GNC 2011 Annual Report Download - page 94

Table of Contents
NOTE 5. INCOME TAXES (Continued)
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
December 31,
2010 2009 2008
(in thousands)
Balance of unrecognized tax benefits at beginning of period $ 6,776 $ 5,542 $ 6,871
Additions for tax positions taken during current period 1,027 1,881 1,620
Additions for tax positions taken during prior periods 1,880 2,108 —
Reductions for tax positions taken during prior periods (39) (2,264) (2,059)
Settlements (924) (491) (890)
Balance of unrecognized tax benefits at end of period $ 8,720 $ 6,776 $ 5,542
At December 31, 2010, the amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $8.7 million. While it is often
difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its unrecognized tax
benefits reflect the most likely outcome. The Company adjusts these unrecognized tax benefits, as well as the related interest, in light of changing facts and
circumstances. Settlement of any particular position could require the use of cash. Favorable resolution would be recognized as a reduction to its effective
income tax rate in the period of resolution.
NOTE 6. PREPAIDS AND OTHER CURRENT ASSETS
Other current assets at each respective period consisted of the following at December 31:
2010 2009
(in thousands)
Current portion of franchise note receivables $ 976 $ 718
Prepaid rent 14,003 13,397
Prepaid insurance 2,974 4,452
Prepaid income tax 3,607 9,737
Prepaid payroll tax 992 923
Deferred tax asset (Note 5) 4,007 —
Other current assets 13,066 12,992
$ 39,625 $ 42,219
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