Question-and-Answer Session
Operator
(Operator instructions). And we will take our first question from Kathleen Reed with Stanford Financial.
Kathleen Reed – Stanford Financial
Hi, good morning everybody. I guess first question, just a little more clarity on your tax rate, so by my calculation a 33% rate for the full year versus an assumption you know previously in the high 30% range for the year is like a $0.15 swing in earnings, so even using $1.53 minus $0.15 you still get more towards the low end of your full year guidance and I just wondered if something came in a little bit less or lower than you had expected, if there was a swing factor? Was it really the Canada situation which I have a follow up question on as well or was there some other issue that was a little bit then worse to offset the $0.15 incremental benefit?
Steve Smith
Sure Kathy, actually I’ll widen out your question to hit two pieces, one that you may ask again later or ask later regarding the scanned based trading performance as well. So if you look both at the tax rate, which you’re correct, was around $0.15 and then the under spending if you will against scanned based trading which is worth roughly $0.10, it’s about a $0.25 difference from our expectations in December.
There were really three items that impacted us in the fourth quarter that would address that $0.25. The first item was the costs or were the costs associated with the implementation of the new product line in Canada, that account for about 50% of the delta. Second of all we had some additional film production costs which were higher than anticipated, that was about 25% of the delta. And third our retail store operations did not perform as strongly as expected either at Christmas or at Valentine’s Day and that was the bulk of the remainder. So those three items, the Canadian line, the film production costs and the retail store performance really address your question.
Kathleen Reed – Stanford Financial
Okay and I guess just to elaborate on the Canadian, the changes that you made to Canada, can you just explain that a little bit more, you know dual prices, that you’ve had I guess for a really long time, so now you’re moving to one price and so is it that you had to take the inventory back and put new cards out or can you just give us a little more information there?
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