Einstein Bros 2005 Annual Report Download - page 50

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http://www.sec.gov/Archives/edgar/data/949373/000110465906016136/a06-3178_110k.htm[9/11/2014 10:13:03 AM]
Under the terms of agreement, we sold the assets for a total sales price of approximately $0.4 million, which was received in cash. In
connection with the sale of Willoughby’ s, we also executed a two-year supply agreement to purchase coffee for our New World Coffee cafés from
the buyer.
64
NEW WORLD RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
We have considered SFAS No. 144 in our determination that the revenues, cost of sales, other operating expenses and the net book value of
the assets related to the sale of the coffee roasting plant and three retail locations included in the Willoughby’ s business were immaterial in relation
to our Einstein Bros., Noah and Manhattan restaurants, as well as the consolidated financial statements taken as a whole. Accordingly, we have not
presented discontinued operations in the accompanying consolidated statements of operations, nor have we reflected assets as held for sale in the
accompanying consolidated balance sheet as of December 28, 2004. We recognized a gain from the sale of approximately $90,000 during the year
ended December 28, 2004.
21. INCOME TAXES
The provision for income taxes consists of the following:
2005 2004 2003
(in thousands of dollars)
Current
Federal
$ —
$ —
$ —
State
—
(49) 812
Total current income tax expense (benefit)
—
(49) 812
Deferred
Federal
—
—
—
State
—
—
—
Total deferred income tax benefit
—
—
—
Total income tax benefit (expense)
$ —
$ (49)$ 812
A reconciliation between the reported provision for income taxes and the amount computed by applying the statutory federal income tax rate
of 35% to loss before income taxes is as follows:
2005 2004 2003
(in thousands of dollars)
Expected tax benefit at 35%
$ (4,906) $ (6,109) $ (25,448)
State net of federal benefit
(390) (611) (1,601)
Loss on extinguishment of debt
—
—
8,052
Other, net
705
(469) 2,303
Change in valuation allowance
4,591
7,140
17,506
Total benefit (provision) for taxes
$ —
$ (49)$ 812
65
NEW WORLD RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)