The following discussion should be read in conjunction with the information
contained in our consolidated financial statements, including the notes thereto.
Statements regarding future economic performance, management's plans and
objectives, and any statements concerning assumptions related to the foregoing
contained in Management's Discussion and Analysis of Financial Condition and
Results of Operations constitute forward-looking statements. Certain factors,
which may cause actual results to vary materially from these forward-looking
statements, accompany such statements or appear elsewhere in this Form 10-K,
including the disclosures under Part I, Item 1A, "Risk Factors."

In Management's Discussion and Analysis of Financial Condition and Results of
Operations, we provide a detailed analysis for fiscal 2021 compared to fiscal
2020. For a comparison of our results of operations for fiscal 2020 compared to
fiscal 2019, see "Part II, Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" of our annual report on Form 10-K
for the fiscal year ended January 30, 2021, as filed with the SEC on March 23,
2021.

OVERVIEW

GameStop Corp. ("GameStop," "we," "us," "our," or the "Company"), a Delaware
corporation established in 1996, is a leading specialty retailer offering games
and entertainment products through its ecommerce properties and thousands of
stores.

The COVID-19 pandemic has impacted the global economy, changed consumer behaviors and disrupted global supply chains, and may continue to do so. The extent of the impact of the COVID-19 pandemic on our business and financial results will depend on future developments. See Item 1A of Part I, “Risk Factors”, for more information.

COMMERCIAL PRIORITIES

GameStop is on a strategic path to fully leverage our unique position and brand
in gaming. GameStop is focused on transforming into a customer-obsessed
technology company to delight gamers and is actively focused on efforts to (1)
establish ecommerce excellence (2) expand our selection to deliver a
market-leading offering in gaming & entertainment, (3) leverage existing
strengths and assets (4) invest in new growth opportunities.

We take measures that include:

•Increase the size of our addressable market by offering a wide selection of products and expanding our product catalog across PC games, collectibles, consumer electronics, toys, augmented reality, virtual reality , blockchain technology and other categories that represent natural extensions of our business;

• Expand fulfillment operations to improve delivery speed and service to our customers;

• Create a superior customer experience, including establishing a we– customer service operation based on frictionless e-commerce and in-store experience; and

•Building technology capabilities, including investing in new systems, modernized e-commerce assets and an expanded and experienced talent base.

We believe these future transformation efforts are an important aspect of our
continued business to enable long-term value creation for our shareholders.
Accordingly, we prioritize long-term revenue growth and market leadership over
short-term margins.

In fiscal 2021 we further strengthened our balance sheet by eliminating
$314.6 million of total outstanding debt and raising $1,672.8 million in gross
equity capital through an at-the-market offering. The Company will continue to
invest in growth initiatives, while continuing to prioritize maintaining a
strong balance sheet. Connected to our transformation efforts, we have incurred
and may continue to incur severance, store closure costs and expenses for
consultants and advisors. See "Consolidated Results of Operations-Selling,
General and Administrative Expenses" for additional information.

REMEMBER ACCOUNT INFORMATION

The following table shows the number of stores by segment at the end of fiscal 2021 compared to the end of fiscal 2020.

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                           January 30, 2021        Net Disposals        January 29, 2022
       United States            3,192                  (174)                 3,018
       Canada                     253                   (22)                   231
       Australia                  417                     -                    417
       Europe                     954                   (47)                   907
       Total Stores             4,816                  (243)                 4,573


SEASONALITY

Our business, like that of many retailers, is seasonal, with the major portion
of sales and operating profit realized during the fourth quarter, which includes
the holiday selling season. Results for any quarter are not necessarily
indicative of the results that may be achieved for a full fiscal year. Quarterly
results may fluctuate materially depending upon, among other factors, the timing
of new product introductions, sales impacts related to temporary store closures,
increases or decreases in comparable store sales, the nature and timing of
acquisitions, adverse weather conditions, shifts in the timing of certain
holidays or promotions and changes in our merchandise mix. During fiscal 2021
and 2020, we generated approximately 37% and 42%, respectively, of our sales
during the fourth quarter.
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CONSOLIDATED OPERATING RESULTS

The following table presents certain income statement items (in millions) and as a percentage of net sales:

