Best Buy 2008 Annual Report Download - page 96

$ in millions, except per share amounts or as otherwise noted
Deferred tax assets and liabilities included in our The following table provides a reconciliation of the
consolidated balance sheets were as follows: beginning and ending amount of unrecognized tax benefits
in fiscal 2008:
March 1, March 3,
2008 2007
Balance at March 4, 2007 $195
Other current assets $109 $144
Gross increases related to prior period tax
Other assets 50 35
positions 18
Net deferred tax assets $159 $179 Gross decreases related to prior period tax
positions (7)
At March 1, 2008, we had total net operating loss
Gross increases related to current period tax
carryforwards from international operations of $14, $13 of
positions 59
which expires between fiscal 2010 and fiscal 2027, and
Settlements with taxing authorities (4)
$1 that has an indefinite life. At March 1, 2008, a
Lapse of statute of limitations —
valuation allowance of $9 was established against certain
Balance at March 1, 2008 $261
international net operating loss carryforwards. Additionally,
at March 1, 2008, we had acquired federal net operating
At March 1, 2008 and March 4, 2007, $110 and $81,
losses of $18 that expire between fiscal 2019 and fiscal
respectively, of unrecognized tax benefits would favorably
2027.
impact the effective tax rate if recognized.
We have not provided deferred taxes on unremitted
We recognize interest and penalties (not included in the
earnings attributable to foreign operations that have been
‘‘unrecognized tax benefits’’ above), as well as interest
considered to be reinvested indefinitely. These earnings
received from favorable tax settlements, as components of
relate to ongoing operations and were $714 at March 1,
income tax expense. Interest expense was $13 in fiscal
2008. It is not practicable to determine the income tax
2008. At March 1, 2008 and March 4, 2007, we had
liability that would be payable if such earnings were not
accrued interest of $45 and $31, respectively. No
indefinitely reinvested.
penalties were recognized in fiscal 2008 or accrued for at
We adopted the provisions of FIN No. 48 effective March 1, 2008.
March 4, 2007. The adoption of FIN No. 48 resulted in
We file a consolidated U.S. federal income tax return, as
the reclassification of $195 of certain tax liabilities from
well as income tax returns in various states and foreign
current to long-term and a $13 increase in our liability for
jurisdictions. With few exceptions, we are no longer subject
unrecognized tax benefits, which was accounted for as a
to U.S. federal, state and local, or non-U.S. income tax
reduction to the March 4, 2007 retained earnings
examinations by tax authorities for years before fiscal
balance. All unrecognized tax benefits at March 1, 2008,
2003. In April 2007, the Internal Revenue Service
were classified as long-term liabilities on our consolidated
completed its examination of our U.S. federal income tax
balance sheet.
returns for fiscal 2003 and 2004, and we expect
resolution of the issues on appeal pertaining to those
years in fiscal 2009. However, we do not expect that the
resolution of these issues will have a material effect on our
consolidated financial condition or results of operations.
Because existing tax positions will continue to generate
increased liabilities for unrecognized tax benefits over the
next 12 months, and the fact that we are routinely under
audit by various taxing authorities, it is reasonably possible
that the amount of unrecognized tax benefits will change
during the next 12 months. An estimate of the amount or
range of such change cannot be made at this time.
However, we do not expect the change, if any, to have a
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