The following questions pertain to Couche-Tard’s income taxes:

a. What amount did Couche-Tard report as its income tax expense in the years ended April 27, 2008 and April 26, 2009? What portion was classified as a current expense and what portion was a future income tax expense? How much did Couche-Tard owe government for income taxes on April 26, 2009? How much did the company actually pay in income taxes to government during 2009? Why is this amount different from the current income tax expense?

b. What amount does Couche-Tard report on its April 27, 2008 and April 26, 2009 balance sheet for future income taxes? What do these amounts represent? What is the largest source of future income tax liabilities?

c. What was Couche-Tard’s combined statutory income tax rate in 2007, 2008, and 2009? What is Couche-Tard’s actual (effective) income tax rate based on the income tax expense in 2007, 2008, and 2009? What is Couche-Tard’s tax rate based on its current income tax expense in 2007, 2008, and 2009?

Alimentation Couche-Tard Inc. (Couche-Tard) is a Canadian convenience store operator with a network of over 2,000 stores:in Canada and more than 3,000 stores in the U.S. Over 3,600 of the total number are company-operated and the rest operate under an affiliate program. The company sells fuel in 65 percent of its company-operated stores. The stores are primarily operated under the Couche-Tard and Mac’s trademarks in Canada and the Circle K trademark in the U.S.
In addition to the North American Couche-Tard network, there are approximately 3,500 Circle K-licensed stores in other parts of the world."
Couche-Tard’s consolidated balance sheets and statements of earnings as well as extracts from the statements of cash flows and notes to the financial statements from its 2009 annual report are provided in Exhibit 9.11.'

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EXHIBIT 9.11 Alimentation Couche-Tard Inc.: Extracts from the Financial Statements CONSOLIDATED BALANCE SHEETS as at April 26, 2009 and April 27, 2008 (in millions of US dollars (Note 2)) Assets Current assets Cash and cash equivalents Accounts receivable (Note 10) Inventories (Note 11) Prepaid expenses Future income taxes (Note 7) Property and equipment (Note 12) Goodwill (Note 13) Trademarks and licenses Other assets (Note 14) Future income taxes (Note 7) 2009 2008 173.3 216.0 225.4 251.7 400.3 444.5 8.5 8.3 37.0 24.7 844.5 945.2 1,789.4 1,748.3 384.8 402.6 172.0 170.3 60.7 53.3 4.5 0.9 3,255.9 3,320.6 Liabilities Current liabilities Accounts payable and accrued liabilities (Note 15) 758.1 842.7 Income taxes payable (Note 7) 26.3 18.6 Current portion of long-term debt (Note 16) 3.9 1.2 Future income taxes (Note 7) 0.7 789.0 862.5 Long-term debt (Note 16) Deferred credits and other liabilities (Note 17) Future income taxes (Note 7) 745.3 841.0 259.0 253.8 136.6 109.6 1,929.9 2,066.9