True Value 2008 Annual Report Download - page 47

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notes to consolidated financial statements
26 :: T RUE VALUE COMPA NY
The significant components of True Value’s deferred tax assets
and liabilities were as follows for fiscal years ended:
January 3, December 29,
($ in thousands) 2009 2007
Deferred tax assets:
Net operating loss carryforwards $ 7,865 $ 5,294
AMT credit carryforward 784 784
Nonqualified notices of allocation 7,271 7,598
Vacation pay 2,284 3,200
Deferred gain 15,558 16,669
Severance and restructuring costs 1,249 1,015
Book depreciation in excess of
tax depreciation 1,570 2,212
Rent expense 1,295 1,903
Inventory capitalization 713 885
Other 4,080 7,110
Total deferred tax assets 42,669 46,670
Valuation allowance for
deferred tax assets (41,043) (44,673)
Net deferred tax assets 1,626 1,997
Deferred tax liabilities:
Tax depreciation in excess of
book depreciation – –
Contributions to fund
retirement plans 1,626 1,997
Net deferred taxes $ – $ –
10. SUPPLEMENTAL CASH FLOW
INFORMATION
The annual patronage dividend is satisfied through cash payments
and issuance of subordinated promissory notes and Redeemable
Class B nonvoting common stock; for members with loss allo-
cation accounts, the Class B nonvoting common stock is offset
to satisfy members’ remaining allocation of the 1999 loss. Non-
cash operating and financing activities relating to the issuance of
patronage dividends were as follows for the years ended:
January 3, December 29, December 30,
($ in thousands) 2009 2007 2006
Distribution of annual
patronage dividend:
Patronage dividend
payable in cash $ 17,509 $ 17,392 $ 15,713
Issuance of subordinated
promissory notes 16,520 8,857 2,862
Issuance of Redeemable
Class B nonvoting
common stock 21,523 28,721 30,222
Reduction of Loss
allocation accounts 611 1,161 3,277
Total $ 56,163 $ 56,131 $ 52,074
True Value may set off its obligation to make payments to members
for redeemable stock, notes, interest or declared and unpaid
dividends against any obligation owed by the member to True
Value. True Value classifies stock redemption requests that had
not fully completed the redemption process in Liabilities. True
Value exercised its set-off rights on stock redemptions in 2008
and 2007 of $9,434 and $9,816, respectively, against obligation
owed by the member to True Value for loss allocation accounts,
amounts related to the 2001 loss and accounts receivables of
$2,770 and $3,437. The remaining amount due to members was
partially satisfied with subordinated promissory installment notes
of $5,321 and $5,061 in 2008 and 2007, respectively.
($ in thousands)