AutoZone 2010 Annual Report Download - page 139

Download and view the complete annual report

Please find page 139 of the 2010 AutoZone annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 172

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172

Note D — Income Taxes
The provision for income tax expense consisted of the following:
(in thousands)
August 28,
2010
August 29,
2009
August 30,
2008
Year Ended
Current:
Federal ............................................................................................... $397,062 $303,929 $285,516
State ................................................................................................... 34,155 26,450 20,516
431,217 330,379 306,032
Deferred:
Federal ............................................................................................... (3,831) 46,809 51,997
State ................................................................................................... (5,192) (491) 7,754
(9,023) 46,318 59,751
Income tax expense............................................................................... $422,194 $376,697 $365,783
A reconciliation of the provision for income taxes to the amount computed by applying the federal statutory
tax rate of 35% to income before income taxes is as follows:
(in thousands)
August 28,
2010
August 29,
2009
August 30,
2008
Year Ended
Federal tax at statutory U.S. income tax rate....................................... 35.0% 35.0% 35.0%
State income taxes, net ......................................................................... 1.6% 1.6% 1.8%
Other...................................................................................................... (0.2%) (0.2%) (0.5%)
Effective tax rate ................................................................................... 36.4% 36.4% 36.3%
Significant components of the Company’s deferred tax assets and liabilities were as follows:
(in thousands)
August 28,
2010
August 29,
2009
Deferred tax assets:
Domestic net operating loss and credit carryforwards ............................................ $ 25,781 $ 23,119
Foreign net operating loss and credit carryforwards ............................................... — 1,369
Insurance reserves ..................................................................................................... 20,400 14,769
Accrued benefits ....................................................................................................... 50,991 32,976
Pension....................................................................................................................... 34,965 26,273
Other .......................................................................................................................... 34,764 35,836
Total deferred tax assets ....................................................................................... 166,901 134,342
Less: Valuation allowances ................................................................................... (7,085) (7,116)
159,816 127,226
Deferred tax liabilities:
Property and equipment ............................................................................................ (35,714) (36,472)
Inventory.................................................................................................................... (205,000) (192,715)
Other .......................................................................................................................... (19,850) (14,840)
(260,564) (244,027)
Net deferred tax liability............................................................................................... $(100,748) $(116,801)
Deferred taxes are not provided for temporary differences of approximately $91.1 million at August 28, 2010,
and $47.1 million of August 29, 2009, representing earnings of non-U.S. subsidiaries that are intended to be
permanently reinvested. Computation of the potential deferred tax liability associated with these undistributed
earnings and other basis differences is not practicable.
49
10-K