Carol DiRaimo - VP of IR Linda Lang - CEO Paul Schultz - COO Jerry Rebel - EVP and CFO Harold Sachs - Outgoing VP of IR

Christopher O'Cull – SunTrust Larry Miller – RBC Capital Markets Joe Buckley – Bank of America Jeff [Omahundra] – Wachovia Keith Signer - Credit Suisse Matthew DeFrisco, Oppenheimer Rachel Rothman - Merrill Lynch Steven Weiss - JP Morgan Justin Mauer – Lord Abbett Brian Moore - Wedbush Morgan Securities Fitzhugh Taylor, Thomas Weisel Partners

Welcome to the Jack in the Box Incorporated's fourth quarter and fiscal year 2008 earnings conference call. (Operator Instructions) At this time for opening remarks and introductions, I would like to turn the call over to Carol DiRaimo, Vice President of Investor Relations and Corporate Communications for Jack in the Box.

Joining me on the call today are Chairman and CEO Linda Lang, our President and Chief Operating Officer, Paul Schultz, and Executive Vice President and CFO, Jerry Rebel. During this morning's session, we'll review the company's operating results for the fourth quarter and fiscal year '08 and discuss our guidance for fiscal 2009, as well as our long-term outlook for the business. Following today's presentation we'll take questions. Please be advised that during the course of our presentation and our question and answer session today, we may make 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 yesterday'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, 10-Q and other public documents filed with the SEC. A couple of calendar items to note that we expect to file our Form 10-K for fiscal year 2008 in the next few days and Jack in the Box management will be presenting at the JP Morgan Mid Cap Conference on December 4th and the Cowen Company Consumer's Conference on January 12th. Both conferences will be in New York and to help your planning during the busy yearend earnings season, our first quarter of 2009 ends on January 18th and we tentatively expect to release earnings the week of February 16th. With that, I'll turn the call over to Linda.

Between the slowing economy, food cost inflation, tightening credit markets and Hurricane Ike, we faced a number of challenges on several fronts during the fourth quarter, but still delivered earnings of $0.47 per diluted share. Our bottom line showed full year earnings of $2.01 per diluted share. Both the fourth quarter and the full year were negatively impacted by $0.04 to $0.05 due to Ike. Excluding the impact that Hurricane Ike had on our restaurants, fourth quarter comparable sales growth at Jack in the Box company restaurants would have been slightly been positive for the quarter and in line with our expectations. We were pleased to see sales trends continue to improve in California where our company restaurants experienced positive sales growth in the quarter. Our same store sales for the year were up two-tenths of a percent on top of a very strong 6.1% increase in fiscal 2007. Economic pressures are impacting our fast casual subsidiary Qdoba Mexican Grill as well, which experienced its first quarterly decrease in system wide same store sales in more than nine years. For the full year, same store sales at Qdoba were up 1.6% for the year on top of a 4.6% increase last year. Although we remain cautious about how aggressively we raise prices in this environment as we discussed during our third quarter call, we retained a well-recognized pricing consultant to develop recommendations used in their proprietary scientific approach designed to optimize profits at each location. We saw positive sales in margin results in company and franchise restaurants and as a result, we raised prices at company locations by approximately 2.5% earlier this month. Our focus continues to be on premium products versus deep value or discounting messages. We have a tiered menu strategy that is keeping our brand relevant to a wide range of consumers, including those trading down from other restaurant categories as well as those whose discretionary spending has been especially hard hit by the country's economic problems. We provide variety on our menu, including innovative products that are not typically offered in the QSR segment, such as the Breakfast Bowls and Pita Snacks that we introduced in the fourth quarter, and our Real Fruit Smoothies, which continue to sell well. Another new product that we're excited about is our Teriyaki Bowls, which we added to the menu in most of our western US markets in late October. This product features a generous serving of steamed rice, broccoli, and carrots with a choice of either all-white-meat chicken or sirloin steak topped with teriyaki sauce. Our Teriyaki Bowls are a great addition to the non-burger alternatives on our menu and have a lower than average food cost. We've been pleased by the initial reception to this unique product in the QSR segment and are looking forward to expanding them into our central US and southeast markets later in the fiscal year. As we noted in our press release, our board of directors in September approved the continuation of our long-term strategic plan, which focuses on expanding franchising, improving our business model, growing our business and reinventing the Jack in the Box brand. Since announcing our strategic initiative to reinvent the Jack in the Box brand, our teams have done a great job of developing new products that are relevant to the evolving tastes and budgets of our guests. We're also making progress on the other key aspects of our brand reinvention initiatives in enhancing our restaurant facilities and improving guest service. Nearly half of all company restaurants and more than 40% of the entire Jack in the Box system now reflect our new restaurant image. We remain on track to re-image all restaurants including franchised locations by the end of fiscal year 2011. Because the restaurants exterior is very visible to the consumer, we are prioritizing the system wide completion of all exterior elements of our re-image program by the end of fiscal 2009. We think there's an opportunity for us to achieve a more cohesive brand image throughout our system by completing the exterior elements of the re-image program first. Another initiative that we expect will have a positive impact on guest service is the recent consolidation and realignment of all company and franchise restaurant operations, which should improve communication, integration, and consistency at all locations system wide. We're also leveraging new technologies to improve speed of service and guest satisfaction at our restaurants. In 2008, we expanded our tests of self-serve kiosks, which offer guests an alternative method of ordering inside Jack in the Box restaurants. We're seeing higher average checks with kiosk transactions and are planning to install this technology where the frequency of use is expected to be highest based on restaurants that experience positive results in the test. Regarding re-franchising, we exceeded our forecast in the fourth quarter and despite the challenging market conditions. We continue to see high demand to purchase Jack in the Box restaurants from existing franchisee's as well as strong interest generated from our new franchisee recruiting efforts. Our plan is to accelerate the pace of our re-franchising efforts over the next five years, which would allow us to reach our goal of franchised ownership in the range of 70 to 80% by the end of fiscal year 2013. While the lending environment is currently more difficult than in the past, re-franchising is a multi-year strategy for us and with our cash flow needs met through operations, as well as our credit facility, we can afford to be patient if necessary. Moving on to our third major strategic initiative, improving the business model, we continue to sustain improvements in labor management at our restaurants and saw turnover among team members reduced to near record low levels in 2008. Our efforts to reduce packaging and food costs, as well field and other G&A expenses, are helping to offset the high commodities and utility costs we're seeing and we'll have our organization well positioned when economic conditions improve. As far as strategic initiatives to grow our business, Jack in the Box expanded into Denver, Colorado in fiscal 2008, as well as three other new contiguous markets in Texas. In 2009, our franchisees plan to continue expanding our brand into additional new contiguous markets in Colorado, New Mexico and Texas. Additional markets have been approved for company seating and our plan is to convert these new markets to franchise markets in the future. Continued success in executing each of the major initiatives of our long-term strategic plan is key to our ability to grow earnings and free cash flow in order to evolve our business model to one that is less capital intensive and not as susceptible to cost fluctuations. We know it will take our full attention to realize the tremendous upside potential of our Jack in the Box and Qdoba brands. This is why we made the difficult decision to sell our chain of Quick Stuff convenience stores. I'd like to thank everyone in our organization, including our field and store employees who have worked so hard to develop this award-winning brand. And since announcing our intent to sell Quick Stuff, I've been even more impressed by the character and integrity they've shown as we prepare that chain for sale. Before I turn the call over to Jerry, I'd like to acknowledge a couple of exciting events that will benefit our primary charitable partner, Big Brothers Big Sisters. Since late October, we've been selling a new antenna ball called "Beanie Jack" in our restaurants with all profits going directly to Big Brothers Big Sisters. We're also very excited to showcase our partnership with Big Brothers Big Sisters at the 2009 Tournament of Roses Parade in Pasadena, California. We'll be entering our first ever float in the parade which will be seen by millions of people. As part of this event, we're offering guests the opportunity to enter a sweepstakes online to win a football package trip to the Rose Bowl in Pasadena. We've been strong supporters of Big Brothers Big Sisters for more than a decade and we're very excited about the opportunity to promote the wonderful efforts of this worthwhile organization and give back to the community. And now I'll turn the call over to Jerry for a closer look at the financial side of our business.

