Jack In The Box 2008 Annual Report Download - page 53

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of operations — Founded in 1951, Jack in the Box Inc. (the “Company”) operates and franchises JACK
IN THE BOX»quick-service restaurants and Qdoba Mexican Grill»(“Qdoba”) fast-casual restaurants in 44 states. The
following summarizes the number of restaurants:
Sept. 28,
2008 Sept. 30, 2007 Oct. 1, 2006
Jack in the Box:
Company-operated...................................... 1,346 1,436 1,475
Franchised............................................ 812 696 604
Total system .......................................... 2,158 2,132 2,079
Qdoba:
Company-operated...................................... 111 90 70
Franchised............................................ 343 305 248
Total system .......................................... 454 395 318
References to the Company throughout these notes to the consolidated financial statements are made using the
first person notations of “we,” “us” and “our.”
Basis of presentation — The accompanying consolidated financial statements have been prepared in accor-
dance with U.S. generally accepted accounting principles and the rules and regulations of the Securities and
Exchange Commission (“SEC”). The consolidated financial statements include the accounts of the Company, its
wholly-owned subsidiaries and the accounts of any variable interest entities where we are deemed the primary
beneficiary. All significant intercompany transactions are eliminated.
Reclassifications and adjustments — Certain prior year amounts in the consolidated financial statements have
been reclassified to conform to the fiscal 2008 presentation. The accompanying consolidated financial statements
have been adjusted to take into account the impact to goodwill from the sale of company-operated restaurants to
franchisees. Refer to Note 3, Goodwill and Intangible Assets, Net for additional information. Quick Stuff has been
classified as a discontinued operation for all periods presented. Refer to Note 2, Discontinued Operations, for
additional information.
Fiscal year — Our fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. Fiscal years 2008,
2007 and 2006 include 52 weeks.
Use of estimates — In preparing the consolidated financial statements in conformity with U.S. generally
accepted accounting principles, management is required to make certain assumptions and estimates that affect
reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingencies. In making these
assumptions and estimates, management may from time to time seek advice and consider information provided by
actuaries and other experts in a particular area. Actual amounts could differ materially from these estimates.
Cash and cash equivalents — We invest cash in excess of operating requirements in short-term, highly liquid
investments with original maturities of three months or less, which are considered cash equivalents.
Accounts and other receivables, net is primarily comprised of receivables from franchisees, tenants and credit
card processors. Franchisee receivables primarily include rents, royalties, and marketing fees associated with the
franchise agreements and receivables arising from distribution services provided to most franchisees. Tenant
receivables relate to subleased properties where we are on the master lease agreement. The allowance for doubtful
accounts is based on historical experience and a review of existing receivables. Changes in accounts and other
receivables are classified as operating activity in the consolidated statements of cash flows.
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