EX-13 3 annualreporttoshareholders.htm PORTIONS OF OUR ANNUAL REPORT TO SHAREHOLDERS Annual Report to Shareholders - 1.31.13
Five-Year Financial Summary
Exhibit 13
Wal-Mart Stores, Inc.
 
 
 
As of and for the Fiscal Years Ended January 31,
(Amounts in millions, except per share and unit count data)
 
2013
 
2012
 
2011
 
2010
 
2009
Operating results
 

 

 

 

 

Total revenues
 
$
469,162

 
$
446,950

 
$
421,849

 
$
408,085

 
$
404,254

Percentage change in total revenues from previous fiscal year
 
5.0
%
 
6.0
%
 
3.4
 %
 
0.9
 %
 
7.2
%
Net sales
 
466,114

 
443,854

 
418,952

 
405,132

 
401,087

Percentage change in net sales from previous fiscal year
 
5.0
%
 
5.9
%
 
3.4
 %
 
1.0
 %
 
7.3
%
Increase (decrease) in calendar comparable sales(1) in the United States
 
2.4
%
 
1.6
%
 
(0.6
)%
 
(0.8
)%
 
3.5
%
Walmart U.S.
 
2.0
%
 
0.3
%
 
(1.5
)%
 
(0.7
)%
 
3.2
%
Sam's Club
 
4.1
%
 
8.4
%
 
3.9
 %
 
(1.4
)%
 
4.9
%
Gross profit margin
 
24.4
%
 
24.5
%
 
24.8
 %
 
24.9
 %
 
24.3
%
Operating, selling, general and administrative expenses, as a percentage of net sales
 
19.1
%
 
19.2
%
 
19.4
 %
 
19.7
 %
 
19.4
%
Operating income
 
$
27,801

 
$
26,558

 
$
25,542

 
$
24,002

 
$
22,767

Income from continuing operations attributable to Walmart
 
16,999

 
15,766

 
15,355

 
14,449

 
13,235

Net income per common share:
 

 

 

 

 

Diluted income per common share from continuing operations attributable to Walmart
 
$
5.02

 
$
4.54

 
$
4.18

 
$
3.73

 
$
3.35

Dividends declared per common share
 
1.59

 
1.46

 
1.21

 
1.09

 
0.95

 
 
 
 
 
 
 
 
 
 
 
Financial position
 

 

 

 

 

Inventories
 
$
43,803

 
$
40,714

 
$
36,437

 
$
32,713

 
$
34,013

Property, equipment and capital lease assets, net
 
116,681

 
112,324

 
107,878

 
102,307

 
95,653

Total assets
 
203,105

 
193,406

 
180,782

 
170,407

 
163,096

Long-term debt, including obligations under capital leases
 
41,417

 
47,079

 
43,842

 
36,401

 
34,549

Total Walmart shareholders' equity
 
76,343

 
71,315

 
68,542

 
70,468

 
64,969

 
 
 
 
 
 
 
 
 
 
 
Unit counts
 

 

 

 

 

Walmart U.S. segment
 
4,005

 
3,868

 
3,804

 
3,755

 
3,703

Walmart International segment
 
6,148

 
5,651

 
4,557

 
4,099

 
3,595

Sam's Club segment
 
620

 
611

 
609

 
605

 
611

Total units
 
10,773

 
10,130

 
8,970

 
8,459

 
7,909

(1)
Comparable store and club sales include fuel. Comparable sales include sales from stores and clubs open for the previous 12 months, including remodels, relocations and expansions, as well as online sales.



Wal-Mart Stores, Inc.
Form 10-K
For the Fiscal Year Ended January 31, 2013


Table of Contents

1


Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
Wal-Mart Stores, Inc. ("Walmart," the "Company" or "we") operates retail stores in various formats under 69 banners around the world and is committed to saving people money so they can live better. We earn the trust of our customers every day by providing a broad assortment of quality merchandise and services at everyday low prices ("EDLP"), while fostering a culture that rewards and embraces mutual respect, integrity and diversity. EDLP is our pricing philosophy under which we price items at a low price every day so that our customers trust that our prices will not change under frequent promotional activities. Our focus for Sam's Club is to provide exceptional value on brand name and private label merchandise at "members only" prices for both business and personal use. Internationally, we operate with similar philosophies.
Our fiscal year ends on January 31 for our United States ("U.S.") and Canadian operations. We consolidate all other operations generally using a one-month lag and on a calendar basis. We discuss how the results of our various operations are consolidated for financial reporting purposes in Note 1 in the "Notes to Consolidated Financial Statements."
We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from year to year, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. We also discuss certain performance metrics that management uses to assess our performance. Additionally, the discussion provides information about the financial results of the various segments of our business to provide a better understanding of how those segments and their results affect the financial condition and results of operations of the Company as a whole. This discussion, which presents our results for the fiscal years ended January 31, 2013 ("fiscal 2013"), January 31, 2012 ("fiscal 2012") and January 31, 2011 ("fiscal 2011"), should be read in conjunction with our Consolidated Financial Statements and accompanying notes.
Our operations consist of three reportable business segments: Walmart U.S., Walmart International and Sam's Club. The Walmart U.S. segment includes the Company's mass merchant concept in the U.S., operating under the "Walmart" or "Wal-Mart" brand, as well as walmart.com. The Walmart International segment consists of the Company's operations outside of the U.S., including various retail websites. The Sam's Club segment includes the warehouse membership clubs in the U.S., as well as samsclub.com.
Our business is seasonal to a certain extent due to different calendar events and national and religious holidays, as well as different climates. Historically, our highest sales volume and operating income occur in the fiscal quarter ending January 31.
Throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations, we discuss segment operating income, comparable store and club sales and other measures. Management measures the results of its segments using, among other measures, each segment's operating income, including certain corporate overhead allocations. From time to time, we revise the measurement of each segment's operating income or other measures, including any corporate overhead allocations and other items impacting the measures used to evaluate our segment's results, as dictated by the information regularly reviewed by our chief operating decision maker. When we do so, the previous period amounts and balances are reclassified to conform to the current period's presentation. The amounts disclosed for "Other unallocated" in the leverage discussion of the Company's performance metrics consist of corporate overhead and other items not allocated to any of the Company's segments.
Comparable store and club sales is a metric which indicates the performance of our existing U.S. stores and clubs by measuring the change in sales for such stores and clubs for a particular period from the corresponding period in the previous year. Walmart's definition of comparable store and club sales includes sales from stores and clubs open for the previous 12 months, including remodels, relocations and expansions, as well as sales initiated online. Changes in format are excluded from comparable store and club sales when the conversion is accompanied by a relocation or expansion that results in a change in retail square feet of more than five percent. Comparable store and club sales are also referred to as "same-store" sales by others within the retail industry. The method of calculating comparable store and club sales varies across the retail industry. As a result, our calculation of comparable store and club sales is not necessarily comparable to similarly titled measures reported by other companies.

2


In discussing our operating results, the term currency exchange rates refers to the currency exchange rates we use to convert the operating results for all countries where the functional currency is not the U.S. dollar. We calculate the effect of changes in currency exchange rates as the difference between current period activity translated using the current period's currency exchange rates, and the comparable prior year period's currency exchange rates. Throughout our discussion, we refer to the results of this calculation as the impact of currency exchange rate fluctuations. When we refer to constant currency operating results, this means operating results without the impact of the currency exchange rate fluctuations and without the impact of acquisitions until the acquisitions are included in both comparable periods. The disclosure of constant currency amounts or results permits investors to understand better Walmart's underlying performance without the effects of currency exchange rate fluctuations or acquisitions. Volatility in currency exchange rates may impact the results, including net sales and operating income, of the Company and the Walmart International segment in the future.
We made certain reclassifications to prior period amounts and balances to conform to the presentation in the current fiscal year. These reclassifications did not impact the Company's consolidated operating income or net income. Additionally, certain prior period segment asset and expense allocations have been reclassified among segments to be comparable with the current period presentation.
The Retail Industry
We operate in the highly competitive retail industry in all of the countries we serve. We face strong sales competition from other discount, department, drug, dollar, variety and specialty stores, warehouse clubs and supermarkets. Many of these competitors are national, regional or international chains, as well as internet-based retailers and catalog businesses. We compete with a number of companies for prime retail site locations, as well as in attracting and retaining quality employees (whom we call "associates"). We, along with other retail companies, are influenced by a number of factors including, but not limited to: general economic conditions, cost of goods, consumer disposable income, consumer debt levels and buying patterns, consumer credit availability, interest rates, tax rates, customer preferences, unemployment, labor costs, inflation, deflation, currency exchange rate fluctuations, fuel and energy prices, weather patterns, climate change, catastrophic events, competitive pressures and insurance costs. Further information on certain risks to our Company can be located in "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended January 31, 2013, and in the discussion under "Forward-Looking Statements."

3


Company Performance Metrics
The Company's performance metrics emphasize three priorities for improving shareholder value: growth, leverage and returns. The Company's priority of growth focuses on sales through comparable store or club sales and unit square feet growth; the priority of leverage encompasses the Company's objective to increase its operating income at a faster rate than the growth in net sales by growing its operating, selling, general and administrative expenses ("operating expenses") at a slower rate than the growth of its net sales; and the priority of returns focuses on how efficiently the Company employs its assets through return on investment and how effectively the Company manages working capital and capital expenditures through free cash flow.
Growth
Net Sales
 
 
Fiscal Years Ended January 31,
 
 
2013
 
2012
 
2011
(Amounts in millions)
 
Net Sales
 
Percent
of Total
 
Percent
Change
 
Net Sales
 
Percent
of Total
 
Percent
Change
 
Net Sales
 
Percent
of Total
Walmart U.S.
 
