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INCOME TAXES | 12 Months Ended
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Jan. 30, 2016
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The components of income before taxes are as follows (in thousands):
|  | Fiscal Year Ended
|  | January 30, 2016 |  | January 31, 2015 |  | February 1, 2014
U.S. |  | $ | 46,053 |  |  | $ | 47,888 |  |  | $ | 36,487 |
Foreign |  | 43,329 |  |  | 31,987 |  |  | 40,061 |
Total |  | $ | 89,382 |  |  | $ | 79,875 |  |  | $ | 76,548 |
11. | INCOME TAXES (Continued)
The components of the Company's provision for income taxes consisted of the following (in thousands):
|  | Fiscal Year Ended
|  | January 30, 2016 |  | January 31, 2015 |  | February 1, 2014
Current - |  |  |  |  |  |
Federal |  | $ | 7,248 |  |  | $ | 8,212 |  |  | $ | 13,240 |
State |  | 2,275 |  |  | 3,691 |  |  | 4,371 |
Foreign |  | 9,809 |  |  | 5,457 |  |  | 9,463 |
Total current |  | 19,332 |  |  | 17,360 |  |  | 27,074 |
Deferred - |  |  |  |  |  |
Federal |  | 9,649 |  |  | 5,260 |  |  | (1,513 | )
State |  | 2,548 |  |  | 1,426 |  |  | (731 | )
Foreign |  | (31 | ) |  | (1,059 | ) |  | (1,308 | )
Total deferred |  | 12,166 |  |  | 5,627 |  |  | (3,552 | )
Tax provision as shown on the consolidated statements of operations |  | $ | 31,498 |  |  | $ | 22,987 |  |  | $ | 23,522 |
Effective tax rate |  | 35.2 | % |  | 28.8 | % |  | 30.7 | %
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
|  | January 30, 2016 |  | January 31, 2015 |  | February 1, 2014
Calculated income tax provision at federal statutory rate |  | $ | 31,284 |  |  | $ | 27,956 |  |  | $ | 26,792 |
State income taxes, net of federal benefit |  | 3,052 |  |  | 3,326 |  |  | 2,366 |
Foreign tax rate differential (1) |  | (9,744 | ) |  | (8,849 | ) |  | (7,224 | )
Nondeductible expenses |  | 2,729 |  |  | 1,685 |  |  | 1,792 |
Unrecognized tax benefit |  | 3,892 |  |  | 807 |  |  | (1,347 | )
Change in valuation allowance |  | 399 |  |  | (1,472 | ) |  | 447 |
Other |  | (114 | ) |  | (466 | ) |  | 696 |
Total tax provision |  | $ | 31,498 |  |  | $ | 22,987 |  |  | $ | 23,522 |
(1) The foreign tax rate differential is due to the Company having a lower foreign effective tax rate as compared to its U.S. federal statutory tax rate of 35%. The Company has substantial operations in both Hong Kong and Canada which have lower statutory income tax rates as compared to the U.S. The Company's foreign effective tax rates for Fiscal 2015, Fiscal 2014 and Fiscal 2013 were 22.6%, 13.7% and 20.4%, respectively. This rate will fluctuate from year to year in response to changes in the mix of pre-tax earnings by country as well as changes in foreign jurisdiction tax laws.
11. | INCOME TAXES (Continued)
The tax effects of temporary differences which give rise to deferred tax assets and liabilities are as follows (in thousands):
|  | January 30, 2016 |  | January 31, 2015
Current – |  |  |  |
Assets |  |  |  |
Inventory |  | 4,472 |  |  | 4,128 |
Reserves |  | 15,965 |  |  | 15,169 |
Hedging transactions |  | (223 | ) |  | — |
Total current assets |  | 20,214 |  |  | 19,297 |
Liabilities-prepaid expenses |  | (4,728 | ) |  | (4,217 | )
Total current, net |  | 15,486 |  |  | 15,080 |
Noncurrent – |  |  |  |
Property and equipment |  | (6,855 | ) |  | 7,654 |
Deferred rent |  | 14,548 |  |  | 14,830 |
Equity compensation |  | 9,757 |  |  | 7,101 |
Reserves and other |  | 4,780 |  |  | 5,995 |
Net operating loss carryover and other tax credits |  | 2,293 |  |  | 1,930 |
Total noncurrent, gross |  | 24,523 |  |  | 37,510 |
Valuation allowance |  | (2,293 | ) |  | (1,930 | )
Net noncurrent |  | 22,230 |  |  | 35,580 |
Total deferred tax asset, net |  | $ | 37,716 |  |  | $ | 50,660 |
As of January 30, 2016, the Company has not provided Federal taxes on approximately $268.6 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 foreign net operating loss carryforwards of approximately $5.9 million which do not expire. The Company also has an Alternative Minimum Tax credit ("AMT") in Puerto Rico of approximately $0.8 million which does not expire. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in assessing the need for a valuation allowance. 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 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. 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
11. | INCOME TAXES (Continued)
Company receives an income tax benefit upon the award's vesting equal to the tax effect of the underlying stock's fair market value. Uncertain Tax Positions Tax positions are evaluated in a two step process. The Company first determines whether it is more-likely-than-not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold it is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. A reconciliation of the gross amounts of unrecognized tax benefits, excluding accrued interest and penalties, is as follows (in thousands):
|  | January 30, 2016 |  | January 31, 2015
Beginning Balance |  | $ | 5,479 |  |  | $ | 4,412 |
Additions for current year tax positions |  | 3,800 |  |  | 833 |
Additions for prior year tax positions |  | — |  |  | 1,070 |
Reductions for prior year tax positions |  | (242 | ) |  | (156 | )
Settlements |  | (60 | ) |  | (43 | )
Reductions due to a lapse of the applicable statute of limitations |  | (596 | ) |  | (637 | )
|  | $ | 8,381 |  |  | $ | 5,479 |
Approximately $8.7 million of unrecognized tax benefits at January 30, 2016 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 $2.1 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 January 30, 2016 and January 31, 2015 accrued interest and penalties included in unrecognized tax benefits were approximately $1.3 million and $1.0 million, respectively. Interest, penalties and reversals, thereof, net of taxes, was a benefit of $0.4 million in each of Fiscal 2015, Fiscal 2014 and Fiscal 2013. 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. The Company, with certain exceptions, is no longer subject to income tax examinations by U.S. Federal, state and local or foreign tax authorities for tax years fiscal 2011 and prior.

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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 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 2: 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 Reference 3: 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 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 + Details
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