WAL MART STORES INC, 10-K filed on 3/31/2017
Annual Report
Document And Entity Information (USD $)
12 Months Ended
Jan. 31, 2017
Mar. 29, 2017
Jul. 29, 2016
Document And Entity Information [Abstract]
 
 
 
Entity Registrant Name
WAL MART STORES INC 
 
 
Entity Central Index Key
0000104169 
 
 
Current Fiscal Year End Date
--01-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Jan. 31, 2017 
 
 
Document Fiscal Year Focus
2017 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
3,033,009,079 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 108,531,045,541 
Consolidated Statements of Income (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Jan. 31, 2017
Jan. 31, 2016
Jan. 31, 2015
Revenues:
 
 
 
Net sales
$ 481,317 
$ 478,614 
$ 482,229 
Membership and other income
4,556 
3,516 
3,422 
Total revenues
485,873 
482,130 
485,651 
Costs and expenses:
 
 
 
Cost of sales
361,256 
360,984 
365,086 
Operating, selling, general and administrative expenses
101,853 
97,041 
93,418 
Operating income
22,764 
24,105 
27,147 
Interest:
 
 
 
Debt
2,044 
2,027 
2,161 
Capital lease and financing obligations
323 
521 
300 
Interest income
(100)
(81)
(113)
Interest, net
2,267 
2,467 
2,348 
Income from continuing operations before income taxes
20,497 
21,638 
24,799 
Provision for income taxes
6,204 
6,558 
7,985 
Income from continuing operations
14,293 
15,080 
16,814 
Income from discontinued operations, net of income taxes
285 
Consolidated net income
14,293 
15,080 
17,099 
Consolidated net income attributable to noncontrolling interest
(650)
(386)
(736)
Consolidated net income attributable to Walmart
$ 13,643 
$ 14,694 
$ 16,363 
Basic net income per common share:
 
 
 
Basic income per common share from continuing operations attributable to Walmart
$ 4.40 
$ 4.58 
$ 5.01 
Basic income per common share from discontinued operations attributable to Walmart
$ 0.00 
$ 0.00 
$ 0.06 
Basic net income per common share attributable to Walmart
$ 4.40 
$ 4.58 
$ 5.07 
Diluted net income per common share:
 
 
 
Diluted income per common share from continuing operations attributable to Walmart
$ 4.38 
$ 4.57 
$ 4.99 
Diluted income per common share from discontinued operations attributable to Walmart
$ 0.00 
$ 0.00 
$ 0.06 
Diluted net income per common share attributable to Walmart
$ 4.38 
$ 4.57 
$ 5.05 
Weighted-average common shares outstanding:
 
 
 
Basic
3,101 
3,207 
3,230 
Diluted
3,112 
3,217 
3,243 
Dividends declared per common share
$ 2.00 
$ 1.96 
$ 1.92 
Consolidated Statements of Comprehensive Income (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 31, 2017
Jan. 31, 2016
Jan. 31, 2015
Consolidated net income
$ 14,293 
$ 15,080 
$ 17,099 
Less consolidated net income attributable to nonredeemable noncontrolling interest
(650)
(386)
(736)
Consolidated net income attributable to Walmart
13,643 
14,694 
16,363 
Other comprehensive income (loss), net of income taxes
 
 
 
Currency translation and other
(2,882)
(5,220)
(4,558)
Minimum pension liability
(397)
86 
(69)
Other comprehensive income (loss), net of income taxes
(2,845)
(4,970)
(4,718)
Less other comprehensive income (loss) attributable to nonredeemable noncontrolling interest
210 
541 
546 
Other comprehensive income (loss) attributable to Walmart
(2,635)
(4,429)
(4,172)
Comprehensive income, net of income taxes
11,448 
10,110 
12,381 
Less comprehensive income (loss) attributable to nonredeemable noncontrolling interest
(440)
155 
(190)
Comprehensive income attributable to Walmart
11,008 
10,265 
12,191 
Net investment hedging
 
 
 
Other comprehensive income (loss), net of income taxes
 
 
 
Derivative instruments
413 
366 
379 
Cash flow hedging
 
 
 
Other comprehensive income (loss), net of income taxes
 
 
 
Derivative instruments
$ 21 
$ (202)
$ (470)
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Jan. 31, 2017
Jan. 31, 2016
Current assets:
 
 
Cash and cash equivalents
$ 6,867 
$ 8,705 
Receivables, net
5,835 
5,624 
Inventories
43,046 
44,469 
Prepaid expenses and other
1,941 
1,441 
Total current assets
57,689 
60,239 
Property and equipment:
 
 
Property and equipment
179,492 
176,958 
Less accumulated depreciation
(71,782)
(66,787)
Property and equipment, net
107,710 
110,171 
Property under capital lease and financing obligations:
 
 
Property under capital lease and financing obligations
11,637 
11,096 
Less accumulated amortization
(5,169)
(4,751)
Property under capital lease and financing obligations, net
6,468 
6,345 
Goodwill
17,037 
16,695 
Other assets and deferred charges
9,921 
6,131 
Total assets
198,825 
199,581 
Current liabilities:
 
 
Short-term borrowings
1,099 
2,708 
Accounts payable
41,433 
38,487 
Accrued liabilities
20,654 
19,607 
Accrued income taxes
921 
521 
Long-term debt due within one year
2,256 
2,745 
Capital lease and financing obligations due within one year
565 
551 
Total current liabilities
66,928 
64,619 
Long-term debt
36,015 
38,214 
Long-term capital lease and financing obligations
6,003 
5,816 
Deferred income taxes and other
9,344 
7,321 
Commitments and contingencies
   
   
Equity:
 
 
Common stock
305 
317 
Capital in excess of par value
2,371 
1,805 
Retained earnings
89,354 
90,021 
Accumulated other comprehensive loss
(14,232)
(11,597)
Total Walmart shareholders' equity
77,798 
80,546 
Nonredeemable noncontrolling interest
2,737 
3,065 
Total equity
80,535 
83,611 
Total liabilities and equity
$ 198,825 
$ 199,581 
Consolidated Statement Of Shareholders' Equity and Redeemable Noncontrolling Interest (USD $)
In Millions, unless otherwise specified
Total
Common stock
Capital in excess of par value
Retained earnings
Accumulated other comprehensive income (loss)
Total Walmart shareholders' equity
Nonredeemable noncontrolling interest
Balances at Jan. 31, 2014
$ 81,339 
$ 323 
$ 2,362 
$ 76,566 
$ (2,996)
$ 76,255 
$ 5,084 
Balances, in shares at Jan. 31, 2014
 
3,233 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
Consolidated net income
17,099 
 
 
16,363 
 
16,363 
736 
Other comprehensive income, net of income taxes
(4,718)
 
 
 
(4,172)
(4,172)
(546)
Cash dividends declared
(6,185)
 
 
(6,185)
 
(6,185)
 
Purchase of Company stock (in shares)
 
(13)
 
 
 
 
 
Purchase of Company stock
(980)
(1)
(29)
(950)
 
(980)
 
Other, in shares
 
 
 
 
 
 
Other
(618)
129 
(17)
 
113 
(731)
Purchase of redeemable noncontrolling interest
(1,491)
 
 
 
 
 
 
Balances at Jan. 31, 2015
85,937 
323 
2,462 
85,777 
(7,168)
81,394 
4,543 
Balances, in shares at Jan. 31, 2015
 
3,228 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
Consolidated net income
15,080 
 
 
14,694 
 
14,694 
386 
Other comprehensive income, net of income taxes
(4,970)
 
 
 
(4,429)
(4,429)
(541)
Cash dividends declared
(6,294)
 
 
(6,294)
 
(6,294)
 
Purchase of Company stock (in shares)
 
(65)
 
 
 
 
 
Purchase of Company stock
(4,256)
(6)
(102)
(4,148)
 
(4,256)
 
Dividends declared to noncontrolling interest
(691)
 
 
 
 
 
(691)
Other, in shares
 
(1)
 
 
 
 
 
Other
(1,195)
 
(555)
(8)
 
(563)
(632)
Balances at Jan. 31, 2016
83,611 
317 
1,805 
90,021 
(11,597)
80,546 
3,065 
Balances, in shares at Jan. 31, 2016
 
3,162 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
Consolidated net income
14,293 
 
 
13,643 
 
13,643 
650 
Other comprehensive income, net of income taxes
(2,845)
 
 
 
(2,635)
(2,635)
(210)
Cash dividends declared
(6,216)
 
 
(6,216)
 
(6,216)
 
Purchase of Company stock (in shares)
 
(120)
 
 
 
 
 
Purchase of Company stock
(8,276)
(12)
(174)
(8,090)
 
(8,276)
 
Dividends declared to noncontrolling interest
(519)
 
 
 
 
 
(519)
Other, in shares
 
 
 
 
 
 
Other
487 
 
740 
(4)
 
736 
(249)
Balances at Jan. 31, 2017
$ 80,535 
$ 305 
$ 2,371 
$ 89,354 
$ (14,232)
$ 77,798 
$ 2,737 
Balances, in shares at Jan. 31, 2017
 
3,048 
 
 
 
 
 
Consolidated Statement Of Shareholders' Equity and Redeemable Noncontrolling Interest (Parenthetical)
12 Months Ended
Jan. 31, 2017
Jan. 31, 2016
Jan. 31, 2015
Statement of Stockholders' Equity [Abstract]
 
 
 
Dividends declared per common share
$ 2.00 
$ 1.96 
$ 1.92 
Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 31, 2017
Jan. 31, 2016
Jan. 31, 2015
Cash flows from operating activities:
 
 
 
Consolidated net income
$ 14,293 
$ 15,080 
$ 17,099 
Income from discontinued operations, net of income taxes
(285)
Income from continuing operations
14,293 
15,080 
16,814 
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
 
 
 
Depreciation and amortization
10,080 
9,454 
9,173 
Deferred income taxes
761 
(672)
(503)
Other operating activities
206 
1,410 
785 
Changes in certain assets and liabilities, net of effects of acquisitions:
 
 
 
Receivables, net
(402)
(19)
(569)
Inventories
1,021 
(703)
(1,229)
Accounts payable
3,942 
2,008 
2,678 
Accrued liabilities
1,137 
1,303 
1,249 
Accrued income taxes
492 
(472)
166 
Net cash provided by operating activities
31,530 
27,389 
28,564 
Cash flows from investing activities:
 
 
 
Payments for property and equipment
(10,619)
(11,477)
(12,174)
Proceeds from the disposal of property and equipment
456 
635 
570 
Proceeds from the disposal of certain operations
662 
246 
671 
Purchase of available for sale securities
(1,901)
Investment and business acquisitions, net of cash acquired
(2,463)
Other investing activities
(122)
(79)
(192)
Net cash used in investing activities
(13,987)
(10,675)
(11,125)
Cash flows from financing activities:
 
 
 
Net change in short-term borrowings
(1,673)
1,235 
(6,288)
Proceeds from issuance of long-term debt
137 
39 
5,174 
Payments of long-term debt
(2,055)
(4,432)
(3,904)
Dividends paid
(6,216)
(6,294)
(6,185)
Purchase of Company stock
(8,298)
(4,112)
(1,015)
Dividends paid to noncontrolling interest
(479)
(719)
(600)
Purchase of noncontrolling interest
(90)
(1,326)
(1,844)
Other financing activities
(255)
(513)
(409)
Net cash used in financing activities
(18,929)
(16,122)
(15,071)
Effect of exchange rates on cash and cash equivalents
(452)
(1,022)
(514)
Net increase (decrease) in cash and cash equivalents
(1,838)
(430)
1,854 
Cash and cash equivalents at beginning of year
8,705 
9,135 
7,281 
Cash and cash equivalents at end of year
6,867 
8,705 
9,135 
Supplemental disclosure of cash flow information:
 
 
 
Income Taxes Paid
4,507 
8,111 
8,169 
Interest Paid
$ 2,351 
$ 2,540 
$ 2,433 
Summary of Significant Accounting Policies
Basis of presentation
Summary of Significant Accounting Policies
General
Wal-Mart Stores, Inc. ("Walmart" or the "Company") helps people around the world save money and live better – anytime and anywhere – in retail stores or through the Company's e-commerce and mobile capabilities. Through innovation, the Company is striving to create a customer-centric experience that seamlessly integrates digital and physical shopping and saves time for our customers. Each week, the Company serves over 260 million customers who visit its 11,695 stores under 59 banners in 28 countries and e-commerce websites in 11 countries. The Company's strategy is to lead on price, invest to differentiate on access, be competitive on assortment and deliver a great experience.
The Company's operations comprise three reportable segments: Walmart U.S., Walmart International and Sam's Club.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Walmart and its subsidiaries as of and for the fiscal years ended January 31, 2017 ("fiscal 2017"), January 31, 2016 ("fiscal 2016") and January 31, 2015 ("fiscal 2015"). All material intercompany accounts and transactions have been eliminated in consolidation. We consolidate variable interest entities where it has been determined that the Company is the primary beneficiary of those entities' operations. Investments in unconsolidated affiliates, which are 50% or less owned and do not otherwise meet consolidation requirements, are accounted for primarily using the equity method. These investments are immaterial to the Company's Consolidated Financial Statements.
The Company's Consolidated Financial Statements are based on a fiscal year ending on January 31 for the United States ("U.S.") and Canadian operations. The Company consolidates all other operations generally using a one-month lag and based on a calendar year. There were no significant intervening events during January 2017 that materially affected the Consolidated Financial Statements.
Use of Estimates
The Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles. Those principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Management's estimates and assumptions also affect the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.
Cash and Cash Equivalents
The Company considers investments with a maturity when purchased of three months or less to be cash equivalents. All credit card, debit card and electronic benefits transfer transactions that process in less than seven days are classified as cash and cash equivalents. The amounts due from banks for these transactions classified as cash and cash equivalents totaled $1.5 billion and $3.4 billion at January 31, 2017 and 2016, respectively. In addition, cash and cash equivalents included restricted cash of $265 million and $362 million at January 31, 2017 and 2016, respectively, which was primarily related to cash collateral holdings from various counterparties, as required by certain derivative and trust agreements.
The Company's cash balances are held in various locations around the world. Of the Company's $6.9 billion and $8.7 billion of cash and cash equivalents at January 31, 2017 and 2016, respectively, $5.9 billion and $4.5 billion, respectively, were held outside of the U.S. and were generally utilized to support liquidity needs in the Company's non-U.S. operations.
The Company uses intercompany financing arrangements in an effort to ensure cash can be made available in the country in which it is needed with the minimum cost possible. Management does not believe it will be necessary to repatriate earnings held outside of the U.S. and anticipates the Company's domestic liquidity needs will be met through cash flows provided by domestic operating activities, supplemented with long-term debt and short-term borrowings. Accordingly, the Company intends, with only certain exceptions, to continue to indefinitely reinvest the Company's earnings held outside of the U.S. in our foreign operations. When the income earned, either from operations or through intercompany financing arrangements, and indefinitely reinvested outside of the U.S. is taxed at local country tax rates, which are generally lower than the U.S. statutory rate, the Company realizes an effective tax rate benefit. If the Company's intentions with respect to reinvestment were to change, most of the amounts held within the Company's foreign operations could be repatriated to the U.S., although any repatriation under current U.S. tax laws would be subject to U.S. federal income taxes, less applicable foreign tax credits. Although there can be no assurance of the impact on the Company of potential federal tax reform in the U.S., the Company does not expect current local laws, other existing limitations or potential taxes on anticipated future repatriations of earnings held outside of the U.S. to have a material effect on the Company's overall liquidity, financial condition or results of operations.
As of January 31, 2017 and 2016, cash and cash equivalents of approximately $1.0 billion and $1.1 billion, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions.
Receivables
Receivables are stated at their carrying values, net of a reserve for doubtful accounts. Receivables consist primarily of amounts due from:
insurance companies resulting from pharmacy sales;
banks for customer credit and debit cards and electronic bank transfers that take in excess of seven days to process;
consumer financing programs in certain international operations;
suppliers for marketing or incentive programs; and
real estate transactions.
The Walmart International segment offers a limited number of consumer credit products, primarily through its financial institutions in select countries. The receivable balance from consumer credit products was $1.2 billion, net of a reserve for doubtful accounts of $79 million at January 31, 2017, compared to a receivable balance of $1.0 billion, net of a reserve for doubtful accounts of $70 million at January 31, 2016. These balances are included in receivables, net, in the Company's Consolidated Balance Sheets.
Inventories
The Company values inventories at the lower of cost or market as determined primarily by the retail inventory method of accounting, using the last-in, first-out ("LIFO") method for substantially all of the Walmart U.S. segment's inventories. The inventory at the Walmart International segment is valued primarily by the retail inventory method of accounting, using the first-in, first-out ("FIFO") method. The retail inventory method of accounting results in inventory being valued at the lower of cost or market since permanent markdowns are immediately recorded as a reduction of the retail value of inventory. The inventory at the Sam's Club segment is valued using the LIFO method. At January 31, 2017 and January 31, 2016, the Company's inventories valued at LIFO approximated those inventories as if they were valued at FIFO.
Property and Equipment
Property and equipment are stated at cost. Gains or losses on disposition are recognized as earned or incurred. Costs of major improvements are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred. The following table summarizes the Company's property and equipment balances and includes the estimated useful lives that are generally used to depreciate the assets on a straight-line basis:
 
 
 
 
Fiscal Years Ended January 31,
(Amounts in millions)
 
Estimated Useful Lives
 
2017
 
2016
Land
 
N/A
 
$
24,801

 
$
25,624

Buildings and improvements
 
3-40 years
 
98,547

 
96,845

Fixtures and equipment
 
1-30 years
 
48,998

 
47,033

Transportation equipment
 
3-15 years
 
2,845

 
2,917

Construction in progress
 
N/A
 
4,301

 
4,539

Property and equipment
 
 
 
$
179,492

 
$
176,958

Accumulated depreciation
 
 
 
(71,782
)
 
(66,787
)
Property and equipment, net
 
 
 
