Walmart 2004 Annual Report Download - page 46

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44
Hedging instruments with a favorable fair value are classified as other assets and deferred charges in the Consolidated Balance Sheets.
Those instruments with an unfavorable fair value are classified as accrued liabilities.
Cash and cash equivalents: The carrying amount approximates fair value due to the short maturity of these instruments.
Long-term debt: Fair value is based on the Company’s current incremental borrowing rate for similar types of borrowing arrangements.
Interest rate instruments and net investment instruments: The fair values are estimated amounts the Company would receive or pay to
terminate the agreements as of the reporting dates.
4 Other Accumulated Comprehensive Income
Comprehensive income is net income plus certain other items that are recorded directly to Shareholders’ equity. The following table
gives further detail regarding the changes in the composition of comprehensive income during fiscal 2004, 2003 and 2002 (in millions):
Foreign Minimum
Currency Derivative Pension
Translation Instruments Liability Total
Balance at January 31, 2001 ($ 1,766) $ 1,082 $ – ($ 684)
Foreign currency translation adjustment (472) – – (472)
Change in fair value of hedge instruments – 322 – 322
Reclassification of tax payable on terminated hedges – (426) – (426)
Reclassification to earnings – (8) – (8)
Balance at January 31, 2002 ( 2,238) 970 – (1,268)
Foreign currency translation adjustment 1,113 – – 1,113
Change in fair value of hedge instruments – (164) – (164)
Reclassification to earnings – 16 – 16
Subsidiary minimum pension liability – – (206) (206)
Balance at January 31, 2003 ( 1,125) 822 (206) (509)
Foreign currency translation adjustment 1,685 – – 1,685
Change in fair value of hedge instruments – (444) – (444)
Reclassification to earnings – 103 – 103
Subsidiary minimum pension liability – – 16 16
Balance at January 31, 2004 $ 560 $ 481 ($ 190) $ 851
5 Income Taxes
The income tax provision consists of the following (in millions):
Fiscal years ended January 31, 2004 2003 2002
Current
Federal $ 4,039 $ 3,299 $ 2,941
State and local 333 229 303
International 569 355 381
Total current tax provision 4,941 3,883 3,625
Deferred
Federal 31 305 188
State and local 226 14
International 144 143 (62)
Total deferred tax provision 177 474 140
Total provision for income taxes $ 5,118 $ 4,357 $ 3,765