Quarterly report pursuant to Section 13 or 15(d)

Change in Accounting for Retirement-Related Benefits (Notes)

v3.5.0.2
Change in Accounting for Retirement-Related Benefits (Notes)
6 Months Ended
Jul. 30, 2016
Change in Accounting for Retirement-Related Benefits [Abstract]  
Accounting Changes [Text Block]
 Change in Accounting for Retirement-Related Benefits
In 2015, the Company elected to change its method of recognizing pension expense. Previously, for the primary and supplemental pension plans, net actuarial gains or losses in excess of 10% of the greater of the fair value of plan assets or the plans’ projected benefit obligation (the corridor) were recognized over the remaining service period of plan participants (eight years for the primary pension plan). Under the Company’s new accounting method, the Company recognizes changes in net actuarial gains or losses in excess of the corridor annually in the fourth quarter each year (Mark-to-market Adjustment). The remaining components of pension expense, primarily service and interest costs and assumed return on plan assets, will be recorded on a quarterly basis. While the historical policy of recognizing pension expense was considered acceptable, the Company believes that the new policy is preferable as it eliminates the delay in recognition of actuarial gains and losses outside the corridor.

This change has been reported through retrospective application of the new policy to all periods presented. The impacts of all adjustments made to the financial statements are summarized below:

Consolidated Statements of Operations
 
Three Months Ended
 
Six Months Ended
 
August 1, 2015
 
August 1, 2015
($ in millions, except per share data)
Previously Reported
 
As Adjusted
 
Effect of Change
 
Previously Reported
 
As Adjusted
 
Effect of Change
Pension
$
13

 
$
(16
)
 
$
(29
)
 
$
23

 
$
(35
)
 
$
(58
)
Income/(loss) before income taxes
(141
)
 
(112
)
 
29

 
(314
)
 
(256
)
 
58

Income tax expense/(benefit)
(3
)
 
5

 
8

 
(9
)
 
11

 
20

Net income/(loss)
$
(138
)
 
(117
)
 
$
21

 
$
(305
)
 
(267
)
 
$
38

Basic earnings/(loss) per common share
$
(0.45
)
 
$
(0.38
)
 
$
0.07

 
$
(1.00
)
 
$
(0.87
)
 
$
0.13

Diluted earnings/(loss) per common share
$
(0.45
)
 
$
(0.38
)
 
$
0.07

 
$
(1.00
)
 
$
(0.87
)
 
$
0.13


Consolidated Statements of Comprehensive Income/(Loss)
 
Three Months Ended
 
Six Months Ended
 
August 1, 2015
 
August 1, 2015
($ in millions)
Previously Reported
 
As Adjusted
 
Effect of Change
 
Previously Reported
 
As Adjusted
 
Effect of Change
Net income/(loss)
$
(138
)
 
$
(117
)
 
$
21

 
$
(305
)
 
$
(267
)
 
$
38

Reclassifications for amortization of net actuarial (gain)/loss
18

 

 
(18
)
 
35

 

 
(35
)
Deferred tax valuation allowance

 
(3
)
 
(3
)
 

 
(3
)
 
(3
)
Total other comprehensive income/(loss), net of tax
12

 
(9
)
 
(21
)
 
29

 
(9
)
 
(38
)
Total comprehensive income/(loss), net of tax
$
(126
)
 
$
(126
)
 
$

 
$
(276
)
 
$
(276
)
 
$


Consolidated Balance Sheets
 
August 1, 2015
($ in millions)
Previously Reported
 
As Adjusted
 
Effect of Change
Reinvested earnings/(accumulated deficit)
$
(2,084
)
 
$
(2,761
)
 
$
(677
)
Accumulated other comprehensive income/(loss)
(1,036
)
 
(359
)
 
677


Consolidated Statements of Cash Flows
 
Three Months Ended
 
Six Months Ended
 
August 1, 2015
 
August 1, 2015
($ in millions)
Previously Reported
 
As Adjusted
 
Effect of Change
 
Previously Reported
 
As Adjusted
 
Effect of Change
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net income/(loss)
$
(138
)
 
$
(117
)
 
$
21

 
$
(305
)
 
$
(267
)
 
$
38

Benefit plans
6

 
(23
)
 
(29
)
 
10

 
(48
)
 
(58
)
Deferred taxes
$
(6
)
 
$
2

 
$
8

 
$
(17
)
 
$
3

 
$
20