Jack In The Box 2006 Annual Report Download - page 71

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
F-21
9. POSTRETIREMENT BENEFIT PLANS
We sponsor health care plans that provide postretirement medical benefits for employees who meet minimum
age and service requirements. The plans are contributory; with retiree contributions adjusted annually, and
contain other cost-sharing features such as deductibles and coinsurance. Our policy is to fund the cost of medical
benefits in amounts determined at the discretion of management.
2006 2005
Change in benefit obligation:
Benefit obligation at beginning of year ......................................................................... $ 18,822 $ 14,217
Service cost ................................................................................................................... 272 292
Interest cost ................................................................................................................... 1,023 1,127
Participant contributions................................................................................................ 102 88
Actuarial (gain) loss....................................................................................................... (2,973) 3,581
Benefits paid.................................................................................................................. (563) (483)
Benefit obligation at end of year ................................................................................... $ 16,683 $ 18,822
Change in plan assets:
Fair value of plan assets at beginning of year................................................................ $ — $ —
Employer contributions ................................................................................................. 461 395
Participant contributions................................................................................................ 102 88
Benefits paid.................................................................................................................. (563) (483)
Fair value of plan assets at end of year.......................................................................... $ — $ —
Reconciliation of funded status:
Funded status................................................................................................................. $ (16,683) $ (18,822)
Unrecognized prior service cost .................................................................................... 816 1,001
Unrecognized actuarial gain, net ................................................................................... (6,338) (3,737)
Net liability recognized ................................................................................................. $ (22,205) $ (21,558)
The net liability recognized in the reconciliation of funded status is included in other long-term liabilities in the
consolidated balance sheets.
Assumptions — We determine our actuarial assumptions on an annual basis. In determining the present values of
our benefit obligation and net periodic benefit cost as of and for the fiscal years ended October 1, 2006, October
2, 2005 and October 3, 2004, respectively, we used the following assumptions:
2006 2005 2004
Assumptions used to determine benefit obligation:
Discount rate......................................................................................... 6.60% 5.50% 6.45%
Measurement date................................................................................. 6/30/2006 6/30/2005 6/30/2004
Assumptions used to determine net periodic benefit cost:
Discount rate......................................................................................... 5.50% 6.45% 6.15%
Measurement date................................................................................. 6/30/2005 6/30/2004 6/30/2003
The assumed discount rate reflects the market rates for high-quality bonds currently available. The Company’ s
discount rate was determined by considering the average yield curves constructed of a population of high quality
bonds.
Net periodic benefit cost — The components of the fiscal year net periodic benefit cost are as follows:
2006 2005 2004
Service cost ................................................................................................................ $ 272 $ 292 $ 259
Interest cost ................................................................................................................ 1,023 1,127 825
Recognized actuarial gain .......................................................................................... (371) (376) (506)
Amortization of prior service cost.............................................................................. 185 185 —
Amortization of losses................................................................................................ — 4 —
Net periodic benefit cost............................................................................................. $ 1,109 $ 1,232 $ 578