UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange
    Act of 1934 for the fiscal year ended January 31, 2000, or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
    Exchange Act of 1934
    Commission file number 1-6991.

WAL-MART STORES, INC.	
(Exact name of registrant as specified in its charter)	
	
Delaware	71-0415188	
(State or other jurisdiction of	(IRS Employer	
incorporation or organization)	Identification No.)	
		
Bentonville, Arkansas	72716	
(Address of principal executive offices)	(Zip Code)	
		
Registrant’s telephone number, including area code: (501) 273-4000	
	
 Securities registered pursuant to Section 12(b) of the Act:	
	
	Name of each exchange	
Title of each class	on which registered	
	
Common Stock, par value $.10	New York Stock Exchange	
per share	Pacific Stock Exchange	
	
Securities registered pursuant to Section 12(g) of the Act: None	
    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 for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.
Yes X    No 
    Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    [ ]
    The aggregate market value of the voting stock held by non-affiliates of the registrant, based on the closing price of these shares on the New York Stock Exchange on March 31, 2000, was $146,684,895,928. For the purposes of this disclosure only, the registrant has assumed that its directors, officers and
Page 1 of 25 (Form 10-K)
 
beneficial owners of 5% or more of the registrant’s common stock are the affiliates of the registrant.
    The registrant had 4,454,034,171 shares of common stock outstanding as of March 31, 2000.
DOCUMENTS INCORPORATED BY REFERENCE
    Portions of the registrant’s Annual Report to Shareholders for the fiscal year ended January 31, 2000, are incorporated by reference into Parts I and II of this Form 10-K.
    Portions of the registrant’s definitive Proxy Statement for the Annual Meeting of Shareholders to be held June 2, 2000, are incorporated by reference into Part III and IV of this Form 10-K.
FORWARD-LOOKING STATEMENTS OR INFORMATION
    This Form 10-K includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements included or incorporated by reference in this Form 10-K which address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof), expansion and other development trends of industry segments in which the Company is active, business strategy, expansion and growth of the Company’s business and operations and other such matters are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions within the bounds of its knowledge of its business, a number of factors could cause actual results to differ materially from those expressed in any forward-looking statements, whether oral or written, made by or on behalf of the Company. Many of these factors have previously been identified in filings or statements made by or on behalf of the Company.
    All phases of the Company’s operations are subject to influences outside its control. Any one, or a combination, of these factors could materially affect the results of the Company’s operations. These factors include: the cost of goods, competitive pressures, inflation, consumer debt levels, currency exchange fluctuations, trade restrictions, changes in tariff and freight rates, Year 2000 issues, unemployment levels, interest rate fluctuations and other capital market and economic conditions. Forward-looking statements made by or on behalf of the Company are based on a knowledge of its business and the environment in which it operates, but because of the factors listed above, actual results may differ from those in the forward-looking statements. Consequently, all of the forward-looking statements made are qualified by these and other cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Company or its business or operations.
Page 2 of 25 (Form 10-K)
 
WAL-MART STORES, INC.
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JANUARY 31, 2000
PART I
ITEM 1 . BUSINESS
        Wal-Mart Stores, Inc. (together with its subsidiaries hereinafter referred to as the "Company") is the world’s largest retailer measured by total revenues. During the fiscal year ended January 31, 2000, the Company had net sales of $165,013,000,000.
(a) Development of Business
        Domestically, at January 31, 2000, the Company operated 1,801 discount stores, 721 Supercenters, and 463 SAM’S Clubs. Tables summarizing information concerning additions of units and square footage for domestic discount stores, Supercenters and SAM’S Clubs in fiscal years 1995 through 2000, are included as Schedules A and B to Item 1 found on pages 11 and 12 of this annual report.
        In the third quarter of fiscal 2000, the Company acquired ASDA Group PLC (ASDA), the third largest retailer in the United Kingdom with, at that time, 229 stores. In June and July of 1999, the Company acquired 29% of the outstanding ASDA shares on the open market and made a cash tender offer for all remaining ASDA shares other than shares held by shareholders residing in certain countries. As of the end of the third quarter of fiscal 2000, the Company had acquired 100% of the outstanding shares of ASDA. The acquired assets are included in the Company’s consolidated balance sheet as of January 31, 2000, and five months of results of ASDA operations are included in the Company’s consolidated statements of income for the year ended January 31, 2000. ASDA reports on a December 31 year-end, therefore ASDA results are consolidated on a trailing month reporting basis.
        In fiscal 2000, the Company increased its investment in Korea by acquiring most of the minority interest in its operations in Korea from its joint venture partner. The Company anticipates that the remaining minority interest will be acquired in early fiscal 2001.
        See Note 6 of Notes to Consolidated Financial Statements incorporated by reference in Item 8 of Part II found on page 19 of this annual report for additional information regarding our acquisitions.
        Internationally, at January 31, 2000, the Company operated units in Argentina(13), Brazil(14), Canada(166), Germany(95), Korea(5) Mexico(458), Puerto Rico(15)and the United Kingdom (232), and, under joint venture agreements in China(6). Tables summarizing information concerning additions of units and square footage for international units operated since January 31, 1995 is included as Schedule C to Item 1, found on pages 13 and 14 of this annual report.
Page 3 of 25 (Form 10-K)
 
In the fourth quarter of fiscal 2000, the Company joined with Accel Partners, a Silicon Valley based venture capital firm, to form Wal-mart.com, Inc. Wal-Mart.com, Inc. will base its operations in Palo Alto, California and was formed to further develop and operate the internet retail site, Wal-Mart.com, and to further the Company’s efforts to attract customers to the Company’s internet site with the Wal-Mart name.
(b) Financial information about the Company’s industry
     segments
        The Company is principally engaged in the operation of mass merchandising stores, which serve our customers primarily through the operation of three segments.
        The Company identifies segments based on management responsibility within the United States and geographically for all international units. The Wal-Mart Stores segment includes the Company’s discount stores and Supercenters in the United States. The SAM’S Club segment includes the warehouse membership clubs in the United States. The International segment includes all operations in Argentina, Brazil, Canada, China, Germany, Korea, Mexico, Puerto Rico and the United Kingdom. For the financial results of the Company’s operating segments, see Note 9 of Notes to Consolidated Financial Statements incorporated by reference in Item 8 of Part II, found on page 19 of this annual report.
(c) Narrative Description of Business
        The Company, a Delaware corporation, has its principal offices in Bentonville, Arkansas. Although the Company was incorporated in October 1969, the businesses conducted by its predecessors began in 1945 when Sam M. Walton opened a franchise Ben Franklin variety store in Newport, Arkansas. In 1946, his brother, James L. Walton, opened a similar store in Versailles, Missouri. Until 1962, the Company’s business was devoted entirely to the operation of variety stores. In that year, the first Wal-Mart Discount City (discount store) was opened. In fiscal 1984, the Company opened its first three SAM’S Clubs, and in fiscal 1988, its first Wal-Mart Supercenter (combination full-line supermarket and discount store). In fiscal 1992, the Company began its first international initiative when the Company entered into a joint venture in which it had a 50% interest with Cifra S.A. de C.V. (Cifra). The Company’s international presence has continued to expand and at January 31, 2000, the Company had international operations in eight countries and Puerto Rico. In February 2000, Cirfa officially changed its name to Wal-Mart de Mexico, S.A. de C.V.
WAL-MART STORES OPERATING SEGMENT
        The Wal-Mart Stores segment, which includes the Company’s discount stores and Supercenters in the United States, had sales of $108,721,000,000, $95,395,000,000 and $83,820,000,000 for the three fiscal years ended January 31, 2000, 1999, and 1998, respectively. During the most recent fiscal year, no single discount store or Supercenter location accounted for as much as 1% of total Company sales or net income. See Note 9 of Notes to Consolidated Financial
Page 4 of 25 (Form 10-K)
 
Statements incorporated by reference in Item 8 of Part II, found on page 19 of this annual report for additional information regarding our operating segments.
        General. The Company operates Wal-Mart discount stores in all 50 states. The average size of a discount store is approximately 94,800 square feet. Wal-Mart Supercenters are located in 34 states and the average size of a Supercenter is 181,300 square feet. The Supercenter prototypes range in size from 110,000 square feet to 241,000 square feet.
        Merchandise. Wal-Mart discount stores and the general merchandise area of the Supercenters are generally organized with 40 departments and offer a wide variety of merchandise, including apparel for women, girls, men, boys and infants. Each store also carries domestics, fabrics and notions, stationery and books, shoes, housewares, hardware, electronics, home furnishings, small appliances, automotive accessories, horticulture and accessories, sporting goods, toys, pet food and accessories, cameras and supplies, health and beauty aids, pharmaceuticals and jewelry. In addition, the stores offer an assortment of grocery merchandise, with the grocery assortment in Supercenters being broader and including meat, produce, deli, bakery, dairy, frozen foods and dry grocery.
        Nationally advertised merchandise accounts for a majority of sales in the stores. The Company markets lines of merchandise under store brands including but not limited to "Sam’s American Choice", "One Source", "Great Value", "Ol’ Roy" and "Equate". The Company also markets lines of merchandise under licensed brands, some of which include "Faded Glory", "Kathie Lee", "White Stag", "Puritan", "Better Homes & Gardens", "Popular Mechanics", "Catalina", "McKids", and "Basic Equipment".
        During the fiscal year ended January 31, 2000, sales in discount stores and Supercenters (which are subject to seasonal variance) by product category were as follows:

CATEGORY	PERCENTAGE
OF SALES	
Hardgoods	22	
Softgoods/domestics	20	
Grocery, candy and tobacco	18	
Pharmaceuticals	10	
Electronics	8	
Sporting goods and toys	7	
Health and beauty aids	7	
Stationery	3	
Shoes	2	
Jewelry	2	
One-hour photo	1	
	100%	
 
        Operations. Hours of operation for nearly all Supercenters and an increasing number of discount stores are 24 hours each day. Hours of operation
Page 5 of 25 (Form 10-K)
 
for the remaining discount stores vary by location, but generally range from 7:00a.m. to 11:00 p.m., six days a week, and from 10:00 a.m. to 8:00 p.m. on Sundays. Wal-Mart discount stores and Supercenters maintain uniform prices, except where lower prices are necessary to meet local competition. Sales are primarily on a self-service, cash-and-carry basis with the objective of maximizing sales volume and inventory turnover while minimizing expenses. Bank credit card programs, operated without recourse to the Company, are available in all stores.
        Seasonal Aspects of Operations. The Wal-Mart Stores operating segment’s business is seasonal to a certain extent. Generally, the highest volume of sales occurs in the Company’s fourth fiscal quarter and the lowest volume occurs during its first fiscal quarter.
        Competition. Wal-Mart discount stores compete with other discount, department, drug, variety and specialty stores, many of which are national chains. Wal-Mart Supercenters compete with other supercenter-type stores, discount stores, supermarkets and specialty stores, many of which are national or regional chains. The Company also competes with others for new store sites. As of January 31, 2000, based on net sales, the Wal-Mart Stores segment ranked first among all retail department store chains and among all discount department store chains.
        The Company’s competitive position within the industry is largely determined by its ability to offer value and service to its customers. The Company has many programs designed to meet the competitive pressures within its industry. These include the Company’s "Everyday Low Price", "Item Merchandising", "Store-Within-a-Store" and "Price Rollbacks" programs. Although the Company believes it has had a major influence in most of the retail markets in which its stores are located, there is no assurance that this influence will continue.
        Distribution. During fiscal 2000, approximately 83% of the Wal-Mart discount stores’ and Supercenters’ purchases were shipped from Wal-Mart’s 45 distribution centers, ten of which are grocery distribution centers, and two of which are import distribution centers. The balance of merchandise purchased was shipped directly to the stores from suppliers. The 45 distribution centers are located throughout the continental United States. Five distribution centers are located in each of Arkansas and Texas; three in each of South Carolina and New York; two in each of California, Florida, Georgia, Indiana, Mississippi, and Pennsylvania; and one in each of Alabama, Arizona, Colorado, Iowa, Illinois, Kansas, Kentucky, Michigan, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Tennessee, Utah, Virginia and Wisconsin.
SAM’S CLUB OPERATING SEGMENT
        The SAM’S Club segment, which includes the warehouse membership clubs in the United States, had sales of $24,801,000,000, $22,881,000,000 and $20,668,000,000 for the three fiscal years ended January 31, 2000, 1999, and 1998, respectively. During the most recent fiscal year, no single club location accounted for as much as 1% of total Company sales or net income. See Note 9 of Notes to Consolidated Financial Statements incorporated by reference in Item 8 of
Page 6 of 25 (Form 10-K)
 
Part II found on page 19 of this annual report for additional information regarding our segments.
        General. The Company operates SAM’S Clubs in 48 states. The average size of a SAM’S Club is approximately 121,700 square feet, and club sizes generally range between 90,000 and 154,000 square feet of building area.
        Merchandise . SAM’S Clubs offer bulk displays of name brand hardgood merchandise, some softgoods and institutional size grocery items, and selected items under the "Member's Mark" store brand. Generally each SAM’S Club also carries software, electronic goods, jewelry, sporting goods, toys, tires, stationery and books. Most clubs have fresh food departments, which include bakery, meat and produce. In addition, some clubs offer one-hour photo, embroidery departments, pharmaceuticals, optical departments and gas stations.
        During the fiscal year ended January 31, 2000, sales in the clubs (which are subject to seasonal variance) by product category were as follows:

CATEGORY	PERCENTAGE
OF SALES	
Food	32	
Sundries	32	
Hardlines	22	
Service Businesses	8	
Softlines	6	
 	100%	
 
       Operations. Operating hours vary among SAM’S Clubs, but they are generally open Monday through Friday from 10:00 a.m. to 8:30 p.m. Saturday from 9:30 a.m. to 8:30 p.m. and Sunday from 11:00 a.m. to 6:00 p.m.
        SAM’S Clubs are membership only, cash-and-carry operations. However, a financial service credit card program (Discover Card) is available in all clubs and the "SAM’S Direct" commercial finance program and "Business Revolving Credit" are available to qualifying business members. Also, a "Personal Credit" program is available to qualifying club members. Any credit extended to members under these programs is without recourse to the Company. Club members include businesses and those individuals who are members of certain qualifying organizations, such as government and state employees and credit union members. In fiscal 2000, business members paid an annual membership fee of $30 for the primary membership card with a spouse card available at no additional cost. The annual membership fee for an individual member is $35 for the primary membership card with a spouse card available at no additional cost. During fiscal 2000, SAM’S Clubs launched an Elite Membership program which offers additional benefits such as long distance service, roadside assistance, internet access, home improvement, Telebank, business insurance and financial planning, auto brokering, pharmacy discounts, and entertainment savings guides to Elite Members. The annual membership fee for an Elite Member is $100.
Page 7 of 25 (Form 10-K)
 
        Seasonal Aspects of Operations. The SAM’S Club operating segment’s business is seasonal to a certain extent. Generally, the highest volume of sales occurs in the Company’s fourth fiscal quarter and the lowest volume occurs during its first fiscal quarter.
        Competition. SAM’S Clubs compete with other warehouse clubs, as well as with discount retailers, wholesale grocers and general merchandise wholesalers and distributors. The Company also competes with others for new club sites. As of January 31, 2000, based on domestic U.S. net sales, the SAM’S Club segment ranked first among all warehouse clubs.
        Distribution. During fiscal 2000, approximately 57% of the SAM’S Club purchases were shipped from the Segment’s distribution facilities. The balance was shipped directly to the clubs location from suppliers. Operationally, the principal focus is on crossdocking product, while maintaining stored inventory is minimized. A combination of 6 Company owned and operated facilities and 19 third-party owned and operated facilities comprise the overall distribution structure for the SAM’s Club segment. Two of the Company owned and operated facilities are located in Texas with one located in each of Arkansas, Colorado, Minnesota and Indiana. Of the third party owned and operated facilities, two are located in each of Illinois, Ohio and Texas and one in each of Arizona, Arkansas, California, Florida, Georgia, Maryland, Michigan, Missouri, New Hampshire, Nevada, North Carolina, Pennsylvania and Washington.
 
