Income Taxes

6 Months Ended

Aug. 15, 2011

Income Taxes

Income Taxes

NOTE 13 — INCOME TAXES

Income tax (benefit) expense consisted of the following:

	Successor									Predecessor
	Twelve Weeks Ended August 15, 2011			Twenty-Eight Weeks Ended August 15, 2011			Four Weeks Ended August 9, 2010			Eight Weeks Ended July 12, 2010		Twenty-Four Weeks Ended July 12, 2010
Federal and state income taxes	$	(760	)	$	(2,672	)	$	(5,818	)	$	9,837	$	7,173
Foreign income taxes		446			937			81			204		599
Income tax (benefit) expense	$	(314	)	$	(1,735	)	$	(5,737	)	$	10,041	$	7,772

Our effective income tax rate for the Successor twelve and twenty-eight weeks ended August 15, 2011 differs from the federal statutory rate primarily as a result of non-deductible share-based compensation expense, state income taxes and federal income tax credits. Our effective income tax rate for the Successor four weeks ended August 9, 2010 differs from the federal statutory rate primarily as a result of non-deductible transaction-related costs and share-based compensation expense. Our effective income tax rate for the Predecessor eight and twenty-four weeks ended July 12, 2010 differs from the federal statutory rate primarily as a result of non-deductible transaction-related costs, state income taxes and certain expenses that are non-deductible for income tax purposes.

We had $2,776 of tax benefits as of January 31, 2011, that, if recognized, would affect our effective income tax rate. There were no material changes in the unrecognized tax benefits during the twenty-eight weeks ended August 15, 2011. We believe that it is reasonably possible that decreases in unrecognized tax benefits of up to $565 may be necessary within twelve months as a result of statutes closing on such items. In addition, we believe that it is reasonably possible that our unrecognized tax benefits may increase as a result of tax positions that may be taken during fiscal 2012 and 2013.

As of August 15, 2011, we maintained a valuation allowance of $10,667 for state capital loss carryforwards and certain state net operating loss and income tax credit carryforwards. Realization of the tax benefit of such deferred income tax assets may remain uncertain for the foreseeable future, since they are subject to various limitations and may only be used to offset income of certain entities or of a certain character.