Jack In The Box 2008 Annual Report Download - page 33

performance of insurance investment products used to fund certain non-qualified retirement plans. Changes in the
cash value of the insurance products are not deductible or taxable.
Net Earnings and Net Earnings per Share from Continuing Operations
Net earnings from continuing operations were $118.2 million or $1.99 per diluted share, in 2008; $124.7 million
or $1.85 per diluted share, in 2007; and $106.4 million or $1.48 per diluted share, in 2006.
Earnings from Discontinued Operations
As described in the “Financial Reporting Changes” section, Quick Stuff’s results of operations have been
reported as discontinued operations. Earnings from discontinued operations, net were $1.1million, $0.9 million and
$1.7 million in 2008, 2007 and 2006, respectively.
Cumulative Effect of Accounting Change
In fiscal 2006, we adopted Financial Accounting Standards Board Interpretation (“FIN”) 47 which requires
that we record a liability for an asset retirement obligation at the end of a lease if the amount can be reasonably
estimated. As a result of adopting FIN 47, we recorded an after-tax cumulative effect from this accounting change of
$1.0 million related to the depreciation and interest expense that would have been charged prior to the adoption.
LIQUIDITY AND CAPITAL RESOURCES
General. Our primary sources of short-term and long-term liquidity are expected to be cash flows from
operations, the revolving bank credit facility, the sale of company-operated restaurants to franchisees and the sale
and leaseback of certain restaurant properties.
Our cash requirements consist principally of:
• working capital;
• capital expenditures for new restaurant construction, restaurant renovations and upgrades of our manage-
ment information systems;
• income tax payments;
• debt service requirements; and
• obligations related to our benefit plans.
Based upon current levels of operations and anticipated growth, we expect that cash flows from operations,
combined with other financing alternatives in place or available, will be sufficient to meet our capital expenditure,
working capital and debt service requirements.
As is common in the restaurant industry, we maintain relatively low levels of accounts receivable and
inventories and our vendors grant trade credit for purchases such as food and supplies. We also continually invest in
our business through the addition of new units and refurbishment of existing units, which are reflected as long-term
assets and not as part of working capital. As a result, we typically maintain current liabilities in excess of current
assets that result in a working capital deficit.
Cash and cash equivalents increased $32.2 million to $47.9 million at September 28, 2008 from $15.7 million
at the beginning of the fiscal year. This increase is primarily due to borrowings under our credit facility, cash flows
provided by operating activities and from the sale of restaurants to franchisees. We generally reinvest available cash
flows from operations to develop new restaurants or enhance existing restaurants, to repurchase shares of our
common stock and to reduce debt.
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