WAL MART STORES INC, 10-K filed on 4/1/2015
Annual Report
Document And Entity Information (USD $)
12 Months Ended
Jan. 31, 2015
Mar. 30, 2015
Jul. 31, 2014
Document And Entity Information [Abstract]
 
 
 
Entity Registrant Name
WAL MART STORES INC 
 
 
Entity Central Index Key
0000104169 
 
 
Current Fiscal Year End Date
--01-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Jan. 31, 2015 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
3,226,062,652 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 116,140,698,613 
Consolidated Statements Of Income (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Jan. 31, 2015
Jan. 31, 2014
Jan. 31, 2013
Revenues:
 
 
 
Net sales
$ 482,229 
$ 473,076 
$ 465,604 
Membership and other income
3,422 
3,218 
3,047 
Total revenues
485,651 
476,294 
468,651 
Costs and expenses:
 
 
 
Cost of sales
365,086 
358,069 
352,297 
Operating, selling, general and administrative expenses
93,418 
91,353 
88,629 
Operating income
27,147 
26,872 
27,725 
Interest:
 
 
 
Debt
2,161 
2,072 
1,977 
Capital leases
300 
263 
272 
Interest income
(113)
(119)
(186)
Interest, net
2,348 
2,216 
2,063 
Income from continuing operations before income taxes
24,799 
24,656 
25,662 
Provision for income taxes:
 
 
 
Current
8,504 
8,619 
7,976 
Deferred
(519)
(514)
(18)
Total provision for income taxes
7,985 
8,105 
7,958 
Income from continuing operations
16,814 
16,551 
17,704 
Income from discontinued operations, net of income taxes
285 
144 
52 
Consolidated net income
17,099 
16,695 
17,756 
Less consolidated net income attributable to noncontrolling interest
(736)
(673)
(757)
Consolidated net income attributable to Walmart
$ 16,363 
$ 16,022 
$ 16,999 
Basic net income per common share:
 
 
 
Basic income per common share from continuing operations attributable to Walmart
$ 5.01 
$ 4.87 
$ 5.03 
Basic income per common share from discontinued operations attributable to Walmart
$ 0.06 
$ 0.03 
$ 0.01 
Basic net income per common share attributable to Walmart
$ 5.07 
$ 4.90 
$ 5.04 
Diluted net income per common share:
 
 
 
Diluted income per common share from continuing operations attributable to Walmart
$ 4.99 
$ 4.85 
$ 5.01 
Diluted income per common share from discontinued operations attributable to Walmart
$ 0.06 
$ 0.03 
$ 0.01 
Diluted net income per common share attributable to Walmart
$ 5.05 
$ 4.88 
$ 5.02 
Weighted-average common shares outstanding:
 
 
 
Basic
3,230 
3,269 
3,374 
Diluted
3,243 
3,283 
3,389 
Dividends declared per common share
$ 1.92 
$ 1.88 
$ 1.59 
Consolidated Statements of Comprehensive Income (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 31, 2015
Jan. 31, 2014
Jan. 31, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
Consolidated net income
$ 17,099 
$ 16,695 
$ 17,756 
Less consolidated net income attributable to nonredeemable noncontrolling interest
(736)
(606)
(684)
Less consolidated net income attributable to redeemable noncontrolling interest
(67)
(73)
Consolidated net income attributable to Walmart
16,363 
16,022 
16,999 
Other comprehensive income (loss), net of income taxes
 
 
 
Currency translation and other
(4,179)
(3,146)
1,042 
Derivative instruments
(470)
207 
136 
Minimum pension liability
(69)
153 
(166)
Other comprehensive income (loss), net of income taxes
(4,718)
(2,786)
1,012 
Less other comprehensive income (loss) attributable to nonredeemable noncontrolling interest
546 
311 
(138)
Less other comprehensive income (loss) attributable to redeemable noncontrolling interest
(66)
51 
Other comprehensive income (loss) attributable to Walmart
(4,172)
(2,409)
823 
Comprehensive income, net of income taxes
12,381 
13,909 
18,768 
Less comprehensive income attributable to nonredeemable noncontrolling interest
(190)
(295)
(822)
Less comprehensive income attributable to redeemable noncontrolling interest
(1)
(124)
Comprehensive income attributable to Walmart
$ 12,191 
$ 13,613 
$ 17,822 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Jan. 31, 2015
Jan. 31, 2014
Current assets:
 
 
Cash and cash equivalents
$ 9,135 
$ 7,281 
Receivables, net
6,778 
6,677 
Inventories
45,141 
44,858 
Prepaid expenses and other
2,224 
1,909 
Current assets of discontinued operations
460 
Total current assets
63,278 
61,185 
Property and equipment:
 
 
Property and equipment
177,395 
173,089 
Less accumulated depreciation
(63,115)
(57,725)
Property and equipment, net
114,280 
115,364 
Property under capital leases:
 
 
Property under capital leases
5,239 
5,589 
Less accumulated amortization
(2,864)
(3,046)
Property under capital leases, net
2,375 
2,543 
Goodwill
18,102 
19,510 
Other assets and deferred charges
5,671 
6,149 
Total assets
203,706 
204,751 
Current liabilities:
 
 
Short-term borrowings
1,592 
7,670 
Accounts payable
38,410 
37,415 
Accrued liabilities
19,152 
18,793 
Accrued income taxes
1,021 
966 
Long-term debt due within one year
4,810 
4,103 
Obligations under capital leases due within one year
287 
309 
Current liabilities of discontinued operations
89 
Total current liabilities
65,272 
69,345 
Long-term debt
41,086 
41,771 
Long-term obligations under capital leases
2,606 
2,788 
Deferred income taxes and other
8,805 
8,017 
Redeemable noncontrolling interest
1,491 
Commitments and contingencies
   
   
Equity:
 
 
Common stock
323 
323 
Capital in excess of par value
2,462 
2,362 
Retained earnings
85,777 
76,566 
Accumulated other comprehensive income (loss)
(7,168)
(2,996)
Total Walmart shareholders' equity
81,394 
76,255 
Nonredeemable noncontrolling interest
4,543 
5,084 
Total equity
85,937 
81,339 
Total liabilities, redeemable noncontrolling interest, and equity
$ 203,706 
$ 204,751 
Consolidated Statement Of Shareholders' Equity (USD $)
In Millions
Total
Common stock
Capital in excess of par value
Retained earnings
Accumulated other comprehensive income (loss)
Total Walmart shareholders' equity
Nonredeemable Noncontrolling interest
Redeemable noncontrolling interest at Jan. 31, 2012
$ 404 
 
 
 
 
 
 
Balances at Jan. 31, 2012
75,761 
342 
3,692 
68,691 
(1,410)
71,315 
4,446 
Balances, in shares at Jan. 31, 2012
 
3,418 
 
 
 
 
 
Consolidated net income
17,683 
 
 
16,999 
 
16,999 
684 
Other comprehensive income, net of income taxes
961 
 
 
 
823 
823 
138 
Cash dividends declared
(5,361)
 
 
(5,361)
 
(5,361)
 
Purchase of Company stock (in shares)
 
(115)
 
 
 
 
 
Purchase of Company stock
(7,709)
(11)
(357)
(7,341)
 
(7,709)
 
Nonredeemable noncontrolling interest of acquired entity
469 
 
 
 
 
 
469 
Other, in shares
 
11 
 
 
 
 
 
Other
(66)
285 
(10)
 
276 
(342)
Consolidated net income, net of tax, attributable to redeemable noncontrolling interest
73 
 
 
 
 
 
 
Less other comprehensive income (loss) attributable to redeemable noncontrolling interest
51 
 
 
 
 
 
 
Other change in redeemable noncontrolling interest
(9)
 
 
 
 
 
 
Redeemable noncontrolling interest at Jan. 31, 2013
519 
 
 
 
 
 
 
Balances at Jan. 31, 2013
81,738 
332 
3,620 
72,978 
(587)
76,343 
5,395 
Balances, in shares at Jan. 31, 2013
 
3,314 
 
 
 
 
 
Consolidated net income
16,617 
 
 
16,022 
 
16,022 
595 
Other comprehensive income, net of income taxes
(2,720)
 
 
 
(2,409)
(2,409)
(311)
Cash dividends declared
(6,139)
 
 
(6,139)
 
(6,139)
 
Purchase of Company stock (in shares)
 
(87)
 
 
 
 
 
Purchase of Company stock
(6,557)
(9)
(294)
(6,254)
 
(6,557)
 
Redemption value adjustment of redeemable noncontrolling interest
(1,019)
 
(1,019)
 
 
(1,019)
 
Other, in shares
 
 
 
 
 
 
Other
(581)
 
55 
(41)
 
14 
(595)
Consolidated net income, net of tax, attributable to redeemable noncontrolling interest
78 
 
 
 
 
 
 
Less other comprehensive income (loss) attributable to redeemable noncontrolling interest
(66)
 
 
 
 
 
 
Redemption value adjustment of redeemable noncontrolling interest
1,019 
 
 
 
 
 
 
Other change in redeemable noncontrolling interest
(59)
 
 
 
 
 
 
Redeemable noncontrolling interest at Jan. 31, 2014
1,491 
 
 
 
 
 
 
Balances at Jan. 31, 2014
81,339 
323 
2,362 
76,566 
(2,996)
76,255 
5,084 
Balances, in shares at Jan. 31, 2014
 
3,233 
 
 
 
