Famous Footwear 2012 Annual Report Download - page 65

2012 BROWN SHOE COMPANY, INC. FORM 10-K 63
6. INCOME TAXES
The components of earnings before income taxes from continuing operations consisted of domestic earnings (loss) before
income taxes from continuing operations of $10.5 million, $(11.1) million and $23.8 million in 2012, 2011 and 2010, respectively,
and foreign earnings before income taxes from continuing operations of $28.0 million, $20.2 million and $29.4 million in 2012,
2011 and 2010, respectively. In addition to the income tax expense associated with continuing operations, we also recorded
income tax expense associated with net earnings from discontinued operations of $8.0 million in 2011. The Company did not
record net earnings from discontinued operations in 2012 or 2010.
The components of income tax provision on earnings from continuing operations were as follows:
($ thousands) 2012 2011 2010
Federal
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1,275) $ (2,528) $ (3,001)
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,578 319 13,209
4,303 (2,209) 10,208
State
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591 (588) 885
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,858 137 2,285
2,449 (451) 3,170
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,591 2,986 2,782
Total income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,343 $ 326 $ 16,160
The Company made federal, state and foreign tax payments, net of refunds, of $5.7 million in 2012. The Company received
federal, state and foreign tax refunds, net of payments, of $5.7 million and $4.6 million in 2011 and 2010, respectively.
The dierences between the tax provision reflected in the consolidated financial statements and the amounts calculated at
the federal statutory income tax rate of 35% were as follows:
($ thousands) 2012 2011 2010
Income taxes at statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,491 $ 3,168 $ 18,627
State income taxes, net of federal tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,592 (293) 2,061
Tax impact of nondeductible stock option expense . . . . . . . . . . . . . . . . . . . . . . . . . . 16 76 285
Foreign earnings taxed at lower rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,206) (4,090) (6,504)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,450 1,465 1,691
Total income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,343 $ 326 $ 16,160
The other category of income tax provision principally represents the impact of expenses that are not deductible for federal
income tax purposes.
Significant components of the Company’s deferred income tax assets and liabilities were as follows:
($ thousands) February 2, 2013 January 28, 2012
Deferred Tax Assets
Employee benefits, compensation and insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,913 $ 18,096
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,788 10,207
Postretirement and postemployment benefit plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,753 2,088
Deferred rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 2,411
Accounts receivable reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,136 5,584
Net operating loss (“NOL”) carryforward/carryback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,355 30,113
Inventory capitalization and inventory reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,692 4,033
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,956 7,394
Total deferred tax assets, before valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,974 79,926
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,476) (6,946)
Total deferred tax assets, net of valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,498 72,980
Deferred Tax Liabilities
Retirement plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,496) (22,550)
LIFO inventory valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42,914) (36,139)
Capitalized software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,433) (13,469)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,949) (1,288)
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (892) (1,874)
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,963) (14,364)
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (91,647) (89,684)
Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (13,149) $ (16,704)