$
107,710

 
$
110,171


Leasehold improvements are depreciated or amortized over the shorter of the estimated useful life of the asset or the remaining expected lease term. Total depreciation and amortization expense for property and equipment, property under financing obligations and property under capital leases for fiscal 2017, 2016 and 2015 was $10.0 billion, $9.4 billion and $9.1 billion, respectively. Interest costs capitalized on construction projects were $36 million, $39 million and $59 million in fiscal 2017, 2016 and 2015, respectively.
Leases
The Company estimates the expected term of a lease by assuming the exercise of renewal options where an economic penalty exists that would preclude the abandonment of the lease at the end of the initial non-cancelable term and the exercise of such renewal is at the sole discretion of the Company. The expected term is used in the determination of whether a store or club lease is a capital or operating lease and in the calculation of straight-line rent expense. Additionally, the useful life of leasehold improvements is limited by the expected lease term or the economic life of the asset, whichever is shorter. If significant expenditures are made for leasehold improvements late in the expected term of a lease and renewal is reasonably assured, the useful life of the leasehold improvement is limited to the end of the renewal period or economic life of the asset, whichever is shorter. Rent abatements and escalations are considered in the calculation of minimum lease payments in the Company's capital lease tests and in determining straight-line rent expense for operating leases.
The Company is often involved in the construction of its leased stores. In certain cases, payments made for certain structural components included in the lessor's construction of the leased assets result in the Company being deemed the owner of the leased assets for accounting purposes. As a result, the payments, regardless of the significance, are automatic indicators of ownership and require the Company to capitalize the lessor's total project cost with a corresponding financing obligation. Upon completion of the lessor's project, the Company performs a sale-leaseback analysis to determine if these assets and the related financing obligation can be derecognized from the Company's Consolidated Balance Sheets. If the Company is deemed to have "continuing involvement," the leased assets and the related financing obligation remain on the Company's Consolidated Balance Sheets and are generally amortized over the lease term. At the end of the lease term, including exercise of any renewal options, the net remaining financing obligation over the net carrying value of the fixed asset will be recognized as a non-cash gain on sale of the property.
Long-Lived Assets
Long-lived assets are stated at cost. Management reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows, which is at the individual store or club level or, in certain circumstances, a market group of stores. Undiscounted cash flows expected to be generated by the related assets are estimated over the assets' useful lives based on updated projections. If the evaluation indicates that the carrying amount of the assets may not be recoverable, any potential impairment is measured based upon the fair value of the related asset or asset group as determined by an appropriate market appraisal or other valuation technique. Impairment charges of long-lived assets for fiscal 2017, 2016 and 2015 were not material.
Goodwill and Other Acquired Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations and is allocated to the appropriate reporting unit when acquired. Other acquired intangible assets are stated at the fair value acquired as determined by a valuation technique commensurate with the intended use of the related asset. Goodwill and indefinite-lived intangible assets are not amortized; rather, they are evaluated for impairment annually and whenever events or changes in circumstances indicate that the value of the asset may be impaired. Definite-lived intangible assets are considered long-lived assets and are amortized on a straight-line basis over the periods that expected economic benefits will be provided.
Goodwill is evaluated for impairment using either a qualitative or quantitative approach for each of the Company's reporting units. Generally, a qualitative assessment is first performed to determine whether a quantitative goodwill impairment test is necessary. If management determines, 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 goodwill impairment test would be required. The quantitative test for goodwill impairment is performed by determining the fair value of the related reporting units. Fair value is measured based on the discounted cash flow method and relative market-based approaches.
The Company's reporting units were evaluated using a quantitative impairment test. Management determined the fair value of each reporting unit is greater than the carrying amount and, accordingly, the Company has not recorded any impairment charges related to goodwill.
The following table reflects goodwill activity, by reportable segment, for fiscal 2017 and 2016:
(Amounts in millions)
 
Walmart U.S.
 
Walmart
International
 
Sam's Club
 
Total
Balances as of February 1, 2015
 
$
461

 
$
17,328

 
$
313

 
$
18,102

Changes in currency translation and other
 

 
(1,412
)
 

 
(1,412
)
Acquisitions(1)
 

 
5

 

 
5

Balances as of January 31, 2016
 
461

 
15,921

 
313

 
16,695

Changes in currency translation and other
 

 
(1,433
)
 

 
(1,433
)
Acquisitions(2)
 
1,775

 

 

 
1,775

Balances as of January 31, 2017
 
$
2,236

 
$
14,488

 
$
313

 
$
17,037

(1)
Goodwill recorded for fiscal 2016 acquisitions relates to acquisitions that are not significant, individually or in the aggregate, to the Company's Consolidated Financial Statements.
(2)
Goodwill recorded for fiscal 2017 Walmart U.S. acquisitions primarily relates to Jet.com, Inc. ("jet.com").
Indefinite-lived intangible assets are included in other assets and deferred charges in the Company's Consolidated Balance Sheets. These assets are evaluated for impairment based on their fair values using valuation techniques which are updated annually based on the most recent variables and assumptions. There were no significant impairment charges related to indefinite-lived intangible assets recorded for fiscal 2017, 2016 and 2015.
Self Insurance Reserves
The Company self-insures a number of risks, including, but not limited to, workers' compensation, general liability, auto liability, product liability and certain employee-related healthcare benefits. Standard actuarial procedures and data analysis are used to estimate the liabilities associated with these risks as of the balance sheet date on an undiscounted basis. The recorded liabilities reflect the ultimate cost for claims incurred but not paid and any estimable administrative run-out expenses related to the processing of these outstanding claim payments. On a regular basis, claims reserve valuations are provided by independent third-party actuaries to ensure liability estimates are appropriate. To limit exposure to some risks, the Company maintains insurance coverage with varying limits and retentions, including stop-loss insurance coverage for workers' compensation, general liability and auto liability.
Income Taxes
Income taxes are accounted for under the balance sheet method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases ("temporary differences"). Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date.
Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent that a portion is not more likely than not to be realized. Many factors are considered when assessing whether it is more likely than not that the deferred tax assets will be realized, including recent cumulative earnings, expectations of future taxable income, carryforward periods, and other relevant quantitative and qualitative factors. The recoverability of the deferred tax assets is evaluated by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income rely heavily on estimates.
In determining the provision for income taxes, an annual effective income tax rate is used based on annual income, permanent differences between book and tax income, and statutory income tax rates. Discrete events such as audit settlements or changes in tax laws are recognized in the period in which they occur.
The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company records interest and penalties related to unrecognized tax benefits in interest expense and operating, selling, general and administrative expenses, respectively, in the Company's Consolidated Statements of Income. Refer to Note 9 for additional income tax disclosures.
Revenue Recognition    
Sales
The Company recognizes sales revenue, net of sales taxes and estimated sales returns, at the time it sells merchandise to the customer. Digital retail sales include shipping revenue and are recorded upon delivery to the customer.
Membership Fee Revenue
The Company recognizes membership fee revenue both in the U.S. and internationally over the term of the membership, which is typically 12 months. The following table summarizes membership fee activity for fiscal 2017, 2016 and 2015:
 
 
Fiscal Years Ended January 31,
(Amounts in millions)
 
2017
 
2016
 
2015
Deferred membership fee revenue, beginning of year
 
$
744

 
$
759

 
$
641

Cash received from members
 
1,371

 
1,333

 
1,410

Membership fee revenue recognized
 
(1,372
)
 
(1,348
)
 
