Advance Auto Parts 2012 Annual Report Download - page 72

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F-27
The provision for income taxes differed from the amount computed by applying the federal statutory income tax
rate due to:
December 29,
2012
December 31,
2011
January 1,
2011
Income before provision for income taxes at
statutory U.S. federal income tax rate (35%) $ 218,426 $ 221,632 $ 194,970
State income taxes, net of federal income tax
benefit 16,295 18,348 16,127
Other, net 1,683 (1,426)(95)
$ 236,404 $ 238,554 $ 211,002
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:
December 31,
2011
January 1,
2011
Deferred income tax assets $ 103,339 $ 109,011
Valuation allowance (1,557)(1,557)
Deferred income tax liabilities (330,139)(300,025)
Net deferred income tax liabilities $ (228,357) $ (192,571)
At December 29, 2012 and December 31, 2011, the Company had deferred income tax assets of $3,213 and $4,097 from
federal net operating losses, or NOLs, of $9,181 and $11,707, and deferred income tax assets of $1,841 and $1,928 from state
NOLs of $35,681 and $37,360, respectively. These NOLs may be used to reduce future taxable income and expire periodically
through Fiscal 2031. Due to uncertainties related to the realization of certain deferred tax assets for NOLs in certain
jurisdictions, the Company recorded a valuation allowance of $1,557 as of both December 29, 2012 and December 31, 2011.
The amount of deferred income tax assets realizable, however, could change in the future if projections of future taxable
income change. At December 29, 2012 and December 31, 2011, the Company had cumulative net deferred income tax
liabilities of $228,357 and $192,571, respectively.
ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 29, 2012, December 31, 2011 and January 1, 2011
(in thousands, except per share data)