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Income Taxes
 12 Months Ended
Mar. 30, 2013
Income Tax [Abstract]  
Income Taxes

NOTE 8 - INCOME TAXES

 

The components of the provision for income taxes are as follows:

 

   Year Ended Fiscal March
    2013  2012  2011
   (Dollars in thousands)
Current -        
 Federal$ 22,366 $ 26,002 $ 22,094
 State  2,266   2,910   3,451
     24,632   28,912   25,545
Deferred -        
 Federal  (101)   3,273   3,121
 State  (274)   (111)   (570)
     (375)   3,162   2,551
  Total$ 24,257 $ 32,074 $ 28,096

Deferred tax (liabilities) assets consist of the following:

 

   March 30,  March 31, 
   2013  2012 
  (Dollars in thousands)
        
Goodwill$ (13,104) $ (9,525) 
Property and equipment  (927)   (5,367) 
Prepaid expenses  (391)   (569) 
Other  (254)   (343) 
        
 Total deferred tax liabilities  (14,676)   (15,804) 
        
Insurance reserves  8,872   7,561 
Warranty and other reserves  4,447   2,389 
Stock options  2,982   2,429 
Deferred rent  2,086   2,064 
Accrued compensation  1,444   1,373 
Indirect effect of unrecognized tax benefits in other jurisdictions  981   1,163 
Pension  403   99 
Other  4,519   2,989 
        
 Total deferred tax assets  25,734   20,067 
        
 Net deferred tax assets$ 11,058 $ 4,263 

We have $3.0 million of state net operating loss carryforwards available as of March 30, 2013. The carryforwards expire in varying amounts through 2033. Based on all available evidence, we have determined that it is more likely than not that sufficient taxable income of the appropriate character within the carryforward period will exist for the realization of the tax benefits on existing state net operating loss carryforwards.

 

We believe it is more likely than not that all other future tax benefits will be realized as a result of current and future income.

 

A reconciliation between the U. S. federal statutory tax rate and the effective tax rate reflected in the accompanying financial statements is as follows:

 

  Year Ended Fiscal March
  2013 2012 2011
   Amount Percent  Amount Percent  Amount Percent
   (Dollars in thousands)
Federal income tax based on              
 statutory tax rate applied              
 to income before taxes$ 23,388  35.0 $ 30,340  35.0 $ 25,878  35.0
State income tax, net of              
 federal income tax benefit  1,159  1.7   2,231  2.6   2,291  3.1
Other  (290)  (0.4)   (497)  (0.6)   (73)  (0.1)
  $ 24,257  36.3 $ 32,074  37.0 $ 28,096  38.0

The following is a rollforward of Monro's liability for income taxes associated with unrecognized tax benefits:

 

(Dollars in thousands)
Balance at March 27, 2010$ 5,586
Tax positions related to current year:  
Additions  799
Reductions  
Tax positions related to prior years:  
Additions  335
Reductions  (612)
Settlements  
Lapses in statutes of limitations  (144)
Balance at March 26, 2011  5,964
Tax positions related to current year:  
Additions  1,000
Reductions  
Tax positions related to prior years:  
Additions  230
Reductions  (904)
Settlements  (166)
Lapses in statutes of limitations  (640)
Balance at March 31, 2012  5,484
Tax positions related to current year:  
Additions  1,198
Reductions  
Tax positions related to prior years:  
Additions  
Reductions  
Settlements  (266)
Lapses in statutes of limitations  (712)
Balance at March 30, 2013$ 5,704

The total amount of unrecognized tax benefits was $5.7 million at March 30, 2013, the majority of which, if recognized, would affect the effective tax rate.

 

In the normal course of business, Monro provides for uncertain tax positions and the related interest and penalties, and adjusts its unrecognized tax benefits and accrued interest and penalties accordingly. During the years ended March 30, 2013 and March 31, 2012, we recorded a benefit from the reversal of accrued interest and penalties of approximately $.2 million and $.3 million, respectively, in income tax expense; and during the year ended March 26, 2011, we recognized interest and penalties of approximately $.3 million in income tax expense. Additionally, we had approximately $.5 million and $.7 million of interest and penalties associated with uncertain tax benefits accrued as of March 30, 2013 and March 31, 2012, respectively.

 

Monro is currently under state audit for the fiscal 2007 through 2010 tax years. It is reasonably possible that the examination phase of the audits for these years may conclude in the next 12 months, and that the related unrecognized tax benefits for tax positions taken regarding previously filed tax returns may change from those recorded as liabilities for uncertain tax positions in Monro's Consolidated Financial Statements as of March 30, 2013. However, based on the status of the examinations, it is not possible to estimate the effect of any amount of such change to previously recorded uncertain tax positions.

 

We file U.S. federal income tax returns and income tax returns in various state jurisdictions. Monro's fiscal 2011 and 2012 U.S. federal tax years and various state tax years remain subject to income tax examinations by tax authorities.