(1,292
)
Deferred membership fee revenue, end of year
 
$
743

 
$
744

 
$
759


Membership fee revenue is included in membership and other income in the Company's Consolidated Statements of Income. The deferred membership fee is included in accrued liabilities in the Company's Consolidated Balance Sheets.
Shopping Cards
Customer purchases of shopping cards, to be utilized in our stores or on our e-commerce websites, are not recognized as revenue until the card is redeemed and the customer purchases merchandise using the shopping card. Shopping cards in the U.S. do not carry an expiration date; therefore, customers and members can redeem their shopping cards for merchandise indefinitely. Shopping cards in certain foreign countries where the Company does business may have expiration dates. A certain number of shopping cards, both with and without expiration dates, will not be fully redeemed. Management estimates unredeemed shopping cards and recognizes revenue for these amounts when it is determined the likelihood of redemption is remote. Management periodically reviews and updates its estimates.
Financial and Other Services
The Company recognizes revenue from service transactions at the time the service is performed. Generally, revenue from services is classified as a component of net sales in the Company's Consolidated Statements of Income.
Cost of Sales
Cost of sales includes actual product cost, the cost of transportation to the Company's distribution facilities, stores and clubs from suppliers, the cost of transportation from the Company's distribution facilities to the stores, clubs and customers and the cost of warehousing for the Sam's Club segment and import distribution centers. Cost of sales is reduced by supplier payments that are not a reimbursement of specific, incremental and identifiable costs.
Payments from Suppliers
The Company receives consideration from suppliers for various programs, primarily volume incentives, warehouse allowances and reimbursements for specific programs such as markdowns, margin protection, advertising and supplier-specific fixtures. Payments from suppliers are accounted for as a reduction of cost of sales and are recognized in the Company's Consolidated Statements of Income when the related inventory is sold, except in certain limited situations when the payment is a reimbursement of specific, incremental and identifiable costs.
Operating, Selling, General and Administrative Expenses
Operating, selling, general and administrative expenses include all operating costs of the Company, except cost of sales, as described above. As a result, the majority of the cost of warehousing and occupancy for the Walmart U.S. and Walmart International segments' distribution facilities is included in operating, selling, general and administrative expenses. Because the Company does not include most of the cost of its Walmart U.S. and Walmart International segments' distribution facilities in cost of sales, its gross profit and gross profit as a percentage of net sales may not be comparable to those of other retailers that may include all costs related to their distribution facilities in cost of sales and in the calculation of gross profit.
Advertising Costs
Advertising costs are expensed as incurred, consist primarily of print, television and digital advertisements and are recorded in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income. In certain limited situations, reimbursements from suppliers that are for specific, incremental and identifiable advertising costs are recognized as a reduction of advertising costs in operating, selling, general and administrative expenses. Advertising costs were $2.9 billion, $2.5 billion and $2.4 billion for fiscal 2017, 2016 and 2015, respectively.
Pre-Opening Costs
The cost of start-up activities, including organization costs, related to new store openings, store remodels, relocations, expansions and conversions are expensed as incurred and included in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income. Pre-opening costs totaled $131 million, $271 million and $317 million for fiscal 2017, 2016 and 2015, respectively.
Currency Translation
The assets and liabilities of all international subsidiaries are translated from the respective local currency to the U.S. dollar using exchange rates at the balance sheet date. Related translation adjustments are recorded as a component of accumulated other comprehensive income (loss). The income statements of all international subsidiaries are translated from the respective local currencies to the U.S. dollar using average exchange rates for the period covered by the income statements.
Recent Accounting Pronouncements
Revenue Recognition
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. Management continues to evaluate the impact this ASU, the related amendments and the interpretive guidance will have on the Company's consolidated financial statements. While management does not expect this ASU to materially impact the Company's consolidated net income, balance sheet or cash flows, the ASU will impact the timing of recognition of some revenue and may impact the gross amount of revenue presented for certain contracts. Management expects the most significant timing change to result from the revenue associated with the unredeemed portion of Company issued gift cards, which will be recognized over the expected redemption period of the gift card under the new standard rather than waiting until the likelihood of redemption becomes remote or waiting for the gift card to expire. Additionally, management continues to assess the guidance and the related interpretation to determine if that guidance will impact the gross amount of revenue presented for certain contracts. The Company is planning to adopt this ASU on February 1, 2018 under the modified retrospective approach, which will result in a cumulative adjustment to retained earnings.
Leases
In February 2016, FASB issued ASU 2016-02, Leases (Topic 842). FASB issued ASU 2016-02 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Certain qualitative and quantitative disclosures are required, as well as a retrospective recognition and measurement of impacted leases. The Company is planning to adopt the ASU on February 1, 2019. Management is evaluating this ASU and currently expects it to have a material impact on the Company's consolidated balance sheet. Management is still evaluating the effect on consolidated net income, cash flows and disclosures.
Financial Instruments
In January 2016, FASB issued ASU 2016-01, Financial Instruments–Overall (Topic 825). ASU 2016-01 updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017. Management is currently evaluating this ASU to determine its impact on the Company's consolidated net income, balance sheet and disclosures.
In June 2016, FASB issued ASU 2016-13, Financial Instruments–Credit Losses (Topic 326). ASU 2016-13 modifies the measurement of expected credit losses of certain financial instruments. ASU 2016-13 is effective for fiscal years and interim periods within those years beginning after December 15, 2019. Management is currently evaluating this ASU to determine its impact on the Company's consolidated net income, balance sheet, cash flows and disclosures.
Stock Compensation
In March 2016, FASB issued ASU 2016-09, Compensation–Stock Compensation (Topic 718). ASU 2016-09 includes new guidance on stock compensation, which is intended to simplify accounting for share-based payment transactions. The guidance will change several aspects of the accounting for share-based payment award transactions, including accounting for income taxes, forfeitures, and minimum statutory tax withholding requirements. Management has determined that the Company will adopt ASU 2016-09 in the first quarter of the year ended January 31, 2018 ("fiscal 2018"). Management has evaluated this ASU and determined that, upon adoption, it will have an immaterial retrospective impact on the classification of cash flows between operating and financing activities.
Net Income Per Common Share
Net income per common share
Net Income Per Common Share
Basic income per common share from continuing operations attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period. Diluted income per common share from continuing operations attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period adjusted for the dilutive effect of share-based awards. The Company did not have significant share-based awards outstanding that were antidilutive and not included in the calculation of diluted income per common share from continuing operations attributable to Walmart for fiscal 2017, 2016 and 2015.
The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted income per common share from continuing operations attributable to Walmart:
 
 
Fiscal Years Ended January 31,
(Amounts in millions, except per share data)
 
2017
 
2016
 
2015
Numerator
 
 
 
 
 
 
Income from continuing operations
 
$
14,293

 
$
15,080

 
$
16,814

Income from continuing operations attributable to noncontrolling interest
 
(650
)
 
(386
)
 
(632
)
Income from continuing operations attributable to Walmart
 
$
13,643

 
$
14,694

 
$
16,182

 
 
 
 
 
 
 
Denominator
 
 
 
 
 
 
Weighted-average common shares outstanding, basic
 
3,101

 
3,207

 
3,230

Dilutive impact of stock options and other share-based awards
 
11

 
10

 
13

Weighted-average common shares outstanding, diluted
 
3,112

 
3,217

 
3,243


 
 
 
 
 
 
Income per common share from continuing operations attributable to Walmart
 
 
 
 
 
 
Basic
 
$
4.40

 
$
4.58

 
$
5.01

Diluted
 
4.38

 
4.57

 
4.99

Shareholders' Equity
Stockholders' Equity Note Disclosure [Text Block]
Shareholders' Equity
Share-Based Compensation
The Company has awarded share-based compensation to associates and nonemployee directors of the Company. The compensation expense recognized for all plans was $596 million, $448 million and $462 million for fiscal 2017, 2016 and 2015, respectively. Share-based compensation expense is included in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income. The total income tax benefit recognized for share-based compensation was $212 million, $151 million and $173 million for fiscal 2017, 2016 and 2015, respectively. The following table summarizes the Company's share-based compensation expense by award type:
 
Fiscal Years Ended January 31,
(Amounts in millions)
2017
 
2016
 
2015
Restricted stock and performance share units
$
237

 
$
134

 
$
157

Restricted stock units
332

 
292

 
277

Other
27

 
22

 
28

Share-based compensation expense
$
596

 
$
448

 
$
462


The Company's shareholder-approved Stock Incentive Plan of 2015 (the "Plan") became effective June 5, 2015 and amended and restated the Company's Stock Incentive Plan of 2010. The Plan was established to grant stock options, restricted (non-vested) stock, performance share units and other equity compensation awards for which 210 million shares of common stock issued or to be issued under the Plan have been registered under the Securities Act of 1933, as amended. The Company believes that such awards serve to align the interests of its associates with those of its shareholders.
The Plan's award types are summarized as follows:
Restricted Stock and Performance Share Units. Restricted stock awards are for shares that vest based on the passage of time and include restrictions related to employment. Performance share units vest based on the passage of time and achievement of performance criteria and may range from 0% to 150% of the original award amount. Vesting periods for these awards are generally between one and three years. Restricted stock and performance share units may be settled or deferred in stock and are accounted for as equity in the Company's Consolidated Balance Sheets. The fair value of restricted stock awards is determined on the date of grant and is expensed ratably over the vesting period. The fair value of performance share units is determined on the date of grant using the Company's stock price discounted for the expected dividend yield through the vesting period and is recognized over the vesting period. The weighted-average discount for the dividend yield used to determine the fair value of performance share units in fiscal 2017, 2016 and 2015 was 8.3%, 7.4% and 7.1%, respectively.
Restricted Stock Units. Restricted stock units provide rights to Company stock after a specified service period; generally 50% vest three years from the grant date and the remaining 50% vest five years from the grant date. The fair value of each restricted stock unit is determined on the date of grant using the stock price discounted for the expected dividend yield through the vesting period and is recognized ratably over the vesting period. The expected dividend yield is based on the anticipated dividends over the vesting period. The weighted-average discount for the dividend yield used to determine the fair value of restricted stock units granted in fiscal 2017, 2016 and 2015 was 9.0%, 8.7% and 9.5%, respectively.
In addition to the Plan, the Company's subsidiary in the United Kingdom has stock option plans for certain colleagues which generally vest over three years. The stock option share-based compensation expense is included in the Other line in the table above.
The following table shows the activity for restricted stock and performance share units and restricted stock units during fiscal 2017:
 
 
Restricted Stock and Performance Share Units(1)
 
Restricted Stock Units
(Shares in thousands)
 
Shares
 
Weighted-Average Grant-Date Fair Value Per Share
 
Shares
 
Weighted-Average Grant-Date Fair Value Per Share
Outstanding at February 1, 2016
 
8,259

 
$
72.23

 
17,591

 
$
65.67

Granted
 
4,102

 
64.09

 
12,696

 
63.71

Vested/exercised
 
(2,073
)
 
71.99

 
(4,332
)
 
60.54

Forfeited or expired
 
(1,211
)
 
71.58

 
(1,679
)
 
65.95

Outstanding at January 31, 2017
 
9,077

 
$
68.61

 
24,276

(2) 
$
65.52

(1)
Assumes payout rate at 100% for Performance Share Units.
(2)
Includes 3.6 million restricted stock units granted in fiscal 2017 outside of the Plan in conjunction with the acquisition of jet.com.

The following table includes additional information related to restricted stock and performance share units and restricted stock units: 
 
Fiscal Years Ended January 31,
(Amounts in millions)
2017
 
2016
 
2015
Fair value of restricted stock and performance share units vested
$
149

 
$
142

 
$
156

Fair value of restricted stock units vested
261

 
237

 
218

Unrecognized compensation cost for restricted stock and performance share units
211

 
133

 
154

Unrecognized compensation cost for restricted stock units
986

 
628

 
570

Weighted average remaining period to expense for restricted stock and performance share units (years)
1.3

 
1.3

 
1.3

Weighted average remaining period to expense for restricted stock units (years)
1.9

 
1.7

 
1.7


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 $20.0 billion share repurchase program, as authorized by the Board of Directors on October 13, 2015, has no expiration date or other restrictions limiting the period over which the Company can make share repurchases. At January 31, 2017, authorization for $9.2 billion of share repurchases remained under the current share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status.
The Company considers several factors in determining when to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings, its results of operations and the market price of its common stock. The following table provides, on a settlement date basis, the number of shares repurchased, average price paid per share and total cash paid for share repurchases for fiscal 2017, 2016 and 2015:
 
 
Fiscal Years Ended January 31,
(Amounts in millions, except per share data)
 
2017
 
2016
 
2015
Total number of shares repurchased
 
119.9

 
62.4

 
13.4

Average price paid per share
 
$
69.18

 
$
65.90

 
$
75.82

Total cash paid for share repurchases
 
$
8,298

 
$
4,112

 
$
1,015

Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Loss
The following table provides changes in the composition of total accumulated other comprehensive loss for fiscal 2017, 2016 and 2015:
(Amounts in millions and net of income taxes)
Currency Translation
and Other
 
Net Investment Hedges
 
Cash Flow Hedges
 
Minimum
Pension Liability
 
Total
Balances as of January 31, 2014
$
(2,999
)
 
$
277

 
$
336

 
$
(610
)
 
$
(2,996
)
Other comprehensive income (loss) before reclassifications
(4,012
)
 
379

 
(496
)
 
(58
)
 
(4,187
)
Amounts reclassified from accumulated other comprehensive loss

 

 
26

 
(11
)
 
15

Balances as of January 31, 2015
(7,011
)
 
656

 
(134
)
 
(679
)
 
(7,168
)
Other comprehensive income (loss) before reclassifications
(4,679
)
 
366

 
(217
)
 
96

 
(4,434
)
Amounts reclassified from accumulated other comprehensive loss

 

 
15

 
(10
)
 
5

Balances as of January 31, 2016
(11,690
)
 
1,022

 
(336
)
 
(593
)
 
(11,597
)
Other comprehensive income (loss) before reclassifications
(2,672
)
 
413

 
(22
)
 
(389
)
 
(2,670
)
Amounts reclassified from accumulated other comprehensive loss

 

 
43

 
(8
)
 
35

Balances as of January 31, 2017
$
(14,362
)
 
$
1,435

 
$
(315
)
 
$
(990
)
 
$
(14,232
)
Amounts reclassified from accumulated other comprehensive loss for derivative instruments are recorded in interest, net, in the Company's Consolidated Statements of Income, and the amounts for the minimum pension liability are recorded in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income.
Accrued Liabilities
Accounts payable and accrued liabilities disclosure
Accrued Liabilities
The Company's accrued liabilities consist of the following:
 
 
As of January 31,
(Amounts in millions)
 
2017
 
2016
Accrued wages and benefits(1)
 
$
6,105

 
$
5,814

Self-insurance(2)
 
3,922

 
3,414

Accrued non-income taxes(3)
 
2,816

 
2,544

Other(4)
 
7,811

 
7,835

Total accrued liabilities
 
$
20,654

 
$
19,607

(1)
Accrued wages and benefits include accrued wages, salaries, vacation, bonuses and other incentive plans.
(2)
Self-insurance consists of all insurance-related liabilities, such as workers' compensation, general liability, auto liability, product liability and certain employee-related healthcare benefits.
(3)
Accrued non-income taxes include accrued payroll, value added, sales and miscellaneous other taxes.
(4)
Other accrued liabilities consist of various items such as maintenance, utilities, advertising and interest.
Short-term Borrowings and Long-term Debt
Short-term Borrowings and Long-term debt
Note 6. Short-term Borrowings and Long-term Debt
Short-term borrowings consist of commercial paper and lines of credit. Short-term borrowings outstanding at January 31, 2017 and 2016 were $1.1 billion and $2.7 billion, respectively, with weighted-average interest rates of 6.2% and 2.3%, respectively.
The Company has various committed lines of credit, committed with 23 financial institutions, totaling $12.5 billion and $15.0 billion as of January 31, 2017 and 2016, respectively. The committed lines of credit are summarized in the following table:
 
 
Fiscal Years Ended January 31,
 
 
2017
 
2016
(Amounts in millions)
 
Available
 
Drawn
 
Undrawn
 
Available
 
Drawn
 
Undrawn
Five-year credit facility(1)
 
$
5,000

 
$

 
$
5,000

 
$
6,000

 
$

 
$
6,000

364-day revolving credit facility(1)
 
7,500

 

 
7,500

 
9,000

 

 
9,000

Total
 
$
12,500

 
$

 
$
12,500

 
$
15,000

 
$

 
$
15,000


(1)
In June 2016, the Company renewed and extended its existing five-year credit facility and its existing 364-day revolving credit facility, both of which are used to support its commercial paper program.
The committed lines of credit mature at various times between May 2017 and June 2021, carry interest rates generally ranging between LIBOR plus 10 basis points and LIBOR plus 75 basis points, and incur commitment fees ranging between 1.5 and 4.0 basis points. In conjunction with the lines of credit listed in the table above, the Company has agreed to observe certain covenants, the most restrictive of which relates to the maximum amount of secured debt.
Apart from the committed lines of credit, the Company has trade and stand-by letters of credit totaling $3.6 billion and $4.5 billion at January 31, 2017 and 2016, respectively. These letters of credit are utilized in normal business activities.
The Company's long-term debt, which includes the fair value instruments further discussed in Note 8, consists of the following:
 
 
 
 
January 31, 2017
 
January 31, 2016
(Amounts in millions)
 
Maturity Dates
By Fiscal Year
 
Amount
 
Average Rate(1)
 
Amount
 
Average Rate(1)
Unsecured debt
 
 
 
 
 
 
 
 
 
 
Fixed
 
2018 - 2045
 
$
30,500

 
4.7%
 
$
32,500

 
4.5%
Variable
 
2018
 
500

 
5.5%
 
500

 
5.3%
Total U.S. dollar denominated
 
 
 
31,000

 
 
 
33,000

 
 
Fixed
 
2023 - 2030
 
2,674

 
3.3%
 
2,708

 
3.3%
Variable
 
 
 

 
 
 

 
 
Total Euro denominated
 
 
 
2,674

 
 
 
2,708

 
 
Fixed
 
2031 - 2039
 
4,370

 
5.3%
 
4,985

 
5.3%
Variable
 
 
 

 
 
 

 
 
Total Sterling denominated
 
 
 
4,370

 
 
 
4,985

 
 
Fixed
 
2021
 
88

 
1.6%
 
83

 
1.6%
Variable
 
 
 

 
 
 

 
 
Total Yen denominated
 
 
 
88

 
 
 
83

 
 
Total unsecured debt
 
 
 
38,132

 
 
 
40,776

 
 
Total other debt (in USD)(2)
 
 
 
139

 
 
 
183

 
 
Total debt
 
 
 
38,271

 
 
 
40,959

 
 
Less amounts due within one year
 
 
 
(2,256
)
 
 
 
(2,745
)
 
 
Long-term debt
 
 
 
$
36,015

 
 
 
$
38,214

 
 
(1)
The average rate represents the weighted-average stated rate for each corresponding debt category, based on year-end balances and year-end interest rates. Interest costs are also impacted by certain derivative financial instruments described in Note 8.
(2)
A portion of other debt at January 31, 2017 and 2016 includes secured debt in the amount of $14 million and $13 million, respectively, which was collateralized by property that had an aggregate carrying amount of approximately $82 million and $131 million, respectively.
At January 31, 2017 and 2016, the Company had $500 million in debt with embedded put options. The issuance of money market puttable reset securities in the amount of $500 million is structured to be remarketed in connection with the annual reset of the interest rate. If, for any reason, the remarketing of the notes does not occur at the time of any interest rate reset, the holders of the notes must sell and the Company must repurchase the notes at par. Accordingly, this issuance has been classified as long-term debt due within one year in the Company's Consolidated Balance Sheets.
Annual maturities of long-term debt during the next five years and thereafter are as follows:
(Amounts in millions)
Annual
Fiscal Year
Maturities
2018
$
2,256

2019
3,497

2020
542

2021
3,311

2022
1,083

Thereafter
27,582

Total
$
38,271


Debt Issuances
The Company did not have any material long-term debt issuances during fiscal 2017 or 2016, but received proceeds from a number of small, immaterial long-term debt issuances by several of its non-U.S. operations.
Maturities
During fiscal 2017, the following long-term debt matured and was repaid:
(Amounts in millions)
 
 
 
 
 
 
 
 
Maturity Date
 
Principal Amount
 
Fixed vs. Floating
 
Interest Rate
 
Repayment
April 11, 2016
 
1,000 USD
 
Fixed
 
0.600%
 
$
1,000

April 15, 2016
 
1,000 USD
 
Fixed
 
2.800%
 
1,000

 
 
 
 
 
 
 
 
$
2,000


During fiscal 2016, the following long-term debt matured and was repaid:
(Amounts in millions)
 
 
 
 
 
 
 
 
Maturity Date
 
Principal Amount
 
Fixed vs. Floating
 
Interest Rate
 
Repayment
April 1, 2015
 
750 USD
 
Fixed
 
2.875%
 
$
750

July 1, 2015
 
750 USD
 
Fixed
 
4.500%
 
750

July 8, 2015
 
750 USD
 
Fixed
 
2.250%
 
750

July 28, 2015
 
30,000 JPY
 
Floating
 
Floating
 
243

July 28, 2015
 
60,000 JPY
 
Fixed
 
0.940%
 
487

October 25, 2015
 
1,250 USD
 
Fixed
 
1.500%
 
1,250

 
 
 
 
 
 
 
 
$
4,230


During fiscal 2017 and 2016, the Company also repaid other, smaller long-term debt as it matured in several of its non-U.S. operations.
Fair Value Measurements
Fair value measurements
Fair Value Measurements
The Company records and discloses certain financial and non-financial assets and liabilities at fair value. The fair value of an asset is the price at which the asset could be sold in an ordinary transaction between unrelated, knowledgeable and willing parties able to engage in the transaction. The fair value of a liability is the amount that would be paid to transfer the liability to a new obligor in a transaction between such parties, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:
Level 1: observable inputs such as quoted prices in active markets;
Level 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions.
Recurring Fair Value Measurements
The Company holds derivative instruments that are required to be measured at fair value on a recurring basis. The fair values are the estimated amounts the Company would receive or pay upon termination of the related derivative agreements as of the reporting dates. The fair values have been measured using the income approach and Level 2 inputs, which include the relevant interest rate and foreign currency forward curves. As of January 31, 2017 and 2016, the notional amounts and fair values of these derivatives were as follows:
 
January 31, 2017
 
January 31, 2016
(Amounts in millions)
Notional Amount
 
Fair Value
 
Notional Amount
 
Fair Value
Receive fixed-rate, pay variable-rate interest rate swaps designated as fair value hedges
$
5,000

 
$
(4
)
 
$
5,000

 
$
173

Receive fixed-rate, pay fixed-rate cross-currency swaps designated as net investment hedges
2,250

 
471

 
1,250

 
319

Receive fixed-rate, pay fixed-rate cross-currency swaps designated as cash flow hedges
3,957

 
(618
)
 
4,132

 
(609
)
Total
$
11,207

 
$
(151
)
 
$
10,382

 
$
(117
)

Additionally, the Company has available-for-sale securities that are measured at fair value on recurring basis using Level 1 inputs. Changes in fair value are recorded in accumulated other comprehensive loss.
Nonrecurring Fair Value Measurements
In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company's assets and liabilities, such as goodwill, other indefinite-lived acquired intangible assets, and investments, are also subject to nonrecurring fair value measurements. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. The Company did not record any significant impairment charges to assets measured at fair value on a nonrecurring basis during the fiscal years ended January 31, 2017 or 2016.
Other Fair Value Disclosures
The Company records cash and cash equivalents and short-term borrowings at cost. The carrying values of these instruments approximate their fair value due to their short-term maturities.
The Company's long-term debt is also recorded at cost. The fair value is estimated using Level 2 inputs based on the Company's current incremental borrowing rate for similar types of borrowing arrangements. The carrying value and fair value of the Company's long-term debt as of January 31, 2017 and 2016, are as follows: 
 
 
January 31, 2017
 
January 31, 2016
(Amounts in millions)
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Long-term debt, including amounts due within one year
 
$
38,271

 
$
44,602

 
$
40,959

 
$
46,965

Derivative Financial Instruments
Derivative financial instruments
Derivative Financial Instruments
The Company uses derivative financial instruments for hedging and non-trading purposes to manage its exposure to changes in interest and currency exchange rates, as well as to maintain an appropriate mix of fixed- and variable-rate debt. Use of derivative financial instruments in hedging programs subjects the Company to certain risks, such as market and credit risks. Market risk represents the possibility that the value of the derivative financial instrument will change. In a hedging relationship, the change in the value of the derivative financial instrument is offset to a great extent by the change in the value of the underlying hedged item. Credit risk related to a derivative financial instrument represents the possibility that the counterparty will not fulfill the terms of the contract. The notional, or contractual, amount of the Company's derivative financial instruments is used to measure interest to be paid or received and does not represent the Company's exposure due to credit risk. Credit risk is monitored through established approval procedures, including setting concentration limits by counterparty, reviewing credit ratings and requiring collateral (generally cash) from the counterparty when appropriate.
The Company only enters into derivative transactions with counterparties rated "A-" or better by nationally recognized credit rating agencies. Subsequent to entering into derivative transactions, the Company regularly monitors the credit ratings of its counterparties. In connection with various derivative agreements, including master netting arrangements, the Company held cash collateral from counterparties of $242 million and $345 million at January 31, 2017 and January 31, 2016, respectively. The Company records cash collateral received as amounts due to the counterparties exclusive of any derivative asset. Furthermore, as part of the master netting arrangements with each of these counterparties, the Company is also required to post collateral with a counterparty if the Company's net derivative liability position exceeds $150 million with such counterparties. The Company did not have any cash collateral posted with counterparties at January 31, 2017, and had an insignificant amount of cash collateral posted with counterparties at January 31, 2016. The Company records cash collateral it posts with counterparties as amounts receivable from those counterparties exclusive of any derivative liability.
The Company uses derivative financial instruments for the purpose of hedging its exposure to interest and currency exchange rate risks and, accordingly, the contractual terms of a hedged instrument closely mirror those of the hedged item, providing a high degree of risk reduction and correlation. Contracts that are effective at meeting the risk reduction and correlation criteria are recorded using hedge accounting. If a derivative financial instrument is recorded using hedge accounting, depending on the nature of the hedge, changes in the fair value of the instrument will either be offset against the change in fair value of the hedged assets, liabilities or firm commitments through earnings or be recognized in accumulated other comprehensive loss until the hedged item is recognized in earnings. Any hedge ineffectiveness is immediately recognized in earnings. The Company's net investment and cash flow instruments are highly effective hedges and the ineffective portion has not been, and is not expected to be, significant. Instruments that do not meet the criteria for hedge accounting, or contracts for which the Company has not elected hedge accounting, are recorded at fair value with unrealized gains or losses reported in earnings during the period of the change.
Fair Value Instruments
The Company is a party to receive fixed-rate, pay variable-rate interest rate swaps that the Company uses to hedge the fair value of fixed-rate debt. The notional amounts are used to measure interest to be paid or received and do not represent the Company's exposure due to credit loss. The Company's interest rate swaps that receive fixed-interest rate payments and pay variable-interest rate payments are designated as fair value hedges. As the specific terms and notional amounts of the derivative instruments match those of the fixed-rate debt being hedged, the derivative instruments are assumed to be perfectly effective hedges. Changes in the fair values of these derivative instruments are recorded in earnings, but are offset by corresponding changes in the fair values of the hedged items, also recorded in earnings, and, accordingly, do not impact the Company's Consolidated Statements of Income. These fair value instruments will mature on dates ranging from October 2020 to April 2024.
Net Investment Instruments
The Company is a party to cross-currency interest rate swaps that the Company uses to hedge its net investments. The agreements are contracts to exchange fixed-rate payments in one currency for fixed-rate payments in another currency. All changes in the fair value of these instruments are recorded in accumulated other comprehensive loss, offsetting the currency translation adjustment of the related investment that is also recorded in accumulated other comprehensive loss. These instruments will mature on dates ranging from July 2020 to February 2030.
The Company has issued foreign-currency-denominated long-term debt as hedges of net investments of certain of its foreign operations. These foreign-currency-denominated long-term debt issuances are designated and qualify as nonderivative hedging instruments. Accordingly, the foreign currency translation of these debt instruments is recorded in accumulated other comprehensive loss, offsetting the foreign currency translation adjustment of the related net investments that is also recorded in accumulated other comprehensive loss. At January 31, 2017 and January 31, 2016, the Company had ¥10.0 billion of outstanding long-term debt designated as a hedge of its net investment in Japan, as well as outstanding long-term debt of £2.5 billion at January 31, 2017 and January 31, 2016 that was designated as a hedge of its net investment in the United Kingdom. These nonderivative net investment hedges will mature on dates ranging from July 2020 to January 2039.
Cash Flow Instruments
The Company is a party to receive fixed-rate, pay fixed-rate cross-currency interest rate swaps to hedge the currency exposure associated with the forecasted payments of principal and interest of certain non-U.S. denominated debt. The swaps are designated as cash flow hedges of the currency risk related to payments on the non-U.S. denominated debt. The effective portion of changes in the fair value of derivatives designated as cash flow hedges of foreign exchange risk is recorded in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The hedged items are recognized foreign currency-denominated liabilities that are re-measured at spot exchange rates each period, and the assessment of effectiveness (and measurement of any ineffectiveness) is based on total changes in the related derivative's cash flows. As a result, the amount reclassified into earnings each period includes an amount that offsets the related transaction gain or loss arising from that re-measurement and the adjustment to earnings for the period's allocable portion of the initial spot-forward difference associated with the hedging instrument. These cash flow instruments will mature on dates ranging from April 2022 to March 2034.
Financial Statement Presentation
Although subject to master netting arrangements, the Company does not offset derivative assets and derivative liabilities in its Consolidated Balance Sheets. Derivative instruments with an unrealized gain are recorded in the Company's Consolidated Balance Sheets as either current or non-current assets, based on maturity date, and those hedging instruments with an unrealized loss are recorded as either current or non-current liabilities, based on maturity date. Refer to Note 7 for the net presentation of the Company's derivative instruments.
The Company's derivative instruments, as well as its nonderivative debt instruments designated and qualifying as net investment hedges, were classified as follows in the Company's Consolidated Balance Sheets:
 
January 31, 2017
 
January 31, 2016
(Amounts in millions)
Fair Value
Instruments
 
Net Investment
Instruments
 
Cash Flow
Instruments
 
Fair Value
Instruments
 
Net Investment
Instruments
 
Cash Flow
Instruments
Derivative instruments
 
 
 
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
 
 
 
Other assets and deferred charges
$
8

 
$
471

 
$

 
$
173

 
$
319

 
$
129

 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities:
 
 
 
 
 
