XML 90 R18.htm IDEA: XBRL DOCUMENT
v3.20.1

Retirement Plans | 12 Months Ended
--- | ---
Feb. 01, 2020
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] |
Retirement Plans | Retirement Plans The Company has defined contribution plans which cover substantially all employees who work 1,000 hours or more in a year. In addition, the Company has a funded defined benefit plan (“Pension Plan”) and an unfunded defined benefit supplementary retirement plan (“SERP”), which provides benefits, for certain employees, in excess of qualified plan limitations. Effective January 1, 2012, the Pension Plan was closed to new participants, with limited exceptions, and effective January 2, 2012, the SERP was closed to new participants. In February 2013, the Company announced changes to the Pension Plan and SERP whereby eligible employees no longer earn future pension service credits after December 31, 2013, with limited exceptions. All retirement benefits attributable to service in subsequent periods are provided through defined contribution plans. Retirement expenses, excluding settlement charges, included the following components:
| 2019 |  | 2018 |  | 2017
| (millions)
401(k) Qualified Defined Contribution Plan | $ | 96 |  |  | $ | 96 |  |  | $ | 93 |
Non-Qualified Defined Contribution Plan | 2 |  |  | 1 |  |  | 1 |
Pension Plan | (54 | ) |  | (64 | ) |  | (82 | )
Supplementary Retirement Plan | 30 |  |  | 31 |  |  | 31 |
| $ | 74 |  |  | $ | 64 |  |  | $ | 43 |
The Company estimates the service and interest cost components of net periodic benefit costs for the Pension Plan and SERP. This method uses a full yield curve approach in the estimation of these components of net periodic benefit costs. Under this approach, the Company applies discounting using individual spot rates from the yield curve composed of the rates of return from a portfolio of high quality corporate debt securities available at the measurement date. These spot rates align to each of the projected benefit obligation and service cost cash flows. Defined Contribution Plans The Company has a qualified plan that permits participating associates to defer eligible compensation up to the maximum limits allowable under the Internal Revenue Code. Beginning January 1, 2014, the Company has a non-qualified plan which permits participating associates to defer eligible compensation above the limits of the qualified plan. The Company contributes a matching percentage of employee contributions under both the qualified and non-qualified plans. Effective January 1, 2014, the Company's matching contribution to the qualified plan was enhanced for all participating employees, with limited exceptions. Prior to January 1, 2014, the matching contribution rate under the qualified plan was higher for those employees not eligible for the Pension Plan than for employees eligible for the Pension Plan. The liability related to the qualified plan matching contribution, which is reflected in accounts payable and accrued liabilities on the Consolidated Balance Sheets, was $104 million at February 1, 2020 and $103 million at February 2, 2019. Expense related to matching contributions for the qualified plan amounted to $96 million for 2019 and 2018, and $93 million for 2017. At February 1, 2020 and February 2, 2019, the liability under the non-qualified plan, which is reflected in other liabilities on the Consolidated Balance Sheets, was $34 million and $27 million, respectively. The liability related to the non-qualified plan matching contribution, which is reflected in accounts payable and accrued liabilities on the Consolidated Balance Sheets, was $2 million at February 1, 2020 and February 2, 2019. Expense related to matching contributions for the non-qualified plan amounted to $2 million for 2019 and $1 million for both 2018 and 2017. In connection with the non-qualified plan, the Company had mutual fund investments at February 1, 2020 and February 2, 2019 of $34 million and $27 million, respectively, which are included in prepaid expenses and other current assets on the Consolidated Balance Sheets. Pension Plan The following provides a reconciliation of benefit obligations, plan assets, and funded status of the Pension Plan as of February 1, 2020 and February 2, 2019:
| 2019 |  | 2018
