Pier 1 2009 Annual Report Download - page 26

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(5) Subsequent to year end, the Company’s consolidated long-term debt was reduced to $105.1 million
as a result of a repurchase of a portion of the Company’s outstanding convertible debt. See detailed
discussion in Note 13 of the Notes to the Consolidated Financial Statements contained in Item 8 of
this report.
(6) In fiscal years 2009 and 2008, the Company recorded minimal state and foreign tax provisions and
provided a valuation allowance on the deferred tax asset arising from the tax benefit of fiscal 2009
and 2008 losses. The decrease in the Company’s effective tax rate for fiscal 2007 was the result of
recording a valuation allowance on its deferred tax assets during the second quarter and only
recording a tax benefit on the losses for the year that could be carried back.
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