Jack In The Box 2011 Annual Report Download - page 29

Table of Contents
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The income tax provisions reflect effective tax rates of 35.9%, 33.8%, and 37.7% of pretax earnings from continuing operations in 2011, 2010, and 2009,
respectively. The higher tax rate in 2011 is primarily due to the market performance of insurance investment products used to fund certain non-qualified
retirement plans. The lower tax rate in 2010 is largely attributable to the impact of audit settlements, higher work opportunity tax credits and the market
performance of insurance investment products. Changes in the cash value of the insurance products are not included in taxable income.
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Earnings from continuing operations were $80.6 million, or $1.61 per diluted share, in 2011; $70.2 million, or $1.26 per diluted share, in 2010; and
$131.0 million, or $2.27 per diluted share, in 2009. We estimate that the extra 53rd week benefitted net earnings by approximately $1.8 million, or $0.03 per
diluted share, in fiscal 2010.
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As described in the “Financial Reporting” section, Quick Stuff’s results of operations have been reported as discontinued operations. In 2009, the loss
from discontinued operations, net was $12.6 million, and included a loss from the sale of Quick Stuff of $15.0 million, net of tax.
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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 Jack
in the Box 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 and restaurant renovations;
• 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 cash requirements for the foreseeable future.
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, which
results in a working capital deficit.
Cash and cash equivalents increased slightly to $11.4 million at October 2, 2011 from $10.6 million at the beginning of the fiscal year. During 2011, cash
flows provided by operating activities, proceeds from the sale of restaurants to franchisees, and net borrowings under our revolving credit facility were
partially offset by
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