- Q4 Reported EPS was
$0.96, Exceeding Recent Guidance - Underlying EPS was $1.03, Exceeding First Call Consensus Estimate - FY09 Reported EPS was $3.35; Underlying EPS was $3.42- Record Full-Year Free Cash Flow of $11.6 Billion
Reported diluted earnings per share from continuing operations ("reported EPS") for the fourth quarter of fiscal year 2009 were
Net sales for the fiscal year were
"Our performance relative to competitors was exceptionally strong in the fourth quarter and throughout the year. We expect this momentum to continue," Duke said. "We finished the year with a strong balance sheet, record free cash flow of
A reconciliation of free cash flow (a non-GAAP measure) is attached at the end of this release.
Net Sales Net sales were as follows (dollars in billions): Three Months Ended Twelve Months Ended January 31, January 31, Percent Percent 2009 2008 Change 2009 2008 Change Net Sales: Walmart U.S. $71.464 $67.428 6.0% $255.745 $239.529 6.8% International 24.696 26.949 -8.4% 98.645 90.421 9.1% Sam's Club 11.836 11.831 0.0% 46.854 44.357 5.6% Total Company $107.996 $106.208 1.7% $401.244 $374.307 7.2%
Segment Operating Income
Segment operating income from continuing operations, which is defined as income before net interest expense, income taxes, unallocated corporate overhead, minority interest and discontinued operations for each operating segment, was as follows (dollars in billions):
Three Months Ended Twelve Months Ended January 31, January 31, Percent Percent 2009 2008 Change 2009 2008 Change Segment Operating Income: Walmart U.S. $5.400 $5.286 2.2% $18.763 $17.516 7.1% International 1.490 1.739 -14.3% 4.940 4.725 4.6% Sam's Club 0.427 0.444 -3.8% 1.610 1.618 -0.5%
Comparable Store Sales
The company reports comparable store sales in this earnings release based on the calendar months in the quarters and the 12-month periods ended
Jan. 31, 2009and 2008. The 2009 fiscal year benefited from the addition of one sales day on Feb. 29, due to leap year. Comparable store sales for the United Stateswere as follows: Without Fuel With Fuel Fuel Impact Three Months Three Months Three Months Ended Ended Ended January 31, January 31, January 31, 2009 2008 2009 2008 2009 2008 Walmart U.S. 2.8% 1.6% 2.8% 1.6% 0.0% 0.0% Sam's Club 2.5% 2.5% -0.9% 5.0% -3.4% 2.5% Total U.S. 2.8% 1.7% 2.3% 2.1% -0.5% 0.4% Without Fuel With Fuel Fuel Impact Twelve Months Twelve Months Twelve Months Ended Ended Ended January 31, January 31, January 31, 2009 2008 2009 2008 2009 2008 Walmart U.S. 3.2% 1.0% 3.2% 1.0% 0.0% 0.0% Sam's Club 3.6% 4.2% 4.8% 4.9% 1.2% 0.7% Total U.S. 3.3% 1.4% 3.5% 1.6% 0.2% 0.2%
The company expects reported EPS to be between
"Our guidance reflects the strength of our underlying business and global economic conditions," said
The financial statements reflect the disposal of
After this earnings release has been furnished to the SEC, a pre-recorded call offering additional comments on the quarter will be available to all investors. Callers may listen to this call by dialing 203-369-1090. The information included in this release, including reconciliations, and the pre-recorded phone call is available in the investor information area on the Company's Web site at www.walmartstores.com/investors.
