Advance Auto Parts 2014 Annual Report Download - page 79

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ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 3, 2015, December 28, 2013 and December 29, 2012
(in thousands, except per share data)
F-32
Temporary differences which give rise to significant deferred income tax assets (liabilities) are as follows:
January 3,
2015
December 28,
2013
Current deferred income tax assets (liabilities):
Inventory valuation differences $ (156,703)$ (178,201)
Accrued medical and workers compensation 14,250 9,370
Accrued expenses not currently deductible for tax 48,684 28,501
Other, net 5,119 5,612
Total current deferred income tax assets (liabilities) $ (88,650)$ (134,718)
Long-term deferred income tax assets (liabilities):
Property and equipment $ (181,511)$ (143,577)
Share-based compensation 13,721 10,733
Accrued medical and workers compensation 30,424 20,532
Net operating loss carryforwards 7,233 3,426
Straight-line rent 21,431 20,784
Intangible assets (255,050)(10,961)
Other, net 6,051 12,425
Total long-term deferred income tax assets (liabilities) $ (357,701)$ (86,638)
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 January 3, 2015, December 28, 2013 and December 29, 2012:
January 3,
2015
December 28,
2013
December 29,
2012
Unrecognized tax benefits, beginning of period $ 18,458 $ 16,708 $ 24,711
Increases related to prior period tax positions — — 702
Decreases related to prior period tax positions (4,841)(1,313)(9,629)
Increases related to current period tax positions 4,329 3,678 3,985
Settlements (2,345)—
(1,111)
Expiration of statute of limitations (1,568)(615)(1,950)
Unrecognized tax benefits, end of period $ 14,033 $ 18,458 $ 16,708
As of January 3, 2015, 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.
The Company provides for potential interest and penalties associated with uncertain tax positions as a part of income tax
expense. During 2014, the Company recognized a benefit from interest and penalties related to uncertain tax positions of
$3,684. During 2013, the Company recorded potential interest and penalties of $818. During 2012 the Company recognized a
benefit from interest and penalties related to uncertain tax positions of $754. As of January 3, 2015, the Company had recorded
a liability for potential interest and penalties of $1,759 and $138, respectively. As of December 28, 2013, the Company had
recorded a liability for potential interest and penalties of $5,767 and $316, respectively. The Company has not provided for any