Henry Schein 2012 Annual Report Download - page 99
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(in thousands, except per share data)
89
Note 12 – Income Taxes – (Continued)
The tax provisions differ from the amount computed using the federal statutory income tax rate as follows:
Years ended
December 29, December 31, December 25,
2012 2011 2010
Income tax provision at federal statutory rate ...............................
.
$ 211,466 $ 199,256 $ 175,713
State income tax provision, net of federal income tax effect ........
.
21,665 18,035 13,224
Foreign income tax benefit ............................................................
.
(17,979) (20,169) (17,109)
Valuation allowance ......................................................................
.
1,502 442 (7,085)
Interest expense related to loans ....................................................
.
(21,018) (14,394) (9,714)
Other .............................................................................................
.
(7,778) (2,958) 5,040
Total income tax provision ...................................................
.
$ 187,858 $ 180,212 $ 160,069
For the year ended December 29, 2012, our effective tax rate was 31.1% compared to 31.7% for the prior year
period. The net reduction in our 2012 effective tax rate results from additional tax planning, settlements of tax
audits and higher income from lower taxing countries. The difference between our effective tax rates and the
federal statutory tax rates for both periods related primarily to state and foreign income taxes and interest expense.
Provision has not been made for U.S. or additional foreign taxes on undistributed earnings of foreign
subsidiaries, which have been, and will continue to be reinvested. These earnings could become subject to
additional tax if they were remitted as dividends, if foreign earnings were loaned to us or a U.S. affiliate, or if we
should sell, transfer or dispose of our stock in the foreign subsidiaries. It is not practicable to determine the amount
of additional tax, if any, that might be payable on the foreign earnings. As of December 29, 2012, the cumulative
amount of reinvested earnings was approximately $564.6 million.
ASC Topic 740 clarifies the accounting for uncertainty in income taxes recognized in the financial statements
in accordance with other provisions contained within this guidance. This topic 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.