Required 1 Required 2 Required 3 Net income Target's Note 18 indicates that We recognized a...

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Required 1 Required 2 Required 3 Net income Target's Note 18 indicates that "We recognized a net tax benefit of $36 million and $372 million in 2018 and 2017, respectively, primarily because we remeasured our net deferred tax liabilities using the new lower U.S. corporate tax rate." What was the effect of the tax rate change on 2018 net income? Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Required 4 by million < Required 2 Required 4 Show less A 18. Income Taxes Earnings from continuing operations before income taxes were $4,190 million, $3,676 million, and $3,630 million during 2019, 2018, and 2017, respectively, including $653 million, $565 million, and $566 million earned by our foreign entities subject to tax outside of the U.S. During 2019, we reached an agreement with the IRS on certain tax positions related to our global sourcing operations, and as a result, we reclassified $169 million and $156 million of previously disclosed 2018 and 2017 eamings, respectively, from foreign to domestic to conform to the current period classification. Tax Rate Reconciliation - Continuing Operations Federal statutory rate State income taxes, net of the federal tax benefit International Tax Act Excess tax benefit related to share-based payments deral tax credits Other Effective tax rate (a) Provision for Income Taxes (millions) Current: Federal State International Total current Deferred: Federal State 2019 21.0% 3.7 (1.4) Represents the discrete benefit of remeasuring our net deferred tax liabilities at the new lower U.S. corporate income tax rate. International Total deferred Total provision - (0.4) (0.8) (0.1) 22.0% 2019 536 $ 169 38 743 150 29 (1) 2018 21.0% 3.6 (1.3) (1.0) (0.3) (1.1) (0.6) 20.3% 178 921 S 2018 257 $ 116 51 424 263 57 2 2017 33.7% 2.2 (4.6) (9.5) (0.1) (0.8) (1.0) 19.9 % 322 746 $ 2017 746 105 59 910 (229) 27 14 (188) 722 In December 2017, the U.S. government enacted the Tax Cuts and Jobs Act tax reform legislation (the Tax Act), which among other matters reduced the U.S. corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. In 2017, we recorded a provisional $343 million net tax benefit primarily related to the remeasurement of certain deferred tax assets and liabilities, including $372 million of benefit from the new lower rate, partially offset by $29 million of deferred income tax expense from our foreign operations. During 2018, we completed our Tax Act accounting and recorded adjustments to previously-recorded provisional amounts, resulting in a $36 million tax benefit primarily related to the remeasurement of deferred tax assets and liabilities. Beginning with 2018, we are subject to a new tax on global intangible low-taxed income that is imposed on foreign earnings. We have made an accounting election to record this tax as a period cost and thus have not adjusted any Net Deferred Tax Asset/(Liability) (millions) Gross deferred tax assets: Accrued and deferred compensation Accruals and reserves not currently deductible Self-insured benefits Deferred occupancy income Lease liabilities Other Total gross deferred tax assets Gross deferred tax liabilities: Property and equipment Leased assets Inventory Other FINANCIAL STATEMENTS Total gross deferred tax liabilities Total net deferred tax liability NOTES $ $ Reconciliation of Liability for Unrecognized Tax Benefits (millions) Balance at beginning of period Additions based on tax positions related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years Settlements Balance at end of period February 1, 2020 264 S 169 124 148 1,000 58 1,763 2019 300 $ 28 13 (69) (112) (1,767) (880) (156) (74) (2,877) (1,114) S 160 S Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates in effect for the year the temporary differences are expected to be recovered or settled. Tax rate changes affecting deferred tax assets and liabilities are recognized at the enactment date. We recognized a net tax benefit of $36 million and $372 million in 2018 and 2017, respectively, primarily because we remeasured our net deferred tax liabilities using the new lower U.S. corporate tax rate. Table of Contacts Beginning in 2017, due to changes effected by the Tax Act and other reasons, we have not asserted indefinite reinvestment in our foreign operations. Because of this change, we recorded a deferred tax charge of $29 million during 2017. February 2, 2019 We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. The U.S. Internal Revenue Service (IRS) has completed exams on the U.S. federal income tax returns for years 2017 and prior. With few exceptions, we are no longer subject to state and local or non-U.S. income tax examinations by tax authorities for years before 2013. 