Dollar General 2008 Annual Report Download - page 92

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90
The change, from the date of adoption, through the end of the Predecessor period ended
July 6, 2007 in the uncertain tax benefits, interest expense related to income taxes and potential
income tax penalties that impacted the consolidated statement of operations was a net increase of
$10.4 million and $0.2 million and a decrease of $0.4 million, respectively. The change, from
the end of the Predecessor period ended July 6, 2007, through the end of the Successor period
ended February 1, 2008, in the uncertain tax benefits and interest expense related to income taxes
that impacted the consolidated statement of operations was a net increase of $0.2 million and
$4.2 million, respectively. There was no change in the reserve for potential income tax penalties
during the Successor period ended February 1, 2008.
During 2008, the Company included in its consolidated statement of operations a net
increase of $0.8 million, a net decrease of $1.0 million and a net increase of $0.3 million related
to uncertain tax benefits, interest expense related to income taxes and potential tax penalties,
respectively. The net decrease in interest expense related to uncertain tax positions is due to the
reduction during 2008 in amounts previously accrued related to uncertain tax positions.
The Company believes that it is reasonably possible that the reserve for uncertain tax
positions may be reduced by approximately $33.6 million in the coming twelve months
principally as a result of the settlement of currently ongoing state income tax examinations and
the anticipated filing of an income tax accounting method change request that is expected to
resolve certain uncertainties related to accounting methods employed by the Company. The
reasonably possible change of $33.6 million is included in both current liabilities ($20.1 million)
and other noncurrent liabilities ($13.5 million) in the consolidated balance sheet as of January
30, 2009. Also, as of January 30, 2009, approximately $23.9 million of the uncertain tax
positions would impact the Company’ s effective income tax rate if the Company were to
recognize the tax benefit for these positions.
A reconciliation of the uncertain income tax positions from February 3, 2007 (the date of
adoption) through January 30, 2009 is as follows:
(In thousands)
Balance as of February 3, 2007
$
77,864
Increases – tax positions taken in the current year
19,568
Increases – tax positions taken in prior years
1,149
Decrease – tax positions taken in prior years
(9)
Statute expirations
(185)
Settlements
(1,787)
Balance as of February 1, 2008
$
96,600
Increases – tax positions taken in the current year
25,977
Decrease – tax positions taken in the current year
(2,250)
Increases – tax positions taken in prior years
3,271
Decrease – tax positions taken in prior years
(58,607)
Statute expirations
(1,955)
Settlements
(3,979)
Balance as of January 30, 2009
$
59,057