Sprouts Farmers Market 2015 Annual Report Download - page 90

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82
Income Tax Provision
The income tax provision consists of the following:
Year Ended
January 3,
2016
December 28,
2014
December 29,
2013
U.S. Federal—current ...................................... $(51,322) $ (41,217) $ (15,684)
U.S. Federal—deferred .................................... (15,155)(17,007)(12,203)
U.S. Federal—total........................................... (66,477)(58,224)(27,887)
State—current .................................................. (9,619)(7,815)(3,299)
State—deferred ................................................ (906)(375)(1,555)
State—total....................................................... (10,525)(8,190)(4,854)
Total provision .................................................. $(77,002) $ (66,414) $ (32,741)
Tax Rate Reconciliation
Income tax provision differed from the amounts computed by applying the U.S. federal income tax
rate to pretax income as a result of the following:
Year Ended
January 3,
2016
December 28,
2014
December 29,
2013
Federal statutory rate ................................... 35.00%35.00%35.00%
Increase in income taxes resulting from:
State income taxes, net of federal benefit ... 3.82 3.78 5.18
Other, net................................................. (1.44)(0.63)(1.23)
Effective tax rate ........................................... 37.38%38.15%38.95%
The effective income tax rate decreased to 37.38% in 2015 from 38.15% in 2014 as a result of
increased tax credits and enhanced charitable food contribution deductions for 2015. The effective
income tax rate decreased to 38.15% in 2014 from 38.95% in 2013 as a result of increased enhanced
charitable contributions for 2014.
Excess tax benefits associated with stock option exercises are credited to stockholders’ equity. The
Company uses the tax law ordering approach of intraperiod allocation to allocate the benefit of windfall
tax benefits based on provisions in the tax law that identify the sequence in which those amounts are
utilized for tax purposes. The income tax benefits resulting from stock awards that were credited to
stockholders’ equity were $20.0 million, $47.3 million and $17.8 million in 2015, 2014 and 2013. The
income tax benefit for 2015 included $0.1 million of income tax benefits related to stock award activity in
2013. The income tax benefit for 2014 included $1.4 million of income tax benefits related to stock award
activity in 2013. The excess tax benefits are not credited to stockholders’ equity until the deduction
reduces income taxes payable.