American Eagle Outfitters 2001 Annual Report Download - page 49

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AE Notes to Consolidated Financial Statements
48
Significant components of the provision for income taxes are as follows:
For the years ended Feb 2, 2002 Feb 3, 2001 Jan 29, 2000
in thousands
Current:
Federal $50,258 $57,675 $55,033
State 6,918 7,939 10,875
Total current 57,176 65,614 65,908
Deferred:
Federal 5,897 (5,776) (6,024)
State 677 (796) (1,190)
Total deferred 6,574 (6,572) (7,214)
Provision for income taxes $63,750 $59,042 $58,694
A tax benefit has been recognized as contributed capital, in the amount of $11.3 million for the year ended February 2, 2002, $12.0 million for the year
ended February 3, 2001, and $16.4 million for the year ended January 29, 2000, resulting from additional tax deductions related to vested restricted
stock grants and stock option exercises.
A reconciliation between statutory federal income tax and the effective tax rate follows:
For the years ended Feb 2, 2002 Feb 3, 2001 Jan 29, 2000
Federal income tax rate 35% 35% 35%
State income taxes, net of federal income tax effect 3 4 4
38% 39% 39%
Note 12. Retirement Plan and Employee Stock Purchase Plan
The Company maintains a 401(k) retirement plan and profit sharing plan. Full-time employees and part-time employees are automatically enrolled to
contribute 3% of their salary if they have attained twenty and one-half years of age, have completed sixty days of service, and work at least twenty hours
per week. Individuals can decline enrollment or can contribute up to 20% of their salary to the 401(k) plan on a pretax basis, subject to IRS limitations.
After one year of service, the Company will match up to 4.5% of participants’ eligible compensation.