Jack In The Box 2011 Annual Report Download - page 51

Download and view the complete annual report

Please find page 51 of the 2011 Jack In The Box annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 89

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89

Table of Contents


 
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:
  

Company-operated 629 956 1,190
Franchise 1,592 1,250 1,022
Total system 2,221 2,206 2,212

Company-operated 245 188 157
Franchise 338 337 353
Total system 583 525 510
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 (“VIEs”) where we are deemed the primary beneficiary. All significant intercompany accounts and transactions
are eliminated.
The Financial Accounting Standards Board (“FASB”) authoritative guidance on consolidation requires the primary beneficiary of a VIE to consolidate
that entity. The primary beneficiary of a VIE is an enterprise that has a controlling financial interest in the VIE. Controlling financial interest exists when
an enterprise has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses
or the right to receive benefits of the VIE that could potentially be significant to the VIE.
The primary entities in which we possess a variable interest are franchise entities, which operate our franchise restaurants. We do not possess any
ownership interests in franchise entities. We have reviewed these franchise entities and determined that we are not the primary beneficiary of the entities
and therefore, these entities have not been consolidated. We also hold a variable interest in a subsidiary formed for the purpose of operating a franchisee
lending program. In January 2011, we formed an entity, Jack in the Box Franchise Finance, LLC (“FFE”), which may provide up to $100.0 million to
assist franchisees in re-imaging their restaurants. We are the sole equity investor in FFE. For information related to this VIE, refer to Note 15, Variable
Interest Entities.
F-7
®
®
®