Jack In The Box 2010 Annual Report Download - page 60

Table of Contents
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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 :
 
Deferred tax assets:
Accrued pension and postretirement benefits $ 57,817 $ 58,256
Accrued insurance 13,603 12,676
Leasing transactions 11,290 13,304
Accrued vacation pay expense 8,528 11,835
Deferred income 2,436 2,660
Other reserves and allowances 33,893 21,955
Tax loss and tax credit carryforwards 4,087 3,924
Share-based compensation 16,708 12,172
Other, net 4,515 3,922
Total gross deferred tax assets 152,877 140,704
Valuation allowance (4,087) (3,924)
Total net deferred tax assets 148,790 136,780
Deferred tax liabilities:
Property and equipment, principally due to differences in depreciation (38,250) (51,734)
Intangible assets (23,394) (22,737)
Total gross deferred tax liabilities (61,644) (74,471)
Net deferred tax assets $ 87,146 $ 62,309
Deferred tax assets at October 3, 2010 include state net operating loss carryforwards of approximately $63.5 million expiring at
various times between 2011 and 2028. At October 3, 2010 and September 27, 2009, we recorded a valuation allowance related to
state net operating losses of $4.1 million for October 3, 2010 and $3.9 million for September 27, 2009. The current year change in
the valuation allowance of $0.2 million relates to net operating losses. We believe that it is more likely than not that these loss
carryforwards will not be realized and that the remaining deferred tax assets will be realized through future taxable income or
alternative tax strategies.
At September 27, 2009, our gross unrecognized tax benefits associated with uncertain income tax positions were $0.6 million,
which if recognized, would favorably affect the effective income tax rate. As of October 3, 2010, the gross unrecognized tax benefits
remain unchanged. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows ():
 
Balance beginning of year $ 608 $ 4,172
Increases to tax positions recorded during current years 200 195
Reductions to tax positions due to settlements with taxing authorities (179) (3,759)
Balance at end of year $ 629 $ 608
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 IRS has completed its examination or
until the statute of limitations has expired.
It is reasonably possible that changes of approximately $0.4 million to the gross unrecognized tax benefits will be required within the
next twelve months. These changes relate to the possible settlement of state tax audits.
The major jurisdictions in which the Company files income tax returns include the United States and states in which we operate that
impose an income tax. The federal statutes of limitations have not expired for tax years 2007 and forward. The statutes of limitations
for California and Texas, which constitute the Company’s major
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