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 ~~October~~July 31, ~~2019~~2020.



☐	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 incorporation or organization)		(I.R.S. Employer Identification No.)

702 S.W. 8th Street		72716
Bentonville	AR
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (479) 273-4000

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	WMT22	New York Stock Exchange
2.550% Notes Due 2026	WMT26	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.

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 ~~2,837,174,936~~2,833,752,938 shares of common stock outstanding as of ~~December 2, 2019.~~August 31, 2020.

Walmart Inc.

Form 10-Q

For the Quarterly Period Ended ~~October~~July 31, ~~2019~~2020

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		2015
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		3226
	Item 4. Controls and Procedures		3227

Part II. Other Information
	Item 1. Legal Proceedings		3328
	Item 1A. Risk Factors		3429
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		3429
	Item 5. Other Information		3429
	Item 6. Exhibits		3833

Signatures			3934

Table of Contents

PART I. FINANCIAL INFORMATION


Item 1.	Financial Statements

Walmart Inc.

Condensed Consolidated Statements of Income

(Unaudited)


	Three Months Ended October 31,						Nine Months Ended October 31,						Three Months Ended July 31,						Six Months Ended July 31,
(Amounts in millions, except per share data)	2019			2018			2019			2018			2020			2019			2020			2019
Revenues:
Net sales	$	126,981		$	123,897		$	379,318		$	372,586		$	136,824		$	129,388		$	270,496		$	252,337
Membership and other income	1,010			997			2,975			3,026			918			989			1,868			1,965
Total revenues	127,991			124,894			382,293			375,612			137,742			130,377			272,364			254,302
Costs and expenses:
Cost of sales	95,900			93,116			286,857			280,394			102,689			97,923			204,715			190,957
Operating, selling, general and administrative expenses	27,373			26,792			80,190			79,328			28,994			26,871			56,366			52,817
Operating income	4,718			4,986			15,246			15,890			6,059			5,583			11,283			10,528
Interest:
Debt	547			501			1,693			1,398			577			558			1,087			1,146
Finance, capital lease and financing obligations	86			92			254			279
Finance lease													81			83			163			168
Interest income	(44		)	(59		)	(148		)	(153		)	(23		)	(56		)	(66		)	(104		)
Interest, net	589			534			1,799			1,524			635			585			1,184			1,210
Other (gains) and losses	(244		)	1,876			(996		)	8,570			(3,222		)	85			(3,943		)	(752		)
Income before income taxes	4,373			2,576			14,443			5,796			8,646			4,913			14,042			10,070
Provision for income taxes	1,052			759			3,536			2,430			2,207			1,233			3,529			2,484
Consolidated net income	3,321			1,817			10,907			3,366			6,439			3,680			10,513			7,586
Consolidated net income attributable to noncontrolling interest	(33		)	(107		)	(167		)	(383		)
Consolidated net (income) loss attributable to noncontrolling interest													37			(70		)	(47		)	(134		)
Consolidated net income attributable to Walmart	$	3,288		$	1,710		$	10,740		$	2,983		$	6,476		$	3,610		$	10,466		$	7,452

Net income per common share:
Basic net income per common share attributable to Walmart	$	1.16		$	0.58		$	3.76		$	1.01		$	2.29		$	1.27		$	3.70		$	2.60
Diluted net income per common share attributable to Walmart	1.15			0.58			3.74			1.01			2.27			1.26			3.67			2.59

Weighted-average common shares outstanding:
Basic	2,843			2,924			2,855			2,940			2,832			2,853			2,832			2,861
Diluted	2,861			2,941			2,872			2,956			2,848			2,869			2,848			2,878

Dividends declared per common share	$	—		$	—		$	2.12		$	2.08		$	0		$	0		$	2.16		$	2.12

See accompanying notes.

Table of Contents

Walmart Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended October 31,						Nine Months Ended October 31,						Three Months Ended July 31,						Six Months Ended July 31,
(Amounts in millions)	2019			2018			2019			2018			2020			2019			2020			2019
Consolidated net income	$	3,321		$	1,817		$	10,907		$	3,366		$	6,439		$	3,680		$	10,513		$	7,586
Consolidated net income attributable to noncontrolling interest	(33		)	(107		)	(167		)	(383		)
Consolidated net (income) loss attributable to noncontrolling interest													37			(70		)	(47		)	(134		)
Consolidated net income attributable to Walmart	3,288			1,710			10,740			2,983			6,476			3,610			10,466			7,452

Other comprehensive income (loss), net of income taxes
Currency translation and other	(1,188		)	1,020			(762		)	(200		)	298			(81		)	(3,670		)	426
Net investment hedges	(113		)	114			135			375			(191		)	140			(34		)	248
Cash flow hedges	(12		)	(109		)	(301		)	(341		)	313			(158		)	34			(289		)
Minimum pension liability	8			12			13			64			16			4			31			5
Other comprehensive income (loss), net of income taxes	(1,305		)	1,037			(915		)	(102		)	436			(95		)	(3,639		)	390
Other comprehensive (income) loss attributable to noncontrolling interest	193			123			75			250			(52		)	(84		)	660			(118		)
Other comprehensive income (loss) attributable to Walmart	(1,112		)	1,160			(840		)	148			384			(179		)	(2,979		)	272

Comprehensive income, net of income taxes	2,016			2,854			9,992			3,264			6,875			3,585			6,874			7,976
Comprehensive (income) loss attributable to noncontrolling interest	160			16			(92		)	(133		)	(15		)	(154		)	613			(252		)
Comprehensive income attributable to Walmart	$	2,176		$	2,870		$	9,900		$	3,131		$	6,860		$	3,431		$	7,487		$	7,724

See accompanying notes.

Table of Contents

Walmart Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


	October 31,			January 31,			October 31,			July 31,			January 31,			July 31,
(Amounts in millions)	2019			2019			2018			2020			2020			2019
ASSETS
Current assets:
Cash and cash equivalents	$	8,606		$	7,722		$	9,174		$	16,906		$	9,465		$	9,283
Receivables, net	5,612			6,283			5,785			5,111			6,284			5,382
Inventories	51,546			44,269			50,380			41,084			44,435			44,134
Prepaid expenses and other	2,148			3,623			4,107			1,895			1,622			2,572
Total current assets	67,912			61,897			69,446			64,996			61,806			61,371

Property and equipment, net	104,326			104,317			104,358			101,182			105,208			104,674
Operating lease right-of-use assets, net	16,944			—			—
Operating lease right-of-use assets										16,869			17,424			17,239
Finance lease right-of-use assets, net	4,155			—			—			4,843			4,417			3,949
Property under capital lease and financing obligations, net	—			7,078			6,991
Goodwill	30,716			31,181			31,044			29,542			31,073			31,454
Other long-term assets	15,777			14,822			14,744			19,950			16,567			16,174
Total assets	$	239,830		$	219,295		$	226,583		$	237,382		$	236,495		$	234,861

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	$	4,926		$	5,225		$	7,795		$	357		$	575		$	3,681
Accounts payable	49,750			47,060			49,729			46,326			46,973			45,871
Dividends payable	1,507			—			1,516			3,060			0			3,023
Accrued liabilities	20,973			22,159			22,795			23,768			22,296			20,691
Accrued income taxes	327			428			616			610			280			387
Long-term debt due within one year	4,093			1,876			2,591			5,553			5,362			4,396
Operating lease obligations due within one year	1,740			—			—			1,734			1,793			1,795
Finance lease obligations due within one year	468			—			—			549			511			439
Capital lease and financing obligations due within one year	—			729			709
Total current liabilities	83,784			77,477			85,751			81,957			77,790			80,283

Long-term debt	44,912			43,520			43,275			40,959			43,714			44,404
Long-term operating lease obligations	15,741			—			—			15,669			16,171			16,079
Long-term finance lease obligations	4,068			—			—			4,673			4,307			3,915
Long-term capital lease and financing obligations	—			6,683			6,621
Deferred income taxes and other	13,018			11,981			11,467			12,927			12,961			13,049

Commitments and contingencies

Equity:
Common stock	284			288			291			283			284			285
Capital in excess of par value	3,091			2,965			2,887			3,197			3,247			2,880
Retained earnings	80,656			80,785			80,287			87,614			83,943			78,432
Accumulated other comprehensive loss	(12,382		)	(11,542		)	(11,469		)	(15,784		)	(12,805		)	(11,270		)
Total Walmart shareholders' equity	71,649			72,496			71,996			75,310			74,669			70,327
Noncontrolling interest	6,658			7,138			7,473			5,887			6,883			6,804
Total equity	78,307			79,634			79,469			81,197			81,552			77,131
Total liabilities and equity	$	239,830		$	219,295		$	226,583		$	237,382		$	236,495		$	234,861

See accompanying notes.

Table of Contents

Walmart Inc.

Condensed Consolidated Statements of Shareholders' Equity

(Unaudited)


												Accumulated			Total																				Accumulated			Total
						Capital in						Other			Walmart														Capital in						Other			Walmart
(Amounts in millions)	Common Stock					Excess of			Retained			Comprehensive			Shareholders'			Noncontrolling			Total			Common Stock					Excess of			Retained			Comprehensive			Shareholders'			Noncontrolling			Total
(Amounts in millions)	Shares		Amount			Par Value			Earnings			Loss			Equity			Interest			Equity			Shares		Amount			Par Value			Earnings			Loss			Equity			Interest			Equity
Balances as of February 1, 2019	2,878		$	288		$	2,965		$	80,785		$	(11,542	)	$	72,496		$	7,138		$	79,634
Adoption of new accounting standards on February 1, 2019, net of income taxes	—		—			—			(266		)	—			(266		)	(34		)	(300		)
Balances as of February 1, 2020																								2,832		$	284		$	3,247		$	83,943		$	(12,805	)	$	74,669		$	6,883		$	81,552
Consolidated net income	—		—			—			3,842			—			3,842			64			3,906			—		—			—			3,990			—			3,990			84			4,074
Other comprehensive income, net of income taxes	—		—			—			—			451			451			34			485
Dividends declared ($2.12 per share)	—		—			—			(6,071		)	—			(6,071		)	—			(6,071		)
Other comprehensive loss, net of income taxes																								—		—			—			—			(3,363		)	(3,363		)	(712		)	(4,075		)
Dividends declared ($2.16 per share)																								—		—			—			(6,117		)	—			(6,117		)	—			(6,117		)
Purchase of Company stock	(21	)	(2		)	(73		)	(2,012		)	—			(2,087		)	—			(2,087		)	(6	)	(1		)	(26		)	(666		)	—			(693		)	—			(693		)
Dividends declared to noncontrolling interest	—		—			—			—			—			—			(481		)	(481		)	—		—			—			—			—			—			(359		)	(359		)
Other	5		—			(158		)	(2		)	—			(160		)	(16		)	(176		)	6		1			(238		)	(9		)	—			(246		)	(26		)	(272		)
Balances as of April 30, 2019	2,862		$	286		$	2,734		$	76,276		$	(11,091	)	$	68,205		$	6,705		$	74,910
Balances as of April 30, 2020																								2,832		$	284		$	2,983		$	81,141		$	(16,168	)	$	68,240		$	5,870		$	74,110
Consolidated net income	—		—			—			3,610			—			3,610			70			3,680			—		—			—			6,476			—			6,476			(37		)	6,439
Other comprehensive income (loss), net of income taxes	—		—			—			—			(179		)	(179		)	84			(95		)
Dividends	—		—			—			15			—			15			—			15
Purchase of Company stock	(15	)	(2		)	(54		)	(1,499		)	—			(1,555		)	—			(1,555		)
Other comprehensive income, net of income taxes																								—		—			—			—			384			384			52			436
Dividends to noncontrolling interest	—		—			—			—			—			—			6			6			—		—			—			—			—			—			(3		)	(3		)
Other	—		1			200			30			—			231			(61		)	170			2		(1		)	214			(3		)	—			210			5			215
Balances as of July 31, 2019	2,847		$	285		$	2,880		$	78,432		$	(11,270	)	$	70,327		$	6,804		$	77,131
Consolidated net income	—		—			—			3,288			—			3,288			33			3,321
Other comprehensive loss, net of income taxes	—		—			—			—			(1,112		)	(1,112		)	(193		)	(1,305		)
Dividends	—		—			—			5			—			5			—			5
Purchase of Company stock	(10	)	(1		)	(39		)	(1,068		)	—			(1,108		)	—			(1,108		)
Dividends to noncontrolling interest	—		—			—			—			—			—			3			3
Other	2		—			250			(1		)	—			249			11			260
Balances as of October 31, 2019	2,839		$	284		$	3,091		$	80,656		$	(12,382	)	$	71,649		$	6,658		$	78,307
Balances as of July 31, 2020																								2,834		$	283		$	3,197		$	87,614		$	(15,784	)	$	75,310		$	5,887		$	81,197

See accompanying notes.

Table of Contents

Walmart Inc.

Condensed Consolidated Statements of Shareholders' Equity

(Unaudited)


												Accumulated			Total																				Accumulated			Total
						Capital in						Other			Walmart														Capital in						Other			Walmart
(Amounts in millions)	Common Stock					Excess of			Retained			Comprehensive			Shareholders'			Noncontrolling			Total			Common Stock					Excess of			Retained			Comprehensive			Shareholders'			Noncontrolling			Total
(Amounts in millions)	Shares		Amount			Par Value			Earnings			Loss			Equity			Interest			Equity			Shares		Amount			Par Value			Earnings			Loss			Equity			Interest			Equity
Balances as of February 1, 2018	2,952		$	295		$	2,648		$	85,107		$	(10,181	)	$	77,869		$	2,953		$	80,822
Adoption of new accounting standards on February 1, 2018, net of income taxes	—		—			—			2,361			(1,436		)	925			(1		)	924
Balances as of February 1, 2019																								2,878		$	288		$	2,965		$	80,785		$	(11,542	)	$	72,496		$	7,138		$	79,634
Adoption of new accounting standards on February 1, 2019, net of income taxes																								—		—			—			(266		)	—			(266		)	(34		)	(300		)
Consolidated net income	—		—			—			2,134			—			2,134			142			2,276			—		—			—			3,842			—			3,842			64			3,906
Other comprehensive income, net of income taxes	—		—			—			—			1,336			1,336			163			1,499			—		—			—			—			451			451			34			485
Dividends declared ($2.08 per share)	—		—			—			(6,135		)	—			(6,135		)	—			(6,135		)
Dividends declared ($2.12 per share)																								—		—			—			(6,071		)	—			(6,071		)	—			(6,071		)
Purchase of Company stock	(5	)	(1		)	(15		)	(492		)	—			(508		)	—			(508		)	(21	)	(2		)	(73		)	(2,012		)	—			(2,087		)	—			(2,087		)
Dividends declared to noncontrolling interest	—		—			—			—			—			—			(489		)	(489		)	—		—			—			—			—			—			(481		)	(481		)
Other	4		—			(76		)	7			—			(69		)	4			(65		)	5		—			(158		)	(2		)	—			(160		)	(16		)	(176		)
Balances as of April 30, 2018	2,951		$	294		$	2,557		$	82,982		$	(10,281	)	$	75,552		$	2,772		$	78,324
Consolidated net income	—		—			—			(861		)	—			(861		)	134			(727		)
Other comprehensive loss, net of income taxes	—		—			—			—			(2,348		)	(2,348		)	(290		)	(2,638		)
Dividends	—		—			—			14			—			14			—			14
Purchase of Company stock	(16	)	(1		)	(41		)	(1,324		)	—			(1,366		)	—			(1,366		)
Dividends to noncontrolling interest	—		—			—			—			—			—			9			9
Other	—		1			194			(1		)	—			194			2			196
Balances as of July 31, 2018	2,935		$	294		$	2,710		$	80,810		$	(12,629	)	$	71,185		$	2,627		$	73,812
Balances as of April 30, 2019																								2,862		$	286		$	2,734		$	76,276		$	(11,091	)	$	68,205		$	6,705		$	74,910
Consolidated net income	—		—			—			1,710			—			1,710			107			1,817			—		—			—			3,610			—			3,610			70			3,680
Other comprehensive income (loss), net of income taxes	—		—			—			—			1,160			1,160			(123		)	1,037			—		—			—			—			(179		)	(179		)	84			(95		)
Dividends	—		—			—			14			—			14			—			14			—		—			—			15			—			15			—			15
Purchase of Company stock	(25	)	(3		)	(75		)	(2,242		)	—			(2,320		)	—			(2,320		)	(15	)	(2		)	(54		)	(1,499		)	—			(1,555		)	—			(1,555		)
Dividends to noncontrolling interest	—		—			—			—			—			—			(3		)	(3		)	—		—			—			—			—			—			6			6
Noncontrolling interest of acquired entity	—		—			—			—			—			—			4,852			4,852
Other	2		—			252			(5		)	—			247			13			260			—		1			200			30			—			231			(61		)	170
Balances as of October 31, 2018	2,912		$	291		$	2,887		$	80,287		$	(11,469	)	$	71,996		$	7,473		$	79,469
Balances as of July 31, 2019																								2,847		$	285		$	2,880		$	78,432		$	(11,270	)	$	70,327		$	6,804		$	77,131

See accompanying notes.

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Walmart Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended October 31,						Six Months Ended July 31,
(Amounts in millions)	2019			2018			2020			2019
Cash flows from operating activities:
Consolidated net income	$	10,907		$	3,366		$	10,513		$	7,586
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization	8,159			7,947			5,562			5,436
Unrealized (gains) and losses	(911		)	3,727			(4,006		)	(731		)
(Gains) and losses for disposal of business operations	(1		)	4,846
Loss on disposal of business operations							37			0
Deferred income taxes	574			(346		)	472			241
Other operating activities	938			735			305			348
Changes in certain assets and liabilities, net of effects of acquisitions and dispositions:
Receivables, net	661			178			823			978
Inventories	(7,558		)	(7,279		)	2,466			220
Accounts payable	2,925			4,137			1,052			(1,242		)
Accrued liabilities	(1,107		)	103			1,428			(1,657		)
Accrued income taxes	(48		)	(106		)	304			6
Net cash provided by operating activities	14,539			17,308			18,956			11,185

Cash flows from investing activities:
Payments for property and equipment	(7,765		)	(7,014		)	(3,569		)	(4,871		)
Proceeds from the disposal of property and equipment	218			308			83			128
Proceeds from the disposal of certain operations	833			—			0			833
Payments for business acquisitions, net of cash acquired	(56		)	(13,269		)	(175		)	(56		)
Other investing activities	485			(579		)	27			142
Net cash used in investing activities	(6,285		)	(20,554		)	(3,634		)	(3,824		)

Cash flows from financing activities:
Net change in short-term borrowings	(282		)	2,611			(178		)	(1,564		)
Proceeds from issuance of long-term debt	5,492			15,851			0			4,020
Repayments of long-term debt	(1,907		)	(3,050		)	(2,937		)	(407		)
Dividends paid	(4,545		)	(4,597		)	(3,058		)	(3,036		)
Purchase of Company stock	(4,829		)	(4,161		)	(723		)	(3,707		)
Dividends paid to noncontrolling interest	(407		)	(252		)	(66		)	(259		)
Other financing activities	(735		)	(481		)	(852		)	(578		)
Net cash provided by (used in) financing activities	(7,213		)	5,921
Net cash used in financing activities							(7,814		)	(5,531		)

Effect of exchange rates on cash, cash equivalents and restricted cash	(166		)	(485		)	(69		)	(266		)

Net increase in cash, cash equivalents and restricted cash	875			2,190			7,439			1,564
Cash, cash equivalents and restricted cash at beginning of year	7,756			7,014			9,515			7,756
Cash, cash equivalents and restricted cash at end of period	$	8,631		$	9,204		$	16,954		$	9,320

See accompanying notes.

