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Income Taxes | 12 Months Ended
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Feb. 02, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | (9) Income Taxes Income tax expense (benefit) is summarized as follows (in thousands):
| Year Ended |  | Year Ended |  | Year Ended
| Feb 2, 2013 |  | Jan 28, 2012 |  | Jan 29, 2011
Federal: |  |  |  |  |
Current | $ | 42,365 |  |  | $ | 84,994 |  |  | $ | 59,720 |
Deferred | 10,943 |  |  | (3,136 | ) |  | 11,484 |
State: |  |  |  |  |
Current | 5,853 |  |  | 11,607 |  |  | 7,953 |
Deferred | 1,494 |  |  | (193 | ) |  | 3,548 |
Foreign: |  |  |  |  |
Current | 30,775 |  |  | 32,975 |  |  | 47,353 |
Deferred | 7,698 |  |  | 2,444 |  |  | (3,184 | )
Total | $ | 99,128 |  |  | $ | 128,691 |  |  | $ | 126,874 |
Except where required by U.S. tax law, no provision was made for U.S. income taxes on the undistributed earnings of the foreign subsidiaries as the Company intends to utilize those earnings in the foreign operations for an indefinite period of time or repatriate such earnings only when tax-effective to do so. That portion of accumulated undistributed earnings of foreign subsidiaries as of February 2, 2013 and January 28, 2012 was approximately $700 million and $631 million, respectively. Actual income tax expense differs from expected income tax expense obtained by applying the statutory Federal income tax rate to earnings before income taxes as follows (in thousands):
| Year Ended |  | Year Ended |  | Year Ended
| Feb 2, 2013 |  | Jan 28, 2012 |  | Jan 29, 2011
Computed "expected" tax expense | $ | 98,215 |  |  | $ | 139,769 |  |  | $ | 147,482 |
State taxes, net of federal benefit | 4,776 |  |  | 7,419 |  |  | 7,475 |
Incremental foreign taxes in excess of/(less than) federal statutory tax rate | (13,307 | ) |  | (19,457 | ) |  | (27,822 | )
Net tax settlements | 12,832 |  |  | — |  |  | — |
Other | (3,388 | ) |  | 960 |  |  | (261 | )
Total | $ | 99,128 |  |  | $ | 128,691 |  |  | $ | 126,874 |
Total income tax expense (benefit) was allocated as follows (in thousands):
| Year Ended |  | Year Ended |  | Year Ended
| Feb 2, 2013 |  | Jan 28, 2012 |  | Jan 29, 2011
Operations | $ | 99,128 |  |  | $ | 128,691 |  |  | $ | 126,874 |
Stockholders’ equity | 3,703 |  |  | (208 | ) |  | (8,234 | )
Total income taxes | $ | 102,831 |  |  | $ | 128,483 |  |  | $ | 118,640 |
The tax effects of the components of other comprehensive income were allocated as follows (in thousands):
| Year Ended |  | Year Ended |  | Year Ended
| Feb 2, 2013 |  | Jan 28, 2012 |  | Jan 29, 2011
Unrealized net gain (loss) on hedges | $ | (1,056 | ) |  | $ | 1,170 |  |  | $ | (399 | )
Unrealized gain (loss) on investments or reclassification of loss to income | 85 |  |  | (24 | ) |  | 72 |
SERP | 2,855 |  |  | (2,057 | ) |  | (251 | )
Total income tax (income) expense | $ | 1,884 |  |  | $ | (911 | ) |  | $ | (578 | )
Total earnings before income tax expense and noncontrolling interests were comprised of the following (in thousands):
| Year Ended |  | Year Ended |  | Year Ended
| Feb 2, 2013 |  | Jan 28, 2012 |  | Jan 29, 2011
Domestic operations | $ | 169,755 |  |  | $ | 245,554 |  |  | $ | 215,689 |
Foreign operations | 110,859 |  |  | 153,787 |  |  | 205,688 |
Earnings before income tax expense and noncontrolling interests | $ | 280,614 |  |  | $ | 399,341 |  |  | $ | 421,377 |
The tax effects of temporary differences that give rise to significant portions of current and non-current deferred tax assets and deferred tax liabilities at February 2, 2013 and January 28, 2012 are presented below (in thousands):
| Feb 2, 2013 |  | Jan 28, 2012
Deferred tax assets: |  |  |
SERP | $ | 22,719 |  |  | $ | 23,255 |
Rent expense | 14,680 |  |  | 13,829 |
Deferred compensation | 8,483 |  |  | 11,748 |
Bad debt reserve | 7,006 |  |  | 8,332 |
Fixed assets bases difference | 5,695 |  |  | 7,903 |
Net operating losses | 2,413 |  |  | 1,675 |
Uniform capitalization | 2,096 |  |  | 2,042 |
Deferred income | 1,642 |  |  | 9,386 |
Inventory valuation | 119 |  |  | 690 |
Accrued bonus | — |  |  | 1,783 |
Other | 16,895 |  |  | 7,712 |
Total deferred assets | 81,748 |  |  | 88,355 |
Deferred tax liabilities: |  |  |
Goodwill amortization | (3,189 | ) |  | (3,666 | )
Other | (11,097 | ) |  | (9,090 | )
Valuation allowance | (3,346 | ) |  | (1,984 | )
Net deferred tax assets | $ | 64,116 |  |  | $ | 73,615 |
Included above at February 2, 2013 and January 28, 2012, are $21.1 million and $21.0 million for current deferred tax assets, respectively, and $43.1 million and $52.6 million for non-current deferred tax assets, respectively. Based on the historical earnings of the Company and projections of future taxable income, management believes it is more likely than not that the results of operations will generate sufficient taxable earnings to realize net deferred tax assets. At February 2, 2013, the Company’s U.S. and certain European and Asian retail operations had net operating loss carryforwards of $35.9 million and minimal capital loss carryforwards. The net operating loss carryforwards are comprised of $1.4 million of operating loss carryforwards that have an unlimited carryforward life, $31.0 million of foreign operating loss carryforwards that expire between fiscal 2014 and fiscal 2022 and $3.5 million of state operating loss carryforwards that expire between fiscal 2013 and fiscal 2018. Based on the historical earnings of these operations, management believes that it is more likely than not that these operations will not generate sufficient income or capital gains to utilize all of the net operating loss and the capital loss. Therefore, the Company has recorded a valuation allowance of $3.3 million, which is an in crease of $1.3 million from the prior year. The Company accrues an amount for its estimate of additional income tax liability which the Company, more likely than not, could incur as a result of the ultimate resolution of income tax audits ("uncertain tax positions"). The Company reviews and updates the estimates used in the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, upon completion of tax audits, upon expiration of statutes of limitation, or upon occurrence of other events. A reconciliation of the beginning and ending amount of gross unrecognized tax benefit (excluding interest and penalties) is as follows (in thousands):
