Jack In The Box 2009 Annual Report Download - page 26

Table of Contents
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Interest income was $1.4 million, $0.6 million, and $8.8 million, in 2009, 2008 and 2007, respectively. The increase in 2009 from
a year ago primarily reflects interest earned on notes receivable. The decrease in 2008 compared with 2007 is due to lower average cash
balances.
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The income tax provisions reflect effective tax rates of 37.7%, 37.3%, and 35.6% of pretax earnings from continuing operations in
2009, 2008 and 2007, respectively. The higher tax rates in 2009 and 2008 are primarily attributable to market performance of insurance
investment products used to fund certain non-qualified retirement plans. Changes in the cash value of the insurance products are not
deductible or taxable.
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Earnings from continuing operations were $131.0 million or $2.27 per diluted share, in 2009; $118.2 million or $1.99 per diluted
share, in 2008; and $124.7 million or $1.85 per diluted share, in 2007.
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As described in the “Financial Reporting” section, Quick Stuff’s results of operations have been reported as discontinued
operations. In 2009, the loss from discontinued operations, net was $12.6 million, reflecting the $15.0 million net of tax loss from the
sale of Quick Stuff in the fourth quarter. Earnings from discontinued operations, net were $1.1 million and $0.9 million in 2008 and
2007, respectively.
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General. Our primary sources of short-term and long-term liquidity are expected to be cash flows from operations, the revolving
bank credit facility, the sale of company-operated restaurants to franchisees and the sale and leaseback of certain restaurant properties.
Our cash requirements consist principally of:
• working capital;
• capital expenditures for new restaurant construction and restaurant renovations;
• income tax payments;
• debt service requirements; and
• obligations related to our benefit plans.
Based upon current levels of operations and anticipated growth, we expect that cash flows from operations, combined with other
financing alternatives in place or available, will be sufficient to meet our capital expenditure, working capital and debt service
requirements for the foreseeable future.
As is common in the restaurant industry, we maintain relatively low levels of accounts receivable and inventories and our vendors
grant trade credit for purchases such as food and supplies. We also continually invest in our business through the addition of new units
and refurbishment of existing units, which are reflected as long-term assets and not as part of working capital. As a result, we typically
maintain current liabilities in excess of current assets that result in a working capital deficit.
Cash and cash equivalents increased $5.1 million to $53.0 million at September 27, 2009 from $47.9 million at the beginning of
the fiscal year. This increase is primarily due to cash flows provided by operating activities, proceeds received from the sale of Quick
Stuff and company-operated restaurants, and collections on notes receivable. These cash inflows were partially offset by cash used to
repay borrowings under our revolving credit facility and purchase property and equipment. We generally reinvest available cash flows
from operations to develop new restaurants or enhance existing restaurants, to repurchase shares of our common stock and to reduce debt.
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