Jack In The Box 2006 Annual Report Download - page 68

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
F-18
8. RETIREMENT AND SAVINGS PLANS (continued)
We use a June 30 measurement date for our defined benefit pension plans. The following table provides a
reconciliation of the changes in benefit obligations, plan assets and funded status of our qualified and non-
qualified plans as of June 30, 2006 and June 30, 2005.
Qualified plans Non-qualified plan
2006 2005 2006 2005
Change in benefit obligation:
Benefit obligation at beginning of year .............................. $ 210,363 $ 151,334 $ 37,544 $ 30,878
Service cost ........................................................................ 12,042 8,393 771 644
Interest cost ........................................................................ 12,258 10,053 2,067 2,043
Actuarial (gain) loss............................................................ (35,351) 43,486 (2,326) 4,919
Benefits paid....................................................................... (3,281) (2,903) (1,828) (1,306)
Plan amendment and other ................................................. — — 525 366
Benefit obligation at end of year ........................................ $ 196,031 $ 210,363 $ 36,753 $ 37,544
Change in plan assets:
Fair value of plan assets at beginning of year..................... $ 158,928 $ 127,016 $ — $ —
Actual return on plan assets ................................................ 15,893 12,615 — —
Employer contributions ...................................................... 14,000 22,200 1,828 1,306
Benefits paid....................................................................... (3,281) (2,903) (1,828) (1,306)
Fair value of plan assets at end of year............................... $ 185,540 $ 158,928 $ — $ —
Reconciliation of funded status:
Funded status ...................................................................... $ (10,491) $ (51,435) $ (36,753) $ (37,544)
Unrecognized net loss......................................................... 34,376 81,608 7,308 10,370
Unrecognized prior service cost ......................................... 584 708 4,110 4,255
Unrecognized net transition obligation............................... — — 142 237
Net amount recognized....................................................... $ 24,469 $ 30,881 $ (25,193) $ (22,682)
Amounts recognized in the statement of financial position
consist of:
Accrued benefit liability ..................................................... $ — $ (16,701) $ (33,362) $ (34,100)
Prepaid benefit cost ............................................................ 24,469 4,733 — —
Accumulated other comprehensive loss.............................. — 42,141 3,917 6,926
Intangible assets ................................................................. — 708 4,252 4,492
Net asset (liability) recognized........................................... $ 24,469 $ 30,881 $ (25,193) $ (22,682)
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 2005, lower interest rates caused
our accumulated benefit obligation to exceed the fair value of plan assets. As required, we recognized an
additional minimum pension liability at October 2, 2005. In 2006, higher interest rates caused our accumulated
benefit obligations to decrease, while an improved return on investments and employer contributions contributed
to an increase in the market value of our plan assets. As a result, we were able to fully reverse the qualified
plans’ additional minimum pension liability and a portion of the non-qualified plan’ s additional minimum
pension liability at October 1, 2006. The reversal resulted in a cumulative pre-tax charge to other comprehensive
income in the consolidated statement of stockholders’ equity of $3,917 in fiscal year 2006, a decrease of $45,150
compared with a year ago.