Pottery Barn 2014 Annual Report Download - page 61

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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 28, 2015. 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 1,
2015, an aggregate of $9,651,000 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 25, 2016.
Note D: Income Taxes
The components of earnings before income taxes, by tax jurisdiction, are as follows:
Fiscal Year Ended
In thousands
Feb. 1, 2015
(52 Weeks)
Feb. 2, 2014
(52 Weeks)
Feb. 3, 2013
(53 Weeks)
United States $ 482,739 $ 448,764 $ 401,542
Foreign 19,464 3,918 8,414
Total earnings before income taxes $ 502,203 $ 452,682 $ 409,956
The provision for income taxes consists of the following:
Fiscal Year Ended
In thousands
Feb. 1, 2015
(52 Weeks)
Feb. 2, 2014
(52 Weeks)
Feb. 3, 2013
(53 Weeks)
Current
Federal $ 157,227 $ 173,686 $ 136,742
State 31,959 25,748 22,072
Foreign 4,411 2,690 3,441
Total current 193,597 202,124 162,255
Deferred
Federal 2,719 (26,324) (7,827)
State (2,547) (1,277) (1,202)
Foreign (420) (743) (0)
Total deferred (248) (28,344) (9,029)
Total provision $ 193,349 $ 173,780 $ 153,226
We have historically elected not to provide for U.S. income taxes with respect to the undistributed earnings of
our foreign subsidiaries as we intended to utilize those earnings in our foreign operations for an indefinite period
of time. As of February 1, 2015 the accumulated undistributed earnings of all foreign subsidiaries were
approximately $43,300,000 and are sufficient to support our anticipated future cash needs for our foreign
operations. We currently intend to utilize those 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.
A reconciliation of income taxes at the federal statutory corporate rate to the effective rate is as follows:
Fiscal Year Ended
Feb. 1, 2015
(52 Weeks)
Feb. 2, 2014
(52 Weeks)
Feb. 3, 2013
(53 Weeks)
Federal income taxes at the statutory rate 35.0% 35.0% 35.0%
State income tax rate 4.0% 3.7% 3.3%
Other (0.5%) (0.3%) (0.9%)
Effective tax rate 38.5% 38.4% 37.4%
47
Form 10-K