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2012 Annual Report
50 years
of helping customers
save money and live better

Table of contents

  • Page 1
    50 years of helping customers save money and live better 2012 Annual Report

  • Page 2
    ... incorporates as Wal-Mart Stores, Inc. 1970s 1970: Walmart becomes a publicly traded company on October 1. 1971: The company's first distribution center is opened in Bentonville, Ark. 1972: Walmart is listed on the New York Stock Exchange (ticker: WMT). Now with 51 stores, Walmart records sales of...

  • Page 3
    ... sustainable agriculture. Bharti Walmart, a joint venture, opens its first store in India. 2011: With the acquisition of MassMart, Walmart surpasses 10,000 retail units around the world. 2012: Walmart celebrates 50 years of helping customers save money and live better. Walmart 2012 Annual Report 1

  • Page 4
    50 years of performance Earnings 1962 $30,000 Since 1962, Walmart returned $101 billion to shareholders through dividends and share repurchases. 2012 $15.8 billion Net sales 2002 $201.2 billion 1992 $43.9 billion 1982 $2.4 billion 1972 $78.0 million 1962 $250,000 2012 $443.9 billion For an ...

  • Page 5
    ... and communities around the world. Fiscal 2012 review and key strategies Last year, Walmart delivered a strong financial performance. Net sales increased by 5.9 percent to $443.9 billion, and consolidated operating income grew by 4 percent to $26.6 billion. Our diluted earnings per share from...

  • Page 6
    ... our history. We want to drive full global leverage throughout such areas as information systems, sourcing, business processes and shared services. Winning in Global eCommerce E-commerce will become even more important to serving customers in the coming years. In the U.S. and the U.K., we operate...

  • Page 7
    ...would be no limit to us." Looking to the future, I share that optimism. There is no limit to the difference Walmart associates can make for our shareholders, customers and the world around us. Michael T. Duke President and Chief Executive Officer Wal-Mart Stores, Inc. Walmart 2012 Annual Report 5

  • Page 8
    Walmart U.S. Our Strategy: Offering a broad assortment with even lower prices 6 Walmart 2012 Annual Report

  • Page 9
    ... collateral, Sam and Helen Walton opened the first Walmart in Rogers, Ark. in 1962. The store was just 18,000 square feet of selling space, and had clothing racks made of plumbing pipes. Store 1 was modest - but customers loved the great prices and the wide assortment. Walmart 2012 Annual Report 7

  • Page 10
    Walmart International Our Strategy: Meeting local needs and leveraging global resources 8 Walmart 2012 Annual Report

  • Page 11
    ...to $125.9 billion for fiscal 2012. Operating income was $6.2 billion, increasing 10.8 percent from the prior year. In fiscal 2012, we opened a record 612 new stores through organic growth. Including acquisitions, we added 1,094 stores and 42.2 million square feet around the world. For the past three...

  • Page 12
    Sam's Club Our Strategy: Leveraging Member insights to deliver value and quality 10 Walmart 2012 Annual Report

  • Page 13
    ..., with plans to open nine new clubs in fiscal 2013, while relocating or expanding six more. We help Members shop smarter through e-commerce and the latest technology. The Sam's Club mobile app allows Members to review and shop our online and in-club inventory, build customized shopping lists, and...

  • Page 14
    ...in e-commerce. Our Foundation: Technology-driven supply chain In 1987, Walmart created a bold new competitive advantage with the completion of its satellite network, enabling real-time communication between stores, distribution centers and the Bentonville Home Office. 12 Walmart 2012 Annual Report

  • Page 15
    ... build successful and rewarding careers. In 2011, we took on a new opportunity - women's economic empowerment. Walmart's efforts will not only support the advancement of women in our company, but also will strengthen women-owned enterprises across the globe through a focus on sourcing and training...

  • Page 16
    ... board meeting to the 2012 calendar to provide more face-to-face time with management. Last year, in fact, we had an attendance rate at board, committee and shareholders' meetings of 98 percent, an extraordinary measure of our directors' dedication. We also added a Technology and eCommerce Committee...

  • Page 17
    ... 1969. Michael T. Duke(d)*(e)* Mr. Duke is the President and Chief Executive Officer of Wal-Mart Stores, Inc. and is the Chairman of the Executive Committee of the Board of Directors. Gregory B. Penner(e) (f)* Mr. Penner is a General Partner at Madrone Capital Partners, an investment management firm...

  • Page 18
    ... of sales by an additional 100 basis points over the next five years. We are investing these savings in price in our U.S. businesses, while expanding operating margins in international segments. We strengthened technology and optimized our supply chain. This allows us to operate for less, sell for...

  • Page 19
    ... per share and unit count data) As of and for the Fiscal Years Ended January 31, 2012 2011 2010 2009 2008 Operating Results Net sales Net sales increase Increase (decrease) in calendar comparable sales (1) in the United States Walmart U.S. Sam's Club Gross profit margin Operating, selling, general...

  • Page 20
    ... and Analysis of Financial Condition and Results of Operations Overview Wal-Mart Stores, Inc. ("Walmart," the "Company" or "we") operates retail stores in various formats around the world and is committed to saving people money so they can live better. We earn the trust of our customers every...

  • Page 21
    ... calendar comparable store and club sales provided in our quarterly earnings releases. Calendar comparable store and club sales for fiscal 2012, 2011 and 2010 are as follows: With Fuel Fiscal Years Ended January 31, 2012 2011 2010 2012 Fuel Impact Fiscal Years Ended January 31, 2011 2010 Walmart...

  • Page 22
    ...scal 2012 and 2011, respectively, while net sales increased 5.9% and 3.4% in fiscal 2012 and 2011, respectively. Returns Return on Investment Management believes return on investment ("ROI") is a meaningful metric to share with investors because it helps investors assess how effectively Walmart...

  • Page 23
    ... period to the account balance at the end of the prior period and dividing by 2. (2) Total assets of continuing operations as of January 31, 2012, 2011 and 2010 in the table above exclude assets of discontinued operations that are re ected in the Company's Consolidated Balance Sheets of $89 million...

  • Page 24
    ...) 2012 2011 2010 Net sales Percentage change from previous fiscal year Total U.S. calendar comparable store and club sales Gross profit margin as a percentage of sales Operating income Operating income as a percentage of net sales Income from continuing operations Unit counts Retail square feet...

  • Page 25
    .... Walmart U.S. Segment Fiscal Years Ended January 31, (Amounts in millions, except unit counts) 2012 2011 2010 Net sales Percentage change from previous fiscal year Calendar comparable store sales Operating income Operating income as a percentage of net sales Unit counts Retail square feet...

  • Page 26
    ... 2010 due to effective expense management in Japan and the United Kingdom. Each country had positive constant currency operating income in fiscal 2012, except India. India is a growing wholesale, cash and carry and retail franchise business with many new locations and generated significant sales...

  • Page 27
    ... our operations and global expansion activities. Generally, some or all of the remaining free cash ï¬,ow, if any, funds all or part of the dividends on our common stock and share repurchases. Fiscal Years Ended January 31, (Amounts in millions) 2012 2011 2010 We employ financing strategies in an...

  • Page 28
    ..., cost of borrowings and the market price of our common stock. Cash paid for share repurchases during fiscal 2012, 2011 and 2010 was as follows: Total Number of Shares Repurchased (in millions) Share Repurchases Average Total Price Paid Investment per Share (in billions) Fiscal year ended...

  • Page 29
    ...the liabilities section of the Company's Consolidated Balance Sheets. Estimated interest payments are based on our principal amounts and expected maturities of all debt outstanding at January 31, 2012 and management's forecasted market rates for our variable rate debt. Walmart 2012 Annual Report 27

  • Page 30
    ... uncertain tax positions and have been recorded as liabilities. The timing of the payment associated with these liabilities is uncertain. Refer to Note 10 in the "Notes to Consolidated Financial Statements" for additional discussion on unrecognized tax benefits. Off Balance Sheet Arrangements...

  • Page 31
    ... the estimated annual effect of inï¬,ation, and these estimates are adjusted to actual results determined at year-end. Our LIFO provision is calculated based on inventory levels, markup rates and internally generated retail price indices. At January 31, 2012 and 2011, our inventories valued at LIFO...