INTERNATIONAL OPERATING SEGMENT
        The Company’s International Segment is comprised of wholly owned operations in Argentina, Canada, Germany, Korea, Puerto Rico and the United Kingdom; of operations through joint ventures in China; and of opertions through majority-owned subsidiaries in Brazil and Mexico. Sales for the three fiscal years ended January 31, 2000, 1999 and 1998, were $22,728,000,000, $12,247,000,000 and $7,517,000,000, respectively. During the most recent fiscal year, no single location accounted for as much as 1% of total Company sales or net income. See Note 9 of Notes to Consolidated Financial Statements incorporated by reference in Item 8 of Part II found on page 19 of this annual report for additional information regarding our segments.
        General. Operating formats vary by country, but include Wal-Mart discount stores in Canada and Puerto Rico; Supercenters in Argentina, Brazil, China, Korea and Mexico; SAM’S Clubs in Brazil, China, Mexico, and Puerto Rico; Hypermarkets in Germany; Superamas (traditional supermarket), Bodegas (discount store), Aurreras (combination store), Suburbias (specialty department store) and Vips (restaurant) in Mexico and ASDA stores (combination grocery and apparel store) in the United Kingdom. In March 2000, the Company announced the sale of
Page 8 of 25 (Form 10-K)
 
all three of the Company’s SAM’S Clubs in Argentina. The sale is being made so that the Company can concentrate on expanding its Supercenter business within Argentina.
        Merchandise. The merchandising strategy in the International operating segment is similar to that of domestic segments in the breadth and scope of merchandise offered for sale. While brand name merchandise accounts for a majority of sales, several store brands not found in the United States have been developed to serve customers in the different markets in which the International segment operates. In addition, steps have been taken to develop relationships with local vendors in each country to ensure reliable sources of quality merchandise.
        Operations. The hours of operation for operating units in the international division vary by country and by individual markets within countries, depending upon local and national ordinances governing hours of operation. While sales are primarily on a cash-and-carry basis, credit cards or other consumer finance programs exist in certain markets to facilitate the purchase of goods by the customer.
        Seasonal Aspects of Operations. The International operating segment’s business is seasonal to a certain extent. Generally, the highest volume of sales occurs in the Company’s fourth fiscal quarter. The seasonality of the business varies by country due to different national and religious holidays, festivals and customs, as well as different climatic conditions.
        Competition. The International operating segment competes with a variety of local, national and international chains in the discount, department, drug, variety, specialty and wholesale sectors of the retail market. The segment’s competitive position is determined, to a large extent, by its ability to offer its customers low prices on quality merchandise that offers exceptional value. In Supercenters, our ability to effectively operate the food departments has a major impact on the segment’s competitive position in the markets where we operate.
        Distribution. The International segment operates export consolidation facilities in Los Angeles, California; Jacksonville, Florida; Seattle, Washington; and Laredo, Texas in support of product flow to its Mexican, Asian, and Latin American markets. Distribution facilities are located in Argentina, Brazil, Canada, China, Germany, Puerto Rico, the United Kingdom and Mexico which process and distribte both imported and domestic product to the operating units. Operationally, the principal focus is on crossdocking product, while maintaining stored inventory is minimized. During fiscal 2000, approximately 80% of the International merchandise purchases flowed through these distribution facilities. The balance was shipped directly to the stores from suppliers. A combination of Company owned and operated facilities and third-party facilities comprises the overall distribution structure for International logistics.
Page 9 of 25 (Form 10-K)
 
OTHER
        The sales reported in the "Other" category included in Note 9 of Notes to Consolidated Financial Statements incorporated by reference in Item 8 of Part II found on page 19 of this annual report, result from sales to third parties by McLane Company, Inc. (McLane). McLane is a wholly-owned wholesale distributor that sells its merchandise to a variety of retailers, primarily in the convenience store industry. McLane also services Wal-Mart discount stores, Supercenters and SAM’S Clubs. Sales to third parties for the three fiscal years ended January 31, 2000, 1999 and 1998 were $8,763,000,000, $7,111,000,000 and $5,953,000,000 respectively. McLane offers a wide variety of grocery and non-grocery products, including perishable and non-perishable items. The non-grocery products consist primarily of tobacco products, general merchandise, health and beauty aids, toys and stationery.
        During fiscal 2000, McLane divested its food distribution centers and constructed one new grocery distribution center leaving 16 distribution centers from which its customers, including the Company, are served. The distribution centers are located in the continental United States with two located in each of California and Texas, and one each in Arizona, Alabama, Colorado, Florida, Georgia, Illinois, Kentucky, Mississippi, New York, North Carolina, Virginia and Washington.
Employees (Associates).
As of January 31, 2000, the Company employed approximately 1,140,000 associates worldwide, with approximately 885,000 in the United States and 255,000 internationally. Most associates participate in incentive programs, which provide the opportunity to receive additional compensation based upon the Company’s productivity or profitability.
Page 10 of 25 (Form 10-K)
 
WAL-MART STORES, INC. AND SUBSIDIARIES
SCHEDULE A TO ITEM 1 -
WAL-MART STORES SEGMENT STORE COUNT AND NET SQUARE FOOTAGE GROWTH
YEARS ENDED JANUARY 31, 1995 THROUGH 2000

STORE COUNT	
Fiscal
Year
Ended	Wal-Mart
Discount stores	Wal-Mart
Supercenters	
Total	
Jan 31,	Opened	Closed	Conversions
(1)	Total	Opened	Total	Opened
(2)	Closed	Ending
Balance	
 	
Balance Forward	1,950	 	72	 	 	2,022	
1995	109	5	69	1,985	75	147	115	5	2,132	
1996	92	2	80	1,995	92	239	104	2	2,234	
1997	59	2	92	1,960	105	344	72	2	2,304	
1998	37	1	75	1,921	97	441	59	1	2,362	
1999	37	1	88	1,869	123	564	72	1	2,433	
2000	29	1	96	1,801	157	721	90	1	2,522	

NET SQUARE FOOTAGE	
Fiscal
Year
Ended	Wal-Mart
Discount Stores	Wal-Mart
Supercenters	Total	
Jan 31	Net Additions	Total	Net Additions	Total	Net Additions	Total	
 	
Balance Forward	163,551,870	 	12,713,819	 	176,265,689	
1995	10,109,978	173,661,848	14,087,725	26,801,544	24,197,703	200,463,392	
1996	8,188,223	181,850,071	16,791,559	43,593,103	24,979,782	225,443,174	
1997	( 103,486)	181,746,585	19,661,948	63,255,051	19,558,462	245,001,636	
1998	(2,411,149)	179,335,436	17,076,582	80,331,633	14,665,433	259,667,069	
1999	(3,062,418)	176,273,018	21,892,838	102,224,471	18,830,420	278,497,489	
2000	(5,486,901)	170,786,117	28,488,737	130,713,208	23,001,836	301,499,325	
(1) Wal-Mart discount store locations relocated or expanded as Wal-Mart Supercenters.
(2) Total opened net of conversions of Wal-Mart discount stores to Wal-Mart Supercenters
Page 11 of 25 (Form 10-K)
 
WAL-MART STORES, INC. AND SUBSIDIARIES
SCHEDULE B TO ITEM 1 -
SAM'S CLUB SEGMENT CLUB COUNT AND NET SQUARE FOOTAGE GROWTH
YEARS ENDED JANUARY 31, 1995 THROUGH 2000

STORE COUNT	
Fiscal Year
Ended	SAM’S Clubs	
Jan 31,	Opened	Closed	Total	
 	
Balance Forward	417	
1995	21	12	426	
1996	9	2	433	
1997	9	6	436	
1998	8	1	443	
1999	8	0	451	
2000	12	0	463	

NET SQUARE FOOTAGE	
Fiscal Year
Ended	SAM’S Clubs	
Jan 31,	Net Additions	Total	
 	
Balance Forward	50,374,682	
1995	1,335,742	51,710,424	
1996	825,020	52,535,444	
1997	298,692	52,834,136	
1998	716,150	53,550,286	
1999	1,099,144	54,649,430	
2000	1,701,478	56,350,908	

Page 12 of 25 (Form 10-K)
 
WAL-MART STORES, INC. AND SUBSIDIARIES
SCHEDULE C TO ITEM 1 - INTERNATIONAL SEGMENT UNIT COUNT
YEARS ENDED JANUARY 31, 1995 THROUGH 2000

STORE COUNT	
Fisal Year
Ended	Argentina	Brazil	Canada	
	Wal-Mart
Supercenters	SAM’S
Clubs	Total	Wal-Mart
Supercenters	SAM’S
Clubs	  Total	Wal-Mart
Stores	
	
1995	0	0	0	0	0	0	123	
1996	1	2	3	2	3	5	131	
1997	3	3	6	2	3	5	136	
1998	6	3	9	5	3	8	144	
1999	10	3	13	9	5	14	154	
2000	10	3	13	9	5	14	166	

STORE COUNT	
Fisal Year
Ended	China	Germany	Korea	
	Wal-Mart
Supercenters	SAM’S
Clubs	  Total	     Hypermarkets	Wal-Mart
Supercenters	
	
1995	0	0	0	0	0	
1996	0	0	0	0	0	
1997	1	1	2	0	0	
1998	2	1	3	21	0	
1999	4	1	5	95	4	
2000	5	1	6	95	5	

STORE COUNT	

Fisal Year
Ended	Mexico	Puerto Rico	United Kingdom	
	Wal-Mart
Supercenters	SAM’S
Clubs	Other*	Total	Wal-Mart
Stores	SAM’S
Clubs	Total	ASDA
Stores	
 	
1995	11	22	0	33	5	2	7	0	
1996	13	28	0	41	7	4	11	0	
1997	18	28	0	46	7	4	11	0	
1998	27	28	330	385	9	5	14	0	
1999	27	31	358	416	9	6	15	0	
2000	27	34	397	458	9	6	15	232	

* At January 31, 2000, includes 36 Aurreras (combination stores), 68 Bodegas (discount stores), 51 Suburbias (specialty department stores), 38 Superamas (traditional supermarkets), and 204 Vips (restaurants).
Page 13 of 25 (Form 10-K)
 
WAL-MART STORES, INC. AND SUBSIDIARIES
SCHEDULE C TO ITEM 1 - INTERNATIONAL NET SQUARE FOOTAGE GROWTH
YEARS ENDED JANUARY 31, 1995 THROUGH 2000

NET SQUARE FOOTAGE	

Fisal Year
Ended	Argentina	Brazil	Canada	
	Net
Additions	     Total	Net
Additions	     Total	Net
Additions	      Total	
 	 	 	 	 	 	 	
1995	0	0	0	0	14,606,880	14,606,880	
1996	444,621	444,621	761,581	761,581	868,518	15,475,398	
1997	625,369	1,069,990	0	761,581	578,508	16,053,906	
1998	506,884	1,576,874	540,056	1,301,637	914,365	16,968,271	
1999	663,986	2,240,860	914,618	2,216,255	981,261	17,949,532	
2000	0	2,240,860	0	2,216,255	1,510,890	19,460,422	

NET SQUARE FOOTAGE	

Fisal Year
Ended	China	Germany	Korea	
	Net
Additions	     Total	Net
Additions	     Total	Net
Additions	      Total	
 	 	 	 	 	 	 	
1995	0	0	0	0	0	0	
1996	0	0	0	0	0	0	
1997	316,656	316,656	0	0	0	0	
1998	145,558	462,214	2,449,369	2,449,369	0	0	
1999	224,827	687,041	6,845,491	9,294,860	553,683	553,683	
2000	125,150	812,191	0	9,294,860	71,042	624,725	

NET SQUARE FOOTAGE	

Fisal Year
Ended	Mexico	Puerto Rico	United Kingdom	
	Net
Additions	Total	Net
Additions	Total	Net
Additions	Total	
 	 	 	 	 	 	 	
1995	3,718,910	4,970,473	266,279	835,186	0	0	
1996	1,012,734	5,983,207	470,266	1,305,452	0	0	
1997	1,032,603	7,015,810	0	1,305,452	0	0	
1998	10,292,640	17,308,450	342,888	1,648,340	0	0	
1999	714,459	18,022,909	100,250	1,748,590	0	0	
2000	1,696,475	19,719,384	0	1,748,590	18,825,234	18,825,234	
 Page 14 of 25 (Form 10-K) 
 
ITEM 2. PROPERTIES
        The number and location of domestic and international Wal-Mart discount stores, Supercenters and SAM’S Clubs is incorporated by reference to the table under the caption "Fiscal 2000 End of Year Store Counts" on page 6 of the Annual Report to Shareholders for the year ended January 31, 2000.
        The Company owns 1,352 of the properties on which domestic discount stores and Supercenters are located and 295 of the properties on which domestic SAM’S Clubs are located. In some cases, the Company owns the land associated with leased buildings. New buildings, both leased and owned, are constructed by independent contractors.
        The remaining buildings in which its present domestic locations are located are either leased from a commercial property developer, leased pursuant to a sale/leaseback arrangement or leased from a local governmental entity through an industrial revenue bond transaction. All of the Company’s leases for its stores provide for fixed annual rentals and, in many cases, the leases provide for additional rent based on sales volume.
        Domestically, the Company operated 45 Wal-Mart distribution facilities and 16 McLane distribution facilities as of January 31, 2000. These distribution facilities are primarily owned by the Company, and several are subject to mortgages granted to secure loans. Some of the distribution facilities are leased under industrial development bond financing arrangements and provide the option of purchasing these facilities at the end of the lease term for nominal amounts.
        The Company owns office facilities in Bentonville, Arkansas that serve as the home office for the Company and an office facility in Temple, Texas which serves as the home office for McLane.
        Internationally, the Company has a combination of owned and leased properties in each country in which the operating units are located. The Company owns seven properties in Argentina, nine properties in Brazil, 11 properties in Canada, one property in China through joint venture, 19 properties in Germany, five properties in Korea, 186 properties in Mexico, two properties in Puerto Rico  and 83 properties in the Undited Kingdom in which the operating units are located, with the remaining units in each country being leased.
        The Company utilizes both owned and leased properties for office facilities in each country in which it conducts business.
ITEM 3. LEGAL PROCEEDINGS
        The Company is not a party to any material pending legal proceedings. Neither the Company nor any of its properties is subject to any material pending legal proceeding, other than routine litigation incidental to the Company’s business.
Page 15 of 25 (Form 10-K)
 
        The Company recently opened a Supercenter in Honesdale, Pennsylvania. In February of 1999, the Company settled claims made by the Pennsylvania Department of Environmental Protection (PDEP) that a subcontractor’s acts and omissions relating to the construction of the Supercenter led to excess erosion and sedimentation of a nearby creek. In the settlement, Wal-Mart agreed to pay a fine of $25,000 and to perform a $75,000 community environmental project in the Honesdale area. The Company is negotiating settlement of a claim by the United States Army Corps of Engineers that the construction resulted in the filling of approximately 0.76 acres in excess of the permitted fill area of waters and wetlands at the site. The proposed settlement with the Corps will require Wal-Mart to pay $200,000 to a non-profit corporation for the purchase of local wetlands conservation areas and easements. The Company has been reimbursed for these amounts by the contractor on the project.
        The United States Environmental Protection Agency (EPA) is threatening to bring suit against the Company and five of its contractors over alleged violations of a 1992 storm water permit issued with respect to various Wal-Mart development sites in Texas, New Mexico and Oklahoma. The EPA has presented the Company with penalty calculations of $5.6 million.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
        No matters were submitted to a vote of the Company’s security holders during the last quarter of the year ended January 31, 2000.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
        The following information is furnished with respect to each of the executive officers of the Company, each of whom is elected by and serves at the pleasure of the Board of Directors. The business experience shown for each officer has been his principal occupation for at least the past five years.

                 Name	 
Business Experience	Current
Position
Held Since	 
Age	
S. Robson Walton	Chairman of the Board	1992	55	
David D. Glass	Chairman, Executive Committee of the Board. Prior to January 2000, he served as President and Chief Executive Officer	2000	64	
H. Lee Scott, Jr.	President and Chief Executive Officer. Prior to January 2000, he served as Vice Chairman and Chief Operating Officer. Prior to January 1999, he served as  President and Chief Executive Officer of Wal-Mart Stores Division. Prior to January 1998, he served as Executive Vice President - Merchandising. Prior to October 1995, he served as Executive Vice President Logistics. Prior to that, he served as Senior Vice President- Logistics.	2000	51	
Donald G. Soderquist	Senior Vice Chairman of the Board. Prior to January 1999, he served  as Vice Chairman and Chief Operating Officer.	1999	66	
Thomas M. Coughlin	Executive Vice President and President and Chief Executive Officer of Wal-Mart Stores Division. Prior to January 1999, he served as Executive Vice President and Chief Operating Officer of Wal-Mart Stores Division. Prior to January 1998, he served as Executive Vice President - Store Operations. Prior to 1995, he served as Senior Vice President - Specialty Divisions.	1999	51	
Thomas R. Grimm	Executive Vice President and President and Chief Executive Officer of SAM’S Club Division. Prior to October 1998, he was retired and served as a consultant to various organizations. Prior to June 1994, he served as President and Chief Executive Officer of Pace Membership Warehouse, a Division of K-Mart Corporation.	1998	55	
John B. Menzer	Executive Vice President and President and Chief Executive Officer of Wal-Mart International Division. Prior to June 1999, he served as Executive Vice President and Chief Financial Officer. Prior to September 1995, he served as President and Chief Operating Officer of Ben Franklin Retail Stores, Inc.	1999	49	
Thomas M. Schoewe	Executive Vice President and Chief Financial Officer. Prior to January 2000, he served as Senior Vice President and Chief Financial Officer of Black & Decker Corporation. Prior to February 1997, he served as Vice President and Chief Financial Officer of Black & Decker Corporation.	2000	47	
James A. Walker, Jr.	Senior Vice President and Controller. Prior to 1995, he served as Vice President and Controller.	1995	53	
Page 16 and 17 (Form 10-K)
 
PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY
        AND RELATED SHAREHOLDER MATTERS
        The information required by this item is incorporated by reference to the information "Number of Shareholders" under the caption "11-Year Financial Summary" on pages 18 and 19, and all the information under the captions "Market Price of Common Stock", "Listings - Stock Symbol: WMT" and "Dividends Paid Per Share" on page 41 of the Annual Report to Shareholders for the year ended January 31, 2000.
ITEM 6. SELECTED FINANCIAL DATA
        The information required by this item is incorporated by reference to all information under the caption "11-Year Financial Summary" on pages 18 and 19 of the Annual Report to Shareholders for the year ended January 31, 2000.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS
        The information required by this item is furnished by incorporation by reference to all information under the caption "Management’s Discussion and Analysis" on pages 20 through 25 of the Annual Report to Shareholders for the year ended January 31, 2000.
ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
        The information required by this item is furnished by incorporation by reference to all information under the sub-caption "Market Risk" of the caption "Management’s Discussion and Analysis" on pages 21 through 24 of the Annual
Page 18 of 25 (Form 10-K)
 
Report to Shareholders for the year ended January 31, 2000.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
        The information required by this item is furnished by incorporation by reference to all information under the captions "Consolidated Statements of Income", "Consolidated Balance Sheets", "Consolidated Statements of Shareholders’ Equity", "Consolidated Statements of Cash Flows", "Notes to Consolidated Financial Statements" and "Report of Independent Auditors" on pages 26 through 40 of the Annual Report to Shareholders for the year ended January 31, 2000.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE
        None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
        Information required by this item with respect to the Company’s directors and compliance by the Company’s directors, executive officers and certain beneficial owners of the Company’s Common Stock with Section 16(a) of the Securities Exchange Act of 1934 is furnished by incorporation by reference to all information under the captions entitled "Nominees for Directors" on pages 2 through 4 and "Section 16(a) Beneficial Ownership Reporting Compliance" on page 15 of the Company’s definitive Proxy Statement for its Annual Meeting of Shareholders to be held on Friday, June 2, 2000 (the "Proxy Statement"). The information required by this item with respect to the Company’s executive officers is included as Item 4A of Part I found on pages 16 through 18 of this annual report.
ITEM 11. EXECUTIVE COMPENSATION
        The information required by this item is furnished by incorporation by reference to all information under the caption entitled "Compensation of Directors" on page 4, "Compensation and Nominating Committee Report on Executive Compensation" on pages 6 through 9, and "Summary Compensation", "Option Grants In Last Fiscal Year", and "Option Exercises and Fiscal Year End Option Values" on pages 10 through 12 of the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
        The information required by this item is furnished by incorporation by reference to all information under the caption entitled "Stock Ownership", subcaptions "Ownership of Major Shareholders" and "Holdings of Officers and Directors" on pages 13 through 15 of the Proxy Statement.
Page 19 of 25 (Form 10-K)
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
        The information required by this item is furnished by incorporation by reference to all information under the caption "Related-Party Transactions with Wal-Mart" on page 6 of the Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
         AND REPORTS ON FORM 8-K
(a) 1. & 2. Consolidated Financial Statements
The financial statements listed in the Index to Consolidated Financial Statements, which appears on page 23 of this annual report, are incorporated by reference herein or filed as part of this Form 10-K.
    3.   Exhibits
The following documents are filed as exhibits to this Form 10-K:

3(a)	Restated Certificate of Incorporation of the Company is   incorporated herein by reference to Exhibit 3(a) from the AnnualReport on Form 10-K of the Company for the year ended January 31, 1989, and the Certificate of Amendment to the Restated Certificate of Incorporation is incorporated herein by reference to Registration Statement on Form S-8 (File Number 33-43315).	
3(b)	By-Laws of the Company, as amended June 3, 1993, are incorporated herein by reference to Exhibit 3(b) to the Company’s Annual Report on Form 10-K for the year ended January 31, 1994.	
4(a)	Form of Indenture dated as of June 1, 1985, between the Company and Bank of New York, Trustee, (formerly Boatmen’s Trust Company and Centerre Trust Company) is incorporated herein by reference to Exhibit 4(c) to Registration Statement on Form S-3 (File Number 2-97917).	
4(b)	Form of Indenture dated as of August 1, 1985, between the Company and Bank of New York, Trustee, (formerly Boatmen’s Trust Company and Centerre Trust Company) is incorporated herein by reference to Exhibit 4(c) to Registration Statement on Form S-3 (File Number 2-99162).	
4(c)	Form of Amended and Restated Indenture, Mortgage and Deed of Trust, Assignment of Rents and Security Agreement dated as of December 1, 1986, among the First National Bank of Boston and James E. Mogavero, Owner Trustees, Rewal Corporation I, Estate for Years Holder, Rewal Corporation II, Remainderman, the Company and the First National Bank of Chicago and R.D. Manella, Indenture Trustees, is incorporated herein by reference to Exhibit 4(b) to Registration Statement on Form S-3 (File Number 33-11394).	
Page 20 of 25 (Form 10-K)

4(d)	Form of Indenture dated as of July 15, 1990, between the Company and Harris Trust and Savings Bank, Trustee, is incorporated herein by reference to Exhibit 4(b) to Registration Statement on Form S-3 (File Number 33-35710).	
4(e)	Indenture dated as of April 1, 1991, between the Company and The First National Bank of Chicago, Trustee, is incorporated herein by reference to Exhibit 4(a) to Registration Statement on Form S-3 (File Number 33-51344).	
4(f)	First Supplemental Indenture dated as of September 9, 1992, to the Indenture dated as of April 1, 1991, between the Company and The First National Bank of Chicago, Trustee, is incorporated herein by reference to Exhibit 4(b) to Registration Statement on Form S-3 (File Number 33-51344).	
+10(a)	Form of individual deferred compensation agreements is incorporated herein by reference to Exhibit 10(b)from the Annual Report on Form 10-K of the Company, as amended, for the year ended January 31, 1986.	
+10(b)	Wal-Mart Stores, Inc. Stock Option Plan of 1984 is incorporated herein by reference to Registration Statement on Form S-8 (File Number 2-94358).	
+10(c)	1986 Amendment to the Wal-Mart Stores, Inc. Stock Option Plan of 1984 is incorporated herein by reference to Exhibit 10(h) from the Annual Report on Form 10-K of the Company for the year ended January 31, 1987.	
+10(d)	1991 Amendment to the Wal-Mart Stores, Inc. Stock Option Plan of 1984 is incorporated herein by reference to Exhibit 10(h) from the Annual Report on Form 10-K of the Company for the year ended January 31, 1992.	
+10(e)	1993 Amendment to the Wal-Mart Stores, Inc. Stock Option Plan of 1984 is incorporated herein by reference to Exhibit 10(i) from the Annual Report on Form 10-K of the Company for the year ended January 31, 1993.	
+10(f)	Wal-Mart Stores, Inc. Stock Option Plan of 1994 is incorporated herein by reference to Exhibit 4(c) to Registration Statement on Form S-8 (File Number 33-55325).	
     Page 21 of 25 (Form 10-K)

+10(g)	Wal-Mart Stores, Inc. Director Compensation Plan is incorporated herein by reference to Exhibit 4(d) to Registration Statement on Form S-8 (File Number 333-24259).	
+10(h)	Wal-Mart Stores, Inc. Officer Deferred Compensation Plan is incorporated herein by reference to Exhibit 10(i) from the Annual Report on Form 10-K of the Company for the year ended January 31, 1996.	
+10(i)	Wal-Mart Stores, Inc. Restricted Stock Plan is incorporated herein by reference to Exhibit 10(j) from the Annual Report on Form 10-K of the Company for the year ended January 31, 1997.	
+10(j)	1996 Amendment to the Wal-Mart Stores, Inc. Stock Option Plan of 1994 is incorporated herein by reference to Exhibit 10(j) from the Annual Report on Form 10-K of the Company for the year ended January 31, 1998.	
+10(k)	1997 Amendment to the Wal-Mart Stores, Inc. Stock Option Plan of 1994 is incorporated herein by reference to Exhibit 10(k) from the Annual Report on Form 10-K of the Company for the year ended January 31, 1998.	
+10(l)	Wal-Mart Stores, Inc. Stock Incentive Plan of 1998 is filed herewith as an Exhibit to this Form 10-K.	
+10(m)	Wal-Mart Stores, Inc. Management Incentive Plan of 1998 is filed herewith as an Exhibit to this Form 10-K.	
*12	Statement re computation of ratios	
*13	All information incorporated by reference in Items 1, 2, 5, 6, 7 and 8 of this Annual Report on Form 10-K from the Annual Report to Shareholders for the year ended January 31, 2000.	
*21	List of the Company’s Subsidiaries	
*23	Consent of Independent Auditors	
*27	Financial Data Schedule	
*Filed herewith as an Exhibit.
+Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
        No reports on Form 8-K were filed during the fourth quarter of fiscal 2000 .
Page 22 of 25 (Form 10-K)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	
 	
 	Annual
Report to
Shareholders
(page)	
Covered by Report of Independent
   Auditors:	
   Consolidated Statements of Income
     for each of the three years in the
     period ended January 31, 2000	26	
   Consolidated Balance Sheets at
     January 31, 2000 and 1999	27	
   Consolidated Statements of
     Shareholders’ Equity for each of the
     three years in the period ended
     January 31, 2000	28	
   Consolidated Statements of Cash
     Flows for each of the three
     years in the period ended
     January 31, 2000	29	
   Notes to Consolidated Financial
     Statements, except Note 10	30-39	
Not Covered by Report of Independent
   Auditors:	
   Note 10 - Quarterly Financial Data
     (Unaudited)	39	
 
All schedules have been omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements, including the notes thereto.
Page 23 of 25 (Form 10-K)
 
SIGNATURES
        Pursuant to the requirements of Section 13 or 15(d) 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.

DATE:    April 15, 2000	/s/H. Lee Scott         
   H. Lee Scott
   President and Chief
   Executive Officer	
        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

DATE:    April 15, 2000	/s/H. Lee Scott         
   H. Lee Scott
   President and Chief
   Executive Officer
 	
DATE:    April 15, 2000	/s/S. Robson Walton     
   S. Robson Walton
   Chairman of the Board
 	
DATE:    April 15, 2000	/s/David D. Glass       
   David D. Glass
   Chairman, Executive Committee
  of the Board
 	
DATE:    April 15, 2000	/s/Donald G. Soderquist 
   Donald G. Soderquist
   Senior Vice Chairman of the
   Board and Director
 	
DATE:    April 15, 2000	/s/Thomas M. Schoewe    
   Thomas M. Schoewe
   Executive Vice President and
   Chief Financial Officer
  (Principal Financial Officer)
 	
DATE:    April 15, 2000	/s/James A. Walker, Jr. 
   James A. Walker, Jr.
   Senior Vice President and
   Controller
   (Principal Accounting Officer)

Page 24 of 25 (Form 10-K)
 	
DATE:    April 15, 2000	/s/John A. Cooper, Jr.  
   John A. Cooper, Jr.
   Director

DATE:    April 15, 2000	_________________________
   Stephen Friedman
   Director

DATE:    April 15, 2000	/s/Stanley C. Gault     
  Stanley C. Gault
   Director

DATE:    April 15, 2000	_________________________
  Roland A. Hernandez
   Director

DATE:    April 15, 2000	_________________________
   Frederick S. Humphries
   Director

DATE:    April 15, 2000	/s/E. Stanley Kroenke   
   E. Stanley Kroenke
   Director

DATE:    April 15, 2000	/s/Elizabeth A. Sanders 
   Elizabeth A. Sanders
   Director

DATE:    April 15, 2000	/s/Jack C. Shewmaker    
   Jack C. Shewmaker
   Director

DATE:    April 15, 2000	/s/Paula Stern           
   Paula Stern
   Director

DATE:    April 15, 2000	/s/Jose H. Villarreal   
   Jose H. Villarreal
   Director

DATE:    April 15, 2000	_________________________
  John T. Walton
   Director

Page 25 of 25 (Form 10-K)
 
EXHIBIT 12

Statement re computation of ratios	
 	Nine Months Ended October 31,	Fiscal Years Ended	
 	1999	1998	2000	1999	1998	1997	1996	
Income before income taxes	5,903	4,711	9,083	7,323	5,719	4,877	4,359	
Capitalized	(30)	(24)	(57)	(41)	(33)	(44)	(50)	
Minority interest	(85)	(97)	(170)	(153)	(78)	(27)	(13)	
Adjusted profit before tax*	5,788	4,590	8,856	7,129	5,608	4,806	4,296	
 	
Fixed Charges	 	
   Debt interest	502	380	756	529	555	629	692	
   Capital lease interest	197	201	266	268	229	216	196	
   Capitalized interest	30	24	57	41	33	44	50	
   Interest component of rent	379	395	458	523	477	449	425	
Total fixed expense	1,108	1,000	1,537	1,361	1,294	1,338	1,363	
 	
Profit before taxes and fixed expenses	6,896	5,590	10,393	8,490	6,902	6,144	5,659	
 	
Fixed charge coverage	6.22	5.59	6.76	6.24	5.33	4.59	4.15	
 	
Operating rent expense	474	494	573	654	596	561	531	
Interest portion ratio	80%	80%	80%	80%	80%	80%	80%	
 	
Interest portion of rents	379	395	458	523	477	449	425	
* Does not include the cumulative effect of accounting change recorded by the Company in Fiscal 2000
 
Wal-Mart Stores, Inc. Annual Report - Page 6
Fiscal 2000 End-of-Year Store Count

State	Discount Stores	Supercenters	SAM’S Clubs	
Alabama	43	38	8	
Alaska	4	0	3	
Arizona	31	5	9	
Arkansas	44	33	4	
California	113	0	25	
Colorado	23	16	12	
Connecticut	14	0	3	
Delaware	3	1	1	
Florida	89	50	35	
Georgia	59	35	16	
Hawaii	5	0	1	
Idaho	9	0	1	
Illinois	85	22	26	
Indiana	56	24	14	
Iowa	36	11	7	
Kansas	37	11	5	
Kentucky	39	33	5	
Louisiana	48	29	10	
Maine	17	3	3	
Maryland	25	1	11	
Massachusetts	32	1	3	
Michigan	52	1	21	
Minnesota	35	1	9	
Mississippi	34	25	4	
Missouri	69	43	12	
Montana	9	0	1	
Nebraska	13	6	3	
Nevada	13	0	2	
New Hampshire	18	3	4	
New Jersey	22	0	6	
New Mexico	9	13	3	
New York	52	9	18	
North Carolina	66	26	16	
North Dakota	8	0	2	
Ohio	75	11	24	
Oklahoma	52	27	6	
Oregon	24	0	0	
Pennsylvania	49	27	18	
Rhode Island	7	0	1	
South Carolina	32	25	9	
South Dakota	8	0	2	
Tennessee	49	38	14	
Texas	154	94	53	
Utah	14	0	5	
Vermont	4	0	0	
Virginia	26	37	10	
Washington	24	0	2	
West Virginia	8	18	3	
Wisconsin	54	4	11	
Wyoming	9	0	2	
US Total	1801	721	463	

Country	Discount Stores	Supercenters	SAM’S Clubs	
Argentina	0	10	3	
Brazil	0	9	5	
Canada	166	0	0	
China	0	5	1	
Germany	0	95	0	
Korea	0	5	0	
Mexico	397*	27	34	
Puerto Rico	9	0	6	
United Kingdom	0	232	0	
INT’L Total	572	383	49	
Worldwide
Grand Total	2373	1104	512	
* Includes: 36 Aurreras, 68 Bodegas, 51 Suburbias, 38 Superamas, and 204 Vips.
 
Wal-Mart Stores, Inc. Annual Report - Pages 18 and 19
11-Year Financial Summary

(Dollar amounts in millions except per share data)	2000   	1999  	1998  	1997  	1996  	
Net sales	$   165,013   	$  137,634  	$  117,958  	$  104,859  	$  93,627  	
Net sales increase	20%	17%	12%	12%	13%	
Comparative store sales increase	8%	9%	6%	5%	4%	
Other income-net	1,796   	1,574  	1,341  	1,319  	1,146  	
Cost of sales	129,664   	108,725  	93,438  	83,510  	74,505  	
Operating, selling and general and administrative expenses	27,040   	22,363  	19,358   	16,946  	15,021  	
Interest costs:	
    Debt	756   	529  	555  	629  	692  	
    Capital leases	266   	268  	229  	216  	196  	
Provision for income taxes	3,338   	2,740  	2,115  	1,794  	1,606  	
Minority interest and equity in unconsolidated subsidiaries	(170)   	(153)	(78)	(27)	(13)	
Cumulative effect of accounting change, net of tax	(198)   	-  	-  	-  	-  	
Net income	5,377   	4,430  	3,526  	3,056  	2,740  	
Per share of common stock:	
    Basic net income	1.21   	0.99  	0.78  	0.67  	0.60  	
    Diluted net income	1.20   	0.99  	0.78  	0.67  	0.60  	
    Dividends	0.20   	0.16  	0.14  	0.11  	0.10  	
Financial Position	
Current assets  	$    24,356   	$    21,132  	$    19,352  	$    17,993  	$  17,331  	
Inventories at replacement cost	20,171   	17,549  	16,845  	16,193  	16,300  	
Less LIFO reserve	378   	473  	348  	296  	311	
Inventories at LIFO cost	19,793   	17,076  	16,497  	15,897  	15,989  	
Net property, plant and equipment and capital leases	35,969   	25,973  	23,606  	20,324  	18,894  	
Total assets	70,349   	49,996  	45,384  	39,604  	37,541  	
Current liabilities	25,803   	16,762  	14,460  	10,957  	11,454  	
Long-term debt	13,672   	6,908  	7,191  	7,709  	8,508  	
Long-term obligations under capital leases	3,002   	2,699  	2,483  	2,307  	2,092  	
Shareholders’ equity	25,834   	21,112  	18,503  	17,143  	14,756  	
Financial Ratios	
Current ratio	.9   	1.3  	1.3  	1.6  	1.5  	
Inventories/working capital	(13.7)	3.9  	3.4  	2.3  	2.7  	
Return on assets*	9.8%***	9.6%	8.5%	7.9%	7.8%	
Return on shareholders’ equity**	22.9%	22.4%	19.8%	19.2%	19.9%	
Other Year-End Data	
Number of domestic Wal-Mart stores	1,801   	1,869  	1,921  	1,960  	1,995  	
Number of domestic Supercenters	721   	564  	441  	344  	239  	
Number of domestic SAM’S Club units	463   	451  	443  	436  	433  	
International units	1,004   	715  	601  	314  	276  	
Number of Associates	1,140,000   	910,000  	825,000  	728,000  	675,000  	
Number of Shareholders	341,000   	261,000  	246,000  	257,000  	244,000  	