| (millions)
Change in projected benefit obligation |  |  |
Projected benefit obligation, beginning of year | $ | 3,011 |  |  | $ | 3,271 |
Service cost | 5 |  |  | 5 |
Interest cost | 103 |  |  | 109 |
Actuarial (gain) loss | 463 |  |  | (27 | )
Benefits paid | (261 | ) |  | (347 | )
Projected benefit obligation, end of year | 3,321 |  |  | 3,011 |
Changes in plan assets |  |  |
Fair value of plan assets, beginning of year | 3,018 |  |  | 3,409 |
Actual return on plan assets | 602 |  |  | (44 | )
Company contributions | — |  |  | — |
Benefits paid | (261 | ) |  | (347 | )
Fair value of plan assets, end of year | 3,359 |  |  | 3,018 |
Funded status at end of year | $ | 38 |  |  | $ | 7 |
Amounts recognized in the Consolidated Balance Sheets at February 1, 2020 and February 2, 2019 |  |  |
Other assets | $ | 38 |  |  | $ | 7 |
Amounts recognized in accumulated other comprehensive loss at February 1, 2020 and February 2, 2019 |  |  |
Net actuarial loss | $ | 1,086 |  |  | $ | 1,109 |
The accumulated benefit obligation for the Pension Plan was $3,320 million as of February 1, 2020 and $3,010 million as of February 2, 2019. Net pension costs, settlement charges and other amounts recognized in other comprehensive loss for the Pension Plan included the following actuarially determined components:
| 2019 |  | 2018 |  | 2017
| (millions)
Net Periodic Pension Cost |  |  |  |  |
Service cost | $ | 5 |  |  | $ | 5 |  |  | $ | 6 |
Interest cost | 103 |  |  | 109 |  |  | 104 |
Expected return on assets | (191 | ) |  | (206 | ) |  | (223 | )
Amortization of net actuarial loss | 29 |  |  | 28 |  |  | 31 |
Amortization of prior service credit | — |  |  | — |  |  | — |
| (54 | ) |  | (64 | ) |  | (82 | )
Settlement charges | 45 |  |  | 78 |  |  | 89 |
Other Changes in Plan Assets and Projected Benefit Obligation Recognized in Other Comprehensive Loss |  |  |  |  |
Net actuarial (gain) loss | 51 |  |  | 223 |  |  | (120 | )
Amortization of net actuarial loss | (29 | ) |  | (28 | ) |  | (31 | )
Settlement charges | (45 | ) |  | (78 | ) |  | (89 | )
| (23 | ) |  | 117 |  |  | (240 | )
Total recognized | $ | (32 | ) |  | $ | 131 |  |  | $ | (233 | )
The estimated net actuarial loss for the Pension Plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2020 is $42 million. The following weighted average assumptions were used to determine the projected benefit obligations for the Pension Plan at February 1, 2020 and February 2, 2019:
| 2019 |  | 2018
Discount rate | 2.83 | % |  | 4.03 | %
Rate of compensation increases | 3.25 | % |  | 4.00 | %
The following weighted average assumptions were used to determine the net periodic pension cost for the Pension Plan:
| 2019 |  | 2018 |  | 2017
Discount rate used to measure service cost | 4.09 | % |  | 3.77% - 4.46% |  |  | 3.75% - 4.06% |
Discount rate used to measure interest cost | 3.67 | % |  | 3.39% - 4.06% |  |  | 3.12% - 3.31% |
Expected long-term return on plan assets | 6.50 | % |  | 6.75 | % |  | 7.00 | %
Rate of compensation increases | 4.00 | % |  | 4.00 | % |  | 4.10 | %
The Pension Plan’s assumptions are evaluated annually, and at interim re-measurements if required, and updated as necessary. Due to settlement accounting and re-measurements during 2018 and 2017, the discount rate used to measure service cost and the discount rate used to measure interest cost varied between periods. The table above shows the range of rates used to determine net periodic expense for the Pension Plan. The discount rate used to determine the present value of the projected benefit obligation for the Pension Plan is based on a yield curve constructed from a portfolio of high quality corporate debt securities with various maturities. Each year’s expected future benefit payments are discounted to their present value at the appropriate yield curve rate, thereby generating the overall discount rate for the projected benefit obligation. The Company develops its expected long-term rate of return on plan asset assumption by evaluating input from several professional advisors taking into account the asset allocation of the portfolio and long-term asset class return expectations, as well as long-term inflation assumptions. Expected returns for each major asset class are considered along with their