<PAGE>
Filed pursuant to Rule 424(b)(2)
SEC File No. 333-82909
PROSPECTUS SUPPLEMENT
(To prospectus dated August 5, 1999)
$250,000,000
Wal-Mart Stores, Inc.
6.875% Notes Due 2009
- --------------------------------------------------------------------------------
We are offering $250,000,000 of our 6.875% notes due 2009.
We will pay interest on February 10 and August 10 of each year, beginning on
February 10, 2000.
The notes will be our senior unsecured debt obligations, will not be
redeemable prior to maturity except in the case of a specified tax event, and
will not be convertible or exchangeable.
The terms of the notes, other than their date of issue and their initial
price to the public, will be identical to the terms of the $3,250,000,000
aggregate principal amount of 6.875% notes due 2009 offered and sold by our
prospectus supplement dated August 5, 1999. The notes offered by this
prospectus supplement will have the same Common Code, ISIN and CUSIP numbers as
those other notes, will trade interchangeably with those notes immediately upon
settlement and will increase the aggregate principal amount of the series of
our 6.875% notes due 2009 to $3,500,000,000.
Application has been made to list the notes on the Luxembourg Stock Exchange.
We expect to deliver the notes on or about November 12, 1999 through the
book-entry facilities of The Depository Trust Company, Cedelbank or Euroclear.
<TABLE>
<CAPTION>
Public
offering Underwriting Net proceeds
price* discount to Wal-Mart
------------ ------------ ------------
<S> <C> <C> <C>
Per note................................. 102.681944% 0.450% 102.231944%
Total.................................... $256,704,860 $1,125,000 $255,579,860
</TABLE>
- ----------------
*Includes accrued interest (totaling $4,392,360) from August 10, 1999
through the date we expect to deliver the notes.
Neither the Securities and Exchange Commission nor any state securities
commission or other regulatory body has approved or disapproved of these
securities or determined that this prospectus supplement or the attached
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
- --------------------------------------------------------------------------------
Lead Manager Co-Manager
Lehman Brothers Banc of America Securities LLC
November 8, 1999
<PAGE>
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
Wal-Mart Stores, Inc....................................................... S-3
Recent Developments........................................................ S-3
Use of Proceeds of the Notes............................................... S-4
Capitalization............................................................. S-4
Selected Financial Data.................................................... S-5
Directors and Executive Officers........................................... S-6
Description of the Notes................................................... S-7
Book-Entry Issuance........................................................ S-9
U.S. Federal Income Tax Consequences to Holders............................ S-12
Underwriting............................................................... S-15
Validity of the Notes...................................................... S-16
General Information........................................................ S-16
Prospectus
Where You Can Find More Information........................................ 2
Special Note Regarding Forward-Looking Statements.......................... 3
Wal-Mart Stores, Inc. ..................................................... 4
Ratio of Earnings to Fixed Charges......................................... 4
Use of Proceeds............................................................ 5
Description of the Debt Securities......................................... 5
U.S. Federal Income Tax Consequences to Holders............................ 11
Plan of Distribution....................................................... 11
Legal Matters.............................................................. 12
Experts.................................................................... 12
</TABLE>
----------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the attached prospectus. No one has
been authorized to provide you with different information. If this prospectus
supplement is inconsistent with the attached prospectus, you should rely on
this prospectus supplement.
The notes are not being offered in any jurisdiction in which the offering is
not permitted.
The Luxembourg Stock Exchange takes no responsibility for the contents of
this document, makes no representation as to its accuracy or completeness and
expressly disclaims any liability whatsoever for any loss however arising from
or in reliance upon the whole or any part of the contents of this prospectus
supplement and the attached prospectus.
Wal-Mart accepts responsibility for the information contained in this
prospectus supplement and the attached prospectus. This prospectus supplement
and the attached prospectus may only be used in connection with the offering of
the notes.
This prospectus supplement and the attached prospectus, and the documents
incorporated by reference, including our Quarterly Report on Form 10-Q for our
quarter ended July 31, 1999, will be available free of charge at the office of
Kredietbank S.A. Luxembourgeoise, 43, Boulevard Royal, L-2955 Luxembourg. See
"Where You Can Find More Information" in the attached prospectus.
S-2
<PAGE>
WAL-MART STORES, INC.
We are the world's largest retailer as measured by total net sales for
fiscal 1999. We had total net sales of $137.6 billion in fiscal 1999, over 90%
of which was generated in the United States. We operate mass merchandising
stores that serve our customers primarily through the operation of three
segments:
. Wal-Mart stores, which include our discount stores and Supercenters in
the United States;
. SAM'S Clubs, which include our warehouse membership clubs in the United
States; and
. the international segment of our business.
We currently operate in all 50 states of the United States, Puerto Rico,
Argentina, Brazil, Canada, Germany and Mexico, and in China and Korea under
joint venture agreements. In addition, through our subsidiary, McLane Company,
Inc., we provide products and distribution services to retail industry and
institutional food service customers. At October 31, 1999, we operated in the
United States:
. 1,803 Wal-Mart stores;
. 682 Supercenters; and
. 456 SAM'S Clubs.
As of October 31, 1999, we also operated 164 Canadian Wal-Mart stores, 13
units in Argentina, 14 units in Brazil, six units in China, 95 units in
Germany, five units in Korea, 444 units in Mexico, 15 units in Puerto Rico and
229 units in the United Kingdom. The units operated by our International
Division represent a variety of retail formats.
Wal-Mart Stores, Inc. was incorporated in the State of Delaware on October
31, 1969.
Wal-Mart Stores, Inc. is the parent company of a group of over 10 subsidiary
companies, including McLane Company, Inc., Cifra, S.A. de C.V., Sam's West,
Inc., Sam's East, Inc., Wal-Mart Stores East, Inc., Sam's Property Co., Wal-
Mart Property Co., Wal-Mart Real Estate Business Trust, Sam's Real Estate
Business Trust and Asda Group Limited.
RECENT DEVELOPMENTS
On June 29, 1999, Wal-Mart made a public bid to purchase the outstanding
shares of Asda Group PLC, an English company that owns 229 grocery stores in
the United Kingdom. Pursuant to that public bid and a subsequent compulsory
squeeze out procedure, we have acquired all of the outstanding shares of Asda
for a total cost of approximately $10.8 billion.
Asda is the third largest grocery chain in the United Kingdom and regularly
serves over 6.5 million customers per week. For its fiscal year ended May 1,
1999, Asda reported unaudited consolidated operating profit of (Pounds)436
million, or approximately $714 million, on sales of (Pounds)8.198 billion, or
approximately $13.424 billion. At May 1, 1999, Asda had net assets of
(Pounds)2.517 billion, or approximately $4.122 billion. Asda serves as our
initial entry into the U.K. retail market.
We financed our purchases of Asda shares using the proceeds of short-term
borrowings and issuances of debt securities, as well as funds generated from
operations. See "Use of Proceeds of the Notes."
On August 10, 1999, we sold $1,250,000,000 of 6.150% notes due 2001,
$1,250,000,000 of 6.550% notes due 2004 and $3,250,000,000 of 6.875% notes due
2009 in a public offering. We used the net proceeds from the sale of those
notes, approximately $5.71 billion, to finance a portion of our purchases of
Asda shares.
We have translated pounds sterling amounts to U.S. dollars in this section
using the November 4, 1999 exchange rate of (Pounds)1.00=$1.6375.
S-3
<PAGE>
USE OF PROCEEDS OF THE NOTES
We estimate that the net proceeds from the sale of the notes will be
approximately $255,500,000 after underwriting discounts and payment of
transaction expenses.
We will use all of these net proceeds to refinance a portion of the short-
term borrowings we incurred to acquire the Asda shares. See "--Recent
Developments."
CAPITALIZATION
The following table presents the consolidated capitalization of Wal-Mart and
its subsidiaries at July 31, 1999 and as adjusted to give effect to the
offering of the notes.
<TABLE>
<CAPTION>
July 31, 1999
-----------------
As
Actual Adjusted
------- --------
(in millions)
<S> <C> <C>
Short-term debt
Commercial paper........................................... $ 5,121 $ 4,121
Long-term debt due within one year......................... 1,223 1,223
Obligations under capital leases due within one year....... 118 118
------- -------
Total short-term debt and capital lease obligations...... 6,462 5,462
------- -------
Long-term debt
6.150% notes due 2001...................................... 1,000 1,250
6.550% notes due 2004...................................... 2,000 1,250
6.875% notes due 2009...................................... 2,000 3,500
Other long-term debt....................................... 8,078 8,078
Long-term capital lease obligations........................ 2,964 2,964
------- -------
Total long-term debt and capital lease obligations....... 16,042 17,042
------- -------
Shareholders' equity
Common stock ($0.10 par value; 11,000,000,000 shares
authorized;
4,448,731,409 shares issued and outstanding).............. 445 445
Capital in excess of par value............................. 431 431
Retained earnings.......................................... 22,557 22,557
Other accumulated comprehensive income..................... (485) (485)
------- -------
Total shareholders' equity............................... 22,948 22,948
------- -------
Total long-term debt and capital lease obligations and
shareholders' equity.................................... $45,452 $45,452
======= =======
</TABLE>
The consolidated capitalization presented in the table in (1) the actual
column gives effect to the acquisition of Asda and the related issuance of
$5,000,000,000 of debt securities and (2) the as adjusted column gives effect
to the actual sale of $5,750,000,000 of notes on August 10, 1999.
Except as noted above, there has been no material change in the consolidated
capitalization of Wal-Mart and its subsidiaries since July 31, 1999.
All of the outstanding common stock of Wal-Mart is fully paid and non-
assessable.
S-4
<PAGE>
SELECTED FINANCIAL DATA
The following table presents selected financial data of Wal-Mart and its
subsidiaries for the periods specified.
<TABLE>
<CAPTION>
Six Months
Fiscal Years Ended January 31, Ended July 31,
------------------------------------------ ---------------
1995 1996 1997 1998 1999 1998 1999
------- ------- -------- -------- -------- ------- -------
(in millions) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales............... $82,494 $93,627 $104,859 $117,958 $137,634 $63,340 $73,187
Non-interest expense.... 78,444 89,526 100,456 112,796 131,088 60,598 69,825
Interest expense........ 706 888 845 784 797 379 382
Total expense........... 79,150 90,414 101,301 113,580 131,885 60,977 70,207
Income before income
taxes, minority
interest and equity in
unconsolidated
subsidiaries........... 4,258 4,359 4,877 5,719 7,323 3,060 3,826
Net income.............. 2,681 2,740 3,056 3,526 4,430 1,862 2,359
<CAPTION>
As of January 31, As of July 31,
------------------------------------------ ---------------
1995 1996 1997 1998 1999 1998 1999
------- ------- -------- -------- -------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents............ 45 83 883 1,447 1,879 884 1,508
Inventories............. 14,064 15,989 15,897 16,497 17,076 17,617 18,793
Total current assets.... 15,338 17,331 17,993 19,352 21,132 19,937 22,833
Net property, plant and
equipment.............. 14,308 17,098 18,333 21,469 23,674 22,254 30,933
Net property under
capital leases and
other assets and
deferred charges* ..... 3,173 3,112 3,278 4,563 5,190 4,683 12,499
Total assets............ 32,819 37,541 39,604 45,384 49,996 46,874 66,265
Accounts payable........ 5,907 6,442 7,628 9,126 10,257 9,844 12,326
Commercial paper........ 1,795 2,458 -- -- -- 175 5,121
Long-term debt due
within
one year............... 23 271 523 1,039 900 550 1,223
Obligations under
capital leases due
within one year........ 64 69 95 102 106 108 118
Total current
liabilities............ 9,973 11,454 10,957 14,460 16,762 14,795 24,667
Long-term debt.......... 7,871 8,508 7,709 7,191 6,908 7,414 13,078
Long-term obligations
under capital leases... 1,838 2,092 2,307 2,483 2,699 2,520 2,964
Total liabilities....... 20,093 22,785 22,461 26,881 28,884 27,331 43,317
Total shareholders'
equity................. 12,726 14,756 17,143 18,503 21,112 19,543 22,948
Total liabilities and
shareholders' equity... 32,819 37,541 39,604 45,384 49,996 46,874 66,265
</TABLE>
*Includes goodwill and other acquired intangible assets.
