Yes they gave a great deal of detail in the 10K Mr. Caruthers. But I will never understand it all.
For instance... saying that "During 2007 the Company expects to utilize... carryovers of approximately $5.7 million" suggests that as of the date the 10K was filed, 2/27/2008, the recording period for implementing the carryforwards was not closed or final; and that therefore the amount used could not be finally determined on 2/27/08. But ordinarily when people talk about a tax year that differs from the calendar year, its referred to as a "tax year ending, e.g., October 30, 200_" or something similar.
By using the phrasing above ("During 2007") it suggests to me that at sometime after 12/31/07, and even 2/27/08, the company expects to receive sufficient income which can be reported as taxable income for the "2007 taxing period" such that net taxable income at their rate of 38.5% will permit an offset of $5.7M for that "2007 taxing period."
But I doubt that would accurately reflect what's going on. Rather it seems more appropriate to assume that:
(1) RMTR expects to book substantial income in calendar 2008 which, for tax purposes only, will be reportable as income for calendar 2007;
(2) that RMTR's tax year [the period in which tax events occur] does not coincide with the calendar year as does the financial reporting;
(3) that RMTR is able to defer substantial tax liabilities accrued in calendar 2007 forwards into subsequent calendar years; or
(4) any two or more of these possibilities... are all effecting the financial accounting for the company's income and tax offsets in the 10K.
I believe that option (4) is the most probable just because of the numerous taxes and taxing jurisdictions referenced in the 10K.
As a result it appears extremely likely that the company is dealing with multiple and differing tax events, rates and time periods... and that the "During 2007" language is simply an accountant's "best shot" at trying to homogenize all the relevant income and offsets into something your average "bird brain" could understand in order to relate the $7.3M to some practical measure of time. <Hoo><Hoo><Haa>
This attempt at unification of the income/tax timing differences must have been an order of magnitude tougher than coming up with the combined tax rate of 38.5%. I would put the odds at 50/50 that the accountants had several very large cows at being asked to generate that $5.7M approximation... and no doubt charged an extra $1,000 minimum to get it done. <ack><vbg><ack>
In any case... I think it "more likely than not" that the entire $7.3M will be fully exhausted before the end of Q4 2008 simply because there is no way on G_ds green earth that any CPA would dare attempt to forecast both tax and income levels for this company any further than 1 year out... not post-ENRON anyway! <Hoo><Hoo><Haa>
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