Income Taxes

12 Months Ended

Aug. 27, 2011

Income Taxes

Income Taxes

7. INCOME TAXES

The provision for income taxes is comprised of the following:

	For the Fiscal Years Ended
	August 27, 2011		August 28, 2010		August 29, 2009
Current:
Federal	$	99,034	$	74,917	$	63,190
State and local		15,986		10,916		10,343
		115,020		85,833		73,533
Deferred:
Federal		15,385		4,303		3,348
State and local		139		319		(63	)
		15,524		4,622		3,285
Total	$	130,544	$	90,455	$	76,818

Significant components of deferred tax assets and liabilities are as follows:

	August 27, 2011			August 28, 2010
Deferred tax liabilities:
Depreciation	$	(37,544	)	$	(26,314	)
Deferred catalog costs		(2,435	)		(3,040	)
Goodwill		(30,216	)		(24,635	)
		(70,195	)		(53,989	)
Deferred tax assets:
Accounts receivable		1,753			1,488
Inventory		5,589			5,067
Deferred compensation		1,061			1,501
Stock based compensation		9,129			10,086
Intangible amortization		5,037			4,049
Other		5,962			5,658
		28,531			27,849
Net Deferred Tax Liabilities	$	(41,664	)	$	(26,140	)

Reconciliation of the statutory Federal income tax rate to the Company's effective tax rate is as follows:

	For the Fiscal Years Ended
	August 27, 2011			August 28, 2010			August 29, 2009
U.S. Federal statutory rate		35.0	%		35.0	%		35.0	%
State income taxes, net of Federal benefit		2.8			2.8			3.1
Other, net		(0.4	)		(0.2	)		(0.1	)
Effective income tax rate		37.4	%		37.6	%		38.0	%

The aggregate changes in the balance of gross unrecognized tax benefits during fiscal 2011 and 2010 were as follows:

	August 27, 2011			August 28, 2010
Beginning Balance	$	10,836		$	8,341
Additions for tax positions relating to current year		2,679			2,861
Additions for tax positions relating to prior years		1,064			1,020
Reductions for tax positions relating to prior years		(663	)		—
Lapse of statute of limitations		(2,523	)		(1,386	)
Ending Balance	$	11,393		$	10,836

The Company recognizes interest expense and penalties in the provision for income taxes. The fiscal 2011 and 2010 provisions include interest and penalties of ($26) and $67, respectively. The Company has accrued $642 and $668 for interest and penalties as of August 27, 2011 and August 28, 2010, respectively.

With limited exceptions, the Company is no longer subject to Federal income tax examinations and state jurisdictions through fiscal 2007.