Supercuts 2008 Annual Report Download - page 103

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. INCOME TAXES (Continued)
The provision for income taxes differs from the amount of income tax determined by applying the applicable United States (U.S.) statutory
rate to earnings before income taxes, as a result of the following:
The components of the net deferred tax assets and liabilities are as follows:
At June 30, 2008, the Company had U.S. and foreign operating loss carryforwards of approximately $10.0 million. During fiscal year 2008,
approximately $5.6 million of the loss carryforwards related to French, Spanish and Polish tax losses were transferred in the merger with the
Franck Provost Salon Group. The $10.0 million remainder of the loss carryforwards at June 30, 2008, relate to losses in the U.S. and Canada and
expire in various amounts through 2028. The company expects to fully utilize all of these loss carryforwards.
101
2008
2007
2006
U.S. statutory rate
35.0
%
35.0
%
35.0
%
State income taxes, net of federal income tax benefit
5.7
1.8
2.7
Tax effect of goodwill impairment
—
4.2
—
Foreign income taxes at other than U.S. rates
(2.3
)
(3.0
)
(2.0
)
Work Opportunity and Welfare
-
to
-
Work Tax Credits
(2.0
)
(3.2
)
(0.5
)
Other, net
2.5
0.2
0.4
38.9
%
35.0
%
35.6
%
2008 2007
(Dollars in thousands)
Deferred tax assets:
Deferred rent
$
18,225
$
18,382
Payroll and payroll related costs
29,741
26,605
Net operating loss carryforwards
3,557
4,752
Reserve for impaired assets
8,951
5,328
Inventories
2,551
1,204
Deferred gift card revenue
1,789
1,788
Other
15,268
5,892
Total deferred tax assets
$
80,082
$
63,951
Deferred tax liabilities:
Insurance
$
—
$
(
4,280
)
Depreciation and amortization
(114,912
)
(120,975
)
Accrued property taxes
(2,553
)
(2,617
)
Derivatives
(2,553
)
(583
)
Other
(10
)
(1,032
)
Total deferred tax liabilities
$
(120,028
)
$
(129,487
)
Net deferred tax liabilities
$
(39,946
)
$
(65,536
)