Supercuts 2010 Annual Report Download - page 130

Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. INCOME TAXES (Continued)
unrecognized income tax benefits, including interest and penalties, which was accounted for through the following accounts:
A rollforward of the unrecognized tax benefits is as follows:
If the Company were to prevail on all unrecognized tax benefits recorded, approximately $8.2 million of the $16.9 million reserve would
benefit the effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded within income tax expense. During
the years ended June 30, 2010, 2009 and 2008 we recorded income tax (benefit)/expense of approximately $(1.1), $2.1 and $3.0 million,
respectively, for the accrual of interest and penalties. As of June 30, 2010, the Company had accrued interest and penalties related to
unrecognized tax benefits of $3.5 million. This amount is not included in the gross unrecognized tax benefits noted above.
It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of our unrecognized tax positions will
increase or decrease during the next twelve months. However, we do not expect the change to have a significant effect on our results of
operations or our financial position.
14. BENEFIT PLANS
Regis Retirement Savings Plan
The Company maintains a defined contributed 401(k) plan, the Regis Retirement Savings Plan (the RRSP). The RRSP is a defined
contribution profit sharing plan with a 401(k) feature that is intended to qualify with the Internal Revenue Code (Code) and is subject to the
Employee Retirement Income Security Act of 1974.
The 401(k) portion of the Plan is a contributory defined contribution plan under which eligible employees may elect to contribute a
percentage of their eligible compensation. Employees who are 18 years of age or older and who were not highly compensated employees as
defined by the Code during the preceding Plan year are eligible to participate in the Plan commencing with the first day of the month following
their completion of one month of service.
126
(Dollars in thousands)
Deferred income taxes
$
10,128
Goodwill
6,094
Additional paid
-
in capital
237
Retained earnings
4,237
Total increase
$
20,696
2010 2009 2008
Balance at beginning of period
$
14,787
$
20,400
$
22,500
Additions based on tax positions related to the current year
5,549
2,765
2,466
Additions / (Reductions) based on tax positions of prior years
(185
)
121
1,498
Reductions on tax positions related to the expiration of the statue
of limitations
(2,993
)
(8,167
)
(5,446
)
Settlements
(302
)
(332
)
(618
)
Balance at end of period
$
16,856
$
14,787
$
20,400