Advance Auto Parts 2008 Annual Report Download - page 81

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ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
January 3, 2009, December 29, 2007 and December 30, 2006
(in thousands, except per share data)
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
F-27
Current Deferred Total
2008-
Federal 128,952$ (1,435)$ 127,517$
State 16,404 (1,267) 15,137
145,356$ (2,702)$ 142,654$
2007-
Federal 143,726$ (17,444)$ 126,282$
State 21,126 (3,091) 18,035
164,852$ (20,535)$ 144,317$
2006-
Federal 126,726$ (4,874)$ 121,852$
State 18,433 (1,688) 16,745
145,159$ (6,562)$ 138,597$
The provision (benefit) for income taxes from continuing operations differed from the amount computed by
applying the federal statutory income tax rate due to:
2008 2007 2006
Income from continuing operations
at statutory U.S. federal income tax rate (35%) 133,242$ 133,922$ 129,470$
State income taxes, net of federal
income tax benefit 9,839 11,723 10,884
Non-deductible expenses 2,177 1,181 1,155
Valuation allowance 491 221 70
Other, net (3,095) (2,730) (2,982)
142,654$ 144,317$ 138,597$
Deferred Income Tax Assets/(Liabilities)
Deferred tax assets and liabilities are determined based on the differences between the financial statements and
tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to
reverse. Deferred income taxes reflect the net income tax effect of temporary differences between the basis of assets
and liabilities for financial reporting purposes and for income tax reporting purposes. Net deferred income tax
balances are comprised of the following:
January 3, December 29,
2009 2007
Deferred income tax assets 100,177$ 73,660$
Valuation allowance (1,887) (1,396)
Deferred income tax liabilities (136,942) (118,404)
Net deferred income tax liabilities (38,652)$ (46,140)$
At January 3, 2009 and December 29, 2007, the Company had cumulative net deferred income tax liabilities of
$38,652 and $46,140, respectively. The deferred income tax assets also include state net operating loss carry-
forwards, or NOLs, of approximately $2,581 and $3,214, respectively. These NOLs may be used to reduce future
taxable income and expire periodically through fiscal year 2027. Due to uncertainties related to the realization of