Pep Boys 2013 Annual Report Download - page 129

THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 1, 2014, February 2, 2013 and January 28, 2012
NOTE 8—INCOME TAXES (Continued)
Items that gave rise to the deferred tax accounts are as follows:
February 1, February 2,
(dollar amounts in thousands) 2014 2013
Deferred tax assets:
Employee compensation ......................... $ 3,544 $ 5,274
Store closing reserves ........................... 673 719
Legal reserve ................................. 182 122
Benefit accruals ............................... 2,109 1,247
Net operating loss carryforwards—Federal ............ 1,115 1,887
Net operating loss carryforwards—State .............. 111,258 111,785
Tax credit carryforwards .......................... 26,605 16,291
Accrued leases ................................ 15,215 16,032
Interest rate derivatives .......................... — 708
Deferred gain on sale leaseback .................... 46,176 51,124
Deferred revenue .............................. 2,987 5,194
Other ....................................... 1,312 1,874
Gross deferred tax assets ......................... 211,176 212,257
Valuation allowance ............................ (106,695) (102,341)
104,481 109,916
Deferred tax liabilities:
Depreciation .................................. $ 33,059 $ 42,400
Inventories ................................... 71,630 65,203
Real estate tax ................................ 3,300 3,214
Insurance and other ............................ 4,299 6,261
Interest rate derivatives .......................... 274 —
Debt related liabilities ........................... 3,606 3,588
116,168 120,666
Net deferred tax (liability) asset ..................... $ (11,687) $ (10,750)
As of February 1, 2014, the Company had available tax net operating losses that can be carried
forward to future years. The Company has $1.1 million of deferred tax assets related to federal net
operating loss carryforwards which begin to expire in 2027. The Company has $2.4 million of deferred
tax assets related to state tax net operating loss carryforwards in unitary filing jurisdictions, of which
1.6% will expire in the next five years and a full valuation allowance has been recorded against. The
balance of $108.9 million of the Company’s net operating loss carryforwards are for separate company
state filing jurisdictions that will expire in various years beginning in 2014. Separate company state net
operating losses of $107.1 million are in the jurisdictions where the Company has recorded a full
valuation allowance against its net deferred tax assets.
The tax credit carryforward as of February 1, 2014 consists of $7.9 million of alternative minimum
tax credits, $7.0 million of hiring credits and $11.7 million of various state and foreign credits. The
alternative minimum tax credits have an indefinite life, while the other credits are scheduled to expire
57