Walmart 1999 Annual Report Download - page 32

The Company has $1 billion of outstanding debt with imbedded put
options. Beginning in fiscal 2001, and every second year thereafter
the holders of the debt may require the Company to repurchase
the debt at face value.
Long-term debt is unsecured except for $182 million which is col-
lateralized by property with an aggregate carrying value of approx-
imately $347 million. Annual maturities of long-term debt during
the next five years are (in millions):
The Company has agreed to observe certain covenants under the
terms of its note agreements, the most restrictive of which relate
to amounts of additional secured debt and long-term leases.
The Company has entered into sale/leaseback transactions involv-
ing buildings while retaining title to the underlying land.
These transactions were accounted for as financings and are
included in long-term debt and the annual maturities schedules
above. The resulting obligations are amortized over the lease
terms. Future minimum lease payments for each of the five
succeeding years as of January 31, 1999, are (in millions):
At January 31, 1999 and 1998, the Company had letters of credit
outstanding totaling $767 million and $673 million, respectively.
These letters of credit were issued primarily for the purchase
of inventory.
Under shelf registration statements previously filed with the
Securities and Exchange Commission, the Company may issue
debt securities aggregating $501 million.
Fiscal years ended Annual
January 31, maturity
2000 $ 900
2001 1,284
2002 801
2003 558
2004 285
Thereafter 3,980
Fiscal years ended Minimum
January 31, rentals
2000 $104
2001 100
2002 94
2003 98
2004 93
Thereafter 724
Fiscal years ended January 31, 1999 1998
8.625% Notes due April 2001 $ 750 $ 750
5.875% Notes due October 2005 597 597
5.850% Notes due June 2018 with biannual put options 500 –
5.650% Notes due February 2010 with biannual put options 500 500
7.500% Notes due May 2004 500 500
9.100% Notes due July 2000 500 500
6.500% Notes due June 2003 454 454
7.250% Notes due June 2013 445 445
7.800% - 8.250% Obligations from sale/leaseback transactions due 2014 427 458
6.750% Notes due May 2002 300 300
7.000% - 8.000% Obligations from sale/leaseback transactions due 2013 292 306
8.500% Notes due September 2024 250 250
6.750% Notes due October 2023 250 250
8.000% Notes due September 2006 250 250
6.125% Eurobond due November 2000 250 250
6.375% Notes due March 2003 228 228
6.750% Eurobond due May 2002 200 200
6.875% Eurobond due June 1999 – 250
6.125% Notes due October 1999 – 500
Other 215 203
$6,908 $ 7,191
32
4 Financial Instruments
Interest rate instruments
The Company enters into interest rate swaps to minimize the risks
and costs associated with its financing activities. The swap agree-
ments are contracts to exchange fixed or variable rate interest for
fixed or variable interest rate payments periodically over the life of
the instruments. The notional amounts are used to measure
interest to be paid or received and do not represent the exposure
due to credit loss. Settlements of interest rate swaps are accounted
for by recording the net interest received or paid as an adjustment
to interest expense on a current basis. These instruments are not
recorded on the balance sheet, and as of January 31, 1999 and 1998,
are as follows: