XML 67 R12.htm IDEA: XBRL DOCUMENT
v3.20.1

Income Taxes | 12 Months Ended
--- | ---
Feb. 02, 2020
Income Taxes | Note D: Income Taxes The components of earnings before income taxes, by tax jurisdiction, are as follows:
Dollars in thousands |  | Fiscal 2019 |  |  | Fiscal 2018 |  |  | Fiscal 2017 |
United States |  | $ | 353,215 |  |  | $ | 333,594 |  |  | $ | 379,000 |
Foreign |  |  | 103,806 |  |  |  | 95,653 |  |  |  | 73,439 |
Total |  | $ | 457,021 |  |  | $ | 429,247 |  |  | $ | 452,439 |
The provision for income taxes consists of the following:
Dollars in thousands |  | Fiscal 2019 |  |  | Fiscal 2018 |  |  | Fiscal 2017 |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 76,873 |  |  | $ | 43,745 |  |  | $ | 97,202 |
State |  |  | 14,205 |  |  |  | 15,357 |  |  |  | 19,552 |
Foreign |  |  | 12,438 |  |  |  | 12,822 |  |  |  | 12,759 |
Total Current |  | $ | 103,516 |  |  | $ | 71,924 |  |  | $ | 129,513 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (606 | ) |  | $ | 23,507 |  |  | $ | 62,893 |
State |  |  | (870 | ) |  |  | 1,562 |  |  |  | 460 |
Foreign |  |  | (1,081 | ) |  |  | (1,430 | ) |  |  | 28 |
Total Deferred |  | $ | (2,557 | ) |  | $ | 23,639 |  |  | $ | 63,381 |
Total provision |  | $ | 100,959 |  |  | $ | 95,563 |  |  | $ | 192,894 |
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. Under Internal Revenue Code section 965 of U.S. Tax Reform, we are deemed to have distributed all the post-1986 accumulated earnings of our foreign subsidiaries to the U.S. as of December 31, 2017. In light of the U.S. Tax Cuts and Jobs Act, the Company re-evaluated its permanent reinvestment assertion with respect to unremitted foreign earnings. As a result, we are now permanently reinvested with respect to our foreign earnings in Canada beginning in fiscal 2018. A reconciliation of income taxes at the federal statutory corporate rate to the effective rate is as follows:
|  | Fiscal 2019 |  |  | Fiscal 2018 |  |  | Fiscal 2017 |
Federal income taxes at the statutory rate |  |  | 21.0% |  |  |  | 21.0% |  |  |  | 33.9% |
Re-measurement of deferred tax assets and liabilities |  |  | — |  |  |  | (2.2% | ) |  |  | 6.7% |
Transition tax |  |  | — |  |  |  | (0.6% | ) |  |  | 2.9% |
State income tax rate |  |  | 2.9% |  |  |  | 3.8% |  |  |  | 2.5% |
Officer’s compensation under Sec.162(m) |  |  | 1.0% |  |  |  | — |  |  |  | — |
Deferred true up |  |  | (1.3% | ) |  |  | — |  |  |  | — |
Change in uncertain tax positions |  |  | 0.5% |  |  |  | 4.1% |  |  |  | (1.6% | )
Rate differential |  |  | (1.8% | ) |  |  | (2.3% | ) |  |  | (2.9% | )
Research and development credits |  |  | (0.7% | ) |  |  | (2.1% | ) |  |  | — |
Other |  |  | 0.5% |  |  |  | 0.6% |  |  |  | 1.1% |
Total |  |  | 22.1% |  |  |  | 22.3% |  |  |  | 42.6% |
Significant components of our deferred income tax accounts are as follows:
Deferred tax asset (liabilities), Dollars in thousands |  | Fiscal 2019 |  |  | Fiscal 2018 |
Operating lease liabilities |  | $ | 347,693 |  |  | $ | — |
Merchandise inventories |  |  | 22,311 |  |  |  | 18,703 |
Customer deposits |  |  | 19,520 |  |  |  | 14,345 |
Compensation |  |  | 14,350 |  |  |  | 11,251 |
Stock-based compensation |  |  | 9,860 |  |  |  | 14,281 |
Accrued liabilities |  |  | 8,440 |  |  |  | 13,470 |
State taxes |  |  | 7,546 |  |  |  | 7,435 |
Executive deferred compensation |  |  | 7,543 |  |  |  | 5,739 |
Federal and state net operating loss |  |  | 3,443 |  |  |  | 4,223 |
Deferred rent |  |  | — |  |  |  | 18,942 |
Operating lease right-of-use assets |  |  | (309,801 | ) |  |  | — |
Deferred lease incentives |  |  | (46,701 | ) |  |  | (26,032 | )
Property and equipment |  |  | (37,309 | ) |  |  | (31,557 | )
Prepaid catalog expenses |  |  | (394 | ) |  |  | (936 | )
Other |  |  | 2,369 |  |  |  | (4,797 | )
Valuation allowance |  |  | (3,648 | ) |  |  | (3,542 | )
Total deferred tax assets, net |  | $ | 45,222 |  |  | $ | 41,525 |
As a result of the acquisition of Outward, Inc., we had net state operating loss carry-forwards as of February 2, 2020. A valuation allowance has been provided against certain state net operating carry-forwards, as we do not expect to fully utilize the losses in future years. The following table summarizes the activity related to our gross unrecognized tax benefits:
Dollars in thousands |  | Fiscal 2019 |  |  | Fiscal 2018 |  |  | Fiscal 2017 |
Beginning Balance |  | $ | 35,209 |  |  | $ | 18,051 |  |  | $ | 25,864 |
Increases related to current year tax positions |  |  | 3,438 |  |  |  | 4,694 |  |  |  | 3,345 |
Increases for tax positions for prior years |  |  | 1,405 |  |  |  | 14,905 |  |  |  | 808 |
Decrease for tax positions for prior years |  |  | (308 | ) |  |  | (1,279 | ) |  |  | (10,610 | )
Settlements |  |  | — |  |  |  | (376 | ) |  |  | — |
Lapse in statute of limitations |  |  | (3,106 | ) |  |  | (786 | ) |  |  | (1,356 | )
Ending Balance |  | $ | 36,638 |  |  | $ | 35,209 |  |  | $ | 18,051 |
As of February 2, 2020, we had $36,638,000 of gross unrecognized tax benefits, of which $32,421,000 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, 2020 and February 3, 2019, our accruals for the payment of interest and penalties totaled $7,251,000 and $5,437,000 respectively. Due to the potential resolution of tax 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 $11,757,000. We file income tax returns in the U.S. and foreign jurisdictions. We are subject to examination by the tax authorities in these jurisdictions. Our U.S. federal taxable years for which the statute of limitations has not expired are fiscal years 2016 to 2019. Substantially all material states, local and foreign jurisdictions’ statutes of limitations are closed for taxable years prior to 2016.

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration