Walmart 2014 Annual Report Download - page 36

Management’s Discussion and Analysis of
Financial Condition and Results of Operations
34 Walmart 2014 Annual Report
2015; under the caption “Liquidity and Capital Resources – Transactions
with Noncontrolling Interest Holders” with respect to certain transactions
having an impact on Walmart’s cash ows from nancing activities
in the future; under the caption “Liquidity and Capital Resources –
Capital Resources” with respect to Walmart’s cash ows from continuing
operations, current cash position and access to debt and capital markets
continuing to be sucient to meet operating cash needs, including for
seasonal build-ups in inventories, completing capital expenditures and
funding dividend payments and shares repurchases, the factors that
inuence Walmart’s credit ratings, any downgrade of Walmart’s credit
ratings potentially increasing future borrowing costs and impairing
Walmart’s ability to access capital and credit markets on terms acceptable
to Walmart and downgrades in Walmart’s current short-term credit ratings
impairing its ability to access the commercial paper markets with the
same exibility as Walmart has experienced historically, potentially
requiring Walmart to rely more heavily on more expensive types of debt
nancing; and under the caption “Liquidity and Capital Resources –
Off Balance Sheet Arrangements” with respect to the amount of increases
in payments under operating leases if certain leases are executed.
These forward-looking statements also include statements in: Note 3
to our Consolidated Financial Statements regarding the weighted-
average periods over which certain compensation cost is expected to be
recognized; Note 8 to our Consolidated Financial Statements regarding
the portion of any net investment and cash ow instruments of the
Company that is ineective as a hedge being insignicant and the
amounts related to the our derivatives expected to be reclassied from
accumulated other comprehensive income (loss) to net income during
the next 12 months being insignicant; Note 9 to our Consolidated
Financial Statements regarding the realization of certain net deferred tax
assets, the possibility that tax audit resolutions over the twelve months
ending January 31, 2015, could reduce unrecognized tax benets by an
amount within a certain range or beyond that range and the reasons for
that reduction, the expectation that any change will not have a signicant
impact on the Company’s Consolidated Financial Statements and the
possibility that the resolution of a group of related matters might result
in a material liability to Walmart; Note 10 to our Consolidated Financial
Statements regarding an adverse decision in, or settlement of, certain
litigation to which Walmart is a party possibly resulting in material liability
to Walmart and respecting management’s expectations that the certain
matters relating to an FCPA investigation will not have a material adverse
eect on its business; and Note 11 to our Consolidated Financial
Statements regarding the amount of the increase in payments under
operating leases if certain leases for real property were executed. The
CEO’s Letter also includes forward looking statements regarding Walmart
continuing to invest in training and development of its associates and
increasing investment in e-commerce as e-commerce opportunities
present themselves. The section of this Annual Report captioned
“Walmart U.S.” includes forward-looking statements regarding man-
agement’s expectation for the Walmart U.S. segment to purchase an
additional $250 billion of merchandise from U.S. manufacturers over the
next 10 years and to continue to grow its supercenter eet and for the
Walmart U.S. segment to open new Neighborhood Markets and Walmart
Express units within a certain range and to add retail square feet within a
certain range and to open a number of new units within a certain range
in scal 2015. The section of this Annual Report captioned “Walmart
International” contains forward-looking statements regarding the
Walmart International segment continuing to be a growth vehicle for
Walmart and having a goal of funding price investment by being the
lowest cost operator in every market. The section of this Annual Report
captioned “Sam’s Club” includes forward-looking statements that relates
to management’s expectation for the Sam’s Club segment opening a
certain number of new clubs and launching new membership enhance-
ments in scal 2015. The forward-looking statements described above
are identied by the use in such statements of one or more of the words
or phrases “aim,” “anticipate,” “anticipated,” “could be,” “could impair,”
”could increase,” ”could potentially be,” “could reduce,” “estimated,”
“expansion,” “expect,” “goal,” “grow,” “intend,” “is expected,” “may cause,”
”may continue,” “may uctuate,” “may impact,” “may not be,” “may result,”
“objective,” “objectives,” “plan,” “plans,” “projected,” “should continue,”
”will be,” “will be met,” ”will be paid,” “will continue,” ”will depend,” “will have,”
“will impact,” ”will increase,” “would be,” and “would increase,” and other
similar words or phrases. Similarly, descriptions of our objectives, strategies,
plans, goals or targets are also forward-looking statements. These statements
discuss, among other things, expected growth, future revenues, future
cash ows, future capital expenditures, future performance, future initiatives
and the anticipation and expectations of Walmart and its management
as to future occurrences and trends.
The forward-looking statements included in this Annual Report and
that we make elsewhere are subject to certain factors, in the United States
and internationally, that could materially aect our nancial performance,
our results of operations, including our sales, earnings per share or com-
parable store sales or comparable club sales and our eective income
tax rate for any period and our business operations, business strategy,
plans, goals or objectives. These factors include, but are not limited to:
general economic conditions, including changes in the economy of the
United States or other specic markets in which we operate, economic
instability, changes in the monetary policies of the United States, the
Board of Governors of the Federal Reserve System, other governments or
central banks, economic crises and disruptions in the nancial markets,
including as a result of sovereign debt crises, governmental budget
decits, unemployment and partial employment levels, employment
conditions within our markets, credit availability to consumers and busi-
nesses, levels of consumer disposable income, consumer condence,
consumer credit availability, consumer spending patterns, consumer
debt levels, consumer preferences, including consumer demand for the
merchandise we oer for sale, consumer acceptance of our e-commerce
websites and merchandise oerings on those websites, ination, dea-
tion, commodity prices, the cost of the goods we sell, competitive
pressures, unanticipated expenses and needs for capital expenditures
that aect our cash ows, the seasonality of our business, seasonal
buying patterns in the United States and our other markets, anticipated
store or club closures, labor costs, transportation costs, the cost of diesel