Kroger 2014 Annual Report Download - page 111

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A-46
NO T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S , CO N T I N U E D
Accumulated depreciation and amortization for leased property under capital leases was $332 at
January 31, 2015 and $339 at February 1, 2014.
Approximately $260 and $175, net book value, of property, plant and equipment collateralized certain
mortgages at January 31, 2015 and February 1, 2014, respectively.
5 . T A X E S B A S E D O N I N C O M E
The provision for taxes based on income consists of:
2014 2013 2012
Federal
Current ................................................ $847 $638 $563
Deferred ............................................... (15) 81 154
Subtotal federal ............................................ 832 719 717
State and local
Current ................................................ 59 42 46
Deferred ............................................... 11 (10) 31
Subtotal state and local ...................................... 70 32 77
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $902 $751 $794
A reconciliation of the statutory federal rate and the effective rate follows:
2014 2013 2012
Statutory rate ........................................... 35.0% 35.0% 35.0%
State income taxes, net of federal tax benefit .................. 1.7% 0.9% 2.2%
Credits ................................................ (1.2)% (1.3)% (1.4)%
Favorable resolution of issues .............................. (0.4)% — (0.5)%
Domestic manufacturing deduction ......................... (0.7)% (1.1)% (0.5)%
Other changes, net....................................... (0.3)% (0.6)% (0.3)%
34.1% 32.9% 34.5%
The 2014 effective tax rate differed from the federal statutory rate primarily as a result of the utilization
of tax credits, the Domestic Manufacturing Deduction and other changes, partially offset by the effect of state
income taxes. The 2013 rate for state income taxes is lower than 2014 and 2012 due to an increase in state tax
credits, including the benefit from filing amended returns to claim additional credits. The 2013 benefit from
the Domestic Manufacturing Deduction differed from 2014 and 2012 due to additional deductions taken in
2013, as well as the amendment of prior years’ tax returns to claim the additional benefit available in years still
under review by the Internal Revenue Service.