Jerry P. Rebel - EVP and CFO Linda A. Lang - CEO and Chairman of the Board Paul L. Schultz - President And COO

Christopher O'Cull - SunTrust Robinson Humphrey Jeffrey Omohundro - Wachovia Securities Harry DeMott - King Street Capital Management Rachael Rothman - Merrill Lynch Dean T. Haskell - Morgan Joseph & Co Joseph T. Buckley - Bear Stearns Jonathan Waite - McKay Capital Keith Seigner - Credit Suisse Steven Rees - J.P. Morgan

Good day everyone and welcome to the Jack in the Box Incorporated Fourth Quarter and Fiscal Year 2007 Earnings Conference Call. Today's conference is being recorded. A replay will be available on the Jack in the Box website starting today for those who could not attend the live meeting. During the question-and-answer period, please use your handset when asking a question. Do not ask a question over a speakerphone. At this time, for opening remarks and introductions, I would like to turn the call over to Mr. Jerry Rebel, Executive Vice President and Chief Financial Officer of Jack in the Box Incorporated. Please go ahead, sir. Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Thank you. Good morning and welcome to the Jack in the Box conference call. Joining me today are Chairman and CEO, Linda Lang; and President and Chief Operating Officer, Paul Schultz. During this morning session, we'll review the Company's operating results for the fourth quarter and fiscal 2007. We'll also discuss guidance for fiscal 2008 and review some long-term performance goals for the Company. All of this information was provided in this morning's news release. Please note all per share amount discussed during today's call reflects the two-for-one split of the Company's common stock. Following today's presentation, we will take questions from the financial community. Please be advised that our presentation contains forward-looking statements that reflect management's expectations for the future, which are based on current information. Actual results may differ materially from these expectations, based on risks to the business. The Safe Harbor statement in today's news release is considered a part of this conference call. Material risk factors as well as information relating to Company operations are detailed in our most recent 10-K and other public documents filed with the SEC. And now, I'd like to turn the call over to Linda Lang. Linda? Linda A. Lang - Chief Executive Officer and Chairman of the Board: Thank you Jerry. Good morning and thank you for joining us. Jack in the Box concluded fiscal 2007 with another strong quarter of restaurant operations that contributed to a second consecutive year of record earnings, and our third consecutive year of EPS growth in excess of 20%. Net earnings for the quarter and full year exceeded expectations as we effectively managed the commodity cost pressures that our industry is experiencing. Our strong performance throughout fiscal 2007 is the result of our success in executing the Company's strategic plan. In September, following its annual review of our long-term strategic plan, our Board of Directors again affirmed to the course that Jack in the Box is taking and approved the plan, four key underlined strategic initiatives: growing our business, reinventing the Jack in the Box brand, expanding franchising and improving our business model. Jerry will review the financial highlights for the quarter and year. So, during this morning's call I'd like to devote my comments to the four key initiatives of our strategic plan beginning with our growth strategy. The key goals of our multifaceted growth strategy are to grow earnings, same-store sales and other key operating and financial metrics as well as expand the Jack in the Box and Qdoba brands. I've already mentioned our impressive earnings growth for the year. Additionally, Company operated Jack in the Box restaurants experienced their highest full year increase in same-store sales since 1999 and the two-year cumulative increase of 10.9% is among our highest ever. Our Qdoba brand experienced strong sales growth as well and has now achieved 33 consecutive quarters of comparable sales growth. Our two restaurant brands added a combined 145 locations in 2007. Growth of our Jack in the Box brand occurred primarily in existing markets as we pursued opportunities to increase our market penetration. We also entered a new contiguous market, Corpus Christi, Texas near the end of the year and our first restaurant there set an opening week's sales record for the Company. In 2008, we plan to continue expanding Jack in the Box into other contiguous markets in Colorado, New Mexico and Texas through both Company investment and franchise development. In fact earlier this week we opened our first restaurant in the Denver market and sales have been very strong since our opening on Monday. Qdoba continued its aggressive expansion in 2007 and achieved its fourth consecutive year of average unit growth in excess of 20%. Qdoba is a clear leader in the fast casual segment of the restaurant industry and last month achieved a growth milestone, when its 400th restaurant opened in Boise, Idaho. Moving on to our second strategic initiative. We are about three years in to the holistic re-invention of the Jack in the Box brand through major enhancements to our menu, guest service and restaurant environment. Our goal is to differentiate Jack in the Box from the competition and to deliver a restaurant experience superior to that typically found in the QSR segment. When it comes to our menu, few chains can match the quality and variety that Jack in the Box now offers. In fiscal 2007, we became the first major QSR chain to serve Sirloin Steak when we rolled out products like the Sirloin Steak and Mushroom Ciabatta and the 100% Sirloin burger. This high quality ingredient can serve as a platform to launch additional innovative products as we did in the fourth quarter when we added the Sirloin Steak & Egg Burrito, to our breakfast menu. We continue to maintain a strong pipeline of new products in various stages of development or test. We are also raising the bar when it comes to guest service by building upon recent internal service initiatives at Company restaurants to help attract high quality applicants for team member position which can ultimately improve productivity, maximize retention and reduce training costs. We are also looking to leverage new technologies to improve speed of service and guest satisfaction. As an example in 2007, we equipped all Jack in the Box restaurants with contact lists credit card readers which enables our guest to pay at the front counter or drive-through simply by holding in front of the readers their credit cards embedded with RFID technology. We are also testing self serve kiosks which offer guests an alternative method of ordering inside our restaurants and outside of our restaurants at certain high volume locations we are positioning team