(Dollar amounts in millions except per share data)	1995  	1994  	1993  	1992  	1991  	1990  	
Net sales	$  82,494  	$  67,344  	$  55,484  	$  43,887  	$  32,602  	$  25,811  	
Net sales increase	22%	21%	26%	35%	26%	25%	
Comparative store sales increase	7%	6%	11%	10%	10%	11%	
Other income-net	914  	645  	497  	404  	262  	175   	
Cost of sales	65,586  	53,444  	44,175  	34,786   	25,500  	20,070   	
Operating, selling and general and administrative expenses	12,858  	10,333  	8,321  	6,684  	5,152  	4,070  	
Interest costs:	
    Debt	520  	331  	143  	113  	43  	20  	
    Capital leases	186  	186  	180  	153  	126  	118  	
Provision for income taxes	1,581  	1,358  	1,171  	945  	752  	632  	
Minority interest and equity in unconsolidated subsidiaries	4  	(4)	4  	(1)	-  	-  	
Cumulative effect of accounting change, net of tax	-  	-  	-  	-  	-  	-  	
Net income	2,681  	2,333  	1,995  	1,609  	1,291  	1,076  	
Per share of common stock:	
    Basic net income	0.59  	0.51  	0.44  	0.35  	0.28  	0.24  	
    Diluted net income	0.59  	0.51  	0.44  	0.35  	0.28  	0.24  	
    Dividends	0.09  	0.07  	0.05  	0.04  	0.04  	0.03   	
Financial Position	
Current assets  	$  15,338  	$  12,114  	$  10,198  	$    8,575  	$    6,415  	$    4,713  	
Inventories at replacement cost	14,415  	11,483  	9,780  	7,857  	6,207  	4,751  	
Less LIFO reserve	351	469  	512	473	399	323  	
Inventories at LIFO cost	14,064  	11,014  	9,268  	7,384  	5,808  	4,428  	
Net property, plant and equipment and capital leases	15,874  	13,176  	9,793  	6,434  	4,712  	3,430  	
Total assets	32,819  	26,441  	20,565  	15,443  	11,389  	8,198  	
Current liabilities	9,973  	7,406  	6,754  	5,004  	3,990  	2,845  	
Long-term debt	7,871  	6,156  	3,073  	1,722  	740  	185  	
Long-term obligations under capital leases	1,838  	1,804  	1,772  	1,556  	1,159  	1,087  	
Shareholders’ equity	12,726  	10,753  	8,759  	6,990  	5,366  	3,966  	
Financial Ratios	
Current ratio	1.5  	1.6  	1.5  	1.7  	1.6  	1.7  	
Inventories/working capital	2.6  	2.3  	2.7  	2.1  	2.4  	2.4  	
Return on assets*	9.0%	9.9%	11.1%	12.0%	13.2%	14.8%	
Return on shareholders’ equity**	22.8%	23.9%	25.3%	26.0%	27.7%	30.9%	
Other Year-End Data	
Number of domestic Wal-Mart stores	1,985  	1,950  	1,848  	1,714  	1,568  	1,399  	
Number of domestic Supercenters	147  	72  	34  	10  	9  	6  	
Number of domestic SAM’S Club units	426  	417  	256  	208  	148  	123  	
International units	226  	24  	10  	-  	-  	-  	
Number of Associates	622,000  	528,000  	434,000  	371,000  	328,000  	271,000  	
Number of Shareholders	259,000  	258,000  	181,000  	150,000  	122,000  	80,000  	

    * Net income before minority interest, equity in unconsolidated subsidiaries and cumulative effect of
      accounting change/average assets
  ** Net income/average shareholders’ equity
*** Calculated without giving effect to the amount by which a lawsuit settlement exceeded established
     reserves. See Management’s Discussion and Analysis.
The effects of the change in accounting method for SAM’S Club membership revenue recognition would not have a material impact on this summary prior to 1998. Therefore, pro forma information as if the accounting change had been in effect for all years presented has not been provided. See Management’s Discussion and Analysis for discussion of the impact of the accounting change in fiscal 2000, 1999 and 1998.
The acquisition of the ASDA Group PLC and the Company’s related debt issuance had a significant impact on the fiscal 2000 amounts in this summary. See Notes 3 and 6 to the Consolidated Financial Statements.
 
Wal-Mart Stores, Inc. Annual Report - Page 20
Management’s Discussion and Analysis
Net Sales
Sales (in millions) by operating segment for the three fiscal years ended January 31, are as follows:

Fiscal Year	Wal-Mart Stores	SAM’S Club	International	Other (McLane)	Total Company	Total Company Increase	
2000	$108,721	$24,801	$22,728	$8,763	$165,013	20%	
1999	95,395	22,881	12,247	7,111	137,634	17%	
1998	83,820	20,668	7,517	5,953	117,958	12%	

The Company’s sales growth of 20% in fiscal 2000, when compared to fiscal 1999, is the result of the Company’s expansion program, including international acquisition, and a domestic comparative store sales increase of 8%. The sales increase of 17% in fiscal 1999, when compared to fiscal 1998, was also attributable to our expansion program and a domestic comparative store sales increase of 9%.
Costs and Expenses
Cost of sales, as a percentage of sales, decreased, resulting in increases in gross margin of .4% and .2% in fiscal 2000 and fiscal 1999, respectively. These improvements in gross margin occurred even with continued price rollbacks, our continuing commitment to always providing low prices and higher international and food department sales which generally have lower gross margins than domestic general merchandise. The fiscal 2000 improvement in gross margin can be attributed to a favorable sales mix of higher margin categories, improvements in shrinkage and markdowns, a favorable LIFO inventory adjustment and the slower growth of SAM’S Club, which is our lowest gross margin retail operation. The gross margin improvement in fiscal 1999 was the result of lower inventory levels, which resulted in reduced markdowns and decreased shrinkage.
Operating, selling, general and administrative expenses increased .1% as a percentage of sales in fiscal 2000 when compared with fiscal 1999. This increase was partially due to increased payroll cost incurred during the year. Additionally, in the second quarter of fiscal 2000, a $624 million jury verdict was rendered against the Company in a lawsuit. The Company agreed to settle the lawsuit for an amount less than the jury verdict. The Company had previously established reserves related to this lawsuit, which were not material to its results of operations or financial position. The settlement exceeded the Company’s estimated reserves for this lawsuit and resulted in a charge in the second quarter of fiscal 2000 of $.03 per share net of taxes.
Operating, selling, general and administrative expenses decreased .2% as a percentage of sales in fiscal 1999 when compared with fiscal 1998. The strong sales increase along with lower inventory levels combined to reduce expenses as a percentage of sales. The expense leverage was mitigated in the consolidated results due to the percentage of the total volume decreasing in the SAM’S Club segment, which has lower expenses as a percentage of sales, while the percentage of total volume increased in the International segment, which has higher expenses as a percentage of sales than the other operating segments. Every operating segment was flat or down in expenses as a percent of sales in fiscal 1999 when compared with fiscal 1998.
Wal-Mart Stores
Sales for the Company’s Wal-Mart Stores segment increased by 14.0% in fiscal 2000 when compared to fiscal 1999, and 13.8% in fiscal 1999 when compared to fiscal 1998. The fiscal 2000 growth is the result of comparative store sales increases and the Company’s expansion program. Segment expansion during fiscal 2000 included the opening of 29 Wal-Mart stores and 157 Supercenters (including the conversion of 96 existing Wal-Mart stores into Supercenters). Fiscal 1999 growth is also the result of comparative store sales increases and the Company’s expansion program. Segment expansion during fiscal 1999 included the opening of 37 Wal-Mart stores and 123 Supercenters (including the conversion of 88 existing Wal-Mart stores into Supercenters). Operating income for the segment for fiscal 2000 increased by 19%, from $7.0 billion in fiscal 1999 to $8.4 billion in fiscal 2000. 1999 segment operating income increased by 21%, from $5.8 billion in 1998 to $7.0 billion in 1999. The improvement in operating income in 2000 has been driven by margin improvements resulting from improvements in markdowns and shrinkage. However, these margin improvements were somewhat offset by increased payroll costs. Fiscal 1999 margin improvements were the result of lower inventory levels, which generated lower markdowns and reduced shrinkage.
SAM’S Club
Sales for the Company’s SAM’S Club segment increased by 8.4% in fiscal 2000 when compared to fiscal 1999, and by 10.7% in fiscal 1999 when compared to fiscal 1998. SAM’S Club sales continued to decrease as a percentage of total Company sales, decreasing from 17.5% in fiscal 1998 to 16.6% in fiscal 1999 and to 15.0% in fiscal 2000. This decrease as a percentage of total Company sales is primarily the result of the increased growth rate in the international segment. SAM’S Club segment expansion during fiscal 2000 and 1999 consisted of the opening of twelve and eight clubs, respectively, and the Company has plans for continued new club openings in fiscal 2001. Additionally, the Company intends to continue its program of remodeling its existing SAM’S Club. After consideration of the effects of the change in accounting method for membership revenue recognition, operating income for the segment in fiscal 2000 increased by 16.8%, from $650 million in fiscal 1999 to $759 million in fiscal 2000. The pretax impact of the change in accounting method would have been $57 million in fiscal 1999 and was $16 million in fiscal 2000. The impact of the accounting method change is greater on fiscal 1999 due to an increase in the cost of SAM’S Club membership that occurred during that year. If the effect of this accounting change is not considered, operating income would have been basically flat as a percent of segment sales when comparing fiscal 1999 to fiscal 2000. Fiscal 1999 saw a 7.6% increase in operating income after consideration of the accounting change, when operating income increased from $604 million in fiscal 1998 to $650 million in fiscal 1999. The pretax impact of the accounting change on fiscal 1998 would have been $12 million. Ignoring the effect of this change, operating income increased from 3.0% of segment sales in fiscal 1998 to 3.1% of segment sales in fiscal 1999.
Wal-Mart Stores, Inc. Annual Report - Page 21
International
International sales accounted for approximately 13.8% of total Company sales in fiscal 2000 compared with 8.9% in fiscal 1999. The largest portion of the increase in International sales is the result of the acquisition of the ASDA Group PLC (ASDA), which consisted of 229 stores and was completed during the third quarter of fiscal 2000. Additionally, fiscal 2000 was the first full year containing the operating results of the 74 units of the German Interspar hypermarket chain, which were acquired in the fourth quarter of fiscal 1999. Expansion in the international segment for fiscal 2000 consisted of the opening or acquisition of 288 units.
International sales accounted for approximately 8.9% of total Company sales in fiscal 1999 compared with 6.4% in fiscal 1998. The growth in International is partially due to acquisitions during 1999 and 1998. Expansion in the international segment for fiscal 1999 consisted of the opening or acquisition of 114 units. In the third quarter of fiscal 1998, the Company acquired a controlling interest of Cifra, S.A de C.V. (Cifra), which at acquisition date included 250 units in varying formats including Aurreras, Bodegas, Suburbias, Superamas, and Vips. In the fourth quarter of fiscal 1998, the Company acquired the 21 units of the Wertkauf hypermarket chain in Germany. In fiscal 1999, the Company acquired four units in South Korea which were previously operated by Korea Makro. See Note 6 of Notes to Consolidated Financial Statements for additional information on acquisitions.
The Company’s foreign operations are comprised of wholly-owned operations in Argentina, Canada, Germany, Korea, Puerto Rico and the United Kingdom; joint ventures in China; and majority-owned subsidiaries in Brazil and Mexico. As a result, the Company’s financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which the Company does business. The Company minimizes exposure to the risk of devaluation of foreign currencies by operating in local currencies and through buying forward contracts, where feasible, for most known transactions.
Prior to fiscal 2000, Mexico’s economy was considered highly-inflationary. Accordingly, the results of the operations of the Company’s Mexican subsidiary were reported using United States dollars. Beginning in fiscal 2000, Mexico ceased to be considered a highly-inflationary economy and began reporting its operations in its local currency. The impact on the consolidated or international segment results of operations or financial position as a result of the change was not material. In fiscal 2000, the foreign currency translation adjustment decreased by $54 million to $455 million primarily due to the United States dollar weakening against the British pound and the Canadian dollar. This was partially offset by the United States dollar strengthening against the Brazilian real. In fiscal 1999, the foreign currency translation adjustment increased by $36 million to $509 million, primarily due to the exchange rates in Brazil and Canada.
After consideration of the effects of the change of accounting method for SAM’S membership revenues, the international segment’s operating profit increased from $549 million in fiscal 1999 to $817 million in fiscal 2000. The largest portion of the increase in international operating profit is the result of the ASDA acquisition which was completed during the third quarter of fiscal 2000. Additionally, the Company’s operations in Canada, Mexico and Puerto Rico had operating profit increases in fiscal 2000.
After consideration of the effects of the change of accounting method, the international segment’s operating profit increased from $260 million in fiscal 1998 to $549 million in fiscal 1999. Because the Cifra and Wertkauf acquisitions occurred during the last half of fiscal 1998, the additional operating profit resulting from these acquisitions accounts for a part of the increase in the international segment’s operating profit when comparing fiscal 1999 to fiscal 1998.
In February 2000, Cifra officially changed its name to Wal-Mart de Mexico, S.A. de C.V.
In March 2000, the Company announced the sale of all three of the Company’s SAM’S Clubs in Argentina. The sale is being made so that the Company can concentrate on expanding its Supercenter business within Argentina.
Interest Costs
Debt interest costs increased .08% as a percentage of sales from .38% in fiscal 1999 to .46% in fiscal 2000. This increase is the result of increased fiscal 2000 borrowings incurred as the result of the ASDA acquisition. Interest cost related to capital leases decreased by .03% as a percentage of sales from .19% in fiscal 1999 to .16% in fiscal 2000.
Interest costs decreased .09% as a percentage of sales in fiscal 1999 when compared with fiscal 1998. The Company met cash requirements without short-term borrowings throughout most of fiscal 1999 due to enhanced operating cash flows. The interest on the Company’s capital leases increased over fiscal 1998 due to continuing expansion. See Note 3 of the Notes to Consolidated Financial Statements for additional information on interest and debt.
Liquidity and Capital Resources Cash Flows Information
Cash flows from operating activities were $8,194 million in fiscal 2000, up from $7,580 million in fiscal 1999. In fiscal 2000, the Company invested $6,183 million in capital assets, paid dividends of $890 million, and had a net cash outlay of $10.4 billion primarily for acquisition of ASDA Group PLC, the third largest retailer in the United Kingdom. The ASDA cash outlay was financed with the issuance of long-term debt and commercial paper. See Note 6 of Notes to Consolidated Financial Statements for additional information on acquisitions.
Market Risk
Market risks relating to the Company’s operations result primarily from changes in interest rates and changes in foreign exchange rates.
The Company enters into interest rate and cross currency swaps to minimize the risk and costs associated with financing activities and to hedge its net investment in certain foreign subsidiaries. The swap agreements are contracts to exchange fixed or variable rates for variable or fixed interest rate payments periodically over the life of the instruments. The following tables provide information about the Company’s derivative financial instruments and other financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents principal cash flows and related weighted-average interest rates by expected maturity dates. For interest rate and cross currency swaps, the table presents notional amounts and interest rates by contractual maturity dates. The applicable floating rate index is included for variable rate instruments. All amounts are stated in United States dollar equivalents.
 
