Dollar General 2013 Annual Report Download - page 145

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. Income taxes (Continued)
Net deferred tax liabilities are reflected separately on the consolidated balance sheets as current
and noncurrent deferred income taxes. The following table summarizes net deferred tax liabilities as
recorded in the consolidated balance sheets:
January 31, February 1,
(In thousands) 2014 2013
Current deferred income tax liabilities, net .............. $ (21,795) $ (23,223)
Noncurrent deferred income tax liabilities, net ........... (614,026) (647,070)
Net deferred tax liabilities .......................... $(635,821) $(670,293)
The Company has state net operating loss carry forwards as of January 31, 2014 that total
approximately $4.3 million which will expire in 2028. The Company also has state tax credit carry
forwards of approximately $12.7 million that will expire beginning in 2021 through 2024.
A valuation allowance has been provided for state tax credit carry forwards and federal capital
losses. The 2013, 2012, and 2011 decreases of $0.4 million, $3.1 million and $2.2 million, respectively,
were recorded as a reduction in income tax expense. Based upon expected future income, management
believes that it is more likely than not that the results of operations will generate sufficient taxable
income to realize the deferred tax assets after giving consideration to the valuation allowance.
The Internal Revenue Service (‘‘IRS’’) has previously examined the Company’s 2008 and earlier
federal income tax returns. As a result, the 2008 and earlier tax years are not open for further
examination by the IRS. The Company has filed an amended federal income tax return requesting a
refund of approximately $5.1 million for its 2009 tax year. This amended return is expected to be
examined by the IRS. As the statute of limitations has otherwise closed for the 2009 tax year, the IRS’
ability to assess additional income tax for 2009 is limited to the refund requested on the amended
income tax return. The IRS, at its discretion, may also choose to examine the Company’s 2010 through
2013 fiscal year income tax filings. The Company has various state income tax examinations that are
currently in progress. Generally, the Company’s 2010 and later tax years remain open for examination
by the various state taxing authorities.
As of January 31, 2014, accruals for uncertain tax benefits, interest expense related to income taxes
and potential income tax penalties were $19.6 million, $2.4 million and $0.4 million, respectively, for a
total of $22.4 million. Of this total amount, $3.6 million and $18.8 million are reflected in current
liabilities as Accrued expenses and other and in noncurrent Other liabilities, respectively, in the
consolidated balance sheet.
As of February 1, 2013, accruals for uncertain tax benefits, interest expense related to income taxes
and potential income tax penalties were $22.2 million, $2.3 million and $0.4 million, respectively, for a
total of $24.9 million. Of this total amount, $1.5 million and $23.4 million are reflected in current
liabilities as Accrued expenses and other and in noncurrent Other liabilities, respectively, in the
consolidated balance sheet.
The Company believes that it is reasonably possible that the reserve for uncertain tax positions
may be reduced by approximately $11.2 million in the coming twelve months principally as a result of
the effective settlement of several outstanding issues. Also, as of January 31, 2014, approximately
68
10-K