 
 
Consolidated net income
17,099 
 
 
16,363 
 
16,363 
736 
Other comprehensive income, net of income taxes
(4,718)
 
 
 
(4,172)
(4,172)
(546)
Cash dividends declared
(6,185)
 
 
(6,185)
 
(6,185)
 
Purchase of Company stock (in shares)
 
(13)
 
 
 
 
 
Purchase of Company stock
(980)
(1)
(29)
(950)
 
(980)
 
Other, in shares
 
 
 
 
 
 
Other
(618)
129 
(17)
 
113 
(731)
Purchase of redeemable noncontrolling interest
(1,491)
 
 
 
 
 
 
Less other comprehensive income (loss) attributable to redeemable noncontrolling interest
 
 
 
 
 
 
Redeemable noncontrolling interest at Jan. 31, 2015
 
 
 
 
 
 
Balances at Jan. 31, 2015
$ 85,937 
$ 323 
$ 2,462 
$ 85,777 
$ (7,168)
$ 81,394 
$ 4,543 
Balances, in shares at Jan. 31, 2015
 
3,228 
 
 
 
 
 
Consolidated Statement Of Shareholders' Equity (Parenthetical)
12 Months Ended
Jan. 31, 2015
Jan. 31, 2014
Jan. 31, 2013
Statement of Stockholders' Equity [Abstract]
 
 
 
Dividends declared per common share
$ 1.92 
$ 1.88 
$ 1.59 
Consolidated Statements Of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 31, 2015
Jan. 31, 2014
Jan. 31, 2013
Cash flows from operating activities:
 
 
 
Consolidated net income
$ 17,099 
$ 16,695 
$ 17,756 
Income from discontinued operations, net of income taxes
(285)
(144)
(52)
Income from continuing operations
16,814 
16,551 
17,704 
Adjustments to reconcile consoliated net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
9,173 
8,870 
8,478 
Deferred income taxes
(503)
(279)
(133)
Other operating activities
785 
938 
602 
Changes in certain assets and liabilities, net of effects of acquisitions:
 
 
 
Receivables, net
(569)
(566)
(614)
Inventories
(1,229)
(1,667)
(2,759)
Accounts payable
2,678 
531 
1,061 
Accrued liabilities
1,249 
103 
271 
Accrued income taxes
166 
(1,224)
981 
Net cash provided by operating activities
28,564 
23,257 
25,591 
Cash flows from investing activities:
 
 
 
Payments for property and equipment
(12,174)
(13,115)
(12,898)
Proceeds from the disposal of property and equipment
570 
727 
532 
Proceeds from the disposal of certain operations
671 
Other investing activities
(192)
(138)
(271)
Net cash used in investing activities
(11,125)
(12,526)
(12,637)
Cash flows from financing activities:
 
 
 
Net change in short-term borrowings
(6,288)
911 
2,754 
Proceeds
5,174 
7,072 
211 
Payments of long-term debt
(3,904)
(4,968)
(1,478)
Dividends paid
(6,185)
(6,139)
(5,361)
Purchase of Company stock
(1,015)
(6,683)
(7,600)
Dividends paid to noncontrolling interest
(600)
(426)
(282)
Purchase of noncontrolling interest
(1,844)
(296)
(132)
Other financing activities
(409)
(260)
(58)
Net cash used in financing activities
(15,071)
(10,789)
(11,946)
Effect of exchange rates on cash and cash equivalents
(514)
(442)
223 
Net increase (decrease) in cash and cash equivalents
1,854 
(500)
1,231 
Cash and cash equivalents at beginning of year
7,281 
7,781 
6,550 
Cash and cash equivalents at end of year
9,135 
7,281 
7,781 
Supplemental disclosure of cash flow information:
 
 
 
Income taxes paid
8,169 
8,641 
7,304 
Interest paid
$ 2,433 
$ 2,362 
$ 2,262 
Summary of Significant Accounting Policies
Basis Of Presentation
Summary of Significant Accounting Policies
General
Wal-Mart Stores, Inc. ("Walmart" or the "Company") helps people around the world save money and live better – anytime and anywhere – in retail stores or through the Company's e-commerce and mobile capabilities. Through innovation, the Company is striving to create a customer-centric experience that seamlessly integrates digital and physical shopping. Each week, the Company serves nearly 260 million customers who visit its over 11,000 stores under 72 banners in 27 countries and e-commerce websites in 11 countries. The Company's strategy is to lead on price, invest to differentiate on access, be competitive on assortment and deliver a great experience.
The Company's operations comprise three reportable segments: Walmart U.S., Walmart International and Sam's Club.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Walmart and its subsidiaries as of and for the fiscal years ended January 31, 2015 ("fiscal 2015"), January 31, 2014 ("fiscal 2014") and January 31, 2013 ("fiscal 2013"). All material intercompany accounts and transactions have been eliminated in consolidation. Investments in unconsolidated affiliates, which are 50% or less owned and do not otherwise meet consolidation requirements, are accounted for primarily using the equity method. These investments are immaterial to the Company's Consolidated Financial Statements.
The Company's Consolidated Financial Statements are based on a fiscal year ending on January 31, for the United States ("U.S.") and Canadian operations. The Company consolidates all other operations generally using a one-month lag and based on a calendar year. There were no significant intervening events during January 2015 that materially affected the Consolidated Financial Statements.
Use of Estimates
The Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles. Those principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Management's estimates and assumptions also affect the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.
Cash and Cash Equivalents
The Company considers investments with a maturity when purchased of three months or less to be cash equivalents. All credit card, debit card and electronic benefits transfer transactions that process in less than seven days are classified as cash and cash equivalents. The amounts due from banks for these transactions classified as cash and cash equivalents totaled $2.9 billion and $1.6 billion at January 31, 2015 and 2014, respectively. In addition, cash and cash equivalents included restricted cash of $345 million and $654 million at January 31, 2015 and 2014, respectively, which was primarily related to cash collateral holdings from various counterparties, as required by certain derivative and trust agreements.
The Company's cash balances are held in various locations around the world. Of the Company's $9.1 billion and $7.3 billion of cash and cash equivalents at January 31, 2015 and 2014, respectively, $6.3 billion and $5.8 billion, respectively, were held outside of the U.S. and were generally utilized to support liquidity needs in the Company's non-U.S. operations.
The Company uses intercompany financing arrangements in an effort to ensure cash can be made available in the country in which it is needed with the minimum cost possible. Management does not believe it will be necessary to repatriate cash and cash equivalents held outside of the U.S. and anticipates the Company's domestic liquidity needs will be met through cash flows provided by operating activities, supplemented with long-term debt and short-term borrowings. Accordingly, the Company intends, with only certain exceptions, to continue to indefinitely reinvest the Company's cash and cash equivalents held outside of the U.S. in our foreign operations. When the income earned, either from operations or through intercompany financing arrangements, and indefinitely reinvested outside of the U.S. is taxed at local country tax rates, which are generally lower than the U.S. statutory rate, the Company realizes an effective tax rate benefit. If the Company's intentions with respect to reinvestment were to change, most of the amounts held within the Company's foreign operations could be repatriated to the U.S., although any repatriation under current U.S. tax laws would be subject to U.S. federal income taxes, less applicable foreign tax credits. As of January 31, 2015 and 2014, cash and cash equivalents of approximately $1.7 billion and $1.9 billion, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions. The Company does not expect local laws, other limitations or potential taxes on anticipated future repatriations of cash amounts held outside of the U.S. to have a material effect on the Company's overall liquidity, financial condition or results of operations.
Receivables
Receivables are stated at their carrying values, net of a reserve for doubtful accounts. Receivables consist primarily of amounts due from:
insurance companies resulting from pharmacy sales;
banks for customer credit and debit cards and electronic bank transfers that take in excess of seven days to process;
consumer financing programs in certain international operations;
suppliers for marketing or incentive programs; and
real estate transactions.
The Walmart International segment offers a limited number of consumer credit products, primarily through its financial institutions in select markets. The receivable balance from consumer credit products was $1.2 billion, net of a reserve for doubtful accounts of $114 million at January 31, 2015, compared to a receivable balance of $1.3 billion, net of a reserve for doubtful accounts of $119 million at January 31, 2014. These balances are included in receivables, net, in the Company's Consolidated Balance Sheets.
Inventories
The Company values inventories at the lower of cost or market as determined primarily by the retail inventory method of accounting, using the last-in, first-out ("LIFO") method for substantially all of the Walmart U.S. segment's inventories. The inventory at the Walmart International segment is valued primarily by the retail inventory method of accounting, using the first-in, first-out ("FIFO") method. The retail inventory method of accounting results in inventory being valued at the lower of cost or market since permanent markdowns are immediately recorded as a reduction of the retail value of inventory. The inventory at the Sam's Club segment is valued based on the weighted-average cost using the LIFO method. At January 31, 2015 and January 31, 2014, the Company's inventories valued at LIFO approximated those inventories as if they were valued at FIFO.
Property and Equipment
Property and equipment are stated at cost. Gains or losses on disposition are recognized as earned or incurred. Costs of major improvements are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred. The following table summarizes the Company's property and equipment balances and includes the estimated useful lives that are generally used to depreciate the assets on a straight-line basis:
 
 
 
 
Fiscal Years Ended January 31,
(Amounts in millions)
 
Estimated Useful Lives
 
2015
 
2014
Land
 
N/A
 
$
26,261

 
$
26,184

Buildings and improvements
 
3-40 years
 
97,496

 
95,488

Fixtures and equipment
 
2-30 years
 
45,044

 
42,971

Transportation equipment
 
3-15 years
 
2,807

 
2,785

Construction in progress
 
N/A
 
5,787

 
5,661

Property and equipment
 
 
 
$
177,395

 
$
173,089

Accumulated depreciation
 
 
 
(63,115
)
 
(57,725
)
Property and equipment, net
 
 
 
$
114,280

 
$
115,364

Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the remaining expected lease term. Depreciation expense for property and equipment, including amortization of property under capital leases, for fiscal 2015, 2014 and 2013 was $9.1 billion, $8.8 billion and $8.4 billion, respectively. Interest costs capitalized on construction projects were $59 million, $78 million and $74 million in fiscal 2015, 2014 and 2013, respectively.
Long-Lived Assets
Long-lived assets are stated at cost. Management reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows, which is at the individual store or club level or, in certain circumstances, a market group of stores. Undiscounted cash flows expected to be generated by the related assets are estimated over the assets' useful lives based on updated projections. If the evaluation indicates that the carrying amount of the assets may not be recoverable, any potential impairment is measured based upon the fair value of the related asset or asset group as determined by an appropriate market appraisal or other valuation technique. Impairment charges of long-lived assets for fiscal 2015, 2014 and 2013 were not significant.
Goodwill and Other Acquired Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations and is allocated to the appropriate reporting unit when acquired. Other acquired intangible assets are stated at the fair value acquired as determined by a valuation technique commensurate with the intended use of the related asset. Goodwill and indefinite-lived intangible assets are not amortized; rather, they are evaluated for impairment annually and whenever events or changes in circumstances indicate that the value of the asset may be impaired. Definite-lived intangible assets are considered long-lived assets and are amortized on a straight-line basis over the periods that expected economic benefits will be provided.
Goodwill is evaluated for impairment using either a qualitative or quantitative approach for each of the Company's reporting units. Generally, a qualitative assessment is first performed to determine whether a quantitative goodwill impairment test is necessary. If management determines, after performing an assessment based on the qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, or that a fair value of the reporting unit substantially in excess of the carrying amount cannot be assured, then a quantitative goodwill impairment test would be required. The quantitative test for goodwill impairment is performed by determining the fair value of the related reporting units. Fair value is measured based on the discounted cash flow method and relative market-based approaches.
The Company's reporting units were evaluated using a quantitative impairment test. Management determined the fair value of each reporting unit is greater than the carrying amount and, accordingly, the Company has not recorded any impairment charges related to goodwill.
The following table reflects goodwill activity, by reportable segment, for fiscal 2015 and 2014:
(Amounts in millions)
 
Walmart U.S.
 
Walmart
International
 
Sam's Club
 
Total
Balances as of February 1, 2013
 
$
443

 
$
19,741

 
$
313

 
$
20,497

Changes in currency translation and other
 

 
(1,000
)
 

 
(1,000
)
Acquisitions(1)
 
8

 
5

 

 
13

Balances as of January 31, 2014
 
451

 
18,746

 
313

 
19,510

Changes in currency translation and other
 

 
(1,418
)
 

 
(1,418
)
Acquisitions(1)
 
10

 

 

 
10

Balances as of January 31, 2015
 
$
461

 
$
17,328

 
$
313

 
$
18,102

(1)
Goodwill recorded for fiscal 2015 and 2014 acquisitions relates to acquisitions that are not significant, individually or in the aggregate, to the Company's Consolidated Financial Statements.
Indefinite-lived intangible assets are included in other assets and deferred charges in the Company's Consolidated Balance Sheets. These assets are evaluated for impairment based on their fair values using valuation techniques which are updated annually based on the most recent variables and assumptions. There were no impairment charges related to indefinite-lived intangible assets recorded for fiscal 2015, 2014 and 2013.
Self Insurance Reserves
The Company uses a combination of insurance and self insurance for a number of risks, including, but not limited to, workers' compensation, general liability, auto liability, product liability and the Company's obligation for employee-related health care benefits. Liabilities relating to the claims associated with these risks are estimated by considering historical claims experience, frequency, severity, demographic factors and other actuarial assumptions, including incurred but not reported claims. In estimating its liability for such claims, the Company periodically analyzes its historical trends, including loss development, and applies appropriate loss development factors to the incurred costs associated with the claims. To limit exposure to certain risks, the Company maintains stop-loss insurance coverage for workers' compensation of $5 million per occurrence, and in most instances, $15 million per occurrence for general liability.
Income Taxes
Income taxes are accounted for under the balance sheet method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases ("temporary differences"). Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date.
Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent that a portion is not more likely than not to be realized. Many factors are considered when assessing whether it is more likely than not that the deferred tax assets will be realized, including recent cumulative earnings, expectations of future taxable income, carryforward periods, and other relevant quantitative and qualitative factors. The recoverability of the deferred tax assets is evaluated by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income rely heavily on estimates.
In determining the provision for income taxes, an annual effective income tax rate is used based on annual income, permanent differences between book and tax income, and statutory income tax rates. Discrete events such as audit settlements or changes in tax laws are recognized in the period in which they occur.
The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company records interest and penalties related to unrecognized tax benefits in interest expense and operating, selling, general and administrative expenses, respectively, in the Company's Consolidated Statements of Income. Refer to Note 9 for additional income tax disclosures.
Revenue Recognition    
Sales
The Company recognizes sales revenue, net of sales taxes and estimated sales returns, at the time it sells merchandise to the customer.
Membership Fee Revenue
The Company recognizes membership fee revenue both in the U.S. and internationally over the term of the membership, which is typically 12 months. The following table summarizes membership fee activity for fiscal 2015, 2014 and 2013:
 
 
Fiscal Years Ended January 31,
(Amounts in millions)
 
2015
 
2014
 
2013
Deferred membership fee revenue, beginning of year
 
$
641

 
$
575

 
$
559

Cash received from members
 
1,410

 
1,249

 
1,133

Membership fee revenue recognized
 
(1,292
)
 
(1,183
)
 
(1,117
)
Deferred membership fee revenue, end of year
 
$
759

 
$
641

 
$
575

Membership fee revenue is included in membership and other income in the Company's Consolidated Statements of Income. The deferred membership fee is included in accrued liabilities in the Company's Consolidated Balance Sheets.
Shopping Cards
Customer purchases of shopping cards are not recognized as revenue until the card is redeemed and the customer purchases merchandise using the shopping card. Shopping cards in the U.S. do not carry an expiration date; therefore, customers and members can redeem their shopping cards for merchandise indefinitely. Shopping cards in certain foreign countries where the Company does business may have expiration dates. A certain number of shopping cards, both with and without expiration dates, will not be fully redeemed. Management estimates unredeemed shopping cards and recognizes revenue for these amounts over shopping card historical usage periods based on historical redemption rates. Management periodically reviews and updates its estimates of usage periods and redemption rates.
Financial and Other Services
The Company recognizes revenue from service transactions at the time the service is performed. Generally, revenue from services is classified as a component of net sales in the Company's Consolidated Statements of Income.
Cost of Sales
Cost of sales includes actual product cost, the cost of transportation to the Company's distribution facilities, stores and clubs from suppliers, the cost of transportation from the Company's distribution facilities to the stores, clubs and customers and the cost of warehousing for the Sam's Club segment and import distribution centers. Cost of sales is reduced by supplier payments that are not a reimbursement of specific, incremental and identifiable costs.
Payments from Suppliers
The Company receives consideration from suppliers for various programs, primarily volume incentives, warehouse allowances and reimbursements for specific programs such as markdowns, margin protection, advertising and supplier-specific fixtures. Payments from suppliers are accounted for as a reduction of cost of sales and are recognized in the Company's Consolidated Statements of Income when the related inventory is sold, except when the payment is a reimbursement of specific, incremental and identifiable costs.
Operating, Selling, General and Administrative Expenses
Operating, selling, general and administrative expenses include all operating costs of the Company, except cost of sales, as described above. As a result, the majority of the cost of warehousing and occupancy for the Walmart U.S. and Walmart International segments' distribution facilities is included in operating, selling, general and administrative expenses. Because the Company does not include most of the cost of its Walmart U.S. and Walmart International segments' distribution facilities in cost of sales, its gross profit and gross profit as a percentage of net sales may not be comparable to those of other retailers that may include all costs related to their distribution facilities in cost of sales and in the calculation of gross profit.
Advertising Costs
Advertising costs are expensed as incurred and were $2.4 billion for both fiscal 2015 and fiscal 2014 and $2.3 billion for fiscal 2013. Advertising costs consist primarily of print, television and digital advertisements and are recorded in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income. Reimbursements from suppliers that are for specific, incremental and identifiable advertising costs are recognized as a reduction of advertising costs in operating, selling, general and administrative expenses.
Leases
The Company estimates the expected term of a lease by assuming the exercise of renewal options where an economic penalty exists that would preclude the abandonment of the lease at the end of the initial non-cancelable term and the exercise of such renewal is at the sole discretion of the Company. The expected term is used in the determination of whether a store or club lease is a capital or operating lease and in the calculation of straight-line rent expense. Additionally, the useful life of leasehold improvements is limited by the expected lease term or the economic life of the asset, whichever is shorter. If significant expenditures are made for leasehold improvements late in the expected term of a lease and renewal is reasonably assured, the useful life of the leasehold improvement is limited to the end of the renewal period or economic life of the asset, whichever is shorter.
Rent abatements and escalations are considered in the calculation of minimum lease payments in the Company's capital lease tests and in determining straight-line rent expense for operating leases.
Pre-Opening Costs
The cost of start-up activities, including organization costs, related to new store openings, store remodels, relocations, expansions and conversions are expensed as incurred and included in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income. Pre-opening costs totaled $317 million, $338 million and $316 million for fiscal 2015, 2014 and 2013, respectively.
Currency Translation
The assets and liabilities of all international subsidiaries are translated from the respective local currency to the U.S. dollar using exchange rates at the balance sheet date. Related translation adjustments are recorded as a component of accumulated other comprehensive income (loss). The income statements of all international subsidiaries are translated from the respective local currencies to the U.S. dollar using average exchange rates for the period covered by the income statements.
Reclassifications
Certain reclassifications have been made to previous fiscal year amounts and balances to conform to the presentation in the current fiscal year. These reclassifications did not impact consolidated operating income or net income. Additionally, certain segment asset and expense allocations have been reclassified among segments in the current period. See Note 14 for further discussion of the Company's segments.
Recent Accounting Pronouncements
In April 2014, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which provides guidance for the recognition of discontinued operations, changes the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. This ASU applies to prospective transactions beginning on or after December 15, 2014, with early adoption permitted. The Company adopted this ASU for the fiscal year ended January 31, 2015 and adoption did not materially impact the Company's consolidated net income, financial position or cash flows.
In May 2014, the Financial Accounting Standards Board issued ASU 2014-09, Revenue from Contracts with Customers. This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This ASU is effective for annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. Accordingly, the Company will adopt this ASU on February 1, 2017. Companies may use either a full retrospective or a modified retrospective approach to adopt this ASU. Management is currently evaluating this standard, including which transition approach to use, and does not expect this ASU to materially impact the Company's consolidated net income, financial position or cash flows.
Net Income Per Common Share
Net income per common share
Net Income Per Common Share
Basic income per common share from continuing operations attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period. Diluted income per common share from continuing operations attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period adjusted for the dilutive effect of share-based awards. The Company did not have significant share-based awards outstanding that were antidilutive and not included in the calculation of diluted income per common share from continuing operations attributable to Walmart for fiscal 2015, 2014 and 2013.
The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted income per common share from continuing operations attributable to Walmart:
 
