WAL MART STORES INC, 10-Q filed on 12/1/2016
Quarterly Report
Document And Entity Information
9 Months Ended
Oct. 31, 2016
Nov. 28, 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-Q 
 
Document Period End Date
Oct. 31, 2016 
 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q3 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
3,073,190,306 
Entity Well-known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Condensed Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 31, 2016
Oct. 31, 2015
Oct. 31, 2016
Oct. 31, 2015
Revenues:
 
 
 
 
Net sales
$ 117,176 
$ 116,598 
$ 351,567 
$ 349,930 
Membership and other income
1,003 
810 
3,370 
2,533 
Total revenues
118,179 
117,408 
354,937 
352,463 
Costs and expenses:
 
 
 
 
Cost of sales
87,484 
87,446 
263,513 
263,985 
Operating, selling, general and administrative expenses
25,576 
24,248 
74,865 
71,015 
Operating income
5,119 
5,714 
16,559 
17,463 
Interest:
 
 
 
 
Debt
528 
509 
1,536 
1,555 
Capital lease and financing obligations
81 
64 
246 
428 
Interest income
(24)
(21)
(70)
(64)
Interest, net
585 
552 
1,712 
1,919 
Income before income taxes
4,534 
5,162 
14,847 
15,544 
Provision for income taxes
1,332 
1,748 
4,540 
5,212 
Consolidated net income
3,202 
3,414 
10,307 
10,332 
Consolidated net income attributable to noncontrolling interest
(168)
(110)
(421)
(212)
Consolidated net income attributable to Walmart
$ 3,034 
$ 3,304 
$ 9,886 
$ 10,120 
Basic net income per common share:
 
 
 
 
Basic net income per common share attributable to Walmart
$ 0.98 
$ 1.03 
$ 3.17 
$ 3.14 
Diluted net income per common share:
 
 
 
 
Diluted net income per common share attributable to Walmart
$ 0.98 
$ 1.03 
$ 3.16 
$ 3.13 
Weighted-average common shares outstanding:
 
 
 
 
Basic
3,089 
3,210 
3,114 
3,221 
Diluted
3,100 
3,219 
3,124 
3,231 
Dividends declared per common share
$ 0.00 
$ 0.00 
$ 2.00 
$ 1.96 
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 31, 2016
Oct. 31, 2015
Oct. 31, 2016
Oct. 31, 2015
Consolidated net income
$ 3,202 
$ 3,414 
$ 10,307 
$ 10,332 
Less consolidated net income attributable to nonredeemable noncontrolling interest
(168)
(110)
(421)
(212)
Consolidated net income attributable to Walmart
3,034 
3,304 
9,886 
10,120 
Other comprehensive income (loss), net of income taxes
 
 
 
 
Currency translation and other
(757)
(2,694)
(1,086)
(3,941)
Minimum pension liability
17 
(1)
(89)
73 
Other comprehensive income (loss), net of income taxes
(661)
(2,569)
(830)
(3,842)
Less other comprehensive income (loss) attributable to nonredeemable noncontrolling interest
(2)
298 
92 
351 
Other comprehensive income (loss) attributable to Walmart
(663)
(2,271)
(738)
(3,491)
Comprehensive income, net of income taxes
2,541 
845 
9,477 
6,490 
Less comprehensive income (loss) attributable to nonredeemable noncontrolling interest
(170)
188 
(329)
139 
Comprehensive income attributable to Walmart
2,371 
1,033 
9,148 
6,629 
Net investment hedging
 
 
 
 
Other comprehensive income (loss), net of income taxes
 
 
 
 
Derivative instruments
258 
182 
468 
101 
Cash flow hedging
 
 
 
 
Other comprehensive income (loss), net of income taxes
 
 
 
 
Derivative instruments
$ (179)
$ (56)
$ (123)
$ (75)
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Millions, unless otherwise specified
Oct. 31, 2016
Jan. 31, 2016
Oct. 31, 2015
Current assets:
 
 
 
Cash and cash equivalents
$ 5,939 
$ 8,705 
$ 6,990 
Receivables, net
5,344 
5,624 
5,012 
Inventories
49,822 
44,469 
50,706 
Prepaid expenses and other
2,296 
1,441 
2,404 
Total current assets
63,401 
60,239 
65,112 
Property and equipment:
 
 
 
Property and equipment
179,667 
176,958 
176,660 
Less accumulated depreciation
(70,991)
(66,787)
(65,825)
Property and equipment, net
108,676 
110,171 
110,835 
Property under capital lease and financing obligations:
 
 
 