This release contains statements as to our management's expectations regarding the momentum of the company's performance continuing and as to our company remaining well positioned to serve its customers in the challenging economic environment, management's expectations for the company's reported EPS for the first quarter of fiscal year 2010 and for all of fiscal year 2010 and certain factors underlying those expectations, management's expectations for the impact of currency exchange rates on the company's earnings for the first three quarters of fiscal year 2010, and management's guidance as to the company's comparable store sales increase in the
Wal-Mart Stores, Inc. Condensed Consolidated Statements of Income (Unaudited) (Amounts in millions except per share data) SUBJECT TO RECLASSIFICATION Three Months Ended Twelve Months Ended January 31, January 31, 2009 2008 2009 2008 Revenues: Net sales $107,996 $106,208 $401,244 $374,307 Membership and other income 1,120 1,135 4,363 4,169 109,116 107,343 405,607 378,476 Costs and expenses: Cost of sales 82,601 81,277 306,158 286,350 Operating, selling, general and administrative expenses 20,138 19,190 76,651 70,174 Operating income 6,377 6,876 22,798 21,952 Interest: Debt 494 537 1,896 1,863 Capital leases 66 66 288 240 Interest income (68) (63) (284) (309) Interest, net 492 540 1,900 1,794 Income from continuing operations before income taxes and minority interest 5,885 6,336 20,898 20,158 Provision for income taxes 1,959 2,125 7,145 6,889 Income from continuing operations before minority interest 3,926 4,211 13,753 13,269 Minority interest (134) (101) (499) (406) Income from continuing operations 3,792 4,110 13,254 12,863 (Loss) income from discontinued operations, net of tax - (14) 146 (132) Net income $3,792 $4,096 $13,400 $12,731 Net income per common share: Basic income per common share from continuing operations $0.97 $1.03 $3.36 $3.16 Basic income (loss) per common share from discontinued operations - - 0.04 (0.03) Basic net income per common share $0.97 $1.03 $3.40 $3.13 Diluted income per common share from continuing operations $0.96 $1.03 $3.35 $3.16 Diluted (loss) income per common share from discontinued operations - (0.01) 0.04 (0.03) Diluted net income per common share $0.96 $1.02 $3.39 $3.13 Weighted-average number of common shares: Basic 3,924 3,992 3,939 4,066 Diluted 3,936 3,998 3,951 4,072 Dividends declared per common share $- $- $0.95 $0.88 Wal-Mart Stores, Inc. Condensed Consolidated Balance Sheets (Unaudited) (Amounts in millions) SUBJECT TO RECLASSIFICATION January 31, January 31, 2009 2008 ASSETS Current assets: Cash and cash equivalents $7,275 $5,492 Receivables 3,905 3,642 Inventories 34,511 35,159 Prepaid expenses and other 3,063 2,760 Current assets of discontinued operations 195 967 Total current assets 48,949 48,020 Property and equipment, at cost: Property and equipment, at cost 125,020 122,256 Less accumulated depreciation (32,164) (28,531) Property and equipment, net 92,856 93,725 Property under capital lease: Property under capital lease 5,341 5,736 Less accumulated amortization (2,544) (2,594) Property under capital leases, net 2,797 3,142 Goodwill 15,260 15,879 Other assets and deferred charges 3,567 2,748 Total assets $163,429 $163,514 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Commercial paper $1,506 $5,040 Accounts payable 28,849 30,344 Accrued liabilities 18,112 15,725 Accrued income taxes 677 1,000 Long-term debt due within one year 5,848 5,913 Obligations under capital leases due within one year 315 316 Current liabilities of discontinued operations 83 140 Total current liabilities 55,390 58,478 Long-term debt 31,349 29,799 Long-term obligations under capital leases 3,200 3,603 Deferred income taxes and other 6,014 5,087 Minority interest 2,191 1,939 Commitments and contingencies Shareholders' equity: Common stock and capital in excess of par value 4,313 3,425 Retained earnings 63,660 57,319 Accumulated other comprehensive income (2,688) 3,864 Total shareholders' equity 65,285 64,608 Total liabilities and shareholders' equity $163,429 $163,514 Wal-Mart Stores, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (Amounts in millions) Twelve Months Ended SUBJECT TO RECLASSIFICATION January 31, 2009 2008 Cash flows from operating activities: Net income $13,400 $12,731 (Income) loss from discontinued operations, net of tax (146) 132 Income from continuing operations 13,254 12,863 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization 6,739 6,317 Other 1,849 902 Changes in certain assets and liabilities, net of effects of acquisitions: Increase in accounts receivable (101) (564) Increase in inventories (220) (775) (Decrease) increase in accounts payable (410) 865 Increase in accrued liabilities 2,036 1,034 Net cash provided by operating activities 23,147 20,642 Cash flows from investing activities: Payments for property and equipment (11,499) (14,937) Proceeds from disposal of property and equipment 714 957 Proceeds from (payments for) disposal of certain international operations, net 838 (257) Investment in international operations, net of cash acquired (1,576) (1,338) Other investing activities 781 (95) Net cash used in investing activities (10,742) (15,670) Cash flows from financing activities: (Decrease) increase in commercial paper, net (3,745) 2,376 Proceeds from issuance of long-term debt 6,566 11,167 Payment of long-term debt (5,387) (8,723) Dividends paid (3,746) (3,586) Purchase of Company stock (3,521) (7,691) Other financing activities (85) (965) Net cash used in financing activities (9,918) (7,422) Effect of exchange rates on cash (781) 252 Net increase (decrease) in cash and cash equivalents 1,706 (2,198) Cash and cash equivalents at beginning of year (1) 5,569 7,767 Cash and cash equivalents at end of period (2) $7,275 $5,569 (1) Includes cash and cash equivalents of discontinued operations of
$77 millionand $51 millionat January 31, 2008and 2007, respectively. (2) Includes cash and cash equivalents of discontinued operations of $77 millionat January 31, 2008.
