11-K: Annual report of employee stock purchase, savings and similar plans
Published on July 29, 2008
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
11-K
(Mark
One)
|
x
|
Annual
Report Pursuant to Section 15(d) of the Securities Exchange Act of
1934
|
For
the fiscal year ended January 31, 2008.
or
|
¨
|
Transaction
Report Pursuant to Section 15(d) of the Securities Exchange Act of
1934
|
For
the transition period from
to .
Commission
file number 1-6991
|
A.
|
Full
title of the plan and the address of the plan, if different from that of
the issuer named below:
|
WAL-MART PROFIT
SHARING AND 401(k) PLAN
|
B.
|
Name of issuer of the securities held pursuant to the plan
and the address of its principal executive
office:
|
WAL-MART
STORES, INC.
702
Southwest Eighth Street
Bentonville,
Arkansas 72716
Financial
Statements
and
Supplemental Schedule
Wal-Mart
Profit Sharing and 401(k) Plan
As
of January 31, 2008 and 2007, and for the year ended January 31,
2008
Wal-Mart
Profit Sharing and 401(k) Plan
Financial
Statements and
Supplemental
Schedule
As of
January 31, 2008 and 2007, and for the year ended January 31, 2008
Contents
Report of
Independent Registered Public Accounting
Firm 3
Audited
Financial Statements
Statements
of Net Assets Available for
Benefits 4
Statement
of Changes in Net Assets Available for
Benefits 5
Notes to
Financial
Statements 6
Supplemental
Schedule
Schedule
H, Line 4i—Schedule of Assets (Held at End of
Year) 16
Report of
Independent Registered Public Accounting Firm
The
Retirement Plans Committee
Wal-Mart
Profit Sharing and 401(k) Plan
We have
audited the accompanying statements of net assets available for benefits of the
Wal-Mart Profit Sharing and 401(k) Plan as of January 31, 2008 and 2007, and the
related statement of changes in net assets available for benefits for the year
ended January 31, 2008. These financial statements are the responsibility
of the Plan's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform an
audit of the Plan's internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plan's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for benefits of the Plan at January
31, 2008 and 2007, and the changes in its net assets available for benefits for
the year ended January 31, 2008, in conformity with U.S. generally accepted
accounting principles.
Our
audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of January 31, 2008 is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst &
Young LLP
July 28,
2008
Rogers,
Arkansas
3
Wal-Mart
Profit Sharing and 401(k) Plan
Statements
of Net Assets Available for Benefits
(In
Thousands)
|
January
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Assets
|
||||||||
|
Investments
(at fair value)
|
$ | 10,018,942 | $ | 9,016,525 | ||||
|
Wrapper
contracts (at fair value)
|
157 | 237 | ||||||
|
Receivables:
|
||||||||
|
Company
contributions
|
936,375 | 870,592 | ||||||
|
Due
from broker
|
4,439 | 1,456 | ||||||
|
Other
receivables
|
532 | 246 | ||||||
|
Total
receivables
|
941,346 | 872,294 | ||||||
|
Cash
|
2,119 | 9,928 | ||||||
|
Net
assets available for benefits (at fair value)
|
10,962,564 | 9,898,984 | ||||||
|
Adjustments
from fair value to contract value for fully benefit-responsive
investment contracts
|
6,750 | 23,894 | ||||||
|
Net
assets available for benefits
|
$ | 10,969,314 | $ | 9,922,878 | ||||
See
accompanying notes.
4
Wal-Mart
Profit Sharing and 401(k) Plan
Statement
of Changes in Net Assets Available for Benefits
(In
Thousands)
|
Year
Ended January 31, 2008
|
||||
|
Additions
|
||||
|
Company
contributions
|
$ | 932,019 | ||
|
Associate
contributions
|
419,813 | |||
|
Interest
and dividend income
|
356,667 | |||
|
Net
appreciation in fair value of investments
|
115,191 | |||
|
Other,
net
|
7,719 | |||
|
Total
additions
|
1,831,409 | |||
|
Deductions
|
||||
|
Benefit
payments
|
780,276 | |||
|
Administrative
expenses
|
4,697 | |||
|
Total
deductions
|
784,973 | |||
|
Net
increase
|
1,046,436 | |||
|
Net
assets available for benefits at beginning of year
|
9,922,878 | |||
|
Net
assets available for benefits at end of year
|
$ | 10,969,314 | ||
See
accompanying notes.
5
Wal-Mart
Profit Sharing and 401(k) Plan
Notes to
Financial Statements
January
31, 2008
1.
Description of the Plan
The
following description of the Wal-Mart Profit Sharing and 401(k) Plan (the
“Plan”) provides only general information regarding the Plan as in effect on
January 31, 2008. This document is not part of the Summary Plan Description and
is not a document pursuant to which the Plan is maintained within the meaning of
Section 402(a)(1) of the Employee Retirement Income Security Act of 1974
(“ERISA”), as amended. Participants should refer to the Plan document for a
complete description of the Plan’s provisions. To the extent not specifically
prohibited by statute or regulation, Wal-Mart Stores, Inc. (“Wal-Mart” or the
“Company”) reserves the right to unilaterally amend, modify or terminate the
Plan at any time; such changes may be applied to all Plan participants and their
beneficiaries regardless of whether the participant is actively working or
retired at the time of the change. The Plan may not be amended, however, to
permit any part of the Plan’s assets to be used for any purpose other than for
the purpose of paying benefits to participants and their beneficiaries and
paying Plan expenses.
General
The Plan
is a defined contribution plan which was established by the Company on February
1, 1997 as the Wal-Mart Stores, Inc. 401(k) Retirement Savings
Plan. The Plan was amended, effective October 31, 2003, to merge the
assets of the Wal-Mart Stores, Inc. Profit Sharing Plan applicable to United
States participants into the Plan. In connection with the merger, the Plan was
renamed the Wal-Mart Profit Sharing and 401(k) Plan.
