Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.20.1
Income Taxes (Tables)
12 Months Ended
Feb. 01, 2020
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit)
The components of our income tax expense/(benefit) were as follows:
($ in millions)
 
2019
 
2018
 
2017
Current
 
 
 
 
 
 
Federal and foreign
 
$
4

 
$
(5
)
 
$
(60
)
State and local
 
6

 
1

 
1

Total current
 
10

 
(4
)
 
(59
)
Deferred
 
 
 
 
 
 
Federal and foreign
 
(6
)
 
(17
)
 
(63
)
State and local
 
(1
)
 
5

 
(4
)
Total deferred
 
(7
)
 
(12
)
 
(67
)
Total income tax expense/(benefit)
 
$
3

 
$
(16
)
 
$
(126
)


Schedule of Effective Income Tax Rate Reconciliation
The following table summarizes a reconciliation of income tax expense/(benefit) compared with the amounts at the U.S. federal statutory income tax rate:
($ in millions)
 
2019
 
2018
 
2017
Federal income tax at statutory rate
 
$
(56
)
 
$
(57
)
 
$
(82
)
State and local income tax, less federal income tax benefit
 
(12
)
 
(17
)
 
(12
)
Increase/(decrease) in valuation allowance
 
61

 
47

 
33

Effect of U.S. tax reform
 

 

 
(75
)
Other, including permanent differences and credits
 
10

 
11

 
10

Total income tax expense/(benefit)
 
$
3

 
$
(16
)
 
$
(126
)

Schedule of Deferred Tax Assets and Liabilities
Our deferred tax assets and liabilities were as follows:
($ in millions)
 
2019
 
2018
Assets
 
 
 
 
Merchandise inventory
 
$
7

 
$
4

Accrued vacation pay
 
8

 
8

Gift cards
 
36

 
35

Stock-based compensation
 
18

 
19

State taxes
 
1

 
3

Workers’ compensation/general liability
 
38

 
41

Accrued rent
 

 
27

Litigation exposure
 
1

 
2

Interest expense limitation
 
83

 
48

Mirror savings plan
 
7

 
7

Pension and other retiree obligations
 
4

 
1

Operating lease liabilities
 
299

 

Net operating loss and tax credit carryforwards
 
710

 
707

Other
 
56

 
52

Total deferred tax assets
 
1,268

 
954

Valuation allowance
 
(869
)
 
(802
)
Total net deferred tax assets
 
399

 
152

Liabilities
 
 
 
 
Depreciation and amortization
 
(193
)
 
(223
)
Tax benefit transfers
 
(26
)
 
(29
)
Long-lived intangible assets
 
(36
)
 
(31
)
Operating lease assets
 
(260
)
 

Total deferred tax liabilities
 
(515
)
 
(283
)
Total net deferred tax liabilities
 
$
(116
)
 
$
(131
)


Summary of Income Tax Contingencies
A reconciliation of unrecognized tax benefits is as follows:
($ in millions)
 
2019
 
2018
 
2017
Beginning balance
 
$
35

 
$
35

 
$
79

Additions for tax positions of prior years
 
2

 
3

 
4

Reductions for tax positions of prior years
 

 
(1
)
 
(45
)
Settlements and effective settlements with tax authorities
 
(1
)
 
(2
)
 
(3
)
Balance at end of year 
 
$
36

 
$
35

 
$
35



Unrecognized tax benefits included in our Consolidated Balance Sheets were as follows:
($ in millions)
 
2019
 
2018
Deferred taxes (noncurrent liability)
 
$
35

 
$
32

Accounts payable and accrued expenses (Note 8)
 

 
2

Other liabilities (Note 9)
 
1

 
1

Total
 
$
36

 
$
35