Taxes on Earnings (Tables)

12 Months Ended

Feb. 01, 2020

The provision for income taxes consisted of the following:


($000)	2019		2018		2017
Current
Federal	$	414,823	$	357,170	$	660,017
State	56,528		74,472		52,853
	471,351		431,642		712,870
Deferred
Federal	28,244		33,913		(40,468)
State	3,765		(2,136)		5,565
	32,009		31,777		(34,903)
Total	$	503,360	$	463,419	$	677,967

Provision for Taxes Effective Rate

The provision for taxes for financial reporting purposes is different from the tax provision computed by applying the statutory federal income tax rate. The differences are reconciled below:


	2019		2018		2017
Federal income taxes at the statutory rate	21	%	21	%	34	%
State income taxes (net of federal benefit) and other, net	2		3		2
Tax audit settlements	—		(1)		—
Impact of the Tax Act on deferred taxes	—		—		(3)
Total	23	%	23	%	33	%

Components of Deferred Income Taxes

The components of deferred taxes at February 1, 2020 and February 2, 2019 are as follows:


($000)	2019			2018
Deferred Tax Assets
Accrued liabilities	$	35,242		$	38,367
Deferred compensation	33,108			30,886
Stock-based compensation	35,290			36,118
Deferred rent	—			19,824
State taxes and credits	20,178			20,310
Employee benefits	18,425			18,845
Operating lease liabilities	797,467		¹	—
Other	3,353			1,412
Gross Deferred Tax Assets	943,063			165,762
Less: Valuation allowance	(4,590)			(4,639)
Deferred Tax Assets	938,473			161,123

Deferred Tax Liabilities
Depreciation	(273,255)			(238,631)
Merchandise inventory	(26,376)			(25,686)
Supplies	(10,972)			(10,308)
Operating lease assets	(766,874)		¹	—
Other	(10,675)			(10,806)
Deferred Tax Liabilities	(1,088,152)			(285,431)
Net Deferred Tax Liabilities	$	(149,679)		$	(124,308)

¹Fiscal 2019 reflects the impact of adoption of ASU 2016-02, Leases (ASC 842) on a modified retrospective basis; fiscal 2018 was not restated.

Unrecognized Tax Benefits

The changes in amounts of unrecognized tax benefits (gross of federal tax benefits and excluding interest and penalties) at fiscal 2019, 2018, and 2017 are as follows:


($000)	2019		2018		2017
Unrecognized tax benefits - beginning of year	$	65,787	$	98,666	$	81,122
Gross increases:
Tax positions in current period	13,864		14,722		26,837
Tax positions in prior period	2,672		1,843		—
Gross decreases:
Tax positions in prior periods	(9,559)		(40,600)		(2,755)
Lapse of statutes of limitations	(8,653)		(8,584)		(6,068)
Settlements	(4,224)		(260)		(470)
Unrecognized tax benefits - end of year	$	59,887	$	65,787	$	98,666