Famous Footwear 2013 Annual Report Download - page 63

2013 BROWN SHOE COMPANY, INC. FORM 10-K 61
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 $40.9 million, $23.8 million and ($15.5) million in 2013, 2012, and 2011, respectively,
and foreign earnings before income taxes from continuing operations of $36.8 million, $28.0 million, and $20.2 million in 2013,
2012, and 2011, respectively. In addition to the income tax expense associated with continuing operations, we also recorded
income tax (benefit) expense associated with net (loss) earnings from discontinued operations of ($5.9) million, ($5.3) million,
and $9.7 million in 2013, 2012, and 2011, respectively.
The components of income tax provision (benefit) on earnings from continuing operations were as follows:
($ thousands) 2013 2012 2011
Federal
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,621 $ 2,803 $ (4,006)
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260 5,803 319
14,881 8,606 (3,687)
State
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,770 1,560 (857)
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,210) 1,899 137
4,560 3,459 (720)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,317 4,591 2,986
Total income tax provision (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,758 $ 16,656 $ (1,421)
The Company made federal, state, and foreign tax payments, net of refunds, of $5.0 million and $5.7 million in 2013 and
2012, respectively. The Company received federal, state, and foreign tax refunds, net of payments, of $5.7 million in 2011.
The dierences between the tax provision (benefit) reflected in the consolidated financial statements and the amounts
calculated at the federal statutory income tax rate of 35% were as follows:
($ thousands) 2013 2012 2011
Income taxes at statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27,208 $ 18,139 $ 1,635
State income taxes, net of federal tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,964 2,248 (468)
Foreign earnings taxed at lower rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,090) (5,206) (4,090)
Non-deductibility of impairment of assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . 1,631 – –
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 1,475 1,502
Total income tax provision (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,758 $ 16,656 $ (1,421)
The other category of income tax provision (benefit) principally represents the impact of expenses that are not deductible
or partially deductible for federal income tax purposes and adjustments in the amounts of deferred tax assets that are
anticipated to be realized.
Significant components of the Company’s deferred income tax assets and liabilities were as follows:
($ thousands) February 1, 2014 February 2, 2013
Deferred Tax Assets
Employee benefits, compensation and insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,264 $ 12,877
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,235 17,772
Postretirement and postemployment benefit plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 746 1,753
Deferred rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,255 349
Accounts receivable reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,052 7,018
Net operating loss (“NOL”) carryforward/carryback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,917 28,381
Capital loss carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,145 –
Foreign tax credit carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,236 5,767
Other tax credit carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,591 –
Inventory capitalization and inventory reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,317 2,265
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,924 –
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,923 5,699
Total deferred tax assets, before valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91,605 81,881
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,949) (8,014)
Total deferred tax assets, net of valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,656 73,867
Deferred Tax Liabilities
Retirement plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,608) (16,496)
LIFO inventory valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (51,460) (42,914)
Capitalized software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,729) (18,433)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,966) (1,909)
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,212) (1,298)
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (1,684)
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (100,975) (82,734)
Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (23,319) $ (8,867)