Pep Boys 2011 Annual Report Download - page 102

THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended January 29, 2011, January 30, 2010 and January 31, 2009
NOTE 8—INCOME TAXES (Continued)
Items that gave rise to the deferred tax accounts are as follows:
January 28, January 29,
(dollar amounts in thousands) 2012 2011
Deferred tax assets:
Employee compensation ......................... $ 5,008 $ 3,060
Store closing reserves ........................... 1,365 1,064
Legal reserve ................................. 341 569
Benefit accruals ............................... 5,922 3,576
Net operating loss carryforwards—Federal ............ 16,473 2,527
Net operating loss carryforwards—State .............. 111,588 107,941
Tax credit carryforwards .......................... 17,877 17,086
Accrued leases ................................ 15,916 12,107
Interest rate derivatives .......................... 5,730 5,960
Deferred gain on sale leaseback .................... 56,325 61,904
Deferred revenue .............................. 5,621 5,871
Other ....................................... 1,951 2,570
Gross deferred tax assets ......................... 244,117 224,235
Valuation allowance ............................ (103,915) (104,486)
140,202 119,749
Deferred tax liabilities:
Depreciation .................................. $ 54,284 $ 44,634
Inventories ................................... 65,886 57,538
Real estate tax ................................ 3,307 3,132
Insurance and other ............................ 6,159 2,574
Debt related liabilities ........................... 3,903 2,187
133,539 110,065
Net deferred tax asset ............................. $ 6,663 $ 9,684
As of January 28, 2012 and January 29, 2011, the Company had available tax net operating losses
that can be carried forward to future years. The Company has $16.5 million of deferred tax assets
related to federal net operating loss carryforwards which begin to expire in 2027. The Company has
$2.7 million of deferred tax assets related to state tax net operating loss carryforwards related to
unitary filings of which 2.4% will expire in the next five years for which a full valuation allowance has
been recorded. The balance of $108.8 million of the Company’s net operating loss carryforwards relate
to separate company filing jurisdictions that will expire in various years beginning in 2012 of which
$106.2 million have full valuation allowances recorded against them.
The tax credit carryforward at January 28, 2012 consists of $7.3 million of alternative minimum tax
credits, $4.0 million of work opportunity credits, $0.9 millions of hire tax credits and $5.7 million of
state and Puerto Rico tax credits. The alternative minimum credits have an indefinite life and the other
credits are scheduled to expire in various years starting from 2012 of which $0.9 million have full
valuation allowances recorded against them. The tax credit carryforward at January 29, 2011 consists of
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