Rite Aid 2014 Annual Report Download - page 81

RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended March 1, 2014, March 2, 2013 and March 3, 2012
(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 1, 2014 and March 2, 2013:
2014 2013
Deferred tax assets:
Accounts receivable .......................... $ 62,973 $ 62,745
Accrued expenses ............................ 204,346 214,110
Liability for lease exit costs ..................... 116,803 142,456
Pension, retirement and other benefits ............. 174,917 219,515
Long-lived assets ............................ 424,290 374,101
Other .................................... 1,989 2,079
Credits ................................... 60,951 62,121
Net operating losses .......................... 1,428,751 1,558,694
Total gross deferred tax assets ................. 2,475,020 2,635,821
Valuation allowance .......................... (2,060,811) (2,223,675)
Total deferred tax assets ..................... 414,209 412,146
Deferred tax liabilities:
Inventory .................................. 414,209 412,146
Total gross deferred tax liabilities ............... 414,209 412,146
Net deferred tax assets ......................... $ — $ —
A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:
2014 2013 2012
Unrecognized tax benefits .................. $30,020 $ 247,722 $286,952
Increases to prior year tax positions .......... — 6,305 —
Decreases to tax positions in prior periods ..... (3,215) (196,214) (11,125)
Increases to current year tax positions ........ — — —
Settlements ........................... — (3,655) —
Lapse of statute of limitations .............. (16,662) (24,138) (28,105)
Unrecognized tax benefits balance ............ $10,143 $ 30,020 $247,722
The amount of the above unrecognized tax benefits at March 1, 2014, March 2, 2013 and March 3,
2012 which would impact the Company’s effective tax rate, if recognized, was $876, $14,651 and
$83,804, 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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