A
participant in the Plan as of October 31, 2003, shall continue to be a
participant hereunder from and after November 1, 2003, as long as such
individual continues to be eligible. Each eligible employee who was not a
participant in the Plan as of October 31, 2003, and has completed at least 1,000
hours of service in a consecutive 12-month period commencing on date of hire (or
during any plan year) is eligible to participate in the Plan. Participation may
begin on the first day of the month following eligibility. The Plan is subject
to the provisions of ERISA.
The
responsibility for operation, investment policy and administration of the Plan
(except for day-to-day investment management and control of assets) is vested in
the Retirement Plans Committee of the Plan. Retirement Plans
Committee members are appointed by the Company’s Vice-President, Benefits
Planning and Design, with ratification of a majority of sitting committee
members.
The
trustee function of the Plan is performed by Merrill Lynch Investment Managers,
LLC (the “Trustee”). The Trustee receives and holds contributions made to the
Plan in a trust and invests those contributions as directed by participants and
according to the policies established by the Retirement Plans
Committee. The Trustee makes payouts from the Plan in accordance with
the Plan document. The Trustee is affiliated with Merrill Lynch, Pierce, Fenner
& Smith, Inc., the parent corporation of the Trustee. The Trustee
is also affiliated with BlackRock Investment Management, LLC, manager of the
Merrill Lynch Equity Index Fund, Merrill Lynch Small Cap Index Fund and the
Merrill Lynch Retirement Preservation Fund, which are investment options offered
under the Plan to participants. The Trustee is the record-keeper for the
Plan.
Contributions
All
eligible associates participate in the Plan and may elect to contribute from one
percent to 50 percent of their eligible wages. Certain highly compensated
associate contributions may be further limited under the terms of the
Plan. Participants who have attained age 50 before the end of the
calendar year are eligible to make catch-up contributions. Participants may
also contribute amounts representing distributions from other qualified defined
benefit or defined contribution plans (rollover contributions). Whether or
not a participant contributes to the Plan, he or she will receive a portion of
the Company’s Qualified Non-Elective contribution and Profit Sharing
contribution if the participant completes at least 1,000 hours of service during
the Plan year for which the contributions are made and is employed on the last
day of that Plan year.
Wal-Mart’s
contributions are discretionary and can vary from year to year. At the end of
each Plan year, the Board of Directors of the Company, or its authorized
committee or delegate, at their discretion, determines the Company’s
contributions, if any. The Company’s contribution for each participant will be
based on a percentage of the participant’s eligible wages for the Plan year. For
the Plan year ended January 31, 2008, the discretionary contribution percentage
was two percent of eligible participants’ compensation for each of the Company’s
Qualified Non-Elective contribution and the Company’s Profit Sharing
contribution. Such contributions are subject to certain limitations in
accordance with provisions of the Internal Revenue Code (the
“Code”).
6
Wal-Mart
Profit Sharing and 401(k) Plan
Notes to
Financial Statements (continued)
January
31, 2008
1.
Description of the Plan (continued)
Participant
Accounts
Each
participant’s account is credited with earnings (losses) net of administrative
expenses which are determined by the investments held in each participant’s
account; the participant’s contribution; and an allocation of (a) the Company’s
contributions to the Plan made on the participant’s behalf; and (b) forfeited
balances of terminated participants’ nonvested Profit Sharing contributions and
forfeited unclaimed checks. Allocations of forfeitures to participants are based
on eligible wages. As of January 31, 2008 and 2007, forfeited nonvested Profit
Sharing contributions and unclaimed check forfeitures to be reallocated to the
remaining participants totaled approximately $43 million and $40 million,
respectively.
Vesting
Participants
are immediately vested in all elective contributions, catch-up contributions,
Qualified Non-Elective contributions, rollover contributions, tax credit
contributions and Profit Sharing Plan rollover contributions. Through January
30, 2008, a participant’s Profit Sharing contributions vested based on years of
service at a rate of 20% per year from years three through seven. Effective
January 31, 2008, a partcipant’s contributions vest starting at 20% at two years
of service and increasing 20% each year until fully vested at the end of year
six. The new vesting schedule applies to Company contributions to the
Plan for the year ending January 31, 2008, which were paid in March 2008,
and to account balances of participants employed on or after that
date. Profit Sharing contributions become fully vested upon
Participant retirement at age 65 or above, total and permanent disability, or
death.
Payment
of Benefits and Withdrawals
Generally,
payment upon a participant’s separation from the Company (and its controlled
group members) is a lump-sum payment in cash for the balance of the
participant’s vested account. However, participants may elect to receive a
single lump-sum payment of their Profit Sharing contributions in whole shares of
Company common stock, with partial or fractional shares paid in cash even if
such contributions are not invested in Company common stock. Participants may
also elect to receive a single lump-sum payment of their Qualified Non-Elective
contribution in whole shares of Company common stock, with partial or fractional
shares paid in cash, but only to the extent such contributions are invested in
Company common stock as of the date distributions are processed. To the extent
the participant’s Profit Sharing and Qualified Non-Elective contributions are
not invested in Company common stock, the contributions will automatically be
distributed in cash, unless directed otherwise by the participant. Participants
may also elect to rollover their account balance into a different tax-qualified
retirement plan or individual retirement account upon separation from the
Company (and its controlled group members).
The Plan
permits withdrawals of active participants’ salary reduction contributions and
rollover contributions only in amounts necessary to satisfy financial hardship
as defined by the Internal Revenue Service (“IRS”). In-service withdrawal of
vested balances may be elected by participants who have reached 69 1/2 years of
age.
Plan
Termination
While
there is no intention to do so, the Company may discontinue the Plan subject to
the provisions of ERISA. In the event of complete or partial Plan termination,
or discontinuance of
contributions to the Plan, participants’ accounts shall become fully vested. The
Plan shall remain in effect (unless it is specifically terminated) and the
assets shall be administered in the manner provided by the terms of the trust
agreement and distributed as soon as administratively feasible.
Investment
Options
A
participant may direct the Trustee to invest any portion of his/her elective
contributions, catch-up contributions, Qualified Non-Elective contributions and
rollover contributions in available investment options. Participant investment
options include a variety of mutual funds, common/collective trusts and a stable
value fund, which consists of a money market fund, a common/collective trust and
traditional and synthetic guaranteed investment contracts. Wal-Mart
common stock was removed as an investment option on June 15,
2007. Participants may change their selections at any
time.
Participants’
Profit Sharing contributions and Profit Sharing Plan rollover contributions are
invested at the direction of the Retirement Plans Committee for participants
with less than three years of service. Participants with at least
three years of service may direct the Trustee to invest such contributions in
available investment options, including a variety of mutual funds,
common/collective trusts, Wal-Mart common stock, and a stable value fund, which
consists of a money market fund, a common/collective trust, and traditional and
synthetic guaranteed investment contracts.
Participant
investments not directed by the associate are invested by the Trustee as
directed by the Retirement Plans Committee.
7
Wal-Mart
Profit Sharing and 401(k) Plan
Notes to
Financial Statements (continued)
January
31, 2008
2.
Summary of Accounting Policies
Basis
of Accounting
Shares of
mutual funds are valued at published prices which represent the net asset values
of shares held by the Plan at year end. Shares of money market funds
are stated at cost which approximates fair value. Wal-Mart common stock is
stated at fair value, which equals the exchange quoted market price on the last
business day of the year. Investments in common/collective trust funds are
stated at the fair value of the underlying assets determined by the Trustee.
Traditional and synthetic guaranteed investment contracts held by the Plan
through a stable value fund are considered to be fully benefit-responsive and
are recorded at fair value, then adjusted to contract value (Note 3). Contract
value represents contributions made under the contract, plus interest at the
contract rates, less withdrawals. Purchases and sales are recorded on a
trade-date basis. Dividends are recorded on the ex-dividend date. Benefit
payments are recorded when paid. Company contributions are recorded by the Plan
in the period in which they were accrued by the Company. Company contributions
to the Plan related to the year ending January 31, 2008, were paid in March
2008.
Use
of Estimates
The
preparation of the financial statements in conformity with U.S. generally
accepted accounting principles requires Plan management to use estimates and
assumptions that affect the amounts reported in the accompanying financial
statements and notes. Actual results could differ from these
estimates.
Reclassifications
Certain
prior year amounts have been reclassified to conform to current year
presentations. Non-participant-directed investments in Note 5 as of
January 31, 2007 have been reclassified to exclude a portion of
participant-directed investments.
Fully
Benefit-Responsive Investment Contracts
In
December 2005, the Financial Accounting Standards Board (FASB) issued FASB Staff
Position AAG INV-1 and Statement of Position (SOP) 94-4-1, Reporting of Fully
Benefit-Responsive Investment Contracts Held by Certain Investment Companies
Subject to the AICPA Investment Company Guide and Defined-Contribution Health
and Welfare and Pension Plans (the FSP). The FSP defines the
circumstances in which an investment contract is considered fully
benefit-responsive and provides certain reporting and disclosure requirements
for fully benefit-responsive investment contracts in defined contribution health
and welfare and pension plans. Investments in the accompanying
statements of net assets available for benefits include fully benefit-responsive
investment contracts recognized at fair value with a corresponding adjustment to
reflect these investments at contract value.
Recent
Accounting Pronouncements
In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157, Fair Value
Measurements (SFAS 157). This standard defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles and expands required disclosures about fair value
measurements. The Statement is effective for plan years beginning
after November 15, 2007. The Plan will adopt SFAS 157 on February 1,
2008. The adoption of SFAS 157 is not expected to have a material
impact on the Plan’s net assets and changes in net assets, but additional
disclosures are expected to be required.
3.
Retirement Preservation Fund Investments
The
Plan’s Retirement Preservation Fund (“RPF” or the "Fund") is a stable value
investment option for the Plan’s participants only. The RPF is invested in a
money market fund, a common/collective trust (the “Retirement Preservation
Trust”), traditional guaranteed investment contracts (“GICs”), and synthetic
GICs. Average duration for all investment contracts was 2.7 years at January 31,
2008 and 2007. There are no reserves against the contract value for credit risk
of the contracted issuer or otherwise.
8
Wal-Mart
Profit Sharing and 401(k) Plan
Notes to
Financial Statements (continued)
January
31, 2008
3.
Retirement Preservation Fund Investments (continued)
Traditional
GICs issued by an insurance company are valued by calculating the sum of the
present values of all projected future cash flows of each
investment. The discount rate used is provided by other similar
maturity investment contracts at year-end. The fair values of the
synthetic GIC wrapper contracts are determined by the difference between the
present value of the replacement cost of the wrapper contract and the present
value of the contractually obligated payments in the original wrapper
contract. The underlying investments in the synthetic GICs are debt
securities that are traded primarily in over-the-counter markets and are valued
at the last available bid price in the over-the-counter market or on the basis
of values obtained by a pricing service. Pricing services use
valuation matrixes that incorporate both dealer-supplied valuations and
valuation models.