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Walmart Inc.

Notes to Condensed Consolidated Financial Statements

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The Condensed Consolidated Financial Statements of Walmart Inc. and its subsidiaries ("Walmart" or the "Company") and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for the fair presentation of the Condensed Consolidated Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Condensed Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and do not contain certain information included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, ~~2019~~2020 ("fiscal ~~2019~~"2020"). Therefore, the interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K.

The Company's Consolidated Financial Statements are based on a fiscal year ending January 31 for the United States ("U.S.") and Canadian operations. The Company consolidates all other operations generally using a one-month lag and based on a calendar year. There were no significant intervening events during the month of ~~October~~July related to the operations consolidated using a lag that materially affected the Condensed Consolidated Financial Statements.

The Company's business is seasonal to a certain extent due to calendar events and national and religious holidays, as well as weather patterns. Historically, the Company's highest sales volume and operating income have occurred in the fiscal quarter ending January 31.

~~Restricted Cash~~Use of Estimates

~~Restricted cash not classified as part~~The Consolidated Financial Statements have been prepared in conformity with GAAP. Those principles require management to make estimates and assumptions, including potential impacts arising from the COVID-19 pandemic and related government actions, that affect the reported amounts of ~~cash~~assets and ~~cash equivalents was $25 million~~liabilities. Management's estimates and ~~$34 million as~~assumptions also affect the disclosure of October 31, 2019 and January 31, 2019, respectively, and was primarily recorded in other long-term assets in the Condensed Consolidated Balance Sheets. Restricted cash not classified as part of cash and cash equivalents was $30 million and approximately $0.3 billion as of October 31, 2018 and January 31, 2018, respectively, and was primarily recorded in other long-term assets in the Condensed Consolidated Balance Sheets.

~~Inventories~~

~~At October 31, 2019 and January 31, 2019, the Company's inventories valued at LIFO approximated those inventories as if they were valued at FIFO.~~

~~Leases~~

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842), which requires lease~~contingent assets and liabilities ~~to be recorded on~~at the balance sheet. The Company adopted this ASU and related amendments as of February 1, 2019 under the modified retrospective approach and elected certain practical expedients permitted under the transition guidance, including to retain the historical lease classification as well as relief from reviewing expired or existing contracts to determine if they contain leases. For leases subject to index or rate adjustments, the most current index or rate adjustments were included in the measurement of operating lease obligations at adoption.

~~The adoption of this ASU and related amendments resulted in a $14.8 billion increase to total assets and a $15.1 billion increase to total liabilities in the first quarter~~date of the ~~fiscal year ending January 31, 2020 ("fiscal 2020"). In~~financial statements and the ~~first quarter~~reported amounts of ~~fiscal 2020,~~revenues and expenses during the Company recognized $16.8 billion and $17.5 billion of operating lease right-of-use assets and operating lease obligations, respectively, and removed $2.2 billion and $1.7 billion, respectively, of assets and liabilities related to financial obligations connected with the construction of leased stores. Several other asset and liability line items in the Company's Condensed Consolidated Balance Sheet were also impacted by immaterial amounts. Additionally, the adoption resulted in a cumulative-effect adjustment to retained earnings of approximately $0.3 billion, net of tax, which primarily consisted of the recognition of impairment. The Company’s Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Cash Flows were immaterially impacted. Updated accounting policies as a result of the adoption of this ASU are described below. ~~Note 10~~ ~~provides additional lease disclosures.~~reporting period. Actual results may differ materially from those estimates.

For any new or modified lease, the Company, at the inception of the contract, determines whether a contract is or contains a lease. The Company records right-of-use ("ROU") assets and lease obligations for its finance and operating leases, which are initially recognized based on the discounted future minimum lease payments over the term of the lease. As the rate implicit in the Company's leases is not easily determinable, the Company’s applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments.

Lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company has elected not to recognize ROU asset and lease obligations for its short-term leases, which are defined as leases with an initial term of 12 months or less.

~~Table of Contents~~

For a majority of all classes of underlying assets, the Company has elected to not separate lease from non-lease components. For leases in which the lease and non-lease components have been combined, the variable lease expense includes expenses such as common area maintenance, utilities, and repairs and maintenance.

~~Revenue Recognition~~

~~Contract Balances~~

Contract balances as a result of transactions with customers primarily consist of receivables included in receivables, net, and deferred gift card revenue included in accrued liabilities in the Company's Condensed Consolidated Balance Sheets. The following table provides the Company's receivables and deferred gift card revenue from transactions with customers:

(Amounts in millions) October 31, 2019 January 31, 2019
Assets:
Receivables from transactions with customers, net $ 2,618
$ 2,538

Liabilities:
Deferred gift card revenue $ 1,863
$ 1,932

~~Derivatives~~

~~In fiscal 2020, the Company adopted ASU 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~. The adoption of the standard had no current or historical impact on the Company's Condensed Consolidated Financial Statements. The Company continues to use qualitative methods to assess the effectiveness of its designated hedging relationships. Upon adopting ASU 2017-12, the Company modified its existing hedge documentation to use a quantitative method for assessing effectiveness when the hedge is subsequently determined to be ineffective under the qualitative method. There were no other significant changes to the Company's accounting policies for derivatives.

~~Recent Accounting Pronouncements~~

~~Financial Instruments~~Receivables

In June 2016, the ~~FASB~~Financial Accounting Standards Board issued ~~ASU~~Accounting Standards Update (“ASU”) 2016-13, Financial Instruments–Credit Losses (Topic 326), which modifies the measurement of expected credit losses of certain financial instruments. The Company ~~will adopt~~adopted this ASU on February 1, ~~2020. Management has substantially completed its evaluation of its existing financial instruments and does not expect the adoption of this ASU~~2020 with no material impact to ~~materially impact~~ the Company's Condensed Consolidated Financial Statements.

Receivables are stated at their carrying values, net of a reserve for credit losses, and are primarily due from the following: customers, which also includes insurance companies resulting from pharmacy sales, banks for customer credit, debit cards and electronic transfer transactions that take in excess of seven days to process; suppliers for marketing or incentive programs; governments for income taxes; and real estate transactions.

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Note 2. Net Income Per Common Share

Basic net income per common share attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period. Diluted net income per common share attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period adjusted for the dilutive effect of share-based awards. The Company did not have significant share-based awards outstanding that were anti-dilutive and not included in the calculation of diluted net income per common share attributable to Walmart for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019~~2020 and ~~2018.~~2019.

The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted net income per common share attributable to Walmart:


	Three Months Ended October 31,						Nine Months Ended October 31,						Three Months Ended July 31,					Six Months Ended July 31,
(Amounts in millions, except per share data)	2019			2018			2019			2018			2020		2019			2020			2019
Numerator
Consolidated net income	$	3,321		$	1,817		$	10,907		$	3,366		$	6,439	$	3,680		$	10,513		$	7,586
Consolidated net income attributable to noncontrolling interest	(33		)	(107		)	(167		)	(383		)
Consolidated net (income) loss attributable to noncontrolling interest													37		(70		)	(47		)	(134		)
Consolidated net income attributable to Walmart	$	3,288		$	1,710		$	10,740		$	2,983		$	6,476	$	3,610		$	10,466		$	7,452

Denominator
Weighted-average common shares outstanding, basic	2,843			2,924			2,855			2,940			2,832		2,853			2,832			2,861
Dilutive impact of share-based awards	18			17			17			16			16		16			16			17
Weighted-average common shares outstanding, diluted	2,861			2,941			2,872			2,956			2,848		2,869			2,848			2,878

Net income per common share attributable to Walmart
Basic	$	1.16		$	0.58		$	3.76		$	1.01		$	2.29	$	1.27		$	3.70		$	2.60
Diluted	1.15			0.58			3.74			1.01			2.27		1.26			3.67			2.59

~~Table of Contents~~

Note 3. Accumulated Other Comprehensive Loss

The following table provides the changes in the composition of total accumulated other comprehensive loss for ~~each of~~ the three months ended April 30, ~~2019,~~2020 and July 31, ~~2019 and October 31, 2019,~~2020, respectively:


(Amounts in millions and net of immaterial income taxes)	Currency Translation and Other			Net Investment Hedges			Cash Flow Hedges			Minimum Pension Liability			Total			Currency Translation and Other			Net Investment Hedges			Cash Flow Hedges			Minimum Pension Liability			Total
Balances as of February 1, 2019	$	(12,085	)	$	1,395		$	(140	)	$	(712	)	$	(11,542	)
Balances as of February 1, 2020																$	(11,827	)	$	1,517		$	(539	)	$	(1,956	)	$	(12,805	)
Other comprehensive income (loss) before reclassifications, net	496			108			(145		)	(7		)	452			(3,256		)	157			(295		)	(4		)	(3,398		)
Reclassifications to income, net	(23		)	—			14			8			(1		)	0			0			16			19			35
Balances as of April 30, 2019	$	(11,612	)	$	1,503		$	(271	)	$	(711	)	$	(11,091	)
Balances as of April 30, 2020																$	(15,083	)	$	1,674		$	(818	)	$	(1,941	)	$	(16,168	)
Other comprehensive income (loss) before reclassifications, net	(165		)	140			(172		)	(5		)	(202		)	246			(191		)	303			(2		)	356
Reclassifications to income, net	—			—			14			9			23			0			0			10			18			28
Balances as of July 31, 2019	$	(11,777	)	$	1,643		$	(429	)	$	(707	)	$	(11,270	)
Other comprehensive income (loss) before reclassifications, net	(995		)	(113		)	(12		)	6			(1,114		)
Reclassifications to income, net	—			—			—			2			2
Balances as of October 31, 2019	$	(12,772	)	$	1,530		$	(441	)	$	(699	)	$	(12,382	)
Balances as of July 31, 2020																$	(14,837	)	$	1,483		$	(505	)	$	(1,925	)	$	(15,784	)

The following table provides the changes in the composition of total accumulated other comprehensive loss for ~~each of~~ the three months ended April 30, ~~2018,~~2019 and July 31, ~~2018 and~~ ~~October 31, 2018~~,2019, respectively:

(Amounts in millions and net of immaterial income taxes)
Currency
Translation and Other
Unrealized Gain on Available-for-Sale Securities Net Investment Hedges Cash Flow Hedges
Minimum
Pension
Liability
Total
Balances as of February 1, 2018 $ (12,136 ) $ 1,646
$ 1,030
$ 122
$ (843 ) $ (10,181 )
Adoption of new accounting standards on February 1, 2018, net⁽¹⁾
89
(1,646 ) 93
28
—
(1,436 )
Other comprehensive income (loss) before reclassifications, net 1,302
—
68
(86 ) 32
1,316
Reclassifications to income, net —
—
—
9
11
20
Balances as of April 30, 2018 $ (10,745 ) $ —
$ 1,191
$ 73
$ (800 ) $ (10,281 )
Other comprehensive income (loss) before reclassifications, net (2,395 ) —
193
(171 ) (3 ) (2,376 )
Reclassifications to income, net —
—
—
16
12
28
Balances as of July 31, 2018 $ (13,140 ) $ —
$ 1,384
$ (82 ) $ (791 ) $ (12,629 )
Other comprehensive income (loss) before reclassifications, net (888 ) —
114
(121 ) 2
(893 )
Reclassifications to income, net 2,031
—
—
12
10
2,053
Balances as of October 31, 2018 $ (11,997 )
$ —

$ 1,498

$ (191 )
$ (779 )
$ (11,469 )

~~(1) Primarily relates to the adoption of ASU 2016-01,~~ ~~Financial Instruments–Overall~~ ~~and ASU 2018-02,~~ ~~Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.~~



(Amounts in millions and net of immaterial income taxes)	Currency Translation and Other			Net Investment Hedges		Cash Flow Hedges			Minimum Pension Liability			Total
Balances as of February 1, 2019	$	(12,085	)	$	1,395	$	(140	)	$	(712	)	$	(11,542	)
Other comprehensive income (loss) before reclassifications, net	496			108		(145		)	(7		)	452
Reclassifications to income, net	(23		)	0		14			8			(1		)
Balances as of April 30, 2019	$	(11,612	)	$	1,503	$	(271	)	$	(711	)	$	(11,091	)
Other comprehensive income (loss) before reclassifications, net	(165		)	140		(172		)	(5		)	(202		)
Reclassifications to income, net	0			0		14			9			23
Balances as of July 31, 2019	$	(11,777	)	$	1,643	$	(429	)	$	(707	)	$	(11,270	)

Amounts reclassified from accumulated other comprehensive loss to net income for derivative instruments are recorded in interest, net, in the Company's Condensed Consolidated Statements of Income. Amounts reclassified from accumulated other comprehensive loss to net income for the minimum pension liability, as well as the cumulative translation resulting from the disposition of a business, are recorded in other gains and losses in the Company's Condensed Consolidated Statements of Income. Amounts related to the Company's derivatives expected to be reclassified from accumulated other comprehensive loss to net income during the next 12 months are not significant.

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Note 4. Short-term Borrowings and Long-term Debt

The Company has various committed lines of credit in the U.S. that are used to support its commercial paper program. In April 2020, the Company renewed and extended its existing 364-day revolving credit facility of $10.0 billion. In total, the Company ~~has~~had committed lines of credit in the U.S. of ~~$15~~$15.0 billion at ~~October~~July 31, ~~2019~~2020 and January 31, ~~2019,~~2020, all undrawn.

The following table provides the changes in the Company's long-term debt for the ~~nine~~six months ended ~~October~~July 31, ~~2019:~~2020:

(Amounts in millions) Long-term debt due within one year Long-term debt Total
Balances as of February 1, 2019 $ 1,876

$ 43,520

$ 45,396
Proceeds from issuance of long-term debt —

5,492

5,492
Repayments of long-term debt (1,907 )
—

(1,907 )
Reclassifications of long-term debt 4,129

(4,129 )
—
Other (5 )
29

24
Balances as of October 31, 2019 $ 4,093

$ 44,912

$ 49,005

~~Table of Contents~~

~~Debt Issuances~~

~~Information on long-term debt issued during the nine months ended October 31, 2019 is as follows:~~

(Amounts in millions)
Issue Date Principal Amount Maturity Date Fixed vs. Floating Interest Rate Net Proceeds
April 23, 2019 $1,500 July 8, 2024 Fixed 2.850% $ 1,493
April 23, 2019 $1,250 July 8, 2026 Fixed 3.050% 1,242
April 23, 2019 $1,250 July 8, 2029 Fixed 3.250% 1,243
September 24, 2019 $500 September 24, 2029 Fixed 2.375% 497
September 24, 2019 $1,000 September 24, 2049 Fixed 2.950% 975
Various $42 Various Various Various 42
Total $ 5,492

These issuances, which are used for general corporate purposes, are senior, unsecured notes which rank equally with all other senior, unsecured debt obligations of the Company, and are not convertible or exchangeable. These issuances do not contain any financial covenants which restrict the Company's ability to pay dividends or repurchase company stock.

~~Maturities~~

~~The following table provides details of debt repayments during the nine months ended October 31, 2019:~~

(Amounts in millions)
Maturity Date Original Amount Fixed vs. Floating Interest Rate Repayment
February 1, 2019 $500 Fixed 4.125% $ 364
October 20, 2019 $300 Floating 2.281% 300
October 20, 2019 $1,200 Fixed 1.750% 1,200
Various $43 Various Various 43
Total repayment of matured debt $ 1,907



(Amounts in millions)	Long-term debt due within one year			Long-term debt			Total
Balances as of February 1, 2020	$	5,362		$	43,714		$	49,076
Repayments of long-term debt	(2,937		)	0			(2,937		)
Reclassifications of long-term debt	3,125			(3,125		)	0
Other	3			370			373
Balances as of July 31, 2020	$	5,553		$	40,959		$	46,512

Note 5. Fair Value Measurements

Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:

Level 1: observable inputs such as quoted prices in active markets;

Level 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions.

~~Recurring Fair Value Measurements~~

The Company ~~has~~measures the fair value of equity investments ~~primarily~~(primarily its investment in ~~JD.com, Inc. ("JD"), measured at fair value~~JD.com) on a recurring basis ~~included~~and records them in other long-term assets in the accompanying Condensed Consolidated Balance ~~Sheet as follows:~~Sheets.

The ~~purchased portion of the investment in JD measured using Level 1 inputs, and~~

The portion of the investment in JD received in exchange for selling certain assets related to Yihaodian, the Company's former eCommerce operations in China, measured using Level 2 inputs. Fair value is determined primarily using quoted prices in active markets for similar assets.

~~Table of Contents~~

~~Information for the~~ fair value of the Company's ~~investment in JD is~~equity investments are as follows:



(Amounts in millions)	Fair Value as of July 31, 2020		Fair Value as of January 31, 2020
Equity investments measured using Level 1 inputs	$	4,689	$	2,715
Equity investments measured using Level 2 inputs	5,204		2,723
Total	$	9,893	$	5,438

(Amounts in millions) Fair Value as of October 31, 2019 Fair Value as of January 31, 2019
Investment in JD measured using Level 1 inputs $ 2,244
$ 1,791
Investment in JD measured using Level 2 inputs 2,249
1,792
Total $ 4,493
$ 3,583

~~The changes in fair value for the Company's investment in JD are included in other gains and losses in the Company's Condensed Consolidated Statements of Income.~~Derivatives

The Company also ~~holds derivative instruments.~~has derivatives recorded at fair value. Derivative fair values are the estimated amounts the Company would receive or pay upon termination of the related derivative agreements as of the reporting dates. The fair values have been measured using the income approach and Level 2 inputs, which include the relevant interest ~~yield~~rate and foreign currency forward curves. As of ~~October~~July 31, ~~2019~~2020 and January 31, ~~2019,~~2020, the notional amounts and fair values of these derivatives were as follows:


	October 31, 2019					January 31, 2019					July 31, 2020						January 31, 2020
(Amounts in millions)	Notional Amount		Fair Value			Notional Amount		Fair Value			Notional Amount		Fair Value				Notional Amount		Fair Value
Receive fixed-rate, pay variable-rate interest rate swaps designated as fair value hedges	$	4,000	$	66		$	4,000	$	(78	)	$	4,000	$	205		⁽¹⁾	$	4,000	$	97		⁽¹⁾
Receive fixed-rate, pay fixed-rate cross-currency swaps designated as net investment hedges	3,750		440			2,250		334			3,500		471			⁽¹⁾	3,750		455			⁽¹⁾
Receive fixed-rate, pay fixed-rate cross-currency swaps designated as cash flow hedges	4,078		(658		)	4,173		(272		)	4,271		(748		)	⁽²⁾	4,067		(696		)	⁽²⁾
Total	$	11,828	$	(152	)	$	10,423	$	(16	)	$	11,771	$	(72	)		$	11,817	$	(144	)


⁽¹⁾	Classified in Other long-term assets within the Company's Condensed Consolidated Balance Sheets.


