Walmart 2014 Annual Report Download - page 51

On April 11, 2013, the Company issued $1.0 billion principal amount of its
0.600% Notes due 2016, $1.25 billion principal amount of its 1.125% Notes
due 2018, $1.75 billion principal amount of its 2.550% Notes due 2023
and $1.0 billion principal amount of its 4.000% Notes due 2043. The
aggregate net proceeds from these note issuances were approximately
$5.0 billion. The notes of each series require semi-annual interest payments
on April 11 and October 11 of each year, with the rst interest payment
made on October 11, 2013. Unless previously purchased and canceled,
the Company will repay the notes of each series at 100% of the principal
amount, together with accrued and unpaid interest thereon, at maturity.
However, the Company has the right to redeem any or all of the notes
that mature on April 11, 2023, at any time on or after January 11, 2023, and
to redeem any or all of the notes that mature on April 11, 2043, at any
time on or after October 11, 2042, in each case at 100% of the principal
amount, together with the accrued and unpaid interest thereon to, but
excluding, the date of redemption. The notes of each series are senior,
unsecured obligations of the Company and are not convertible
or exchangeable.
On October 2, 2013, the Company issued $1.0 billion principal amount
of its 1.950% Notes due 2018 and $750 million principal amount of its
4.750% Notes due 2043. The aggregate net proceeds from these note
issuances were approximately $1.7 billion. The 1.950% Notes due 2018 series
requires semi-annual interest payments on June 15 and December 15 of
each year, with the rst interest payment commencing on June 15, 2014.
The 4.750% Notes due 2043 series require semi-annual interest payments
on October 2 and April 2 of each year, commencing on April 2, 2014.
Unless previously purchased and canceled, the Company will repay the
notes of each series at 100% of the principal amount, together with accrued
and unpaid interest thereon, at maturity. However, the Company has the
right to redeem any or all of the notes that mature on October 2, 2043, at
any time on or after April 2, 2043, at 100% of the principal amount, together
with the accrued and unpaid interest thereon to, but excluding, the date
of redemption. The notes of each series are senior, unsecured obligations
of the Company and are not convertible or exchangeable.
The Company did not issue any signicant amounts of long-term debt
during scal 2013.
7 Fair Value Measurements
The Company records and discloses certain nancial and non-nancial assets and liabilities at their fair value. The fair value of an asset is the price
at which the asset could be sold in an ordinary transaction between unrelated, knowledgeable and willing parties able to engage in the transaction.
A liability’s fair value is dened as the amount that would be paid to transfer the liability to a new obligor in a transaction between such parties,
not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using the fair value
hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:
• Level 1: observable inputs such as quoted prices in active markets;
• Level 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and
• Level 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions.
Recurring Fair Value Measurements
The Company holds derivative instruments that are required to be measured at fair value on a recurring basis. The fair values are the estimated
amounts the Company would receive or pay upon termination of the related derivative agreements as of the reporting dates. The fair values have
been measured using the income approach and Level 2 inputs, which include the relevant interest rate and foreign currency forward curves.
As of January 31, 2014 and 2013, the notional amounts and fair values of these derivatives were as follows:
January 31, 2014 January 31, 2013
(Amounts in millions) Notional Amount Fair Value Notional Amount Fair Value
Receive xed-rate, pay variable-rate interest rate swaps designated
as fair value hedges $1,000 $ 5 $ 3,445 $ 60
Receive xed-rate, pay xed-rate cross-currency interest rate swaps
designated as net investment hedges 1,250 97 1,250 223
Receive xed-rate, pay xed-rate cross-currency interest rate swaps
designated as cash ow hedges 3,004 453 2,944 230
Receive variable-rate, pay xed-rate interest rate swaps designated
as cash ow hedges 457 (2) 1,056 (8)
Receive variable-rate, pay xed-rate forward starting interest rate swaps
designated as cash ow hedges 2,500 166 5,000 10
Total $8,211 $719 $13,695 $515
Walmart 2014 Annual Report 49
Notes to Consolidated Financial Statements