                                                            Fiscal Year 2021                             Fiscal Year 2020                             Change
                                                       Amount              Percent of               Amount              Percent of              $                %
                                                                            Net Sales                                    Net Sales
Net sales                                        $       6,010.7               100.0  %       $       5,089.8               100.0  %       $  920.9             18.1  %
Cost of sales                                            4,662.9                77.6                  3,830.3                75.3             832.6             21.7  %
Gross profit                                             1,347.8                22.4                  1,259.5                24.7              88.3              7.0  %
Selling, general and administrative                      1,709.6                28.4                  1,514.2                29.7             195.4             12.9  %
expenses
Asset impairments                                            6.7                 0.1                     15.5                 0.3              (8.8)           (56.8) %
Gain on sale of assets                                         -                   -                    (32.4)               (0.6)             32.4            100.0  %
Operating loss                                            (368.5)               (6.1)                  (237.8)               (4.7)           (130.7)           (55.0) %
Interest expense, net                                       26.9                 0.4                     32.1                 0.6              (5.2)           (16.2) %
Loss from continuing operations before                    (395.4)               (6.6)                  (269.9)               (5.3)           (125.5)           (46.5) %
income taxes
Benefit tax expense                                        (14.1)               (0.2)                   (55.3)               (1.1)             41.2             74.5  %
Net loss from continuing operations                       (381.3)               (6.3)                  (214.6)               (4.2)           (166.7)           (77.7) %
Loss from discontinued operations, net of                      -                   -                     (0.7)                  -               0.7            100.0  %
tax
Net loss                                         $        (381.3)               (6.3) %       $        (215.3)               (4.2) %       $ (166.0)           (77.1) %


Net Sales

The following table presents net sales by significant product category:

                                                               Fiscal Year 2021                             Fiscal Year 2020                            Change
                                                        Net Sales             Percent of             Net Sales             Percent of             $                %
                                                                               Net Sales                                    Net Sales
Hardware and accessories                            $       3,171.7                52.8  %       $       2,530.8                49.7  %       $ 640.9             25.3  %
Software                                                    2,014.8                33.5                  1,979.1                38.9             35.7              1.8  %
Collectibles                                                  824.2                13.7                    579.9                11.4            244.3             42.1  %
Total                                               $       6,010.7               100.0  %       $       5,089.8               100.0  %       $ 920.9             18.1  %


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The following table shows net sales by reportable segment:

                                                                Fiscal Year 2021                 Fiscal Year 2020                Change
                                                         Net Sales             Percent of                Net Sales          Percent of                   $                %
                                                                                Net Sales                                    Net Sales
United States                                        $       4,186.5                69.7  %             $ 3,417.1                67.1  %             $ 769.4             22.5  %
Canada                                                         332.3                 5.5                    258.4                 5.1                   73.9             28.6  %
Australia                                                      591.8                 9.8                    625.3                12.3                  (33.5)            (5.4) %
Europe                                                         900.1                15.0                    789.0                15.5                  111.1             14.1  %
Total                                                $       6,010.7               100.0  %             $ 5,089.8               100.0  %             $ 920.9             18.1  %



Net sales increased $920.9 million, or 18.1%, in fiscal 2021 compared to fiscal
2020. Net sales during fiscal 2021 in our United States, Canada and Europe
segments improved by 22.5%, 28.6% and 14.1%, respectively, while net sales in
our Australia segment decreased 5.4%, when compared to fiscal 2020.

The increase in net sales was primarily attributable to ongoing demand of the
new gaming consoles from Sony and Microsoft, the continued sell-through of the
Nintendo gaming product lines, an increase in store traffic compared to the
prior year during the onset of the COVID-19 pandemic, and the impact of our
product category expansion efforts.

Gross profit

Gross profit increased $88.3 million, or 7.0%, in fiscal 2021 compared to fiscal
2020, and gross profit as a percentage of net sales decreased to 22.4% in fiscal
2021 compared to 24.7% in fiscal 2020. Our gross profit for fiscal 2021 reflects
a shift in product mix towards higher dollar lower margin categories such as new
console hardware and increased freight and credit card fees associated with the
shift to ecommerce sales.

