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 23,~~April 17, 2011

Commission File Number:1-9390~~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.

Yesþ Noo

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).

Yesþ Noo

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. (Check one):


Large accelerated filerþ	Accelerated filero	Non-accelerated filero	Smaller reporting companyo
		(Do not check if a smaller reporting company)

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

Yeso Noþ

As of the close of business ~~February 17,~~May 13, 2011, ~~50,764,646~~49,697,537 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		1415

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		2426

Item 4.	Controls and Procedures		2526

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings		2527

Item 1A.	Risk Factors		2527

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		2627

Item 6.	Exhibits		2728

		Signature			2829
~~EX-10.15.A~~
~~EX-31.1~~
~~EX-31.2~~
~~EX-32.1~~
~~EX-32.2~~
~~EX-101 INSTANCE DOCUMENT~~
~~EX-101 SCHEMA DOCUMENT~~
~~EX-101 CALCULATION LINKBASE DOCUMENT~~
~~EX-101 LABELS LINKBASE DOCUMENT~~
~~EX-101 PRESENTATION LINKBASE DOCUMENT~~

PART I.FINANCIAL INFORMATION


~~ITEM 1.~~		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 23,			October 3,			April 17,			October 3,
	2011			2010			2011			2010

ASSETS
Current assets:
Cash and cash equivalents	$	16,530		$	10,607		$	14,712		$	10,607
Accounts and other receivables, net		57,796			81,150			60,061			81,150
Inventories		39,226			37,391			36,830			37,391
Prepaid expenses		13,399			33,563			30,223			36,100
Deferred income taxes		46,185			46,185			46,328			46,185
Assets held for sale		53,018			59,897			51,349			59,897
Other current assets		3,405			6,129			3,882			3,592

Total current assets		229,559			274,922			243,385			274,922

Property and equipment, at cost		1,541,152			1,562,729			1,551,432			1,562,729
Less accumulated depreciation and amortization		(676,674	)		(684,690	)		(685,614	)		(684,690	)

Property and equipment, net		864,478			878,039			865,818			878,039
Other assets, net		273,189			254,131			293,992			254,131

	$	1,367,226		$	1,407,092		$	1,403,195		$	1,407,092


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	16,224		$	13,781		$	18,695		$	13,781
Accounts payable		68,365			101,216			68,900			101,216
Accrued liabilities		160,958			168,186			173,471			168,186

Total current liabilities		245,547			283,183			261,066			283,183

Long-term debt, net of current maturities		356,953			352,630			388,672			352,630
Other long-term liabilities		253,575			250,440			255,377			250,440
Deferred income taxes		182			376			41			376
Stockholders’ equity:
Preferred stock $0.01 par value, 15,000,000 shares authorized, none issued		—			—			—			—
Common stock $0.01 par value, 175,000,000 shares authorized, 74,683,623 and 74,461,632 issued, respectively		747			745
Common stock $0.01 par value, 175,000,000 shares authorized, 74,812,157 and 74,461,632 issued, respectively								748			745
Capital in excess of par value		192,753			187,544			196,668			187,544
Retained earnings		1,014,821			982,420			1,021,623			982,420
Accumulated other comprehensive loss, net		(75,893	)		(78,787	)		(74,541	)		(78,787	)
Treasury stock, at cost, 23,991,498 and 21,640,400 shares, respectively		(621,459	)		(571,459	)
Treasury stock, at cost, 25,116,010 and 21,640,400 shares, respectively								(646,459	)		(571,459	)

Total stockholders’ equity		510,969			520,463			498,039			520,463

	$	1,367,226		$	1,407,092		$	1,403,195		$	1,407,092

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 23,			January 17,			Quarter						Year-to-Date
	2011			2010			April 17,			April 11,			April 17,			April 11,
							2011			2010			2011			2010
Revenues:
Company restaurant sales	$	436,910		$	512,094		$	321,242		$	388,301		$	758,152		$	900,395
Distribution sales		146,687			104,618			121,362			90,762			268,049			195,380
Franchise revenues		81,121			64,606			62,531			50,643			143,652			115,249

		664,718			681,318			505,135			529,706			1,169,853			1,211,024

Operating costs and expenses, net:
Company restaurant costs:
Food and packaging		141,855			162,327			107,275			122,316			249,130			284,643
Payroll and employee benefits		134,516			156,352			97,998			117,133			232,514			273,485
Occupancy and other		105,409			120,153			76,393			89,888			181,802			210,041

Total company restaurant costs		381,780			438,832			281,666			329,337			663,446			768,169
Distribution costs		147,341			105,369			121,837			90,910			269,178			196,279
Franchise costs		38,352			29,410			31,328			23,102			69,680			52,512
Selling, general and administrative expenses		66,885			70,677			52,619			54,742			119,504			125,419
Impairment and other charges, net		3,596			2,679			4,494			3,452			8,090			6,131
Gains on the sale of company-operated restaurants		(27,872	)		(9,380	)		(878	)		(2,987	)		(28,750	)		(12,367	)

		610,082			637,587			491,066			498,556			1,101,148			1,136,143


Earnings from operations		54,636			43,731			14,069			31,150			68,705			74,881

Interest expense, net		4,611			5,435			3,945			3,873			8,556			9,308


Earnings before income taxes		50,025			38,296			10,124			27,277			60,149			65,573

Income taxes		17,624			14,048			3,322			9,597			20,946			23,645


Net earnings	$	32,401		$	24,248		$	6,802		$	17,680		$	39,203		$	41,928


Net earnings per share:
Basic	$	0.62		$	0.43		$	0.14		$	0.32		$	0.76		$	0.75
Diluted	$	0.61		$	0.43		$	0.13		$	0.32		$	0.75		$	0.74

Weighted-average shares outstanding:
Basic		52,077			56,273			50,183			54,972			51,265			55,711
Diluted		52,883			57,017			50,984			55,797			52,069			56,499

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						Year-to-Date
	January 23,			January 17,			April 17,			April 11,
	2011			2010			2011			2010

Cash flows from operating activities:
Net earnings	$	32,401		$	24,248		$	39,203		$	41,928
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		29,582			31,129			51,817			54,152
Deferred finance cost amortization		743			465			1,350			724
Deferred income taxes		(9,892	)		(1,762	)		(4,965	)		(3,267	)
Share-based compensation expense		2,666			2,805			4,972			5,500
Pension and postretirement expense		7,337			8,949			12,840			15,661
Gains on cash surrender value of company-owned life insurance		(5,461	)		(3,935	)		(7,841	)		(6,026	)
Gains on the sale of company-operated restaurants		(27,872	)		(9,380	)		(28,750	)		(12,367	)
Losses on the disposition of property and equipment, net		2,796			1,182			5,424			2,360
Impairment charges		289			608			1,167			1,503
Changes in assets and liabilities, excluding dispositions:
Changes in assets and liabilities, excluding acquisitions and dispositions:
Accounts and other receivables		(42	)		(49	)		(2,359	)		(11,811	)
Inventories		(1,835	)		(2,548	)		561			(93	)
Prepaid expenses and other current assets		23,592			(5,289	)		6,848			(19,833	)
Accounts payable		(2,977	)		92			(2,851	)		(3,309	)
Pension and postretirement contributions		(1,623	)		(5,289	)		(2,472	)		(11,824	)
Other		(3,899	)		(32,303	)		6,900			(26,652	)

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

Cash flows provided by operating activities		45,805			8,923			81,844			24,474


Cash flows from investing activities:
Purchases of property and equipment		(46,887	)		(28,716	)		(74,129	)		(42,632	)
Proceeds from the sale of company-operated restaurants		44,083			11,575			49,588			19,093
Proceeds from assets held for sale and leaseback, net		4,668			3,356			6,669			8,889
Collections on notes receivable		18,929			4,333			19,062			7,675
Acquisition of franchise-operated restaurants								(21,477	)		—
Other		2			(256	)		(6,618	)		1,031

