Supercuts 2012 Annual Report Download - page 129

Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. INCOME TAXES (Continued)
Deferred taxes would be recorded for earnings of our foreign operations if we determine that such earnings are no longer indefinitely reinvested
and cannot be remitted in a tax-neutral transaction.
The Company files tax returns and pays tax primarily in the U.S., Canada, the U.K., and Luxembourg as well as states, cities, and
provinces within these jurisdictions. In the U.S., fiscal years 2009 and after remain open for federal tax audit. For state tax audits, the statute of
limitations generally spans three to four years, resulting in a number of states remaining open for tax audits dating back to fiscal year 2008.
However, the Company is under audit in a number of states in which the statute of limitations has been extended for fiscal years 2006 and
forward. Internationally, including Canada, the statute of limitations for tax audits varies by jurisdiction, but generally ranges from three to five
years. A rollforward of the unrecognized tax benefits is as follows:
If the Company were to prevail on all unrecognized tax benefits recorded, a benefit of approximately $2.8 million would be recorded in
the effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded within income tax expense. During the years
ended June 30, 2012, 2011, and 2010 we recorded income tax (benefit)/expense of approximately $(1.2), $(0.6), and $(1.1) million,
respectively, for the reversal of previously accrued interest and penalties net of the respective fiscal years additions to the accrual. As of
June 30, 2012, the Company had accrued interest and penalties related to unrecognized tax benefits of $1.5 million. This amount is not
included in the gross unrecognized tax benefits noted above.
It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of our unrecognized tax positions will
increase or decrease during the next twelve months. However, we do not expect the change to have a significant effect on our results of
operations or our financial position.
13. BENEFIT PLANS
Regis Retirement Savings Plan
The Company maintains a defined contribution 401(k) plan, the Regis Retirement Savings Plan (RRSP Plan). The RRSP Plan is a defined
contribution profit sharing plan with a 401(k) feature that is intended to qualify with the Internal Revenue Code (Code) and is subject to the
Employee Retirement Income Security Act of 1974.
The 401(k) portion of the Plan is a contributory defined contribution plan under which eligible employees may elect to contribute a
percentage of their eligible compensation. Employees who are 18 years of age or older and who were not highly compensated employees as
defined by the Code
126
2012 2011 2010
Balance at beginning of period
$
13,493
$
16,856
$
14,787
Additions based on tax positions related to the
current year
482
796
5,549
(Reductions)/additions based on tax positions
of prior years
(7
)
(759
)
(185
)
Reductions on tax positions related to the
expiration of the statute of limitations
(1,571
)
(2,718
)
(2,993
)
Settlements
(8,016
)
(682
)
(302
)
Balance at end of period
$
4,381
$
13,493
$
16,856