JACK IN THE BOX INC /NEW/ (Form: 10-Q, Received: 02/23/2012 16:46:03)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 22, 2012

Commission File Number: 1-9390

JACK IN THE BOX INC.

(Exact name of registrant as specified in its charter)


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)

Registrant’s telephone number, including area code (858) 571-2121

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No þ

As of the close of business February 17, 2012, 44,105,154 shares of the registrant’s common stock were outstanding.

JACK IN THE BOX INC. AND SUBSIDIARIES

INDEX


		Page
	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		16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		26

Item 4.	Controls and Procedures		26

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings		26

Item 1A.	Risk Factors		27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		27

Item 5.	Other Information		28

Item 6.	Exhibits		29

	Signature		30

PART I. FINANCIAL INFORMATION

ITEM 1.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)

(Unaudited)


	January 22, 2012			October 2, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	13,644		$	11,424
Accounts and other receivables, net		79,717			86,213
Inventories		45,393			38,931
Prepaid expenses		20,665			18,737
Deferred income taxes		45,133			45,520
Assets held for sale and leaseback		59,015			51,793
Other current assets		1,275			1,793

Total current assets		264,842			254,411

Property and equipment, at cost		1,527,612			1,518,799
Less accumulated depreciation and amortization		(684,055	)		(663,373	)

Property and equipment, net		843,557			855,426
Other assets, net		328,701			322,485

	$	1,437,100		$	1,432,322

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	21,038		$	21,148
Accounts payable		83,560			94,348
Accrued liabilities		141,677			167,487

Total current liabilities		246,275			282,983

Long-term debt, net of current maturities		472,805			447,350
Other long-term liabilities		296,136			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, 75,125,397 and 74,992,487 issued, respectively		751			750
Capital in excess of par value		205,805			202,684
Retained earnings		1,074,970			1,063,020
Accumulated other comprehensive loss, net		(93,493	)		(95,940	)
Treasury stock, at cost, 31,072,631 and 30,746,099 shares, respectively		(771,459	)		(764,558	)

Total stockholders’ equity		416,574			405,956

	$	1,437,100		$	1,432,322

See accompanying notes to condensed consolidated financial statements.

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

(Unaudited)


	Sixteen Weeks Ended
	January 22,			January 23,
	2012			2011
Revenues:
Company restaurant sales	$	364,102		$	436,910
Distribution sales		194,794			146,687
Franchise revenues		93,819			81,121

		652,715			664,718

Operating costs and expenses, net:
Company restaurant costs:
Food and packaging		122,107			141,855
Payroll and employee benefits		107,812			134,516
Occupancy and other		84,942			105,409

Total company restaurant costs		314,861			381,780
Distribution costs		194,794			147,341
Franchise costs		49,859			38,352
Selling, general and administrative expenses		65,717			66,885
Impairment and other charges, net		4,351			3,596
Gains on the sale of company-operated restaurants		(1,122	)		(27,872	)

		628,460			610,082

Earnings from operations		24,255			54,636
Interest expense, net		6,057			4,611

Earnings before income taxes		18,198			50,025
Income taxes		6,248			17,624

Net earnings	$	11,950		$	32,401

Net earnings per share:
Basic	$	0.27		$	0.62
Diluted	$	0.27		$	0.61
Weighted-average shares outstanding:
Basic		43,863			52,077
Diluted		44,659			52,883

See accompanying notes to condensed consolidated financial statements.

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


	Sixteen Weeks Ended
	January 22,			January 23,
	2012			2011
Cash flows from operating activities:
Net earnings	$	11,950		$	32,401
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		29,534			29,582
Deferred finance cost amortization		788			743
Deferred income taxes		(1,203	)		(9,892	)
Share-based compensation expense		2,022			2,666
Pension and postretirement expense		8,212			7,337
Gains on cash surrender value of company-owned life insurance		(6,742	)		(5,461	)
Gains on the sale of company-operated restaurants		(1,122	)		(27,872	)
Losses on the disposition of property and equipment, net		1,083			2,796
Impairment charges		1,199			289
Accounts and other receivables		8,630			(42	)
Inventories		(6,462	)		(1,835	)
Prepaid expenses and other current assets		(1,412	)		23,592
Accounts payable		2,222			(2,977	)
Accrued liabilities		(21,849	)		(892	)
Pension and postretirement contributions		(996	)		(1,623	)
Other		1,938			(3,007	)

Cash flows provided by operating activities		27,792			45,805

Cash flows from investing activities:
Purchases of property and equipment		(26,945	)		(46,887	)
Proceeds from the sale of company-operated restaurants		1,249			44,083
Proceeds from (purchases of) assets held for sale and leaseback, net		(7,903	)		4,668
Collections on notes receivable		3,539			18,929
Disbursements for loans to franchisees		(2,604	)		—
Acquisitions of franchise-operated restaurants		(6,195	)		—
Other		14			2

Cash flows provided by (used in) investing activities		(38,845	)		20,795

Cash flows from financing activities:
Borrowings on revolving credit facility		222,020			231,000
Repayments of borrowings on revolving credit facility		(191,295	)		(221,000	)
Principal repayments on debt		(5,380	)		(2,922	)
Debt issuance costs		—			(375	)
Proceeds from issuance of common stock		785			2,143
Repurchases of common stock		(6,901	)		(50,000	)
Excess tax benefits from share-based compensation arrangements		191			263
Change in book overdraft		(6,147	)		(19,786	)

Cash flows provided by (used in) financing activities		13,273			(60,677	)

Net increase in cash and cash equivalents		2,220			5,923
Cash and cash equivalents at beginning of period		11,424			10,607

Cash and cash equivalents at end of period	$	13,644		$	16,530

See accompanying notes to condensed consolidated financial statements.

JACK IN THE BOX INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.	BASIS OF PRESENTATION

Nature of operations — Founded in 1951, Jack in the Box Inc. (the “Company”) operates and franchises Jack in the Box ^® quick-service restaurants and Qdoba Mexican Grill ^® (“Qdoba”) fast-casual restaurants in 44 states. The following table summarizes the number of restaurants as of the end of each period:


	January 22,		January 23,
	2012		2011
Jack in the Box:
Company-operated		634		873
Franchise		1,602		1,340

Total system		2,236		2,213

Qdoba:
Company-operated		262		194
Franchise		335		348

Total system		597		542

References to the Company throughout these Notes to Condensed Consolidated Financial Statements are made using the first person notations of “we,” “us” and “our.”

Basis of presentation — The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, all adjustments considered necessary for a fair presentation of financial condition and results of operations for these interim periods have been included. Operating results for one interim period are not necessarily indicative of the results for any other interim period or for the full year.

These financial statements should be read in conjunction with the consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended October 2, 2011. The accounting policies used in preparing these condensed consolidated financial statements are the same as those described in our Form 10-K.

Principles of consolidation — The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and the accounts of any variable interest entities where we are deemed the primary beneficiary. All significant intercompany transactions are eliminated. For information related to the variable interest entity included in our condensed consolidated financial statements, refer to Note 11, Variable Interest Entities .

Fiscal year — Our fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. Fiscal years 2012 and 2011 include 52 weeks. Our first quarter includes 16 weeks and all other quarters include 12 weeks. All comparisons between 2012 and 2011 refer to the 16-weeks (“quarter”) ended January 22, 2012 and January 23, 2011, respectively, unless otherwise indicated.

Use of estimates — In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management is required to make certain assumptions and estimates that affect reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingencies. In making these assumptions and estimates, management may from time to time seek advice and consider information provided by actuaries and other experts in a particular area. Actual amounts could differ materially from these estimates.

JACK IN THE BOX INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

2.	SUMMARY OF REFRANCHISINGS, FRANCHISEE DEVELOPMENT AND ACQUISITIONS

Refranchisings and franchisee 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 ):


	Sixteen Weeks Ended
	January 22,			January 23,
	2012			2011
Restaurants sold to franchisees		—			88
New restaurants opened by franchisees		20			17
Initial franchise fees	$	720		$	4,239
Proceeds from the sale of company-operated restaurants (1)		1,249			44,083
Net assets sold (primarily property and equipment)		—			(15,352	)
Goodwill related to the sale of company-operated restaurants		(48	)		(859	)
Other		(79	)		—

Gains on the sale of company-operated restaurants	$	1,122		$	27,872

(1)

The amount in 2012 primarily represents additional proceeds recognized upon the extension of the underlying franchise and lease agreements related to a restaurant sold in a prior year.

Franchise acquisitions — During fiscal 2012, we acquired 11 Qdoba franchise-operated restaurants in two 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 goodwill recorded is largely attributable to the growth potential of the markets acquired. The following table provides detail of the combined allocations ( in thousands ):


Property and equipment	$	2,942
Reacquired franchise rights		126
Liabilities assumed		(30	)
Goodwill		3,157

Total consideration	$	6,195

JACK IN THE BOX INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3.	FAIR VALUE MEASUREMENTS

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 ):

		$ (39,336)			$ (39,336)			$ (39,336)			$ (39,336)
				Fair Value Measurements as of January 22, 2012
				Quoted Prices
				in Active			Significant
				Markets for			Other			Significant
				Identical			Observable			Unobservable
				Assets			Inputs			Inputs
	Total			(Level 1)			(Level 2)			(Level 3)
Interest rate swaps (Note 4) (1)	$	(2,689	)	$	—		$	(2,689	)	$	—
Non-qualified deferred compensation plan (2)		(36,647	)		(36,647	)		—			—

Total liabilities at fair value	$	(39,336	)	$	(36,647	)	$	(2,689	)	$	—

		$ (39,336)			$ (39,336)			$ (39,336)			$ (39,336)
				Fair Value Measurements as of October 2, 2011
				Quoted Prices
				in Active			Significant
				Markets for			Other			Significant
				Identical			Observable			Unobservable
				Assets			Inputs			Inputs
	Total			(Level 1)			(Level 2)			(Level 3)
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 values of our interest rate swaps are based upon valuation models as reported by our counterparties.

