Walmart Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Consolidated Financial Statements of Walmart Inc. For the Fiscal Year Ended January 31, 2025 Table of Contents Page Report s of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 50 Consolidated Statements of Income 53 Consolidated Statements of Comprehensive Income 54 Consolidated Balance Sheets 55 Consolidated Statements of Shareholders' Equity 56 Consolidated Statements of Cash Flows 57 Notes to Consolidated Financial Statements 58 49 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Walmart Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Walmart Inc. (the Company) as of January 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended January 31, 2025, and the related notes (collectively referred to as the "Consolidated Financial Statements"). In our opinion, the Consolidated Financial Statements present fairly, in all material respects, the financial position of the Company at January 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 14, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the Consolidated Financial Statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates. Contingencies Description of the Matter As described in Note 10 to the Consolidated Financial Statements, at January 31, 2025, the Company is involved in a number of legal proceedings and certain regulatory matters. The Company records a liability for those legal proceedings and regulatory matters when management determines it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses when it is reasonably possible that a material loss may be incurred. In assessing the probability of occurrence and whether an estimate of loss can be reasonably estimated for a particular legal proceeding, management exercises judgment on matters relevant to each proceeding. Auditing management's accounting for, and disclosure of, loss contingencies was complex and highly judgmental as it involved our assessment of the significant judgments made by management when assessing the probability of loss for contingencies or when determining whether an estimate of the loss or range of loss could be made. 50 How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the identification and evaluation of contingencies. For example, we tested controls over the Company's assessment of the likelihood of loss and the Company's determinations regarding the measurement of loss. To test the Company's assessment of the probability of loss or determination of an estimate of loss, or range of loss, among other procedures, we read the minutes of the meetings of the board of directors and committees of the board of directors, reviewed documents provided to the Company by certain outside legal counsel, read letters received directly by us from internal and outside legal counsel, evaluated the current status of contingencies based on discussions with internal and outside legal counsel, and obtained representations from management. We also assessed the adequacy of the related disclosures. /s/ Ernst & Young LLP We have served as the Company's auditor since 1969. Rogers, Arkansas March 14, 2025 51 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Walmart Inc. Opinion on Internal Control Over Financial Reporting We have audited Walmart Inc.'s internal control over financial reporting as of January 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Walmart Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of January 31, 2025, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of January 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended January 31, 2025, and the related notes and our report dated March 14, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Rogers, Arkansas March 14, 2025 52 Walmart Inc. Consolidated Statements of Income Fiscal Years Ended January 31, (Amounts in millions, except per share data) 2025 2024 2023 Revenues: Net sales $ 674,538 $ 642,637 $ 605,881 Membership and other income 6,447 5,488 5,408 Total revenues 680,985 648,125 611,289 Costs and expenses: Cost of sales 511,753 490,142 463,721 Operating, selling, general and administrative expenses 139,884 130,971 127,140 Operating income 29,348 27,012 20,428 Interest: Debt 2,249 2,259 1,787 Finance lease 479 424 341 Interest income ( 483 ) ( 546 ) ( 254 ) Interest, net 2,245 2,137 1,874 Other (gains) and losses 794 3,027 1,538 Income before income taxes 26,309 21,848 17,016 Provision for income taxes 6,152 5,578 5,724 Consolidated net income 20,157 16,270 11,292 Consolidated net (income) loss attributable to noncontrolling interest ( 721 ) ( 759 ) 388 Consolidated net income attributable to Walmart $ 19,436 $ 15,511 $ 11,680 Net income per common share: Basic net income per common share attributable to Walmart $ 2.42 $ 1.92 $ 1.43 Diluted net income per common share attributable to Walmart 2.41 1.91 1.42 Weighted-average common shares outstanding: Basic 8,041 8,077 8,171 Diluted 8,081 8,108 8,202 Dividends declared per common share $ 0.8300 $ 0.7600 $ 0.7467 See accompanying notes. 53 Walmart Inc. Consolidated Statements of Comprehensive Income Fiscal Years Ended January 31, (Amounts in millions) 2025 2024 2023 Consolidated net income $ 20,157 $ 16,270 $ 11,292 Consolidated net (income) loss attributable to noncontrolling interest ( 721 ) ( 759 ) 388 Consolidated net income attributable to Walmart 19,436 15,511 11,680 Other comprehensive income (loss), net of income taxes Currency translation and other ( 2,810 ) 888 ( 1,853 ) Cash flow hedges ( 49 ) 56 ( 203 ) Other comprehensive income (loss), net of income taxes ( 2,859 ) 944 ( 2,056 ) Other comprehensive (income) loss attributable to noncontrolling interest 556 ( 566 ) 404 Other comprehensive income (loss) attributable to Walmart ( 2,303 ) 378 ( 1,652 ) Comprehensive income, net of income taxes 17,298 17,214 9,236 Comprehensive (income) loss attributable to noncontrolling interest ( 165 ) ( 1,325 ) 792 Comprehensive income attributable to Walmart $ 17,133 $ 15,889 $ 10,028 See accompanying notes. 54 Walmart Inc. Consolidated Balance Sheets As of January 31, (Amounts in millions) 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 9,037 $ 9,867 Receivables, net 9,975 8,796 Inventories 56,435 54,892 Prepaid expenses and other 4,011 3,322 Total current assets 79,458 76,877 Property and equipment, net 119,993 110,810 Operating lease right-of-use assets 13,599 13,673 Finance lease right-of-use assets, net 6,112 5,855 Goodwill 28,792 28,113 Other long-term assets 12,869 17,071 Total assets $ 260,823 $ 252,399 LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND SHAREHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 3,068 $ 878 Accounts payable 58,666 56,812 Accrued liabilities 29,345 28,759 Accrued income taxes 608 307 Long-term debt due within one year 2,598 3,447 Operating lease obligations due within one year 1,499 1,487 Finance lease obligations due within one year 800 725 Total current liabilities 96,584 92,415 Long-term debt 33,401 36,132 Long-term operating lease obligations 12,825 12,943 Long-term finance lease obligations 5,923 5,709 Deferred income taxes and other 14,398 14,629 Commitments and contingencies Redeemable noncontrolling interest 271 222 Shareholders' equity: Common stock 802 805 Capital in excess of par value 5,503 4,544 Retained earnings 98,313 89,814 Accumulated other comprehensive loss ( 13,605 ) ( 11,302 ) Total Walmart shareholders' equity 91,013 83,861 Nonredeemable noncontrolling interest 6,408 6,488 Total shareholders' equity 97,421 90,349 Total liabilities, redeemable noncontrolling interest, and shareholders' equity $ 260,823 $ 252,399 See accompanying notes. 55 Walmart Inc. Consolidated Statements of Shareholders' Equity Accumulated Total Capital in Other Walmart Nonredeemable Total (Amounts in millions) Common Stock Excess of Retained Comprehensive Shareholders' Noncontrolling Shareholders' Shares Amount Par Value Earnings Income (Loss) Equity Interest Equity Balances as of February 1, 2022 8,284 $ 828 $ 4,287 $ 86,904 $ ( 8,766 ) $ 83,253 $ 8,638 $ 91,891 Consolidated net income — — — 11,680 — 11,680 ( 388 ) 11,292 Other comprehensive loss, net of income taxes — — — — ( 1,652 ) ( 1,652 ) ( 404 ) ( 2,056 ) Cash dividends declared ($ 0.7467 per share) — — — ( 6,114 ) — ( 6,114 ) — ( 6,114 ) Purchase of Company stock ( 221 ) ( 22 ) ( 518 ) ( 9,326 ) — ( 9,866 ) — ( 9,866 ) Cash dividend declared to noncontrolling interest — — — — — — ( 449 ) ( 449 ) Purchase of noncontrolling interest — — ( 18 ) — ( 1,262 ) ( 1,280 ) ( 493 ) ( 1,773 ) Sale of subsidiary stock — — 48 — — 48 18 66 Other 17 2 631 ( 9 ) — 624 139 763 Balances as of January 31, 2023 8,080 808 4,430 83,135 ( 11,680 ) 76,693 7,061 83,754 Consolidated net income — — — 15,511 — 15,511 774 16,285 Other comprehensive income, net of income taxes — — — — 378 378 566 944 Cash dividends declared ($ 0.7600 per share) — — — ( 6,140 ) — ( 6,140 ) — ( 6,140 ) Purchase of Company stock ( 55 ) ( 6 ) ( 150 ) ( 2,635 ) — ( 2,791 ) — ( 2,791 ) Cash dividend declared to noncontrolling interest — — — — — — ( 776 ) ( 776 ) Purchase of noncontrolling interest — — ( 1,076 ) — — ( 1,076 ) ( 1,367 ) ( 2,443 ) Sale of subsidiary stock — — 562 — — 562 154 716 Other 29 3 778 ( 57 ) — 724 76 800 Balances as of January 31, 2024 8,054 805 4,544 89,814 ( 11,302 ) 83,861 6,488 90,349 Consolidated net income — — — 19,436 — 19,436 766 20,202 Other comprehensive loss, net of income taxes — — — — ( 2,303 ) ( 2,303 ) ( 556 ) ( 2,859 ) Cash dividends declared ($ 0.8300 per share) — — — ( 6,688 ) — ( 6,688 ) — ( 6,688 ) Purchase of Company stock ( 61 ) ( 6 ) ( 230 ) ( 4,241 ) — ( 4,477 ) — ( 4,477 ) Cash dividend declared to noncontrolling interest — — — — — — ( 648 ) ( 648 ) Sale of subsidiary stock — — 169 — — 169 193 362 Other 31 3 1,020 ( 8 ) — 1,015 165 1,180 Balances as of January 31, 2025 8,024 802 5,503 98,313 ( 13,605 ) 91,013 6,408 97,421 See accompanying notes. 56 Walmart Inc. Consolidated Statements of Cash Flows Fiscal Years Ended January 31, (Amounts in millions) 2025 2024 2023 Cash flows from operating activities: Consolidated net income $ 20,157 $ 16,270 $ 11,292 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Depreciation and amortization 12,973 11,853 10,945 Investment (gains) and losses, net 878 3,193 1,683 Deferred income taxes ( 635 ) ( 175 ) 449 Other operating activities 2,889 2,642 1,919 Changes in certain assets and liabilities, net of effects of acquisitions and dispositions: Receivables, net ( 1,106 ) ( 797 ) 240 Inventories ( 2,755 ) 2,017 ( 528 ) Accounts payable 3,228 2,515 ( 1,425 ) Accrued liabilities 379 ( 1,324 ) 4,393 Accrued income taxes 435 ( 468 ) ( 127 ) Net cash provided by operating activities 36,443 35,726 28,841 Cash flows from investing activities: Payments for property and equipment ( 23,783 ) ( 20,606 ) ( 16,857 ) Proceeds from the disposal of property and equipment 432 250 170 Proceeds from disposal of certain strategic investments 4,080 — — Payments for business acquisitions, net of cash acquired ( 1,896 ) ( 9 ) ( 740 ) Other investing activities ( 212 ) ( 922 ) ( 295 ) Net cash used in investing activities ( 21,379 ) ( 21,287 ) ( 17,722 ) Cash flows from financing activities: Net change in short-term borrowings 2,212 512 ( 34 ) Proceeds from issuance of long-term debt — 4,967 5,041 Repayments of long-term debt ( 3,468 ) ( 4,217 ) ( 2,689 ) Dividends paid ( 6,688 ) ( 6,140 ) ( 6,114 ) Purchase of Company stock ( 4,494 ) ( 2,779 ) ( 9,920 ) Dividends paid to noncontrolling interest ( 576 ) ( 763 ) ( 444 ) Purchase of noncontrolling interest — ( 3,462 ) ( 827 ) Sale of subsidiary stock 362 716 66 Other financing activities ( 2,170 ) ( 2,248 ) ( 2,118 ) Net cash used in financing activities ( 14,822 ) ( 13,414 ) ( 17,039 ) Effect of exchange rates on cash, cash equivalents and restricted cash ( 641 ) 69 ( 73 ) Net increase (decrease) in cash, cash equivalents and restricted cash ( 399 ) 1,094 ( 5,993 ) Cash, cash equivalents and restricted cash at beginning of year 9,935 8,841 14,834 Cash, cash equivalents and restricted cash at end of year $ 9,536 $ 9,935 $ 8,841 Supplemental disclosure of cash flow information: Income taxes paid $ 5,884 $ 5,879 $ 3,310 Interest paid 2,739 2,519 2,051 See accompanying notes. 