Audiovox 2010 Annual Report Download - page 90

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Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements, continued
February 28, 2010
(Dollars in thousands, except share and per share data)
The effective tax rate before income taxes varies from the current statutory U.S. federal income tax rate as follows:
Year Year Year
Ended Ended Ended
February 28, February 28, February 29,
2010 2009 2008
Tax provision at Federal statutory
rates $ 3,904 35.0% $ (19,584) 35.0% $ 3,708 35.0%
Tax exempt interest - - - - (999) (9.4)
State income taxes, net of Federal
benefit 208 1.9 (1,268) 2.3 17 0.2
Impairment of non-deductible
goodwill - - 4,682 (8.4) - -
Change in valuation allowance (9,902) (88.8) 29,808 (53.3) 95 0.9
Change in tax reserves (4,623) (41.4) 780 (1.4) 369 3.5
US effects of foreign operations 668 6.0 541 (1.0) 167 1.6
Gain on bargain purchase (1,896) (17.0) - - - -
Permanent differences and other 313 2.8 116 (0.2) 491 4.5
Effective tax rate $ (11,328) (101.5) % $ 15,075 (27.0) % $ 3,848 36.3%
The U.S. effects of foreign operations include differences in the statutory tax rate of the foreign countries as compared to the statutory
tax rate in the U.S., foreign operating losses for which no tax benefit has been provided and the effects of the settlement of the German
tax audit during Fiscal 2008.
Other is a combination of various factors, including changes in the taxable income or loss between various tax entities with differing
effective tax rates, changes in the allocation and apportionment factors between taxable jurisdictions with differing tax rates of each
tax entity, changes in tax rates and other legislation in the various jurisdictions and other items.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting and tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
February 28, February 28,
2010 2009
Deferred tax assets:
Accounts receivable $ 1,059 $ 1,286
Inventory 1,149 1,581
Property, plant and equipment 959 1,284
Intangible assets 4,651 3,639
Accruals and reserves 5,217 6,799
Unrealized gains and losses 4,014 3,766
Net operating losses 4,856 13,936
Tax credits 3,313 3,313
Deferred tax assets before valuation allowance 25,218 35,604
Less: valuation allowance (24,349) (35,010)
Total deferred tax assets 869 594
Deferred tax liabilities:
Intangible assets (9,479) (4,723)
Prepaid expenses (1,261) (1,411)
Total deferred tax liabilities (10,740) (6,134)
Net deferred tax asset (liability) $ (9,871) $ (5,540)
61
Source: AUDIOVOX CORP, 10-K, May 14, 2010 Powered by Morningstar® Document Research℠