Jack In The Box 2009 Annual Report Download - page 59

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Table of Contents


The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at each
year-end are presented below (in thousands):
 
Deferred tax assets:
Accrued pension and postretirement benefits $ 58,256 $ 23,510
Accrued insurance 12,676 13,952
Leasing transactions 13,304 14,057
Accrued vacation pay expense 11,835 11,926
Deferred income 2,660 2,883
Other reserves and allowances 21,955 9,633
Tax loss and tax credit carryforwards 3,924 4,257
Share-based compensation 12,172 11,398
Other, net 3,922 4,244
Total gross deferred tax assets 140,704 95,860
Valuation allowance (3,924) (4,257)
Total net deferred tax assets 136,780 91,603
Deferred tax liabilities:
Property and equipment, principally due to differences in depreciation (51,734) (71,159)
Intangible assets (22,737) (22,388)
Total gross deferred tax liabilities (74,471) (93,547)
Net deferred tax assets (liabilities) $ 62,309 $ (1,944)
Deferred tax assets at September 27, 2009 include state net operating loss carryforwards of approximately $61.1 million expiring at
various times between 2010 and 2027. At September 27, 2009 and September 28, 2008, we recorded a valuation allowance related to state
net operating losses of $3.9 million for September 27, 2009 and $4.3 million for September 28, 2008. The reduction of $0.3 million is
due to utilization of net operating losses in the current year. We believe that it is more likely than not that these loss carryforwards will not
be realized and that the remaining deferred tax assets will be realized through future taxable income or alternative tax strategies.
As of September 28, 2008, gross unrecognized tax benefits for income taxes associated with uncertain tax positions totaled
$4.2 million. At September 27, 2009, we had $0.6 million of unrecognized tax benefits. Of this total, $0.5 million represented the
amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. A
reconciliation of the beginning and ending amount of unrecognized tax benefits follows (in thousands):
 
Balance beginning of year $ 4,172 $11,024
Reductions to tax positions recorded during prior years 195 (689)
Reductions to tax positions due to settlements with taxing authorities (3,759) (3,625)
Reductions to tax positions due to statute expiration — (2,538)
Balance at end of year $ 608 $ 4,172
From time to time, we may take positions for filing our tax returns, which may differ from the treatment of the same item for
financial reporting purposes. The ultimate outcome of these items will not be known until the Internal Revenue Service has completed its
examination or until the statute of limitations has expired.
F-20