  • Page 32
    ...in fiscal 2013; under the caption "Liquidity and Capital Resources - Cash Flows from Financing Activities - Dividends," as well as in Note 16 in the "Notes to Consolidated Financial Statements" and under the caption "Walmart-Corporate and Stock Information-Dividends payable per share," with respect...

  • Page 33
    ... will open Walmart's products and brands to consumers in China; and under the caption "Walmart-2012 Financial Report" regarding management's plan to further strengthen Walmart's price position by leveraging expenses as a percentage of sales by an additional 100 basis points over the next five years...

  • Page 34
    Consolidated Statements of Income Fiscal Years Ended January 31, (Amounts in millions except per share data) 2012 2011 2010 Revenues: Net sales Membership and other income $443,854 3,096 446,950 $418,952 2,897 421,849 $405,132 2,953 408,085 Costs and expenses: Cost of sales Operating, selling, ...

  • Page 35
    ...value; 11,000 shares authorized, 3,418 and 3,516 issued and outstanding at January 31, 2012 and 2011, respectively) Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Total Walmart shareholders' equity Noncontrolling interest Total equity Total liabilities...

  • Page 36
    Consolidated Statements of Shareholders' Equity Common Stock Shares Amount Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Walmart Shareholders' Equity Noncontrolling Total Interest Equity (Amounts in millions, except per share data) Balances - ...

  • Page 37
    ... from issuance of long-term debt Payments of long-term debt Dividends paid Purchase of Company stock Purchase of redeemable noncontrolling interest Payment of capital lease obligations Other financing activities Net cash used in financing activities Effect of exchange rates on cash and cash...

  • Page 38
    ... to Consolidated Financial Statements 1 Summary of Signi General cant Accounting Policies Wal-Mart Stores, Inc. ("Walmart" or the "Company") operates retail stores in various formats around the world, aggregated into three reportable segments: the Walmart U.S. segment; the Walmart International...

  • Page 39
    ... costs associated with the claims. The Company also maintains stop-loss insurance coverage for workers' compensation and general liability of $5 million and $15 million, respectively, per occurrence to limit exposure to certain risks. See Note 6 for more information. Walmart 2012 Annual Report...

  • Page 40
    ... Ended January 31, (Amounts in millions) 2012 2011 2010 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. Cost of Sales...

  • Page 41
    ... expenses in the Company's Consolidated Statements of Income. Pre-opening costs totaled $308 million, $320 million and $227 million for the fiscal years ended January 31, 2012, 2011 and 2010, respectively. Currency Translation The assets and liabilities of all international subsidiaries...

  • Page 42
    ... for all plans was $355 million, $371 million and $335 million for fiscal 2012, 2011 and 2010, 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 bene...

  • Page 43
    ...to Consolidated Financial Statements The following table shows the activity for each award type during fiscal 2012: Restricted Stock and Performance Share Awards Weighted-Average Grant-Date Fair Value Per Share Restricted Stock Rights Weighted-Average Grant-Date Fair Value Per Share Stock Options...

  • Page 44
    ..., cost of borrowings and the market price of its common stock. Cash paid for share repurchases during fiscal 2012, 2011 and 2010 was as follows: Total Number of Shares Average Total Repurchased Price Paid Investment (in millions) per Share (in billions) Share Repurchases Fiscal year ended January...

  • Page 45
    ... of which relates to maximum amounts of secured debt and long-term leases. Committed lines of credit are primarily used to support commercial paper and remained undrawn as of January 31, 2012. The committed lines of credit mature at various times between June 2012 and June 2016, carry interest rates...

  • Page 46
    ... Year Annual Maturity Debt Issuances Information on significant long-term debt issued during fiscal 2012 is as follows (amounts in millions): Issue Date Maturity Date Interest Rate Principal Amount April 18, 2011 April 18, 2011 April 18, 2011 April 18, 2011 Total April 15, 2014 April 15, 2016...

  • Page 47
    ... 2,884 $9,349 $183 316 (16) (3) $480 $4,445 1,250 1,182 2,902 $9,779 $267 233 (18) 238 $720 The fair values above are the estimated amounts the Company would receive or pay upon a termination of the agreements relating to such instruments as of the reporting dates. Walmart 2012 Annual Report 45

  • Page 48
    ... the Company's Consolidated Balance Sheets with no net impact in the Company's Consolidated Statements of Income. These fair value instruments will mature on various dates ranging from April 2012 to May 2014. Net Investment Instruments The Company is party to cross-currency interest rate swaps that...

  • Page 49
    ... or a non-current liability, based on maturity date. As of January 31, 2012 and 2011, the Company's financial instruments were classified as follows in its Consolidated Balance Sheets: January 31, 2012 (Amounts in millions) Fair Value Instruments Net Investment Hedge Cash Flow Instruments Fair...

  • Page 50
    Notes to Consolidated Financial Statements Deferred Taxes The significant components of the Company's deferred tax account balances are as follows: January 31, (Amounts in millions) 2012 2011 Deferred tax assets: Loss and tax credit carryforwards Accrued liabilities Share-based compensation Other ...

  • Page 51
    ... of its accrued income tax liability in the Company's Consolidated Balance Sheet at January 31, 2011. In addition, during fiscal 2012, tax and related interest expense of $67 million was recorded to discontinued operations related to audit adjustments and amended returns from this settlement for...

  • Page 52
    ...ered new safe harbor 401(k) plans for associates in the United States and Puerto Rico, under which associates generally become participants following one year of employment. Under the safe harbor 401(k) plans, the Company matches 100% of participant contributions up to 6% of annual eligible earnings...

  • Page 53
    ...ectively settled with the Internal Revenue Service, during the fourth quarter of fiscal 2011, resulting in a $1.0 billion tax benefit recorded in discontinued operations in the Company's Consolidated Statement of Income. In addition, during fiscal 2012, tax and interest expense of $67 million was...

  • Page 54
    ... $70.7 billion as of January 31, 2012, 2011 and 2010, respectively. No other countries had net revenues or long-lived assets, net, that were material to the consolidated totals. Additionally, the Company did not generate material net revenues from any single customer. 52 Walmart 2012 Annual Report

  • Page 55
    ... 4, 2012 January 2, 2013 17 Quarterly Financial Data (Unaudited) Fiscal Year Ended January 31, 2012 (Amounts in millions except per share data) Q1 Q2 Q3 Q4 Total Net sales Cost of sales Income from continuing operations Consolidated net income Consolidated net income attributable to Walmart Basic...

  • Page 56
    ... Public Accounting Firm The Board of Directors and Shareholders of Wal-Mart Stores, Inc. We have audited the accompanying consolidated balance sheets of Wal-Mart Stores, Inc. as of January 31, 2012 and 2011, and the related consolidated statements of income, comprehensive income, shareholders...

  • Page 57
    ... (United States), the consolidated balance sheets of Wal-Mart Stores, Inc. as of January 31, 2012 and 2011, and related consolidated statements of income, comprehensive income, shareholders' equity and cash ï¬,ows for each of the three years in the period ended January 31, 2012 and our report dated...

  • Page 58
    Management's Report to Our Shareholders Wal-Mart Stores, Inc. Management of Wal-Mart Stores, Inc. ("Walmart," the "company" or "we") is responsible for the preparation, integrity and objectivity of Walmart's Consolidated Financial Statements and other financial information contained in this Annual ...

  • Page 59
    ...200 79 200 70 15 419 2,088 73 305 42 541 5,651 (1) Walmart International unit counts, with the exception of Canada, are stated as of December 31, 2011, to correspond with the country's balance sheet date. (2) Sub-Saharan Africa includes Botswana, Ghana, Lesotho, Malawi, Mozambique, Namibia, Nigeria...

  • Page 60
    ... Company c/o Investor Relations or by calling 1-479-273-8446. These reports are also available via the corporate website Annual Report on Form 10-K Quarterly Reports on Form 10-Q Earnings Releases Current Reports on Form 8-K Copy of Annual Shareholders' Meeting Proxy Statement Global Responsibility...

  • Page 61
    Download Walmart's Investor Relations app and look for ongoing updates to access: • Financial news • Quarterly results • Annual Shareholders' Meeting materials • Proxy voting • Investor presentations Electronic access Since 2007, we have reduced our annual report print run by approximately...

  • Page 62
    Powering our future: 2.2 million associates committed to our customers. Wal-Mart Stores, Inc. (NYSE: WMT) 702 S. W. 8th Street Bentonville, Arkansas 72716 USA 479-273-4000 walmartstores.com