⁽²⁾	Classified in Deferred income taxes and other within the Company's Condensed Consolidated Balance Sheets.

Nonrecurring Fair Value Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company's assets and liabilities are also subject to nonrecurring fair value measurements. ~~The Company~~Generally, assets are recorded ~~other immaterial impairment charges to assets measured~~ at fair value on a nonrecurring basis ~~during the three and nine months ended October 31, 2019.~~

~~As discussed in~~ ~~Note 8, the~~as a result of impairment charges. The Company ~~met the criteria~~did not have any material assets or liabilities subject to recognize Walmart Brazil as held for sale in the second quarter of fiscal 2019. Prior to meeting the held for sale criteria, the carrying values of the long-lived assets were concluded to be recoverable based upon cash flows expected to be generated over the assets' useful lives. When the sale of Walmart Brazil became probable, the Company reclassified the related assets and liabilities to held for sale and measured the disposal group atnonrecurring fair value ~~less costs to sell. The assets~~measurements as of the disposal group totaled $3.3 billion and were comprised of $1.0 billion in current assets, $1.6 billion in property and equipment and property under capital lease and financing obligations, net, and $0.7 billion of other long-term assets. These assets were fully impaired during the second quarter of fiscal 2019 as the carrying value of the disposal group exceeded the fair value, less costs to sell. The Company recorded a pre-tax net loss in the Walmart International segment of approximately $4.8 billion during the nine months ended OctoberJuly 31, ~~2018, in other gains and losses in the Company's Condensed Consolidated Statements of Income. In the third quarter of fiscal 2019, the sale was completed as discussed in~~ ~~Note 8~~.2020.

Other Fair Value Disclosures

The Company records cash and cash equivalents, restricted cash, and short-term borrowings at cost. The carrying values of these instruments approximate their fair value due to their short-term maturities.

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The Company's long-term debt is also recorded at cost. The fair value is estimated using Level 2 inputs based on the Company's current incremental borrowing rate for similar types of borrowing arrangements. The carrying value and fair value of the Company's long-term debt as of ~~October~~July 31, ~~2019~~2020 and January 31, ~~2019,~~2020, are as follows:


	October 31, 2019				January 31, 2019				July 31, 2020				January 31, 2020
(Amounts in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt, including amounts due within one year	$	49,005	$	57,016	$	45,396	$	49,570	$	46,512	$	58,357	$	49,076	$	57,769

Note 6. ~~Derivative Financial Instruments~~

In connection with various derivative agreements, including master netting arrangements, the Company held cash collateral from counterparties of $219 million and $220 million at October 31, 2019 and January 31, 2019, respectively. Furthermore, as part of the master netting arrangements with each of these counterparties, the Company is also required to post collateral with a counterparty if the Company's net derivative liability position exceeds $150 million with such counterparties. The Company did not have any cash collateral posted with counterparties at October 31, 2019 or January 31, 2019.

~~Table of Contents~~

At October 31, 2019 and January 31, 2019, the Company had ¥180 billion of outstanding long-term debt designated as a hedge of its net investment in Japan, as well as outstanding long-term debt of £1.7 billion at October 31, 2019 and January 31, 2019, that was designated as a hedge of its net investment in the United Kingdom. These nonderivative net investment hedges will mature on dates ranging from July 2020 to January 2039.

The Company's derivative instruments, as well as its nonderivative debt instruments designated and qualifying as net investment hedges, were classified as follows in the Company's Condensed Consolidated Balance Sheets:

October 31, 2019 January 31, 2019
(Amounts in millions) Fair Value
Instruments Net Investment
Instruments Cash Flow
Instruments Fair Value
Instruments
Net Investment
Instruments
Cash Flow
Instruments
Derivative instruments
Derivative assets:
Other long-term assets $ 67
$ 440
$ —
$ —
$ 334
$ 78

Derivative liabilities:
Deferred income taxes and other $ 1
$ —
$ 658
$ 78
$ —
$ 350

Nonderivative hedging instruments:
Long-term debt $ —
$ 3,830
$ —
$ —
$ 3,863
$ —

~~Amounts related to the Company's derivatives expected to be reclassified from accumulated other comprehensive loss to net income during the next 12 months are not significant.~~

~~Note 7.~~ Contingencies

Legal Proceedings

The Company is involved in a number of legal proceedings. The Company has made accruals with respect to these matters, where appropriate, which are reflected in the Company's Condensed Consolidated Financial Statements. For some matters, a liability is not probable or the amount cannot be reasonably estimated and therefore an accrual has not been made. However, where a liability is reasonably possible and may be material, such matters have been disclosed. The Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders.

Unless stated otherwise, the matters discussed below, if decided adversely or settled by the Company, individually or in the aggregate, may result in a liability material to the Company's financial condition, results of operations or cash flows.

ASDA Equal Value Claims

ASDA Stores Ltd. ("Asda"), a wholly-owned subsidiary of the Company, is a defendant in over ~~30,000~~40,000 equal value ("Equal Value") claims that began in 2008 and are proceeding before an Employment Tribunal in Manchester (the "Employment Tribunal") in the United Kingdom ("~~UK"~~U.K.") on behalf of current and former Asda store employees, and further claims may be asserted in the future. The claimants allege that the work performed by ~~female~~ employees in Asda's retail stores is of equal value in terms of, among other things, the demands of their jobs compared to that of ~~male~~ employees working in Asda's warehouse and distribution facilities, and that the ~~disparity~~difference in pay between these ~~different~~ job positions disparately impacts women because more women work in retail stores while more men work in warehouses and distribution facilities, and that the pay difference is not objectively justified. ~~As a result,~~The claimants are requesting differential back pay based on higher wage rates in the warehouse and distribution facilities and higher wage rates on a prospective basis.

In March 2015, Asda asked the Employment Tribunal to stay all proceedings and to "strike out" substantially all of the claims because the claimants had not adhered to the Tribunal's procedural rule for including multiple claimants on the same claim form. Ultimately, the Court of Appeals declined to strike out any claims relying on the Employment Tribunal’s finding that claimants had not deliberately disregarded the Tribunal’s procedural rule. As to the initial phase of the Equal Value claims, in October 2016, following a preliminary hearing, the Employment Tribunal ruled that claimants could compare their positions in Asda's retail stores with those of employees in Asda's warehouse and distribution facilities. Asda appealed the ruling and the ~~appeal is currently pending~~oral argument was held before the the Supreme Court of the United ~~Kingdom.~~Kingdom in July 2020. The Company is awaiting a decision.

Notwithstanding the appeal, claimants are proceeding in the next phase of their claims. That phase will determine whether the work performed by the claimants is of equal value to the work performed by employees in Asda's warehouse and distribution facilities.

At present, the Company cannot predict the number of such claims that may be filed, and cannot reasonably estimate any loss or range of loss that may arise from these proceedings. Accordingly, the Company can provide no assurance as to the scope and outcomes of these matters and no assurance as to whether its business, financial position, results of operations or cash flows will not be materially adversely affected. The Company believes it has substantial factual and legal defenses to these claims, and intends to defend the claims vigorously.

~~Table of Contents~~

~~National~~ Prescription Opiate Litigation and ~~Related~~Other Matters

In December 2017, the ~~United States~~U.S. Judicial Panel on Multidistrict Litigation consolidated numerous lawsuits filed against a wide array of defendants by various plaintiffs, including counties, cities, healthcare providers, Native American tribes, individuals, and third-party payors, asserting claims generally concerning the impacts of widespread opioid abuse. The consolidated multidistrict litigation is entitled In re National Prescription Opiate Litigation ~~(MDL~~(MDL No. 2804) ~~and~~, is pending in the U.S. District Court for the Northern District of Ohio. The Company is named as a defendant in some of the cases included in this multidistrict litigation. Similar cases that name the Company have also been filed in state courts by state, local and tribal governments, health care providers and other plaintiffs. Plaintiffs are seeking compensatory and punitive damages, as well as injunctive relief including abatement. The Company cannot predict the number of such claims that may be filed, but believes it has substantial factual and legal defenses to these claims, and intends to defend the claims vigorously. The Company has also been responding to subpoenas, information requests and investigations from governmental entities related to nationwide controlled substance dispensing and distribution practices involving opioids. The Company cannot reasonably estimate any loss or range of loss that may arise from these matters. Accordingly, the Company can provide no assurance as to the scope and outcome of these matters and no assurance as to whether its business, financial position, results of operations or cash flows will not be materially adversely affected.

~~FCPA Investigation and Related Matters~~

As previously disclosed, the Company was under investigation by the U.S. Department of Justice (the "DOJ") and the Securities and Exchange Commission (the "SEC") regarding possible violations of the U.S. Foreign Corrupt Practices Act (the "FCPA"). Throughout the investigative process, the Company cooperated with the DOJ and the SEC, and on June 20, 2019, the Company announced the resolution of the investigations with the DOJ and the SEC and paid $283 million in June 2019 consisting of a combination of penalties, disgorgement and interest as further described below (the "Settlement Amount"). The Company previously recorded the Settlement Amount in the Company's fiscal 2018 consolidated financial statements in anticipated settlement of these matters.

~~The resolution of the investigations with the DOJ and SEC included:~~

A non-prosecution agreement (the "NPA") between the DOJ and the Company for a three-year term. Pursuant to the NPA, the Company paid a $138 million penalty and agreed to maintain the Company's anti-corruption compliance program for three years, certain reporting obligations for three years, and a limited monitorship with a third party for two years regarding the Company's anti-corruption compliance program, with the possibility of a third year pending the results of the monitorship during the initial two-year period. The DOJ agreed that it will not prosecute the Company for any conduct described in the NPA provided that the Company performs its obligations under the NPA for the three-year term.

A plea agreement (the "Plea Agreement") entered into for a three-year term by the DOJ and WMT Brasilia S.a.r.l., an indirect wholly-owned foreign subsidiary of the Company ("WMT Brasilia") that previously owned a majority stake of the Company's Brazilian business. Through the Plea Agreement, entered in the United States District Court for the Eastern District of Virginia, WMT Brasilia pled guilty to one count of causing a books and records violation of the FCPA. The Company on behalf of WMT Brasilia was assessed a $4 million penalty, including forfeiture, that was deducted from the amount paid by the Company under the NPA.

A Cease-and-Desist Order entered into by the SEC in a civil administrative proceeding (the "SEC Order"), the entry of which the Company consented to with respect to certain violations of the books and records and internal controls provisions of the FCPA. The Company paid $145 million in disgorgement and interest, and agreed to make certain reports to the SEC on its anti-corruption compliance and remediation efforts for two years, and cease and desist any violations of the books and records and internal controls provisions of the FCPA.

On June 20, 2019, the Company also entered into an Administrative Agreement with the U.S. Environmental Protection Agency (the "EPA") for a three-year term, which replaces the interim administrative agreement between the Company and the EPA dated May 28, 2013. The May 28, 2013 agreement arose as part of a settlement by the Company regarding certain hazardous waste materials matters with several governmental authorities. The new EPA agreement, among other things, resolved any debarment or suspension as to participation in federal government programs by the Company due to the NPA, the Plea Agreement, and the SEC Order, provided that the Company fulfills the terms and conditions of the new EPA agreement, which requires reporting by the Company to the EPA periodically during the three-year term, and requires a new, limited two-year monitorship. The monitor referenced above that has been engaged by the Company under the NPA will also monitor compliance with the new EPA agreement. If the DOJ monitorship is extended as referenced above, the EPA monitorship may also be extended for an additional year.

In addition, the Company expects to incur costs in implementing the settlement and may incur costs in responding to any new civil or regulatory actions. The Company does not presently believe that these matters will have a material adverse effect on its business, financial position, results of operations, or cash flows.

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~~Note 8. Disposals, Acquisitions, and Other Items~~

~~The following disposals, acquisitions and other items relate to the Company's Walmart International segment. Other immaterial transactions have also occurred or have been announced.~~

~~Walmart Brazil~~

In August 2018, the Company sold an 80 percent stake of Walmart Brazil to Advent International ("Advent"). Under the terms, Advent agreed to contribute additional capital to the business over a three-year period, and Walmart agreed to indemnify Advent for certain matters.

As a result, the Company recorded a pre-tax net loss of $4.8 billion during the nine months ended October 31, 2018 in other gains and losses in the Company's Condensed Consolidated Statement of Income. Substantially all of this charge was recorded during the second quarter of fiscal 2019 upon meeting the held for sale criteria, and an additional immaterial amount was recorded during the third quarter of fiscal 2019 upon closure of the sale. In calculating the loss, the fair value of the disposal group was reduced by $0.8 billion related to an indemnity, for which a liability was recognized upon closing and is recorded in deferred income taxes and other in the Company's Condensed Consolidated Balance Sheets. The Company indemnified Advent for certain pre-closing tax and legal contingencies and other matters for up to R$2.3 billion, adjusted for interest based on the Brazilian interbank deposit rate.

The Company deconsolidated the financial statements of Walmart Brazil during the third quarter of fiscal 2019 and began accounting for its remaining 20 percent ownership interest using the equity method of accounting. This equity method investment was determined to have 0 fair value and continues to have 0 carrying value.

~~Flipkart Private Limited ("Flipkart")~~

In August 2018, the Company acquired 81 percent of the outstanding shares, or 77 percent of the diluted shares, of Flipkart, an Indian-based eCommerce marketplace, for cash consideration of approximately $16 billion. The acquisition increased the Company's investment in India, a large, growing economy. In the second quarter of fiscal 2020, the Company finalized the valuation of assets acquired and liabilities assumed for the Flipkart acquisition as follows:

Assets of $24.1 billion, which is comprised primarily of $2.2 billion in cash and cash equivalents, $2.8 billion in other current assets, $5.0 billion in intangible assets and $13.5 billion in goodwill. Of the intangible assets, $4.7 billion represents the fair value of trade names, each with an indefinite life, which were estimated using the income approach based on Level 3 unobservable inputs. The remaining $0.3 billion of intangible assets primarily related to acquired technology with a life of 3 years. The goodwill arising from the acquisition consisted largely of anticipated synergies and economies of scale primarily related to procurement and logistics and is not expected to be deductible for tax purposes;

~~Liabilities of $3.7 billion, which is comprised primarily of $1.8 billion of current liabilities and $1.7 billion of deferred income taxes; and~~

~~Noncontrolling interest of $4.3 billion, for which the fair value was estimated using the income approach based on Level 3 unobservable inputs.~~

Note 9.7. Segments and Disaggregated Revenue

Segments

The Company is engaged in the operation of retail, wholesale and other units, as well as eCommerce websites, located throughout the U.S., Africa, Argentina, Canada, Central America, Chile, China, India, Japan, Mexico, and the United ~~Kingdom, as well as Brazil until the sale of the majority stake in Walmart Brazil as discussed in~~ ~~Note 8~~ ~~in August 2018.~~Kingdom. The Company's operations are conducted in 3 reportable segments: Walmart U.S., Walmart International and Sam's Club. The Company defines its segments as those operations whose results the chief operating decision maker ("CODM") regularly reviews to analyze performance and allocate resources. The Company sells similar individual products and services in each of its segments. It is impractical to segregate and identify revenues for each of these individual products and services.

The Walmart U.S. segment includes the Company's mass merchandising concept in the U.S., as well as eCommerce and omni-channel initiatives. The Walmart International segment consists of the Company's operations outside of the U.S., as well as eCommerce and omni-channel initiatives. The Sam's Club segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives. Corporate and support consists of corporate overhead and other items not allocated to any of the Company's segments.

~~Table of Contents~~

The Company measures the results of its segments using, among other measures, each segment's net sales and operating income, which includes certain corporate overhead allocations. From time to time, the Company revises the measurement of each segment's operating income, including any corporate overhead allocations, as determined by the information regularly reviewed by its CODM. When the measurement of a segment changes, previous period amounts and balances are reclassified to be comparable to the current period's presentation. Beginning with the first quarter in fiscal 2021, the Company revised its definition of eCommerce net sales to include certain pharmacy transactions and, accordingly, revised prior period amounts to maintain comparability.

Net sales by segment are as follows:


	Three Months Ended October 31,				Nine Months Ended October 31,				Three Months Ended July 31,				Six Months Ended July 31,
(Amounts in millions)	2019		2018		2019		2018		2020		2019		2020		2019
Net sales:
Walmart U.S.	$	83,189	$	80,583	$	248,733	$	241,146	$	93,282	$	85,200	$	182,025	$	165,544
Walmart International	29,167		28,793		87,081		88,507		27,167		29,139		56,933		57,914
Sam's Club	14,625		14,521		43,504		42,933		16,375		15,049		31,538		28,879
Net sales	$	126,981	$	123,897	$	379,318	$	372,586	$	136,824	$	129,388	$	270,496	$	252,337

Operating income by segment, as well as operating loss for corporate and support, interest, net and other gains and losses are as follows:


	Three Months Ended October 31,						Nine Months Ended October 31,						Three Months Ended July 31,						Six Months Ended July 31,
(Amounts in millions)	2019			2018			2019			2018			2020			2019			2020			2019
Operating income (loss):
Walmart U.S.	$	4,176		$	3,937		$	12,977		$	12,343		$	5,057		$	4,659		$	9,359		$	8,801
Walmart International	634			1,179			2,265			3,713			812			893			1,618			1,631
Sam's Club	327			379			1,258			1,106			592			480			1,086			931
Corporate and support	(419		)	(509		)	(1,254		)	(1,272		)	(402		)	(449		)	(780		)	(835		)
Operating income	4,718			4,986			15,246			15,890			6,059			5,583			11,283			10,528
Interest, net	589			534			1,799			1,524			635			585			1,184			1,210
Other (gains) and losses	(244		)	1,876			(996		)	8,570			(3,222		)	85			(3,943		)	(752		)
Income before income taxes	$	4,373		$	2,576		$	14,443		$	5,796		$	8,646		$	4,913		$	14,042		$	10,070

Table of Contents

Disaggregated Revenues

In the following tables, segment net sales are disaggregated by either merchandise category or by market. From time to time, the Company revises the assignment of net sales of a particular item to a merchandise category. When the assignment changes, previous period amounts are reclassified to be comparable to the current period's presentation.

In addition, net sales related to eCommerce are provided for each segment, which include omni-channel sales, where a customer initiates an order ~~online~~digitally and the order is fulfilled through a store or club.


