Burger King 2009 Annual Report Download - page 101

Table of Contents
BURGER KING HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
The significant components of deferred income tax expense (benefit) attributable to income from continuing operations are as
follows (in millions):
Years Ended June 30,
2009 2008 2007
Deferred income tax expense (exclusive of the effects of components listed below) $ 3.2 $ 20.3 $ 8.4
Change in valuation allowance, net of amounts allocated as adjustments to purchase accounting 3.0 (7.1) 5.0
Change in effective state income tax rate 4.5 — (1.9)
Change in effective foreign income tax rate 1.4 7.1 2.1
Total $ 12.1 $ 20.3 $ 13.6
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities
are presented below (in millions):
As of June 30,
2009 2008
Deferred tax assets:
Trade and notes receivable, principally due to allowance for doubtful accounts $ 12.7 $ 16.0
Accrued employee benefits 49.6 44.4
Unfavorable leases 71.9 81.5
Liabilities not currently deductible for tax 52.7 51.8
Tax loss and credit carryforwards 111.3 88.3
Property and equipment, principally due to differences in depreciation 61.6 72.2
Other 3.4 0.9
Total gross deferred tax assets 363.2 355.1
Valuation allowance (78.7) (87.9)
Net deferred tax assets 284.5 267.2
Less deferred tax liabilities:
Intangible assets 237.3 226.4
Leases 55.1 47.0
Total gross deferred tax liabilities 292.4 273.4
Net deferred tax liability $ 7.9 $ 6.2
For the year ended June 30, 2009, the valuation allowance decreased by $9.2 million. The decrease in valuation allowance is
primarily the result of changes in currency exchange rates.
98