Property under capital lease and financing obligations
11,482 
11,096 
10,948 
Less accumulated amortization
(5,070)
(4,751)
(4,827)
Property under capital lease and financing obligations, net
6,412 
6,345 
6,121 
Goodwill
17,792 
16,695 
17,051 
Other assets and deferred charges
10,576 
6,131 
6,025 
Total assets
206,857 
199,581 
205,144 
Current liabilities:
 
 
 
Short-term borrowings
5,082 
2,708 
4,960 
Accounts payable
42,990 
38,487 
40,553 
Dividends payable
1,541 
1,589 
Accrued liabilities
21,243 
19,607 
19,499 
Accrued income taxes
459 
521 
587 
Long-term debt due within one year
2,266 
2,745 
2,746 
Capital lease and financing obligations due within one year
549 
551 
558 
Total current liabilities
74,130 
64,619 
70,492 
Long-term debt
36,178 
38,214 
38,617 
Long-term capital lease and financing obligations
5,930 
5,816 
5,581 
Deferred income taxes and other
10,144 
7,321 
7,824 
Commitments and contingencies
   
   
   
Equity:
 
 
 
Common stock
308 
317 
321 
Capital in excess of par value
2,084 
1,805 
2,006 
Retained earnings
87,636 
90,021 
87,903 
Accumulated other comprehensive loss
(12,335)
(11,597)
(10,659)
Total Walmart shareholders' equity
77,693 
80,546 
79,571 
Nonredeemable noncontrolling interest
2,782 
3,065 
3,059 
Total equity
80,475 
83,611 
82,630 
Total liabilities and equity
$ 206,857 
$ 199,581 
$ 205,144 
Condensed Consolidated Statement Of Shareholders' Equity (Unaudited) (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, 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
10,307 
 
 
9,886 
 
9,886 
421 
Other comprehensive income (loss), net of income taxes
(830)
 
 
 
(738)
(738)
(92)
Cash dividends declared
(6,221)
 
 
(6,221)
 
(6,221)
 
Purchase of Company stock
(6,178)
(9)
(125)
(6,044)
 
(6,178)
 
Purchase of Company stock (in shares)
 
(89)
 
 
 
 
 
Dividends declared to noncontrolling interest
(522)
 
 
 
 
 
(522)
Other, in shares
 
 
 
 
 
 
Other
308 
 
404 
(6)
 
398 
(90)
Balances at Oct. 31, 2016
$ 80,475 
$ 308 
$ 2,084 
$ 87,636 
$ (12,335)
$ 77,693 
$ 2,782 
Balances, in shares at Oct. 31, 2016
 
3,079 
 
 
 
 
 
Consolidated Statement Of Shareholders' Equity (Parenthetical)
0 Months Ended 3 Months Ended 9 Months Ended
Feb. 18, 2016
Oct. 31, 2016
Oct. 31, 2015
Oct. 31, 2016
Oct. 31, 2015
Statement of Stockholders' Equity [Abstract]
 
 
 
 
 
Dividends declared per common share
$ 2.00 
$ 0.00 
$ 0.00 
$ 2.00 
$ 1.96 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Oct. 31, 2016
Oct. 31, 2015
Cash flows from operating activities:
 
 
Consolidated net income
$ 10,307 
$ 10,332 
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
 
 
Depreciation and amortization
7,374 
7,023 
Deferred income taxes
1,167 
(987)
Other operating activities
(387)
644 
Changes in certain assets and liabilities, net of effects of acquisitions:
 
 
Receivables, net
271 
783 
Inventories
(5,516)
(6,637)
Accounts payable
5,121 
3,603 
Accrued liabilities
1,256 
662 
Accrued income taxes
51 
(418)
Net cash provided by operating activities
19,644 
15,005 
Cash flows from investing activities:
 
 
Payments for property and equipment
(7,459)
(8,223)
Proceeds from the disposal of property and equipment
783 
362 
Proceeds from the disposal of certain operations
246 
Purchase of available for sale securities
(1,901)
Investment and business acquisitions, net of cash acquired
(2,406)
Other investing activities
(67)
48 
Net cash used in investing activities
(11,050)
(7,567)
Cash flows from financing activities:
 