The RPF
enters into book value investment contracts ("BVCs"), also known as synthetic
investment contracts. BVCs are comprised of both investment and
contractual components. The investment component consists of
collective investment funds and a pooled portfolio of actively managed fixed
income securities owned by the RPF, referred to as Covered
Assets. This investment component is “wrapped” by contracts ("Wrapper
Agreements") issued by third-party financial institutions (generally insurance
companies or banks) ("Wrapper Providers"). These Wrapper Agreements
generally provide for participant benefit withdrawals and investment transfers
at the full contract value of the Wrapper Agreement (i.e., principal plus
accrued interest) notwithstanding the actual market value of the underlying
investments (i.e., fair value of Covered Assets plus accrued
interest). In this manner, Wrapper Agreements are designed to protect
the Fund from investment losses as a result of movements in interest
rates. However, the Wrapper Agreements generally do not protect the
Fund from loss if an issuer of covered assets defaults on payments of principal
or interest. A
default by the issuer of a covered asset or Wrapper Provider on its obligation
could result in a decrease in the value of the Fund’s assets. The
Fund pays wrapper fees to the Wrapper Providers. Wrapper fees are
negotiated separately with each issuer and are generally calculated based on a
specified percentage of contract value.
In
general, if the contract value of the Wrapper Agreement exceeds the market value
of the Covered Assets (including accrued interest), the Wrapper Provider becomes
obligated to pay that difference to the Fund in the event that redemptions
result in a total contract liquidation. In the event that there are
partial redemptions that would otherwise cause the Wrapper Agreement’s crediting
rate to fall below 0%, the Wrapper Provider is obligated to contribute to the
Fund an amount necessary to maintain the contract’s crediting rate at not less
than 0%. The circumstances under which payments are made and the
timing of payments between the Fund and the Wrapper Provider may vary based on
the terms of the Wrapper Agreement.
A
synthetic GIC provides for a guaranteed principal plus any credited interest
that has accrued over a specified period of time through benefit-responsive
wrapper contracts issued by a third party which are backed by underlying assets.
The fair value on the synthetic GICs is approximately $530,273,000 and
$419,360,000 at January 31, 2008 and 2007, respectively. Included in the fair
value of the synthetic GICs is approximately $157,000 and $237,000 at January
31, 2008 and 2007, respectively, attributable to wrapper contracts.
All
investment contracts held in the portfolio at January 31, 2008 and 2007, are
fully benefit-responsive. All contracts are effected directly between
the RPF, with Merrill Lynch as the Trustee, and the wrapper or issuer of the
benefit-responsive feature. The RPF, with Merrill Lynch as the
Trustee, is prohibited from assigning or selling the contract to another party
without the consent of the Wrapper Provider.
All
benefit-responsive contracts held in the portfolio at January 31, 2008 and 2007,
require that either the repayment of principal and interest credited to
participants in the RPF is a financial obligation of the issuer of the
investment contract or a wrapper contract provides assurance that the interest
crediting rate will not be less than zero. No event has occurred such
that realization of full contract value for a particular investment contract is
no longer probable.
The RPF
invests in the Retirement Preservation Trust, a stable value collective trust
fund. All investment contracts held in the Retirement Preservation
Trust have been individually evaluated for benefit-responsiveness and all are
fully benefit-responsive. There are no restrictions on access to
funds for the payment of benefits.
The RPF
allows participants daily access to the funds. The terms of the
investment contracts held in the portfolio at January 31, 2008 and 2007, permit
all participant-initiated transactions with the RPF to occur at contract value
with no conditions, limits or restrictions. Permitted
participant-initiated transactions are those transactions allowed by the Plan,
such as withdrawals for benefits or transfer to other funds within the
Plan.
9
Wal-Mart
Profit Sharing and 401(k) Plan
Notes to
Financial Statements (continued)
January
31, 2008
3.
Retirement Preservation Fund Investments (continued)
The
interest crediting rate for each investment contract is determined as follows:
the current dollar duration yield to maturity of the underlying investments plus
or minus an adjustment for any difference between the contract value and fair
value of securities taken over the contract value and the duration of the
securities. The key factors that could influence future crediting
rates are changes to market interest rates, changes in the market value of
securities, changes in the duration or weighted average life of securities and
deposits or withdrawals to investment contracts. All investment
contracts have a 0% minimum interest crediting rate. All investment contracts
are reset at least quarterly.
As
interest rates rise, the market value of the underlying securities declines and
when interest rates fall, the market value of the underlying securities
rises. The relationship to future interest crediting rates based on a
change in interest rates up or down will generally have minimal impact on the
crediting rate since the change in rates will generally be offset by the change
in market value, except when there is a change in duration. Duration
is a measure of average life of all cash flows in the portfolio on a present
value basis. A change in duration when market values decline
(interest rates rise) will reduce the crediting rate if duration shortens and
increase the crediting rate if duration lengthens. A change in
duration when market values rise (interest rates fall) will increase the
crediting rate when duration falls and decrease the crediting rate when duration
rises. Finally, any deposit or withdrawal to the investment contract
will impact the crediting rate based on the relative size of the deposit or
withdrawal.
The
average yield earned by the entire RPF (which may differ from the interest rate
credited to participants in the RPF) was 4.68% and 5.60% at January 31, 2008 and
2007, respectively. This average yield was calculated by dividing the
annualized earnings of all investments in the RPF (irrespective of the interest
rate credited to participants in the RPF) by the fair value of all investments
in the RPF.
The
average yield earned by the entire RPF with an adjustment to reflect the actual
interest rate credited to participants in the RPF was 4.89% at both January 31,
2008 and 2007. This average yield was calculated by dividing the
annualized earnings credited to participants in the RPF (irrespective of the
actual earnings of the investments in the RPF) by the fair value of all
investments in the RPF.
The type
of events that could potentially limit the ability of the RPF to transact at
contract value could include premature termination of the contracts by the Plan,
location closings, layoffs, plan termination, bankruptcy, mergers and early
retirement incentives. The likelihood of the occurrence of these
events that would limit the Plan’s ability to transact at contract value with
the participants in the Plan is not probable. The RPF also maintains
a liquidity protocol such that benefit-responsive contracts are insulated in the
portfolio access structure and 67.0% and 69.8% as of January 31, 2008 and 2007,
respectively, insulates these benefit-responsive contracts.
