Aarons 2014 Annual Report Download - page 79

Download and view the complete annual report

Please find page 79 of the 2014 Aarons annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 102

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102

69
NOTE 7: INCOME TAXES
Following is a summary of the Company’s income tax expense for the years ended December 31:
(In Thousands) 2014 2013 2012
Current Income Tax Expense:
Federal $ 41,946 $ 91,664 $ 116,234
State 8,682 9,393 10,819
50,628 101,057 127,053
Deferred Income Tax (Benefit):
Federal (3,314) (35,941) (23,035)
State (3,843) (822) (206)
(7,157) (36,763) (23,241)
$ 43,471 $ 64,294 $ 103,812
At December 31, 2011, the Company had a federal net operating loss (“NOL”) carryforward of approximately $31.2 million
available to offset future taxable income. The entire NOL carryforward was utilized during 2012.
As a result of the extended bonus depreciation provisions in the Tax Increase Prevention Act of 2014, the Company paid more
than anticipated for the 2014 federal tax liability. The 2014 act provided an estimated tax deferral of approximately $126.0
million. The Company filed for and received a refund of $100.0 million in January 2015.
Significant components of the Company’s deferred income tax liabilities and assets at December 31 are as follows:
(In Thousands) 2014 2013
Deferred Tax Liabilities:
Lease Merchandise and Property, Plant and Equipment $ 228,002 $ 249,192
Goodwill & Other Intangibles 40,644 34,512
Investment in Partnership 61,342 —
Other, Net 1,866 2,782
Total Deferred Tax Liabilities 331,854 286,486
Deferred Tax Assets:
Accrued Liabilities 42,024 36,778
Advance Payments 14,272 15,400
Other, Net 7,713 8,032
Total Deferred Tax Assets 64,009 60,210
Less Valuation Allowance (706) (682)
Net Deferred Tax Liabilities $ 268,551 $ 226,958
The Company’s effective tax rate differs from the statutory United States Federal income tax rate for the years ended
December 31 as follows:
2014 2013 2012
Statutory Rate 35.0% 35.0% 35.0%
Increases (Decreases) in United States Federal Taxes
Resulting From:
State Income Taxes, Net of Federal Income Tax Benefit 2.6 3.1 2.5
Federal Tax Credits (1.8) (1.7) (.1)
Other, Net (.1) (1.6) .1
Effective Tax Rate 35.7% 34.8% 37.5%
The Company files a federal consolidated income tax return in the United States and the separate legal entities file in various
states and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state and local tax
examinations by tax authorities for years before 2011.