Cash flows provided by (used in) investing activities		20,795			(9,708	)
Cash flows used in investing activities								(26,905	)		(5,944	)


Cash flows from financing activities:
Borrowings on revolving credit facility		231,000			104,000			396,000			313,000
Repayments of borrowings on revolving credit facility		(221,000	)		(87,000	)		(349,000	)		(293,000	)
Principal repayments on debt		(2,922	)		(24,705	)		(5,731	)		(46,031	)
Debt issuance costs		(375	)		—			(989	)		—
Proceeds from issuance of common stock		2,143			701			3,376			2,445
Repurchase of common stock		(50,000	)		(40,000	)
Repurchases of common stock								(75,000	)		(50,000	)
Excess tax benefits from share-based compensation arrangements		263			181			640			690
Change in book overdraft		(19,786	)		7,114			(20,130	)		13,825

Cash flows used in financing activities		(60,677	)		(39,709	)		(50,834	)		(59,071	)


Net increase (decrease) in cash and cash equivalents		5,923			(40,494	)		4,105			(40,541	)
Cash and cash equivalents at beginning of period		10,607			53,002			10,607			53,002

Cash and cash equivalents at end of period	$	16,530		$	12,508		$	14,712		$	12,461

See accompanying notes to condensed consolidated financial statements.

JACK IN THE BOX INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 45 states. The following table summarizes the number of restaurants:


	Sixteen Weeks Ended
	January 23,		January 17,		April 17,		April 11,
	2011		2010		2011		2010
Jack in the Box:
Company-operated		873		1,176		848		1,153
Franchised		1,340		1,052		1,372		1,080

Total system		2,213		2,228		2,220		2,233

Qdoba:
Company-operated		194		159		221		160
Franchised		348		348		328		345

Total system		542		507		549		505

		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 3, 2010. The accounting policies used in preparing these condensed consolidated financial statements are the same as those described in our Form 10-K, with the exception of new accounting pronouncements adopted in fiscal 2011.

		*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*.

		*Reclassifications and adjustments*— Certain prior year amounts in the condensed consolidated financial statements have been reclassified to conform to the fiscal 2011 presentation. At the end of 2010, we separated impairment and other charges, net from selling, general and administrative expenses in our consolidated statements of earnings. We believe the additional detail provided is useful when analyzing our results of operations.

		*Fiscal year*— Our fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. Fiscal year 2011 includes 52 weeks while 2010 includes 53 weeks. Our first quarter includes 16 weeks and all other quarters include 12 weeks, with the exception of the fourth quarter of fiscal 2010, which includes 13 weeks. All comparisons between 2011 and 2010 refer to the ~~16-week~~twelve weeks (“quarter”) ~~periods~~and twenty-eight weeks (“year-to-date”) ended ~~January 23,~~April 17, 2011 and ~~January 17,~~April 11, 2010, 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.

		*~~New accounting pronouncement adopted~~*— In June 2009, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance for consolidation, which changes the approach for determining which enterprise has a controlling financial interest in a variable interest entity and requires more frequent reassessments of whether an enterprise is a primary beneficiary. The adoption of the provisions of this guidance in fiscal 2011 did not have a material impact on our consolidated financial statements.

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

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

Refranchisings and franchisee development — The following is a summary of ~~initial franchise fees received and gains recognized on~~ the ~~sale~~number of restaurants tosold and developed by franchisees and the related gains and fees recognized (dollars in thousands):


	Sixteen Weeks Ended						Quarter						Year-to-Date
	January 23,			January 17,			April 17,			April 11,			April 17,			April 11,
	2011			2010			2011			2010			2011			2010

Number of restaurants sold to franchisees		88			23			26			30			114			53
Number of new restaurants opened by franchisees		17			12			11			7			28			19

Initial franchise fees received	$	4,239		$	1,413
Initial franchise fees							$	1,640		$	1,562		$	5,879		$	2,975

Cash proceeds from the sale of company-operated restaurants	$	44,083		$	11,575
Cash							$	5,505		$	7,518		$	49,588		$	19,093
Notes receivable		—			2,730			—			—			—			2,730

Total proceeds		44,083			14,305
Total proceeds from the sale of company-operated restaurants								5,505			7,518			49,588			21,823
Net assets sold (primarily property and equipment)		(15,352	)		(4,637	)		(4,520	)		(4,375	)		(19,872	)		(9,012	)
Goodwill related to the sale of company-operated restaurants		(859	)		(288	)		(107	)		(156	)		(966	)		(444	)

Gains on the sale of company-operated restaurants	$	27,872		$	9,380		$	878		$	2,987		$	28,750		$	12,367

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


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

Total	$	21,477

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

FAIR VALUE MEASUREMENTS

Financial assets and liabilities— The following table presents the financial assets and liabilities measured at fair value on a recurring basis as of ~~January 23,~~April 17, 2011 (in thousands):


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

Interest rate swaps (Note 4) (1)	$	704		$	—		$	704	$	—	$	457		$	—		$	457	$	—
Non-qualified deferred compensation plan (2)		(36,879	)		(36,879	)		—		—		(37,803	)		(37,803	)		—		—

Total assets (liabilities) at fair value	$	(36,175	)	$	(36,879	)	$	704	$	—	$	(37,346	)	$	(37,803	)	$	457	$	—


(1)		We entered into interest rate swaps to reduce our exposure to rising interest rates on our variable debt. The fair value of our interest rate swaps is 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 23,~~April 17, 2011.

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

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, ~~(at least annually for goodwill and semi-annually for property and equipment),~~ non-financial instruments are assessed for ~~impairment and, if~~impairment. If applicable, the carrying values of the assets are written down to fair value. In connection with our ~~semi-annual property and equipment~~ impairment review during ~~the quarter,~~fiscal 2011, no material fair value adjustments were required. Refer to Note 5,Impairment, Disposition of Property and Equipment, and Restaurant Closing Costs,for additional information regarding impairment charges.

DERIVATIVE INSTRUMENTS

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

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

		~~$200.0~~ $200.0 million of our variable rate term loan borrowings to a fixed-rate basis from March 2007 to April 1, 2010. These agreements have been designated as cash flow hedges under the terms of the ~~FASB~~Financial Accounting Standards Board (“FASB”) authoritative guidance for derivatives and ~~hedging, and to~~hedging. To the extent that they are effective in offsetting the variability of the hedged cash flows, changes in the ~~derivatives’~~ fair value of the derivatives are not included in net earnings but are included in other comprehensive ~~income.~~income (“OCI”). These changes in fair value are subsequently reclassified into net earnings as a component of interest expense as the hedged interest payments are made on our term debt.

		We are also exposed to the impact of utility price fluctuations related to unpredictable factors such as weather and various other market conditions outside our control. ~~Our ability to recover increased costs through higher prices is limited by the competitive environment in which we operate. Therefore, from~~From time to time, we enter into futures and option contracts to manage these fluctuations. These contracts have not been designated as hedging instruments under the FASB authoritative guidance for derivative instruments and hedging.

