Supercuts 2003 Annual Report Download - page 73

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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
69
7.
Litigation
The Company is a defendant in various lawsuits and claims arising out of the normal course of business. As of June 30, 2003, in the opinion
of company counsel, the ultimate liabilities resulting from such lawsuits and claims, other than consideration of the matter discussed below,
are not anticipated to have a material adverse effect on the Consolidated Financial Statements.
In August 2003, the Company reached an agreement with the Equal Employment Opportunity Commission (“EEOC”) to settle allegations
of discrimination in Supercuts. The $3.2 million settlement was accrued during the fourth quarter of fiscal year 2003 in corporate and
franchise support costs in the Consolidated Statement of Operations.
8.
INCOME TAXES:
The provision for income taxes consists of:
(Dollars in thousands)
2003 2002 2001
Current:
United States
$
46,462
$
27,815
$
31,272
International
2,086
2,891
2,228
Nonrecurring federal benefit
(1,750
)
Deferred:
United States
2,090
14,640
2,291
International
1,288
$
51,926
$
43,596
$
35,791
In fiscal year 2002, the Company implemented certain tax strategies resulting in approximately $1.8 million of economic benefit, which has
been recognized as a nonrecurring income tax benefit in the third quarter, thus reducing fiscal year 2002 income tax expense. The majority
of the nonrecurring benefit was realized through the amendment of previous tax filings.