The
issuer may terminate a benefit-responsive contract with the RPF, with Merrill
Lynch as the Trustee, upon occurrence of certain events including, but not
limited to, a failure of the RPF, with Merrill Lynch as the Trustee, to comply
with contractual requirements; a material mis-representation of the RPF, with
Merrill Lynch as the Trustee; failure to remain a qualified plan under the
Internal Revenue Code; or a merger or termination of the Plan. If
such an event occurs and remains uncured, the issuer may terminate at a
settlement amount other than the contract value.
4.
Investments
The
Trustee holds the Plan’s investments and executes all investment
transactions. The Plan invests in various investment securities.
Investment securities are exposed to various risks, such as interest rate,
credit and market risks. Due to the level of risk associated with
certain investment securities, it is at least reasonably possible that changes
in the values of investment securities will occur in the near term and that such
changes could materially affect participants’ account balances and the amounts
reported in the statements of net assets available for benefits.
10
Wal-Mart
Profit Sharing and 401(k) Plan
Notes to
Financial Statements (continued)
January
31, 2008
4.
Investments (continued)
During
the 2008 Plan year, the Plan’s investments (including investments purchased,
sold and held during the year) appreciated/(depreciated) in value as
follows:
|
Net
Appreciation/ (Depreciation) in Fair Value of Investments
|
||||
|
(In
Thousands)
|
||||
|
Wal-Mart
Stores, Inc. Common Stock
|
$ | 234,540 | ||
|
Mutual
Funds
|
(90,736 | ) | ||
|
Common/Collective
Trusts
|
(30,186 | ) | ||
|
Other
|
1,573 | |||
|
Total
|
$ | 115,191 | ||
The fair
value of individual investments that represent five percent or more of the
Plan’s net assets are as follows:
|
January
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
(In
Thousands)
|
||||||||
|
Wal-Mart
Stores, Inc. Common Stock
|
$ | 3,901,418 | $ | 4,139,382 | ||||
|
PIMCO
Total Return Fund*
|
1,008,356 | 902,652 | ||||||
|
Merrill
Lynch Retirement Preservation Trust*
|
982,209 | 904,135 | ||||||
|
American
Europacific R4*
|
698,575 | - | ||||||
|
Merrill
Lynch Equity Index Trust*
|
694,447 | 529,504 | ||||||
|
Davis
New York Venture Fund*
|
563,923 | - | ||||||
|
*Includes
non-participant directed investments
|
||||||||
|
The
contract value for the Merrill Lynch Retirement Preservation Trust is
$989,970 and $921,646 at January 31, 2008 and 2007,
respectively.
|
||||||||
11
Wal-Mart
Profit Sharing and 401(k) Plan
Notes to
Financial Statements (continued)
January
31, 2008
5.
Non-Participant-Directed Investments
Information
about the net assets and the significant components of the changes in net assets
relating to non-participant-directed investments is as follows (In
Thousands):
|
January
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Assets:
|
||||||||
|
Mutual
Funds
|
$ | 408,282 | $ | 137,336 | ||||
|
Money
Market Fund
|
4,478 | 4,326 | ||||||
|
Common/Collective
Trust
|
158,241 | 47,819 | ||||||
|
Traditional
and Synthetic GICs
|
29,037 | 14,129 | ||||||
|
Investments
(at fair value)
|
600,038 | 203,610 | ||||||
|
Wrapper
contracts (at fair value)
|
- | 13 | ||||||
|
Contributions
receivable
|
434,017 | 576,208 | ||||||
|
Net
assets available for benefits (at fair value)
|
1,034,055 | 779,831 | ||||||
|
Adjustments
from fair value to contract value for fully
benefit-responsive investment contracts
|
- | 1,355 | ||||||
|
Net
assets available for benefits
|
$ | 1,034,055 | $ | 781,186 | ||||
|
Year
Ended January 31, 2008
|
||||
|
Change
in net assets:
|
||||
|
Contributions
|
$ | 589,551 | ||
|
Net
appreciation in fair value of investments
|
32,505 | |||
|
Benefit
payments
|
(41,857 | ) | ||
|
Administrative
expenses
|
(1,754 | ) | ||
|
Net
interfund transfers
|
(326,910 | ) | ||
|
Other,
net
|
1,334 | |||
|
Net
increase
|
252,869 | |||
|
Net
assets available for benefits at beginning of year
|
781,186 | |||
|
Net
assets available for benefits at end of year
|
$ | 1,034,055 | ||
12
Wal-Mart
Profit Sharing and 401(k) Plan
Notes to
Financial Statements (continued)
January
31, 2008
6.
Differences between Financial Statements and Form 5500
Reconciliation
of net assets available for benefits per the financial statements to the Form
5500:
|
January
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
(In
Thousands)
|
||||||||
|
Net
assets available for benefits per the financial statements
|
$ | 10,969,314 | $ | 9,922,878 | ||||
|
Less:
Amounts allocated to withdrawn participants
|
(1,054 | ) | (8,767 | ) | ||||
|
Less:
Adjustment from contract value to fair value for fully benefit-responsive investment
contracts
|
(6,750 | ) | (23,894 | ) | ||||
|
Net
assets available for benefits per the Form 5500
|
$ | 10,961,510 | $ | 9,890,217 | ||||
Reconciliation
of net increase per the financial statements to the Form 5500 as of January 31,
2008 (In
Thousands):
|
Net
increase per the financial statements
|
$ | 1,046,436 | ||
|
Amounts
allocated to withdrawn participants at January 31, 2008
|
(1,054 | ) | ||
|
Amounts
allocated to withdrawn participants at January 31, 2007
|
8,767 | |||
|
Add: Adjustment
from fair value to contract value for certain fully benefit-responsive investment contracts at January
31, 2007
|
23,894 | |||
|
Less: Adjustment
from fair value to contract value for certain fully
benefit-responsive investment contracts at January 31,
2008
|
(6,750 | ) | ||
|
Net
increase per the Form 5500
|
$ | 1,071,293 |
Amounts
allocated to withdrawn participants are recorded in the Form 5500 for benefit
payments that have been processed and approved for payment prior to January 31,
but not paid as of that date. Amounts related to fully
benefit-responsive investment contracts are recorded on the Form 5500 at fair
value and in the financial statements at contract value.
13
Wal-Mart
Profit Sharing and 401(k) Plan
Notes to
Financial Statements (continued)
January
31, 2008
7.
Tax Status
The Plan
has received a determination letter from the IRS dated June 8, 2004, stating
that the Plan is qualified under Section 401(a) of the Code and, therefore, the
related trust is exempt from taxation. Subsequent to this determination by the
IRS, the Plan was amended. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Sponsor
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan, as amended, is
qualified and the related trust is tax exempt.
8.
Related-Party Transactions
Certain
Plan investments are shares of common stock of Wal-Mart Stores, Inc., shares
of common/collective trusts and a stable value fund managed by
BlackRock Investment Management, LLC. Wal-Mart Stores, Inc. is the Plan sponsor,
Merrill Lynch is the trustee and record-keeper as defined by the Plan, and
BlackRock Investment Management, LLC is an affiliate of the Trustee; therefore,
these transactions qualify as exempt party-in-interest transactions. Fees paid
by the Plan for the trustee and record-keeping services amounted to
approximately $4.7 million for the year ended January 31, 2008.
9. Subsequent
Event
The Plan
was amended effective March 25, 2008, to allow for the use of forfeited Profit
Sharing contributions for Plan administrative expenses.
14
Supplemental
Schedule
15
Wal-Mart
Profit Sharing and 401(k) Plan
Schedule H, Line 4i –
Schedule of Assets (Held at End of Year) (In
Thousands)
January
31, 2008
EIN
#71-0415188
Plan
#003
|
Identity
of Issue and Description of Investment
|
Contract
Issuer Moody's /S&P Ratings
|
Crediting
Rate
|
Cost
|
Investments
at Fair Value
|
Wrapper
Contracts at Fair Value
|
Adjustments
to Contract Value
|
Contract
Value
|
|||||||||||||||
|
COMMON
STOCK
|
||||||||||||||||||||||
|
Wal-Mart
Stores, Inc. Common Stock
|
$ | 1,331,101 | $ | 3,901,418 | $ | - | $ | - | $ | - | ||||||||||||
|
TOTAL
EMPLOYER SECURITIES
|
1,331,101 | 3,901,418 | - | - | - | |||||||||||||||||
|
MUTUAL
FUNDS
|
||||||||||||||||||||||
|
AIM
International Growth Fund A
|
175,863 | 179,807 | - | - | - | |||||||||||||||||
|
Allianz
RCM Tech Fund CL A
|
2,790 | 3,448 | - | - | - | |||||||||||||||||
|
American
Europacific GR R4
|
401,622 | 374,503 | - | - | - | |||||||||||||||||
|
American
Europacific R4 GM
|
352,963 | 324,072 | - | - | - | |||||||||||||||||
|
Ariel
Fund
|
154,871 | 135,975 | - | - | - | |||||||||||||||||
|
Ariel
Fund GM
|
168,212 | 155,034 | - | - | - | |||||||||||||||||
|
Davis
New York Venture Fund
|
193,048 | 203,899 | - | - | - | |||||||||||||||||
|
Davis
New York Venture Fund GM
|
300,453 | 360,024 | - | - | - | |||||||||||||||||
|
Franklin
Templeton Investments Small-Mid Cap Growth A
|
304,942 | 281,816 | - | - | - | |||||||||||||||||
|
Franklin
Templeton Investments Small-Mid Cap Growth Fund GM
|
156,277 | 146,451 | - | - | - | |||||||||||||||||
|
Massachusetts
Investments Growth Stock Fund
|
120,222 | 130,060 | - | - | - | |||||||||||||||||
|
Massachusetts
Investments Growth Stock Fund GM
|
280,059 | 328,855 | - | - | - | |||||||||||||||||
|
PIMCO
Total Return Fund
|
284,031 | 297,274 | - | - | - | |||||||||||||||||
|
PIMCO
Total Return Fund GM
|
657,125 | 711,082 | - | - | - | |||||||||||||||||
|
TOTAL
MUTUAL FUNDS
|
3,552,478 | 3,632,300 | - | - | - | |||||||||||||||||
16
Wal-Mart
Profit Sharing and 401(k) Plan
Schedule H, Line 4i – Schedule of Assets (Held at End of
Year), continued (In
Thousands)
January
31, 2008
EIN
#71-0415188
Plan
#003
|
Identity
of Issue and Description of Investment
|
Contract
Issuer Moody's/ S&P Ratings
|
Crediting
Rate
|
Cost
|
Investments
at Fair Value
|
Wrapper
Contracts at Fair Value
|
Adjustments
to Contract Value
|
Contract
Value
|
|||||||||||||||
|
MONEY
MARKET
|
||||||||||||||||||||||
| * |
Merrill
Lynch Premier Fund
|
84,236 | 82,088 | - | - | 82,088 | ||||||||||||||||
|
TOTAL
MONEY MARKET ACCOUNTS
|
84,236 | 82,088 | - | - | 82,088 | |||||||||||||||||
|
COMMON/COLLECTIVE
TRUSTS
|
||||||||||||||||||||||
| * |
Merrill
Lynch Equity Index Trust I
|