The ratio of our earnings to fixed charges was 5.48x and 6.61x for the six
months ended July 31, 1998 and 1999, respectively. See "Ratio of Earnings to
Fixed Charges" in the attached prospectus.
S-5
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of Wal-Mart are as follows:
Principal Occupation
<TABLE>
<CAPTION>
Directors
<S> <C>
John A. Cooper, Jr. .... Chairman of Cooper Communities, Inc.
Stephen Friedman........ Former Chairman of Goldman, Sachs & Co.
Stanley C. Gault........ Former Chairman and Chief Executive Officer of Goodyear Tire
& Rubber Company
David D. Glass.......... President and Chief Executive Officer of Wal-Mart Stores,
Inc.
Roland A. Hernandez..... Chairman and Chief Executive Officer of Telemundo Group,
Inc.
Dr. Frederick S.
Humphries.............. President of Florida A & M University
E. Stanley Kroenke...... Chairman of The Kroenke Group
Elizabeth A. Sanders.... Management Consultant with The Sanders Group
H. Lee Scott, Jr. ...... Vice Chairman and Chief Operating Officer
Jack C. Shewmaker....... International Consultant, Rancher and Retired Wal-Mart
Executive
Donald G. Soderquist.... Senior Vice Chairman of the Board of Directors of Wal-Mart
Stores, Inc.
Dr. Paula Stern......... President of The Stern Group, Inc.
Jose H. Villarreal...... Partner of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
John T. Walton.......... Chairman of Quantum Partners, L.L.C.
S. Robson Walton........ Chairman of the Board of Directors of Wal-Mart Stores, Inc.
Executive Officers
S. Robson Walton........ Chairman of the Board
David D. Glass.......... President and Chief Executive Officer
Donald G. Soderquist.... Senior Vice Chairman
H. Lee Scott, Jr. ...... Vice Chairman and Chief Operating Officer
Paul R. Carter.......... Executive Vice President and President--Wal-Mart Realty
Bob Connolly............ Executive Vice President--Merchandising
Thomas M. Coughlin...... Executive Vice President and Chief Executive Officer--Wal-
Mart Stores Division
David Dible............. Executive Vice President--Speciality Division
Thomas Grimm............ Executive Vice President and President and Chief Executive
Officer--SAM'S Club Division
Don S. Harris........... Executive Vice President--Operations--Wal-Mart Stores
Division
John B. Menzer.......... Executive Vice President and President and Chief Executive
Officer--International Division
Nick White.............. Executive Vice President--Food Division
James A. Walker, Jr. ... Senior Vice President and Controller
</TABLE>
S-6
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the terms and conditions of the notes
supplements the more general terms and conditions of Wal-Mart's debt securities
contained in the attached prospectus.
The notes will be issued under the indenture and will be issued in
registered form without interest coupons in denominations of $1,000 and
integral multiples of $1,000. The notes will constitute our senior unsecured
debt obligations and will rank equally among themselves and with all of our
existing and future senior, unsecured and unsubordinated debt. The notes will
mature on August 10, 2009 at 100% of their principal amount.
The notes form a part of the series of our 6.875% notes due 2009 and will
have the same terms as the other notes of this series. The notes will have the
same Common Code, ISIN and CUSIP numbers as the other notes of this series and
will trade interchangeably with the other notes in this series immediately upon
settlement. The issuance of the notes will increase the aggregate principal
amount of the outstanding notes of this series to $3,500,000,000. We may,
without the consent of the holders of the notes, create and issue additional
notes in this series ranking equally with the other notes of this series and
otherwise similar in all respects to the notes of this series so that these
further notes will be consolidated and form a single series with the other
notes of this series. No additional notes may be issued if an event of default
under the indenture has occurred.
The notes will not be subject to a sinking fund and will not be redeemable
prior to maturity, except in the case of a tax event, as explained below. The
notes will not be convertible or exchangeable. We will pay principal of and
interest and any premium on the notes in U.S. dollars.
The notes will bear interest from August 10, 1999 at an annual interest rate
of 6.875%. Interest will be payable semi-annually in arrears on February 10 and
August 10 of each year, beginning on February 10, 2000, to the person in whose
name the note is registered at the close of business on the preceding February
1 or August 1, as the case may be. Interest on the notes will be computed on
the basis of a 360-day year of twelve 30-day months.
Notices to holders of the notes will be published in a leading daily
newspaper in The City of New York, in London, and, so long as the notes are
listed on the Luxembourg Stock Exchange, in Luxembourg. We expect that
publication will be made in The City of New York in The Wall Street Journal, in
London in the Financial Times, and in Luxembourg in the Luxembourger Wort. Any
notice shall be deemed to have been given on the date of publication or, if
published more than once, on the date of first publication.
The First National Bank of Chicago is the trustee under the indenture and
will be the registrar and paying agent in the United States. As long as the
notes are listed on the Luxembourg Stock Exchange, Kredietbank S.A.
Luxembourgeoise will be the listing agent, paying agent and transfer agent for
the notes in Luxembourg.
The indenture and the notes will be governed by New York law.
Same-Day Settlement and Payment
We will make all payments of principal of and interest on the notes to The
Depository Trust Company ("DTC") in immediately available funds.
The notes will trade in same-day funds settlement system until maturity.
Purchases of notes in secondary market trading must be in immediately available
funds.
Payment of Additional Amounts
We will pay to the holder of any note who is a United States Alien, as
defined below, additional amounts as may be necessary so that every net payment
of principal of and interest on that note, after deduction or
S-7
<PAGE>
withholding for or on account of any present or future tax, assessment or other
governmental charge imposed upon that holder by the United States or any taxing
authority thereof or therein, will not be less than the amount provided in that
note to be then due and payable. We will not be required, however, to make any
payment of additional amounts for or on account of:
(a) any tax, assessment or other governmental charge that would not
have been imposed but for (1) the existence of any present or former
connection between that holder, or between a fiduciary, settlor,
beneficiary of, member or shareholder of, or possessor of a power over,
that holder, if that holder is an estate, trust, partnership or
corporation, and the United States including, without limitation, that
holder, or that fiduciary, settlor, beneficiary, member, shareholder or
possessor, being or having been a citizen or resident or treated as a
resident of the U.S. or being or having been engaged in trade or business
or present in the U.S. or (2) the presentation of a note for payment on a
date more than 30 days after the later of the date on which that payment
becomes due and payable and the date on which payment is duly provided for;
(b) any estate, inheritance, gift, sales, transfer, excise, personal
property or similar tax, assessment or other governmental charge;
(c) any tax, assessment or other governmental charge imposed by reason
of that holder's past or present status as a passive foreign investment
company, a controlled foreign corporation, a personal holding company or
foreign personal holding company with respect to the United States, or as a
corporation which accumulates earnings to avoid United States federal
income tax;
(d) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payment of principal of or interest on
that note;
(e) any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of or interest
on any note if that payment can be made without withholding by any other
paying agent;
(f) any tax, assessment or other governmental charge which would not
have been imposed but for the failure to comply with certification,
information, documentation or other reporting requirements concerning the
nationality, residence, identity or connections with the United States of
the holder or beneficial owner of that note, if such compliance is required
by statute or by regulation of the U.S. Treasury Department as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
(g) any tax, assessment or other governmental charge imposed on
interest received by (i) a 10% shareholder (as defined in Section
871(h)(3)(B) of the U.S. Internal Revenue Code of 1986 and the regulations
that may be promulgated thereunder) of our company or (ii) a controlled
foreign corporation with respect to our company within the meaning of the
Internal Revenue Code; or
(h) any combination of items (a), (b), (c), (d), (e), (f) and (g);
nor will we pay any additional amounts to any holder who is a fiduciary or
partnership or other than the sole beneficial owner of that note to the extent
that a beneficiary or settlor with respect to that fiduciary, or a member of
that partnership or a beneficial owner thereof would not have been entitled to
the payment of those additional amounts had that beneficiary, settlor, member
or beneficial owner been the holder of that note.
"United States Alien" means any corporation, partnership, individual or
fiduciary that is, as to the United States, a foreign corporation, a non-
resident alien individual who has not made a valid election to be treated as a
United States resident, a non-resident fiduciary of a foreign estate or trust,
or a foreign partnership one or more of the members of which is, as to the
United States, a foreign corporation, a non-resident alien individual or a non-
resident fiduciary of a foreign estate or trust.
S-8
<PAGE>
Redemption upon a Tax Event
The notes may be redeemed at our option in whole, but not in part, on not
more than 60 days' and not less than 30 days' notice, at a redemption price
equal to 100% of their principal amount, if we determine that as a result of
any change in or amendment to the laws, treaties, regulations or rulings of the
United States or any political subdivision or taxing authority thereof, or any
proposed change in such laws, treaties, regulations or rulings, or any change
in the official application, enforcement or interpretation of those laws,
treaties, regulations or rulings, including a holding by a court of competent
jurisdiction in the United States, or any other action, other than an action
predicated on law generally known on or before August 5, 1999 except for
proposals before the Congress before that date, taken by any taxing authority
or a court of competent jurisdiction in the United States, or the official
proposal of any action, whether or not such action or proposal was taken or
made with respect to our company, (A) we have or will become obligated to pay
additional amounts as described under "--Payment of Additional Amounts" on any
note in the series of our 6.875% notes due 2009 or (B) there is a substantial
possibility that we will be required to pay those additional amounts. Prior to
the publication of any notice of redemption, we will deliver to the Trustee (1)
an officers' certificate stating that we are entitled to effect a redemption
and setting forth a statement of facts showing that the conditions precedent to
the right of our company so to redeem have occurred and (2) an opinion of
counsel to that effect based on that statement of facts.
BOOK-ENTRY ISSUANCE
The notes will be represented by one or more global securities that will be
deposited with and registered in the name of DTC or its nominee. Thus, we will
not issue certificated securities to you for the notes, except in the limited
circumstances described below. Each global security will be issued to DTC,
which will keep a computerized record of its participants whose clients have
purchased the notes. Each participant will then keep a record of its clients.
