Dick's Sporting Goods 2008 Annual Report Download - page 69

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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:
2008 2007 2006
Federal statutory rate 35.0% 35.0% 35.0%
State tax, net of federal benefi t 3.7% 3.6% 4.2%
Non-deductible compensation 12.8% 0.0% 0.0%
Goodwill impairment 208.4% 0.0% 0.0%
Other permanent items 1.3% 1.2% 0.8%
Effective income tax rate 261.2% 39.8% 40.0%
The 2008 effective income tax rate includes $2.5 million of non-deductible executive separation costs resulting from the departure of
certain executive offi cers of Golf Galaxy and the impairment of non-deductible goodwill related to the 2007 acquisition of Golf Galaxy.
Components of deferred tax assets (liabilities) consist of the following as of the fi scal periods ended:
2008 2007
(In thousands)
Store-closing expense $ 16,769 $ 10,605
Stock-based compensation 22,161 15,760
Employee benefi ts 11,791 6,527
Other accrued expenses not currently deductible for tax purposes 3,664 2,252
Deferred rent 21,434 16,117
Insurance 1,891 2,753
Gift cards 7,176 5,704
Deferred revenue currently taxable 4,651 4,148
Non-Income based tax reserves 3,055 2,787
Uncertain income tax positions 2,723 3,896
Property and equipment 11,401 279
Net operating loss carryforwards 742 1,740
Total deferred tax assets 107,458 72,568
Inventory (20,932) (17,525)
Intangibles (8,196) (28,963)
Total deferred tax liabilities (29,128) (46,488)
Net deferred tax asset $ 78,330 $ 26,080
The deferred tax asset from tax loss carryforwards of $0.7 million represents approximately $15.6 million of state net operating
loss carryforwards, of which $0.9 million expires in the next ten years. The remaining $14.7 million expires between 2019 and 2026.
In 2008, of the $78.3 million net deferred tax asset, $10.6 million is recorded in current assets and $67.7 million is recorded in other
long-term assets in the Consolidated Balance Sheets. In 2007, of the $26.1 million net deferred tax asset, $19.7 million is recorded
in current assets and $6.4 million is recorded in other long term assets in the Consolidated Balance Sheets.
DICK’S SPORTING GOODS, INC. 2008 ANNUAL REPORT 67