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

January 23, 2011

October 3, 2010

April 17, 2011

October 3, 2010

Balance

Sheet

Fair

Sheet

Fair

Sheet

Fair

Sheet

Fair

Location

Value

Location

Value

Location

Value

Location

Value

Derivatives designated hedging instruments:

Derivatives designated as hedging instruments:

Interest rate swaps (Note 3)

Other current
assets

704

Accrued liabilities

(733

)

Other current
assets

457

Accrued
liabilities

(733

)

Total derivatives

704

(733

)

457

(733

)

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

Amount of Gain/(Loss)
Recognized in OCI

Sixteen Weeks Ended
January 23, January 17,
2011 2010

Derivatives in cash flow hedging relationship:
Interest rate swaps (Note 9) $ 1,437 $ (102 )

Amount of Loss Recognized
in Income
Location of Sixteen Weeks Ended
Loss January 23, January 17,
in Income 2011 2010
Derivatives not designated hedging instruments:
Natural gas contracts Occupancy and other $ — $ (59 )


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

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

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

A loss of approximately $2.8 million was reclassified from accumulated other comprehensive loss to interest expense during the quarter ended January 17, 2010. This amount represents payments made to the counterparty for the effective portions of the interest rate swaps that were recognized in accumulated other comprehensive loss and reclassified into earnings as an increase to interest expense. During 2011 and 2010, our interest rate swaps had no hedge ~~ineffectiveness and, in 2011, no~~ineffectiveness.

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


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

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

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

IMPAIRMENT, ~~DISPOSAL~~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 were not material in ~~either~~any period and primarily relate to certain excess Jack in the Box property and restaurants we have closed ~~and, in 2010,~~or plan to close. Additionally, these charges include the write-down of one underperforming Jack in the Box ~~restaurant.~~restaurant in the first quarter of 2010.

~~Disposal~~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

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

		adjusted based on the estimated disposal date, and accelerated depreciation is recorded. Other disposal costs primarily relate to charges from our ongoing re-image program and normal capital maintenance activities.

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


	Sixteen Weeks Ended				Quarter				Year-to-Date
	January 23,		January 17,		April 17,		April 11,		April 17,		April 11,
	2011		2010		2011		2010		2011		2010

Impairment charges	$	289	$	608	$	878	$	895	$	1,167	$	1,503
Losses on the disposition of property and equipment, net	$	2,796	$	1,182	$	2,628	$	1,178	$	5,424	$	2,360

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


	Sixteen Weeks Ended						Quarter						Year-to-Date
	January 23,			January 17,			April 17,			April 11,			April 17,			April 11,
	2011			2010			2011			2010			2011			2010

Balance at beginning of period	$	25,020		$	4,234		$	23,938		$	4,358		$	25,020		$	4,234
Additions and adjustments		805			420			(21	)		1,204			784			1,624
Cash payments		(1,887	)		(296	)		(1,754	)		(332	)		(3,641	)		(628	)

Balance at end of period	$	23,938		$	4,358		$	22,163		$	5,230		$	22,163		$	5,230

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

INCOME TAXES

		The income tax provisions reflect year-to-date effective tax rates of ~~35.2%~~34.8% in 2011 and ~~36.7%~~36.1% in 2010. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual 2011 rate could differ from our current estimates.

		At ~~October 3, 2010,~~April 17, 2011, our gross unrecognized tax benefits associated with uncertain income tax positions were $0.6 million, which if recognized would favorably ~~affect~~impact the effective income tax rate. ~~As of January 23, 2011, the~~The gross unrecognized tax benefits remain ~~unchanged.~~

		unchanged from the beginning of the fiscal year. It is reasonably possible that changes ~~of approximately $0.6 million~~ to the gross unrecognized tax benefits will be required within the next twelve months. These changes relate to the possible settlement of state tax audits.

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

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

RETIREMENT PLANS

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

Postretirement healthcare plans— We ~~also~~ 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						Quarter						Year-to-Date
	January 23,			January 17,			April 17,			April 11,			April 17,			April 11,
	2011			2010			2011			2010			2011			2010

Defined benefit pension plans:
Service cost	$	3,319		$	3,863		$	2,490		$	2,897		$	5,809		$	6,760
Interest cost		6,640			6,372			4,980			4,778			11,620			11,150
Expected return on plan assets		(6,379	)		(5,451	)		(4,784	)		(4,087	)		(11,163	)		(9,538	)
Actuarial loss		3,023			3,433			2,266			2,575			5,289			6,008
Amortization of unrecognized prior service cost		150			181			113			136			263			317

Net periodic benefit cost	$	6,753		$	8,398		$	5,065		$	6,299		$	11,818		$	14,697


Postretirement health plans:
Postretirement healthcare plans:
Service cost	$	24		$	33		$	18		$	24		$	42		$	57
Interest cost		488			442			366			331			854			773
Actuarial loss		62			57			47			43			109			100
Amortization of unrecognized prior service cost		10			19			7			15			17			34

Net periodic benefit cost	$	584		$	551		$	438		$	413		$	1,022		$	964

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


	Defined
	Benefit		Postretirement		Defined Benefit		Postretirement
	Pension Plans		Healthcare Plans		Pension Plans		Healthcare Plans

Net year-to-date contributions	$	1,040	$	583	$	1,560	$	912
Remaining estimated net contributions during fiscal 2011	$	12,000	$	600	$	1,400	$	300

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

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

SHARE-BASED EMPLOYEE COMPENSATION

We offer share-based compensation plans to attract, retain and motivate key officers, employees and non-employee directors to work toward the financial success of the Company. ~~During the quarter ended January 23,~~In fiscal 2011, we granted ~~the following~~ share-based compensation awards in ~~connection with our annual award grant in November:~~each period as follows:


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

Stock options		444,890	$	8.25		—	$	—		444,890	$	8.25
Performance-vested stock awards		220,343	$	21.74		—	$	—		220,343	$	21.74
Nonvested stock units		61,162	$	20.05		7,622	$	24.02		68,784	$	20.49

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

Sixteen Weeks Ended
January 23, January 17,
2011 2010

Stock options $ 1,512 $ 2,076
Performance-vested stock awards 738 371
Nonvested stock awards 186 203
Nonvested stock units 230 64
Deferred compensation for directors — 91

Total share-based compensation expense $ 2,666 $ 2,805

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


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

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

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

STOCKHOLDERS’ EQUITY

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

		*Repurchases of common stock*—In November 2010, the Board of Directors approved a program to repurchase ~~within the next year,~~ up to $100.0 million in shares of our common ~~stock.~~stock expiring November 2011. During 2011, we repurchased approximately ~~2.35~~3.5 million shares at an aggregate cost of ~~$50.0~~$75.0 million. As of ~~January 23,~~April 17, 2011, the aggregate remaining amount authorized for repurchase was ~~$50.0~~$25.0 million. In May 2011, the Board of Directors authorized a new program to repurchase up to $100.0 million in shares of our common stock expiring November 2012.

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


	Sixteen Weeks Ended						Quarter						Year-to-Date
	January 23,			January 17,			April 17,			April 11,			April 17,			April 11,
	2011			2010			2011			2010			2011			2010

Net earnings	$	32,401		$	24,248		$	6,802		$	17,680		$	39,203		$	41,928
Cash flow hedges:
Net change in fair value of derivatives		1,437			(102	)		(247	)		(2	)		1,190			(104	)
Amount of net loss reclassified to earnings		—			2,848
Net loss reclassified to earnings								—			1,871			—			4,719

Total cash flow hedges		1,437			2,746
Total								(247	)		1,869			1,190			4,615
Tax effect		(549	)		(1,048	)		95			(713	)		(454	)		(1,761	)

		888			1,698			(152	)		1,156			736			2,854
Unrecognized periodic benefit costs:
Amount of actuarial losses and prior service cost reclassified to earnings		3,245			3,690
Actuarial losses and prior service cost reclassified to earnings								2,433			2,769			5,678			6,459
Tax effect		(1,239	)		(1,409	)		(929	)		(1,056	)		(2,168	)		(2,465	)

		2,006			2,281			1,504			1,713			3,510			3,994

Total comprehensive income	$	35,295		$	28,227		$	8,154		$	20,549		$	43,449		$	48,776

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

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

January 23, October 3,
2011 2010

Unrecognized periodic benefit costs, net of tax benefits of $47,140 and $48,379, respectively $ (76,328 ) $ (78,334 )
Net unrealized gains (losses) related to cash flow hedges, net of tax effects of ($269) and $280, respectively 435 (453 )

Accumulated other comprehensive loss $ (75,893 ) $ (78,787 )


	April 17,			October 3,
	2011			2010

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

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

10.

