Sonic 2014 Annual Report Download - page 42

Download and view the complete annual report

Please find page 42 of the 2014 Sonic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 54

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54

12. Income Taxes
The Company’s income before the provision for income taxes is classified by source as domestic income.
The components of the provision for income taxes consist of the following for the years ended August 31:
2014 2013 2012
Current:
Federal $ 16,580 $ 16,741 $ 17,851
State 3,490 2,688 3,892
20,070 19,429 21,743
Deferred:
Federal 5,328 439 180
State 450 (270) (46)
5,778 169 134
Provision for income taxes $ 25,848 $ 19,598 $ 21,877
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate due to the
following for the fiscal years ended August 31:
2014 2013 2012
Amount computed by applying a tax rate of 35% $ 25,818 $ 19,705 $ 20,287
State income taxes (net of federal income tax benefit) 2,562 1,572 1,900
Employment related and other tax credits, net (1,537) (1,572) (1,291)
Adjustment of prior year deferred tax items – – 1,559
Other (995) (107) (578)
Provision for income taxes $ 25,848 $ 19,598 $ 21,877
During fiscal year 2012, the Company conducted a reconciliation of its tax basis balance sheet and identified certain adjustments
which were recorded in fiscal year 2012 to appropriately reflect the Company’s current and deferred tax accounts. As a result of this
reconciliation process, the Company recorded an additional income tax provision of $1.6 million for fiscal year 2012. Management
of the Company evaluated the impact of this adjustment and concluded the effect of this adjustment was immaterial to the current
and prior year financial statements.
Notes to Consolidated Financial Statements
August 31, 2014, 2013 and 2012 (In thousands, except per share data)
40