Pep Boys 2008 Annual Report Download - page 143

THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended January 31, 2009, February 2, 2008 and February 3, 2007
(dollar amounts in thousands, except share data)
Items that gave rise to significant portions of the deferred tax accounts are as follows:
January 31, February 2,
2009 2008
Deferred tax assets:
Employee compensation ................................ $ 3,649 $ 9,399
Store closing reserves .................................. 576 2,388
Legal .............................................. 1,826 2,856
Benefit accruals ...................................... 4,998 3,224
Net operating loss carryforwards—Federal ................... 8,608 16,350
Net operating loss carryforwards—State ..................... 104,671 93,228
Tax credit carryforwards ................................ 18,243 16,341
Accrued leases ....................................... 13,588 12,515
Interest rate derivatives ................................. 4,861 4,078
Deferred gain on sale leaseback ........................... 69,746 32,280
Other .............................................. 5,668 5,458
Gross deferred tax assets ................................ 236,434 198,117
Valuation allowance ................................... (107,212) (93,231)
$ 129,222 $104,886
Deferred tax liabilities:
Depreciation ........................................ $ 35,153 $ 36,582
Inventories .......................................... 47,403 31,490
Real estate tax ....................................... 2,946 2,610
Insurance ........................................... 1,860 810
Other .............................................. — 782
$ 87,362 $ 72,274
Net deferred tax asset ................................... $ 41,860 $ 32,612
Net deferred tax liability ................................. $ — $ —
As of January 31, 2009 and February 2, 2008, the Company had available tax net operating losses
that can be carried forward to future years. During the fiscal year 2008, the Company recorded state
deferred tax assets and full valuation allowances that had previously not been recognized as the
Company believes that more likely than not these assets will not be realized. The Company has $24,595
of federal net operating loss carryforwards which begin to expire in 2025. The Company has state tax
net operating losses of $123,122 that will expire in various years beginning in 2009. The balance of the
Company’s net operating loss carryforwards relate to separate company filing jurisdictions that will
expire in various years beginning in 2009 and have full valuation allowances against them.
The tax credit carryforward in 2008 consists of $6,970 of alternative minimum tax credits, $3,064 of
work opportunity credits, $8,152 of state and Puerto Rico tax credits and $57 of charitable contribution
carryforward. The tax credit carryforward in 2007 consists of $6,541 of alternative minimum tax credits,
$3,292 of work opportunity credits, $6,142 of state tax credits and $366 of charitable contribution
carryforward.
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