Pottery Barn 2006 Annual Report Download - page 64

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Note D: Income Taxes
The components of earnings before income taxes, by tax jurisdiction, are as follows:
Fiscal Year Ended
Dollars in thousands Jan. 28, 2007 Jan. 29, 2006 Jan. 30, 2005
United States $ 319,732 $ 337,468 $ 303,986
Foreign 17,454 11,330 6,219
Total earnings before income taxes $ 337,186 $ 348,798 $ 310,205
The provision for income taxes consists of the following:
Fiscal Year Ended
Dollars in thousands Jan. 28, 2007 Jan. 29, 2006 Jan. 30, 2005
Current payable
Federal $ 148,125 $ 131,242 $ 105,096
State 24,645 19,002 17,642
Foreign 6,299 4,479 2,487
Total current 179,069 154,723 125,225
Deferred
Federal (44,573) (18,912) (6,168)
State (5,802) (1,538) (70)
Foreign (376) (341) (16)
Total deferred (50,751) (20,791) (6,254)
Total provision $ 128,318 $ 133,932 $ 118,971
Except where required by U.S. tax law, no provision was made for U.S. income taxes on the cumulative
undistributed earnings of our Canadian subsidiary, as we intend to utilize those earnings in the Canadian
operations for an indefinite period of time and do not intend to repatriate such earnings.
Accumulated undistributed earnings of our Canadian subsidiary were approximately $24,971,000 as of
January 28, 2007. It is currently not practical to estimate the tax liability that might be payable if these foreign
earnings were repatriated.
A reconciliation of income taxes at the federal statutory corporate rate to the effective rate is as follows:
Fiscal Year Ended
Jan. 28, 2007 Jan. 29, 2006 Jan. 30, 2005
Federal income taxes at the statutory rate 35.0% 35.0% 35.0%
State income tax rate, less federal benefit 3.1% 3.4% 3.4%
Total 38.1% 38.4% 38.4%
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