 
Net change in short-term borrowings
2,302 
3,537 
Proceeds from issuance of long-term debt
134 
41 
Payments of long-term debt
(2,040)
(4,422)
Dividends paid
(4,682)
(4,728)
Purchase of Company stock
(6,254)
(1,720)
Dividends paid to noncontrolling interest
(320)
(609)
Purchase of noncontrolling interest
(89)
(890)
Other financing activities
(186)
(468)
Net cash used in financing activities
(11,135)
(9,259)
Effect of exchange rates on cash and cash equivalents
(225)
(324)
Net increase (decrease) in cash and cash equivalents
(2,766)
(2,145)
Cash and cash equivalents at beginning of year
8,705 
9,135 
Cash and cash equivalents at end of period
$ 5,939 
$ 6,990 
Summary of Significant Accounting Policies
Basis of presentation
Accounting Policies
Basis of Presentation
The Condensed Consolidated Financial Statements of Wal-Mart Stores, Inc. and its subsidiaries ("Walmart" or the "Company") and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for the fair presentation of the Condensed Consolidated Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Condensed Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and do not contain certain information included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2016. Therefore, the interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K.
The Company's Condensed 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 the month of October 2016 related to the operations consolidated using a lag that materially affected the Condensed Consolidated Financial Statements.
The Company's business is seasonal to a certain extent due to calendar events and national and religious holidays, as well as weather patterns. Historically, the Company's highest sales volume and operating income have occurred in the fiscal quarter ending January 31.
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 Canada and Chile to customers in those markets. The receivable balance from consumer credit products was $1.2 billion, net of a reserve for doubtful accounts of $77 million at October 31, 2016, 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 Condensed 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 October 31, 2016 and January 31, 2016, the Company's inventories valued at LIFO approximated those inventories as if they were valued at FIFO.
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. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. Subsequently, FASB issued ASUs in 2016 containing implementation guidance related to ASU 2014-09, including: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations; ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which is intended to clarify two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance; and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which contains certain practical expedients in response to identified implementation issues. The Company is planning to adopt ASU 2014-09 and related ASUs on February 1, 2018. Companies may use either a full retrospective or a modified retrospective approach to adopt these ASUs. Management is currently evaluating these ASUs, including which transition approach to use, but does not expect these ASUs to materially impact the Company's consolidated net income, financial position or cash flows.
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. ASU 2016-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2018, with early adoption permitted. Management is currently evaluating this ASU to determine its impact on the Company's consolidated net income, financial position, 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, financial position 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, financial position, 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 attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period. Diluted income per common share 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 attributable to Walmart for the three and nine months ended October 31, 2016 and 2015.
The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted income per common share attributable to Walmart:
 
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
(Amounts in millions, except per share data)
 
2016
 
2015
 
2016
 
2015
Numerator
 
 
 
 
 
 
 
 
Consolidated net income
 
$
3,202

 
$
3,414

 
$
10,307

 
$
10,332

Consolidated net income attributable to noncontrolling interest
 
(168
)
 
(110
)
 
(421
)
 
(212
)
Consolidated net income attributable to Walmart
 
$
3,034

 
$
3,304

 
$
9,886

 
$
10,120

 
 
 
 
 
 
 
 
 
Denominator
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding, basic
 
3,089

 
3,210

 
3,114

 
3,221

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

 
9

 
10

 
10

Weighted-average common shares outstanding, diluted
 
3,100

 
3,219

 
3,124

 
3,231


 
 
 
 
 
 
 
 
Net income per common share attributable to Walmart
 
 
 
 
 
 
 
 
Basic
 
$
0.98

 
$
1.03

 
$
3.17

 
$
3.14

Diluted
 
0.98

 
1.03

 
3.16

 
3.13

Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss
The following table provides the changes in the composition of total accumulated other comprehensive loss for the nine months ended October 31, 2016:
(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 February 1, 2016
 
$
(11,690
)
 
$
1,022

 
$
(336
)
 
$
(593
)
 
$
(11,597
)
Other comprehensive income (loss) before reclassifications
 
(994
)
 
468

 
(151
)
 
(83
)
 
(760
)
Amounts reclassified from accumulated other comprehensive loss
 

 

 
28

 
(6
)
 
22

Balances as of October 31, 2016
 
$
(12,684
)
 
$
1,490

 
$
(459
)
 
$
(682
)
 
$
(12,335
)
Amounts reclassified from accumulated other comprehensive loss for derivative instruments are recorded in interest, net, in the Company's Condensed 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 Condensed Consolidated Statements of Income.
Long-term Debt
Long-term debt
Long-term Debt
The following table provides the changes in the Company's long-term debt for the nine months ended October 31, 2016:
(Amounts in millions)
 
Long-term debt due within one year
 
Long-term debt
 
Total
Balances as of February 1, 2016
 
$
2,745

 
$
38,214

 
$
40,959

Proceeds from long-term debt
 

 
134

 
134

Repayments of long-term debt
 
(2,040
)
 

 
(2,040
)
Reclassifications of long-term debt
 
1,500

 
(1,500
)
 

Other
 
61

 
(670
)
 
(609
)
Balances as of October 31, 2016
 
$
2,266

 
$
36,178

 
$
38,444


Issuances
The Company did not have any material long-term debt issuances during the nine months ended October 31, 2016, but received proceeds from a number of small, immaterial long-term debt issuances by several of its non-U.S. operations.
Maturities
During the nine months ended October 31, 2016, 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


