Restoration Hardware 2012 Annual Report Download - page 153

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event of default exists or (ii) the availability under the revolving line of credit for extensions of credit to
Restoration Hardware, Inc. is less than the greater of (A) $20.0 million and (B) 15% of the lesser of the aggregate
maximum commitments and the domestic borrowing base.
NOTE 10—INCOME TAXES
The following is a summary of the income tax expense (benefit) (in thousands):
Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
Current
Federal $ — $ — $ 53
State 236 331 837
Foreign (387) 595 280
Total current tax expense (benefit) (151) 926 1,170
Deferred
Federal (48,745) (76) 135
State (12,903) 223 (397)
Foreign (224) 48 (223)
Total deferred tax benefit (61,872) 195 (485)
Total income tax expense (benefit) $(62,023) $1,121 $ 685
A reconciliation of the federal statutory tax rate to the Company’s effective tax rate is as follows:
Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
Provision at federal statutory tax rate 35.0% 34.0% 34.0%
State income taxes—net of federal tax impact 0.7 5.6 2.1
Foreign income 0.6 (2.0) (3.3)
Net adjustments to tax accruals and other 0.1 4.6 (4.4)
Valuation allowance 76.5 (49.4) (32.5)
Stock-based compensation (30.0) 12.4 (6.7)
Effective tax rate 82.9% 5.2% (10.8)%
97
Form 10-K