AVERAGE SHARES OUTSTANDING

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

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

Sixteen Weeks Ended
January 23, January 17,
2011 2010

Weighted-average shares outstanding — basic 52,077 56,273
Effect of potentially dilutive securities:
Stock options 466 497
Nonvested stock awards and units 204 167
Performance-vested stock awards 136 80

Weighted-average shares outstanding — diluted 52,883 57,017

Excluded from diluted weighted-average shares outstanding:
Antidilutive 3,389 2,994
Performance conditions not satisfied at the end of the period 369 252

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


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

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

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


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

11.

VARIABLE INTEREST ENTITIES

		~~During the quarter ended~~In January ~~23,~~ 2011, we formed an entity, Jack in the Box Franchise Finance, LLC ~~(the “Financing Entity”~~(“FFE”), for the purpose of operating a franchisee lending program which will provide up to $100.0 million to assist franchisees in ~~re-imaging~~reimaging their restaurants. We are the sole equity investor in ~~the Financing Entity.~~FFE. The $100.0 million lending program is comprised of a $20.0 million commitment from ~~Jack in~~ the ~~Box~~Company in the form of a capital note and an $80.0 million Senior Secured Revolving Securitization Facility (“~~The~~FFE Facility”) entered into with a third party. The FFE Facility is a 12-month revolving loan and security agreement bearing a variable interest rate. As of ~~January 23,~~April 17, 2011, we have contributed ~~$5.0~~$8.0 million to ~~the Financing Entity~~FFE, $6.7 million of which has been used to assist franchisees in reimaging their restaurants, and ~~will~~FFE has not borrowed against its third party revolving credit facility. We expect to make additional contributions of $5.0 ~~– $15.0~~— $10.0 million to FFE during the remainder of fiscal 2011.

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

~~The consolidation of the VIE did not have a material effect on the Company’s consolidated financial statements as of and for the period ended January 23, 2011. The~~FFE’s assets ~~of the VIE~~ consolidated by the Company ~~consisting~~represent assets that can be used only to settle obligations of $4.6 million of cash, included in cash and cash equivalents, and $1.0 million of deferred financing fees, included in other assets, net, do not represent additional assets available to satisfy claims against the ~~Company’s general assets.~~consolidated VIE. Likewise, ~~the $0.2 million of VIE~~FFE’s liabilities consolidated by the Company do not represent additional claims on

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

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


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

Total assets	$	7,804


(1)		Consists primarily of amounts due from franchisees and $1.0 million of deferred finance fees included in other assets, net.

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

12.

LEGAL MATTERS

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

13.

SEGMENT REPORTING

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

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

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						Quarter						Year-to-Date
	January 23,			January 17,			April 17,			April 11,			April 17,			April 11,
	2011			2010			2011			2010			2011			2010

Revenues by segment:
Jack in the Box restaurant operations segment	$	462,331		$	531,249		$	335,318		$	403,361		$	797,649		$	934,610
Qdoba restaurant operations segment		55,700			45,451			48,455			35,583			104,155			81,034
Distribution operations		146,687			104,618			121,362			90,762			268,049			195,380

Consolidated revenues	$	664,718		$	681,318		$	505,135		$	529,706		$	1,169,853		$	1,211,024

Earnings from operations by segment:
Jack in the Box restaurant operations segment	$	54,202		$	41,934		$	12,973		$	29,311		$	67,175		$	71,245
Qdoba restaurant operations segment		1,089			2,515			1,795			1,992			2,884			4,507
Distribution operations		(655	)		(718	)
Distribution operations and other								(699	)		(153	)		(1,354	)		(871	)

Consolidated earnings from operations	$	54,636		$	43,731		$	14,069		$	31,150		$	68,705		$	74,881

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

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

14.

SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION

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


	Sixteen Weeks Ended				Year-to-Date
	January 23,		January 17,		April 17,		April 11,
	2011		2010		2011		2010

Cash paid during the year for:
Interest, net of amounts capitalized	$	3,471	$	8,044	$	7,068	$	12,299
Income tax payments	$	8,384	$	22,939	$	22,601	$	46,305

15.

SUPPLEMENTAL CONSOLIDATED BALANCE SHEET INFORMATION(in thousands)


	January 23,		October 3,		April 17,		October 3,
	2011		2010		2011		2010

Other assets, net:
Goodwill	$	84,182	$	85,041	$	101,514	$	85,041
Company-owned life insurance policies		81,757		76,296		84,137		76,296
Other		107,250		92,794		108,341		92,794

	$	273,189	$	254,131	$	293,992	$	254,131

16.

~~SUBSEQUENT EVENT~~

On February 14, 2011, we acquired 20 Qdoba restaurants from a franchisee for approximately $21 million, consistent with our strategy to opportunistically acquire franchise markets where we believe there is continued opportunity for development as a company market.

~~17.~~

FUTURE APPLICATION OF ACCOUNTING PRINCIPLES

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

1314

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

GENERAL

All comparisons between 2011 and 2010 refer to the ~~16-week~~12-week (“quarter”) and 28-week (“year-to-date”) periods ended ~~January 23,~~April 17, 2011 and ~~January 17,~~April 11, 2010, respectively, unless otherwise indicated.

For an understanding of the significant factors that influenced our performance during the quarterly periods ended ~~January 23,~~April 17, 2011 and ~~January 17,~~April 11, 2010, our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the ~~Condensed~~ Consolidated Financial Statements and related Notes included in this Quarterly Report and our Annual Report on Form 10-K for the fiscal year ended October 3, 2010.

Our MD&A consists of the following sections:

	•		*Overview*— a general description of our business ~~the quick-service dining segment of the restaurant industry~~ and fiscal 2011 highlights.

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

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

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

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

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

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

OVERVIEW

As of ~~January 23,~~April 17, 2011, we operated and franchised ~~2,213~~2,220 Jack in the Box quick-service restaurants (“QSR”), primarily in the western and southern United States, and ~~542~~549 Qdoba Mexican Grill (“Qdoba”) fast-casual restaurants throughout the United States.

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

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

	•		*Restaurant ~~Sales.~~Sales*~~System sales~~—Sales at ~~Jack in the Box~~ restaurants open more than one year (“same-store sales”) increased ~~1.1% in the quarter compared with an 11.2% decrease a year ago. System same-store sales at Qdoba restaurants increased 6.4% in the quarter compared with a 1.7% decrease a year ago.~~(decreased) as follows:


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

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

	•		*Commodity ~~Costs.~~Costs*—Pressures from higher commodity costs continue to impact our business. Overall commodity costs at our Jack in the Box restaurants increased approximately ~~2.3%~~5.0% in the quarter and 3.4% year-to-date compared to a year ago. We expect our overall commodity costs to increase approximately ~~3-4%~~4.5-5.5% in fiscal 2011.

	•		*New Unit ~~Development.~~Development*—We continued to grow our brands with the opening of new company-operated and franchise restaurants. ~~During the quarter system-wide,~~Year-to-date, we opened 816 Jack in the Box locations system-wide, including several in our newer markets, and 2030 Qdoba locations.