(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.

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 January 22, 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 impairment reviews during the quarters ended January 22, 2012, 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.

4.	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.

JACK IN THE BOX INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

January 22, 2012

October 2, 2011

Balance

Sheet

Fair

Sheet

Fair

Location

Value

Location

Value

Derivatives designated as hedging instruments:

Interest rate swaps (Note 3)

Accrued
liabilities

$ (2,689)

Accrued
liabilities

$ (2,682)

Total derivatives

$ (2,689)

$ (2,682)

Financial performance — The following is a summary of the gains or losses recognized on our interest rate swap derivative instruments (in thousands) :


	Location of		Sixteen Weeks Ended
	Loss		January 22,			January 23,
	in Income		2012			2011
Gain/(loss) recognized in OCI (Note 9)		N/A	$	(405	)	$	1,437
Gain/(loss) reclassified from accumulated OCI into income (Note 9)		Interest expense, net	$	(398	)	$	—

Amounts reclassified from accumulated other comprehensive income (“OCI”) into interest expense represent payments made to the counterparty for the effective portions of the interest rate swaps that were recognized in accumulated other comprehensive income (loss) and reclassified into earnings as an increase to interest expense. During the periods presented, our interest rate swaps had no hedge ineffectiveness.

5.	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 two 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 ):


	Sixteen Weeks Ended
	January 22,		January 23,
	2012		2011
Impairment charges	$	1,199	$	289
Losses on the disposition of property and equipment, net	$	1,083	$	2,796

JACK IN THE BOX INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 statement of earnings. Total accrued restaurant closing costs, included in accrued liabilities and other long-term liabilities, changed as follows ( in thousands ):


	Sixteen Weeks Ended
	January 22, 2012			January 23, 2011
Balance at beginning of year	$	21,657		$	25,020
Additions and adjustments		1,246			805
Cash payments		(1,675	)		(1,887	)

Balance at end of quarter	$	21,228		$	23,938

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

6.	INCOME TAXES

The income tax provisions reflect year-to-date effective tax rates of 34.3% in 2012 and 35.2% 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 January 22, 2012, 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 end of fiscal year 2011. 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 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.

7.	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.

JACK IN THE BOX INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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


	Sixteen Weeks Ended
	January 22, 2012			January 23, 2011
Defined benefit pension plans:
Service cost	$	2,900		$	3,319
Interest cost		6,966			6,640
Expected return on plan assets		(6,149	)		(6,379	)
Actuarial loss		3,819			3,023
Amortization of unrecognized prior service cost		133			150

Net periodic benefit cost	$	7,669		$	6,753

Postretirement healthcare plans:
Service cost	$	19		$	24
Interest cost		497			488
Actuarial loss		27			62
Amortization of unrecognized prior service cost		—			10

Net periodic benefit cost	$	543		$	584

Future cash flows — Our policy is to fund our plans at or above the minimum required by law. Details regarding 2012 contributions are as follows ( in thousands ):


	Defined Benefit Pension Plans		Postretirement Healthcare Plans
Net year-to-date contributions	$	1,040	$	411
Remaining estimated net contributions during fiscal 2012	$	12,300	$	1,000

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 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. During the quarter ended January 22, 2012, we authorized the following share-based compensation awards in connection with our annual award grants in November:


	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 ):


	Sixteen Weeks Ended
	January 22, 2012		January 23, 2011
Stock options	$	1,190	$	1,512
Performance-vested stock awards		330		738
Nonvested stock awards		180		186
Nonvested stock units		322		230

Total share-based compensation expense	$	2,022	$	2,666

JACK IN THE BOX INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 within the next two years. As of the end of the first quarter, the $100.0 million remains available under this authorization.

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


	Sixteen Weeks Ended
	January 22, 2012			January 23, 2011
Net earnings	$	11,950		$	32,401
Cash flow hedges:
Net change in fair value of derivatives		(405	)		1,437
Net loss reclassified to earnings		398			—

Total		(7	)		1,437
Tax effect		2			(549	)

		(5	)		888
Unrecognized periodic benefit costs:
Actuarial losses and prior service cost reclassified to earnings		3,979			3,245
Tax effect		(1,527	)		(1,239	)

		2,452			2,006

Total comprehensive income	$	14,397		$	35,295

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 ):

		$ (93,493)			$ (93,493)
	January 22, 2012			October 2, 2011
Unrecognized periodic benefit costs, net of tax benefits of $57,216 and $58,743, respectively	$	(91,836)		$	(94,288)
Net unrealized losses related to cash flow hedges, net of tax benefits of $1,032 and $1,030, respectively		(1,657	)		(1,652	)

Accumulated other comprehensive loss, net	$	(93,493	)	$	(95,940	)

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.

JACK IN THE BOX INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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


	Sixteen Weeks Ended
	January 22, 2012		January 23, 2011
Weighted-average shares outstanding – basic		43,863		52,077
Effect of potentially dilutive securities:
Stock options		348		466
Nonvested stock awards and units		252		204
Performance-vested stock awards		196		136

Weighted-average shares outstanding – diluted		44,659		52,883

Excluded from diluted weighted-average shares outstanding:
Antidilutive		2,893		3,389
Performance conditions not satisfied at the end of the period		399		369

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 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 12-month revolving loan and security agreement bearing a variable interest rate. The revolving period has been extended for two months and is set to expire in March 2012. We may make additional contributions to FFE and FFE may incur additional borrowings under its credit facility during the extended lending period.

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.

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 for the quarter ended January 22, 2012. The FFE’s balance sheet consisted of the following at the end of each period ( in thousands ):


	January 22, 2012			October 2, 2011
Cash	$	1,250		$	531
Other current assets (1)		2,164			2,086
Other assets, net (1)		12,410			12,292

Total assets	$	15,824		$	14,909

Current liabilities	$	234		$	140
Revolving credit facility		1,886			1,160
Other long-term liabilities (2)		14,226			14,046
Retained earnings		(522	)		(437	)

Total liabilities and stockholders’ equity	$	15,824		$	14,909

(1)

Consists primarily of amounts due from franchisees.

(2)

Consists primarily of the capital note contributions from Jack in 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.

JACK IN THE BOX INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 and unfavorable resolutions could occur, 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 amount of ultimate 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.

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 table ( in thousands ):


	Sixteen Weeks Ended
	January 22, 2012			January 23, 2011
Revenues by segment:
Jack in the Box restaurant operations segment	$	382,658		$	462,331
Qdoba restaurant operations segment		75,263			55,700
Distribution operations		194,794			146,687

Consolidated revenues	$	652,715		$	664,718

Earnings from operations by segment:
Jack in the Box restaurant operations segment	$	22,136		$	54,202
Qdoba restaurant operations segment		2,174			1,089
Distribution operations		—			(655	)
FFE operations		(55	)		—

Consolidated earnings from operations	$	24,255		$	54,636

Total depreciation expense by segment:
Jack in the Box restaurant operations segment	$	24,293		$	25,652
Qdoba restaurant operations segment		4,782			3,350
Distribution operations		243			230

Consolidated depreciation expense	$	29,318		$	29,412

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

14.

SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION (in thousands)


	Sixteen Weeks Ended
	January 22, 2012		January 23, 2011
Cash paid during the quarter for:
Interest, net of amounts capitalized	$	5,605	$	3,471
Income tax payments	$	12,478	$	8,384

JACK IN THE BOX INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

15.

SUPPLEMENTAL CONSOLIDATED BALANCE SHEET INFORMATION (in thousands)


	January 22, 2012		October 2, 2011
Other assets, net:
Goodwill	$	108,981	$	105,872
Company-owned life insurance policies		81,944		75,202
Other		137,776		141,411

	$	328,701	$	322,485

Accrued liabilities:
Payroll and related	$	36,681	$	40,438
Sales and property taxes		12,185		13,963
Advertising		20,635		21,899
Insurance		36,721		37,987
Other		35,455		53,200

	$	141,677	$	167,487

Other long-term liabilities:
Pension	$	147,537	$	144,860
Other		148,599		145,863

	$	296,136	$	290,723

16.

SUBSEQUENT EVENT

On February 20, 2012, we acquired 25 Qdoba restaurants in two markets from a franchisee for approximately $33 million, consistent with our strategy to acquire franchise markets where we believe there is continued opportunity for development as a company market. As of the date of this report, the purchase price has not been allocated to the respective financial statement line items as it was impractical to do so prior to issuance of the report.

17.