$
274,490

 
58.9
%
 
3.9
%
 
$
264,186

 
59.5
%
 
1.5
%
 
$
260,261

 
62.1
%
Walmart International
 
135,201

 
29.0
%
 
7.4
%
 
125,873

 
28.4
%
 
15.2
%
 
109,232

 
26.1
%
Sam's Club
 
56,423

 
12.1
%
 
4.9
%
 
53,795

 
12.1
%
 
8.8
%
 
49,459

 
11.8
%
Net sales
 
$
466,114

 
100.0
%
 
5.0
%
 
$
443,854

 
100.0
%
 
5.9
%
 
$
418,952

 
100.0
%
Our consolidated net sales increased 5.0% and 5.9% in fiscal 2013 and 2012, respectively, when compared to the previous fiscal year. The increase in net sales for fiscal 2013 was due to 3.3% growth in retail square feet and positive comparable store and club sales. Additionally, net sales from acquisitions, through their respective anniversary dates, accounted for $4.0 billion of the increase in net sales. The increase in net sales was partially offset by $4.5 billion of negative impact from fluctuations in currency exchange rates. The increase in net sales for fiscal 2012 was due to positive comparable store and club sales and 5.3% growth in retail square feet, which includes square feet added through acquisitions. Net sales from acquisitions in fiscal 2012 accounted for $4.7 billion of the increase in net sales, and fluctuations in currency exchange rates positively impacted net sales by $4.0 billion.

4


Calendar Comparable Store and Club Sales
Comparable store and club sales is a metric that indicates the performance of our existing U.S. stores and clubs by measuring the change in sales for such stores and clubs for a particular period over the corresponding period in the previous year. The retail industry generally reports comparable store and club sales using the retail calendar (also known as the 4-5-4 calendar) and, to be consistent with the retail industry, we provide comparable store and club sales using the retail calendar in our quarterly earnings releases. However, when we discuss our comparable store and club sales below, we are referring to our calendar comparable store and club sales calculated using our fiscal calendar. As our fiscal calendar differs from the retail calendar, our calendar comparable store and club sales also differ from the retail calendar comparable store and club sales provided in our quarterly earnings releases. Calendar comparable store and club sales, as well as the impact of fuel, for fiscal 2013 and 2012, were as follows:
 
 
With Fuel
 
Fuel Impact
 
 
Fiscal Years Ended January 31,
 
Fiscal Years Ended January 31,
 
 
2013
 
2012
 
2013
 
2012
Walmart U.S.
 
2.0
%
 
0.3
%
 
0.0
%
 
0.0
%
Sam's Club
 
4.1
%
 
8.4
%
 
0.3
%
 
3.4
%
Total U.S.
 
2.4
%
 
1.6
%
 
0.1
%
 
0.6
%
Comparable store and club sales in the U.S., including fuel, increased 2.4% and 1.6% in fiscal 2013 and 2012, respectively, when compared to the previous fiscal year. U.S. comparable store and club sales increased during fiscal 2013 as a result of improved average ticket and an increase in customer traffic. U.S. comparable store sales increased during fiscal 2012 primarily due to an increase in average ticket, partially offset by a decline in traffic, while comparable club sales were higher due to a larger member base driving increased traffic, as well as a broader assortment of items.
As we continue to add new stores and clubs in the U.S., we do so with an understanding that additional stores and clubs may take sales away from existing units. We estimate the negative impact on comparable store and club sales as a result of opening new stores and clubs was approximately 0.7% in fiscal 2013 and 0.8% in fiscal 2012.

5


Leverage
Operating Income
 
Fiscal Years Ended January 31,
 
2013
 
2012
 
2011
(Amounts in millions)
Operating
Income
 
Percent
of Total
 
Percent
Change
 
Operating
Income
 
Percent
of Total
 
Percent
Change
 
Operating
Income
 
Percent
of Total
Walmart U.S.
$
21,500

 
77.3
 %
 
5.4
%
 
$
20,391

 
76.7
 %
 
2.3
%
 
$
19,941

 
78.1
 %
Walmart International
6,694

 
24.1
 %
 
8.3
%
 
6,182

 
23.3
 %
 
10.9
%
 
5,575

 
21.8
 %
Sam's Club
1,963

 
7.1
 %
 
6.2
%
 
1,848

 
7.0
 %
 
9.0
%
 
1,695

 
6.6
 %
Other unallocated
(2,356
)
 
(8.5
)%
 
26.5
%
 
(1,863
)
 
(7.0
)%
 
11.6
%
 
(1,669
)
 
(6.5
)%
Total operating income
$
27,801

 
100.0
 %
 
4.7
%
 
$
26,558

 
100.0
 %
 
4.0
%
 
$
25,542

 
100.0
 %
We believe comparing the growth of our operating expenses to the growth of our net sales and comparing the growth of our operating income to the growth of our net sales are meaningful measures as they indicate how effectively we manage costs and leverage operating expenses. Our objective is to grow net sales at a faster rate than operating expenses and to grow operating income at a faster rate than net sales. On occasion, we may make strategic growth investments that may, at times, cause our operating expenses to grow at a faster rate than net sales and that may result in our operating income growing at a slower rate than net sales.
Operating Expenses
We leveraged operating expenses in fiscal 2013 and 2012 due to our continued focus on expense management. We are working to reduce operating expenses as a percentage of sales by at least 100 basis points over a five-year period beginning with fiscal 2013 and achieved a 14 basis point reduction in fiscal 2013.
In fiscal 2013, our operating expenses and sales increased 4.2% and 5.0%, respectively, when compared to fiscal 2012. In fiscal 2012, our operating expenses and sales increased 4.8% and 5.9%, respectively, when compared to fiscal 2011. Operating expenses increased in fiscal 2013 primarily due to overall Company growth, as net sales increased 5.0%. Also contributing to the increase in operating expenses in fiscal 2013 were increased associate incentive payments, continued investment in our Global eCommerce initiatives and incurred expenses related to third-party advisors reviewing matters involving the Foreign Corrupt Practices Act ("FCPA"). Acquisitions also increased operating expenses for fiscal 2013. In fiscal 2012, our Global eCommerce initiatives contributed to the majority of the increase in operating expenses, as we continued to invest in our e-commerce platforms. Depreciation expense also increased due to our financial system investments, with the remainder of the increase being driven by multiple items, none of which were individually significant.
Operating Income
Operating income increased 4.7% and 4.0% in fiscal 2013 and 2012, respectively, when compared to the previous fiscal year. Although we leveraged operating expenses in fiscal 2013 and 2012, operating income for both years grew at a slower rate than sales. In fiscal 2013, the primary causes for operating income growing slower than sales were the investments in our Global eCommerce initiatives and incurred expenses related to third-party advisors reviewing matters involving the FCPA. Additionally, our investment in price for products sold in our retail operations, which reduces gross margin, contributed to operating income growing slower than sales in fiscal 2013 and was the primary cause for operating income growing slower than sales in fiscal 2012.

6


Returns
Return on Investment
Management believes return on investment ("ROI") is a meaningful metric to share with investors because it helps investors assess how effectively Walmart is deploying its assets. Trends in ROI can fluctuate over time as management balances long-term potential strategic initiatives with possible short-term impacts. ROI was 18.2% and 18.6% for fiscal 2013 and 2012, respectively. The decline in ROI was primarily due to the impact of acquisitions and currency exchange rate fluctuations.
We define ROI as adjusted operating income (operating income plus interest income, depreciation and amortization, and rent expense) for the fiscal year divided by average invested capital during that period. We consider average invested capital to be the average of our beginning and ending total assets of continuing operations, plus average accumulated depreciation and average amortization less average accounts payable and average accrued liabilities for that period, plus a rent factor equal to the rent for the fiscal year or trailing twelve months multiplied by a factor of eight.
ROI is considered a non-GAAP financial measure. We consider return on assets ("ROA") to be the financial measure computed in accordance with generally accepted accounting principles ("GAAP") that is the most directly comparable financial measure to ROI as we calculate that financial measure. ROI differs from ROA (which is income from continuing operations for the fiscal year divided by average total assets of continuing operations for the period) because ROI: adjusts operating income to exclude certain expense items and adds interest income; adjusts total assets from continuing operations for the impact of accumulated depreciation and amortization, accounts payable and accrued liabilities; and incorporates a factor of rent to arrive at total invested capital.
Although ROI is a standard financial metric, numerous methods exist for calculating a company's ROI. As a result, the method used by management to calculate our ROI may differ from the methods other companies use to calculate their ROI. We urge you to understand the methods used by other companies to calculate their ROI before comparing our ROI to that of such other companies.

7


The calculation of ROI, along with a reconciliation to the calculation of ROA, the most comparable GAAP financial measure, is as follows:
 
 
Fiscal Years Ended January 31,
(Amounts in millions)
 
2013
 
2012
CALCULATION OF RETURN ON INVESTMENT
Numerator
 
 
 
 
Operating income
 
$
27,801

 
$
26,558

+ Interest income
 
187

 
162

+ Depreciation and amortization
 
8,501

 
8,130

+ Rent
 
2,602

 
2,394

= Adjusted operating income
 
$
39,091

 
$
37,244

 
 
 
 
 
Denominator
 
 
 
 
Average total assets of continuing operations(1)
 
$
198,193

 
$
186,984

+ Average accumulated depreciation and amortization(1)
 
51,829

 
47,613

- Average accounts payable(1)
 
37,344

 
35,142

- Average accrued liabilities(1)
 
18,478

 
18,428

+ Rent x 8
 
20,816

 
19,152

= Average invested capital
 
$
215,016

 
$
200,179

Return on investment (ROI)
 
18.2
%
 
18.6
%
 
 
 
 
 
CALCULATION OF RETURN ON ASSETS
Numerator
 
 
 
 
Income from continuing operations
 
$
17,756

 
$
16,454

Denominator
 
 
 
 
Average total assets of continuing operations(1)
 
$
198,193

 
$
186,984

Return on assets (ROA)
 
9.0
%
 
8.8
%
 
 
As of January 31,
 
 
2013
 
2012
 
2011
Certain Balance Sheet data
 
 
 
 
 
 
Total assets of continuing operations(2)
 
$
203,068

 
$
193,317

 
$
180,651

Accumulated depreciation and amortization
 
55,043

 
48,614

 
46,611

Accounts payable
 
38,080

 
36,608

 
33,676

Accrued liabilities(3)
 
18,802

 
18,154

 
18,701

(1)
The average is based on the addition of the account balance at the end of the current period to the account balance at the end of the prior period and dividing by 2.
(2)  
Total assets of continuing operations as of January 31, 2013, 2012 and 2011 exclude assets of discontinued operations of $37 million, $89 million and $131 million, respectively, which are recorded in prepaid expenses and other in the Company's Consolidated Balance Sheets.
(3)
Accrued liabilities as of January 31, 2013, 2012 and 2011 exclude liabilities of discontinued operations of $6 million, $26 million and $47 million, respectively, which are included in accrued liabilities in the Company's Consolidated Balance Sheets.

