Sprouts Farmers Market 2013 Annual Report Download - page 122
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Table of Contents
Tax Rate Reconciliation
Income tax (provision) benefit differed from the amounts computed by applying the U.S. federal income tax rate to pretax
income as a result of the following:
The effective income tax rate decreased to 38.95% in 2013 from 43.91% in 2012 as a result of increased tax credits and
charitable contributions for 2013 and the non-deductible transaction costs incurred in 2012 related to the Sunflower
Transaction. The effective income tax rate increased to 43.91% in 2012 from 39.25% in 2011 as a result of the non-deductible
transaction costs incurred in 2012 related to the Sunflower Transaction.
Excess tax benefits associated with stock option exercises and antidilution payments made to optionholders are credited to
stockholders’
equity. The Company uses the tax law ordering approach of intraperiod allocation to allocate the benefit of windfall tax
benefits based on provisions in the tax law that identify the sequence in which those amounts are utilized for tax purposes. The
income tax benefits resulting from stock awards that were credited to stockholders’ equity were $17.8 million, $0.1 million and $0.0
for the years ended December 29, 2013, December 30, 2012 and January 1, 2012, respectively.
Deferred Taxes
Significant components of the Company’s deferred tax assets and deferred tax liabilities are as follows:
117
Year Ended
December 29,
2013
December 30,
2012
January 1,
2012
Federal statutory rate
35.00
%
35.00
%
35.00
%
Increase in income taxes resulting from:
State income taxes, net of federal
benefit
5.18
5.17
4.03
Nondeductible transaction costs
—
3.38
—
Other, net
(1.23
)
0.36
0.22
Effective tax rate
38.95
%
43.91
%
39.25
%
As Of
December 29,
2013
December 30,
2012
Deferred tax assets
Employee benefits
$
14,677
$
13,731
Net operating loss carryforwards and tax credits
13,263
10,945
Lease related
63,512
54,798
Other accrued liabilities
6,714
5,048
Intangible assets
6,496
17,917
Charitable contribution carryforward
2,204
—
Inventories and other
538
1,401
Total gross deferred tax assets
107,404
103,840
Deferred tax liabilities
Depreciation and amortization
(73,991
)
(56,670
)
Total gross deferred tax liabilities
(73,991
)
(56,670
)
Net deferred tax asset
$
33,413
$
47,170