Rue 21 2012 Annual Report Download - page 59

rue21, inc.
Notes to Consolidated Financial Statements — Continued
Fiscal Year Ended
(in thousands)
February 2,
2013
January 28,
2012
January 29,
2011
Current-deferred tax assets .............................. $5,910 $ 5,121 $ 5,024
Noncurrent-deferred tax liabilities ........................ (9,625) (11,585) (5,651)
Total ................................................ $(3,715) $ (6,464) $ (627)
The following table summarizes the activity related to our unrecognized tax benefits:
Gross balance as of January 30, 2010 ................................................. $35
Prior period tax positions — (decrease) ............................................... (1)
Gross balance as of January 29, 2011 ................................................. 34
Prior period tax positions — (decrease) ............................................... (34)
Gross balance as of January 28, 2012 ................................................. 0
Prior period tax positions — (decrease) ............................................... 0
Gross balance as of February 2, 2013 ................................................. $ 0
The gross amount of unrecognized tax benefits at fiscal years ended 2012, 2011, and 2010 was $0, $0 and
$34,000, respectively. Over the next 12 months the company believes that there will be no material change in
unrecognized tax benefits.
The Company classifies interest and penalties as an element of tax expense. The amount of tax related interest
and penalties for fiscal years ended 2012, 2011 and 2010, respectively, was not material.
The Company files a consolidated U.S. Federal Tax returns as well as various state tax returns. The Company’s
U.S. Federal tax returns are open for further audit by taxing authorities for the periods of 2008 through 2012. The
principal state jurisdictions that remain open to examination for the periods 2008 and forward are: Pennsylvania,
Texas, North Carolina, Illinois, and West Virginia.
Note 9 — Commitments and Contingencies
We are subject to various proceedings, lawsuits, disputes, and claims arising in the ordinary course of our
business. Many of these actions raise complex factual and legal issues and are subject to uncertainties. Actions filed
against us from time to time include commercial, intellectual property, customer, and employment actions,
including class action lawsuits. The plaintiffs in some actions seek unspecified damages or injunctive relief, or both.
Actions are in various procedural stages, and some are covered in part by insurance. Given the uncertain nature of
litigation generally, we are not able in all cases to estimate the amount or range of loss that could result from an
unfavorable outcome of the litigation to which we are a party. In accordance with U.S. generally accepted
accounting principles, we establish accruals to the extent probable future losses are estimable. Nevertheless, we
could incur charges in excess of any currently established accruals and any available insurance. Any such future
charges, individually or in the aggregate, could have a material adverse effect on our consolidated results of
operations and consolidated cash flows.
On June 11, 2010, Elva Perez, a former employee, on behalf of herself and a purported class of all of our other
similarly situated California employees, filed a complaint in the Superior Court of California, County of Santa Cruz.
The complaint alleges, among other things, that we have forced our in-store employees to work off-the-clock
without compensation; failed to pay overtime wages; failed to provide in-store employees bona fide meal and rest
periods; failed to reimburse in-store employees for business expenses they incur; and failed to provide accurate,
timely itemized wage statements, in violation of the California Labor Code, the California Industrial Welfare
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