Pier 1 2013 Annual Report Download - page 28

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Nonoperating Income and Expense
Nonoperating income for fiscal 2013 was $2.0 million, compared to $9.3 million in fiscal 2012. The
decrease was primarily the result of the completion of deferred gain recognition related to transactions with the
Company’s former proprietary credit card provider. During the second quarter of fiscal 2013, the Company
reversed a portion of its reserve for uncertain income tax positions for which the statute of limitations had
expired. This adjustment resulted in the reversal of $2.8 million of accrued interest expense, which partially
offset the decrease in deferred gain recognition compared to the prior year.
Income Taxes
The Company recorded an effective tax rate of 35.6% and an income tax provision of $71.6 million in
fiscal 2013, which included the impact of the Company reversing a portion of its reserve for uncertain income tax
positions during the second quarter. During fiscal 2012, the Company recorded a benefit of $4.8 million. The
increase over prior year was due to the Company reporting increased income in fiscal 2013. In addition, the
Company reversed its valuation allowance during the fourth quarter of fiscal 2012 and recorded a tax benefit
during the period.
Net Income
Net income in fiscal 2013 was $129.4 million, or $1.20 per share. Net income for fiscal 2012 was $168.9
million, or $1.48 per share, which included the tax benefit resulting from the change in the Company’s tax
valuation allowance during the fourth quarter of fiscal 2012. Before non-recurring tax benefits of $61.5 million,
primarily resulting from the change in the Company’s tax valuation allowance, earnings per share were $0.94 for
fiscal 2012.
FISCAL YEARS ENDED FEBRUARY 25, 2012 AND FEBRUARY 26, 2011
Net Sales
Net sales consisted primarily of sales to retail customers, net of discounts and returns, but also included
delivery revenues and wholesale sales and royalties. Sales by retail concept during fiscal years 2012 and 2011
were as follows (in thousands):
2012 2011
Stores $ 1,518,200 $ 1,381,944
Other (1) 15,411 14,526
Net sales $ 1,533,611 $ 1,396,470
(1) Other sales consisted primarily of wholesale sales and royalties received from subsidiaries of Grupo Sanborns, S.A. de C.V.
and gift card breakage.
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