Unless it is exchanged in whole or in part for a certificated security, a
global security may not be transferred. DTC, its nominees and their successors
may, however, transfer a global security as a whole to one another, and these
transfers are required to be recorded on our records or a register to be
maintained by the trustee.
Beneficial interests in a global security will be shown on, and transfers of
beneficial interests in the global security will be made only through, records
maintained by DTC and its participants. DTC has provided us with the following
information: DTC is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the United States Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered under the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its direct
participants deposit with DTC. DTC also records the settlements among direct
participants of securities transactions, such as transfers and pledges, in
deposited securities through computerized records for direct participants'
accounts. This eliminates the need to exchange certificated securities. Direct
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations.
DTC's book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies that work through a
direct participant. The rules that apply to DTC and its participants are on
file with the SEC.
DTC is owned by a number of its direct participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc.
When you purchase notes through the DTC system, the purchases must be made
by or through a direct participant, which will receive credit for the notes on
DTC's records. When you actually purchase the notes, you will become their
beneficial owner. Your ownership interest will be recorded only on the direct
or indirect
S-9
<PAGE>
participants' records. DTC will have no knowledge of your individual ownership
of the notes. DTC's records will show only the identity of the direct
participants and the amount of the notes held by or through them. You will not
receive a written confirmation of your purchase or sale or any periodic account
statement directly from DTC. You should instead receive these from your direct
or indirect participant. As a result, the direct or indirect participants are
responsible for keeping accurate account of the holdings of their customers.
The trustee will wire payments on the notes to DTC's nominee. We and the
trustee will treat DTC's nominee as the owner of each global security for all
purposes. Accordingly, we, the trustee and any paying agent will have no direct
responsibility or liability to pay amounts due on a global security to you or
any other beneficial owners in that global security. Any redemption notices
will be sent by us directly to DTC, which will, in turn, inform the direct
participants (or the indirect participants), which will then contact you as a
beneficial holder.
It is DTC's current practice, upon receipt of any payment of distributions
or liquidation amounts, to proportionately credit direct participants' accounts
on the payment date based on their holdings. In addition, it is DTC's current
practice to pass through any consenting or voting rights to such participants
by using an omnibus proxy. Those participants will, in turn, make payments to
and solicit votes from you, the ultimate owner of notes, based on their
customary practices. Payments to you will be the responsibility of the
participants and not of DTC, the trustee or our company.
Notes represented by one or more global securities will be exchangeable for
certificated securities with the same terms in authorized denominations only
if:
. DTC is unwilling or unable to continue as depositary or ceases to be a
clearing agency registered under applicable law, and a successor is not
appointed by us within 90 days; or
. we decide to discontinue the book-entry system.
If the global security is exchanged for certificated securities, the trustee
will keep the registration books for the notes at its corporate office and
follow customary practices and procedures regarding those certificated
securities.
In the event that we issue certificated securities under the limited
circumstances described above, and the notes are listed on the Luxembourg Stock
Exchange at that time, then holders of certificated securities may transfer
their notes in whole or in part upon the surrender of the certificate to be
transferred, together with a completed and executed assignment form endorsed on
the definitive note, at, as the case may be, the office of the transfer agent
in The City of New York, The First National Bank of Chicago, or at the main
office of the transfer agent in Luxembourg, Kredietbank S.A. Luxembourgeoise.
Each time that we transfer or exchange a new note in certificated form for
another note in certificated form, and after the transfer agent receives a
completed assignment form, we will make available for delivery the new
definitive note at, as the case may be, the office of the transfer agent in The
City of New York, The First National Bank of Chicago, or at the main office of
the transfer agent in Luxembourg, Kredietbank S.A. Luxembourgeoise.
Alternatively, at the option of the person requesting the transfer or exchange,
we will mail, at that person's risk, the new definitive note to the address of
that person which is specified in the assignment form. In addition, if we issue
notes in certificated form and the notes are listed on the Luxembourg Stock
Exchange at that time, then we will make payments of principal of and interest
and any premium on the notes to holders in whose names the notes in
certificated form are registered at the close of business on the record date
for these payments. If the notes are issued in certificated form, we will make
payments of principal against the surrender of these certificated notes at, as
the case may be, the office of the paying agent in The City of New York, The
First National Bank of Chicago, or at the main office of the paying agent in
Luxembourg, Kredietbank S.A. Luxembourgeoise. We will make payments to holders
of notes by check delivered to the addresses of the holders as their addresses
appear on our register or by transfer to an account maintained by that holder
with a bank located in the United States.
DTC's management is aware that some computer applications, systems and the
like for processing data that are dependent upon calendar dates, including
dates before, on and after January 1, 2000, may encounter "Year 2000 problems."
DTC has informed its participants and other members of the financial community
that
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it has developed and is implementing a program so that its systems, as the same
relate to the timely payment of distributions (including principal and interest
payments) to security holders, book-entry deliveries, and settlement of trades
within DTC, continue to function appropriately. This program includes a
technical assessment and a remediation plan, each of which is complete.
Additionally, DTC's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
However, DTC's ability to perform its services properly is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as third-party vendors from whom DTC licenses software and hardware, and
third-party vendors on whom DTC relies for information of the provision of
services, including telecommunications and electrical utility service
providers, among others. DTC has informed its participants and other members of
the financial community that it is contacting, (and will continue to contact),
third-party vendors from whom DTC acquires services to impress upon them the
importance of such service being Year 2000 compliant, and determine the extent
of their efforts for Year 2000 remediation and, as appropriate, testing, of
their services. In addition, DTC is in the process of developing contingency
plans as it deems appropriate.
