Jack In The Box 2006 Annual Report Download - page 67

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
F-17
7. INCOME TAXES (continued)
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:
2006 2005
Deferred tax assets:
Accrued pension and post retirement benefits ................................................................ $ 19,074 $ 29,351
Accrued insurance .......................................................................................................... 18,714 17,937
Leasing transactions ....................................................................................................... 14,377 13,744
Accrued vacation pay expense........................................................................................ 12,539 12,458
Deferred income ............................................................................................................. 4,614 5,643
Other reserves and allowances ....................................................................................... 9,072 7,213
Tax loss and tax credit carryforwards............................................................................. 2,736 2,571
Other, net........................................................................................................................ 6,946 2,294
Total gross deferred tax assets........................................................................................ 88,072 91,211
Valuation allowance........................................................................................................... (2,560) (2,320)
Total net deferred tax assets ............................................................................................... 85,512 88,891
Deferred tax liabilities:
Property and equipment, principally due to differences in depreciation ........................ 89,172 87,899
Intangible assets ............................................................................................................. 23,291 21,512
Total gross deferred tax liabilities................................................................................... 112,463 109,411
Net deferred tax liabilities .............................................................................................. $ 26,951 $ 20,520
Deferred tax assets at October 1, 2006 include state net operating loss carryforwards of approximately $41,458
expiring at various times between 2010 and 2026. At October 1, 2006 and October 2, 2005, the Company
recorded a valuation allowance related to state net operating losses of $2,560 and $2,230, respectively. The
current year change in the valuation allowance of $240 related to state net operating losses. The Company
believes that it is more likely than not that these loss carryforwards will not be realized. Management believes
that the remaining deferred tax assets will be realized through future taxable income or alternative tax strategies.
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.
8. RETIREMENT AND SAVINGS PLANS
We have non-contributory defined benefit pension plans covering those employees meeting certain eligibility
requirements. The plans provide retirement benefits based on years of service and compensation and are subject
to modification at anytime. It is our practice to fund retirement costs as necessary.