My voice is crackling a little bit this morning so I apologize in advance. As Linda stated, 2008 presented more than a few challenges. To respond to those challenges, we decided to focus on things we could control such as labor and SG&A management and on new products like Smoothies and Breakfast Bowls, which we launched earlier than planned and which helped us to mitigate much of the impact of the down economy. With that said, let's take a look at our Q4 results. We estimated the impact of Hurricane Ike on EPS was approximately $0.04 to $0.05 per share. On the top line, we lost approximately 1,300 company operating days, which impacted our same store sales by an estimated full percentage point in the quarter. The hurricane impacted restaurant operating margin by about 50 basis points. Overall, food and packaging costs were about 180 basis points higher than the same quarter of last year, led by higher beef costs, which increased by more than 18% in the quarter, double what we had anticipated in early August when we announced third quarter results. Alone, beef negatively impacted restaurant operating margin by approximately 100 basis points and was driven by higher than expected costs [inaudible]. Shortening was up almost 60% and potatoes were up 8%. Combined, these commodities contributed to a 7% increase in overall food costs for the quarter, which was the highest increase for fiscal 2008 that we saw. Along with higher food costs, utilities were also up by 50 basis points in the fourth quarter, primarily due to higher gas and electricity rates as well as mark-to-market accounting on a hedging arrangement, which cost about 20 basis points. Repairs and maintenance costs were also higher by approximately 30 basis points due to timing and extreme heat in several markets, which required the unexpected repair or replacement of HVAC units. In addition to these factors, margins were impacted by sales de-leverage from a 5.2% same store sales increase last year to a negative 0.8% in Q4 2008. The good news though is that we do not expect our restaurant operating margin to continue at this level and I'll discuss our outlook in more detail in just a couple minutes. Our SG&A expense rate reflects lower revenues resulting from the re-class of Quick Stuff to discontinued operations net on our P&L. The impact of the re-class was to reduce the distribution and other sales line by approximately $111 million and $90 million in the fourth quarter of 2008 and 2007 respectively. For 2008, Quick Stuff revenues were $462 million versus $363 million for fiscal 2007. The effect of the re-class raised our reported SG&A expense rate to 11.3% for the year whereas without the re-class, SG&A would have been 9.6% of revenue. Now just as a note, I believe you'll find the information that you'll deem necessary for your models in the 10-K regarding continuing operations for the quarters for the past two years. If not though, give Carol a call and we'll be happy to provide that for you or put it on the website. On our re-franchising efforts, we exceeded our targets for both number of units and gains for the year. We sold 41 company operated Jack in the Box restaurants to franchisees with gains totaling $23.1 million in the fourth quarter compared with $11.9 million in the year ago quarter from the sale of 24 restaurants. For the full year, we sold 109 restaurants versus 76 last year and gains for the full year averaged $609,000 versus $501,000 last year and gains for the quarter averaged $564,000 this year versus $494,000 last year. During the fourth quarter, credit for franchise financing became much tighter than we had experienced in the past, and for us and our franchisees this had the effect of slowing down deals but not stopping them. So to turn over operations to franchisees as planned, we provided bridge financing while the franchisees completed the loan process with their lenders. At fiscal year end we had approximately $20 million outstanding on two deals, of which $11 million has since been repaid and the remainder is expected to be repaid in the next couple of weeks. CapEx in fiscal 2008 increased to approximately $181 million compared with $154 million last year with the increase due primarily to investment and kitchen enhancements, Smoothie equipment and the Jack in the Box re-image program and 11 more new company Qdoba's than in 2007. Of the 2008 total, I'll provide you a little detail we spent about $51 million on new restaurants, $81 million on remodels and maintenance CapEx and about $37 million was spent on restaurant and other equipment. The remainder would be on IC and non-restaurant items. In this environment, it's worth noting that our balance sheet remains strong with no required debt repayments until fiscal 2010 and then only modest repayments are required until 2012. We also have ample room under our debt covenants. Before I review our guidance for the first quarter and for fiscal 2009, I'd like to provide some insight on our commodity cost outlook for the upcoming year. We expect overall commodity costs to increase 7 to 8% in the first quarter, led by an approximate 20% increase in beef costs. Commodity costs should then moderate over the remainder of the year with a full year increase expected to be in the 3 to 4% range. Let me give you a little more detail on some of our major commodity purchases. Beef is our single largest food cost accounting for nearly 20% of our spend. The high beef costs we're seeing are primarily driven by still high trim prices which are running over 50% higher in quarter one than a year ago, with 50's at about $0.81 a pound versus $0.53 a pound last year in the quarter. However, 90's are currently trading at levels similar to last year and we clearly view that as a positive trend. And we expect moderation in the price of 50's as we move through the rest of the year. Chicken is our second largest commodity, accounting for 12% of our spend and we have fixed price contracts on chicken that run through March of 2010 for 80% of what we use. We also have fixed price contracts in place for bakery and potatoes with 60% of our bakery needs covered through December and contracts for the remaining 40% expiring over the course of the fiscal year. A 100% of our potato needs for the full year are contracted with an average increase of about 12%. Potatoes account for about 8% of our spend. Two other commodities that individually account for 5% or more of our spend are cheese at 6% and produce at 5%. We have 40% of our cheese needs contracted through January at roughly current market prices, which are running about 6% lower than last year. Produce costs are currently flat year-over-year. On a positive note, we currently expect full year reduction for cheese, cooking oil and eggs versus the prior year. Now let's move on to our guidance for fiscal 2009, and while we don't normally provide quarterly EPS guidance, we felt it important given the economy, the credit markets, and volatility in commodity costs, to provide some information regarding our thinking about the first quarter. So we expect same store sales for a Jack in the Box company restaurants to range from flat to plus 2% and system wide same store sales for Qdoba to be approximately flat. As we've discussed, we expect overall commodity costs to increase 7 to 8%, which combined with our same store sales expectations, should drive operating margin of between 15 and 15.5% versus 17.1% in last year's first quarter. Commodity costs are expected to account for the majority of the variance in fiscal 2008 first quarter restaurant operating margin, which the 17.1% last year was the highest that we experienced in the year. Diluted earnings per share from continuing operations for the first quarter are expected in the range of $0.50 to $0.55 including franchise gains of $15 to $18 million and given the current state of the credit markets, franchise gains are more difficult to predict but we had a good pipeline of deals that has been negotiated and loans are in process. It is possible that one or more of these deals, however could slip to a later quarter if franchisee financing is delayed. Now for the full year, we're expecting same store sales at Jack in the Box company restaurant to range from flat to a 2% increase and same for Qdoba system restaurants. Restaurant operating margin for the full year is expected to be approximately 16%, similar to fiscal 2008 with food costs expected to increase 3 to 4%, offset by a decrease in utility costs and the impact of price increases. Gains in the sale of 120 to 140 Jack in the Box restaurants to franchisees are forecasted to range from $60 to $70 million with $80 to $90 million from cash proceeds resulting from the sales and of course are dependent on available franchise financing. CapEx is expected to range from $175 to $185 million with key variances including reductions in spending on restaurant equipment as we completed our kitchen enhancements and Smoothie rollout in fiscal 2008 and offsetting this decrease has increased company development of Qdoba, completion of the exterior re-images of all Jack in the Box company restaurants and continued interior re-images. Diluted earnings per share from continuing operations are expected to range from $2.00 to $2.20 including franchise gains. Now I realize our guidance has a wider range than typical so I thought it might be useful to provide our sensitivity to fluctuations in both sales and restaurant operating margin. For every 1% of same store sales growth, we estimate the annual impact earnings is roughly $0.06 to $0.08 per share depending on flow through and assuming relatively stable costs. For every 10 basis point change in restaurant operating margin, the estimated annual EPS impact is approximately $0.02 a share. Remember that our earnings per share guidance from continuing operations exclude the results of Quick Stuff, as well as any potential insurance recoveries related to Hurricane Ike. And now I'd like to turn the call back over to Linda for closing remarks.