8


Free Cash Flow
We define free cash flow as net cash provided by operating activities in a period minus payments for property and equipment made in that period. We generated free cash flow of $12.7 billion, $10.7 billion and $10.9 billion for fiscal 2013, 2012 and 2011, respectively. The $2.0 billion increase in free cash flow for fiscal 2013 compared to fiscal 2012 was primarily due to higher income from continuing operations positively impacting net cash generated from operating activities and lower capital expenditures. The modest decline in free cash flow in fiscal 2012 compared to fiscal 2011 was primarily due to capital expenditures outpacing the growth in net cash generated from operating activities.
Free cash flow is considered a non-GAAP financial measure. Management believes, however, that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the Company's financial performance. Free cash flow should be considered in addition to, rather than as a substitute for, income from continuing operations as a measure of our performance and net cash provided by operating activities as a measure of our liquidity.
Additionally, our definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures as the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our Consolidated Statements of Cash Flows.
Although other companies report their free cash flow, numerous methods may exist for calculating a company's free cash flow. As a result, the method used by our management to calculate our free cash flow may differ from the methods other companies use to calculate their free cash flow. We urge you to understand the methods used by other companies to calculate their free cash flow before comparing our free cash flow to that of such other companies.
The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, which we believe to be the GAAP financial measure most directly comparable to free cash flow, as well as information regarding net cash used in investing activities and net cash used in financing activities.
 
 
Fiscal Years Ended January 31,
(Amounts in millions)
 
2013
 
2012
 
2011
Net cash provided by operating activities
 
$
25,591

 
$
24,255

 
$
23,643

Payments for property and equipment
 
(12,898
)
 
(13,510
)
 
(12,699
)
         Free cash flow
 
$
12,693

 
$
10,745

 
$
10,944

 
 
 
 
 
 
 
Net cash used in investing activities(1)
 
$
(12,611
)
 
$
(16,609
)
 
$
(12,193
)
Net cash used in financing activities
 
(11,972
)
 
(8,458
)
 
(12,028
)
(1)
"Net cash used in investing activities" includes payments for property and equipment, which is also included in our computation of free cash flow.

9


Results of Operations
The following discussion of our results of operations is based on our continuing operations and excludes any results or discussion of our discontinued operations.
Consolidated Results of Operations
 
 
Fiscal Years Ended January 31,
(Amounts in millions, except unit counts)
 
2013
 
2012
 
2011
Total revenues
 
$
469,162

 
$
446,950

 
$
421,849

Percentage change in total revenues from previous fiscal year
 
5.0
%
 
6.0
%
 
3.4
 %
Net sales
 
$
466,114

 
$
443,854

 
$
418,952

Percentage change in net sales from previous fiscal year
 
5.0
%
 
5.9
%
 
3.4
 %
Total U.S. calendar comparable store and club sales
 
2.4
%
 
1.6
%
 
(0.6
)%
Gross profit margin as a percentage of sales
 
24.4
%
 
24.5
%
 
24.8
 %
Operating income
 
$
27,801

 
$
26,558

 
$
25,542

Operating income as a percentage of net sales
 
6.0
%
 
6.0
%
 
6.1
 %
Income from continuing operations
 
$
17,756

 
$
16,454

 
$
15,959

Unit counts
 
10,773

 
10,130

 
8,970

Retail square feet
 
1,072

 
1,037

 
985

Our total revenues increased 5.0% and 6.0% for fiscal 2013 and 2012, respectively, when compared to the previous fiscal year as a result of increases in net sales, which increased 5.0% and 5.9% in fiscal 2013 and 2012, respectively, when compared to the previous fiscal year. The increase in net sales for fiscal 2013 was due to 3.3% growth in retail square feet and positive comparable store and club sales. Additionally, net sales from acquisitions, through their respective anniversary dates, accounted for $4.0 billion of the increase in net sales. The increase in net sales was partially offset by $4.5 billion of negative impact from fluctuations in currency exchange rates. The increase in net sales for fiscal 2012 was due to positive comparable store and club sales and 5.3% growth in retail square feet, which includes square feet added through acquisitions. Net sales from acquisitions in fiscal 2012 accounted for $4.7 billion of the increase in net sales and fluctuations in currency exchange rates positively impacted net sales by $4.0 billion.
Our gross profit as a percentage of sales ("gross profit rate") declined 12 and 33 basis points in fiscal 2013 and 2012, respectively, when compared to the previous fiscal year. The decline in gross profit rate during fiscal 2013 is primarily due to the Walmart U.S. segment's strategic focus on price investment and low price leadership. During fiscal 2012, all three segments realized a decline in gross profit rate due to investments in price. Generally, our Walmart U.S. and Walmart International segments realize higher gross profit rates than our Sam's Club segment, which operates on lower margins as a membership club warehouse.
Operating expenses, as a percentage of net sales, were 19.1%, 19.2% and 19.4% for fiscal 2013, 2012 and 2011, respectively. In fiscal 2013 and 2012, operating expenses, as a percentage of net sales, decreased primarily due to our continued focus on expense management. We leveraged operating expenses in fiscal 2013 and 2012. We are working to reduce operating expenses as a percentage of sales by at least 100 basis points over a five-year period beginning with fiscal 2013 and achieved a 14 basis point reduction in fiscal 2013.

10


Operating income was $27.8 billion, $26.6 billion and $25.5 billion for fiscal 2013, 2012 and 2011, respectively. Operating income increased in fiscal 2013 and 2012, when compared to the previous fiscal year, primarily for the reasons described above. Fluctuations in currency exchange rates negatively impacted operating income $111 million in fiscal 2013 and positively impacted operating income $105 million and $231 million in fiscal 2012 and 2011, respectively.
Our effective income tax rate was 31.0% for fiscal 2013 compared with 32.6% and 32.2% for fiscal 2012 and 2011, respectively. The fiscal 2013 effective income tax rate was lower than the previous fiscal year primarily due to a number of discrete tax items, including the positive impact from fiscal 2013 legislative changes arising at the end of the fiscal year, most notably the American Taxpayer Relief Act of 2012. The fiscal 2012 effective income tax rate was largely consistent with that for fiscal 2011. The reconciliation from the U.S. statutory rate to the effective income tax rates for fiscal 2013, 2012 and 2011 is presented in Note 9 in the "Notes to Consolidated Financial Statements." Looking forward, we expect the annual effective income tax rate for fiscal year ended January 31, 2014 ("fiscal 2014") to range between 32.0% and 33.0%. As was the case with our effective income tax rate for fiscal 2013, our effective income tax rate may fluctuate from period to period due to a variety of factors, including changes in our assessment of certain tax contingencies, valuation allowances, changes in tax laws, outcomes of administrative audits, the impact of other discrete items and the mix of earnings among our U.S. and international operations where the statutory rates are generally lower than the U.S. statutory rate.
As a result of the factors discussed above, we reported $17.8 billion, $16.5 billion and $16.0 billion of income from continuing operations for fiscal 2013, 2012 and 2011, respectively. Diluted income per common share from continuing operations attributable to Walmart ("EPS") was $5.02, $4.54 and $4.18 in fiscal 2013, 2012 and 2011, respectively. For fiscal 2014, we expect EPS to range between $5.20 and $5.40, which includes incremental fiscal 2014 expenses of approximately $0.09 per share for our e-commerce operations.

11


Walmart U.S. Segment
 
 
Fiscal Years Ended January 31,
(Amounts in millions, except unit counts)
 
2013
 
2012
 
2011
Net sales
 
$
274,490

 
$
264,186

 
$
260,261

Percentage change in net sales from previous fiscal year
 
3.9
%
 
1.5
%
 
0.1
 %
Calendar comparable store sales
 
2.0
%
 
0.3
%
 
(1.5
)%
Operating income
 
$
21,500

 
$
20,391

 
$
19,941

Operating income as a percentage of net sales
 
7.8
%
 
7.7
%
 
7.7
 %
Unit counts
 
4,005

 
3,868

 
3,804

Retail square feet
 
641

 
627

 
617

Net sales for the Walmart U.S. segment increased 3.9% and 1.5% for fiscal 2013 and 2012, respectively, when compared to the previous fiscal year. The increase in net sales for fiscal 2013 compared to fiscal 2012 was due to a 2.0% increase in comparable store sales as a result of higher average ticket and an increase in customer traffic, combined with a 2.2% increase in retail square feet. The increase in net sales for fiscal 2012 compared to fiscal 2011 was primarily due to an increase of 1.6% in retail square feet.
Gross profit rate declined 16 basis points for fiscal 2013, when compared to the previous fiscal year, primarily due to our strategic focus on price investment and low price leadership. Gross profit rate was relatively flat in fiscal 2012 when compared to the previous fiscal year.
Operating expenses, as a percentage of segment net sales, declined 27 and 10 basis points during fiscal 2013 and 2012, respectively, when compared to the previous fiscal year, primarily due to our continued focus on productivity and expense management. As a result, Walmart U.S. leveraged operating expenses in fiscal 2013 and 2012.
As a result of the factors discussed above, operating income was $21.5 billion, $20.4 billion and $19.9 billion during fiscal 2013, 2012 and 2011, respectively. Walmart U.S. grew operating income faster than sales during fiscal 2013 and 2012.

