Walmart's 2013 Financial Report

In fiscal 2013, Walmart continued its long history of delivering strong results for our customers and shareholders. In fact, over the last decade, Walmart grew sales by approximately 7 percent on a compounded annual rate, earnings per share by approximately 11 percent on a compounded annual rate, and returned close to $100 billion to shareholders in the form of dividends and share repurchases. We are proud of our record of consistent and strong performance, even during times when the global economy was volatile. Walmart continues to create value because our strategies are guided by our financial priorities — growth, leverage and returns.

We're excited about Walmart's future growth opportunities from a combination of comp store sales, new stores and e-commerce. We're gaining market share across almost every country in which we operate. And in food and grocery — our largest part of the overall business — we continue to gain share as well. Our fiscal 2014 capital expenditure plan is to spend between $12 billion and $13 billion. This capital plan includes continued growth in new stores, logistics and supply chain expansion, investments to drive productivity and reduce expenses, and Global eCommerce expansion. Our three operating segments are projected to add between 36 million and 40 million retail square feet this year. Two fundamental operating principles — Everyday Low Cost (EDLC) and Everyday Low Price (EDLP) — underpin our ability to grow profitably. Offering everyday low prices on a broad merchandise assortment builds customer trust and resonates with consumers globally.

Our three operating segments are projected to add between 36 million and 40 million retail square feet this year. Two fundamental operating principles — Everyday Low Cost (EDLC) and Everyday Low Price (EDLP) – underpin our ability to grow profitably.

Walmart's commitment to leverage expenses (to reduce operating expenses as a percentage of sales) is the foundation of driving the productivity loop. With the savings from lowering costs, we are able to invest in price, drive greater traffic to our stores and our e-commerce sites, grow sales and deliver strong financial results. In fact, achieving greater productivity through EDLC is central to the Walmart business model that Sam Walton put in place in 1962, when he opened the first store in Rogers, Arkansas. We're pleased that in fiscal 2013, Walmart successfully leveraged operating expenses for a third consecutive year. We've also made a conscientious effort to improve capital expenditure efficiency by being disciplined in new store and club openings and lowering the cost of remodels. These productivity gains are made possible by the innovative ideas and the hard work of our 2.2 million associates worldwide. Their collective efforts in tightly managing costs result in lower prices for our customers, strong profitability and greater value for our shareholders.

Delivering strong returns to shareholders remains a top priority for Walmart. Our AA credit rating is a testament to Walmart's strong cash flows, disciplined financial management and the strength of our underlying business. This strength allows us to invest in growth and provide strong returns by way of dividends and share repurchases. Walmart's annual dividend per share has increased about 18 percent on average over the last decade, and we've returned over $60 billion in share repurchases and dividends over the last five years alone.

In the next section, you can review our financial results and see more clearly how we are delivering shareholder value through our focus on growth, leverage and returns. All of us at Walmart are proud of what we have accomplished and are excited about our future opportunities. We're confident that our strong financial position, along with our EDLC and EDLP operating model, will continue to produce solid results for our shareholders.

Sincerely,

Charles M. Holley, Jr.
Executive Vice President and
Chief Financial Officer
Wal‑Mart Stores, Inc.