Pep Boys 2007 Annual Report Download - page 120

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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 2, 2008, February 3, 2007 and January 28, 2006
(dollar amounts in thousands, except share data)
reconciliation of the beginning balance and ending carrying amounts of the Company’s asset retirement
obligation under SFAS 143 from January 28, 2006 through February 2, 2008:
Asset retirement obligation, January 28, 2006 ....................... $6,775
Asset retirement obligation incurred during the period .............. 131
Asset retirement obligation settled during the period ................ (130)
Accretion expense ......................................... 269
Asset retirement obligation, February 3, 2007 ....................... $7,045
Asset retirement obligation incurred during the period .............. 290
Asset retirement obligation settled during the period ................ (273)
Accretion expense ......................................... 284
Asset retirement obligation, February 2, 2008 ....................... $7,346
In the fourth quarter of fiscal 2005, the Company reviewed and revised its estimated settlement
costs. The Company reversed $1,945 of the liability as the original estimates of the contamination
occurrence rate and the cost to remediate such contaminations proved to be higher than actual
experience is yielding.
The Company adopted FIN 47, ‘‘Accounting for Conditional Asset Retirement Obligations,’’ an
interpretation of SFAS 143, ‘‘Asset Retirement Obligations’’ on January 28, 2006. This interpretation
impacted the Company in recognition of legal obligations associated with surrendering its leased
properties. These obligations were previously omitted from the Company’s SFAS 143 analysis due to
their uncertain timing. The impact of adopting FIN 47 was the recognition of net additional leasehold
improvement assets amounting to $470, an asset retirement obligation of $3,652 and a charge of $3,182
($2,021; net of tax), which was included in Cumulative Effect of Change in Accounting Principle in the
accompanying consolidated statement of operations for fiscal year 2005.
NOTE 14—INCOME TAXES
The (benefit) provision for income taxes includes the following:
Year ended
February 2, 2008 February 3, 2007 January 28, 2006
Current:
Federal .......................... $ (3,646) $ — $ —
State ............................ 654 933 1,008
Foreign .......................... 2,187 105 631
Deferred:
Federal .......................... (20,570) (4,745) (20,621)
State ............................ (3,761) (3,007) (1,306)
Foreign .......................... (458) 315 (739)
$(25,594) $(6,399) $(21,027)
74
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