members near the menu board to process drive-through orders utilizing a portable wireless communications device. The third aspect of brand reinvention is a major renovation of our restaurant facility. In fiscal 2007, 200 company and franchise restaurants were re-imaged with a comprehensive program that includes a complete redesign of dining rooms and common areas. We have seen positive sales trends and higher attribute ratings and markets where all of our restaurants have been re-imaged. We expect the entire Jack in the Box system including franchise locations to be re-imaged over the next three to four years. In addition to growth and brand reinvention, our third strategic initiative is to continue expanding our franchise operations to generate higher margins and returns for the Company while mitigating business costs and investment risks. In fiscal 2007, we sold 76 Company Jack in the Box restaurants to franchisees. Additionally, franchisees developed more new Jack in the Box locations than ever, and entered into development agreement to build more locations over the next few years. Many of those restaurants will be in new contiguous markets. In 2008, for example, our franchisees plan to expand the Jack in the Box brand into Albuquerque, New Mexico, and two Texas markets Abilene/San Angelo and Midland/Odessa; nearly, a third of the Jack in the Box system is franchised. Through continued re-franchising and development of new franchised restaurants, our long-term goal is to grow the percentage of franchise ownership by approximately 5% annually and to move towards the range of franchise ownership more closely aligned with that of the QSR industry. Ultimately, approximately 70% to 80%. Our Qdoba system is predominately franchised, and our goal is to continue expanding that brand is primarily through franchised growth. Our fourth major strategic initiative is to improve our business model, as Jack in the Box transitions to a new business model comprised to predominately franchised restaurants. We plan to improve restaurant profitability and returns and increase the long-term value of the business. We'll also focus on profit improvement initiatives to reduce G&A and improve operating margins without negatively impacting our guest experience. Other initiatives include a new restaurant prototype featuring a reengineered kitchen. Before turning the call over to Jerry, I want to take this opportunity to thank our dedicated employees for executing our strategic initiative and producing such impressive results in fiscal 2007. The year was not without its challenges but our employees' resourcefulness and perseverance kept this organization on track with its goal. I'd like to also comment on a recent challenge that our organization overcame in October when wildfire struck Southern California. Poor air quality caused by the fires in San Diego County prompted us to voluntarily close our corporate offices although all essential functions remained as that. 15 company and franchised restaurants in San Diego were temporarily closed for varying lengths of time, from a few hours to a few days due to evacuations or power outages. But none of our restaurants or facilities suffered damage and our sales were mostly unaffected. I am proud to report that in addition to donating several 1000 meals to the American Red Cross evacuation centers and firefighters and others on the frontline, the Jack in the Box foundation has committed 120,000 to the American Red Cross and other relief agencies. In total including, food and services are supported estimated at about 175,000. And now, Jerry will take a closer look at financial side of the business. Jerry? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Thank you Linda. Our per share earnings of $0.43 in the fourth quarter exceeded the high end of the range forecast by the company and analysts first call consensus by $0.05. With $0.04 of the improvement due primarily to higher sales, improved labor efficiencies and leverage on fixed costs, with $0.01 of the improvement resulting from fewer shares outstanding due to stock repurchases during the quarter. This compares with $0.46 of share earned in 2006 which included approximately $0.12 a share from the sale of the company's 25 restaurants in Hawaii. As Linda mentioned, Jack in the Box just completed its third consecutive year of EPS growth above 20%. In fiscal 2007, we earned $1.88 per diluted share versus a $1.50 last year. As a reminder, this year's performance included an approximate $0.04 per share benefit form an insurance settlement in our third quarter. Driving the earnings growth this year was a significant increase in same-store sales. In the fourth quarter, same-store sales at company operated Jack in the Box restaurants increased 5.2% on top of the year ago increase of 5.9%. Contributing to the sales growth was a price increase that we took mid quarter on certain products and add-on ingredients. We continue to evaluate opportunities for additional price increases in 2008. For the full year, same-store sales increased 6.1% which contributed to a double digit two-year cumulative increase of 10.9%. Restaurant operating margin in the quarter was approximately 60 basis points higher than our internal forecast due to fixed cost leverage from higher sales this year and labor efficiencies. Our fourth quarter price increase helped offset increases in commodity costs. As expected, commodity prices remained high in the quarter. Beef cost, which moderated somewhat with increases in production were up 6% in the fourth quarter versus last year; slightly higher than expected, but lower than the 9% increase we saw in the third quarter. Cost for eggs and cheese were up more than 30% and 40% respectively, versus the fourth quarter of last year, as worldwide demand for dairy products remained strong. You'll note in our press release, that we've modified our approach on guidance to provide more insight on longer term key metrics and targets. We will continue to provide quarterly forecast on our same-store sales expectations for Jack in the box and Qdoba but we will no longer provide quarterly earnings guidance. As we accelerate the rate of our re-franchising strategy which is planned to include a 100 to 120 restaurants in 2008, our ability to accurately predict the quarterly impact of such transactions becomes more difficult. In fiscal 2008, we expect to earn between a $1.98 and $2.06 per diluted share on same-store sales growth of 2% to 4% versus the $1.88 per share last year and again the $1.88 includes an insurance settlement in the third quarter with that $0.04 to our 2007 earnings. Some of the business initiatives supporting the long-term strategies that Linda outlined earlier, are expected to add costs that are included in our earnings guidance of a $1.98 to $2.06. These initiatives which will help position our business and future growth includes financial assistance of $25,000 per restaurant to incentivise franchisee to re-image their restaurants more quickly. We estimate this contribution to our franchisees will reduce earnings by about $0.04 per diluted share in fiscal 2008. Our franchise community is planning on re-imaging a 100 to 150 restaurants in 2008, up from 13 in 2007. We plan to increase the number of company locations re-imaged in 2008 to approximately 250. We are also accelerating the installation of new kitchen equipment which will accommodate new menu platform roll outs and are expected to reduce energy and labor costs and improve speed of service. Facility charges associated with these and certain other improvements are expected to reduce diluted EPS by about $0.06 compared to those similar costs in 2007. And finally, restaurant operating margin is expected to be down approximately 20 basis points from 2007 due primarily to higher commodity costs. Generally, we expect commodity costs overall to be up in the 1% to 2% range over 2007, with higher increases for cheese and shortening. However, for the first two quarters we expect commodity costs to increase in the 3% to 5% range, again with significant increases in cheese and shortenings and more modest increases for beef. And now, I'd like to turn the call back over to Linda. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Thanks Jerry. We'll go ahead and take your questions at this time. Question And Answer

Thank you. [Operator Instructions]. The first question comes from Mr. Chris O'Cull from SunTrust. You may ask your question. Christopher O'Cull - SunTrust Robinson Humphrey: Good morning guys. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Good morning Chris. Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Good morning Chris. Christopher O'Cull - SunTrust Robinson Humphrey: Jerry, first question regarding the guidance. Your long-term guidance closed for 12% to 15% earnings growth. Yet the high end of your fiscal '08 guidance falls short of that long-term range. Would you explain what prevented you guys from targeting the longer term growth rate in '08? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Yes Chris, couple of things. Why, I think is the higher food costs and we are continuing to see higher food cost as everybody else is and you may recall that our first two quarters of last year saw relatively and significantly lower food costs than what we've been experiencing here in the last two quarters. So, that's the piece of it. The other piece though is the investments that we are making in our strategy, which includes the franchise assistance and the additional facility charges. So, I think if you add back the facility charges and the re-image assistance, they are non-comparable. I mean, they are real costs, they are not comparable with what we did in 2007; you get very close to that 12% to 15% range. In fact you may actually be a little north to that 12% to 15% range. Christopher O'Cull - SunTrust Robinson Humphrey: Great, thanks. And Linda, one question regarding just your plan. One of your competitors has benefited in terms of constant franchise development from increasing their national cable advertising each year, and I know you guys utilize national cable as part of your media strategy. But I was wondering at what point did your plan call for materially higher usage of national cable? Linda A. Lang - Chief Executive Officer and Chairman of the Board: Right. Chris, we've actually increased our national cable advertising quite significantly over the last couple of years, and we plan to increase that again in 2008. So, we are ramping that up, the spending in national cable advertising. Christopher O'Cull - SunTrust Robinson Humphrey: Can you describe... can you quantify what percentage of your media budget is dedicated to that medium? Linda A. Lang - Chief Executive Officer and Chairman of the Board: Yes. We really haven't shared that Chris. It's not as significant as the Sonic advertising. I think you are probably referring to Sonic. It's not as significant but it's definitely much more than we have three years ago. Christopher O'Cull - SunTrust Robinson Humphrey: Okay. And then Linda if you consider the pace and approach you are using to grow the Qdoba brand coupled with the pace of re-franchising Jack, it doesn't appear that Qdoba whatever be a meaningful benefactor to growth given that by the time it becomes a meaningful contributor to income it may likely be pretty far along it's development cycle. I guess my question is; is Qdoba really another meaningful growth vehicle for the company? Linda A. Lang - Chief Executive Officer and Chairman of the Board: We believe it is. They have grown significantly 20% or more in terms of unit growth or same-store sales growth has been very impressive and there's still a lot in development under development agreement. So, we do believe that's a growth vehicle for us. Christopher O'Cull - SunTrust Robinson Humphrey: Okay. At what point does it become more of a contributor though to the income and growth to the -- I mean the income of the Company you think? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: It's our -- Chris, we're adding in the neighborhood of 20 restaurants plus or minus this year in terms of the quarter growth. We're also looking at -- we're going to spend more time going in to some markets such as Manhattan. So, we are looking at a more of an urban approach to the Company growth as related to Qdoba and again there they are growing in the 60 to 70 units per year on the franchising size. So, their earnings were up significantly this year and you'll see that when you look at our 10-K and they are probably in the neighborhood of about 5% of our total earnings right now. So, and that's up quite significantly from just couple of years ago. Christopher O'Cull - SunTrust Robinson Humphrey: Okay, great and then one last question and I'll get back in the queue. In order to get a handle on the benefits you're getting from trade down versus new product introductions, can you give us some information or help quantify the impact your mix is having or the value offerings versus premium products? Are you seeing any type of mix shift there or they're growing at an equal rate? Linda A. Lang - Chief Executive Officer and Chairman of the Board: The mix shift between the premium and value? Christopher O'Cull - SunTrust Robinson Humphrey: Right, your lower price point items. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Yes, we've seen -- where we've seen the gain is really in the trade-up to our premium item. So, we're not seeing significant trade-down to our bottom tier items. Christopher O'Cull - SunTrust Robinson Humphrey: So, the premium products are becoming a bigger contributor to your overall product mix? Linda A. Lang - Chief Executive Officer and Chairman of the Board: Yes, correct. Christopher O'Cull - SunTrust Robinson Humphrey: Okay. Thank you guys.

