8. Income Taxes

The components of income before income taxes are as follows:


	Fiscal Year Ended January 31,
	2015		2014		2013
Domestic	$	328,479	$	375,793	$	340,536
Foreign		34,971		51,725		35,036

	$	363,450	$	427,518	$	375,572

The components of the provision for income tax expense/ (benefit) are as follows:


	Fiscal Year Ended January 31,
	2015			2014			2013
Current:
Federal	$	109,978		$	139,848		$	93,625
State		19,665			20,530			15,746
Foreign		3,600			13,285			6,639

	$	133,243		$	173,663		$	116,010

Deferred:
Federal	$	(3,295	)	$	(15,171	)	$	23,285
State		1,372			(6,225	)		(722	)
Foreign		(298	)		(7,109	)		(315	)

		(2,221	)		(28,505	)		22,248

	$	131,022		$	145,158		$	138,258

The Company’s effective tax rate was different than the statutory U.S. federal income tax rate for the following reasons:


	Fiscal Year Ended January 31,
	2015			2014			2013
Expected provision at statutory U.S. federal tax rate		35.0	%		35.0	%		35.0	%
State and local income taxes, net of federal tax benefit		3.7			2.2			3.1
Foreign taxes		(2.4	)		(2.7	)		(1.7	)
Other		(0.3	)		(0.5	)		0.4

Effective tax rate		36.0	%		34.0	%		36.8	%

The significant components of deferred tax assets and liabilities as of January 31, 2015 and 2014 are as follows:


	January 31,
	2015			2014
Deferred tax liabilities:
Prepaid expense	$	(3,732	)	$	(2,813	)
Depreciation		(51,774	)		(48,362	)
Other temporary differences		(1,728	)		(634	)

Gross deferred tax liabilities		(57,234	)		(51,809	)

Deferred tax assets:
Deferred rent		70,023			66,579
Inventories		8,137			5,624
Accounts receivable		2,844			3,063
Net operating loss carryforwards		4,003			2,601
Tax uncertainties		3,363			3,372
Accrued salaries and benefits		31,747			28,045
Other temporary differences		5,839			9,413

Gross deferred tax assets, before valuation allowances		125,956			118,697

Valuation allowances		(45	)		(54	)

Net deferred tax assets	$	68,677		$	66,834

Net deferred tax assets are attributed to the jurisdictions in which the Company operates. As of January 31, 2015 and 2014, respectively, $43,330 and $39,513 were attributable to U.S. federal, $16,097 and $17,092 were attributed to state jurisdictions and $9,250 and $10,229 were attributed to foreign jurisdictions.

As of January 31, 2015, certain non-U.S. subsidiaries of the Company had net operating loss carryforwards for tax purposes of approximately $853 that expire from 2016 through 2033 and approximately $12,866 that do not expire. Certain U.S. subsidiaries of the Company had state net operating loss carryforwards for tax purposes of approximately $1,307 that expire from 2018 through 2031. As of January 31, 2015, the Company had a full valuation allowance for certain foreign net operating loss carryforwards where it was uncertain the carryforwards would be utilized. The Company had no valuation allowance for certain other foreign and state net operating loss carryforwards where management believes it is more likely than not the tax benefit of these carryforwards will be realized. As of January 31, 2015 and 2014, the non-current portion of net deferred tax assets aggregated $49,922 and $38,061, respectively.

The cumulative amount of the Company’s share of undistributed earnings of non-U.S. subsidiaries for which no deferred taxes have been provided was $240,704 as of January 31, 2015. These earnings are deemed to be permanently re-invested to finance growth programs. It is not practical to estimate the income tax liability that might be incurred if such earnings were remitted to the United States.

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:


	January 31,
Tax Benefit Reconciliation	2015			2014			2013
Balance at the beginning of the period	$	4,835		$	7,895		$	8,664
Increases in tax positions for prior years		2,518			1,026			419
Decreases in tax positions for prior years		(12	)		(305	)		(929	)
Increases in tax positions for current year		352			521			635
Settlements		(620	)		(3,190	)		(13	)
Lapse in statute of limitations		(184	)		(1,112	)		(881	)

Balance at the end of the period	$	6,889		$	4,835		$	7,895

The total amount of net unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate were $4,952 and $2,416 as of January 31, 2015 and 2014, respectively. The Company accrues interest and penalties related to unrecognized tax benefits in income tax expense in the Consolidated Statements of Income, which is consistent with the recognition of these items in prior reporting periods. During the years ended January 31, 2015, 2014 and 2013, the Company recognized expense/(benefit) of $408, ($1,992) and $541, respectively, related to interest and penalties. The Company accrued $1,486 and $1,078 for the payment of interest and penalties as of January 31, 2015 and 2014, respectively.

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Certain federal, foreign and state jurisdictions are subject to audit from fiscal 2005 to 2014. It is possible that a state or foreign examination may be resolved within twelve months. Due to the potential for resolution of federal and foreign audit and state examinations, and the expiration of various statutes of limitation, it is possible that the Company’s gross unrecognized tax benefits balance may change within the next twelve months by a range of zero to $2,450.