Cracker Barrel 2009 Annual Report Download - page 75

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2009 2008 2007
Current:
Federal $20,307 $23,536 $ 46,883
State 3,320 1,789 7,824
Deferred:
Federal (1,157) 1,565 (14,250)
State 1,635 1,322 41
Total income tax provision $24,105 $28,212 $ 40,498
A reconciliation of the provision for income taxes from
continuing operations and the amount computed by
multiplying the income before the provision for income
taxes by the U.S. federal statutory rate of 35% was as
follows:
2009 2008 2007
Provision computed at federal
statutory income tax rate $31,521 $32,730 $40,768
State and local income taxes,
net of federal benefit 1,697 2,992 6,143
Employer tax credits for
FICA taxes paid on employee
tip income (6,383) (5,846) (5,449)
Federal reserve adjustments — — 168
Other employer tax credits (3,740) (2,994) (3,915)
Section 162(m) non-deductible
compensation 44 — 1,809
Other-net 966 1,330 974
Total income tax provision $24,105 $28,212 $40,498
As of July 31, 2009, the Company’s liability for uncertain
tax positions was $26,137 ($17,364, net of related federal
tax benefits of $8,773). As of August 1, 2008, the
Company’s liability for uncertain tax positions was $26,602
($17,753, net of related federal tax benefits of $8,849).
At July 31, 2009 and August 1, 2008, the amount of
uncertain tax positions that, if recognized, would affect the
effective tax rate is $17,364 and $17,753, respectively.
Summarized below is a tabular reconciliation of the
beginning and ending balance of the Company’s total gross
liability for uncertain tax positions exclusive of interest
and penalties:
July 31, August 1,
2009 2008
Balance at beginning of year $22,879 $21,338
Tax positions related to the current year:
Additions 3,168 3,857
Reductions — —
Tax positions related to prior years:
Additions 90 1,342
Reductions (2,146) (995)
Settlements (127) —
Expiration of statute of limitations (1,908) (2,663)
Balance at end of year $21,956 $22,879
The Company recognizes, net of tax, interest and
estimated penalties related to uncertain tax positions in its
provision for income taxes. At July 31, 2009 and August 1,
2008, the Company recognized approximately $302 and
$780, respectively, in interest and penalties related to
uncertain tax positions in its provision for income taxes. At
July 31, 2009 and August 1, 2008, the Company’s liability
for uncertain tax positions included $3,092 and $2,790,
respectively, net of tax for potential interest and penalties.
In many cases, the Company’s uncertain tax positions
are related to tax years that remain subject to examination
by the relevant taxing authorities. Based on the outcome of
these examinations or as a result of the expiration of the
statutes of limitations for specific taxing jurisdictions, the
related uncertain tax positions taken regarding previously
filed tax returns could decrease from those recorded
as liabilities for uncertain tax positions in the Company’s
financial statements at July 31, 2009 by approximately
$5,000 to $6,000 within the next twelve months.
At July 31, 2009, the Company was subject to income
tax examinations for its U.S. federal income taxes
after 2005 and for state and local income taxes generally
after 2005.
16 DISCONTINUED OPERATIONS
On December 6, 2006, the Company completed the sale of
Logan’s, for total consideration of approximately $485,000.
A portion of the consideration was funded by a real estate
sale-leaseback transaction, which required the Company
to retain three Logan’s restaurant locations at that time.
The Company leased these three properties to Logan’s under
terms and conditions consistent with the sale-leaseback
transaction. Two of these properties were sold in 2007 and
the remaining property was sold in 2008 (see Note 11).
The Company has reported in discontinued operations
certain expenses related to the divestiture of Logan’s
in 2009, 2008 and 2007 and the results of operations of
Logan’s through December 5, 2006, which consist of
the following:
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