Selling, general and administrative expenses

Selling, general and administrative ("SG&A") expenses increased $195.4 million,
or 12.9%, in fiscal 2021 compared to fiscal 2020. SG&A expenses increased as a
result of the impact the COVID-19 pandemic had on our store expenses in prior
year as we experienced temporary store closures beginning in March of 2020.
Contributing to the increase in SG&A expenses are costs associated with our
transformation into a technology company, which include increased labor costs as
the Company in-sources talent and expands its capabilities to support growth,
severance expenses, and increased marketing and customer care costs. We expect
to continue to incur costs associated with our transformation initiatives. The
increase in SG&A expenses is partially offset by the continued benefit from
lower store occupancy costs as a percent of sales driven by our cost reduction
initiatives in 2020 and 2021. These net reductions include 243 permanent store
closures since January 30, 2021.

Asset impairments

Asset impairments decreased $8.8 million, or 56.8% in fiscal 2021 compared to
fiscal 2020. In the first quarter of fiscal 2021, we recognized $0.6 million in
asset impairment charges related to our right-of-use lease assets. In the fourth
quarter of fiscal 2021, we incurred impairment charges of $6.1 million related
to store-level property and equipment, right-of-use asset and other asset
impairment charges. See Item 8, Notes to the Consolidated Financial Statements,

Note 9, “Impairment of assets”, for additional information related to the impact on our segments.

Gain on sale of assets

During fiscal 2020 in separate unrelated transactions, and to unaffiliated third
parties, we completed sale and leaseback transactions for our corporate
headquarters, a refurbishment center, and ancillary office space in Grapevine,
Texas for an aggregate total of $43.7 million, the sale of our Australian
headquarters in Eagle Farm, Queensland for $27.0 million, and the sale of our
Canadian headquarters in Brampton, Ontario for approximately $16.7 million.

The net proceeds from the sale of these assets were used for general corporate
purposes. As a result of the transactions that occurred during fiscal 2020, a
gain on sale of assets of $32.4 million was recognized and is included in our
Consolidated Statements of Operations for fiscal 2020.

See Item 8, Notes to the Consolidated Financial Statements,   Note     10  ,
"Leases," for additional information regarding the sale and leaseback of these
facilities.

Interest Expense, Net
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Interest expense, net decreased by $5.2 million, or 16.2%, for fiscal 2021
compared to fiscal 2020, primarily due to the voluntary early redemption of the
outstanding balance of our 2023 Senior Notes in the first quarter of 2021,
partially offset by a $17.8 million make-whole premium paid upon the voluntary
early redemption of the outstanding balance of such notes.

Income tax

We recognized an income tax benefit of $14.1 million representing an effective
tax rate of 3.6% in fiscal 2021, compared to an income tax benefit of $55.3
million representing an effective tax rate of 20.5% in fiscal 2020. The
effective tax rate of 3.6% is primarily due to not recognizing benefits on
certain current period losses, the release of a valuation allowance on deferred
tax assets in Australia and New Zealand, as well as income taxes due in certain
foreign and state jurisdictions in which we operate. The effective tax rate of
20.5% in fiscal year 2020 was primarily due to the establishment of a full
valuation allowance on U.S. deferred tax assets, a change in the tax status of
certain foreign entities, and tax benefits associated with the availability of a
five-year carryback period pursuant to the CARES Act. See Item 8, Notes to the
Consolidated Financial Statements,   Note 15  , "Income Taxes," for additional
information.
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CASH AND CAPITAL RESOURCES

Overview

Our principal sources of liquidity are cash from operations, cash on hand, and
our revolving credit facilities. As of January 29, 2022, we had total
unrestricted cash on hand of $1,271.4 million and an additional $389.6 million
of available borrowing capacity under our revolving credit facilities.

During fiscal 2021, we sold an aggregate of 8,500,000 shares of our common stock
under our at-the market equity offering program (the "ATM Transactions"). We
generated $1.68 billion in aggregate gross proceeds from sales under the ATM
Transactions, and paid an aggregate of $10.1 million in commissions to the sales
agent, among other legal and administrative fees. The net proceeds generated
from sales under the ATM Transactions have been, and are expected to be, used
for working capital and general corporate purposes, including repayment of
indebtedness, funding our transformation, growth initiatives and product
category expansion efforts, capital expenditures and the satisfaction of our tax
withholding obligations upon the vesting of shares of restricted stock held by
our executive officers and other employees.

