Income Taxes (Tables)

12 Months Ended

Feb. 02, 2013

Earnings (Loss) before income taxes are as follows for Fiscal 2012, Fiscal 2011 and Fiscal 2010:


	*(in thousands)*
	Years Ended
	February 2, 2013			January 28, 2012			January 29, 2011
Domestic	$	33,625		$	(7,618	)	$	52,796
Foreign		(4,460	)		(2,802	)		332

Total Earnings (Loss) before income taxes	$	29,165		$	(10,420	)	$	53,128

Income Tax (Benefit) Expense

Income tax expense (benefit) is as follows for Fiscal 2012, Fiscal 2011 and Fiscal 2010:


	*(in thousands)*
	Years Ended
	February 2, 2013			January 28, 2012			January 29, 2011
Current:
Federal	$	13,813		$	(11,847	)	$	11,229
State		(3,704	)		5,901			9,159
Foreign		291			2,499			856


Subtotal		10,400			(3,447	)		21,244


Deferred:

Federal		(3,386	)		903			3,241

State		(3,519	)		(1,235	)		(1,622	)
Foreign		369			(369	)		(733	)

Subtotal		(6,536	)		(701	)		886

Total income tax expense (benefit)	$	3,864		$	(4,148	)	$	22,130

Tax Rate Reconciliations

The tax rate reconciliations are as follows for Fiscal 2012, Fiscal 2011 and Fiscal 2010:


	Years Ended
	February 2, 2013			January 28, 2012			January 29, 2011

Tax at statutory rate (%)		35.0	%		(35.0	)%		35.0	%

State income taxes, net of federal		5.8			(9.5	)		8.9
Change in valuation allowance		1.8			14.8			(2.3	)
Permanent Items		(1.4	)		13.3			0.5
Tax credits		(11.7	)		(30.5	)		(2.6	)
Tax reserves		(14.1	)		(11.6	)		2.2
Impact of Change in State Tax Laws and Rates		(2.1	)		9.0			—
Foreign Taxes		(1.2	)		9.7			—
Other		1.2			—			—

Effective tax rate (%)		13.3	%		(39.8	)%		41.7	%

Tax Effects of Temporary Differences Included in Deferred Tax Accounts

The tax effects of temporary differences are included in deferred tax accounts as follows:


	*(in thousands)*
	February 2, 2013					January 28, 2012
Period Ended	Tax Assets			Tax Liabilities		Tax Assets			Tax Liabilities

Current deferred tax assets and liabilities:

Allowance for doubtful accounts	$	32		$	—	$	33		$	—
Compensated absences		743			—		659			—
Inventory costs and reserves capitalized for tax purposes		6,977			—		9,845			—
Insurance reserves		6,985			—		6,863			—
Prepaid items and other items deductible for tax purposes		—			17,355		—			10,152

Sales return reserves		2,890			—		3,031			—
Reserves		331			—		2,383			—
Accrued interest		19			—		1,044			—
Prepaid items taxable for tax purposes		1,546			—		1,539			—
Deferred revenue		1,062			—		811			—
Employee benefit accrual		4,641			—		6,115			—
Deferred gain		—			1,203		—			—
Other		268			—		2,135			—
Valuation allowance		(803	)		—		(1,063	)		—


Total Current deferred tax assets and liabilities	$	24,691		$	18,558	$	33,395		$	10,152

Non-Current deferred tax assets and liabilities:

Property and equipment basis adjustments	$	—		$	130,793	$	—		$	136,663
Deferred rent		28,266			—		25,761			—
Intangibles – Long-Lived		—			124,129		—			138,557
Intangibles – Indefinite-Lived		—			93,368		—			93,614
Insurance reserves		12,253			—		11,994			—
Employee benefit compensation		4,373			—		4,816			—

State net operating losses (net of federal benefit)		9,206			—		9,845			—
Prepaid items taxable for tax purposes		5,341			—		6,698			—
Landlord allowances		29,673			—		28,640			—
Accrued interest		2,991			—		2,456			—
Other		553			—		5,267			—
State Credits		2,366			—		—			—
Federal and Puerto Rico Tax Credits		7,008			—		2,658			—
Valuation allowance		(7,079	)		—		(6,286	)		—


Total non-current deferred tax assets and liabilities	$	94,951		$	348,290	$	91,849		$	368,834


Net Deferred Tax Liability				$	247,206				$	253,742

Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (exclusive of interest and penalties) is as follows:


*(in thousands)*
	Gross Unrecognized Tax Benefits, Exclusive of Interest and Penalties
Ending balance at January 30, 2010	$	23,205
Additions for tax positions of the current year		—
Additions for tax positions of prior years		1,590
Reduction for tax positions of prior years		(1,524	)
Settlements		—
Lapse of statute of limitations		—

Ending balance at January 29, 2011	$	23,271
Additions for tax positions of the current year		—
Additions for tax positions of prior years		6,383
Reduction for tax positions of prior years		(7,505	)
Settlements		—
Lapse of statute of limitations		—

Ending balance at January 28, 2012	$	22,149

Additions for tax positions of the current year		0
Additions for tax positions of prior years		0
Reduction for tax positions of prior years		(5,225	)
Settlements		0
Lapse of statute of limitations		0

Ending balance at February 2, 2013	$	16,924

BURLINGTON COAT FACTORY WAREHOUSE CORP 10-K