| Year Ended |  | Year Ended |  | Year Ended
| Feb 2, 2013 |  | Jan 28, 2012 |  | Jan 29, 2011
Beginning Balance | $ | 16,045 |  |  | $ | 10,828 |  |  | $ | 9,615 |
Additions: |  |  |  |  |
Tax positions related to the prior year | — |  |  | 4,782 |  |  | 1,002 |
Tax positions related to the current year | — |  |  | 78 |  |  | 352 |
Reductions: |  |  |  |  |
Tax positions related to the prior year | (568 | ) |  | 357 |  |  | — |
Settlements | (10,950 | ) |  | — |  |  | (141 | )
Expiration of statutes of limitation | — |  |  | — |  |  | — |
Ending Balance | $ | 4,527 |  |  | $ | 16,045 |  |  | $ | 10,828 |
The amount of unrecognized tax benefits at February 2, 2013 includes $2.2 million (net of federal benefit on state issues) which, if ultimately recognized, may reduce our future annual effective tax rate. As of February 2, 2013 and January 28, 2012, the Company had $4.4 million and $16.7 million, respectively, of aggregate accruals for uncertain tax positions, including penalties and interest and net of federal tax benefits. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Net income tax (benefit) expense included interest and penalties related to uncertain tax positions of $(0.9) million, $(5.8) million and $1.4 million for fiscal 2013, fiscal 2012 and fiscal 2011, respectively. As of February 2, 2013 and January 28, 2012, the Company recognized interest and penalties related to uncertain tax positions of $0.5 million and $1.4 million, respectively. The Company and its subsidiaries are subject to U.S. federal and foreign income tax as well as income tax of multiple state and foreign local jurisdictions. From time to time, the Company is subject to routine income tax audits on various tax matters around the world in the ordinary course of business. Although the Company has substantially concluded all U.S. federal, foreign, state and foreign local income tax matters for years through fiscal 2009, as of February 2, 2013, several income tax audits were underway in multiple jurisdictions for various periods after fiscal 2009. The Company does not believe that the resolution of open matters will have a material effect on the Company’s financial position or liquidity. Italian Tax Settlement Prior to the third quarter of fiscal 2013, the Company received tax audit reports from the Italian tax authority regarding its ongoing audit of one of the Company’s Italian subsidiaries for the 2008 and 2009 fiscal years. In September 2012, the Company received a formal tax assessment of approximately $12 million and understood that similar or even larger assessments for periods subsequent to fiscal 2009 continued to be possible. While the Company disagreed with the positions of the Italian tax authority and was prepared to vigorously defend itself in this matter, the Company continued to work with the Italian tax authority throughout the fourth quarter of fiscal 2013 in an attempt to resolve the dispute through standard tax resolution processes. In January 2013, to avoid a potentially long and costly litigation process, the Company reached an agreement with the Italian tax authority, which covered fiscal years 2008 through 2013 (with fiscal years 2012 and 2013 remaining subject to final documentation). As a result of the agreement, the Company recorded a settlement charge of $12.8 million (including penalty and interest and net of related offsets in other tax jurisdictions) in excess of prior uncertain tax position reserves of $11.7 million. As part of the agreement, a portion of the amount payable to the Italian tax authority will be payable in four installments during fiscal 2015, and as such, €9.1 million (US$12.4 million) is included in other long-term liabilities in the consolidated balance sheet as of February 2, 2013. The Company has been advised by its Italian counsel that tax audits like this one in Italy involving proposed income adjustments greater than €2 million are automatically referred for review by a public prosecutor who may seek to pursue charges or close the matter, and that resulting criminal charges, if any, would be instituted against individuals rather than against the affected companies under Italian law. Consistent with this process, a review proceeding by a prosecutor in Italy has been initiated with respect to one current and two former members of the Guess European management team and the Company’s former President (as the signing officer for certain Italian tax returns covering the relevant periods). The prosecutor has not yet made a final determination regarding this matter.

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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 Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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=6881521&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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: 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 7: 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 8: 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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