Pottery Barn 2012 Annual Report Download - page 62

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Credit Facility
We have a credit facility that provides for a $300,000,000 unsecured revolving line of credit that may be used for loans
or letters of credit. Prior to December 22, 2016, we may, upon notice to the lenders, request an increase in the credit
facility of up to $200,000,000, to provide for a total of $500,000,000 of unsecured revolving credit. As of February 3,
2013, we were in compliance with our financial covenants under the credit facility and, based on current projections,
we expect to remain in compliance throughout fiscal 2013. The credit facility matures on June 22, 2017, at which time
all outstanding borrowings must be repaid and all outstanding letters of credit must be cash collateralized.
We may elect interest rates calculated at (i) Bank of America’s prime rate (or, if greater, the average rate on
overnight federal funds plus one-half of one percent, or a rate based on LIBOR plus one percent) plus a margin
based on our leverage ratio or (ii) LIBOR plus a margin based on our leverage ratio. During fiscal 2012 and fiscal
2011, we had no borrowings under the credit facility, and no amounts were outstanding as of February 3, 2013 or
January 29, 2012. Additionally, as of February 3, 2013, $4,970,000 in issued but undrawn standby letters of
credit was outstanding under the credit facility. The standby letters of credit were issued to secure the liabilities
associated with workers’ compensation and other insurance programs.
Letter of Credit Facilities
We have three unsecured letter of credit reimbursement facilities for a total of $90,000,000, each of which
matures on August 30, 2013. The letter of credit facilities contain covenants that are consistent with our
unsecured revolving line of credit. Interest on unreimbursed amounts under the letter of credit facilities accrues at
the lender’s prime rate (or if greater, the average rate on overnight federal funds plus one-half of one percent)
plus 2.0%. As of February 3, 2013, an aggregate of $18,578,000 was outstanding under the letter of credit
facilities, which represents only a future commitment to fund inventory purchases to which we had not taken
legal title. The latest expiration possible for any future letters of credit issued under the facilities is January 27,
2014.
Note D: Income Taxes
The components of earnings before income taxes, by tax jurisdiction, are as follows:
Fiscal Year Ended
Dollars in thousands
Feb. 3, 2013
(53 Weeks)
Jan. 29, 2012
(52 Weeks)
Jan. 30, 2011
(52 Weeks)
United States $ 401,542 $ 367,620 $ 308,033
Foreign 8,414 14,210 15,027
Total earnings before income taxes $ 409,956 $ 381,830 $ 323,060
The provision for income taxes consists of the following:
Fiscal Year Ended
Dollars in thousands
Feb. 3, 2013
(53 Weeks)
Jan. 29, 2012
(52 Weeks)
Jan. 30, 2011
(52 Weeks)
Current
Federal $ 136,742 $ 104,370 $ 79,719
State 22,072 22,275 15,576
Foreign 3,441 4,044 3,972
Total current 162,255 130,689 99,267
Deferred
Federal (7,827) 15,650 20,429
State (1,202) (1,427) 3,047
Foreign (0) (13) 90
Total deferred (9,029) 14,210 23,566
Total provision $ 153,226 $ 144,899 $ 122,833
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