Income Taxes (Tables)

12 Months Ended

Feb. 02, 2013

Domestic and International Pre-Tax Income from Continuing Operations

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

	2012		2011		2010
	(in millions)
Domestic	$	508	$	321	$	158
International		99		114		99
Total pre-tax income	$	607	$	435	$	257

Income Tax Provision

The income tax provision consists of the following:

	2012		2011		2010
	(in millions)
Current:
Federal	$	152	$	93	$	(28	)
State and local		22		11		4
International		16		24		28
Total current tax provision		190		128		4
Deferred:
Federal		13		16		79
State and local		5		6		4
International		2		7		1
Total deferred tax provision		20		29		84
Total income tax provision	$	210	$	157	$	88

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 is as follows:

	2012			2011			2010
Federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State and local income taxes, net of federal tax benefit		3.2			3.1			2.3
International income taxed at varying rates		(0.4	)		(0.3	)		1.0
Foreign tax credits		(1.8	)		(1.3	)		(2.0	)
Decrease in valuation allowance		—			—			(0.4	)
Domestic/foreign tax settlements		(2.2	)		0.3			(2.3	)
Federal tax credits		(0.2	)		(0.6	)		(0.7	)
Other, net		1.0			(0.2	)		1.4
Effective income tax rate		34.6	%		36.0	%		34.3	%

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:

	2012			2011
	(in millions)
Deferred tax assets:
Tax loss/credit carryforwards and capital loss	$	13		$	18
Employee benefits		63			77
Property and equipment		160			166
Straight-line rent		28			27
Goodwill and other intangible assets		20			21
Other		36			32
Total deferred tax assets		320			341
Valuation allowance		(4	)		(5	)
Total deferred tax assets, net		316			336
Deferred tax liabilities:
Merchandise inventories		76			71
Other		15			8
Total deferred tax liabilities		91			79
Net deferred tax asset	$	225		$	257
Balance Sheet caption reported in:
Deferred taxes	$	257		$	284
Other current assets		4			2
Accrued and other current liabilities		(31	)		(24	)
Other liabilities		(5	)		(5	)
	$	225		$	257

Unrecognized Tax Benefits Activity

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

	2012			2011			2010
	(in millions)
Unrecognized tax benefits at beginning of year	$	65		$	62		$	70
Foreign currency translation adjustments		1			(1	)		3
Increases related to current year tax positions		4			7			4
Increases related to prior period tax positions		3			1			3
Decreases related to prior period tax positions		(3	)		—			(7	)
Settlements		(15	)		(3	)		(9	)
Lapse of statute of limitations		(1	)		(1	)		(2	)
Unrecognized tax benefits at end of year	$	54		$	65		$	62