(Amounts in millions)	Three Months Ended October 31,				Nine Months Ended October 31,				Three Months Ended July 31,				Six Months Ended July 31,
Walmart U.S. net sales by merchandise category	2019		2018		2019		2018		2020		2019		2020		2019
Grocery	$	47,845	$	46,183	$	140,936	$	136,034	$	51,545	$	48,196	$	104,466	$	94,395
General merchandise	25,196		24,838		77,269		76,317		31,682		27,246		57,148		51,637
Health and wellness	9,262		8,869		28,018		26,834		9,154		8,949		18,754		17,888
Other categories	886		693		2,510		1,961		901		809		1,657		1,624
Total	$	83,189	$	80,583	$	248,733	$	241,146	$	93,282	$	85,200	$	182,025	$	165,544

Of Walmart U.S.'s total net sales, approximately ~~$5.0~~$10.5 billion and ~~$3.6~~$5.4 billion related to eCommerce for the three months ended ~~October~~July 31, ~~2019~~2020 and ~~2018,~~2019, respectively. Approximately ~~$14.0~~$18.8 billion and ~~$10.2~~$10.1 billion related to eCommerce for the ~~nine~~six months ended ~~October~~July 31, ~~2019~~2020 and ~~2018,~~2019, respectively.


(Amounts in millions)	Three Months Ended October 31,				Nine Months Ended October 31,				Three Months Ended July 31,				Six Months Ended July 31,
Walmart International net sales by market	2019		2018		2019		2018		2020		2019		2020		2019
Mexico and Central America	$	7,913	$	7,740	$	23,765	$	22,934	$	7,208	$	8,014	$	15,704	$	15,852
United Kingdom	6,961		7,407		21,355		22,572		6,698		7,316		13,830		14,393
Canada	4,608		4,639		13,366		13,596		5,127		4,635		9,413		8,758
China	2,718		2,637		8,209		8,322		2,579		2,428		5,947		5,491
Other	6,967		6,370		20,386		21,083		5,555		6,746		12,039		13,420
Total	$	29,167	$	28,793	$	87,081	$	88,507	$	27,167	$	29,139	$	56,933	$	57,914

Of Walmart International's total net sales, approximately ~~$2.9~~$3.3 billion and ~~$1.5~~$2.6 billion related to eCommerce for the three months ended ~~October~~July 31, ~~2019~~2020 and ~~2018,~~2019, respectively. Approximately ~~$7.9~~$6.2 billion and ~~$3.4~~$5.1 billion related to eCommerce for the ~~nine~~six months ended ~~October~~July 31, ~~2019~~2020 and ~~2018,~~2019, respectively.

~~Table of Contents~~


(Amounts in millions)	Three Months Ended October 31,				Nine Months Ended October 31,				Three Months Ended July 31,				Six Months Ended July 31,
Sam’s Club net sales by merchandise category	2019		2018		2019		2018		2020		2019		2020		2019
Grocery and consumables	$	8,967	$	8,570	$	26,342	$	25,167	$	10,715	$	8,931	$	21,076	$	17,251
Fuel, tobacco and other categories	2,831		3,168		8,646		9,348		2,068		2,863		4,081		5,481
Home and apparel	1,228		1,209		3,851		3,809		1,953		1,763		3,233		3,193
Health and wellness	858		813		2,526		2,403		931		842		1,832		1,669
Technology, office and entertainment	741		761		2,139		2,206		708		650		1,316		1,285
Total	$	14,625	$	14,521	$	43,504	$	42,933	$	16,375	$	15,049	$	31,538	$	28,879

Of Sam's Club's total net sales, approximately ~~$0.9~~$1.3 billion and ~~$0.7~~$1.0 billion related to eCommerce for the three months ended ~~October~~July 31, ~~2019~~2020 and ~~2018,~~2019, respectively. Approximately ~~$2.5~~$2.3 billion and ~~$1.9~~$1.7 billion related to eCommerce for the ~~nine~~six months ended ~~October~~July 31, 2020 and 2019, ~~and 2018,~~ respectively.

~~Note 10. Leases~~

~~The Company leases certain retail locations, distribution and fulfillment centers, warehouses, office spaces, land and equipment throughout the U.S. and internationally.~~

~~The Company's lease cost consists of the following:~~

(Amounts in millions) Three Months Ended October 31, 2019 Nine Months Ended October 31, 2019
Operating lease cost $ 692
$ 1,989
Finance lease cost:
Amortization of right-of-use assets 127
354
Interest on lease obligations 78
230
Variable lease cost 173
508

~~Other lease information is as follows:~~

(Dollar amounts in millions) Nine Months Ended October 31, 2019
Cash paid for amounts included in measurement of lease obligations:
Operating cash flows from operating leases $ 1,932
Operating cash flows from finance leases 202
Financing cash flows from finance leases 363
Assets obtained in exchange for operating lease obligations 1,576
Assets obtained in exchange for finance lease obligations 733
Weighted-average remaining lease term - operating leases 15.6 years
Weighted-average remaining lease term - finance leases 13.9 years
Weighted-average discount rate - operating leases 5.4 %
Weighted-average discount rate - finance leases 8.9 %

~~The aggregate annual lease obligations at October 31, 2019 are as follows:~~

(Amounts in millions)
Fiscal Year Operating Leases Finance Leases
Remainder of 2020 $ 580
$ 173
2021 2,462
755
2022 2,242
702
2023 2,019
579
2024 1,829
498
Thereafter 16,430
5,688
Total undiscounted lease obligations 25,562
8,395
Less imputed interest (8,081 ) (3,859 )
Net lease obligations $ 17,481
$ 4,536

~~Table of Contents~~

~~Upon adoption of ASU 2016-02,~~ ~~Leases~~ (Topic 842), the Company's aggregate annual lease obligations includes leases with reasonably assured renewals. The aggregate minimum annual lease rentals as of January 31, 2019 for the remaining contractual term of non-cancelable leases under ASC 840 were as follows:

(Amounts in millions)
Fiscal Year
Operating Leases⁽¹⁾
Capital Lease and Financing Obligations
2020 $ 1,856
$ 917
2021 1,655
856
2022 1,420
794
2023 1,233
667
2024 1,063
593
Thereafter 6,891
6,069
Total minimum rentals $ 14,118
$ 9,896
Less estimated executory costs 23
Net minimum lease payments 9,873
Financing obligation noncash gains and other 2,278
Less imputed interest (4,739 )
Present value of minimum lease payments $ 7,412


~~(1)~~	~~Represents minimum contractual obligation for non-cancelable leases with initial or remaining terms greater than 12 months as of January 31, 2019.~~

~~Note 11. Subsequent Event~~

~~ASDA Group Pension Scheme~~

In the fourth quarter of fiscal 2020, Asda, Walmart and the Trustee of the Asda Group Pension Scheme (the "Plan") entered into an agreement pursuant to which Asda made a cash contribution of $1.1 billion to the Plan which enabled the Plan to purchase a bulk insurance annuity contract for the benefit of Plan participants. The agreement between Asda, Walmart and the Trustee of the Plan contemplates that subsequent to the purchase of the bulk annuity insurance contract by the Plan, each of the Plan participants will be issued individual annuity contracts. The issuer of the individual annuity insurance contracts will be solely responsible for paying each participant’s benefits in full and will release the Plan and Asda from any future obligations. The Company expects the issuance of individual annuity contracts to the Plan participants to take place in late fiscal 2021 or early fiscal 2022, which will trigger a pension settlement that will result in all Plan balances, including accumulated pension components within other comprehensive income, being charged to expense.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

This discussion, which presents Walmart Inc.'s ("Walmart," the "Company," "our," or "we") results for periods occurring in the fiscal year ending January 31, ~~2020~~2021 ("fiscal ~~2020~~"2021") and the fiscal year ended January 31, ~~2019~~2020 ("fiscal ~~2019"~~2020"), should be read in conjunction with our Condensed Consolidated Financial Statements as of and for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, and the accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our Consolidated Financial Statements as of and for the year ended January 31, ~~2019,~~2020, the accompanying notes and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in our Annual Report on Form 10-K for the year ended January 31, ~~2019 incorporated by reference.~~2020.

We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period and the primary factors that accounted for those changes. We also discuss certain performance metrics that management uses to assess the Company's performance. Additionally, the discussion provides information about the financial results of each of the three segments of our business to provide a better understanding of how each of those segments and its results of operations affect the financial condition and results of operations of the Company as a whole.

Throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations, we discuss segment operating income, comparable store and club sales and other measures. Management measures the results of the Company's segments using each segment's operating income, including certain corporate overhead allocations, as well as other measures. From time to time, we revise the measurement of each segment's operating income and other measures as determined by the information regularly reviewed by our chief operating decision maker.

Comparable store and club sales, or comparable sales, is a metric that indicates the performance of our existing stores and clubs by measuring the change in sales for such stores and clubs, including eCommerce sales, for a particular period from the corresponding ~~period in the previous year.~~prior year period. Walmart's definition of comparable sales includes sales from stores and clubs open for the previous 12 months, including remodels, relocations, expansions and conversions, as well as eCommerce sales. We measure the eCommerce sales impact by including all sales initiated ~~online or~~digitally and those initiated through mobile applications, including omni-channel transactions which are fulfilled through our stores and clubs. Sales at a store that has changed in format are excluded from comparable sales when the conversion of that store is accompanied by a relocation or expansion that results in a change in the store's retail square feet of more than five percent. Additionally, sales related to acquisitions are excluded until such acquisitions have been owned for 12 months. Comparable sales are also referred to as "same-store" sales by others within the retail industry. The method of calculating comparable sales varies across the retail industry. As a result, our calculation of comparable sales is not necessarily comparable to similarly titled measures reported by other companies.

Beginning with the first quarter of the current fiscal year, we updated our definition of what was previously referred to as traffic (a component, along with ticket, of comparable sales). Traffic is now referred to as "transactions" and measures a percentage change in the number of sales transactions in our comparable stores, as well as for comparable eCommerce activity.

In discussing our operating results, the term currency exchange rates refers to the currency exchange rates we use to convert the operating results for countries where the functional currency is not the U.S. dollar into U.S. dollars or for countries experiencing hyperinflation. We calculate the effect of changes in currency exchange rates as the difference between current period activity translated using the current ~~period's~~period’s currency exchange rates and the comparable prior year ~~period's~~period’s currency exchange rates. Additionally, no currency exchange rate fluctuations are calculated for non-USD acquisitions until owned for 12 months. Throughout our discussion, we refer to the results of this calculation as the impact of currency exchange rate fluctuations. Volatility in currency exchange rates may impact the results, including net sales and operating income, of the Company and the Walmart International segment in the future.

Each of our segments contributes to the Company's operating results differently. Each, however, has generally maintained a consistent contribution rate to the Company's net sales and operating income in recent years other than minor changes to the contribution rate for the Walmart International segment due to fluctuations in currency exchange rates. ~~We recently took strategic actions to strengthen our portfolio for the long-term, including:~~


•	~~Acquisition of 81 percent of the outstanding shares, or 77 percent of the diluted shares, of Flipkart Private Limited ("Flipkart") in August 2018. Refer to~~ ~~Note 8~~ ~~for additional information on the transaction.~~


•	Divestiture of 80 percent of Walmart Brazil to Advent International ("Advent") in August 2018, for which we recorded a pre-tax loss of $4.8 billion in fiscal 2019, substantially all of which was recorded during the second quarter of fiscal 2019. Refer to ~~Note 8~~ ~~for additional information on the transaction.~~

~~Divestiture of banking operations in Walmart Chile and Walmart Canada in December 2018 and April 2019, respectively.~~

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•

Entered into an agreement in the fourth quarter of fiscal 2020 between Asda, Walmart and the Trustee of the Asda Group Pension Scheme (the "Plan") pursuant to which Asda made a $1.1 billion cash contribution to the Plan. This cash contribution enabled the Plan to purchase a bulk insurance annuity contract for the benefit of Plan participants in anticipation that each Plan participant is issued individual annuity contracts. The issuer of the individual annuity insurance contracts will be solely responsible for paying each participant’s benefits in full and will release the Plan and Asda from any future obligations. Once Plan participants have been issued individual annuity contracts, we will recognize a total, pre-tax charge of approximately $2.2 billion related to the pension settlement in late fiscal 2021 or early fiscal 2022. Refer to ~~Note 11~~ ~~for additional information on the transaction.~~

~~The Retail Industry~~

We operate in the highly competitive omni-channel retail industry in all of the markets we serve. We face strong sales competition from other discount, department, drug, dollar, variety and specialty stores, warehouse clubs and supermarkets, as well as eCommerce businesses. Many of these competitors are national, regional or international chains or have a national or international omni-channel or eCommerce presence. We compete with a number of companies for attracting and retaining quality employees ("associates"). We, along with other retail companies, are influenced by a number of factors including, but not limited to: catastrophic events and global health epidemics including the recent COVID-19 pandemic, weather, competitive pressures, consumer disposable income, consumer debt levels and buying patterns, consumer credit availability, cost of goods, currency exchange rate fluctuations, customer preferences, deflation, inflation, fuel and energy prices, general economic conditions, insurance costs, interest rates, labor costs, tax rates, the imposition of tariffs, cybersecurity attacks and unemployment. Further information on the factors that can affect our operating results and on certain risks to our Company and an investment in our securities can be found herein under "Item 5. Other Information."

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COVID-19 Updates

Our strategy is to make every day easier for busy families, operate with discipline, sharpen our culture, become more digital, and make trust a competitive advantage. These areas of focus are fundamental in running our business every day, and even more so now as Walmart plays an important role during the current COVID-19 pandemic.

Supporting our associates.We remain focused on our strategy while also prioritizing the physical safety, financial health and emotional well-being of our associates. In the U.S., we provided extra pay and benefits, including special cash bonuses to store associates and the introduction of a COVID-19 Emergency Leave Policy. We have also done similar things in some of our international markets to support and reward associates.

Serving our customers.From an operational standpoint, stores continued to operate at reduced hours to allow for additional cleaning and sanitizing, posted social-distancing decals, implemented protocols for temperature checks, began metering the number of customers in a store or club at any one time, and installed sneeze guards at pharmacies and checkouts. Stores, clubs, and facilities received masks and gloves, and associates and customers are required to wear face coverings to protect both associates and our customers. Globally, we hired more than 500,000 associates through August 2020, many of whom are temporary.

Helping others.We increased our giving to community organizations and continued food donations from our stores and distribution centers. We supported tenants in various markets by waiving or discounting rent for in-store tenants during April 2020, which continued through May 2020.

Managing the business and driving our long-term strategy.As we take care of associates, customers and communities, we continue to manage the business and drive our long-term strategy. We are maintaining our everyday low-price discipline and our omni-channel offering continues to resonate with customers around the world who are increasingly seeking convenience.

The COVID-19 pandemic resulted in broad challenges globally in the first half fiscal 2021, including new and varying government regulations, stretching our supply chain, and introducing significant sales volatility as well as channel and mix shifts due to changing consumer habits. Increased demand led to strong growth in net sales, including eCommerce growth acceleration, and higher operating expenses during the six months ended July 31, 2020. Although gross margin rates were flat for the six months ended July 31, 2020, gross margin rates significantly improved in the second quarter of fiscal 2021 as compared to the first quarter of fiscal 2021. For a detailed discussion on results of operations by reportable segment, refer to "Results of Operations" below.

We expect continued uncertainty in our business and the global economy due to the duration and intensity of the COVID–19 pandemic; the duration and extent of economic stimulus; the length and impact of any stay–at–home orders or government mandates; and volatility in employment trends and consumer confidence which will impact our results in the short term.

In the current environment, we believe cash flows from operations, our current cash position and access to capital markets will continue to be sufficient to meet our anticipated operating cash needs, which include funding seasonal buildups in merchandise inventories and funding our capital expenditures, acquisitions, dividend payments and share repurchases. See "Liquidity and Capital Resources" for additional information.

Company Performance Metrics

We are committed to helping customers save money and live better through everyday low prices, supported by everyday low costs. At times, we adjust our business strategies to maintain and strengthen our competitive positions in the countries in which we operate. We define our financial framework as:

strong, efficient growth;

consistent operating discipline; and

strategic capital allocation.

As we execute on this financial framework, we believe our returns on capital will improve over time.

The COVID-19 pandemic led to increased demand and overall net sales growth through the first two quarters of fiscal 2021. As our Company continues to respond to the COVID-19 pandemic, we have prioritized our focus on associate care, including extra pay and benefits as well as masks and gloves; increased cleaning and sanitation measures; customer safety; and new associate hiring. Additionally, we've reduced capital spending, delayed certain consulting projects, and reduced marketing and travel in response to the COVID-19 pandemic.

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Strong, Efficient Growth

Our objective of prioritizing strong, efficient growth means we will focus on the most productive growth opportunities, increasing comparable store and club sales, accelerating eCommerce sales growth and expansion of omni-channel initiatives while slowing the rate of growth of new stores and clubs. At times, we make strategic investments which are focused on the long-term growth of the Company.

Comparable sales is a metric that indicates the performance of our existing stores and clubs by measuring the change in sales for such stores and clubs, including eCommerce sales, for a particular period over the corresponding period in the previous year. The retail industry generally reports comparable sales using the retail calendar (also known as the 4-5-4 calendar). To be consistent with the retail industry, we provide comparable sales using the retail calendar in our quarterly earnings releases. However, when we discuss our comparable sales below, we are referring to our calendar comparable sales calculated using our fiscal calendar. As our fiscal calendar differs from the retail calendar, our fiscal calendar comparable sales also differ from the retail calendar comparable sales provided in our quarterly earnings releases. Calendar comparable sales, as well as the impact of fuel, for the three and ~~nine~~six months ended ~~October~~July 31, 2020 and 2019, were as follows:


	Three Months Ended October 31,								Nine Months Ended October 31,								Three Months Ended July 31,								Six Months Ended July 31,
	2019		2018		2019		2018		2019		2018		2019		2018		2020		2019		2020		2019		2020		2019		2020		2019
	With Fuel				Fuel Impact				With Fuel				Fuel Impact				With Fuel				Fuel Impact				With Fuel				Fuel Impact
Walmart U.S.	3.3	%	3.4	%	0.0	%	0.1	%	3.1	%	3.5	%	0.0	%	0.1	%	9.7	%	2.9	%	(0.2	)%	0.0	%	10.1	%	3.1	%	(0.3	)%	0.0	%
Sam's Club	0.6	%	5.4	%	0.1	%	2.1	%	1.3	%	6.1	%	0.6	%	2.1	%	8.8	%	1.7	%	(4.7	)%	0.6	%	9.2	%	1.6	%	(4.0	)%	0.8	%
Total U.S.	2.9	%	3.7	%	0.0	%	0.4	%	2.8	%	3.9	%	0.0	%	0.4	%	9.6	%	2.7	%	(0.8	)%	0.0	%	10.0	%	2.8	%	(0.7	)%	0.0	%

Comparable sales in the U.S., including fuel, increased ~~2.9%~~9.6% and ~~2.8%~~10.0% for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, when compared to the same period in the previous fiscal year. The Walmart U.S. segment had comparable sales growth of ~~3.3%~~9.7% and ~~3.1%~~10.1% for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, driven by growth in average ticket ~~and transactions.~~primarily resulting from increased demand due to the COVID-19 pandemic, partially offset by a decline in transactions as customers consolidated shopping trips. With the shift in purchasing behavior, Walmart U.S. segment's eCommerce sales positively contributed approximately ~~1.7%~~6.0% and ~~1.5%~~5.0% to comparable sales for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019, respectively.~~

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2020, respectively, and was primarily driven by store pickup and delivery and walmart.com.

Comparable sales at the Sam's Club segment were ~~0.6%~~8.8% and ~~1.3%~~9.2% for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively. The Sam's Club segment's comparable sales benefited from growth in transactions and ~~higher fuel sales, which were~~average ticket resulting from the COVID-19 pandemic, partially offset by lower ~~ticket due to~~fuel sales and our decision to remove tobacco from certain club locations. The Sam's Club segment's eCommerce sales positively contributed approximately ~~1.5%~~2.0% and ~~1.4%~~1.9% to comparable sales ~~respectively,~~ for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019.~~2020, respectively.

Consistent Operating Discipline

We operate with discipline by managing expenses and optimizing the efficiency of how we work and creating an environment in which we have sustainable lowest cost to serve. We invest in technology and process improvements to increase productivity, manage inventory and reduce costs. We measure operating discipline through expense leverage, which we define as net sales growing at a faster rate than operating, selling, general and administrative ("operating") expenses.


	Three Months Ended October 31,						Nine Months Ended October 31,						Three Months Ended July 31,						Six Months Ended July 31,
(Amounts in millions)	2019			2018			2019			2018			2020			2019			2020			2019
Net sales	$	126,981		$	123,897		$	379,318		$	372,586		$	136,824		$	129,388		$	270,496		$	252,337
Percentage change from comparable period	2.5		%	1.4		%	1.8		%	3.3		%	5.7		%	1.8		%	7.2		%	1.5		%
Operating, selling, general and administrative expenses	$	27,373		$	26,792		$	80,190		$	79,328		$	28,994		$	26,871		$	56,366		$	52,817
Percentage change from comparable period	2.2		%	(0.3		)%	1.1		%	2.6		%	7.9		%	0.6		%	6.7		%	0.5		%
Operating, selling, general and administrative expenses as a percentage of net sales	21.6		%	21.6		%	21.1		%	21.3		%	21.2		%	20.8		%	20.8		%	20.9		%

Despite the increase in net sales from the strong demand resulting from the COVID-19 pandemic for the three months ended July 31, 2020, operating expenses as a percentage of net sales increased by 42 basis points when compared to the same period in the previous fiscal year. The increase was primarily the result of $1.5 billion of incremental expenses related to associate care and customer safety during the COVID-19 pandemic which included special bonuses, additional cleaning and supplies, emergency leave pay and other similar charges, as well as a $0.4 billion business restructuring charge in Walmart U.S.

For the ~~three and nine~~six months ended ~~October~~July 31, ~~2019~~2020 we leveraged operating expenses, decreasing operating expenses as a percentage of net sales by ~~6 and 15~~9 basis points when compared to the same period in the previous fiscal ~~year, respectively.~~year. The primary ~~drivers~~driver of the expense leverage ~~for~~was due to our growth in comparable store sales driven by strong demand resulting from the ~~three and nine months ended October 31, 2019 were strong sales and productivity improvements in the Walmart U.S. segment~~COVID-19 pandemic, which was partially offset by ~~a $0.3~~$2.4 billion ~~non-cash trade name impairment charge in~~of incremental expenses described above during the ~~Walmart International segment.~~

~~Strategic Capital Allocation~~

~~We are allocating more capital to eCommerce, technology and supply chain~~COVID-19 pandemic as well as ~~store remodels and less to new store and club openings, when compared to prior years. Our strategy includes initiatives to improve our customer proposition~~a $0.4 billion business restructuring charge in stores and clubs and integrate our digital and physical shopping experience. As such, we have been allocating more capital in recent years to eCommerce, technology and supply chain, as well as store remodels, and less capital to new stores and clubs openings. The following table presents our capital allocation for the nine months ended October 31, 2019 and 2018:

(Amounts in millions) Nine Months Ended October 31,
Allocation of Capital Expenditures 2019 2018
eCommerce, technology, supply chain and other $ 3,859
$ 3,355
Store remodels 1,855
1,734
New stores and clubs, including expansions and relocations 67
230
Total U.S. 5,781
5,319
Walmart International 1,984
1,695
Total capital expenditures $ 7,765
$ 7,014

Walmart U.S.

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Strategic Capital Allocation

Our strategy includes improving our customer-facing initiatives in stores and clubs and creating a seamless omni-channel experience for our customers. In recent years, we have allocated more capital to eCommerce, technology, supply chain, and store remodels and less to new store and club openings. We will continue to remain disciplined with our capital spending in light of the COVID-19 pandemic. Total capital expenditures for the six months ended July 31, 2020 decreased compared to the prior year due to the COVID-19 pandemic which impacted the timing of store remodeling and front-end technology transformation activities in Walmart U.S.; the following table provides additional detail:



(Amounts in millions)	Six Months Ended July 31,
Allocation of Capital Expenditures	2020		2019
eCommerce, technology, supply chain and other	$	1,814	$	2,327
Store remodels	822		1,310
New stores and clubs, including expansions and relocations	43		41
Total U.S.	2,679		3,678
Walmart International	890		1,193
Total Capital Expenditures	$	3,569	$	4,871

Returns

As we execute our financial framework, we believe our return on capital will improve over time. We measure return on capital with our return on investment and free cash flow metrics. In addition, we provide returns in the form of share repurchases and dividends, which are discussed in the Liquidity and Capital Resources section.

Return on Assets and Return on Investment

We include Return on Assets ("ROA"), the most directly comparable measure based on our financial statements presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"), and Return on Investment ("ROI") as metrics to assess returns on assets. While ROI is considered a non-GAAP financial measure, management believes ROI is a meaningful metric to share with investors because it helps investors assess how effectively Walmart is deploying its assets. Trends in ROI can fluctuate over time as management balances long-term strategic initiatives with possible short-term impacts. ROA was ~~6.3%~~7.7% and ~~2.6%~~6.0% for the trailing twelve months ended ~~October~~July 31, ~~2019~~2020 and ~~2018,~~2019, respectively. The increase in ROA was primarily due to the increase in consolidated net income ~~over the trailing twelve months,~~ primarily ~~resulting from lapping the $4.5 billion net loss in fiscal 2019 related to the sale of the majority stake in Walmart Brazil,~~driven by the change in fair value of the investment in JD.com, ~~and lapping the restructuring and impairment charges in the fourth quarter of fiscal 2018,~~ partially offset by ~~the dilution to operating income related to Flipkart.~~ ~~ROI was 13.7% and 13.4% for the trailing twelve months ended October 31, 2019 and 2018, respectively.~~ The increase in ROI was due to the increase in operating income over the trailing twelve months primarily as a result of lapping the restructuring and impairment charges in the fourth quarter of fiscal 2018, offset by the dilution to operating income related to Flipkart. The denominator remained relatively flat as the increase in average total assets due to the acquisition of ~~Flipkart~~Flipkart. ROI was ~~offset by~~13.5% and 14.3% for the trailing twelve months ended July 31, 2020 and 2019, respectively. The decrease in ~~average invested capital resulting from~~ROI was primarily due to the ~~removal of the eight times rent factor upon adoption of ASU 2016-02, Leases ("ASU 2016-02") since operating lease right of use assets are now included~~increase in average total assets. due to the acquisition of Flipkart.

We define ROI as adjusted operating income (operating income plus interest income, depreciation and amortization, and rent expense) for the trailing 12 months divided by average invested capital during that period. We consider average invested capital to be the average of our beginning and ending total assets, plus average accumulated depreciation and average amortization, less average accounts payable and average accrued liabilities for that period. ~~Upon adoption of ASU 2016-02, rent for~~For the trailing 12twelve months ~~multiplied by a factor of 8 is no longer included in the calculation of ROI on a prospective basis as operating lease assets are now capitalized. For fiscal 2020,~~ended July 31, 2019, lease related assets and associated accumulated amortization are included in the denominator at their carrying amount as of ~~the current~~that balance sheet date, rather than averaged, because they are ~~no longer~~not directly comparable to the prior year calculation which included rent for the trailing 12 months multiplied by a factor of 8. A two-point average ~~will be~~was used for leased assets beginning in fiscal 2021, after one full year from the date of adoption of the new lease standard. Further, beginning prospectively in fiscal 2020, rent expense in the numerator excludes short-term and variable lease costs as these costs are not included in the operating lease right-of-use asset balance.

Accounting Standards Update 2016-02, ~~Prior to adoption of~~ Leases (Topic 842) ("ASU 2016-02, we defined ROI as adjusted operating income (operating income plus interest income, depreciation and amortization, and rent expense) for the trailing 12 months divided by average invested capital during that period. We considered average invested capital to be the average of our beginning and ending total assets, plus average accumulated depreciation and average amortization, less average accounts payable and average accrued liabilities for that period, plus a rent factor equal to the rent for the fiscal year or trailing 12 months multiplied by a factor of 8, which estimated the hypothetical capitalization of our operating leases. ~~Because the new lease standard was adopted under the modified retrospective approach as of February 1, 2019, our calculation of ROI for the comparable fiscal 2019 period was not revised.~~2016-02").

Our calculation of ROI is considered a non-GAAP financial measure because we calculate ROI using financial measures that exclude and include amounts that are included and excluded in the most directly comparable GAAP financial measure. For example, we exclude the impact of depreciation and amortization from our reported operating income in calculating the numerator of our calculation of ROI. As mentioned above, we consider ROA to be the financial measure computed in accordance with generally accepted accounting principles most directly comparable to our calculation of ROI. ROI differs from ROA (which is consolidated net income for the period divided by average total assets for the period) because ROI: adjusts operating income to exclude certain expense items and adds interest income; adjusts total assets for the impact of accumulated depreciation and amortization, accounts payable and accrued liabilities to arrive at total invested capital. Because of the adjustments mentioned above, we believe ROI more accurately measures how we are deploying our key assets and is more meaningful to investors than ROA.Although ROI is a standard financial measure, numerous methods exist for calculating a company's ROI. As a result, the method used by management to calculate our ROI may differ from the methods used by other companies to calculate their ~~ROI.~~ROI.

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The calculation of ROA and ROI, along with a reconciliation of ROI to the calculation of ROA, the most comparable GAAP financial measure, is as follows:


	For the Trailing Twelve Months Ending October 31,						For the Trailing Twelve Months Ending July 31,
(Amounts in millions)	2019			2018			2020			2019
CALCULATION OF RETURN ON ASSETS
Numerator
Consolidated net income	$	14,720		$	5,729		$	18,128		$	13,216
Denominator
Average total assets⁽¹⁾	$	233,207		$	217,999		$	236,122		$	220,462
Return on assets (ROA)	6.3		%	2.6		%	7.7		%	6.0		%

CALCULATION OF RETURN ON INVESTMENT
Numerator
Operating income	$	21,313		$	20,357		$	21,323		$	21,581
+ Interest income	212			190			151			227
+ Depreciation and amortization	10,889			10,649			11,113			10,782
+ Rent	2,733			3,053			2,679			2,809
= Adjusted operating income	$	35,147		$	34,249
= ROI operating income							$	35,266		$	35,399

Denominator
Average total assets^(1),(2)	$	240,261		$	217,999		$	236,122		$	227,557
+ Average accumulated depreciation and amortization^{(1), (2)}	87,982			84,136			93,418			86,003
- Average accounts payable⁽¹⁾	49,740			48,658			46,099			44,500
- Average accrued liabilities⁽¹⁾	21,884			22,276			22,230			21,769
+ Rent x 8	N/A			24,424
= Average invested capital	$	256,619		$	255,625		$	261,211		$	247,291
Return on investment (ROI)	13.7		%	13.4		%	13.5		%	14.3		%


	As of October 31,						As of July 31,
	2019		2018		2017		2020		2019		2018
Certain Balance Sheet Data
Total assets	$	239,830	$	226,583	$	209,414	$	237,382	$	234,861	$	206,062
Leased assets, net	21,099		6,991		7,144		NP		21,188		6,998
Total assets without leased assets, net	218,731		219,592		202,270		NP		213,673		199,064
Accumulated depreciation and amortization	91,697		85,827		82,445		97,023		89,813		84,052
Accumulated amortization on leased assets	4,140		5,701		5,497		NP		3,686		5,547
Accumulated depreciation and amortization, without leased assets	87,557		80,126		76,948		NP		86,127		78,505
Accounts payable	49,750		49,729		47,587		46,326		45,871		43,128
Accrued liabilities	20,973		22,795		21,757		23,768		20,691		22,846

~~(1)~~ ¹The average is based on the addition of the account balance at the end of the current period to the account balance at the end of the corresponding prior period and dividing by 2. Average total assets as used in ROA includes the average impact of the adoption of ASU ~~2016-02~~2016-02..

~~(2)~~ ²For the twelve months ended ~~October~~July 31, 2019, as a result of adopting ASU 2016-02, average total assets is based on the average of total assets without leased assets, net plus leased assets, net as of ~~October~~July 31, 2019. Average accumulated depreciation and amortization is based on the average of accumulated depreciation and amortization, without leased assets plus accumulated amortization on leased assets as of ~~October~~July 31, 2019.

NP = Not provided

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Free Cash Flow

Free cash flow is considered a non-GAAP financial measure. Management believes, however, that free cash flow, which measures our ability to generate cash from our business operations, is an important financial measure for use in evaluating the Company's financial performance. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. See Liquidity and Capital Resources for discussions of GAAP metrics including net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities.

We define free cash flow as net cash provided by operating activities in a period minus payments for property and equipment made in that period. We had net cash provided by operating activities of ~~$14.5~~$19.0 billion for the ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, which ~~decreased~~increased when compared to ~~$17.3~~$11.2 billion for the ~~nine~~six months ended ~~October~~July 31, ~~2018~~ 2019primarily due to the ~~timing~~impact of ~~vendor payments and U.S. associate payroll,~~the global health crisis which accelerated inventory sell-through, as well as the ~~inclusion~~timing and payment of ~~Flipkart operations~~inventory purchases, incremental COVID-19 related expenses and certain benefit payments. We generated free cash flow of ~~$6.8~~$15.4 billion for the ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, which ~~decreased~~increased when compared to ~~$10.3~~$6.3 billion for the ~~nine~~six months ended ~~October~~July 31, ~~2018~~2019 due to the same reasons as the ~~decline~~increase in net cash provided by operating activities, as well as ~~$0.8~~$1.3 billion in ~~increased~~decreased capital expenditures. due to impacts from the COVID-19 pandemic which impacted the timing of store remodeling and front-end technology transformation activities in Walmart U.S.

Walmart'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 or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our Condensed Consolidated Statements of Cash Flows.

Although other companies report their free cash flow, numerous methods may exist for calculating a company's free cash flow. As a result, the method used by management to calculate our free cash flow may differ from the methods used by other companies to calculate their free cash flow.

The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, which we believe to be the GAAP financial measure most directly comparable to free cash flow, as well as information regarding net cash used in investing activities and net cash used in financing activities.


	Nine Months Ended October 31,						Six Months Ended July 31,
(Amounts in millions)	2019			2018			2020			2019
Net cash provided by operating activities	$	14,539		$	17,308		$	18,956		$	11,185
Payments for property and equipment	(7,765		)	(7,014		)	(3,569		)	(4,871		)
Free cash flow	$	6,774		$	10,294		$	15,387		$	6,314

Net cash used in investing activities⁽¹⁾	$	(6,285	)	$	(20,554	)	$	(3,634	)	$	(3,824	)
Net cash provided by (used in) financing activities	(7,213		)	5,921
Net cash used in financing activities							(7,814		)	(5,531		)

(1) "Net cash used in investing activities" includes payments for property and equipment, which is also included in our computation of free cash flow.

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Results of Operations

Consolidated Results of Operations


	Three Months Ended October 31,						Nine Months Ended October 31,						Three Months Ended July 31,						Six Months Ended July 31,
(Amounts in millions, except unit counts)	2019			2018			2019			2018			2020			2019			2020			2019
Total revenues	$	127,991		$	124,894		$	382,293		$	375,612		$	137,742		$	130,377		$	272,364		$	254,302
Percentage change from comparable period	2.5		%	1.4		%	1.8		%	3.2		%	5.6		%	1.8		%	7.1		%	1.4		%
Net sales	$	126,981		$	123,897		$	379,318		$	372,586		$	136,824		$	129,388		$	270,496		$	252,337
Percentage change from comparable period	2.5		%	1.4		%	1.8		%	3.3		%	5.7		%	1.8		%	7.2		%	1.5		%
Total U.S. calendar comparable sales increase	2.9		%	3.7		%	2.8		%	3.9		%	9.6		%	2.7		%	10.0		%	2.8		%
Gross profit margin as a percentage of net sales	24.5		%	24.8		%	24.4		%	24.7		%	24.9		%	24.3		%	24.3		%	24.3		%
Operating income	$	4,718		$	4,986		$	15,246		$	15,890		$	6,059		$	5,583		$	11,283		$	10,528
Operating income as a percentage of net sales	3.7		%	4.0		%	4.0		%	4.3		%	4.4		%	4.3		%	4.2		%	4.2		%
Other (gains) and losses	$	(244	)	$	1,876		$	(996	)	$	8,570		$	(3,222	)	$	85		$	(3,943	)	$	(752	)
Consolidated net income (loss)	$	3,321		$	1,817		$	10,907		$	3,366
Consolidated net income													$	6,439		$	3,680		$	10,513		$	7,586
Unit counts at period end	11,438			11,277			11,438			11,277			11,496			11,389			11,496			11,389
Retail square feet at period end	1,128			1,125			1,128			1,125			1,127			1,127			1,127			1,127

Our total revenues, which are mostly comprised of net sales, but also include membership and other income, increased ~~$3.1~~$7.4 billion or ~~2.5%~~5.6% and ~~$6.7~~$18.1 billion or ~~1.8%~~7.1% for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, when compared to the same periods in the previous fiscal year. These increases in ~~revenues~~revenue were due to increases in net sales, which were primarily due to ~~overall~~strong positive comparable sales for the Walmart U.S. and Sam's Club segments resulting from strong demand due to the COVID-19 pandemic, along with positive comparable sales in majority of our international markets, despite operating limitations in several markets due to government regulations and precautionary measures taken as a result of the ~~addition of net sales from Flipkart, which we acquired in August 2018.~~COVID-19 pandemic. These increases were partially offset by ~~our sale of the majority stake in Walmart Brazil in August 2018 and~~ a ~~$1.0~~$2.4 billion and ~~$4.2~~$3.7 billion negative impact of fluctuations in currency exchange rates for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively.

~~Our gross~~As the COVID-19 pandemic spread to the U.S in late February, we saw the mix of sales shift heavily toward food and consumables as consumers initiated stock-up trips. Toward the end of the first quarter of fiscal 2021 and throughout the second quarter of fiscal 2021, sales increased in several general merchandise categories which were heavily influenced by stimulus dollars in the U.S. eCommerce sales remained strong throughout the first half of fiscal 2021 as more customers gravitated toward and continued using store pickup and delivery.

Gross profit as a percentage of net sales ("gross profit rate") ~~decreased 36~~increased 63 basis points for the three ~~and nine~~ months ended ~~October~~July 31, ~~2019,~~2020 when compared to the same ~~periods~~period in the previous fiscal year. ~~These decreases were~~The increase was primarily ~~due~~the result of strong sales in higher-margin general merchandise categories, which in the U.S. was aided by government stimulus, lower markdowns, and better fuel margins.