	•		*Franchising ~~Program.~~Program*—We refranchised 88114 Jack in the Box restaurants, while Qdoba and Jack in the Box franchisees opened a total of 1728 restaurants ~~during the quarter.~~year-to-date. We ~~remain on track to achieve~~are ahead of our ~~goal~~timeline to increase ~~the percentage of~~ franchise ownership into 70-80% of the Jack in the Box system, ~~to 70-80% by the end of fiscal year 2013,~~ and we were ~~more than 60%~~approximately 62% franchised at the end of the ~~first~~second quarter.

	•		*Share ~~Repurchases.~~Repurchases*—Pursuant to a share repurchase program authorized by our Board of Directors, we repurchased approximately ~~2.35~~3.5 million shares of our common stock at an average price of ~~$21.27~~$21.58 per share ~~during the quarter,~~year-to-date, including the cost of brokerage fees.

	•		*Franchise Financing ~~Entity.~~Entity*—We formed an entity, Jack in the Box Franchise Finance, LLC, for the purpose of operating a franchisee lending program used primarily to assist franchisees in reimaging their restaurants. During the quarter, FFE provided $6.7 million to franchisees. The impact of this entity on the Company’s condensed consolidated financial statements as of and for the period ended ~~January 23,~~April 17, 2011 was not material.

FINANCIAL REPORTING

At the end of fiscal 2010, we separated impairment and other charges, net from selling, general and administrative expenses in our consolidated statements of earnings. Prior year amounts have been reclassified to conform to this new presentation.

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.


	Sixteen Weeks Ended						Quarter						Year-to-Date
	January 23,			January 17,			April 17,			April 11,			April 17,			April 11,
	2011			2010			2011			2010			2011			2010

Statement of Earnings Data:
Revenues:
Company restaurant sales		65.7	%		75.2	%		63.6	%		73.3	%		64.8	%		74.4	%
Distribution sales		22.1	%		15.3	%		24.0	%		17.1	%		22.9	%		16.1	%
Franchise revenues		12.2	%		9.5	%		12.4	%		9.6	%		12.3	%		9.5	%

		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%


Operating costs and expenses, net:
Company restaurant costs:
Food and packaging (1)		32.5	%		31.7	%		33.4	%		31.5	%		32.9	%		31.6	%
Payroll and employee benefits (1)		30.8	%		30.5	%		30.5	%		30.2	%		30.7	%		30.4	%
Occupancy and other (1)		24.1	%		23.5	%		23.8	%		23.1	%		24.0	%		23.3	%

Total company restaurant costs (1)		87.4	%		85.7	%		87.7	%		84.8	%		87.5	%		85.3	%


Distribution costs (1)		100.4	%		100.7	%		100.4	%		100.2	%		100.4	%		100.5	%
Franchise costs (1)		47.3	%		45.5	%		50.1	%		45.6	%		48.5	%		45.6	%
Selling, general and administrative expenses		10.1	%		10.4	%		10.4	%		10.3	%		10.2	%		10.4	%
Impairment and other charges, net		0.5	%		0.4	%		0.9	%		0.7	%		0.7	%		0.5	%
Gains on the sale of company-operated restaurants		(4.2	%)		(1.4	%)		(0.2	%)		(0.6	%)		(2.5	%)		(1.0	%)
Earnings from operations		8.2	%		6.4	%		2.8	%		5.9	%		5.9	%		6.2	%
Income tax rate (2)		35.2	%		36.7	%		32.8	%		35.2	%		34.8	%		36.1	%


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

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

1516

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


	January 23, 2011									January 17, 2010									April 17, 2011									April 11, 2010
	Company			Franchise			Total			Company			Franchise			Total			Company			Franchise			Total			Company			Franchise			Total

Jack in the Box:
Beginning of period		956			1,250			2,206			1,190			1,022			2,212			956			1,250			2,206			1,190			1,022			2,212
New		5			3			8			9			8			17			7			9			16			16			12			28
Refranchised		(88	)		88			—			(23	)		23			—			(114	)		114			—			(53	)		53			—
Acquired from franchisees																				—			—			—			1			(1	)		—
Closed		—			(1	)		(1	)		—			(1	)		(1	)		(1	)		(1	)		(2	)		(1	)		(6	)		(7	)

End of period		873			1,340			2,213			1,176			1,052			2,228			848			1,372			2,220			1,153			1,080			2,233

% of system		39	%		61	%		100	%		53	%		47	%		100	%		38	%		62	%		100	%		52	%		48	%		100	%
Qdoba:
Beginning of period		188			337			525			157			353			510			188			337			525			157			353			510
New		6			14			20			2			4			6			11			19			30			3			7			10
Acquired from franchisees																				22			(22	)		—			—			—			—
Closed		—			(3	)		(3	)		—			(9	)		(9	)		—			(6	)		(6	)		—			(15	)		(15	)

End of period		194			348			542			159			348			507			221			328			549			160			345			505

% of system		36	%		64	%		100	%		31	%		69	%		100	%		40	%		60	%		100	%		32	%		68	%		100	%
Consolidated:

Total system		1,067			1,688			2,755			1,335			1,400			2,735			1,069			1,700			2,769			1,313			1,425			2,738

% of system		39	%		61	%		100	%		49	%		51	%		100	%		39	%		61	%		100	%		48	%		52	%		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 continually decrease while revenues from franchise restaurants increase. As such, company restaurant sales decreased ~~$75.2~~$67.1 million, or ~~14.7%~~17.3%, in the quarter and $142.2 million, or 15.8%, year-to-date, reflecting the decline in the number of Jack in the Box company-operated restaurants. This decrease was partially offset by increases in same-store sales at Jack in the Box and Qdoba restaurants and an increase in the number of Qdoba company-operated restaurants. The following table represents the approximate impact of these increases (decreases) on restaurant sales(in thousands):


	Quarter				Year-to-Date
Reduction in the average number of Jack in the Box company-operated restaurants		$	(107,900	)		$	(101,100	)	$	(209,000	)
Jack in the Box per-store average (“PSA”) sales increase			23,200				21,200			44,400
Qdoba			9,500				12,800			22,400

Total decrease in restaurant sales		$	(75,200	)		$	(67,100	)	$	(142,200	)

Same-store sales at Jack in the Box company-operated restaurants grew ~~1.5%~~0.8% in the quarter ~~due primarily to a 1.1% increase in transactions. Our average check grew 0.4%, reflecting price increases of approximately~~and 1.2%~~. California remained our strongest performing market.~~ year-to-date as follows:


	Quarter			Year-to-Date
Increase in transactions		0.1	%		0.7	%
Average check growth (1)		0.7	%		0.5	%


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

Distribution sales to Jack in the Box and Qdoba franchisees grew ~~$42.1~~$30.6 million in the quarter and $72.7 million year-to-date from a year ~~ago, primarily reflecting an~~ago. The increase ~~in the~~reflects a higher number of Jack in the Box franchise restaurants ~~serviced by~~that purchase ingredients and supplies from our distribution centers, which contributed additional sales of approximately ~~$36.2~~$28.0 million and ~~higher~~$64.2 million, respectively. Higher commodity ~~prices.~~prices also contributed to the increase in distribution sales in both periods.

