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Restructuring | 6 Months Ended
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Jul. 31, 2021
Restructuring [Abstract] |
Restructuring | 2. Restructuring Restructuring charges were as follows ($ in millions):
|  |  |  |  |  | Three Months Ended |  | Six Months Ended
|  |  |  |  |  | July 31, 2021 |  | August 1, 2020 |  | July 31, 2021 |  | August 1, 2020
Mexico Exit and Strategic Realignment(1) |  |  | $ | 4 |  |  | $ | - |  |  | $ | (44) |  |  | $ | - |
Fiscal 2020 U.S. Retail Operating Model Changes |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |
Total |  |  |  |  |  | $ | 4 |  |  | $ | - |  |  | $ | (44) |  |  | $ | 1 |
(1)Includes ($6) million related to inventory markdowns recorded in Cost of sales on our Condensed Consolidated Statements of Earnings for the six months ended July 31, 2021. Mexico Exit and Strategic Realignment In March 2020 the World Health Organization declared the outbreak of novel coronavirus disease (“COVID-19”) as a pandemic. The COVID-19 pandemic has had significant impacts on, for example, the economic conditions of the markets in which we operate, customer shopping behaviors, the role of technology in peoples’ lives and the way we meet their needs. In light of these changes, we are adapting our Building the New Blue Strategy to ensure that our focus and resources are closely aligned with the opportunities we see in front of us. As a result, in the third quarter of fiscal 2021, we made the decision to exit our operations in Mexico and began taking other actions to more broadly align our organizational structure in support of our strategy. Charges incurred in our International segment primarily related to our decision to exit our operations in Mexico. All remaining stores in Mexico were closed in the first quarter of fiscal 2022 and we do not expect to incur material future restructuring charges related to the exit. Charges incurred in our Domestic segment primarily related to actions taken to align our organizational structure in support of our strategy. During the six months ended July 31, 2021, we recorded a $44 million credit primarily due to a reduction in expected termination benefits resulting from adjustments to previously planned organizational changes and higher-than-expected employee retention. As we continue to evolve our Building the New Blue Strategy, it is possible that we will incur material future restructuring costs, but we are unable to forecast the timing and magnitude of such costs. All charges incurred related to the exit from Mexico and strategic realignment described above were from continuing operations and were presented as follows ($ in millions):
| Statement of | Three Months Ended July 31, 2021 |  | Six Months Ended July 31, 2021
| Earnings Location | Domestic |  | International |  | Total |  | Domestic |  | International |  | Total
Inventory markdowns | Cost of sales | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | (6) |  |  | $ | (6) |
Asset impairments | Restructuring charges |  | - |  |  |  | 4 |  |  |  | 4 |  |  |  | - |  |  |  | 7 |  |  |  | 7 |
Termination benefits | Restructuring charges |  | - |  |  |  | - |  |  |  | - |  |  |  | (44) |  |  |  | (1) |  |  |  | (45) |
|  | $ | - |  |  | $ | 4 |  |  | $ | 4 |  |  | $ | (44) |  |  | $ | - |  |  | $ | (44) |
| Statement of | Cumulative Amount as of July 31, 2021
| Earnings Location | Domestic |  | International |  | Total
Inventory markdowns | Cost of sales | $ | - |  |  | $ | 17 |  |  | $ | 17 |
Asset impairments(1) | Restructuring charges |  | 10 |  |  |  | 64 |  |  |  | 74 |
Termination benefits | Restructuring charges |  | 79 |  |  |  | 19 |  |  |  | 98 |
Currency translation adjustment | Restructuring charges |  | - |  |  |  | 39 |  |  |  | 39 |
Other(2) | Restructuring charges |  | - |  |  |  | 5 |  |  |  | 5 |
|  |  |  |  |  | $ | 89 |  |  | $ | 144 |  |  | $ | 233 |
(1)Remaining net carrying value approximates fair value and was immaterial as of July 31, 2021. (2)Other charges are primarily comprised of contract termination costs. Restructuring accrual activity related to the exit from Mexico and strategic realignment described above was as follows ($ in millions):
| Termination Benefits
| Domestic |  | International |  | Total
Balances at January 30, 2021 | $ | 104 |  |  | $ | 20 |  |  | $ | 124 |
Cash payments |  | (48) |  |  |  | (15) |  |  |  | (63) |
Adjustments(1) |  | (44) |  |  |  | (1) |  |  |  | (45) |
Changes in foreign currency exchange rates |  | - |  |  |  | (1) |  |  |  | (1) |
Balances at July 31, 2021 | $ | 12 |  |  | $ | 3 |  |  | $ | 15 |
(1)Represents adjustments to previously planned organizational changes in our Domestic segment and higher-than-expected employee retention in both our Domestic and International segments. Fiscal 2020 U.S. Retail Operating Model Changes In the second quarter of fiscal 2020, we made changes primarily related to our U.S. retail operating model to increase organization effectiveness and create a more seamless customer experience across all channels. All charges incurred were related to termination benefits within our Domestic segment and were presented within Restructuring charges from continuing operations on our Condensed Consolidated Statements of Earnings. As of July 31, 2021, the cumulative amount of charges incurred was $41 million and no material liability remains.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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