Express 2015 Annual Report Download - page 41

Table of Contents

The 52-week period ended January 30, 2016 includes the correction of an error with regard to the calculation of a deferred tax liability. As a result of the
error, in previously filed Consolidated Financial Statements current deferred tax liabilities were overstated and current accrued liabilities were understated.
The error had no impact on stockholders’ equity, the Consolidated Statements of Income, or net cash provided by operating activities on the Consolidated
Statements of Cash Flows for prior periods. The Company does not believe these corrections were material to any current or prior interim or annual periods
that were affected. The correction of the error in the 52-week period ended January 30, 2016 resulted in an increase to deferred tax assets of $7.7 million, an
increase in accrued expenses of $0.5 million, an increase in other long-term liabilities of $7.5 million, and incremental income tax expense of $0.3 million.
The increase in other long-term liabilities is due to an uncertain tax position, including the effect of interest. The correction also resulted in corresponding
changes in certain lines within the operating activities section of the Consolidated Statements of Cash Flows.


The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America ("GAAP") requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Consolidated Financial Statements
and the reported amounts of revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and liabilities as of the
date of the Consolidated Financial Statements. Actual results may differ from those estimates. The Company revises its estimates and assumptions as new
information becomes available.

Cash and cash equivalents include investments in money market funds, payments due from banks for third-party credit and debit card transactions for up to 5
days of sales, cash on hand, and deposits with financial institutions. As of January 30, 2016 and January 31, 2015, amounts due from banks for credit and
debit card transactions totaled approximately $13.4 million and $11.9 million, respectively.
Outstanding checks not yet presented for payment amounted to $17.0 million and $14.6 million as of January 30, 2016 and January 31, 2015, respectively,
and are included in accounts payable on the Consolidated Balance Sheets.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of
inputs to the valuation as of the measurement date.
Level 1- Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2- Valuation is based upon quoted prices for similar assets and liabilities in active markets or other inputs that are observable for the
asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3- Valuation is based upon other unobservable inputs that are significant to the fair value measurement.
41