Popeye's 2015 Annual Report Download - page 82

Popeyes Louisiana Kitchen, Inc.
Notes to Consolidated Financial Statements
For Fiscal Years 2015, 2014, and 2013 — (Continued)
The components of income tax expense were as follows:
(in millions) 2015 2014 2013
Current income tax expense:
Federal $ 18.1 $ 17.4 $ 12.8
Foreign 1.9 1.6 1.4
State 2.3 2.4 1.7
22.3 21.4 15.9
Deferred income tax expense:
Federal 3.9 1.7 4.1
State 0.3 0.7 0.4
4.2 2.4 4.5
Total $ 26.5 $ 23.8 $ 20.4
In 2014, the Company recorded a $0.5 million adjustment to correct an error related to the measurement of its deferred tax
liability associated with its indefinite lived intangible assets in prior periods dating back to 2006. The adjustment is included
as a component of state deferred income tax expense. The impact of the adjustment was to increase income tax expense and
increase long-term deferred tax liabilities by $0.5 million . The Company does not believe the error was material to its financial
statements for the year ended December 28, 2014 or for any prior period.
Applicable foreign withholding taxes are generally deducted from royalties and certain other revenues collected from
international franchisees. Foreign taxes withheld are generally eligible for credit against the Company’s U.S. income tax
liabilities.
Reconciliations of the Federal statutory income tax rate to the Company’s effective tax rate are presented below:
2015 2014 2013
Federal income tax rate 35.0 % 35.0 % 35.0 %
State taxes, net of federal benefit 2.9 % 2.3 % 1.9 %
Valuation allowance (0.1)% 1.3 % 0.9 %
Provision to return adjustments 0.1 % 0.4 % (0.3)%
Adjustments to estimated tax reserves — % (0.1)% 0.1 %
Other items, net (0.4)% (0.4)% (0.2)%
Effective income tax rate 37.5 % 38.5 % 37.4 %
Provision to return adjustments include the effects of the reconciliation of income tax amounts recorded in our Consolidated
Statements of Operations to amounts reflected on our tax returns.
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