Aarons 2012 Annual Report Download - page 71

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61
Sale-leasebacks
The Company finances a portion of store expansion through sale-leaseback transactions. The properties are
generally sold at net book value and the resulting leases qualify and are accounted for as operating leases. The
Company does not have any retained or contingent interests in the stores nor does the Company provide any
guarantees, other than a corporate level guarantee of lease payments, in connection with the sale-leasebacks.
Other Debt
Other debt at December 31, 2012 and 2011 includes $3.3 million of industrial development corporation revenue
bonds. The weighted-average interest rate on the outstanding bonds was 0.35% and 0.29% as of December 31, 2012
and 2011, respectively. No principal payments are due on the bonds until maturity in 2015.
Future maturities under the Company’s long-term debt and capital lease obligations are as follows:
(In Thousands)
2013
$ 1,755
2014
26,881
2015
30,321
2016
27,001
2017
26,858
Thereafter
28,712
$ 141,528
NOTE 7: INCOME TAXES
Following is a summary of the Company’s income tax expense for the years ended December 31:
(In Thousands)
2012
2011
2010
Current Income Tax Expense:
Federal
$ 116,234
$ -
$ -
State
10,819
9,797
8,932
127,053
9,797
8,932
Deferred Income Tax (Benefit) Expense:
Federal
(23,035)
62,015
64,679
State
(206)
(2,202)
(1,201)
(23,241)
59,813
63,478
$ 103,812
$ 69,610
$ 72,410
At December 31, 2011, the Company had a federal net operating loss (―NOL‖) carryforward of approximately $31.2
million available to offset future taxable income. The entire NOL carryforward was absorbed during 2012.
As a result of the bonus depreciation provisions in the Small Business Jobs Act of 2010 and the Tax Relief,
Unemployment Insurance Reauthorization, and Job Creation Act of 2010, the Company paid more than anticipated
for the 2010 federal tax liability. The 2010 acts provided an estimated tax deferral of approximately $127.0
million. The Company filed for a refund of overpaid federal tax of approximately $80.9 million in January 2011 and
received that refund in February 2011.