Income Taxes

6 Months Ended

Jul. 30, 2022

Income Taxes

Income Taxes

NOTE 12—INCOME TAXES

We recorded income tax expense of $56 million and $3.0 million in the three months ended July 30, 2022 and July 31, 2021, respectively. We recorded an income tax benefit of $107 million and income tax expense of $45 million in the six months ended July 30, 2022 and July 31, 2021, respectively. The effective tax rate was 31.6% and 1.3% in the three months ended July 30, 2022 and July 31, 2021, respectively. The effective tax rate was (49.6)% and 11.1% in the six months ended July 30, 2022 and July 31, 2021, respectively. The increase in our effective tax rate for the three months ended July 30, 2022 as compared to the three months ended July 31, 2021 is primarily attributable to significantly lower net excess tax benefits from stock-based compensation and amounts related to the extinguishment of debt in the three months ended July 30, 2022. The decrease in our effective tax rate for the six months ended July 30, 2022 as compared to the six months ended July 31, 2021 is primarily attributable to significantly higher net excess tax benefits from stock-based compensation in the six months ended July 30, 2022.

As of July 30, 2022, we had $8.6 million of unrecognized tax benefits, of which $7.9 million would reduce income tax expense and the effective tax rate, if recognized. The remaining unrecognized tax benefits would offset other deferred tax assets, if recognized. As of July 30, 2022, we had $5.9 million of exposures related to unrecognized tax benefits that are expected to decrease in the next 12 months.