Walmart 2007 Annual Report Download - page 36

Wal-Mart 2007 Annual Report 34
Contractual Obligations and Other Commercial Commitments
The following table sets forth certain information concerning our obligations and commitments to make contractual future payments, such
as debt and lease agreements, and contingent commitments:
Payments Due During Fiscal Years Ending January 31,
(In millions) Total 2008 2009–2010 2011–2012 Thereafter
Recorded contractual obligations:
Long-term debt $32,650 $ 5,428 $ 9,120 $ 5,398 $12,704
Commercial paper 2,570 2,570 – – –
Capital lease obligations 5,715 538 1,060 985 3,132
Unrecorded contractual obligations:
Non-cancelable operating leases 10,446 842 1,594 1,332 6,678
Interest on long-term debt 17,626 1,479 2,482 1,705 11,960
Undrawn lines of credit 6,890 3,390 – 3,500 –
Trade letters of credit 2,986 2,986 – – –
Standby letters of credit 2,247 2,247 – – –
Purchase obligations 15,168 11,252 3,567 126 223
Total commercial commitments $96,298 $30,732 $17,823 $13,046 $34,697
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
Purchase obligations include all legally binding contracts such as  rm
commitments for inventory and utility purchases, as well as commit-
ments to make capital expenditures, software acquisition/license
commitments and legally binding service contracts. Purchase orders
for the purchase of inventory and other services are not included in
the table above. Purchase orders represent authorizations to purchase
rather than binding agreements. For the purposes of this table, con-
tractual obligations for purchase of goods or services are de ned as
agreements that are enforceable and legally binding and that specify
all signi cant terms, including:  xed or minimum quantities to be
purchased; fixed, minimum or variable price provisions; and the
approximate timing of the transaction. Our purchase orders are based
on our current inventory needs and are ful lled by our suppliers within
short time periods. We also enter into contracts for outsourced services;
however, the obligations under these contracts are not signi cant
and the contracts generally contain clauses allowing for cancellation
without signi cant penalty.
The expected timing for payment of the obligations discussed above
is estimated based on current information. Timing of payments and
actual amounts paid of some unrecorded contractual commitments
may be di erent depending on the timing of receipt of goods or ser-
vices or changes to agreed-upon amounts for some obligations.
O Balance Sheet Arrangements
In addition to the unrecorded contractual obligations discussed and
presented above, the Company has made certain guarantees as dis-
cussed below for which the timing of payment, if any, is unknown.
In connection with certain debt  nancing, we could be liable for early
termination payments if certain unlikely events were to occur. At
January 31, 2007, the aggregate termination payment was $69 mil-
lion. These two arrangements expire in  scal 2011 and  scal 2019.
In connection with the development of our grocery distribution
network in the United States, we have agreements with third parties
which would require us to purchase or assume the leases on certain
unique equipment in the event the agreements are terminated. These
agreements, which can be terminated by either party at will, cover up to
a  ve-year period and obligate the Company to pay up to approximately
$150 million upon termination of some or all of these agreements.
The Company has entered into lease commitments for land and
buildings for 141 future locations. These lease commitments with real
estate developers provide for minimum rentals ranging from 4 to 30
years, which, if consummated based on current cost estimates, will
approximate $72 million annually over the lease terms.
Capital Resources
During  scal 2007, we issued $7.2 billion of long-term debt. The net
proceeds from the issuance of such long-term debt were used to repay
outstanding commercial paper indebtedness and for other general
corporate purposes.
Management believes that cash
flows from operations and proceeds
from the sale of commercial paper
will be sufficient to finance any
seasonal buildups in merchandise
inventories and meet other
cash requirements.