Pottery Barn 2010 Annual Report Download - page 67

Significant components of our deferred tax accounts are as follows:
Dollars in thousands Jan. 30, 2011 Jan. 31, 2010
Current:
Compensation $ 8,086 $ 8,659
Merchandise inventories 20,424 21,715
Accrued liabilities 16,182 17,451
Customer deposits 50,452 53,229
Prepaid catalog expenses (14,614) (13,014)
Other 5,082 4,155
Total current 85,612 92,195
Non-current:
Depreciation 16,064 37,586
Deferred rent 15,067 16,007
Deferred lease incentives (26,990) (36,556)
Stock-based compensation 17,370 23,956
Executive deferral plan 5,253 5,307
Uncertainties 5,407 7,252
Other 475 257
Total non-current 32,646 53,809
Total deferred tax assets, net $118,258 $146,004
The following table summarizes the activity related to our gross unrecognized tax benefits:
Dollars in thousands Jan. 30, 2011 Jan. 31, 2010 Feb. 1, 2009
Balance at beginning of year $ 15,866 $ 16,243 $ 35,211
Increases related to current year tax positions 821 1,029 2,018
Increases for tax positions for prior years 0 655 178
Decreases for tax positions for prior years (560) (179) (1,628)
Settlements (1,701) (329) (18,469)
Lapses in statute of limitations (2,807) (1,553) (1,067)
Balance at end of year $ 11,619 $ 15,866 $ 16,243
As of January 30, 2011, January 31, 2010 and February 1, 2009, we had $11,619,000, $15,866,000, and
$16,243,000, respectively, of gross unrecognized tax benefits, of which $7,812,000, $10,594,000, and
$10,558,000, respectively, would, if recognized, affect the effective tax rate.
We accrue interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of
January 30, 2011 and January 31, 2010, our accruals, primarily for the payment of interest, totaled $4,062,000
and $5,081,000, respectively.
Due to the potential resolution of state issues, it is reasonably possible that the balance of our gross unrecognized
tax benefits could decrease within the next twelve months by a range of zero to $5,200,000.
We file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. We have
concluded all U.S. federal income tax matters through fiscal 2006. Substantially all material state, local and
foreign income tax examinations have been concluded through fiscal 2000.
Note E: Accounting for Leases
Operating Leases
We lease store locations, distribution centers, customer care centers, corporate facilities and certain equipment
for original terms ranging generally from 2 to 22 years. Certain leases contain renewal options for periods up to
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Form 10-K