v3.22.0.1
Income Taxes
 12 Months Ended
Jan. 29, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following table presents the (benefit) provision for income taxes from continuing operations:
Fiscal Year
202120202019
Current tax (benefit) expense:
Federal$(13.2)$(154.9)$(25.3)
State7.6 (1.5)1.5 
Foreign7.8 18.8 (0.1)
2.2 (137.6)(23.9)
Deferred tax (benefit) expense:
Federal— 45.5 12.6 
State— 7.6 3.2 
Foreign(16.3)29.2 45.7 
(16.3)82.3 61.5 
Total income tax (benefit) expense$(14.1)$(55.3)$37.6 
The following table presents the components of loss from continuing operations before income taxes:
Fiscal Year
202120202019
United States$(362.7)$(224.6)$(352.8)
International(32.7)(45.3)(74.0)
Total$(395.4)$(269.9)$(426.8)
The following is a reconciliation of income tax expense (benefit) from continuing operations computed at the U.S. Federal statutory tax rate to income tax (benefit) expense reported in our Consolidated Statements of Operations:
Fiscal Year
202120202019
Federal statutory tax rate21.0 %21.0 %21.0 %
State income taxes, net of federal effect3.1 5.0 (1.0)
Foreign income tax rate differential0.4 (3.9)(0.5)
Change in valuation allowance(33.6)(41.8)(17.9)
Change in unrecognized tax benefits(1.4)— 3.4 
Foreign tax credit— — 0.2 
Withholding tax expense(0.3)(0.3)(0.2)
Stock-based compensation6.4 — — 
Impairment of goodwill— — (15.4)
Nondeductible interest— — (0.1)
U.S. impact of foreign operations— 7.6 — 
Incremental benefit of net operating loss carryback3.6 23.5 — 
Loss on worthless debt and related investment5.5 10.7 — 
Simply Mac loss on sale— — 1.6 
Other (including permanent differences)(1)
(1.1)(1.3)0.1 
3.6 %20.5 %(8.8)%
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(1) Other is comprised of numerous items, none of which is individually or in the aggregate greater than 5% of income tax expense calculated at the statutory rate.
Differences between financial accounting principles and tax laws cause differences between the bases of certain assets and liabilities for financial reporting purposes and tax purposes. The tax effects of these differences, to the extent they are temporary, are recorded as deferred tax assets and liabilities which are presented in the table below.
January 29, 2022January 30, 2021
Deferred tax asset:
Inventory$8.6 $1.5 
Deferred rents0.9 2.1 
Operating lease liabilities180.0 212.3 
Stock-based compensation4.7 1.5 
Net operating losses and other loss carryforwards219.8 111.8 
Customer liabilities15.1 18.1 
Credits25.1 27.6 
Accrued compensation9.3 12.9 
Intangible assets25.5 29.8 
Goodwill0.9 1.2 
Other48.1 24.5 
Total deferred tax assets538.0 443.3 
Valuation allowance(338.3)(225.7)
Total deferred tax assets, net199.7 217.6 
Deferred tax liabilities:
Property and equipment(5.4)(7.9)
Prepaid expenses(0.9)(2.0)
Operating lease right-of-use assets(177.1)(207.4)
Other— (0.3)
Total deferred tax liabilities(183.4)(217.6)
Net deferred tax assets$16.3 $— 
The above amounts are reflected in the consolidated financial statements as:
Deferred income taxes - assets$16.3 $— 
Deferred income taxes - liabilities$— $— 

During fiscal 2021, we increased our valuation allowances by approximately $128.9 million in various jurisdictions where it was determined that it was more likely than not that existing gross and/or net deferred tax assets would not be realized, primarily due to cumulative losses in those jurisdictions. We also decreased our valuation allowances by approximately $16.3 million in Australia and New Zealand where it was determined in the current period that it is more likely than not that deferred tax assets will be realized. As of January 29, 2022, we maintain full valuation allowances on our deferred tax assets in all jurisdictions except for Australia and New Zealand. We will continue to assess the realizability of our gross and net deferred tax assets in all tax jurisdictions in which we do business in future periods.