Additionally, during the first quarter of 2021, we repaid the remaining
$73.2 million aggregate principal amount of our then outstanding 6.75% Senior
Notes due 2021 ("2021 Senior Notes") and the remaining $216.4 million aggregate
principal amount of our then outstanding 10.00% Senior Notes due 2023 ("2023
Senior Notes"). In connection with the voluntary early redemption of our 2023
Senior Notes, we paid a $17.8 million make-whole premium. In the first quarter
of 2021, we repaid our then outstanding borrowings of $25.0 million under our
asset-based revolving credit facility due November 2022 ("2022 Revolver"). In
the second quarter of 2021, at the request of Micromania SAS, the six separate
unsecured term loans held by our French subsidiary, Micromania SAS, for a total
of €40.0 million ($44.6 million as of January 29, 2022) were extended for five
years. On November 3, 2021, we entered into an asset-based secured revolving
credit facility which provides for a borrowing capacity of $500 million with a
maturity date of November 3, 2026 (the "2026 Revolver"). See Item 8, Notes to
the Consolidated Financial Statements,   Note 14  , "Debt," for additional
information.

On an ongoing basis, we evaluate and consider certain strategic operating
alternatives, including divestitures, restructuring or dissolution of
unprofitable business segments, as well as equity and debt financing
alternatives that we believe may enhance stockholder value. The nature, amount
and timing of any strategic operational change, or financing transactions that
we might pursue will depend on a variety of factors, including, as of the
applicable time, our available cash and liquidity and operating performance, our
commitments and obligations, our capital requirements, limitations imposed under
our credit arrangements and overall market conditions.

We utilize cash generated from operations and have funds available to us under
the 2026 Revolver to cover seasonal fluctuations in cash flows and to support
our various initiatives. Our cash and cash equivalents are carried at cost and
consist primarily of U.S.and Government Prime money market funds and cash
deposits with commercial banks.

Independent of Revolver 2026, we issue letters of credit and bank guarantees, sometimes backed by cash collateral. From January 29, 2022we have had $92.4 million outstanding letters of credit and other bank guarantees under facilities outside of Revolver 2026.

See Item 8, Notes to Consolidated Financial Statements, Note 14, “Debt”, for more information.

Cash flow

The following table provides a summary of our cash flows from operating, investing and financing activities, as reflected in the consolidated statements of cash flows:

                                                                2021              2020             Change
Cash (used in) provided by operating activities              $ (434.3)         $  123.7          $ (558.0)
Cash (used in) provided by investing activities                 (64.8)             36.9            (101.7)
Cash provided by (used in) financing activities               1,200.6       

(55.4) 1,256.0 Effect of exchange rate on cash, cash equivalents and restricted cash

                                                 (16.6)             16.3             (32.9)

Increase in cash, cash equivalents and restricted cash $684.9

   $  121.5          $  563.4


Operating Activities

In fiscal 2021, cash used in operating activities was $434.3 million, compared
to cash provided by operating activities of $123.7 million in fiscal 2020. Cash
used in operating activities during fiscal 2021 was primarily attributable to an
increase in merchandise inventory levels when compared to prior year to, among
other things, support our product category expansion efforts, and to mitigate
the full impact of global supply chain issues. The increase in merchandise
inventory levels was
                                       25
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accompanied by an increase in associated payables. Cash provided by operating
activities in fiscal 2020 was primarily due to improvements in working capital
as a result of optimizing inventory and accounts payable levels through the cash
conversion cycle and more efficient carrying levels of inventory.

Investing activities

In fiscal 2021, cash used in investing activities was $64.8 million compared to
cash provided by investing activities of $36.9 million in fiscal 2020. Cash used
in investing activities during fiscal 2021 was primarily attributable to
continued technological investments, and investments in two new fulfillment
centers. Cash provided by investing activities in the fiscal 2020 was primarily
attributable to the net proceeds from the sale and leaseback of properties
including our corporate headquarters, a refurbishment center and ancillary
office space in Grapevine, Texas of $43.7 million, the sale of our Australian
headquarters in Eagle Farm, Queensland for $27.0 million, the sale of our
Canadian headquarters in Brampton, Ontario for approximately $16.7 million, and
net proceeds of $8.6 million from the sale of our corporate aircraft

