Advance Auto Parts 2009 Annual Report Download - page 84

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ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 2, 2010, January 3, 2009 and December 29, 2007
(in thousands, except per share data)
.
F-31
The provision (benefit) for income taxes differed from the amount computed by applying the federal statutory
income tax rate due to:
200920082007
Income before provision (benefit) for income taxes
at statutory U.S. federal income tax rate (35%) 151,079$ 133,242$ 133,922$
State income taxes, net of federal
income tax benefit 10,400 9,839 11,723
Non-deductible expenses 3,077 2,177 1,181
Valuation allowance (614) 491 221
Other, net (2,660) (3,095) (2,730)
161,282$ 142,654$ 144,317$
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 2, January 3,
2010 2009
Deferred income tax assets 104,078$ 100,177$
Valuation allowance (1,273) (1,887)
Deferred income tax liabilities (209,658) (136,942)
Net deferred income tax liabilities (106,853)$ (38,652)$
At January 2, 2010 and January 3, 2009, the Company had cumulative net deferred income tax liabilities of
$106,853 and $38,652, respectively. The deferred income tax assets also include state net operating loss carry-
forwards, or NOLs, of approximately $2,057 and $2,581, respectively. These NOLs may be used to reduce future
taxable income and expire periodically through Fiscal 2027. Due to uncertainties related to the realization of certain
deferred tax assets for NOLs in certain jurisdictions, the Company recorded a valuation allowance of $1,273 as of
January 2, 2010 and $1,887 as of January 3, 2009. The amount of deferred income tax assets realizable, however,
could change in the future if projections of future taxable income change.
Temporary differences which give rise to significant deferred income tax assets (liabilities) are as follows: