Walmart 2005 Annual Report Download - page 44

Download and view the complete annual report

Please find page 44 of the 2005 Walmart annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 60

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60

Hedging instruments with a favorable fair value are recorded on
the Consolidated Balance Sheets as other current assets or other
assets and deferred charges, based on maturity date. Those instru-
ments with an unfavorable fair value are recorded in accrued liabil-
ities or deferred income taxes and other, based on maturity date.
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 incre-
mental 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. Amounts included in
other accumulated comprehensive income for the company’s derivative instruments and minimum pension liability are recorded net
of the฀
comprehensive income during fiscal 2005, 2004 and 2003 (in millions):
Foreign Currency Derivative Minimum
Translation Instruments Pension Liability Total
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
Foreign currency translation adjustment 2,130 2,130
Change in fair value of hedge instruments (235) (235)
Reclassification to earnings 41 41
Subsidiary minimum pension liability (93) (93)
Balance at January 31, 2005 $2,690 $287 $(283) $2,694
5 Income Taxes
The income tax provision consists of the following (in millions):
Fiscal years ended January 31, 2005 2004 2003
Current:
Federal $4,116 $4,039 $3,299
State and local 640 333 229
International 570 569 355
Total current tax provision 5,326 4,941 3,883
Deferred:
Federal 311 31 305
State and local (71) 2 26
International 23 144 143
Total deferred tax provision 263 177 474
Total provision for
income taxes $5,589 $5,118 $4,357
Income from continuing operations before income taxes and
minority interest is as follows (in millions):
Fiscal years ended January 31, 2005 2004 2003
United States $13,599 $12,075 $10,490
Outside the United States 2,506 2,118 1,878
Total income from continuing
operations before income
taxes and minority interest $16,105 $14,193 $12,368
Notes to Consolidated Financial Statements
W A L -M A R T
42 WAL-MART 2005 ANNUAL REPORT