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 October 31, 2016 and January 31, 2016, the notional amounts and fair values of these derivatives were as follows:
 
October 31, 2016
 
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

 
$
172

 
$
5,000

 
$
173

Receive fixed-rate, pay fixed-rate cross-currency swaps designated as net investment hedges
1,250

 
532

 
1,250

 
319

Receive fixed-rate, pay fixed-rate cross-currency swaps designated as cash flow hedges
3,970

 
(837
)
 
4,132

 
(609
)
Total
$
10,220

 
$
(133
)
 
$
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 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 three and nine months ended October 31, 2016, or for the fiscal year ended January 31, 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 October 31, 2016 and January 31, 2016, are as follows: 
 
 
October 31, 2016
 
January 31, 2016
(Amounts in millions)
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Long-term debt, including amounts due within one year
 
$
38,444

 
$
46,797

 
$
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 $266 million and $345 million at October 31, 2016 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 October 31, 2016, however, the Company did have 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 Condensed 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 October 2023 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 October 31, 2016 and January 31, 2016, the Company had ¥10 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 October 31, 2016 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 Condensed Consolidated Balance Sheets. Derivative instruments with an unrealized gain are recorded in the Company's Condensed 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 5 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 Condensed Consolidated Balance Sheets:
 
October 31, 2016
 
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
$
172

 
$
532

 
$

 
$
173

 
$
319

 
$
129

 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities:
 
 
 
 
 
 
 
 
 
 
 
Deferred income taxes and other

 

 
837

 

 

 
738

 
 
 
 
 
 
 
 
 
 
 
 
Nonderivative hedging instruments
 
 
 
 
 
 
 
 
 
 
 
Long-term debt

 
3,142

 

 

 
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 Condensed 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.
Share Repurchases
Share repurchases
Share Repurchases
From time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Company's Board of Directors. The current $20.0 billion share repurchase program has no expiration date or other restrictions limiting the period over which the Company can make share repurchases. At October 31, 2016, authorization for $11.3 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 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 amount paid for share repurchases for the nine months ended October 31, 2016 and 2015:
 
 
Nine Months Ended October 31,
(Amounts in millions, except per share data)
 
2016
 
2015
Total number of shares repurchased
 
90.6

 
23.2

Average price paid per share
 
$
69.04

 
$
74.20

Total amount paid for share repurchases
 
$
6,254

 
$
1,720

Common Stock Dividends
Dividends payable
Common Stock Dividends
Dividends Declared
On February 18, 2016, the Board of Directors approved the fiscal 2017 annual dividend of $2.00 per share, an increase over the fiscal 2016 annual dividend of $1.96 per share. For fiscal 2017, the annual dividend will be paid in four quarterly installments of $0.50 per share, according to the following record and payable dates:
Record Date
  
Payable Date
March 11, 2016
  
April 4, 2016
May 13, 2016
  
June 6, 2016
August 12, 2016
  
September 6, 2016
December 9, 2016
  
January 3, 2017

The dividend installments payable on April 4, 2016, June 6, 2016 and September 6, 2016 were paid as scheduled.
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 Condensed 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 8,000 "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 near 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. 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, which is composed solely of independent directors, 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 three and nine months ended October 31, 2016 and 2015, the Company incurred the following third-party expenses in connection with the FCPA investigation and related matters:
 
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
(Amounts in millions)
 
2016
 
2015
 
2016
 
2015
Ongoing inquiries and investigations
 
$
24

 
$
22

 
$
68

 
$
70

Global compliance program and organizational enhancements
 
5

 
8

 
14

 
23

Total
 
$
29

 
$
30

 
$
82

 
$
93


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.
Segments
Segments
Segments
The Company is engaged in retail and wholesale operations located in the U.S., Argentina, Brazil, Canada, Chile, China, India, Japan, Mexico and the United Kingdom, as well as countries located in Africa and Central America. 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 digital retail. 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.
Net sales by segment are as follows:
 
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
(Amounts in millions)
 
2016

2015
 
2016
 
2015
Net sales:
 
 
 
 
 
 
 
 
Walmart U.S.
 
$
74,550

 
$
72,712

 
$
224,086

 
$
216,916

Walmart International
 
28,390

 
29,811

 
85,094

 
90,726

Sam's Club
 
14,236

 
14,075

 
42,387

 
42,288

Net sales
 
$
117,176

 
$
116,598

 
$
351,567

 
$
349,930


Operating income by segment, as well as operating loss for corporate and support, and interest, net, are as follows:
 
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
(Amounts in millions)
 
2016

2015
 
2016
 
2015
Operating income (loss):
 
 
 
 
 
 
 
 
Walmart U.S.
 
