Income Taxes

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The amount of the deferred tax assets considered realizable could be adjusted if estimates of future taxable income during the carryforward periods are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence, such as the Company’s projections for growth. Significant components of our deferred tax liabilities and assets as of April 29, 2016, and April 24, 2015, were as follows:



(in thousands)	April 29, 2016			April 24, 2015
Deferred tax assets:
Self-insurance	$	5,595		$	6,357
Stock and deferred compensation plans	12,582			16,857
Deferred proceeds on Mimi’s Café sale	3,564			4,263
State net operating loss carry forward	1,021			2,586
Credit carryforwards	17			13
Legal Reserve	459			2,791
Inventory	2,605			2,582
Wage and related liabilities	3,426			—
Deferred gain from sale leaseback	22,306			—
Other	7,189			6,772
Total deferred tax assets before valuation allowances	58,764			42,221
Valuation allowance	(246		)	(241		)
Net deferred tax assets	$	58,518		$	41,980

Deferred tax liabilities:
Property, plant and equipment	$	28,111		$	40,054
Other	1,405			1,308
Total deferred tax liabilities	29,516			41,362
Net deferred tax assets (liabilities)	$	29,002		$	618

In November 2015, the FASB issued ASU 2015-17, which requires that deferred tax assets and liabilities be classified as non-current in our Consolidated Balance Sheet. We elected to early adopt this standard effective April 29, 2016 using the retrospective application transition method as allowed by the standard and accordingly have adjusted our April 24, 2015, Consolidated Balance Sheet to reflect the current presentation. See the table below for the impact of this adjustment:



(in thousands)	As reported			As adjusted
Current deferred tax assets	$	16,117		$	—
Non-current deferred tax assets	2,326			4,836
Non-current deferred tax liabilities	(17,825		)	(4,218		)
Net deferred tax assets	$	618		$	618

There are $1,021 of state net operating loss carry forwards that will expire at various times through 2035.

As of April 29, 2016, and April 24, 2015, the valuation allowance for net operating loss carryovers totaled $246 and $241, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, taxable income in carryback years and tax-planning strategies when making this assessment.

Significant components of the provision (benefit) for income taxes are as follows:



(in thousands)	2016			2015			2014
Current:
Federal	$	27,952		$	8,021		$	7,734
State	1,631			(746		)	(1,236		)
Total current	29,583			7,275			6,498
Deferred:
Federal	(28,440		)	(15,243		)	(6,769		)
State	56			452			414
Total deferred	(28,384		)	(14,791		)	(6,355		)
Total tax provision (benefit)	$	1,199		$	(7,516	)	$	143

Our provision (benefit) for income taxes differs from the amounts computed by applying the federal statutory rate due to the following:



	2016		2015		2014
Statutory Federal Tax Rate	35.0	%	35.0	%	35.0	%
State income tax — net	5.1		0.5		1.5
Federal tax credits	(21.1	)	(72.4	)	(17.0	)
Domestic Production Activity Deduction	(13.4	)	(29.2	)	(8.7	)
Worthless stock	—		—		(1.9	)
Officers life insurance	2.4		(6.9	)	(2.6	)
Charitable Contributions	(1.9	)	(4.5	)	(1.0	)
Settlements with state taxing authorities	—		—		(4.0	)
State and Local Tax Reserves	(0.3	)	(5.8	)	(0.3	)
Other	(1.1	)	0.1		(0.5	)
Provision (benefit) for income taxes	4.7	%	(83.2	)%	0.5	%

Taxes paid during fiscal 2016, fiscal 2015 and fiscal 2014 were $7,739, $10,543, and $16,332, respectively.

Uncertain Tax Positions

The following table summarizes activity of the total amounts of unrecognized tax benefits:



(in thousands)	2016			2015			2014
Balance at beginning of fiscal year	$	5,202		$	5,952		$	9,554
Additions based on tax positions related to the current year	306			63			31
Additions for tax positions of prior years	149			551			1,004
Reductions for tax positions of prior years	(188		)	(284		)	(25		)
Reductions due to settlements with taxing authorities	(113		)	(672		)	(1,423		)
Reductions due to statute of limitations expiration	(373		)	(408		)	(3,189		)
Balance at end of fiscal year	$	4,983		$	5,202		$	5,952

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of April 29, 2016, April 24, 2015, and April 25, 2014, was $4,720, $4,939 and $5,652, respectively. The remaining unrecognized tax benefits relate to tax positions for which ultimate deductibility is highly certain, but for which there is uncertainty as to the timing of such deductibility. Recognition of these tax benefits would not affect our effective tax rate.

The Company believes that it is reasonable that a decrease of up to $573 to $2,054 in unrecognized tax benefits related to state exposures may be necessary in the coming year due to settlements with taxing authorities or lapses of statutes of limitations.

We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense in the Consolidated Statements of Net Income. During fiscal 2016, fiscal 2015 and fiscal 2014, we recognized approximately ($50), ($166) and $204, respectively, of interest and penalties in tax expense (benefit). As of April 29, 2016, and April 24, 2015, we accrued approximately $790 and $839, respectively, in interest and penalties related to unrecognized tax benefits.

We file United States federal and various state and local income tax returns. Tax returns are generally subject to examination for a period of three to five years after the filing of the respective return. The federal statute of limitations has been extended to April 30, 2016, for the fiscal years ended April 29, 2011, and April 27, 2012.