Wal-Mart Stores, Inc. Annual Report - Page 22
Interest Rate Sensitivity As of January 31, 2000
Principal (Notional) Amount by Expected Maturity
Average Interest (Swap) Rate

(Amounts in millions)	2001  	2002  	2003  	2004  	2005  	Thereafter	Total	Fair value
1/31/00	
Liabilities	
Long-term debt including current portion	
    Fixed rate debt	$  1,964  	$  2,070  	$  659  	$  742  	$  1,854  	$  8,347  	$  15,636  	$  14,992  	
    Average interest rate -
        USD rate	6.9%	6.8%	6.8%	6.8%	6.8%	6.9%	6.9%	 	
 Interest Rate Derivative Financial Instruments
Related to Debt	
Interest rate swap	
    Pay variable/receive fixed	500  	-  	-  	-  	-  	-  	500  	(1)	
    Average rate paid - 30-day U.S. commercial
        paper non-financial plus .245%	
    Fixed rate received - USD
        rate	5.9%	-  	-  	-  	-  	-  	5.9%	 	
Interest rate swap	
    Pay variable/receive fixed	500  	-  	-  	-  	-  	-  	500  	-  	
    Average rate paid - 30-day U.S. commercial
        paper non-financial plus .134%	
    Fixed rate received - USD
        rate	5.7%	-  	-  	-  	-  	-  	5.7%	 	
Interest rate swap	
    Pay variable/receive fixed	41  	45  	49  	54  	58  	266  	513  	(7)	
    Average rate paid - 30-day U.S. commercial
        paper non-financial	
    Fixed rate received - USD
        rate	7.0%	7.0%	7.0%	7.0%	7.0%	7.0%	7.0%	 	
Interest rate swap	
    Pay variable/receive fixed	-  	-  	-  	-  	-  	230  	230  	(14)	
    Floating rate paid -
        6-month U.S. LIBOR		
    Fixed rate received - USD
        rate	-  	-  	-  	-  	-  	7.0%	7.0%	 	
Interest rate swap	
    Pay fixed/receive variable	-  	-  	-  	-  	-  	151  	151  	(11)	
    Fixed rate paid - USD rate	-  	-  	-  	-  	-  	8.1%	8.1%	 	
    Floating rate received -
        3-month U.S. LIBOR		
 Interest Rate Derivative Financial Instruments
Related to Currency Swaps	
Currency swap- German Deutschemarks	
    Pay variable/receive
        variable	-  	-  	1,101  	-  	-  	-  	1,101  	122	
    Floating rate paid- 3-month German
        Deutschemark LIBOR minus .0676%	
    Average rate received- 30-day U.S. commercial
        paper non-financial	
Interest rate swap- German Deutschemarks	
    Pay fixed/receive variable	-  	-  	1,101  	-  	-  	-  	1,101  	6  	
    Fixed rate paid- German
        Deutschemark rate	-  	-  	4.5%	-  	-  	-  	4.5%	 	
    Floating rate received- 3-month German
        Deutschemark LIBOR minus .0676%	
Interest rate swap- U. S. Dollars	
    Pay variable/receive fixed	-  	-  	1,101  	-  	-  	-  	1,101  	(38)	
    Average rate paid- 30-day U.S. commercial
         paper non-financial	
    Fixed rate received- USD
        rate	-  	-  	5.8%	-  	-  	-  	5.8%	 	
Currency swap- German Deutschemarks	
    Pay variable/receive
        variable	-  	-  	-  	809  	-  	-  	809  	129  	
    Floating rate paid- 3-month German
        Deutschemark LIBOR minus .055%	
    Average rate received- 30-day U.S. commercial
        paper non-financial	
Interest rate swap- German Deutschemarks	
     Pay fixed/receive variable	-  	-  	-  	809  	-  	-  	809  	40  	
    Fixed rate paid- German
        Deutschemark rate	-  	-  	-  	3.4%	-  	-  	3.4%	 	
    Floating rate received- 3-month German
        Deutschemark LIBOR minus .055%	
Interest rate swap- U.S. Dollars	
    Pay variable/receive fixed	-  	-  	-  	809  	-  	-  	809  	(57)	
    Average rate paid- 30-day U.S. commercial
         paper non-financial	
    Fixed rate received- USD
        rate	-  	-  	-  	5.2%	-  	-  	5.2%	 	
Currency swap- Great Britain Pounds	
    Pay variable/receive
        variable	-  	-  	-  	-  	-  	3,500  	3,500  	(29)	
    Floating rate paid- 6-month Great Britain
        Pound LIBOR minus .1203%	
    Floating rate received- 3-month U.S.
        Dollar LIBOR minus .0842%	
Interest rate swap- Great Britain Pounds	
     Pay fixed/receive variable	-  	-  	-  	-  	-  	3,500  	3,500  	83  	
    Fixed rate paid- Great
        Britain Pound rate	-  	-  	-  	-  	-  	6.2%	6.2%	 	
    Floating rate received- 3-month Great Britain
        Pound LIBOR minus .1203%	
Interest rate swap- U.S. Dollars	
    Pay variable/receive fixed	-  	-  	-  	-  	-  	3,500  	3,500  	(71)	
    Floating rate paid- 3-month U.S.
        Dollar LIBOR minus .0842%	
    Fixed rate received- USD
        rate	-  	-  	-  	-  	-  	6.9%	6.9%	 	

Wal-Mart Stores, Inc. Annual Report - Page 23
Interest Rate Sensitivity As of January 31, 1999
Principal (Notional) Amount by Expected Maturity
Average Interest (Swap) Rate

(Amounts in millions)	2000  	2001  	2002  	2003  	2004  	Thereafter	Total	Fair value
1/31/99	
Liabilities	
Long-term debt including current portion	
    Fixed rate debt	$  900  	$  830  	$  801  	$  558  	$  739  	$  3,980  	$  7,808  	$  8,323  	
    Average interest rate-USD rate	7.1%	7.2%	7.1%	6.9%	7.0%	7.2%	7.2%	 	
Long-term obligation related to
        real estate investment trust	
    Fixed rate obligation	39  	43  	46  	50  	55  	327  	560  	$641  	
    Fixed interest rate-USD rate	8.4%	8.4%	8.4%	8.4%	8.4%	8.4%	8.4%	 	
 Interest Rate Derivative Financial Instruments
Related to Debt	
Interest rate swap	
    Pay variable/receive fixed	-  	500  	-  	-  	-  	-  	500  	10  	
    Average rate paid-30-day U. S. commercial
        paper non-financial plus .134%	
    Fixed rate received-USD rate	-  	5.7%	-  	-  	-  	-  	5.7%	 	
Interest rate swap	
    Pay variable/receive fixed	-  	500  	-  	-  	-  	-  	500  	5  	
    Average rate paid-30-day U.S. commercial
        paper non-financial plus .245%	
    Fixed rate received-USD rate	-  	5.9%	-  	-  	-  	-  	5.9%	 	
Interest Rate Derivative Financial Instruments
Related to Real Estate Investment Trust Obligation	
Interest rate swap	
    Pay variable/receive fixed	38  	41  	45  	49  	54  	324  	551  	44  	
    Average rate paid-30-day U.S. commercial
         paper non-financial	
    Fixed rate received-USD rate	7.0%	7.0%	7.0%	7.0%	7.0%	7.0%	7.0%	 	
Interest rate swap	
    Pay variable/receive fixed	-  	-  	-  	-  	-  	230  	230  	30  	
    Floating rate paid-6-month U.S. LIBOR	
    Fixed rate received-USD rate	-  	-  	-  	-  	-  	7.0%	7.0%	 	
Interest Rate Derivative Financial Instruments
Related to Currency Swaps	
Currency swap-German Deutschemarks	
    Pay variable/receive variable	-  	-  	-  	1,101  	-  	-  	1,101  	(43)	
    Floating rate paid-3-month German
        Deutschemark LIBOR minus .0676%	
    Average rate received-30-day U.S. commercial
        paper non-financial	
Interest rate swap-German Deutschemarks	
     Pay fixed/receive variable	-  	-  	-  	1,101  	-  	-  	1,101  	(58)	
    Fixed rate paid-German
        Deutschemark rate	-  	-  	-  	4.5%	-  	-  	4.5%	 	
    Floating rate received-3-month German
        Deutschemark LIBOR minus .0676%	
Interest rate swap-U. S. Dollars	
    Pay variable/receive fixed	-  	-  	-  	1,101  	-  	-  	1,101  	28  	
    Average rate paid-30-day U.S. commercial
        paper non-financial	
    Fixed rate received-USD rate	-  	-  	-  	5.8%	-  	-  	5.8%	 	
Currency swap-German Deutschemarks	
    Pay variable/receive variable	-  	-  	-  	-  	809  	-  	809  	18  	
    Floating rate paid-3-month German
        Deutschemark LIBOR minus .055%	
    Average rate received-30-day U.S. commercial
        paper non-financial	
Interest rate swap-German Deutschemarks	
     Pay fixed/receive variable	-  	-  	-  	-  	809  	-  	809  	3  	
    Fixed rate paid-German
        Deutschemark rate	-  	-  	-  	-  	3.4%	-  	3.4%	 	
    Floating rate received-3-month German
        Deutschemark LIBOR minus .055%	
Interest rate swap-U.S. Dollars	
    Pay variable/receive fixed	-  	-  	-  	-  	809  	-  	809  	1  	
    Average rate paid-30-day U.S. commercial
        paper non-financial	
    Fixed rate received-USD rate	-  	-  	-  	-  	5.2%	-  	5.2%	 	

In fiscal 2000, the Company converted the long-term obligation related to a real estate investment trust in which it acquired the equity interest to long-term debt and, accordingly, has included this debt in the long-term debt section above.
 
Wal-Mart Stores, Inc. Annual Report - Page 24
The Company routinely enters into forward currency exchange contracts in the regular course of business to manage its exposure against foreign currency fluctuations on cross-border purchases of inventory. These contracts are generally for durations of six months or less. In addition, the Company entered into a series of foreign currency swaps to hedge the net investment in Germany and the United Kingdom.
The following tables provide information about the Company’s derivative financial instruments, including foreign currency forward exchange agreements and currency swap agreements by functional currency, and presents the information in United States dollar equivalents. For foreign currency forward exchange agreements, the table presents the notional amounts and weighted average exchange rates by contractual maturity dates.
Foreign Currency Exchange Rate Sensitivity As of January 31, 2000
Principal (Notional) Amount by Expected Maturity

(Amounts in millions)	2001  	2002  	2003  	2004  	2005  	Thereafter	Total	Fair value
1/31/2000	
Forward Contracts to Sell Canadian
    Dollars for Foreign Currencies	
United States Dollars	
    Notional amount	$  91  	-  	-  	-  	-  	-  	$  91  	(1)	
    Average contract rate	1.5  	-  	-  	-  	-  	-  	1.5  	 	
Forward Contracts to Sell British
    Pounds for Foreign Currencies	
Hong Kong Dollars	
    Notional amount	70  	-  	-  	-  	-  	-  	70  	1  	
    Average contract rate	12.8  	-  	-  	-  	-  	-  	12.8  	 	
United States Dollars	
    Notional amount	40  	-  	-  	-  	-  	-  	40  	1  	
    Average contract rate	1.6  	-  	-  	-  	-  	-  	1.6  	 	
Other Currencies	
    Notional amount	45  	-  	-  	-  	-  	-  	45  	(2)	
    Average contract rate	Various	-  	-  	-  	-  	-  	Various	 	
Currency Swap Agreements	
Payment of German Deutschemarks	
    Notional amount	-  	-  	1,101  	-  	-  	-  	1,101  	122  	
    Average contract rate	-  	-  	1.8  	-  	-  	-  	1.8  	 	
Payment of German Deutschemarks	
    Notional amount	-  	-  	-  	809  	-  	-  	809  	129  	
    Average contract rate	-  	-  	-  	1.7  	-  	-  	1.7  	 	
Payment of Great Britain Pounds	
    Notional amount	-  	-  	-  	-  	-  	3,500  	3,500  	(29)	
    Average contract rate	-  	-  	-  	-  	-  	0.6  	0.6  	 	
Foreign Currency Exchange Rate Sensitivity As of January 31, 1999
Principal (Notional) Amount by Expected Maturity

(Amounts in millions)	2000  	2001  	2002  	2003  	2004  	Thereafter	Total	Fair value
1/31/99	
Forward Contracts to Sell Canadian
    Dollars for Foreign Currencies	
United States Dollars	
    Notional amount	$  45  	-  	-  	-  	-  	-  	$  45  	(1)	
    Average contract rate	1.5  	-  	-  	-  	-  	-  	1.5  	 	
Forward Contracts to Sell German
    Deutschemarks for Foreign Currencies	
Hong Kong Dollars	
    Notional amount	1  	-  	-  	-  	-  	-  	1  	-  	
    Average contract rate	0.2  	-  	-  	-  	-  	-  	0.2  	 	
United States Dollars	
    Notional amount	1  	-  	-  	-  	-  	-  	1  	-  	
    Average contract rate	1.8  	-  	-  	-  	-  	-  	1.8  	 	
Currency Swap Agreements	
Payment of German Deutschemarks	
    Notional amount	-  	-  	-  	1,101  	-  	-  	1,101  	(43)	
    Average contract rate	-  	-  	-  	1.8  	-  	-  	1.8  	 	
Payment of German Deutschemarks	
     Notional amount	-  	-  	-  	-  	809  	-  	809  	18  	
    Average contract rate	-  	-  	-  	-  	1.7  	-  	1.7  	 	
 
Wal-Mart Stores, Inc. Annual Report - Page 25
Company Stock Purchase and Common Stock Dividends
In fiscal 2000 and 1999, the Company repurchased over 2 million and 21 million shares of its common stock for $101 million and $1,202 million, respectively. In the Company’s quarterly report on Form 10-Q for the third quarter of fiscal 2000, the Company announced its intent to postpone any further share repurchases until the ratio of debt to total book capitalization was approximately 40%. At January 31, 2000, the Company’s total debt to capitalization ratio including commercial paper was 46%. Subsequent to year-end, the Company’s stock price decreased and in February and March 2000, the Company repurchased 4.1 million shares of its common stock for $193 million.
The Company paid dividends totaling $.20 per share in fiscal 2000. In March 2000, the Company increased its dividend 20% to $.24 per share for fiscal 2001. This marks the 28th consecutive yearly increase in dividends.
Borrowing Information
The Company had committed lines of credit with 85 firms and banks, aggregating $4,872 million and informal lines of credit with various other banks, totaling an additional $1,500 million, which were used to support commercial paper. These lines of credit and their anticipated cyclical increases should be sufficient to finance the seasonal buildups in merchandise inventories and other cash requirements.
The Company anticipates generating sufficient operating cash flow to pay the increased dividend and to fund all capital expenditures. Accordingly, management does not plan to finance future capital expenditures with debt. However, the Company plans to refinance existing long-term debt as it matures and may desire to obtain additional long-term financing for other uses of cash or for strategic reasons. The Company anticipates no difficulty in obtaining long-term financing in view of an excellent credit rating and favorable experiences in the debt market in the recent past. In addition to the available credit lines mentioned above, and after consideration of $1 billion in notes issued in February and March of 2000, the Company is permitted to sell up to $3.5 billion of public debt under shelf registration statements previously filed with the United States Securities and Exchange Commission.
Expansion
Domestically, the Company plans to open approximately 40 new Wal-Mart stores and approximately 165 new Supercenters in fiscal 2000. Relocations or expansions of existing discount stores will account for 107 of the Supercenters, while approximately 58 will be new locations. Due to the continued positive customer feedback on the Neighborhood Market concept, which is being tested in seven locations, the Company plans to add five to ten new locations. Also planned for fiscal 2001 are 19 new SAM’S Clubs, including eight relocations. In addition, the Company will remodel approximately 140 of the existing SAM’S Clubs and expand two units. In order to serve these and future developments, the Company will begin shipping from 11 new distribution centers (including one replacement unit) in the next fiscal year. Internationally, plans are to develop or relocate 90 to 100 retail units. These units are planned in Argentina, Brazil, Canada, China, Germany, Korea, Mexico, Puerto Rico and the United Kingdom. Total planned growth represents approximately 34.9 million square feet of net additional retail space.
Total planned capital expenditures for fiscal 2001 approximate $8 billion. We plan to finance our expansion primarily with operating cash flows.
In the fourth quarter of fiscal 2000, the Company joined with Accel Partners, a venture capital firm, to form Wal-Mart.com, Inc. Wal-Mart.com, Inc. will base its operations in Palo Alto, California and was formed to further develop and operate the Internet retail site, Wal-Mart.com, and to further the Company’s efforts to attract customers to the Internet with the Wal-Mart name.
Year 2000 Issue Update
The Company did not experience any significant malfunctions or errors in its operating or business systems when the date changed from 1999 to 2000. Based on operations since January 1, 2000, the Company does not expect any significant impact to its ongoing business as a result of the ’Year 2000 issue.’ However, it is possible that the full impact of the date change, which was of concern due to computer programs that use two digits instead of four digits to define years, has not been fully recognized. For example, it is possible that Year 2000 or similar issues such as leap year-related problems may occur with billing, payroll, or financial closings at month, quarter, or year end. The Company believes that any such problems are unlikely and that should they occur, they will be minor and correctable. In addition, the Company could still be negatively affected if its suppliers are adversely affected by the Year 2000 or similar issues. The Company currently is not aware of any significant Year 2000 or similar problems that have arisen for its suppliers.
The Company expended $28.2 million on Year 2000 readiness efforts through January 31, 2000. Of this, $18.7 million is related to reprogramming, replacement, extensive testing and validation of software, which was expensed as incurred, while $9.5 million was related to acquisition of hardware, which is being capitalized. $2.2 million of the cost was assumed as a result of the acquisition of ASDA Group PLC.
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. Certain statements contained in Management’s Discussion and Analysis, in other parts of this report and in other Company filings are forward-looking statements. These statements discuss, among other things, expected growth, future revenues, future cash flows and future performance. The forward-looking statements are subject to risks and uncertainties including but not limited to the cost of goods, competitive pressures, inflation, consumer debt levels, currency exchange fluctuations, trade restrictions, changes in tariff and freight rates, Year 2000 issues, interest rate fluctuations and other capital market conditions, and other risks indicated in the Company’s filings with the United States Securities and Exchange Commission. Actual results may materially differ from anticipated results described in these statements.
 
