Jack In The Box 2010 Annual Report Download - page 47

Table of Contents
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
 
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 45 states. The following summarizes the
number of restaurants:
  

Company-operated 956 1,190 1,346
Franchised 1,250 1,022 812
Total system 2,206 2,212 2,158

Company-operated 188 157 111
Franchised 337 353 343
Total system 525 510 454
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 accordance with
U.S. generally accepted accounting principles and the rules and regulations of the Securities and Exchange Commission (“SEC”).
During fiscal 2009, we sold all of our Quick Stuff® convenience stores and fuel stations. These stores and their related activities
have been presented as discontinued operations for all periods presented. Unless otherwise noted, amounts and disclosures
throughout these Notes to Consolidated Financial Statements relate to our continuing operations.
Principles of consolidation — 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 2010 presentation. In 2010, we separated impairment and other charges, net from selling, general and
administrative expenses in our consolidated statements of earnings. We believe the additional detail provided is useful when
analyzing our results of operations.
Fiscal year — Our fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. Fiscal 2010 includes 53 weeks while
fiscal 2009 and 2008 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. We charge interest on past due accounts receivable and accrue interest on notes receivable based
on the contractual terms. The allowance for doubtful accounts is based on historical experience and a review of existing receivables.
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