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INCOME TAXES
 12 Months Ended
Jan. 30, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The domestic and foreign components of income (loss) before income taxes were as follows:
(In millions)202120202019
Domestic$(120.3)$(1,248.7)$(441.2)
Foreign1,093.0 55.7 885.2 
Total$972.7 $(1,193.0)$444.0 
    
The (loss) before income taxes in 2020 was due to the significant adverse impacts of the COVID-19 pandemic on the Company’s business, including $1,027.7 million of noncash impairment charges.

Taxes paid were $155.4 million, $130.7 million and $133.0 million in 2021, 2020 and 2019, respectively.

The provision (benefit) for income taxes attributable to income (loss) consisted of the following:
(In millions)202120202019
Federal:   
   Current$(87.7)$(22.2)$(30.4)
   Deferred(51.4)(1)(103.5)(52.6)(4)
State and local:   
   Current19.6 3.1 4.3 
   Deferred(21.7)(19.0)(16.5)
Foreign:   
   Current153.7 108.3 127.9 
   Deferred8.2 (2)(22.2)(3)(3.8)(4)
Total$20.7 $(55.5)$28.9 

(1)     Includes a $106.3 million benefit related to a tax accounting method change made in conjunction with the Company’s 2020 U.S. federal income tax return that provides additional tax benefits to the foreign components of the federal income tax provision.

(2)     Includes a $32.3 million benefit related to the remeasurement of certain net deferred tax assets in connection with the expiration of the special tax rates at the end of 2021.
(3)     Includes a $33.1 million expense related to the remeasurement of certain net deferred tax liabilities in connection with the enactment of legislation in the Netherlands known as the “2021 Dutch Tax Plan,” which became effective on January 1, 2021.

(4)     Includes a $27.8 million benefit related to the write-off of deferred tax liabilities in connection with the pre-tax noncash impairment of the then-owned Speedo perpetual license right, primarily in the United States. Please see Note 3, “Acquisitions and Divestitures,” for further discussion.

The provision (benefit) for income taxes for the years 2021, 2020 and 2019 was different from the amount computed by applying the statutory United States federal income tax rate to the underlying income (loss) as follows:
 202120202019
Statutory federal income tax rate21.0 %21.0 %21.0 %
State and local income taxes, net of federal income tax benefit(0.1)%1.7 %(2.4)%
Effects of international jurisdictions, including foreign tax credits(8.0)%(2.2)%(15.7)%
Change in estimates for uncertain tax positions(9.7)%2.1 %(11.8)%
Change in valuation allowance0.7 %0.9 %1.8 %
Tax accounting method change(10.9)%— %— %
Tax on foreign earnings (U.S. Tax Legislation - GILTI and FDII)7.6 %(5.9)%10.0 %
Tax on Speedo transaction basis difference— %— %2.3 %
Goodwill impairment— %(13.3)%— %
Excess tax benefits related to stock-based compensation— %(0.4)%(0.2)%
Other, net1.5 %0.8 %1.5 %
Effective income tax rate2.1 %4.7 %6.5 %

The Company files income tax returns in more than 40 international jurisdictions each year. A substantial amount of the Company’s earnings are in international jurisdictions, particularly the Netherlands and Hong Kong SAR, where income tax rates, when coupled with special rates levied on income from certain of the Company’s jurisdictional activities, are lower than the United States statutory income tax rate. The Company benefited from these special rates until the end of 2021. The effects of international jurisdictions, including foreign tax credits, reflected in the above table for 2021, 2020 and 2019 included those taxes at statutory income tax rates and at special rates levied on income from certain jurisdictional activities.

The United States government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) on March 27, 2020, which included various income tax provisions aimed at providing economic relief. The Company had a slight favorable cash flow impact as a result of the deferral of income tax payments under the CARES Act in 2020. The Company also considered the significant adverse impact of the pandemic on its business in assessing the realizability of its deferred tax assets. Based on this assessment, the Company determined that no additional valuation allowances were needed against its deferred tax assets.

The United States Tax Cuts and Job Act of 2017 (the “U.S. Tax Legislation”) was enacted on December 22, 2017. The U.S. Tax Legislation significantly revised the United States tax code by, among other things, introducing a tax on foreign earnings in excess of a deemed return on tangible assets of foreign corporations (known as “GILTI”) for tax years beginning after December 31, 2017. The guidance indicated that companies must make a policy election to either record deferred taxes for basis differences expected to reverse as a result of the GILTI provisions in future years or treat any taxes on GILTI inclusions as period costs when incurred. The Company completed its analysis of the tax effects of the GILTI provisions in 2018 and elected to account for these tax effects as period costs when incurred.
The components of deferred income tax assets and liabilities were as follows:
(In millions)20212020
Gross deferred tax assets
   Tax loss and credit carryforwards$131.7 $314.3 
   Operating lease liabilities401.5 457.1 
   Employee compensation and benefits111.8 107.1 
   Inventories42.6 36.4 
   Accounts receivable24.2 16.3 
   Accrued expenses18.2 22.5 
   Derivative financial instruments— 17.6 
Property, plant and equipment208.4 (1)— 
   Other, net — 13.0 
      Subtotal938.4 984.3 
   Valuation allowances(69.3)(62.2)
Total gross deferred tax assets, net of valuation allowances$869.1 $922.1 
Gross deferred tax liabilities
   Intangibles$(828.8)$(867.8)
   Operating lease right-of-use assets(352.8)(399.2)
   Property, plant and equipment— (16.3)
   Derivative financial instruments(11.1)— 
   Other, net(4.2)— 
Total gross deferred tax liabilities$(1,196.9)$(1,283.3)
Net deferred tax liability$(327.8)$(361.2)

(1)    Includes a deferred tax asset related to a tax accounting method change made in conjunction with the Company’s 2020 U.S. federal income tax return.

At the end of 2021, the Company had on a tax-effected basis approximately $142.2 million of net operating loss and tax credit carryforwards available to offset future taxable income in various jurisdictions. This included net operating loss carryforwards of approximately $1.9 million and $43.2 million for federal and various state and local jurisdictions, respectively, and $24.4 million for various foreign jurisdictions. The Company also had federal and state tax credit and other carryforwards of $72.7 million. The carryforwards expire principally between 2022 and 2041.

Prior to the enactment of the U.S. Tax Legislation, the Company’s undistributed foreign earnings were considered permanently reinvested and, as such, United States federal and state income taxes were not previously recorded on these earnings. As a result of the U.S. Tax Legislation, substantially all of the Company’s earnings in foreign subsidiaries generated prior to the enactment of the U.S. Tax Legislation were deemed to have been repatriated. The Company’s intent is to reinvest indefinitely substantially all of its foreign earnings outside of the United States. However, if the Company decides at a later date to repatriate these earnings to the United States, the Company may be required to accrue and pay additional taxes, including any applicable foreign withholding tax and United States state income taxes. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation.
    
Uncertain tax positions activity for each of the last three years was as follows:
(In millions)202120202019
Balance at beginning of year$210.7 $219.9 $248.3 
Increases related to prior year tax positions2.6 5.4 7.7 
Decreases related to prior year tax positions(0.2)(2.9)(15.8)
Increases related to current year tax positions15.5 10.9 18.2 
Lapses in statute of limitations(93.3)(30.7)(36.0)
Effects of foreign currency translation(7.5)8.1 (2.5)
Balance at end of year$127.8 $210.7 $219.9 
    
The entire amount of uncertain tax positions as of January 30, 2022, if recognized, would reduce the future effective tax rate under current accounting guidance.

Interest and penalties related to uncertain tax positions are recorded in the Company’s income tax provision. Interest and penalties recognized in the Company’s Consolidated Statements of Operations for 2021, 2020 and 2019 totaled a benefit of $7.4 million, an expense of $2.3 million and a benefit of $15.0 million, respectively. Interest and penalties accrued in the Company’s Consolidated Balance Sheets as of January 30, 2022 and January 31, 2021 totaled $19.9 million and $28.3 million, respectively. The Company recorded its liabilities for uncertain tax positions principally in accrued expenses and other liabilities in its Consolidated Balance Sheets.

The Company files income tax returns in the United States and in various foreign, state and local jurisdictions. Most examinations have been completed by tax authorities or the statute of limitations has expired for United States federal, foreign, state and local income tax returns filed by the Company for years through 2006. It is reasonably possible that a reduction of uncertain tax positions in a range of $8.0 million to $10.0 million may occur within 12 months of January 30, 2022.