INCOME TAXES (Tables)

12 Months Ended

Feb. 03, 2019

INCOME TAXES

Components of Income from Continuing Operations before Provision for Income Taxes

The components of Income from Continuing Operations before Provision for Income Taxes are as follows (amounts in millions):

	Fiscal Year Ended
	February 3,		January 28,		January 29,
	2019		2018		2017
United States	$	516	$	352	$	112
Foreign		10		8		5
Total	$	526	$	360	$	117

Provision for Income Taxes

The Provision for Income Taxes consisted of the following (amounts in millions):

	Fiscal Year Ended
	February 3,		January 28,		January 29,
	2019		2018		2017
Current:
Federal	$	—	$	5	$	(1)
State		8		3		1
Foreign		3		2		5
		11		10		5
Deferred:
Federal		108		186		41
State		16		(3)		5
		124		183		46
Total	$	135	$	193	$	51

Reconciliation of the provision (benefit) for income taxes from continuing operations at the federal statutory rate of 35% to the actual tax provision (benefit)

The reconciliation of the provision for income taxes from continuing operations at the federal statutory rate of 21% to the actual tax provision for fiscal 2018, the federal statutory rate of 33.9% to the actual tax provision for fiscal 2017, and the federal statutory rate of 35% to the actual tax provision for fiscal 2016 is as follows (amounts in millions):

	Fiscal year Ended
	February 3,		January 28,			January 29,
	2019		2018		2017
Income taxes at federal statutory rate	$	110	$	122	$	41
State income taxes, net of federal income tax benefit		24		13		5
Foreign rate differential		—		(1)		(1)
Legal entity restructuring		—		—		1
Valuation allowance		—		1		(1)
Adjustments to tax reserves		—		(1)		2
Tax Cuts and Jobs Act of 2017		—		72		—
Excess tax benefits related to stock-based compensation(1)		(2)		(16)		—
Global Intangible Low-Tax Income		2		—		—
Other, net		1		3		4
Total provision (benefit)	$	135	$	193	$	51

(1) The adoption of ASU 2016-09 in fiscal 2017 requires excess tax benefits from share-based awards activity to be reflected as a reduction of the provision for income taxes, whereas they were previously recognized in Stockholders’ Equity.

Significant portions of the deferred tax assets and deferred tax liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of February 3, 2019 and January 28, 2018 were as follows (amounts in millions):

	February 3,		January 28,
	2019		2018
Deferred Tax Assets:
Accrued compensation	$	12	$	10
Accrued self-insurance liabilities		9		9
Other accrued liabilities		13		14
Restructuring liabilities		7		6
Net operating loss carryforward		99		239
Fixed assets		1		2
Allowance for doubtful accounts		4		3
Inventory		26		22
Tax credit carryforward		40		38
Cash flow hedge		5		—
Other		—		3
Valuation allowance		(7)		(7)
Noncurrent deferred tax assets		209		339
Deferred Tax Liabilities:
Prepaid expense	$	—	$	(1)
Deferred financing costs		(2)		(23)
Software costs		(11)		(5)
Intangible assets		(118)		(95)
Income from discharge of indebtedness		—		(10)
Noncurrent deferred tax liabilities		(131)		(134)
Deferred tax assets, net	$	78	$	205

Reconciliation of the beginning and ending amount of unrecognized tax benefits for continuing operations

A reconciliation of the beginning and ending amount of unrecognized tax benefits for continuing operations for fiscal 2018, fiscal 2017, and fiscal 2016 is as follows (amounts in millions):

	Fiscal Year Ended
	February 3,		January 28,		January 29,
	2019		2018		2017
Unrecognized Tax Benefits beginning of period	$	16	$	10	$	9
Gross increases for tax positions in current period		1		6		—
Gross increases for tax positions in prior period		—		—		1
Unrecognized Tax Benefits end of period	$	17	$	16	$	10