Before opening the call to Q&A, I'd like to just thank our employees throughout the organization as well as our franchisees for all of their contributions during these challenging times. We couldn't execute our strategic plan as effectively as we have without their support and dedication. I'd also like to acknowledge the tremendous strength of the Jack in the Box brand, even in tough times our brand remains compelling to our guests as well as attractive to prospective franchise operators interested in investing in our business. And with that, we'll open up the call for your questions.

(Operator Instructions) Your first question comes from Christopher O'Cull – SunTrust Christopher O'Cull – SunTrust: A couple of questions let me start off first with just the menu items that you guys have introduced, Linda. You guys have added quite a few in the past 12 months, are you seeing any changes to your speed of service?

No, we haven't, Chris. Actually, we've been able to maintain our speed of service even with the introduction of the new products. Christopher O'Cull – SunTrust: And I know you've introduced a lot of new promotion, or value products, do you attribute the reversal in the California trend to the changes that you made to that plan?

No. You know, Chris, we really haven't offered any deep discount products throughout the system. We're really focused on this three-tier strategy, which is premium products like our Smoothies, we believe Smoothies really helped in the California market, the Pita Snacks, which are priced at a $1.99, so they're a good value but you wouldn't consider them a discounted product. And now with the new Teriyaki Bowls, they tested very well. They have the potential to do extremely well for us as we roll it out now in the western markets and then we'll be rolling it out, I believe, the end of January beginning of February in the rest of the system. So it's really across the board, we continue to have the value menu but we have our mid-tier items and then we have our premium products, and we've actually seen a little bit more shift to our premium products if you were to look at our menu mix across all of our tiers.

Chris, just let me add to that, that particularly on the Smoothie's and the Teriyaki Bowls, both of those have lower than average system food costs, so we would consider them to be pretty margin-friendly for us also. Christopher O'Cull – SunTrust: And now let me turn my attention to boneless beef inflation. Jerry, did you mention what the assumption was for your guidance for fiscal '09 for the B50's?

