Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v2.4.1.9
Income Taxes (Tables)
12 Months Ended
Jan. 31, 2015
Income Taxes  
Schedule of significant components of deferred tax assets and liabilities

The Michaels Companies, Inc. and MSI are as follows (in millions):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Michaels Companies, Inc.

 

 

Michaels Stores, Inc.

 

 

Fiscal Year

 

 

Fiscal Year

 

 

2014

  

2013

 

 

2014

  

2013

Gross deferred tax assets:

  

 

 

 

 

 

 

  

 

 

 

 

 

Accrued liabilities

 

$

13 

 

$

14 

 

 

$

13 

 

$

14 

State income taxes

 

 

 

 

 

 

 

 

 

Vacation accrual

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

16 

 

 

22 

 

 

 

16 

 

 

22 

Deferred rent

 

 

15 

 

 

17 

 

 

 

15 

 

 

17 

Gift cards

 

 

 

 

 

 

 

 

 

Self-insurance

 

 

19 

 

 

19 

 

 

 

19 

 

 

19 

Original issue discount write-off

 

 

33 

 

 

41 

 

 

 

33 

 

 

41 

Federal, State and foreign net operating losses

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

10 

 

 

 

 

 

10 

Total gross deferred tax assets

 

 

130 

 

 

148 

 

 

 

130 

 

 

148 

Valuation allowance

 

 

(5)

 

 

(9)

 

 

 

(5)

 

 

(9)

Total deferred tax assets, net of valuation allowance

 

 

125 

 

 

139 

 

 

 

125 

 

 

139 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchandise inventories

 

 

(8)

 

 

(10)

 

 

 

(8)

 

 

(10)

Property and equipment

 

 

(34)

 

 

(25)

 

 

 

(34)

 

 

(25)

Unremitted earnings

 

 

(2)

 

 

 —

 

 

 

(2)

 

 

 —

Cancellation of debt income

 

 

(32)

 

 

(40)

 

 

 

(32)

 

 

(40)

Total deferred tax liabilities

 

 

(76)

 

 

(75)

 

 

 

(76)

 

 

(75)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net deferred tax assets

 

$

49 

 

$

64 

 

 

$

49 

 

$

64 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current portion

 

 

38 

 

 

38 

 

 

 

38 

 

 

38 

Non-current portion

 

 

11 

 

 

26 

 

 

 

11 

 

 

26 

Total

 

$

49 

 

$

64 

 

 

$

49 

 

$

64 

 

Schedule of reconciliation between the actual income tax provision and the income tax provision (benefit) calculated by applying the federal statutory tax rate

The reconciliation between the actual provision for income tax and the provision for income tax calculated by applying the federal statutory tax rate of 35% is as follows (in millions):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Michaels Companies, Inc.

 

Michaels Stores, Inc.

 

 

Fiscal Year

 

Fiscal Year

 

    

2014

    

2013

    

2012

 

2014

    

2013

    

2012

Income tax provision at statutory rate

 

$

123 

 

$

133 

 

$

111 

 

$

146 

 

$

144 

 

$

111 

State income taxes, net of federal income tax effect

 

 

11 

 

 

 

 

 

 

13 

 

 

 

 

Federal tax credits

 

 

(2)

 

 

(1)

 

 

 

 

(2)

 

 

(1)

 

 

Unrecognized tax benefits

 

 

 

 

 —

 

 

(1)

 

 

 

 

 —

 

 

(1)

State valuation allowance

 

 

(4)

 

 

(1)

 

 

 

 

(4)

 

 

(1)

 

 

Other

 

 

 

 

(3)

 

 

(1)

 

 

 —

 

 

(3)

 

 

(1)

Total provision for income tax

 

$

134 

 

$

136 

 

$

115 

 

$

157 

 

$

148 

 

$

115 

 

Schedule of federal, state and international income tax provision

The federal, state and international provision for income tax for The Michaels Companies, Inc. and MSI are as follows (in millions):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Michaels Companies, Inc.

 

Michaels Stores, Inc.

 

 

 

Fiscal Year

 

Fiscal Year

 

 

    

2014

    

2013

    

2012

    

2014

    

2013

    

2012

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal

  

$

90 

  

$

114 

  

$

92 

  

$

111 

  

$

125 

  

$

92 

 

State

 

 

19 

 

 

15 

 

 

10 

 

 

21 

 

 

15 

 

 

10 

 

International

 

 

10 

 

 

11 

 

 

20 

 

 

10 

 

 

11 

 

 

20 

 

Total current

 

 

119 

 

 

140 

 

 

122 

 

 

142 

 

 

151 

 

 

122 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

20 

 

 

(1)

 

 

(7)

 

 

20 

 

 

 

 

(7)

 

State

 

 

(2)

 

 

(4)

 

 

 

 

(2)

 

 

(4)

 

 

 

International

 

 

(3)

 

 

 

 

(1)

 

 

(3)

 

 

 

 

(1)

 

Total deferred

 

 

15 

 

 

(4)

 

 

(7)

 

 

15 

 

 

(3)

 

 

(7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

$

134 

 

$

136 

 

$

115 

 

$

157 

 

$

148 

 

$

115 

 

 

Schedule of reconciliation of gross unrecognized tax benefits, including reduction of deferred tax assets for state operating losses

A reconciliation of gross unrecognized tax benefits, including reduction of deferred tax assets for state operating losses, from the end of fiscal year 2013 through the end of fiscal 2014 is as follows  (in millions):

 

 

 

 

 

 

    

 

 

 

 

 

 

Balance at beginning of year

 

$

12 

 

Additions based on tax positions related to the current year

 

 

 

Additions for tax positions related to prior years

 

 

 

Reductions for expiration of statute of limitations

 

 

(2)

 

Balance at end of year

 

$

17