GameStop 2010 Annual Report Download - page 95
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Table of Contents
GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The difference in income tax provided and the amounts determined by applying the statutory rate to income before income taxes resulted from
the following:
52 Weeks 52 Weeks 52 Weeks
Ended Ended Ended
January 29, January 30, January 31,
2011 2010 2009
Federal statutory tax rate 35.0% 35.0% 35.0%
State income taxes, net of federal effect 1.7 1.5 1.1
Foreign income taxes 0.4 1.5 0.5
Other (including permanent differences) (2.6) (1.8) 0.6
34.5% 36.2% 37.2%
The Company's effective tax rate decreased from 36.2% in the 52 weeks ended January 30, 2010 to 34.5% in the 52 weeks ended January 29,
2011, primarily due to audit settlements and statute expirations. The Company's effective tax rate decreased from 37.2% in the 52 weeks ended
January 31, 2009 to 36.2% in the 52 weeks ended January 30, 2010, primarily due to audit settlements and statute expirations.
Differences between financial accounting principles and tax laws cause differences between the bases of certain assets and liabilities for
financial reporting purposes and tax purposes. The tax effects of these differences, to the extent they are temporary, are recorded as deferred tax
assets and liabilities and consisted of the following components (in millions):
January 29, January 30,
2011 2010
Deferred tax asset:
Fixed assets $ — $ 29.8
Inventory obsolescence reserve 19.7 17.4
Deferred rents 16.4 14.7
Stock-based compensation 25.8 22.6
Net operating losses 15.9 12.3
Other 19.7 10.0
Total deferred tax assets 97.5 106.8
Deferred tax liabilities:
Fixed Assets (15.1) —
Goodwill (44.5) (37.9)
Prepaid expenses (7.5) (4.0)
Acquired intangible assets (59.6) (63.5)
Valuation allowance (2.7) (2.0)
Other (14.2) (3.7)
Total deferred tax liabilities (143.6) (111.1)
Net $ (46.1) $ (4.3)
Financial statements:
Current deferred tax assets $ 28.8 $ 21.2
Deferred tax liabilities $ (74.9) $ (25.5)
F-25