Let me talk about 90’s also though. When we looked at where we were on August 5th when we provided guidance we weren’t too far off on our 90’s estimate. We did expect however that the 50’s were going to be in the $0.60 to $0.65 per pound rage which still would have been higher than fiscal ’07 but what we saw was that the 50’s averaged about $0.90 to $0.95 a pound during the quarter, so that’s where we missed it. Christopher O'Cull – SunTrust: Okay and then when you look at your guidance for fiscal ’09 are you expecting boneless beef to inflate 10% or?

No where we are on the 90’s again they are at about levels where they were last year. In fact we are seeing the 90 continue to come down particularly for the import as worldwide demand lessens. So we’re not anticipating increases for the 90’s, on the 50’s though the 50’s are still higher. We’re buying them at about $0.80, $0.81 per pound right now which is up from $0.53 a pound in the fourth quarter, earned in the fourth quarter last year. We do expect that to moderate somewhat I think our current thinking is that it may be rather than 50% higher, they may be 20 or 30% higher in Q2 and start to go down from there. Christopher O'Cull – SunTrust: And then when you look outside of the boneless beef it sounds like you have a number of your other commodities already contracted. What’s the greatest risk to your commodity inflation guidance for 2009 outside of the boneless beef?

Outside of the boneless beef the biggest risk would likely be on the 40% that we don’t have contracted on breads, although we do like the trends that we’re seeing on wheat and flour costs right now but I think that’s the major one. We do have as I mentioned chicken, 80% contracted through 2010. Christopher O'Cull – SunTrust: Okay and you’re chicken contracts they’re not indexed to feed costs or anything of that nature?

No they’re not. We just renegotiated that deal at pretty favorable rates. In fact we’re expecting poultry to be flat with where it was 2008. Christopher O'Cull – SunTrust: Okay and then just two other questions. Do your credit facility agreements limit your ability to provide bridge financing to franchisees?

Yes. We have two baskets that total $75 million that we can provide that kind of financing to franchisees. I will mention thought that the bridge financing is something that we would use on a limited basis which the credit markets froze up quite severely mid to late fourth quarter for us. So we felt it appropriate to use that if certain lenders were just not lending any more money until the end of the third quarter. We had already announced these sales to our employees. We felt that it's prudent to go ahead and make the switch particularly when they had either a letter of intent or a letter of commitment from their lender. I think the more obvious choice or the preferred choice would be to provide mezzanine financing on occasion to franchisees to help bridge the gap from what might have been typically requested in terms of capital ends from the franchisee to what is currently being requested, but the good news is for that, Chris, we would still get somewhere between 80 to 90% of the overall cash flow in from that deal, so we still feel pretty good about that and we would expect to float that for somewhere in the neighborhood of 12 to 24 months for us for franchise locations. Christopher O'Cull – SunTrust: Okay in the pool of lenders that are active in this market for you guys is it still pretty large?

What we have seen is I guess with every bad news there is some good news here. What we have seen is a significant pullback from GE Capital particularly. Many of our franchisees used them in the past but quite honestly it was fairly easy. GE Capital still tells us that we are one of their favorite brands and they like our franchisee base, they are very familiar with that. However as I think everybody is aware GE Capital is not actively lending until the end of, until at least the end of the calendar year. What that’s caused though is that many of our franchisees have gone and sought and actually secured financing from some regional banks. So I think what this is going to end up doing in the longer term is to provide a greater pool of available financing options for our franchisees even when GE Capital comes back in, and so as an example we’re anticipating three deals in Q1 which we all have letters of intent from lending institutions and one in fact has a letter of commitment already. All three are from new lenders.

Your next question comes from Larry Miller - RBC Capital Markets. Larry Miller – RBC Capital Markets: I wonder if I could just follow up on the mezzanine financing part. Jerry when you look out at the 120 to 140 deals Linda said you expect to sell in fiscal 2009, how many of those deals in your models now have some sort of mezzanine financing that you’re providing in place or might have it in place and what’s the total dollar value that you'd committed at a maximum, and then just related to that it sounds like you were through out your comments reasonably cautious on the credit markets. I certainly like the idea of accelerating the re-franchising but what kind of confidence levels should we all have in your ability to hit that 120 to 140 this year? I have one more question as well.

Let me talk about the mezzanine financing first. Out of the three deals that I discussed in the first quarter right now we think that will be offered to only one of those deals and I think in total that might be in the $2 to $2.5 million range. Now, I think it’s important to note that that’s not cash out the door it just reduces the cash flow coming in. I think we’d expect to have that deal or that particular loan for about a two-year time frame. So it’s small dollars on a per transaction basis and it is a short window to expect it to receive repayment. So I think that’s important to note. If we did every deal of the year at a 20% mezzanine financing it would be in the neighborhood of $15 to $20 million. So it’s not huge. We had talked about what 80 to $90 million of cash flow coming in. If we did every single one of the mezzanine financing you would have somewhere in the neighborhood of $65 to $80 million still coming in. So we think it’s a very good way for us to continue to move the franchising strategy forward and to still generate a significant amount of cash flow for us, but we do not think, Larry, that we’re going to have do this to every single deal. Larry Miller – RBC Capital Markets: And then your confidence in the pipeline can you also talk about what kind of franchisees get financing from you guys? Do they have to have certain criteria, standards in place?

Absolutely, first of all they have to meet standards just to be able to purchase restaurants from us and in order to do that there are certain financial ratios which would include fixed cost coverage ration, debt to EBITDA ratio it's like you would see in any normal financing and we would make sure that they hit that. First of all, and secondly, we would only do this to existing franchisees because one of the things that we do when we provide this kind of financing is we also cross the fault to their existing franchise locations. So we know that we’re well protected on that so if we’re going to sell five restaurants to a franchisee that already has ten that makes sense. We wouldn’t do this to sell restaurants to a franchisee who had two because we wouldn’t feel like the protection would be there for us. So we would loan this very, very conservatively. Larry Miller – RBC Capital Markets: And then also just on the CapEx can you kind of give us an idea of how much that exterior remodel costs and the interior remodel costs, and it sounds like if I'm doing the math roughly right there's about 1,100 units left that need this total re-image? Is that right?

No, I think that the total is not right. We’re more in the 700 range that would need that. Remember we would just be doing this for the company units for us. Franchisees would end up doing their own. The average cost is going to be between $30 and $40,000 for the exterior, but that depends is when we’re doing the exterior we also will go in and touch some of the interior elements if there is a need. So if we see things that need repair or replacing we’ll go ahead and do them at that time and the total re-image cost is now between 150 and 160.

