In Q1 2021, the U.S. government enacted tax legislation to provide economic stimulus and support to businesses during the COVID-19 pandemic, referred to as the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which enabled companies to carry back tax losses to years prior to the enactment of the Tax Cuts and Jobs Act when the federal statutory income tax rate was 35%. Additionally, the CARES Act included an administrative correction of the depreciation recovery period for qualified improvement property which impacted certain leasehold improvement costs that resulted in the acceleration of depreciation on these assets retroactively to 2018.


Provision for Income Tax Expense (Benefit)	Year Ended
	February 26, 2021		February 28, 2020		February 22, 2019
Current income tax expense (benefit):
Federal	$	(30.4)	$	6.8	$	18.4
State and local	1.9		10.9		6.0
Foreign	12.9		15.4		14.6
	(15.6)		33.1		39.0
Deferred income tax expense (benefit):
Federal	13.7		10.3		(3.6)
State and local	(1.1)		(2.8)		1.2
Foreign	2.8		4.9		1.3
	15.4		12.4		(1.1)
Income tax expense (benefit)	$	(0.2)	$	45.5	$	37.9


Source of Income (Loss) Before Income Tax Expense (Benefit)	Year Ended
	February 26, 2021		February 28, 2020		February 22, 2019
Domestic	$	(10.1)	$	195.8	$	119.4
Foreign	36.0		49.4		44.5
	$	25.9	$	245.2	$	163.9


Income Tax Provision Reconciliation	Year Ended
	February 26, 2021		February 28, 2020		February 22, 2019
Tax expense at the U.S. federal statutory rate	$	5.4	$	51.5	$	34.4
State and local income taxes, net of federal	0.6		6.4		5.7
Impact of the CARES Act	(11.7)		—		—
Sale of PolyVision (1)	—		(11.6)		—
Valuation allowance provisions and adjustments (2)	0.4		(1.3)		(1.3)
Goodwill impairment charge (3)	3.4		—		—
COLI income (4)	(2.7)		(1.4)		(1.6)
Foreign operations, less applicable foreign tax credits (5)	5.4		4.9		7.8
Impact of change to non-U.S. federal statutory tax rates (6)	0.4		(1.2)		(0.8)
Officer compensation limitation	1.9		1.1		1.0
Research tax credit	(3.0)		(2.9)		(2.9)

Other	(0.3)		—		(4.4)
Total income tax expense (benefit) recognized	$	(0.2)	$	45.5	$	37.9

(1)The tax basis of PolyVision exceeded the book equity of the entity. For U.S. federal tax purposes, this generated a capital loss and related benefit, which varied from the expected U.S. federal tax expense on the financial statement gain on disposal.


Deferred Income Taxes	February 26, 2021		February 28, 2020
Deferred income tax assets:
Employee benefit plan obligations and deferred compensation	$	57.6	$	68.9
Operating lease obligations	62.7		64.2
Foreign and domestic net operating loss carryforwards	45.2		39.1
Reserves and accruals	15.1		17.1
Tax credit carryforwards	22.0		19.1
Other, net	15.0		17.1
Total deferred income tax assets	217.6		225.5
Valuation allowances	(6.6)		(5.7)
Net deferred income tax assets	211.0		219.8
Deferred income tax liabilities:
Right-of-use operating lease assets	57.4		61.4
Property, plant and equipment	32.3		28.6
Intangible assets	13.0		9.8
Prepaid expenses	2.0		2.2
Total deferred income tax liabilities	104.7		102.0
Net deferred income taxes	$	106.3	$	117.8
Net deferred income taxes is comprised of the following components:

Deferred income tax assets—non-current	113.3		124.6

Deferred income tax liabilities—non-current	7.0		6.8

As of February 26, 2021, the valuation allowance of $6.6 included $3.5 relating to foreign deferred tax assets. In updating our assessment of the ultimate realization of deferred tax assets, we considered the following factors:

Based on our evaluation of these factors, particularly cumulative losses, we were unable to assert that it is more likely than not that the deferred tax assets in our owned dealers and sales offices in France, Australia, Morocco and Hong Kong would be realized as of February 26, 2021. During 2021, we liquidated our owned dealer in Brazil, requiring the reversal of the valuation allowance on its deferred tax assets, which reduced tax expense by $1.0. During 2020, we determined that it was more likely than not that all of the deferred tax assets, including net operating losses, of our owned dealer in the U.K. would be utilized, and the reversal of the valuation allowance on these items reduced tax expense by $3.1. Also during 2020, we determined that it was not more likely than not that all of the deferred tax assets, including net operating losses, of our owned dealer in Australia would be utilized, and recorded a valuation allowance which increased tax expense by $1.2.

