Walmart : Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended July 31, 2019.

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 001-6991

WALMART INC.

(Exact name of registrant as specified in its charter)

Delaware	71-0415188
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
702 S.W. 8th Street
Bentonville AR	72716
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: [phone]

Former name, former address and former fiscal year, if changed since last report: N/A

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.10 per share		WMT		New York Stock Exchange
1.900% Notes Due 2022				New York Stock Exchange
2.550% Notes Due 2026				New York Stock Exchange

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The registrant had 2,844,284,080 shares of common stock outstanding as of September 4, 2019.

Table of Contents

Walmart Inc.

Form 10-Q

For the Quarterly Period Ended July 31, 2019

Table of Contents

	Page
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Statements of Income	3
Condensed Consolidated Statements of Comprehensive Income	4
Condensed Consolidated Balance Sheets	5
Condensed Consolidated Statements of Shareholders' Equity	6
Condensed Consolidated Statements of Cash Flows	8
Notes to Condensed Consolidated Financial Statements	9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3. Quantitative and Qualitative Disclosures About Market Risk	32
Item 4. Controls and Procedures	32
Part II. Other Information
Item 1. Legal Proceedings	33
Item 1A. Risk Factors	34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 5. Other Information	34
Item 6. Exhibits	38
Signatures	39

2

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Walmart Inc.

Condensed Consolidated Statements of Income

(Unaudited)

		Three Months Ended July			Six Months Ended July
				31,					31,
(Amounts in millions, except per share data)			2019				2018			2019				2018
Revenues:
Net sales	$	129,388	$	127,059	$	252,337	$	248,689
Membership and other income			989				969			1,965				2,029
Total revenues			130,377				128,028			254,302				250,718
Costs and expenses:
Cost of sales			97,923				95,571			190,957				187,278
Operating, selling, general and administrative expenses			26,871				26,707			52,817				52,536
Operating income			5,583				5,750			10,528				10,904
Interest:
Debt			558				460			1,146				897
Finance, capital lease and financing obligations			83				94			168				187
Interest income			(56)				(51)			(104)				(94)
Interest, net			585				503			1,210				990
Other (gains) and losses			85				4,849			(752)				6,694
Income before income taxes			4,913				398			10,070				3,220
Provision for income taxes			1,233				1,125			2,484				1,671
Consolidated net income (loss)			3,680				(727)			7,586				1,549
Consolidated net income attributable to noncontrolling interest			(70)				(134)			(134)				(276)
Consolidated net income (loss) attributable to Walmart		$	3,610			$	(861)		$	7,452			$	1,273
Net income (loss) per common share:
Basic net income (loss) per common share attributable to Walmart	$	1.27	$	(0.29)	$	2.60	$	0.43
Diluted net income (loss) per common share attributable to Walmart			1.26				(0.29)			2.59				0.43
Weighted-average common shares outstanding:
Basic			2,853				2,946			2,861				2,948
Diluted			2,869				2,946			2,878				2,963
Dividends declared per common share		$	-			$	-		$	2.12			$	2.08
See accompanying notes.

3

Table of Contents

Walmart Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended July			Six Months Ended July
			31,					31,
(Amounts in millions)		2019				2018			2019				2018
Consolidated net income (loss)	$	3,680			$	(727)		$	7,586			$	1,549
Consolidated net income attributable to noncontrolling interest		(70)				(134)			(134)				(276)
Consolidated net income (loss) attributable to Walmart		3,610				(861)			7,452				1,273
Other comprehensive income (loss), net of income taxes
Currency translation and other		(81)				(2,685)			426				(1,220)
Net investment hedges		140				193			248				261
Cash flow hedges		(158)				(155)			(289)				(232)
Minimum pension liability		4				9			5				52
Other comprehensive income (loss), net of income taxes		(95)				(2,638)			390				(1,139)
Other comprehensive (income) loss attributable to noncontrolling interest		(84)				290			(118)				127
Other comprehensive income (loss) attributable to Walmart		(179)				(2,348)			272				(1,012)
Comprehensive income (loss), net of income taxes		3,585				(3,365)			7,976				410
Comprehensive (income) loss attributable to noncontrolling interest		(154)				156			(252)				(149)
Comprehensive income (loss) attributable to Walmart	$	3,431			$	(3,209)		$	7,724			$	261

See accompanying notes.

4

Table of Contents

Walmart Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

			July 31,			January 31,			July 31,
(Amounts in millions)			2019			2019			2018
ASSETS
Current assets:
Cash and cash equivalents		$	9,283		$	7,722		$	15,840
Receivables, net			5,382			6,283			5,002
Inventories			44,134			44,269			41,985
Prepaid expenses and other			2,572			3,623			3,543
Total current assets			61,371			61,897			66,370
Property and equipment, net			104,674			104,317			104,019
Operating lease right-of-use assets, net			17,239			-			-
Finance lease right-of-use assets, net			3,949			-			-
Property under capital lease and financing obligations, net			-			7,078			6,998
Goodwill			31,454			31,181			17,840
Other long-term assets			16,174			14,822			10,835
Total assets		$	234,861		$	219,295		$	206,062
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings		$	3,681		$	5,225		$	444
Accounts payable			45,871			47,060			43,128
Dividends payable			3,023			-			3,057
Accrued liabilities			20,691			22,159			22,846
Accrued income taxes			387			428			424
Long-term debt due within one year			4,396			1,876			1,090
Operating lease obligations due within one year			1,795			-			-
Finance lease obligations due within one year			439			-			-
Capital lease and financing obligations due within one year			-			729			694
Total current liabilities			80,283			77,477			71,683
Long-term debt			44,404			43,520			44,958
Long-term operating lease obligations			16,079			-			-
Long-term finance lease obligations			3,915			-			-
Long-term capital lease and financing obligations			-			6,683			6,610
Deferred income taxes and other			13,049			11,981			8,999
Commitments and contingencies
Equity:
Common stock			285			288			294
Capital in excess of par value			2,880			2,965			2,710
Retained earnings			78,432			80,785			80,810
Accumulated other comprehensive loss			(11,270)			(11,542)			(12,629)
Total Walmart shareholders' equity			70,327			72,496			71,185
Noncontrolling interest			6,804			7,138			2,627
Total equity			77,131			79,634			73,812
Total liabilities and equity		$	234,861		$	219,295		$	206,062

See accompanying notes.

5