Jack In The Box 2009 Annual Report Download - page 53

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Table of Contents


The following table summarizes, as of September 27, 2009, the estimated amortization expense for each of the next five fiscal years
(in thousands):

2010 $ 734
2011 733
2012 721
2013 687
2014 658
Total $3,533
 
The following table presents the financial assets and liabilities measured at fair value on a recurring basis as of September 27, 2009
(in thousands):


 
  
   
   
Interest rate swaps(1) (Note 6) $ 4,615 $ — $ 4,615 $ —
Non-qualified deferred compensation plan(2) 34,194 34,194 — —
Total liabilities at fair value $ 38,809 $ 34,194 $ 4,615 $ —
(1) We entered into interest rate swaps to reduce our exposure to rising interest rates on our variable debt. The fair value of our interest rate
swaps are based upon valuation models as reported by our counterparties.
(2) We maintain an unfunded defined contribution plan for key executives and other members of management excluded from
participation in our qualified savings plan. The fair value of this obligation is based on the closing market prices of the participants’
elected investments.
The fair values of cash and cash equivalents, accounts and other receivables, accounts payable and accrued liabilities approximate
their carrying amounts due to their short maturities. The fair values of each of our long-term debt instruments are based on quoted market
values, where available, or on the amount of future cash flows associated with each instrument, discounted using our current borrowing
rate for similar debt instruments of comparable maturity. At September 27, 2009, the fair value of our term loan approximated
$402.6 million compared with its carrying value of $415.0 million. The estimated fair values of our capital lease obligations
approximated their carrying values as of September 27, 2009.
 
Objectives and strategies — We are exposed to interest rate volatility with regard to our variable rate debt. To reduce our exposure to
rising interest rates, in March 2007, we entered into two interest rate swap agreements that effectively converted $200.0 million of our
variable rate term loan borrowings to a fixed rate basis until April 1, 2010. These agreements have been designated as cash flow hedges
under the terms of the FASB authoritative guidance for derivatives and hedging with effectiveness assessed based on changes in the
present value of the term loan interest payments. As such, the gains or losses on these derivatives are reported in other comprehensive
income (“OCI”).
F-14