57 Walmart Inc. Notes to Consolidated Financial Statements Note 1. Summary of Significant Accounting Policies General Walmart Inc. ("Walmart" or the "Company") is a people-led, technology-powered omni-channel retailer dedicated to helping people around the world save money and live better by providing the opportunity to shop in both retail stores and through eCommerce. Through innovation, the Company is striving to continuously improve a customer-centric experience that seamlessly integrates eCommerce and retail stores in an omni-channel offering that saves time for its customers. The Company's operations comprise three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S. 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, 2025 ("fiscal 2025"), January 31, 2024 ("fiscal 2024") and January 31, 2023 ("fiscal 2023"). Intercompany accounts and transactions have been eliminated in consolidation. The Company consolidates variable interest entities where it has been determined that the Company is the primary beneficiary of those entities' operations. Investments in common stock or in-substance common stock for which the Company exercises significant influence but does not have control are accounted for under the equity method. These variable interest entities and equity method 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 the month of January 2025 related to the operations consolidated using a lag 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 ("GAAP"). 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. Common Stock Split On February 23, 2024, the Company effected a 3 -for-1 forward split of its common stock and a proportionate increase in the number of authorized shares. All share and per share information, including share based compensation, has been retroactively adjusted to reflect the stock split. The shares of common stock retain a par value of $ 0.10 per share. Accordingly, an amount equal to the par value of the increased shares resulting from the stock split was reclassified from capital in excess of par value to common stock. 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 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 $ 2.3 billion and $ 2.1 billion as of January 31, 2025 and 2024, respectively. The Company's cash balances are held in various locations around the world. Of the Company's $ 9.0 billion and $ 9.9 billion in cash and cash equivalents as of January 31, 2025 and January 31, 2024, approximately 62 % and 60 % were held outside of the U.S., respectively. Cash and cash equivalents held outside of the U.S. are 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. As of January 31, 2025 and 2024, cash and cash equivalents of approximately $ 3.3 billion and $ 3.5 billion, respectively, may not be freely transferable to the U.S. due to local laws, other restrictions or are subject to the approval of the noncontrolling interest shareholders. 58 Receivables Receivables are stated at their carrying values, net of a reserve for credit losses, and are primarily due from the following: customers, which includes pharmacy insurance companies, advertisers, and banks for customer credit, debit cards and electronic transfer transactions that take in excess of seven days to process; suppliers for marketing or incentive programs; governments for income taxes; and real estate transactions. Net receivables from transactions with customers were $ 4.4 billion and $ 3.7 billion as of January 31, 2025 and January 31, 2024, respectively. Inventories The Company utilizes various inventory methods to account for and value its inventories depending upon the nature of the store formats and businesses in each of its segments, resulting in inventories that are recorded at the lower of cost or market or net realizable value, as appropriate. • Walmart U.S. Segment - Inventories are primarily accounted for under the retail inventory method of accounting ("RIM") to determine inventory cost, using the last-in, first-out ("LIFO") valuation method. RIM generally results in inventory being valued at the lower of cost or market as permanent markdowns are immediately recorded as a reduction of the retail value of inventory. • Walmart International Segment – Depending on the store format in each market, inventories are generally accounted for using either the RIM or weighted-average cost method, using the first-in, first-out valuation method. • Sam's Club U.S. Segment - The majority of this segment's inventory is accounted for and valued using the weighted-average cost LIFO method. For those segments that utilize the LIFO method, the Company records an adjustment each quarter, if necessary, for the projected annual effect of inflation or deflation. These estimates are adjusted to actual results determined at year end for inflation or deflation and inventory levels. Property and Equipment Property and equipment are initially recorded 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 expensed 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: Estimated Useful Lives As of January 31, (Dollars in millions) (in Years) 2025 2024 Land N/A $ 19,342 $ 19,562 Buildings and improvements 3 - 40 117,973 111,767 Fixtures and equipment 2 - 30 76,226 72,161 Transportation equipment 3 - 15 2,673 2,979 Construction in progress N/A 15,403 13,390 Property and equipment 231,617 219,859 Accumulated depreciation ( 111,624 ) ( 109,049 ) Property and equipment, net $ 119,993 $ 110,810 Leasehold improvements are depreciated or amortized over the shorter of the estimated useful life of the asset or the remaining expected lease term. Total depreciation and amortization expense for property and equipment, property under finance leases and intangible assets for fiscal 2025, 2024 and 2023 was $ 13.0 billion, $ 11.9 billion and $ 10.9 billion, respectively. Leases For any new or modified lease, the Company, at the inception of the contract, determines whether a contract is or contains a lease. The Company records right-of-use ("ROU") assets and lease obligations for its finance and operating leases, which are initially recognized based on the discounted future lease payments over the term of the lease. If the rate implicit in the Company's leases is not readily determinable, the Company's applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments. Lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company has elected not to recognize ROU asset and lease obligations for its short-term leases, which are defined as leases with an initial term of 12 months or less. For a majority of all classes of underlying assets, the Company has elected to not separate lease from non-lease components. For leases in which the lease and non-lease components have been combined, the variable lease expense includes expenses such as common area maintenance, utilities and repairs and maintenance. 59 Impairment of Long-Lived Assets 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. 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. 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 typically assigned to the reporting unit which consolidates the acquisition. Components within the same reportable segment are aggregated and deemed a single reporting unit if the components have similar economic characteristics. Goodwill and other indefinite-lived acquired intangible assets are 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. Management has performed its evaluation and determined the fair value of each reporting unit is significantly greater than the carrying amount and, accordingly, the Company has not recorded any impairment charges related to goodwill during fiscal 2025, fiscal 2024 or fiscal 2023. The following table reflects goodwill activity, by reportable segment, for fiscal 2025 and 2024: (Amounts in millions) Walmart U.S. Walmart International Sam's Club U.S. Total Balances as of February 1, 2023 $ 3,374 $ 24,479 $ 321 $ 28,174 Changes in currency translation and other ( 10 ) ( 58 ) — ( 68 ) Acquisitions — 7 — 7 Balances as of January 31, 2024 3,364 24,428 321 28,113 Changes in currency translation and other — ( 696 ) — ( 696 ) Acquisitions 1 1,375 — — 1,375 Balances as of January 31, 2025 $ 4,739 $ 23,732 $ 321 $ 28,792 1 Goodwill recorded in fiscal 2025 relates to the acquisition of VIZIO Holding Corp. in December 2024 within the Walmart U.S. segment. Intangible assets are recorded in other long-term assets in the Company's Consolidated Balance Sheets . As of January 31, 2025 and 2024, the Company had $ 4.5 billion and $ 4.1 billion, respectively, in indefinite-lived intangible assets which primarily consists of acquired trade names. There were no significant impairment charges related to intangible assets for fiscal 2025, 2024 or 2023. Fair Value Measurement 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 orderly 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. Refer to Note 8 for more information. Investments Investments in equity securities are recorded in other long-term assets in the Consolidated Balance Sheets. Changes in the fair value of certain equity securities, as well as certain immaterial equity method investments where the Company has elected the fair value option, are measured on a recurring basis (generally using Level 1 and Level 2 inputs in the fair value hierarchy) and recognized within other gains and losses in the Consolidated Statements of Income. These fair value changes, along with certain other immaterial investment activity, resulted in net losses of $ 0.8 billion, $ 3.8 billion and $ 1.7 billion for fiscal 2025, 2024 and 60 2023, respectively, primarily due to net changes in the underlying stock prices of those investments. Refer to Note 8 for details. Equity investments without readily determinable fair values are carried at cost and adjusted for any observable price changes or impairments within other gains and losses in the Consolidated Statements of Income. Investments in debt securities classified as trading are reported at fair value and included in other long-term assets in the Consolidated Balance Sheets, and adjustments in fair value are recorded within other gains and losses in the Consolidated Statements of Income. The Company had debt securities classified as trading of $ 1.2 billion as of both January 31, 2025 and January 31, 2024, the majority of which is mandatorily redeemable in fiscal 2029, related to its retained investment in Asda, the Company's former retail operations in the U.K. The fair value of this investment is primarily estimated (generally using Level 3 inputs in the fair value hierarchy) by discounting the future cash flows over the remaining period until the mandatory redemption date at an appropriate discount rate reflecting Asda’s credit risk. Indemnification Liabilities The Company has provided certain indemnifications in connection with previous divestitures and has recorded indemnification liabilities equal to the estimated fair value of the obligations. As of January 31, 2025 and January 31, 2024, the Company had $ 0.6 billion and $ 0.7 billion, respectively, of certain legal indemnification liabilities recorded within deferred income taxes and other in the Consolidated Balance Sheets. Maximum potential future payments under these indemnities was $ 3.1 billion, based on exchange rates as of January 31, 2025. Supplier Financing Program Obligations The Company has