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INCOME TAXES | 12 Months Ended
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Feb. 01, 2014
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The components of income before taxes are as follows (in thousands):
|  | Fiscal Year Ended
|  | February 1, 2014 |  | February 2, 2013 |  | January 28, 2012
U.S. |  | $ | 36,487 |  |  | $ | 36,948 |  |  | $ | 47,101 |
Foreign |  | 40,061 |  |  | 52,747 |  |  | 57,652 |
Total |  | $ | 76,548 |  |  | $ | 89,695 |  |  | $ | 104,753 |
11. | INCOME TAXES (Continued)
The components of the Company's provision for income taxes consisted of the following (in thousands):
|  | Fiscal Year Ended
|  | February 1, 2014 |  | February 2, 2013 |  | January 28, 2012
Current - |  |  |  |  |  |
Federal |  | $ | 13,240 |  |  | $ | 7,575 |  |  | $ | 6,984 |
State |  | 4,371 |  |  | 5,230 |  |  | 6,462 |
Foreign |  | 9,463 |  |  | 11,674 |  |  | 14,693 |
Total current |  | 27,074 |  |  | 24,479 |  |  | 28,139 |
Deferred - |  |  |  |  |  |
Federal |  | (1,513 | ) |  | 3,045 |  |  | 1,542 |
State |  | (731 | ) |  | (762 | ) |  | 1,590 |
Foreign |  | (1,308 | ) |  | (310 | ) |  | (863 | )
Total deferred |  | (3,552 | ) |  | 1,973 |  |  | 2,269 |
Tax provision as shown on the consolidated statements of operations |  | $ | 23,522 |  |  | $ | 26,452 |  |  | $ | 30,408 |
Effective tax rate |  | 30.7 | % |  | 29.5 | % |  | 29.0 | %
A reconciliation between the calculated tax provision on income based on statutory rates in effect and the effective tax rate for is as follows (in thousands):
|  | Fiscal Year Ended
|  | February 1, 2014 |  | February 2, 2013 |  | January 28, 2012
Calculated income tax provision at federal statutory rate |  | $ | 26,792 |  |  | $ | 31,393 |  |  | $ | 36,664 |
State income taxes, net of federal benefit |  | 2,366 |  |  | 2,904 |  |  | 5,234 |
Foreign tax rate differential |  | (7,224 | ) |  | (9,044 | ) |  | (7,064 | )
Deemed repatriation of foreign income and reversals thereof |  | — |  |  | — |  |  | (870 | )
Nondeductible expenses |  | 1,792 |  |  | 1,611 |  |  | 1,373 |
Unrecognized tax benefit |  | (1,347 | ) |  | (743 | ) |  | (3,729 | )
Change in valuation allowance |  | 447 |  |  | 1,395 |  |  | — |
Other |  | 696 |  |  | (1,064 | ) |  | (1,200 | )
Total tax provision |  | $ | 23,522 |  |  | $ | 26,452 |  |  | $ | 30,408 |
11. | INCOME TAXES (Continued)
The tax effects of temporary differences which give rise to deferred tax assets and liabilities are as follows (in thousands):
|  | February 1, 2014 |  | February 2, 2013
Current – |  |  |  |
Assets |  |  |  |
Inventory |  | 1,067 |  |  | 1,538 |
Reserves |  | 13,256 |  |  | 12,376 |
Total current assets |  | 14,323 |  |  | 13,914 |
Liabilities-prepaid expenses |  | (3,464 | ) |  | (4,200 | )
Total current, net |  | 10,859 |  |  | 9,714 |
Noncurrent – |  |  |  |
Property and equipment |  | 18,446 |  |  | 18,519 |
Deferred rent |  | 14,325 |  |  | 13,598 |
Equity compensation |  | 6,792 |  |  | 4,401 |
Reserves and other |  | 6,243 |  |  | 7,160 |
Net operating loss carryover and other tax credits |  | 1,842 |  |  | 1,395 |
Capital loss carryover |  | 1,560 |  |  | 1,560 |
Total noncurrent, gross |  | 49,208 |  |  | 46,633 |
Valuation allowance |  | (3,402 | ) |  | (2,955 | )
Net noncurrent |  | 45,806 |  |  | 43,678 |
Total deferred tax asset, net |  | $ | 56,665 |  |  | $ | 53,392 |
The Company evaluates its permanent reinvestment assertions with respect to foreign earnings at each reporting period. During the fourth quarter of fiscal 2011 the Company changed its permanent reinvestment assertion as it related to its Hong Kong and other Asian subsidiaries, whereby the Company no longer provides deferred taxes on the undistributed earnings of these subsidiaries. After this date the Company is fully reinvested in all its foreign subsidiaries. This had the effect of reducing the Company's anticipated income tax provision by approximately $6.9 million, of which approximately $0.9 million related to prior year non-repatriated foreign income for which U.S. income taxes were provided. As of February 1, 2014, the Company has not provided Federal taxes on approximately $201.3 million of unremitted earnings of its foreign subsidiaries. The Company intends to reinvest these earnings to fund expansion in these and other markets outside the