Income Taxes	6 Months Ended
Jul. 28, 2012
Income Taxes	Note 9 – Income Taxes The Company’s effective income tax rate was 17.1% during the twenty-six weeks ended July 28, 2012, compared to a 87.5% benefit rate during the twenty-six weeks ended July 30, 2011. The Company’s effective income tax rate was 17.3% during the thirteen weeks ended July 28, 2012, compared to a 53.9% benefit rate during the thirteen weeks ended July 30, 2011. The Company recorded $2.2 million of net favorable discrete events in the twenty-six weeks ended July 28, 2012 and $1.4 million of favorable discrete events for the twenty-six weeks ended July 30, 2011. The Company’s effective tax rate differs from the U.S. statutory rate principally due to valuation allowances in the United States and the tax impact of offshore operations in Asia (China, Hong Kong, Taiwan, Indonesia and Vietnam) from which the Company sources the majority of its product and is subject to substantially lower local country income taxes. The Company’s weighted average foreign effective tax rate projected for 2012 is 11.1%, compared to 17.7% projected as of the second quarter of 2011. The rate projected as of the second quarter of 2011 was higher primarily due to an audit settlement payment made in Asia during the second quarter of 2011. The Company continues to maintain a valuation allowance related to the net deferred tax assets in the United States, as well as certain foreign jurisdictions. The framework established in the accounting for income taxes guidance requires that all available positive and negative evidence be weighed to determine whether a valuation allowance should be recorded or released. The realizability of deferred tax assets will continue to be monitored quarterly. The valuation allowance does not have any impact on cash, nor does such an allowance preclude the Company from using their loss carryforwards or utilizing other deferred tax assets in the future. If the deferred tax assets currently subject to a valuation allowance are ultimately realized in the future, the benefit will be recorded in the Condensed Consolidated Statement of Earnings (Loss), except for the portion related to AOCI, which will be credited to Collective Brands, Inc. shareowners’ equity. If the Company’s near-term forecasts are not achieved, they may be required to record additional valuation allowances against deferred tax assets. This could have a material impact on the Company’s financial position and results of operations in a particular period. The Company has unrecognized tax benefits, inclusive of related interest and penalties, of $34.2 million and $38.3 million as of July 28, 2012 and July 30, 2011, respectively. The portion of the unrecognized tax benefits that would impact the effective income tax rate if recognized are $21.0 million and $24.7 million, respectively. The Company anticipates that it is reasonably possible that the total amount of unrecognized tax benefits at July 28, 2012 will decrease by up to $2.3 million within the next twelve months. To the extent these tax benefits are recognized, the effective rate would be favorably impacted in the period of recognition by up to $1.5 million. The potential reduction primarily relates to potential settlements of on-going examinations with tax authorities and the potential lapse of the statutes of limitations in relevant tax jurisdictions. The Company’s U.S. federal income tax returns have been examined by the Internal Revenue Service through 2007. The Company has certain state and foreign income tax returns in the process of examination or administrative appeal.

Note 9 – Income Taxes

The Company’s effective income tax rate was 17.1% during the twenty-six weeks ended July 28, 2012, compared to a 87.5% benefit rate during the twenty-six weeks ended July 30, 2011. The Company’s effective income tax rate was 17.3% during the thirteen weeks ended July 28, 2012, compared to a 53.9% benefit rate during the thirteen weeks ended July 30, 2011. The Company recorded $2.2 million of net favorable discrete events in the twenty-six weeks ended July 28, 2012 and $1.4 million of favorable discrete events for the twenty-six weeks ended July 30, 2011.

The Company’s effective tax rate differs from the U.S. statutory rate principally due to valuation allowances in the United States and the tax impact of offshore operations in Asia (China, Hong Kong, Taiwan, Indonesia and Vietnam) from which the Company sources the majority of its product and is subject to substantially lower local country income taxes. The Company’s weighted average foreign effective tax rate projected for 2012 is 11.1%, compared to 17.7% projected as of the second quarter of 2011. The rate projected as of the second quarter of 2011 was higher primarily due to an audit settlement payment made in Asia during the second quarter of 2011.

The Company continues to maintain a valuation allowance related to the net deferred tax assets in the United States, as well as certain foreign jurisdictions. The framework established in the accounting for income taxes guidance requires that all available positive and negative evidence be weighed to determine whether a valuation allowance should be recorded or released. The realizability of deferred tax assets will continue to be monitored quarterly. The valuation allowance does not have any impact on cash, nor does such an allowance preclude the Company from using their loss carryforwards or utilizing other deferred tax assets in the future. If the deferred tax assets currently subject to a valuation allowance are ultimately realized in the future, the benefit will be recorded in the Condensed Consolidated Statement of Earnings (Loss), except for the portion related to AOCI, which will be credited to Collective Brands, Inc. shareowners’ equity. If the Company’s near-term forecasts are not achieved, they may be required to record additional valuation allowances against deferred tax assets. This could have a material impact on the Company’s financial position and results of operations in a particular period.

The Company has unrecognized tax benefits, inclusive of related interest and penalties, of $34.2 million and $38.3 million as of July 28, 2012 and July 30, 2011, respectively. The portion of the unrecognized tax benefits that would impact the effective income tax rate if recognized are $21.0 million and $24.7 million, respectively.

The Company anticipates that it is reasonably possible that the total amount of unrecognized tax benefits at July 28, 2012 will decrease by up to $2.3 million within the next twelve months. To the extent these tax benefits are recognized, the effective rate would be favorably impacted in the period of recognition by up to $1.5 million. The potential reduction primarily relates to potential settlements of on-going examinations with tax authorities and the potential lapse of the statutes of limitations in relevant tax jurisdictions.

The Company’s U.S. federal income tax returns have been examined by the Internal Revenue Service through 2007. The Company has certain state and foreign income tax returns in the process of examination or administrative appeal.