Wal-Mart Stores, Inc. Annual Report - Page 26
Consolidated Statements of Income
(Amounts in millions except per share data)

Fiscal years ended January 31,	2000   	1999  	1998  	
Revenues:	
    Net sales	$  165,013   	$  137,634  	$  117,958  	
    Other income-net	1,796   	1,574  	1,341  	
 	166,809   	139,208  	119,299  	
Costs and Expenses:	
    Cost of sales	129,664   	108,725  	93,438   	
    Operating, selling and general
        and administrative expenses	27,040   	22,363  	19,358  	
Interest Costs:	
    Debt	756   	529  	555   	
    Capital leases	266   	268  	229  	
 	157,726   	131,885  	113,580   	
Income Before Income Taxes, Minority Interest,
    Equity in Unconsolidated Subsidiaries and
    Cumulative Effect of Accounting Change	9,083   	7,323  	5,719  	
Provision for Income Taxes	
    Current	3,476   	3,380  	2,095  	
    Deferred	(138)	(640)	20  	
 	3,338   	2,740  	2,115  	
Income Before Minority Interest, Equity in
    Unconsolidated Subsidiaries and Cumulative
    Effect of Accounting Change	5,745   	4,583  	3,604  	
Minority Interest and Equity in Unconsolidated Subsidiaries	(170)	(153)	(78)	
Income Before Cumulative Effect of Accounting Change	5,575   	4,430  	3,526  	
Cumulative Effect of Accounting Change, net of tax
    benefit of $119	(198)	-  	-  	
Net Income	$  5,377   	$  4,430  	$  3,526  	
Net Income Per Common Share:
    Basic Net Income Per Common Share:	
        Income before cumulative effect of accounting change	$  1.25   	$  0.99  	$  0.78  	
        Cumulative effect of accounting change, net of tax	(0.04)	-  	-  	
     Net Income Per Common Share	$  1.21   	$  0.99  	$  0.78  	
     Average number of Common Shares	4,451   	4,464  	4,516  	
     Diluted Net Income Per Common Share:	
        Income before cumulative effect of accounting change	$  1.25   	$  0.99  	$  0.78  	
        Cumulative effect of accounting change, net of tax	(0.04)	0.00  	0.00  	
     Net Income Per Common Share	$  1.20   	$  0.99  	$  0.78  	
     Average number of Common Shares	4,474   	4,485  	4,533  	
Pro forma amounts assuming accounting change had
    been in effect in fiscal 2000, 1999 and 1998:	
        Net Income	$  5,575   	$  4,393  	$  3,517  	
        Net income per common share, basic and diluted	$  1.25   	$  0.98  	$  0.78  	

See accompanying notes.
 
Wal-Mart Stores, Inc. Annual Report - Page 27
Consolidated Balance Sheets
(Amounts in millions)

January 31,	2000   	1999  	
Assets	
Current Assets:	
    Cash and cash equivalents	$  1,856   	$  1,879  	
    Receivables	1,341   	1,118  	
    Inventories	
        At replacement cost	20,171   	17,549  	
        Less LIFO reserve	378   	473   	
            Inventories at LIFO cost	19,793   	17,076  	
    Prepaid expenses and other	1,366   	1,059  	
         Total Current Assets	24,356   	21,132  	
Property, Plant and Equipment, at Cost:	
    Land	8,785   	5,219  	
    Building and improvements	21,169   	16,061  	
    Fixtures and equipment	10,362   	9,296  	
    Transportation equipment	747   	553  	
 	41,063   	31,129  	
    Less accumulated depreciation	8,224   	7,455  	
    Net property, plant and equipment	32,839   	23,674  	
Property Under Capital Lease:	
    Property under capital lease	4,285   	3,335  	
    Less accumulated amortization	1,155   	1,036  	
        Net property under capital leases	3,130   	2,299  	
Other Assets and Deferred Charges:	
    Net goodwill and other acquired intangible assets	9,392   	2,538  	
    Other assets and deferred charges	632   	353  	
         Total Assets	$  70,349   	$  49,996  	
Liabilities and Shareholders’ Equity	
Current Liabilities:	
    Commercial paper	$  3,323   	$            -  	
    Accounts payable	13,105   	10,257  	
    Accrued liabilities	6,161   	4,998  	
    Accrued income taxes	1,129   	501  	
    Long-term debt due within one year	1,964   	900  	
    Obligations under capital leases due within one year	121   	106  	
         Total Current Liabilities	25,803   	16,762  	
Long-Term Debt	13,672   	6,908  	
Long-Term Obligations Under Capital Leases	3,002   	2,699  	
Deferred Income Taxes and Other	759   	716  	
Minority Interest	1,279   	1,799  	
Shareholders’ Equity	
    Preferred stock ($.10 par value; 100 shares authorized, none issued)	
    Common stock ($.10 par value; 5,500 shares authorized, 4,457
        and 4,448 issued and outstanding in 2000 and 1999, respectively)	446   	445  	
    Capital in excess of par value	714   	435  	
    Retained earnings	25,129   	20,741  	
    Other accumulated comprehensive income	(455)	(509)	
     Total Shareholders’ Equity	25,834   	21,112  	
     Total Liabilities and Shareholders’ Equity	$  70,349   	$  49,996  	

See accompanying notes.
 
Wal-Mart Stores, Inc. Annual Report - Page 28
Consolidated Statements of Shareholders’ Equity

(Amounts in millions except per share data)	Number  
of shares  	Common  
stock  	Capital in  
excess of  
par value  	Retained  
earnings  	Other  
accumulated  
comprehensive  
income  	Total	
Balance - January 31, 1997	2,285  	228  	547  	16,768  	(400)	$  17,143  	
Comprehensive Income	
    Net income	 	 	 	3,526  	 	3,526  	
    Other accumulated comprehensive income	
        Foreign currency translation adjustment	 	 	 	 	(73)	(73)	
Total Comprehensive Income	 	 	 	 	 	$  3,453   	
    Cash dividends ($.14 per share)	 	 	 	(611)	 	(611)	
    Purchase of Company stock	(47)	(5)	(48)	(1,516)	 	(1,569)	
    Stock options exercised and other	3  	1  	86  	 	 	87  	
Balance - January 31, 1998	2,241  	224  	585  	18,167  	(473)	18,503  	
Comprehensive Income	
    Net income	 	 	 	4,430  	 	4,430  	
    Other accumulated comprehensive income	
        Foreign currency translation adjustment	 	 	 	 	(36)	(36)	
Total Comprehensive Income	 	 	 	 	 	$  4,394  	
    Cash dividends ($.16 per share)	 	 	 	(693)	 	(693)	
    Purchase of Company stock	(21)	(2)	(37)	(1,163)	 	(1,202)	
    Two-for-one stock split	2,224  	223  	(223)	 	 	-  	
    Stock options exercised and other	4  	 	110  	 	 	110  	
Balance - January 31, 1999	4,448  	445  	435  	20,741  	(509)	21,112  	
Comprehensive Income	
    Net income	 	 	 	5,377  	 	5,377  	
    Other accumulated comprehensive income	
        Foreign currency translation adjustment	 	 	 	 	54  	54  	
Total Comprehensive Income	 	 	 	 	 	$ 5,431  	
    Cash dividends ($.20 per share)	 	 	 	(890)	 	(890)	
    Purchase of Company stock	(2)	 	(2)	(99)	 	(101)	
    Stock options exercised and other	11  	1  	281  	 	 	282  	
Balance - January 31, 2000	4,457  	$  446  	$  714  	$  25,129  	($455)  	$  25,834  	

See accompanying notes.
 
Wal-Mart Stores, Inc. Annual Report - Page 29
Consolidated Statements of Cash Flows
(Amounts in millions)

Fiscal years ended January 31,	2000   	1999  	1998  	
Cash flows from operating activities	
    Net Income	$  5,377   	$  4,430  	$  3,526  	
Adjustments to reconcile net income to net cash
    provided by operating activities:	
    Depreciation and amortization	2,375   	1,872  	1,634  	
    Cumulative effect of accounting change, net of tax	198   	-  	-  	
    Increase in accounts receivable	(255)	(148)	(78)	
    Increase in inventories	(2,088)	(379)	(365)	
    Increase in accounts payable	1,849   	1,108  	1,048  	
    Increase in accrued liabilities	1,015   	1,259  	1,329  	
    Deferred income taxes	(138)	(640)	20  	
    Other	(139)	78  	9  	
Net cash provided by operating activities	8,194   	7,580  	7,123  	
Cash flows from investing activities	
    Payments for property, plant and equipment	(6,183)	(3,734)	(2,636)	
    Investment in international operations (net of cash acquired,
        $195 million in Fiscal 2000)	(10,419)	(855)	(1,865)	
    Other investing activities	(244)	171  	80  	
Net cash used in investing activities	(16,846)	(4,418)	(4,421)	
Cash flows from financing activities	
    Increase in commercial paper	4,316   	-  	-  	
    Proceeds from issuance of long-term debt	6,000   	536  	547  	
    Purchase of Company stock	(101)	(1,202)	(1,569)	
    Dividends paid	(890)	(693)	(611)	
    Payment of long-term debt	(863)	(1,075)	(554)	
    Payment of capital lease obligations	(133)	(101)	(94)	
    Other financing activities	300   	(195)	143  	
Net cash provided by (used in) financing activities	8,629   	(2,730)	(2,138)	
Net (decrease)/increase in cash and cash equivalents	(23)	432  	564  	
Cash and cash equivalents at beginning of year	1,879   	1,447  	883  	
Cash and cash equivalents at end of year	$  1,856   	$  1,879  	$  1,447  	
Supplemental disclosure of cash flow information	
    Income tax paid	$  2,780   	$  3,458  	$  1,971  	
    Interest paid	849   	805  	796  	
    Capital lease obligations incurred	378   	347  	309  	
    Investment in unconsolidated subsidiary exchanged
        in acquisition	-   	-  	226  	
    Property, plant and equipment acquired with debt	65   	-  	-  	
    ASDA acquisition cost satisfied with debt	264   	-  	-  	
    ASDA acquisition cost satisfied with Company stock	175   	-  	-  	

See accompanying notes.
 
Wal-Mart Stores, Inc. Annual Report - Page 30
Notes to Consolidated Financial Statements
1 Summary of Significant Accounting Policies
Consolidation
The consolidated financial statements include the accounts of subsidiaries. Significant intercompany transactions have been eliminated in consolidation.
Cash and cash equivalents
The Company considers investments with a maturity of three months or less when purchased to be cash equivalents.
Inventories
The Company uses the retail last in first out (LIFO) method for domestic Wal-Mart discount stores and Supercenters and cost LIFO for SAM’S Clubs. International inventories are on other cost methods. Inventories are not in excess of market value.
Pre-opening costs
During fiscal 1999, the Company adopted Statement of Position (SOP) 98-5, "Reporting on the Costs of Start-Up Activities.’ The SOP requires that the costs of start-up activities, including organization costs, be expensed as incurred. The impact of the adoption of SOP 98-5 on fiscal 1999 was $8 million net of taxes. Due to the immateriality to the Company’s results of operations, the initial application was not reported as a cumulative effect of a change in an accounting principle. The impact of the change did not have a material effect on any of the years presented.
Interest during construction
In order that interest costs properly reflect only that portion relating to current operations, interest on borrowed funds during the construction of property, plant and equipment is capitalized. Interest costs capitalized were $57 million, $41 million, and $33 million in 2000, 1999 and 1998, respectively.
Financial Instruments
The Company uses derivative financial instruments for purposes other than trading to reduce its exposure to fluctuations in foreign currencies and to minimize the risk and cost associated with financial and global operating activities. Contracts that effectively meet risk reduction and correlation criteria are recorded using hedge accounting. Unrealized gains and losses resulting from market movements are not recognized. Hedges of firm commitments are deferred and recognized when the hedged transaction occurs.
Advertising costs
Advertising costs are expensed as incurred and were $523 million, $405 million and $292 million in 2000, 1999 and 1998, respectively.
Operating, selling and general and administrative expenses
Buying, warehousing and occupancy costs are included in operating, selling and general and administrative expenses.
Depreciation and amortization
Depreciation and amortization for financial statement purposes is provided on the straight-line method over the estimated useful lives of the various assets. Depreciation expense for the years 2000, 1999 and 1998 was $1,998 million, $1,648 million and $1,426 million, respectively. For income tax purposes, accelerated methods are used with recognition of deferred income taxes for the resulting temporary differences. Estimated useful lives are as follows:

Building and improvements	5 - 50 years	
Fixtures and equipment	5 - 12 years	
Transportation equipment	2 - 5 years	
Goodwill and other acquired
    intangible assets	20 - 40 years	
Internally developed software	3 years	

Costs of computer software
During fiscal 2000, the Company adopted the Accounting Standards Executive Committee Statement of Position (SOP) 98-1, ’Accounting For the Costs of Computer Software Developed For or Obtained For Internal Use.’ This SOP requires the capitalization of certain costs incurred in connection with developing or obtaining software for internal use. Previously, costs related to developing internal-use software were expensed as incurred. Under the new method these costs are capitalized and amortized over a three year life. The impact of the adoption of SOP 98-1 was to capitalize $32 million of costs in fiscal 2000, which would have previously been expensed. The impact of the change would not have a material effect on any of the years presented prior to fiscal 2000.
Accounting for derivative instruments and hedging activities
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement No. 133, ’Accounting for Derivative Instruments and Hedging Activities.’ The new Statement requires all derivatives to be recorded on the balance sheet at fair value and establishes accounting treatment for three types of hedges: hedges of changes in the fair value of assets, liabilities, or firm commitments; hedges of the variable cash flows of forecasted transactions; and hedges of foreign currency exposures of net investments in foreign operations. In July 1999, the FASB issued Statement No. 137 "Accounting for Derivative Instruments and Hedging Activities - Deferral of the effective Date of FASB Statement No. 133", which postponed the effective date of Statement No. 133 for one year. Statement 133 will now be effective for the Company beginning February 1, 2001. The Company currently does not anticipate there will be a material impact on the results of operations or financial position upon adoption of Statement No. 133.
Goodwill and other acquired intangible assets
Goodwill and other acquired intangible assets are amortized on a straight-line basis over the periods that expected economic benefits will be provided. Management estimates such periods of economic benefits using factors such as entry barriers in certain countries, operating rights and estimated lives of other operating assets acquired. The realizability of goodwill and other intangibles is evaluated periodically when events or circumstances indicate a possible inability to recover the carrying amount. Su ch evaluation is based on cash flow and profitability projections that incorporate the impact of existing Company businesses. The analyses necessarily involve significant management judgment to evaluate the capacity of an acquired business to perform within projections. Historically, the Company has generated sufficient returns from acquired businesses to recover the cost of the goodwill and other intangible assets.
Long-lived assets
The Company periodically reviews long-lived assets and certain intangible assets when indicators of impairments exist and if the value of the assets is impaired, an impairment loss would be recognized.
 
Wal-Mart Stores, Inc. Annual Report - Page 31
Stock split
On March 4, 1999, the Company announced a two-for-one stock split issued in the form of a 100% stock dividend. The date of record was March 19, 1999, and it was distributed April 19, 1999. Consequently, the stock option data and per share data for fiscal 1999 and 1998 have been restated to reflect the stock split.
Net income per share
Basic net income per share is based on the weighted average outstanding common shares. Diluted net income per share is based on the weighted average outstanding shares reduced by the dilutive effect of stock options (23 million, 21 million and 17 million shares in 2000, 1999 and 1998, respectively).
Foreign currency translation
The assets and liabilities of all foreign subsidiaries are translated at current exchange rates and any related translation adjustments are recorded as a component of accumulated comprehensive income.
Estimates and assumptions
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
New accounting pronouncement
In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 - ’Revenue Recognition in Financial Statements’ (SAB 101). This SAB deals with various revenue recognition issues, several of which are common within the retail industry. As a result of the issuance of this SAB, the Company changed its method of recognizing revenues for SAM’S Club membership fees effective as of the beginning of fiscal 2000. The Company is currently evaluating the effects of the SAB on its method of recognizing revenues related to layaway sales and will make any accounting method changes necessary during the first quarter of fiscal 2001.
Accounting principle change
In fiscal 2000 the Company changed its method of accounting for SAM’S membership fee revenue both domestically and internationally. Previously the Company had recognized membership fee revenues when received. Under the new accounting method the Company recognizes membership fee revenues over the term of the membership, which is 12 months. The Company recorded a non-cash charge of $198 million (after reduction for income taxes of $119 million), or $.04 per share, to reflect the cumulative effect of the accounting change as of the beginning of the fiscal year. The effect of this change on the year ended January 31, 2000, before the cumulative effect of the accounting change was to decrease net income $12 million, or almost $.01 per share. If the new accounting method had been in effect in fiscal 1999 and 1998, net income would have been $4,393 million, or $.98 per basic or dilutive share and $3,517 million, or $.78 per basic or dilutive share, respectively.
The following table provides unearned revenues, membership fees received from members and the amount of revenues recognized in earnings for each of the fiscal years ended 1998, 1999 and 2000 as if the accounting change had been in effect for each of those years
(in millions):

Deferred revenue January 31, 1997	$  244  	
    Membership fees received	494  	
    Membership revenue recognized	(480)	
Deferred revenue January 31, 1998	258  	
    Membership fees received	600  	
    Membership revenue recognized	(541)	
Deferred revenue January 31, 1999	317  	
    Membership fees received	646  	
    Membership revenue recognized	(626)	
Deferred revenue January 31, 2000	$  337  	

The Company’s deferred revenue is included in accrued liabilities in the January 31, 2000 consolidated balance sheet. The Company’s analysis of historical membership fee refunds indicates that such refunds have been de minimis. Accordingly, no reserve has been established for membership fee refunds at January 31, 2000.
Revenue recognition
The Company recognizes sales revenue at the time the sale is made to the customer. Effective as of the first quarter of fiscal 2000, the Company began recognizing SAM’S Club membership fee revenue over the term of the membership, which is 12 months.
Reclassifications
Certain reclassifications have been made to prior periods to conform to current presentations.
2 Defined Contribution Plans
The Company maintains profit sharing plans under which most full-time and many part-time associates become participants following one year of employment and a 401(k) plan in which the same associates may elect to contribute a percentage of their earnings. During fiscal 2000 participants could contribute up to 10% of their earnings. Effective fiscal 2001 the allowable participant contributions were increased to 15%.
The Company will make annual contributions to these plans on behalf of all eligible associates, including those who have not elected to contribute to the 401(k) plan.
Annual Company contributions are made at the sole discretion of the Company, and were $429 million, $388 million and $321 million in 2000, 1999 and 1998, respectively.
 