Reconciliation of and Other Information regarding Non-GAAP Financial Measures
(In Millions, except per share data)
The following information provides reconciliations of non-GAAP financial measures presented in the press release, to which this reconciliation is attached, to the most nearly comparable financial measures calculated and presented in accordance with general accepted accounting principles ("GAAP"). The company has provided the non-GAAP financial information presented in the press release, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in the press release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the press release. The non-GAAP financial measures in the press release may differ from similar measures used by other companies.
Underlying Diluted Earnings Per Share from Continuing Operations
As used in the press release referred to above, the company defines its underlying earnings per share from continuing operations (underlying EPS) for the periods presented as its reported diluted income per common share from continuing operations for those periods calculated in accordance with generally accepted accounting principles adjusted to exclude the effect of the charges from its settlement of 63 U.S. class action wage and hour lawsuits that it accrued in the three months ended
This non-GAAP financial measure provides investors with an understanding of our diluted income per common share from continuing operations adjusted to exclude the effect of the charges described above and assists investors in making a ready comparison of the company's diluted income per common share from continuing operations for its fiscal year ended
The following table reconciles diluted income per common share from continuing operations for the periods presented, a GAAP financial measure, to underlying EPS, a non-GAAP financial measure.
Three Months Twelve Months Ended Ended January 31, January 31, 2009 2008 2009 2008 Income from continuing operations $3,792 $4,110 $13,254 $12,863 After-tax effect of charge for litigation settlement 255 - 251 - Underlying income from continuing operations $4,047 $4,110 $13,505 $12,863 Diluted income per common share from continuing operations $0.96 $1.03 $3.35 $3.16 Per common share effect of charge for litigation settlement 0.07 - 0.07 - Underlying EPS $1.03 $1.03 $3.42 $3.16 Free Cash Flow
The company defines free cash flow as net cash provided by operating activities in the period for which free cash flow is presented minus payments for property and equipment made in that period. Free cash flow is considered a non-GAAP financial measure under the SEC's rules. Management of the company believes that free cash flow is an important financial measure for use in evaluating the company's financial performance, as it measures the company's ability to generate additional cash from its business operations. Free cash flow should be considered in addition to, rather than as a substitute for, net income as a measure of the company's performance and net cash provided by operating activities as a measure of its liquidity.
The company's definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations. Therefore, the company believes it is important to view free cash flow as a measure that provides supplemental information to the company's entire statement of cash flows.
The following table reconciles net cash provided by operating activities, a GAAP financial measure, to free cash flow, a non-GAAP financial measure.
Twelve Months Ended (Amounts in millions) January 31, 2009 January 31, 2008
Net cash provided by operating activities $23,147 $20,642 Payments for property and equipment (11,499) (14,937) Free cash flow $11,648 $5,705 Net cash used in investing activities $(10,742) $(15,670) Net cash used in financing activities $(9,918) $(7,422)
Comparable Store Sales Excluding Fuel Sales
The company presents its comparable store sales in the
Wal-Mart Stores, Inc.