Cedelbank and Euroclear
Links have been established among DTC, Cedelbank and Euroclear (two European
book-entry depositaries similar to DTC) to facilitate the initial issuance of
the notes sold outside of the United States and cross-market transfers of the
notes associated with secondary market trading.
Although DTC, Cedelbank and Euroclear have agreed to the procedures provided
below in order to facilitate transfers, they are under no obligation to perform
these procedures, and these procedures may be modified or discontinued at any
time.
Cedelbank and Euroclear will record the ownership interests of their
participants in much the same way as DTC, and DTC will record the total
ownership of each of the U.S. agents of Cedelbank and Euroclear, as
participants in DTC.
When notes are to be transferred from the account of a DTC participant to
the account of a Cedelbank participant or a Euroclear participant, the
purchaser must send instructions to Cedelbank or Euroclear through a
participant at least one business day prior to settlement. Cedelbank or
Euroclear, as the case may be, will instruct its U.S. agent to receive notes
against payment. After settlement, Cedelbank or Euroclear will credit its
participant's account. Credit for the notes will appear on the next day
(European time).
Because settlement is taking place during New York business hours, DTC
participants will be able to employ their usual procedures for sending notes to
the relevant U.S. agent acting for the benefit of Cedelbank or Euroclear
participants. The sale proceeds will be available to the DTC seller on the
settlement date. As a result, to the DTC participant, a cross-market
transaction will settle no differently than a trade between two DTC
participants.
When a Cedelbank or Euroclear participant wishes to transfer notes to a DTC
participant, the seller will be required to send instructions to Cedelbank or
Euroclear through a participant at least one business day prior to settlement.
In these cases, Cedelbank or Euroclear will instruct its U.S. agent to transfer
these notes against payment for them. The payment will then be reflected in the
account of the Cedelbank or Euroclear participant the following day, with the
proceeds back-valued to the value date, which would be the preceding day, when
settlement occurs in New York. If settlement is not completed on the intended
value date, that is, the trade fails, proceeds credited to the Cedelbank or
Euroclear participant's account will instead be valued as of the actual
settlement date.
S-11
<PAGE>
U.S. FEDERAL INCOME TAX CONSEQUENCES TO HOLDERS
In the opinion of Hughes & Luce, L.L.P., our counsel, the following is a
discussion of the material U.S. federal income tax consequences of the
ownership of notes as of the date of this prospectus supplement. Except where
noted, this discussion deals only with notes held as capital assets and does
not deal with special situations. For example, this discussion does not
address:
. tax consequences to holders who may be subject to special tax treatment,
such as dealers in securities or currencies, financial institutions, tax-
exempt entities, traders in securities that elect to use a mark-to-market
method of accounting for their securities holdings, corporations that
accumulate earnings to avoid federal income tax or life insurance
companies, or, in some cases, an expatriate of the United States or a
non-resident alien individual who has made a valid election to be treated
as a United States resident;
. tax consequences to persons holding Notes as part of a hedging,
integrated, constructive sale or conversion transaction or a straddle;
. tax consequences to holders of notes whose "functional currency" is not
the U.S. dollar;
. tax consequences to holders of notes that are "controlled foreign
corporations," "passive foreign investment companies" or "foreign
personal holding companies;"
. alternative minimum tax consequences, if any; or
. any state, local or foreign tax consequences.
The discussion below is based upon the provisions of the U.S. Internal
Revenue Code of 1986, as amended, and regulations, rulings and judicial
decisions as of the date of this prospectus supplement. Those authorities may
be changed, perhaps retroactively, so as to result in U.S. federal income tax
consequences different from those discussed below.
You should consult your own tax advisors concerning the U.S. federal income
tax consequences to you and any consequences arising under the laws of any
other taxing jurisdiction.
Consequences to United States Holders
The following is a discussion of the material U.S. federal tax consequences
that will apply to you if you are a United States holder of notes.
Certain consequences to "non-United States holders" of notes (which are
holders that are not United States holders) are described under "--
Consequences to Non-United States Holders" below.
"United States holder" means a beneficial owner of a note that is:
. a citizen or resident of the United States;
. a corporation or partnership created or organized in or under the laws of
the United States or any political subdivision of the United States;
. an estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
. a trust that (1) is subject to the supervision of a court within the
United States and the control of one or more U.S. persons or (2) has a
valid election in effect under applicable U.S. Treasury regulations to be
treated as a U.S. person.
Payments of Interest
Interest on a note will generally be taxable to you as ordinary income at
the time it is paid or accrued in accordance with your method of accounting for
tax purposes.
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<PAGE>
Pre-issuance Accrued Interest
The issue price of the notes will not include the amount attributable to
pre-issuance accrued interest. A portion of the interest payable on the first
interest payment date for the notes will be treated as a return of this pre-
issuance accrued interest, rather than as interest payable on the notes.
Bond Premium
It is anticipated that the notes will be issued with bond premium equal to
the excess of your tax basis in the notes over the principal amount of the
notes. You may make an election to amortize this premium, using a constant
yield method, over the remaining term of the notes. If you do not elect to
amortize bond premium, the premium will decrease the gain or increase the loss
you would otherwise recognize on disposition of the notes. An election to
amortize bond premium applies to all taxable debt obligations held or acquired
during or after the taxable year in which the election is made and may be
revoked only with the consent of the IRS.
