Dick's Sporting Goods 2006 Annual Report Download - page 60

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The provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows for
the following periods:
2006 2005 2004
Federal statutory rate 35.0% 35.0% 35.0%
State tax, net of federal benefit 4.2% 4.6%4.3%
Other permanent items 0.8% 0.4% 0.7%
Effective income tax rate 40.0% 40.0% 40.0%
Components of deferred tax assets (liabilities) consist of the following as of the fiscal periods ended:
2006 2005
(In thousands)
Store closings expense $ 7,772 $ 14,269
Stock option compensation 7,455 –
Employee benefits 8,071 8,454
Other accrued expenses not currently deductible for tax purposes 10,331 8,273
Deferred rent 10,732 7,709
Insurance 3,5953,491
State net operating loss carryforwards 2,931 2,242
Total deferred tax assets 50,887 44,438
Property and equipment (12,281) (16,288)
Inventory (29,911) (18,762)
Total deferred tax liabilities (42,192) (35,050)
Net deferred tax asset $ 8,695 $ 9,388
The gross deferred tax asset from tax loss carryforwards of $2.9 million represents approximately $58.1 million of state net operating
loss carryforwards, of which $1.6 million expires in the next ten years. The remaining $56.5 million expires between 2018 and 2026.
In 2006, of the $8.7 million net deferred tax asset, $17.4 million is recorded in other long-term assets and $8.7 million is recorded in
deferred revenue and other current liabilities in the Consolidated Balance Sheets. In 2005, of the $9.4 million net deferred tax asset,
$0.4 million is recorded in current assets and $9.0 million is recorded in other long-term assets in the Consolidated Balance Sheets.
11. Interest Expense, Net
Interest expense, net is comprised of the following:
2006 2005 2004
(In thousands)
Interest expense $ 10,836$ 13,196 $ 9,142
Interest income (811) (237) (1,133)
Interest expense, net $ 10,025 $ 12,959 $ 8,009
DICK’S SPORTING GOODS, INC. 2006 ANNUAL REPORT
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