 
 
 
 
 
 
Deferred income taxes and other
12

 

 
618

 

 

 
738

 
 
 
 
 
 
 
 
 
 
 
 
Nonderivative hedging instruments
 
 
 
 
 
 
 
 
 
 
 
Long-term debt

 
3,209

 

 

 
3,644

 


Gains and losses related to the Company's derivatives primarily relate to interest rate hedges, which are recorded in interest, net, in the Company's Consolidated Statements of Income. Amounts related to the Company's derivatives expected to be reclassified from accumulated other comprehensive loss to net income during the next 12 months are not significant.
Taxes
Income tax disclosure
Taxes
Income from Continuing Operations
The components of income from continuing operations before income taxes are as follows:
 
Fiscal Years Ended January 31,
(Amounts in millions)
2017
 
2016
 
2015
U.S.
$
15,680

 
$
16,685

 
$
18,610

Non-U.S.
4,817

 
4,953

 
6,189

Total income from continuing operations before income taxes
$
20,497

 
$
21,638

 
$
24,799


A summary of the provision for income taxes is as follows:
 
Fiscal Years Ended January 31,
(Amounts in millions)
2017
 
2016
 
2015
Current:
 
 
 
 
 
U.S. federal
$
3,454

 
$
5,562

 
$
6,165

U.S. state and local
495

 
622

 
810

International
1,510

 
1,400

 
1,529

Total current tax provision
5,459

 
7,584

 
8,504

Deferred:
 
 
 
 
 
U.S. federal
1,054

 
(704
)
 
(387
)
U.S. state and local
51

 
(106
)
 
(55
)
International
(360
)
 
(216
)
 
(77
)
Total deferred tax expense (benefit)
745

 
(1,026
)
 
(519
)
Total provision for income taxes
$
6,204

 
$
6,558

 
$
7,985


Effective Income Tax Rate Reconciliation
The Company's effective income tax rate is typically lower than the U.S. statutory tax rate primarily because of benefits from lower-taxed global operations, including the use of global funding structures and certain U.S. tax credits as further discussed in the "Cash and Cash Equivalents" section of the Company's significant accounting policies in Note 1. The Company's non-U.S. income is generally subject to local country tax rates that are below the 35% U.S. statutory tax rate. Certain non-U.S. earnings have been indefinitely reinvested outside the U.S. and are not subject to current U.S. income tax. A reconciliation of the significant differences between the U.S. statutory tax rate and the effective income tax rate on pretax income from continuing operations is as follows:
 
Fiscal Years Ended January 31,
 
2017
 
2016
 
2015
U.S. statutory tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
U.S. state income taxes, net of federal income tax benefit
1.7
 %
 
1.8
 %
 
1.8
 %
Income taxed outside the U.S.
(4.5
)%
 
(4.0
)%
 
(2.7
)%
Net impact of repatriated international earnings
(1.0
)%
 
0.1
 %
 
(1.5
)%
Other, net
(0.9
)%
 
(2.6
)%
 
(0.4
)%
Effective income tax rate
30.3
 %
 
30.3
 %
 
32.2
 %

Deferred Taxes
The significant components of the Company's deferred tax account balances are as follows:
 
 
January 31,
(Amounts in millions)
 
2017
 
2016
Deferred tax assets:
 
 
 
 
Loss and tax credit carryforwards
 
$
3,633

 
$
3,313

Accrued liabilities
 
3,437

 
3,763

Share-based compensation
 
309

 
192

Other
 
1,474

 
1,390

Total deferred tax assets
 
8,853

 
8,658

Valuation allowances
 
(1,494
)
 
(1,456
)
Deferred tax assets, net of valuation allowance
 
7,359

 
7,202

Deferred tax liabilities:
 
 
 
 
Property and equipment
 
6,435

 
5,813

Inventories
 
1,808

 
1,790

Other
 
1,884

 
1,452

Total deferred tax liabilities
 
10,127

 
9,055

Net deferred tax liabilities
 
$
2,768

 
$
1,853


The deferred taxes noted above are classified as follows in the Company's Consolidated Balance Sheets:
  
 
January 31,
(Amounts in millions)
 
2017
 
2016
Balance Sheet classification
 
 
 
 
Assets:
 
 
 
 
Other assets and deferred charges
 
$
1,565

 
$
1,504

 
 
 
 
 
Liabilities:
 
 
 
 
Deferred income taxes and other
 
4,333

 
3,357

 
 
 
 
 
Net deferred tax liabilities
 
$
2,768

 
$
1,853


Unremitted Earnings
U.S. income taxes have not been provided on accumulated but undistributed earnings of the Company's international subsidiaries of approximately $26.6 billion and $26.1 billion as of January 31, 2017 and 2016, respectively, as the Company intends to permanently reinvest these amounts outside of the U.S. However, if any portion were to be distributed, the related U.S. tax liability may be reduced by foreign income taxes paid on those earnings. Determination of the unrecognized deferred tax liability related to these undistributed earnings is not practicable because of the complexities with its hypothetical calculation. The Company provides deferred or current income taxes on earnings of international subsidiaries in the period that the Company determines it will remit those earnings.
Net Operating Losses, Tax Credit Carryforwards and Valuation Allowances
At January 31, 2017, the Company had net operating loss and capital loss carryforwards totaling approximately $6.1 billion. Of these carryforwards, approximately $3.6 billion will expire, if not utilized, in various years through 2037. The remaining carryforwards have no expiration. At January 31, 2017, the Company had foreign tax credit carryforwards of approximately $1.9 billion, which will expire in various years through 2027 if not utilized.
The recoverability of these future tax deductions and credits is evaluated by assessing the adequacy of future expected taxable income from all sources, including taxable income in prior carryback years, reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. To the extent the Company does not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is established. To the extent that a valuation allowance has been established and it is subsequently determined that it is more likely than not that the deferred tax assets will be recovered, the valuation allowance will be released.
The Company had valuation allowances of approximately $1.5 billion as of January 31, 2017 and 2016, respectively, on deferred tax assets associated primarily with net operating loss carryforwards for which management has determined it is more likely than not that the deferred tax asset will not be realized. Net activity in the valuation allowance during fiscal 2017 related to releases arising from the use of deferred tax assets, changes in judgment regarding the future realization of deferred tax assets, increases from certain net operating losses and deductible temporary differences arising in fiscal 2017, decreases due to operating loss expirations and fluctuations in currency exchange rates. Management believes that it is more likely than not that the remaining deferred tax assets will be fully realized.
Uncertain Tax Positions
The benefits of uncertain tax positions are recorded in the Company's Consolidated Financial Statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities.
As of January 31, 2017 and 2016, the amount of unrecognized tax benefits related to continuing operations was $1.1 billion and $607 million, respectively. The amount of unrecognized tax benefits that would affect the Company's effective income tax rate was $703 million and $522 million for January 31, 2017 and 2016, respectively.
A reconciliation of unrecognized tax benefits from continuing operations is as follows:
 
Fiscal Years Ended January 31,
(Amounts in millions)
2017
 
2016
 
2015
Unrecognized tax benefits, beginning of year
$
607

 
$
838

 
$
763

Increases related to prior year tax positions
388

 
164

 
7

Decreases related to prior year tax positions
(32
)
 
(446
)
 
(17
)
Increases related to current year tax positions
145

 
119

 
174

Settlements during the period
(46
)
 
(25
)
 
(89
)
Lapse in statutes of limitations
(12
)
 
(43
)
 