Sale, Exchange and Retirement of Notes
Your tax basis in a note will, in general, be your cost for that note
reduced by any amortized premium and by the pre-issuance accrued interest. Upon
the sale, exchange, retirement or other disposition of a note, you will
recognize gain or loss equal to the difference between the amount you realize
upon the sale, exchange, retirement or other disposition (less an amount equal
to any accrued qualified stated interest) and the adjusted tax basis of the
note. That gain or loss will be capital gain or loss. Capital gains of
individuals derived in respect of capital assets held for more than one year
are eligible for reduced rates of taxation. The deductibility of capital losses
is subject to limitations.
Information Reporting and Backup Withholding
In general, information reporting requirements will apply to certain
payments of principal and interest paid on notes and to the proceeds of sale of
the notes made to you unless you are an exempt recipient (such as a
corporation). A 31% backup withholding tax will apply to such payments if you
fail to provide a taxpayer identification number or certification of foreign or
other exempt status or fail to report in full dividend and interest income.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against your U.S. federal income tax liability provided the
required information is furnished to the IRS.
Consequences to Non-United States Holders
The following is a discussion of the material U.S. federal income tax
consequences that generally will apply to you if you are a non-United States
holder of Notes. A non-United States holder is a holder other than a United
States holder.
U.S. Federal Withholding Tax
The 30% U.S. federal withholding tax will not apply to any payment of
principal of or interest on the notes, provided that:
. you do not actually or constructively own 10% or more of the total
combined voting power of all classes of our voting stock within the
meaning of the Internal Revenue Code and U.S. Treasury regulations;
. you are not a controlled foreign corporation that is related to us
through stock ownership;
. you are not a bank whose receipt of interest on the notes is described in
Section 881(c)(3)(A) of the Internal Revenue Code; and
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<PAGE>
. (1) you provide your name and address on an IRS Form W-8, and certify,
under penalty of perjury, that you are not a U.S. person or (2) a
financial institution holding the notes on your behalf certifies, under
penalty of perjury, that it has received an IRS Form W-8 from the
beneficial owner and provides us with a copy.
If you cannot satisfy the requirements described above, payments of interest
made to you will be subject to the 30% U.S. federal withholding tax, unless you
provide us with a properly executed (1) IRS Form 1001 or IRS Form W-8BEN (or
successor form) claiming an exemption from withholding under the benefit of a
tax treaty or (2) IRS Form 4224 or IRS Form W-8ECI (or successor form) stating
that interest paid on the notes is not subject to withholding tax because it is
effectively connected with your conduct of a trade or business in the United
States.
The 30% U.S. federal withholding tax generally will not apply to any gain
that you realize on the sale, exchange, retirement or other disposition of the
note.
U.S. Federal Estate Tax
Your estate will not be subject to U.S. federal estate tax on the notes
beneficially owned by you at the time of your death, provided that (1) you do
not own, within the meaning of the Internal Revenue Code and the U.S. Treasury
regulations, 10% or more of the total combined voting power of those classes of
our voting stock and (2) interest on the notes would not have been, if received
at the time of your death, effectively connected with the conduct by you of a
trade or business in the United States.
U.S. Federal Income Tax
If you are engaged in a trade or business in the United States and interest
on the notes is effectively connected with the conduct of that trade or
business (although exempt from the 30% withholding tax), you will be subject to
U.S. federal income tax on that interest on a net income basis in the same
manner as if you were a U.S. person as defined under the Internal Revenue Code.
In addition, if you are a foreign corporation, you may be subject to a branch
profits tax equal to 30% (or lower applicable treaty rate) of your earnings and
profits for the taxable year, subject to adjustments, that are effectively
connected with the conduct by you of a trade or business in the United States.
For this purpose, interest on notes will be included in your earnings and
profits.
Any gain or income realized on the disposition of a note generally will not
be subject to U.S. federal income tax unless (1) that gain or income is
effectively connected with the conduct of a trade or business in the United
States by you, or (2) you are an individual who is present in the United States
for 183 days or more in the taxable year of that disposition and certain other
conditions are met.
Information Reporting and Backup Withholding
In general, you will not be subject to information reporting and backup
withholding with respect to payments that we make to you provided that we do
not have actual knowledge that you are a U.S. person and we have received from
you the statement described above under "--U.S. Federal Withholding Tax."
In addition, you will not be subject to backup withholding and information
reporting with respect to the proceeds of the sale of a note within the United
States or conducted through certain U.S.-related financial intermediaries, if
the payor receives the statement described above and does not have actual
knowledge that you are a U.S. person, as defined under the Internal Revenue
Code, or you otherwise establish an exemption.
U.S. Treasury regulations were recently issued that generally modify the
information reporting and backup withholding rules applicable to certain
payments made after December 31, 2000. In general, the new U.S. Treasury
regulations would not significantly alter the present rules discussed above,
except in certain special situations.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against your U.S. federal income tax liability provided the
required information is furnished to the IRS.
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<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement,
dated November 4, 1999, we have agreed to sell to the underwriters named below,
severally and not jointly, the principal amount of notes set forth opposite
their respective names:
<TABLE>
<CAPTION>
Principal
Amount of
Underwriter Notes
----------- ------------
<S> <C>
Lehman Brothers Inc. ........................................... $200,000,000
Banc of America Securities LLC.................................. 50,000,000
------------
Total......................................................... $250,000,000
============
</TABLE>
The underwriters have advised us that they propose to offer the notes to the
public initially at the public offering prices set forth on the cover page of
this prospectus supplement. The underwriters may also offer notes to dealers at
that price less a concession not in excess of 0.275% of the principal amount of
the notes. The underwriters may allow, and these dealers may reallow, a
concession to other dealers not in excess of 0.250% of the principal amount of
the notes. After the initial public offering of the notes is completed, the
public offering prices and these concessions may be changed.
