Pep Boys 2014 Annual Report Download - page 57

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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 6—LEASE AND OTHER COMMITMENTS (Continued)
deferred gain for all sale leaseback transactions is being recognized as a reduction of costs of
merchandise sales and costs of service revenues over the minimum term of these leases.
NOTE 7—ASSET RETIREMENT OBLIGATIONS
The Company records asset retirement obligations as incurred and when reasonably estimable,
including obligations for which the timing and/or method of settlement are conditional on a future
event that may or may not be within the control of the Company. The obligation principally represents
the removal of leasehold improvements from stores upon termination of store leases. The obligations
are recorded as liabilities at fair value using discounted cash flows and are accreted over the lease
term. Costs associated with the obligations are capitalized and amortized over the estimated remaining
useful life of the asset.
The Company has recorded a liability pertaining to the asset retirement obligation in other
long-term liabilities on its consolidated balance sheet. Changes in assumptions reflect favorable
experience with the rate of occurrence of obligations and expected settlement dates. The liability for
asset retirement obligations activity from February 2, 2013 through January 31, 2015 is as follows:
(dollar amounts in thousands)
Asset retirement obligation at February 2, 2013 ..................... $5,963
Additions ................................................. 245
Change in assumptions ....................................... (287)
Settlements ............................................... (12)
Accretion expense ........................................... 334
Asset retirement obligation at February 1, 2014 ..................... 6,243
Additions ................................................. 113
Change in assumptions ....................................... (734)
Settlements ............................................... (48)
Accretion expense ........................................... 350
Asset retirement obligation at January 31, 2015 ..................... $5,924
NOTE 8—INCOME TAXES
The components of (loss) income from continuing operations before income tax (benefit) expense
are as follows:
Year Ended
January 31, February 1, February 2,
(dollar amounts in thousands) 2015 2014 2013
Domestic ............................. $(32,878) $8,533 $14,577
Foreign ............................... 1,336 757 7,923
Total ................................. $(31,542) $9,290 $22,500
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