Henry Schein 2009 Annual Report Download - page 97

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HENRY SCHEIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(In thousands, except share and per share data)
85
Note 10 – Income Taxes – (Continued)
ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial
statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For
those benefits to be recognized, a tax position must be more likely than not to be sustained upon
examination by the taxing authorities. The amount recognized is measured as the largest amount of benefit
that is greater than 50% likely of being realized upon ultimate audit settlement.
The total amount of unrecognized tax benefits, including accrued interest, as of December 26, 2009
was approximately $20.9 million, all of which would affect the effective tax rate if recognized. It is
expected that the amount of unrecognized tax benefits will change in the next 12 months; however, we do
not expect the change to have a material impact on our consolidated financial statements.
The total amounts of interest and penalties accrued were approximately $3.9 million and $0,
respectively, as of December 26, 2009. It is expected that the amount of interest will change in the next
twelve months. However, we do not expect the change to have a material impact on our consolidated
financial statements.
The tax years subject to examination by major tax jurisdictions include the years 2006 and forward by
the U.S. Internal Revenue Service, the years 1996 and forward for certain states and the years 1998 and
forward for certain foreign jurisdictions.
The following table provides a reconciliation of unrecognized tax benefits excluding the effects of
deferred taxes:
December 26,
2009
December 27,
2008
Balance, beginning of period ........................................................................ 11,800$ 12,100$
Additions based on current year tax positions .............................................. 1,600 800
Additions based on prior year tax positions .................................................. 6,700 3,300
Reductions based on prior year tax positions ............................................... (100) (2,100)
Reductions resulting from settlements with taxing authorities ...................... (2,000) (2,000)
Reductions resulting from lapse in statutes of limitations ............................ (1,000) (300)
Balance, end of period .................................................................................. 17,000$ 11,800$