Your next question comes from Joe Buckley - Bank of America. Joe Buckley – Bank of America: I have a couple of questions as well. You mentioned the California same store sales I think for Jack in the Box specifically turned positive in the fourth quarter. Could you trace back and just remind us when California went negative and if you could size it a little bit in terms of how negative it went versus maybe how positive it was in the fourth quarter just to provide perspective.

California became negative quarter two of ’08 so in quarter four we’re almost, in fact all the major California markets became positive. What we’re seeing system wide now in the east in the Texas markets the same store sales slowed down slightly and that’s because they were rolling over very high numbers in ’07 10% plus in ’07. Joe Buckley – Bank of America: That was going to be my next question what was sort of offsetting California?

Right it was Texas and it was really the strong rollover, Joe. Joe Buckley – Bank of America: And then the release mentions, I may read it here for a moment. In the first quarter discussion talks about continued volatility in the financial markets which is expected to impact SG&A in the tax range? Could you elaborate on that?

Yes, Joe, we have like many companies do, we have some life insurance instruments that we use to plunge if you will non-qualified retirement plans and we are required to mark those to market which we do. That impacts the SG&A rate and the gain or the loss on those mark-to-markets and those life insurance products are non-tax deductible or taxable. So when we’re writing down those investments or those life insurance instruments it increases the effected tax rate. Joe Buckley – Bank of America: Are the life insurance instruments used with respect to the pension plan? So it [inaudible] to the pension plan ultimately?

No these are non-qualified. These are the deferred comp type programs. Joe Buckley – Bank of America: Then question on SG&A obviously when we get the numbers restated by quarter for Quick Stuff I guess some of this will be evident, but it sounds like you’re guiding for SG&A as a percent of revenues to be relatively flat. I think it was 11.3% and you’re saying 11 to 11.5%, is the absolute number though likely to be down because the revenue number would be down just given the re-franchising activity?

Yes I think that’s true, and then also you may consider the bonus accrual in there also which was lower this year and we would expect that to go back up to more normal levels next year. Joe Buckley – Bank of America: Okay and then just one more. Just on share repurchases. I know you didn’t do anything in the fourth quarter from the release and a lot of companies have just sort of stopped and given volatility in the markets and so forth that’s understandable I think in a lot of cases but I think it’s a more critical part of the re-franchising puzzle I guess. I don’t mean puzzle in a bad sense but the re-franchising strategies. How are you thinking about share repurchases for fiscal 2009?

Yes, Joe, I think one is we’re taking a cautious view of that right now in really two parts. One is because of the volatility in the financial markets which is the reason that we didn’t do anything in the fourth quarter and I think a lot of the other companies are not doing this also, but also based on what you just said it is a part of the re-franchising strategy to the extent that the credit markets freeze or lessen some of that re-franchising strategy. We’re going to be cautious with respect to share repurchases. I will remind you that we do have a $100 million still authorized from our board.

Your next question comes from Jeff [Omahundra] – Wachovia. Jeff [Omahundra] - Wachovia: I guess first off on the pricing increase that was recently taken. Maybe give a little more detail on the components of the increase and what you’re thinking as you look out into ’09 about additional pricing potential. That’s my first question.

Jeff, this is Linda. On the pricing we just took a 2.5% price increase and that was really based on the results of our tests that we had in place at both company and franchise locations and that was through our work with our new pricing consulting. So what we’ll do is we’ve put that in place. So far it looks good. We’ll analyze that in some time and then we will look at whether or not we have opportunities to take additional price this year. Jeff [Omahundra] - Wachovia: My second question is related to the kiosk tests and I understand you’re seeing some higher check. I'm just curious if there's any other operational learning that you’re gathering such as either service or line speed or anything of that nature? Thanks.

Hi Jeff, this is Paul. We certainly find that there is a demographic of guests that really liked it and perceives it as improvement to the service. There is obviously folks that would much rather talk to a computer screen than talk to a human being and it definitely helps with the order accuracy as well.

Your next question comes from Keith Signer - Credit Suisse. Keith Signer – Credit Suisse: I had a quick question on the company contribution to the franchisees for the remodel. In the past you talked about it being 25,000 per unit with the acceleration to do the exterior first. How does that affect the contribution? Do they get a contribution this year to do the exterior? Does it only come when they do the interior? How should we think about that?

Hi, Keith this is Paul I’ll answer that one. We’ve actually in order to accelerate the franchisees commitment to complete the exteriors we’ve committed to them to take $5,000 of our $25,000 contribution and move that toward the interiors or the exterior excuse me. So they’ll get $5,000 for the exteriors and then when they complete the interiors to specification and on time they’ll get the additional $20,000. Keith Signer – Credit Suisse: Another question as part of the long-term goal, the unit growth goal for Jack in the Box is definitely very clearly indicated to be 3 to 4% with accelerated openings in the new market where the awareness is high, but when you look at the ’09 guidance you’re still well below this and granted this is a tough environment, but should we think about an acceleration in 2010 toward that target if things stabilize and maybe when you get to that 3 to 4% how much of that should we think of that as coming from franchisees?

Right if you look at our new unit openings over the years we’ve actually significantly increased the number of franchise openings as percent of our total new unit growth. So you’ll continue to see two things. One is the acceleration of actual units, total units open as well as the percent that are opened by our franchise operators. So yes you will see a ramp up, you will see a ramp up more on the franchising side and we also refer to the seating strategy as well in our press release which for example going into Denver where the company goes in, enters the market, puts in three or four locations, proves the concept in a new market, in fact we’re very pleased with the results in our new market and then at some point in the future offer that market up to franchisees that would be interested in going in and filling out the market. Keith Signer – Credit Suisse: Then one last quick question on Qdoba, I’m just a little bit surprised about what’s going on comp. Have you done any tests on customer satisfaction to see maybe does the concept or the offerings, does it need any tweaking maybe to enhance the value proposition to customers? Have you done any tests like that recently?

