Income Taxes (Tables)

11 Months Ended

Feb. 02, 2013

Income Tax Disclosure [Abstract]

Reconciliation of the federal statutory income tax rate to income tax expense

The following is a reconciliation of the federal statutory income tax rate to income tax expense in fiscal 2013 (11-month), 2012 and 2011 ($ in millions):

	11-Month			12-Month
	2013			2012			2011
Federal income tax at the statutory rate	$	(69	)	$	758		$	787
State income taxes, net of federal benefit	(2		)	47			49
(Benefit) expense from foreign operations	49			(63		)	(55		)
Other	5			—			3
Goodwill impairment (non-deductible)	287			—			—
Income tax expense	$	270		$	742		$	784
Effective income tax rate	(138.3		)%	34.3		%	34.9		%

Earning before income tax expense and equity in income (loss) of affiliates

Earnings (loss) from continuing operations before income tax expense and equity in income of affiliates by jurisdiction was as follows in fiscal 2013 (11-month), 2012 and 2011 ($ in millions):

	11-Month			12-Month
	2013			2012		2011
United States	$	281		$	1,644	$	1,893
Outside the United States	(477		)	522		354
Earnings (loss) from continuing operations before income tax expense and equity in income of affiliates	$	(196	)	$	2,166	$	2,247

Components of income tax expense

Income tax expense was comprised of the following in fiscal 2013 (11-month), 2012 and 2011 ($ in millions):

	11-Month			12-Month
	2013			2012			2011
Current:
Federal	$	204		$	515		$	775
State	(2		)	61			77
Foreign	66			72			50
	268			648			902
Deferred:
Federal	27			91			(113		)
State	(2		)	11			(2		)
Foreign	(23		)	(8		)	(3		)
	2			94			(118		)
Income tax expense	$	270		$	742		$	784

Deferred income tax assets and liabilities

Deferred taxes are the result of differences between the bases of assets and liabilities for financial reporting and income tax purposes. Deferred tax assets and liabilities were comprised of the following ($ in millions):

	February 2, 2013			March 3, 2012
Accrued property expenses	$	194		$	146
Other accrued expenses	119			108
Deferred revenue	153			128
Compensation and benefits	95			103
Stock-based compensation	137			157
Loss and credit carryforwards	266			310
Other	125			121
Total deferred tax assets	1,089			1,073
Valuation allowance	(228		)	(204		)
Total deferred tax assets after valuation allowance	861			869
Property and equipment	(343		)	(376		)
Goodwill and intangibles	(127		)	(118		)
Inventory	(90		)	(85		)
Other	(22		)	(27		)
Total deferred tax liabilities	(582		)	(606		)
Net deferred tax assets	$	279		$	263

Schedule of deferred tax assets and liabilities included in consolidated balance sheets

Deferred tax assets and liabilities included in our Consolidated Balance Sheets were as follows ($ in millions):

	February 2, 2013			March 3, 2012
Other current assets	$	228		$	226
Other assets	66			53
Other current liabilities	(5		)	—
Other long-term liabilities	(10		)	(16		)
Net deferred tax assets	$	279		$	263

Reconciliation of changes in unrecognized tax benefits

The following table provides a reconciliation of changes in unrecognized tax benefits for fiscal 2013 (11-month), 2012 and 2011 ($ in millions):

	11-Month			12-Month
	2013			2012			2011
Balance at beginning of period	$	387		$	359		$	393
Gross increases related to prior period tax positions	10			69			36
Gross decreases related to prior period tax positions	(22		)	(35		)	(90		)
Gross increases related to current period tax positions	37			43			40
Settlements with taxing authorities	(10		)	(20		)	—
Lapse of statute of limitations	(19		)	(29		)	(20		)
Balance at end of period	$	383		$	387		$	359