Walmart Inc. - FORM 8-K - EX-99.1 - PRESS RELEASE

Attached files

file	filename
8-K - FORM 8-K - Walmart Inc.	form8-kx10312017.htm
EX-99.2 - EARNINGS PRESENTATION - Walmart Inc.	earningspresentation1031.htm

Walmart U.S. Q3 comps¹ grew 2.7% and Walmart U.S. eCommerce sales grew 50%,

Company reports Q3 FY18 GAAP EPS of $0.58; Adjusted EPS² of $1.00,

The company now expects full-year GAAP EPS of $3.84 to $3.92,

Adjusted full-year EPS² of $4.38 to $4.46



	The company's third-quarter GAAP EPS was adjusted² for three items. A charge of $0.29 for loss on extinguishment of debt in connection with the company's recently completed debt tender offer, a charge of $0.09 based on discussions with government agencies regarding the possible resolution of the FCPA matter, and a charge of $0.04 based on the decision to exit certain properties in one of the company's international markets.
	Total revenue was $123.2 billion, an increase of $5.0 billion, or 4.2%. Excluding currency², total revenue was $122.7 billion, an increase of $4.5 billion, or 3.8%.		"We are pleased with the strong results in the quarter across each of our business segments, and I want to thank our associates for their commitment and great work to make it happen. We have momentum, and it's encouraging to see customers responding to our store and eCommerce initiatives. We are leveraging our unique assets to save customers time and money and serve them in ways that are easy, fast, friendly and fun." Doug McMillon President and CEO, Walmart
	Walmart U.S. comp sales¹ increased 2.7%, and comp traffic increased 1.5%.
	eCommerce growth at Walmart U.S. remained strong, led by growth through Walmart.com. Net sales and GMV³ increased 50% and 54%, respectively.
	Net sales at Walmart International were $29.5 billion, an increase of 4.1%. Excluding currency², net sales were $29.1 billion, an increase of 2.5%. Ten of eleven markets posted positive comp sales, including our four largest markets.



Key results
(Amounts in millions, except as noted)



	Q3 FY18	Q3 FY17	Change
	Q3 FY18	Q3 FY17	Change
Revenue	$123,179	$118,179	$5,000	4.2%
Revenue (constant currency)²	$122,721	$118,179	$4,542	3.8%
Operating income	$4,764	$5,119	-$355	-6.9%
Operating income (constant currency)²	$4,704	$5,119	-$415	-8.1%



Free Cash Flow	YTD FY18	$ Change	Returns to Shareholders	Q3 FY18	% Change
Operating cash flow	$17,060	-$2,721	Dividends	$1,526	-1.5%
Capital expenditures	$6,908	-$551	Share repurchases⁴	$2,209	57.6%
Free cash flow²	$10,152	-$2,170	Total	$3,735	26.6%

¹ Represents Walmart U.S. comparable sales excluding fuel. Including fuel, Walmart U.S. comparable sales grew 2.8%. See additional information at the end of this release regarding non-GAAP financial measures.

²See additional information at the end of this release regarding non-GAAP financial measures.

³ GMV represents the total U.S. dollar volume of merchandise sold or services rendered for all transactions, including marketplace transactions, that are generally initiated through our eCommerce platforms or include our owned inventory sold on other third party platforms. For additional information, visit stock.walmart.com.

⁴ The company repurchased approximately 27 million shares in Q3 FY18 under the $20 billion authorization approved in October 2015. Effective November 20, 2017, share repurchases will be made under the company’s $20 billion share repurchase authorization approved in October 2017.



NYSE: WMT	November 16, 2017	stock.walmart.com

Guidance


•	Fiscal year 2018 GAAP EPS: $3.84 to $3.92


•	Fiscal year 2018 Adjusted EPS¹: $4.38 to $4.46


•	Comp sales for the 13-week period ending Jan. 26, 2018:


◦	Walmart U.S. (ex. fuel)¹: +1.5% to +2.0%


◦	Sam's Club (ex. fuel)¹: +1.5% to +2.0%



Segment results
(Amounts in millions, except as noted)



U.S.		Q3 FY18	Q3 FY17	Change
Net sales		$77,724	$74,550	$3,174	4.3%
Comp sales (ex. fuel)^1,2		2.7%	1.2%	150 bps	N/A
	Traffic	1.5%	0.7%	80 bps	N/A
	Ticket	1.2%	0.5%	70 bps	N/A
	eCommerce	~80 bps	~50 bps	~30 bps	N/A
Operating income		$4,030	$3,999	$31	0.8%



