Henry Schein 2009 Annual Report Download - page 48

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36
As a component of total selling, general and administrative expenses, general and administrative expenses
increased $27.6 million, or 6.0%, for the year ended December 26, 2009 from the prior year period. As a
percentage of net sales, general and administrative expenses increased to 7.5% from 7.2% for the comparable
prior year period.
Other Expense, Net
Other expense, net for the years ended 2009 and 2008 was as follows (in thousands):
2009 2008 (1) (2) $
Interest income ................................................. 9,979$ 16,355$ (6,376)$ (39.0) %
Interest expense ................................................ (23,370) (34,605) 11,235 32.5
Other, net ......................................................... 2,026 (5,587) 7,613 136.3
Other expense, net .................................... (11,365)$ (23,837)$ 12,472$ 52.3
Increase / (Decrease)
%
(1) Adjusted to reflect the effects of discontinued operations.
(2) Adjusted to reflect the effects of the adoption of provisions contained within ASC Topic 470-20, “Debt with
Conversion and Other Options.”
Other expense, net decreased $12.5 million to $11.4 million for the year ended December 26, 2009 from
the comparable prior year period. The decrease was primarily the result of decreased interest expense of
$11.2 million due to repayment of our $130.0 million senior notes on June 30, 2009, as well as lower interest
rates on our floating debt, partially offset by a decrease in interest income of $6.4 million resulting from lower
interest rates on our invested funds. In addition, Other, net increased by $7.6 million due primarily to net
proceeds received from litigation settlements in the third quarter of 2009 and non-recurring charges incurred
during the third quarter of 2008 relating to the bankruptcy of Lehman Brothers Holdings, Inc.
Income Taxes
For the year ended December 26, 2009, our effective tax rate from continuing operations was 28.2%
compared to 33.2% for the prior year period. The difference is primarily related to a reduction in the
valuation allowance on certain foreign deferred tax assets related to net operating losses, as well as additional
tax planning, settlements of tax audits and higher income from lower taxing countries. Absent the effects of
the reversal of a portion of the valuation allowance on certain foreign deferred tax assets in the third quarter of
2009, our effective tax rate for the year ended December 26, 2009 would have been 32.8%. The remaining
difference in our effective tax rate between 2009 and 2008 is due to foreign and state income taxes. For 2010,
we expect our effective tax rate to be in the range of 32.5% to 33.5%.
Loss from Discontinued Operations
During the years ended December 26, 2009 and December 27, 2008, respectively, we recognized
aggregate gains and (losses) of $2.6 million and $(7.9) million, net of tax, respectively, related to
discontinued operations (see Note 7 in the accompanying annual consolidated financial statements for further
discussion).
Net Income
Net income increased $71.8 million, or 27.5%, for the year ended December 26, 2009 compared to the
prior year period. The increase in net income is primarily due to the factors noted above.