supplier financing programs with financial institutions, in which the Company agrees to pay the financial institution the stated amount of confirmed invoices on the invoice due date for participating suppliers. Participation in these programs is optional and solely up to the supplier, who negotiates the terms of the arrangement directly with the financial institution and may allow early payment. Supplier participation in these programs has no bearing on the Company's amounts due. The payment terms that the Company has with participating suppliers under these programs generally range between 30 and 90 days. The Company does not have an economic interest in a supplier's participation in the program or a direct financial relationship with the financial institution funding the program. The Company is responsible for ensuring that participating financial institutions are paid according to the terms negotiated with the supplier, regardless of whether the supplier elects to receive early payment from the financial institution . The rollforward of the Company's outstanding payment obligations to financial institutions under these programs is as follows: (Amounts in millions) Fiscal 2025 Confirmed obligations outstanding at the beginning of the year $ 5,271 Invoices confirmed during the year 41,335 Confirmed invoices paid during the year ( 40,810 ) Translation and other ( 71 ) Confirmed obligations outstanding at the end of the year $ 5,725 These obligations are generally classified as accounts payable within the Consolidated Balance Sheets. The activity related to these programs is classified as an operating activity within the Consolidated Statements of Cash Flows. Self Insurance Reserves The Company self-insures a number of risks, including, but not limited to, workers' compensation, general liability, auto liability, product liability and certain employee-related healthcare benefits. Standard actuarial procedures and data analysis are used to estimate the liabilities associated with these risks on an undiscounted basis. The recorded liabilities reflect the ultimate cost for claims incurred but not paid and any estimable administrative run-out expenses related to the processing of these outstanding claim payments. On a regular basis, the liabilities are evaluated for appropriateness with claims reserve valuations. To limit exposure to some risks, the Company maintains insurance coverage with varying limits and retentions, including stop-loss insurance coverage for workers' compensation, general liability and auto liability. Refer to Note 5 for the self insurance reserves which are recorded in accrued liabilities in the Company's Consolidated Balance Sheets. 61 Derivatives The Company uses derivatives for hedging 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 derivatives in hedging programs subjects the Company to certain risks, such as market and credit risks. The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Credit risk is monitored through established approval procedures, including setting concentration limits by counterparty, reviewing credit ratings and requiring collateral from the counterparty. The Company enters into derivatives with counterparties rated generally "A-" or better by nationally recognized credit rating agencies. The Company is subject to master netting arrangements which provides set-off and close-out netting of exposures with counterparties, but the Company does not offset derivative assets and liabilities in its Consolidated Balance Sheets. The Company's collateral arrangements require the counterparty in a net liability position in excess of pre-determined thresholds, after considering the effects of netting arrangements, to pledge cash collateral. Cash collateral received from counterparties and cash collateral provided to counterparties under these arrangements was not significant as of January 31, 2025 and 2024. In order to qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge. If a derivative is recorded using hedge accounting, depending on the nature of the hedge, derivative gains and losses are recorded through the same financial statement line item in earnings or are recognized in accumulated other comprehensive loss until the hedged item is recognized in earnings. Derivatives 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. Derivatives 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 derivatives with an unrealized loss are recorded as either current or non-current liabilities, based on maturity date. Refer to Note 8 for the presentation of the Company's derivative assets and liabilities. Fair Value Hedges 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. All interest rate swaps designated as fair value hedges of the related long-term debt meet the shortcut method requirements under GAAP. Accordingly, changes in the fair values of these interest rate swaps are considered to exactly offset changes in the fair value of the underlying long-term debt. These derivatives will mature on dates ranging from September 2028 to September 2031. Cash Flow Hedges The Company is a party to receive fixed-rate, pay fixed-rate cross currency interest rate swaps used to hedge the currency exposure associated with the forecasted payments of principal and interest of certain non-U.S. denominated debt. The Company records changes in the fair value of these swaps in accumulated other comprehensive loss which is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. These derivatives will mature on dates ranging from April 2026 to January 2039. 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 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. 62 Redeemable Noncontrolling Interest Noncontrolling interests that are redeemable outside the Company's control at fixed or determinable prices and dates are presented as temporary equity in the Consolidated Balance Sheets. Redeemable noncontrolling interests are recorded at the greater of the redemption fair value or the carrying value of the noncontrolling interest and adjusted each reporting period for income, loss and any distributions made. Remeasurements to the redemption value of the redeemable noncontrolling interest are recognized in capital in excess of par. The Company has a redeemable noncontrolling interest related to an acquisition in the Walmart U.S. segment as the minority interest owner holds a put option which may require the Company to purchase its interest beginning in December 2027, with annual options thereafter. Revenue Recognition Net Sales The Company recognizes sales revenue, net of sales taxes and estimated sales returns, at the time it sells merchandise or provides services to the customer. eCommerce sales include shipping revenue and are recorded upon delivery to the customer. Estimated sales returns are calculated based on expected returns. Financial, Advertising 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. Membership and Other Income Membership and other income primarily includes membership fee revenue associated with the Company's various membership offerings for customers and members across each reportable segment. Membership fee revenue is recognized over the term of the membership, which is typically 12 months. Membership fee revenue was $ 3.8 billion for fiscal 2025, $ 3.1 billion for fiscal 2024 and $ 2.6 billion for fiscal 2023. Deferred membership fee revenue is included in accrued liabilities in the Company's Consolidated Balance Sheets. Additionally, membership and other income includes items such as rental and tenant income, recycling income and gift card breakage income. Gift Cards Customer purchases of gift cards are not recognized as sales until the card is redeemed and the customer purchases merchandise using the gift card, thus a liability for deferred gift card revenue is recorded within accrued liabilities in the Consolidated Balance Sheets. Refer to Note 5 . Gift cards in the U.S. and some countries do not carry an expiration date; therefore, customers and members can redeem their gift cards for merchandise and services indefinitely. Gift cards in some countries where the Company does business have expiration dates. While gift cards are generally redeemed within 12 months, a certain number of gift cards, both with and without expiration dates, will not be fully redeemed. Management estimates unredeemed balances and recognizes gift card breakage income for these amounts in membership and other income in the Company's Consolidated Statements of Income over the expected redemption period. Cost of Sales Cost of sales includes costs of merchandise sold and services performed; costs of transporting merchandise to the Company's distribution facilities, stores, clubs, and customers; and also includes warehousing costs for the Sam's Club U.S. segment and import distribution centers. Cost of sales is reduced by supplier payments, except in certain situations as described below. 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, certain advertising arrangements and supplier-specific fixtures. Payments from suppliers are accounted for as a reduction of cost of sales and recognized in the Company's Consolidated Statements of Income when the related inventory is sold, except in situations when the payment is in exchange for a distinct good or service or a reimbursement of specific, incremental and identifiable costs. 63 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), which comprise substantially all labor-related, depreciation and amortization, maintenance and repairs, utilities, and other general operating costs incurred in stores, clubs and other facilities. 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 only includes a portion 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. As a result, the Company’s cost of sales and operating, selling, general and administrative expenses for each of its reportable segments may not be comparable to those of other retailers. Advertising Costs Advertising costs are expensed as incurred, and consist primarily of digital, television and print advertisements that are recorded in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income. Advertising costs were $ 5.1 billion, $ 4.4 billion and $ 4.1 billion for fiscal 2025, 2024 and 2023, 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 loss. The Company's Consolidated Statements of Income 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. Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company adopted the ASU for the fiscal year ended January 31, 2025 on a retrospective basis for all prior periods presented in the financial statements, which includes disclosure of cost of sales and operating, selling, general and administrative expenses by segment. See Note 12 . In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which expands the requirements for income tax disclosures in order to provide greater transparency. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied prospectively, although optional retrospective application is permitted. Management intends to adopt the amendments prospectively for the fiscal year ending January 31, 2026 and is currently evaluating this ASU to determine its impact on the Company's disclosures. The amendments only impact disclosures and are not expected to have an impact on the Company's financial condition and results of operations. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires incremental disclosures about specific expense categories, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and the amendments may be applied either prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company's disclosures. The amendments only impact disclosures and are not expected to have an impact on the Company's financial condition and results of operations. Note 2. Net Income Per Common Share Basic net income per common share attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period. Diluted net income per common share attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period adjusted for the dilutive effect of share-based awards as determined under the treasury stock method. The Company did not have significant share-based awards outstanding that were antidilutive and not included in the calculation of diluted net income per common share attributable to Walmart for fiscal 2025, 2024 and 2023. 64 The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted net income per common share attributable to Walmart: Fiscal Years Ended January 31, (Amounts in millions, except per share data) 2025 2024 2023 Numerator Consolidated net income $ 20,157 $ 16,270 $ 11,292 Consolidated net (income) loss attributable to noncontrolling interest ( 721 ) ( 759 ) 388 Consolidated net income attributable to Walmart $ 19,436 $ 15,511 $ 11,680 Denominator Weighted-average common shares outstanding, basic 8,041 8,077 8,171 Dilutive impact of stock options and other share-based awards 40 31 31 Weighted-average common shares outstanding, diluted 8,081 8,108 8,202 Net income per common share attributable to Walmart Basic $ 2.42 $ 1.92 $ 1.43 Diluted 2.41 1.91 1.42 Note 3. Shareholders' Equity The total authorized shares of $ 0.10 par value common stock is 33.0 billion, of which 8.0 billion and 8.1 billion were issued and outstanding as of January 31, 2025 and 2024, respectively. The total authorized shares of $ 0.10 par value preferred stock is 0.1 billion; none of which were issued or outstanding for any period presented. Purchases and Sales of Subsidiary Stock During fiscal 2024, the Company paid $ 3.5 billion to acquire shares from certain Flipkart noncontrolling interest holders and settle the liability to former noncontrolling interest holders of PhonePe. The Company's ownership of Flipkart increased from approximately 75 % as of January 31, 2023 to approximately 85 % as of January 31, 2024. Also during fiscal 2024, the Company received $ 0.7 billion related to new rounds of equity funding for the Company's majority owned PhonePe subsidiary, which decreased the Company's ownership from approximately 89 % as of January 31, 2023 to approximately 84 % as of January 31, 2024. During fiscal 2023, the Company completed a $ 0.4 billion buyout of the noncontrolling interest shareholders of the Company's Massmart subsidiary. This transaction increased the Company's ownership in Massmart from approximately 53 % to 100 %. Additionally, the Company completed a $ 0.4 billion acquisition of Alert Innovation, which was previously consolidated as a variable interest entity, and resulted in the Company becoming a 100 % owner. This entity was subsequently sold and deconsolidated in fiscal 2025. Also during fiscal 2023, the Company increased its ownership in PhonePe from approximately 76 % to approximately 89 % as part of the separation from the Company's majority-owned Flipkart subsidiary. In consideration for the transaction, the Company initially recorded a liability to noncontrolling interest holders of $ 0.9 billion within accrued liabilities in the Company's Consolidated Balance Sheet as of January 31, 2023, which was paid during fiscal 2024. Share-Based Compensation The Company has awarded share-based compensation to associates and nonemployee directors of the Company. The compensation expense recognized for all stock incentive plans, including expense associated with plans of the Company's consolidated subsidiaries granted in the subsidiaries' respective stock, was $ 2.8 billion, $ 2.1 billion and $ 1.6 billion for fiscal 2025, 2024 and 2023, respectively. Share-based compensation expense is generally 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 $ 0.7 billion, $ 0.5 billion and $ 0.4 billion for fiscal 2025, 2024 and 2023, respectively. The following table summarizes the Company's share-based compensation expense by award type for all plans: Fiscal Years Ended January 31, (Amounts in millions) 2025 2024 2023 Restricted stock units $ 1,909 $ 1,258 $ 927 Restricted stock and performance-based restricted stock units 632 609 444 Other 228 226 207 Share-based compensation expense $ 2,769 $ 2,093 $ 1,578 The Walmart Inc. Stock Incentive Plan of 2015 (the "Plan"), as subsequently amended and restated, was established to grant stock options, restricted (non-vested) stock, restricted stock units, performance share units and other equity compensation awards for which 780 million shares of Walmart common stock issued or to be issued under the Plan have been registered 65 under the Securities Act of 1933. 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 Units. Restricted stock units provide rights to Company stock after a specified service period. Beginning in fiscal 2023, restricted stock units generally vest at a rate of approximately 8 % each quarter over a three year period from the date of grant. For grants made from fiscal 2020 through fiscal 2022, restricted stock units generally vest at a rate of 25 % each year over a four year period from the date of the grant. 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 2025, 2024 and 2023 was 2.0 %, 2.2 % and 2.3 %, respectively. • Restricted Stock and Performance-based Restricted Stock Units. Restricted stock awards are for shares that vest based on the passage of time and include restrictions related to employment. Performance-based restricted stock units generally vest based on a one-year performance period followed by a two-year vesting period based on the passage of time. Vesting conditions during the performance period are based on achieving pre-established financial goals for metrics related to growth and returns and generally range from 0 % to 150 % of the original award amount. Vesting periods for restricted stock are generally between one month and three years . Vesting periods for performance-based restricted stock units are generally between one and three years . Restricted stock and performance-based restricted stock units may be settled or, in certain circumstances, deferred 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-based restricted stock 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 if it is probable that performance conditions will be achieved. The weighted-average discount for the dividend yield used to determine the fair value of performance-based restricted stock units in fiscal 2025, 2024 and 2023 was 3.2 %, 3.3 % and 3.3 %, respectively. In addition to the Plan, certain of the Company's subsidiaries have share-based compensation plans for associates under which options to acquire their own common shares are issued. Share-based compensation expense associated with these plans is included in the Other line in the table above. The following table shows the activity for restricted stock units and restricted stock and performance-based restricted stock units during fiscal 2025: Restricted Stock Units Restricted Stock and Performance-based 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 as of February 1, 2024 49,191 $ 46.79 23,103 $ 48.09 Granted 46,054 60.29 9,887 63.97 Adjustment for performance achievement (1) — — 3,661 47.35 Vested/exercised ( 36,974 ) 49.99 ( 12,353 ) 48.62 Forfeited ( 6,513 ) 53.15 ( 3,338 ) 49.75 Outstanding as of January 31, 2025 51,758 $ 55.72 20,960 $ 54.88 (1) Represents the adjustment to previously granted performance share units for performance achievement. The following table includes additional information related to restricted stock units and restricted stock and performance-based restricted stock units: Fiscal Years Ended January 31, (Amounts in millions, except years) 2025 2024 2023 Fair value of restricted stock units vested $ 1,848 $ 1,345 $ 931 Fair value of restricted stock and performance-based restricted stock units vested 602 477 390 Unrecognized compensation cost for restricted stock units 2,243 1,686 1,323 Unrecognized compensation cost for restricted stock and performance-based restricted stock units 669 656 548 Weighted average remaining period to expense for restricted stock units (years) 0.9 0.9 1.0 Weighted average remaining period to expense for restricted stock and performance-based restricted stock units (years) 1.3 1.3 1.4 66 As of January 31, 2025, the Company also has approximately $ 3 billion in unrecognized compensation cost (based on grant-date fair value) primarily associated with share-based compensation plans of certain subsidiaries which contain performance or other conditions including vesting upon an initial public offering. If such conditions are ultimately satisfied, unrecognized compensation cost would be recognized in the applicable reporting period. Share Repurchase Program From time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Company's Board of Directors. All repurchases made during fiscal 2025 were made under the current $ 20.0 billion share repurchase program approved in November 2022, which has no expiration date or other restrictions limiting the period over which the Company can make repurchases. As of January 31, 2025 authorization for $ 12.0 billion of share repurchases remained under the share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status. The Company regularly reviews share repurchase activity and considers several factors in determining when to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings, results of operations and the market price of the Company's common stock. The following table provides, on a settlement date basis, the number of shares repurchased, average price paid per share and total amount paid for share repurchases for fiscal 2025, 2024 and 2023: Fiscal Years Ended January 31, (Amounts in millions, except per share data) 2025 2024 2023 Total number of shares repurchased 61.9 54.6 221.8 Average price paid per share $ 72.72 $ 50.87 $ 44.72 Total cash paid for share repurchases $ 4,494 $ 2,779 $ 9,920 Note 4. Accumulated Other Comprehensive Loss The following table provides the changes in the composition of total accumulated other comprehensive loss for fiscal 2025, 2024 and 2023: (Amounts in millions and net of immaterial income taxes) Currency Translation and Other Cash Flow Hedges Total Balances as of February 1, 2022 $ ( 8,018 ) $ ( 748 ) $ ( 8,766 ) Other comprehensive loss before reclassifications, net ( 1,140 ) ( 571 ) ( 1,711 ) Return of currency translation to parent (1) ( 1,262 ) — ( 1,262 ) Reclassifications to income, net ( 309 ) 368 59 Balances as of January 31, 2023 ( 10,729 ) ( 951 ) ( 11,680 ) Other comprehensive income (loss) before reclassifications, net 322 ( 8 ) 314 Reclassifications to income, net — 64 64 Balances as of January 31, 2024 ( 10,407 ) ( 895 ) ( 11,302 ) Other comprehensive loss before reclassifications, net ( 2,161 ) ( 198 ) ( 2,359 ) Reclassifications to income, net ( 93 ) 149 56 Balances as of January 31, 2025 $ ( 12,661 ) $ ( 944 ) $ ( 13,605 ) (1) Upon closing of the noncontrolling interest shareholder buyout of the Company's Massmart subsidiary during the fourth quarter of fiscal 2023, the cumulative amount of currency translation was reallocated from the Company's noncontrolling interest back to the Company. Refer to Note 3 . Amounts reclassified from accumulated other comprehensive loss for cash flow hedges are generally recorded in interest, net, in the Company's Consolidated Statements of Income. Amounts reclassified related to the cumulative translation for settlements of foreign-denominated bonds and associated cross-currency swaps are recorded in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income. 