Franchise revenues increased ~~$16.5~~$11.9 million, or ~~25.6%~~23.5%, in the quarter and $28.4 million, or 24.6%, year-to-date due primarily to a ~~17.2%~~28.6% and 26.0% increase in the average number of Jack in the Box franchise restaurants, which contributed additional royalties and rents of approximately ~~$13.8 million. Also, an increase~~$12.6 million and $26.4 million, respectively. In addition,

year-to-date increases in the number of restaurants sold to and developed by franchisees ~~in the quarter~~ resulted in higher revenues from initial franchise fees. These increases were partially offset by an increase in re-image contributions to franchisees, which are recorded as a reduction of franchise revenues. 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						Quarter						Year-to-Date
	January 23,			January 17,			April 17,			April 11,			April 17,			April 11,
	2011			2010			2011			2010			2011			2010

Royalties	$	31,225		$	26,034		$	25,120		$	20,352		$	56,345		$	46,386
Rents		46,083			36,856			36,643			28,190			82,726			65,046
Re-image contributions to franchisees		(1,280	)		(555	)		(1,435	)		(95	)		(2,715	)		(650	)
Franchise fees and other		5,093			2,271			2,203			2,196			7,296			4,467

Franchise revenues	$	81,121		$	64,606		$	62,531		$	50,643		$	143,652		$	115,249

Increase (decrease) in Jack in the Box franchise-operated same-store sales		0.9	%		(11.3	%)		(0.3	%)		(7.3	%)		0.4	%		(9.4	%)

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

Operating Costs and Expenses

Food and packaging costs increased to ~~32.5%~~33.4% of company restaurant sales in the quarter and 32.9% year-to-date from ~~31.7%~~31.5% and 31.6%, respectively, a year ago. ~~Our overall~~Overall commodity costs at our Jack in the Box restaurants increased approximately ~~2.3%,~~5.0% in the quarter and 3.4% year-to-date, driven by higher costs for beef, cheese, pork, dairy, shortening and ~~shortening,~~produce, partially offset by lower costs for poultry ~~bakery~~ and ~~produce.~~bakery. Additionally, the unfavorable impact of product mix and promotions was partially offset by ~~selling price increases.~~the benefit of higher prices.

Payroll and employee benefit costs were ~~30.8%~~30.5% of company restaurant sales in the quarter and 30.7% year-to-date, compared to ~~30.5%~~30.2% and 30.4%, respectively, in 2010, reflecting higher levels of staffing designed to improve the guest experience. ~~Also, an increase~~In addition, increases in ~~workers’ compensation and other insurance costs~~unemployment taxes in several states in which we operate negatively impacted these ~~costs by approximately 10 basis points as compared to last year.~~costs.

Occupancy and other costs were ~~24.1%~~23.8% of company restaurant sales in the quarter and 24.0% year-to-date compared with ~~23.5%~~23.1% and 23.3%, respectively, last year. The higher percentage in 2011 primarily relates to guest service initiatives and higher rent expense as a percentage of sales resulting from a greater proportion of company-operated Qdoba restaurants compared with last year. ~~The increase also includes additional costs relating to guest service initiatives, an increase in repairs and maintenance and higher credit card fees reflecting an increase in usage, which~~These increases were partially offset by lower utilities expense.

Distribution costs increased ~~to $147.3~~$30.9 million in the quarter ~~from $105.4~~and $72.9 million ~~last year,~~year-to-date, primarily reflecting an increase in the related sales. ~~These~~In the quarter, these costs ~~decreased to~~were 100.4% of distribution sales in ~~the quarter~~2011 compared with ~~100.7%~~100.2% a year ago ~~due~~ primarily reflecting lower PSA volumes. Year-to-date, these costs remained fairly consistent as a percentage of the related sales decreasing slightly to ~~leverage~~100.4% from ~~higher PSA sales at Jack in the Box and Qdoba franchise restaurants.~~100.5% last year.

Franchise costs, principally rents and depreciation on properties leased to Jack in the Box franchisees, increased ~~$8.9~~$8.2 million ~~in the quarter~~ to ~~47.3%~~50.1% of the related revenues in the quarter and $17.2 million to 48.5% year-to-date, from ~~45.5%~~45.6% of the related revenues in each period a year ago. The percentage increase is primarily due to higher depreciation and rent expense as a greater proportion of properties are leased to franchisees and the impact of higher re-image ~~incentive payments,~~contributions, which were partially offset year-to-date by leverage from higher franchise fee revenue.

1718

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


	Increase/			Increase/(Decrease)
	(Decrease)			Quarter			Year-to-Date

Advertising	$	(2,513	)	$	(4,221	)	$	(6,734	)
Refranchising strategy		(4,345	)		(713	)		(5,058	)
Incentive compensation		2,066			1,651			3,717
Cash surrender value of COLI policies, net		(1,014	)		(599	)		(1,613	)
Pension and postretirement benefits		(1,612	)		(1,209	)		(2,821	)
Qdoba general and administrative		1,414			1,642			3,056
Hurricane Ike insurance proceeds in 2010		1,004			—			1,004
Other		1,208			1,326			2,534

	$	(3,792	)	$	(2,123	)	$	(5,915	)

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, ~~our Jack in the Box~~ 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 ~~for~~at Qdoba due to sales growth and timing. The increase in our incentive compensation accruals in 2011 reflects the expected improvement in the Company’s ~~performance.~~results compared with performance goals. Changes in the cash surrender value of our company-owned life insurance (“COLI”) policies, net of changes in our non-qualified deferred compensation obligation supported by these policies are subject to market fluctuations and positively impacted SG&A by ~~$3.1~~$1.3 million in ~~2011.~~the quarter and $4.4 million year-to-date compared to $0.7 million and $2.8 million, respectively, a year ago. The decrease in pension and postretirement benefits expense principally relates to changes to the Company’s pension plan whereby participants will no longer accrue benefits after December 31, 2015. The increase in Qdoba costs is primarily due to higher pre-opening expenses and overhead to support ~~the recently acquired Boston market and new unit growth.~~our growing company-operated restaurant base.

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


					Quarter				Year-to-Date
	Sixteen Weeks Ended				April 17,		April 11,		April 17,		April 11,
	January 23,		January 17,		2011		2010		2011		2010
	2011		2010
Impairment charges	$	289	$	608	$	878	$	895	$	1,167	$	1,503
Losses on the disposition of property and equipment, net		2,796		1,182		2,628		1,178		5,424		2,360
Costs of closed restaurants (primarily lease obligations) and other		511		889		988		1,379		1,499		2,268

	$	3,596	$	2,679	$	4,494	$	3,452	$	8,090	$	6,131

Impairment and other charges, net increased ~~$0.9~~$1.0 million in the quarter and $2.0 million year-to-date from a year ago due primarily to losses ~~related to~~associated with our ongoing re-image program, which is targeted to be completed by the end of ~~2011.~~2011, and the rollout of signage related to our new logo.

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


	Sixteen Weeks Ended				Quarter				Year-to-Date
	January 23,		January 17,		April 17,		April 11,		April 17,		April 11,
	2011		2010		2011		2010		2011		2010

Number of restaurants sold to franchisees		88		23		26		30		114		53

Gains on the sale of company-operated restaurants	$	27,872	$	9,380	$	878	$	2,987	$	28,750	$	12,367

Average gain on restaurants sold	$	317	$	408	$	34	$	100	$	252	$	233

Gains were impacted by the number of restaurants sold and the specific sales and cash flows of those restaurants, which affected the changes in average gains recognized.

1819

Interest Expense, Net

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


	Sixteen Weeks Ended						Quarter						Year-to-Date
	January 23,			January 17,			April 17,			April 11,			April 17,			April 11,
	2011			2010			2011			2010			2011			2010

Interest expense	$	4,947		$	5,772		$	4,204		$	4,125		$	9,151		$	9,897
Interest income		(336	)		(337	)		(259	)		(252	)		(595	)		(589	)

Interest expense, net	$	4,611		$	5,435		$	3,945		$	3,873		$	8,556		$	9,308

Interest expense, net ~~decreased $0.8 million~~increased slightly in the quarter and decreased $0.7 million year-to-date compared with last year ~~due~~ primarily toreflecting lower average interest rates and borrowings compared to a year ~~ago.~~ago, offset in the quarter by interest expense incurred in connection with FFE.

