Pep Boys 2014 Annual Report Download - page 53

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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended January 31, 2015, February 1, 2014 and February 2, 2013
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
ASU 2013-11 states that an unrecognized tax benefit should be presented in the financial statements as
a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward, if
available at the reporting date under the applicable tax law to settle any additional income taxes that
would result from the disallowance of a tax position. If the tax law of the applicable jurisdiction does
not require the entity to use, and the entity does not intend to use, the deferred tax asset for such
purpose, the unrecognized tax benefit should be presented in the financial statements as a liability. The
amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning
after December 15, 2013. The adoption of ASU 2013-11 did not have a material impact on the
Company’s consolidated financial statements.
NOTE 2—ACQUISITIONS
During 2013, the Company paid $10.7 million to purchase 18 Service & Tire Centers located in
Southern California from AKH Company, Inc., which had operated under the name Discount Tire
Centers. This acquisition was financed using cash on hand. Collectively, the acquired stores produced
approximately $26.1 million in sales annually based on unaudited pre-acquisition historical information.
The results of operations of these acquired stores are included in the Company’s results of operations
as of the date of acquisition.
The Company expensed all costs related to this acquisition during Fiscal 2013. The total costs
related to this acquisition were immaterial and are included in the consolidated statement of operations
within selling, general and administrative expenses.
The purchase price of the acquisition was allocated to tangible assets of approximately $0.8 million
and $0.1 million in intangible assets, with the remaining $9.9 million recorded as goodwill. The goodwill
was primarily related to growth opportunities and assembled workforces, and is deductible for tax
purposes.
NOTE 3—OTHER CURRENT ASSETS
The following are the components of other current assets:
January 31, February 1,
(dollar amounts in thousands) 2015 2014
Reinsurance receivable ............................ $55,405 $61,182
Income taxes receivable ............................ 270 1,643
Other ......................................... 311 580
Total ......................................... $55,986 $63,405
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