Walmart 2003 Annual Report Download - page 26

We paid dividends totaling approximately $1.3 billion or $0.30 per share in fiscal 2003. In March 2003, our Board of
Directors authorized a 20% increase in our dividend to $0.36 per share for fiscal 2004. The Company has increased its
dividend every year since it first declared a dividend in March 1974.
Contractual Obligations and Other Commercial Commitments
The following tables set forth certain information concerning our obligations and commitments to make future payments
under contracts, such as debt and lease agreements, and under contingent commitments.
Payments Due by Period
Contractual Obligations Less than 1 – 3 4 – 5 After
(in millions) Total 1 year years years 5 years
Long-term debt $ 21,145 $ 4,538 $ 5,139 $ 3,632 $ 7,836
Commercial paper 1,079 1,079 – – –
Capital lease obligations 5,282 440 859 831 3,152
Non-cancelable operating leases 7,988 589 1,136 1,061 5,202
Total contractual cash obligations $ 35,494 $ 6,646 $ 7,134 $ 5,524 $ 16,190
Amount of Commitment Expiration Per Period
Other Commercial Commitments Less than 1 – 3 4 – 5 After
(in millions) Total 1 year years years 5 years
Lines of credit $ 5,160 $ 2,910 $ 2,250 $ – $ –
Informal lines of credit 73 73 – – –
Trade letters of credit 1,927 1,927 – – –
Standby letters of credit 898 898 – – –
Other 362 229 – – 133
Total commercial commitments $ 8,420 $ 6,037 $ 2,250 $ – $ 133
The Company has entered into lease commitments for land and buildings for 10 future locations. These lease
commitments with real estate developers provide for minimum rentals for 10 to 25 years, excluding renewal options,
which, if consummated based on current cost estimates, will approximate $12 million annually over the lease terms.
Management believes that cash flows from operations and proceeds from the sale of commercial paper will be sufficient
to finance any seasonal buildups in merchandise inventories and meet other cash requirements. If the operating cash flow
we generate is not sufficient to pay dividends and to fund all capital expenditures, the Company anticipates funding any
shortfall in these expenditures with a combination of commercial paper and long-term debt. We plan to refinance existing
long-term debt as it matures. We may also desire to obtain additional long-term financing for other corporate purposes.
We anticipate no difficulty in obtaining long-term financing in view of our excellent credit rating and favorable experiences
in the debt market in the recent past. During fiscal 2003, the Company issued $2.0 billion of long-term debt. The proceeds
from the issuance of this debt were used to reduce short-term borrowings, to refinance existing debt, finance expansion
activities, and other corporate purposes.
At January 31, 2003, the Company’s ratio of debt to total capitalization, including commercial paper borrowings, was
39.2%. This is in line with management’s objective to maintain a debt to total capitalization ratio of approximately 40%.
At January 31, 2003, we had total assets of $94.7 billion compared with total assets of $83.5 billion at January 31, 2002.
Our working capital deficit at January 31, 2003, was $2.1 billion, a decrease of $2.7 billion from the $596 million positive
working capital at January 31, 2002. Our ratio of current assets to current liabilities was 0.9 to 1, at January 31, 2003, and
1 to 1 at January 31, 2002.
In December 2002, the SEC declared effective a shelf registration under which we could issue up to a total of $10 billion in
debt securities. In February 2003, we sold notes totaling $1.5 billion under that existing shelf registration. These notes bear
interest at the three-month LIBOR rate minus 0.0425% and mature in February 2005. The proceeds from the sale of these
notes were used to reduce commercial paper debt and, therefore, the Company classified $1.5 billion of commercial paper
as long-term debt on the January 31, 2003 balance sheet. After consideration of this debt issuance, we are permitted to sell
up to $8.5 billion of public debt under our shelf registration statement. At the same time as the issuance of this debt we
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