Jack In The Box 2005 Annual Report Download - page 26

Forward-Looking Statements
From time-to-time the Company makes oral and written statements that reflect the Company’ s current expectations
regarding future results of operations, economic performance, financial condition and achievements of the Company. We try,
whenever possible, to identify these forward-looking statements by using words such as “anticipate,” “assume,” “believe,”
“estimate,” “expect,” “intend,” “plan,” “project,” “may,” “will,” “would,” and similar expressions. Certain forward-looking
statements are included in this Form 10-K, principally in the sections captioned “Business,” “Legal Proceedings,” the
“Consolidated Financial Statements” and “Management’ s Discussion and Analysis of Financial Condition and Results of
Operations” including statements regarding our strategic plans and operating strategies. Although we believe that the
expectations reflected in our forward-looking statements are based on reasonable assumptions, such expectations may prove to be
materially incorrect due to known and unknown risks and uncertainties.
In some cases, information regarding certain important factors that could cause actual results to differ materially from
any forward-looking statement appears together with such statement. In addition, the factors described under Critical Accounting
Policies and Risk Factors, as well as other possible factors not listed, could cause actual results to differ materially from those
expressed in forward-looking statements; weather conditions and related events such as floods that may adversely affect the level
of customer traffic, damage our restaurants or otherwise disrupt operations; changes in accounting standards policies and
practices or related interpretations by auditors or regulatory entities; assumptions relating to pension costs, including the
possibility of increased pension expense and contributions; the practical or psychological effects of terrorist acts or government
responses; the on-going conflict in Iraq; war or the risk of war; the costs and other effects of legal claims by employees,
franchisees, customers, vendors, stockholders and others, including settlement of those claims; and the effectiveness of
management strategies and decisions.
ITEM 1A. RISK FACTORS
Risks Related to the Food Service Industry. Food service businesses may be affected by changes in consumer tastes,
national, regional and local economic and political conditions, demographic trends, and the impact on consumer eating habits of
new information regarding diet, nutrition and health. The performance of individual restaurants may be adversely affected by
factors such as traffic patterns, demographics and the type, number and location of competing restaurants.
Multi-unit food service businesses such as ours can also be materially and adversely affected by widespread negative
publicity of any type, but particularly regarding food quality, illness, obesity, injury or other health concerns with respect to
certain foods. To minimize the risk of food-borne illness, we have implemented a HACCP system for managing food safety and
quality. Nevertheless, the risk of food-borne illness cannot be completely eliminated. Any outbreak of such illness attributed to
our restaurants or within the food service industry or any widespread negative publicity regarding our brands or the restaurant
industry in general could have a material adverse effect on our financial condition and results of operations.
Dependence on frequent deliveries of fresh produce and groceries subjects food service businesses, such as ours, to the
risk that shortages or interruptions in supply, caused by adverse weather or other conditions, could adversely affect the
availability, quality and cost of ingredients. In addition, unfavorable trends or developments concerning factors such as inflation,
increased cost of food, labor, fuel, utilities, technology, insurance and employee benefits (including increases in hourly wage, and
workers’ compensation and other insurance premiums), increases in the number and locations of competing restaurants, regional
weather conditions and the availability of experienced management and hourly employees, may also adversely affect the food
service industry in general. Because our restaurants are predominantly company-operated, we may have greater exposure to
operating cost issues than chains that are primarily franchised. Changes in economic conditions affecting our customers could
reduce traffic in some or all of our restaurants or impose practical limits on pricing, either of which could have a material adverse
effect on our financial condition and results of operations. Our continued success will depend in part on our ability to anticipate,
identify and respond to changing conditions.
Risks Associated with Development. We intend to grow primarily by developing additional company-owned restaurants
and through new restaurants to be developed by franchisees. Development involves substantial risks, including the risk of (i) the
availability of financing for the Company and to franchisees at acceptable rates and terms, (ii) development costs exceeding
budgeted or contracted amounts, (iii) delays in completion of construction, (iv) the inability to identify, or the unavailability of
suitable sites, both traditional and nontraditional, on acceptable leasing or purchase terms, (v) developed properties not achieving
desired revenue or cash flow levels once opened, (vi) competition for suitable development sites; (vii) incurring substantial
unrecoverable costs in the event a development project is abandoned prior to completion, (viii) the inability to obtain all required
governmental permits, including, in appropriate cases, liquor licenses; (ix) changes in governmental rules, regulations, and
interpretations (including interpretations of the requirements of the American with Disabilities Act, (ADA) and (x) general
economic and business conditions.
Although we intend to manage our development to reduce such risks, we cannot assure you that present or future
development will perform in accordance with our expectations. We cannot assure you that we will complete the development and
construction of the facilities, or that any such development will be completed in a timely manner or within budget, or that any
restaurants will generate our expected returns on investment. Our inability to expand in accordance with our plans or to manage
our growth could have a material adverse effect on our results of operations and financial condition.
11