Income Taxes

The tax rate ~~for~~decreased to 32.8% in the ~~first~~ quarter ~~was 35.2%~~and 34.8% year-to-date, compared with ~~36.7%~~35.2% and 36.1%, respectively, in ~~the prior year, with the decrease~~2010. The decreases are due primarily to the impact of the market performance of insurance investment products used to fund certain non-qualified retirement ~~plans and higher work opportunity tax credits.~~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 approximately ~~35-36%~~35%. 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 ~~$32.4~~$6.8 million, or ~~$0.61~~$0.13 per diluted share, in the quarter compared with $17.7 million, or $0.32 per diluted share, a year ago. Year-to-date, net earnings were $39.2 million, or $0.75 per diluted share, compared with ~~$24.2~~$41.9 million, or ~~$0.43~~$0.74 per diluted share, a year ago.

LIQUIDITY AND CAPITAL RESOURCES

~~General.~~General

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

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 ~~$5.9~~$4.1 million to ~~$16.5~~$14.7 million at the end of the quarter from $10.6 million at the beginning of the fiscal year. This increase is primarily due to cash flows provided by operating activities, proceeds and collections of notes receivable from the sale of restaurants to franchisees, and ~~cash flows provided by operating activities,~~borrowings under our revolving credit facility, offset in part by cash used to repurchase common stock, ~~and~~ purchase property and ~~equipment.~~equipment and acquire Qdoba franchise-operated restaurants. We generally reinvest available cash flows from operations to improve our restaurant facilities and develop new ~~restaurants or enhance existing~~ restaurants, to reduce debt and to repurchase shares of our common stock.

1920

Cash ~~Flows.~~Flows

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


	Sixteen Weeks Ended						Year-to-Date
	January 23,			January 17,			April 17,			April 11,
	2011			2010			2011			2010

Total cash provided by (used in):
Operating activities	$	45,805		$	8,923
Operating activities:
Continuing operations							$	81,844		$	26,646
Discontinued operations								—			(2,172	)
Investing activities		20,795			(9,708	)		(26,905	)		(5,944	)
Financing activities		(60,677	)		(39,709	)		(50,834	)		(59,071	)

Increase (decrease) in cash and cash equivalents	$	5,923		$	(40,494	)	$	4,105		$	(40,541	)

Operating Activities.Operating cash flows from continuing operations increased ~~$36.9~~$55.2 million compared with a year ago due primarily to the timing of property rent payments and a reduction in bonus and estimated income tax payments.

Investing Activities.~~Investing activity cash flows~~Cash used in investing activities increased ~~$30.5~~$21.0 million compared with a year ago due primarily to an increase in capital expenditures and cash used to acquire Qdoba franchise-operated restaurants in 2011, partially offset by an increase in the number of restaurants sold to franchisees and collections of notes receivables related to prior year refranchising ~~activity, partially offset by an increase in capital expenditures.~~activity.

Assets Held for Sale and ~~Leaseback.~~Leaseback —We use sale and leaseback financing to lower the initial cash investment in our Jack in the Box restaurants to the cost of the equipment, whenever possible. In 2011 we sold and leased back 12 restaurants, generating proceeds of $21.8 million compared with 19 restaurants and $36.0 million a year ago. As of ~~January 23,~~April 17, 2011, we had cash investments of ~~$53.0~~$51.3 million in 56 operating and under-construction restaurant properties that we expect to sell during the next twelve months.

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

Sixteen Weeks Ended
January 23, January 17,
2011 2010

Jack in the Box:
New restaurants $ 7,891 $ 16,272
Restaurant facility improvements 29,412 10,682
Other, including corporate 3,834 371
Qdoba 5,750 1,391

Total capital expenditures $ 46,887 $ 28,716

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


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

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

Total capital expenditures	$	74,129	$	42,632

Capital expenditures increased compared to a year ago due primarily to an increase in spending related to our Jack in the Box re-image program and new logo rollout, as well as new Qdoba restaurants, partially offset by a decrease in spending for new Jack in the ~~rollout of our new logo.~~Box locations. We expect fiscal 2011 capital expenditures to be approximately ~~$130-~~$125-$~~140~~135 million, including investment costs related to the Jack in the Box restaurant re-image program. We plan to open approximately 1918 Jack in the Box and 25 Qdoba company-operated restaurants in 2011.

Sale of Company-Operated Restaurants —. We have continued to expand franchise ownership in the Jack in the Box system primarily through the sale of company-operated restaurants to franchisees. The following table details proceeds received in connection with our refranchising activities(dollars in thousands):


	Sixteen Weeks Ended				Year-to-Date
	January 23,		January 17,		April 17,		April 11,
	2011		2010		2011		2010

Number of restaurants sold to franchisees		88		23		114		53

Cash	$	44,083	$	11,575	$	49,588	$	19,093
Notes receivable		—		2,730		—		2,730

Total proceeds	$	44,083	$	14,305	$	49,588	$	21,823


Average proceeds	$	501	$	622	$	435	$	412

In certain instances, we may provide financing to facilitate the closing of certain transactions. As of ~~January 23,~~April 17, 2011, the notes receivable balance related to prior year refranchisings was ~~$11.0~~$10.9 million, $4.3 million of which is expected to be fully repaid by the end of the fiscal year. We expect total proceeds of $85-$95 million from the sale of 175-225 Jack in the Box restaurants in 2011.

Acquisition of Franchise-Operated Restaurants —In 2011, we acquired 20

Qdoba franchise-operated restaurants in the Indianapolis market and two in Northern Florida for approximately $21.5 million. The purchase price was allocated primarily to goodwill, property and equipment and reacquired franchise rights. For additional information, refer to Note 2,Summary of Refranchisings, Franchisee Development and Acquisitions, of the notes to the condensed consolidated financial statements.

Financing Activities.Cash used in financing activities ~~increased $21.0~~decreased $8.2 million compared with a year ago primarily attributable to lower principal repayments on debt and an increase in borrowings under our revolving credit facility, offset in part by the change in our book overdraft related to the timing of working capital receipts and disbursements and an increase in cash used to repurchase shares of the Company’s common ~~stock, offset in part by lower principal repayments on debt compared with a year ago.~~stock.

Credit ~~Facility.~~Facility —Our credit facility is comprised of (i) a $400.0 million revolving credit facility and (ii) a $200.0 million term loan ~~with a five-year maturity,~~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 23,~~April 17, 2011.

At ~~January 23,~~April 17, 2011, we had ~~$195.0~~$192.5 million outstanding under the term loan, borrowings under the revolving credit facility of ~~$170.0~~$207.0 million and letters of credit outstanding of $35.8 million.

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

Interest Rate ~~Swaps.~~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 will effectively convert $100.0 million of our variable rate term loan to a fixed-rate basis beginning September 2011 through September 2014. Based on the term loan applicable margin of 2.50% as of ~~January 23,~~April 17, 2011, these agreements would have an average pay rate of 1.54%, yielding an “all-in” fixed rate of 4.04%. ~~Previously,~~From March 2007 to April 2010, we held two interest rate swaps that

effectively converted $200.0 million of our variable rate term loan borrowings to a fixed-rate ~~basis from March 2007 to April 1, 2010.~~basis. For additional information related to our interest rate swaps, refer to Note 4,Derivative Instruments, of the notes to the condensed consolidated financial statements.

Repurchases of Common ~~Stock.~~Stock —In November 2010, the Board of Directors approved a ~~new~~ program to repurchase ~~within the next year,~~ up to $100.0 million in shares of our common ~~stock.~~stock expiring November 2011. During 2011, we repurchased approximately ~~2.35~~3.5 million shares at an aggregate cost of ~~$50.0~~$75.0 million. As of ~~January 23,~~April 17, 2011, the aggregate remaining amount authorized for repurchase was ~~$50.0~~$25.0 million. In May 2011, the Board of Directors authorized a new program to repurchase up to $100.0 million in shares of our common stock expiring November 2012.

Off-Balance Sheet Arrangements.

Other than operating leases, we are not a party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources. We finance a portion of our new restaurant development through sale-leaseback transactions. These transactions involve selling restaurants to unrelated parties and leasing the restaurants back.

DISCUSSION OF CRITICAL ACCOUNTING ESTIMATES

We have identified the following as our most critical accounting estimates, which are those that are most important to the portrayal of the Company’s financial condition and results and that require management’s most subjective and complex judgments. Information regarding our other significant accounting estimates and policies is disclosed in Note 1 of our most recent Annual Report on Form 10-K filed with the SEC.

Long-lived Assets— Property, equipment and certain other assets, including amortized intangible assets, are reviewed for impairment when indicators of impairment are present. This review generally includes a restaurant-level analysis, except when we are actively selling a group of restaurants, in which case we perform our impairment evaluations at the group level. Impairment evaluations for individual restaurants take into consideration a restaurant’s operating cash flows, the period of time since a restaurant has been opened or remodeled, refranchising expectations and the maturity of the related market. Impairment evaluations for a group of restaurants take into consideration the group’s expected future cash flows and sales proceeds from bids received, if any, or fair market value based on, among other considerations, the specific sales and cash flows of those restaurants. If the assets of a restaurant or group of restaurants subject to our impairment evaluation are not recoverable based upon the forecasted, undiscounted cash flows, we recognize an impairment loss as the amount by which the carrying value of the assets exceeds fair value. Our estimates

of cash flows used to assess impairment are subject to a high degree of judgment and may differ from actual cash flows due to, among other things, economic conditions or changes in operating performance.

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

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

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

Restaurant Closing Costs— Restaurant closing costs consist of net future lease commitments and expected ancillary costs. We record a liability for the net present value of any remaining lease obligations, ~~net of~~less estimated sublease income, at the date we cease using a property. Subsequent adjustments to the liability as a result of changes in estimates of sublease income or lease cancellations are recorded in the period incurred. The estimates we make related to sublease income are subject to a high degree of judgment and may differ from actual sublease income due to changes in economic conditions, desirability of the sites and other factors.

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

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

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

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

NEW ACCOUNTING PRONOUNCEMENTS

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements use such words as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “forecast,” “goals,” “guidance,” “intend,” “plan,” “project,” “may,” “will,” “would” and similar expressions. These statements are based on management’s current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from expectations. You should not rely unduly on forward-looking statements. All forward-looking statements are made only as of the date issued. The estimates and assumptions underlying those forward-looking statements can and do change. We do not undertake any obligation to update any forward-looking statements. We caution the reader that the following important factors and the important factors described in the “Discussion of Critical Accounting Estimates,” and in other sections in this Form 10-Q and in our Annual Report on Form 10-K and other Securities and Exchange Commission filings, could cause our results to vary materially from those expressed in any forward-looking statement:

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

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

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

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

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

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

		addition, tight credit markets may negatively impact the ability of franchisees to fulfill their restaurant development commitments.

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

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

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

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

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

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

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

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

•		Significant demographic changes, adverse weather, political conditions such as terrorist activity or the effects of war, or other significant events (particularly in California and Texas where nearly ~~60%~~70% of our Jack in the Box system restaurants are located), new legislation, ~~and~~ governmental regulation, the possibility of unforeseen events affecting the food service industry in general and other factors over which we have no control can each adversely affect our results of operation.

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

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 23,~~April 17, 2011, 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 23,~~April 17, 2011, 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 23,~~April 17, 2011, would result in an estimated increase of ~~$3.7~~$4.0 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 23,~~April 17, 2011, we had no such contracts in place.

ITEM 4.CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules of the Securities and Exchange Commission, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

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

Changes in Internal Control Over Financial Reporting

There have been no significant changes in the Company’s internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q 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

ITEM 1A.RISK FACTORS

You should consider the risks and uncertainties described under Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended October 3, 2010, which we filed with the SEC on November 24, 2010, 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. These risks and uncertainties are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. If any of the risks or uncertainties actually occurs, our business and financial results could be harmed. In that case, the market price of our common stock could

decline. You should also refer to the other information set forth in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended October 3, 2010, including our financial statements and the related notes.

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

Our credit agreement provides for $500.0 million for the potential payment of cash dividends and stock repurchases, subject to certain limitations based on our leverage ratio as defined in our credit agreement. As of ~~January 23,~~April 17, 2011, the aggregate remaining amount authorized and available under our credit agreement was ~~$403.0~~$378.0 million.

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

Stock Repurchases.In November ~~2007, the Board approved a program to repurchase up to $200.0 million in shares of our common stock over three years expiring November 9, 2010. In November~~ 2010, the Board of Directors approved a ~~new~~ program to repurchase ~~within the next year,~~ up to $100.0 million in shares of our common ~~stock.~~stock expiring November 2011. As of ~~January 23,~~April 17, 2011, the aggregate remaining amount authorized for repurchase was ~~$50.0~~$25.0 million. The following table summarizes shares repurchased pursuant to ~~these programs~~this program during the quarter ended ~~January 23,~~April 17, 2011:

(c)
Total number
of shares (d)
(a) (b) purchased as Maximum dollar
Total number Average part of publicly value that may yet
of shares price paid announced be purchased under
purchased per share programs these programs
$   3,000,485
October 4, 2010 - October 31, 2010 — — — 3,000,485
November 1, 2010 - November 28, 2010 218,000 $   20.01 218,000 95,633,272
November 29, 2010 - December 26, 2010 1,238,236 $   20.97 1,238,236 69,630,469
December 27, 2010 - January 23, 2011 894,862 $   21.91 894,862 $   50,000,012

Total 2,351,098 $   21.24 2,351,098


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

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

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

2627

ITEM 6.EXHIBITS


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

3.1.1		Certificate of Amendment of Restated Certificate of Incorporation, which is incorporated herein by reference from the registrant’s Current Report on Form 8-K dated September 21, 2007.

3.2		Amended and Restated Bylaws, which are incorporated herein by reference from the registrant’s Current Report on Form 8-K dated May 11, 2010.

10.15(a)		Memorandum of Understanding clarifying date of employment with Qdoba Restaurant ~~Corporation.~~Corporation, which is incorporated herein by reference from the registrant’s Quarterly Report on Form 10-Q for the quarter ended January 23, 2011.

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

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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.

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.

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document


*		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.”

2728

SIGNATURE

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


	~~JACK IN THE BOX INC.~~

JACK IN THE BOX INC.		~~By:~~
By:	/S/ JERRY P. REBEL

	Jerry P. Rebel		~~Jerry P. Rebel~~
		Executive Vice President and Chief Financial Officer (principal financial officer) (Duly Authorized Signatory)
				~~(Principal Financial Officer)~~
		~~(Duly Authorized Signatory)~~

Date: ~~February 24,~~May 19, 2011

2829


	Amount of Gain/(Loss)
	Recognized in OCI
	Sixteen Weeks Ended
	January 23,		January 17,
	2011		2010

Derivatives in cash flow hedging relationship:
Interest rate swaps (Note 9)	$	1,437	$	(102	)


		Amount of Loss Recognized in Income
	Location of	Sixteen Weeks Ended
	Loss	January 23,		January 17,
	in Income	2011		2010
Derivatives not designated hedging instruments:
Natural gas contracts	Occupancy and other	$	—	$	(59	)