Panera Bread 2008 Annual Report Download - page 79

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Other
The Company is subject to on-going federal and state income tax audits and any unfavorable rulings could
materially and adversely affect its financial condition or results of operations. The Company believes reserves for
these matters are adequately provided for in its consolidated financial statements.
Under the February 1, 2007 agreement to purchase 51 percent of the outstanding stock of Paradise, the
Company has the right to purchase the remaining 49 percent of the outstanding stock of Paradise after January 1,
2009 at a contractually determined value, which approximates fair value. If the Company does not exercise its right
to purchase the remaining 49 percent of the outstanding stock of Paradise, the remaining Paradise owners have the
right to purchase the Company’s 51 percent ownership interest in Paradise after June 30, 2009, for $21.1 million.
14. Income Taxes
The components of earnings before income taxes, by tax jurisdiction, were as follows for the periods indicated
(in thousands):
December 30,
2008
December 25,
2007
December 26,
2006
For the Fiscal Year Ended
United States................................. $108,711 $88,827 $92,676
Canada ..................................... (3) 63 —
Total earnings before income taxes................. $108,708 $88,890 $92,676
The provision for income taxes consisted of the following for the periods indicated (in thousands):
December 30,
2008
December 25,
2007
December 26,
2006
For the Fiscal Year Ended
Current(1):
Federal ................................... $37,188 $30,438 $34,766
State ..................................... 8,192 6,453 4,117
45,380 36,891 38,883
Deferred(1):
Federal ................................... (3,589) (4,624) (4,725)
State ..................................... (519) (833) (331)
(4,108) (5,457) (5,056)
Tax Provision ................................ $41,272 $31,434 $33,827
(1) Current and deferred income taxes consist primarily of United States taxes. Canadian taxes are nominal, and
thus are not shown separately.
72
PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)