-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QjO6T1AJsN0wxLYnlmMqfXoGXGwvwP4ihRVZQw4BpPY8eB9QBik8E+S+hfUfSy2x fOKEw45n0Db6r42ZUgGB1g== 0000104169-98-000010.txt : 19981228 0000104169-98-000010.hdr.sgml : 19981228 ACCESSION NUMBER: 0000104169-98-000010 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981031 FILED AS OF DATE: 19981223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WAL MART STORES INC CENTRAL INDEX KEY: 0000104169 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 710415188 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-06991 FILM NUMBER: 98774271 BUSINESS ADDRESS: STREET 1: 702 SOUTHWEST 8TH ST CITY: BENTONVILLE STATE: AR ZIP: 72716 BUSINESS PHONE: 5012734000 MAIL ADDRESS: STREET 1: 702 SOUTHWEST 8TH STREET CITY: BENTONVILLE STATE: AR ZIP: 72716 10-Q/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A AMENDMENT 1 (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended October 31, 1998. 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 WAL-MART STORES, 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. Eighth Street Bentonville, Arkansas ____________72716______________ (Address of principal executive offices) (Zip Code) (501) 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 _____ Applicable Only to Issuers Involved in Bankruptcy Proceedings During the Preceding Five Years Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court. Yes _____ No _____ 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 -- 2,223,453,506 shares as of October 31, 1998. The Condensed Consolidated Statements of Income included in Item 1 of Part 1 of Form 10-Q contained a calculation error in the return for the period on average shareholders' equity. The Condensed Consolidated Statements of Cash Flows included in Item 1 of Part 1 of Form 10-Q contained an error due to reclassification of noncash items and other. Item 1 of Part 1 of the registrant's 10-Q is hereby amended in its entirety as follows: PART I. FINANCIAL INFORMATION Item 1. Financial Statements WAL-MART STORES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in millions)
October 31, January 31, 1998 1998 ASSETS (Unaudited) (*Note) Cash and cash equivalents $ 1,009 $ 1,447 Receivables 1,401 976 Inventories 20,620 16,497 Other current assets 488 432 Total current assets 23,518 19,352 Property, plant and equipment 30,071 27,376 Less accumulated depreciation 7,030 5,907 Net property, plant and equipment 23,041 21,469 Property under capital leases 3,248 3,040 Less accumulated amortization 998 903 Net property under capital leases 2,250 2,137 Other assets and deferred charges 2,430 2,426 Total assets $ 51,239 $45,384 LIABILITIES AND SHAREHOLDERS' EQUITY Commercial paper $ 1,976 $ - Accounts payable 11,424 9,126 Accrued liabilities 4,969 3,628 Other current liabilities 984 1,706 Total current liabilities 19,353 14,460 Long-term debt 6,953 7,191 Long-term obligations under capital leases 2,637 2,483 Deferred income taxes and other 771 809 Minority Interest 1,811 1,938 Common stock and capital in excess of par value 805 809 Retained earnings 19,437 18,167 Other accumulated comprehensive income ( 528) ( 473) Total shareholders' equity 19,714 18,503 Total liabilities and shareholders' equity $ 51,239 $45,384
[FN] See accompanying notes to condensed consolidated financial statements *Note: The balance sheet at January 31, 1998, has been derived from the audited financial statements at that date, and condensed. WAL-MART STORES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Amounts in millions except per share data)
Three Months Ended Nine Months Ended October 31, October 31, 1998 1997 1998 1997 Revenues: Net sales $33,509 $28,777 $96,849 $82,572 Other income - net 415 350 1,112 954 33,924 29,127 97,961 83,526 Costs and expenses: Cost of sales 26,380 22,680 76,328 65,285 Operating, selling and general and administrative expenses 5,691 4,958 16,341 14,058 Interest costs: Debt 135 142 380 413 Capital leases 67 56 201 166 32,273 27,836 93,250 79,922 Income before income taxes, minority interest and equity in unconsolidated subsidiaries 1,651 1,291 4,711 3,604 Provision for income taxes 611 483 1,743 1,333 Income before minority interest and equity in unconsolidated subsidiaries 1,040 808 2,968 2,271 Minority interest and equity in unconsolidated subsidiaries ( 31) ( 16) ( 97) ( 32) Net income $ 1,009 $ 792 $ 2,871 $ 2,239 Net income per share - Basic and dilutive $ .45 $ .35 $ 1.28 $ .99 Dividends per share $ .0775 $ .0675 $ .2325 $ .2025 Average shareholders' equity $19,629 $17,409 $19,109 $17,349 Return for the period on average shareholders' equity 5.14% 4.55% 15.02% 12.91% Average number of common shares: Basic 2,231 2,253 2,235 2,262 Dilutive 2,246 2,263 2,251 2,266
[FN] See accompanying notes to condensed consolidated financial statements. WAL-MART STORES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in millions)
Nine Months Ended October 31, 1998 1997 Cash flows from operating activities: Net income $ 2,871 $ 2,239 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,400 1,178 Increase in inventories ( 4,136) ( 3,221) Increase in accounts payable 2,304 2,405 Increase in accrued liabilities 741 1,027 Noncash items and other ( 504) ( 380) Net cash provided by operating activities 2,676 3,248 Cash flows from investing activities: Payments for property, plant & equipment ( 2,652) ( 1,894) Acquisitions ( 47) ( 770) Other investing activities 69 72 Net cash used in investing activities ( 2,630) ( 2,592) Cash flows from financing activities: Increase in commercial paper 1,890 1,523 Proceeds from issuance of long-term debt 521 - Dividends paid ( 520) ( 459) Payment of long-term debt ( 1,046) ( 523) Purchase of Company stock ( 1,117) ( 1,367) Other financing activities ( 212) 15 Net cash used in financing activities ( 484) ( 811) Net decrease in cash and cash equivalents ( 438) ( 155) Cash and cash equivalents at beginning of year 1,447 883 Cash and cash equivalents at end of period $ 1,009 $ 728 Supplemental disclosure of cash flow information: Income tax paid $ 2,227 $ 1,396 Interest paid 581 598 Capital lease obligations incurred 203 176
[FN] See accompanying notes to condensed consolidated financial statements. WAL-MART STORES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. Basis of Presentation The condensed consolidated balance sheet as of October 31, 1998, and the related condensed consolidated statements of income for the three and nine month periods ended October 31, 1998, and 1997, and the statements of cash flow for the nine month periods ended October 31, 1998, and 1997, are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the financial statements have been included. The adjustments consisted only of normal recurring items. Interim results are not necessarily indicative of results for a full year. Certain reclassifications have been made to the prior year's income statements to conform to current presentation. The financial statements and notes are presented in accordance with the rules and regulations of the Securities and Exchange Commission and do not contain certain information included in the Company's annual report. Therefore, the interim statements should be read in conjunction with the Company's annual report for the fiscal year ended January 31, 1998. NOTE 2. Inventories The Company uses the retail last-in, first-out (LIFO) method for the Wal-Mart Stores segment, cost LIFO for the Sam's Club segment, and other cost methods for the International segment. Inventories are not in excess of market value. Quarterly inventory determinations under LIFO are partially based on assumptions as to inventory levels at the end of the fiscal year, sales and the rate of inflation for the year. If the first- in, first-out (FIFO) method of accounting had been used by the Company, inventories at October 31, 1998, would have been $428 million higher than reported, an increase in the LIFO reserve of $80 million from January 31, 1998, and an increase of $25 million from July 31, 1998. If the FIFO method had been used at October 31, 1997, inventories would have been $344 million higher than reported, an increase in the LIFO reserve of $48 million from January 31, 1997, and an increase of $30 million from July 31, 1997. NOTE 3. Net Income Per Share The Company presents basic and dilutive net income per share according to guidance established in Statement of Financial Accounting Standards No. 128, "Earnings Per Share." Statement 128 replaces primary and fully dilutive net income per share with basic and dilutive net income per share. Unlike primary net income per share, basic net income per share excludes any dilutive effect of stock options. Basic and dilutive net income per share for all periods presented are the same as previously reported. Basic net income per share is based on the weighted average outstanding common shares. Dilutive net income per share is based on the weighted average outstanding common shares reduced by the dilutive effect of stock options. NOTE 4. Segments The Company is principally engaged in the operation of mass merchandising stores that serve customers primarily through the operation of three segments. The Company identifies its segments based on management responsibility within the United States and geographically for all international units. The Wal-Mart Stores segment includes the Company's discount stores and Supercenters in the United States. The Sam's Club segment includes the warehouse membership clubs in the United States. The International segment includes all operations in Argentina, Brazil, Canada, China, Germany, Korea, Mexico and Puerto Rico. The revenues in the "Corporate and Other" category result from sales to third parties by McLane Company, Inc., a wholesale distributor. Revenues by operating segment were as follows (in millions):