Wal-Mart Stores, Inc. Annual Report - Page 32
3 Commercial Paper and Long-term Debt
Information on short-term borrowings and interest rates is as follows (dollar amounts in millions):

Fiscal years ended January 31,	2000  	1999  	1998  	
Maximum amount outstanding at month-end	$  6,588  	$  1,976  	$  1,530  	
Average daily short-term borrowings	2,233  	256  	212  	
Weighted average interest rate	5.4%	5.1%	5.6%	

At January 31, 2000, short-term borrowings consisting of $3,323 million of commercial paper were outstanding. At January 31, 1999, there were no short-term borrowings outstanding. At January 31, 2000, the Company had committed lines of $4,872 million with 85 firms and banks and informal lines of credit with various banks totaling an additional $1,500 million, which were used to support commercial paper.
Long-term debt at January 31, consist of (amounts in millions):

Fiscal years ended January 31,	2000	1999	
6.875% Notes due August 2009	$   3,500	-	
6.550% Notes due August 2004	1,250	-	
6.150% Notes due August 2001	1,250	-	
8.625% Notes due April 2001	750	750	
5.875% Notes due October 2005	597	597	
7.500% Notes due May 2004	500	500	
6.500% Notes due June 2003	454	454	
7.250% Notes due June 2013	445	445	
7.800% - 8.250%Obligations from sale/leaseback transactions due 2014	398	427	
6.750% Notes due May 2002	300	300	
7.000% - 8.000%Obligations from sale/leaseback transactions due 2013	275	292	
8.500% Notes due September 2024	250	250	
6.750% Notes due October 2023	250	250	
8.000% Notes due September 2006	250	250	
6.375% Notes due March 2003	228	228	
6.750% Eurobond due May 2002	200	200	
5.850% Notes due June 2018 with biannual put options	-	500	
5.650% Notes due February 2010 with biannual put options	-	500	
9.100% Notes due July 2000	-	500	
6.125% Eurobond due November 2000	-	250	
7.290% Notes due July 2006	435	 	
4.410% - 10.880%Notes acquired in ASDA acquisition due 2002-2015	1,026	-	
Commercial paper classified as long-term debt	993	-	
Other	321	215	
 	$  13,672	$  6,908	

The Company has $1 billion of outstanding debt with imbedded put options. Beginning in fiscal 2001, and every second year thereafter, the holders of debt may require the Company to repurchase the debt at face value. In February 2000, $500 million of this debt was put to the Company. The debt was refinanced with commercial paper at that time. The remaining $500 million of debt can be put to the Company later in 2000 and has been classified as a current liability in the January 31, 2000 consolidated balance sheet.
In February and March of 2000, the Company sold notes totaling $1 billion. These notes bear interest at 7.55% and will be due in 2030. The proceeds from the sale of these notes were used to reduce the commercial paper balance and, therefore, the Company classified $993 million of commercial paper as long-term debt in its January 31, 2000 consolidated balance sheet.
Long-term debt is unsecured except for $170 million which is collateralized by property with an aggregate carrying value of approximately $516 million. Annual maturities of long-term debt during the next five years are (in millions):

Fiscal year ended
January 31,	Annual
maturity	
2001	$  1,964	
2002	2,070	
2003	659	
2004	742	
2005	1,854	
Thereafter	8,347	

The Company has agreed to observe certain covenants under the terms of its note agreements, the most restrictive of which relates to amounts of additional secured debt and long-term leases.
The Company has entered into sale/leaseback transactions involving buildings while retaining title to the underlying land. These transactions were accounted for as financings and are included in long-term debt and the annual maturities schedules above. The resulting obligations are amortized over the lease terms.
 
Wal-Mart Stores, Inc. Annual Report - Page 33
Future minimum lease payments for each of the five succeeding years as of January 31, 2000, are (in millions):

Fiscal year ended
January 31,	Minimum
payments	
2001	$  100	
2002	94	
2003	98	
2004	93	
2005	130	
Thereafter	594	

At January 31, 2000 and 1999, the Company had letters of credit outstanding totaling $902 million and $767 million, respectively. These letters of credit were issued primarily for the purchase of inventory.
Under shelf registration statements previously filed with the Securities and Exchange Commission, and after consideration of the $1 billion in notes issued in February and March of 2000 discussed previously, the Company is permitted to issue debt securities aggregating $3.5 billion.
4 Financial Instruments
Interest rate instruments
The Company enters into interest rate swaps to minimize the risks and costs associated with its financial activities. The swap agreements are contracts to exchange fixed or variable rate interest for variable or fixed interest rate payments periodically over the life of the instruments. The notional amounts are used to measure interest to be paid or received and do not represent the exposure due to credit loss. Settlements of interest rate swaps are accounted for by recording the net interest received or paid as an adjustment to interest expense on a current basis.
Net Investment instruments
The Company has entered into cross currency interest rate swap agreements to hedge its net investments in Germany and the United Kingdom. The swap agreements are contracts to exchange fixed rate payments in United States dollars for fixed rate payments in foreign currencies. Settlements of currency swaps are accounted for by recording the net payments as an adjustment to currency translation adjustment. In February and March 2000, the Company entered into two interest rate swap agreements to hedge an additio nal $1 billion of net investments in Great Britain pounds. These instruments are not recorded on the balance sheet, and as of January 31, 2000 and 1999, are as follows:

USD notional
(amounts
in millions)	FX notional
(amounts
in millions)	Fiscal
maturity
date	Rate
received	Rate
paid	Fair
value
1/31/2000	Fair
value
1/31/1999	
Interest Rate Instruments	
$ 500	-	2001	5.9% (USD rate)	Rate A plus .245%	$ (1)	$ 5	
500	-	2001	5.7% (USD rate)	Rate A plus .134%	-	10	
513 ($551 in FYE 1999)	-	2027	7.0% (USD rate)	Rate A	(7)	44	
230	-	2027	7.0% (USD rate)	Rate B	(14)	30	
151	-	2027	Rate C	8.1% (USD rate)	(11)	N/A	
Cross Currency Instruments	
3,500	2,010 GBP	2010	Rate C minus .0842%	Rate D minus .1203%	(29)	N/A	
3,500	-	2010	6.9% (USD rate)	Rate C minus .0842%	(71)	N/A	
-	2,010 GBP	2010	Rate D minus .1203%	6.2% (GBP rate)	83	N/A	
1,101	1,960 DEM	2003	Rate A	Rate E minus .0676%	122	(43)	
1,101	-	2003	5.8% (USD rate)	Rate A	(38)	28	
-	1,960 DEM	2003	Rate E minus .0676%	4.5% (DEM rate)	6	(58)	
809	1,360 DEM	2004	Rate A	Rate E minus .055%	129	18	
809	-	2004	5.2% (USD rate)	Rate A	(57)	1	
-	1,360 DEM	2004	Rate E minus .055%	3.4% (DEM rate)	40	3	

Rate A 30-day U.S. dollar commercial paper non-financial
Rate B 6-month U.S. dollar LIBOR
Rate C 3-month U.S. dollar LIBOR
Rate D 6-month Great Britain pound LIBOR
Rate E 3-month German DEM LIBOR
The Company routinely enters into forward currency exchange contracts in the regular course of business to manage its exposure against foreign currency fluctuations on cross-border purchases of inventory. These contracts are generally for short durations of six months or less and are insignificant to the Company’s operations or financial position. There were approximately $246 million and $47 million notional outstanding at January 31, 2000 and 1999, respectively. These contracts had a fair value of approximately $(1) million at January 31, 2000 and 1999, respectively.
 
Wal-Mart Stores, Inc. Annual Report - Page 34
Fair value of financial instruments
Cash and cash equivalents: The carrying amount approximates fair value due to the short maturity of these instruments.
Long-term debt: Fair value approximates $14,992 million at January 31, 2000 and is based on the Company’s current incremental borrowing rate for similar types of borrowing arrangements.
Interest rate instruments and net investment instruments: The fair values are estimated amounts the Company would receive or pay to terminate the agreements as of the reporting dates.
Foreign currency contracts: The fair value of foreign currency contracts are estimated by obtaining quotes from external sources.
5 Income Taxes
The income tax provision consists of the following (in millions):

Fiscal years ended January 31,	2000   	1999  	1998  	
Current	
    Federal	$  2,920   	$  3,043  	$  1,891  	
    State and local	299   	254  	186  	
    International	257   	83  	18  	
Total current tax provision	3,476   	3,380  	2,095  	
Deferred	
    Federal	(71)	(655)	(5)	
    State and local	(3)	(28)	(2)	
    International	(183)	43	27	
Total deferred tax provision	(257)	(640)	20  	
Total provision for income taxes	$  3,219 (a)	$  2,740  	$  2,115  	

(a) Total provision for income tax includes a provision on income before the cumulative effect of accounting change of $3,338 and a tax benefit of $119 resulting from the cumulative effect of the accounting change.
Earnings before income taxes are as follows (in millions):

Fiscal years ended January 31,	2000   	1999  	1998  	
    Domestic	$  8,414   	$  6,866  	$  5,528  	
    International	669   	457  	191  	
Total earnings before income taxes	$  9,083   	$  7,323  	$  5,719  	

Items that give rise to significant portions of the deferred tax accounts at January 31, are as follows (in millions):

 	2000   	1999  	1998  	
Deferred tax liabilities:	
Property, plant, and equipment	$  748   	$  695  	$  797  	
Inventory	393   	286  	275  	
International, principally asset basis difference	348   	272  	387  	
Acquired asset basis difference	314   	-  	-  	
Other	66   	36  	33  	
Total deferred tax liabilities	1,869   	1,289  	1,492  	
Deferred tax assets:	
Amounts accrued for financial reporting purposes
    not yet deductible for tax purposes	1,098   	985  	441  	
Capital leases	193   	188  	190  	
International, asset basis and loss carryforwards	402   	143  	258  	
Deferred revenue	181   	66  	89  	
Other	215   	184  	108  	
Total deferred tax assets	2,089   	1,566  	1,086  	
Net deferred tax liabilities (assets)	$  (220)	$  (277)	$  406  	

A reconciliation of the significant differences between the effective income tax rate and the federal statutory rate on pretax income follows:

Fiscal years ended January 31,	2000   	1999  	1998  	
Statutory tax rate	35.00%	35.00%	35.00%	
State income taxes, net of federal income tax benefit	2.18%	2.01%	2.07%	
International	-0.74%	-0.50%	-0.30%	
Other	0.31%	0.90%	0.20%	
 	36.75%	37.41%	36.97%	
 
Wal-Mart Stores, Inc. Annual Report - Page 35
6 Acquisitions
During the second quarter of fiscal 2000, the Company began acquiring ASDA Group PLC (ASDA), the third largest retailer in the United Kingdom with 229 stores. The Company acquired approximately 29% of the outstanding ASDA shares on the open market during June and July 1999. On July 27, 1999, a tender offer for all remaining ASDA shares became unconditional and the majority of the remaining shares were tendered. The Company owned 100% of the outstanding shares of ASDA as of the end of the third quarter of fiscal 2000. The transaction has been accounted for as a purchase. The purchase price of approximately $11 billion has been allocated to the net assets acquired and liabilities assumed based on their estimated fair value. The resulting goodwill and other acquired intangible assets of approximately $7 billion are being amortized over 40 years. ASDA reports on a December 31 fiscal year-end, therefore, the ASDA financial statements are consolidated on a trailing month reporting basis. The results of operations are included in the consolidated Company results since the date of acquisition.
On January 1, 1999, the Company took possession of 74 units from the Interspar hypermarket chain in Germany. The units were acquired from Spar Handels AG, a German company that owns multiple retail formats and wholesale operations throughout Germany. The transaction closed on December 29, 1998; therefore, the assets are included in the January 31, 1999 consolidated balance sheet and the results of operations are included in fiscal 2000. The transaction has been recorded as a purchase. The net assets and liabilities acquired are recorded at fair value. Resulting goodwill is being amortized over 40 years.
In July 1998, the Company extended its presence in Asia with an investment in Korea. The Company acquired a majority interest in four units previously operated by Korea Makro as well as six undeveloped sites. The transaction has been accounted for as a purchase. The net assets and liabilities acquired are recorded at fair value. The goodwill is being amortized over 40 years. The results of operations since the effective date of the acquisition have been included in the Company’s results. In December 1999, the Company acquired most of the minority interest of its operation in Korea from its joint venture partner and anticipates that the remaining minority interest will be acquired in early fiscal 2001.
A merger of the Mexican joint venture companies owned by Wal-Mart Stores, Inc. and Cifra, S.A. de C.V. (Cifra) was consummated with an effective merger date of September 1, 1997. The Company received voting shares of Cifra equaling approximately 33.5% of the outstanding voting shares of Cifra in exchange for the Company’s joint venture interests having a net book value of approximately $644 million.
The Company then acquired 593,100,000 shares of the Series ’A’ Common Shares and Series ’B’ Common Shares of Cifra, for approximately $1.2 billion. The transaction has been accounted for as a purchase. The net assets and liabilities acquired are recorded at fair value. Resulting goodwill is being amortized over 40 years. As a result of the merger and tender offer, Wal-Mart holds a majority of the outstanding voting shares of Cifra. The results of operations for Cifra, since the effective merger date, have been included in the Company’s results.
In December 1997, the Company acquired the Wertkauf hypermarket chain in Germany, as well as certain real estate. The 21 hypermarkets are one-stop shopping centers that offer a broad assortment of high quality general merchandise and food and are similar to the Wal-Mart Supercenter format in the United States. The transaction has been accounted for as a purchase. Net assets and liabilities of Wertkauf and the real estate are recorded at fair value. The goodwill is being amortized over 40 years. The transaction closed on December 30, 1997; therefore, the results of operations are included beginning in fiscal 1999.
In December 1997, the Company acquired the minority interest in its Brazilian joint venture from Lojas Americanas, and then sold a lesser share to an individual. The purchase price of the minority interest approximated book value. Because the transaction closed on December 30, 1997, the results of operations for fiscal 1998 include the Company’s original ownership percentage of the joint venture.
The fair value of the assets and liabilities recorded as a result of these transactions is as follows (in millions):

 	2000   	1999  	1998  	
Cash and cash equivalents	$  195   	$  137  	$   500  	
Receivables	16   	-  	97  	
Inventories	655   	200  	266  	
Prepaid expenses and other	403   	-  	-  	
Net property, plant and equipment	5,290   	219  	2,105  	
Net property under capital leases	612   	-  	-  	
Goodwill	7,020   	576  	1,213  	
Accounts payable	(1,159)	(112)	(431)	
Accrued liabilities	(564)	(60)	(132)	
Accrued income taxes	(283)	-  	-  	
Long-term debt and obligations under capital leases	(1,272)	-  	-  	
Deferred income taxes	(58)	32  	(353)	
Minority interest	-   	(22)	(705)	
Other	(7)	22  	31  	
 	10,848   	992  	2,591  	
Investment in unconsolidated Mexican subsidiary exchanged	-   	-  	(226)	
 	$  10,848   	$  992  	$  2,365  	
 
Wal-Mart Stores, Inc. Annual Report - Page 36
The following presents the unaudited pro forma results as if the ASDA acquisition had occurred at the beginning of the fiscal years ended January 31, 1999 and 2000. Adjustments to net income are primarily related to the amortization of goodwill and other acquired intangible assets and additional interest expense on the debt incurred to finance the acquisition. The ASDA results were converted from Great Britain pounds to United States dollars at the average exchange rate for the periods presented and range from 1.60 to 1.66.
The aggregate impact of other acquisitions in these periods are not presented due to the insignificant differences from historical results (amounts in millions except per share data):

Fiscal years ended January 31,	2000	1999	
Sales	$  172,29 5	$  149,844	
Net income	$  5,551	$  4,435	
Net income per share - basic	$  1.25	$  0.99	
Net income per share - diluted	$  1.24	$  0.99	

7 Stock Option Plans
At January 31, 2000, 131 million shares of common stock were reserved for issuance under stock option plans. The options granted under the stock option plans expire ten years from the date of grant. Options granted prior to November 17, 1995, may be exercised in nine annual installments. Generally, options granted on or after November 17, 1995, may be exercised in seven annual installments. The Company has elected to follow Accounting Principles Board Opinion No. 25, ’Accounting for Stock Issued to Employees’ (APB 25) and related interpretations in accounting for its employee stock options because the alternative fair value accounting provided under FASB Statement 123, ’Accounting for Stock-Based Compensation,’ (FAS No. 123) requires the use of option valuation models that were not developed for use in valuing employee stock options. Under APB 25, because the exercise price of the Company’s employee stock options equals the market price of the underlying stock on the date of the grant, no compensation expense is recognized.
Pro forma information, regarding net income and income per share, is required by FAS No. 123 and has been determined as if the Company had accounted for its associate stock option plans under the fair value method of that statement. The fair value of these options was estimated at the date of the grant using the Black-Scholes option pricing model with the following assumption ranges: risk-free interest rates between 4.4% and 6.7%, dividend yields between 0.4% and 1.2%, volatility factors between .23 and .30, and an expected life of the option of 7.4 years for the options issued prior to November 17, 1995, 5.8 years for options issued thereafter and 2.0 to 4.0 years for options converted from ASDA stock options.
The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferrable. In addition, option valuation methods require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s associate stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimates, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its associate stock options. Using the Black-Scholes option evaluation model, the weighted average value of options granted during the years ending January 31, 2000, 1999, and 1998, were $13, $14, and $7 per option, respectively.
The effect of applying the fair value method of FAS No. 123 to the stock option grants subsequent to February 1, 1995, does not result in net income and net income per share that are materially different from the amounts reported in the Company’s consolidated financial statements as demonstrated below (amounts in millions except per share data):

