Macy's 2015 Annual Report Download - page 75

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F-26
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred
tax liabilities are as follows:
January 30,
2016
January 31,
2015
(millions)
Deferred tax assets
Post employment and postretirement benefits ......................................................... $ 536 $ 586
Accrued liabilities accounted for on a cash basis for tax purposes.......................... 340 305
Long-term debt......................................................................................................... 73 83
Unrecognized state tax benefits and accrued interest............................................... 79 76
State operating loss and credit carryforwards .......................................................... 82 80
Other......................................................................................................................... 206 175
Valuation allowance................................................................................................. (27)(24)
Total deferred tax assets.................................................................................... 1,289 1,281
Deferred tax liabilities
Excess of book basis over tax basis of property and equipment.............................. (1,485)(1,510)
Merchandise inventories .......................................................................................... (606)(585)
Intangible assets ....................................................................................................... (345)(294)
Other......................................................................................................................... (330)(335)
Total deferred tax liabilities .............................................................................. (2,766)(2,724)
Net deferred tax liability ................................................................................... $ (1,477) $ (1,443)
The valuation allowance at January 30, 2016 and January 31, 2015 relates to net deferred tax assets for state net
operating loss and credit carryforwards. The net change in the valuation allowance amounted to an increase of $3 million
for 2015 and an increase of $1 million for 2014.
As of January 30, 2016, the Company had no federal net operating loss carryforwards, state net operating loss
carryforwards of $615 million, and state credit carryforwards of $30 million, which will expire between 2016 and 2035.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
January 30,
2016
January 31,
2015
February 1,
2014
(millions)
Balance, beginning of year ...................................................................... $ 172 $ 189 $ 170
Additions based on tax positions related to the current year ................... 30 33 37
Additions for tax positions of prior years ................................................ — — —
Reductions for tax positions of prior years.............................................. (7)(15)(1)
Settlements............................................................................................... (3)(23)(1)
Statute expirations.................................................................................... (14)(12)(16)
Balance, end of year................................................................................. $ 178 $ 172 $ 189
Amounts recognized in the Consolidated Balance Sheets at
January 30, 2016, January 31, 2015 and February 1, 2014
Current income taxes ........................................................................ $ 12 $ 11 $ 31
Long-term deferred income taxes..................................................... 5 6 11
Other liabilities ................................................................................. 161 155 147
$ 178 $ 172 $ 189