Radio Shack 2010 Annual Report Download - page 70

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Amounts recognized as liabilities in the Consolidated
Balance Sheets consist of:
December 31,
(In millions) 2010 2009
Accrued expenses and other
current liabilities
$ 3.9 $ 5.0
Other non-current liabilities 17.3 19.0
Net amount recognized $ 21.2 $ 24.0
The cost of the SERP defined benefit plan included the
following components for the last three years:
(In millions) 2010 2009 2008
Service cost – benefits
earned during the year
$ 0.6 $ 0.5 $ 0.6
Interest cost on projected
benefit obligation 1.0 1.4 1.6
Amortization of prior
service cost 0.1 0.1 0.1
Net periodic benefit cost $ 1.7 $ 2.0 $ 2.3
Amounts not yet reflected in net periodic benefit cost and
included in accumulated other comprehensive loss (pre-tax)
included prior service cost of $0.7 million, $0.8 million, and
$0.9 million at December 31, 2010, 2009 and 2008,
respectively, and an actuarial loss of $0.2 million and gain
of $0.3 million at December 31, 2010 and 2009,
respectively. The amount of prior service cost that will be
amortized from accumulated other comprehensive loss into
net periodic benefit cost in 2011 is estimated to be $0.1
million.
Assumptions used to determine benefit obligations at
December 31 were as follows:
2010 2009 2008
Discount rate 4.1% 4.7% 5.9%
Rate of compensation
increase 3.5% 3.5% 3.5%
Actuarial assumptions used to determine net periodic
benefit cost for the years ended December 31 were as
follows:
2010 2009 2008
Discount rate 4.7% 5.9% 5.7%
Rate of compensation
increase 3.5% 3.5% 3.5%
We base our discount rate on the rates of return available
on high-quality bonds with maturities approximating the
expected period over which the pension benefits will be
paid. The rate of compensation increase is based on
historical and expected increases.
As the SERP is an unfunded plan, benefit payments are
made from the general assets of RadioShack. The
expected future benefit payments based upon the
assumptions described above and including benefits
attributable to future employee service for the following
periods are as follows:
(In millions)
2011 $ 4.1
2012 3.5
2013 3.4
2014 3.0
2015 2.5
2016 through 2020 4.0
In 2011, we expect to make contributions to the plan of $4.1
million in the form of benefit payments.
NOTE 9 – INCOME TAXES
The following is a reconciliation of the federal statutory
income tax rate to our income tax expense:
Year Ended December 31,
(In millions) 2010
2009
2008
Components of income from
continuing operations:
United States $ 334.0 $ 326.4 $ 289.6
Foreign 2.1 2.1 9.9
Income before income taxes 336.1 328.5 299.5
Statutory tax rate x 35.0%
x 35.0%
x 35.0%
Federal income tax expense
at statutory rate 117.6 115.0 104.8
State income taxes,
net of federal benefit 9.2 9.2 8.4
Unrecognized tax benefits 1.1 (3.1) 2.3
Other, net 2.1 2.4 (5.4)
Total income tax expense $ 130.0 $ 123.5 $ 110.1
Effective tax rate 38.7%
37.6%
36.8%
The components of income tax expense were as follows:
Year Ended December 31,
(In millions) 2010
2009 2008
Current:
Federal $ 101.9
$ 105.3
$ 92.2
State 13.7 7.1 14.0
Foreign 2.4 2.6 (7.8)
118.0 115.0 98.4
Deferred:
Federal 10.7 8.6 8.9
State 1.1 0.2 2.8
Foreign 0.2 (0.3)
--
12.0 8.5 11.7
Income tax expense $ 130.0 $ 123.5 $ 110.1