	Q3 FY18	Q3 FY17	Change
	Q3 FY18	Q3 FY17	Change
Net sales	$29,548	$28,390	$1,158	4.1%
Net sales (constant currency)¹	$29,094	$28,390	$704	2.5%
Operating income	$1,249	$1,354	-$105	-7.8%
Operating income (constant currency)¹	$1,189	$1,354	-$165	-12.2%



		Q3 FY18	Q3 FY17	Change
		Q3 FY18	Q3 FY17	Change
Net sales		$14,864	$14,236	$628	4.4%
Comp sales (ex. fuel)^1,2		2.8%	1.4%	140 bps	N/A
	Traffic	3.6%	-0.5%	410 bps	N/A
	Ticket	-0.8%	1.9%	-270 bps	N/A
	eCommerce	~80 bps	~60 bps	~20 bps	N/A
Operating income		$447	$396	$51	12.9%

¹ See additional information at the end of this release regarding non-GAAP financial measures.

² 13-week period ended Oct. 27, 2017, compared to 13-week period ended Oct. 28, 2016, and excludes fuel.



NYSE: WMT	November 16, 2017	stock.walmart.com

Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world save money and live better - anytime and anywhere - in retail stores, online, and through their mobile devices. Each week, over 260 million customers and members visit our more than 11,600 stores under 59 banners in 28 countries and e-commerce websites in 11 countries. With fiscal year 2017 revenue of $485.9 billion, Walmart employs approximately 2.3 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visiting http://corporate.walmart.com, on Facebook at http://facebook.com/walmart and on Twitter at http://twitter.com/walmart.

Investor Relations contact

Steve Schmitt (479) 258-7172

Media Relations contact

Randy Hargrove (800) 331-0085

Along with this press release, Walmart makes available a recorded call with executive leaders and a financial presentation to review business results, provide strategic updates, and comment on expectations for the future. We provide that call in both audio form and in a written transcript. Details on accessing the call are as follows:


•	877-523-5612 (U.S. and Canada)


•	201-689-8483 (other countries)


•	Passcode: 9256278 (Walmart)

The call is archived at stock.walmart.com

###



NYSE: WMT	November 16, 2017	stock.walmart.com

Forward-Looking Statements

This release contains statements as to Walmart management's guidance regarding earnings per share and adjusted earnings per share for the fiscal year ending January 31, 2018, and Walmart U.S.'s comparable sales and Sam's Club's comparable sales, excluding fuel, for the 13 weeks ending January 26, 2018. Walmart believes such statements are "forward-looking statements" as defined in, and are intended to enjoy the protection of the safe harbor for forward-looking statements provided by, the Private Securities Litigation Reform Act of 1995, as amended. Assumptions on which such forward-looking statements are based are also forward-looking statements. Walmart's actual results may differ materially from the guidance provided as a result of changes in circumstances, assumptions not being realized or other risks, uncertainties and factors including:


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


•	currency exchange rate fluctuations, changes in market interest rates and commodity prices;


•	unemployment levels;


•	competitive pressures;


•	inflation or deflation, generally and in particular product categories;


•	consumer confidence, disposable income, credit availability, spending levels, shopping patterns, debt


•	levels and demand for certain merchandise;


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


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


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


•	Walmart's ability to successfully integrate acquired businesses, including within the e-commerce space;


•	Walmart's effective tax rate and the factors affecting Walmart's effective tax rate, including assessments of certain tax contingencies, valuation allowances, changes in law, administrative audit outcomes, impact of discrete items and the mix of earnings between the U.S. and Walmart's international operations;


•	customer traffic and average ticket in Walmart's stores and clubs and on its e-commerce websites;


•	the mix of merchandise Walmart sells, the cost of goods it sells and the shrinkage it experiences;


•	the amount of Walmart's total sales and operating expenses in the various markets in which it operates;


•	transportation, energy and utility costs and the selling prices of gasoline and diesel fuel;


•	supply chain disruptions and disruptions in seasonal buying patterns;


•	consumer acceptance of and response to Walmart's stores, clubs, e-commerce websites, mobile apps,


•	initiatives, programs and merchandise offerings;


•	cyber security events affecting Walmart and related costs;


•	developments in, outcomes of, and costs incurred in legal or regulatory proceedings to which Walmart is a party;


•	casualty and accident-related costs and insurance costs;


•	the turnover in Walmart's workforce and labor costs, including healthcare and other benefit costs;


•	changes in accounting estimates or judgments;


•	changes in existing tax, labor and other laws and regulations and changes in tax rates, trade agreements,


•	trade restrictions and tariff rates;


•	the level of public assistance payments;


•	natural disasters, public health emergencies, civil disturbances, and terrorist attacks; and


•	Walmart's expenditures for FCPA and other compliance related costs, including the adequacy of the accrual with respect to this matter made in the third quarter of the fiscal year ending January 31, 2018.