2018 248 181 114 157 823 40 1,563 325 $ 58 10 (91) (2) 300 $ (1,557) (731) (140) (95) (2,523) (960) 2017 153 112 142 (71) (11) 325 global sourcing operations we Required 1 Required 2 Required 3 Net income Target's Note 18 indicates that "We recognized a net tax benefit of $36 million and $372 million in 2018 and 2017, respectively, primarily because we remeasured our net deferred tax liabilities using the new lower U.S. corporate tax rate." What was the effect of the tax rate change on 2018 net income? Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Required 4 by million < Required 2 Required 4 Show less A 18. Income Taxes Earnings from continuing operations before income taxes were $4,190 million, $3,676 million, and $3,630 million during 2019, 2018, and 2017, respectively, including $653 million, $565 million, and $566 million earned by our foreign entities subject to tax outside of the U.S. During 2019, we reached an agreement with the IRS on certain tax positions related to our global sourcing operations, and as a result, we reclassified $169 million and $156 million of previously disclosed 2018 and 2017 eamings, respectively, from foreign to domestic to conform to the current period classification. Tax Rate Reconciliation - Continuing Operations Federal statutory rate State income taxes, net of the federal tax benefit International Tax Act Excess tax benefit related to share-based payments deral tax credits Other Effective tax rate (a) Provision for Income Taxes (millions) Current: Federal State International Total current Deferred: Federal State 2019 21.0% 3.7 (1.4) Represents the discrete benefit of remeasuring our net deferred tax liabilities at the new lower U.S. corporate income tax rate. International Total deferred Total provision - (0.4) (0.8) (0.1) 22.0% 2019 536 $ 169 38 743 150 29 (1) 2018 21.0% 3.6 (1.3) (1.0) (0.3) (1.1) (0.6) 20.3% 178 921 S 2018 257 $ 116 51 424 263 57 2 2017 33.7% 2.2 (4.6) (9.5) (0.1) (0.8) (1.0) 19.9 % 322 746 $ 2017 746 105 59 910 (229) 27 14 (188) 722 In December 2017, the U.S. government enacted the Tax Cuts and Jobs Act tax reform legislation (the Tax Act), which among other matters reduced the U.S. corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. In 2017, we recorded a provisional $343 million net tax benefit primarily related to the remeasurement of certain deferred tax assets and liabilities, including $372 million of benefit from the new lower rate, partially offset by $29 million of deferred income tax expense from our foreign operations. During 2018, we completed our Tax Act accounting and recorded adjustments to previously-recorded provisional amounts, resulting in a $36 million tax benefit primarily related to the remeasurement of deferred tax assets and liabilities. Beginning with 2018, we are subject to a new tax on global intangible low-taxed income that is imposed on foreign earnings. We have made an accounting election to record this tax as a period cost and thus have not adjusted any Net Deferred Tax Asset/(Liability) (millions) Gross deferred tax assets: Accrued and deferred compensation Accruals and reserves not currently deductible Self-insured benefits Deferred occupancy income Lease liabilities Other Total gross deferred tax assets Gross deferred tax liabilities: Property and equipment Leased assets Inventory Other FINANCIAL STATEMENTS Total gross deferred tax liabilities Total net deferred tax liability NOTES $ $ Reconciliation of Liability for Unrecognized Tax Benefits (millions) Balance at beginning of period Additions based on tax positions related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years Settlements Balance at end of period February 1, 2020 264 S 169 124 148 1,000 58 1,763 2019 300 $ 28 13 (69) (112) (1,767) (880) (156) (74) (2,877) (1,114) S 160 S Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates in effect for the year the temporary differences are expected to be recovered or settled. Tax rate changes affecting deferred tax assets and liabilities are recognized at the enactment date. We recognized a net tax benefit of $36 million and $372 million in 2018 and 2017, respectively, primarily because we remeasured our net deferred tax liabilities using the new lower U.S. corporate tax rate. Table of Contacts Beginning in 2017, due to changes effected by the Tax Act and other reasons, we have not asserted indefinite reinvestment in our foreign operations. Because of this change, we recorded a deferred tax charge of $29 million during 2017. February 2, 2019 We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. The U.S. Internal Revenue Service (IRS) has completed exams on the U.S. federal income tax returns for years 2017 and prior. With few exceptions, we are no longer subject to state and local or non-U.S. income tax examinations by tax authorities for years before 2013. 2018 248 181 114 157 823 40 1,563 325 $ 58 10 (91) (2) 300 $ (1,557) (731) (140) (95) (2,523) (960) 2017 153 112 142 (71) (11) 325 global sourcing operations we

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Required 1 Effect of Tax Rate Change on 2018 Net Income Targets Note 18 states that the company recognized a net tax benefit of 36 million in 2018 due ... View the full answer