Pottery Barn 2013 Annual Report Download - page 61

Download and view the complete annual report

Please find page 61 of the 2013 Pottery Barn annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 156

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156

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 2013 and fiscal
2012, we had no borrowings under the credit facility, and no amounts were outstanding as of February 2, 2014 or
February 3, 2013. Additionally, as of February 2, 2014, $3,070,000 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 $70,000,000, each of which
matures on August 29, 2014. 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 2, 2014, an aggregate of $15,283,000 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 26,
2015.
Note D: Income Taxes
The components of earnings before income taxes, by tax jurisdiction, are as follows:
Fiscal Year Ended
Dollars in thousands
Feb. 2, 2014
(52 Weeks)
Feb. 3, 2013
(53 Weeks)
Jan. 29, 2012
(52 Weeks)
United States $ 448,764 $ 401,542 $ 367,620
Foreign 3,918 8,414 14,210
Total earnings before income taxes $ 452,682 $ 409,956 $ 381,830
The provision for income taxes consists of the following:
Fiscal Year Ended
Dollars in thousands
Feb. 2, 2014
(52 Weeks)
Feb. 3, 2013
(53 Weeks)
Jan. 29, 2012
(52 Weeks)
Current
Federal $ 173,686 $ 136,742 $ 104,370
State 25,748 22,072 22,275
Foreign 2,690 3,441 4,044
Total current 202,124 162,255 130,689
Deferred
Federal (26,324) (7,827) 15,650
State (1,277) (1,202) (1,427)
Foreign (743) (0) (13)
Total deferred (28,344) (9,029) 14,210
Total provision $ 173,780 $ 153,226 $ 144,899
We consider the earnings of certain foreign subsidiaries to be indefinitely invested outside the United States on
the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs
and our specific plans for reinvestment of those subsidiary earnings. As such, we have not recorded a deferred
tax liability related to the U.S. federal and state income taxes and foreign withholding taxes on approximately
$37,400,000 of undistributed earnings of foreign subsidiaries indefinitely invested outside the United States.
47
Form 10-K