Our next question comes from Mr. Jeff Omohundro of Wachovia. You may ask your question. Jeffrey Omohundro - Wachovia Securities: Thanks. Couple of facilities sort of question. I guess first could you talk a little bit in the new prototype you mentioned reengineered kitchen just elaborate a little bit on that and particular do you see an opportunity in those speed of service? Paul L. Schultz - President And Chief Operating Officer: This is Paul. Yes. Some of the key components of the new kitchen are increased capacity through the installation of a dual sided grill, a dual assembly line of the kitchen is certainly more open and showcases are quality to a much greater degree. There is quite a number of enhancements. Jeffrey Omohundro - Wachovia Securities: And --: Linda A. Lang - Chief Executive Officer and Chairman of the Board: Jeff we have experienced with that with our opening and for Denver markets and we been able to execute at very high sales volume. Jeffrey Omohundro - Wachovia Securities: And how are the kitchen enhancements that you are currently doing and the remodeling. How is that flowing through the P&L the spending on that? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: This is Jerry. You won't see a significant amount of that flow through this year. Whether you will start to see because we are rolling that out this year. We completed a little less in the third quarter of that and we will complete the rest of that over the balance of the year which is... what's driving the facility charges. You will start to see there a reduction in utilities. One of the pieces in equipment uses significantly less energy than what our current piece of equipment does. We're also adding in some refrigerated storage right at the point of assembly which will significantly improve our ability to continue to air high quality premium products to our menu offerings, and then also in some locations we're putting in a clamshell grill which will also help the speed of service. Paul L. Schultz - President And Chief Operating Officer: This is Paul again. I would add to that that the combination of those elements also realizes some improvement in productivity. Therefore there is some labor pickup and you'll actually see some of that labor pickup this year to help offset the increase in the food costs. We also have included some utility savings as a result of that also. But you'll see much more of that impact 2009 and beyond as we complete this project. Jeffrey Omohundro - Wachovia Securities: When you think about these potential enhancements the speed of service, plus things like the contact list, credit card payment, the handheld ordering devices and so forth. What do you see in terms of the opportunity there in terms of magnitude? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: We really haven't quantified it at this point. Jeffrey Omohundro - Wachovia Securities:: Okay. Thank you. Linda A. Lang - Chief Executive Officer and Chairman of the Board: You're welcome.

The next question comes from Mr. Chris O'Cull of SunTrust. You may ask your question. Christopher O'Cull - SunTrust Robinson Humphrey: Well, I got back in the queue but it was little quicker than I thought. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Hey Chris. Christopher O'Cull - SunTrust Robinson Humphrey: Hey. Just a follow-up on the guidance; does your guidance for '08 does it reflect share repurchases? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: It reflects the share repurchases that we completed in the fourth quarter, and it assumes that average shares outstanding to be flat with what the average works in the fourth quarter, Chris. Christopher O'Cull - SunTrust Robinson Humphrey: Okay, great. And then, Jerry would you breakdown the CapEx plan for '08 in a little more detail? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Chris, we haven't we have not done that historically. We're not prepared to do that today. We may begin to break that out a little bit more in detail. What I can tell you though is the significant increase from the 154 this year to the 175 to 185 is due to a couple of things. One, we accelerated the opening of some restaurants into the fourth quarter this year late that we had originally thought are going to be opening up in the first quarter. We actually had the opposite of construction delay which you don't usually get. Some of the cash flow for those openings will actually occur early in the first quarter of 2008. So, that's about $7 million of that increase, and then the remaining piece of the increase is really due to the kitchen enhancements and the increase in the re-image program. So, its similar CapEx to this year expect for those three items. Christopher O'Cull - SunTrust Robinson Humphrey: Okay, great. And then Paul, can you kind of describe your day par guest count trends, and then some detail in terms of just breakfast, lunch, dinner, snack? Paul L. Schultz - President And Chief Operating Officer: They are actually all up. Christopher O'Cull - SunTrust Robinson Humphrey: Okay, great. And Paul one other question, I believe most of the industry doesn't provide an incentive to franchisees to re-image their units. Could you explain why the company felt they needed to do that and whether you are seeing any ancillary benefits from the franchised community from this program? Paul L. Schultz - President And Chief Operating Officer: Well, we simply wanted to accelerate the rate at which they complete the programs. We each benefit when that occurs. Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Chris, just from a financial perspective they... we will receive obviously the 5% royalties, but remember we also get about 3.5% rent spread on average for our small franchised locations since we control the lease. So it really is a two prong strategy, one we get the increase on those royalties and rents much more quickly and it also there is just a great overhang for the brand. You get the entire brand up to the re-image standard much more quickly and well that's difficult to quantify that. We just pick up the right thing to do from the overall brand image perspective. Christopher O'Cull - SunTrust Robinson Humphrey: So the rental markup is on a variable arrangement? Paul L. Schultz - President And Chief Operating Officer: Yes it is. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Yes. Christopher O'Cull - SunTrust Robinson Humphrey: Great, okay thanks guys.