Fundraising activities

In fiscal 2021, cash provided by financing activities was $1,200.6 million
compared to cash used in financing activities of $55.4 million in fiscal 2020.
Cash provided by financing activities in fiscal 2021 was primarily due to the
sale of shares of our common stock in connection with the ATM transactions for
aggregate net proceeds of $1.673 billion. These proceeds were partially offset
by a payment of $136.8 million for withholding obligations upon the vesting of
shares of restricted stock, repaid at maturity $73.2 million of our then
outstanding 2021 Senior Notes, and the voluntary early redemption of our
outstanding 2023 Senior Notes for an aggregate of $234.2 million. We also repaid
$25.0 million of our outstanding borrowing under our 2022 Revolver. Cash used in
financing activities in 2020 was primarily due to the repayment of $130.3
million of our 2021 Senior Notes through a combination of open market
transactions and an optional early redemption of $125.0 million of our 2021
Senior Notes, at par, in December 2020, partially offset by a net $25.0 million
draw down on our 2022 Revolver and $47.1 million in proceeds from term loans
entered into by our French subsidiary, Micromania SAS.

Share buybacks

At March 4, 2019our Board of Directors has approved a share repurchase authorization allowing us to repurchase up to $300.0 million of our Class A common shares. The authorization has no expiry date.

On June 11, 2019, we commenced a modified Dutch auction tender offer for up
to 12.0 million shares of our Class A Common Stock with a price range
between $5.20 and $6.00 per share. The tender offer expired on July 10, 2019.
Through the tender offer, we accepted for payment 12.0 million shares at a
purchase price of $5.20 per share for a total of $62.9 million, including fees
and commissions. The shares purchased through the tender offer were immediately
retired.

In addition to the equity tender offer described above, during the second half
of fiscal 2019, we executed a series of open market repurchases for an aggregate
of 26.1 million shares of our Class A Common Stock totaling $135.8 million,
including fees and commissions. These repurchased shares were immediately
retired.

In aggregate, during fiscal 2019, we repurchased a total of 38.1 million shares
of our Class A Common Stock, totaling $198.7 million, for an average price of
$5.19 per share. We did not repurchase shares during fiscal 2021 or fiscal 2020.
As of January 29, 2022, we have $101.3 million remaining under the repurchase
authorization.

OFF-BALANCE SHEET ARRANGEMENTS

We had no significant off-balance sheet arrangements January 29, 2022 other than those communicated Item 8, Notes to the consolidated financial statements,

Note 16, “Commitments and contingencies”.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires us to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. In preparing these financial statements, we have
made our best estimates and judgments of certain amounts included in the
financial statements, giving due consideration to materiality. Changes in the
estimates and assumptions used by us could have a significant impact on our
financial results, and actual results could differ from those estimates. Our
senior management has discussed the development and selection of these critical
accounting policies, as well as the significant accounting policies disclosed in
Item 8, Notes to the Consolidated Financial Statements,   N    ote     2  ,
"Summary of Significant Accounting Policies," with the Audit Committee of our
Board of Directors. We believe the following accounting policies are the most
critical to aid in fully understanding and evaluating our reporting of
transactions and events, and the estimates these policies involve our most
difficult, subjective or complex judgments.

Valuation of stocks of goods

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Our merchandise inventories are carried at the lower of cost or market generally
using the average cost method. Under the average cost method, as new product is
received from vendors, its current cost is added to the existing cost of product
on-hand and this amount is re-averaged over the cumulative units. Pre-owned
gaming systems traded in by customers are recorded as inventory at the amount of
the store credit given to the customer. In valuing inventory, we are required to
make assumptions regarding the necessity of reserves required to value
potentially obsolete or over-valued items at the lower of cost or market. We
consider quantities on hand, recent sales, potential price protections and
returns to vendors, among other factors, when making these assumptions.

Our ability to gauge these factors is dependent upon our ability to forecast
customer demand and to provide a well-balanced merchandise assortment. Any
inability to forecast customer demand properly could lead to increased costs
associated with write-downs of inventory to reflect volumes or pricing of
inventory which we believe represents the net realizable value. A 10% change in
our obsolescence reserve percentage at January 29, 2022 would have affected net
earnings by approximately $1.6 million in fiscal 2021.

Customer Responsibilities

Our PowerUp Rewards loyalty program allows enrolled members to earn points on
purchases in our stores and on some of our websites that can be redeemed for
rewards and discounts. We allocate the transaction price between the product and
loyalty points earned based on the relative stand-alone selling prices and
expected point redemption. The portion allocated to the loyalty points is
initially recorded as deferred revenue and subsequently recognized as revenue
upon redemption or expiration. The two primary estimates utilized to record the
deferred revenue for loyalty points earned by members are the estimated retail
price per point and estimated amount of points that will never be redeemed,
which is a concept known in the retail industry as "breakage." Additionally, we
sell gift cards to our customers in our retail stores, through our website and
through selected third parties. At the point of sale, a liability is established
for the value of the gift card. We recognize revenue from gift cards when the
card is redeemed by the customer and recognize estimated breakage on gift cards
in proportion to historical redemption patterns.