We continue to monitor customer satisfaction in Qdoba and I can say it’s still a very strong, very compelling brand that delivers well on the guests expectations. We’re even more focused on quality and customer experience than ever before and, it’s really, it’s the consumer decrease in discretionary spending. They are hit just as much as other restaurants concepts have been in this economy. We've have been more conservative with pricing at Qdoba certainly than our main competitor. We believe that's the prudent thing to do. We are encouraging our franchise operators to investment spend in local store promotion, local store marketing because that’s really what it's all about for Qdoba and we’ve ramped up and seen more usage in our frequency loyalty club with the Qdoba card.

Your next question comes from Matthew DeFrisco – Oppenheimer. Matthew DeFrisco, Oppenheimer: I had a couple of bookkeeping questions. First, you said bakery goods are hedged December. Is that December '08 or '09?

'09. Matthew DeFrisco, Oppenheimer: Thank you for that clarity, and then with respect to the tax rate on the sales what is the applicable tax rate that you're using on that proceeds generated from the store sales to franchisees in the current quarter and also your guidance?

Yes, it’s whatever the effected tax rate is for that quarter or for that year so for the quarter I would think it is was 35.3 or 4 and for next fiscal year we’re guiding 39% to 40% it’s just the exact same effective tax rate that we would use for anything else. Matthew DeFrisco, Oppenheimer: Okay well that’s interesting. Then also just how many stores have the kiosk test right now?

We have about 30 locations with the kiosk and we’ll be rolling hat out to more restaurants that make sense in terms of the profile of that restaurant and it really has to do with the demographics in that trade area, the percent of dine-in transactions as well as the menu mix. The more premium products we see on the menu mix the higher the success rate is on the kiosk according to our tests. Matthew DeFrisco, Oppenheimer: Then also just as far as the California comp a follow up to that question I think Joe asked with respect to what do we have ahead as far as and what was the fourth quarter California comp versus the third quarter California comp a year ago last. Did it get a benefit from dropping off? I remember this time last year you had, not that you don’t have them this year again but California fires were disruptive also in Southern California a little earlier in the quarter. Was the fourth quarter aided by an easier comp and what is the outlook for the lap that we have coming up in one Q ’08.

Right we don’t really provide details by market on quarterly sales but I can say that they are. Prior year was positive in all but one of the major companies in the California market. So the two year key in was positive. Matthew DeFrisco, Oppenheimer: So you were lacking a positive comp? Okay, and then I assume you’re lapping a relatively close comp also in the first quarter similar to 4Q?

Yes. That’s accurate. Matthew DeFrisco, Oppenheimer: Okay and then the pricing. Can you just clarify? You said you took 2.5. So is that now basically what you’re carrying or is that on top of, how much do we have remaining from the 1.5 you have in the third quarter continuing and when does that cycle off if any.

Yes, I don’t have that off the top of my head we don’t really provide all that detail on the rollover, but we had price of 2.2% in fiscal ’08. So there will be a small of that lapping in ’09 and then we just took the 2.5% in November, and we had 1.4 in effective price in Q4. Matthew DeFrisco, Oppenheimer: So 2.2 for all of ’08, 1.4 in Q4 and you just put on 2.5 so presumably you’re going to be significantly north of 2.5 for a couple of quarters?

Well what you call significant may be 3% or so in total.

Right, okay. Appreciate that. Thank you very much.

Hey Matt just before you go I misspoke on the bakery content I just want to clarify that its through December of 2008.

Okay, so December 2008.

2009, I apologize for that. Matthew DeFrisco, Oppenheimer: So you’re in the market now to look at pricing and you should probably be taking a look at the spot which seems to be getting more favorable so I would assume ’09 is going to be more favorable?

It very well could be.

Your next question comes from Rachel Rothman - Merrill Lynch. Rachel Rothman - Merrill Lynch: I just wanted to circle back if we could on the G&A and the question on the percentage or dollar savings since we don’t have the complete set of pro forma from Quick Stuff for discontinued ops. I guess if you guys included your advertising expense below the line in G&A as you continue to re-franchise even with the higher bonus accrual expected in ’09. Wouldn’t dollar G&A have to be down fairly significantly given the call it 200-unit decline in the number of company-operated stores?

Yes, there’s no question. We will see a decline for every dollar of sales that we transfer to a franchisee we’re going to save 5% of that in advertising costs. So absolutely you should see G&A costs down. Rachel Rothman - Merrill Lynch: Then layering on top of the advertising savings I know in the past years you've kind of broken down in chunks of stores how much regional oversight you're able to eliminate from a dollar perspective as we think about the swing between '07 and '09 just using those because maybe the bonus accruals will be similar and how should we think about the headcount reductions as these further opportunities are levered for the G&A dollar?

That should be similar. What we've done in the past is it's been about $28,000 on average per restaurant re-franchise. That does have very variability though from any given quarter or from any given year depending on where we happen to be re-franchising. So, if we're re-franchising in isolated markets it's going to be a little higher than that. If we're re-franchising in locations in an already mixed like Houston or such as L.A. it's not going to be quite as significant, but [inaudible] $28,000 a unit. Rachel Rothman - Merrill Lynch: Then can you help us out, you gave some good sensitivity around margin and around the same store sales. Is it possible to link the two together meaning how should we think about the commence rate basis point decline in the margins that you would experience at a flat com for a 3% decline or a 5% decline or maybe how do you think about the attribution fixed versus variable split of your overall restaurant level margin so we can do the calculation ourselves.

Rachel, what we've calculated in the past, and I think this holds true is that it takes about 2% of comp to keep margins flat. We've also said that that assumes that there are fairly stable food costs. Clearly that was not the case in the latter half of 2007 all the way through 2008 and likely not to be the case in early 2009, but we are seeing some softening of the overall food costs. So, what we're expecting for 2009 is that with the 3 to 4% increase in commodity costs that we're expecting about a 2.5% increase in price and keep margins basically flat. So, that would tell you that we are looking for some other margin related cost reductions in there also. That's not as clear as you might want but it's just difficult to give those kinds of sensitivity in this environment. Rachel Rothman - Merrill Lynch: I'm just thinking like [inaudible] obviously not what your estimate is but a lot of people refer to on the upside we would require 3% same store sales to hold things flat or 2 or 4 or it depends by company, but I guess we're getting into an environment now where a metric on what the margin pressure commensurate with the same store sales decline would be. It would it be just as helpful to give people some sensitivity around - -

Let me go back and in stable markets or in stable food costs we think about 2% is what we need to be flat. What we said last year for 2008 needed about 4% to be flat with the higher food costs, which were up in the 5 to 6% range total for the year. Rachel Rothman - Merrill Lynch: If same store sales wound up being worse than your expectation and instead came in down three, how should we think about what the commence margin desegregation would be?

