Advance Auto Parts 2013 Annual Report Download - page 81

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ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 28, 2013, December 29, 2012 and December 31, 2011
(in thousands, except per share data)
F-29
Temporary differences which give rise to significant deferred income tax assets (liabilities) are as follows:
December 28,
2013
December 29,
2012
Current deferred income tax assets (liabilities):
Inventory valuation differences $ (178,201) $ (176,869)
Accrued medical and workers compensation 9,370 10,523
Accrued expenses not currently deductible for tax 28,501 31,061
Other, net 5,612 1,437
Total current deferred income tax assets (liabilities) $ (134,718) $ (133,848)
Long-term deferred income tax assets (liabilities):
Property and equipment $ (143,577) $ (153,270)
Share-based compensation 10,733 12,624
Accrued medical and workers compensation 20,532 19,570
Net operating loss carryforwards 3,426 4,048
Straight-line rent 20,784 17,799
Other, net 1,464 4,720
Total long-term deferred income tax assets (liabilities) $ (86,638) $ (94,509)
These amounts are recorded in Other current liabilities and Other long-term liabilities in the accompanying consolidated
balance sheets, as appropriate.
Unrecognized Tax Benefits
The following table lists each category and summarizes the activity of the Company’s gross unrecognized tax benefits for
the fiscal years ended December 28, 2013, December 29, 2012 and December 31, 2011:
December 28,
2013
December 29,
2012
December 31,
2011
Unrecognized tax benefits, beginning of period $ 16,708 $ 24,711 $ 12,953
Increases related to prior period tax positions — 702 10,555
Decreases related to prior period tax positions (1,313)(9,629)(660)
Increases related to current period tax positions 3,678 3,985 2,861
Settlements — (1,111)(319)
Expiration of statute of limitations (615)(1,950)(679)
Unrecognized tax benefits, end of period $ 18,458 $ 16,708 $ 24,711
As of December 28, 2013 and December 29, 2012, the entire amount of unrecognized tax benefits, if recognized, would
reduce the Company’s annual effective tax rate. As of December 31, 2011, the Company had $14,551 of unrecognized tax
benefits which, if recognized, would reduce the Company’s annual effective tax rate.
The Company provides for potential interest and penalties associated with uncertain tax positions as a part of income tax
expense. During Fiscal 2013, the Company recorded potential interest and penalties of $818. During Fiscal 2012, the Company
recognized a benefit from interest and penalties related to uncertain tax positions of $754. During Fiscal 2011 the Company
recorded potential interest and penalties related to uncertain tax positions of $1,628. As of December 28, 2013, the Company
had recorded a liability for potential interest and penalties of $5,767 and $316, respectively. As of December 29, 2012, the
Company had recorded a liability for potential interest and penalties of $4,964 and $301, respectively. The Company has not