Dillard's 2015 Annual Report Download - page 60

F-18
Deferred tax assets and liabilities are presented as follows in the accompanying consolidated balance sheets:
(in thousands of dollars)
January 30,
2016
January 31,
2015
Net deferred tax assets—other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(6,473)$ —
Net deferred tax liabilities—deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258,070 278,998
Net deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 251,597 $ 278,998
The total amount of unrecognized tax benefits as of January 30, 2016 and January 31, 2015 was $4.3 million and $4.8
million, respectively, of which $2.5 million and $2.6 million, respectively, would, if recognized, affect the effective tax rate.
The Company does not expect a significant change in unrecognized tax benefits in the next twelve months. Where applicable,
associated interest and penalties are also recorded. The total amounts of interest and penalties were not material.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in thousands of dollars) Fiscal 2015 Fiscal 2014 Fiscal 2013
Unrecognized tax benefits at beginning of period . . . . . . . . . . . . . . . . . . . . . $ 4,806 $ 6,538 $ 5,432
Gross increases—tax positions in prior period. . . . . . . . . . . . . . . . . . . . . . . — 55 967
Gross decreases—tax positions in prior period . . . . . . . . . . . . . . . . . . . . . . (734)(1,689)(733)
Gross increases—current period tax positions . . . . . . . . . . . . . . . . . . . . . . . 317 665 1,207
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —(545)(335)
Lapse of statutes of limitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (124)(218)—
Unrecognized tax benefits at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,265 $ 4,806 $ 6,538
The fiscal tax years that remain subject to examination for the federal tax jurisdiction are 2013 and forward and for major
state tax jurisdictions are 2012 and forward. At this time, the Company does not expect the results from any income tax audit to
have a material impact on the Company's consolidated financial statements.
Income taxes paid, net of income tax refunds received, during fiscal 2015, 2014 and 2013 were approximately $183.6
million, $189.7 million and $173.8 million, respectively.
7. Subordinated Debentures
At January 30, 2016, the Company had $200 million outstanding of its 7.5% subordinated debentures due August 1,
2038. All of these subordinated debentures were held by Dillard's Capital Trust I ("Trust"), a 100% owned unconsolidated
finance subsidiary of the Company. The subordinated debentures are the sole asset of the Trust. The Company has the right to
defer the payment of interest on the subordinated debentures at any time for a period not to exceed 20 consecutive quarters.
At January 30, 2016, the Trust has outstanding $200 million liquidation amount of 7.5% Capital Securities, due August 1,
2038 (the "Capital Securities"). Holders of the Capital Securities are entitled to receive cumulative cash distributions, payable
quarterly, at the annual rate of 7.5% of the liquidation amount of $25 per Capital Security. The Capital Securities are subject to
mandatory redemption upon repayment of the Company's subordinated debentures. The Company's obligations under the
subordinated debentures and related agreements, taken together, provide a full and unconditional guarantee of payments due on
the Capital Securities.
The Trust is a variable interest entity and is not consolidated into the Company's financial statements, since the Company
is not the primary beneficiary of the Trust.