Your next question comes from Harry DeMott of King Street Capital Management. Your may ask your question Harry DeMott - King Street Capital Management: Hey guys and gal, I've got a couple of them. Thanks for taking it. You put in pricing of about 2% in the quarter and then 1.3% for the year. Looking at the bunch of the comps you guys seems like a bunch of people have taken higher pricing. Is there... was there a strategy in place to keep that price increase lower and could there be more in the future or this is just sort of a go slow, try to keep it limited idea? Linda A. Lang - Chief Executive Officer and Chairman of the Board: Yes, we have 2% in our plan for next year for '08 and that's actually double what we typically do in a year, we generally budget around 1% price increase and so we're... we take a pretty cautious approach to pricing, given the current economic environment. In a effect that we frankly are already kind of at the high end in terms of average check for our segment. So we were very conservative in terms of testing on any price increases that we actually put it in the marketplace, we test it prior to rolling out price increases. So we continue to evaluate and look at opportunities to take price increases where we feel is appropriate. Harry DeMott - King Street Capital Management: And then the... thanks for that Linda, the Qdoba pricing, you gave good pricing details and offered Jack do you talk about pricing at Qdoba? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: We have... this is Jerry. Qdoba did take a price increase in the fourth quarter also it was a little more aggressive than what we were but it's important to know that their key competitor at the Portway [ph] has been very aggressive on taking price over the last couple of quarters and that gives us a bit more license to go a little higher. Harry DeMott - King Street Capital Management: Okay. And then the, of the 350 re-imaged restaurants that you have done, how many of those have been done by franchisees as opposed to you guys and sort of how does the new contracts with franchisees different new builds I would assume they are obviously new image restaurants or the new planned restaurant but how do they, when you sell some of these things how is that re-imaging plan get worked into that? Paul L. Schultz - President And Chief Operating Officer: They, we have... franchisees so far have done 12 or 13 restaurants this year and we plan on them doing a 100-150 next year and so clearly that's been accelerated and we believe that that is do in part to the $25,000 worth of re-image assistance. With respect to the new restaurants, franchisees opened up 16 this year which is more than what they have ever done in the past and our development agreements in selling restaurants to franchisees has increased our development agreements and they plan to open up somewhere in the neighborhood of that 16 next year, slightly lower than that. So we are very pleased with that and here is... what was the other part of the question? yes when we sell restaurants to franchisees if they have been re-imaged that cost gets passed on to the franchisee. Harry DeMott - King Street Capital Management: Okay. And I have two real quick ones. What was D&A for the year? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: GA? Harry DeMott - King Street Capital Management: Depreciation and amortization? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Amortizationabout $94 million. Harry DeMott - King Street Capital Management: About $94 million, and then the other last question was if you look at your out year plan of 2010, 2011 you claimed that your CapEx would go back down to more normal $125 million. Is that possible that that number is... I would say conservatively high in so much as you plan on continuing to re-franchise restaurants and continue to re-sell them off. So, if you accelerate that into '08, '09, '10 by the time you get out to '11 and all those things are re-imaged, you should have thought fewer restaurants on your books. So, is that CapEx number potentially lower than your comfort range so to speak? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Well, you may have noticed that there are two words following the 125 language that were left. So, we do think it has potentially to go to lower. The wild part here though is to the extent that we build in new markets with company money to seed for franchise locations. So, we may go in to a new contagious market, build out 5, 6 restaurants and so and sell those to franchisees. We keep the CapEx up in that range, that's why we said 125 or less. But, other than that Harry as follow on it would... it has to be lower in that. Harry DeMott - King Street Capital Management: Thanks so much. Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Yes. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Thank you.