It would be lower. I don't have that right here. We're not guiding down three. Rachel Rothman - Merrill Lynch: No, for sure again I'm just trying to get a sense for what the sensitivities are and I know people always talk about the positive end of the spectrum but just in the spirit of putting gold posts on two ends of the spectrum what would the downside scenario look like? I'm not saying you're guiding to a downside scenario clearly you're not. I'm just saying for those of us on the outside it would be helpful to get a sense of what that could look like if it were to happen.

Maybe I can answer the question for you this way. We would expect roughly at 30 to 40% flow through on sales up or on sales down. So, without telling you what that impact from an operating margin not running this through right now, I think you can get pretty close if you factor that into your model for what you think a 3% downside might do to you. Rachel Rothman - Merrill Lynch: Just on the performance of the new markets I know Linda touched on it, can you talk to us a little bit about what the performance has been in your newer markets such as Denver and maybe why you think they're more successful or what strategies you're imploring there that you could translate elsewhere in the system?

Sure, if you look at I'll take Denver and Corpus Christi because those are two company markets that we've just opened, both have sales averaging at volumes significantly higher than the system average. We're seeing more in terms of dine-in business, higher average check and most of that I believe is due to the new prototype that we have. We have the new design it's the new kitchen which is more efficient. It's the new dining room. It has the fireplace. It has kiosk in there. We went in with the smoothie launch so in terms of our positioning in the marketplace, very compelling to the consumers. It really does fill a need or a gap in the marketplace. Does that help? Rachel Rothman - Merrill Lynch: It does, thank you so much guys.

Your next question comes from Steven Weiss – JP Morgan. Steven Weiss – JP Morgan: Jerry, just on the re-franchising perhaps you can maybe just give us some sense of the margin performance and aggregate of the 190 that you re-franchised this past year. I guess would you say they were in line with the system, above or below. I'm just trying to gauge the overall impact on your reported restaurant rollover margin from the re-franchising.

Steve, they were in markets all across our system which would tend to indicate that they're going to be pretty consistent with the overall company margin that we reported. Steven Weiss – JP Morgan: And then for what you expect for the 120 to 140 next year is there anything, are these better performers in line or underperformers.

No, we take a market-based approach rather than a performance based approach so we know which markets we want to continue to operate in when we complete the re-franchising strategy. So, we're doing this from a market-based perspective so again you'd expect the performance on these to mirror what the system is doing. Steven Weiss – JP Morgan: And then perhaps, Linda, you could talk about are you seeing any trade down on your menu or increasing use of your value menu, and I guess we're hearing a lot about price points in QSR and changes to value menu. Do you think you need to change the value menu that you have today?

No, we feel pretty good about where our pricing is and how we've tiered our menu. So, we haven't seen significant trade down so the mix of our bottom tier is not up significantly year-over-year. We've actually seen more growth in the premium product mix than we have in the value menu. Steven Weiss – JP Morgan: Finally, on Qdoba could you just talk about how the new units that you've opened up there are performing relative to the system and then maybe just talk about the trends in markets where you have seen increased competition or rollout from some of the other fast casual Mexican players how your trends are holding up there?

We don’t provide a lot of detail on Qdoba market-by-market. I can tell you the markets that are hurting are the markets where unemployment is up significantly, and that for example St. Louis is one of the markets that's been a challenge for Qdoba. The other market that opened well in the new market Manhattan solid performance, although with all the layoffs in New York, and I don't have to tell you guys, it's been a little more difficult most recently.

Your next question comes from Justin Mauer – Lord Abbett. Justin Mauer – Lord Abbett: Quick follow up on the pricing it's unclear that the 2.5 that you've instituted but you’re lapping at 2.2 so wouldn't that just imply 30 BFS year-over-year incremental then?

No, it depends on the timing of the pricing in '08. Justin Mauer – Lord Abbett: So, it didn't start to roll until later in the year?

The 2.5 or the 2.2? Justin Mauer – Lord Abbett: The 2.2, sorry.

We had multiple price increases that were staggered throughout the year. Justin Mauer – Lord Abbett: On the franchising conception, Linda, as you talked about you guys aren't in a hurry the balance sheet doesn't require it you're on this path to 2013. Why do you want to keep it in the guidance? I understand you want to be upfront with people this is how many we're trying to sell, this is what the proceeds and the gains we expect, but it just seems to lend itself to confusion when people look at the earnings and the guidance and if you miss it on just a function of gains being short because some have slipped as you guys have alluded to maybe something slipped to a quarter or two that it just tends to be more confusing than helpful for people.

Well, I think it's important to keep it in the guidance and in our outlook because it really is a major strategy for us. If you go back over the years we haven't missed a year in terms of the number of units that we committed to selling and the gains that we had in our outlook and we feel that given the infrastructure we have in place, given our interest by our existing franchisees, which are very solid. The average tenure is 21 years of our franchise base and they're still very interested in growing with Jack in the Box. What is unknown to us and why we're being somewhat cautious is really the credit markets and hopefully when the government figures out what's going on with the bailout things will ease up and maybe they'll be more backend loaded but we feel committed, very committed to making that number of 70% plus franchise by 2013. So, it's really more of a timing issue. Plus we have the benefit of providing mezzanine financing if necessary. Justin Mauer – Lord Abbett: No, and I appreciate that clarity, but I guess the question is if the credit markets are backwards, which they certainly appear to be, and you have GE Capital backing out for the time being and even though like you said you've got some other banks kind of filling the holes. At least based on what I think you were saying some of those banks might be a little bit new to the game so maybe it takes them a little bit longer to get comfortable with the economics and that type of thing. So, when you talk about that and then you say oh by the way we're doing some mezzanine financing too, it seems as though, and I don't think this is the case, but it seems as though you guys are trying to push it a little bit just to stay on that tact when maybe '09 is a little bit thinner year just because of the environment we're in only to reaccelerate it in 2010 or 2011.

