TJ Maxx 1999 Annual Report Download - page 16

The Company had a net deferred tax asset as follows:
Ja n u a ry 2 9, Ja nu a ry 3 0 ,
I n Th o u s a n d s 2 0 0 0 1 9 9 9
Deferred tax assets:
Foreign net operating loss carryforward $ 30,107 $ 30,660
Reserve for discontinued operations 10,900 12,074
Reserve for closed store and restructuring costs 11,569 19,767
Insurance costs not currently deductible for tax purposes 1,025 7,496
Pension, postretirement and employee benefits 48,968 48,556
Leases 15,596 13,379
Other 24,709 24,255
Valuation allowance (15,678) (27,321)
Total deferred tax assets 127,196 128,866
Deferred tax liabilities:
Property, plant and equipment 19,240 17,056
Safe harbor leases 24,450 31,738
Tradename 45,408 47,373
Other 14,955 10,313
Total deferred tax liabilities 104,053 106,480
Net deferred tax asset $ 23,143 $ 22,386
The Company has elected to repatriate the fiscal 2000 and 1999 earnings of its Canadian subsidiary.The major-
ity of the fiscal 2000 and 1999 earnings from of its Canadian subsidiary were repatriated and deferred foreign
tax credits have been provided for on the undistributed portions for these years. Prior earnings of its Canadian
subsidiary and all the earnings of the Company’s other foreign subsidiaries are indefinitely reinvested and no
deferred taxes have been provided for on those earnings.
The Company has a United Kingdom and a Netherlands net operating loss carryforward of approximately $51
million and $9 million, re s p e c t i ve ly, for both tax and financial reporting purp o s e s .The United Kingdom and Nether-
lands net operating losses do not expire under the current tax laws of each country. The Company also has a
Puerto Rico net operating loss carryforward of approximately $30 million, for tax and financial reporting
purposes, which was acquired in the Marshalls acquisition and expires in fiscal years 2001 through 2003. The
Company recognized a deferred tax asset of $8.0 million and $3.4 million, in fiscal years 2000 and 1999 respec-
tively, for the estimated future utilization of the Puerto Rico net operating loss carryforward. The valuation
allowance relates to the Company’s foreign net operating losses that have not yet been recognized or are likely
to expire. Additional utilization of these net operating loss carryforwards is dependent upon future earnings of
the Company’s foreign subsidiaries.
The Company ’s wo rl dwide effe c t i ve tax rate was 38% for the fiscal ye a rs ended Ja n u a ry 29, 2 0 0 0 , and Ja n u a ry 30,
1 9 9 9 , and 41% for the fiscal year ended Ja n u a ry 31, 1 9 9 8 .The diffe rence between the U. S . f e d e ral stat u t o ry income
tax rate and the Company ’s wo rl dwide effe c t ive income tax rate is summarized as fo l l ow s :
Fi scal Ye a r E n d e d
Ja n u a ry 2 9 , Ja n u a ry 3 0, Ja nu a ry 3 1 ,
2 0 0 0 1 9 9 9 1 9 9 8
U.S. federal statutory income tax rate 35% 35% 35%
Effective state income tax rate 44 5
Impact of foreign operations (1) (1) –
All other –– 1
Worldwide effective income tax rate 38% 38% 41%