Dollar General 2015 Annual Report Download - page 132

10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. Income taxes (Continued)
Deferred taxes reflect the effects of temporary differences between carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant
components of the Company’s deferred tax assets and liabilities are as follows:
January 29, January 30,
(In thousands) 2016 2015
Deferred tax assets:
Deferred compensation expense ................................. $ 8,200 $ 8,842
Accrued expenses ........................................... 8,139 5,146
Accrued rent ............................................... 20,793 19,360
Accrued insurance ........................................... 72,676 76,197
Accrued incentive compensation ................................. 19,902 14,866
Share based compensation ..................................... 17,988 17,623
Interest rate hedges .......................................... 3,702 4,318
Tax benefit of income tax and interest reserves related to uncertain tax
positions ................................................ 1,371 1,502
Deferred gain on sale-leaseback ................................. 22,637 24,385
Other .................................................... 9,440 3,550
State tax credit carry forwards, net of federal tax ..................... 10,711 11,039
195,559 186,828
Less valuation allowances ....................................... (1,474) (2,845)
Total deferred tax assets ........................................ 194,085 183,983
Deferred tax liabilities:
Property and equipment ....................................... (320,619) (302,531)
Inventories ................................................ (72,456) (73,188)
Trademarks ................................................ (433,548) (433,328)
Other .................................................... (7,417) (1,794)
Total deferred tax liabilities ...................................... (834,040) (810,841)
Net deferred tax liabilities ....................................... $(639,955) $(626,858)
Deferred tax assets (liabilities) at January 30, 2015 include the reclassification of current deferred
tax assets and liabilities to noncurrent. See Note 1 for additional information.
The Company has state tax credit carry forwards of approximately $16.5 million that will expire
beginning in 2021 through 2024.
A valuation allowance has been provided for state tax credit carry forwards. The 2015 decrease of
$1.4 million was recorded as a reduction in income tax expense. The 2014 increase of $1.5 million and
2013 decrease of $0.4 million were recorded as an increase and a reduction in income tax expense,
respectively. Based upon expected future income, management believes that it is more likely than not
that the results of operations will generate sufficient taxable income to realize the deferred tax assets
after giving consideration to the valuation allowance.
The Company’s 2010 and earlier tax years are not open for further examination by the Internal
Revenue Service (‘‘IRS’’). Due to the filing of an amended federal income tax return for the 2011 tax
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