12


Walmart International Segment
 
 
Fiscal Years Ended January 31,
(Amounts in millions, except unit counts)
 
2013
 
2012
 
2011
Net sales
 
$
135,201

 
$
125,873

 
$
109,232

Percentage change from previous fiscal year
 
7.4
%
 
15.2
%
 
12.1
%
Operating income
 
$
6,694

 
$
6,182

 
$
5,575

Operating income as a percentage of net sales
 
5.0
%
 
4.9
%
 
5.1
%
Unit counts
 
6,148

 
5,651

 
4,557

Retail square feet
 
348

 
329

 
287

Net sales for the Walmart International segment increased 7.4% and 15.2% for fiscal 2013 and 2012, respectively, when compared to the previous fiscal year. The increase in net sales for fiscal 2013 was due to growth in retail square feet of 5.9% and positive comparable sales. In addition, net sales from acquisitions, through their respective anniversary dates, accounted for $4.0 billion of the increase in net sales. The increase in net sales was partially offset by $4.5 billion of negative impact from fluctuations in currency exchange rates. The increase in net sales for fiscal 2012 was due to 14.7% growth in retail square feet, which includes square feet added through acquisitions. In fiscal 2012, acquisitions contributed $4.7 billion in sales and a positive impact of $4.0 billion from fluctuations in currency exchange rates.
Gross profit rate was flat in fiscal 2013, when compared to fiscal 2012. Gross profit rate decreased 46 basis points for fiscal 2012, when compared to fiscal 2011, due primarily to acquisitions included in the fiscal 2012 results and not in the fiscal 2011 results.
Operating expenses, as a percentage of segment net sales, decreased 22 and 19 basis points in fiscal 2013 and 2012, respectively, when compared to the previous fiscal year. Walmart International leveraged operating expenses in fiscal 2013 and 2012, primarily due to our global focus on expense management. While each country is focused on leveraging operating expenses, the countries that generated the most leverage included Brazil, Chile and the United Kingdom in fiscal 2013 and the United Kingdom, Japan and Canada in fiscal 2012.
As a result of the factors discussed above, operating income was $6.7 billion, $6.2 billion and $5.6 billion for fiscal 2013, 2012 and 2011, respectively. Fluctuations in currency exchange rates negatively impacted operating income $111 million in fiscal 2013 and positively impacted operating income $105 million and $231 million in fiscal 2012 and 2011, respectively. Walmart International grew operating income faster than sales in fiscal 2013, but did not grow operating income faster than sales in fiscal 2012.

13


Sam's Club Segment
We believe the information in the following table under the caption "Excluding Fuel" is useful to investors because it permits investors to understand the effect that fuel sales, which are impacted by the volatility of fuel prices, has on the operating results of the Sam's Club segment. Volatility in fuel prices may continue to impact the operating results of the Sam's Club segment in the future. 
 
 
Fiscal Years Ended January 31,
(Amounts in millions, except unit counts)
 
2013
 
2012
 
2011
Including fuel
 
 
 
 
 
 
Net sales
 
$
56,423

 
$
53,795

 
$
49,459

Percentage change from previous fiscal year
 
4.9
%
 
8.8
%
 
3.5
%
Calendar comparable club sales
 
4.1
%
 
8.4
%
 
3.9
%
Operating income
 
$
1,963

 
$
1,848

 
$
1,695

Operating income as a percentage of net sales
 
3.5
%
 
3.4
%
 
3.4
%
Unit counts
 
620

 
611

 
609

Retail square feet
 
83

 
82

 
81

 
 
 
 
 
 
 
Excluding fuel
 
 
 
 
 
 
Net sales
 
$
49,789

 
$
47,616

 
$
45,193

Percentage change from previous fiscal year
 
4.6
%
 
5.4
%
 
1.4
%
Calendar comparable club sales
 
3.8
%
 
5.0
%
 
1.9
%
Operating income
 
$
1,916

 
$
1,809

 
$
1,675

Operating income as a percentage of net sales
 
3.8
%
 
3.8
%
 
3.7
%
Net sales for Sam's Club increased 4.9% and 8.8% for fiscal 2013 and 2012, respectively, when compared to the previous fiscal year. The net sales increase in fiscal 2013 was primarily due to positive comparable club sales, driven by an increase in customer traffic and average ticket. The addition of nine new clubs in fiscal 2013 also helped increase net sales. The net sales increase in fiscal 2012 was primarily due to positive comparable club sales, driven by an increase in customer traffic and average ticket and higher fuel sales. Higher fuel sales, resulting from higher fuel prices and increased gallons sold, positively impacted comparable sales by 340 basis points during fiscal 2012.
Gross profit rate was flat in fiscal 2013 when compared to fiscal 2012 and was not impacted by fuel. In fiscal 2012, gross profit rate decreased 41 basis points when compared to fiscal 2011, driven by the highly competitive retail environment, as well as inflation and high fuel costs. In fiscal 2012, fuel costs negatively impacted the comparison by 33 basis points.
Operating expenses, as a percentage of net sales, decreased 9 and 55 basis points for fiscal 2013 and 2012, respectively, when compared to the previous fiscal year. The fiscal 2013 decrease was due to improved wage management, a benefit related to a prior year overpayment of state excise taxes and the extent of club remodels. In fiscal 2012, the decrease was due to the impact of fuel, which positively impacted the comparison by 31 basis points, and improved wage management. Sam's Club leveraged operating expenses during fiscal 2013 and 2012.
As a result of the factors discussed above, as well as continued growth in membership and other income, operating income was $2.0 billion, $1.8 billion and $1.7 billion for fiscal 2013, 2012 and 2011, respectively. Sam's Club grew operating income faster than sales in fiscal 2013 and 2012.

14


Liquidity and Capital Resources
Liquidity
Cash flows provided by operating activities have historically supplied us with a significant source of liquidity. We use these cash flows, supplemented with long-term debt and short-term borrowings, to fund our operations and global expansion activities. Generally, some or all of the remaining available cash flow, if any, funds all or part of the dividends on our common stock and share repurchases.
 
 
Fiscal Years Ended January 31,
(Amounts in millions)
 
2013
 
2012
 
2011
Net cash provided by operating activities
 
$
25,591

 
$
24,255

 
$
23,643

Payments for property and equipment
 
(12,898
)
 
(13,510
)
 
(12,699
)
Free cash flow
 
$
12,693

 
$
10,745

 
$
10,944

 
 
 
 
 
 
 
Net cash used in investing activities(1)
 
$
(12,611
)
 
$
(16,609
)
 
$
(12,193
)
Net cash used in financing activities
 
(11,972
)
 
(8,458
)
 
(12,028
)
(1)
"Net cash used in investing activities" includes payments for property and equipment, which is also included in our computation of free cash flow.
Cash Flows Provided by Operating Activities
Cash flows provided by operating activities were $25.6 billion, $24.3 billion and $23.6 billion for fiscal 2013, 2012 and 2011, respectively. The increase in cash flows provided by operating activities in fiscal 2013 and 2012, when compared to the previous fiscal year, is primarily due to higher income from continuing operations.
Cash Equivalents and Working Capital
Cash and cash equivalents were $7.8 billion and $6.6 billion at January 31, 2013 and 2012, respectively. Our working capital deficits were $11.9 billion and $7.3 billion at January 31, 2013 and 2012, respectively. The increase in our working capital deficit is primarily attributable to the increase in our long-term debt due within one year, as well as an increase in accrued income taxes. We generally operate with a working capital deficit due to our efficient use of cash in funding operations and in providing returns to our shareholders in the form of stock repurchases and payments of dividends.
We employ financing strategies in an effort to ensure cash can be made available in the country in which it is needed with the minimum cost possible. We do not believe it will be necessary to repatriate cash and cash equivalents held outside of the U.S. and anticipate our domestic liquidity needs will be met through other funding sources (ongoing cash flows generated from operations, external borrowings, or both). Accordingly, we intend, with only certain limited exceptions, to continue to permanently reinvest the Company's cash and cash equivalents held outside of the U.S. in our foreign operations. If our intentions were to change, most of the amounts held within our foreign operations could be repatriated to the U.S., although any repatriations under current U.S. tax laws would be subject to U.S. federal income taxes, less applicable foreign tax credits. As of January 31, 2013 and January 31, 2012, cash and cash equivalents of approximately $876 million and $768 million, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions. We do not expect local laws, other limitations or potential taxes on anticipated future repatriations of amounts held outside of the U.S. to have a material effect on our overall liquidity, financial condition or results of operations.

15


Cash Flows Used in Investing Activities
Cash flows used in investing activities generally consist of payments for property and equipment, which were $12.9 billion, $13.5 billion and $12.7 billion for fiscal 2013, 2012 and 2011, respectively. These capital expenditures primarily relate to new store growth, as well as remodeling costs for existing stores. We are focused on lowering the average cost of remodels in order to shift more capital to new stores, while lowering the amount of overall capital expenditures. Cash flows used in investing activities also consist of payments for investments and business acquisitions, net of cash acquired, which were of $0.3 billion, $3.5 billion and $0.2 billion for fiscal 2013, 2012 and 2011, respectively.
Global Expansion Activities
In addition to our growth in retail square feet discussed throughout the "Results of Operations" discussion, we also experienced global expansion in e-commerce in each of our segments during fiscal 2013, with Walmart U.S. and Sam's Club focused on the e-commerce market in the U.S. and Walmart International focused on the international e-commerce markets in countries outside of the U.S., primarily the United Kingdom, Brazil and China. Some of our fiscal 2013 e-commerce accomplishments included developing pricing optimization tools, mobile applications and a new search engine available on our various websites. Each of these accomplishments further supports our segment operations and helps us save people money so they can live better. Our Walmart International segment also increased its investment in Newheight Holdings Ltd, a holding company that owns Yihaodian, an e-commerce business in China, to approximately 51% during fiscal 2013.
Our fiscal 2014 global expansion plans include growing our retail square feet and expanding our e-commerce capabilities, which we plan to finance primarily through cash flows from operations and future debt financings. The following table provides our estimated range for fiscal 2014 capital expenditures, as well as our estimated range for growth in retail square feet. Our anticipated e-commerce capital expenditures are included in our estimated range for fiscal 2014 capital expenditures. The amounts in the table do not include capital expenditures or growth in retail square feet from any future acquisitions.
 
 
Fiscal 2014 Projected Capital Expenditures (in billions)
 
Fiscal 2014 Projected Growth in
Retail Square Feet
(in thousands)
Walmart U.S.
 
$
5.5

 
to
 
$
6.0

 
15,000

 
to
 
17,000

Walmart International
 
4.5

 
to
 
5.0

 
20,000

 
to
 
22,000

Sam's Club
 
1.0

 
to
 
1.0

 
1,000

 
to
 
1,000

Other Unallocated
 
1.0

 
to
 
1.0

 

 
to
 

Total
 
$
12.0

 
to
 
$
13.0

 
36,000

 
to
 
40,000

The following table represents the allocation of our capital expenditures for property and equipment:
(Amounts in millions)
 
Allocation of Capital Expenditures
Fiscal Years Ending January 31,
Capital Expenditures
 
2013
 
2012
New stores and clubs, including expansions and relocations
 
$
4,340

 
$
3,735

Information systems, distribution, e-commerce and other
 
2,922

 
2,852

Remodels
 
995

 
1,648

Total U.S.
 
8,257

 
8,235

Walmart International
 
4,641

 
5,275

Total capital expenditures
 
$
12,898

 
$
13,510


16


Cash Flows Used in Financing Activities
Cash flows used in financing activities generally consist of transactions related to our short-term borrowings and long-term debt, as well as dividends paid and share repurchases.
Short-Term Borrowings
Short-term borrowings increased $2.8 billion for fiscal 2013, compared to an increase of $3.0 billion during the same period in the previous fiscal year. From time to time, we utilize the liquidity under our short-term borrowing programs to fund our operations, dividend payments, share repurchases, capital expenditures and for other cash requirements and corporate purposes, as needed. As a result, we have continued to utilize the favorable interest rates available on our commercial paper and increased our short-term borrowings during the fiscal years ended January 31, 2013 and 2012.
Long-Term Debt
We did not complete any significant long-term debt issuances during fiscal 2013, due in part to our free cash flow of $12.7 billion, as well as our continued use of short-term borrowings. Proceeds from the issuance of long-term debt during fiscal 2012 and 2011 were $5.1 billion and $11.4 billion, respectively, which were used to pay down or refinance existing debt and for other general corporate purposes.
Dividends
Our total dividend payments were $5.4 billion, $5.0 billion and $4.4 billion for fiscal 2013, 2012 and 2011, respectively. On February 21, 2013, the Board of Directors approved an increase in the annual dividend for fiscal 2014 to $1.88 per share, an increase of approximately 18% over the $1.59 per share dividend paid in fiscal 2013. For fiscal 2014, the annual dividend will be paid in four quarterly installments of $0.47 per share, according to the following record and payable dates:
Record Date
  
Payable Date
March 12, 2013
  
April 1, 2013
May 10, 2013
  
June 3, 2013
August 9, 2013
  
September 3, 2013
December 6, 2013
  
January 2, 2014
Company Share Repurchase Program
From time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Board of Directors. The current $15.0 billion share repurchase program has no expiration date or other restriction limiting the period over which the Company can make share repurchases under the program. At January 31, 2013, authorization for $3.7 billion of share repurchases remained under the current share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status.
We consider several factors in determining when to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings and the market price of the Company's common stock. Cash paid for share repurchases during fiscal 2013, 2012 and 2011, was as follows:
Share Repurchases
 
Total Number of Shares Repurchased
(in millions)
 
Average Price Paid per Share
(in dollars)
 
Total Investment
(in billions)
Fiscal year ended January 31, 2013
 
113.2

 
$
67.15

 
$
7.6

Fiscal year ended January 31, 2012
 
115.3

 
54.64

 
6.3

Fiscal year ended January 31, 2011
 
279.1

 
53.03

 
14.8


17


Capital Resources
Management believes cash flows from continuing operations and proceeds from the issuance of short-term borrowings will be sufficient to finance seasonal buildups in merchandise inventories and meet other cash requirements. If our operating cash flows are not sufficient to pay dividends and to fund our capital expenditures, we anticipate funding any shortfall in these expenditures with a combination of short-term borrowings and long-term debt. We plan to refinance existing long-term debt obligations as they mature and may desire to obtain additional long-term financing for other corporate purposes.
Our access to the commercial paper and long-term debt markets has historically provided us with adequate sources of liquidity. We anticipate no difficulty in obtaining financing from those markets in the future due to our favorable experiences in the debt markets in the recent past. Our ability to continue to access the commercial paper and long-term debt markets with favorable interest rates and other terms will depend, to a significant degree, on the ratings assigned by the credit rating agencies to our indebtedness continuing to be at or above the level of our current ratings. At January 31, 2013, the ratings assigned to our commercial paper and rated series of our outstanding long-term debt were as follows:
Rating agency
  
Commercial paper
  
Long-term debt
Standard & Poor's
  
A-1+
  
AA
Moody's Investors Service
  
P-1
  
Aa2
Fitch Ratings
  
F1+
  
AA
In the event that the ratings of our commercial paper or any rated series of our outstanding long-term debt issues were lowered or withdrawn for any reason or if the ratings assigned to any new issue of our long-term debt securities were lower than those noted above, our ability to access the debt markets would be adversely affected. In addition, in such a case, our cost of funds for new issues of commercial paper and long-term debt (i.e., the rate of interest on any such indebtedness) would be higher than our cost of funds had the ratings of those new issues been at or above the level of the ratings noted above. The rating agency ratings are not recommendations to buy, sell or hold our commercial paper or debt securities. Each rating may be subject to revision or withdrawal at any time by the assigning rating organization and should be evaluated independently of any other rating. Moreover, each credit rating is specific to the security to which it applies.
To monitor our credit rating and our capacity for long-term financing, we consider various qualitative and quantitative factors. We monitor the ratio of our debt-to-total capitalization as support for our long-term financing decisions.  At January 31, 2013 and 2012, the ratio of our debt-to-total capitalization was 41.5% and 42.8%, respectively. For the purpose of this calculation, debt is defined as the sum of short-term borrowings, long-term debt due within one year, obligations under capital leases due within one year, long-term debt and long-term obligations under capital leases. Total capitalization is defined as debt plus total Walmart shareholders' equity. The decrease in our debt-to-capital ratio resulted from our growth in retained earnings, although we returned $13.0 billion to shareholders in the form of dividends and share repurchases, our retained earnings grew $4.3 billion in fiscal 2013, primarily due to a $17.0 billion increase in consolidated net income attributable to Walmart.

18


Contractual Obligations and Other Commercial Commitments
The following table sets forth certain information concerning our obligations and commitments to make contractual future payments, such as debt and lease agreements, and certain contingent commitments:
 
 
 
 
Payments Due During Fiscal Years Ending January 31,
(Amounts in millions)
 
Total
 
2014
 
2015-2016
 
2017-2018
 
Thereafter
Recorded contractual obligations:
 
 
 
 
 
 
 
 
 
 
Long-term debt(1)
 
$
43,981

 
$
5,587

 
$
8,315

 
$
2,255

 
$
27,824

Short-term borrowings
 
6,805

 
6,805

 

 

 

Capital lease obligations(2)
 
6,268

 
620

 
1,119

 
939

 
3,590

Unrecorded contractual obligations:
 
 
 
 
 
 
 
 
 
 
Non-cancelable operating leases
 
16,803

 
1,722

 
3,078

 
2,630

 
9,373

Estimated interest on long-term debt
 
31,632

 
1,853

 
3,382

 
3,107

 
23,290

Trade letters of credit
 
2,726

 
2,726

 

 

 

Purchase obligations
 
4,458

 
3,394

 
1,010

 
50

 
4

Total commercial commitments
 
$
112,673

 
$
22,707

 
$
16,904

 
$
8,981

 
$
64,081

(1)
"Long-term debt" includes certain derivative fair value adjustments.
(2)
"Capital lease obligations" includes executory costs and imputed interest related to capital lease obligations that are not yet recorded. Refer to Note 11 for more information.
Additionally, the Company has approximately $16.3 billion in undrawn lines of credit and standby letters of credit which, if drawn upon, would be included in the liabilities section of the Company's Consolidated Balance Sheets.
Estimated interest payments are based on our principal amounts and expected maturities of all debt outstanding at January 31, 2013, and management's forecasted market rates for our variable rate debt.
Purchase obligations include legally binding contracts such as firm commitments for inventory and utility purchases, as well as commitments to make capital expenditures, software acquisition and license commitments and legally binding service contracts. Purchase orders for the purchase of inventory and other services are not included in the table above. Purchase orders represent authorizations to purchase rather than binding agreements. For the purposes of this table, contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Our purchase orders are based on our current inventory needs and are fulfilled by our suppliers within short time periods. We also enter into contracts for outsourced services; however, the obligations under these contracts are not significant and the contracts generally contain clauses allowing for cancellation without significant penalty.
The expected timing for payment of the obligations discussed above is estimated based on current information. Timing of payments and actual amounts paid with respect to some unrecorded contractual commitments may be different depending on the timing of receipt of goods or services or changes to agreed-upon amounts for some obligations.
In addition to the amounts shown in the table above, $818 million of unrecognized tax benefits are considered uncertain tax positions and have been recorded as liabilities. The timing of the payment, if any, associated with these liabilities is uncertain. Refer to Note 9 in the "Notes to Consolidated Financial Statements" for additional discussion of unrecognized tax benefits.