We actually did bring down the number that we are guiding to versus what we had originally planned for the year, so we have factored all of those conditions in and the fact that we were able to deliver in the fourth quarter, and that was when the credit markets were also very tough, I think both well for what we can do in '09.

Just to add to that, I think if we had less than fairly high compass we were going to be able to perform between the 120 and 140. We wouldn't have guided there, but I think the fact that we have indicates that we think we hit the numbers. Justin Mauer – Lord Abbett: Just on the insurance in the mark on the SG&A is that a Rabbi Trust, Jerry?

No. Justin Mauer – Lord Abbett: And its not Rabbi Trust structure, okay. And the Delta, what are we talking about just if you can provide that in terms of the potential dollar amount swing. It's all subject to the market I understand, but is it a couple million dollars, can it be more than that?

Well, I'll just say, and this is already factored into the guidance, but if the market got no better from where it was at the end of October it would be roughly $0.04 on the G&A expense, or about $4 million. Justin Mauer – Lord Abbett: Lastly on the discounting, are you guys getting a sense it certainly seems like the tenure of discounting may be starting up a little bit again. You mentioned that you're not really seeing that in your menu, but from a competitive standpoint is that a feeling out there at all or are things pretty well behaved still?

I think things are pretty well behaved. There are a couple of players Taco Bell is pretty aggressive with their low-cost menu. Wendy's a little bit more aggressive but they've been more aggressive since they rolled out their new $0.99 products, but other than that I wouldn’t say that it's real aggressive. It's not like it was in 2000, 2001.

Operator given the time let's take two more questions.

Your next question comes from Brian Moore - Wedbush Morgan. Brian Moore - Wedbush Morgan Securities: I guess I'll ask the perhaps unpopular but I think very relevant question on Q1 comp guidance. Brian Moore - Wedbush Morgan Securities: The stock obviously you're looking at the stock today and we've had results from other companies reported it and your guidance implies a pretty dramatic deceleration. So, given your comments about the teriyaki testing while given the dramatic decline in gas prices we've seen. I guess I'd ask two parts. First, could you tell us what the quarter-to-date comp is and then secondly, could you maybe talk to any regional disparity within California in terms of more housing impacted markets like Sacramento to [inaudible] if you're seeing any kind of comp divergence there versus other California markets.

Right, we don’t provide the quarter-to-date numbers, Brian, but in terms of the guidance and the way we thought about guiding sales was that we wanted to be somewhat cautious given the uncertainty around consumer spending, especially around the holiday period. That typically is a very strong sales period for us, the time between Thanksgiving and Christmas, and we just don't have a lot of visibility on what's going to happen in terms of the travel. We know travel's down and there's an expectation that it's going to be a pretty tough lean Christmas. So, that's what we wanted to be somewhat cautious in our guidance for the first quarter. With that said, though, I can tell you it's very early but we are excited about the Teriyaki Bowls. It's a great product, it's a great value because it's a full meal in one product and it's also a health alternative to the burgers. Brian Moore - Wedbush Morgan Securities: Then anything on the regional in terms of housing affected markets versus less housing affected markets?

Not really. I'm not seeing huge variance in the California markets. Brian Moore - Wedbush Morgan Securities: I certainly appreciate that color, Linda. If I could ask the question I guess about proceeds per store re-franchise. I think we previously talked about having a longer timetable on the re-franchising to preserve the proceeds or transaction value per store and I'm wondering how should we think about that value per store as we look out even beyond the current year. Does it decline, does it remain stable, does it go higher?

Brian, this is Jerry. We no longer take that view that we have to go slower to preserve the cash flow and to gain. We continue to have very high demand from our existing franchisees and we're making traction on our new franchise recruiting process, so we don't really look at it how we did say three years ago when we felt that the faster that we went to gain would be lower and I would point back to evidence of us increasing our franchising activity in each of the last three years and each of the last three years the average gains and the average cash flow has been higher. Brian Moore - Wedbush Morgan Securities: Just two final questions, I guess the first on demand. Could you give color on existing versus new franchisees for both I guess new units and re-franchising and then also maybe where you stand on your unit backlog for new development?

Brian, this is Paul. Thus far the demand for units has been primarily from our existing franchisees. As Jerry mentioned, we've just begun to get some traction on recruitment of new franchisees. We do have interest but we don’t have anything of significance that's really immanent. Brian Moore - Wedbush Morgan Securities: Final question, I'll tackle Joe and Rachel's question in a different way. Looking at G&A, on a nominal basis should we expect it to decline more or less than the $6 to $7 million you've achieved in reductions the last two years?

Brian, the only thing I can tell you is what we've guided to. We didn’t provide long-term guidance on the G&A. We do expect it to be 11 to 11.5% of revenues in 2009, fiscal 2009. I think it was 11.3 in 2008 and that includes that $4 million estimate on increase in cost because of the mark-to-market on the life insurance product. So, that's really all that I can tell you on that, and with lower revenues you'd expect the cost to be down also. I think you guys could probably get to the number with that information.

Operator, last question please.

Your final question will come from Fitzhugh Taylor - Thomas Weisel Partners. Fitzhugh Taylor - Thomas Weisel Partners: Linda, just a quick question and based on, or at least harkening back to your comments about the success of the new prototype, I just wondered with the acceleration of the exterior re-image do you possibly give up something in the, for lack of a better term, wow affect of not doing the inside?

No, because we're actually on track to complete all of the interior re-images at the same timeline as we had planned a year ago or a couple of years ago. So, all we're doing is accelerating that exterior re-image which really affects all of those customers that are going through the drive-thru and every consumer that's driving by a Jack in the Box, so we see it as an upside potential and we'll still go in at the same goal end date and do the complete interiors as well. Thank you very much appreciate your time. We'll talk to you again some time the week of February 16th.

Thank you everyone for participating on today's conference. (Operator Instructions)