$
3,999

 
$
4,506

 
$
12,750

 
$
13,964

Walmart International
 
1,354

 
1,338

 
4,245

 
3,685

Sam's Club
 
396

 
539

 
1,281

 
1,394

Corporate and support
 
(630
)
 
(669
)
 
(1,717
)
 
(1,580
)
Operating income
 
5,119

 
5,714

 
16,559

 
17,463

Interest, net
 
585

 
552

 
1,712

 
1,919

Income before income taxes
 
$
4,534

 
$
5,162

 
$
14,847

 
$
15,544

Accounting Policies Summary of Significant Accounting Policies (Policies)
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.
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.
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. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. Subsequently, FASB issued ASUs in 2016 containing implementation guidance related to ASU 2014-09, including: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations; ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which is intended to clarify two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance; and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which contains certain practical expedients in response to identified implementation issues. The Company is planning to adopt ASU 2014-09 and related ASUs on February 1, 2018. Companies may use either a full retrospective or a modified retrospective approach to adopt these ASUs. Management is currently evaluating these ASUs, including which transition approach to use, but does not expect these ASUs to materially impact the Company's consolidated net income, financial position or cash flows.
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. ASU 2016-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2018, with early adoption permitted. Management is currently evaluating this ASU to determine its impact on the Company's consolidated net income, financial position, 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, financial position 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, financial position, 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 (Tables)
Schedule of calculation of numerator and denominator in earnings per share
The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted income per common share attributable to Walmart:
 
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
(Amounts in millions, except per share data)
 
2016
 
2015
 
2016
 
2015
Numerator
 
 
 
 
 
 
 
 
Consolidated net income
 
$
3,202

 
$
3,414

 
$
10,307

 
$
10,332

Consolidated net income attributable to noncontrolling interest
 
(168
)
 
(110
)
 
(421
)
 
(212
)
Consolidated net income attributable to Walmart
 
$
3,034

 
$
3,304

 
$
9,886

 
$
10,120

 
 
 
 
 
 
 
 
 
Denominator
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding, basic
 
3,089

 
3,210

 
3,114

 
3,221

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

 
9

 
10

 
10

Weighted-average common shares outstanding, diluted
 
3,100

 
3,219

 
3,124

 
3,231


 
 
 
 
 
 
 
 
Net income per common share attributable to Walmart
 
 
 
 
 
 
 
 
Basic
 
$
0.98

 
$
1.03

 
$
3.17

 
$
3.14

Diluted
 
0.98

 
1.03

 
3.16

 
3.13

Accumulated Other Comprehensive Loss (Tables)
Composition of accumulated other comprehensive loss
The following table provides the changes in the composition of total accumulated other comprehensive loss for the nine months ended October 31, 2016:
(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 February 1, 2016
 
$
(11,690
)
 
$
1,022

 
$
(336
)
 
$
(593
)
 
$
(11,597
)
Other comprehensive income (loss) before reclassifications
 
(994
)
 
468

 
(151
)
 
(83
)
 
(760
)
Amounts reclassified from accumulated other comprehensive loss
 

 

 
28

 
(6
)
 
22

Balances as of October 31, 2016
 
$
(12,684
)
 
$
1,490

 
$
(459
)
 
$
(682
)
 
$
(12,335
)
Long-term Debt (Tables)
The following table provides the changes in the Company's long-term debt for the nine months ended October 31, 2016:
(Amounts in millions)
 
Long-term debt due within one year
 
Long-term debt
 
Total
Balances as of February 1, 2016
 
$
2,745

 
$
38,214

 
$
40,959

Proceeds from long-term debt
 

 
134

 
134

Repayments of long-term debt
 
(2,040
)
 

 
(2,040
)
Reclassifications of long-term debt
 
1,500

 
(1,500
)
 

Other
 
61

 
(670
)
 
(609
)
Balances as of October 31, 2016
 
$
2,266

 
$
36,178

 
$
38,444

During the nine months ended October 31, 2016, 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

Fair Value Measurements (Tables)
As of October 31, 2016 and January 31, 2016, the notional amounts and fair values of these derivatives were as follows:
 
October 31, 2016
 
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

 
$
172

 
$
5,000

 
$
173

Receive fixed-rate, pay fixed-rate cross-currency swaps designated as net investment hedges
1,250

 
532

 
1,250

 
319

Receive fixed-rate, pay fixed-rate cross-currency swaps designated as cash flow hedges
3,970

 
(837
)
 
4,132

 
(609
)
Total
$
10,220

 
$
(133
)
 
$
10,382

 
$
(117
)
The carrying value and fair value of the Company's long-term debt as of October 31, 2016 and January 31, 2016, are as follows: 
 
