Walmart 1999 Annual Report Download - page 22

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The Company routinely enters into forward currency exchange con-
tracts in the regular course of business to manage its exposure
against foreign currency fluctuations on cross-border purchases of
inventory. These contracts are generally for durations of six months
or less. In addition, the Company entered into two foreign curren-
cy swaps to hedge the net investment in Germany.
The following tables provide information about the Company’s
derivative financial instruments, including foreign currency for-
ward exchange agreements and currency swap agreements by func-
tional currency and presents the information in United States dol-
lar equivalents. For foreign currency forward exchange agree-
ments, the table presents the notional amounts and average
exchange rates by contractual maturity dates.
Interest Rate Sensitivity
As of January 31, 1998
Principal (Notional) Amount by Expected Maturity
Average Interest (Swap) Rate
Fair value
(Amounts in millions) 1999 2000 2001 2002 2003 Thereafter Total 1/31/98
Liabilities
Long-term debt including current portion
Fixed rate debt $1,039 $815 $1,268 $802 $559 $3,747 $8,230 $8,639
Average interest rate – U.S.$ rate 7.1% 7.2% 7.2% 7.1% 6.9% 7.2% 7.2%
Long-term obligation related to
real estate investment trust
Fixed rate obligation 36 39 43 46 50 382 596 660
Fixed interest rate – U.S.$ rate 8.4% 8.4% 8.4% 8.4% 8.4% 8.4% 8.4%
Interest Rate Derivative Financial Instruments
Related to Debt
Interest rate swap
Pay variable/receive fixed – – 500 – – – 500 –
Average rate paid – 30-day U.S. commercial
paper non-financial plus .134%
Fixed rate received- U.S.$ rate – – 5.7% – – – 5.7%
Interest Rate Derivative Financial Instruments
Related to Real Estate Investment Trust Obligation
Interest rate swap
Pay variable/receive fixed 34 38 41 45 49 378 585 17
Average pay rate – 30-day U.S. commercial
paper non-financial
Fixed rate received- U.S.$ rate 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
Interest rate swap
Pay variable/receive fixed – – – – – 230 230 20
Average rate paid – 6-month U.S. LIBOR
Fixed rate received- U.S.$ rate – – – – – 7.0% 7.0%
Interest Rate Derivative Financial Instrument
Related to Currency Swap
German Deutschemarks
Pay variable/receive variable – – – 1,101 – – 1,101 (1)
Average rate paid – 3-month German
Deutschemark LIBOR minus .0676%
Average rate received – 30-day U.S. commercial
paper non-financial
22