67 Note 5. Accrued Liabilities The Company's accrued liabilities consist of the following as of January 31, 2025 and 2024: January 31, (Amounts in millions) 2025 2024 Accrued wages and benefits (1) 7,897 8,590 Self-insurance (2) 4,976 4,916 Accrued non-income taxes (3) 3,503 3,459 Deferred gift card revenue 2,755 2,664 Other (4) 10,214 9,130 Total accrued liabilities $ 29,345 $ 28,759 (1) Accrued wages and benefits include accrued wages, salaries, vacation, bonuses and other incentive plans. (2) Self-insurance consists of insurance-related liabilities, such as workers' compensation, general liability, auto liability, product liability and certain employee-related healthcare benefits. (3) Accrued non-income taxes include accrued payroll, property, value-added, sales and miscellaneous other taxes. (4) Other accrued liabilities includes items such as deferred membership revenue, interest, supply chain, advertising, and maintenance and utilities. Note 6. Short-term Borrowings and Long-term Debt Short-term borrowings consist of commercial paper and lines of credit. Short-term borrowings as of January 31, 2025 and 2024 were $ 3.1 billion and $ 0.9 billion, respectively, with weighted-average interest rates of 5.3 % and 7.7 %, respectively. The Company has various committed lines of credit in the U.S. to support its commercial paper program which are summarized in the following table: January 31, 2025 January 31, 2024 (Amounts in millions) Available Drawn Undrawn Available Drawn Undrawn Five -year credit facility (1) $ 5,000 $ — $ 5,000 $ 5,000 $ — $ 5,000 364 -day revolving credit facility (1) 10,000 — 10,000 10,000 — 10,000 Total $ 15,000 $ — $ 15,000 $ 15,000 $ — $ 15,000 (1) In April 2024, the Company renewed and extended its existing 364 -day revolving credit facility as well as its five year credit facility. The committed lines of credit in the table above mature in April 2025 and April 2029, carry interest rates of the Secured Overnight Financing Rate plus 55 basis points, and incur commitment fees ranging between 1.5 and 4.0 basis points. In conjunction with the committed 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. Additionally, the Company has syndicated and fronted letters of credit available which totaled $ 2.1 billion as of January 31, 2025 and 2024, of which $ 1.5 billion and $ 1.7 billion was drawn as of January 31, 2025 and 2024, respectively. The Company's long-term debt, which includes the fair value instruments further discussed in Note 8 , consists of the following as of January 31, 2025 and 2024: January 31, 2025 January 31, 2024 (Amounts in millions) Maturity Dates By Fiscal Year Amount Average Rate (1) Amount Average Rate (1) Unsecured fixed-rate debt U.S. dollar denominated 2026 - 2054 $ 31,406 3.8 % $ 34,527 3.7 % Euro denominated 2027 - 2030 1,715 4.0 % 1,789 4.0 % Sterling denominated 2031 - 2039 3,336 5.4 % 3,412 5.4 % Yen denominated 2028 389 0.5 % 677 0.4 % Total unsecured fixed-rate debt 36,846 40,405 Total other (2) ( 847 ) ( 826 ) Total debt 35,999 39,579 Less amounts due within one year ( 2,598 ) ( 3,447 ) Long-term debt $ 33,401 $ 36,132 (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. (2) Includes deferred loan costs, discounts, fair value hedges, foreign-held debt and secured debt. 68 Annual maturities of long-term debt during the next five years and thereafter are as follows: (Amounts in millions) Annual Fiscal Year Maturities 2026 $ 2,598 2027 3,451 2028 1,741 2029 3,340 2030 1,955 Thereafter 22,914 Total $ 35,999 Debt Issuances There were no long-term debt issuances in fiscal 2025. Information on significant long-term debt issued during fiscal 2024, for general corporate purposes, is as follows: (Amounts in millions) Issue Date Principal Amount Maturity Date Fixed vs. Floating Interest Rate Net Proceeds April 18, 2023 $ 750 April 15, 2026 Fixed 4.000 % $ 748 April 18, 2023 $ 750 April 15, 2028 Fixed 3.900 % 746 April 18, 2023 $ 500 April 15, 2030 Fixed 4.000 % 497 April 18, 2023 $ 1,500 April 15, 2033 Fixed 4.100 % 1,491 April 18, 2023 $ 1,500 April 15, 2053 Fixed 4.500 % 1,485 Total $ 4,967 These issuances are senior, unsecured notes which rank equally with all other senior, unsecured debt obligations of the Company, and are not convertible or exchangeable. These issuances do not contain any financial covenants which restrict the Company's ability to pay dividends or repurchase Company stock. Maturities The following tables provide details of significant long-term debt repayments during fiscal 2025 and 2024, respectively: (Amounts in millions) Maturity Date Principal Amount Fixed vs. Floating Interest Rate Repayment April 22, 2024 $ 1,500 Fixed 3.300 % $ 1,500 July 8, 2024 $ 990 Fixed 2.850 % 990 July 18, 2024 ¥ 40,000 Fixed 0.298 % 253 December 15, 2024 $ 630 Fixed 2.650 % 630 Total repayment of matured debt $ 3,373 (Amounts in millions) Maturity Date Principal Amount Fixed vs. Floating Interest Rate Repayment April 11, 2023 $ 1,750 Fixed 2.550 % $ 1,750 June 26, 2023 $ 2,280 Fixed 3.400 % 2,280 Total repayment of matured debt $ 4,030 Note 7. Leases The Company leases certain retail locations, distribution and fulfillment centers, warehouses, office spaces, land and equipment throughout the U.S. and internationally. The Company's lease costs recognized in the Consolidated Statements of Income consist of the following: Fiscal years ended January 31, (Amounts in millions) 2025 2024 2023 Operating lease cost $ 2,347 $ 2,277 $ 2,306 Finance lease cost: Amortization of right-of-use assets 891 755 596 Interest on lease obligations 381 326 256 Variable lease cost 1,145 1,082 899 69 Other lease information is as follows: Fiscal years ended January 31, (Amounts in millions) 2025 2024 2023 Cash paid for amounts included in measurement of lease obligations: Operating cash flows from operating leases $ 2,390 2,273 2,280 Operating cash flows from finance leases 375 315 248 Financing cash flows from finance leases 908 1,055 563 Assets obtained in exchange for operating lease obligations 1,974 1,514 1,714 Assets obtained in exchange for finance lease obligations 1,455 1,572 1,226 As of January 31, 2025 2024 Weighted-average remaining lease term - operating leases 11.3 years 11.7 years Weighted-average remaining lease term - finance leases 11.7 years 12.4 years Weighted-average discount rate - operating leases 6.5 % 6.4 % Weighted-average discount rate - finance leases 6.7 % 6.8 % The aggregate annual lease obligations at January 31, 2025, are as follows: (Amounts in millions) Fiscal Year Operating Leases Finance Leases 2026 $ 2,160 $ 1,153 2027 2,111 1,086 2028 1,986 987 2029 1,835 808 2030 1,674 661 Thereafter 10,837 5,843 Total undiscounted lease obligations 20,603 10,538 Less imputed interest ( 6,279 ) ( 3,815 ) Net lease obligations $ 14,324 $ 6,723 Note 8. Fair Value Measurements Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are: • Level 1: observable inputs such as quoted prices in active markets; • Level 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and • Level 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions. As described in Note 1 , the Company measures the fair value of certain equity investments, including certain immaterial equity method investments where the Company has elected the fair value option, on a recurring basis within other long-term assets in the accompanying Consolidated Balance Sheets. The amounts of gains and losses included in earnings from fair value changes for these investments are recognized within other gains and losses in the Consolidated Statements of Income. The fair value of these investments is as follows: (Amounts in millions) Fair Value as of January 31, 2025 Fair Value as of January 31, 2024 Equity investments measured using Level 1 inputs $ 959 $ 2,835 Equity investments measured using Level 2 inputs 2,082 4,414 Total $ 3,041 $ 7,249 The fair value of these investments decreased $ 4.2 billion during fiscal 2025, primarily due to the sale of the Company's investment in JD.com in August 2024, as well as gains and losses resulting from net changes in the underlying stock prices of the investments, along with certain other immaterial investment activity. The fair value of these investments decreased $ 3.4 billion during fiscal 2024 primarily due to gains and losses resulting from net changes in the underlying stock prices, along with certain other immaterial investment activity. Sale of Investment In August 2024, the Company sold its investment in JD.com for net proceeds of approximately $ 3.6 billion and recorded a realized loss of $ 0.3 billion within other gains and losses. 70 Derivatives The Company also has derivatives recorded at fair value. Derivative fair values are the estimated amounts the Company would receive or pay upon termination of the related derivative agreements as of the reporting dates. The fair values have been measured using the income approach and Level 2 inputs, which include the relevant interest rate and foreign currency forward curves. As of January 31, 2025 and January 31, 2024, the notional amounts and fair values of these derivatives were as follows: January 31, 2025 January 31, 2024 (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 $ 4,771 $ ( 611 ) (1) $ 6,271 $ ( 654 ) (1) Receive fixed-rate, pay fixed-rate cross-currency swaps designated as cash flow hedges 5,452 ( 1,388 ) (1) 5,879 ( 1,302 ) (1) Total $ 10,223 $ ( 1,999 ) $ 12,150 $ ( 1,956 ) (1) Primarily classified in deferred income taxes and other within the Company's Consolidated Balance Sheets. Nonrecurring Fair Value Measurements In addition to assets and liabilities 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 have any material assets or liabilities resulting in nonrecurring fair value measurements as of January 31, 2025 and January 31, 2024. Other Fair Value Disclosures The Company records cash and cash equivalents, restricted cash and short-term borrowings at cost. The carrying values of these instruments approximate their fair value due to their short-term maturities. The Company's long-term debt is also recorded at cost. The fair value is estimated using Level 2 inputs based on observable prices of identical instruments in less active markets. The carrying value and fair value of the Company's long-term debt as of January 31, 2025 and 2024, are as follows: January 31, 2025 January 31, 2024 (Amounts in millions) Carrying Value Fair Value Carrying Value Fair Value Long-term debt, including amounts due within one year $ 35,999 $ 33,790 $ 39,579 $ 38,431 Note 9. Taxes The components of income before income taxes are as follows: Fiscal Years Ended January 31, (Amounts in millions) 2025 2024 2023 U.S. $ 18,571 $ 20,092 $ 15,089 Non-U.S. 7,738 1,756 1,927 Total income before income taxes $ 26,309 $ 21,848 $ 17,016 A summary of the provision for income taxes is as follows: Fiscal Years Ended January 31, (Amounts in millions) 2025 2024 2023 Current: U.S. federal $ 3,478 $ 3,215 $ 2,030 U.S. state and local 886 762 610 International 2,451 1,772 2,654 Total current tax provision 6,815 5,749 5,294 Deferred: U.S. federal ( 214 ) ( 438 ) 608 U.S. state and local 30 141 119 International ( 479 ) 126 ( 297 ) Total deferred tax expense (benefit) ( 663 ) ( 171 ) 430 Total provision for income taxes $ 6,152 $ 5,578 $ 5,724 71 Effective Income Tax Rate Reconciliation A reconciliation of the significant differences between the U.S. statutory tax rate and the effective income tax rate on pre-tax income from continuing operations is as follows: Fiscal Years Ended January 31, 2025 2024 2023 U.S. statutory tax rate 21.0 % 21.0 % 21.0 % U.S. state income taxes, net of federal income tax benefit 2.8 % 3.0 % 3.1 % Income taxed outside the U.S. 1.3 % 0.1 % 1.1 % Separation, disposal and wind-down of certain business operations — % — % 6.3 % Valuation allowance 0.4 % 1.2 % 1.7 % Net impact of repatriated international earnings ( 0.6 ) % ( 0.4 ) % ( 0.4 ) % Federal tax credits ( 1.4 ) % ( 1.5 ) % ( 1.3 ) % Change in unrecognized