Pep Boys 2012 Annual Report Download - page 96

THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 2, 2013, January 28, 2012 and January 29, 2011
NOTE 8—INCOME TAXES (Continued)
Items that gave rise to the deferred tax accounts are as follows:
February 2, January 28,
(dollar amounts in thousands) 2013 2012
Deferred tax assets:
Employee compensation ......................... $ 5,274 $ 5,008
Store closing reserves ........................... 719 1,365
Legal reserve ................................. 122 341
Benefit accruals ............................... 1,247 5,922
Net operating loss carryforwards—Federal ............ 1,887 16,473
Net operating loss carryforwards—State .............. 111,785 111,588
Tax credit carryforwards .......................... 16,291 17,877
Accrued leases ................................ 16,032 15,916
Interest rate derivatives .......................... 708 5,730
Deferred gain on sale leaseback .................... 51,124 56,325
Deferred revenue .............................. 5,194 5,621
Other ....................................... 1,874 1,951
Gross deferred tax assets ......................... 212,257 244,117
Valuation allowance ............................ (102,341) (103,915)
109,916 140,202
Deferred tax liabilities:
Depreciation .................................. $ 42,400 $ 54,284
Inventories ................................... 65,203 65,886
Real estate tax ................................ 3,214 3,307
Insurance and other ............................ 6,261 6,159
Debt related liabilities ........................... 3,588 3,903
120,666 133,539
Net deferred tax (liability) asset ..................... $ (10,750) $ 6,663
At February 2, 2013, the Company had available tax net operating losses that can be carried
forward to future years. The Company has $1.9 million of deferred tax assets related to federal net
operating loss carryforwards, which begin to expire in 2027. The Company has $2.3 million of deferred
tax assets related to state tax net operating loss carryforwards in unitary filing jurisdictions, of which
2.9% will expire in the next five years and a full valuation allowance has been recorded against. The
balance of $109.5 million of the Company’s net operating loss carryforwards are for separate company
state filing jurisdictions that will expire in various years beginning in 2013. $108.1 million of separate
company state net operating losses are in the jurisdictions, where the Company has recorded a full
valuation allowance against its net deferred tax assets.
The tax credit carryforward at February 2, 2013 consists of $6.8 million of alternative minimum tax
credits, $4.2 million of work opportunity credits, $0.9 million of hire tax credits and $4.4 million of
various state credits. The alternative minimum tax credits have an indefinite life and the other credits
are scheduled to expire in various years starting from 2013. The tax credit carryforward at January 28,
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