Such risks, uncertainties and factors also include the risks relating to our operations and financial performance discussed in our filings with the SEC. You should read this release in conjunction with our Annual Report on Form 10-K for the year ended January 31, 2017, and our subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. You should consider all of the risks, uncertainties and other factors identified above and in those SEC reports carefully when evaluating the forward-looking statements in this release. We cannot assure you that the future results reflected in or implied by any such forward-looking statement will be realized or, even if substantially realized, will have the forecasted or expected consequences and effects for or on our operations or financial performance. Such forward-looking statements are made as of the date of this release, and Walmart undertakes no obligation to update such statements to reflect subsequent events or circumstances.

Wal-Mart Stores, Inc.

Condensed Consolidated Statements of Income

(Unaudited)



	Three Months Ended								Nine Months Ended
	October 31,								October 31,
(Amounts in millions, except per share data)	2017			2016			Percent Change		2017			2016			Percent Change
Revenues:
Net sales	$	122,136		$	117,176		4.2	%	$	360,611		$	351,567		2.6	%
Membership and other income	1,043			1,003			4.0	%	3,465			3,370			2.8	%
Total revenues	123,179			118,179			4.2	%	364,076			354,937			2.6	%
Costs and expenses:
Cost of sales	91,547			87,484			4.6	%	270,756			263,513			2.7	%
Operating, selling, general and administrative expenses	26,868			25,576			5.1	%	77,350			74,865			3.3	%
Operating income	4,764			5,119			(6.9	)%	15,970			16,559			(3.6	)%
Interest:
Debt	502			528			(4.9	)%	1,530			1,536			(0.4	)%
Capital lease and financing obligations	81			81			—	%	264			246			7.3	%
Interest income	(42		)	(24		)	75.0	%	(115		)	(70		)	64.3	%
Interest, net	541			585			(7.5	)%	1,679			1,712			(1.9	)%
Loss on extinguishment of debt	1,344			—			N/A		2,132			—			N/A
Income before income taxes	2,879			4,534			(36.5	)%	12,159			14,847			(18.1	)%
Provision for income taxes	975			1,332			(26.8	)%	3,999			4,540			(11.9	)%
Consolidated net income	1,904			3,202			(40.5	)%	8,160			10,307			(20.8	)%
Consolidated net income attributable to noncontrolling interest	(155		)	(168		)	(7.7	)%	(473		)	(421		)	12.4	%
Consolidated net income attributable to Walmart	$	1,749		$	3,034		(42.4	)%	$	7,687		$	9,886		(22.2	)%

Net income per common share:
Basic net income per common share attributable to Walmart	$	0.59		$	0.98		(39.8	)%	$	2.56		$	3.17		(19.2	)%
Diluted net income per common share attributable to Walmart	$	0.58		$	0.98		(40.8	)%	$	2.54		$	3.16		(19.6	)%

Weighted-average common shares outstanding:
Basic	2,981			3,089					3,008			3,114
Diluted	2,996			3,100					3,021			3,124

Dividends declared per common share	$	—		$	—				$	2.04		$	2.00

Wal-Mart Stores, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)




	October 31,			January 31,			October 31,
(Amounts in millions)	2017			2017			2016
ASSETS
Current assets:
Cash and cash equivalents	$	7,026		$	6,867		$	5,939
Receivables, net	5,865			5,835			5,344
Inventories	50,147			43,046			49,822
Prepaid expenses and other	2,330			1,941			2,296
Total current assets	65,368			57,689			63,401
Property and equipment:
Property and equipment	185,103			179,492			179,667
Less accumulated depreciation	(76,948		)	(71,782		)	(70,991		)
Property and equipment, net	108,155			107,710			108,676
Property under capital lease and financing obligations:
Property under capital lease and financing obligations	12,641			11,637			11,482
Less accumulated amortization	(5,497		)	(5,169		)	(5,070		)
Property under capital lease and financing obligations, net	7,144			6,468			6,412

