Dillard's 2012 Annual Report Download - page 71

Notes to Consolidated Financial Statements (Continued)
6. Income Taxes (Continued)
purposes. Significant components of the Company’s deferred tax assets and liabilities as of February 2,
2013 and January 28, 2012 are as follows:
February 2, January 28,
(in thousands of dollars) 2013 2012
Property and equipment bases and depreciation differences . $ 346,246 $ 408,003
Prepaid expenses ................................ 26,565 22,675
Joint venture bases differences ...................... 12,277 11,312
Differences between book and tax bases of inventory ...... 52,306 62,794
Other ........................................ 3,239 1,970
Total deferred tax liabilities ....................... 440,633 506,754
Accruals not currently deductible ..................... (94,286) (95,440)
Net operating loss carryforwards ..................... (89,828) (95,763)
State income taxes ............................... (1,994) (3,889)
Other ........................................ (199) (442)
Total deferred tax assets ......................... (186,307) (195,534)
Net operating loss valuation allowance ................. 62,712 64,870
Net deferred tax assets .......................... (123,595) (130,664)
Net deferred tax liabilities ........................ $317,038 $ 376,090
At February 2, 2013, the Company had a deferred tax asset related to state net operating loss
carryforwards of approximately $90 million that could be utilized to reduce the tax liabilities of future
years. These carryforwards will expire between fiscal 2013 and 2033. A portion of the deferred tax asset
attributable to state net operating loss carryforwards was reduced by a valuation allowance of
approximately $63 million for the losses of various members of the affiliated group in states for which
the Company determined that it is ‘‘more likely than not’’ that the benefit of the net operating losses
will not be realized.
Deferred tax assets and liabilities are presented as follows in the accompanying consolidated
balance sheets:
February 2, January 28,
(in thousands of dollars) 2013 2012
Net deferred tax liabilities—noncurrent ................ $255,652 $314,598
Net deferred tax liabilities—current ................... 61,386 61,492
Net deferred tax liabilities ........................ $317,038 $376,090
The total amount of unrecognized tax benefits as of February 2, 2013 and January 28, 2012 was
$5.4 million and $8.5 million, respectively, of which $3.9 million and $5.8 million, respectively, would, if
recognized, affect the effective tax rate. The Company classifies accrued interest expense and penalties
relating to income tax in the consolidated financial statements as income tax expense. The total interest
and penalties recognized in the consolidated statements of income during fiscal 2012, 2011 and 2010
was $(2.1) million, $(0.2) million and $(2.3) million, respectively. The total accrued interest and
penalties in the consolidated balance sheets as of February 2, 2013 and January 28, 2012 was
$1.4 million and $3.4 million, respectively.
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