Sprouts Farmers Market 2015 Annual Report Download - page 89

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81
payment for the 2015 receivable during 2016. No receivable was recorded as of December 28, 2014 as
the stop-loss limit was not exceeded.
15. Defined Contribution Plan
The Company maintains the Sprouts Farmers Market, Inc. Employee 401(k) Savings Plan (the
“Plan”), which is a defined contribution plan covering all eligible team members. Under the provisions of
the Plan, participants may direct the Company to defer a portion of their compensation to the Plan,
subject to the Internal Revenue Code limitations. The Company provides for an employer matching
contribution equal to 50% of each dollar contributed by the participants up to 6% of their eligible
compensation.
Total expense recorded for the matching under the Plan:
Year Ended
January 3,
2016
December 28,
2014
December 29,
2013
$2,656 $1,980 $1,583
16. Closed Store Reserves
A summary of closed store reserve activity is as follows:
As Of
January 3,
2016
December 28,
2014
Beginning balance ............................................... $1,785 $4,713
A
dditions .............................................................. 1,144 688
Usage................................................................... (1,332)(3,204)
A
djustments ......................................................... 420 (412)
Ending balance .................................................... $2,017 $1,785
Additions made during 2015 include remaining lease payments for the corporate support office
relocation, and usage during 2015 primarily related to lease payments made during the period for closed
stores. Additions made during 2014 relate to the closure and relocation of one store and to the closure
and relocation of the Texas warehouse, and usage during 2014 relates to lease payments made during
the period for closed stores. Adjustments made during 2014 include a $0.4 million favorable reserve
adjustment due to a sublease for the Sunflower administrative office and a $1.2 million favorable reserve
adjustment for one store due to settlement with the landlord. Also during 2014, the Company determined
that it should have been recording accretion expense for store closure reserves and made a correcting
entry of $0.9 million to adjust the liability for closed stores to include such accretion for prior periods. The
effect of this error on the Company’s financial statements was not material to any prior period.
17. Income Taxes
In July 2013, in connection with the IPO, the Company converted from a limited liability company to
a C-corporation. During the period from April 17, 2011 until the corporate conversion, the Company had
elected to be taxed as a corporation for income tax purposes.