FUTURE APPLICATION OF ACCOUNTING PRINCIPLES

In June 2011, the FASB issued ASU No. 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

GENERAL

All comparisons between 2012 and 2011 refer to the 16-week (“quarter”) periods ended January 22, 2012 and January 23, 2011, respectively, unless otherwise indicated.

For an understanding of the significant factors that influenced our performance during the quarterly periods ended January 22, 2012 and January 23, 2011, 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 2, 2011.

Our MD&A consists of the following sections:

•

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

•

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 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 January 22, 2012, we operated and franchised 2,236 Jack in the Box quick-service restaurants (“QSR”), primarily in the western and southern United States, and 597 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 2012 and certain trends compared to a year ago:

•

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


	Sixteen Weeks Ended
	January 22, 2012			January 23, 2011
Jack in the Box:
Company		5.3	%		1.5	%
Franchise		2.8	%		0.9	%
System		3.6	%		1.1	%
Qdoba:
Company		3.5	%		5.8	%
Franchise		4.0	%		6.6	%
System		3.8	%		6.4	%

•

Commodity Costs — Pressures from higher commodity costs continue to impact our business. Overall commodity costs at our Jack in the Box and Qdoba restaurants increased approximately 7.0% and 13.2%, respectively, in the quarter compared to a year ago.

•

New Unit Development — We continued to grow our brands with the opening of new company-operated and franchise-operated restaurants. During the quarter, we opened 16 Jack in the Box locations and 15 Qdoba locations system-wide.

•

Franchising Program — Qdoba and Jack in the Box franchisees opened a total of 20 restaurants during the quarter. Our Jack in the Box system was approximately 72% franchised at the end of the first quarter and we plan to further increase franchise ownership to approximately 80% over the next couple of 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.

CONSOLIDATED STATEMENTS OF EARNINGS DATA


	Sixteen Weeks Ended
	January 22, 2012			January 23, 2011
Revenues:
Company restaurant sales		55.8	%		65.7	%
Distribution sales		29.8	%		22.1	%
Franchise revenues		14.4	%		12.2	%

Total revenues		100.0	%		100.0	%

Operating costs and expenses, net:
Company restaurant costs:
Food and packaging (1)		33.5	%		32.5	%
Payroll and employee benefits (1)		29.6	%		30.8	%
Occupancy and other (1)		23.3	%		24.1	%

Total company restaurant costs (1)		86.5	%		87.4	%

Distribution costs (1)		100.0	%		100.4	%
Franchise costs (1)		53.1	%		47.3	%
Selling, general and administrative expenses		10.1	%		10.1	%
Impairment and other charges, net		0.7	%		0.5	%
Gains on the sale of company-operated restaurants		(0.2	%)		(4.2	%)
Earnings from operations		3.7	%		8.2	%
Income tax rate (2)		34.3	%		35.2	%

(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 )


	Sixteen Weeks Ended
	January 22, 2012				January 23, 2011
Jack in the Box:
Company restaurant sales	$	294,353			$	387,076
Company restaurant costs:
Food and packaging		101,591	34.5	%		127,811	33.0	%
Payroll and employee benefits		87,570	29.7	%		120,087	31.0	%
Occupancy and other		64,290	21.8	%		89,730	23.2	%

Total company restaurant costs	$	253,451	86.1	%	$	337,628	87.2	%
Qdoba:
Company restaurant sales	$	69,749			$	49,834
Company restaurant costs:
Food and packaging		20,516	29.4	%		14,044	28.2	%
Payroll and employee benefits		20,242	29.0	%		14,429	29.0	%
Occupancy and other		20,652	29.6	%		15,679	31.5	%

Total company restaurant costs	$	61,410	88.0	%	$	44,152	88.6	%

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


	January 22, 2012									January 23, 2011
	Company			Franchise			Total			Company			Franchise			Total
Jack in the Box:
Beginning of period		629			1,592			2,221			956			1,250			2,206
New		5			11			16			5			3			8
Refranchised		—			—			—			(88	)		88			—
Closed		—			(1	)		(1	)		—			(1	)		(1	)

End of period		634			1,602			2,236			873			1,340			2,213

% of system		28	%		72	%		100	%		39	%		61	%		100	%
Qdoba:
Beginning of period		245			338			583			188			337			525
New		6			9			15			6			14			20
Acquired from franchisees		11			(11	)		—			—			—			—
Closed		—			(1	)		(1	)		—			(3	)		(3	)

End of period		262			335			597			194			348			542

% of system		44	%		56	%		100	%		36	%		64	%		100	%
Consolidated:

Total system		896			1,937			2,833			1,067			1,688			2,755

% of system		32	%		68	%		100	%		39	%		61	%		100	%

Revenues

As we 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 continue to decrease while revenues from franchise restaurants increase. As such, company restaurant sales decreased $72.8 million, or 16.7%, in the quarter. This decrease is due primarily to a decrease in the average number of Jack in the Box company-operated restaurants, partially offset by 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) :


Reduction in the average number of Jack in the Box restaurants	$	(141,300	)
Jack in the Box PSA sales increase		48,600
Increase in the average number of Qdoba restaurants		17,400
Qdoba PSA sales increase		2,500

Total decrease in company restaurant sales	$	(72,800	)

Same-store sales at Jack in the Box company-operated restaurants increased 5.3% driven by a combination of price increases and transaction growth. Same-store sales at Qdoba company-operated restaurants increased 3.5% primarily driven by price increases. The following table summarizes the change in company-operated same-store sales:


Jack in the Box transactions	2.8	%
Jack in the Box average check (1)	2.5	%

Jack in the Box change in same-store sales	5.3	%

Qdoba change in same-store sales (2)	3.5	%

(1)	Includes price increases of approximately 3.3%.

(2)	Includes price increases of approximately 4.0%.

Distribution sales to Jack in the Box and Qdoba franchisees grew $48.1 million from a year ago. This growth primarily reflects an increase 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 $33.9 million, and higher commodity prices.

Franchise revenues increased $12.7 million, or 15.7%, in 2012 due primarily to an increase in the average number of Jack in the Box franchise restaurants, which contributed additional royalties and rents of approximately $18.5 million. This increase was partially offset by an increase in re-image contributions to franchisees, which are recorded as a reduction of franchise revenues, and a decline in the number of restaurants sold to franchisees resulting in a decrease in revenues from initial franchise fees of $3.5 million. 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 ( in thousands ):


	Sixteen Weeks Ended
	January 22, 2012			January 23, 2011
Royalties	$	38,129		$	31,225
Rents		59,667			46,083
Re-image contributions to franchisees		(5,707	)		(1,280	)
Franchise fees and other		1,730			5,093

Franchise revenues	$	93,819		$	81,121

% increase		15.7	%
Average number of franchise restaurants		1,597			1,276
% increase		25.2	%
Increase in franchise-operated same-store sales:
Jack in the Box		2.8	%		0.9	%
Qdoba		4.0	%		6.6	%
Royalties as a percentage of estimated franchise restaurant sales:
Jack in the Box		5.2	%		5.3	%
Qdoba		5.0	%		5.0	%

Operating Costs and Expenses

Food and packaging costs increased to 33.5% of company restaurant sales from 32.5% a year ago, due primarily to higher commodity costs, partially offset by the benefit of selling price increases. Overall commodity costs increased approximately 7.0% and 13.2% at our company-operated Jack in the Box and Qdoba restaurants, respectively, driven by higher costs for most commodities other than produce. We expect commodity costs for fiscal 2012 to increase approximately 5%, with higher inflation in the first half of the fiscal year. Beef represents the largest portion, or approximately 20%, of the

Company’s overall commodity spend, and we typically do not enter into fixed price contracts for our beef needs. For the full year, we currently expect beef costs to be up in the high single-digit range, and most other major commodities to be higher in 2012 compared with last year.

Payroll and employee benefit costs decreased to 29.6% of company restaurant sales in the quarter from 30.8% in 2011, reflecting the leverage from same-store sales increases and the benefits of refranchising. These decreases were offset by increases in unemployment taxes in several states and higher levels of incentive compensation.

Occupancy and other costs decreased to 23.3% of company restaurant sales in the quarter from 24.1% last year. The lower percentage in 2012 is due primarily to the leverage from same-store sales increases and the benefits of refranchising. 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 resulting from a greater proportion of company-operated Qdoba restaurants compared with last year.

Distribution costs increased $47.5 million in the quarter compared with a year ago, primarily reflecting an increase in the related sales. The new supply chain agreement provides that any profits or losses related to our distribution operations are shared by all company and franchise restaurants who utilize our distribution services.

Franchise costs, principally rents and depreciation on properties we lease to Jack in the Box franchisees, increased $11.5 million to 53.1% of the related revenues in the quarter from 47.3% a year ago. The percent of revenues increase is primarily due to an increase in re-image contributions to franchisees, lower franchise fee revenue, and higher rent and depreciation expense resulting from an increase in the percentage of locations that we lease to franchisees.

