Restoration Hardware 2015 Annual Report Download - page 91

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A reconciliation of the federal statutory tax rate to the Company’s effective tax rate is as follows:
Year Ended
January 30, January 31, February 1,
2016 2015 2014
Provision at federal statutory tax rate ................................................ 35.0% 35.0 % 35.0%
State income taxes—net of federal tax impact .................................. 3.7 4.0 5.8
Stock-based compensation................................................................. — — 21.3
Valuation allowance .......................................................................... — — (0.1)
Foreign income .................................................................................. (0.1) (0.3 ) (0.2)
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et adjustments to tax accruals and other ......................................... 0.6 (0.1 ) 1.2
Effective tax rate .......................................................................... 39.2% 38.6 % 63.0%
In November 2015, the FASB issued ASU 2015-17, which amends the current requirements for an entity to separate deferred
income tax liabilities and assets into current and non-current amounts on the consolidated balance sheets. To simplify the presentation
of deferred income taxes, the ASU requires that all deferred tax assets and liabilities be classified as non-current on the consolidated
balance sheets. The Company has elected to early adopt the guidance on a retrospective basis effective with the consolidated balance
sheet as of January 30, 2016. This is a change from the Company’s historical presentation whereby certain deferred tax assets and
liabilities were classified as current and the remainder were classified as non-current. To conform to the current period presentation,
the Company reclassified $27.9 million and $0.1 million which were previously included in current assets and current liabilities,
respectively, as of January 31, 2015 to non-current assets and non-current liabilities, respectively, on the consolidated balance sheets.
Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):
January 30, January 31,
2016 2015
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o
n
-current deferred tax assets (liabilities)
Stock-based compensation ........................................................... $ 32,248 $ 29,894
Inventory ...................................................................................... 29,430 26,067
Deferred lease credits ................................................................... 20,074 14,963
Accrued expense ........................................................................... 18,964 22,469
Deferred revenue .......................................................................... 1,800 1,281
U.S. impact of Canadian transfer pricing ..................................... 1,420 1,410
Net operating loss carryforwards .................................................. 214 752
Property and equipment ................................................................ (24,905 ) (17,113 )
Trademarks and domain names .................................................... (18,414 ) (18,271 )
Prepaid expense and other ............................................................ (17,956 ) (22,182 )
Convertible senior notes ............................................................... (4,719 ) 1,035
State tax benefit ............................................................................ (3,052 ) (3,350 )
Construction allowance ................................................................ — (1,697 )
Other ............................................................................................. 1,793 1,378
Non-current deferred tax assets ............................................... 36,897 36,636
Valuation allowance ..................................................................... (158 ) (176 )
Net non-current deferred tax assets ......................................... 36,739 36,460
A reconciliation of the valuation allowance is as follows (in thousands):
Year Ended
January 30, January 31, February 1,
2016 2015 2014
Balance at beginning of fiscal year ..................................................... $ 176 $ 206 $ 293
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et changes in deferred tax assets and liabilities ................................ (18) (30 ) (87)
Balance at end of fiscal year ............................................................... $ 158 $ 176 $ 206