Our next question comes from Rachael Rothman of Merrill Lynch. You may ask your question. Rachael Rothman - Merrill Lynch: Hi, everybody. Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Hey Rachael. Rachael Rothman - Merrill Lynch: Couple of quick questions? Well, first thank you so much help for advocating for additional disclosure, I really appreciate that though. Thank you guys. Jerry P. Rebel - Executive Vice President and Chief Financial Officer: I'll get a big bonus this year. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Yes. Rachael Rothman - Merrill Lynch: I work at Merrill. So, clearly I can give it you but I hope somebody does. So, as you guys kind of look back at fiscal 2007, your results finally came about a $1.88, which I think was about 25% above your initial guidance? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Yes. Rachael Rothman - Merrill Lynch: So, can you talk about what surprised you the most to the upsides because obviously a delta 25% is pretty big, and how should we think about potential drivers of upside for fiscal 2008 since your current EPS guidance is below your three-year target? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: A couple of things there Rachel, and then I may not hit all of them, and then I may not give you all of them what the exact precision. But there were a few things that wouldn't have driven that. One, the initial guidance I think your pretty clear on this did not include the impact of share repurchases with the Dutch tender and then the follow-on to complete that that's tender work. We think that share repurchases over the guidance probably added somewhere in the neighborhood of $0.06 a share. Well, we didn't sell some more restaurants than we thought; the average gains were higher, that was high worth about $0.08 a share and these are round numbers. And, then... but clearly the vast majority of that was due to sales which were at 6.1%, which was near probably 60% higher than what we had originally guided to, and restaurant operating margin was 40 basis points higher. So, we did get tremendous flow through on those sales, and that's in spite of the fact that we had significant food cost pressures in Q3 and Q4. We're not for that. I think we would have beat the numbers by much higher but it was all because of... for the vast majority it was high quality flow through on much higher sales. Rachael Rothman - Merrill Lynch: Okay and given your outlook for 2% to 4% comps next year. How should we think about your ability to leverage margin? What level of same-store sales do you think is kind of the base level needed to drive margins? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: On a normal year, Rachael we would... it takes somewhere between 1% and 2% to stay flat on restaurant operating margin. So, normally you'd expect to see improvements through restaurant operating margin at levels above that, and it is not pro-rata. It's a... we get significant uplift to higher those sales growth. This year however, 2% to 4%, we're actually suggesting the restaurant operating margins going to be down by about 20 basis points. And its due to the higher food cost we're expecting in the first half of the year. You may remember that we had very low food costs in our first two quarters, and so we have those to roll lower and I... we are not to that. We would see leverage. But, we are seeing leverage within that restaurant operating margin down about 20 basis points. We are seeing leverage on the fixed cost. We are seeing leverage on labor. Rachael Rothman - Merrill Lynch: And can you just remind us do you guys have 10b5-1 in place or how do you go by your repurchases? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Yes. We have used virtually everything in the past and the 10b5-1 open market purchases to the Dutch tender; although other than the Dutch tender we've never actually disclosed previously how we plan to do those and we're going to stick with that practice. Rachael Rothman - Merrill Lynch: Okay. And then in terms of the costs, the management costs associated with your company operated restaurants that are allocated to G&A. Can you talk about... are you carrying your district managers or your regional managers or any of those costs in your G&A, and what are the opportunities to leverage your G&A as you re-franchises your coming same-stores [ph]? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Yes. We are showing reductions in those costs as we continue to sell restaurants, and you will see while we haven't given you the exact number on that we are suggesting that G&A will be down in the 10% range next year, and that due in large parts the reductions in the field related G&A because of selling 100 to 120 restaurants? Rachael Rothman - Merrill Lynch: So, just categorically can you quickly breakdown for us what titles you have in restaurant operating costs and which are in G&A, not the dollar value but structurally what you categorize that? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Their functions? Rachael Rothman - Merrill Lynch: Yes. Jerry P. Rebel - Executive Vice President and Chief Financial Officer: The people in the field would be your above unit level management meaning area coaches and Regional Vice Presidents and office staff and associated support staff. Rachael Rothman - Merrill Lynch: And your district managers that oversea, I don't know are they make up at number 5 to 7 restaurants, maybe they go in one of their restaurants every single day but on a sign to particular one unit. Are they in G&A or they at the restaurant level? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: They are in G&A. Rachael Rothman - Merrill Lynch: Okay. So, everybody is above the restaurant level managers? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: An area coach Rachael. Rachael Rothman - Merrill Lynch: Okay. So, everybody above the restaurant mangers in G&A? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Right. Correct. Rachael Rothman - Merrill Lynch: Great. Thank so much. Jerry P. Rebel - Executive Vice President and Chief Financial Officer: You're welcome. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Thanks Rachael.

