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PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
59
In addition, the Company is subject to other routine legal proceedings, claims, and litigation in the ordinary course of its business.
Defending lawsuits requires significant management attention and financial resources and the outcome of any litigation, including
the matters described above, is inherently uncertain. The Company does not believe the ultimate resolution of these actions will
have a material adverse effect on its consolidated financial statements. However, a significant increase in the number of these
claims, or one or more successful claims under which the Company incurs greater liabilities than is currently anticipated, could
materially and adversely affect its consolidated financial statements.
Other
The Company is subject to on-going federal and state income tax audits and sales and use tax audits and any unfavorable rulings
could materially and adversely affect its consolidated financial condition or results of operations. The Company believes reserves
for these matters are adequately provided for in its consolidated financial statements.
14. Income Taxes
The components of income (loss) before income taxes, by tax jurisdiction, were as follows for the periods indicated (in thousands):
For the fiscal year ended
December 25,
2012 December 27,
2011 December 28,
2010
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 286,702 $ 221,906 $ 180,458
Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,706)(2,003)(296)
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 282,996 $ 219,903 $ 180,162
The provision for income taxes consisted of the following for the periods indicated (in thousands):
For the fiscal year ended
December 25,
2012 December 27,
2011 December 28,
2010
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 72,434 $ 67,466 $ 64,471
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,955 15,705 8,919
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (571)(167)
88,389 82,600 73,223
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,640 1,084 (4,306)
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,603 267 (354)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 916 — —
21,159 1,351 (4,660)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 109,548 $ 83,951 $ 68,563
A reconciliation of the statutory U.S. federal income tax rate to the effective tax rate is as follows for the periods indicated:
For the fiscal year ended
December 25,
2012 December 27,
2011 December 28,
2010
Statutory rate provision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.0% 35.0% 35.0%
State income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 4.5 5.0
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.8)(1.3)(1.9)
Effective tax rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.7% 38.2% 38.1%