Pep Boys 2012 Annual Report Download - page 98

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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 2, 2013, January 28, 2012 and January 29, 2011
NOTE 8—INCOME TAXES (Continued)
$0.2 million, respectively, for the payment of interest and penalties which are excluded from the
unrecognized tax benefit noted above.
Unrecognized tax benefits include $0.9 million, $1.3 million, and $1.4 million, at February 2, 2013,
January 28, 2012 and January 29, 2011, respectively, of tax benefits that, if recognized, would affect the
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 December 12, 2012, the Company’s Board of Directors authorized a program to repurchase up
to $50.0 million of the Company’s common stock to be made from time to time in the open market or
in privately negotiated transactions, with no expiration date. During the fourth quarter of fiscal 2012,
the Company repurchased 35,000 shares of Common Stock for $342,000. All of these repurchased
shares were placed into the Company’s treasury.
NOTE 10—ACCUMULATED OTHER COMPREHENSIVE LOSS
The components of accumulated other comprehensive loss are:
Year Ended
February 2, January 28, January 29,
(dollar amounts in thousands) 2013 2012 2011
Defined benefit plan adjustment, net of tax ..... $ — $ (9,696) $ (6,576)
Derivative financial instrument adjustment, net of
tax ................................ (980) (7,953) (10,452)
Accumulated other comprehensive loss ........ $(980) $(17,649) $(17,028)
NOTE 11—STORE CLOSURES AND ASSET IMPAIRMENTS
During fiscal 2012, the Company recorded a $10.6 million impairment charge related to 49 stores
classified as held and used. Of the $10.6 million impairment charge, $5.1 million was charged to
merchandise cost of sales, and $5.5 million was charged to service cost of sales. In 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 both years the Company used a probability-
weighted approach and estimates of expected future cash flows to determine the fair value of these
stores. Discount and growth rate assumptions were derived from current economic conditions,
management’s expectations and projected trends of current operating results. The fair market value
estimates are classified as a Level 2 or Level 3 measure within the fair value hierarchy. The remaining
fair value of impaired assets was $2.3 million and $1.4 million at February 2, 2013 and January 28,
2012, respectively.
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