Cracker Barrel 2015 Annual Report Download - page 47

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45
A reconciliation of the Company’s provision for income
taxes andincome taxes based on the statutory U.S.federal
rate of 35% was as follows:
2015 2014 2013
Provision computed at federal
statutory income tax rate $83,370 $66,797 $58,024
State andlocal income taxes,
net of federal benet6,378 5,029 5,698
Employer taxcredits for FICA taxes
paid on employee tip income (10,681) (9,962) (9,635)
Other employer taxcredits (5,058) (3,781) (5,927)
Other-net 289 638 357
Total provision for income taxes $74,298 $58,721 $48,517
Signicant components of the Company’s net deferredtax
liability consisted of the following at:
July 31, 2015 August 1, 2014
Deferred taxassets:
Compensation and employeebenets $13,721 $10,858
Deferred rent 16,022 14,900
Accrued liabilities16,869 13,942
Insurance reserves 12,074 11,944
Inventory 4,525 6,212
Other2,606 3,172
Deferred taxassets $65,817 $61,028
Deferred taxliabilities:
Property andequipment $88,651 $88,543
Inventory 11,568 13,415
Other9,534 9,591
Deferred taxliabilities109,753 111,549
Netdeferred taxliability $ 43,936 $50,521
e Companybelieves that adequate amounts of tax,
interest andpenalties have been provided for potential tax
uncertainties; these amounts are included in other long-term
liabilities in the Consolidated Balance Sheets. As of July 31,
2015 and August 1, 2014, the Company’s gross liability for
uncertain tax positions, exclusive of interestand penalties,
was$25,507 and $22,832, respectively. Summarizedbelow is
a tabular reconciliation of the beginning and ending balance
of the Company’s total gross liability for uncertain tax positions
exclusive of interestand penalties:
July 31, 2015 August1, 2014 August2, 2013
Balance at beginning of year $22,832 $20,972 $18,098
Ta xpositions related to the
current year:
Additions3,994 3,989 3,731
Reductions— — —
Ta xpositions related to the
prior year:
Additions118 1,400 191
Reductions(227) (1,630) (280)
Selements (204) (755) —
Expiration of statute of limitations(1,006) (1,144) (768)
Balance at end of year $25,507 $22,832 $20,972
If the Companywere to prevail on all uncertain tax posi-
tions,the reversalof this accrual would be a tax benet to the
Company and impactthe eective tax rate. e following table
highlights the amount of uncertain tax positions, exclusive
of interest andpenalties, which, if recognized,would aect
the eective tax rate for eachof the three years:
2015 2014 2013
Uncertain tax positions $16,579 $14,840 $13,631
e Companyhad $9,754, $8,559 and $7,869 in interest
andpenalties accrued as of July 31, 2015, August 1, 2014,
andAugust 2, 2013, respectively.
e Companyrecognized accrued interest andpenalties
related to unrecognized taxbenets of $1,194, $691 and
$1,264 in its provision for income taxes on July 31, 2015,
August 1, 2014 and August 2, 2013, respectively.
In many cases, the Company’s uncertain tax positions are
related to tax years that remain subjectto examination by the
relevant taxing authorities. Based on the outcome of these
examinations or as a result of the expiration of the statutesof
limitations for specic taxing jurisdictions, it is reasonably
possible that the related uncertain tax positions taken
regarding previously led tax returns could decrease from
those recorded as liabilities for uncertain tax positions in the