With respect to state and local jurisdictions and countries outside of the United States, we and our subsidiaries are typically subject to examination for three years to six years after the income tax returns have been filed. Although the outcome of tax audits is always uncertain, we believe that adequate amounts of tax, interest and penalties have been provided for in the accompanying consolidated financial statements for any adjustments that might be incurred due to state, local or foreign audits.

As of January 29, 2022, we have approximately $8.0 million of net operating loss carryforwards in various foreign jurisdictions that expire in years 2027 through 2042, as well as $363.1 million of foreign net operating loss carryforwards that have no expiration date. In addition, we have approximately $22.2 million of foreign tax credit carryforwards that expire in years 2024 through 2027. We also have approximately $56.1 million of U.S. federal net operating loss carryovers acquired through the ThinkGeek acquisition that will expire in years 2023 through 2035. Section 382 under the Internal Revenue Code imposes limits on the amount of tax attributes that can be utilized where there has been an ownership change. The federal and state net operating loss carryovers acquired through the ThinkGeek acquisition experienced an ownership change on July 17, 2015, and we have determined that these net operating loss carryforwards will be subject to future limitation. As of January 29, 2022 we have a $168.6 million U.S. federal income tax receivable resulting from the carryback of net operating losses allowed pursuant to the CARES Act. Income tax receivable is recognized in prepaid expenses and other current assets on our Consolidated Balance Sheets.
As of January 29, 2022, the gross amount of unrecognized tax benefits was approximately $9.1 million. If we were to prevail on all uncertain tax positions, the net effect would be a benefit to our effective tax rate of approximately $9.1 million, exclusive of any benefits related to interest and penalties.
The following table presents a reconciliation of the changes in the gross balances of unrecognized tax benefits:
Fiscal Year
202120202019
Beginning balance of unrecognized tax benefits$5.7 $6.5 $22.5 
Increases related to current period tax positions4.0 — 0.4 
Increases related to prior period tax positions0.7 1.2 1.6 
Decreases related to prior period tax positions
— — (10.2)
Reductions as a result of a lapse of the applicable statute of limitations
(0.8)(0.6)(4.3)
Reductions as a result of settlements with taxing authorities
(0.5)(1.4)(3.5)
Ending balance of unrecognized tax benefits$9.1 $5.7 $6.5 
We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense in our Consolidated Statement of Operations. As of January 29, 2022, January 30, 2021, and February 1, 2020, we had approximately $3.8 million, $3.4 million and $2.8 million, respectively, in interest and penalties related to unrecognized tax benefit accrued, of which approximately $0.4 million of expense, $0.6 million of benefit and $2.6 million of benefit were recognized through income tax expense in fiscal 2021, 2020 and 2019, respectively. If we were to prevail on all uncertain tax positions, the reversal of these accruals related to interest and penalties would also be a benefit to our effective tax rate.
It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our unrecognized tax positions could significantly increase or decrease within the next 12 months as a result of settling ongoing audits. However, as audit outcomes and the timing of audit resolutions are subject to significant uncertainty and given the nature and complexity of the issues involved, we are unable to reasonably estimate the possible amount of change in the unrecognized tax benefits, if any, that may occur within the next 12 months as a result of ongoing examinations. Nevertheless, we believe we are adequately reserved for our uncertain tax positions as of January 29, 2022.
We do not assert indefinite reinvestment on the undistributed earnings of our foreign subsidiaries. Income tax and/or withholding tax associated with any amounts available for distribution as of January 29, 2022 is not expected to be material to our financial statements.
Cash Paid for Income Taxes
The following table presents cash paid for income taxes, net of refunds:
Fiscal Year
202120202019
Cash paid for income taxes$21.4 $8.3 $66.8 
Cash refunds received(4.5)(57.4)(15.7)
Cash paid (refunded) for income taxes, net$16.9 $(49.1)$51.1