Lululemon 2014 Annual Report Download - page 60

Download and view the complete annual report

Please find page 60 of the 2014 Lululemon 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 96

  • 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

Table of Contents
13 RELATED PARTY BALANCES AND TRANSACTIONS
The Company entered into the following transactions with related parties, all of which were approved by the Company's Audit Committee
in accordance with the Company’s related party transaction policy:
The Company's founder, who was member of the Company's board of directors up until February 2, 2015, owns a retail space that the
Company leases for one of its corporate-owned stores. Consulting fees were paid to a relative of the Company's founder.
14 SUPPLEMENTAL CASH FLOW INFORMATION
15 INCOME TAXES
The Company files income tax returns in the U.S., Canada and various foreign, state and provincial jurisdictions. The 2011 to 2013 tax
years remain subject to examination by the U.S. federal and state tax authorities. The 2010 tax year is still open for certain state tax authorities.
The 2007 to 2013 tax years remain subject to examination by Canadian tax authorities. The 2008 to 2013 tax years remain subject to
examination by tax authorities in certain foreign jurisdictions. The Company's policy is to recognize interest expense and penalties related to
income tax matters as part of other income (expense), net. At February 1, 2015 , the Company does not have any significant accruals for interest
related to unrecognized tax benefits or tax penalties.
The Company's intercompany transfer pricing policies are currently subject to audits by the various foreign tax jurisdictions. Although the
Company believes that its intercompany transfer pricing policies and tax positions are fully supportable, the final determination of tax audits or
potential tax disputes may be different from that which is reflected in the Company's income tax provisions and accruals.
The provision for income taxes consists of the following:
The provision for income taxes in fiscal 2014 includes a tax expense of $33.7 million to provide for U.S. income and applicable foreign
withholding taxes on dividends of $473.7 million which were distributed during fiscal 2014 by foreign subsidiaries to the U.S. parent entity to
fund the share repurchase program.
54
February 1, 2015
February 2, 2014
February 3, 2013
Payments to related parties
Occupancy costs for one corporate-owned store
$
140
$
150
$
151
Consulting fees
$
289
$
409
$
295
February 1, 2015
February 2, 2014
February 3, 2013
Cash paid for income taxes
$
146,376
$
155,394
$
71,342
Interest paid
$
14
$
117
$
206
February 1, 2015
February 2, 2014
February 3, 2013
Federal income tax at statutory rate
35.0
%
35.0
%
35.0
%
Non-deductible compensation expense
0.3
0.5
0.8
U.S. state taxes
1.2
1.2
1.2
Foreign tax rate differential
(6.8
)
(7.1
)
(7.7
)
Tax on repatriated foreign earnings
8.8
—
—
Permanent and other
(0.9
)
—
(
0.5
)
Provision for income taxes
37.6
%
29.6
%
28.8
%