Supercuts 2010 Annual Report Download - page 128

Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. 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:
During the fiscal year 2010, the Company recorded adjustments to correct its income tax balances. The adjustments increased the
Company's fiscal year 2010 income tax provision by $2.1 million and increased its effective income tax rate by 3.9 percent. Included in the
income tax provision are U.S. and international income tax adjustments resulting in a shift of the income tax provision between jurisdictions.
On a world-wide basis the adjustments are immaterial. The Company does not believe the adjustments are material to its fiscal 2010 results of
operations or its financial position or results of operations of any prior periods.
During the fourth quarter of fiscal year 2009, the Company recorded an adjustment to correct its prior year deferred income tax balances.
The adjustment increased the Company's fiscal year 2009 income tax provision by $3.8 million and increased its effective income tax rate by
4.8 percent. The Company does not believe the adjustment is material to its fiscal 2009 results of operations or its financial position or results
of operations of any prior periods.
124
2010 2009 2008
U.S. statutory rate
35.0
%
35.0
%
35.0
%
State income taxes, net of federal
income tax benefit
3.4
3.4
3.0
Tax effect of goodwill impairment
11.4
14.5
—
Foreign income taxes at other than U.S.
rates
(0.8
)
(1.6
)
(2.3
)
Work Opportunity and Welfare-to-
Work Tax Credits
(6.4
)
(4.9
)
(2.0
)
Adjustment of prior year income tax
balances
3.9
4.8
—
Other, net
1.6
2.1
5.8
48.1
%
53.3
%
39.5
%