Pep Boys 2011 Annual Report Download - page 104

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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)
Company’s annual effective tax rate. The Company believes it is reasonably possible that the amount
will increase or decrease within the next twelve months; however, it is not currently possible to estimate
the impact of the change.
NOTE 9—STOCKHOLDERS’ EQUITY
On January 26, 2010, the Company terminated the flexible employee benefits trust (the ‘‘Trust’’)
that was established on April 29, 1994 to fund a portion of the Company’s obligations arising from
various employee compensation and benefit plans. In accordance with the terms of the Trust, upon its
termination, the Trust’s sole asset, consisting of 2,195,270 shares of the Company’s common stock, was
transferred to the Company in exchange for the full satisfaction and discharge of all intercompany
indebtedness then owed by the Trust to the Company. The termination of the Trust had no impact on
the Company’s consolidated financial statements, except for the reclassification of the shares within the
shareholders equity section of the Company’s Consolidated Balance Sheets. The Company uses its
treasury shares to satisfy share requirements to its employees under its compensation plans and
dividend reinvestment program.
NOTE 10—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following are the components of other comprehensive income:
Year Ended
January 28, January 29, January 30,
(dollar amounts in thousands) 2012 2011 2010
Net earnings ........................... $28,903 $36,631 $23,036
Other comprehensive income (loss), net of tax:
Defined benefit plan adjustment ........... (3,120) 582 595
Derivative financial instrument adjustment . . . 2,499 81 (211)
Comprehensive income ................... $28,282 $37,294 $23,420
The components of accumulated other comprehensive loss are:
Year Ended
January 28, January 29, January 30,
(dollar amounts in thousands) 2012 2011 2010
Defined benefit plan adjustment, net of tax .... $ (9,696) $ (6,576) $ (7,158)
Derivative financial instrument adjustment, net
of tax .............................. (7,953) (10,452) (10,533)
Accumulated other comprehensive loss ........ $(17,649) $(17,028) $(17,691)
NOTE 11—STORE CLOSURES AND ASSET IMPAIRMENTS
During fiscal 2011, the Company recorded a $1.6 million impairment charge related to 12 stores
classified as held and used. Of the $1.6 million impairment charge, $0.6 million was charged to
merchandise cost of sales, and $1.0 million was charged to service cost of sales. In fiscal 2010, the
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