Unrecognized tax benefits, end of year
$
1,050

 
$
607

 
$
838


The Company classifies interest and penalties related to uncertain tax benefits as interest expense and as operating, selling, general and administrative expenses, respectively. During fiscal 2017, 2016 and 2015, the Company recognized interest expense related to uncertain tax positions of $35 million, $5 million and $18 million, respectively. As of January 31, 2017 and 2016, accrued interest related to uncertain tax positions of $72 million and $60 million, respectively, was recorded in the Company's Consolidated Balance Sheets. The Company did not have any accrued penalties recorded for income taxes as of January 31, 2017 or 2016.
During the next twelve months, it is reasonably possible that tax audit resolutions could reduce unrecognized tax benefits by between $50 million and $300 million, either because the tax positions are sustained on audit or because the Company agrees to their disallowance. The Company is focused on resolving tax audits as expeditiously as possible. As a result of these efforts, unrecognized tax benefits could potentially be reduced beyond the provided range during the next twelve months. The Company does not expect any change to have a significant impact to its Consolidated Financial Statements.
The Company remains subject to income tax examinations for its U.S. federal income taxes generally for fiscal 2013 through 2017. The Company also remains subject to income tax examinations for international income taxes for fiscal 2000 through 2017, and for U.S. state and local income taxes generally for the fiscal years ended 2011 through 2017.
Other Taxes
The Company is subject to tax examinations for value added, sales-based, payroll and other non-income taxes. A number of these examinations are ongoing in various jurisdictions. In certain cases, the Company has received assessments from the respective taxing authorities in connection with these examinations. Unless otherwise indicated, the possible losses or range of possible losses associated with these matters are individually immaterial, but a group of related matters, if decided adversely to the Company, could result in a liability material to the Company's Consolidated Financial Statements.
In particular, Brazil federal, state and local laws are complex and subject to varying interpretations, and the Company's subsidiaries in Brazil are party to a large number of non-income tax assessments. One of these interpretations common to the retail industry in Brazil relates to whether credits received from suppliers should be treated as a reduction of cost for purposes of calculating certain indirect taxes. The Company believes credits received from suppliers are reductions in cost and that it has substantial legal defenses in this matter and intends to defend this matter vigorously. As such, the Company has not accrued for this matter, although the Company may be required to deposit funds in escrow or secure financial guarantees to continue the judicial process in defending this matter in Brazil.
Contingencies
Contingencies
Contingencies
Legal Proceedings
The Company is involved in a number of legal proceedings. The Company has made accruals with respect to these matters, where appropriate, which are reflected in the Company's Consolidated Financial Statements. For some matters, a liability is not probable or the amount cannot be reasonably estimated and therefore an accrual has not been made. However, where a liability is reasonably possible and may be material, such matters have been disclosed. The Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders.
Unless stated otherwise, the matters, or groups of related matters, discussed below, if decided adversely to or settled by the Company, individually or in the aggregate, may result in a liability material to the Company's financial condition or results of operations.
ASDA Equal Value Claims
ASDA Stores, Ltd. ("ASDA"), a wholly-owned subsidiary of the Company, is a defendant in over 10,000 "equal value" claims that are proceeding before an Employment Tribunal in Manchester (the "Employment Tribunal") in the United Kingdom ("UK") on behalf of current and former ASDA store employees, who allege that the work performed by female employees in ASDA's retail stores is of equal value in terms of, among other things, the demands of their jobs to that of male employees working in ASDA's warehouse and distribution facilities, and that the disparity in pay between these different job positions is not objectively justified. Claimants are requesting differential back pay based on higher wage rates in the warehouse and distribution facilities and those higher wage rates on a prospective basis as part of these equal value proceedings. ASDA believes that further claims may be asserted in the future. On March 23, 2015, ASDA asked the Employment Tribunal to stay all proceedings and to "strike out" substantially all of the claims. On July 23, 2015, the Employment Tribunal denied ASDA's requests. Following additional proceedings, the Employment Appeal Tribunal agreed to review the "strike out" issue and the Court of Appeals agreed to review the stay issue. On May 26, 2016, the Court of Appeals denied ASDA's appeal of the stay issue. On October 14, 2016, following a preliminary hearing, the Employment Tribunal ruled that claimants could compare their positions in ASDA's retail stores with those of employees in ASDA's warehouse and distribution facilities. Claimants will now proceed to the next phase of their claims. That phase will determine whether the work performed by the claimants is of equal value to the work performed by employees in ASDA's warehouse and distribution facilities. On November 23, 2016, ASDA filed a request with the Employment Appeal Tribunal to hear an appeal of the October 14, 2016 ruling, which was granted on January 11, 2017. At present, the Company cannot predict the number of such claims that may be filed, and cannot reasonably estimate any loss or range of loss that may arise from these proceedings. The Company believes it has substantial factual and legal defenses to these claims, and intends to defend the claims vigorously.
FCPA Investigation and Related Matters
The Audit Committee (the "Audit Committee") of the Board of Directors of the Company has been conducting an internal investigation into, among other things, alleged violations of the U.S. Foreign Corrupt Practices Act ("FCPA") and other alleged crimes or misconduct in connection with foreign subsidiaries, including Wal-Mart de México, S.A.B. de C.V. ("Walmex"), and whether prior allegations of such violations and/or misconduct were appropriately handled by the Company. The Audit Committee and the Company have engaged outside counsel from a number of law firms and other advisors who are assisting in the on-going investigation of these matters.
The Company has also been conducting a voluntary global review of its policies, practices and internal controls for anti-corruption compliance. The Company is engaged in strengthening its global anti-corruption compliance program through appropriate remedial anti-corruption measures.  In November 2011, the Company voluntarily disclosed that investigative activity to the U.S. Department of Justice (the "DOJ") and the Securities and Exchange Commission (the "SEC"). Since the implementation of the global review and the enhanced anti-corruption compliance program, the Audit Committee and the Company have identified or been made aware of additional allegations regarding potential violations of the FCPA. When such allegations have been reported or identified, the Audit Committee and the Company, together with their third party advisors, have conducted inquiries and when warranted based on those inquiries, opened investigations. Inquiries or investigations regarding allegations of potential FCPA violations were commenced in a number of foreign markets where the Company operates, including, but not limited to, Brazil, China and India.
As previously disclosed, the Company is under investigation by the DOJ and the SEC regarding possible violations of the FCPA. The Company has been cooperating with the agencies and discussions have begun with them regarding the resolution of these matters. As these discussions are preliminary, the Company cannot currently predict the timing, the outcome or the impact of a possible resolution of these matters.
A number of federal and local government agencies in Mexico have also initiated investigations of these matters. Walmex is cooperating with the Mexican governmental agencies conducting these investigations. Furthermore, lawsuits relating to the matters under investigation have been filed by several of the Company's shareholders against it, certain of its current directors, certain of its former directors, certain of its current and former officers and certain of Walmex's current and former officers.
The Company could be exposed to a variety of negative consequences as a result of the matters noted above. There could be one or more enforcement actions in respect of the matters that are the subject of some or all of the on-going government investigations, and such actions, if brought, may result in judgments, settlements, fines, penalties, injunctions, cease and desist orders, debarment or other relief, criminal convictions and/or penalties and the shareholder lawsuits referenced above may result in judgments against the Company and its current and former directors and officers named in those proceedings. The Company expects that there will be on-going media and governmental interest, including additional news articles from media publications on these matters, which could impact the perception among certain audiences of the Company's role as a corporate citizen.
In addition, the Company has incurred and expects to continue to incur costs in responding to requests for information or subpoenas seeking documents, testimony and other information in connection with the government investigations, in defending the shareholder lawsuits, and in conducting the review and investigations. These costs will be expensed as incurred. For the fiscal years ended January 31, 2017, 2016 and 2015, the Company incurred the following third-party expenses in connection with the FCPA investigation and related matters:
 
 
Fiscal Years Ended January 31,
(Amounts in millions)
 
2017
 
2016
 
2015
Ongoing inquiries and investigations
 
$
80

 
$
95

 
$
121

Global compliance program and organizational enhancements
 
19

 
31

 
52

Total
 
$
99

 
$
126

 
$
173


While the Company believes that it is probable that it will incur a loss from these matters, given the on-going nature and complexity of the review, inquiries and investigations, the Company cannot yet reasonably estimate a loss or range of loss that may arise from the conclusion of these matters. Although the Company does not presently believe that these matters will have a material adverse effect on its business, given the inherent uncertainties in such situations, the Company can provide no assurance that these matters will not be material to its business in the future.
Commitments
Commitments disclosure
Commitments
The Company has long-term leases for stores and equipment. Rentals (including amounts applicable to taxes, insurance, maintenance, other operating expenses and contingent rentals) under operating leases and other short-term rental arrangements were $2.6 billion, $2.5 billion and $2.8 billion in fiscal 2017, 2016 and 2015, respectively.
Aggregate minimum annual rentals at January 31, 2017, under non-cancelable leases are as follows:
(Amounts in millions)
 
 
 
 
Fiscal Year
 
Operating Leases(1)
 
Capital Lease and Financing Obligations
2018
 
$
2,270

 
$
894

2019
 
1,787

 
838

2020
 
1,679

 
786

2021
 
1,524

 
743

2022
 
1,342

 
652

Thereafter
 
9,537

 
4,996

Total minimum rentals
 
$
18,139

 
$
8,909

Less estimated executory costs
 
 
 
30

       Net minimum lease payments
 
 
 
8,879

Noncash gain on future termination of financing obligation
 
 
 
1,061

Less imputed interest
 
 
 
(3,372
)
Present value of minimum lease payments
 
 
 
$
6,568


(1)
Represents minimum contractual obligation for non-cancelable leases with initial or remaining terms greater than 12 months as of January 31, 2017.
Certain of the Company's leases provide for the payment of contingent rentals based on a percentage of sales. Such contingent rentals were not material for fiscal 2017, 2016 and 2015. Substantially all of the Company's store leases have renewal options, some of which may trigger an escalation in rentals.
Segments
Segments
Segments
The Company is engaged in the operation of retail, wholesale and other units located in the U.S., Africa, Argentina, Brazil, Canada, Central America, Chile, China, India, Japan, Mexico and the United Kingdom. The Company's operations are conducted in three business segments: Walmart U.S., Walmart International and Sam's Club. The Company defines its segments as those operations whose results its chief operating decision maker ("CODM") regularly reviews to analyze performance and allocate resources. The Company sells similar individual products and services in each of its segments. It is impractical to segregate and identify revenues for each of these individual products and services.
The Walmart U.S. segment includes the Company's mass merchant concept in the U.S. operating under the "Walmart" or "Wal-Mart" brands, as well as retail websites such as walmart.com and jet.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. Corporate and support consists of corporate overhead and other items not allocated to any of the Company's segments.
The Company measures the results of its segments using, among other measures, each segment's net sales and operating income, which includes certain corporate overhead allocations. From time to time, the Company revises the measurement of each segment's operating income, including any corporate overhead allocations, as determined by the information regularly reviewed by its CODM. When the measurement of a segment changes, previous period amounts and balances are reclassified to be comparable to the current period's presentation.
Information for the Company's segments, as well as for Corporate and support, including the reconciliation to income from continuing operations before income taxes, is provided in the following table:
(Amounts in millions)
 
Walmart U.S.
 
Walmart International
 
Sam's Club
 
Corporate and support
 
Consolidated
Fiscal Year Ended January 31, 2017
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
307,833

 
$
116,119

 
$
57,365

 
$

 
$
481,317

Operating income (loss)
 
17,745