Goodwill	18,204			17,037			17,792
Other assets and deferred charges	10,543			9,921			10,576
Total assets	$	209,414		$	198,825		$	206,857

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	$	5,114		$	1,099		$	5,082
Accounts payable	47,587			41,433			42,990
Dividends payable	1,530			—			1,541
Accrued liabilities	21,757			20,654			21,243
Accrued income taxes	540			921			459
Long-term debt due within one year	3,257			2,256			2,266
Capital lease and financing obligations due within one year	650			565			549
Total current liabilities	80,435			66,928			74,130

Long-term debt	34,206			36,015			36,178
Long-term capital lease and financing obligations	6,700			6,003			5,930
Deferred income taxes and other	9,167			9,344			10,144

Commitments and contingencies

Equity:
Common stock	297			305			308
Capital in excess of par value	2,501			2,371			2,084
Retained earnings	84,480			89,354			87,636
Accumulated other comprehensive loss	(11,133		)	(14,232		)	(12,335		)
Total Walmart shareholders’ equity	76,145			77,798			77,693
Nonredeemable noncontrolling interest	2,761			2,737			2,782
Total equity	78,906			80,535			80,475
Total liabilities and equity	$	209,414		$	198,825		$	206,857

Wal-Mart Stores, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)



	Nine Months Ended
	October 31,
(Amounts in millions)	2017			2016
Cash flows from operating activities:
Consolidated net income	$	8,160		$	10,307
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization	7,827			7,374
Deferred income taxes	231			1,167
Loss on extinguishment of debt	2,132			—
Other operating activities	144			(387		)
Changes in certain assets and liabilities, net of effects of acquisitions:
Receivables, net	(529		)	271
Inventories	(6,446		)	(5,516		)
Accounts payable	5,630			5,121
Accrued liabilities	510			1,393
Accrued income taxes	(599		)	51
Net cash provided by operating activities	17,060			19,781

Cash flows from investing activities:
Payments for property and equipment	(6,908		)	(7,459		)
Proceeds from the disposal of property and equipment	301			783
Proceeds from disposal of certain operations	1,046			—
Purchase of available for sale securities	—			(1,901		)
Business acquisitions, net of cash acquired	(372		)	(2,406		)
Other investing activities	62			(67		)
Net cash used in investing activities	(5,871		)	(11,050		)

Cash flows from financing activities:
Net change in short-term borrowings	4,004			2,302
Proceeds from issuance of long-term debt	7,476			134
Repayments of long-term debt	(8,859		)	(2,040		)
Premiums paid to extinguish debt	(2,067		)	—
Dividends paid	(4,614		)	(4,682		)
Purchase of Company stock	(6,656		)	(6,254		)
Dividends paid to noncontrolling interest	(536		)	(320		)
Purchase of noncontrolling interest	(8		)	(89		)
Other financing activities	(156		)	(323		)
Net cash used in financing activities	(11,416		)	(11,272		)

Effect of exchange rates on cash and cash equivalents	386			(225		)

Net increase (decrease) in cash and cash equivalents	159			(2,766		)
Cash and cash equivalents at beginning of year	6,867			8,705
Cash and cash equivalents at end of period	$	7,026		$	5,939

Wal-Mart Stores, Inc.

Supplemental Financial Information

(Unaudited)

Net sales and operating income



	Net Sales						Operating Income
	Three Months Ended						Three Months Ended
	October 31,						October 31,
(dollars in millions)	2017		2016		Percent Change		2017		2016		Percent Change
Walmart U.S.	$	77,724	$	74,550	4.3	%	$	4,030	$	3,999	0.8	%
Walmart International	29,548		28,390		4.1	%	1,249		1,354		-7.8	%
Sam's Club	14,864		14,236		4.4	%	447		396		12.9	%
Corporate and support	—		—		N/A		-962		-630		52.7	%
Consolidated	$	122,136	$	117,176	4.2	%	$	4,764	$	5,119	-6.9	%

U.S. comparable sales results



	With Fuel		Without Fuel¹		Fuel Impact
	13 Weeks Ended		13 Weeks Ended		13 Weeks Ended
	10/27/2017	10/28/2016	10/27/2017	10/28/2016	10/27/2017	10/28/2016
Walmart U.S.	2.8%	1.2%	2.7%	1.2%	0.1%	0.0%
Sam's Club	4.0%	0.7%	2.8%	1.4%	1.2%	-0.7%
Total U.S.	3.0%	1.1%	2.7%	1.2%	0.3%	-0.1%

¹ See additional information at the end of this release regarding non-GAAP financial measures.