tax benefits 0.3 % 0.6 % 0.3 % Other, net ( 0.4 ) % 1.5 % 1.8 % Effective income tax rate 23.4 % 25.5 % 33.6 % Deferred Taxes The significant components of the Company's deferred tax account balances are as follows: January 31, (Amounts in millions) 2025 2024 Deferred tax assets: Loss and tax credit carryforwards $ 7,539 $ 7,136 Accrued liabilities 3,009 3,066 Share-based compensation 263 238 Lease obligations 4,611 4,831 Other 1,076 1,124 Total deferred tax assets 16,498 16,395 Valuation allowances ( 7,405 ) ( 7,485 ) Deferred tax assets, net of valuation allowances 9,093 8,910 Deferred tax liabilities: Property and equipment 4,303 4,813 Acquired intangibles 1,096 898 Inventory 3,336 3,035 Lease right of use assets 4,816 4,941 Mark-to-market investments 353 322 Other 460 486 Total deferred tax liabilities 14,364 14,495 Net deferred tax liabilities $ 5,271 $ 5,585 The deferred taxes noted above are classified as follows in the Company's Consolidated Balance Sheets: January 31, (Amounts in millions) 2025 2024 Balance Sheet classification Assets: Other long-term assets $ 1,748 $ 1,663 Liabilities: Deferred income taxes and other 7,019 7,248 Net deferred tax liabilities $ 5,271 $ 5,585 Net Operating Losses, Tax Credit Carryforwards and Valuation Allowances As of January 31, 2025, the Company's net operating loss and capital loss carryforwards totaled approximately $ 32.4 billion. Of these carryforwards, approximately $ 18.5 billion will expire, if not utilized, in various years through 2045. The remaining carryforwards have no expiration. The realizability 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 the Company does not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is generally established. To the extent that a valuation 72 allowance was established and it is subsequently determined that it is more likely than not that the deferred tax assets will be recovered, the change in the valuation allowance is recognized in the Consolidated Statements of Income. The Company had valuation allowances of approximately $ 7.4 billion and $ 7.5 billion as of January 31, 2025 and 2024, respectively, on deferred tax assets associated primarily with the net operating loss carryforwards. 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, 2025 and 2024, the amount of gross unrecognized tax benefits related to continuing operations was $ 3.8 billion and $ 3.5 billion, respectively. The amount of unrecognized tax benefits that would affect the Company's effective income tax rate was $ 2.0 billion and $ 1.7 billion as of January 31, 2025 and 2024, respectively. A reconciliation of gross unrecognized tax benefits from continuing operations is as follows: Fiscal Years Ended January 31, (Amounts in millions) 2025 2024 2023 Gross unrecognized tax benefits, beginning of year $ 3,540 $ 3,307 $ 3,245 Increases related to prior year tax positions 445 336 79 Decreases related to prior year tax positions ( 228 ) ( 74 ) ( 248 ) Increases related to current year tax positions 93 102 357 Settlements during the period ( 77 ) ( 102 ) ( 89 ) Lapse in statutes of limitations ( 16 ) ( 29 ) ( 37 ) Gross unrecognized tax benefits, end of year $ 3,757 $ 3,540 $ 3,307 The Company classifies interest and penalties related to uncertain tax benefits as interest expense and as operating, selling, general and administrative expenses, respectively. Interest expense and penalties related to these positions were immaterial for fiscal 2025, 2024 and 2023. During the next twelve months, it is reasonably possible that tax audit resolutions could reduce unrecognized tax benefits by an immaterial amount, either because the tax positions are sustained on audit or because the Company agrees to their disallowance. The Company does not expect any change to have a material impact to its Consolidated Financial Statements. The Company remains subject to income tax examinations for its U.S. federal income taxes generally for fiscal 2018 through 2024. The Company also remains subject to income tax examinations for international income taxes for fiscal 2013 through 2024, and for U.S. state and local income taxes generally for the fiscal years ended 2018 through 2024. With few exceptions, the Company is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before fiscal 2013. Other Taxes The Company is subject to tax examinations for value added, sales-based, payroll and other non-income taxes. A number of these examinations are ongoing in various jurisdictions. In certain cases, the Company has received assessments and judgments from the respective taxing authorities in connection with these examinations. Unless otherwise indicated, the possible losses or range of possible losses associated with these matters are individually immaterial, but a group of related matters, if decided adversely to the Company, could result in a liability material to the Company's Consolidated Financial Statements. Note 10. Contingencies Legal Proceedings The Company is involved in a number of legal proceedings and certain regulatory matters. The Company records a liability for those legal proceedings and regulatory matters when it determines it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses when it is reasonably possible that a material loss may be incurred. From time to time, the Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders. Unless stated otherwise, the matters discussed below, if decided adversely to or settled by the Company, individually or in the aggregate, may result in a liability material to the Company's financial position, results of operations or cash flows. The Company can provide no assurance as to the scope and outcome of these matters and cannot reasonably estimate any loss or range of loss, beyond the amounts accrued, if any, that may arise from these matters. 73 Settlement of Certain Opioid-Related Matters The Company entered into settlement agreements with all 50 states, the District of Columbia, Puerto Rico, three U.S. territories, and the vast majority of eligible political subdivisions and federally recognized Native American tribes to resolve opioid-related claims against the Company. In fiscal year 2023, the Company accrued a liability of approximately $ 3.3 billion for these settlements, which include amounts for remediation of alleged harms, attorneys' fees, and costs. As of January 31, 2025, all of the accrued liability has been paid. Remaining eligible political subdivisions and federally recognized Native American tribes have until July 15, 2025 and February 24, 2026, respectively, to join these settlements. The Company will owe no additional funds for any eligible political subdivision or federally recognized Native American tribe that elects to join the settlement. Ongoing Opioid-Related Litigation The Company will continue to vigorously defend against any opioid-related matters not settled or otherwise resolved, including, but not limited to, each of the matters described below; any other actions filed by healthcare providers, individuals, and third-party payers; and any action filed by a political subdivision or Native American tribe that elects not to join the settlement described above. Accordingly, the Company has not accrued a liability for these opioid-related matters nor can the Company reasonably estimate any loss or range of loss that may arise from these matters. The Company can provide no assurance as to the scope and outcome of any of the opioid-related matters and no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected. Opioid Multidistrict Litigation; Other Opioid-Related Matters in the U.S. and Canada . In December 2017, the United States Judicial Panel on Multidistrict Litigation consolidated numerous lawsuits filed against a wide array of defendants by various plaintiffs, including counties, cities, healthcare providers, Native American tribes, individuals and third-party payers, asserting claims generally concerning the impacts of widespread opioid abuse. The consolidated multidistrict litigation is entitled In re National Prescription Opiate Litigation (MDL No. 2804) (the "MDL") and is pending in the U.S. District Court for the Northern District of Ohio. The Company is named as a defendant in some cases included in the MDL. A trial involving claims brought by two counties against certain defendants, including the Company, in the MDL resulted in a judgment on August 17, 2022 that ordered all three defendants, including the Company, to pay an aggregate amount of approximately $ 0.7 billion over 15 years, on a joint and several liability basis, and granted the plaintiffs injunctive relief. The monetary aspect of the judgment was stayed pending appeal, and the injunctive aspect of the judgment went into effect on February 20, 2023, which did not materially impact the Company's operations. The Company filed an appeal with the Sixth Circuit Court of Appeals, which issued an order certifying certain questions in the appeal for review by the Supreme Court of Ohio. On December 10, 2024, the Supreme Court of Ohio issued an order certifying the law and holding that the Ohio Product Liability Act bars all common law public nuisance claims arising from the sale of a product. On January 31, 2025, the Sixth Circuit Court of Appeals entered an order vacating the approximately $ 0.7 billion judgment, dissolving the injunction, and remanding the case back to the MDL for further proceedings. Additional opioid-related cases against the Company remain pending in the MDL and in state and federal courts. The plaintiffs include healthcare providers, third-party payers, individuals and others and seek compensatory and punitive damages and injunctive relief, including abatement. Four cases brought by third-party payers and one case brought by a hospital have been selected as bellwether cases to proceed through discovery in the MDL, and the MDL Court may designate additional bellwether cases in the future. The Florida Health Sciences Center case pending in state court in Florida asserts claims on behalf of several hospital systems against the Company and other defendants, and this matter is scheduled for jury trial beginning on September 18, 2025. The Company has been responding to subpoenas, information requests, and investigations from governmental entities related to nationwide controlled substance dispensing and distribution practices involving opioids. Wal-Mart Canada Corp. and certain other subsidiaries of the Company have been named as defendants in two putative class action complaints filed in Canada related to distribution practices involving opioids. These matters remain pending. Department of Justice Opioid Civil Litigation. On December 22, 2020, the U.S. Department of Justice (the "DOJ") filed a civil complaint in the U.S. District Court for the District of Delaware alleging that the Company unlawfully dispensed controlled substances from its pharmacies and unlawfully distributed controlled substances to those pharmacies. The complaint alleges that this conduct resulted in violations of the Controlled Substances Act. The DOJ is seeking civil penalties and injunctive relief. On March 11, 2024, the Court granted in-part Walmart's motion to dismiss by dismissing the entirety of the DOJ's claims related to distribution and dismissing the DOJ's claims arising under one of the DOJ's two dispensing liability theories. The DOJ's claims arising under its other dispensing liability theory remain pending. Trial is scheduled for November 2027. Opioid-Related Securities Class Actions. The Company is the subject of two securities class actions alleging violations of the federal securities laws regarding the Company's disclosures with respect to opioids purportedly on behalf of a class of investors who acquired Walmart stock from March 31, 2017 through December 22, 2020. Those actions were filed in the U.S. District Court for the District of Delaware in 2021 and later consolidated. On April 8, 2024, the Court granted the Company's motion to dismiss these actions. On April 29, 2024, the plaintiffs appealed to the Third Circuit Court of Appeals, where the matter remains pending. 