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Income Taxes | 12 Months Ended
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Feb. 02, 2014
Income Taxes | 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. Furthermore, it is currently not practical to estimate the tax liability that might be payable if these foreign earnings were repatriated. Should we decide to repatriate these foreign earnings, we would need to adjust our income tax provision in the period we determine that the earnings will no longer be indefinitely invested outside the United States. A reconciliation of income taxes at the federal statutory corporate rate to the effective rate is as follows:
|  | Fiscal Year Ended |
|  | Feb. 2, 2014 (52 Weeks) |  |  | Feb. 3, 2013 (53 Weeks) |  |  | Jan. 29, 2012 (52 Weeks) |
Federal income taxes at the statutory rate |  |  | 35.0% |  |  |  | 35.0% |  |  |  | 35.0% |
State income tax rate |  |  | 3.7% |  |  |  | 3.3% |  |  |  | 3.5% |
Other |  |  | (0.3% | ) |  |  | (0.9% | ) |  |  | (0.6% | )
Effective tax rate |  |  | 38.4% |  |  |  | 37.4% |  |  |  | 37.9% |
Significant components of our deferred tax accounts are as follows:
Dollars in thousands |  |  |  | Feb. 2, 2014 |  |  | Feb. 3, 2013 |
Current: |  |  |  |  |  |  |  |  |  |
Compensation |  |  |  | $ | 14,378 |  |  | $ | 9,255 |
Merchandise inventories |  |  |  |  | 27,337 |  |  |  | 23,413 |
Accrued liabilities |  |  |  |  | 26,461 |  |  |  | 19,462 |
Customer deposits |  |  |  |  | 58,479 |  |  |  | 55,321 |
Prepaid catalog expenses |  |  |  |  | (12,576 | ) |  |  | (13,971 | )
Other |  |  |  |  | 7,407 |  |  |  | 6,284 |
Total current |  |  |  |  | 121,486 |  |  |  | 99,764 |
Non-current: |  |  |  |  |  |  |  |  |  |
Depreciation |  |  |  |  | (4,216 | ) |  |  | (11,142 | )
Deferred rent |  |  |  |  | 17,500 |  |  |  | 16,205 |
Deferred lease incentives |  |  |  |  | (33,065 | ) |  |  | (29,931 | )
Stock-based compensation |  |  |  |  | 28,948 |  |  |  | 23,245 |
Executive deferral plan |  |  |  |  | 5,699 |  |  |  | 4,562 |
Uncertainties |  |  |  |  | 4,378 |  |  |  | 3,907 |
Other |  |  |  |  | (5,420 | ) |  |  | 5,552 |
Total non-current |  |  |  |  | 13,824 |  |  |  | 12,398 |
Total deferred tax assets, net |  |  |  | $ | 135,310 |  |  | $ | 112,162 |
The following table summarizes the activity related to our gross unrecognized tax benefits:
Dollars in thousands |  | Fiscal 2013 (52 Weeks) |  |  | Fiscal 2012 (53 Weeks) |  |  | Fiscal 2011 (52 Weeks) |
Balance at beginning of year |  | $ | 8,990 |  |  | $ | 10,023 |  |  | $ | 11,619 |
Increases related to current year tax positions |  |  | 3,351 |  |  |  | 2,188 |  |  |  | 1,329 |
Increases related to prior years’ tax positions |  |  | 328 |  |  |  | 936 |  |  |  | 379 |
Decreases related to prior years’ tax positions |  |  | (42 | ) |  |  | (171 | ) |  |  | (370 | )
Settlements |  |  | (170 | ) |  |  | (1,069 | ) |  |  | (2,070 | )
Lapses in statute of limitations |  |  | (1,692 | ) |  |  | (2,917 | ) |  |  | (864 | )
Balance at end of year |  | $ | 10,765 |  |  | $ | 8,990 |  |  | $ | 10,023 |
As of February 2, 2014, we had $10,765,000 of gross unrecognized tax benefits, of which $7,202,000 would, if recognized, affect the effective tax rate. We accrue interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of February 2, 2014 and February 3, 2013, our accruals for the payment of interest and penalties totaled $2,231,000 and $2,508,000, respectively, primarily related to interest. Due to the potential resolution of state issues, it is reasonably possible that the balance of our gross unrecognized tax benefits could decrease within the next twelve months by a range of $0 to $2,000,000. We file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Internal Revenue Service (IRS) had concluded examination of our U.S. federal income tax returns for years prior to fiscal 2011 without any significant adjustments. Substantially all material state, local and foreign income tax examinations have been concluded through fiscal 2001.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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