volatility and the expected correlations among them. These expectations are based upon historical relationships as well as forecasts of how future returns may vary from historical returns. Returns by asset class and correlations among asset classes are combined using the target asset allocation to derive an expected return for the portfolio as a whole. Long-term historical returns of the portfolio are also considered. Portfolio returns are calculated net of all expenses, therefore, the Company also analyzes expected costs and expenses, including investment management fees, administrative expenses, Pension Benefit Guaranty Corporation premiums and other costs and expenses. As of February 1, 2020, the Company lowered the assumed annual long-term rate of return for the Pension Plan's assets from 6.50% to 6.25% based on expected future returns on the portfolio of assets. The assets of the Pension Plan are managed by investment specialists with the primary objectives of payment of benefit obligations to Plan participants and an ultimate realization of investment returns over longer periods in excess of inflation. The Company employs a total return investment approach whereby a mix of domestic and foreign equity securities, fixed income securities and other investments is used to maximize the long-term return on the assets of the Pension Plan for a prudent level of risk. Risks are mitigated through asset diversification and the use of multiple investment managers. The target allocation for plan assets is currently 30% equity securities, 63% debt securities, 2% real estate and 5% private equities. The Company generally employs investment managers to specialize in a specific asset class. These managers are chosen and monitored with the assistance of professional advisors, using criteria that include organizational structure, investment philosophy, investment process, performance compared to market benchmarks and peer groups. The Company periodically conducts an analysis of the behavior of the Pension Plan’s assets and liabilities under various economic and interest rate scenarios to ensure that the long-term target asset allocation is appropriate given the liabilities. The fair values of the Pension Plan assets as of February 1, 2020, excluding interest and dividend receivables and pending investment purchases and sales, by asset category are as follows:
| Fair Value Measurements
| Total |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
| (millions)
Money market funds | $ | 37 |  |  | $ | 37 |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |
U.S. stocks | 122 |  |  | 122 |  |  | — |  |  | — |
U.S. pooled funds | 474 |  |  | 474 |  |  | — |  |  | — |
International pooled funds (a) | 357 |  |  | 82 |  |  | — |  |  | — |
Fixed income securities: |  |  |  |  |  |  |
U.S. Treasury bonds | 58 |  |  | — |  |  | 58 |  |  | — |
Other Government bonds | 61 |  |  | — |  |  | 61 |  |  | — |
Agency backed bonds | 13 |  |  | — |  |  | 13 |  |  | — |
Corporate bonds | 615 |  |  | — |  |  | 615 |  |  | — |
Mortgage-backed securities | 23 |  |  | — |  |  | 23 |  |  | — |
Asset-backed securities | 10 |  |  | — |  |  | 10 |  |  | — |
Pooled funds | 1,442 |  |  | 1,442 |  |  | — |  |  | — |
Other types of investments: |  |  |  |  |  |  |
Real estate (a) | 37 |  |  | — |  |  | — |  |  | — |
Private equity (a) | 167 |  |  | — |  |  | — |  |  | — |
Derivatives in a positive position | 4 |  |  | — |  |  | 4 |  |  | — |
Derivatives in a negative position | (6 | ) |  | — |  |  | (6 | ) |  | — |
Total | $ | 3,414 |  |  | $ | 2,157 |  |  | $ | 778 |  |  | $ | — |
(a) Certain investments that are measured at fair value using the net asset value per share as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets. The fair values of the Pension Plan assets as of February 2, 2019, excluding interest and dividend receivables and pending investment purchases and sales, by asset category are as follows:
| Fair Value Measurements
| Total |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
| (millions)
Short term investments | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |
Money market funds | 33 |  |  | 33 |  |  | — |  |  | — |
Equity securities: |  |  |  |  |  |  |  |
U.S. stocks | 117 |  |  | 117 |  |  | — |  |  | — |
