Ross 2015 Annual Report Download - page 59

57
The changes in amounts of unrecognized tax benefits (gross of federal tax benefits and excluding interest and penalties) at
fiscal 2015, 2014, and 2013 are as follows:
($000)
2015
2014
2013
Unrecognized tax benefits - beginning of year
$
78,116
$
80,323
$
65,667
Gross increases:
Tax positions in current period
14,990
15,441
15,591
Tax positions in prior period
—
—
2,418
Gross decreases:
Tax positions in prior periods
(10,589
)
(9,432
)
(519
)
Lapse of statute limitations
(4,216
)
(5,732
)
(2,274
)
Settlements
(2,929
)
(2,484
)
(560
)
Unrecognized tax benefits - end of year
$
75,372
$
78,116
$
80,323
At the end of fiscal 2015, 2014, and 2013, the reserves for unrecognized tax benefits were $94.2 million, $101.7 million, and
$104.9 million inclusive of $18.8 million, $23.6 million, and $24.6 million of related interest and penalties, respectively. The
Company accounts for interest and penalties related to unrecognized tax benefits as a part of its provision for taxes on
earnings. If recognized, $45.9 million would impact the Company’s effective tax rate. The difference between the total
amount of unrecognized tax benefits and the amounts that would impact the effective tax rate relates to amounts attributable
to deferred tax assets and liabilities. These amounts are net of federal and state income taxes.
The Company believes it is reasonably possible that certain federal and state tax matters may be concluded or statutes of
limitations may lapse during the next twelve months. Accordingly, the total amount of unrecognized tax benefits may
decrease, reducing the provision for taxes on earnings by up to $3.7 million.
The Company is generally open to audit by the Internal Revenue Service under the statute of limitations for fiscal years 2012
through 2015. The Company’s state income tax returns are generally open to audit under the various statutes of limitations
for fiscal years 2011 through 2015. Certain state tax returns are currently under audit by state tax authorities. The Company
does not expect the results of these audits to have a material impact on the consolidated financial statements.
Note G: Employee Benefit Plans
The Company has a defined contribution plan that is available to certain employees. Under the plan, employee and
Company contributions and accumulated plan earnings qualify for favorable tax treatment under Section 401(k) of the
Internal Revenue Code. This plan permits employees to make contributions up to the maximum limits allowable under the
Internal Revenue Code. The Company matches up to 4% of the employee’s salary up to the plan limits. Company matching
contributions to the 401(k) plan were $12.7 million, $11.4 million, and $10.4 million in fiscal 2015, 2014, and 2013,
respectively.
The Company also has an Incentive Compensation Plan which provides cash awards to key management and employees
based on Company and individual performance.
The Company also makes available to management a Non-qualified Deferred Compensation Plan which allows
management to make payroll contributions on a pre-tax basis in addition to the 401(k) plan. Other long-term assets include
$86.1 million and $94.1 million at January 30, 2016 and January 31, 2015, respectively, of long-term plan investments, at
market value, set aside or designated for the Non-qualified Deferred Compensation Plan (See Note B). Plan investments are
designated by the participants, and investment returns are not guaranteed by the Company. The Company has a
corresponding liability to participants of $86.1 million and $94.1 million at January 30, 2016 and January 31, 2015,
respectively, included in Other long-term liabilities in the Consolidated Balance Sheets.