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


	Increase / (Decrease)
Advertising	$	(5,153	)
Refranchising strategy		(1,160	)
Cash surrender value of COLI policies, net		(82	)
Pension and postretirement benefits		875
Pre-opening costs		751
Insurance costs		568
Restaurant technology		347
Qdoba general and administrative		875
Other		1,811

	$	(1,168	)

Our refranchising strategy has resulted in a decrease in the number of company-operated restaurants and the related overhead expenses to manage and support those restaurants. As such, 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 higher advertising expense at Qdoba due to an increase in the number of company-operated restaurants and same-store sales growth. 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. The changes in market values had a positive impact of $3.2 million and $3.1 million in 2012 and 2011, respectively. The increase in pension and postretirement benefits expense principally relates to a decrease in the 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 markets. The increase in insurance costs includes the impact of a large claim in 2012, partially offset by lower monthly payments related to our decreasing number of employees. Qdoba general and administrative costs increased primarily due to higher overhead to support our growing number of company-operated restaurants.

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


	Sixteen Weeks Ended
	January 22, 2012		January 23, 2011
Impairment charges	$	1,199	$	289
Losses on the disposition of property and equipment, net		1,083		2,796
Costs of closed restaurants (primarily lease obligations) and other		2,069		511

	$	4,351	$	3,596

Impairment and other charges, net increased in the quarter to $4.4 million from $3.6 million a year ago. This increase relates primarily to the impairment of two underperforming Jack in the Box restaurants in 2012 and an increase in costs associated with restaurants we have closed. These increases were partially offset by a decrease in costs related to our re-image and new logo program as it nears completion.

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


	Sixteen Weeks Ended
	January 22, 2012		January 23, 2011
Number of restaurants sold to franchisees		—		88
Gains on the sale of company-operated restaurants	$	1,122	$	27,872
Average gain on restaurants sold		N/A	$	317

In 2012, the gains on the sale of company-operated restaurants primarily represent additional proceeds recognized upon the extension of the underlying franchise and lease agreements related to a restaurant sold in a prior year.

Interest Expense, Net

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


	Sixteen Weeks Ended
	January 22, 2012			January 23, 2011
Interest expense	$	6,604		$	4,947
Interest income		(547	)		(336	)

Interest expense, net	$	6,057		$	4,611

Interest expense, net increased $1.4 million in the quarter compared with a year ago primarily due to higher average borrowings compared with a year ago.

Income Taxes

The tax rate decreased to 34.3% in the quarter compared with 35.2% in the prior year. The decrease is due primarily to the impact of the market performance of insurance investment products used to fund certain non-qualified retirement plans. Changes in the cash value of the insurance products are not included in taxable income. We expect the fiscal year tax rate to be 36%-37%. 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 $12.0 million, or $0.27 per diluted share, in the quarter compared with $32.4 million, or $0.61 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 and leaseback of certain restaurant properties and the sale of Jack in the Box company-operated restaurants to franchisees.

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.

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 $2.2 million to $13.6 million at the end of the quarter from $11.4 million at the beginning of the fiscal year. During the first quarter of 2012, net borrowings under our revolving credit facility, cash flows provided by operating activities, and collections of notes receivable were partially offset by expenditures for property and equipment, net cash outflows related to assets held for sale and leaseback activity, the acquisition of Qdoba franchise-operated restaurants and repurchases of common stock. 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 ):


	Sixteen Weeks Ended
	January 22, 2012			January 23, 2011
Total cash provided by (used in):
Operating activities	$	27,792		$	45,805
Investing activities		(38,845	)		20,795
Financing activities		13,273			(60,677	)

Net increase in cash and cash equivalents	$	2,220		$	5,923

Operating Activities . Operating cash flows decreased $18.0 million compared with a year ago due primarily to increases in payments for the following: property rent related to fluctuations in the timing of October rent payments ($9.5 million), inventories ($4.6 million), bonuses ($4.1 million) and income taxes ($4.1 million).

Investing Activities . Investing activity cash flows decreased $59.6 million compared with a year ago due primarily to a decrease in proceeds from the sale of restaurants to franchisees, the collection of notes receivables related to prior years’ refranchising activities and proceeds from the sale and leaseback of restaurant properties, as well as an increase in cash used to acquire Qdoba franchise-operated restaurants. The impact of these decreases in cash flows were partially offset by a decrease in capital expenditures.

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


	Sixteen Weeks Ended
	January 22, 2012		January 23, 2011
Jack in the Box:
New restaurants	$	6,068	$	7,891
Restaurant facility improvements		11,087		29,412
Other, including corporate		3,822		3,834
Qdoba		5,968		5,750

Total capital expenditures	$	26,945	$	46,887

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 Box restaurant re-image and new logo program. We expect fiscal 2012 capital expenditures to be approximately $90-$100 million. We plan to open approximately 15 Jack in the Box and 40 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) :


	2012		2011
Number of restaurants sold to franchisees		—		88
Total proceeds	$	1,249	$	44,083
Average proceeds		N/A	$	501

In certain instances, we may provide financing to facilitate the closing of certain transactions. As of January 22, 2012, notes receivable related to prior year refranchisings were $8.8 million. We expect total proceeds of $35-$50 million from the sale of 80-120 Jack in the Box restaurants in 2012.

Assets Held for Sale and Leaseback — We use sale and leaseback financing to lower the initial cash investment in our Jack in the Box restaurants to the cost of the equipment, whenever possible. The following table summarizes the cash flow activity related to sale and leaseback transactions in each period ( dollars in thousands ):


	2012			2011
Number of restaurants sold and leased back		2			8
Proceeds from sale of assets	$	3,143		$	14,626
Spending to acquire/purchase assets		(11,046	)		(9,958	)

Net cash flows related to assets held for sale and leaseback	$	(7,903	)	$	4,668

As of January 22, 2012, we had investments of $59.0 million in approximately 47 operating or under construction restaurant properties that we expect to sell and leaseback during the next 12 months.

Acquisition of Franchise-Operated Restaurants — During the quarter, we acquired 11 Qdoba franchise-operated restaurants in two markets consistent with our strategy to acquire markets where we believe there is continued opportunity for restaurant development. The combined purchase price of $6.2 million was primarily allocated to property and equipment, goodwill and reacquired franchise rights. For additional information, refer to Note 2, Summary of Refranchisings, Franchisee Development and Acquisitions .

Financing Activities . Cash flows from financing activities increased $74.0 million compared with a year ago primarily attributable to a decrease in cash used to repurchase shares of our common stock, an increase in borrowings under our credit facility and the change in our book overdraft related to the timing of working capital receipts and disbursements.

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 London Interbank Offered Rate (“LIBOR”) plus 2.50 %. As part of the credit agreement, we may also request the issuance of up to $75.0 million in letters of credit, the outstanding amount of which reduces the net borrowing capacity under the agreement. The 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 January 22, 2012. Effective February 16, 2012, to provide additional financial flexibility due to the timing of refranchising transactions and the $33 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 January 22, 2012, we had $180.0 million outstanding under the term loan, borrowings under the revolving credit facility of $305.0 million and letters of credit outstanding of $38.9 million.

FFE Credit Facility — FFE entered into an $80.0 million Senior Secured Revolving Securitization Facility (“FFE Facility”) with a third party to assist in funding our franchisee lending program. The FFE Facility is a revolving loan and security agreement bearing a variable interest rate. The revolving period has been extended for two months and is set to expire in March 2012. As of January 22, 2012, FFE had borrowings outstanding of $1.9 million against 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 swaps that effectively convert $100.0 million of our variable rate term loan to a fixed-rate basis from September 2011 through September 2014. Based on the term loan’s applicable margin of 2.50% as of January 22, 2012, these agreements would have an average pay rate of 1.54%, yielding an “all-in” fixed rate of 4.04%. 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 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 within the next two years. As of the end of the first quarter, the $100.0 million remains available under this authorization.

Off-Balance Sheet Arrangements

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.

DISCUSSION OF CRITICAL ACCOUNTING ESTIMATES

Critical accounting estimates are those the Company believes are most important for the portrayal of the Company’s financial condition and results and that require management’s most subjective and complex judgments. Judgments and uncertainties regarding 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 previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 2, 2011.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2011, the FASB issued ASU No. 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. This pronouncement is not expected to have a material impact on our consolidated financial statements upon adoption.

Other 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 may be identified by words such 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 in some cases beyond our control. Factors that may cause our actual results to differ from any forward-looking statements include, but are not limited to, 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 and increased costs and continued volatility are expected in 2012, which could negatively impact our margins as well as franchisee margins.

•

Multi-unit food service businesses such as ours can also 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 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 maintain the ownership mix of franchise 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 franchise restaurants will have the abilities or resources to open restaurants or be effective operators, to remain aligned with our operations, promotional and capital-intensive initiatives or to successfully operate restaurants in a manner consistent with our standards. In addition, franchisees’ 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 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 accounting standards, policies or related interpretations by accountants or regulatory entities may negatively impact 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 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 January 22, 2012, the applicable margin for the LIBOR-based revolving loans and term loan was set at 2.50%.

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% as of January 22, 2012, these agreements would have an average pay rate of 1.54%, yielding an “all-in” fixed rate of 4.04%.

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 January 22, 2012, would result in an estimated increase of $3.9 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 January 22, 2012, we had no such contracts in place.

ITEM 4.

CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Based on an evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a - 15 and 15d - 15 of the Securities Exchange Act of 1934, as amended), as of the end of the Company’s quarter ended January 22, 2012, the Company’s Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial officer, respectively) have concluded that the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended January 22, 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

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.

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 2, 2011, which we filed with the SEC on November 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 2, 2011, including our financial statements and the related notes.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

As of January 22, 2012, our credit agreement provides for up to $253.0 million for the potential payment of cash dividends and stock repurchases, subject to certain limitations based on our leverage ratio as defined in our credit agreement.

