GNC 2010 Annual Report Download - page 93

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, 2009 December 31, 2008
(in thousands)
Assets Liabilities Net Assets Liabilities Net
Deferred tax:
Current assets (liabilities):
Operating reserves $ 2,906 $ — $ 2,906 $ 4,510 $ — $ 4,510
Deferred revenue 1,727 — 1,727 12,002 — 12,002
Prepaid expenses — (10,170) (10,170) — (10,292) (10,292)
Accrued worker compensation 2,167 — 2,167 1,845 — 1,845
Foreign tax credits 1,035 — 1,035 2,858 — 2,858
Other 3,401 (1,688) 1,713 562 (30) 532
Total current $ 11,236 $ (11,858) $ (622) $ 21,777 $ (10,322) $ 11,455
Non-current assets (liabilities):
Intangibles $ — $ (308,724) $ (308,724) $ — $ (305,644) $ (305,644)
Fixed assets 5,255 — 5,255 9,945 — 9,945
Stock compensation 2,705 — 2,705 1,638 — 1,638
Net operating loss carryforwards 8,100 — 8,100 12,743 — 12,743
Interest rate swap 5,343 — 5,343 6,880 — 6,880
Foreign tax credits. — — — 3,950 — 3,950
Other 5,957 — 5,957 4,475 — 4,475
Valuation allowance (7,530) — (7,530) (11,990) — (11,990)
Total non-current $ 19,830 $ (308,724) $ (288,894) $ 27,641 $ (305,644) $ (278,003)
Total net deferred taxes $ 31,066 $ (320,582) $ (289,516) $ 49,418 $ (315,966) $ (266,548)
As of December 31, 2009 and 2008, the Company had deferred tax assets relating to state NOLs in the amount of $8.1 million and
$12.7 million, respectively. With the exception of $0.6 million and $0.8 million of deferred tax assets as of December 31, 2009 and 2008,
respectively, a valuation allowance was provided for all the state NOLs as the Company currently believes that these NOLs, with lives ranging
from five to twenty years, may not be realizable prior to their expiration.
Deferred income taxes were not provided on cumulative undistributed earnings of international subsidiaries, at December 31, 2009 and
2008, 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 Year ended March 16- January 1-
December 31, December 31, December 31, March 15,
2009 2008 2007 2007
(in thousands)
Domestic $ 104,155 $ 79,840 $ 25,607 $ (63,672)
Foreign 7,083 6,941 5,977 1,661
Total income (loss) before income taxes $ 111,238 $ 86,781 $ 31,584 $ (62,011)
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