Our next question comes from Mr. Dean Haskell of Morgan Joseph. You may ask your question. Dean T. Haskell - Morgan Joseph & Co: Good morning. Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Good morning Dean. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Hey Dean. Dean T. Haskell - Morgan Joseph & Co: How are you Linda? Linda A. Lang - Chief Executive Officer and Chairman of the Board: Good. How are you doing? Dean T. Haskell - Morgan Joseph & Co: And Allen, and God I'm sorry. I've forgotten Mr. Jerry Rebel. Dean T. Haskell - Morgan Joseph & Co: Jerry and Paul. We've got a whole bunch of people here. Dean T. Haskell - Morgan Joseph & Co: A whole crowd here. Okay. Commodities, first quarter, second quarter, are up pretty strong 3% to 4%. So, you are looking for those to be down a couple of percent in the back half for the year. Where do you think that's going to come from Jerry? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: It is likely to come from cheese. Cheese was up in the all, it was over $2 for a while averaging in the 190 range, much of those timeframe. You can get cheese right now, and for those months between $1.60 and $1.17. So, we have taken some protection there as we feel pretty good about that. And, we expect beef to be down slightly in the 1% to 2% range for the second half of the year. Again we are rolling over high numbers. You may remember beef 50s were at $0.83 a pound for us in the third quarter. They already come down in the fourth quarter for us at $0.57 of pound. And, so what we are seeing some reductions in that and we are not forecasting them to be up in to the 80s and even higher than that in the back half of the year. Those are the two key pieces. Dean T. Haskell - Morgan Joseph & Co: Okay. What is your beef contract run out? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: We have... we do lock in prices for beef from time-to-time. In fact we always have something locked in. Right now we have our import 90s pretty well locked in for most of the first quarter. The 50 tend to flow on the open market. Dean T. Haskell - Morgan Joseph & Co: Okay. So you are using an import 90s. So, any further weakness in the dollar would not be good. On the serving side -- Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Dean just from me [ph]. What we have seen is we have not seen. I don't know if anybody else that. We have not seen beef 50 move up because of weakness in the dollar. They have been pretty stable in the 130 rate, to 130, 135 and that's exactly what we are seeing now and the dollar hasn't gotten any better over the last six months. Dean T. Haskell - Morgan Joseph & Co: So, you're importing the 90s right, not the 50s? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: I'm sorry, we import 90s. Yes, my mistake. Thanks for catching that point. Dean T. Haskell - Morgan Joseph & Co: Okay. That's what is about $1.30 pound in the import 90s? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Yes sir. Dean T. Haskell - Morgan Joseph & Co: Okay. The movements to a more of a premium mix as you mentioned earlier. How's that impacting your beef cost as well? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: It's not impacting the beef cost, we are clearly in third quarter of this test year of 2007 with the Sirloin burger introduction, we clearly sold more beef than what we normally sell because of the introduction of that product and the overall mix success that we have with that product. It is an impact that beef cost per se but it did impact the margin somewhat because we were selling more beef at higher rates. Dean T. Haskell - Morgan Joseph & Co: Okay and my final question. Talk about the cost of re-imaging both the front of the house and the back of the house and then the return you expect to get on those, please. Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Yes, we're really not doing much with the back of the house. The re-image program is primarily front of the house rest rooms, things that the guest can see and touch and also some enhancements to the outside the drive through area patent and landscaping and so forth. The cost of the re-image is we've said between a 100 to 150 depending on the age and the size of the restaurant. Most of that running closer to the 150 range. We've also talked about sales generation that would be necessary to achieve about a 20% cash-on-cash return and we've been pretty happy with results so far and that's getting with our targets returns. Dean T. Haskell - Morgan Joseph & Co: Okay. But you mentioned a kid center re-imaging in your press release. What's that going to cost? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: That we haven't talked about that specifically but that's going to cost, I'll say that's around $30,000 in restaurant. Dean T. Haskell - Morgan Joseph & Co: Okay, good. Congratulations. By the way I loved the steak egg burrito breakfast, breakfast burrito. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Awesome. Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Its one of my favorites as well. Thanks Dean. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Thank you Dean.

Our next question comes from Mr. Joe Buckley of Bear Stearns. You may ask your question. Joseph T. Buckley - Bear Stearns: Thank you. Just a follow up on Dean's... the 30,000 for the kitchen set that's basically equipment replacement then. I mean not like a remodel the footprint in anyway in the kitchen? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: No. All equipment. Joseph T. Buckley - Bear Stearns: Okay and the charges I think its $0.06 a share that you expect from the kitchen move and the re-model of course is that a lot of that accelerated depreciation? Is a lot of that non-cash? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: That's exactly... it's all already depreciation or a specific write off Dean, it's all non-cash though. Joseph T. Buckley - Bear Stearns: Jerry not Dean. You forgot your name but... Jerry P. Rebel - Executive Vice President and Chief Financial Officer: I am sorry Joe. Joseph T. Buckley - Bear Stearns: That's okay I am just joking. And then lastly the company openings for Qdoba it seem to pick up a little bit in the fourth quarter and I think you are targeting a few more for '08 with the fourth quarter company openings are you doing 7 is that just going to... I know they will fell in the quarter or are you pushing the company side a little bit more? Linda A. Lang - Chief Executive Officer and Chairman of the Board: There is really more timing Joe. Joseph T. Buckley - Bear Stearns: Okay, okay thank you very much. Linda A. Lang - Chief Executive Officer and Chairman of the Board: You are welcome. Thank you.