 
October 31, 2016
 
January 31, 2016
(Amounts in millions)
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Long-term debt, including amounts due within one year
 
$
38,444

 
$
46,797

 
$
40,959

 
$
46,965

Derivative Financial Instruments (Tables)
Schedule of derivative instruments in statement of financial position, fair value
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 Condensed Consolidated Balance Sheets:
 
October 31, 2016
 
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
$
172

 
$
532

 
$

 
$
173

 
$
319

 
$
129

 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities:
 
 
 
 
 
 
 
 
 
 
 
Deferred income taxes and other

 

 
837

 

 

 
738

 
 
 
 
 
 
 
 
 
 
 
 
Nonderivative hedging instruments
 
 
 
 
 
 
 
 
 
 
 
Long-term debt

 
3,142

 

 

 
3,644

 

Share Repurchases (Tables)
Schedule of Company's share repurchases
The following table provides, on a settlement date basis, the number of shares repurchased, average price paid per share and total amount paid for share repurchases for the nine months ended October 31, 2016 and 2015:
 
 
Nine Months Ended October 31,
(Amounts in millions, except per share data)
 
2016
 
2015
Total number of shares repurchased
 
90.6

 
23.2

Average price paid per share
 
$
69.04

 
$
74.20

Total amount paid for share repurchases
 
$
6,254

 
$
1,720

Common Stock Dividends (Tables)
Common stock dividends, record date and payable date
For fiscal 2017, the annual dividend will be paid in four quarterly installments of $0.50 per share, according to the following record and payable dates:
Record Date
  
Payable Date
March 11, 2016
  
April 4, 2016
May 13, 2016
  
June 6, 2016
August 12, 2016
  
September 6, 2016
December 9, 2016
  
January 3, 2017

Contingencies Schedule of FCPA Expenses (Tables)
Foreign corrupt practices act expenses
For the three and nine months ended October 31, 2016 and 2015, the Company incurred the following third-party expenses in connection with the FCPA investigation and related matters:
 
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
(Amounts in millions)
 
2016
 
2015
 
2016
 
2015
Ongoing inquiries and investigations
 
$
24

 
$
22

 
$
68

 
$
70

Global compliance program and organizational enhancements
 
5

 
8

 
14

 
23

Total
 
$
29

 
$
30

 
$
82

 
$
93

Segments (Tables)
Net sales by segment are as follows:
 
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
(Amounts in millions)
 
2016

2015
 
2016
 
2015
Net sales:
 
 
 
 
 
 
 
 
Walmart U.S.
 
$
74,550

 
$
72,712

 
$
224,086

 
$
216,916

Walmart International
 
28,390

 
29,811

 
85,094

 
90,726

Sam's Club
 
14,236

 
14,075

 
42,387

 
42,288

Net sales
 
$
117,176

 
$
116,598

 
$
351,567

 
$
349,930

Operating income by segment, as well as operating loss for corporate and support, and interest, net, are as follows:
 
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
(Amounts in millions)
 
2016

2015
 
2016
 
2015
Operating income (loss):
 
 
 
 
 
 
 
 
Walmart U.S.
 
$
3,999

 
$
4,506

 
$
12,750

 
$
13,964

Walmart International
 
1,354

 
1,338

 
4,245

 
3,685

Sam's Club
 
396

 
539

 
1,281

 
1,394

Corporate and support
 
(630
)
 
(669
)
 
(1,717
)
 
(1,580
)
Operating income
 
5,119

 
5,714

 
16,559

 
17,463

Interest, net
 
585

 
552

 
1,712

 
1,919

Income before income taxes
 
$
4,534

 
$
5,162

 
$
14,847

 
$
15,544

Accounting Policies Summary of Significant Accounting Policies (Details) (Consumer credit receivable, USD $)
Oct. 31, 2016
Jan. 31, 2016
Consumer credit receivable
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
Consumer credit receivable, net
$ 1,200,000,000 
$ 1,000,000,000 
Consumer credit receivable, reserve for doubtful accounts
$ 77,000,000 
$ 70,000,000 
Net Income Per Common Share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 31, 2016
Oct. 31, 2015
Oct. 31, 2016
Oct. 31, 2015
Net Income Per Common Share [Line Items]
 
 
 