The gross profit rate was flat for the six months ended July 31, 2020 when compared to the ~~addition of Flipkart~~same period in the ~~Walmart International segment and price investment~~previous fiscal year. The increase in the gross profit rate for the three months ended July 31, 2020, as described above, was offset in the Walmart U.S. segment ~~partially offset~~ by ~~favorable merchandise mix including strength~~ carryover of prior year price investments as well the temporary closure of our Auto Care Centers and Vision Centers in ~~private brands and less pressure from transportation costs~~response to the COVID-19 pandemic.

Despite the increase in ~~the Walmart U.S. segment.~~

~~Operating~~net sales, operating expenses as a percentage of net sales ~~decreased 6 and 15~~increased 42 basis points for the three ~~and nine~~ months ended ~~October~~July 31, 2019, respectively, when compared to the same periods in the previous fiscal year. The primary drivers of the expense leverage for the three and nine months ended October 31, 2019 were strong sales and productivity improvements in the Walmart U.S. segment partially offset by a $0.3 billion non-cash trade name impairment charge in the Walmart International segment.

Other gains and losses consisted of a gain of $0.2 billion and a loss of $1.9 billion for the three months ended October 31, 2019 and 2018, respectively, and consisted of a gain of $1.0 billion and a loss of $8.6 billion for the nine months ended October 31, 2019 and 2018, respectively. The changes in other gains and losses for the three months ended October 31, 20192020 when compared to the same period in the previous fiscal year is primarily due to $1.5 billion of incremental costs related to the ~~recognition~~COVID-19 pandemic and a $0.4 billion business restructuring charge in the Walmart U.S. segment.

Operating expenses as a percentage of ~~changes in fair value of our investment in JD.com. The change in other gains and losses~~ net sales decreased 9 basis points for the ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020 when compared to the same period in the previous fiscal year, ~~were~~ primarily due to ~~the $4.8~~strong sales, partially offset by $2.4 billion ~~pre-tax loss~~of incremental costs related to the ~~sale~~COVID-19 pandemic as well as a $0.4 billion business restructuring charge in the Walmart U.S. segment.

Other gains and losses consisted of a ~~majority stake in Walmart Brazil~~gain of $3.2 billion and a loss of $0.1 billion for the ~~recognition~~three months ended July 31, 2020 and 2019, respectively, and a gain of ~~changes in~~$3.9 billion and $0.8 billion for the six months ended July 31, 2020 and 2019, respectively, primarily representing the fair value change of our ~~investment in JD.com.~~JD.com investment.

Our effective income tax rate was ~~24.1%~~25.5% and ~~24.5%~~25.1% for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, compared to ~~29.5%~~25.1% and ~~41.9%~~24.7% for the same periods in the previous fiscal year. The decrease in our effective tax rate for the three months ended October 31, 2019, when compared to the same period in the previous fiscal year is primarily due to the changes in fair value of our investment in JD.com and the timing of the Flipkart acquisition. The decrease in our effective tax rate for the nine months ended October 31, 2019, is primarily due to the sale of a majority stake in Walmart Brazil, which increased the comparative period's effective tax rate 17%, as it provided minimal realizable tax benefit. Our effective income tax rate may fluctuate from quarter to quarter as a result of factors including changes in our assessment of certain tax contingencies, valuation allowances, changes in tax law, outcomes of administrative audits, the impact of discrete items and the mix and size of earnings among our U.S. operations and international operations, which are subject to statutory rates that may be different than the U.S. statutory rate.

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As a result of the factors discussed above, consolidated net income increased ~~$1.5~~$2.8 billion and ~~$7.5~~$2.9 billion for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, when compared to the same periods in the previous fiscal year. Accordingly, diluted net income per common share attributable to Walmart was ~~$1.15~~$2.27 and ~~$3.74~~$3.67 for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, which represents an increase of ~~$0.57~~$1.01 and ~~$2.73~~$1.08 when compared to the same periods, respectively, in the previous fiscal year.

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Walmart U.S. Segment


	Three Months Ended October 31,						Nine Months Ended October 31,						Three Months Ended July 31,						Six Months Ended July 31,
(Amounts in millions, except unit counts)	2019			2018			2019			2018			2020			2019			2020			2019
Net sales	$	83,189		$	80,583		$	248,733		$	241,146		$	93,282		$	85,200		$	182,025		$	165,544
Percentage change from comparable period	3.2		%	3.7		%	3.1		%	4.0		%	9.5		%	2.9		%	10.0		%	3.1		%
Calendar comparable sales increase	3.3		%	3.4		%	3.1		%	3.5		%	9.7		%	2.9		%	10.1		%	3.1		%
Operating income	$	4,176		$	3,937		$	12,977		$	12,343		$	5,057		$	4,659		$	9,359		$	8,801
Operating income as a percentage of net sales	5.0		%	4.9		%	5.2		%	5.1		%	5.4		%	5.5		%	5.1		%	5.3		%
Unit counts at period end	4,759			4,755			4,759			4,755			4,754			4,759			4,754			4,759
Retail square feet at period end	703			705			703			705			703			704			703			704

Net sales for the Walmart U.S. segment increased ~~$2.6~~$8.1 billion or ~~3.2%~~9.5% and ~~$7.6~~$16.5 billion or ~~3.1%~~10.0% for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, when compared to the same periods in the previous fiscal year. The increases were due to comparable sales of ~~3.3%~~9.7% and ~~3.1%~~10.1% for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, driven by growth in average ticket primarily resulting from increased demand due to economic conditions and ~~transactions.~~government stimulus initiatives related to the COVID-19 pandemic. Customers continued consolidating shopping trips and purchasing larger baskets which contributed to the growth in average ticket while transactions decreased. Stimulus funds resulting from the COVID-19 pandemic tapered off contributing to slower growth in comparable sales towards the end of the second quarter. With the shift in purchasing behavior, Walmart U.S. eCommerce sales positively contributed approximately ~~1.7%~~6.0% and ~~1.5%~~5.0% to comparable sales during the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, and ~~were~~was primarily driven by ~~online grocery.~~store pickup and delivery and walmart.com.

Gross profit rate ~~decreased 4 and 7~~increased 42 basis points for the three ~~and nine~~ months ended ~~October~~July 31, ~~2019, respectively,~~2020, when compared to the same ~~periods~~period in the previous fiscal ~~year. The decreases were primarily~~year due to increased sales of higher-margin general merchandise categories, fewer markdowns, and improvements in walmart.com's contribution to gross margin rates. Gross profit rate decreased 33 basis points for the ~~result~~six months ended July 31, 2020, when compared to the same period in the previous fiscal year due to carryover of ~~continued~~prior year price investments ~~which were~~as well the temporary closure of our Auto Care Centers and Vision Centers in response to the COVID-19 pandemic, partially offset by the gross profit rate increase during the three months ended July 31, 2020.

Despite the increase in net sales, operating expenses as a percentage of net sales increased 41 basis points for the three months ended July 31, 2020 when compared to the same period in the previous fiscal year primarily due to $1.2 billion of incremental costs related to the COVID-19 pandemic, including special bonuses for store associates, additional costs associated with outfitting our associates with masks and gloves, expanded cleaning practices, and expanded sick and emergency leave pay, as well as a $0.4 billion business restructuring charge resulting from changes to Walmart U.S. support teams to better ~~merchandise mix, including strength in private brands, and less pressure from transportation costs.~~support its omni-channel strategy.

Operating expenses as a percentage of net sales decreased ~~21 and 19~~22 basis points for the ~~three and nine~~six months ended ~~October~~July 31, ~~2019, respectively,~~2020 when compared to the same ~~periods~~period in the previous fiscal year, primarily due to strong sales, ~~and productivity improvements,~~which were partially offset by $1.9 billion of incremental costs related to the ~~continued growth of eCommerce.~~COVID-19 pandemic as well as the $0.4 billion business restructuring charge described above.

As a result of the factors discussed above, operating income increased ~~$0.2~~$0.4 billion and $0.6 billion for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, when compared to the same periods in the previous fiscal year.

Walmart International Segment

Three Months Ended October 31, Nine Months Ended October 31,
(Amounts in millions, except unit counts) 2019 2018 2019 2018
Net sales $ 29,167
$ 28,793
$ 87,081
$ 88,507
Percentage change from comparable period 1.3 % (2.6 )% (1.6 )% 4.2 %
Operating income $ 634
$ 1,179
$ 2,265
$ 3,713
Operating income as a percentage of net sales 2.2 % 4.1 % 2.6 % 4.2 %
Unit counts at period end 6,080

5,925
6,080
5,925
Retail square feet at period end 344

340
344
340

Net sales for the Walmart International segment increased $0.4 billion or 1.3% for the three months ended October 31, 2019, when compared to the same period in the previous fiscal year. The increase was primarily due to the addition of net sales from Flipkart, which we acquired in August 2018, and positive comparable sales growth in the majority of our markets. This increase was offset by negative fluctuations in currency exchange rates of $1.0 billion and a reduction in net sales due to our sale of the majority stake in Walmart Brazil in August 2018.



	Three Months Ended July 31,						Six Months Ended July 31,
(Amounts in millions, except unit counts)	2020			2019			2020			2019
Net sales	$	27,167		$	29,139		$	56,933		$	57,914
Percentage change from comparable period	(6.8		)%	(1.1		)%	(1.7		)%	(3.0		)%
Operating income	$	812		$	893		$	1,618		$	1,631
Operating income as a percentage of net sales	3.0		%	3.1		%	2.8		%	2.8		%
Unit counts at period end	6,143			6,031			6,143			6,031
Retail square feet at period end	344			343			344			343

Net sales for the Walmart International segment decreased ~~$1.4~~$2.0 billion or 1.6% for the nine months ended October 31, 2019, when compared to the same period in the previous fiscal year. The decrease was primarily due to negative fluctuations in currency exchange rates of $4.16.8% and $1.0 billion and a reduction in net sales due to our sale of the majority stake in Walmart Brazil in August 2018. This decrease was offset by the addition of net sales from Flipkart and positive comparable sales growth in the majority of our markets.

~~Gross profit rate decreased 150 and 159 basis points~~or 1.7% for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, when compared to the same periods in the previous fiscal year. The decreases were primarily due to negative fluctuations in ~~gross profit rate~~currency exchange rates of $2.4 billion and $3.7 billion for the three and ~~nine~~six months

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ended ~~October~~July 31, ~~2019,~~2020, respectively, which were ~~primarily due~~partially offset by positive comparable sales growth in the majority of our markets driven by changes in consumer behavior in response to the ~~addition~~COVID-19 pandemic.

Beginning in March, we experienced significant economic pressure, channel shift and mix shifts in our major markets as customers focused on pantry stock-ups and reduced purchases of ~~Flipkart,~~non-essential products. Through April and into May, we experienced extensive store and operational closures in several markets such as ~~well~~India, South Africa and Central America as ~~a change in merchandise mix.~~government mandates limited or restricted the sale of certain products. By the end of the second quarter, most of our closed stores and warehouses had resumed operations.

~~Operating expenses as a percentage of net sales~~Gross profit rate increased 4974 and 39 basis points for the three and six months ended ~~October~~July 31, 2019 when compared to the same period in the previous fiscal year primarily due to a $0.3 billion non-cash impairment charge to write-off the carrying value of one of Flipkart's two fashion trade names, Jabong.com, as a result of a recent strategic decision to focus our efforts on a single fashion platform in order to simplify the business and customer proposition.

~~Operating expenses as a percentage of net sales decreased 5 basis points for the nine months ended October 31, 2019~~2020, respectively, when compared to the same periods in the previous fiscal year. The ~~decrease~~increases in gross profit rate for the ~~nine~~three and six months ended ~~October~~July 31, ~~2019, was~~2020 were due to reduced fuel sales in the U.K. and limited operations in our Flipkart business during the second quarter of fiscal 2021.

Operating expenses as a percentage of net sales increased 65 and 24 basis points for the three and six months ended July 31, 2020, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily due to ~~positive comparable sales in~~$0.2 billion and $0.3 billion of incremental costs related to the ~~majority of our markets~~COVID-19 pandemic for the three and ~~cost discipline across multiple markets,~~six months ended July 31, 2020, respectively, including additional costs related to customer and associate health as well as increased cleaning practices, expanded sick and emergency leave pay, and bonuses for store associates. The incremental costs associated with the COVID-19 pandemic were partially offset by the ~~impairment charge described above.~~

~~Table~~current period impact of ~~Contents~~

a twelve-month property tax abatement in the U.K.

As a result of the factors discussed above, operating income decreased ~~$0.5 billion and $1.4 billion~~ for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019, respectively,~~2020, when compared to the same periods in the previous fiscal year.

Sam's Club Segment


	Three Months Ended October 31,						Nine Months Ended October 31,						Three Months Ended July 31,						Six Months Ended July 31,
(Amounts in millions, except unit counts)	2019			2018			2019			2018			2020			2019			2020			2019
Including Fuel
Net sales	$	14,625		$	14,521		$	43,504		$	42,933		$	16,375		$	15,049		$	31,538		$	28,879
Percentage change from comparable period	0.7		%	(2.3		)%	1.3		%	(1.8		)%	8.8		%	1.8		%	9.2		%	1.6		%
Calendar comparable sales increase	0.6		%	5.4		%	1.3		%	6.1		%	8.8		%	1.7		%	9.2		%	1.6		%
Operating income	$	327		$	379		$	1,258		$	1,106		$	592		$	480		$	1,086		$	931
Operating income as a percentage of net sales	2.2		%	2.6		%	2.9		%	2.6		%	3.6		%	3.2		%	3.4		%	3.2		%
Unit counts at period end	599			597			599			597			599			599			599			599
Retail square feet at period end	80			80			80			80			80			80			80			80

Excluding Fuel ⁽¹⁾
Net sales	$	13,075		$	13,002		$	38,979		$	38,675		$	15,264		$	13,451		$	29,333		$	25,904
Percentage change from comparable period	0.6		%	(4.3		)%	0.8		%	(3.8		)%	13.5		%	1.2		%	13.2		%	0.9		%
Operating income	$	274		$	345		$	1,141		$	1,027		$	527		$	424		$	925		$	867
Operating income as a percentage of net sales	2.1		%	2.7		%	2.9		%	2.7		%	3.5		%	3.2		%	3.2		%	3.3		%

(1) We believe the "Excluding Fuel" information is useful to investors because it permits investors to understand the effect of the Sam's Club segment's fuel sales on its results of operations, which are impacted by the volatility of fuel prices. Volatility in fuel prices may continue to impact the operating results of the Sam's Club segment in the future.

Net sales for the Sam's Club segment increased ~~$0.1~~$1.3 billion or ~~0.7%~~8.8% and ~~$0.6~~$2.7 billion or ~~1.3%~~9.2% for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, when compared to the same periods in the previous fiscal year. The increases were primarily due to comparable sales, including fuel, of ~~0.6%~~8.8% and ~~1.3%~~9.2% for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively. Comparable sales benefited from growth in transactions and ~~higher fuel sales, which were~~average ticket resulting from the COVID-19 pandemic and partially offset by lower ~~ticket due to~~fuel sales and our decision to remove tobacco from certain club locations. Sam's Club eCommerce sales positively contributed approximately ~~1.5%~~2.0% and ~~1.4%~~1.9% to comparable sales for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively.

Gross profit r~~ate~~ ~~decreased 30~~rate increased 105 basis points for the three months ended ~~October~~July 31, ~~2019,~~2020, when compared to the same period in the previous fiscal ~~year.~~year due to higher fuel margins, lower markdowns, and improvements in inventory losses. The increase in the gross profit rate ~~decrease~~for the three months ended July 31, 2020, was ~~due to~~partially offset by investments in price and higher eCommerce fulfillment ~~costs, partially offset by higher fuel margins and reduced tobacco sales, which have lower margins.~~costs.

Gross profit rate increased 864 basis points for the ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, when compared to the same period in the previous fiscal ~~year. The gross profit rate increased from a~~year due to higher fuel margins, improvements in inventory losses, and reduction in the sale of tobacco, ~~higher co-branded credit card income, and higher fuel margins,~~which has lower margins. The increase in the gross profit rates for the six months ended July 31, 2020, was partially offset by ~~increased~~investments in price and higher eCommerce fulfillment ~~costs and price investments.~~costs.

Membership and other income increased ~~1.9%~~4.0% and ~~5.0%~~4.8% for the three and ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, respectively, when compared to the same periods in the previous fiscal year. The ~~increase~~increases for the three and six months ended ~~October~~July 31, ~~2019, was~~2020 were due to increases in total members, ~~which benefited from higher~~ overall renewal rates, ~~including those for~~and Plus ~~members. The increase for~~penetration rate as a result of the ~~nine months ended October 31, 2019, was primarily due to gains recognized on asset sales and other income along with~~COVID-19 pandemic.

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Despite the ~~above mentioned~~ increase in ~~total members.~~

~~Operating expenses as a percentage of segment~~ net ~~sales increased 11 basis points for t~~he ~~three months ended October 31, 2019~~, ~~when compared to~~sales from the ~~same period in~~strong demand resulting from the ~~previous fiscal year. This increase is primarily the result of a reduction in sales of tobacco and a higher level of technology investment partially offset by lower labor-related costs.~~

~~Operating~~COVID-19 pandemic, operating expenses as a percentage of segment net sales ~~decreased 14~~increased 52 and 32 basis points for the ~~nine~~three and six months ended ~~October~~July 31, ~~2019,~~2020, respectively, when compared to the same ~~period~~periods in the previous fiscal year. The ~~decrease was~~increases were primarily the result of ~~lower labor-related~~$0.1 billion and $0.2 billion of incremental costs ~~and a charge of approximately $50 million~~ related to ~~lease exist~~the COVID-19 pandemic for the three and six months ended July 31, 2020, respectively, including additional costs such as special bonuses for club associates, expanded security and cleaning practices, outfitting our associates with masks and gloves, and expanded sick and emergency leave pay. Additionally, the increases in ~~the prior comparable period. These benefits~~operating expense as a percentage of segment net sales were ~~partially offset~~affected by ~~a reduction in sales of tobacco.~~reduced fuel and tobacco sales.

As a result of the factors discussed above, operating income ~~decreased $52~~increased $112 million and $155 million for the three and six months ended ~~October~~July 31, ~~2019, and increased $152 million for the nine months ended October 31, 2019,~~2020, respectively, when compared to the same periods in the previous fiscal year.

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Liquidity and Capital Resources

Liquidity

The strength and stability of our operations have historically supplied us with a significant source of liquidity. Our cash flows provided by operating activities, supplemented with our long-term debt and short-term borrowings, have been sufficient to fund our operations while allowing us to invest in activities that support the long-term growth of our operations. Generally, some or all of the remaining available cash flow has been used to fund the dividends on our common stock and share repurchases. WeIn the current environment,we believe our sources of liquidity will continue to be adequate to fund operations, finance our global investment and expansion activities, pay dividends and fund our share repurchases for the foreseeable future.

