Macy's, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Taxes (Tables)

Taxes (Tables)

12 Months Ended

Feb. 02, 2019

Schedule of Income Tax Expense (Benefit)

Income tax expense (benefit) is as follows:



	2018						2017								2016
	Current		Deferred		Total		Current		Deferred			Total			Current		Deferred			Total
	(millions)
Federal	$	156	$	79	$	235	$	367	$	(462	)	$	(95	)	$	433	$	(121	)	$	312
State and local	53		34		87		16		40			56			37		(3		)	34
	$	209	$	113	$	322	$	383	$	(422	)	$	(39	)	$	470	$	(124	)	$	346

Schedule of Effective Income Tax Reconciliation

The reasons for this difference and their tax effects are as follows:



	2018			2017			2016
	(millions)
Expected tax	$	300		$	515		$	341
State and local income taxes, net of federal income tax benefit (a)	59			19			12
Federal tax reform deferred tax remeasurement	(17		)	(584		)	—
Tax impact of equity awards (a)	—			14			—
Federal tax credits	(16		)	(16		)	(12		)
Change in valuation allowance	10			18			9
Other	(14		)	(5		)	(4		)
	$	322		$	(39	)	$	346

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:



	February 2, 2019			February 3, 2018
	(millions)
Deferred tax assets
Post employment and postretirement benefits	$	208		$	188
Accrued liabilities accounted for on a cash basis for tax purposes	222			218
Long-term debt	18			25
Unrecognized state tax benefits and accrued interest	39			39
State operating loss and credit carryforwards	103			101
Other	154			158
Valuation allowance	(75		)	(65		)
Total deferred tax assets	669			664
Deferred tax liabilities
Excess of book basis over tax basis of property and equipment	(987		)	(923		)
Merchandise inventories	(398		)	(389		)
Intangible assets	(308		)	(276		)
Other	(214		)	(224		)
Total deferred tax liabilities	(1,907		)	(1,812		)
Net deferred tax liability	$	(1,238	)	$	(1,148	)

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	February 2, 2019			February 3, 2018			January 28, 2017
	(millions)
Balance, beginning of year	$	140		$	167		$	178
Additions based on tax positions related to the current year	17			7			16
Additions for tax positions of prior years	13			—			—
Reductions for tax positions of prior years	(12		)	(23		)	(12		)
Settlements	—			(2		)	(4		)
Statute expirations	(9		)	(9		)	(11		)
Balance, end of year	$	149		$	140		$	167
Amounts recognized in the Consolidated Balance Sheets
Current income taxes	$	28		$	11		$	6
Deferred income taxes	4			4			4
Other liabilities (a)	117			125			157
	$	149		$	140		$	167

(a) Unrecognized tax benefits not expected to be settled within one year are included within other liabilities on the Consolidated Balance Sheets.

Summary of Income Tax Contingencies

Additional information regarding unrecognized benefits and related interest and penalties is as follow:



	February 2, 2019		February 3, 2018
	(millions)
Amount of unrecognized tax benefits, net of deferred tax assets, that if recognized would affect the effective tax rate	$	120	$	111
Accrued federal, state and local interest and penalties	56		51
Amounts recognized in the Consolidated Balance Sheets
Current income taxes	28		27
Other liabilities	28		24