

	Three Months Ended				Six Months Ended
	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Mexico Exit and Strategic Realignment⁽¹⁾	$	4	$	-	$	(44)	$	-
Fiscal 2020 U.S. Retail Operating Model Changes		-		-		-		1
Total	$	4	$	-	$	(44)	$	1

(1)Includes ($6) million related to inventory markdowns recorded in Cost of sales on our Condensed Consolidated Statements of Earnings for the six months ended July 31, 2021.

In March 2020 the World Health Organization declared the outbreak of novel coronavirus disease (“COVID-19”) as a pandemic. The COVID-19 pandemic has had significant impacts on, for example, the economic conditions of the markets in which we operate, customer shopping behaviors, the role of technology in peoples’ lives and the way we meet their needs. In light of these changes, we are adapting our Building the New Blue Strategy to ensure that our focus and resources are closely aligned with the opportunities we see in front of us. As a result, in the third quarter of fiscal 2021, we made the decision to exit our operations in Mexico and began taking other actions to more broadly align our organizational structure in support of our strategy.

Charges incurred in our International segment primarily related to our decision to exit our operations in Mexico. All remaining stores in Mexico were closed in the first quarter of fiscal 2022 and we do not expect to incur material future restructuring charges related to the exit.

Charges incurred in our Domestic segment primarily related to actions taken to align our organizational structure in support of our strategy. During the six months ended July 31, 2021, we recorded a $44 million credit primarily due to a reduction in expected termination benefits resulting from adjustments to previously planned organizational changes and higher-than-expected employee retention.

As we continue to evolve our Building the New Blue Strategy, it is possible that we will incur material future restructuring costs, but we are unable to forecast the timing and magnitude of such costs.

All charges incurred related to the exit from Mexico and strategic realignment described above were from continuing operations and were presented as follows ($ in millions):



	Statement of	Three Months Ended July 31, 2021						Six Months Ended July 31, 2021
	Earnings Location	Domestic		International		Total		Domestic		International		Total
Inventory markdowns	Cost of sales	$	-	$	-	$	-	$	-	$	(6)	$	(6)
Asset impairments	Restructuring charges		-		4		4		-		7		7
Termination benefits	Restructuring charges		-		-		-		(44)		(1)		(45)
		$	-	$	4	$	4	$	(44)	$	-	$	(44)



	Statement of	Cumulative Amount as of July 31, 2021
	Earnings Location	Domestic		International		Total
Inventory markdowns	Cost of sales	$	-	$	17	$	17
Asset impairments⁽¹⁾	Restructuring charges		10		64		74
Termination benefits	Restructuring charges		79		19		98
Currency translation adjustment	Restructuring charges		-		39		39
Other⁽²⁾	Restructuring charges		-		5		5
		$	89	$	144	$	233

(1)Remaining net carrying value approximates fair value and was immaterial as of July 31, 2021.

Restructuring accrual activity related to the exit from Mexico and strategic realignment described above was as follows ($ in millions):


	Termination Benefits
	Domestic		International		Total
Balances at January 30, 2021	$	104	$	20	$	124
Cash payments		(48)		(15)		(63)
Adjustments⁽¹⁾		(44)		(1)		(45)
Changes in foreign currency exchange rates		-		(1)		(1)
Balances at July 31, 2021	$	12	$	3	$	15

(1)Represents adjustments to previously planned organizational changes in our Domestic segment and higher-than-expected employee retention in both our Domestic and International segments.