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Table of Contents

The following table shows interest expense in dollars for the stated periods:
 
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


Interest expense, net $ 15,882
$ 23,896
$ 19,522
The $8.0 million decrease in interest expense is primarily attributable to the reduction in interest expense following the redemption of our 8 3/4% Senior
Notes due 2018 (the "Senior Notes") in the first quarter of 2015, partially offset by a $9.7 million loss on extinguishment of debt in connection with the
redemption.
The increase in interest expense, net in 2014 compared to 2013 resulted from the accounting rules related to our flagship stores in New York City and San
Francisco that require a portion of the rent payments to be allocated to interest expense. Refer to Note 5 of the Consolidated Financial Statements for
additional information.

The following table shows income tax expense in dollars for the stated periods:
 
 


 
Income tax expense $ 74,171
$ 43,231
$ 76,627
The effective tax rate was 38.9% in 2015 compared to 38.8% in 2014. We anticipate our effective tax rate will be approximately 39% in 2016.
The effective tax rate for 2014 was 38.8% compared to 39.7% for 2013. The reduction in the tax rate for 2014 was primarily related to the release of uncertain
tax positions following the conclusion of an IRS examination.
Refer to Note 7 of the Consolidated Financial Statements for additional information regarding the tax rate.

The following table presents Adjusted Net Income and Adjusted Earnings Per Diluted Share for the stated periods which eliminate the non-core operating
costs incurred in connection with the redemption of our Senior Notes in the first quarter of 2015:





Adjusted Net Income $ 122,429
$ 68,325 * $ 116,539 *
Adjusted Earnings Per Diluted Share $ 1.45
$ 0.81 * $ 1.37 *
* No adjustments were made to net income or earnings per diluted share for 2014 and 2013.
We supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial measures: adjusted net income and
adjusted earnings per diluted share. We believe that these non-GAAP measures provide meaningful information to assist stockholders in understanding our
financial results and assessing our prospects for future performance. Management believes adjusted net income and adjusted earnings per diluted share are
important indicators of our operations because they exclude items that may not be indicative of, or are unrelated to, our core operating results, and provide a
better baseline for analyzing trends in our underlying business. In addition, adjusted earnings per diluted share is used as a performance measure in our
executive compensation program for purposes of determining the number of equity awards that are ultimately earned. Because non-GAAP financial measures
are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or
similar names. These adjusted financial measures should
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