 
Income from continuing operations
$ 3,202 
$ 3,414 
$ 10,307 
$ 10,332 
Consolidated net income attributable to noncontrolling interest
(168)
(110)
(421)
(212)
Income from continuing operations attributable to Walmart
$ 3,034 
$ 3,304 
$ 9,886 
$ 10,120 
Weighted-average common shares outstanding, basic
3,089 
3,210 
3,114 
3,221 
Dilutive impact of stock options and other share-based awards
11 
10 
10 
Weighted-average common shares outstanding, diluted
3,100 
3,219 
3,124 
3,231 
Basic income per common share from continuing operations attributable to Walmart
$ 0.98 
$ 1.03 
$ 3.17 
$ 3.14 
Diluted income per common share from continuing operations attributable to Walmart
$ 0.98 
$ 1.03 
$ 3.16 
$ 3.13 
Accumulated Other Comprehensive Income (Loss) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Oct. 31, 2016
Oct. 31, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Balances - beginning of period
$ (11,597)
$ (10,659)
Other comprehensive income (loss) before reclassifications
(760)
 
Amounts reclassified from accumulated other comprehensive income (loss)
22 
 
Balances - end of period
(12,335)
(10,659)
Currency translation and other
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Balances - beginning of period
(11,690)
 
Other comprehensive income (loss) before reclassifications
(994)
 
Balances - end of period
(12,684)
 
Net investment hedges
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Balances - beginning of period
1,022 
 
Other comprehensive income (loss) before reclassifications
468 
 
Balances - end of period
1,490 
 
Cash flow hedges
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Balances - beginning of period
(336)
 
Other comprehensive income (loss) before reclassifications
(151)
 
Amounts reclassified from accumulated other comprehensive income (loss)
28 
 
Balances - end of period
(459)
 
Minimum pension liability
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Balances - beginning of period
(593)
 
Other comprehensive income (loss) before reclassifications
(83)
 
Amounts reclassified from accumulated other comprehensive income (loss)
(6)
 
Balances - end of period
$ (682)
 
Schedule of Debt (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Oct. 31, 2016
Oct. 31, 2015
Jan. 31, 2016
Debt Instrument [Line Items]
 
 
 
Long-term debt due within one year
$ 2,266 
$ 2,746 
$ 2,745 
Long-term debt
36,178 
38,617 
38,214 
Total
38,444 
 
40,959 
Proceeds from issuance of long-term debt
134 
41 
 
Repayments of long-term debt
(2,040)
(4,422)
 
Reclassifications of long-term debt
(1,500)
 
 
Reclassifications of long-term debt
1,500 
 
 
Long-term debt, current maturities, other changes
61 
 
 
Long-term debt, excluding current maturities, other changes
(670)
 
 
Long-term debt, other changes
(609)
 
 
Unsecured debt
 
 
 
Debt Instrument [Line Items]
 
 
 
Repayments of long-term debt
$ (2,000)
 
 
Long-term Debt Schedule of Debt Maturities (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended 9 Months Ended
Oct. 31, 2016
Oct. 31, 2015
Oct. 31, 2016
Unsecured debt
Oct. 31, 2016
Unsecured debt
0.600% Fixed Rate Debt, Due 2016 [Member]
Apr. 11, 2016
Unsecured debt
0.600% Fixed Rate Debt, Due 2016 [Member]
Oct. 31, 2016
Unsecured debt
2.800% Fixed Rate Debt, Due 2016 [Member]
Apr. 15, 2016
Unsecured debt
2.800% Fixed Rate Debt, Due 2016 [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
Principal Amount
 
 
 
 
$ 1,000 
 
$ 1,000 
Interest Rate
 
 
 
 
0.60% 
 
2.80% 
Repayments of Long-term Debt
$ 2,040 
$ 4,422 
$ 2,000 
$ 1,000 
 
$ 1,000 
 
Fair Value Measurements (Notional Amounts And Fair Values Of Interest Rate Swaps) (Details) (Recurring, USD $)
In Millions, unless otherwise specified
Oct. 31, 2016
Jan. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Notional Amount
$ 10,220 
$ 10,382 
Fair value, inputs, level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair Value
(133)
(117)
Fair value hedging |
Floating-rate interest rate swaps
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Notional Amount
5,000 
5,000 
Fair value hedging |
Floating-rate interest rate swaps |
Fair value, inputs, level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair Value
172 
173 
Net investment hedging |
Cross-currency swaps
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Notional Amount
1,250 
1,250 
Net investment hedging |
Cross-currency swaps |
Fair value, inputs, level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair Value
532 
319 
Cash flow hedging |
Cross-currency swaps
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Notional Amount
3,970 
4,132 
Cash flow hedging |
Cross-currency swaps |
Fair value, inputs, level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair Value
$ (837)
$ (609)
Fair Value Measurements (Carrying Value And Fair Value Of Long-Term Debt) (Details) (USD $)
In Millions, unless otherwise specified
Oct. 31, 2016
Jan. 31, 2016
Carrying value
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term debt
$ 38,444 
$ 40,959 
Fair value |
Fair value, inputs, level 2
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term debt, including amounts due within one year, Fair Value
$ 46,797 
$ 46,965 
Derivative Financial Instruments (Narrative) (Details)
9 Months Ended
Oct. 31, 2016
USD ($)
Jan. 31, 2016
USD ($)
Oct. 31, 2016
Net investment hedging
Japan
JPY (¥)
Oct. 31, 2016
Net investment hedging
United Kingdom
GBP (£)
Oct. 31, 2016
Designated as hedging instrument
Net investment hedging
Japan
JPY (¥)
Oct. 31, 2016
Designated as hedging instrument
Net investment hedging
United Kingdom
GBP (£)
Derivative [Line Items]
 
