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Over 100% Tax Rate?
Posted by: Jo-Jo (IP Logged)
Date: December 5, 2012 08:23PM

Heidrick and Struggles (HSII) came up on one of my screens, so I decided to take a look at their recent 10-Q. In the section on Income Taxes they talk about their effective tax rates being incredibly high. For the nine months ended September 30, 2012 was 66.8%. The same period last year was 74.6%. For the nine months ended September 30, 2011 their rate was 227.9% on a 9 million dollar loss.

On their last 10-k it looks like they are paying high taxes on foreign income even though they have been losing money on foreign operations. I don't do a lot of investing outside the US. Can someone tell me if I am right about them paying taxes in foreign countries even though they have negative income? If that is correct, is that normal in a lot of places?

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Re: Over 100% Tax Rate?
Posted by: Jo-Jo (IP Logged)
Date: December 5, 2012 08:48PM

I think I just figured it out. It looks like they are taking some valuation allowances, and including Goodwill impairment. The 10-K describes this, but the 10-Q doesn't. I assume the same effects are in play on the 10-Q though. They certainly have some complicated tax issues.

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