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 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. In November 2011, the Board of Directors approved a new program to repurchase $100.0 million in shares of our common stock expiring within the next two years. As of the end of the first quarter, the $100.0 million remains available under this authorization. The following table summarizes shares repurchased during the quarter ended January 22, 2012:


	(a) Total number of shares purchased		(b) Average price paid per share		(c) Total number of shares purchased as part of publicly announced programs		(d) Maximum dollar value that may yet be purchased under these programs
							$	6,352,414
October 3, 2011 - October 30, 2011		326,532	$	19.43		326,532	$	—
October 31, 2011 - November 27, 2011		—		—		—	$	100,000,000
November 28, 2011 - December 25, 2011		—		—		—	$	100,000,000
December 26, 2011 - January 22, 2012		—		—		—	$	100,000,000

Total		326,532	$	19.43		326,532

ITEM 5.

OTHER INFORMATION

Item 1.01

Entry into a material definitive agreement

Item 2.03

Creation of a direct financial obligation or an obligation under an off-balance sheet arrangement of a registrant

Effective February 16, 2012, to provide additional financial flexibility due to the timing of refranchising transactions and the $33 million acquisition of Qdoba franchised restaurants completed in the second quarter of fiscal 2012, we amended our Credit Agreement dated as of June 29, 2010 among the Company, Wells Fargo Bank, National Association, as administrative agent, and certain lender parties (the “Credit Agreement”) to, among other changes, temporarily increase the maximum financial leverage ratio under the Credit Agreement to 2.50 to 1.00 from 2.25 to 1.00 for the fiscal quarters ending during the period between October 3, 2011 to and including July 8, 2012. The foregoing description of the terms of our recent Credit Agreement amendment is qualified in its entirety by reference to the First Amendment to Credit Agreement dated as of February 16, 2012, a copy of which is filed as Exhibit 10.1.4 to this report.

The agent and lender parties under the Credit Agreement and their affiliates have provided and may, from time to time, continue to provide investment banking, financial advisory, cash management and other services to the Company and its affiliates, for which they have received customary fees and reimbursement of expenses, and for which they expect to receive customary fees and reimbursement of expenses, respectively.

ITEM 6.

EXHIBITS


Number	Description	Form	Filed with SEC

3.1	Restated Certificate of Incorporation, as amended, dated September 21, 2007	10-K	11/20/2009

3.1.1	Certificate of Amendment of Restated Certificate of Incorporation dated September 21, 2007	8-K	9/24/2007

3.2	Amended and Restated Bylaws dated August 4, 2011	8-K	8/9/2011

10.1.4	First Amendment to the Credit Agreement dated as of June 29, 2010 by and among Jack in the Box Inc. and the lenders named therein	—	Filed herewith

10.8.7 ~	Form of Stock Option and Performance Share Awards Agreement under the 2004 Stock Incentive Plan	—	Filed herewith

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	Filed herewith

31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 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	—	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	—	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 of 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.

By:		/ S / J ERRY P. R EBEL
		Jerry P. Rebel
		Executive Vice President and Chief Financial Officer (principal financial officer) (Duly Authorized Signatory)

Date: February 23, 2012

E XHIBIT 10.1.4

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “ Amendment ”) is dated as of February 16, 2012, by and among JACK IN THE BOX INC., a Delaware corporation (the “ Borrower ”), the Guarantors, the banks and other financial institutions or entities party hereto (the “ Consenting Lenders ”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “ Administrative Agent ”).

Statement of Purpose

The Borrower, the Lenders and the Administrative Agent are parties to that certain Credit Agreement dated as of June 29, 2010 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), pursuant to which the Lenders have extended certain credit facilities to the Borrower.

The Borrower has requested, and the Consenting Lenders and the Administrative Agent have agreed, subject to the terms and conditions set forth herein, to amend the Credit Agreement as specifically set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1. Capitalized Terms . All capitalized undefined terms used in this Amendment (including, without limitation, in the introductory paragraph and the Statement of Purpose hereto) shall have the meanings assigned thereto in the Credit Agreement.

2. Amendments . Subject to and in accordance with the terms and conditions set forth herein, the parties hereto hereby agree that the Credit Agreement is amended as follows:

(a) Section 1.1 of the Credit Agreement is hereby amended by:

(i) adding the following new defined term in proper alphabetical order:

“‘ Louisville Purchase ’ means the purchase by a Credit Party from a franchisee of certain Qdoba concept restaurant units located in or around Louisville, Kentucky.”

(ii) amending the definition of “Acquisition” by adding the following additional proviso immediately before the period at the end of such definition:

“; provided , further , that notwithstanding anything to the contrary contained herein or in any other Loan Document (including, without limitation, the preceding proviso of this definition and Section 11.14 hereof), the Louisville Purchase shall, for all purposes of this Agreement, be deemed to be an Acquisition.”

(b) Section 10.1 of the Credit Agreement is hereby amended by deleting such Section in its entirety and replacing it with the following:

“Section 10.1. Maximum Leverage Ratio . As of any fiscal quarter end permit the ratio of (a) Funded Debt on such date to (b) EBITDA for the four (4) consecutive fiscal quarter period ending on or immediately prior to such date (such ratio, the “ Leverage Ratio ”) to be greater than the corresponding ratio set forth below:


Period	Maximum Ratio

Closing Date to and including October 2, 2011		2.25 to 1.00

October 3, 2011 to and including July 8, 2012		2.50 to 1.00

Thereafter		2.25 to 1.00

3. Effectiveness . This Amendment shall become effective on the date when the Administrative Agent or Wells Fargo Securities, LLC (“ Wells Fargo Securities ”), as applicable, shall have received (a) counterparts of this Amendment executed by the Borrower, the Guarantors, the Required Lenders and the Administrative Agent and (b) payment of all fees, costs and expenses set forth in Section 7 of this Amendment (including, without limitation, an Amendment Fee (as defined below) for the account of each Lender party hereto).

4. Limited Effect . Except as expressly provided herein, the Credit Agreement and the other Loan Documents shall remain unmodified and in full force and effect. This Amendment shall not be deemed (a) to be a waiver of, or consent to, or a modification or amendment of, any other term or condition of the Credit Agreement or any other Loan Document other than as expressly set forth herein, (b) to prejudice any right or rights which the Administrative Agent or the Lenders may now have or may have in the future under or in connection with the Credit Agreement or the other Loan Documents or any of the instruments or agreements referred to therein, as the same may be amended, restated, supplemented or modified from time to time, or (c) to be a commitment or any other undertaking or expression of any willingness to engage in any further discussion with the Borrower, any of its Subsidiaries or any other Person with respect to any other waiver, amendment, modification or any other change to the Credit Agreement or the Loan Documents or any rights or remedies arising in favor of the Lenders or the Administrative Agent, or any of them, under or with respect to any such documents. References in the Credit Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein”, “hereof” or other words of like import) and in any Loan Document to the “Credit Agreement” shall be deemed to be references to the Credit Agreement as modified hereby.

5. Representations and Warranties . The Borrower and each Guarantor represents and warrants that (a) it has the corporate power and authority to make, deliver and perform this Amendment, (b) it has taken all necessary corporate or other action to authorize the execution, delivery and performance of this Amendment, (c) this Amendment has been duly executed and delivered on behalf of such Person, (d) this Amendment constitutes a legal, valid and binding obligation of such Person, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law), (e) each of the representations and warranties made by the Borrower and the Guarantors in or pursuant to the Loan Documents is true and correct in all material respects (except to the extent that such representation and warranty is subject to a materiality or Material Adverse Effect qualifier, in which case it shall be true and correct in all respects), in each case on and as of the date hereof as if made on and as of the date hereof, except to the extent that such representations and warranties relate to an earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date and (f) no Default or Event of Default has occurred and is continuing as of the date hereof or after giving effect hereto.

6. Acknowledgement and Reaffirmation . By their execution hereof, the Borrower and each Guarantor hereby expressly (a) consents to this Amendment and (b) acknowledges that the covenants, representations, warranties and other obligations set forth in the Credit Agreement, the Notes and the other Loan Documents to which the Borrower or such Guarantor is a party remain in full force and effect (it being understood and agreed that to the extent any such covenants, representations, warranties or other obligations are expressly modified herein, such covenants, representations, warranties or obligations shall continue in full force and effect as expressly modified herein).

7. Costs, Expenses and Taxes . The Borrower agrees to pay (a) in accordance with Section 14.2 of the Credit Agreement all reasonable costs and expenses of the Administrative Agent and Wells Fargo Securities in connection with the preparation, execution, delivery, administration of this Amendment and the other instruments and documents to be delivered hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent and Wells Fargo Securities, (b) to each Consenting Lender who delivers an executed counterpart to this Amendment to the Administrative Agent (or its counsel) prior to 12:00 p.m. (Eastern) on February 15, 2012, an amendment fee (the “ Amendment Fee ”) in an amount equal to 0.10% times the sum of the (i) Revolving Credit Commitment of such Lender and (ii) outstanding principal amount of the Term Loans owing to such Lender and (c) to Wells Fargo Securities, such other fees and expenses as agreed to by the Borrower and Wells Fargo Securities.

