v2.4.0.6

Income Taxes | 12 Months Ended
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Jan. 28, 2012
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The approximate tax effect of the significant components of Staples' deferred tax assets and liabilities are as follows (in thousands):
|  | January 28, 2012 |  | January 29, 2011
Deferred income tax assets: |  |  |  |
Deferred rent |  | $ | 46,446 |  |  | $ | 49,256 |
Foreign tax credit carryforwards |  | 90,730 |  |  | 109,913 |
Net operating loss carryforwards |  | 313,732 |  |  | 402,136 |
Capital loss carryforwards |  | 18,598 |  |  | 20,110 |
Employee benefits |  | 126,632 |  |  | 125,466 |
Merger related charges |  | 15,072 |  |  | 20,044 |
Inventory |  | 42,556 |  |  | 52,604 |
Insurance |  | 39,375 |  |  | 35,891 |
Deferred revenue |  | 82,724 |  |  | 26,672 |
Depreciation |  | 32,887 |  |  | 45,362 |
Unrealized loss on hedge instruments |  | 6,028 |  |  | 4,629 |
Other—net |  | 77,925 |  |  | 78,786 |
Total deferred income tax assets |  | 892,705 |  |  | 970,869 |
Total valuation allowance |  | (307,616 | ) |  | (331,567 | )
Net deferred income tax assets |  | $ | 585,089 |  |  | $ | 639,302 |
Deferred income tax liabilities: |  |  |  |
Intangibles |  | $ | (148,601 | ) |  | $ | (200,901 | )
Other—net |  | (4,616 | ) |  | (3,308 | )
Total deferred income tax liabilities |  | (153,217 | ) |  | (204,209 | )
Net deferred income tax assets |  | $ | 431,872 |  |  | $ | 435,093 |
The deferred tax asset from tax loss carryforwards of $313.7 million represents approximately $1.16 billion of net operating loss carryforwards, $639.9 million of which are subject to expiration beginning in 2012. The remainder has an indefinite carryforward period. The deferred tax asset from foreign tax credit carryforwards of $90.7 million is subject to expiration beginning in 2015. The valuation allowance decreased by $24.0 million during 2011, primarily due to utilization of certain foreign net operating losses. For financial reporting purposes, consolidated income before income taxes includes the following components (in thousands):
|  | 2011 |  | 2010 |  | 2009
Pretax income: |  |  |  |  |  |
United States |  | $ | 1,009,979 |  |  | $ | 877,936 |  |  | $ | 728,765 |
Foreign |  | 449,162 |  |  | 478,659 |  |  | 427,129 |
|  | $ | 1,459,141 |  |  | $ | 1,356,595 |  |  | $ | 1,155,894 |
The provision for income taxes consists of the following (in thousands):
|  | 2011 |  | 2010 |  | 2009
Current tax expense: |  |  |  |  |  |
Federal |  | $ | 253,078 |  |  | $ | 142,282 |  |  | $ | 329,809 |
State |  | 59,877 |  |  | 49,797 |  |  | 42,547 |
Foreign |  | 155,647 |  |  | 103,317 |  |  | 116,180 |
Deferred tax expense (benefit): |  |  |  |  |  |
Federal |  | 75,233 |  |  | 141,103 |  |  | (63,494 | )
State |  | (4,666 | ) |  | 6,329 |  |  | (8,191 | )
Foreign |  | (63,861 | ) |  | 25,198 |  |  | (18,068 | )
Total income tax expense |  | $ | 475,308 |  |  | $ | 468,026 |  |  | $ | 398,783 |
A reconciliation of the federal statutory tax rate to Staples' effective tax rate on net income is as follows:
|  | 2011 |  | 2010 |  | 2009
Federal statutory rate |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State effective rate, net of federal benefit |  | 2.6 |  |  | 3.3 |  |  | 2.9 |
Effect of foreign taxes |  | (4.6 | ) |  | (5.5 | ) |  | (3.4 | )
Tax credits |  | (0.5 | ) |  | (0.4 | ) |  | (0.7 | )
Italian tax refund (previously deemed uncollectible) |  | (1.4 | ) |  | — |  |  | — |
Other |  | 1.5 |  |  | 2.1 |  |  | 0.7 |
Effective tax rate |  | 32.6 | % |  | 34.5 | % |  | 34.5 | %
The effective tax rate in any year is impacted by the geographic mix of earnings. Additionally, certain foreign operations are subject to both U.S. and foreign income tax regulations, and as a result, income before tax by location and the components of income tax expense by taxing jurisdiction are not directly related. The tax impact of the unrealized gain or loss on instruments designated as hedges of net investments in foreign subsidiaries is reported in accumulated other comprehensive loss in stockholders' equity. The Company operates in multiple jurisdictions and could be subject to audit in these jurisdictions. These audits can involve complex issues that may require an extended period of time to resolve and may cover multiple years. In the Company's opinion, an adequate provision for income taxes has been made for all years subject to audit. Income tax payments were $308.9 million, $404.9 million and $236.1 million during 2011, 2010 and 2009, respectively. Income taxes have not been provided on certain undistributed earnings of foreign subsidiaries of approximately $896.6 million, net of the noncontrolling interest, because such earnings are considered to be indefinitely reinvested in the business. The determination of the amount of the unrecognized deferred tax liability related to the undistributed earnings is not practicable because of the complexities associated with its hypothetical calculation. Uncertain Tax Positions At January 28, 2012, the Company had $250.4 million of gross unrecognized tax benefits, of which $247.6 million, if recognized, would affect the Company's tax rate. At January 29, 2011, the Company had $254.2 million of gross unrecognized tax benefits, of which $209.5 million, if recognized, would affect the Company's tax rate. The Company does not reasonably expect any material changes to the estimated amount of liability associated with its uncertain tax positions through fiscal 2012. The following summarizes the activity related to our unrecognized tax benefits (in thousands):
|  | 2011 |  | 2010 |  | 2009
Balance at beginning of fiscal year |  | $ | 254,167 |  |  | $ | 264,277 |  |  | $ | 222,892 |
Additions for tax positions related to current year |  | 48,032 |  |  | 25,876 |  |  | 47,354 |
Additions (reductions) for tax positions of prior years |  | 15,361 |  |  | (9,983 | ) |  | 15,422 |
Reduction for Statute of Limitations Expiration |  | (13,441 | ) |  | (19,840 | ) |  | (20,802 | )
Settlements |  | (53,722 | ) |  | (6,163 | ) |  | (589 | )
Balance at end of fiscal year |  | $ | 250,397 |  |  | $ | 254,167 |  |  | $ | 264,277 |
The change in uncertain tax positions during 2011 for settlement primarily relates to reductions in deferred tax assets against which a tax reserve had been maintained and had no impact on the overall effective tax rate. Staples is subject to U.S. federal income tax, as well as income tax of multiple state and foreign jurisdictions. The Company has substantially concluded all U.S. federal income tax matters for years through 2007. All material state, local and foreign income tax matters for years through 2002 have been substantially concluded. Staples' continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had $32.7 million and $30.1 million accrued for gross interest and penalties as of January 28, 2012 and January 29, 2011, respectively.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 + Details
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