296,272 | 342,345 | - | - | - | ||||||||||||||||
| * |
Merrill
Lynch Equity Index Trust I GM
|
313,063 | 352,102 | - | - | - | ||||||||||||||||
| * |
Merrill
Lynch Retirement Preservation Trust
|
1,023,612 | 982,209 | - | 7,761 | 989,970 | ||||||||||||||||
| * |
Merrill
Lynch Small Cap Index CT Tier I
|
35,783 | 35,726 | - | - | - | ||||||||||||||||
| * |
Merrill
Lynch Small Cap Index GM
|
174,414 | 156,795 | - | - | - | ||||||||||||||||
|
TOTAL
COMMON/COLLECTIVE TRUSTS
|
1,843,144 | 1,869,177 | - | 7,761 | 989,970 | |||||||||||||||||
|
SYNTHETIC
GUARANTEED INVESTMENT CONTRACTS
|
||||||||||||||||||||||
|
AIG
Financial Products:
|
Aa2/AA
|
5.29 | % | - | - | 34 | (893 | ) | 69,371 | |||||||||||||
|
Fannie
Mae Trust Series 2003-15 Class CP, 4.50%
|
194 | 197 | - | - | - | |||||||||||||||||
|
Fannie
Mae, 5.88%, 6/27/2013
|
10,465 | 10,595 | - | - | - | |||||||||||||||||
|
Morgan
Stanley Dean Witter Capital I Series 2003-TOP9 Class A1,
3.98%
|
1,268 | 1,283 | - | - | - | |||||||||||||||||
|
Ginnie
Mae Trust Series 2005-09 Class AB, 4.49%
|
9,656 | 9,776 | - | - | - | |||||||||||||||||
|
GMAC
Mortgage Corporation Loan Trust Series 2005-AR4 Series 4A1,
5.17%
|
10,207 | 10,334 | - | - | - | |||||||||||||||||
|
WFMBS
2007-11 A3
|
24,741 | 25,047 | - | - | - | |||||||||||||||||
|
Freddie
Mac Multiclass Certificates Series 3073 Class LA, 5.00%
|
12,839 | 12,998 | - | - | - | |||||||||||||||||
|
Bank
of America N.A.:
|
Aaa/AA+
|
5.11 | % | - | - | 67 | 833 | 72,761 | ||||||||||||||
|
Banc
of America Commercial Mortgage Inc. Series 2004-6 Class A3,
4.51%
|
19,991 | 19,744 | - | - | - | |||||||||||||||||
17
Wal-Mart
Profit Sharing and 401(k) Plan
Schedule H, Line 4i – Schedule of Assets (Held at End of
Year), continued (In
Thousands)
January
31, 2008
EIN
#71-0415188
Plan
#003
|
Identity
of Issue and Description of Investment
|
Contract
Issuer Moody's/ S&P Ratings
|
Crediting
Rate
|
Cost
|
Investments
at Fair Value
|
Wrapper
Contracts at Fair Value
|
Adjustments
to Contract Value
|
Contract
Value
|
||||||||||||||
|
JP
Morgan Mortgage Trust Series 2006-A3 Class 3A2, 5.76%
|
20,685 | 20,430 | - | - | - | ||||||||||||||||
|
Asset
Backed Funding Certificates Series 2005-AQ1 Class A4,
5.01%
|
6,856 | 6,771 | - | - | - | ||||||||||||||||
|
WAMU
2007-HY5 2 A4
|
19,230 | 18,992 | - | - | - | ||||||||||||||||
|
Wells
Fargo mortgage Backed Securities Trust Series 2003-H Class A1,
4.65%
|
5,999 | 5,925 | - | - | - | ||||||||||||||||
|
IXIS
Financial Products, Inc.:
|
Aa2/AA
|
5.06 | % | - | - | (23 | ) | 46 | 54,964 | ||||||||||||
|
Fannie
Mae Trust Series 2003-55 Class CG, 4.00%
|
24,348 | 24,338 | - | - | - | ||||||||||||||||
|
Citigroup
Mortgage Loan Trust Inc. Series 2005-10 Class 1A5A, 5.87%
|
9,702 | 9,698 | - | - | - | ||||||||||||||||
|
Banc
of America Commercial Mortgage Inc. Series 2006-2 Class A3,
5.71%
|
20,914 | 20,905 | - | - | - | ||||||||||||||||
|
JPMorgan
Chase Bank:
|
Aaa/AA
|
5.24 | % | - | - | 2 | (493 | ) | 69,798 | ||||||||||||
|
Banc
of America Funding Corporation Series 2006-4 Class A11,
6.00%
|
8,549 | 8,609 | - | - | - | ||||||||||||||||
|
FNMA
5.75% 9/8/2016
|
26,692 | 26,880 | - | - | - | ||||||||||||||||
|
Fannie
Mae Trust Series 2004-92 Class QY, 4.50%
|
6,255 | 6,299 | - | - | - | ||||||||||||||||
|
Federal
Home Loan Banks SB-2016 1, 4.89%, 12/23/2016
|
4,240 | 4,270 | - | - | - | ||||||||||||||||
|
Wells
Fargo Mortgage Backed Securities Trust Series 2005-2 Class 1A3,
5.25%
|
14,234 | 14,334 | - | - | - | ||||||||||||||||
|
Banc
of America Mortgage Securities Series 2005-L Class 2A3,
5.24%
|
3,976 | 4,004 | - | - | - | ||||||||||||||||
|
JPMorgan
Mortgage Trust Series 2006-A1 Class 3A2, 5.61%
|
5,852 | 5,893 | - | - | - | ||||||||||||||||
|
Rabobank
Nederland:
|
Aaa/AAA
|
5.67 | % | - | - | 30 | (569 | ) | 63,196 | ||||||||||||
|
Fannie
Mae, 5.75%, 5/1/2013
|
26,268 | 26,492 | - | - | - | ||||||||||||||||
|
CMSC
2007 - C3 A2
|
20,741 | 20,918 | - | - | - | ||||||||||||||||
|
JPMorgan
Mortgage Trust Series 2006-A4 Class 4A2, 5.80%
|
16,187 | 16,325 | - | - | - | ||||||||||||||||
|