 
Fiscal Years Ended January 31,
(Amounts in millions, except per share data)
 
2015
 
2014
 
2013
Numerator
 
 
 
 
 
 
Income from continuing operations
 
$
16,814

 
$
16,551

 
$
17,704

Less income from continuing operations attributable to noncontrolling interest
 
(632
)
 
(633
)
 
(741
)
Income from continuing operations attributable to Walmart
 
$
16,182

 
$
15,918

 
$
16,963

 
 
 
 
 
 
 
Denominator
 
 
 
 
 
 
Weighted-average common shares outstanding, basic
 
3,230

 
3,269

 
3,374

Dilutive impact of stock options and other share-based awards
 
13

 
14

 
15

Weighted-average common shares outstanding, diluted
 
3,243

 
3,283

 
3,389


 
 
 
 
 
 
Income per common share from continuing operations attributable to Walmart
 
 
 
 
 
 
Basic
 
$
5.01

 
$
4.87

 
$
5.03

Diluted
 
4.99

 
4.85

 
5.01

Shareholder's Equity
Stockholders' equity note disclosure
Shareholders' Equity
Share-Based Compensation
The Company has awarded share-based compensation to associates and nonemployee directors of the Company. The compensation expense recognized for all plans was $462 million, $388 million and $378 million for fiscal 2015, 2014 and 2013, respectively. Share-based compensation expense is included in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income. The total income tax benefit recognized for share-based compensation was $173 million, $145 million and $142 million for fiscal 2015, 2014 and 2013, respectively. The following table summarizes the Company's share-based compensation expense by award type:
 
Fiscal Years Ended January 31,
(Amounts in millions)
2015
 
2014
 
2013
Restricted stock and performance share units
$
157

 
$
141

 
$
152

Restricted stock units
277

 
224

 
195

Other
28

 
23

 
31

Share-based compensation expense
$
462

 
$
388

 
$
378


The Company's shareholder-approved Stock Incentive Plan of 2010 (the "Plan") became effective June 4, 2010 and amended and restated the Company's Stock Incentive Plan of 2005. The Plan was established to grant stock options, restricted (non-vested) stock, performance shares units and other equity compensation awards for which 210 million shares of common stock issued or to be issued under the Plan have been registered under the Securities Act of 1933, as amended. The Company believes that such awards serve to align the interests of its associates with those of its shareholders.
The Plan's award types are summarized as follows:
Restricted Stock and Performance Share Units. Restricted stock awards are for shares that vest based on the passage of time and include restrictions related to employment. Performance share units vest based on the passage of time and achievement of performance criteria and may range from 0% to 150% of the original award amount. Vesting periods for these awards are generally between one and three years. Restricted stock and performance share units may be settled or deferred in stock and are accounted for as equity in the Company's Consolidated Balance Sheets. The fair value of restricted stock awards is determined on the date of grant and is expensed ratably over the vesting period. The fair value of performance share units is determined on the date of grant using the Company's stock price discounted for the expected dividend yield through the vesting period and is recognized over the vesting period.
Restricted Stock Units. Restricted stock units provide rights to Company stock after a specified service period; 50% vest three years from the grant date and the remaining 50% vest five years from the grant date. The fair value of each restricted stock unit is determined on the date of grant using the stock price discounted for the expected dividend yield through the vesting period and is recognized ratably over the vesting period. The expected dividend yield is based on the anticipated dividends over the vesting period. The weighted-average discount for the dividend yield used to determine the fair value of restricted stock units granted in fiscal 2015, 2014 and 2013 was 9.5%, 10.3% and 12.2%, respectively.
In addition to the Plan, the Company's subsidiary in the United Kingdom has stock option plans for certain colleagues which generally vest over three years. The stock option share-based compensation expense is included in the other line in the table above.
The following table shows the activity for restricted stock and performance share units and restricted stock units during fiscal 2015:
 
 
Restricted Stock and Performance Share Units(1)
 
Restricted Stock Units
(Shares in thousands)
 
Shares
 
Weighted-
Average
Grant-Date
Fair Value
Per Share
 
Shares
 
Weighted-
Average
Grant-Date
Fair Value
Per Share
Outstanding at February 1, 2014
 
9,951

 
$
63.26

 
17,785

 
$
55.87

Granted
 
3,328

 
75.30

 
5,671

 
69.39

Vested/exercised
 
(2,799
)
 
55.64

 
(4,554
)
 
47.81

Forfeited or expired
 
(1,757
)
 
62.35

 
(1,334
)
 
61.63

Outstanding at January 31, 2015
 
8,723

 
$
68.89

 
17,568

 
$
61.00

(1)
Assumes payout rate at 100% for Performance Share Units.

The following table includes additional information related to restricted stock and performance share units and restricted stock units: 
 
Fiscal Years Ended January 31,
(Amounts in millions)
2015
 
2014
 
2013
Fair value of restricted stock and performance share units vested
$
156

 
$
116

 
$
155

Fair value of restricted stock units vested
218

 
189

 
168

Unrecognized compensation cost for restricted stock and performance share units
154

 
200

 
233

Unrecognized compensation cost for restricted stock units
570

 
497

 
437

Weighted average remaining period to expense for restricted stock and performance share units (years)
1.3

 
2.0

 
2.0

Weighted average remaining period to expense for restricted stock units (years)
1.7

 
2.1

 
1.7



Share Repurchase Program
From time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Board of Directors. On June 6, 2013, the Company's Board of Directors replaced the previous $15.0 billion share repurchase program, which had approximately $712 million of remaining authorization for share repurchases as of that date, with a new $15.0 billion share repurchase program, which was announced on June 7, 2013. As was the case with the replaced share repurchase program, the current share repurchase program has no expiration date or other restrictions limiting the period over which the Company can make share repurchases. At January 31, 2015, authorization for $10.3 billion of share repurchases remained under the current share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status.
The Company considers several factors in determining when to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings, its results of operations and the market price of its common stock. The following table provides, on a settlement date basis, the number of shares repurchased, average price paid per share and total cash paid for share repurchases for fiscal 2015, 2014 and 2013:
 
 
Fiscal Years Ended January 31,
(Amounts in millions, except per share data)
 
2015
 
2014
 
2013
Total number of shares repurchased
 
13.4

 
89.1

 
113.2

Average price paid per share
 
$
75.82

 
$
74.99

 
$
67.15

Total cash paid for share repurchases
 
$
1,015

 
$
6,683

 
$
7,600

Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
The following table provides the fiscal 2015, 2014 and 2013 changes in the composition of total accumulated other comprehensive income (loss), including the amounts reclassified out of accumulated other comprehensive income (loss) by component for fiscal 2015 and 2014:
(Amounts in millions and net of income taxes)
 
Currency Translation
and Other
 
Derivative
Instruments
 
Minimum
Pension Liability
 
Total
Balances as of January 31, 2012
 
$
(806
)
 
$
(7
)
 
$
(597
)
 
$
(1,410
)
Other comprehensive income (loss) before reclassifications
 
853

 
136

 
(166
)
 
823

Balances as of January 31, 2013
 
47

 
129

 
(763
)
 
(587
)
Other comprehensive income (loss) before reclassifications
 
(2,769
)
 
194

 
149

 
(2,426
)
Amounts reclassified from accumulated other comprehensive income (loss)
 

 
13

 
4

 
17

Balances as of January 31, 2014
 
(2,722
)
 
336

 
(610
)
 
(2,996
)
Other comprehensive income (loss) before reclassifications
 
(3,633
)
 
(496
)
 
(58
)
 
(4,187
)
Amounts reclassified from accumulated other comprehensive income (loss)
 

 
26

 
(11
)
 
15

Balances as of January 31, 2015
 
$
(6,355
)
 
$
(134
)
 
$
(679
)
 
$
(7,168
)
Amounts reclassified from accumulated other comprehensive income (loss) for derivative instruments are recorded in interest, net, in the Company's Consolidated Statements of Income, and the amounts for the minimum pension liability are recorded in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income.
The Company's unrealized net gains and losses on net investment hedges, included in the currency translation and other category of accumulated other comprehensive income (loss), were not significant as of January 31, 2015 and January 31, 2014.
Accrued Liabilities
Accounts payable and accrued liabilities disclosure
Accrued Liabilities
The Company's accrued liabilities consist of the following:
 
 
As of January 31,
(Amounts in millions)
 
2015
 
2014
Accrued wages and benefits(1)
 
$
4,954

 
$
4,652

Self-insurance(2)
 
3,306

 
3,477

Accrued non-income taxes(3)
 
2,592

 
2,554

Other(4)
 
8,300

 
8,110

Total accrued liabilities
 
$
19,152

 
$
18,793

(1)
Accrued wages and benefits include accrued wages, salaries, vacation, bonuses and other incentive plans.
(2)
Self-insurance consists of all insurance-related liabilities, such as workers' compensation, general liability, vehicle liability, property liability and employee-related health care benefits.
(3)
Accrued non-income taxes include accrued payroll, value added, sales and miscellaneous other taxes.
(4)
Other accrued liabilities consist of various items such as maintenance, utilities, advertising and interest.
Short-term Borrowings and Long-term Debt
Short-term Borrowings and Long-term Debt
Short-term Borrowings and Long-term Debt
Short-term borrowings consist of commercial paper and lines of credit. Short-term borrowings outstanding at January 31, 2015 and 2014 were $1.6 billion and $7.7 billion, respectively. The following table includes additional information related to the Company's short-term borrowings for fiscal 2015, 2014 and 2013:
 
 
Fiscal Years Ended January 31,
(Amounts in millions)
 
2015
 
2014
 
2013
Maximum amount outstanding at any month-end
 
$
11,581

 
$
13,318

 
$
8,740

Average daily short-term borrowings
 
7,009

 
8,971

 
6,007

Weighted-average interest rate
 
0.5
%
 
0.1
%
 
0.1
%

The Company has various committed lines of credit, committed with 23 financial institutions, totaling $15.0 billion as of January 31, 2015 and with 24 financial institutions, totaling $15.4 billion as of January 31, 2014. The committed lines of credit are summarized in the following table:
 
 
Fiscal Years Ended January 31,
 
 
2015
 
2014
(Amounts in millions)
 
Available
 
Drawn
 
Undrawn
 
Available
 
Drawn
 
Undrawn
Five-year credit facility(1)
 
$
6,000

 
$

 
$
6,000

 
$
6,000

 
$

 
$
6,000

364-day revolving credit facility(2)
 
9,000

 

 
9,000

 
9,400

 

 
9,400

Total
 
$
15,000

 
$

 
$
15,000

 
$
15,400

 
$

 
$
15,400

(1)
In June 2014, the Company renewed and extended its existing five-year credit facility, which is used to support its commercial paper program.
(2)
In June 2014, the Company renewed and extended its existing 364-day revolving credit facility, which is used to support its commercial paper program.
The committed lines of credit mature at various times between June 2015 and June 2019, carry interest rates generally ranging between LIBOR plus 10 basis points and LIBOR plus 75 basis points, and incur commitment fees ranging between 1.5 and 4.0 basis points. In conjunction with the lines of credit listed in the table above, the Company has agreed to observe certain covenants, the most restrictive of which relates to the maximum amount of secured debt.
Apart from the committed lines of credit, the Company has trade and stand-by letters of credit totaling $4.6 billion and $4.7 billion at January 31, 2015 and 2014, respectively. These letters of credit are utilized in normal business activities.
The Company's long-term debt, which includes the fair value instruments further discussed in Note 8, consists of the following:
 
 
 
 
January 31, 2015
 
January 31, 2014
(Amounts in millions)
 
Maturity Dates
By Fiscal Year
 
Amount
 
Average Rate(1)
 
Amount
 
Average Rate(1)
Unsecured debt
 
 
 
 
 
 
 
 
 
 
Fixed
 
2016 - 2045
 
$
36,000

 
4.3%
 
$
35,500

 
4.3%
Variable
 
2019
 
500

 
5.4%
 
500

 
5.4%
Total U.S. dollar denominated
 

 
36,500

 

 
36,000

 

Fixed
 
2023 - 2030
 
2,821

 
3.3%
 
1,356

 
4.9%
Variable
 

 

 

 

 

Total Euro denominated
 

 
2,821

 

 
1,356

 

Fixed
 
2031 - 2039
 
5,271

 
5.3%
 
5,770

 
5.3%
Variable
 

 

 

 

 

Total Sterling denominated
 

 
5,271

 

 
5,770

 

Fixed
 
2016 - 2021
 
596

 
1.0%
 
1,490

 
1.3%
Variable
 
2016
 
255

 
0.6%
 
457

 
0.7%
Total Yen denominated
 

 
851

 

 
1,947

 

Total unsecured debt
 

 
45,443

 

 
45,073

 

Total other debt (in USD)(2)
 

 
453

 

 
801

 

Total debt
 

 
45,896

 

 
45,874

 

Less amounts due within one year
 

 
(4,810
)
 

 
(4,103
)
 

Long-term debt
 

 
$
41,086

 

 
$
41,771

 

(1)
The average rate represents the weighted-average stated rate for each corresponding debt category, based on year-end balances and year-end interest rates. Interest costs are also impacted by certain derivative financial instruments described in Note 8.
(2)
A portion of other debt at January 31, 2015 and 2014 includes secured debt in the amount of $139 million and $572 million, respectively, which was collateralized by property that had an aggregate carrying amount of approximately $19 million and $471 million, respectively.
At January 31, 2015 and 2014, the Company had $500 million in debt with embedded put options. The issuance of money market puttable reset securities in the amount of $500 million is structured to be remarketed in connection with the annual reset of the interest rate. If, for any reason, the remarketing of the notes does not occur at the time of any interest rate reset, the holders of the notes must sell, and the Company must repurchase, the notes at par. Accordingly, this issuance has been classified as long-term debt due within one year in the Company's Consolidated Balance Sheets.
Annual maturities of long-term debt during the next five years and thereafter are as follows:
(Amounts in millions)
Annual
Fiscal Year
Maturities
2016
$
4,810

2017
2,312

2018
1,523

2019
3,518

2020
514

Thereafter
33,219

Total
$
45,896

Debt Issuances
Information on significant long-term debt issued during fiscal 2015 is as follows: 
(Amounts in millions)
 
 
 
 
 
 
 
 
 
 
Issue Date
 
Principal Amount
 
Maturity Date
 
Fixed vs. Floating
 
Interest Rate
 
Proceeds
April 8, 2014
 
850 Euro
 
April 8, 2022
 
Fixed
 
1.900%
 
$
1,161

April 8, 2014
 
650 Euro
 
April 8, 2026
 
Fixed
 
2.550%
 
885

April 22, 2014
 
500 USD
 
April 21, 2017
 
Fixed
 
1.000%
 
499

April 22, 2014
 
1,000 USD
 
April 22, 2024
 
Fixed
 
3.300%
 
992

April 22, 2014
 
1,000 USD
 
April 22, 2044
 
Fixed
 
4.300%
 
985

October 22, 2014
 
500 USD
 
April 22, 2024
 
Fixed
 
3.300%
 
508

Total
 
 
 
 
 
 
 
 
 
$
5,030



Information on significant long-term debt issued during fiscal 2014 is as follows: 
(Amounts in millions)
 
 
 
 
 
 
 
 
 
 
Issue Date
 
Principal Amount
 
Maturity Date
 
Fixed vs. Floating
 
Interest Rate
 
Proceeds
April 11, 2013
 
1,000 USD
 
April 11, 2016
 
Fixed
 
0.600%
 
$
997

April 11, 2013
 
1,250 USD
 
April 11, 2018
 
Fixed
 
1.130%
 
1,244

April 11, 2013
 
1,750 USD
 
April 11, 2023
 
Fixed
 
2.550%
 
1,738

April 11, 2013
 
1,000 USD
 
April 11, 2043
 
Fixed
 
4.000%
 
988

October 2, 2013
 
1,000 USD
 
December 15, 2018
 
Fixed
 
1.950%
 
995

October 2, 2013
 
750 USD
 
October 2, 2043
 
Fixed
 
4.750%
 
738

Total
 
 
 
 
 
 
 
 
 
$
6,700


During fiscal 2015 and 2014, the Company also received additional proceeds from other, smaller long-term debt issuances by several of its non-U.S. operations. The proceeds in both fiscal years were used to pay down and refinance existing debt and for other general corporate purposes.
Maturities
On February 3, 2014, $500 million of 3.000% Notes matured and were repaid; on April 14, 2014, $1.0 billion of 1.625% Notes matured and were repaid; on May 15, 2014, $1.0 billion of 3.200% Notes matured and were repaid; and on August 6, 2014, ¥100 billion of floating rate Notes matured and were repaid.
On April 15, 2013, $1.0 billion of 4.250% Notes matured and were repaid; on May 1, 2013, $1.5 billion of 4.550% Notes matured and were repaid; on June 1, 2013, $500 million of 7.250% Notes matured and were repaid; on August 5, 2013, ¥25 billion of 2.010% and ¥50 billion of floating rate Notes matured and were repaid; and on October 25, 2013, $750 million of 0.750% Notes matured and were repaid.
During fiscal 2015 and 2014, the Company also repaid other, smaller long-term debt as it matured in several of its non-U.S. operations.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
The Company records and discloses certain financial and non-financial assets and liabilities at fair value. The fair value of an asset is the price at which the asset could be sold in an ordinary transaction between unrelated, knowledgeable and willing parties able to engage in the transaction. The fair value of a liability is the amount that would be paid to transfer the liability to a new obligor in a transaction between such parties, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:

Level 1: observable inputs such as quoted prices in active markets;
Level 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions.
Recurring Fair Value Measurements
The Company holds derivative instruments that are required to be measured at fair value on a recurring basis. The fair values are the estimated amounts the Company would receive or pay upon termination of the related derivative agreements as of the reporting dates. The fair values have been measured using the income approach and Level 2 inputs, which include the relevant interest rate and foreign currency forward curves. As of January 31, 2015 and 2014, the notional amounts and fair values of these derivatives were as follows:
 
January 31, 2015
 
January 31, 2014
(Amounts in millions)
Notional Amount
 
Fair Value
 
Notional Amount
 
Fair Value
Receive fixed-rate, pay variable-rate interest rate swaps designated as fair value hedges
$
500

 
$
12

 
$
1,000

 
$
5

Receive fixed-rate, pay fixed-rate cross-currency interest rate swaps designated as net investment hedges
1,250

 
207

 
1,250

 
97

Receive fixed-rate, pay fixed-rate cross-currency interest rate swaps designated as cash flow hedges
4,329

 
(317
)
 
3,004

 
453

Receive variable-rate, pay fixed-rate interest rate swaps designated as cash flow hedges
255

 
(1
)
 
457

 
(2
)
Receive variable-rate, pay fixed-rate forward starting interest rate swaps designated as cash flow hedges

 

 
2,500

 
166

Total
$
6,334

 
$
(99
)
 
$
8,211

 
$
719


Nonrecurring Fair Value Measurements
In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company's assets and liabilities are also subject to nonrecurring fair value measurements. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. The Company did not record any significant impairment charges to assets measured at fair value on a nonrecurring basis during the fiscal years ended January 31, 2015, or 2014.
Other Fair Value Disclosures
The Company records cash and cash equivalents and short-term borrowings at cost. The carrying values of these instruments approximate their fair value due to their short-term maturities.
The Company's long-term debt is also recorded at cost. The fair value is estimated using Level 2 inputs based on the Company's current incremental borrowing rate for similar types of borrowing arrangements. The carrying value and fair value of the Company's long-term debt as of January 31, 2015 and 2014, are as follows: 
 
 
January 31, 2015
 
January 31, 2014
(Amounts in millions)
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Long-term debt, including amounts due within one year
 
$
45,896

 
$
56,237

 
$
45,874

 
$
50,757

Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments
The Company uses derivative financial instruments for hedging and non-trading purposes to manage its exposure to changes in interest and currency exchange rates, as well as to maintain an appropriate mix of fixed- and variable-rate debt. Use of derivative financial instruments in hedging programs subjects the Company to certain risks, such as market and credit risks. Market risk represents the possibility that the value of the derivative financial instrument will change. In a hedging relationship, the change in the value of the derivative financial instrument is offset to a great extent by the change in the value of the underlying hedged item. Credit risk related to a derivative financial instrument represents the possibility that the counterparty will not fulfill the terms of the contract. The notional, or contractual, amount of the Company's derivative financial instruments is used to measure interest to be paid or received and does not represent the Company's exposure due to credit risk. Credit risk is monitored through established approval procedures, including setting concentration limits by counterparty, reviewing credit ratings and requiring collateral (generally cash) from the counterparty when appropriate.
The Company only enters into derivative transactions with counterparties rated "A-" or better by nationally recognized credit rating agencies. Subsequent to entering into derivative transactions, the Company regularly monitors the credit ratings of its counterparties. In connection with various derivative agreements, including master netting arrangements, the Company held cash collateral from counterparties of $323 million and $641 million at January 31, 2015 and January 31, 2014, respectively. The Company records cash collateral received as amounts due to the counterparties exclusive of any derivative asset. Furthermore, as part of the master netting arrangements with these counterparties, the Company is also required to post collateral if the Company's net derivative liability position exceeds $150 million with any counterparty. The Company did not have any cash collateral posted with counterparties at January 31, 2015 or January 31, 2014. The Company records cash collateral it posts with counterparties as amounts receivable from those counterparties exclusive of any derivative liability.
The Company uses derivative financial instruments for the purpose of hedging its exposure to interest and currency exchange rate risks and, accordingly, the contractual terms of a hedged instrument closely mirror those of the hedged item, providing a high degree of risk reduction and correlation. Contracts that are effective at meeting the risk reduction and correlation criteria are recorded using hedge accounting. If a derivative financial instrument is recorded using hedge accounting, depending on the nature of the hedge, changes in the fair value of the instrument will either be offset against the change in fair value of the hedged assets, liabilities or firm commitments through earnings or be recognized in accumulated other comprehensive income (loss) until the hedged item is recognized in earnings. Any hedge ineffectiveness is immediately recognized in earnings. The Company's net investment and cash flow instruments are highly effective hedges and the ineffective portion has not been, and is not expected to be, significant. Instruments that do not meet the criteria for hedge accounting, or contracts for which the Company has not elected hedge accounting, are recorded at fair value with unrealized gains or losses reported in earnings during the period of the change.
Fair Value Instruments
The Company is a party to receive fixed-rate, pay variable-rate interest rate swaps that the Company uses to hedge the fair value of fixed-rate debt. The notional amounts are used to measure interest to be paid or received and do not represent the Company's exposure due to credit loss. The Company's interest rate swaps that receive fixed-interest rate payments and pay variable-interest rate payments are designated as fair value hedges. As the specific terms and notional amounts of the derivative instruments match those of the fixed-rate debt being hedged, the derivative instruments are assumed to be perfectly effective hedges. Changes in the fair values of these derivative instruments are recorded in earnings, but are offset by corresponding changes in the fair values of the hedged items, also recorded in earnings, and, accordingly, do not impact the Company's Consolidated Statements of Income. These fair value instruments will mature in October 2020.
Net Investment Instruments
The Company is a party to cross-currency interest rate swaps that the Company uses to hedge its net investments. The agreements are contracts to exchange fixed-rate payments in one currency for fixed-rate payments in another currency. All changes in the fair value of these instruments are recorded in accumulated other comprehensive income (loss), offsetting the currency translation adjustment of the related investment that is also recorded in accumulated other comprehensive income (loss). These instruments will mature on dates ranging from October 2023 to February 2030.
The Company has issued foreign-currency-denominated long-term debt as hedges of net investments of certain of its foreign operations. These foreign-currency-denominated long-term debt issuances are designated and qualify as nonderivative hedging instruments. Accordingly, the foreign currency translation of these debt instruments is recorded in accumulated other comprehensive income (loss), offsetting the foreign currency translation adjustment of the related net investments that is also recorded in accumulated other comprehensive income (loss). At January 31, 2015 and January 31, 2014, the Company had ¥100 billion and ¥200 billion, respectively, of outstanding long-term debt designated as a hedge of its net investment in Japan, as well as outstanding long-term debt of £2.5 billion at January 31, 2015 and 2014 that was designated as a hedge of its net investment in the United Kingdom. These nonderivative net investment hedges will mature on dates ranging from July 2015 to January 2039.
Cash Flow Instruments
The Company is a party to receive variable-rate, pay fixed-rate interest rate swaps that the Company uses to hedge the interest rate risk of certain non-U.S. denominated debt. The swaps are designated as cash flow hedges of interest expense risk. Amounts reported in accumulated other comprehensive income (loss) related to these derivatives are reclassified from accumulated other comprehensive income (loss) to earnings as interest is expensed for the Company's variable-rate debt, converting the variable-rate interest expense into fixed-rate interest expense. These cash flow instruments will mature in July 2015.
The Company is also a party to receive fixed-rate, pay fixed-rate cross-currency interest rate swaps to hedge the currency exposure associated with the forecasted payments of principal and interest of certain non-U.S. denominated debt. The swaps are designated as cash flow hedges of the currency risk related to payments on the non-U.S. denominated debt. The effective portion of changes in the fair value of derivatives designated as cash flow hedges of foreign exchange risk is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The hedged items are recognized foreign currency-denominated liabilities that are remeasured at spot exchange rates each period, and the assessment of effectiveness (and measurement of any ineffectiveness) is based on total changes in the related derivative's cash flows. As a result, the amount reclassified into earnings each period includes an amount that offsets the related transaction gain or loss arising from that remeasurement and the adjustment to earnings for the period's allocable portion of the initial spot-forward difference associated with the hedging instrument. These cash flow instruments will mature on dates ranging from April 2022 to March 2034.
The Company used forward starting receive variable-rate, pay fixed-rate swaps ("forward starting swaps") to hedge its exposure to the variability in future cash flows due to changes in the LIBOR swap rate for debt issuances forecasted to occur in the future. These forward starting swaps were terminated in October 2014, April 2014 and April 2013 concurrently with the issuance of the hedged debt. Upon termination of the forward starting swaps, the Company received net cash payments from the related counterparties of $96 million in fiscal 2015 and made net cash payments to the related counterparties of $74 million in fiscal 2014. The payments were recorded in accumulated other comprehensive income (loss) and will be reclassified to earnings over the life of the related debt through May 2044, effectively adjusting interest expense to reflect the fixed interest rates entered into by the forward starting swaps.
Financial Statement Presentation
Although subject to master netting arrangements, the Company does not offset derivative assets and derivative liabilities in its Consolidated Balance Sheets. Derivative instruments with an unrealized gain are recorded in the Company's Consolidated Balance Sheets as either current or non-current assets, based on maturity date, and those hedging instruments with an unrealized loss are recorded as either current or non-current liabilities, based on maturity date.
The Company's derivative instruments, as well as its nonderivative debt instruments designated and qualifying as net investment hedges, were classified as follows in the Company's Consolidated Balance Sheets:
 
