| Income Taxes | Note 7: Income Taxes
The following table sets forth our provision for income taxes for
the fiscal years ended:
January 29, January 31, February 1,
Current provision:
Federal $ 35,596 $ 18,342 $ 739
State and local 10,107 5,810 4,617
Foreign 72 126 117
Total current provision 45,775 24,278 5,473
Deferred provision (benefit):
Federal 7,318 8,384 (730 )
State and local (287 ) (623 ) (978 )
Foreign (70 ) 92 93
Total deferred provision (benefit) 6,961 7,853 (1,615 )
Provision for income taxes $ 52,736 $ 32,131 $ 3,858
The following tables set forth the significant components of our
deferred assets and liabilities as of the fiscal years ended:
January 29, January 31,
Deferred tax assets:
Deferred revenue and redemption ticket liability $ 18,318 $ 14,938
Leasing transactions 13,735 10,578
Accrued liabilities 3,990 5,143
Workers compensation and general liability insurance 4,698 4,235
Tax credit carryovers
— 4,490
Share-based compensation 5,284 3,538
Net operating loss carryovers 2,040 2,241
Indirect benefit of unrecognized tax benefits 563 536
Other 3,108 2,672
Total 51,736 48,371
Valuation allowance (821 ) (1,006 )
Total deferred tax assets, net of valuation allowance 50,915 47,365
Deferred tax liabilities:
Trademark/tradename (31,545 ) (31,907 )
Property and equipment (30,956 ) (20,115 )
Other (465 ) (433 )
Total deferred tax liabilities (62,966 ) (52,455 )
Net deferred tax liabilities $ (12,051 ) $ (5,090 )
Reported as:
Deferred tax assets, net—current
— 30,257
Deferred tax assets, net—noncurrent 2,446
—
Deferred tax liablities, net—noncurrent (14,497 ) (35,347 )
Net deferred tax liabilities $ (12,051 ) $ (5,090 )
At January 29, 2017, we had a valuation allowance of $821
against our deferred tax assets. The ultimate realization of our
deferred tax assets is dependent on the generation of future
taxable income in the jurisdiction and during periods in which
temporary differences become deductible. In assessing the
realizability of our deferred tax assets, we considered whether it
is more likely than not that some or all of the deferred tax assets
will not be realized. Based on the level of recent historical
taxable income; consistent generation of annual taxable income, and
estimations of future taxable income we have concluded that it is
more likely than not that we will realize the federal tax benefits
associated with our deferred tax assets. We assessed the
realizability of the deferred tax assets associated with state
taxes, foreign taxes and uncertain tax positions and have concluded
that it is more likely than not that we will realize only a portion
of these benefits. Accordingly, we have established a valuation
allowance to reduce those deferred tax assets to an amount which we
believe will ultimately be realized.
As of January 29, 2017, we have $63,245 of state net operating
loss carryforwards. Included in state net operating loss
carryforwards is approximately $22,233 of state net operating loss
carryforwards related to excess stock compensation. Generally,
state net operating losses can be carried forward 20 years. State
net operating loss carryforwards do not begin to expire until 2018.
As of January 29, 2017, we could not conclude that it was more
likely than not that all of our state net operating loss
carryforwards, when considered on a state by state basis, will be
fully utilized prior to their expiration. Included in our total
valuation allowance is $646 related to state net operating losses
that may not be realized.
The following table sets forth the change in unrecognized tax
benefits excluding interest, penalties and related income tax
benefits for the fiscal years ended:
January 29, 2017 January 31, 2016 February 1, 2015
Balance at beginning of year $ 1,263 $ 566 $ 476
Additions for tax positions of prior years 240 711 90
Reductions for tax positions of prior years (76 )
—
—
Lapse of statute of limitations (79 ) (14 )
—
Balance at end of year $ 1,348 $ 1,263 $ 566
As of January 29, 2017 and January 31, 2016, the accrued
interest and penalties on the unrecognized tax benefits were $355
and $399, respectively, excluding any related income tax
benefits. The Company recorded accrued interest related to the
unrecognized tax benefits and penalties as a component of the
provision for income taxes recognized in the Consolidated
Statements of Comprehensive Income.
We currently anticipate that approximately $39 of unrecognized tax
benefits will be settled through federal and state audits or will
be recognized as a result of the expiration of statute of
limitations during fiscal 2018. Future recognition of potential
interest or penalties, if any, will be recorded as a component of
income tax expense. Because of the impact of deferred tax
accounting, $980 of unrecognized tax benefits, if recognized, would
affect the effective tax rate.
The following table sets forth the reconciliation of the federal
statutory rate to the effective income tax rate for the fiscal
years ended:
January 29, 2017 January 31, 2016 February 1, 2015
Federal corporate statutory rate 35.0 % 35.0 % 35.0 %
State and local income taxes, net of federal income tax benefit 4.4 % 2.8 % 20.7 %
Foreign taxes — % (0.1 )% — %
Nondeductible expenses 1.5 % 1.7 % 11.3 %
Tax credits (4.1 )% (5.4 )% (31.4 )%
Valuation allowance (0.1 )% 0.1 % (4.0 )%
Change in reserve — % 0.8 % 1.2 %
Other — % 0.1 % 0.9 %
Effective tax rate 36.7 % 35.0 % 33.7 %
We file consolidated income tax returns with all our domestic
subsidiaries, which are periodically audited by various federal,
state and foreign jurisdictions. We are generally no longer subject
to federal, state, or foreign income tax examinations for years
prior to 2012. |