In connection with the offering, SEC rules permit the underwriters to engage
in certain transactions that stabilize the price of the notes. These
transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of the notes. If the underwriters create a
short position in the notes in connection with the offering by selling a larger
principal amount of notes than as set forth on the cover page of this
prospectus supplement, the underwriters may reduce that short position by
purchasing notes in the open market. In general, purchases of a security for
the purpose of stabilization or to reduce a short position could cause the
price of the security to be higher than it might otherwise be in the absence of
such purchases. Neither we nor either of the underwriters can make any
representation or prediction as to the direction or magnitude of any effect
that the transactions described above may have on the price of the notes. In
addition, neither we nor either of the underwriters makes any representation
that the underwriters will engage in such transactions, or that such
transactions, once begun, will not be discontinued without notice. Lehman
Brothers Inc. will act as stabilization manager for the offering of the notes.
One or both of the underwriters and their affiliates may from time to time
in the ordinary course of business provide, and have provided in the past,
investment or commercial banking services to Wal-Mart and its affiliates.
The notes offered by this prospectus supplement will trade interchangeably
with $3,250,000,000 of our 6.875% notes due 2009 that we issued on August 10,
1999.
We will pay transaction expenses, estimated to be approximately $50,000,
relating to the offering of the notes in addition to the underwriting discounts
appearing on the cover page of this prospectus supplement.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.
Each underwriter has represented and agreed that (1) it has not offered or
sold and prior to the date six months after the date of issue of the notes will
not offer or sell notes in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments as principal or agent for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the public
offers of Securities Regulations 1995; (2) it has complied and will comply with
all applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the notes in, from or otherwise involving
the United Kingdom; and (3) it has only issued or passed on, and will only
issue or pass on, in the United Kingdom any document received by it in
connection with the issue of the notes to a person who is of a kind described
in
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<PAGE>
Article 11(3) of the Financial Services Act 1986 (Investment Advertisement)
(Exemptions) Order 1996 (as amended) or is a person to whom the document may
otherwise lawfully be issued or passed on.
VALIDITY OF THE NOTES
The validity of the notes will be passed on for us by Hughes & Luce, L.L.P.,
Dallas, Texas and for the underwriters by Simpson Thacher & Bartlett, New York,
New York.
GENERAL INFORMATION
Application has been made to list the notes on the Luxembourg Stock
Exchange. In connection with the listing application, Wal-Mart has deposited
its certificate of incorporation and by-laws and a legal notice relating to the
issuance of the notes with Registrar of the District Court of Luxembourg
(Greffier en Chef du Tribunal d'Arrondissement de et a Luxembourg), where
copies may be obtained upon request. So long as any of the notes is
outstanding, copies of these documents, together with this prospectus
supplement, the attached prospectus, the indenture, a copy of the global notes
representing the notes and our current annual and quarterly reports, and all
future annual reports and quarterly reports, will be made available for
inspection at the main office of Kredietbank S.A. Luxembourgeoise in
Luxembourg, our listing agent, paying agent and transfer agent for the notes in
Luxembourg. Kredietbank S.A. Luxembourgeoise will act as intermediary between
the Luxembourg Stock Exchange and Wal-Mart and the holders of the notes. In
addition, copies of our annual reports and quarterly reports may be obtained
free of charge at that office.
Except as disclosed in the prospectus supplement or the attached prospectus,
including the documents incorporated by reference, there has been no material
adverse change in the financial position of Wal-Mart since July 31, 1999.
The independent auditors of Wal-Mart are Ernst & Young LLP, Tulsa, Oklahoma.
Neither Wal-Mart nor any of its subsidiaries is involved in litigation,
arbitration, or administrative proceedings relating to claims or amounts that
are material in the context of the offering of the notes. We are not aware of
any material litigation, arbitration or administrative proceedings pending or
threatened.
Resolutions authorizing the issue and sale of the notes were adopted by the
executive committee of Wal-Mart's board of directors on November 5, 1999.
The notes have been accepted for clearance through Euroclear and Cedelbank
and have been assigned the following identification numbers:
<TABLE>
<CAPTION>
Common Code ISIN Number CUSIP Number
----------- ------------ ------------
<S> <C> <C> <C>
10081432 US931142BE24 931142BE2
</TABLE>
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<PAGE>
PRINCIPAL EXECUTIVE OFFICES OF WAL-MART STORES, INC.
Wal-Mart Stores, Inc.
702 S.W. 8th Street
Bentonville, Arkansas 72716
U.S.A.
TRUSTEE, REGISTRAR, U.S. PAYING AGENT
AND U.S. TRANSFER AGENT
The First National Bank of Chicago
One First National Plaza
Suite 126
Chicago, Illinois 60670
U.S.A.
LUXEMBOURG LISTING AGENT, PAYING AGENT AND TRANSFER AGENT
Kredietbank S.A. Luxembourgeoise
43, Boulevard Royal
L-2955 Luxembourg
LEGAL ADVISERS
To the Company To the Underwriters
Hughes & Luce, L.L.P. Simpson Thacher & Bartlett
1717 Main Street 425 Lexington Avenue
Dallas, Texas 75201 New York, New York 10017
U.S.A. U.S.A.
INDEPENDENT AUDITORS
Ernst & Young LLP
3900 One Williams Center
Tulsa, Oklahoma 74172
U.S.A.
<PAGE>
$250,000,000
Wal-Mart Stores, Inc.
6.875% Notes Due 2009
---------------
Prospectus Supplement
November 8, 1999
---------------
Lead Manager Co-Manager
Lehman Brothers Banc of America Securities LLC
