Advance Auto Parts 2011 Annual Report Download - page 82

ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 1, 2011, January 2, 2010 and January 3, 2009
(in thousands, except per share data)
.
F-28
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 1, January 2,
2011 2010
Deferred income tax assets 110,953$ 104,078$
Valuation allowance (1,141) (1,273)
Deferred income tax liabilities (256,601) (209,658)
Net deferred income tax liabilities (146,789)$ (106,853)$
At January 1, 2011 and January 2, 2010, the Company had cumulative net deferred income tax liabilities of
$146,789 and $106,853, respectively. The deferred income tax assets also include state net operating loss carry-
forwards, or NOLs, of approximately $1,513 and $2,057, 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 $1,141 as of
January 1, 2011 and $1,273 as of January 2, 2010. The amount of deferred income tax assets realizable, however,
could change in the future if projections of future taxable income change.
Temporary differences which give rise to significant deferred income tax assets (liabilities) are as follows:
January 1, January 2,
2011 2010
Current deferred income tax assets (liabilities):
Inventory valuation differences (149,992)$ (114,510)$
Accrued medical and workers compensation 11,760 30,015
Accrued expenses not currently deductible for tax 30,630 26,674
Net operating loss carryforwards 241 445
Interest rate swaps 7,309 4,184
Other, net 749 984
Total current deferred income tax assets (liabilities) (99,303)$ (52,208)$
Long-term deferred income tax assets (liabilities):
Property and equipment (106,609) (95,148)
Postretirement benefit obligation 2,931 3,042
Share-based compensation 16,546 19,872
Accrued medical and workers compensation 19,663 -
Closed store related 4,242 5,428
Net operating loss carryforwards 1,272 1,612
Straight-line rent 12,495 10,029
Valuation allowance (1,141) (1,273)
Other, net 3,115 1,793
Total long-term deferred income tax assets (liabilities) (47,486)$ (54,645)$
These amounts are recorded in Other current liabilities and Other long-term liabilities in the accompanying
consolidated balance sheets, as appropriate.