January 31, 2015
 
January 31, 2014
(Amounts in millions)
Fair Value
Instruments
 
Net Investment
Instruments
 
Cash Flow
Instruments
 
Fair Value
Instruments
 
Net Investment
Instruments
 
Cash Flow
Instruments
Derivative instruments
 
 
 
 
 
 
 
 
 
 
 
Prepaid expenses and other
$

 
$

 
$

 
$
5

 
$

 
$

Other assets and deferred charges
12

 
207

 
293

 

 
97

 
619

Derivative asset subtotals
$
12

 
$
207

 
$
293

 
$
5

 
$
97

 
$
619

 
 
 
 
 
 
 
 
 
 
 
 
Accrued liabilities
$

 
$

 
$
1

 
$

 
$

 
$
1

Deferred income taxes and other

 

 
610

 

 

 
1

Derivative liability subtotals
$

 
$

 
$
611

 
$

 
$

 
$
2

 
 
 
 
 
 
 
 
 
 
 
 
Nonderivative hedging instruments
 
 
 
 
 
 
 
 
 
 
 
Long-term debt due within one year
$

 
$
766

 
$

 
$

 
$
973

 
$

Long-term debt

 
3,850

 

 

 
5,095

 

Nonderivative hedge liability subtotals
$

 
$
4,616

 
$

 
$

 
$
6,068

 
$


Gains and losses related to the Company's derivatives primarily relate to interest rate hedges, which are recorded in interest, net, in the Company's Consolidated Statements of Income. Amounts related to the Company's derivatives expected to be reclassified from accumulated other comprehensive income (loss) to net income during the next 12 months are not significant.
Taxes
Income tax disclosure
Taxes
Income from Continuing Operations
The components of income from continuing operations before income taxes are as follows:
 
Fiscal Years Ended January 31,
(Amounts in millions)
2015
 
2014
 
2013
U.S.
$
18,610

 
$
19,412

 
$
19,352

Non-U.S.
6,189

 
5,244

 
6,310

Total income from continuing operations before income taxes
$
24,799

 
$
24,656

 
$
25,662


A summary of the provision for income taxes is as follows:
 
Fiscal Years Ended January 31,
(Amounts in millions)
2015
 
2014
 
2013
Current:
 
 
 
 
 
U.S. federal
$
6,165

 
$
6,377

 
$
5,611

U.S. state and local
810

 
719

 
622

International
1,529

 
1,523

 
1,743

Total current tax provision
8,504

 
8,619

 
7,976

Deferred:

 

 

U.S. federal
(387
)
 
(72
)
 
38

U.S. state and local
(55
)
 
37

 
(8
)
International
(77
)
 
(479
)
 
(48
)
Total deferred tax expense (benefit)
(519
)
 
(514
)
 
(18
)
Total provision for income taxes
$
7,985

 
$
8,105

 
$
7,958


Effective Income Tax Rate Reconciliation
The Company's effective income tax rate is typically lower than the U.S. statutory tax rate primarily because of benefits from lower-taxed global operations, including the use of global funding structures and certain U.S. tax credits as further discussed in the "Cash and Cash Equivalents" section of the Company's significant accounting policies in Note 1. The Company's non-U.S. income is generally subject to local country tax rates that are below the 35% U.S. statutory tax rate. Certain non-U.S. earnings have been indefinitely reinvested outside the U.S. and are not subject to current U.S. income tax. A reconciliation of the significant differences between the U.S. statutory tax rate and the effective income tax rate on pretax income from continuing operations is as follows:
 
Fiscal Years Ended January 31,
 
2015
 
2014
 
2013
U.S. statutory tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
U.S. state income taxes, net of federal income tax benefit
1.8
 %
 
2.0
 %
 
1.7
 %
Income taxed outside the U.S.
(2.7
)%
 
(2.8
)%
 
(2.6
)%
Net impact of repatriated international earnings
(1.5
)%
 
(1.4
)%
 
(2.5
)%
Other, net
(0.4
)%
 
0.1
 %
 
(0.6
)%
Effective income tax rate
32.2
 %
 
32.9
 %
 
31.0
 %

Deferred Taxes
The significant components of the Company's deferred tax account balances are as follows:
 
 
January 31,
(Amounts in millions)
 
2015
 
2014
Deferred tax assets:
 
 
 
 
Loss and tax credit carryforwards
 
$
3,255

 
$
3,566

Accrued liabilities
 
3,395

 
2,986

Share-based compensation
 
184

 
126

Other
 
1,119

 
1,573

Total deferred tax assets
 
7,953

 
8,251

Valuation allowances
 
(1,504
)
 
(1,801
)
Deferred tax assets, net of valuation allowance
 
6,449

 
6,450

Deferred tax liabilities:
 

 

Property and equipment
 
5,972

 
6,295

Inventories
 
1,825

 
1,641

Other
 
1,618

 
1,827

Total deferred tax liabilities
 
9,415

 
9,763

Net deferred tax liabilities
 
$
2,966

 
$
3,313


The deferred taxes are classified as follows in the Company's Consolidated Balance Sheets:
  
 
January 31,
(Amounts in millions)
 
2015
 
2014
Balance Sheet classification:
 
 
 
 
Assets:
 
 
 
 
Prepaid expenses and other
 
$
728

 
$
822

Other assets and deferred charges
 
1,033

 
1,151

Asset subtotals
 
1,761

 
1,973

Liabilities:
 

 

Accrued liabilities
 
56

 
176

Deferred income taxes and other
 
4,671

 
5,110

Liability subtotals
 
4,727

 
5,286

Net deferred tax liabilities
 
$
2,966

 
$
3,313


Unremitted Earnings
U.S. income taxes have not been provided on accumulated but undistributed earnings of the Company's international subsidiaries of approximately $23.3 billion and $21.4 billion as of January 31, 2015 and 2014, respectively, as the Company intends to permanently reinvest these amounts outside of the U.S. However, if any portion were to be distributed, the related U.S. tax liability may be reduced by foreign income taxes paid on those earnings. Determination of the unrecognized deferred tax liability related to these undistributed earnings is not practicable because of the complexities with its hypothetical calculation. The Company provides deferred or current income taxes on earnings of international subsidiaries in the period that the Company determines it will remit those earnings.
Net Operating Losses, Tax Credit Carryforwards and Valuation Allowances
At January 31, 2015, the Company had net operating loss and capital loss carryforwards totaling approximately $5.6 billion. Of these carryforwards, approximately $2.9 billion will expire, if not utilized, in various years through 2033. The remaining carryforwards have no expiration. At January 31, 2015, the Company had foreign tax credit carryforwards of $2.0 billion, which will expire in various years through 2025, if not utilized.
The recoverability of these future tax deductions and credits is evaluated by assessing the adequacy of future expected taxable income from all sources, including taxable income in prior carryback years, reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. To the extent management does not consider it more likely than not that a deferred tax asset will be realized, a valuation allowance is established. If a valuation allowance has been established and management subsequently determines that it is more likely than not that the deferred tax assets will be realized, the valuation allowance is released.
As of January 31, 2015 and 2014, the Company had valuation allowances recorded of approximately $1.5 billion and $1.8 billion, respectively, on deferred tax assets associated primarily with net operating loss carryforwards for which management has determined it is more likely than not that the deferred tax asset will not be realized. The $0.3 billion net decrease in the valuation allowance during fiscal 2015 related to releases arising from the use of deferred tax assets, changes in judgment regarding the future realization of deferred tax assets, increases from certain net operating losses and deductible temporary differences arising in fiscal 2015, decreases due to operating loss expirations and fluctuations in currency exchange rates. Management believes that it is more likely than not that the remaining net deferred tax assets will be fully realized.
Uncertain Tax Positions
The benefits of uncertain tax positions are recorded in the Company's Consolidated Financial Statements only after determining a more likely than not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities.
As of January 31, 2015 and 2014, the amount of unrecognized tax benefits related to continuing operations was $838 million and $763 million, respectively. The amount of unrecognized tax benefits that would affect the Company's effective income tax rate was $763 million and $698 million for January 31, 2015 and 2014, respectively.
A reconciliation of unrecognized tax benefits from continuing operations was as follows:
 
