Pottery Barn 2008 Annual Report Download - page 67
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of credit represent only a future commitment to fund inventory purchases to which we had not taken legal title as
of February 1, 2009. The latest expiration possible for any future letters of credit issued under the facilities is
February 1, 2010.
Interest Expense
Interest expense was $1,480,000 (net of capitalized interest of $1,163,000), $2,099,000 (net of capitalized interest
of $1,389,000) and $2,125,000 (net of capitalized interest of $699,000) for fiscal 2008, fiscal 2007 and fiscal
2006, respectively.
Note D: Income Taxes
The components of earnings before income taxes, by tax jurisdiction, are as follows:
Fiscal Year Ended
Dollars in thousands
Feb. 1, 2009
(52 Weeks)
Feb. 3, 2008
(53 Weeks)
Jan. 28, 2007
(52 Weeks)
United States $ 33,376 $ 299,235 $ 319,732
Foreign 8,577 17,105 17,454
Total earnings before income taxes $ 41,953 $ 316,340 $ 337,186
The provision for income taxes consists of the following:
Fiscal Year Ended
Dollars in thousands
Feb. 1, 2009
(52 Weeks)
Feb. 3, 2008
(53 Weeks)
Jan. 28, 2007
(52 Weeks)
Current
Federal $ 5,143 $126,219 $148,125
State (1,096) 19,254 24,645
Foreign 2,775 7,061 6,299
Total current 6,822 152,534 179,069
Deferred
Federal 4,817 (26,494) (44,573)
State (83) (4,796) (5,802)
Foreign 373 (661) (376)
Total deferred 5,107 (31,951) (50,751)
Total provision $11,929 $120,583 $128,318
Except where required by U.S. tax law, we have historically elected not to provide for U.S. income taxes with
respect to the undistributed earnings of our foreign subsidiaries as we have intended to utilize those earnings in
our foreign operations for an indefinite period of time. In the fourth quarter of fiscal 2008, based on the current
economic environment, we assessed our anticipated future cash needs and the overall financial position of our
Canadian subsidiary and concluded that the remaining undistributed earnings were in excess of our future cash
requirements for the on-going operations of our Canadian subsidiary. Accordingly, our Canadian subsidiary
repatriated $13,900,000 to our U.S. operations in the fourth quarter of fiscal 2008. These repatriated earnings
were offset by foreign tax credits that reduced the financial tax liability associated with this foreign dividend to
zero. The accumulated undistributed earnings of all of our foreign subsidiaries were approximately $500,000 as
of February 1, 2009 and are sufficient to support our anticipated future cash needs for our foreign operations. We
currently intend to utilize the remainder of these undistributed earnings for an indefinite period of time and will
only repatriate such earnings when it is tax effective to do so. It is currently not practical to estimate the tax
liability that might be payable if these foreign earnings were to be repatriated.
55
Form 10-K