Income Taxes

6 Months Ended

Jul. 28, 2012

Income Taxes [Abstract]

Income Taxes

NOTE 3: INCOME TAXES

The effective income tax rates for the three- and six-month periodsended July 28, 2012 were46.0%and 40.8%, respectively, as compared to 49.0%and 34.1%for the three- and six-month periods ended July 30, 2011, respectively. The decrease in the effective tax rate for the three months ended July 28, 2012is primarily due to the year-over-year differences with respect to the settling of tax examinations and other tax reserve adjustments.The increase in the effective tax rate for the six months ended July 28, 2012 is primarily related to the write-off of a deferred tax asset associated with non-deductible compensation and a decrease in the release of reserves for uncertain tax positions.

A reconciliation of our income tax expense (benefit) for the three and six months endedJuly 28, 2012 and July 30, 2011 is as follows:

		Three Months Ended				Six Months Ended
		July 28,		July 30,		July 28,		July 30,
		2012		2011		2012		2011
Expected federal income taxes at statutory rate of 35%		$	(7,975)	$	(5,746)	$	11,734	$	10,645
State and local income taxes, net of federal benefit			(1,763)		(713)		2,263		2,098
Valuation allowance adjustment related to state net operating losses			(160)		(146)		(625)		(856)
Effect of settling tax examinations and other tax reserve adjustments			(898)		(1,512)		(1,283)		(1,628)
Non-deductible compensation			—		—		1,152		—
Other, net			308		69		438		115
	Income tax expense (benefit)	$	(10,488)	$	(8,048)	$	13,679	$	10,374

We file a consolidated U.S. federal income tax return as well as state tax returns in multiple state jurisdictions. Examinations have been completed by the Internal Revenue Service or the statute of limitations has expired for taxable years through February 2, 2008. With respect to state and local jurisdictions, examinations have been completed in many jurisdictions through the same period and beyond. Currently,examinations in several jurisdictions are in progress.

As of July 28, 2012,gross deferred tax assets related to U.S. federal and state net operating loss and alternative minimum tax credit carryforwards were $103,555. The majority of the net operating loss carryforward is a result of the net operating losses incurred during the fiscal years ended January 30, 2010 and January 31, 2009 principally due to difficult market and macroeconomic conditions. We have concluded, based on the weight of all available positive and negative evidence, that all but $18,592 of these tax benefits relating to certain state losses are more likely than not to be realized in the future. Therefore, the valuation allowance as of July 28, 2012 was$18,592. We evaluate the realizability of our deferred tax assets on a quarterly basis andwill continue to assess the need for a valuation allowance in the future. If future results are less than or more than projected or tax planning strategies are no longer viable, then changes to valuation allowances may be required which could have a material impact on our results of operations in the period in which they are recorded.