Circuit City 1998 Annual Report Download - page 31

An aggregate of 420,348 options granted during 1997, with exercise prices ranging from $24.38 to $49.13, were re-priced on April 28, 1997
with an exercise price of $17.50, which represented the market price of the common stock at such date. All other terms of these options
remained unchanged.
7. INCOME TAXES
The provision for income taxes consists of the following (in thousands):
Income taxes are accrued and paid by each foreign entity in accordance with applicable local regulations.
A reconciliation of the difference between the income tax expense and the computed income tax expense based on the Federal statutory
corporate rate is as follows (in thousands):
The deferred tax assets (liabilities) are comprised of the following:
The foreign net operating loss carryforwards generally expire at dates through 2007 except for carryforwards in the United Kingdom and
Germany, which have no expiration. In accordance with Statement of Financial Accounting Standard 109 "Accounting for Income Taxes", the
Company maintains valuation allowances against its foreign net operating loss carryforwards since, at this time, the realizability of the related
deferred tax benefits can not be reasonably assured.
$17.51 to $22.50 48,500 8.69 $18.73 5,000 $21.56
$22.51 to $30.00 230,000 6.64 $26.88 130,000 $26.87
$30.01 to $39.06 4,000 7.33 $39.06 4,000 $39.06
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$12.38 to $39.06 1,642,848 7.71 $18.04 335,550 $21.38
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YEAR ENDED DECEMBER 31 1998 1997 1996
---------------------- -------- ---------- --------
Current:
Federal $ 22,072 $ 23,274 $ 23,140
State 4,259 4,107 3,787
Foreign 2,242 1,041 1,038
Deferred (2,749) (5,279) (865)
Change in valuation allowance 143 580
-------- -------- ---------
Total $ 25,824 $ 23,286 $ 27,680
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YEAR ENDED DECEMBER 31 1998 1997 1996
---------------------- -------- ---------- --------
Federal statutory rate $ 23,477 $ 21,734 $ 24,984
State and local income taxes, net of Federal tax benefit 2,511 2,092 2,456
Foreign tax less than domestic rate (192) (232) (463)
Net operating losses utilized (276) (165) (335)
Other items, net 304 (143) 1,038
-------- --------- ---------
$ 25,824 $ 23,286 $ 27,680
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1998 1997
------------------ ---------------
Current:
Deductible assets.................................................... $(4,106) $ (3,649)
Non-deductible accruals and reserves.................................. 10,040 7,458
Non-deductible assets................................................. 986 553
Foreign net operating loss carryforwards 26
Other................................................................. (55) (329)
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Current.......................................................... $ 6,865 4,059
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Non-current:
Foreign net operating loss carryforwards 5,658 4,980
Accelerated depreciation.............................................. (1,147) (1,243)
Basis differences from acquisitions................................... 1,063 1,843
Valuation allowances.................................................. (2,490) (2,458)
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Non-current....................................................... 3,084 3,122
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Total........................................................ $ 9,949 $ 7,181
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