Dillard's 2015 Annual Report Download - page 59

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F-17
A reconciliation between the Company's income tax provision and income taxes using the federal statutory income tax
rate is presented below:
(in thousands of dollars) Fiscal 2015 Fiscal 2014 Fiscal 2013
Income tax at the statutory federal rate (inclusive of income on and equity
in losses of joint ventures). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 143,549 $ 178,967 $ 173,975
State income taxes, net of federal benefit (inclusive of income on and
equity in losses of joint ventures) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,488 4,426 8,013
Net changes in unrecognized tax benefits, interest and penalties /reserves . . (367)(1,386)(481)
Tax benefit of federal credits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,018)(2,810)(3,037)
Changes in cash surrender value of life insurance policies. . . . . . . . . . . . . . . (705)(731)(986)
Changes in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,473) 1,485 (5,501)
Tax benefit of dividends paid to ESOP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (763)(802)(581)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 331 1,998
$ 140,770 $ 179,480 $ 173,400
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the
Company's deferred tax assets and liabilities as of January 30, 2016 and January 31, 2015 are as follows:
(in thousands of dollars)
January 30,
2016
January 31,
2015
Property and equipment bases and depreciation differences . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 245,404 $ 265,764
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,672 58,998
Joint venture bases differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,985 14,351
Differences between book and tax bases of inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,116 52,486
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,551 3,599
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365,728 395,198
Accruals not currently deductible. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (88,277)(90,192)
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (74,094)(77,774)
State income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,123)(1,320)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,361)(1,573)
Total deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (166,855)(170,859)
Net operating loss valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,724 54,659
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (114,131)(116,200)
Net deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 251,597 $ 278,998
At January 30, 2016, the Company had a deferred tax asset related to state net operating loss carryforwards of
approximately $74.1 million that could be utilized to reduce the tax liabilities of future years. These carryforwards will expire
between fiscal 2016 and 2036. A portion of the deferred tax asset attributable to state net operating loss carryforwards was
reduced by a valuation allowance of approximately $52.7 million for the losses of various members of the affiliated group in
states for which the Company determined that it is "more likely than not" that the benefit of the net operating losses will not be
realized.
In the beginning of the fourth quarter of fiscal 2015, the Company elected to adopt ASU No. 2015-17, Income Taxes (Topic
740): Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred taxes in the consolidated balance
sheets (refer to Note 1). The Company's retrospective application resulted in the reclassification of $84.7 million net deferred tax
liabilities from current deferred taxes to noncurrent deferred taxes in the consolidated balance sheet at January 31, 2015.