Supercuts 2012 Annual Report Download - page 127

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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. INCOME TAXES
The components of (loss) income before income taxes are as follows:
The (benefit) provision for income taxes consists of:
The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory rate to (loss)
earnings before income taxes, as a result of the following:
During the twelve months ended June 30, 2012, the Company recognized a tax benefit of $5.3 million with a corresponding effective tax
rate of 5.8 percent. The effective income tax rate for the twelve months ended June 30, 2012 was negatively impacted by the goodwill
impairment charges totaling $146.1 million which are primarily non-deductible for tax purposes. This resulted in the Company recording less
of a tax benefit on the pre-tax loss than what would normally be expected utilizing the Company's historical range of tax rates.
The (3.9) percent of other, net in fiscal year 2012 includes the rate impact of unrecognized tax benefits and miscellaneous items of (2.8)
and (1.1) percent, respectively.
For fiscal year 2011, the Company reported a $25.6 million loss from continuing operations before income taxes as compared to income
from continuing operations before income taxes of $53.2 million in fiscal year 2010. The rate reconciliation items have a greater impact on the
annual effective income tax rate in fiscal year 2011 because the magnitude of the loss from continuing operations before income
124
2012 2011 2010
(Dollars in thousands)
(Loss) income before income taxes:
U.S.
$
(100,792
)
$
(31,963
)
$
35,289
International
10,364
6,334
17,925
$
(90,428
)
$
(25,629
)
$
53,214
2012 2011 2010
(Dollars in thousands)
Current:
U.S.
$
6,493
$
3,658
$
5,580
International
2,399
1,557
14,882
Deferred:
U.S.
(13,984
)
(17,882
)
4,007
International
(187
)
3,171
1,108
$
(5,279
)
$
(9,496
)
$
25,577
2012 2011 2010
U.S. statutory rate (benefit)
(35.0
)%
(35.0
)%
35.0
%
State income taxes, net of federal income tax
benefit
0.8
0.7
5.9
Tax effect of goodwill impairment
37.9
10.4
12.1
Foreign income taxes at other than U.S. rates
(0.2
)
7.9
(0.8
)
Work Opportunity and Welfare-to-Work Tax
Credits
(5.4
)
(15.7
)
(7.0
)
Adjustment of prior year income tax balances
—
—
3.9
Other, net
(3.9
)
(5.4
)
(1.0
)
(5.8
)%
(37.1
)%
48.1
%