Papa Johns 2005 Annual Report Download - page 71

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69
15. Income Taxes
A summary of the provision (benefit) for income taxes, exclusive of the tax effects related to
discontinued operations and the cumulative effect of accounting change, follows (in thousands):
2005 2004 2003
Current:
Federal 18,569$ 25,400$ 15,233$
Foreign 234 174 61
State and local 2,176 2,727 2,109
Deferred (federal and state) 4,385 (16,280) 1,037
Total 25,364$ 12,021$ 18,440$
Significant deferred tax assets (liabilities) follow (in thousands):
2005 2004
Unearned development fees 2,368$ 2,509$
Accrued liabilities 10,825 10,815
Other assets and liabilities 5,660 6,325
BIBP net operating loss 7,153 8,797
Interest rate swaps 270 681
Total deferred tax assets 26,276$ 29,127$
Deferred expenses (2,755) (3,221)
Accelerated depreciation (6,635) (7,851)
Goodwill (3,815) -
Other (4,087) (4,314)
Total deferred tax liabilities (17,292) (15,386)
Net deferred tax assets 8,984$ 13,741$
As of December 25, 2005, the Company had approximately $1.7 million of foreign net operating loss
carryovers for which a valuation allowance has been provided. Management believes it is more likely
than not that the Company’s future earnings will be sufficient to ensure the realization of the recorded net
deferred tax assets for federal and state purposes.
The reconciliation of income tax computed at the U.S. federal statutory rate to income tax expense,
exclusive of income associated with discontinued operations and the tax effect related to the cumulative
effect of accounting change, for the years ended December 25, 2005, December 26, 2004 and December
28, 2003 is as follows (in thousands):
2005 2004 2003
Tax at U.S. federal statutory rate 24,388$ 11,227$ 17,216$
State and local income taxes 1,839 846 1,289
Other (863) (52) (65)
Total 25,364$ 12,021$ 18,440$
Income taxes paid were $15.3 million in 2005, $20.0 million in 2004 and $23.2 million in 2003.