Ross 2006 Annual Report Download - page 58

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40
The provision for taxes for financial reporting purposes is different from the tax provision computed by applying the statutory
federal income tax rate. The differences are reconciled as follows:
2006 2005 2004
Federal income taxes at the statutory rate 35% 35% 35%
State income taxes (net of federal benefit) and other, net 4% 4% 4%
39% 39% 39%
The components of the net deferred tax liabilities at February 3, 2007 and January 28, 2006 are as follows:
($000) 2006 2005
Deferred Tax Assets
Deferred compensation $ 28,813 $ 28,326
Deferred rent 8,742 7,781
Employee benefits 7,307 5,422
Accrued liabilities 16,633 15,111
California franchise taxes 3,905 2,765
Stock-based compensation 3,998 −
All other 3,579 7,737
72,977 67,142
Deferred Tax Liabilities
Depreciation (110,445) (115,507)
Merchandise inventory (25,189) (25,666)
Supplies (5,134) (4,596)
Prepaid expenses (4,587) (3,244)
All other 2,419 1,228
(142,936) (147,785)
Net Deferred Tax Liabilities $ (69,959) $ (80,643)
Note G: Employee Benefit Plans
The Company has a defined contribution plan that is available to certain employees. Under the plan, employee and Company
contributions and accumulated plan earnings qualify for favorable tax treatment under Section 401(k) of the Internal Revenue
Code. This plan permits employees to make contributions up to the maximum limits allowable under the Internal Revenue Code.
The Company matches up to 4% of the employee’s salary up to the plan limits. Company matching contributions to the 401(k)
plan were $6.1 million, $5.1 million and $4.6 million in fiscal 2006, 2005 and 2004, respectively.
The Company also has an Incentive Compensation Plan, which provides cash awards to key management employees based on
the Company’s and the individual’s performance. The Company also makes available to management a Non-qualified Deferred
Compensation Plan which allows management to make payroll contributions on a pre-tax basis in addition to the 401(k) plan.
Other long-term assets include $47.0 million and $43.4 million at February 3, 2007 and January 28, 2006, respectively, of long-
term investments, at market value, set aside or designated for the Non-qualified Deferred Compensation Plan. Plan investments
are designated by the participants, and investment returns are not guaranteed by the Company.
In addition, the Company has certain individuals who receive or will receive post-employment benefits. The estimated liability
for these benefits of $2.5 million is included in accrued liabilities and other in the accompanying consolidated balance sheet as
of February 3, 2007.