Pep Boys 2006 Annual Report Download - page 109
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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 3, 2007, January 28, 2006 and January 29, 2005
(dollar amounts in thousands, except share data)
70
A reconciliation of the statutory federal income tax rate to the effective rate of the provision for
income taxes follows:
Year ended
February 3,
2007
January 28,
2006
January 29,
2005
Statutorytaxrate................................... 35.0% 35.0% 35.0%
State income taxes, net of federal tax benefits . . . . . . . . . . (3.6) 0.9 2.8
Jobcredits......................................... 5.8 0.8 (1.0)
State Deferred Adjustment(a). . . . . . . . . . . . . . . . . . . . . . . . 38.9 — —
ForeignTaxes,netoffederalbenefits................. (3.8) — —
Other,net......................................... (4.1) (0.2) 0.6
68.2% 36.5% 37.4%
(a) The tax rate for the year ended February 2007 includes an adjustment to the state deferred liabilities
primarily due to change in the Company’s filing position in certain states. Based on the new filing
position, the Company has recorded certain tax attributes that were not recognized previously.
Items that gave rise to significant portions of the deferred tax accounts are as follows:
February 3,
2007
January 28,
2006
Deferred tax assets:
Employee compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,227 $ 6,693
Store closing reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 741 1,087
Legal ...................................................... 2,193 500
BenefitAccruals............................................. 1,998 538
Netoperatinglosscarryforwards .............................. 46,831 27,640
Taxcreditcarryforwards...................................... 13,944 12,775
Accruedleases.............................................. 12,937 13,522
Interestratederivatives ...................................... 1,305 —
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,566 3,049
Grossdeferredtaxassets..................................... 91,742 65,804
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,077) (3,545)
$87,665 $62,259
Deferred tax liabilities:
Depreciation................................................ $51,017 $55,222
Inventories ................................................. 37,544 17,655
Real estate tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,414 2,405
Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793 3,180
Interest rate derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,151
$91,768 $80,613
Net deferred tax liability........................................ $4,103 $18,354