Jack In The Box 2005 Annual Report Download - page 58

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(continued)
5. LEASES (continued)
As lessor – We lease or sublease restaurants to certain franchisees and others under agreements that generally provide for
the payment of percentage rentals in excess of stipulated minimum rentals, usually for a period of 20 years. Total rental
revenue was $45,734, $39,906 and $32,749, including contingent rentals of $10,280, $10,290 and $9,319, in 2005, 2004
and 2003, respectively.
The minimum rents receivable expected to be received under these non-cancelable leases, excluding contingent rentals, are
as follows:
Fiscal
year
Direct financing
lease
Operating
leases
2006........................................................................................................................... $ 442 $ 39,275
2007........................................................................................................................... 442 37,180
2008........................................................................................................................... 442 34,956
2009........................................................................................................................... 442 32,877
2010........................................................................................................................... 442 31,254
Thereafter .................................................................................................................. 5,393 346,804
Total minimum future rentals....................................................................................... 7,603 $ 522,346
Less amount representing unearned income................................................................. (7,126)
Net investment (included in other assets)..................................................................... $ 477
Land, building and equipment assets held for lease were $78,580 and $66,366, net of accumulated depreciation of $48,697
and $38,694, as of October 2, 2005 and October 3, 2004, respectively.
6. RESTAURANT CLOSING, IMPAIRMENT CHARGES AND OTHER
In fiscal 2005 and 2004, we recorded immaterial impairment charges related to the closure of certain company-operated
restaurants. Furthermore, in the fourth quarter of fiscal 2005, we incurred costs of approximately $3,000 related to the
cancellation of the Company’ s test of a fast-casual concept called JBX Grill. These charges have been included in selling,
general and administrative expenses in the consolidated statements of earnings.
Total accrued restaurant closing costs, included in accrued expenses and other long-term liabilities, were $5,495 and
$6,321 as of October 2, 2005 and October 3, 2004, respectively. In fiscal years 2005, 2004 and 2003, lease exit costs of
$143, $287 and $1,516, respectively, were charged to operations, resulting from revisions to certain sublease assumptions,
and cash payments of $969, $977 and $1,470, respectively, were applied against the restaurant closing costs accrual.
7. INCOME TAXES
The fiscal year income taxes consist of the following:
2005 2004 2003
Federal – current ........................................................................ $ 44,007 $ 33,082 $ 21,137
– deferred ...................................................................... (18,191) 17,986 3,876
State – current ........................................................................ 5,897 5,715 4,647
– deferred ...................................................................... (3,069) 2,546 (1,794)
Subtotal ......................................................................................... 28,644 59,329 27,866
Income tax expense (benefit) related to additional minimum
pension liability and interest rate swaps................................... 18,023 (16,509) 11,652
Income taxes ................................................................................. $ 46,667 $ 42,820 $ 39,518
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