Stein Mart 2010 Annual Report Download - page 35

Download and view the complete annual report

Please find page 35 of the 2010 Stein Mart annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 48

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48

STEIN MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in tables in thousands, except per share amounts)
F-11
5. Leases and Commitments
We lease all of our retail stores, support facilities and certain equipment under operating leases. Annual store rent is generally comprised
of a fixed minimum amount plus a contingent amount based on a percentage of sales in excess of specified levels. Most store leases also
require additional payments covering real estate taxes, common area costs and insurance.
Rent expense is as follows:
2010 2009 2008
Minimum rentals $76,797 $80,724 $82,146
Contin
g
ent rentals 1,015 430 275
$77,812 $81,154 $82,421
At January 29, 2011, we were committed under non-cancelable operating leases with remaining terms of up to 14 years. Future minimum
payments under non-cancelable leases are:
2011 $ 72,477
2012 61,885
2013 52,007
2014 41,419
2015 32,334
Thereafte
r
56,324
Total $316,446
6. Income Taxes
Temporary differences, which give rise to deferred tax assets and liabilities, are as follows:
January 29,
2011
January 30,
2010
Gross deferred tax assets:
Unredeemed
g
ift and return card liabilities $ 998 $ 4,694
Deferred rent liabilit
y
3,170 3,175
Deferred compensation liabilit
y
1,171 1,382
Insurance reserves 2,666 3,170
Share-based compensation 4,239 6,209
Store closin
g
reserves 1,910 1,682
Other accrued liabilities 4,798 3,399
Othe
r
1,058 1,720
20,010 25,431
Valuation allowance -
(
16,686
)
Gross deferred tax assets, net of valuation allowance 20,010 8,745
Gross deferred tax liabilities:
Inventor
y
2,808 3,678
Propert
y
and equipment 9,568 3,370
Prepaid items 1,470 1,381
Other assets 191 316
Gross deferred tax liabilities 14,037 8,745
Net deferred tax asset $ 5,973 $ -
We perform a quarterly assessment of our net deferred tax assets to determine realization. During the fourth quarter of 2008, we
established a $19.0 million valuation allowance against deferred tax assets because 2008 operating results produced a cumulative three-
year loss, which is considered a significant factor that is difficult to overcome when determining if a valuation allowance is required per ASC
Topic 740, Income Taxes. Although we were profitable in 2009, we remained in a cumulative three-year loss. The $19.0 million valuation
allowance was reduced by $2.3 million to $16.7 million in 2009.