The next question comes from Mr. Jonathan Waite of McKay Capital. You may ask your question. Jonathan Waite - McKay Capital: Yes good morning. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Good morning. Jonathan Waite - McKay Capital: A quick question for you and I am not sure that you have discussed this in the past but your stocks trading in the teens, below its peers and to put ways up in what 50, 60 times. Why haven't I heard in your calls any discussion about potentially spinning off Qdoba? Linda A. Lang - Chief Executive Officer and Chairman of the Board: Actually we have got that question several times and we have really said at this point in time we have no plans to spin off Qdoba. It's really a different business model than to Chipotle. Chipotle is 100% company owned versus Qdoba being almost 80% franchise. So in terms of earnings, if it's significantly smaller than Chipotle so really it is not at the point where it would even make sense to be a but off company or independently traded company. Jonathan Waite - McKay Capital: Because it is smaller? Linda A. Lang - Chief Executive Officer and Chairman of the Board: Yes. Jonathan Waite - McKay Capital: Okay. So what is your grand scheme as you look out 5 to 10 years? Linda A. Lang - Chief Executive Officer and Chairman of the Board: We continue to grow Qdoba. We continue to have synergies between Qdoba and Jack in the Box in terms of being the parent company of Qdoba. So we haven't talked about timing that's been off or whether or not we would even spin it off but we just know at this point in time it's not really in the plan. Jonathan Waite - McKay Capital: Okay, thanks. Linda A. Lang - Chief Executive Officer and Chairman of the Board: You are welcome.

The next question comes from Keith Seigner of Credit Suisse, you may ask your question. Keith Seigner - Credit Suisse: Thank you. Menu innovation has obviously been key recently and it sounds like a lot of the focus going forward seems to be on more traditional items like burgers and sandwiches and know you have toyed with smoothies but is there any focus on alternative beverages or may be some other kinds of products to target afternoon or late night. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Yes there is quite a bit of focus on the beverage category. For competitive reasons we are really not going to share the specifics of what we have in test but we do have several items in test at this point in time. So you will hear more about that as the year continues. Keith Seigner - Credit Suisse: Might we see some of these products in this fiscal year or is -- Linda A. Lang - Chief Executive Officer and Chairman of the Board: You might. Keith Seigner - Credit Suisse: Okay, with the increased purchase from the re-franchising strong free cash flows and no repurchases really built into guidance just remind us kind of the priorities from what you might be doing with the cash or how you would think about using that cash? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Yes it is... our main priority is growth. So we are spending and in fact we've talked about ramping up the re-image program from... to that 450 restaurants in 2008, plus that kitchen enhancements both of which we think are growth oriented and then again $25,000 for the franchise which again we believe is all growth oriented and the right thing to do for the brand. We do have authorization from the board for $200 million worth of additional share repurchases although we do not have that included into our guidance and we have a... we do have a history of executing share repurchase programs. And then with respect to new restaurant growth, Linda mentioned two markets that we just entered into Corpus Christi and Denver, we've been very happy with results of all that early. So you would also likely see increased growth in the new market. So... and then of course like I said, we always have the option to execute share repurchase programs which is why the board authorized the additional package for us. Keith Seigner - Credit Suisse: Okay, thank you. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Thank you

[Operator Instructions]. The next question comes from Mr. Joseph Ginko [ph] of J.P. Morgan. You may ask your question Steven Rees - J.P. Morgan: Hi actually this is Steve Rees from J.P. Morgan, how are you? Jerry P. Rebel - Executive Vice President and Chief Financial Officer: Hey Steve. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Good. How are you? Steven Rees - J.P. Morgan: Linda, so you guys pretty much led the way with kind of higher quality premium products and now we're seeing a lot more competitive intrusion to that space specifically of burgers and I guess my first question is have you seen any impact in anywhere markets from competition and where do you see the biggest opportunity to maintain your point of differentiation going forward? Linda A. Lang - Chief Executive Officer and Chairman of the Board: Right. We haven't really seen impact from competitors' premium products. All of our premium product launches have been very successful and we'll continue on the strategy of looking for both shorter term, new product ideas, but also these longer term, what we call platform development. It's really innovation around. Like for example; store line is the platform, so we did the store line burger, the store line stake, store line for breakfast. So, we continue to look at various platforms going forward; that really, truly are innovative to our category and so we're not really concerned about meaty products from the competitors. Steven Rees - J.P. Morgan: Okay; and I think you guys just introduced a new coffee key talk. Maybe that, what coffee is as a percentage of the sales and where you think that can go over time? Linda A. Lang - Chief Executive Officer and Chairman of the Board: I actually don't have the mix on the top of my head. We don't really share mix of specific products. We were actually one of the early chains to introduce a more robust coffee. And so this is an upgrade to that earlier introduction about 3 years ago. But we've already seen just from the introduction and increase in our coffee sales. So we think there's opportunity; not only with this, but future developments around coffee. Steven Rees - J.P. Morgan: Okay, great. Thank you very much. Linda A. Lang - Chief Executive Officer and Chairman of the Board: Welcome.

[Operator Instructions]. Linda A. Lang - Chief Executive Officer and Chairman of the Board: We'll take one more question if there is one. Sounds like there isn't. Thank you very much for your questions. Have a great holiday. Thanks a lot.