State
Street Bank:
|
Aa1/AA
|
4.89 | % | - | - | 7 | 409 | 59,923 | |||||||||||||
|
Citicorp
Mortgage Securities, Inc. Series 2005-1 Class 1A1, 5.00%
|
14,613 | 14,511 | - | - | - | ||||||||||||||||
|
Citicorp
Mortgage Securities, Inc. Series 2004-6 Class 1A1, 5.50%
|
7,504 | 7,452 | - | - | - | ||||||||||||||||
18
Wal-Mart
Profit Sharing and 401(k) Plan
Schedule H, Line 4i – Schedule of Assets (Held at End of
Year), continued (In
Thousands)
January
31, 2008
EIN
#71-0415188
Plan
#003
|
Identity
of Issue and Description of Investment
|
Contract
Issuer Moody's/ S&P Ratings
|
Crediting
Rate
|
Cost
|
Investments
at Fair Value
|
Wrapper
Contracts at Fair Value
|
Adjustments
to Contract Value
|
Contract
Value
|
||||||||||||||||||
|
GMAC
Commercial Mortgage Securities Inc. Series 2004-C3 Class A4,
4.55%
|
9,990 | 9,921 | - | - | - | ||||||||||||||||||||
|
WFMBS
2005-AR10 2A15
|
16,356 | 16,243 | - | - | - | ||||||||||||||||||||
|
Countrywide
Home Loan Series 2005-5 Class A6, 5.50%
|
11,459 | 11,380 | - | - | - | ||||||||||||||||||||
|
Transamerica
Life Insurance Co.:
|
Aa3/AA
|
5.27 | % | - | - | 25 | (372 | ) | 68,691 | ||||||||||||||||
|
Freddie
Mac Multiclass Certificates Series 2603 Class TC, 4.00%
|
1,789 | 1,798 | - | - | - | ||||||||||||||||||||
|
Bear
Sterns Commercial Mortgage Securities Series 2000-WF1 Class A1,
7.64%
|
410 | 412 | - | - | - | ||||||||||||||||||||
|
Banc
of America Funding Corporation Series 2006-D Class 5A2,
5.24%
|
24,367 | 24,490 | - | - | - | ||||||||||||||||||||
|
GE
Capital Commercial Mortgage Corporation Series 2003-C1 Class A1,
3.09%
|
164 | 165 | - | - | - | ||||||||||||||||||||
|
Freddie
Mac Multiclass Certificates Series 2772 Class DJ, 4.50%
|
10,462 | 10,515 | - | - | - | ||||||||||||||||||||
|
Countrywide
Home Loan Series 2005-6 Class 1A2, 5.00%
|
12,810 | 12,875 | - | - | - | ||||||||||||||||||||
|
CWHL
2007-9 A6
|
15,310 | 15,387 | - | - | - | ||||||||||||||||||||
|
Wells
Fargo Mortgage Backed Securities Trust Series 2005-AR14 Class A2,
5.39%
|
3,378 | 3,395 | - | - | - | ||||||||||||||||||||
|
UBS
AG:
|
Aa1/AA-
|
5.11 | % | - | - | 15 | 28 | 70,715 | |||||||||||||||||
|
GMAC
Mortgage Corporation Loan Trust Series 2005-AR2 Series 2A,
4.85%
|
12,385 | 12,377 | - | - | - | ||||||||||||||||||||
|
Fannie
Mae Whole Loan Series 2004-W6 Class 1A4, 5.50%
|
18,633 | 18,621 | - | - | - | ||||||||||||||||||||
|
FNMA
5.5% 11/17/2016
|
26,859 | 26,843 | - | - | - | ||||||||||||||||||||
|
Asset
Backed Funding Certificates Series 2005-AQ1 Class A6,
4.78%
|
7,105 | 7,101 | - | - | - | ||||||||||||||||||||
19
Wal-Mart
Profit Sharing and 401(k) Plan
Schedule H, Line 4i – Schedule of Assets (Held at End of
Year), continued (In
Thousands)
January
31, 2008
EIN
#71-0415188
Plan
#003
| Identity of Issue and Description of Investment |
Contract
Issuer Moody's/ S&P Ratings
|
Crediting
Rate
|
Cost
|
Investments
at Fair Value
|
Wrapper
Contracts at Fair Value
|
Adjustments
to Contract Value
|
Contract
Value
|
|||||||||||||||
|
GSAA
Home Equity Trust Series 2005-7 Class AF3, 4.75%
|
5,734 | 5,730 | - | - | - | |||||||||||||||||
|
TOTAL
SYNTHETIC GUARANTEED INVESTMENT CONTRACTS
|
529,417 | 530,273 | 157 | (1,011 | ) | 529,419 | ||||||||||||||||
|
TRADITIONAL
GUARANTEED INVESTMENT CONTRACTS
|
||||||||||||||||||||||
|
Hartford
Life Insurance Company, 4.57%
|
1,000 | 1,202 | - | - | 1,202 | |||||||||||||||||
|
New
York Life Insurance Co., 3.22%
|
1,340 | 1,577 | - | - | 1,577 | |||||||||||||||||
|
Pacific
Life Insurance Co., 4.40%
|
754 | 907 | - | - | 907 | |||||||||||||||||
|
TOTAL
INVESTMENTS
|
$ | 7,343,470 | $ | 10,018,942 | $ | 157 | $ | 6,750 | $ | 1,605,163 | ||||||||||||
|
*
Party in interest
|
||||||||||||||||||||||
20
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the trustees (or
other persons who administer the employee benefit plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto
duly authorized
Wal-Mart Profit Sharing and
401(k) Plan
Date: July 29,
2008 By: /s/ Stephen
R. Hunter
Stephen R.
Hunter
Vice
President Benefits Planning and Design
Wal-Mart
Stores, Inc.
21