Petsmart 2014 Annual Report Download - page 89

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Table of Contents
PetSmart, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements — (Continued)
A reconciliation of the federal statutory income tax rate to our effective tax rate is as follows (dollars in thousands):
Year Ended
February 2, 2014 February 3, 2013 January 29, 2012
(52 weeks) (53 weeks) (52 weeks)
Provision at federal statutory tax rate $224,544 35.0 % $208,911 35.0 % $156,197 35.0 %
State income taxes, net of federal income tax benefit 15,518 2.4 15,724 2.6 10,423 2.3
Tax on equity income from Banfield (560) (0.1) 1,709 0.3 (645) (0.2)
Other (58) — (3,015) (0.5) 985 0.3
$239,444 37.3 % $223,329 37.4 % $166,960 37.4 %
The components of the net deferred income tax assets (liabilities) included in the Consolidated Balance Sheets are as
follows (in thousands):
February 2, 2014 February 3, 2013
Deferred income tax assets:
Capital lease obligations $ 170,155 $ 185,137
Employee benefit expense 91,367 102,063
Deferred rents 30,687 33,086
Net operating loss carryforwards 14,482 15,534
Other 45,259 38,047
Total deferred income tax assets 351,950 373,867
Valuation allowance (8,592) (8,250)
Deferred income tax assets, net of valuation allowance 343,358 365,617
Deferred income tax liabilities:
Property and equipment (130,800) (167,428)
Inventory (9,952) (10,771)
Other (20,253) (21,567)
Total deferred income tax liabilities (161,005) (199,766)
Net deferred income tax assets $ 182,353 $ 165,851
As of February 2, 2014, we had, for income tax reporting purposes, federal net operating loss carryforwards of $41.4
million which expire in varying amounts between 2019 and 2020. The federal net operating loss carryforwards are subject to
certain limitations on their utilization pursuant to the Internal Revenue Code. We also had a Canadian capital loss
carryforward of $11.6 million and state tax credit carryforwards of $4.6 million which expire in varying amounts between
2017 and 2023.
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