 
 
 
 
 
Cash collateral held from counterparties
$ 266,000,000 
$ 345,000,000 
 
 
 
 
Threshold of derivative liability position requiring cash collateral
150,000,000 
 
 
 
 
 
Notional amount of nonderivative instruments
 
 
¥ 10,000,000,000 
£ 2,500,000,000 
¥ 10,000,000,000 
£ 2,500,000,000 
Derivative Financial Instruments (Balance Sheet Classification Of Financial Instruments) (Details) (USD $)
In Millions, unless otherwise specified
Oct. 31, 2016
Jan. 31, 2016
Fair value hedging |
Other assets and deferred charges
 
 
Derivative [Line Items]
 
 
Derivative assets
$ 172 
$ 173 
Net investment hedging |
Other assets and deferred charges
 
 
Derivative [Line Items]
 
 
Derivative assets
532 
319 
Net investment hedging |
Long-term debt
 
 
Derivative [Line Items]
 
 
Nonderivative hedging instruments
3,142 
3,644 
Cash flow hedging |
Other assets and deferred charges
 
 
Derivative [Line Items]
 
 
Derivative assets
129 
Cash flow hedging |
Deferred income taxes and other
 
 
Derivative [Line Items]
 
 
Derivative liabilities
$ 837 
$ 738 
Share Repurchases (Narrative) (Details) (Two Thousand And Fifteen Share Repurchase Program [Member], USD $)
In Billions, unless otherwise specified
Oct. 31, 2016
Oct. 13, 2015
Two Thousand And Fifteen Share Repurchase Program [Member]
 
 
Equity, Class of Treasury Stock [Line Items]
 
 
Share repurchase program, authorized amount
 
$ 20.0 
Stock repurchase program, remaining authorized repurchase amount
$ 11.3 
 
Share Repurchases (Schedule Of Company's Share Repurchases) (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
9 Months Ended
Oct. 31, 2016
Oct. 31, 2015
Equity, Class of Treasury Stock [Line Items]
 
 
Total number of shares repurchased
90.6 
23.2 
Average price paid per share
$ 69.04 
$ 74.20 
Total amount paid for share repurchases
$ 6,254 
$ 1,720 
Common Stock Dividends (Narrative) (Details)
0 Months Ended 3 Months Ended 9 Months Ended 0 Months Ended
Feb. 18, 2016
Oct. 31, 2016
Oct. 31, 2015
Oct. 31, 2016
Oct. 31, 2015
Feb. 18, 2016
Sep. 6, 2016
Dividend paid
Jun. 6, 2016
Dividend paid
Apr. 4, 2016
Dividend paid
Dividends Payable [Line Items]
 
 
 
 
 
 
 
 
 
Dividends
 
 
 
 
 
 
Sep. 06, 2016 
Jun. 06, 2016 
Apr. 04, 2016 
Common stock, quarterly dividends, per share, declared
 
 
 
 
 
$ 0.50 
 
 
 
Annual dividend approved by Board of Directors
$ 2.00 
$ 0.00 
$ 0.00 
$ 2.00 
$ 1.96 
 
 
 
 
Contingencies (Details) (Asda equal value lawsuit)
9 Months Ended
Oct. 31, 2016
Asda equal value lawsuit
 
Loss Contingencies [Line Items]
 
Loss contingency, claims filed, number
8,000 
Contingencies Schedule of FCPA Expenses (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 31, 2016
Oct. 31, 2015
Oct. 31, 2016
Oct. 31, 2015
Foreign Corrupt Practices Act Expenses [Line Items]
 
 
 
 
Foreign corrupt practices act related expenses
$ 29 
$ 30 
$ 82 
$ 93 
Compliance programs and organizational enhancements
 
 
 
 
Foreign Corrupt Practices Act Expenses [Line Items]
 
 
 
 
Foreign corrupt practices act related expenses
14 
23 
Inquiry and investigation expense
 
 
 
 
Foreign Corrupt Practices Act Expenses [Line Items]
 
 
 
 
Foreign corrupt practices act related expenses
$ 24 
$ 22 
$ 68 
$ 70