8. Execution in Counterparts . This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

9. Governing Law . This Amendment and the rights and obligations of the parties under this Amendment shall be governed by, and construed and interpreted in accordance with, the law of the state of New York (including Section 5-1401 and Section 5-1402 of the General Obligations Law of the State of New York), without reference to the conflicts or choice of law principles thereof.

10. Entire Agreement . This Amendment is the entire agreement, and supersedes any prior agreements and contemporaneous oral agreements, of the parties concerning its subject matter.

11. Successors and Assigns . This Amendment shall be binding on and inure to the benefit of the parties and their heirs, beneficiaries, successors and permitted assigns.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed under seal by their duly authorized officers, all as of the day and year first written above.


BORROWER:

JACK IN THE BOX INC. , as Borrower



By:		/S/ PAUL D. MELANCON


Name:		Paul D. Melancon


Title:		Vice President, Finance, Controller and Treasurer

GUARANTORS:

JBX GENERAL PARTNER LLC , as Guarantor

By:		Jack in the Box Inc., as sole member



By:		/S/ PAUL D. MELANCON


Name:		Paul D. Melancon


Title:		Vice President, Finance, Controller and Treasurer

JBX LIMITED PARTNER LLC , as Guarantor

By:		Jack in the Box Inc., as sole member



By:		/S/ PAUL D. MELANCON


Name:		Paul D. Melancon


Title:	Vice President, Finance, Controller and Treasurer

JACK IN THE BOX EASTERN DIVISION L.P. , as Guarantor

By:	JBX General Partner LLC, as general partner

	By:	Jack in the Box Inc. as sole member



By:		/S/ PAUL D. MELANCON


Name:		Paul D. Melancon


Title:		Vice President, Finance, Controller and Treasurer

Jack in the Box Inc.

First Amendment (2012)

Signature Page


QDOBA RESTAURANT CORPORATION , as Guarantor

By:		/S/ JERRY P. REBEL


Name:		Jerry P. Rebel


Title:		Chief Financial Officer

Jack in the Box Inc.

First Amendment (2012)

Signature Page


AGENT AND LENDERS:

WELLS FARGO BANK, NATIONAL ASSOCIATION , as Administrative Agent and Lender

By:		/S/ STEPHEN LEON


Name:		Stephen Leon


Title:		Managing Director

BADGERLAND FINANCIAL, FLCA , as Lender



By:		/S/ LARRY COULTHARD


Name:		Larry Couthard


Title:		Vice President, Capital Markets

BANK OF AMERICA, N.A. , as Lender



By:		/S/ WILLIAM M. BULGER, JR.


Name:		William M. Bulger, Jr.


Title:		Vice President

BANK OF THE WEST , as Lender



By:		/S/ JASON ANTRIM


Name:		Jason Antrim


Title:		Vice President

CITY NATIONAL BANK , as Lender



By:		/S/ JEANINE A. SMITH


Name:		Jeanine A. Smith


Title:		Vice President

Jack in the Box Inc.

First Amendment (2012)

Signature Page


COMERICA BANK , as Lender



By:		/S/ DON R. CARRUTH


Name:		Don R. Carruth


Title:		Vice President

CREDIT INDUSTRIEL ET COMMERCIAL , as Lender



By:		/S/ BRIAN O’LEARY


Name:		Brian O’Leary


Title:		Managing Director



By:		/S/ ANTHONY ROCK


Name:		Anthony Rock


Title:		Managing Director

FIFTH THIRD BANK , as Lender



By:		/S/ GARY S. LOSEY


Name:		Gary S. Losey


Title:		Vice President, Corporate Banking

1 ^st FARM CRDIT SERVICES, PCA , as Lender



By:		/S/ COREY J. WALDINGER


Name:		Corey J. Waldinger


Title:		Vice President, Capital Markets

FIRST TENNESSEE BANK NATIONAL ASSOCIATION , as Lender



By:		/S/ MATTHEW A. WAGES


Name:		Matthew A. Wages


Title:		Vice President

Jack in the Box Inc.

First Amendment (2012)

Signature Page


HSBC BANK USA NATIONAL ASSOCIATION, as Lender

By:		/S/ JEAN FRAMMOLINO


Name:		Jean Frammolino


Title:		Vice President

MANUFACTURERS BANK, as Lender



By:		/S/ SANDY LEE


Name:		Sandy Lee


Title:		Vice President

MORGAN STANLEY BANK, N. A., as Lender



By:		/S/ CHRISTOPHER WINTHROP


Name:		Christopher Winthrop


Title:		Authorized Signatory

MORGAN STANLEY SENIOR FUNDING, INC., as Lender



By:		/S/ CHRISTOPHER WINTHROP


Name:		Christopher Winthrop


Title:		Authorized Signatory

PNC BANK, NATIONAL ASSOCIATION, as Lender



By:		/S/ JOHN BERRY


Name:		John Berry


Title:		Vice President

Jack in the Box Inc.

First Amendment (2012)

Signature Page


COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK NEDERLAND” NEW YORK BRANCH , as Lender



By:		/S/ STEVEN CASHIOLA


Name:		Steven Cashiola


		Title: Vice President



By:		/S/ BRETT DELFINO


Name:		Brett Delfino


Title:		Executive Director

RAYMOND JAMES BANK, N.A., as Lender



By:		/S/ JOSEPH A. CICCOLINI


Name:		Joseph A. Ciccolini


Title:		Vice President, Senior Corporate Banker

STATE BANK OF INDIA, as Lender



By:		/S/ VIJAYALAKSHMI MUDDU


Name:		Vijayalakshmi Muddu


Title:		Vice President & Hear (Syndications)

UNION BANK, N.A., as Lender



By:		/S/ GLENN FORTIN


Name:		Glenn Fortin


Title:		Vice President

Jack in the Box Inc.

First Amendment (2012)

Signature Page

E XHIBIT 10.8.7

JACK IN THE BOX INC.

STOCK OPTION AND PERFORMANCE SHARE AWARD AGREEMENT

UNDER THE 2004 STOCK INCENTIVE PLAN

This Stock Option and Performance Share Award Agreement (the “Agreement”) is made and entered into effective as of <<Grant Date>> (the “Grant Date”) by and between Jack in the Box Inc., a Delaware corporation (the “Company”), and <<Full Name>> (the “Awardee”).

RECITALS

The Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board”) which administers the Company’s 2004 Stock Incentive Plan, as amended from time to time (the “Plan”), has granted to the Awardee as of the Grant Date this award of Stock Options (the “Option”) and Performance Shares (the “PSU Award”) (collectively, the “Award”) on the terms and conditions set forth herein.

AGREEMENT

In consideration of the foregoing and of the mutual covenants set forth herein and other good and valuable consideration, the parties hereto agree as follows:

1 CONSIDERATION. The Option and PSU Award have been granted in consideration of the Awardee’s continued employment with the Company or a Subsidiary Corporation and acceptance by the Awardee of the terms and conditions set forth below and in the Plan.

OPTION AWARD

2.1 SHARES OPTIONED; OPTION PRICE. The Awardee may purchase all or any part of an aggregate of <<#shares>> shares of Stock, at the exercise price of $<<exercise price>> per share (the “Option Exercise Price”), subject to the terms and conditions set forth herein.

2.2 OPTION TERM; EXERCISABILITY. The Option shall terminate and no portion of the Option may be exercised in whole or in part after the close of trading on the NASDAQ Stock Market on the seventh (7th) anniversary of the Grant Date (the “Expiration Date”).

Subject to the terms and conditions described in this Agreement, the Option shall become exercisable in accordance with the schedule below:

(1) One third on <<date>>.

(2) One third on <<date>>.

(3) One third on <<date>>.

2.3 EXERCISE DATES. Subject to the terms and conditions herein and in the Plan, the Option shall become exercisable, on each of the dates and to the extent provided on each date as provided in Section 2.2 above, subject to the Awardee being continuously employed by the Company or a Subsidiary Corporation from the Grant Date through the applicable exercisability dates. No portion of the Option will become exercisable after the Awardee’s employment ceases, except as provided below in the event that the Awardee’s employment ceases due to Disability. Fractional shares may not be purchased or delivered hereunder. Once exercisable and until terminated, all or any portion of the exercisable Option may be exercised from time to time and at any time under procedures that the Company shall establish from time to time, including, without limitation, procedures regarding the frequency of exercise and the minimum number of shares of Stock which may be purchased at any time.

2.4 EXERCISING THE OPTION. This Option may be exercised only by the Awardee or his or her permitted transferees and only by the methods set forth herein. Subject to the terms and conditions of the Plan, the Awardee may exercise all or any portion of the Option by giving notice of exercise to the Company or its designee in the manner specified from time to time by the Company, accompanied by payment or instructions for payment in full of the Option Exercise Price for the shares being purchased together with any amount which the Company may withhold upon such exercise for applicable foreign, federal (including FICA), state and local taxes. Each such notice shall specify the number of shares of Stock to be purchased, the Option Exercise Price, the Grant Date, and such other matters as required by the Committee.

2.5 PAYMENT OF EXERCISE PRICE. The payment of the aggregate Option Exercise Price shall be means of a payment under an arrangement with a broker approved by the Company where payment is made pursuant to an irrevocable commitment by the broker to deliver to the Company the proceeds from the sale of the Stock issuable upon exercise of the Option.