19


Off Balance Sheet Arrangements
In addition to the unrecorded contractual obligations presented above, we have entered into certain arrangements, as discussed below, for which the timing of payment, if any, is unknown.
In connection with certain debt financing, we could be liable for early termination payments if certain unlikely events were to occur. At January 31, 2013, the aggregate termination payment would have been $104 million. The arrangement pursuant to which this payment could be made will expire in fiscal 2019.
The Company has future lease commitments for land and buildings for approximately 366 future locations. These lease commitments have lease terms ranging from 4 to 50 years and provide for certain minimum rentals. If executed, payments under operating leases would increase by $82 million for fiscal 2014, based on current cost estimates.
Market Risk
In addition to the risks inherent in our operations, we are exposed to certain market risks, including changes in interest rates and fluctuations in currency exchange rates.
The analysis presented below for each of our market risk sensitive instruments is based on a hypothetical scenario used to calibrate potential risk and does not represent our view of future market changes. The effect of a change in a particular assumption is calculated without adjusting any other assumption. In reality, however, a change in one factor could cause a change in another, which may magnify or negate other sensitivities.
Interest Rate Risk
We are exposed to changes in interest rates as a result of our short-term borrowings and long-term debt issuances. We hedge a portion of our interest rate risk by managing the mix of fixed and variable rate debt and entering into interest rate swaps.
The table below provides information about our financial instruments that are sensitive to changes in interest rates. For debt obligations, the table represents the principal cash flows and related weighted-average interest rates by expected maturity dates. For interest rate swaps, including forward starting interest rate swaps, the table represents the contractual cash flows and weighted-average interest rates by the contractual maturity date, unless otherwise noted. The notional amounts are used to calculate contractual cash flows to be exchanged under the contracts. The weighted-average variable rates are based upon prevailing market rates at January 31, 2013.

 
Expected Maturity Date
(Amounts in millions)
 
Fiscal 2014
 
Fiscal 2015
 
Fiscal 2016
 
Fiscal 2017
 
Fiscal 2018
 
Thereafter
 
Total
Liabilities
 

 

 

 

 

 

 

Short-term borrowings:
 

 

 

 

 

 

 

Variable rate
 
$
6,805

 
$

 
$

 
$

 
$

 
$

 
$
6,805

Weighted-average interest rate
 
0.1
%
 
%
 
%
 
%
 
%
 
%
 
0.1
%
Long-term debt:
 

 

 

 

 

 

 

Fixed rate
 
$
4,542

 
$
3,569

 
$
4,235

 
$
1,127

 
$
1,128

 
$
27,824

 
$
42,425

Weighted-average interest rate
 
3.9
%
 
2.3
%
 
2.3
%
 
2.8
%
 
5.4
%
 
5.3
%
 
4.6
%
Variable rate
 
$
1,045

 
$
184

 
$
327

 
$

 
$

 
$

 
$
1,556

Weighted-average interest rate
 
3.0
%
 
0.9
%
 
0.6
%
 
%
 
%
 
%
 
2.3
%
Interest rate derivatives
 

 

 

 

 

 

 

Interest rate swaps:
 

 

 

 

 

 

 

Variable to fixed(1)
 
$
3,045

 
$
2,684

 
$
327

 
$

 
$

 
$

 
$
6,056

Weighted-average pay rate
 
2.5
%
 
2.7
%
 
0.9
%
 
%
 
%
 
%
 
2.5
%
Weighted-average receive rate
 
0.4
%
 
0.3
%
 
0.6
%
 
%
 
%
 
%
 
0.4
%
Fixed to variable
 
$
2,445

 
$
1,000

 
$

 
$

 
$

 
$

 
$
3,445

Weighted-average pay rate
 
0.7
%
 
0.3
%
 
%
 
%
 
%
 
%
 
0.6
%
Weighted-average receive rate
 
5.0
%
 
3.1
%
 
%
 
%
 
%
 
%
 
4.4
%
(1)
Forward starting interest rate swaps have been included in the fiscal 2014 and 2015 maturity categories based on when the related hedged forecasted debt issuances, and corresponding swap terminations, are expected to occur.
As of January 31, 2013, our variable rate borrowings, including the effect of our commercial paper and interest rate swaps, represented 23% of our total short-term and long-term debt. Based on January 31, 2013 debt levels, a 100 basis point change in prevailing market rates would cause our annual interest costs to change by approximately $47 million.

20


Foreign Currency Risk
We are exposed to fluctuations in foreign currency exchange rates as a result of our net investments and operations in countries other than the United States. We hedge a portion of our foreign currency risk by entering into currency swaps and designating certain foreign-currency-denominated long-term debt as net investment hedges.
We hold currency swaps to hedge the currency exchange component of our net investments and also to hedge the currency exchange rate fluctuation exposure associated with the forecasted payments of principal and interest of non-U.S. denominated debt. The aggregate fair value of these swaps was in an asset position of $453 million and $313 million at January 31, 2013 and 2012, respectively. A hypothetical 10% increase or decrease in the currency exchange rates underlying these swaps from the market rate at January 31, 2013 would have resulted in a loss or gain in the value of the swaps of $241 million. A hypothetical 10% change in interest rates underlying these swaps from the market rates in effect at January 31, 2013 would have resulted in a loss or gain in value of the swaps of $51 million.
In addition to currency swaps, we have designated foreign-currency-denominated long-term debt as nonderivative hedges of net investments of certain of our foreign operations. At January 31, 2013 and January 31, 2012, we had £2.5 billion and £3.0 billion, respectively, of outstanding long-term debt designated as a hedge of our net investment in the United Kingdom. At January 31, 2013, a hypothetical 10% increase or decrease in value of the U.S. dollar relative to the British pound would have resulted in a gain or loss in the value of the debt of $360 million. In addition, we have outstanding long-term debt of ¥275 billion at January 31, 2013 and January 31, 2012, that was designated as a hedge of our net investment in Japan. At January 31, 2013, a hypothetical 10% increase or decrease in value of the U.S. dollar relative to the Japanese yen would have resulted in a gain or loss in the value of the debt of $273 million.
Other Matters
We discuss our existing FCPA investigation and related matters in the Annual Report on Form 10-K for fiscal 2013, including certain risks arising therefrom, in Part I, Item 1A of the Form 10-K under the caption "Risk Factors" and in Note 10 to our Consolidated Financial Statements, which is captioned "Contingencies," under the sub-caption "FCPA Investigation and Related Matters." We also discuss various legal proceedings related to the FCPA investigation in Item 3 of the Form 10-K under the caption "Item 3. Legal Proceedings," under the sub-caption "II. Certain Other Proceedings."

21


Summary of Critical Accounting Estimates
Management strives to report our financial results in a clear and understandable manner, although in some cases accounting and disclosure rules are complex and require us to use technical terminology. In preparing the Company's Consolidated Financial Statements, we follow accounting principles generally accepted in the United States. These principles require us to make certain estimates and apply judgments that affect our financial position and results of operations as reflected in our financial statements. These judgments and estimates are based on past events and expectations of future outcomes. Actual results may differ from our estimates.
Management continually reviews our accounting policies, how they are applied and how they are reported and disclosed in our financial statements. Following is a summary of our critical accounting estimates and how they are applied in preparation of the financial statements.
Inventories
We value inventories at the lower of cost or market as determined primarily by the retail method of accounting, using the last-in, first-out ("LIFO") method for substantially all of the Walmart U.S. segment's merchandise inventories. The retail method of accounting results in inventory being valued at the lower of cost or market since permanent markdowns are currently taken as a reduction of the retail value of inventory. The Sam's Club segment's merchandise is valued based on the weighted-average cost using the LIFO method. Inventories for the Walmart International operations are primarily valued by the retail method of accounting and are stated using the first-in, first-out ("FIFO") method.
Under the retail method, inventory is stated at cost, which is determined by applying a cost-to-retail ratio to each merchandise grouping's retail value. The FIFO cost-to-retail ratio is generally based on the fiscal year purchase activity. The cost-to-retail ratio for measuring any LIFO provision is based on the initial margin of the fiscal year purchase activity less the impact of any permanent markdowns. The retail method requires management to make certain judgments and estimates that may significantly impact the ending inventory valuation at cost, as well as the amount of gross profit recognized. Judgments made include recording markdowns used to sell inventory and shrinkage. When management determines the salability of inventory has diminished, markdowns for clearance activity and the related cost impact are recorded. Factors considered in the determination of markdowns include current and anticipated demand, customer preferences and age of merchandise, as well as seasonal and fashion trends. Changes in weather patterns and customer preferences related to fashion trends could cause material changes in the amount and timing of markdowns from year to year.
When necessary, we record a LIFO provision for the estimated annual effect of inflation, and these estimates are adjusted to actual results determined at year-end. Our LIFO provision is calculated based on inventory levels, markup rates and internally generated retail price indices. At January 31, 2013 and 2012, our inventories valued at LIFO approximated those inventories as if they were valued at FIFO.
We provide for estimated inventory losses ("shrinkage") between physical inventory counts on the basis of a percentage of sales. Following annual inventory counts, the provision is adjusted to reflect updated historical results.

22


Impairment of Assets
We evaluate long-lived assets other than goodwill and assets with indefinite lives for indicators of impairment whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. Management's judgments regarding the existence of impairment indicators are based on market conditions and operational performance, such as operating income and cash flows. The evaluation for long-lived assets is performed at the lowest level of identifiable cash flows, which is generally at the individual store level or, in certain circumstances, at the market group level. The variability of these factors depends on a number of conditions, including uncertainty about future events and changes in demographics. Thus, our accounting estimates may change from period to period. These factors could cause management to conclude that impairment indicators exist and require impairment tests be performed, which could result in management determining the value of long-lived assets is impaired, resulting in a write-down of the long-lived assets.
Goodwill and other indefinite-lived acquired intangible assets are not amortized, but are evaluated for impairment annually or whenever events or changes in circumstances indicate that the value of a certain asset may be impaired. Generally, this evaluation begins with a qualitative assessment to determine whether a quantitative impairment test is necessary. If we determine, after performing an assessment based on the qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, or that a fair value of the reporting unit substantially in excess of the carrying amount cannot be assured, then a quantitative impairment test would be required. The quantitative test for impairment requires management to make judgments relating to future cash flows, growth rates, and economic and market conditions. These evaluations are based on determining the fair value of a reporting unit or asset using a valuation method such as discounted cash flow or a relative, market-based approach. Historically, we have generated sufficient returns within the applicable reporting units to recover the cost of goodwill and other indefinite-lived acquired intangible assets. Because of the nature of the factors used in these tests, if different conditions occur in future periods, future operating results could be materially impacted.
Income Taxes
Income taxes have a significant effect on our net earnings. As a global commercial enterprise, our tax rates are affected by many factors, including our global mix of earnings, the extent to which those global earnings are indefinitely reinvested outside the United States, legislation, acquisitions, dispositions and tax characteristics of our income. Our tax returns are routinely audited and settlements of issues raised in these audits sometimes affect our tax provisions. Accordingly, the determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in our financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, we reassess these probabilities and record any changes in the financial statements as appropriate. We account for uncertain tax positions by determining the minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. This determination requires the use of judgment in assessing the timing and amounts of deductible and taxable items.

