Jack In The Box 2006 Annual Report Download - page 77

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JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
F-27
11. STOCKHOLDERS’ EQUITY (continued)
Comprehensive income — Our total comprehensive income, net of taxes, was as follows:
2006 2005 2004
Net earnings ...................................................................................................
.
$ 108,031 $ 91,537 $ 74,684
Net unrealized gains related to cash flow hedges, net of taxes of $117 and
$266, respectively.........................................................................................
.
180 417 —
Additional minimum pension liability, net of taxes of $17,563, (18,289),
and $16,509, respectively.............................................................................
.
27,587 (28,726) 25,930
Total comprehensive income..........................................................................
.
$ 135,798 $ 63,228 $ 100,614
The components of accumulated other comprehensive income (loss), net of taxes, were as follows as of October
1, 2006 and October 2, 2005:
2006 2005
Additional minimum pension liability adjustment ..............................................................
.
$ (2,393) $ (29,980)
Net unrealized gains related to cash flow hedges................................................................
.
597 417
Accumulated other comprehensive income (loss)...............................................................
.
$ (1,796) $ (29,563)
12. AVERAGE SHARES OUTSTANDING
The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares
outstanding (in thousands):
2006 2005 2004
Weighted-average shares outstanding — basic .............................................................
.
34,944 35,625 36,237
Assumed additional shares issued upon exercise of stock options, net of shares
reacquired at the average market price........................................................................
.
907 1,158 644
Assumed vesting of nonvested stock, net of shares reacquired at the average
market price.................................................................................................................
.
66 155 80
Weighted-average shares outstanding — diluted ..........................................................
.
35,917 36,938 36,961
Stock options excluded (1)............................................................................................
.
337 — 1,281
Performance based awards excluded (2) .......................................................................
.
217 156 93
____________
(1) Excluded from diluted weighted-average shares outstanding because their exercise prices, unamortized
compensation and tax benefits exceeded the average market price of common stock for the period.
(2) Excluded from diluted weighted-average shares outstanding because the number of shares issued is
contingent on achievement of performance goals at the end of a three-year performance period.
13. COMMITMENTS, CONTINGENCIES AND LEGAL MATTERS
Commitments — We are principally liable for lease obligations on various properties subleased to third parties.
We are also obligated under a lease guarantee agreement associated with a Chi-Chi’ s restaurant property. Due to
the bankruptcy of the Chi-Chi’ s restaurant chain, previously owned by the Company, we are obligated to
perform in accordance with the terms of a guarantee agreement, as well as four other lease agreements, which
expire at various dates in 2010 and 2011. During fiscal year 2003, we established an accrual for these lease
obligations and do not anticipate incurring any additional charges in future years related to Chi-Chi’ s
bankruptcy. As of October 1, 2006, our accrual for the lease guarantee was $1,012 and the maximum potential
amount of future payments was $1,675.
Legal Proceedings — During the first quarter of fiscal year 2006, we recorded a $2,400 charge for a legal
settlement related to a labor matter in California.
We are also subject to normal and routine litigation. In the opinion of management, based in part on the advice
of legal counsel, the ultimate liability from all other pending legal proceedings, asserted legal claims and known
potential legal claims is not expected to materially affect our operating results, financial position and liquidity.