Fiscal years ended January 31,	2000	1999	1998	
 Pro forma net income	$  5,324	$  4,397	$  3,504	
Pro forma earnings
    per share - basic	$  1.20	$  0.98	$  0.78	
Pro forma earnings
    per share - dilutive	$  1.19	$  0.98	$  0.77	

The following table summarizes information about stock options outstanding as of January 31, 2000:

Range
of exercise
prices	Number of
outstanding
options	Weighted
average
remaining
life in years	Weighted average
exercise price of
outstanding
options	Number of
options
exerciseable	Weighted average
exercise price of
exerciseable
options	
$  4.39 to 5.33	24,000	<1.0	$  5.33	24,000	$  5.33	
6.63 to 8.84	686,000	1.0	7.27	681,000	7.26	
10.00 to 15.41	28,336,000	5.6	12.00	9,039,000	12.23	
17.53 to 19.97	10,443,000	8.0	19.31	1,728,000	19.14	
24.97 to 34.53	709,000	8.6	29.60	48,000	28.57	
39.88 to 43.00	6,374,000	9.0	40.11	722,000	39.88	
45.56 to 55.94	4,742,000	4.5	46.97	725,000	46.17	
$  5.33 to 55.94	51,314,000	6.4	$ 20.39	12,967,000	$  16.38	
 
Wal-Mart Stores, Inc. Annual Report - Page 37
Further information concerning the options is as follows:

 	Shares	Option price
per share	Weighted Average
per share	Total  	
January 31, 1997	60,772,000	$  3.25 - 15.41	$  11.26	$   683,884,000  	
(12,896,000 shares exerciseable)	
Options granted	10,526,000	12.44 - 19.97	18.93	199,309,000  	
Options canceled	(3,604,000)	3.25 - 17.53	11.72	(42,251,000)	
Options exercised	(7,038,000)	3.25 - 15.41	9.62	(67,729,000)	
January 31, 1998	60,656,000	3.59 - 19.97	12.75	773,213,000  	
(13,462,000 shares exerciseable)	
Options granted	9,256,000	12.63 - 43.00	33.02	305,646,000  	
Options canceled	(4,254,000)	4.39 - 39.88	13.74	(58,436,000)	
Options exercised	(9,500,000)	3.59 - 19.09	10.92	(103,748,000)	
January 31, 1999	56,158,000	4.39 - 43.00	16.32	916,675,000  	
(12,357,000 shares exerciseable)	
Options granted	1,540,000	41.25 - 55.94	44.62	68,703,000  	
ASDA options converted to Wal-Mart options	4,250,000	46.17	46.17	196,244,000  	
Options canceled	(2,452,000)	5.33 - 43.00	17.27	(42,337,000)	
Options exercised	(8,182,000)	4.39 - 39.88	11.44	(93,583,000)	
January 31, 2000	51,314,000	$ 5.33 - 55.94	$  20.39	$  1,045,702,000	
(12,967,000 shares exerciseable)	
Shares available for option:	
January 31, 1999	75,256,000	 	 	 	
January 31, 2000	71,918,000	 	 	 	

8 Commitments and Contingencies
The Company and certain of its subsidiaries have long-term leases for stores and equipment. Rentals (including, for certain leases, amounts applicable to taxes, insurance, maintenance, other operating expenses and contingent rentals) under all operating leases were $573 million, $654 million, and $596 million in 2000, 1999, and 1998, respectively. Aggregate minimum annual rentals at January 31, 2000, under non-cancelable leases are as follows (in millions):

Fiscal
year	Operating
leases	Capital
leases	
2001	$  387	$   377	
2002	402	392	
2003	385	390	
2004	370	389	
2005	363	387	
Thereafter	3,055	3,674	
Total minimum rentals	$ 4,962	5,609	
Less estimated executory costs	 	65	
Net minimum lease payments	 	5,544	
Less imputed interest at rates ranging from 6.1% to 14.0%	 	2,421	
Present value of minimum lease payments	 	$  3,123	

Certain of the leases provide for contingent additional rentals based on percentage of sales. Such additional rentals amounted to $51 million, $49 million and $46 million in 2000, 1999 and 1998, respectively. Substantially all of the store leases have renewal options for additional terms from five to 25 years at comparable rentals.
The Company has entered into lease commitments for land and buildings for 34 future locations. These lease commitments with real estate developers provide for minimum rentals for 20 to 25 years, excluding renewal options, which if consummated based on current cost estimates, will approximate $36 million annually over the lease terms.
The Company and its subsidiaries are involved from time to time in claims, proceedings and litigation arising from the operation of its business. The Company does not believe that any such claim, proceeding or litigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position or results of its operations.
 
Wal-Mart Stores, Inc. Annual Report - Page 38
9 Segments
The Company and its subsidiaries are principally engaged in the operation of mass merchandising stores located in all 50 states, Argentina, Canada, Germany, Korea, Puerto Rico, and the United Kingdom, and through joint ventures in China, and through majority-owned subsidiaries in Brazil and Mexico.  The Company identifies segments based on management responsibility within the United States and geographically for all international units.  The Wal-Mart Sores segment included the Company's discount stores and Supercenters in the United States.  The SAM'S Club segment includes the warehouse membership clubs in the United States.  The Company's operations in Argentina, Brazil, China, Germany, Korea, Mexico and the United Kingdom are consolidated using a December 31 fiscal year end, generally due to statutory reporting requirements.   There were no significant intervening events which materially affected the financial statements.  The Company's operations in Canada and Puerto Rico are consolidated using a January 31 fiscal year end.  The Company measures segment profit as operating profit, which is defined as income before interest expense, income taxes, minority interest, equity in unconsolidated subsidiaries and cumulative effect of accounting change.  Information on segments and a reconciliation to income, before income taxes, minority interest, equity in unconsolidated subsidiaries and cumulative effect of accounting change, are as follows (in millions):

Fiscal year ended January 31, 2000	Wal-Mart Stores	SAM’S Club	International	Other  	Consolidated  	
Revenues from external customers	$  108,721	$  24,801	$  22,728	$  8,763  	$  165,013  	
Intercompany real estate charge (income)	1,542	366	 	(1,908)	 	
Depreciation and amortization	812	124	402	1,037  	2,375  	
Operating income	8,419	759	817	110  	10,105  	
Interest expense	 	 	 	 	(1,022)	
Income before income taxes, minority interest, equity in
    unconsolidated subsidiaries and cumulative effect of
    accounting change	 	 	 	 	9,083  	
Total assets	$  18,213	$  3,586	$  25,330	$  23,220  	$  70,349  	

Fiscal year ended January 31, 1999	Wal-Mart Stores	SAM’S Club	International	Other  	Consolidated  	
Revenues from external customers	$  95,395	$  22,881	$  12,247	$  7,111  	$  137,634  	
Intercompany real estate charge (income)	1,502	355	 	(1,857)	 	
Depreciation and amortization	716	111	252	793  	1,872  	
Operating income (loss)	7,075	650	549	(213)	8,061  	
Interest expense	 	 	 	 	(797)	
Reverse adjustment for accounting change	-	57	2	-  	59  	
Income before income taxes, minority interest and equity
    in unconsolidated subsidiaries	 	 	 	 	7,323  	
Total assets	$  16,950	$  2,834	$  9,537	$  20,675  	$  49,996  	

Fiscal year ended January 31, 1998	Wal-Mart Stores	SAM’S Club	International	Other  	Consolidated  	
Revenues from external customers	$  83,820	$  20,668	$  7,517	$  5,953  	$  117,958  	
Intercompany real estate charge (income)	1,375	349	 	(1,724)	 	
Depreciation and amortization	674	104	118	738  	1,634  	
Operating income (loss)	5,833	604	260	(208)	6,489  	
Interest expense	 	 	 	 	(784)	
Reverse adjustment for accounting change	-	12	2	-  	14  	
Income before income taxes, minority interest and equity
    in unconsolidated subsidiaries	 	 	 	 	5,719  	
Total assets	$  16,229	$  2,933	$  7,390	$  18,832  	$  45,384  	
 
Wal-Mart Stores, Inc. Annual Report - Page 39
For comparative purposes 1999 and 1998 operating income have been adjusted to reflect the impact of the membership fee revenue accounting change described in Note 1. This is reversed for purposes of reconciling operating profit to income before taxes, minority interest and equity in unconsolidated subsidiaries.
Domestic long-lived assets excluding goodwill were $25,227 million, $21,929 million and $20,069 million in 2000, 1999 and 1998, respectively. Additions to domestic long-lived assets were $3,814 million, $3,317 million and $2,050 million in 2000, 1999 and 1998, respectively. International long-lived assets excluding goodwill were $10,742 million, $4,044 million and $3,537 million in 2000, 1999 and 1998, respectively. Additions to international long-lived assets were $7,070 million, $732 million and $2,401 million in 2000, 1999 and 1998, respectively. The international segment includes all international real estate. All of the real estate in the United States is included in the "Other’ category and is leased to Wal-Mart Stores and SAM’S Club. The revenues in the ’Other’ category result from sales to third parties by McLane Company, Inc., a wholesale distributor.
McLane offers a wide variety of grocery and non-grocery products, which it sells to a variety of retailers including the Company’s Wal-Mart Stores and SAM’S Club segments. McLane is not a significant segment and therefore, results are not presented separately.
10 Quarterly Financial Data (Unaudited)

 	Quarters ended	

Amounts in millions (except per share information)	April 30,	July 31,	October 31,	January 31,	
2000	
Net sales	$  34,717  	$  38,470  	$  40,432  	$  51,394  	
Cost of sales	27,241  	30,123  	31,606  	40,694  	
Income before cumulative effect of accounting change	1,110  	1,249  	1,299  	1,917  	
Cumulative effect of accounting change, net of tax	(198)	-  	-  	-  	
Net income	$  912  	$  1,249  	$  1,299  	$  1,917  	
Net income per common share:	
Income before cumulative effect of accounting change	$  0.25  	$  0.28  	$  0.29  	$   0.43  	
Cumulative effect of accounting change	(0.04)	-  	-  	-  	
Net income per common share, basic and diluted	$  0.20  	$  0.28  	$  0.29  	$   0.43  	
Pro forma amounts assuming accounting change
    had been in effect for all of fiscal 2000:	
Net Income	$  1,114  	$  1,251  	$  1,294  	$  1,916  	
Net income per common share, basic and diluted	$  0.25  	$  0.28  	$  0.29  	$   0.43  	

1999	
Net sales	$  29,819  	$  33,521  	$  33,509  	$  40,785  	
Cost of sales	23,526  	26,422  	26,380  	32,397  	
Net income	828  	1,034  	1,009  	1,559  	
Net income per common share, basic and diluted	$  0.18  	$  0.23  	$  0.23  	$   0.35  	
Pro forma amounts assuming accounting change
    had been in effect in fiscal 1999:	
Net Income	$  826  	$  1,029  	$  990  	$  1,548  	
Net income per common share, basic and diluted	$  0.18  	$  0.23  	$  0.22  	$   0.35  	
 
Wal-Mart Stores, Inc. Annual Report - Page 40
Report of Independent Auditors
The Board of Directors and Shareholders,
Wal-Mart Stores, Inc.
We have audited the accompanying consolidated balance sheets of Wal-Mart Stores, Inc. as of January 31, 2000 and 1999, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended January 31, 2000. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Wal-Mart Stores, Inc. and Subsidiaries at January 31, 2000 and 1999, and the consolidated results of their operations and their cash flows for each of the three years in the period ended January 31, 2000, in conformity with accounting principles generally accepted in the United States.
As explained in Note 1 to the consolidated financial statements, the Company changed its method of accounting for membership fee income from a cash basis to a deferred basis whereby membership fee income is recognized ratably over the twelve-month life of the membership.
Tulsa, Oklahoma
March 24, 2000
 
Wal-Mart Stores, Inc. Annual Report - Page 41
Corporate Informatio n
Listings - Stock Symbol: WMT
New York Stock Exchange
Pacific Stock Exchange
Market Price of Common Stock

 	Fiscal years ended January 31,	
 	2000	1999	
Quarterly Ended	Hi	Low	Hi	Low	
April 30	$52.44	$40.47	$26.94	$20.41	
July 31	$49.19	$41.13	$34.50	$24.97	
October 31	$57.06	$40.19	$34.53	$26.56	
January 31	$69.44	$54.75	$43.00	$33.44	

Dividends Paid Per Share **

Fiscal years ended January 31,	
Quarterly	
2000	1999	
April 19	$0.0500	April 6	$0.0388	
July 12	$0.0500	July 13	$0.0388	
October 12	$0.0500	October 12	$0.0388	
January 10	$0.0500	January 11	$0.0388	
 
EXHIBIT 21

SUBSIDIARIES OF WAL-MART STORES, INC.	
SUBSIDIARY	ORGANIZED OR
INCORPORATED	PERCENT OF EQUITY SECURITIES OWNED	NAME UNDER WHICH DOING BUSINESS OTHER THAN SUBSIDIARY’S	
Wal-Mart Stores East, Inc.	Delaware, U. S.	100%	Wal-Mart	
Sam’s West, Inc.	Delaware, U. S.	100%	Sam’s Club	
Sam’s East, Inc.	Delaware, U. S.	100%	Sam’s Club	
Wal-Mart Property Company	Delaware, U. S.	100%	NA	
Sam’s Property Company	Delaware, U. S.	100%	NA	
McLane Company, Inc., and its subsidiaries	Texas, U. S.	100%	Wal-Mart	
Cifra, S.A. de C.V.	Mexico	53%	 	
ASDA Group Limited	England	100%	ASDA	

EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form 10-K) of Wal-Mart Stores, Inc. of our report dated March 24, 2000 included in the 2000 Annual Report to Shareholders of Wal-Mart Stores, Inc.
We also consent to the incorporation by reference of our report dated March 24, 2000, with respect to the consolidated financial statements of Wal-Mart Stores, Inc. incorporated by reference in this Annual Report (Form 10-K) for the year ended January 31, 2000, in the following registration statements and related prospectuses.

Stock Option Plan of 1984 of	Form S-8	File No. 2-94358	
Wal-Mart Stores, Inc., as amended		and 33-43315	
			
Stock Option Plan of 1994 of	Form S-8	File No. 33-55325	
Wal-Mart Stores, Inc., as amended			
			
Debt Securities and Pass-Through	Form S-3	File No. 33-55725	
Certificates of Wal-Mart Stores, Inc.			
			
Director Compensation Plan of	Form S-8	File No. 333-24259	
Wal-Mart Stores, Inc.			
			
Debt Securities of Wal-Mart Stores, Inc.	Form S-3	File No. 33-53125	
			
Dividend Reinvestment and Stock Purchase	Form S-3	File No. 333-2089	
Plan of Wal-Mart Stores, Inc.			
			
401(k) Retirement Savings	Form S-8	File No. 333-29847	
Plan of Wal-Mart Stores, Inc.			
			
401(k) Retirement Savings	Form S-8	File No. 33-44659	
Plan of Wal-Mart Puerto Rico, Inc.			
			
Registration Statement	Form S-3	File No. 333-56993	
Covering 14,710,000 Shares of
Common stock of Wal-Mart Stores, Inc.			

			
Associate Stock Purchase Plan of	Form S-8	File No. 333-62965	
Wal-Mart Stores, Inc.			
			
Stock Incentive Plan of Wal-Mart Stores, Inc.	Form S-8	File No. 333-60329	
			
The ASDA Colleague Share Ownership Plan 1	Form S-8	File No. 333-84027	
The ASDA Group Long Term Incentive Plan 1			
The ASDA Group PLC Sharesave Scheme 1			
The ASDA 1984 Executive Share Option Scheme 1			
The ASDA 1994 Executive Share Option Scheme 1			
			
The ASDA Colleague Share Ownership Plan 1999	Form S-8	File No. 333-88501	
 
/s/ Ernst & Young LLP
Ernst & Young LLP
Tulsa, Oklahoma
April 17, 2000

ARTICLE 5	

		
PERIOD TYPE	YEAR	
FISCAL YEAR END	JAN 31 2000	
PERIOD END	JAN 31 2000	
CASH	1,856	
SECURITIES	0	
RECEIVABLES	1,341	
ALLOWANCES	0	
INVENTORY	19,793	
CURRENT ASSETS	24,356	
PP&E	41,063	
DEPRECIATION	8,224	
TOTAL ASSETS	70,349	
CURRENT LIABILITIES	25,803	
BONDS	0	
PREFERRED MANDATORY	0	
PREFERRED	0	
COMMON	446	
OTHER SE	25,388	
TOTAL LIABILITY AND EQUITY	70,349	
SALES	165,013	
TOTAL REVENUES	166,809	
CGS	129,664	
TOTAL COSTS	157,726	
OTHER EXPENSES	0	
LOSS PROVISION	0	
INTEREST EXPENSE	1,022	
INCOME PRETAX	9,083	
INCOME TAX	3,338	
INCOME CONTINUING	5,575	
DISCONTINUED	0	
EXTRAORDINARY	0	
CHANGES	198	
NET INCOME	5,377	
EPS BASIC	1.21	
EPS DILUTED	1.20