The two primary estimates utilized to record the balance sheet liability for
loyalty points earned by members are the estimated redemption rate and the
estimated weighted-average retail price per point redeemed. We use historical
redemption rates experienced under our loyalty program as a basis for estimating
the ultimate redemption rate of points earned. We estimate breakage of loyalty
points and unredeemed gift cards based on historical redemption rates. The
weighted-average retail price per point redeemed is based on our most recent
actual loyalty point redemptions and is adjusted as appropriate for recent
changes in redemption values, including the mix of rewards redeemed. Our
estimate of the amount and timing of gift card redemptions is based primarily on
historical transaction experience.

We continually evaluate our methodology and assumptions based on developments in
redemption patterns, retail price per point redeemed and other factors. Changes
in the ultimate redemption rate and weighted-average retail price per point
redeemed have the effect of either increasing or decreasing the deferred revenue
balance through current period revenue by an amount estimated to cover the
retail value of all points previously earned but not yet redeemed by loyalty
program members as of the end of the reporting period. A 10% change in our
customer loyalty program redemption rate or a 10% change in our weighted-average
retail value per point redeemed at January 29, 2022, in each case, would have
affected net earnings by approximately $4.6 million in fiscal 2021. A 10% change
in our gift card breakage rate at January 29, 2022 would have affected net
earnings by approximately $11.2 million in fiscal 2021.

Income taxes

We account for income taxes using an asset-liability approach, and deferred taxes are determined based on the estimated future tax effect of differences between the financial reporting and the tax bases of assets and liabilities. using current tax rates. Due to our operations in many foreign countries, our overall tax rate is derived from a combination of applicable tax rates in the various jurisdictions in which we operate.

Additionally, a valuation allowance is recorded against a deferred tax asset if
it is not more likely than not that the asset will be realized. We assess the
available positive and negative evidence to estimate whether sufficient future
taxable income will be generated to permit use of the existing deferred tax
assets. Several factors are considered in evaluating the realizability of our
deferred tax assets, including the remaining years available for carry forward,
the tax laws for the applicable jurisdictions, the future profitability of the
specific business units, and tax planning strategies. Based on our analysis, we
have determined that it is more likely than not that some portion of our
deferred tax assets will not be realized. Our valuation allowances increased to
$338.3 million as of January 29, 2022, primarily due to cumulative losses in
certain jurisdictions. See Item 8, Notes to the Consolidated Financial
Statements,   Note 15  , "Income Taxes," for additional information.

We maintain accruals for uncertain tax positions until examination of the tax
year is completed by the taxing authority, available review periods expire, or
additional facts and circumstances cause us to change our assessment of the
appropriate accrual amount. Our liability for uncertain tax positions was $12.9
million as of January 29, 2022. Considerable management judgment is necessary to
assess the inherent uncertainties related to the interpretations of complex tax
laws, regulations and taxing
                                       27
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authority rulings, as well as to the expiration of statutes of limitations in
the jurisdictions in which we operate. We base our estimate of an annual
effective tax rate at any given point in time on a calculated mix of the tax
rates applicable to our operations and to estimates of the amount of income to
be derived in any given jurisdiction. We file our tax returns based on our
understanding of the appropriate tax rules and regulations. However,
complexities in the tax rules and our operations, as well as positions taken
publicly by the taxing authorities, may lead us to conclude that accruals for
uncertain tax positions are required.

Our judgments and estimates concerning uncertain tax positions may change as a
result of evaluation of new information, such as the outcome of tax audits or
changes to or further interpretations of tax laws and regulations. Our judgments
and estimates concerning realizability of deferred tax assets could change if
any of the evaluation factors change. If such changes take place, there is a
risk that our effective tax rate could increase or decrease in any period,
impacting our net earnings.

RECENT ACCOUNTING STANDARDS AND PRINCIPLES

See Section 8, Notes to the Consolidated Financial Statements, Note 3, “New Accounting Pronouncements”, for recent accounting standards and pronouncements.

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