Walmart 2013 Annual Report Download - page 49

Walmart 2013 Annual Report || 47
accumulated other comprehensive income (loss) and is subsequently
reclassi ed into earnings in the period that the hedged forecasted
transaction a ects earnings. The hedged items are recognized foreign
currency-denominated liabilities that are remeasured at spot exchange
rates each period, and the assessment of e ectiveness (and measure-
ment of any ine ectiveness) is based on total changes in the related
derivative’s cash  ows. As a result, the amount reclassi ed into earnings
each period includes an amount that o sets the related transaction gain
or loss arising from that remeasurement and the adjustment to earnings
for the period’s allocable portion of the initial spot-forward di erence
associated with the hedging instrument. These cash  ow instruments
will mature on dates ranging from September 2029 to March 2034.
The Company also uses forward starting receive variable-rate, pay  xed-
rate interest rate swaps to hedge its exposure to the variability in future
cash  ows due to changes in the LIBOR swap rate for U.S.-denominated
10- and 30-year debt issuances forecasted to occur in the future.
Amounts reported in accumulated other comprehensive income (loss)
related to these derivatives will be reclassi ed from accumulated other
comprehensive income (loss) to earnings as interest payments are made
on the forecasted hedged  xed-rate debt, adjusting interest expense to
re ect the  xed-rate locked in by the forward starting swaps. These cash
 ow instruments hedge forecasted interest payments over a maximum
period of 32 years. These forward starting swaps will be terminated on
the day the hedged forecasted debt issuances occur, but no later than
October 31, 2014, if the hedged forecasted debt issuances do not occur.
Notes to Consolidated Financial Statements
Financial Statement Presentation
Derivative instruments with an unrealized gain are recorded in the Company’s Consolidated Balance Sheets as either a current or a non-current asset,
based on maturity date, and those hedging instruments with an unrealized loss are recorded as either a current or a non-current liability, based on
maturity date.
The Company’s derivative instruments, as well as its nonderivative debt instruments designated and qualifying as hedging instruments,
were classi ed as follows in the Company’s Consolidated Balance Sheets:
January 31, 2013 January 31, 2012
Fair Value Net Investment Cash Flow Fair Value Net Investment Cash Flow
(Amounts in millions) Instruments Instruments Instruments Instruments Instruments Instruments
Derivative instruments
Prepaid expenses and other $29 $ — $ — $ 2 $ — $ —
Other assets and deferred charges 31 223 327 181 316 91
Derivative asset subtotals $60 $ 223 $327 $183 $ 316 $ 91
Accrued liabilities $— $ — $ 4 $ — $ — $ —
Deferred income taxes and other — — 91 — — 110
Derivative liability subtotals $— $ — $ 95 $ — $ — $110
Nonderivative hedging instruments
Long-term debt due within one year $— $ 818 $ — $ — $ 785 $ —
Long-term debt — 6,145 — — 7,546 —
Nonderivative hedge
liability subtotals $— $6,963 $ — $ — $8,331 $ —
Gains and losses related to the Company’s derivatives primarily relate to interest rate hedges, which are included in interest, net, in the Company’s
Consolidated Statements of Income. Amounts reclassi ed from accumulated other comprehensive income (loss) to net income for the  scal years
ending January 31, 2013 and 2012, as well as the amounts expected to be reclassi ed from accumulated other comprehensive income (loss) to net
income during the next 12 months, are not signi cant.