Wal-Mart Stores, Inc.

Reconciliations of and Other Information Regarding Non-GAAP Financial Measures

(Unaudited)

The following information provides reconciliations of certain non-GAAP financial measures presented in the press release to which this reconciliation is attached to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided the non-GAAP financial information presented in the press release, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in the press release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the press release. The non-GAAP financial measures in the press release may differ from similar measures used by other companies.

Free Cash Flow

We define free cash flow as net cash provided by operating activities in a period minus payments for property and equipment made in that period. We had net cash provided by operating activities of $17.1 billion and $19.8 billion for the nine months ended October 31, 2017 and 2016, respectively. We generated free cash flow of $10.2 billion and $12.3 billion for the nine months ended October 31, 2017 and 2016, respectively. The decreases in net cash provided by operating activities and free cash flow were due to the timing of payments and an increase in incentive payments, as well as lapping prior year's improvements in working capital management.

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

Additionally, Walmart's definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our Consolidated Statements of Cash Flows.

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

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



	Nine Months Ended
	October 31,
(Dollars in millions)	2017		2016¹
Net cash provided by operating activities	$	17,060	$	19,781
Payments for property and equipment (capital expenditures)	-6,908		-7,459
Free cash flow	$	10,152	$	12,322

Net cash used in investing activities²	$	-5,871	$	-11,050
Net cash used in financing activities	-11,416		-11,272

¹ Reclassifications made due to the adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting.

² "Net cash used in investing activities" includes payments for property and equipment, which is also included in our computation of free cash flow.

Constant Currency

In discussing our operating results, the term currency exchange rates refers to the currency exchange rates we use to convert the operating results for all countries where the functional currency is not the U.S. dollar ("non-USD entities") into U.S. dollars. We calculate the effect of changes in currency exchange rates as the difference between current period activity translated using the current period's currency exchange rates, and the comparable prior year period's currency exchange rates. Throughout our discussion, we refer to the results of this calculation as the impact of currency exchange rate fluctuations. When we refer to constant currency operating results, this means operating results without the impact of the currency exchange rate fluctuations and without the impact of acquisitions of non-USD entities, if any, until such acquisitions are included in both comparable periods. The disclosure of constant currency amounts or results permits investors to better understand Walmart's underlying performance without the effects of currency exchange rate fluctuations of non-USD entities.

The table below reflects the calculation of constant currency for total revenues, net sales and operating income for the three and nine months ended October 31, 2017.



	Three Months Ended October 31,								Nine Months Ended October 31,
	Walmart International				Consolidated				Walmart International				Consolidated
(Dollars in millions)	2017		Percent Change¹		2017		Percent Change¹		2017		Percent Change¹		2017		Percent Change¹
Total revenues:
As reported	$	29,879	3.9	%	$	123,179	4.2	%	$	86,308	-0.3	%	$	364,076	2.6	%
Currency exchange rate fluctuations	-458		N/A		-458		N/A		1,790		N/A		1,790		N/A
Constant currency total revenues	$	29,421	2.3	%	$	122,721	3.8	%	$	88,098	1.8	%	$	365,866	3.1	%

Net sales:
As reported	$	29,548	4.1	%	$	122,136	4.2	%	$	84,976	-0.1	%	$	360,611	2.6	%
Currency exchange rate fluctuations	-454		N/A		-454		N/A		1,739		N/A		1,739		N/A
Constant currency net sales	$	29,094	2.5	%	$	121,682	3.8	%	$	86,715	1.9	%	$	362,350	3.1	%

Operating income:
As reported	$	1,249	-7.8	%	$	4,764	-6.9	%	$	4,004	-5.7	%	$	15,970	-3.6	%
Currency exchange rate fluctuations	-60		N/A		-60		N/A		146		N/A		145		N/A
Constant currency operating income	$	1,189	-12.2	%	$	4,704	-8.1	%	$	4,150	-2.2	%	$	16,115	-2.7	%

¹Change versus prior year comparable period.

