Walmart 2012 Annual Report Download - page 50
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Please find page 50 of the 2012 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.48 Walmart 2012 Annual Report
Deferred Taxes
The signifi cant components of the Company’s deferred tax account
balances are as follows:
January 31,
(Amounts in millions) 2012 2011
Deferred tax assets:
Loss and tax credit carryforwards $ 2,996 $ 2,968
Accrued liabilities 2,949 3,532
Share-based compensation 376 332
Other 1,029 708
Total deferred tax assets 7,350 7,540
Valuation allowance (2,528) (2,899)
Deferred tax assets, net of valuation allowance $ 4,822 $ 4,641
Deferred tax liabilities:
Property and equipment $ 5,891 $ 4,848
Inventories 1,627 1,014
Other 409 474
Total deferred tax liabilities 7,927 6,336
Net deferred tax liabilities $ 3,105 $ 1,695
The deferred taxes noted above are classifi ed as follows in the
Company’s Consolidated Balance Sheets:
January 31,
(Amounts in millions) 2012 2011
Balance Sheet Classi cation:
Assets:
Prepaid expenses and other $ 815 $1,636
Other assets and deferred charges 738 327
Asset subtotals 1,553 1,963
Liabilities:
Accrued liabilities 41 17
Deferred income taxes and other 4,617 3,641
Liability subtotals 4,658 3,658
Net deferred tax liabilities $3,105 $1,695
Unremitted Earnings
United States income taxes have not been provided on accumulated
but undistributed earnings of the Company’s international subsidiaries
of approximately $19.7 billion and $17.0 billion as of January 31, 2012 and
2011, respectively, as the Company intends to permanently reinvest these
amounts outside of the United States. However, if any portion were
to be distributed, the related U.S. tax liability may be reduced by foreign
income taxes paid on those earnings. Determination of the unrecognized
deferred tax liability related to these undistributed earnings is not
practicable because of the complexities with its hypothetical calculation.
Deferred or current taxes are and have been provided for earnings of
international subsidiaries and associated companies when the Company
plans to remit those earnings.
Net Operating Losses, Tax Credit Carryforwards
and Valuation Allowances
At January 31, 2012, the Company had net operating loss and capital loss
carryforwards totaling approximately $5.3 billion. Of these carryforwards,
approximately $3.4 billion will expire, if not utilized, in various years
through 2022. The remaining carryforwards have no expiration. At
January 31, 2012, the Company had foreign tax credit carryforwards of
$1.2 billion, which will expire in various years through 2022, if not utilized.
As of January 31, 2012, the Company has provided a valuation allowance
of approximately $2.5 billion on deferred tax assets associated primarily
with net operating loss carryforwards for which management has
determined it is more likely than not that the deferred tax asset will not
be realized. The $371 million net change in the valuation allowance
during fi scal 2012 related to releases arising from the use of net operating
and capital loss carryforwards, releases due to changes in judgment
regarding the future ability to use net operating and capital loss
carryforwards, increases from certain net operating losses arising in
fi scal 2012, decreases due to operating and capital loss expirations and
fl uctuations in currency exchange rates. Management believes that it is
more likely than not that the remaining net deferred tax assets will be
fully realized.
Uncertain Tax Positions
The benefi ts of uncertain tax positions are recorded in the Company’s
Consolidated Financial Statements only after determining a more-likely-
than-not probability that the uncertain tax positions will withstand
challenge, if any, from taxing authorities.
As of January 31, 2012 and 2011, the amount of unrecognized tax benefi ts
related to continuing operations was $611 million and $795 million,
respectively, of which, the amount of unrecognized tax benefi ts that
would aff ect the Company’s eff ective tax rate is $520 million and
$687 million for January 31, 2012 and 2011, respectively.
A reconciliation of unrecognized tax benefi ts from continuing operations
is as follows:
Fiscal Years Ended January 31,
(Amounts in millions)
2012 2011 2010
Unrecognized tax benefi t,
beginning of year $ 795 $1,019 $1,017
Increases related to prior year
tax positions 87 101 129
Decreases related to prior year
tax positions (162) (61) (33)
Increases related to current year
tax positions 56 199 246
Settlements during the period (161) (453) (340)
Lapse in statutes of limitations (4) (10) —
Unrecognized tax benefi t,
end of year $ 611 $ 795 $1,019
Notes to Consolidated Financial Statements