Comfort Inn 2014 Annual Report Download - page 97
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Table of Contents
Balance sheet presentation:
Current net deferred tax assets
$ 26,684
Non-current net deferred tax assets (liabilities)
(5,149)
Net deferred tax assets
$ 21,535
The statutory United States federal income tax rate reconciles to the effective income tax rates for continuing operations as follows:
Statutory U.S. federal income tax rate
35.0 %
35.0 %
State income taxes, net of federal tax benefit
1.6 %
1.5 %
Benefits and taxes related to foreign operations
(7.2)%
(8.5)%
Unrecognized tax positions
(0.2)%
0.1 %
Adjustment to current and deferred taxes, prior years
— %
(0.5)%
Other
(0.6)%
0.9 %
Effective income tax rates
28.6 %
28.5 %
The Company's effective income tax rates from continuing operations were 30.1% and 28.6% for the years ended December 31, 2014 and 2013,
respectively. The effective tax rate for discontinued operations was 37.1% for the years ended December 31, 2014 and 2013.
The effective income tax rates for the years ended December 31, 2014 and 2013 were lower than the United States federal statutory rate of 35% primarily due
to the recurring impact of foreign operations, partially offset by state income taxes. Additionally, the effective income tax rates for the years ended December
31, 2014 and 2013 were reduced by the settlement of unrecognized tax positions. The effective income tax rate for the year ended December 31, 2013 also
included the impact of legislation retroactively extending the U.S. controlled foreign corporation look-through rules.
As of December 31, 2014 and 2013, the Company’s gross unrecognized tax benefits totaled $3.4 million and $4.0 million, respectively. After considering the
deferred income tax accounting impact, it is expected that $2.8 million of the total as of December 31, 2014 would favorably affect the effective tax rate if
resolved in the Company’s favor. The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits:
Balance, January 1
$ 4,415
$ 4,570
Changes for tax positions of prior years
503
410
Increases for tax positions related to the current year
1,164
—
Settlements and lapsing of statutes of limitations
(2,035)
(565)
Balance, December 31
$ 4,047
$ 4,415
It is reasonably possible that the Company’s unrecognized tax benefits could decrease within the next 12 months by as much as $3.4 million due to
settlements and the expiration of applicable statutes of limitations.
The Internal Revenue Service has concluded their examination of the Company’s United States federal income tax returns for all tax years prior to 2012.
There were no significant adjustments.
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