Three Months Ended Nine Months Ended October 31, October 31, 1998 1997 1998 1997 Wal-Mart Stores $23,244 $20,495 $67,214 $59,089 Sam's Club 5,589 5,062 16,316 14,824 International 2,961 1,781 8,514 4,555 Corporate and Other 1,715 1,439 4,805 4,104 Total Revenues $33,509 $28,777 $96,849 $82,572
Operating profit and reconciliation to income before income taxes, minority interest and equity in unconsolidated subsidiaries are as follows (in millions):
Three Months Ended Nine Months Ended October 31, October 31, 1998 1997 1998 1997 Wal-Mart Stores $ 1,640 $ 1,347 $ 4,827 $ 3,863 Sam's Club 172 138 471 398 International 109 52 315 85 Corporate and Other ( 68) ( 48) (321) (163) Operating profit 1,853 1,489 5,292 4,183 Interest expense 202 198 581 579 Income before income taxes, minority interest and equity in unconsolidated subsidiaries $ 1,651 $ 1,291 $ 4,711 $ 3,604
NOTE 5. Comprehensive Income As of February 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income". This statement establishes standards for reporting and display of comprehensive income and its components. Comprehensive income is net income, plus certain other items that are recorded directly to shareholders' equity, bypassing net income. The only such item currently applicable to the Company is foreign currency translation adjustments. Comprehensive income was $986 million and $766 million for the quarters ended October 31, 1998 and 1997, respectively, and was $2,816 million and $2,193 million for the nine months ended October 31, 1998 and 1997, respectively. The adoption of this Statement had no effect on the Company's results of operations or financial position. NOTE 6. Acquisition In July 1998, the Company extended its presence in Asia with an investment in Korea. The Company acquired a majority interest in four units as well as six undeveloped sites for approximately $179 million. The four units were previously operated by Korea Makro. The purchase price included $130 million for newly issued shares in the acquired company. The proceeds were used to reduce debt and to provide for working capital needs. The transaction has been accounted for as a purchase. The net assets and liabilities acquired are recorded at fair value. The Company is evaluating the useful life of the resulting goodwill and will amortize the goodwill over that period. The results of operations since the effective date of the acquisition have been included in the Company's results. The transaction should not have a material impact on the fiscal 1999 consolidated operating results. Pro forma results of operations are not presented due to the insignificant differences from the historical results. NOTE 7. Pre-opening costs During the second quarter, the Company adopted Statement of Position (SOP) 98-5, "Reporting on the Costs of Start-Up Activities". The SOP requires that the costs of start-up activities, including organization costs, be expensed as incurred. The impact of the adoption of SOP 98-5 was $8 million net of taxes. Due to the immateriality to the Company's results of operations, the initial application was not reported as a cumulative effect of a change in an accounting principle. NOTE 8. Subsequent event On December 9, 1998, the Company announced that it had reached an agreement to purchase 74 units of the Interspar hypermarket chain in Germany. Pending government approval, the agreement is expected to be final by the end of December. The units are being acquired from Spar Handels AG, a German company that owns multiple retail formats and wholesale operations throughout Germany. If consummated, the transaction should not have a material impact on the fiscal 1999 consolidated operating results. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WAL-MART STORES, INC. Date: December 21, 1998 /s/David D. Glass________________ David D. Glass President and Chief Executive Officer Date: December 21, 1998 /s/John B. Menzer________________ John B. Menzer Executive Vice President and Chief Financial Officer EX-27 2
5 9-MOS JAN-31-1999 OCT-31-1998 1,009 0 1,401 0 20,620 23,518 30,071 7,030 51,239 19,353 0 0 0 222 19,492 51,239 96,849 97,961 76,328 93,250 0 0 581 4,711 1,743 2,871 0 0 0 2,871 1.28 1.28
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