GNC 2009 Annual Report Download - page 87

Table of Contents
GENERAL NUTRITION CENTERS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax assets and liabilities at each respective period consisted of the following:
December 31, 2008 December 31, 2007
(in thousands)
Assets Liabilities Net Assets Liabilities Net
Deferred tax:
Current assets (liabilities):
Operating reserves $ 4,510 $ — $ 4,510 $ 6,098 $ — $ 6,098
Deferred revenue 12,002 — 12,002 12,084 — 12,084
Prepaid expenses — (10,292) (10,292) — (8,520) (8,520)
Accrued worker compensation 1,845 — 1,845 1,680 — 1,680
Foreign tax credits 2,858 — 2,858 4,675 — 4,675
Other 562 (30) 532 1,406 (394) 1,012
Total current $ 21,777 $ (10,322) $ 11,455 $ 25,943 $ (8,914) $ 17,029
Non-current assets (liabilities):
Intangibles $ — $ (305,644) $ (305,644) $ — $ (303,319) $ (303,319)
Fixed assets 9,945 — 9,945 12,771 — 12,771
Stock compensation 1,638 — 1,638 694 — 694
Net operating loss carryforwards 12,743 — 12,743 23,726 — 23,726
Interest rate swap 6,880 — 6,880 2,051 — 2,051
Foreign tax credits 3,950 — 3,950 — — —
Other 4,475 — 4,475 7,244 — 7,244
Valuation allowance (11,990) — (11,990) (10,955) — (10,955)
Total non-current $ 27,641 $ (305,644) $ (278,003) $ 35,531 $ (303,319) $ (267,788)
Total net deferred taxes $ 49,418 $ (315,966) $ (266,548) $ 61,474 $ (312,233) $ (250,759)
As of December 31, 2008 and 2007, the Company had deferred tax assets relating to state NOLs in the amount of $12.7 million and
$12.9 million, respectively. With the exception of $0.8 million and $2.0 million of deferred tax assets as of December 31, 2008 and 2007,
respectively, a valuation allowance was provided for all the state NOLs as the Company believes that these NOLs, with lives ranging from five
to twenty years, will not be realizable prior to their expiration.
Deferred income taxes were not provided on cumulative undistributed earnings of international subsidiaries, at December 31, 2008 and
2007, as unremitted earnings of the Company's non-U.S. subsidiaries were determined to be permanently reinvested.
Income before income taxes consisted of the following components:
Successor Predecessor
Year ended March 16- January 1- Year ended
December 31, December 31, March 15, December 31,
2008 2007 2007 2006
(in thousands)
Domestic $ 79,840 $ 25,607 $ (63,672) $ 56,453
Foreign 6,941 5,977 1,661 3,148
Total income before income taxes $ 86,781 $ 31,584 $ (62,011) $ 59,601
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