Net Cash Provided by Operating Activities


	Nine Months Ended October 31,				Six Months Ended July 31,
(Amounts in millions)	2019		2018		2020		2019
Net cash provided by operating activities	$	14,539	$	17,308	$	18,956	$	11,185

~~We had net~~Net cash provided by operating activities ~~of $14.5~~was $19.0 billion and ~~$17.3~~$11.2 billion for the ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020 and ~~October 31,~~ ~~2018,~~2019, respectively. The ~~decline~~increase in cash provided by operating activities for the six months ended July 31, 2020, wasprimarily due to the ~~timing~~impact of ~~vendor payments and U.S. associate payroll,~~the global health crisis which accelerated inventory sell-through, as well as the ~~inclusion~~timing and payment of ~~Flipkart operations~~inventory purchases, incremental COVID-19 related expenses and certain benefit payments.

Cash Equivalents and Working Capital Deficit

Cash and cash equivalents were ~~$8.6~~$16.9 billion and ~~$9.2~~$9.3 billion at ~~October~~July 31, 2020 and 2019, respectively. We maintained more cash at July 31, 2020 compared to July 31, 2019 ~~and 2018, respectively.~~in order to provide us with enhanced financial flexibility due to the uncertainties related to the COVID-19 pandemic. Our working capital deficit was ~~$15.9~~$17.0 billion at ~~October~~July 31, ~~2019,~~2020, which ~~was relatively consistent with $16.3~~decreased when compared to $18.9 billion at ~~October~~July 31, ~~2018.~~2019. We generally operate with a working capital deficit due to our efficient use of cash in funding operations, consistent access to the capital markets and returns provided to our shareholders in the form of payments of cash dividends and share repurchases.

We use intercompany financing arrangements in an effort to ensure cash can be made available in the country in which it is needed with the minimum cost possible. Additionally, from time-to-time, we repatriate earnings and related cash from jurisdictions outside of the U.S. While we are awaiting anticipated technical guidance from the IRS and the U.S. Treasury Department, we do not expect current local laws, other existing limitations or potential taxes on anticipated future repatriations of cash amounts held outside the U.S. to have a material effect on our overall liquidity, financial condition or results of operations.

As of ~~October~~July 31, ~~2019~~2020 and January 31, ~~2019,~~2020, cash and cash equivalents of ~~$2.4~~$1.9 billion and ~~$2.8~~$2.3 billion, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions. Of the ~~$2.4~~$1.9 billion at ~~October~~July 31, ~~2019,~~2020, approximately ~~$0.8~~$0.4 billion can only be accessed through dividends or intercompany financing arrangements subject to approval of the Flipkart minority shareholders; however, this cash is expected to be utilized to fund the operations of Flipkart.

Net Cash Used in Investing Activities


	Nine Months Ended October 31,						Six Months Ended July 31,
(Amounts in millions)	2019			2018			2020			2019
Net cash used in investing activities	$	(6,285	)	$	(20,554	)	$	(3,634	)	$	(3,824	)

Net cash used in investing activities was ~~$6.3~~$3.6 billion and ~~$20.6~~$3.8 billion for the ~~nine~~six months ended ~~October~~July 31, ~~2019~~2020 and ~~2018,~~2019, respectively. Net cash used in investing activities decreased ~~$14.3~~$0.2 billion for the ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, primarily as a result of ~~the prior year $13.1 billion payment for the acquisition of Flipkart, net of cash acquired, and the~~decreased capital expenditures, partially offset by lapping net proceeds received from the sale of our banking operations in Walmart Canada in fiscal 2020.

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Net Cash Used in ~~or Provided by~~ Financing Activities


	Nine Months Ended October 31,					Six Months Ended July 31,
(Amounts in millions)	2019			2018		2020			2019
Net cash provided by (used in) financing activities	$	(7,213	)	$	5,921
Net cash used in financing activities						$	(7,814	)	$	(5,531	)

Net cash ~~provided by or~~ used in financing activities generally consists of transactions related to our short-term and long-term debt, dividends paid and the repurchase of Company stock. Transactions with noncontrolling interest shareholders are also classified as cash flows from financing activities. Net cash used in financing activities was ~~$7.2~~$7.8 billion and $5.5 billion for the ~~nine~~six months ended ~~October~~July 31, 2020 and 2019, ~~and net cash provided by financing activities was $5.9 billion for the nine months ended October 31, 2018.~~respectively. The ~~change in net cash used in financing activities~~increase is primarily due to the ~~prior year $15.9 billion net proceeds from issuance~~timing of issuances and repayments of long-term debt, ~~to fund~~partially offset by a ~~portion of the purchase price for the acquisition of Flipkart~~reduction in share repurchases and ~~a net decrease in~~ short-term borrowings as ~~compared to the prior year, partially offset by $5.5 billion of additional long term debt issued in~~we manage our financial position during the current ~~year to fund general business operations.~~economic environment.

~~Additionally,~~In April 2020, the Company ~~has~~renewed and extended its existing 364-day revolving credit facility of $10.0 billion. In total, we had committed lines of credit in the U.S. ~~with 22 financial institutions~~ of $15.0 billion ~~as of October~~at July 31, ~~2019 and January 31, 2019, respectively,~~2020, all undrawn.

Long-term Debt

The following table provides the changes in our long-term debt for the ~~nine~~six months ended ~~October~~July 31, ~~2019:~~2020:

(Amounts in millions) Long-term debt due within one year Long-term debt Total
Balances as of February 1, 2019 $ 1,876
$ 43,520
$ 45,396
Proceeds from issuance of long-term debt —
5,492
5,492
Repayments of long-term debt (1,907 ) —
(1,907 )
Reclassifications of long-term debt 4,129
(4,129 ) —
Other (5 ) 29
24
Balances as of October 31, 2019 $ 4,093
$ 44,912
$ 49,005

Our total outstanding long-term debt balance increased $3.6 billion for the nine months ended October 31, 2019, primarily due to the net proceeds from issuance of long-term debt in both April 2019 and September 2019 to fund general business operations, partially offset by repayments of long-term debt.



(Amounts in millions)	Long-term debt due within one year			Long-term debt			Total
Balances as of February 1, 2020	$	5,362		$	43,714		$	49,076
Repayments of long-term debt	(2,937		)	—			(2,937		)
Reclassifications of long-term debt	3,125			(3,125		)	—
Other	3			370			373
Balances as of July 31, 2020	$	5,553		$	40,959		$	46,512

Dividends

On February ~~19, 2019,~~18, 2020, the Board of Directors approved the fiscal 2021 annual dividend of $2.16 per share, an increase over the fiscal 2020 annual dividend of $2.12 per ~~share, an increase over the fiscal 2019 annual dividend of $2.08 per~~ share. For fiscal ~~2020,~~2021, the annual dividend was or will be paid in four quarterly installments of ~~$0.53~~$0.54 per share, according to the following record and payable dates:



Record Date		Payable Date
March ~~15, 2019~~20, 2020		April ~~1, 2019~~6, 2020
May ~~10, 2019~~8, 2020		June ~~3, 2019~~1, 2020
August ~~9, 2019~~14, 2020		September ~~3, 2019~~8, 2020
December ~~6, 2019~~11, 2020		January ~~2, 2020~~4, 2021

The dividend installments payable on April 6, 2020 and June 1, ~~2019, June 3, 2019 and September 3, 2019~~2020 were paid as scheduled.

Company Share Repurchase Program

From time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Company's Board of Directors. All repurchases made during the ~~nine~~six months ended ~~October~~July 31, ~~2019~~2020 were made under the current $20 billion share repurchase program approved in October 2017, which has no expiration date or other restrictions limiting the period over which the Company can make share repurchases. As of ~~October~~July 31, ~~2019,~~2020, authorization for ~~$6.6~~$5.0 billion of share repurchases remained under the share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status.

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We ~~regularly~~continue to review our share repurchase activity in light of the COVID-19 pandemic and consider several factors in determining when to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings, our results of operations and the market price of our common stock. We anticipate that a majority of the ongoing share repurchase program will be funded through the Company's free cash flow. The following table provides, on a settlement date basis, share repurchase information for the ~~nine~~six months ended ~~October~~July 31, ~~2019~~2020 and ~~2018:~~2019:

Nine Months Ended October 31,
(Amounts in millions, except per share data) 2019 2018
Total number of shares repurchased $ 46
$ 45
Average price paid per share $ 103.98
$ 92.01
Total amount paid for share repurchases $ 4,829
$ 4,161

~~Share repurchases increased $0.7 billion for the nine months ended October 31, 2019, when compared to the same period in the previous fiscal year.~~



	Six Months Ended July 31,
(Amounts in millions, except per share data)	2020		2019
Total number of shares repurchased	6.3		36.6
Average price paid per share	$	114.73	$	101.26
Total amount paid for share repurchases	$	723	$	3,707

Capital Resources

We believe cash flows from operations, our current cash position and access to capital markets will continue to be sufficient to meet our anticipated operating cash needs, which include funding seasonal increases in merchandise inventories, our capital expenditures, acquisitions, dividend payments and share repurchases.

We have strong commercial paper and long-term debt ratings that have enabled and should continue to enable us to refinance our debt as it becomes due at favorable rates in the capital markets. We also have $15.0 billion in various committed lines of credit in the U.S., all of which currently remains undrawn. At ~~October~~July 31, ~~2019,~~2020, the ratings assigned to our commercial paper and rated series of our outstanding long-term debt were as follows:



Rating agency	Commercial paper	Long-term debt
Standard & Poor's	A-1+	AA
Moody's Investors Service	P-1	Aa2
Fitch Ratings	F1+	AA

Credit rating agencies review their ratings periodically and, therefore, the credit ratings assigned to us by each agency may be subject to revision at any time. Accordingly, we are not able to predict whether our current credit ratings will remain consistent over time. Factors that could affect our credit ratings include changes in our operating performance, the general economic environment, conditions in the retail industry, our financial position, including our total debt and capitalization, and changes in our business strategy. Any downgrade of our credit ratings by a credit rating agency could increase our future borrowing costs or impair our ability to access capital and credit markets on terms commercially acceptable to us. In addition, any downgrade of our current short-term credit ratings could impair our ability to access the commercial paper markets with the same flexibility that we have experienced historically, potentially requiring us to rely more heavily on more expensive types of debt financing. The credit rating agency ratings are not recommendations to buy, sell or hold our commercial paper or debt securities. Each rating may be subject to revision or withdrawal at any time by the assigning rating organization and should be evaluated independently of any other rating. Moreover, each credit rating is specific to the security to which it applies.

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Other Matters

In Note 76 to our Condensed Consolidated Financial Statements, which is captioned "Contingencies" and appears in Part I of this Quarterly Report on Form 10-Q under the caption "Item 1. Financial Statements," we discuss, under the sub-caption ~~"FCPA Investigation and Related Matters,~~"ASDA Equal Value Claims," ~~the resolution of our~~certain existing ~~FCPA investigation and related matters~~employment claims against Asda including certain risks arising therefrom. In that Note 7~~, we also discuss, under the sub-caption "ASDA Equal Value Claims," certain existing employment claims against ASDA including certain risks arising therefrom. Further, in that~~ ~~Note 7~~6, we also discuss, under the sub-caption "~~National~~ Prescription Opiate Litigation and ~~Related~~Other Matters," the ~~National~~ Prescription Opiate Litigation and ~~related~~other matters, including certain risks arising therefrom. We also discuss various legal proceedings related to the ASDA Equal Value Claims, and ~~National~~the Prescription Opiate Litigation in Part II of this Quarterly Report on Form 10-Q under the caption "Item 1. Legal Proceedings," under the sub-caption "I. Supplemental Information." The foregoing matters and other matters described elsewhere in this Quarterly Report on Form 10-Q represent contingent liabilities of the Company that may or may not result in the incurrence of a material liability by the Company upon their final resolution.

Item 3. Quantitative and Qualitative Disclosures ~~about~~About Market Risk

Market risks relating to our operations result primarily from changes in interest rates, currency exchange rates or the market value of our investments. Our market risks at ~~October~~July 31, ~~2019~~2020 are similar to those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2019.~~2020. The information concerning market risk set forth in Part II, Item 7A. of our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2019,~~2020, as filed with the SEC on March ~~28, 2019,~~20, 2020, under the caption "Quantitative and Qualitative Disclosures About Market Risk," is hereby incorporated by reference into this Quarterly Report on Form 10-Q.

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Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be timely disclosed, is accumulated and communicated to management in a timely fashion. In designing and evaluating such controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management is necessarily required to use judgment in evaluating controls and procedures. Also, we have investments in unconsolidated entities. Since we do not control or manage those entities, our controls and procedures with respect to those entities are substantially more limited than those we maintain with respect to our consolidated subsidiaries.

In the ordinary course of business, we review our internal control over financial reporting and make changes to our systems and processes to improve such controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, updating existing systems, automating manual processes, standardizing controls globally, migrating certain processes to our shared services organizations and increasing monitoring controls. These changes have not materially affected, and are not reasonably likely to materially affect, the Company's internal control over financial reporting and they allow us to continue to enhance our internal controls over financial reporting and ensure that they remain effective.

An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms.

There has been no change in the Company's internal control over financial reporting during the most recently completed fiscal quarter, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

I. SUPPLEMENTAL INFORMATION: We discuss certain legal proceedings in Part I of this Quarterly Report on Form 10-Q under the caption "Item 1. Financial Statements," in Note 76 to our Condensed Consolidated Financial Statements, which is captioned "Contingencies," under the sub-caption "Legal Proceedings." We refer you to that discussion for important information concerning those legal proceedings, including the basis for such actions and, where known, the relief sought. We provide the following additional information concerning those legal proceedings, including the name of the lawsuit, the court in which the lawsuit is pending, and the date on which the petition commencing the lawsuit was filed.

ASDA Equal Value ~~Claims:~~ Claims: Ms S Brierley & Others v ASDA Stores Ltd (2406372/2008 & Others - Manchester Employment Tribunal); ASDA Stores Ltd v Brierley & Ors (A2/2016/0973 - United Kingdom Court of Appeal); ASDA Stores Ltd v Ms S Brierley & Others (UKEAT/0059/16/DM - United Kingdom Employment Appeal Tribunal); and ASDA Stores Ltd v Ms S Brierley & Others (UKEAT/0009/16/JOJ - United Kingdom Employment Appeal Tribunal).

~~National~~ Prescription Opiate ~~Litigation:~~Litigation: In re National Prescription Opiate Litigation (MDL No. 2804) (the "MDL"). The MDL is pending in the U.S. District Court for the Northern District of Ohio and includes over ~~1,800~~2,000 cases as of ~~November 25, 2019; over 40~~August 21, 2020; some cases are in the process of being transferred to the MDL or have remand motions ~~pending;~~pending. A trial is currently scheduled to begin on November 9, 2020 against a number of parties, including the Company, regarding opioid distribution claims. A trial is also currently scheduled to begin in the MDL in May 2021 against a number of parties, including the Company, regarding opioid dispensing and distribution claims. There is one case in which the Company is named as a defendant that was remanded from the MDL court to the United States District Court for the Eastern District of Oklahoma. In addition, there are over ~~100 additional~~200 state court cases pending as of ~~November 25, 2019.~~August 21, 2020, some of which may be removed to federal court to seek MDL transfer. The case citations for the state court cases and other information are ~~listed~~included on Exhibit 99.1 to this Form 10-Q.

II. CERTAIN OTHER MATTERS: The Company has received grand jury subpoenas issued by the U.S. Attorney’s Office for the Middle District of Pennsylvania seeking documents regarding the Company’s consumer fraud program and anti-money laundering compliance related to the Company’s money transfer services, where Walmart is an agent. The Company has been responding to these subpoenas. The Company has also been responding to civil investigative demands from the U.S. Federal Trade Commission related to money transfers and the Company’s anti-fraud program. Due to the investigative stage of these matters, the Company is unable to predict the outcome of the investigations by the governmental entities. While the Company does not currently believe that the outcome of these matters will have a material adverse effect on its business, financial condition, results of operations or cash flows, the Company can provide no assurance as to the scope and outcome of these matters and whether its business, financial position, results of operations or cash flows will not be materially adversely affected.

III. ENVIRONMENTAL ~~MATTERS:~~MATTERS: Item 103 of SEC Regulation S-K requires disclosure of certain environmental matters. The following matters are disclosed in accordance with that requirement. For the matters listed below, management does not believe any possible loss or the range of any possible loss that may be incurred in connection with each matter, individually or in the aggregate, will be material to the Company's financial condition or results of operations.

In September 2018, the ~~United States~~U.S. Environmental Protection Agency (the “EPA”) notified the Company that it ~~had~~ initiated an administrative penalty action by issuing a Draft Consent Agreement and Final Order. The letter accompanying the Draft Consent Agreement and Final Order alleges that the Company distributed and/or sold three unregistered pesticide products from March to June, 2017. The EPA is seeking a penalty of $960,000. The manufacturer of the product is responsible for ensuring that a FIFRA-regulated product is properly registered prior to its sale. The Company is cooperating with the EPA.

In January 2018, the Environmental Prosecutor of the State of Chiapas (Procuraduría Ambiental del Estado de Chiapas) in Mexico imposed a fine of approximately $163,000 for the absence of an Environmental Impact Authorization License related to the store Mi Bodega Las Rosas. The Company is challenging the ~~fine and denies any wrongdoing.~~

In April 2017, the California Air Resources Board ("ARB") notified the Company that it had taken the position that retailers are required to use unclaimed deposits collected on sales of small containers of automotive refrigerant to fund certain consumer education programs. The ARB alleged that the Company had improperly retained approximately $4.2 million in unclaimed deposits and has sought reimbursement. The Company has denied any wrongdoing.fine.

In April 2013, a subsidiary of the Company, Corporacion de Compañias Agroindustriales, operating in Costa Rica, became aware that the Municipality of Curridabat is seeking a penalty of approximately $380,000 in connection with the construction of a retaining wall for a perishables distribution center that is situated along a protected river bank. The subsidiary obtained permits from the Municipality and the Secretaria Técnica Nacional Ambiental at the time of construction, but the Municipality now alleges that the wall is non-conforming. The Company is cooperating with the Municipality.

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Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2019, as supplemented by Item 1A, "Risk Factors"~~2020. The COVID-19 pandemic and related governmental actions have had wide-ranging effects on our business and the global economy and have exacerbated the potential for certain risks identified in that disclosure, including, without limitation, risks related to the successful execution of our ~~Quarterly Report on Form 10-Q for~~omni-channel strategy, operational risks associated with geo-political and catastrophic events, risks associated with our suppliers, reputational risks and risk associated with changes in and failure to comply with laws and regulations, to materially and adversely affect our financial performance. The financial impact to the ~~quarter~~Company of the COVID-19 pandemic during the six month period ended July 31, ~~2019, which risks could~~2020, as well as certain of the actions we have taken to protect the health and safety of our associates, customers, members and the communities we serve, are discussed in Item 2 of Part I, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Given the uncertainty regarding the duration and scope of the COVID-19 pandemic and its economic effect in the U.S and the other markets we serve, there can be no assurance that the pandemic will not materially and adversely affect our business, results of operations, financial condition, ~~and liquidity. No material change~~or liquidity in the risk factors discussed in such Form 10-K has occurred. Such risk factors do not identify all risks that we face because our business operations could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations. Our business operations could also be affected by additional factors that apply to all companies operating in the U.S. and globally.future.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

From time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Company's Board of Directors. All repurchases made during the ~~nine~~six months ended ~~October~~July 31, ~~2019,~~2020, were made under the current $20 billion share repurchase program approved in October 2017, which has no expiration date or other restrictions limiting the period over which the Company can make share repurchases. As of ~~October~~July 31, ~~2019,~~2020, authorization for ~~$6.6~~$5 billion of share repurchases remained under the share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status.