23


Forward-Looking Statements
This Annual Report contains statements that Walmart believes are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Those statements are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that Act. Those forward-looking statements include statements in Management's Discussion and Analysis of Financial Condition and Results of Operations: under the caption "Overview" with respect to the volatility of currency exchange rates possibly affecting the results, including net sales and operating income, of Walmart and its Walmart International segment in the future; under the captions "Company Performance Metrics" and "Company Performance Metrics-Leverage-Operating Income" with respect to Walmart's objectives of growing net sales at a faster rate than operating expenses and growing operating income at a faster rate than net sales; under the caption "Results of Operations-Consolidated Results of Operations" with respect to our goal of reducing our operating expenses as a percentage of sales by at least 100 basis points over a five-year period, regarding the possible fluctuation of our effective tax rate over future periods and with respect to management's expectation that our diluted earnings per share from continuing operations attributable to Walmart for the fiscal year ending January 31, 2014 will be within the range of $5.20 and $5.40 per share, and the earnings per share will include incremental expenses of approximately $0.09 per share for Walmart's e-commerce business; under the caption "Results of Operations-Sam's Club Segment" with respect to the volatility of fuel prices possibly continuing to affect the operating results of Walmart's Sam's Club segment in the future; under the caption "Liquidity and Capital Resources-Cash Flows Provided by Operating Activities-Cash Equivalents and Working Capital," as well as in Note 1 to our Consolidated Financial Statements, regarding our ability to meet our liquidity needs through sources other than the cash we hold outside of the United States, our intention to permanently reinvest cash held outside of the United States, and our ability to repatriate cash held outside of the United States; under the caption "Liquidity and Capital Resources-Cash Flows Used in Investing Activities-Global Expansion Activities" with respect to Walmart's fiscal 2014 global expansion plans including growing our retail square feet and expanding our e-commerce capabilities and our plans to finance that expansion primarily through cash flows and future debt financings, with respect to Walmart's estimated range of capital expenditures (including e-commerce capital expenditures) in fiscal 2014 for the Walmart U.S. segment, the Walmart International segment, the Sam's Club segment, in the "other unallocated" category and in total, with respect to the estimated/projected growth in retail square feet in total and by reportable segment in fiscal 2014; under the caption "Liquidity and Capital Resources-Cash Flows Used in Financing Activities-Dividends," as well as in Note 15 to our Consolidated Financial Statements and elsewhere in this Annual Report under the caption "Dividends payable per share," regarding the payment of the dividend on our shares of common stock in fiscal 2014, the expected payment of certain installments of the dividend on our shares of common stock on certain dates in fiscal 2014 and the expected total amount of the dividend per share to be paid in fiscal 2014; under the caption "Liquidity and Capital Resources-Capital Resources" with respect to Walmart's ability to finance seasonal build-ups in inventories and to meet other cash requirements with cash flows from operations and short-term borrowings, Walmart's anticipated funding of any shortfall in cash to pay dividends and to fund capital expenditures with short-term borrowings and long-term debt, Walmart's plan to refinance existing long-term debt as it matures and its anticipation that it may obtain additional long-term financing for other corporate purposes, Walmart's ability to obtain financing from the commercial paper and long-term debt markets, the factors that influence Walmart's ability to access those markets on favorable terms and the factors that could adversely affect Walmart's ability to access those markets on favorable terms; and under the caption "Liquidity and Capital Resources-Off Balance Sheet Arrangements" with respect to the amount of increases in payments under operating leases if certain leases are executed.
These forward-looking statements also include statements in: Note 3 to our Consolidated Financial Statements regarding the weighted-average periods over which certain compensation cost is expected to be recognized; Note 9 to our Consolidated Financial Statements regarding the possible reduction of U.S. tax liability on accumulated but undistributed earnings of our non-U.S. subsidiaries, the realization of certain deferred tax assets, possible reduction of unrecognized tax benefits, and the reasons for such reductions, the magnitude of their impact on our results of operations and financial condition and the possibility that the resolution of a group of related matters might result in a material liability to Walmart; and Note 10 to our Consolidated Financial Statements regarding an adverse decision in, or settlement of, certain litigation to which Walmart is a party possibly resulting in material liability to Walmart and respecting management's expectations that the certain matters relating to an FCPA investigation will not have a material adverse effect on its business. The section of this Annual Report captioned "Walmart U.S." includes a forward-looking statement that relates to management's expectation for the Walmart U.S. segment to add retail square feet within a certain range and to open a number of new units within a certain range in fiscal 2014. The section of this Annual Report captioned "Sam's Club" includes a forward-looking statement that relates to management's expectation for the Sam's Club segment opening a certain number of new clubs and expanding or relocating a certain number of other clubs in fiscal 2014. The section of this Annual Report captioned "Global eCommerce" includes forward-looking statements that relate to management's goals for our e-commerce operations. The forward-looking statements described above are identified by the use in such statements of one or more of the words or phrases "aim," "allocation," "anticipate," "anticipated," "commitment," "could be," "could potentially be," "could reduce," "estimated," "expansion," "expect," "goal," "grow," "intend," "is expected," "may continue," "may fluctuate," "may impact," "may not be," "may result," "objective," "objectives," "plan," "plans," "projected," "to reduce," "will be," "will be paid," "will depend," "will have," "will open," "will … reduce," "will strengthen," "would be," and "would increase," and other similar words or phrases. Similarly, descriptions of

24


our objectives, strategies, plans, goals or targets are also forward-looking statements. These statements discuss, among other things, expected growth, future revenues, future cash flows, future capital expenditures, future performance, future initiatives and the anticipation and expectations of Walmart and its management as to future occurrences and trends.
The forward-looking statements included in this Annual Report and that we make elsewhere are subject to certain factors, in the United States and internationally, that could materially affect our financial performance, our results of operations, including our sales, earnings per share or comparable store sales or comparable club sales and our effective income tax rate for any period and our business operations, business strategy, plans, goals or objectives. These factors include, but are not limited to: general economic conditions, including changes in the economy of the United States or other specific markets in which we operate, economic instability, changes in the monetary policies of the United States, the Board of Governors of the Federal Reserve System, other governments or central banks, economic crises and disruptions in the financial markets, including as a result of sovereign debt crises, governmental budget deficits, unemployment and partial employment levels, employment conditions within our markets, credit availability to consumers and businesses, levels of consumer disposable income, consumer confidence, consumer credit availability, consumer spending patterns, consumer debt levels, consumer preferences, the timing of receipt of tax refund checks by consumers, inflation, deflation, commodity prices, the cost of the goods we sell, competitive pressures, the seasonality of our business, seasonal buying patterns in the United States and our other markets, labor costs, transportation costs, the cost of diesel fuel, gasoline, natural gas and electricity, the selling prices of fuel, the cost of healthcare and other benefits, accident costs, our casualty and other insurance costs, information security costs, the cost of construction materials, availability of acceptable building sites for new stores, clubs and other formats, availability of qualified labor pools in the specific markets in which we operate, zoning, land use and other regulatory restrictions, competitive pressures, accident-related costs, weather conditions, patterns and events, climate change, catastrophic events and natural disasters, as well as storm and other damage to our stores, clubs, distribution and other facilities, store closings and other limitations on our customers' access to our stores and clubs resulting from such events and disasters, disruption in the availability of our online shopping sites on the internet, cyberattacks on our information systems, disruption in our supply chain, including availability and transport of goods from domestic and foreign suppliers, trade restrictions, changes in tariff and freight rates, adoption of or changes in tax, labor and other laws and regulations that affect our business, including changes in corporate and personal tax rates and the imposition of new taxes and surcharges, costs of compliance with laws and regulations, the mix of our earnings from our United States and foreign operations, changes in our assessment of certain tax contingencies, valuation allowances, outcome of administrative audits, the impact of discrete items on our effective tax rate, the resolution of tax matters, developments in and the outcome of legal and regulatory proceedings to which we are a party or are subject and the expenses associated therewith, currency exchange rate fluctuations and volatility, fluctuations in market rates of interest, and other conditions and events affecting domestic and global financial and capital markets, public health emergencies, economic and geo-political conditions and events, including civil unrest and disturbances and terrorist attacks. Moreover, we typically earn a disproportionate part of our annual operating income in the fourth quarter as a result of the seasonal buying patterns. Those buying patterns are difficult to forecast with certainty.
The foregoing list of factors that may affect our business operations and financial performance is not exclusive. Other factors and unanticipated events could adversely affect our business operations and financial performance. We discuss certain of these matters more fully, as well as certain risk factors that may affect our business operations, financial condition, results of operations and liquidity in other of our filings with the Securities and Exchange Commission (the "SEC"), including our Annual Report on Form 10-K under the heading "Item 1A. Risk Factors." We filed our Annual Report on Form 10-K for the fiscal year ended January 31, 2013, with the SEC on March 26, 2013. The forward-looking statements described above are made based on knowledge of our business and the environment in which we operate and assumptions that we believe to be reasonable at the time such forward-looking statements are made. However, because of the factors described and listed above, as well as other factors, or as a result of changes in facts, assumptions not being realized or other circumstances, actual results may materially differ from anticipated results described or implied in these forward-looking statements. We cannot assure the reader that the results or developments expected or anticipated by us will be realized or, even if substantially realized, that those results or developments will result in the expected consequences for us or affect us, our business or our operations in the way we expect. You are urged to consider all of these risks, uncertainties and other factors carefully in evaluating the forward-looking statements and not to place undue reliance on such forward-looking statements. The forward-looking statements included in this Annual Report speak only as of the date of this report, and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances, except as may be required by applicable law.