Adjusted EPS

The adjusted diluted earnings per share from continuing operations attributable to Walmart (Adjusted EPS) for the three-month period ended October 31, 2017 is considered a non-GAAP financial measure under the SEC's rules because the Adjusted EPS for each such period excludes certain amounts not excluded in the diluted earnings per share from continuing operations attributable to Walmart calculated in accordance with GAAP (EPS) for such period. Management believes that the Adjusted EPS for the three-month period ended October 31, 2017 is a meaningful measure to share with investors because that measure, which adjusts EPS for such period for certain items recorded in such period, is the measure that best allows comparison of the performance for the comparable period. In addition, the measure affords investors a view of what management considers Walmart's core earnings performance for the three-month period ended October 31, 2017 and also affords investors the ability to make a more informed assessment of such core earnings performance for the comparable period.

We have calculated Adjusted EPS for the three months ended October 31, 2017 by adjusting EPS for the following: (1) the loss on the early extinguishment of certain debt, (2) the FCPA accrual based on discussions with government agencies regarding the possible resolution of the FCPA matter and (3) the impairment of certain properties due to our decision to exit those properties in one of our international markets. Adjusted EPS for the three months ended October 31, 2017 is a non-GAAP financial measure. The most directly comparable financial measure calculated in accordance with GAAP is EPS for the three months ended October 31, 2017.



	Three Months Ended October 31, 2017
Diluted earnings per share:
Reported EPS			$0.58

Adjustments:	Pre-Tax Impact	Tax Impact¹	Net Impact
Loss on Early Extinguishment of Debt	$0.45	-$0.16	$0.29
FCPA Accrual	0.09	—	0.09
Impairment of Certain International Properties	0.05	-0.01	0.04
Net adjustments			$0.42

Adjusted EPS			$1.00

¹Calculated based on nature of item and statutory rate in effect for relevant jurisdiction.

Adjusted EPS Guidance

Adjusted EPS Guidance is considered a non-GAAP financial measure. Management believes that Adjusted EPS Guidance for Fiscal 2018 is a meaningful metric to share with investors because that metric, which adjusts EPS for certain items to be recorded in the period, is the metric that best allows comparison of the expected performance for Fiscal 2018 to the comparable prior period. In addition, the metric affords investors a view of what management is forecasting for Walmart's core earnings performance for Fiscal 2018 and also affords investors the ability to make a more informed assessment of the core earnings performance for the comparable period.

We have calculated Adjusted EPS Guidance for Fiscal 2018 by adjusting for the amount of the impact of: (1) the loss on the early extinguishment of certain debt, (2) the FCPA accrual based on discussions with government agencies regarding the possible resolution of the FCPA matter, (3) the gain on the sale of Suburbia in Mexico and (4) the impairment of certain properties due to our decision to exit those properties in one of our international markets.



	Fiscal 2018
Diluted net income per share:
Forecasted EPS				$3.84 - $3.92

Adjustments:	Pre-Tax Impact	Tax Impact¹	NCI Impact²	Net Impact
Loss on Early Extinguishment of Debt	$0.71	-$0.25	$—	$0.46
FCPA Accrual	0.09	—	—	0.09
Gain on Sale of Suburbia	-0.13	0.04	0.04	-0.05
Impairment of Certain International Properties	0.05	-0.01	—	0.04
Net adjustments				$0.54

Adjusted EPS Guidance				$4.38 - $4.46

¹Calculated based on nature of item and statutory rate in effect for relevant jurisdiction.

²Calculated based on the ownership percentages of the noncontrolling interest at Walmex.

Comparable Sales Measures Excluding Fuel

The comparable sales of the company's Walmart U.S. and Sam's Club operating segments for the 13-week period ended October 27, 2017, and October 28, 2016, and our guidance for comparable sales for the 13-week period ending January 26, 2018, in each case calculated or forecasted by excluding fuel sales for such periods (the "Comparable Sales Measures Excluding Fuel"), are non-GAAP financial measures as defined by the SEC's rules. We believe the most directly comparable financial measures computed in accordance with GAAP are the comparable sales calculated by including fuel sales for the corresponding periods.

We believe that the presentation of the Comparable Sales Measures Excluding Fuel provides useful information to investors regarding the company's financial condition and results of operations because that information permits investors to understand the effect of the fuel sales, which are affected by the volatility of fuel prices, on Walmart U.S. and Sam's Club's comparable sales for the periods presented.

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Walmart Inc. - FORM 8-K - EX-99.1 - PRESS RELEASE - November 16, 2017

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Walmart Inc. Reports