Fiscal Years Ended January 31,
(Amounts in millions)
2015
 
2014
 
2013
Unrecognized tax benefits, beginning of year
$
763

 
$
818

 
$
611

Increases related to prior year tax positions
7

 
41

 
88

Decreases related to prior year tax positions
(17
)
 
(112
)
 
(232
)
Increases related to current year tax positions
174

 
133

 
431

Settlements during the period
(89
)
 
(117
)
 
(80
)
Lapse in statutes of limitations

 

 

Unrecognized tax benefits, end of year
$
838

 
$
763

 
$
818


The Company classifies interest and penalties related to uncertain tax benefits as interest expense and as operating, selling, general and administrative expenses, respectively. During fiscal 2015, 2014 and 2013, the Company recognized interest and penalty expense (benefit) related to uncertain tax positions of $18 million, $(7) million and $2 million, respectively. As of January 31, 2015 and 2014, accrued interest related to uncertain tax positions of $57 million and $40 million, respectively, was recorded in the Company's Consolidated Balance Sheets. The Company did not have any accrued penalties recorded for income taxes as of January 31, 2015 or 2014.
During the next twelve months, it is reasonably possible that tax audit resolutions could reduce unrecognized tax benefits by between $50 million and $350 million, either because the tax positions are sustained on audit or because the Company agrees to their disallowance. The Company is focused on resolving tax audits as expeditiously as possible. As a result of these efforts, unrecognized tax benefits could potentially be reduced beyond the provided range during the next twelve months. The Company does not expect any change to have a significant impact to its Consolidated Financial Statements.
The Company remains subject to income tax examinations for its U.S. federal income taxes generally for fiscal 2013 through 2015. The Company also remains subject to income tax examinations for international income taxes for fiscal 2000 through 2015, and for U.S. state and local income taxes generally for the fiscal years ended 2006 through 2015.
Other Taxes
The Company is subject to tax examinations for payroll, value added, sales-based and other non-income taxes. A number of these examinations are ongoing in various jurisdictions, including Brazil. In certain cases, the Company has received assessments from the respective taxing authorities in connection with these examinations. Where a probable loss has occurred, the Company has made accruals, which are reflected in the Company's Consolidated Financial Statements. While the possible losses or range of possible losses associated with these matters are individually immaterial, a group of related matters, if decided adversely to the Company, could result in a liability material to the Company's Consolidated Financial Statements.
Contingencies
Contingencies
Contingencies
Legal Proceedings
The Company is involved in a number of legal proceedings. The Company has made accruals with respect to these matters, where appropriate, which are reflected in the Company's Consolidated Financial Statements. For some matters, a liability is not probable or the amount cannot be reasonably estimated and therefore an accrual has not been made. However, where a liability is reasonably possible and may be material, such matters have been disclosed. The Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company's shareholders.
Unless stated otherwise, the matters, or groups of related matters, discussed below, if decided adversely to or settled by the Company, individually or in the aggregate, may result in a liability material to the Company's financial condition or results of operations.
Wage-and-Hour Class Action: The Company is a defendant in Braun/Hummel v. Wal-Mart Stores, Inc., a class-action lawsuit commenced in March 2002 in the Court of Common Pleas in Philadelphia, Pennsylvania. The plaintiffs allege that the Company failed to pay class members for all hours worked and prevented class members from taking their full meal and rest breaks. On October 13, 2006, a jury awarded back-pay damages to the plaintiffs of approximately $78 million on their claims for off-the-clock work and missed rest breaks. The jury found in favor of the Company on the plaintiffs' meal-period claims. On November 14, 2007, the trial judge entered a final judgment in the approximate amount of $188 million, which included the jury's back-pay award plus statutory penalties, prejudgment interest and attorneys' fees. By operation of law, post-judgment interest accrues on the judgment amount at the rate of six percent per annum from the date of entry of the judgment, which was November 14, 2007, until the judgment is paid, unless the judgment is set aside on appeal. On December 7, 2007, the Company filed its Notice of Appeal. On June 10, 2011, the Pennsylvania Superior Court of Appeals issued an opinion upholding the trial court's certification of the class, the jury's back pay award, and the awards of statutory penalties and prejudgment interest, but reversing the award of attorneys' fees. On September 9, 2011, the Company filed a Petition for Allowance of Appeal with the Pennsylvania Supreme Court. On July 2, 2012, the Pennsylvania Supreme Court granted the Company's Petition. On December 15, 2014, the Pennsylvania Supreme Court issued its opinion affirming the Superior Court of Appeals' decision. At that time, the Company recorded expenses of $249 million for the judgment amount and post-judgment interest incurred to date. The Company will continue to accrue for the post-judgment interest until final resolution. However, the Company continues to believe it has substantial factual and legal defenses to the claims at issue and, on March 13, 2015, the Company filed a petition for writ of certiorari with the U.S. Supreme Court.
ASDA Equal Value Claims: ASDA Stores, Ltd. ("ASDA"), a wholly-owned subsidiary of the Company, is a defendant in over 4,000 "equal value" claims that are proceeding before an Employment Tribunal in Manchester (the "Employment Tribunal") in the United Kingdom ("UK") on behalf of current and former ASDA store employees, who allege that the work performed by female employees in ASDA's retail stores is of equal value in terms of, among other things, the demands of their jobs to that of male employees working in ASDA's warehouse and distribution facilities, and that the disparity in pay between these different job positions is not objectively justified. Claimants are requesting differential back pay based on higher wage rates in the warehouse and distribution facilities and those higher wage rates on a prospective basis as part of these equal value proceedings. ASDA believes that further claims may be asserted in the near future. On March 23, 2015, ASDA asked the Employment Tribunal to stay all proceedings, contending that the High Court, which is the superior first instance civil court in the UK that is headquartered in the Royal Courts of Justice in the City of London, is the more convenient and appropriate forum to hear these claims. On March 23, 2015, ASDA also asked the Employment Tribunal to "strike out" substantially all of the claims for failing to comply with Employment Tribunal rules. At present, the Company cannot predict the number of such claims that may be filed, and cannot reasonably estimate any loss or range of loss that may arise from these proceedings. The Company believes it has substantial factual and legal defenses to these claims, and intends to defend the claims vigorously.
FCPA Investigation and Related Matters
The Audit Committee (the "Audit Committee") of the Board of Directors of the Company, which is composed solely of independent directors, is conducting an internal investigation into, among other things, alleged violations of the U.S. Foreign Corrupt Practices Act ("FCPA") and other alleged crimes or misconduct in connection with foreign subsidiaries, including Wal-Mart de México, S.A.B. de C.V. ("Walmex"), and whether prior allegations of such violations and/or misconduct were appropriately handled by the Company. The Audit Committee and the Company have engaged outside counsel from a number of law firms and other advisors who are assisting in the on-going investigation of these matters.
The Company is also conducting a voluntary global review of its policies, practices and internal controls for FCPA compliance. The Company is engaged in strengthening its global anti-corruption compliance program through appropriate remedial anti-corruption measures.  In November 2011, the Company voluntarily disclosed that investigative activity to the U.S. Department of Justice (the "DOJ") and the Securities and Exchange Commission (the "SEC"). Since the implementation of the global review and the enhanced anti-corruption compliance program, the Audit Committee and the Company have identified or been made aware of additional allegations regarding potential violations of the FCPA. When such allegations are reported or identified, the Audit Committee and the Company, together with their third party advisors, conduct inquiries and when warranted based on those inquiries, open investigations. Inquiries or investigations regarding allegations of potential FCPA violations have been commenced in a number of foreign markets where the Company operates, including, but not limited to, Brazil, China and India.
The Company has been informed by the DOJ and the SEC that it is also the subject of their respective investigations into possible violations of the FCPA. The Company is cooperating with the investigations by the DOJ and the SEC. A number of federal and local government agencies in Mexico have also initiated investigations of these matters. Walmex is cooperating with the Mexican governmental agencies conducting these investigations. Furthermore, lawsuits relating to the matters under investigation have been filed by several of the Company's shareholders against it, certain of its current directors, certain of its former directors, certain of its current and former officers and certain of Walmex's current and former officers.
The Company could be exposed to a variety of negative consequences as a result of the matters noted above. There could be one or more enforcement actions in respect of the matters that are the subject of some or all of the on-going government investigations, and such actions, if brought, may result in judgments, settlements, fines, penalties, injunctions, cease and desist orders, debarment or other relief, criminal convictions and/or penalties. The shareholder lawsuits may result in judgments against the Company and its current and former directors and officers named in those proceedings. The Company cannot predict at this time the outcome or impact of the government investigations, the shareholder lawsuits, or its own internal investigations and review. In addition, the Company has incurred and expects to continue to incur costs in responding to requests for information or subpoenas seeking documents, testimony and other information in connection with the government investigations, in defending the shareholder lawsuits, and in conducting the review and investigations. These costs will be expensed as incurred. For the fiscal years ended January 31, 2015, 2014 and 2013, the Company incurred the following third-party expenses in connection with the FCPA investigation and related matters:
 
 
Fiscal Years Ended January 31,
(Amounts in millions)
 
2015
 
2014
 
2013
Ongoing inquiries and investigations
 
$