74 Opioid-Related Shareholder Derivative Litigation. Three shareholders of the Company filed a derivative action in the Delaware Court of Chancery alleging that certain current and former directors and officers breached their fiduciary duties by failing to adequately oversee the Company's distribution and dispensing of prescription opioids. This action was entitled Ontario Provincial Council of Carpenters' Pension Trust Fund, et al. v. Walton, et al. , Delaware Court of Chancery, Case No. 2021-0827-JTL ("Ontario Action"). Other shareholders of the Company filed two derivative actions alleging that certain current and former directors and officers breached fiduciary duties and violated federal securities laws in connection with the Company's distribution and dispensing of prescription opioids. Those actions were entitled Abt v. Alvarez, et al. , U.S. District Court for the District of Delaware, Case No. 21-cv-00172-CFC and Nguyen v. McMillon, et al. , U.S. District Court for the District of Delaware, Case No. 21-cv-00551-CFC (collectively with the Ontario Action, the "Derivative Actions"). On May 5, 2023, the Walmart Board of Directors adopted resolutions creating a special litigation committee ("SLC") to investigate, review, and analyze the facts and circumstances surrounding the claims and allegations in the Derivative Actions and determine whether the prosecution of such claims is in Walmart's best interest. The Delaware Court of Chancery entered a final order and judgment on December 20, 2024, granting approval to a settlement of the Derivative Actions. Pursuant to this order and judgment (i) insurance carriers funded a $ 123 million settlement, of which $ 24.6 million was awarded to plaintiffs' counsel for attorneys' fees and the balance was awarded to the Company; and (ii) the Company agreed to maintain certain corporate governance practices for a period of at least five years . The settlement does not include any admission of liability, and the defendants expressly deny any wrongdoing. The Company received settlement proceeds of approximately $ 99 million on December 24, 2024 and recorded it as a reduction to operating, selling, general, and administrative expense. The Abt and Nguyen actions were dismissed on January 16, 2025. False Claims Act Litigation. On August 23, 2019, a qui tam action was filed in the U.S. District Court for the District of New Mexico. The action was partially unsealed on April 30, 2024 after the federal government declined to intervene. The DOJ informed the Company of its decision not to intervene on June 20, 2024. On July 25, 2024, the Court transferred the litigation to the U.S. District Court for the District of Delaware. On January 9, 2025, the plaintiffs filed a third amended complaint on behalf of two former pharmacists of the Company as relators that alleges the Company violated the Controlled Substances Act and state pharmacy regulations and that such conduct constitutes violations of the federal False Claims Act. The Company intends to file a renewed motion to dismiss. Other Legal Proceedings Asda Equal Value Claims. Asda, formerly a subsidiary of the Company, is a defendant in certain equal value claims that began in 2008 and are proceeding in the United Kingdom before an Employment Tribunal in Manchester and before the High Court. Claims have been brought by approximately 70,000 current and former Asda store employees who allege their work is of equal value to the work done by employees in Asda's distribution centers and that the difference in pay and conditions between the different jobs is not objectively justified. Additional employees may assert claims in the future. The legal proceedings to consider these equal value claims are in three phases, and the first phase is complete. Certain claims remain under consideration in the second phase. On January 31, 2025, the Employment Tribunal issued a ruling that certain of the claims are permitted to advance to the third phase. There are factual and legal defenses to the equal value claims, and the Company intends to vigorously defend them. Subsequent to the divestiture of Asda in February 2021, the Company continues to oversee the conduct of the defense of these claims. While potential liability for these claims remains with Asda, the Company has agreed to provide indemnification with respect to certain of these claims up to a contractually determined amount. The Company cannot predict the number of such claims that may ultimately be filed and cannot reasonably estimate any loss or range of loss that may arise related to these proceedings. Accordingly, the Company can provide no assurance as to the scope and outcome of these matters. Money Transfer Agent Services Matters. The Company has responded to grand jury subpoenas issued by the United States Attorney's Office for the Middle District of Pennsylvania on behalf of the DOJ seeking documents regarding the Company's consumer fraud prevention program and anti-money laundering compliance related to the Company's money transfer services, where Walmart is an agent. The most recent subpoena was issued in August 2020. Walmart's responses to DOJ's subpoenas have been complete since 2021. The Company continues to cooperate with the DOJ's review. The Company has also responded to civil investigative demands from the United States Federal Trade Commission (the "FTC") in connection with the FTC's investigation related to money transfers and the Company's anti-fraud program in its capacity as an agent. On June 28, 2022, the FTC filed a complaint against the Company in the U.S. District Court for the Northern District of Illinois alleging that Walmart violated the Federal Trade Commission Act and the Telemarketing Sales Rule regarding its money transfer agent services and is requesting non-monetary relief and civil penalties. Following rulings on Walmart's motion to dismiss, the FTC filed an amended complaint on June 30, 2023. On July 3, 2024, the Court granted in part Walmart's motion to dismiss the amended complaint by dismissing with prejudice the claims under the Telemarketing Sales Rule but denying the motion to dismiss with respect to claims for injunctive relief under Section 5 of the Federal Trade Commission Act. On October 18, 2024, the Court certified its rulings on the motions to dismiss for interlocutory appeal and stayed discovery. On October 28, 2024, Walmart filed a petition for interlocutory appeal with the Seventh Circuit Court of Appeals. The petition for interlocutory appeal was granted on November 18, 2024. The Company's appellate brief was filed on February 12, 2025. 75 The Company intends to vigorously defend these matters. However, the Company can provide no assurance as to the scope and outcome of these matters and cannot reasonably estimate any loss or range of loss that may arise. Accordingly, the Company can provide no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected. Driver Platform Matters. On December 23, 2024, the Consumer Financial Protection Bureau ("CFPB") filed a lawsuit against the Company and Branch Messenger, Inc. in the District of Minnesota alleging the Company violated the Consumer Financial Protection Act by allegedly requiring independent contractor drivers on the Spark platform to receive payments through a financial product offered by Branch. The CFPB seeks an injunction and unspecified restitution, damages, and civil penalties. On February 20, 2025, the Court entered an order that indefinitely stays the case and vacates all deadlines. The Company has been responding to subpoenas, information requests and investigations from other governmental entities regarding the independent contractor classification of drivers and payment and operational practices with respect to the driver platform. The Company is also defending putative class and representative action civil litigation relating to driver classification and defending other civil litigation and arbitration claims in connection with the driver platform. The Company intends to vigorously defend these matters. However, the Company can provide no assurance as to the scope and outcome of these matters and cannot reasonably estimate any loss or range of loss that may arise. Accordingly, the Company can provide no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected. Mexico Antitrust Matter. On October 6, 2023, the Comisión Federal de Competencia Económica of México ("COFECE") notified the main Mexican operating subsidiary of Wal-Mart de México, S.A.B. de C.V. ("Walmex"), a majority owned subsidiary of the Company, that COFECE's Investigatory Authority ("IA") had recommended the initiation of a quasi-judicial administrative process against Walmex's subsidiary for alleged relative monopolistic practices in connection with the supply and wholesale distribution of certain consumer goods, retail marketing practices of such consumer goods and related services. On December 12, 2024, after Walmex provided defenses, produced expert evidence and participated in a hearing, COFECE issued a split decision that Walmex's subsidiary had engaged in a single relative monopolistic practice in relation to the negotiation of two types of contributions with its suppliers. The resolution imposed a monetary penalty on Walmex's subsidiary in the amount of $ 93.4 million pesos (approximately $ 5 million U.S. dollars) and certain non-structural conduct measures relating to the two prohibited types of supplier contributions (while recognizing that other supplier contributions can continue). On January 6, 2025, Walmex's subsidiary challenged COFECE's resolution through an appeal in the specialized federal courts. Until the appeal is resolved, Walmex's subsidiary will operate in compliance with COFECE's ruling. Payment of the monetary penalty is stayed until the lawsuit is resolved. Foreign Direct Investment Matters. In July 2021, the Directorate of Enforcement in India issued a show cause notice to Flipkart Private Limited and one of its subsidiaries ("Flipkart"), and to unrelated companies and individuals, including certain current and former shareholders and directors of Flipkart. The notice requests the recipients to show cause as to why further proceedings under India's Foreign Direct Investment rules and regulations (the "Rules") should not be initiated against them based on alleged violations during the period from 2009 to 2015, prior to the Company's acquisition of a majority stake in Flipkart in 2018 (the "Notice"), in addition to more recent requests for information from the Directorate of Enforcement to Flipkart for periods prior and subsequent to April 2016 regarding the Rules, including the most recent request in February 2025 (the "Requests"). The Notice is an initial stage of proceedings under the Rules which could, depending upon the conclusions at the end of the initial stage, lead to a hearing to consider the merits of the allegations described in the Notice. If a hearing is initiated, whether with respect to the Notice or from further proceedings related to the Requests, and if it is determined that violations of the Rules occurred, then the regulatory authority has the authority to impose monetary and/or non-monetary relief, such as share ownership restrictions. Flipkart has been responding to the Notice and, if the matter progresses to a consideration of the merits of the allegations described in the Notice, Flipkart intends to defend against the allegations vigorously. Due to the fact that the process regarding the Notice is in the early stages, the Company is unable to predict whether the Notice will lead to a hearing on the merits or, if it does, the final outcome of the resulting proceedings, as well as whether any further proceedings will arise with respect to the Requests. The Company cannot reasonably estimate any loss or range of loss that may arise from these matters and can provide no assurance as to the scope or outcome of any proceeding that might result from the Notice or the Requests, or the amount of the proceeds the Company may receive in indemnification from individuals and entities that sold shares to the Company under the 2018 agreement for the period prior to the date the Company acquired its majority stake in Flipkart, and further can provide no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected. 