Income Taxes (Tables)

12 Months Ended

Jan. 28, 2012

Domestic and International Pre-Tax Income from Continuing Operations

Following are the domestic and international components of pre-tax income from continuing operations:

	2011		2010		2009
	(in millions)
Domestic	$	321	$	158	$	(23	)
International		114		99		96
Total pre-tax income	$	435	$	257	$	73

Income Tax Provision

The income tax provision consists of the following:

	2011		2010			2009
	(in millions)
Current:
Federal	$	93	$	(28	)	$	(6	)
State and local		11		4			—
International		24		28			30
Total current tax provision		128		4			24
Deferred:
Federal		16		79			(3	)
State and local		6		4			—
International		7		1			5
Total deferred tax provision		29		84			2
Total income tax provision	$	157	$	88		$	26

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

A reconciliation of the significant differences between the federal statutory income tax rate and the effective income tax rate on pre-tax income from continuing operations is as follows:

	2011			2010			2009
Federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State and local income taxes, net of federal tax benefit		3.1			2.3			0.2
International income taxed at varying rates		(0.3	)		1.0			1.3
Foreign tax credits		(1.3	)		(2.0	)		(7.4	)
Decrease in valuation allowance		—			(0.4	)		—
Domestic/foreign tax settlements		0.3			(2.3	)		(2.8	)
Federal tax credits		(0.6	)		(0.7	)		(2.0	)
Canadian tax rate changes		—			—			6.0
Other, net		(0.2	)		1.4			5.7
Effective income tax rate		36.0	%		34.3	%		36.0	%

Significant Portions of Deferred Tax Accounts

Items that give rise to significant portions of the Company’s deferred tax assets and deferred tax liabilities are as follows:

	2011			2010
	(in millions)
Deferred tax assets:
Tax loss/credit carryforwards and capital loss	$	18		$	31
Employee benefits		77			67
Property and equipment		166			173
Straight-line rent		27			27
Goodwill and other intangible assets		21			23
Other		32			32
Total deferred tax assets		341			353
Valuation allowance		(5	)		(6	)
Total deferred tax assets, net		336			347
Deferred tax liabilities:
Inventories		71			63
Other		8			6
Total deferred tax liabilities		79			69
Net deferred tax asset	$	257		$	278
Balance Sheet caption reported in:
Deferred taxes	$	284		$	296
Other current assets		2			2
Accrued and other current liabilities		(24	)		(20	)
Other liabilities		(5	)		—
	$	257		$	278

Unrecognized Tax Benefits Activity

The following table summarizes the activity related to unrecognized tax benefits:

	2011			2010			2009
	(in millions)
Unrecognized tax benefits at beginning of year	$	62		$	70		$	58
Foreign currency translation adjustments		(1	)		3			6
Increases related to current year tax positions		7			4			4
Increases related to prior period tax positions		1			3			4
Decreases related to prior period tax positions		—			(7	)		(2	)
Settlements		(3	)		(9	)		—
Lapse of statute of limitations		(1	)		(2	)		—
Unrecognized tax benefits at end of year	$	65		$	62		$	70