Papa Johns 2009 Annual Report Download - page 94

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87
13. Income Taxes (continued)
The Company had approximately $30.1 million and $26.0 million of foreign tax net operating loss
carryovers as of December 27, 2009 and December 28, 2008, respectively, for which a valuation
allowance has been provided. A substantial majority of our foreign tax net operating losses do not have
an expiration date.
Management believes it is more likely than not that the Company’s future earnings will be sufficient to
ensure the realization of the recorded net deferred tax assets for federal and state purposes.
The reconciliation of income tax computed at the U.S. federal statutory rate to income tax expense for
the years ended December 27, 2009, December 28, 2008 and December 30, 2007 is as follows in both
dollars and as a percentage of income before income taxes ($ in thousands):
Income Tax
Expense
Income
Tax Rate
Income Tax
Expense
Income
Tax Rate
Income Tax
Expense
Income
Tax Rate
Tax at U.S. federal statutory rate 31,568$ 35.0% 20,579$ 35.0% 16,469$ 35.0%
State and local income taxes 2,037 2.2% 1,507 2.6% 1,189 2.5%
Foreign income taxes 904 1.0% 810 1.4% 620 1.3%
Settlement of certain tax issues (1,238) (1.4%) (1,684) (2.9%) (3,408) (7.2%)
Tax associated with
noncontrolling interests (1,397) (1.5%) (753) (1.3%) (382) (0.8%)
Non-qualified deferred compensation
plan (income) loss (803) (0.9%) 1,235 2.1% (184) (0.4%)
Tax credits and other (2,086) (2.3%) (1,714) (2.9%) (1,011) (2.1%)
Total
28,985
$
32.1%
19,980
$
34.0%
13,293
$
28.3%
2009 2008 2007
Income taxes paid were $24.8 million in 2009, $23.9 million in 2008 and $24.0 million in 2007.
The Company files income tax returns in the U.S. federal jurisdiction and various states and foreign
jurisdictions. The Company, with few exceptions, is no longer subject to U.S. federal, state and local, or
non-U.S. income tax examinations by tax authorities for years before 2005. The Company is currently
undergoing examinations by various tax authorities. The Company anticipates that the finalization of
these current examinations and other issues could result in a decrease in the liability for unrecognized tax
benefits (and a decrease of income tax expense) of approximately $549,000 during the next 12 months.