2.6 TERMINATION OF EMPLOYMENT.

(a) Termination for Cause . If the Awardee ceases to be employed by the Company or a Subsidiary Corporation because of the Awardee’s discharge for cause, as determined by the Committee in its sole discretion, then this Option shall expire immediately upon such cessation of employment.

(b) Termination of Employment in General . If the Awardee ceases to be employed by the Company or a Subsidiary Corporation because of the Awardee’s cessation of employment for any reason other than termination for cause, Retirement, death, or Disability, then the portion of this Option, if any, that is not then exercisable shall terminate immediately and the portion of this Option, if any, that is then exercisable shall expire ninety days following such cessation of employment, but not later than the Expiration Date. During such period after the Awardee ceases to be an employee, this Option shall be exercisable only as to those shares, if any, with respect to which the Awardee could have exercised the Option as of the date of such cessation of employment.

(c) Retirement . If the Awardee ceases to be employed by the Company or any Subsidiary Corporation because of the Awardee’s Retirement, then this Option shall be exercisable only as to those shares, if any, (i) with respect to which the Awardee could have exercised the Option as of the date of such cessation of employment, and (ii) for each twelve full months during which the Awardee was in the employ of the Company or a Subsidiary Corporation an additional 5% of the aggregate number of shares covered by the Option (total exercisable shares not to exceed original grant amount), and the balance of the Option shall terminate immediately; provided, however, that all rights under the exercisable portion of the Option shall expire, in any event, on the Expiration Date specified in Section 2.2 hereof. As used in this Agreement, “Retirement” means the Awardee’s termination of employment other than for cause (as determined by the Committee in its sole discretion) due to retirement at age 55 or older with 10 or more full years of continuous employment with the Company or a Subsidiary Corporation.

(d) Death . If the Awardee shall die while in the employment of the Company or a Subsidiary Corporation, and such deceased Awardee shall not have suffered Disability (as defined below) within ninety days prior to death, then this Option shall be exercisable by the person or persons to whom the Awardee’s rights under the Option shall have passed by will or by applicable laws of descent and distribution, as to all shares covered by the Option without regard to the exercisability schedule; provided, however, that all rights under the Option shall expire, in any event, on the Expiration Date specified in Section 2.2 hereof.

(e) Disability . If the Awardee shall suffer a Disability while in the employment of the Company or a Subsidiary Corporation, this Option shall continue to become exercisable in accordance with Section 2.2 hereof

for twelve months following the Awardee’s first day of absence from work with the Company or a Subsidiary Corporation due to Disability; provided, however, that all rights under the Option shall expire, in any event, on the Expiration Date specified in Section 2.2 hereof. As used in this Agreement, “Disability” means a physical or mental condition that results in a total and permanent disability to such extent that the person is eligible for disability benefits under the federal Social Security Act.

2.7 BUY OUT OF OPTION GAINS. At any time after an Option becomes exercisable, the Committee shall have the right to elect, in its sole discretion and without the consent of the holder thereof, to cancel such Option and to pay to the Awardee the excess of the fair market value of the shares of Stock covered by such Option over the Option Exercise Price of such Option at the date the Committee provides written notice (the “Buy Out Notice”) of the intention to exercise such right. Buyouts pursuant to this provision shall be effected by the Company as promptly as possible after the date of the Buy Out Notice. Payments of buyout amounts may be made in cash, in shares of Stock, or partly in cash and partly in shares of Stock, as the Committee deems advisable. To the extent payment is made in Stock, the number of shares shall be determined by dividing the amount of the payment to be made by the fair market value of a share of Stock at the date of the Buy Out Notice. In no event shall the Company be required to deliver a fractional share of Stock in satisfaction of this buy out provision. Payments of any such buy out amounts shall be made net of any applicable foreign, federal (including FICA), state and local withholding taxes. For the purposes of this provision, fair market value shall be equal to the average of the high and low prices at which a share of Stock is traded on the NASDAQ Stock Market on the relevant date.

2.8 EFFECT OF CHANGE IN CONTROL. Subject to the provisions of the Plan, in the event of a Change in Control, the Acquiring Corporation may, without the consent of the Awardee, either assume the Company’s rights and obligations under outstanding Options or substitute for outstanding Options substantially equivalent options for the Acquiring Corporation’s stock. In the event that the Acquiring Corporation elects not to assume or substitute for outstanding Options in connection with a Change in Control, the exercisability and vesting of each such outstanding Option and any shares acquired upon the exercise thereof held by an Awardee whose employment has not terminated prior to such date shall be accelerated, effective as of the date ten (10) days prior to the date of the Change in Control. The exercise or vesting of any Option in accordance with the foregoing shall be conditioned upon the consummation of the Change in Control. Any Options which are neither assumed or substituted for by the Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the Change in Control.

2.9 RESPONSIBILITY FOR EXERCISE. The Awardee hereby acknowledges that he or she is responsible for taking any and all actions as may be required to exercise this Option in a timely manner and for properly executing any such documents as may be required for exercise in accordance with such rules and procedures as may be established by the Committee from time to time. By signing this Agreement, the Awardee acknowledges that information regarding the procedures and requirements for exercise of the Option is available upon request. The Company shall have no duty or obligation to notify the Awardee of the date on which this Option will expire or otherwise terminate.

PSU AWARD

3.1 PSU AWARD . The Committee hereby grants <<# units>> Performance Shares at “target” to the Awardee on the terms and conditions set forth herein. Each Performance Share represents an unfunded and unsecured promise of the Company to deliver a share of Stock to Awardee upon vesting, subject to the requirements set forth herein. The actual number of shares of Stock payable, if any, to the Awardee in settlement of the PSU Award will depend on whether and to the extent that performance goals established by the Committee are attained within the applicable Performance Period (as that term is defined in Section 3.3 herein) as described in Appendix I to this Award.

3.2 VESTING. The PSU Award shall become vested upon the achievement, if any, of Company Performance Goals (“Performance Goals”) for the Performance Period (as that term is defined in Section 3.3 herein), as described in Appendix I to this Award, the achievement of which shall be determined by the Committee after the end of the Performance Period. No portion of the PSU Award shall become vested at any time prior to the date the Committee certifies achievement of the Performance Goals for the Performance Period. The Awardee must be employed by the Company or a Subsidiary Corporation continuously from the Grant Date through the last day of the Performance Period to receive payment of the PSU Award due to satisfaction of the Company Performance Goals, except as provided in Section 3.5 (Termination of Employment) of this Agreement. If any shares subject to this PSU Award would otherwise become vested on a day on which the sale of such shares would violate the provisions of the Company’s Employee/Insider Trading policy, then such vesting automatically shall be deemed to occur on the second business day of the next “window” period opened in accordance with the Company’s Employee/Insider Trading policy.

3.3 PERFORMANCE PERIOD . The Performance Period for the PSU Award shall be the period that begins on <<date>> and ends on <<date>> (the “Performance Period”).

3.4 DISTRIBUTION. A PSU Award that has become vested in accordance with Section 3.2 of this Agreement due to achievement of the Performance Goals will be settled in shares of Stock. The Company, to the extent permitted by law, may deduct any income taxes, FICA, state disability insurance or other similar payroll and withholding taxes arising from the receipt or vesting of the PSU Award from any payment of any kind due to the Awardee, including the PSU Award, and the net balance will be settled in whole shares of Stock of the Company (“Award Shares”) and distributed in a single distribution no later than December 31 of the calendar year in which the Performance Period ends by depositing such shares of Stock for the benefit of the Awardee with the Company’s designated broker.

3.5 TERMINATION OF EMPLOYMENT.

(a) General . Except as set forth in paragraph (b) below, if the Awardee ceases to be employed by the Company or any Subsidiary Corporation prior to the last day of the Performance Period for any reason other than termination for Retirement, Disability, or death, then the PSU Award will be forfeited to the Company immediately and automatically upon such cessation without payment of any consideration for the PSU Award, and the Awardee will have no further right, title or interest in or to the PSU Award, any Performance Shares, or any shares of Stock.

(b) Termination due to Retirement, Disability, or Death . If the Awardee ceases to be employed by the Company or any Subsidiary Corporation prior to the last day of the Performance Period due to the Awardee’s Retirement, Disability, or death, then provided that as of <<date 1 year from start of Performance Period>>, the Awardee is still employed by the Company or a Subsidiary Corporation, and had been continuously employed by the Company or a Subsidiary Corporation since the Grant Date, this PSU Award shall become vested and payable at the end of the Performance Period as described in Section 3.4 solely based on the level of achievement of Company Performance Goals as determined by the Committee, multiplied by a fraction, the numerator of which is the number of full accounting periods the Awardee was continuously employed by the Company or a Subsidiary Corporation during the Performance Period, and the denominator of which is thirty-nine (39). (The Company divides each of its fiscal years into 13 “accounting periods” of four or five weeks each.)

3.6 EFFECT OF CHANGE IN CONTROL . Subject to the terms of the Plan, in the event of a Change in Control, the PSU Award held by the Awardee whose employment has not terminated prior to such date shall become payable effective as of the date of the Change in Control (except as otherwise provided in this Agreement). For this purpose, the final value of the PSU Award shall be determined by the greater of (a) the extent to which the applicable Performance Goals have been attained during the Performance Period prior to the date of the Change in Control or (b) the pre-established 100% level with respect to each Performance Target comprising the applicable Performance Goals. Any acceleration of the PSU Award in accordance with the foregoing shall be conditioned upon the consummation of the Change in Control.

