You can use it to pass a bunch of variables between functions, without having to constantly get them from an array.

    function qux() {
      return compact('foo', 'bar', 'baz');
    }

And in the other function:

    extract(qux());

You can have one "preparer" function that works on the data and sets up the variables, then several others that work on it, and all call the same preparer. Or the reverse.

Obviously you can do the same thing by just passing arrays but sometimes a simple variable is easier and less cumbersome.