25


Wal-Mart Stores, Inc.
Consolidated Statements of Income
 
 
Fiscal Years Ended January 31,
(Amounts in millions, except per share data)
 
2013
 
2012
 
2011
Revenues:
 
 
 
 
 
 
Net sales
 
$
466,114

 
$
443,854

 
$
418,952

Membership and other income
 
3,048

 
3,096

 
2,897

Total revenues
 
469,162

 
446,950

 
421,849

Costs and expenses:
 
 
 
 
 
 
Cost of sales
 
352,488

 
335,127

 
314,946

Operating, selling, general and administrative expenses
 
88,873

 
85,265

 
81,361

Operating income
 
27,801

 
26,558

 
25,542

Interest:
 
 
 
 
 
 
Debt
 
1,977

 
2,034

 
1,928

Capital leases
 
274

 
288

 
277

Interest income
 
(187
)
 
(162
)
 
(201
)
Interest, net
 
2,064

 
2,160

 
2,004

Income from continuing operations before income taxes
 
25,737

 
24,398

 
23,538

Provision for income taxes:
 


 


 


Current
 
7,999

 
6,742

 
6,703

Deferred
 
(18
)
 
1,202

 
876

Total provision for income taxes
 
7,981

 
7,944

 
7,579

Income from continuing operations
 
17,756

 
16,454

 
15,959

Income (loss) from discontinued operations, net of income taxes
 

 
(67
)
 
1,034

Consolidated net income
 
17,756

 
16,387

 
16,993

Less consolidated net income attributable to noncontrolling interest
 
(757
)
 
(688
)
 
(604
)
Consolidated net income attributable to Walmart
 
$
16,999

 
$
15,699

 
$
16,389

 
 
 
 
 
 
 
Basic net income per common share:
 
 
 
 
 
 
Basic income per common share from continuing operations attributable to Walmart
 
$
5.04

 
$
4.56

 
$
4.20

Basic income (loss) per common share from discontinued operations attributable to Walmart
 

 
(0.02
)
 
0.28

Basic net income per common share attributable to Walmart
 
$
5.04

 
$
4.54

 
$
4.48

 
 
 
 
 
 
 
Diluted net income per common share:
 
 
 
 
 
 
Diluted income per common share from continuing operations attributable to Walmart
 
$
5.02

 
$
4.54

 
$
4.18

Diluted income (loss) per common share from discontinued operations attributable to Walmart
 

 
(0.02
)
 
0.29

Diluted net income per common share attributable to Walmart
 
$
5.02

 
$
4.52

 
$
4.47

 
 
 
 
 
 
 
Weighted-average common shares outstanding:
 
 
 
 
 
 
Basic
 
3,374

 
3,460

 
3,656

Diluted
 
3,389

 
3,474

 
3,670

Dividends declared per common share
 
$
1.59

 
$
1.46

 
$
1.21

See accompanying notes.

26


Wal-Mart Stores, Inc.
Consolidated Statements of Comprehensive Income
 
 
Fiscal Years Ended January 31,
(Amounts in millions)
 
2013
 
2012
 
2011
Consolidated net income
 
$
17,756

 
$
16,387

 
$
16,993

Less consolidated net income attributable to nonredeemable noncontrolling interest
 
(684
)
 
(627
)
 
(584
)
Less consolidated net income attributable to redeemable noncontrolling interest
 
(73
)
 
(61
)
 
(20
)
Consolidated net income attributable to Walmart
 
16,999

 
15,699

 
16,389

 
 
 
 
 
 
 
Other comprehensive income (loss), net of income taxes
 
 
 
 
 
 
Currency translation and other
 
1,042

 
(2,758
)
 
1,137

Derivative instruments
 
136

 
(67
)
 
(17
)
Minimum pension liability
 
(166
)
 
43

 
(145
)
Other comprehensive income (loss), net of income taxes
 
1,012

 
(2,782
)
 
975

Less other comprehensive income (loss) attributable to nonredeemable noncontrolling interest
 
(138
)
 
660

 
(162
)
Less other comprehensive income (loss) attributable to redeemable noncontrolling interest
 
(51
)
 
66

 
(97
)
Other comprehensive income (loss) attributable to Walmart
 
823

 
(2,056
)
 
716

 
 
 
 
 
 
 
Comprehensive income, net of income taxes
 
18,768

 
13,605

 
17,968

Less comprehensive income (loss) attributable to nonredeemable noncontrolling interest
 
(822
)
 
33

 
(746
)
Less comprehensive income (loss) attributable to redeemable noncontrolling interest
 
(124
)
 
5

 
(117
)
Comprehensive income attributable to Walmart
 
$
17,822

 
$
13,643

 
$
17,105

See accompanying notes.

27


Wal-Mart Stores, Inc.
Consolidated Balance Sheets
 
 
As of January 31,
(Amounts in millions)
 
2013
 
2012
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
7,781

 
$
6,550

Receivables, net
 
6,768

 
5,937

Inventories
 
43,803

 
40,714

Prepaid expenses and other
 
1,588

 
1,774

Total current assets
 
59,940

 
54,975

Property and equipment:
 
 
 
 
Property and equipment
 
165,825

 
155,002

Less accumulated depreciation
 
(51,896
)
 
(45,399
)
Property and equipment, net
 
113,929

 
109,603

Property under capital leases:
 
 
 
 
Property under capital leases
 
5,899

 
5,936

Less accumulated amortization
 
(3,147
)
 
(3,215
)
Property under capital leases, net
 
2,752

 
2,721

 
 
 
 
 
Goodwill
 
20,497

 
20,651

Other assets and deferred charges
 
5,987

 
5,456

Total assets
 
$
203,105

 
$
193,406

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Short-term borrowings
 
$
6,805

 
$
4,047

Accounts payable
 
38,080

 
36,608

Accrued liabilities
 
18,808

 
18,180

Accrued income taxes
 
2,211

 
1,164

Long-term debt due within one year
 
5,587

 
1,975

Obligations under capital leases due within one year
 
327

 
326

Total current liabilities
 
71,818

 
62,300

 
 
 
 
 
Long-term debt
 
38,394

 
44,070

Long-term obligations under capital leases
 
3,023

 
3,009

Deferred income taxes and other
 
7,613

 
7,862

Redeemable noncontrolling interest
 
519

 
404

 
 
 
 
 
Commitments and contingencies
 

 

 
 
 
 
 
Equity:
 
 
 
 
Common stock
 
332

 
342

Capital in excess of par value
 
3,620

 
3,692

Retained earnings
 
72,978

 
68,691

Accumulated other comprehensive income (loss)
 
(587
)
 
(1,410
)
Total Walmart shareholders' equity
 
76,343

 
71,315

Nonredeemable noncontrolling interest
 
5,395

 
4,446

Total equity
 
81,738

 
75,761

Total liabilities and equity
 
$
203,105

 
$
193,406

See accompanying notes.

28


Wal-Mart Stores, Inc.
Consolidated Statements of Shareholders' Equity
 
 
 
 
 
 
 
 
 
Accumulated
 
Total
 
 
 
 
 
 
 
 
 
Capital in
 
 
 
Other
 
Walmart
 
Nonredeemable
 
 
(Amounts in millions and exclude
redeemable noncontrolling interest)
Common Stock
 
Excess of
 
Retained
 
Comprehensive
 
Shareholders'
 
Noncontrolling
 
Total
Shares
 
Amount
 
Par Value
 
Earnings
 
Income (Loss)
 
Equity
 
Interest
 
Equity
Balances as of February 1, 2010
3,786

 
$
378

 
$
3,803

 
$
66,357

 
$
(70
)
 
$
70,468

 
$
2,180

 
$
72,648

Consolidated net income

 

 

 
16,389

 

 
16,389

 
584

 
16,973

Other comprehensive income, net of income taxes

 

 

 

 
716

 
716

 
162

 
878

Cash dividends declared ($1.21 per share)

 

 

 
(4,437
)
 

 
(4,437
)
 

 
(4,437
)
Purchase of Company stock
(280
)
 
(28
)
 
(487
)
 
(14,319
)
 

 
(14,834
)
 

 
(14,834
)
Other
10

 
2

 
261

 
(23
)
 

 
240

 
(221
)
 
19

Balances as of January 31, 2011
3,516

 
352

 
3,577

 
63,967

 
646

 
68,542

 
2,705

 
71,247

Consolidated net income

 

 

 
15,699

 

 
15,699

 
627

 
16,326

Other comprehensive income, net of income taxes

 

 

 

 
(2,056
)
 
(2,056
)
 
(660
)
 
(2,716
)
Cash dividends declared ($1.46 per share)

 

 

 
(5,048
)
 

 
(5,048
)
 

 
(5,048
)
Purchase of Company stock
(113
)
 
(11
)
 
(229
)
 
(5,930
)
 

 
(6,170
)
 

 
(6,170
)
Nonredeemable noncontrolling interest of acquired entity

 

 

 

 

 

 
1,988

 
1,988

Other
15

 
1

 
344

 
3

 

 
348

 
(214
)
 
134

Balances as of January 31, 2012
3,418

 
342

 
3,692

 
68,691

 
(1,410
)
 
71,315

 
4,446

 
75,761

Consolidated net income

 

 

 
16,999

 

 
16,999

 
684

 
17,683

Other comprehensive income, net of income taxes

 

 

 

 
823

 
823

 
138

 
961

Cash dividends declared ($1.59 per share)

 

 

 
(5,361
)
 

 
(5,361
)
 

 
(5,361
)
Purchase of Company stock
(115
)
 
(11
)
 
(357
)
 
(7,341
)
 

 
(7,709
)
 

 
(7,709
)
Nonredeemable noncontrolling interest of acquired entity

 

 

 

 

 

 
469

 
469

Other
11

 
1

 
285

 
(10
)
 

 
276