Barnes and Noble 2011 Annual Report Download - page 48

The tax eff ects of temporary diff erences that give rise to
signifi cant components of the Company’s deferred tax
assets and liabilities as of April 30, 2011 and May 1, 2010 are
as follows:
April 30, 2011 May 1, 2010
Deferred tax liabilities:
Investment in Barnes & Noble.com $ (95,051) (95,051)
Depreciation (57,156) (75,385)
Goodwill and intangible asset
amortization (236,845) (239,434)
Prepaid expenses (7,125) (6,944)
Other (4,861) (7,201)
Total deferred tax liabilities (401,038) (424,015)
Deferred tax assets:
Loss and credit carryovers 57,751 41,348
Lease transactions 32,986 40,353
Estimated accruals 52,868 81,898
Stock-based compensation 11,508 11,482
Insurance liability 11,396 10,896
Pension 10,254 10,998
Inventory 18,996 22,642
Investments in equity securities 1,282 1,282
Total deferred tax assets 197,041 220,899
Net deferred tax liabilities $ (203,997) (203,116)
Balance Sheet caption reported in:
Prepaid expenses and other current
assets $ 76,135 108,491
Deferred tax liabilities (280,132) (311,607)
Net deferred tax liabilities $ (203,997) (203,116)
At April 30, 2011, the Company had federal and state net
operating loss carryforwards (NOLs) of approximately
$86,000 that expire beginning in 2018 through 2022, the
utilization of which is limited to approximately $6,700 on
an annual basis. Additionally, the Company had approxi-
mately $6,000 of federal NOLs and $149,000 of state NOLs
that have no annual limitation and expire in 2030. These
NOLs account for $44,232 of the $57,751 of loss and credit
carryover deferred tax assets at April 30, 2011, with the
remainder relating primarily to other state NOLs and
federal credits.
As of April 30, 2011, the Company had $16,715 of unrecog-
nized tax benefi ts, all of which, if recognized, would aff ect
the Company’s eff ective tax rate. A reconciliation of the
beginning and ending amount of unrecognized tax benefi ts
for fi scal 2011, fi scal 2010, the transition period and fi scal
2008 is as follows:
Balance at January 31, 2009 $ 23,833
Additions for tax positions of the current period 339
Additions for tax positions of prior periods 369
Balance at May 2, 2009 $ 24,541
Additions for tax positions of the current period 2,457
Additions for tax positions of prior periods 2,563
Other reductions for tax positions of prior periods (14,293)
Balance at May 1, 2010 $ 15,268
Additions for tax positions of the current period 1,809
Additions for tax positions of prior periods 1,199
Reductions due to settlements (508)
Other reductions for tax positions of prior periods (1,053)
Balance at April 30, 2011 $ 16,715
The Company’s continuing practice is to recognize inter-
est and penalties related to income tax matters in income
tax expense. As of May 1, 2010 and April 30, 2011, the
Company had accrued $3,119 and $3,236, respectively, for
net interest and penalties, which is included in the $15,268
and $16,715 of unrecognized tax benefi ts noted above. The
change in the amount accrued for net interest and penalties
includes $825 in additions for net interest and penalties
recognized in income tax expense in the Company’s fi scal
2011 statement of operations.
The Company is subject to U.S. federal income tax as well as
income tax in jurisdictions of each state having an income
tax. The tax years that remain subject to examination are
primarily from fi scal 2007 and forward. Some earlier years
remain open for a small minority of states.
46 Barnes & Noble, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued