10-Q 1 d10q.htm FORM 10-Q Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended July 31, 2007.

or

 

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from              to             .

Commission file number 1-6991

LOGO

 

WAL-MART STORES, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware   71-0415188

(State or other jurisdiction of

incorporation or organization)

  

(I.R.S. Employer

Identification No.)

 

702 S.W. 8th Street

Bentonville, Arkansas

   72716
(Address of principal executive offices)   (Zip Code)

(479) 273-4000

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (See definition of “accelerated filer and large accelerated filer” as defined in Rule 12b-2 of the Exchange Act). Check One:

Large Accelerated Filer  x    Accelerated Filer  ¨    Non-Accelerated Filer  ¨

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨     No  x

Applicable Only to Corporate Issuers

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common Stock, $.10 Par Value – 4,068,226,506 shares as of August 24, 2007.

 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WAL-MART STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Amounts in millions except per share data)

 

    

Three Months Ended

July 31,

    

Six Months Ended

July 31,

  
     2007     2006     2007     2006  

Revenues:

         

Net sales

    $ 91,990     $ 84,524     $ 177,377     $ 163,359  

Membership and other income

      1,022       906       2,045       1,746  
                                
     93,012       85,430       179,422       165,105  

Costs and expenses:

         

Cost of sales

      70,589       64,585       135,900       124,822  

Operating, selling, general and administrative expenses

      17,130       15,741       33,379       30,683  
                                

Operating income

      5,293       5,104       10,143       9,600  

Interest:

         

Debt

      446       387       852       754  

Capital leases

      42       69       111       137  

Interest income

      (82 )     (63 )     (165 )     (131 )
                                

Interest, net

      406       393       798       760  
                                

Income from continuing operations before income taxes and minority interest

      4,887       4,711       9,345       8,840  

Provision for income taxes

      1,676       1,636       3,208       3,025  
                                

Income from continuing operations before minority interest

      3,211       3,075       6,137       5,815  

Minority interest

      (106 )     (91 )     (206 )     (170 )
                                

Income from continuing operations

      3,105       2,984       5,931       5,645  

Loss from discontinued operations, net of tax

      (153 )     (901 )     (153 )     (947 )
                                

Net income

    $ 2,952     $ 2,083     $ 5,778     $ 4,698  
                                

Net income per common share:

         

Basic income per common share from continuing operations

    $ 0.76     $ 0.72     $ 1.44     $ 1.35  

Basic loss per common share from discontinued operations

      (0.04 )     (0.22 )     (0.03 )     (0.22 )
                                

Basic net income per common share

    $ 0.72     $ 0.50     $ 1.41     $ 1.13  
                                

Diluted income per common share from continuing operations

    $ 0.76     $ 0.72     $ 1.44     $ 1.35  

Diluted loss per common share from discontinued operations

      (0.04 )     (0.22 )     (0.04 )     (0.22 )
                                

Diluted net income per common share

    $ 0.72     $ 0.50     $ 1.40     $ 1.13  
                                

Weighted-average number of common shares:

         

Basic

      4,102       4,168       4,112       4,167  

Diluted

      4,108       4,172       4,118       4,171  

Dividends declared per common share

    $ —       $ —       $ 0.88     $ 0.67  

 

2

WAL-MART STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Amounts in millions)

 

    

July 31,

2007

    

July 31,

2006

    

January 31,

2007

  
ASSETS       

Current assets:

       

Cash and cash equivalents

    $ 6,094     $ 6,386     $ 7,373  

Receivables

      2,767       2,522       2,840  

Inventories

      34,184       32,087       33,685  

Prepaid expenses and other

      3,342       3,307       2,690  

Current assets of discontinued operations

      —         1,870       —    
                        

Total current assets

      46,387       46,172       46,588  

Property and equipment, at cost

      116,654       103,121       109,798  

Less accumulated depreciation

      (26,773 )     (23,198 )     (24,408 )
                        

Property and equipment, net

      89,881       79,923       85,390  

Property under capital leases

      5,515       5,523       5,392  

Less accumulated amortization

      (2,448 )     (2,264 )     (2,342 )
                        

Property under capital leases, net

      3,067       3,259       3,050  

Goodwill

      14,655       13,269       13,759  

Other assets and deferred charges

      2,959       2,165       2,406  
                        

Total assets

    $ 156,949     $ 144,788     $ 151,193  
                        
LIABILITIES AND SHAREHOLDERS’ EQUITY       

Current liabilities:

       

Commercial paper

    $ 8,117     $ 6,072     $ 2,570  

Accounts payable

      27,748       26,023       28,090  

Dividends payable

      1,794       1,305       —    

Accrued liabilities

      14,056       13,028       14,675  

Accrued income taxes

      170       700       706  

Long-term debt due within one year

      3,176       6,235       5,428  

Obligations under capital leases due within one year

      189       196       285  

Current liabilities of discontinued operations

      —         580       —    
                        

Total current liabilities

      55,250       54,139       51,754  

Long-term debt

      27,966       24,099       27,222  

Long-term obligations under capital leases

      3,594       3,883       3,513  

Deferred income taxes and other

      5,449       4,741       4,971  

Minority interest

      2,404       1,554       2,160  

Commitments and contingencies

       

Shareholders’ equity:

       

Common stock and capital in excess of par value

      3,412       3,165       3,247  

Retained earnings

      55,414       51,091       55,818  

Accumulated other comprehensive income

      3,460       2,116       2,508  
                        

Total shareholders’ equity

      62,286       56,372       61,573  
                        

Total liabilities and shareholders’ equity

    $ 156,949     $ 144,788     $ 151,193  
                        

 

3

WAL-MART STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Amounts in millions)

 

    

Six Months Ended

July 31,

  
     2007     2006  

Cash flows from operating activities:

     

Net income

    $ 5,778     $ 4,698  

Loss from discontinued operations, net of tax

      153       947  
                

Income from continuing operations

      5,931       5,645  

Adjustments to reconcile income from continuing operations to net cash provided by operating activities:

     

Depreciation and amortization

      3,060       2,642  

Other

      68       (443 )

Changes in certain assets and liabilities, net of effects of acquisitions:

     

Decrease in accounts receivable

      255       134  

(Increase) decrease in inventories

      (64 )     134  

(Decrease) increase in accounts payable

      (1,134 )     224  

Decrease in accrued liabilities

      (1,524 )     (1,030 )
                

Net cash provided by operating activities of continuing operations

      6,592       7,306  

Net cash used in operating activities of discontinued operations

      —         (46 )
                

Net cash provided by operating activities

      6,592       7,260  

Cash flows from investing activities:

     

Payments for property and equipment

      (6,971 )     (6,812 )

Proceeds from disposal of property and equipment

      319       94  

Investment in international operations, net of cash acquired

      (467 )     (68 )

Other investing activities

      (61 )     (18 )
                

Net cash used in investing activities of continuing operations

      (7,180 )