Dollar Tree 2012 Annual Report Download - page 40

Notes to Consolidated Financial Statements
Deferredincometaxesreectthenettaxeectsoftemporarydierencesbetweenthecarryingamountsofassets
andliabilitiesfornancialreportingpurposesandtheamountsusedforincometaxpurposes.Deferredtaxassetsand
liabilitiesareclassiedontheaccompanyingconsolidatedbalancesheetsbasedontheclassicationoftheunderlying
assetorliability.SignicantcomponentsoftheCompany’snetdeferredtaxassets(liabilities)follow:
(in millions) February 2, 2013 January28,2012
Deferred tax assets:
Deferred rent $ 35.6 $ 31.5
Accrued expenses
32.6   31.4
 Netoperatinglossesandcreditcarryforwards
14.4 9.1
Accrued compensation expense
28.2 27.0
Other
0.8 1.5
Total deferred tax assets
111.6 100.5
 Valuationallowance
(4.3) (3.5)
Deferred tax assets, net
107.3 97.0
Deferred tax liabilities:
Property and equipment
(32.8) (34.0)
Goodwill
(15.9) (15.1)
Prepaid expenses
(4.0) (0.4)
Inventory
(3.8) (4.5)
Total deferred tax liabilities
(56.5) (54.0)
Netdeferredtaxasset $ 50.8 $ 43.0
Avaluationallowanceof$4.3million,netoffederal
taxbenets,hasbeenprovidedprincipallyforcertainstate
credit carryforwards and net operating loss carryforwards.
Inassessingtherealizabilityofdeferredtaxassets,the
Company considers whether it is more likely than not
that some portion or all of the deferred taxes will not
berealized.Basedupontheavailabilityofcarrybacksof
futuredeductibleamountstothepasttwoyears’taxable
incomeandtheCompany’sprojectionsforfuturetaxable
income over the periods in which the deferred tax assets
are deductible, the Company believes it is more likely than
nottheremainingexistingdeductibletemporarydierences
will reverse during periods in which carrybacks are available
or in which the Company generates net taxable income.
e company is participating in the Internal Revenue
Service(“IRS”)ComplianceAssuranceProgram(“CAP”)
forthe2012scalyearandhasappliedtoparticipatefor
scalyear2013.isprogramacceleratestheexamination
of key transactions with the goal of resolving any issues
beforethetaxreturnisled.Ourfederaltaxreturns
have been examined and all issues have been settled
throughourscal2011taxyear.Inaddition,severalstates
completedtheirexaminationduringscal2012.Fiscal
years2010andforwardarewithinthestatuteoflimita-
tions for state tax purposes. e statute of limitations is
stillopenpriorto2010forsomestates.
38 Dollar Tree, Inc.