U.S. pooled funds | 398 |  |  | 398 |  |  | — |  |  | — |
International pooled funds (a) | 347 |  |  | 78 |  |  | — |  |  | — |
Fixed income securities: |  |  |  |  |  |  |  |
U.S. Treasury bonds | 52 |  |  | — |  |  | 52 |  |  | — |
Other Government bonds | 53 |  |  | — |  |  | 53 |  |  | — |
Agency backed bonds | 11 |  |  | — |  |  | 11 |  |  | — |
Corporate bonds | 513 |  |  | — |  |  | 513 |  |  | — |
Mortgage-backed securities | 15 |  |  | — |  |  | 15 |  |  | — |
Asset-backed securities | 11 |  |  | — |  |  | 11 |  |  | — |
Pooled funds | 1,270 |  |  | 1,270 |  |  | — |  |  | — |
Other types of investments: |  |  |  |  |  |  |  |
Real estate (a) | 56 |  |  | — |  |  | — |  |  | — |
Private equity (a) | 185 |  |  | — |  |  | — |  |  | — |
Derivatives in a positive position | 6 |  |  | — |  |  | 6 |  |  | — |
Derivatives in a negative position | (2 | ) |  | — |  |  | (2 | ) |  | — |
Total | $ | 3,066 |  |  | $ | 1,896 |  |  | $ | 660 |  |  | $ | — |
(a) Certain investments that are measured at fair value using the net asset value per share as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets. Corporate bonds consist primarily of investment grade bonds of U.S. issuers from diverse industries. The fair value of certain pooled funds including equity securities, real estate and private equity investments represents the reported net asset value of shares or underlying assets of the investment as a practical expedient to estimate fair value. International equity pooled funds seek to provide long-term capital growth and income by investing in equity securities of non-U.S. companies located both in developed and emerging markets. There are generally no redemption restrictions or unfunded commitments related to these equity securities. Real estate investments include several funds which seek risk-adjusted return by providing a stable, income-driven rate of return over the long term with high potential for growth of net investment income and appreciation of value. The real estate investments are diversified across property types and geographical areas primarily in the United States of America. Private equity investments have an objective of realizing aggregate long-term returns in excess of those available from investments in the public equity markets. Private equity investments generally consist of limited partnerships in the United States of America, Europe and Asia. Private equity and real estate investments are valued using fair values per the most recent financial reports provided by the investment sponsor, adjusted as appropriate for any lag between the date of the financial reports and the Company’s reporting date. Due to the nature of the underlying assets of the real estate and private equity investments, changes in market conditions and the economic environment may significantly impact the net asset value of these investments and, consequently, the fair value of the Pension Plan’s investments. These investments are redeemable at net asset value to the extent provided in the documentation governing the investments. However, these redemption rights may be restricted in accordance with the governing documents. Redemption of these investments is subject to restrictions including lock-up periods where no redemptions are allowed, restrictions on redemption frequency and advance notice periods for redemptions. As of February 1, 2020 and February 2, 2019, certain of these investments are generally subject to lock-up periods, ranging from one to nine years, certain of these investments are subject to restrictions on redemption frequency, ranging from daily to four times per year, and certain of these investments are subject to advance notice requirements. As of February 1, 2020 and February 2, 2019, the Pension Plan had unfunded commitments related to certain of these investments totaling $43 million and $49 million, respectively. The Company does not anticipate making funding contributions to the Pension Plan in 2020. The following benefit payments are estimated to be paid from the Pension Plan:
| (millions)
Fiscal year |
2020 | $ | 325 |
2021 | 274 |
2022 | 259 |
2023 | 250 |
2024 | 234 |
2025-2029 | 1,010 |
Supplementary Retirement Plan The following provides a reconciliation of benefit obligations, plan assets and funded status of the supplementary retirement plan as of February 1, 2020 and February 2, 2019:
| 2019 |  | 2018
| (millions)
Change in projected benefit obligation |  |  |
Projected benefit obligation, beginning of year | $ | 644 |  |  | $ | 703 |
Service cost | — |  |  | — |
Interest cost | 21 |  |  | 23 |
Actuarial (gain) loss | 87 |  |  | (9 | )
Benefits paid | (71 | ) |  | (73 | )
Projected benefit obligation, end of year | 681 |  |  | 644 |
Change in plan assets |  |  |
Fair value of plan assets, beginning of year | — |  |  | — |
Company contributions | 71 |  |  | 73 |
Benefits paid | (71 | ) |  | (73 | )
Fair value of plan assets, end of year | — |  |  | — |
Funded status at end of year | $ | (681 | ) |  | $ | (644 | )
Amounts recognized in the Consolidated Balance Sheets at February 1, 2020 and February 2, 2019 |  |  |
Accounts payable and accrued liabilities | $ | (55 | ) |  | $ | (68 | )
Other liabilities | (626 | ) |  | (576 | )
| $ | (681 | ) |  | $ | (644 | )
Amounts recognized in accumulated other comprehensive loss at February 1, 2020 and February 2, 2019 |  |  |
Net actuarial loss | $ | 283 |  |  | $ | 218 |
Prior service cost | 6 |  |  | 6 |
| $ | 289 |  |  | $ | 224 |
The accumulated benefit obligation for the supplementary retirement plan was $681 million as of February 1, 2020 and $644 million as of February 2, 2019. Net pension costs, settlement charges and other amounts recognized in other comprehensive loss for the supplementary retirement plan included the following actuarially determined components:
| 2019 |  | 2018 |  | 2017
| (millions)
Net Periodic Pension Cost |  |  |  |  |
Service cost | $ | — |  |  | $ | — |  |  | $ | — |
Interest cost | 21 |  |  | 23 |  |  | 22 |
Amortization of net actuarial loss | 9 |  |  | 7 |  |  | 8 |
Amortization of prior service cost | — |  |  | 1 |  |  | 1 |
| 30 |  |  | 31 |  |  | 31 |
Settlement charges | 13 |  |  | 10 |  |  | 16 |
Other Changes in Plan Assets and Projected Benefit Obligation Recognized in Other Comprehensive Loss |  |  |  |  |
Net actuarial loss (gain) | 87 |  |  | (9 | ) |  | 20 |
Amortization of net actuarial loss | (9 | ) |  | (7 | ) |  | (8 | )
Amortization of prior service cost | — |  |  | (1 | ) |  | (1 | )
Settlement charges | (13 | ) |  | (10 | ) |  | (16 | )
| 65 |  |  | (27 | ) |  | (5 | )
Total recognized | $ | 108 |  |  | $ | 14 |  |  | $ | 42 |
The estimated net actuarial loss and prior service cost for the supplementary retirement plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2020 is $12 million. The following weighted average assumption was used to determine the projected benefit obligations for the supplementary retirement plan at February 1, 2020 and February 2, 2019:
| 2019 |  | 2018
Discount rate | 2.89 | % |  | 4.10 | %
The following weighted average assumption was used to determine net pension costs for the supplementary retirement plan:
| 2019 |  | 2018 |  | 2017
Discount rate used to measure interest cost | 2.65% - 3.69% |  | 3.39% - 4.09% |  | 3.10% - 3.26%
The supplementary retirement plan’s assumptions are evaluated annually, and at interim re-measurements if required, and updated as necessary. Due to settlement accounting and re-measurements during 2019, 2018 and 2017, the discount rate used to measure interest cost varied between periods. The table above shows the range of rates used to determine net periodic expense for the supplementary retirement plan. The discount rate used to determine the present value of the projected benefit obligation for the supplementary retirement plan is based on a yield curve constructed from a portfolio of high quality corporate debt securities with various maturities. Each year’s expected future benefit payments are discounted to their present value at the appropriate yield curve rate, thereby generating the overall discount rate for the projected benefit obligation. The following benefit payments are estimated to be funded by the Company and paid from the supplementary retirement plan:
| (millions)
Fiscal year |
2020 | $ | 55 |
2021 | 50 |
2022 | 47 |
2023 | 46 |
2024 | 45 |
2025-2029 | 203 |

X
- References No definition available. + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitExpenseAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration