Income Taxes (Tables)

12 Months Ended

Jan. 28, 2023

Income Taxes [Abstract]

Domestic and International Pre-Tax Income

The domestic and international components of pre-tax income are as follows:

($ in millions)	2022		2021		2020
Domestic	$	440	$	1,244	$	647
International		84		(4)		(153)
Total pre-tax income	$	524	$	1,240	$	494

Income Tax Provision

The income tax provision consists of the following:

($ in millions)	2022		2021		2020
Current:
Federal	$	64	$	192	$	114
State and local		27		66		43
International		68		16		23
Total current tax provision		159		274		180
Deferred:
Federal		23		49		6
State and local		4		15		(2)
International		(6)		10		(13)
Total deferred tax provision		21		74		(9)
Total income tax provision	$	180	$	348	$	171

Reconciliation of Significant Differences between Federal Statutory Income Tax Rate and Effective Income Tax Rate on Pre-Tax Income from Continuing Operations

	2022		2021		2020
Federal statutory income tax rate	21.0	%	21.0	%	21.0	%
Increase in valuation allowance	2.6		0.7		6.3
State and local income taxes, net of federal tax benefit	5.0		5.4		6.6
International income taxed at varying rates	8.4		2.4		4.3
Foreign tax credits	(3.6)		(1.4)		(2.4)
Domestic/foreign tax settlements	(0.5)		(0.3)		(0.5)
Federal tax credits	(0.4)		(0.1)		(0.4)
Other, net	1.8		0.4		(0.4)
Effective income tax rate	34.3	%	28.1	%	34.5	%

Significant Portions of Deferred Tax Accounts

Items that give rise to significant portions of our deferred tax assets and liabilities are as follows:

	January 28,		January 29,
($ in millions)	2023		2022
Deferred tax assets:
Tax loss/credit carryforwards and capital loss	$	123	$	133
Employee benefits		42		38
Property and equipment		—		15
Operating leases - liabilities		725		720
Other		61		74
Total deferred tax assets	$	951	$	980
Valuation allowance		(93)		(80)
Total deferred tax assets, net	$	858	$	900
Deferred tax liabilities:
Merchandise inventories	$	87	$	68
Operating leases - assets		667		662
Goodwill and other intangible assets		123		155
Net investment gains		115		131
Property and equipment		6		—
Other		7		22
Total deferred tax liabilities	$	1,005	$	1,038
Net deferred tax liability	$	(147)	$	(138)
Balance Sheet caption reported in:
Deferred taxes	$	90	$	86
Other liabilities		(237)		(224)
	$	(147)	$	(138)

Unrecognized Tax Benefits Activity

($ in millions)	2022		2021		2020
Unrecognized tax benefits at beginning of year	$	41	$	47	$	45
Foreign currency translation adjustments		(1)		(2)		3
Increases related to current year tax positions		9		3		2
Increases related to prior period tax positions		7		2		3
Decreases related to prior period tax positions		—		(3)		—
Settlements		—		(1)		(1)
Lapse of statute of limitations		(4)		(5)		(5)
Unrecognized tax benefits at end of year	$	52	$	41	$	47