Walmart 2006 Annual Report Download - page 41

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39
Hedging instruments with an unrealized gain are recorded on the
Consolidated Balance Sheets in other current assets or other assets
and deferred charges, based on maturity date. Those instruments
with an unrealized loss are recorded in accrued liabilities 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.
Fair value 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 ACCUMULATED OTHER COMPREHENSIVE INCOME
Comprehensive income is net income plus certain other items that are recorded directly to shareholders’ equity. Amounts included in
accumulated other comprehensive income for the Company’s derivative instruments and minimum pension liability are recorded net
of the related income tax effects. The following table gives further detail regarding changes in the composition of accumulated other
comprehensive income during fi scal 2006, 2005 and 2004 (in millions):
Foreign Currency Derivative Minimum
Translation Instruments Pension Liability Total
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)
Reclassifi cation 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)
Reclassifi cation to earnings 41 41
Subsidiary minimum pension liability (93) (93)
Balance at January 31, 2005 $ 2,690 $ 287 $ (283) $ 2,694
Foreign currency translation adjustment (1,920) (1,920)
Change in fair value of hedge instruments 157 157
Reclassifi cation to earnings 71 71
Subsidiary minimum pension liability 51 51
Balance at January 31, 2006 $ 770 $515 $(232) $ 1,053
5 INCOME TAXES
The income tax provision consists of the following (in millions):
Fiscal Year Ended January 31, 2006 2005 2004
Current:
Federal $4,646 $4,116 $4,039
State and local 449 640 333
International 837 570 569
Total current tax provision 5,932 5,326 4,941
Deferred:
Federal (62) 311 31
State and local 56 (71) 2
International (123) 23 144
Total deferred tax provision (129) 263 177
Total provision for
income taxes $5,803 $5,589 $5,118
Income from continuing operations before income taxes and
minority interest by jurisdiction is as follows (in millions):
Fiscal Year Ended January 31, 2006 2005 2004
United States $14,447 $13,599 $12,075
Outside the United States $ 2,911 2,506 2,118
Total income from continuing
operations before income
taxes and minority interest $17,358 $16,105 $14,193