Rite Aid 2013 Annual Report Download - page 85

RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended March 2, 2013, March 3, 2012 and February 26, 2011
(In thousands, except per share amounts)
5. Income Taxes (Continued)
The tax effect of temporary differences that gave rise to significant components of deferred tax
assets and liabilities consisted of the following at March 2, 2013 and March 3, 2012:
2013 2012
Deferred tax assets:
Accounts receivable .......................... $ 62,745 $ 54,119
Accrued expenses ............................ 214,110 252,560
Liability for lease exit costs ..................... 142,456 158,454
Pension, retirement and other benefits ............. 219,515 218,197
Long-lived assets ............................ 374,101 298,877
Other .................................... 2,079 1,994
Credits ................................... 62,121 71,716
Net operating losses .......................... 1,558,694 1,584,626
Total gross deferred tax assets ................. 2,635,821 2,640,543
Valuation allowance .......................... (2,223,675) (2,317,425)
Total deferred tax assets ..................... 412,146 323,118
Deferred tax liabilities:
Inventory .................................. 412,146 323,118
Total gross deferred tax liabilities ............... 412,146 323,118
Net deferred tax assets ......................... $ — $ —
A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:
2013 2012 2011
Unrecognized tax benefits .................. $247,722 $286,952 $300,707
Increases to prior year tax positions ......... 6,305 — 8,872
Decreases to tax positions in prior periods .... (196,214) (11,125) (16,940)
Increases to current year tax positions ........ — — 821
Settlements ........................... (3,655) — (2,498)
Lapse of statute of limitations ............. (24,138) (28,105) (4,010)
Unrecognized tax benefits balance ............ $ 30,020 $247,722 $286,952
The amount of the above unrecognized tax benefits at March 2, 2013, March 3, 2012 and
February 26, 2011 which would impact the Company’s effective tax rate, if recognized, was $14,651,
$83,804 and $109,030, respectively. Additionally, any impact on the effective rate may be mitigated by
the valuation allowance that is maintained against the Company’s net deferred tax assets.
The Company is indemnified by Jean Coutu Group for certain tax liabilities incurred for all years
ended up to and including the acquisition date of June 4, 2007, related to the Brooks Eckerd
acquisition. Although the Company is indemnified by Jean Coutu Group, the Company remains the
primary obligor to the tax authorities with respect to any tax liability arising for the years prior to the
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