ equity		498,039			520,463

	$	1,403,195		$	1,407,092



	April 15, 2012			October 2, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	11,308		$	11,424
Accounts and other receivables, net	89,824			86,213
Inventories	33,718			38,931
Prepaid expenses	24,018			18,737
Deferred income taxes	44,914			45,520
Assets held for sale and leaseback	62,511			51,793
Other current assets	1,139			1,793
Total current assets	267,432			254,411
Property and equipment, at cost	1,527,637			1,518,799
Less accumulated depreciation and amortization	(694,032		)	(663,373		)
Property and equipment, net	833,605			855,426
Goodwill	134,503			105,872
Other assets, net	225,268			216,613
	$	1,460,808		$	1,432,322
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	21,849		$	21,148
Accounts payable	67,131			94,348
Accrued liabilities	169,231			167,487
Total current liabilities	258,211			282,983
Long-term debt, net of current maturities	460,683			447,350
Other long-term liabilities	293,642			290,723
Deferred income taxes	5,310			5,310
Stockholders’ equity:
Preferred stock $0.01 par value, 15,000,000 shares authorized, none issued	—			—
Common stock $0.01 par value, 175,000,000 shares authorized, 75,280,508 and 74,992,487 issued, respectively	753			750
Capital in excess of par value	208,668			202,684
Retained earnings	1,096,602			1,063,020
Accumulated other comprehensive loss, net	(91,602		)	(95,940		)
Treasury stock, at cost, 31,072,631 and 30,746,099 shares, respectively	(771,459		)	(764,558		)
Total stockholders’ equity	442,962			405,956
	$	1,460,808		$	1,432,322


	Year-to-Date
	April 17,			April 11,
	2011			2010

Cash flows from operating activities:
Net earnings	$	39,203		$	41,928
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		51,817			54,152
Deferred finance cost amortization		1,350			724
Deferred income taxes		(4,965	)		(3,267	)
Share-based compensation expense		4,972			5,500
Pension and postretirement expense		12,840			15,661
Gains on cash surrender value of company-owned life insurance		(7,841	)		(6,026	)
Gains on the sale of company-operated restaurants		(28,750	)		(12,367	)
Losses on the disposition of property and equipment, net		5,424			2,360
Impairment charges		1,167			1,503
Changes in assets and liabilities, excluding acquisitions and dispositions:
Accounts and other receivables		(2,359	)		(11,811	)
Inventories		561			(93	)
Prepaid expenses and other current assets		6,848			(19,833	)
Accounts payable		(2,851	)		(3,309	)
Pension and postretirement contributions		(2,472	)		(11,824	)
Other		6,900			(26,652	)

Cash flows provided by operating activities from continuing operations		81,844			26,646
Cash flows used in operating activities from discontinued operations		—			(2,172	)

Cash flows provided by operating activities		81,844			24,474


Cash flows from investing activities:
Purchases of property and equipment		(74,129	)		(42,632	)
Proceeds from the sale of company-operated restaurants		49,588			19,093
Proceeds from assets held for sale and leaseback, net		6,669			8,889
Collections on notes receivable		19,062			7,675
Acquisition of franchise-operated restaurants		(21,477	)		—
Other		(6,618	)		1,031

Cash flows used in investing activities		(26,905	)		(5,944	)


Cash flows from financing activities:
Borrowings on revolving credit facility		396,000			313,000
Repayments of borrowings on revolving credit facility		(349,000	)		(293,000	)
Principal repayments on debt		(5,731	)		(46,031	)
Debt issuance costs		(989	)		—
Proceeds from issuance of common stock		3,376			2,445
Repurchases of common stock		(75,000	)		(50,000	)
Excess tax benefits from share-based compensation arrangements		640			690
Change in book overdraft		(20,130	)		13,825

Cash flows used in financing activities		(50,834	)		(59,071	)


Net increase (decrease) in cash and cash equivalents		4,105			(40,541	)
Cash and cash equivalents at beginning of period		10,607			53,002

Cash and cash equivalents at end of period	$	14,712		$	12,461

1.
1.	BASIS OF PRESENTATION