Einstein Bros 2004 Annual Report Download - page 53

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http://www.sec.gov/Archives/edgar/data/949373/000104746905006202/a2153240z10-k.htm[9/11/2014 10:13:29 AM]
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Cash in drawer, accounts receivable, and inventory at all Willoughby's locations.
Under the terms of agreement, we sold the assets for a total sales price of approximately $400, which was received in cash. In connection with
the sale of Willoughby's, we also executed a two-year supply agreement to purchase coffee for our New World Coffee cafés from the buyer.
We have considered Statement of Financial Accounting Standard No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.
We have determined that the revenues, cost of sales, other operating expenses and the net book value of the assets related to the sale of the coffee
roasting plant and three retail locations included in the Willoughby's business were immaterial in relation to our Einstein Bros., Noah and
Manhattan restaurants, as well as the financial statements taken as a whole. Accordingly, we have not presented discontinued operations in the
accompanying consolidated statements of operations, nor have we reflected assets as held for sale in the accompanying consolidated balance
sheets. We recognized a gain from the sale of approximately $90 during the year ended December 28, 2004.
21. INCOME TAXES
The provision for income taxes consists of the following:
2004
2003
2002
(restated)
(restated)
Current
Federal $ — $ — $ —
State (49) 812 366
Total current income tax expense (benefit) (49) 812 366
Deferred
Federal (6,529) (15,905) (17,354)
State (611) (1,601) (1,577)
Total deferred income tax benefit (7,140) (17,506) (18,931)
Increase in valuation allowance 7,140 17,506 18,931
Total income tax benefit (expense) $ (49) $ 812 $ 366
64
A reconciliation between the reported provision for income taxes and the amount computed by applying the statutory federal income tax rate
of 35% to loss before income taxes is as follows:
2004
2003
2002
(restated)
(restated)
Expected tax expense (benefit) at 35% $ (6,109) $ (25,448) $ (15,585)
State tax, net of federal benefit (611) (1,601) (1,577)
Loss on extinguishment of debt — 8,052 —
Other, net (469) 2,303 (1,403)
Change in valuation allowance 7,140 17,506 18,931
Total provision (benefit) for taxes $ (49) $ 812 $ 366