Jack In The Box 2013 Annual Report Download - page 27
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The income tax provisions reflect effective tax rates of 32.8%, 33.2% and 36.1% of pretax earnings from continuing operations in 2013, 2012 and 2011,
respectively. The changes in tax rates are primarily due to the market performance of insurance investment products used to fund certain non-qualified
retirement plans coupled with the impact of work opportunity tax credits. Changes in the cash value of the insurance products are not included in taxable
income.
Earnings from continuing operations were $82.6 million, or $1.84 per diluted share, in 2013; $68.1 million, or $1.52 per diluted share, in 2012; and
$85.9 million, or $1.71 per diluted share, in 2011.
As described in Note 2, Discontinued Operations, in the notes to our consolidated financial statements, the losses from our distribution business and the
2013 Qdoba Closures have been reported as discontinued operations for all periods presented.
Losses from discontinued operations net of tax, are as follows for each discontinued operation in each year (in thousands):
Distribution business
$(3,974)
$(5,321)
$(1,131)
2013 Qdoba Closures
(27,482)
(5,132)
(4,147)
$(31,456)
$(10,453)
$(5,278)
The loss from discontinued operations related to our distribution business includes includes pre-tax charges of $1.9 million and $6.0 million for the
accelerated depreciation of a long-lived asset disposed of upon completion of the transaction, $2.0 million and $0.7 million for future lease commitments, and
$1.2 million and $1.1 million primarily related to costs incurred to exit certain vendor contracts in fiscal 2013 and 2012, respectively. In 2013, the loss from
discontinued operations related to the 2013 Qdoba Closures includes pre-tax charges of $22.2 million for asset impairments, $10.3 million for future lease
commitments, net of reversals for deferred rent and tenant improvement allowances of $4.3 million, $3.0 million of other exits costs (primarily severance,
equipment removal costs and inventory write-offs) and a $8.8 million net loss from operations.
These losses from discontinued operations reduced diluted earnings per share by the following in each year (amounts may not add due to rounding):
Distribution business
$(0.09)
$(0.12)
$(0.02)
2013 Qdoba Closures
(0.61)
(0.11)
(0.08)
$(0.70)
$(0.23)
$(0.11)
Our primary sources of short-term and long-term liquidity are expected to be cash flows from operations, our revolving bank credit facility and the sale and
leaseback of certain restaurant properties.
We generally reinvest available cash flows from operations to develop new restaurants or enhance existing restaurants, to reduce debt and to repurchase
shares of our common stock. 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 capital expenditure, working capital and debt service requirements for at least the next twelve months and the
foreseeable future.
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