76 India Antitrust Matter. On January 13, 2020, the Competition Commission of India ("CCI") ordered its Director General (the "DG") to investigate certain matters alleging competition law violations by certain subsidiaries of Flipkart in India and other parties. On September 13, 2024, those subsidiaries received a non-confidential version of the DG's Investigation Report (the "Report"), alleging certain competition law violations. CCI is not bound by the Report, and will conduct its independent analysis of the allegations, including hearing objections from the subsidiaries and other parties before issuing its final order in the matter, which could include monetary and non-monetary relief. CCI's final order would also be subject to appropriate appellate proceedings. The Company can provide no assurance as to the scope and outcome of this matter, cannot reasonably estimate any loss or range of loss that may arise, and can provide no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected. Note 11. Retirement-Related Benefits The Company offers a 401(k) plan for associates in the U.S. under which eligible associates can begin contributing to the plan immediately upon hire. The Company also offers a 401(k) type plan for associates in Puerto Rico under which associates can begin to contribute generally after one year of employment. Under these plans, after one year of employment, the Company matches 100 % of participant contributions up to 6 % of annual eligible earnings. The matching contributions immediately vest at 100 % for each associate. Participants can contribute up to 50 % of their pre-tax earnings, but not more than the statutory limits. Associates in international countries who are not U.S. citizens are covered by various defined contribution post-employment benefit arrangements. These plans are administered based upon the legislative and tax requirements in the countries in which they are established. The following table summarizes the contribution expense related to the Company's defined contribution plans for fiscal 2025, 2024 and 2023: Fiscal Years Ended January 31, (Amounts in millions) 2025 2024 2023 Defined contribution plans: U.S. $ 1,751 $ 1,528 $ 1,491 International 78 85 74 Total contribution expense for defined contribution plans $ 1,829 $ 1,613 $ 1,565 Note 12. Segments and Disaggregated Revenue Segments The Company is engaged in the operation of retail and wholesale stores and clubs, as well as eCommerce websites and mobile applications, located throughout the U.S., Africa, Canada, Central America, Chile, China, India and Mexico. The Company's operations are conducted in three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S. The Company defines its segments as those operations whose results the chief operating decision maker ("CODM"), the Company's Chief Executive Officer, regularly reviews to analyze performance and allocate resources. The Company sells similar individual products and services in each of its segments. It is impractical to segregate and identify revenues for each of these individual products and services. The Walmart U.S. segment includes the Company's mass merchandising concept in the U.S., as well as eCommerce, which includes omni-channel initiatives and certain other business offerings such as advertising services. The Walmart International segment consists of the Company's operations outside of the U.S., as well as eCommerce and omni-channel initiatives. The Sam's Club U.S. segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives. Corporate and support consists of corporate overhead and other items not allocated to any of the Company's segments. 77 The Company measures the profit or loss of its segments using operating income. The CODM uses operating income to allocate resources across the reportable segments as part of the Company's long-range and annual planning processes, and to evaluate planned versus actual results when assessing segment operating performance. From time to time, the Company may revise the measurement of each segment's operating income, including any corporate overhead allocations, and presentation of significant segment expenses, as determined by the information regularly reviewed by its CODM. The operating results of each reportable segment, including the mix of cost of sales and operating, selling, general and administrative expenses, are not directly comparable due to differences in business model, format and channel mix. Additionally, the operating results of each reportable segment may not be comparable to those of other retailers, as discussed in Note 1 . Information for the Company's segments, as well as for Corporate and support, including the reconciliation to income before income taxes, is provided as follows: Fiscal Years Ended January 31, (Amounts in millions) 2025 2024 2023 Walmart U.S. Net sales $ 462,415 $ 441,817 $ 420,553 Membership and other income 2,594 1,985 1,845 Total revenues 465,009 443,802 422,398 Cost of sales 336,451 323,563 308,805 Operating, selling, general and administrative expenses 104,676 98,085 92,973 Operating income $ 23,882 $ 22,154 $ 20,620 Walmart International Net sales $ 121,885 $ 114,641 $ 100,983 Membership and other income 1,478 1,408 1,621 Total revenues 123,363 116,049 102,604 Cost of sales 95,267 89,831 79,332 Operating, selling, general and administrative expenses 22,595 21,309 20,307 Operating income $ 5,501 $ 4,909 $ 2,965 Sam's Club U.S. (1) Net sales $ 90,238 $ 86,179 $ 84,345 Membership and other income 2,323 2,051 1,908 Total revenues 92,561 88,230 86,253 Cost of sales 80,035 76,748 75,584 Operating, selling, general and administrative expenses 10,122 9,290 8,705 Operating income $ 2,404 $ 2,192 $ 1,964 Corporate and support Membership and other income (2) $ 52 $ 44 $ 34 Operating, selling, general and administrative expenses 2,491 2,287 5,155 Operating loss $ ( 2,439 ) $ ( 2,243 ) $ ( 5,121 ) Consolidated Net sales $ 674,538 $ 642,637 $ 605,881 Membership and other income 6,447 5,488 5,408 Total revenues 680,985 648,125 611,289 Cost of sales 511,753 490,142 463,721 Operating, selling, general and administrative expenses 139,884 130,971 127,140 Operating income 29,348 27,012 20,428 Interest, net 2,245 2,137 1,874 Other (gains) and losses 794 3,027 1,538 Income before income taxes $ 26,309 $ 21,848 $ 17,016 (1) Total fuel-related expenses for Sam's Club U.S. were $ 9.9 billion, $ 10.6 billion, and $ 12.1 billion in fiscal 2025, fiscal 2024, and fiscal 2023 respectively. (2) Includes other income from corporate campus facilities. 78 Total assets, depreciation and amortization, and capital expenditures for the Company's segments, as well as for Corporate and support, are as follows: Fiscal Years Ended January 31, (Amounts in millions) 2025 2024 2023 Walmart U.S. Total assets $ 150,006 $ 137,782 $ 130,659 Depreciation and amortization 8,549 7,671 7,054 Capital expenditures 16,466 13,877 11,425 Walmart International Total assets $ 80,016 $ 86,136 $ 86,766 Depreciation and amortization 2,260 2,159 1,964 Capital expenditures 3,178 2,911 2,625 Sam's Club U.S. Total assets $ 16,862 $ 15,682 $ 15,490 Depreciation and amortization 706 642 609 Capital expenditures 1,212 1,041 727 Corporate Total assets $ 13,939 $ 12,799 $ 10,282 Depreciation and amortization 1,458 1,381 1,318 Capital expenditures 2,927 2,777 2,080 Consolidated Total assets $ 260,823 $ 252,399 $ 243,197 Depreciation and amortization 12,973 11,853 10,945 Capital expenditures 23,783 20,606 16,857 Total revenues and long-lived assets, consisting primarily of net property and equipment and lease right-of-use assets, aggregated by the Company's U.S. and non-U.S. operations, are as follows: Fiscal Years Ended January 31, (Amounts in millions) 2025 2024 2023 Revenues U.S. operations $ 557,622 $ 532,076 $ 508,685 Non-U.S. operations 123,363 116,049 102,604 Total revenues $ 680,985 $ 648,125 $ 611,289 Long-lived assets U.S. operations $ 115,250 $ 104,480 $ 95,567 Non-U.S. operations 24,455 25,858 23,667 Total long-lived assets $ 139,705 $ 130,338 $ 119,234 No individual country outside of the U.S. had total revenues or long-lived assets that were material to the consolidated totals. Additionally, the Company did not generate material revenues from any single customer. Disaggregated Revenues In the following tables, segment net sales are disaggregated by either merchandise category or market. In addition, net sales related to eCommerce are provided for each segment. Net sales related to eCommerce include omni-channel sales where a customer initiates an order digitally and the order is fulfilled through a store or club, as well as net sales from other business offerings that are part of the Company's ecosystem such as certain advertising arrangements, fulfillment services, and data insights. From time to time, the Company revises the assignment of net sales of a particular item to a merchandise category. When the assignment changes, previous period amounts are reclassified to be comparable to the current period's presentation. (Amounts in millions) Fiscal Years Ended January 31, Walmart U.S. net sales by merchandise category 2025 2024 2023 Grocery $ 276,003 $ 264,210 $ 247,299 General merchandise 113,921 113,985 118,597 Health and wellness 62,092 54,898 46,591 Other 10,399 8,724 8,066 Total $ 462,415 $ 441,817 $ 420,553 Of Walmart U.S.'s total net sales, approximately $ 79.3 billion, $ 65.4 billion and $ 53.4 billion related to eCommerce for fiscal 2025, 2024 and 2023, respectively. 79 (Amounts in millions) Fiscal Years Ended January 31, Walmart International net sales by market 2025 2024 2023 Mexico and Central America $ 51,970 $ 49,726 $ 40,496 Canada 23,035 22,639 22,300 China 19,975 17,011 14,711 Other 26,905 25,265 23,476 Total $ 121,885 $ 114,641 $ 100,983 Of Walmart International's total net sales, approximately $ 29.5 billion, $ 24.8 billion and $ 20.3 billion related to eCommerce for fiscal 2025, 2024 and 2023, respectively. (Amounts in millions) Fiscal Years Ended January 31, Sam's Club U.S. net sales by merchandise category 2025 2024 2023 Grocery $ 59,976 $ 56,455 $ 53,055 Fuel and other 12,924 13,678 15,385 General merchandise 11,249 11,041 11,669 Health and wellness 6,089 5,005 4,236 Total $ 90,238 $ 86,179 $ 84,345 Of Sam's Club U.S.'s total net sales, approximately $ 12.1 billion, $ 9.9 billion and $ 8.4 billion related to eCommerce for fiscal 2025, 2024 and 2023, respectively. Note 13. Subsequent Event Dividends Declared The Company approved, effective February 20, 2025, the fiscal 2026 annual dividend of $ 0.94 per share, an increase over the fiscal 2025 dividend of $ 0.83 per share. For fiscal 2026, the annual dividend will be paid in four quarterly installments of $ 0.235 per share, according to the following record and payable dates: Record Date Payable Date March 21, 2025 April 7, 2025 May 9, 2025 May 27, 2025 August 15, 2025 September 2, 2025 December 12, 2025 January 5, 2026 80 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.