Pier 1 2016 Annual Report Download - page 59

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The provision for income taxes for each of the last three fiscal years consisted of (in thousands):
2016 2015 2014
Federal:
Current $14,600 $30,771 $43,325
Deferred 2,352 5,620 16,311
State:
Current 2,248 4,402 5,234
Deferred 2,265 2,027 (2,404)
Foreign:
Current 2,066 2,420 4,652
Deferred ———
Total income tax provision $23,531 $45,240 $67,118
The differences between income taxes at the statutory federal income tax rate of 35% in fiscal 2016, 2015 and 2014, and
income tax reported in the consolidated statements of operations were as follows (in thousands):
2016 2015 2014
Tax provision at statutory federal income tax rate $22,108 $42,141 $61,127
State income taxes, net of federal provision 2,703 4,402 3,138
Change in valuation allowance 232 (224) (1,298)
Foreign income taxes 2,066 2,420 4,652
Foreign and other tax credits (4,561) (3,436) (5,444)
Other, net 983 (63) 4,943
Provision for income taxes $23,531 $45,240 $67,118
Effective tax rate 37.3% 37.6% 38.4%
Deferred tax assets and liabilities at February 27, 2016 and February 28, 2015, were comprised of the following (in thousands):
2016 2015
Deferred tax assets:
Deferred compensation $ 21,750 $ 25,505
Accrued average rent 12,998 11,540
Self insurance reserves 11,245 10,288
Cumulative foreign currency translation 4,205 4,310
Deferred revenue and revenue reserves 5,136 6,375
Foreign and other tax credits 2,403 2,931
Other 4,254 2,378
Total deferred tax assets $ 61,991 $ 63,327
Deferred tax liabilities:
Properties and equipment, net $(28,510) $(21,389)
Inventory (23,733) (22,231)
Store supplies (3,679) (3,942)
Deferred gain on debt repurchase (11,014) (14,716)
Other (782) (787)
Total deferred tax liabilities $(67,718) $(63,065)
Valuation allowance $ (654) $ (422)
Net deferred tax assets (1) $ (6,381) $ (160)
(1) The Company adopted retrospectively Accounting Standards Update 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” in the fourth quarter of fiscal 2016.
All deferred tax assets and liabilities are classified as noncurrent, accordingly. For fiscal 2016 and 2015, deferred tax assets were $3,199 and $5,604, respectively, and related to state
deferred tax assets. Deferred tax assets are included in noncurrent assets. Deferred tax liabilities were $9,580 and $5,764 for fiscal 2016 and 2015, respectively, and related to federal deferred
tax liabilities. Deferred tax liabilities are included in other noncurrent liabilities.
PIER 1 IMPORTS, INC. 2016 Form 10-K 53