OPTION AND PSU AWARDS

4	AWARD AS COMPENSATION. No amount attributable to this Award shall be considered as compensation for the purposes of any other Company sponsored plan.

NON-TRANSFERABILITY . Except as otherwise provided in this Paragraph, this Award is not transferable other than by will or the laws of descent and distribution. This Award shall not be otherwise transferred, assigned, pledged, hypothecated or disposed of in any way, whether by operation of law or otherwise, and shall not be subject to execution, attachment or similar process. Upon any attempt to transfer this Award otherwise than by will or the laws of descent and distribution or to assign, pledge, hypothecate or otherwise dispose of this Award, other than as permitted herein, or upon the levy of any execution, attachment or similar process upon this Award, this Award shall immediately terminate and become null and void. Notwithstanding the foregoing, with the approval of the Committee, the Option may be transferred to a trust for the benefit of the Awardee or the Awardee’s “family member” as that term is defined in the General Instructions to Form S-8 Registration Statement under the Securities Act.

LEGALITY. The Company shall not be required to issue any shares of Stock subject to this Award unless and until all applicable requirements of the Securities and Exchange Commission (the “SEC”), the California Department of Corporations or other regulatory agencies having jurisdiction with respect to such issuance, and any exchanges upon which the Stock may be listed, shall have been fully complied with. If the shares of Stock subject to this Award are being distributed subject to restrictions or if the rules and interpretations of the SEC so require, such shares may be issued only if the Awardee represents and warrants in writing to the Company that the shares are being acquired for investment and not with a view to the distribution thereof, and any certificates issued upon distribution of the shares shall bear appropriate legends setting forth the restrictions on transfer of such shares. Such legends may not be removed until the Company so requests, based on the opinion of the Company’s counsel that the restrictions are no longer applicable.

ADJUSTMENTS IN STOCK; DISSOLUTION OR LIQUIDATION. Subject to the provisions of the Plan, if the outstanding shares of the Company Stock of the class subject to this Award are increased or decreased, or are changed into or exchanged for a different number or kind of shares or securities as a result of one or more reorganizations, recapitalizations, stock splits, reverse stock splits, stock dividends and the like, appropriate adjustments, to be conclusively determined by the Committee, shall be made in the number and/or type of shares or securities subject to this Award and any fractional shares resulting from adjustments shall be rounded down to the nearest whole number. Upon the dissolution or liquidation of the Company, the Award will terminate in full for no consideration.

8	EMPLOYMENT. Nothing in the Plan or in this Agreement shall confer upon the Awardee any right to continue in the employment of the Company or any of its subsidiaries or interfere in any way with any right of the Company to terminate the Awardee’s employment at any time.

PLAN CONTROLS. The Award and all terms and conditions set forth in this Agreement are subject in all respects to the terms and conditions of the Plan, which is incorporated herein by reference, as may be amended from time to time (but no amendment to the Plan shall adversely affect the Awardee’s rights under this Award) and any rules and regulations promulgated by the Committee, which shall be controlling. All constructions, interpretations, rule determinations or other actions taken by the Committee shall be final, binding and conclusive on all interested parties, including the Company and its Subsidiary Corporations and all former, present and future employees of the Company or its Subsidiary Corporations. Capitalized terms that are not defined herein shall have the definition given to them in the Plan.

ARBITRATION. Any dispute or claim concerning any Awards granted (or not granted) pursuant to the Plan and this Agreement and any other disputes or claims relating to or arising out of the Plan and this Agreement shall be fully, finally and exclusively resolved by binding arbitration conducted in San Diego, California, by either (i) the American Arbitration Association in accordance with its rules and procedures, or (ii) by any party mutually agreed upon by the Committee and the claimant. BY ACCEPTING AN AWARD, THE AWARDEE AND THE COMPANY WAIVE THEIR RESPECTIVE RIGHTS TO HAVE ANY DISPUTES OR CLAIMS TRIED BY A JUDGE OR JURY.

11	LAWS GOVERNING. The Award and the Plan shall be construed and enforced in accordance with the laws of the State of Delaware without regard to the principles of conflicts of law.

12	RECEIPT OF PROSPECTUS. The Awardee hereby acknowledges that he or she has received a copy of the prospectus relating to the Award and the shares covered thereby and the Plan.

13	AWARD AGREEMENT. This Agreement has no cash value or other legal significance and the entitlement of any rights here under shall be governed by the terms of the Plan and the books and records maintained by the Company.

ELECTRONIC DELIVERY OF DOCUMENTS. By signing this Agreement, the Awardee (i) consents to the electronic delivery of this Agreement, all information with respect to the Plan and the Award, and any reports of the Company provided generally to the Company’s stockholders; (ii) acknowledges that the Awardee may receive from the Company a paper copy of any documents delivered electronically at no cost to the Awardee by contacting the Company by telephone or in writing; (iii) further acknowledges that the Awardee may revoke the Awardee’s consent to the electronic delivery of documents at any time by notifying the Company of such revoked consent by telephone, postal service or electronic mail; and (iv) further acknowledges that the Awardee understands that the Awardee is not required to consent to electronic delivery of documents.

15	MISCELLANEOUS.

(a) This writing constitutes the entire agreement of the parties with respect to the subject matter hereof and may not be modified or amended except by a written agreement signed by the Awardee and the Company other than as provided in paragraph (g) below. Anything in this Agreement to the contrary notwithstanding, any modification or amendment of this Agreement by a written agreement signed by, or binding upon, the Awardee shall be valid and binding upon any and all persons or entities who may, at any time, have or claim any rights under or pursuant to this Agreement (including all Awardees hereunder) in respect of the Award granted to the Awardee.

(b) No waiver of any breach or default hereunder shall be considered valid unless in writing and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature. Anything in this Agreement to the contrary notwithstanding, any waiver, consent or other instrument under or pursuant to this Agreement signed by, or binding upon, the Awardee shall be valid and binding upon any and all persons or entities (other than the Company) who may, at any time, have or claim any rights under or pursuant to this Agreement (including all Awardees hereunder) in respect of the Award originally granted to the Awardee.

(c) Except as otherwise expressly provided herein, this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and the Awardee and his heirs, personal representatives, successors and assigns; provided, however, that nothing contained herein shall be construed as granting the Awardee the right to transfer any of his Award except in accordance with this Agreement. If the Award is settled after the death of the Awardee, the Award shall be considered transferred to the person or persons (the

“Heir”) to whom the Awardee’s rights under the Award passed by will or by the applicable laws of descent and distribution, as to all shares of Stock granted under this Award. It shall be the responsibility of the Heir to notify the Company of any changes in address.

(d) If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render invalid or unenforceable any other severable provision of this Agreement, and this Agreement shall be carried out as if any such invalid or unenforceable provision were not contained herein.

(e) The section headings contained herein are for the purposes of convenience only and are not intended to define or limit the contents of said sections.

(f) Each party hereto shall cooperate and shall take such further action and shall execute and deliver such further documents as may be reasonably requested by any other party in order to carry out the provisions and purposes of this Agreement.

(g) This Agreement is intended to be exempt from Section 409A of the Code. Should any provision of this Agreement be found to be contrary to this intent, it shall be modified and given effect, in the sole discretion of the Committee and without requiring the Awardee’s consent (notwithstanding anything herein to the contrary), in such manner as the Committee determines to be necessary or appropriate to effectuate an exemption from Section 409A of the Code or comply therewith. The Company has no duty or obligation to minimize the tax consequences to the Awardee of this Award and shall not be liable for any adverse tax consequences to the Awardee arising in connection with this Award.

(h) This Agreement may be executed in counterparts, all of which taken together shall be deemed one original.

[signatures are on the next page]

IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed on its behalf by its President or one of its Vice Presidents and the Awardee has executed, effective on the Grant Date.


JACK IN THE BOX INC.				AWARDEE


				Signature


				Name


				Street Address


				City, State Zip


				Social Security Number

Exhibit 31.1

CERTIFICATION

I, Linda A. Lang, certify that:

I have reviewed this quarterly report on Form 10-Q of Jack in the Box Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: February 23, 2012		/S/ LINDA A. LANG
		Linda A. Lang
		Chief Executive Officer, Chairman of the Board and President

Exhibit 31.2

CERTIFICATION

I, Jerry P. Rebel, certify that:

I have reviewed this quarterly report on Form 10-Q of Jack in the Box Inc.;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: February 23, 2012		/S/ JERRY P. REBEL
		Jerry P. Rebel
		Chief Financial Officer

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Linda A. Lang, Chief Executive Officer of Jack in the Box Inc. (the “Registrant”), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

the Quarterly Report on Form 10-Q of the Registrant, to which this certification is attached as an exhibit (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.


Dated: February 23, 2012		/S/ LINDA A. LANG
		Linda A. Lang
		Chief Executive Officer

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Jerry P. Rebel, Chief Financial Officer of Jack in the Box Inc. (the “Registrant”), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.


Dated: February 23, 2012		/S/ JERRY P. REBEL
		Jerry P. Rebel
		Chief Financial Officer