Jack In The Box 2005 Annual Report Download - page 60

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(continued)
8. RETIREMENT AND SAVINGS PLANS
We have non-contributory defined benefit pension plans covering those employees meeting certain eligibility requirements.
These plans are subject to modification at any time. The plans provide retirement benefits based on years of service and
compensation. It is our practice to fund retirement costs as necessary.
We use a June 30 measurement date for our defined benefit pension plans. The following table provides a reconciliation,
as of June 30, 2005 and June 30, 2004, of the changes in benefit obligations, plans assets and funded status of our qualified
and non-qualified plans.
Qualified plans Non–qualified plan
2005 2004 2005 2004
Change in benefit obligation:
Benefit obligation at beginning of year.................. $ 151,334 $ 139,595 $ 30,878 $ 31,663
Service cost............................................................ 8,393 8,170 644 536
Interest cost............................................................ 10,053 8,943 2,043 1,941
Actuarial (gain) loss............................................... 43,486 (2,851) 4,919 (2,093)
Benefits paid .......................................................... (2,903) (2,523) (1,306) (1,214)
Plan amendment and other..................................... – – 366 45
Benefit obligation at end of year............................ $ 210,363 $ 151,334 $ 37,544 $ 30,878
Change in plan assets:
Fair value of plan assets at beginning of year ........ $ 127,016 $ 84,928 $ – $ –
Actual return on plan assets ................................... 12,615 14,611 – –
Employer contributions.......................................... 22,200 30,000 1,306 1,214
Benefits paid .......................................................... (2,903) (2,523) (1,306) (1,214)
Fair value of plan assets at end of year .................. $ 158,928 $ 127,016 $ – $ –
Reconciliation of funded status:
Funded status ......................................................... $ (51,435) $ (24,318) $ (37,544) $ (30,878)
Unrecognized net loss ............................................ 81,608 45,370 10,370 5,894
Unrecognized prior service cost............................. 708 832 4,492 4,873
Net amount recognized .......................................... $ 30,881 $ 21,884 $ (22,682) $ (20,111)
Amounts recognized in the statement of
financial position consist of:
Accrued benefit liability......................................... $ (16,701) $ – $ (34,100) $ (27,037)
Prepaid benefit cost................................................ 4,733 21,884 – –
Accumulated other comprehensive loss................. 42,141 – 6,926 2,053
Intangible assets..................................................... 708 – 4,492 4,873
Net asset (liability) recognized............................... $ 30,881 $ 21,884 $ (22,682) $ (20,111)
A minimum pension liability adjustment is required when the accumulated benefit obligation exceeds the fair value of plan
assets and accrued benefit liabilities at the measurement date. In fiscal year 2005, lower interest rates have caused our
accumulated benefit obligation to increase. As a result, we were required to recognize an additional minimum pension
liability at October 2, 2005. The additional liability recognized in fiscal year 2005 resulted in a cumulative charge to other
comprehensive income in the consolidated statements of stockholders’ equity of $49,067, an increase of $47,014 compared
with a year ago. All defined benefit pension plan obligations, regardless of the funding status of the underlying plans, are
fully supported by the financial strength of the Company.
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