U.S. Accordingly, the Company has not provided any provision for income tax expense in excess of foreign jurisdiction income tax requirements relative to such unremitted earnings in the accompanying financial statements. Due to the complexities associated with the hypothetical calculation, including the availability of foreign tax credits, the Company has concluded it is not practicable to determine the unrecognized deferred tax liability related to the undistributed earnings. The Company has a capital loss carryforward (“CLC”) of approximately $3.9 million, which will expire in 2015, if unused. The Company has foreign net operating loss carryforwards of approximately $2.7 million which do not expire. The Company also has an Alternative Minimum Tax credit ("AMT") in Puerto Rico of approximately $1.2 million which does not expire. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company has concluded that it is more likely than not that certain deferred tax assets cannot be used in the foreseeable future, principally the CLC in the U.S., the foreign net operating loss carryforwards and the AMT credit in Puerto Rico. Accordingly, a valuation allowance has been established for these tax benefits. However, to the extent that tax benefits related to these are realized in the future, the reduction of the valuation allowance will reduce income tax expense accordingly.
11. | INCOME TAXES (Continued)
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become realizable. The Company's income taxes payable have been reduced by the tax benefits from employee stock plan awards. For stock options, the Company receives an income tax benefit calculated as the tax effect of the difference between the fair market value of the stock issued at the time of the exercise and the exercise price. For Deferred Awards and Performance Awards, the Company receives an income tax benefit upon the award's vesting equal to the tax effect of the underlying stock's fair market value. A reconciliation of the gross amounts of unrecognized tax benefits, excluding accrued interest and penalties, is as follows (in thousands):
|  | February 1, 2014 |  | February 2, 2013
Beginning Balance |  | $ | 5,919 |  |  | $ | 6,935 |
Additions for current year tax positions |  | 490 |  |  | 475 |
Additions for prior year tax positions |  | 349 |  |  | 100 |
Reductions for prior year tax positions |  | (54 | ) |  | (158 | )
Settlements |  | (851 | ) |  | (39 | )
Reductions due to a lapse of the applicable statute of limitations |  | (1,441 | ) |  | (1,394 | )
|  | $ | 4,412 |  |  | $ | 5,919 |
Approximately $4.6 million of unrecognized tax benefits at February 1, 2014 would affect the Company's effective tax rate if recognized. The Company believes it is reasonably possible that there may be a reduction of approximately $1.8 million of unrecognized tax benefits in the next 12 months as a result of settlements with taxing authorities and statute of limitations expirations. The Company accrued interest and penalties related to unrecognized tax benefits as part of the provision for income taxes. At February 1, 2014 and February 2, 2013 accrued interest and penalties included in unrecognized tax benefits were approximately $1.4 million and $1.9 million, respectively. Interest, penalties and reversals, thereof, net of taxes, was a benefit of $0.4 million, $0.2 million and $0.8 million for Fiscal 2013, Fiscal 2012 and Fiscal 2011, respectively. Included in income tax expense for Fiscal 2011, the Company recorded a benefit of approximately $3.7 million related to unrecognized tax benefits primarily as a result of settlements with taxing authorities and statute of limitations expirations. The Company is subject to tax in the United States and foreign jurisdictions, including Canada and Hong Kong. The Company, joined by its domestic subsidiaries, files a consolidated income tax return for Federal income tax purposes. During fiscal 2009, the Company completed the U.S. Federal income tax audit for fiscal years 2008 and prior. The Company, with certain exceptions, is no longer subject to income tax examinations by state and local or foreign tax authorities for tax years before fiscal 2010.

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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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