Jack In The Box 2007 Annual Report Download - page 33

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(2) Effective fiscal 2007, we are reporting gains as a discrete line item within operating costs and expenses, rather
than within revenues, as previously presented. Prior year’s gains on sale of company-operated restaurants to
franchisees have been reclassified to conform with the current year presentation.
(3) Fiscal year 2004 includes a $9.2 million charge related to the refinancing of our term loan and the early
redemption of our senior subordinated notes.
(4) Earnings per share data reflects a two-for-one stock split effected in October 2007.
(5) Fiscal year 2007 includes the weighted impact of 7.1 million shares repurchased through our tender offer and
share repurchase programs. The 7.1 million shares repurchased has not been adjusted for the stock split as
treasury shares were not subject to the two-for-one split.
(6) Fiscal year 2007 reflects higher bank borrowings associated with our new credit facility entered into in the first
quarter.
(7) Fiscal year 2007 includes a reduction in stockholders’ equity of $363.4 million related to shares repurchased
and retired during the year.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
For an understanding of the significant factors that influenced our performance during the past three fiscal
years, we believe our Management’s Discussion and Analysis of Financial Condition and Results of Operations
(“MD&A”) should be read in conjunction with the Consolidated Financial Statements and related Notes included in
this Annual Report as indexed on page F-1.
All comparisons under this heading among 2007, 2006 and 2005 refer to the 52-week periods ended
September 30, 2007, October 1, 2006, and October 2, 2005, respectively, unless otherwise indicated.
Our MD&A consists of the following sections:
•Overview — a general description of our business, the quick-service dining segment of the restaurant
industry and fiscal 2007 highlights.
•Financial reporting changes — a summary of significant financial statement reclassifications, adjustments
and new accounting pronouncements adopted.
•Results of operations — an analysis of our consolidated statements of earnings for the three years presented
in our consolidated financial statements.
•Liquidity and capital resources — an analysis of cash flows including capital expenditures, aggregate
contractual obligations, share repurchase activity, known trends that may impact liquidity, and the impact of
inflation.
•Discussion of critical accounting estimates — a discussion of accounting policies that require critical
judgments and estimates.
•New accounting pronouncements — a discussion of new accounting pronouncements, dates of implemen-
tation and impact on our consolidated financial position or results of operations, if any.
OVERVIEW
As of September 30, 2007, Jack in the Box Inc. (the “Company”) owned, operated, and franchised 2,132 JACKINTHE
BOX quick-service restaurants and 395 Qdoba Mexican Grill (“Qdoba”) fast-casual restaurants, primarily in the western
and southern United States.
Our primary source of revenue is from retail sales at company-operated restaurants. We also derive revenue
from sales of food and packaging to JACK IN THE BOX and Qdoba franchises, retail sales from fuel and convenience
stores (“QUICK STUFF”), and revenue from franchisees including royalties, based upon a percent of sales, franchise
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