We have the ability to repatriate foreign subsidiary earnings to our U.S. parent without incurring additional U.S. federal income tax. We have provided deferred income taxes where appropriate on earnings of subsidiaries expected to be distributed. However, we have not recorded deferred taxes on any remaining historical outside basis differences in non-U.S. subsidiaries as we continue to assert indefinite reinvestment on those basis differences that are not related to amounts previously taxed in the U.S. or undistributed earnings generated after 2018.


Income Taxes	February 26, 2021		February 28, 2020
Other current assets:
Income taxes receivable	$	49.5	$	8.0
Other long-term assets:
Income taxes receivable	$	—	$	7.8
Accrued expenses:
Income taxes payable	$	7.4	$	13.9


Fiscal Year Ending February	Net Operating Loss Carryforwards (Gross)						Net Operating Loss Carryforwards (Tax Effected)								Tax Credit Carryforwards
	Federal		State		International		Federal		State		International		Total
2022	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—



2023-2041	0.9		56.3		0.7		0.2		4.5		0.2		4.9		22.0
No expiration	—		—		173.2		—		—		41.2		41.2		—
	$	0.9	$	56.3	$	173.9	0.2		4.5		41.4		46.1		22.0
Valuation allowances							—		—		(3.0)		(3.0)		(3.1)
Net benefit							$	0.2	$	4.5	$	38.4	$	43.1	$	18.9

Future tax benefits for net operating loss and tax credit carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. It is considered more likely than not that a benefit of $62.0 will be realized on these net operating loss and tax credit carryforwards. This determination is based on the expectation that related operations will be sufficiently profitable or various tax, business and other planning strategies available to us will enable utilization of the carryforwards. We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. Valuation allowances are recorded to the extent realization of these carryovers is not more likely than not.

We are subject to taxation in the U.S. and various states and foreign jurisdictions with varying statutes of limitation. Tax years that remain subject to examination by major tax jurisdictions include: the U.S. 2016 through 2021 (certain U.S. tax years are open to assessment due to the carryback of tax losses to those years), Canada 2017 through 2021, France 2015 through 2021 and Germany 2014 through 2021. We adjust these reserves, as well as the related interest and penalties, in light of changing facts and circumstances.

We are audited by the U.S. Internal Revenue Service under the Compliance Assurance Process (“CAP”). Under CAP, the U.S. Internal Revenue Service works with large business taxpayers to identify and resolve issues prior to the filing of a tax return. Accordingly, we record minimal liabilities for U.S. federal uncertain tax positions.


Unrecognized Tax Benefits	Year Ended
	February 26, 2021		February 28, 2020		February 22, 2019
Balance as of beginning of period	$	2.0	$	2.0	$	2.2

Gross decreases—tax positions in prior period	—		—		—

Currency translation adjustment	0.3		—		(0.2)
Balance as of end of period	$	2.3	$	2.0	$	2.0

We have taken tax positions in a non-U.S. jurisdiction that do not meet the more likely than not test required under the uncertain tax position accounting guidance. Since the tax positions have increased net operating loss carryforwards, the underlying deferred tax asset is shown net of a $2.3 liability for uncertain tax positions as of February 26, 2021. No other amounts are recorded as a liability for uncertain tax positions, including interest and penalties, on the Consolidated Balance Sheets.

Unrecognized tax benefits of $2.3, if favorably resolved, would be recorded as an income tax benefit. We do not expect the amount of unrecognized tax benefits will significantly change due to expiring statutes or audit activity in the next twelve months.