Pep Boys 2014 Annual Report Download - page 59

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 8—INCOME TAXES (Continued)
Items that gave rise to the deferred tax accounts are as follows:
January 31, February 1,
(dollar amounts in thousands) 2015 2014
Deferred tax assets:
Employee compensation ......................... $ 5,608 $ 3,544
Store closing reserves ........................... 1,179 673
Legal reserve ................................. 1,619 182
Benefit accruals ............................... 1,655 2,109
Net operating loss carryforwards—Federal ............ 6,253 1,115
Net operating loss carryforwards—State .............. 112,411 111,258
Tax credit carryforwards .......................... 28,179 26,605
Accrued leases ................................ 13,876 15,215
Deferred gain on sale leaseback .................... 41,385 46,176
Deferred revenue .............................. 1,965 2,987
Other ....................................... 4,226 1,312
Gross deferred tax assets ......................... 218,356 211,176
Valuation allowance ............................ (108,845) (106,695)
109,511 104,481
Deferred tax liabilities:
Depreciation .................................. $ 33,610 $ 33,059
Inventories ................................... 67,420 71,630
Real estate tax ................................ 3,495 3,300
Insurance and other ............................ 7,176 4,299
Interest rate derivatives .......................... — 274
Debt related liabilities ........................... 2,454 3,606
114,155 116,168
Net deferred tax (liability) asset ..................... $ (4,644) $ (11,687)
As of January 31, 2015, the Company had available tax net operating losses that can be carried
forward to future years. The Company has $6.2 million of deferred tax assets related to federal net
operating loss carryforwards which begin to expire in 2029. The Company has $2.8 million of deferred
tax assets related to state tax net operating loss carryforwards in unitary filing jurisdictions. The balance
of $109.6 million of deferred tax assets related to net operating loss carryforwards in separate company
state filing jurisdictions will expire in various years beginning in 2015. The Company has recorded a full
valuation allowance against these net deferred tax assets.
The tax credit carryforward as of January 31, 2015 consists of $7.9 million of federal alternative
minimum tax credits, $7.9 million of federal hiring credits and $12.4 million of various state and foreign
credits. The alternative minimum tax credits have an indefinite life, while the other credits are
scheduled to expire in various years starting from 2015 and have a $7.4 million valuation allowance
recorded against them.
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