Walmart 2013 Annual Report Download - page 50

48 || Walmart 2013 Annual Report
9 Taxes
Income from Continuing Operations
The components of income from continuing operations before income
taxes are as follows:
Fiscal Years Ended January31,
(Amounts in millions) 2013 2012 2011
U.S. $19,352 $18,685 $18,398
Non-U.S. 6,385 5,713 5,140
Total income from continuing
operations before income taxes $25,737 $24,398 $23,538
A summary of the provision for income taxes is as follows:
Fiscal Years Ended January31,
(Amounts in millions) 2013 2012 2011
Current:
U.S. federal $5,611 $4,596 $4,600
U.S. state and local 622 743 637
International 1,766 1,403 1,466
Total current tax provision 7,999 6,742 6,703
Deferred:
U.S. federal 38 1,444 818
U.S. state and local (8) 57 39
International (48) (299) 19
Total deferred tax expense (bene t) (18) 1,202 876
Total provision for income taxes $7,981 $7,944 $7,579
E ective Income Tax Rate Reconciliation
The Company’s e ective income tax rate is typically lower than the U.S.
statutory tax rate primarily because of bene ts from lower-taxed global
operations, including the use of global funding structures and certain
U.S. tax credits. The Company’s non-U.S. income is generally subject to
local country tax rates that are below the 35% U.S. statutory tax rate.
Certain non-U.S. earnings have been inde nitely reinvested outside
the U.S. and are not subject to current U.S. income tax. A reconciliation
of the signi cant di erences between the U.S. statutory tax rate and the
e ective income tax rate on pretax income from continuing operations
is as follows:
Fiscal Years Ended January 31,
2013 2012 2011
U.S. statutory tax rate 35.0% 35.0% 35.0%
U.S. state income taxes, net of
federal income tax bene t 1.7% 2.0% 1.9%
Income taxed outside the U.S. (2.6)% (2.8)% (2.2)%
Net impact of repatriated
international earnings (2.5)% (0.3)% (1.5)%
Other, net (0.6)% (1.3)% (1.0)%
E ective income tax rate 31.0% 32.6% 32.2%
Deferred Taxes
The signi cant components of the Company’s deferred tax account
balances are as follows:
January 31,
(Amounts in millions) 2013 2012
Deferred tax assets:
Loss and tax credit carryforwards $ 3,525 $ 2,996
Accrued liabilities 2,683 2,949
Share-based compensation 204 376
Other 1,500 1,029
Total deferred tax assets 7,912 7,350
Valuation allowance (2,225) (2,528)
Deferred tax assets, net of valuation allowance 5,687 4,822
Deferred tax liabilities:
Property and equipment 5,830 5,891
Inventories 1,912 1,627
Other 1,157 409
Total deferred tax liabilities 8,899 7,927
Net deferred tax liabilities $ 3,212 $ 3,105
The deferred taxes are classi ed as follows in the Company’s
Consolidated Balance Sheets:
January 31,
(Amounts in millions) 2013 2012
Balance Sheet classi cation:
Assets:
Prepaid expenses and other $ 520 $ 815
Other assets and deferred charges 757 738
Asset subtotals 1,277 1,553
Liabilities:
Accrued liabilities 116 41
Deferred income taxes and other 4,373 4,617
Liability subtotals 4,489 4,658
Net deferred tax liabilities $3,212 $3,105
Unremitted Earnings
United States income taxes have not been provided on accumulated but
undistributed earnings of the Company’s international subsidiaries of
approximately $19.2 billion and $19.7 billion as of January 31, 2013 and
2012, 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 unrecog-
nized deferred tax liability related to these undistributed earnings is not
practicable because of the complexities with its hypothetical calculation.
The Company provides deferred or current income taxes on earnings of
international subsidiaries in the period that the Company determines it
will remit those earnings.
Notes to Consolidated Financial Statements