Macy's 2011 Annual Report Download - page 62

Download and view the complete annual report

Please find page 62 of the 2011 Macy's 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.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F-22
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax
liabilities are as follows:
January 28,
2012 January 29,
2011
(millions)
Deferred tax assets:
Post employment and postretirement benefits ......................................................... $ 559 $ 473
Accrued liabilities accounted for on a cash basis for tax purposes.......................... 227 195
Long-term debt......................................................................................................... 109 117
Unrecognized state tax benefits and accrued interest............................................... 77 91
State operating loss carryforwards........................................................................... 52 61
Other......................................................................................................................... 155 144
Valuation allowance................................................................................................. (34)(35)
Total deferred tax assets.................................................................................... 1,145 1,046
Deferred tax liabilities:
Excess of book basis over tax basis of property and equipment.............................. (1,733)(1,793)
Merchandise inventories .......................................................................................... (531)(483)
Intangible assets ....................................................................................................... (195)(162)
Other......................................................................................................................... (235)(217)
Total deferred tax liabilities.............................................................................. (2,694)(2,655)
Net deferred tax liability ................................................................................... $ (1,549) $ (1,609)
The valuation allowance at January 28, 2012 and January 29, 2011 relates to net deferred tax assets for state net operating
loss carryforwards. The net change in the valuation allowance amounted to a decrease of $1 million for 2011 and an increase of
$2 million for 2010.
As of January 28, 2012, the Company had no federal net operating loss carryforwards and state net operating loss
carryforwards of approximately $1,079 million, which will expire between 2012 and 2031.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
January 28,
2012 January 29,
2011
(millions)
Balance, beginning of period........................................................................................... $ 205 $ 207
Additions based on tax positions related to the current year........................................... 23 19
Additions for tax positions of prior years........................................................................ — —
Reductions for tax positions of prior years...................................................................... (21)(8)
Settlements ...................................................................................................................... (15)(4)
Statute expirations ........................................................................................................... (13)(9)
Balance, end of period..................................................................................................... $ 179 $ 205
Amounts recognized in the Consolidated Balance Sheets at
January 28, 2012 and January 29, 2011
Current income taxes................................................................................................ $ 18 $ 11
Long-term deferred income taxes ............................................................................ 27 24
Other liabilities......................................................................................................... 134 170
$ 179 $ 205
As of January 28, 2012 and January 29, 2011, the amount of unrecognized tax benefits, net of deferred tax assets, that, if
recognized would affect the effective income tax rate, was $116 million and $133 million, respectively.