1.
Summary of Significant Accounting Policies--(continued)
Reclassifications
Certain reclassifications have been made to the prior years' financial statements to conform with
the fiscal 2002 presentation.
2.
Income Taxes
The current income tax provision (benefit) consists of (dollars in thousands):
Fiscal Years Ended
February 23,
2002
February 24,
2001
February 26,
2000
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(3,595)
$
409
$
3,642
State and local . . . . . . . . . . . . . . . . . . . . . . . . . .
(18)
25
356
(3,613)
434
3,998
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(896)
479
63
Total provision (benefit) . . . . . . . . . . . . . . . . . . . .
$
(4,509)
$
913
$
4,061
The exercise of non-qualified stock options and the vesting of restricted stock (see Note 10)
result in a tax deduction to the Company equivalent to the taxable compensation recognized by
the individuals. For accounting purposes, the tax benefit of these deductions is credited directly
to additional paid-in capital. These amounts were not material for fiscal 2000.
The Company's effective income tax rate is reconciled to the U.S. federal statutory tax rate as
follows:
Fiscal Years Ended
February 23,
2002
February 24,
2001
February 26,
2000
Federal statutory tax rate . . . . . . . . . . . . . . . . . . . .
(34.0%)
34.0%
34.0%
State income taxes, net of federal tax effect . . . . .
(1.0)
9.3
2.3
Non-deductible items . . . . . . . . . . . . . . . . . . . . . . .
.3
47.0
--
Change in valuation allowance--charitable
contributions carryforward . . . . . . . . . . . . . . . . .
1.3
445.7
1.9
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.2
(14.3)
1.0
(33.2%)
521.7%
39.2%
F-10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
L I L L I A N V E R N O N