The Company regularly reviews its share repurchase activity and considers several factors in determining when to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings and the market price of its common stock. Share repurchase activity under our share repurchase program, on a trade date basis, for the three months ended ~~October~~July 31, ~~2019,~~2020, was as follows:

Fiscal Period
Total
Number of
Shares
Purchased

Average
Price Paid
per Share

Total Number of
Shares Purchased
as Part of Publicly
Announced Plans or
Programs

Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs⁽¹⁾
(billions)
August 1 - 31, 2019 4,433,894
$ 109.86
4,433,894
$ 7.2
September 1 - 30, 2019 2,480,316
116.90
2,480,316
6.9
October 1 - 31, 2019 2,791,452
118.63
2,791,452
6.6
Total 9,705,662
9,705,662



Fiscal Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs⁽¹⁾ (billions)
May 1 - 31, 2020	—	$	—	—	$	5.0
June 1 - 30, 2020	—	—		—	5.0
July 1 - 31, 2020	—	—		—	5.0
Total	—			—

(1) Represents approximate dollar value of shares that could have been purchased under the plan in effect at the end of the month.

Item 5. Other Information

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements that Walmart believes are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that Act.

Forward-looking Statements

The forward-looking statements in this report ~~include:~~include, among other things:

•

statements in Note 1 to Walmart's Condensed Consolidated Financial Statements as of and for the three and nine months ended October 31, 2019, regarding management's determinations regarding the materiality of the impact of, certain ASUs issued by the FASB; statements in ~~Note 6~~3 to those Condensed Consolidated Financial Statements regarding the expected insignificance of the amounts relating to certain net investment and cash flow derivative financial instruments to which Walmart is a party that are expected to be reclassified from accumulated other comprehensive loss to net income in the next 12 months; and statements in Note 76 to those Condensed Consolidated Financial Statements regarding the possible outcome of, and future effect on Walmart's financial condition and results of operations of, certain litigation and other proceedings to which Walmart is a party, the possible outcome of, and future effect on Walmart's business of, certain other matters to which Walmart is subject, including Walmart's existing ASDA Equal Value Claims and the ~~National~~Prescription Opiate Litigation and ~~related matters,~~Other Matters, and the liabilities, losses, expenses and costs that Walmart may incur in connection with such matters; ~~and statements in~~ ~~Note 11~~ ~~to to those Condensed Consolidated Financial Statements regarding the anticipated timing of the charge related to the Asda Plan;~~

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•

in Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations": statements regarding future changes to our business and our expectations about the potential impacts on our business, financial position, results of operations or cash flows as a result of the COVID-19 pandemic; statements under the caption "Overview" relating to the possible impact of volatility in currency exchange rates on the results, including net sales and operating income, of Walmart and the Walmart International ~~segment and~~segment; statements under the caption “COVID-19 Updates” regarding the ~~timing~~continued uncertainty in our business and ~~amount~~the global economy due to the duration and intensity of the ~~charge related to the Asda Plan;~~COVID-19 pandemic; statements under the caption "Company Performance Metrics - Strong, Efficient Growth" regarding the focus of our investments and the impact of such investments; statements under the caption "Company Performance Metrics – Strategic Capital Allocation" regarding our strategy and discipline for capital allocation; statements under thecaption "Company Performance Metrics", and the "- Returns" sub-heading under that caption, regarding our belief that returns on capital will improve as we execute on our strategic framework; statements under the caption "Results of Operations - Consolidated Results of Operations" regarding the possibility of fluctuations in Walmart's effective income tax rate from quarter to quarter and the factors that may cause those fluctuations; a statement under the caption "Results of Operations - Sam's Club Segment" relating to the possible continuing impact of volatility in fuel prices on the future operating results of the Sam's Club segment; a statement under the caption "Liquidity and Capital Resources - Liquidity" that Walmart's sources of liquidity will be adequate to fund its operations, finance its global investment and expansion activities, pay dividends and fund share repurchases; statements under the caption "Liquidity and Capital Resources - Liquidity - Net Cash Provided by Operating Activities - Cash Equivalents and Working Capital" regarding management's expectation that cash in market will be utilized to fund Flipkart's operations; a statement under the caption "Liquidity and Capital Resources Liquidity - Net Cash Used in Financing Activities - Dividends" regarding the payment of dividends in fiscal 2020; a statement under the caption "Liquidity and Capital Resources Liquidity - Net Cash Used in Financing Activities - Company Share Repurchase Program" regarding funding of the ongoing share repurchase program; statements under the caption "Liquidity and Capital Resources - Capital Resources" regarding management's expectations regarding the Company's cash flows from operations, current cash position and access to capital markets continuing to be sufficient to meet its anticipated operating cash needs, the Company's commercial paper and long-term debt ratings continuing to enable it to refinance its debts at favorable rates, factors that could affect its credit ratings, and the effect that lower credit ratings would have on its access to capital and credit markets and borrowing costs; and statements under the caption "Other Matters"regarding the contingent liabilities of the Company that may or may not result in the incurrence of a material liability by the Company;

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~~Performance Metrics - Strong, Efficient Growth" regarding the focus of our investments and the impact of such investments; statements under the caption "Company Performance Metrics", and the "-~~ ~~Returns" sub-heading under that caption, regarding our belief that returns on capital will improve as we execute on our strategic framework; statements under the caption "Results of Operations - Consolidated Results of Operations" regarding the possibility of fluctuations in Walmart's effective income tax rate from quarter to quarter and the factors that may cause those fluctuations; a statement under the caption "Results of Operations - Sam's Club Segment" relating to the possible continuing impact of volatility in fuel prices on the future operating results of the Sam's Club segment; a statement under the caption "Liquidity and Capital Resources - Liquidity~~" that Walmart's sources of liquidity will be adequate to fund its operations, finance its global investment and expansion activities, pay dividends and fund share repurchases; statements under the caption "~~Liquidity and Capital Resources - Liquidity - Net Cash Provided by Operating Activities - Cash Equivalents and Working Capital" regarding management's expectation that cash in market will be utilized to fund Flipkart's operations; a statement under the caption "Liquidity and Capital Resources Liquidity - Net Cash Used in Financing Activities - Dividends" regarding the payment of dividends in fiscal 2020; a statement under the caption "Liquidity and Capital Resources Liquidity - Net Cash Used in Financing Activities - Company Share Repurchase Program" regarding funding of the ongoing share repurchase program; and statements under the caption "Liquidity and Capital Resources - Capital Resources~~" regarding management's expectations regarding the Company's cash flows from operations, current cash position and access to capital markets continuing to be sufficient to meet its anticipated operating cash needs, the Company's commercial paper and long-term debt ratings continuing to enable it to refinance its debts at favorable rates, factors that could affect its credit ratings, and the effect that lower credit ratings would have on its access to capital and credit markets and borrowing costs;


•	in Part I, Item 4 "Controls and Procedures": the statements regarding the effect of changes to systems and processes on our internal control over financial reporting; ~~and~~


•	statements in Part II, Item 1 "Legal Proceedings" regarding the effect that possible losses or the range of possible losses that might be incurred in connection with the legal proceedings and other matters discussed therein may have on our financial condition or results of ~~operations.~~operations; and


•	statements in Part II, Item 1A. "Risk Factors" regarding the uncertainty of the duration and scope of the COVID-19 pandemic and its potential impact on our business, results of operations, financial condition or liquidity in the future and its effect on other risk factors disclosed in Item 1A. “Risk Factors” of our Annual Report on Form 10-K.

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Risks, Factors and Uncertainties Regarding ~~our~~Our Business

These forward-looking statements are subject to risks, uncertainties and other factors, domestically and internationally, including:

Economic Factors

economic, geo-political, capital markets and business conditions, trends and events around the world and in the markets in which Walmart operates;

currency exchange rate fluctuations;

changes in market rates of interest;

changes in market levels of wages;

changes in the size of various markets, including eCommerce markets;

unemployment levels;

inflation or deflation, generally and in certain product categories;

transportation, energy and utility costs;

commodity prices, including the prices of oil and natural gas;

consumer confidence, disposable income, credit availability, spending levels, shopping patterns, debt levels, and demand for certain merchandise;

trends in consumer shopping habits around the world and in the markets in which Walmart operates;

consumer enrollment in health and drug insurance programs and such programs' reimbursement rates and drug formularies; and

initiatives of competitors, competitors' entry into and expansion in Walmart's markets, and competitive ~~pressures;~~pressures.

Operating Factors

the amount of Walmart's net sales and operating expenses denominated in U.S. dollar and various foreign currencies;

the financial performance of Walmart and each of its segments, including the ~~amounts~~amount of Walmart's cash flow during various periods;

customer transaction and average ticket in Walmart's stores and clubs and on its eCommerce platforms;

the mix of merchandise Walmart sells and its customers purchase;

the availability of goods from suppliers and the cost of goods acquired from suppliers;

the effectiveness of the implementation and operation of Walmart's strategies, plans, programs and initiatives;

the impact of acquisitions, divestitures, store or club closures, and other strategic decisions;

Walmart's ability to successfully integrate acquired businesses, including within the eCommerce space;

unexpected changes in Walmart's objectives and plans;

the amount of shrinkage Walmart experiences;

consumer acceptance of and response to Walmart's stores and clubs, eCommerce platforms, programs, merchandise offerings and delivery methods;

Walmart's gross profit margins, including pharmacy margins and margins of other product categories;

the selling prices of gasoline and diesel fuel;

disruption of seasonal buying patterns in Walmart's markets;

disruptions in Walmart's supply chain;

cybersecurity events affecting Walmart and related costs and impact of any disruption in business;

Walmart's labor costs, including healthcare and other benefit costs;

Walmart's casualty and accident-related costs and insurance costs;

the size of and turnover in Walmart's workforce and the number of associates at various pay levels within that workforce;

the availability of necessary personnel to staff Walmart's stores, clubs and other facilities;

delays in the opening of new, expanded, relocated or remodeled units;

developments in, and the outcome of, legal and regulatory proceedings and investigations to which Walmart is a party or is subject, and the liabilities, obligations and expenses, if any, that Walmart may incur in connection therewith;

changes in the credit ratings assigned to the Company's commercial paper and debt securities by credit rating agencies;

Walmart's effective tax rate; and

unanticipated changes in accounting judgments and ~~estimates;~~estimates.

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Regulatory and Other Factors

changes in existing, tax, labor and other laws and changes in tax rates, including the enactment of laws and the adoption and interpretation of administrative rules and regulations;

the imposition of new taxes on imports, new tariffs and changes in existing tariff rates;

the imposition of new trade restrictions and changes in existing trade restrictions;

adoption or creation of new, and modification of existing, governmental policies, programs, initiatives and actions in the markets in which Walmart operates and elsewhere and actions with respect to such policies, programs and initiatives;

changes in currency control laws;

changes in the level of public assistance payments;

one or more prolonged federal government shutdowns;

the timing of federal income tax refunds;


•	~~natural disasters, changes in climate, geo-political~~ natural disasters, changes in climate, catastrophic events and global health epidemics or pandemics including COVID-19; and ~~catastrophic events;and~~

changes in generally accepted accounting principles in the United States.

Other Risk Factors; No Duty to Update

This Quarterly Report on Form 10-Q should be read in conjunction with Walmart's Annual Report on Form 10-K for the fiscal year ended January 31, ~~2019~~2020 and all of Walmart's subsequent other filings ~~including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, made~~ with the ~~SEC.~~Securities and Exchange Commission. Walmart urges ~~the reader~~investors to consider all of ~~these~~the risks, uncertainties and other factors disclosed in these filings carefully in evaluating the forward-looking statements contained in this Quarterly Report on Form 10-Q. The Company cannot assure you that the results or developments anticipated by the Company and reflected or implied by any forward-looking statement contained in this Quarterly Report on Form 10-Q will be realized or, even if substantially realized, that those results or developments will result in the forecasted or expected consequences for the Company or affect the Company, its operations or its financial performance as the Company has forecasted or expected. As a result of the matters discussed above and other matters, including changes in facts, assumptions not being realized or other factors, the actual results relating to the subject matter of any forward-looking statement in this Quarterly Report on Form 10-Q may differ materially from the anticipated results expressed or implied in that forward-looking statement. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this report, and Walmart undertakes no obligation to update any such statements to reflect subsequent events or circumstances.

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Item 6. Exhibits

The following documents are filed as an exhibit to this Quarterly Report on Form 10-Q:



Exhibit 3.1		Restated Certificate of Incorporation of the Company dated February 1, 2018 is incorporated herein by reference to Exhibit 3.1 to the Report on Form 8-K that the Company filed on February 1, 2018 (File No. 001-06991)

Exhibit 3.2		Amended and Restated Bylaws of the Company dated July 23, 2019 are incorporated herein by reference to Exhibit 3.1 to the Report on Form 8-K that the Company filed on July 26, 2019 (File No. 001-06991)

Exhibit 31.1*		Chief Executive Officer Section 302 Certification

Exhibit 31.2*		Chief Financial Officer Section 302 Certification

Exhibit 32.1**		Chief Executive Officer Section 906 Certification

Exhibit 32.2**		Chief Financial Officer Section 906 Certification

Exhibit 99.1*		State Court Prescription Opiate Litigation Cases

Exhibit 101.INS*		Inline XBRL Instance Document

Exhibit 101.SCH*		Inline XBRL Taxonomy Extension Schema Document

Exhibit 101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit 101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

Exhibit 101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

Exhibit 101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~October~~July 31, ~~2019,~~2020, formatted in Inline XBRL (included in Exhibit 101)



*	Filed herewith as an Exhibit.
**	Furnished herewith as an Exhibit.

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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.

WALMART INC.



~~December 4, 2019~~September 2, 2020	By:	/s/ C. Douglas McMillon
		C. Douglas McMillon President and Chief Executive Officer (Principal Executive Officer)

~~December 4, 2019~~September 2, 2020	By:	/s/ M. Brett Biggs
		M. Brett Biggs Executive Vice President and Chief Financial Officer (Principal Financial Officer)

~~December 4, 2019~~September 2, 2020	By:	/s/ David M. Chojnowski
		David M. Chojnowski Senior Vice President and Controller (Principal Accounting Officer)

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(Amounts in millions and net of immaterial income taxes)	Currency Translation and Other			Unrealized Gain on Available-for-Sale Securities			Net Investment Hedges		Cash Flow Hedges			Minimum Pension Liability			Total
Balances as of February 1, 2018	$	(12,136	)	$	1,646		$	1,030	$	122		$	(843	)	$	(10,181	)
Adoption of new accounting standards on February 1, 2018, net⁽¹⁾	89			(1,646		)	93		28			—			(1,436		)
Other comprehensive income (loss) before reclassifications, net	1,302			—			68		(86		)	32			1,316
Reclassifications to income, net	—			—			—		9			11			20
Balances as of April 30, 2018	$	(10,745	)	$	—		$	1,191	$	73		$	(800	)	$	(10,281	)
Other comprehensive income (loss) before reclassifications, net	(2,395		)	—			193		(171		)	(3		)	(2,376		)
Reclassifications to income, net	—			—			—		16			12			28
Balances as of July 31, 2018	$	(13,140	)	$	—		$	1,384	$	(82	)	$	(791	)	$	(12,629	)
Other comprehensive income (loss) before reclassifications, net	(888		)	—			114		(121		)	2			(893		)
Reclassifications to income, net	2,031			—			—		12			10			2,053
Balances as of October 31, 2018	$	(11,997	)	$	—		$	1,498	$	(191	)	$	(779	)	$	(11,469	)



(Amounts in millions)
Issue Date	Principal Amount	Maturity Date	Fixed vs. Floating	Interest Rate	Net Proceeds
April 23, 2019	$1,500	July 8, 2024	Fixed	2.850%	$	1,493
April 23, 2019	$1,250	July 8, 2026	Fixed	3.050%	1,242
April 23, 2019	$1,250	July 8, 2029	Fixed	3.250%	1,243
September 24, 2019	$500	September 24, 2029	Fixed	2.375%	497
September 24, 2019	$1,000	September 24, 2049	Fixed	2.950%	975
Various	$42	Various	Various	Various	42
Total					$	5,492



(Amounts in millions)
Maturity Date	Original Amount	Fixed vs. Floating	Interest Rate	Repayment
February 1, 2019	$500	Fixed	4.125%	$	364
October 20, 2019	$300	Floating	2.281%	300
October 20, 2019	$1,200	Fixed	1.750%	1,200
Various	$43	Various	Various	43
Total repayment of matured debt				$	1,907



(Amounts in millions)	Fair Value as of October 31, 2019		Fair Value as of January 31, 2019
Investment in JD measured using Level 1 inputs	$	2,244	$	1,791
Investment in JD measured using Level 2 inputs	2,249		1,792
Total	$	4,493	$	3,583



(Amounts in millions)	Three Months Ended October 31, 2019		Nine Months Ended October 31, 2019
Operating lease cost	$	692	$	1,989
Finance lease cost:
Amortization of right-of-use assets	127		354
Interest on lease obligations	78		230
Variable lease cost	173		508



(Dollar amounts in millions)	Nine Months Ended October 31, 2019
Cash paid for amounts included in measurement of lease obligations:
Operating cash flows from operating leases	$	1,932
Operating cash flows from finance leases	202
Financing cash flows from finance leases	363
Assets obtained in exchange for operating lease obligations	1,576
Assets obtained in exchange for finance lease obligations	733
Weighted-average remaining lease term - operating leases	15.6 years
Weighted-average remaining lease term - finance leases	13.9 years
Weighted-average discount rate - operating leases	5.4		%
Weighted-average discount rate - finance leases	8.9		%



(Amounts in millions)
Fiscal Year	Operating Leases			Finance Leases
Remainder of 2020	$	580		$	173
2021	2,462			755
2022	2,242			702
2023	2,019			579
2024	1,829			498
Thereafter	16,430			5,688
Total undiscounted lease obligations	25,562			8,395
Less imputed interest	(8,081		)	(3,859		)
Net lease obligations	$	17,481		$	4,536



(Amounts in millions)
Fiscal Year	Operating Leases⁽¹⁾		Capital Lease and Financing Obligations
2020	$	1,856	$	917
2021	1,655		856
2022	1,420		794
2023	1,233		667
2024	1,063		593
Thereafter	6,891		6,069
Total minimum rentals	$	14,118	$	9,896
Less estimated executory costs			23
Net minimum lease payments			9,873
Financing obligation noncash gains and other			2,278
Less imputed interest			(4,739		)
Present value of minimum lease payments			$	7,412

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Non-Accelerated Filer

Smaller Reporting Company

Emerging Growth Company