Cracker Barrel 2013 Annual Report Download - page 53

51
Signicant components of the Company’s net deferred tax
liability consisted of the following at:
August 2, 2013 August 3, 2012
Deferred tax assets:
Compensation and employee benets $ 16,750 $ 14,803
Deferred rent 13,535 12,162
Accrued liabilities 12,766 12,988
Insurance reserves 12,091 12,308
Inventory 5,669 5,293
Other 4,437 13,609
Deferred tax assets $ 65,248 $ 71,163
Deferred tax liabilities:
Property and equipment $ 94,179 $ 96,783
Inventory 13,700 12,956
Other 9,550 9,402
Deferred tax liabilities 117,429 119,141
Net deferred tax liability $ 52,181 $ 47,978
e Company provided no valuation allowance against
deferred tax assets recorded as of August 2, 2013 and
August 3, 2012, as the “more-likely-than-not” valuation
method determined all deferred assets to be fully realizable
in future taxable periods.
e Company believes that adequate amounts of tax,
interest and penalties have been provided for potential tax
uncertainties. As of August 2, 2013 and August 3, 2012,
the Company’s gross liability for uncertain tax positions,
exclusive of interest and penalties, was $20,972 and $18,098,
respectively. Summarized below is a tabular reconciliation
of the beginning and ending balance of the Company’s total
gross liability for uncertain tax positions exclusive of
interest and penalties:
August 2, 2013 August 3, 2012 July 29, 2011
Balance at beginning of year $ 18,098 $ 14,167 $ 12,965
Tax positions related to the
current year:
Additions 3,731 3,326 2,616
Reductions — — —
Tax positions related to the
prior year:
Additions 191 2,556 987
Reductions (280) (1,043) (24)
Selements — — —
Expiration of statute of limitations (768) (908) (2,377)
Balance at end of year $ 20,972 $ 18,098 $ 14,167
If the Company were to prevail on all uncertain tax
positions, the reversal of this accrual would be a tax
benet to the Company and impact the eective tax rate.
e following table highlights the amount of uncertain
tax positions, exclusive of interest and penalties, which, if
recognized, would aect the eective tax rate for each
of the three years:
2013 2012 2011
Uncertain tax positions $ 13,631 $ 11,764 $ 9,209
e Company had $7,869, $6,605 and $5,380 in interest
and penalties accrued as of August 2, 2013, August 3, 2012
and July 29, 2011, respectively.
e Company recognized accrued interest and penalties
related to unrecognized tax benets of $1,264, $1,225
and $878 in its provision for income taxes in August 2, 2013,
August 3, 2012 and July 29, 2011, respectively.
In many cases, the Company’s uncertain tax positions are
related to tax years that remain subject to examination
by the relevant taxing authorities. Based on the outcome of
these examinations or as a result of the expiration of the
statutes of limitations for specic taxing jurisdictions, it is
reasonably possible that the related uncertain tax positions
taken regarding previously led tax returns could decrease
from those recorded as liabilities for uncertain tax
positions in the Company’s nancial statements at August 2,
2013 by approximately $1,000 to $2,000 within the next
twelve months. At August 2, 2013, the Company was subject
to income tax examinations for its U.S. federal income
taxes aer 2009 and for state and local income taxes generally
aer 2009.