<PAGE>
Filed Pursuant to Rule 424(B)(2)
SEC File No. 333-82909
PROSPECTUS SUPPLEMENT
(To prospectus dated August 5, 1999)
$500,000,000
Wal-Mart Stores, Inc.
6.875% Notes Due 2002
--------------------------------------------------------------------------------
We are offering $500,000,000 of our 6.875% notes due 2002.
We will pay interest on February 1 and August 1 of each year, beginning on
February 1, 2001.
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.
We expect to deliver the notes on or about August 1, 2000 through the book-
entry facilities of The Depository Trust Company, Clearstream Banking or
Euroclear.
The underwriters propose to offer the notes from time to time for sale in
negotiated transactions, or otherwise, at varying prices to be determined at
the time of each sale. The underwriters have agreed to purchase the notes from
us at 99.903% of their principal amount ($499,515,000 of proceeds to us),
subject to the terms and conditions of the Underwriting Agreement.
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.
--------------------------------------------------------------------------------
Joint Book-running Lead Managers
Lehman Brothers Goldman, Sachs & Co.
July 27, 2000
<PAGE>
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
Wal-Mart Stores, Inc....................................................... S-3
Use of Proceeds of the Notes............................................... S-3
Capitalization............................................................. S-4
Selected Financial Data.................................................... S-5
Description of the Notes................................................... S-6
Book-Entry Issuance........................................................ S-8
U.S. Federal Income Tax Consequences to Holders............................ S-11
Underwriting............................................................... S-14
Validity of the Notes...................................................... S-15
General Information........................................................ S-15
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.
This prospectus supplement and the attached prospectus may only be used in
connection with the offering of the notes.
S-2
<PAGE>
WAL-MART STORES, INC.
We are the world's largest retailer as measured by total net sales for
fiscal 2000. We had total net sales of approximately $165 billion in fiscal
2000, over 85% 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, Mexico and the United Kingdom, 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 April 30, 2000, we
operated in the United States:
. 1,784 Wal-Mart stores;
. 753 Supercenters; and
. 465 SAM'S Clubs.
As of April 30, 2000, we also operated 166 Canadian Wal-Mart stores, 10
units in Argentina, 16 units in Brazil, eight units in China, 95 units in
Germany, five units in Korea, 460 units in Mexico, 15 units in Puerto Rico and
236 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 subsidiary
companies, including McLane Company, Inc., Wal-Mart.com, Inc., Wal-Mart de
Mexico, S.A. de C.V., Asda Group Limited, 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 Wares Delaware
Corporation.
USE OF PROCEEDS OF THE NOTES
We estimate that the net proceeds from the sale of the notes will be
approximately $499,440,000 after underwriting discounts and payment of
transaction expenses.
We will use these net proceeds to reduce short-term commercial paper debt
incurred to retire long-term indebtedness that matured in June 2000.
S-3
<PAGE>
CAPITALIZATION
The following table presents the consolidated capitalization of Wal-Mart and
its subsidiaries at April 30, 2000, and as adjusted to give effect to the
offering of the notes and the application of the estimated net proceeds from
the sale of the notes.
<TABLE>
<CAPTION>
April 30, 2000
--------------------
Actual As Adjusted
------- -----------
(in millions)
<S> <C> <C>
Short-term debt
Commercial paper........................................ $ 4,759 $ 4,260
Long-term debt due within one year...................... 2,127 2,127
Obligations under capital leases due within one year.... 154 154
------- -------
Total short-term debt and capital lease obligations... 7,040 6,541
------- -------
Long-term debt
Long-term debt.......................................... 12,778 12,778
6.875% notes due 2002................................... -- 500
Long-term capital lease obligations..................... 2,928 2,928
------- -------
Total long-term debt and capital lease obligations.... 15,706 16,206
------- -------
Shareholders' equity
Common stock ($0.10 par value; 11,000,000,000 shares
authorized; 4,464,876,693 shares issued and
outstanding)........................................... 446 446
Capital in excess of par value.......................... 1,272 1,272
Retained earnings....................................... 26,004 26,004
Other accumulated comprehensive income.................. (581) (581)
------- -------
Total shareholders' equity............................ 27,141 27,141
------- -------
Total debt and capital lease obligations and
shareholders' equity................................. $49,887 $49,888
======= =======
</TABLE>
After the sale of the notes, we will have offered or sold an aggregate
principal amount of $8,000,000,000 of debt securities pursuant to registration
statements that we filed with the SEC. We are permitted to issue an additional
$2,500,700,000 of debt securities under one of those registration statements.
No limit exists on our ability to register additional debt securities for sale
in the future.
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>
Quarter Ended
Fiscal Years Ended January 31, April 30,
------------------------------------------- ---------------
1996 1997 1998 1999 2000 1999 2000
------- -------- -------- -------- -------- ------- -------
(in millions) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales...................... $93,627 $104,859 $117,958 $137,634 $165,013 $34,717 $42,985
Non-interest expense........... 89,526 100,456 112,796 131,088 156,704 33,129 40,983
Interest expense............... 888 845 784 797 1,022 191 330
Total expense.................. 90,414 101,301 113,580 131,885 157,726 33,320 41,313
Income before income taxes,
minority interest, equity in
unconsolidated subsidiaries
and cumulative effect of
accounting change............. 4,359 4,877 5,719 7,323 9,083 1,809 2,134
Net income..................... 2,740 3,056 3,526 4,430 5,377 916 1,326
<CAPTION>
As of January 31, As of April 30,
------------------------------------------- ---------------
1996 1997 1998 1999 2000 1999 2000
------- -------- -------- -------- -------- ------- -------
(in millions) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents...... 83 883 1,447 1,879 1,856 1,967 1,360
Inventories.................... 15,989 15,897 16,497 17,076 19,793 18,149 20,971
Total current assets........... 17,331 17,993 19,352 21,132 24,356 22,346 25,101
Net property, plant and
equipment..................... 17,098 18,333 21,469 23,674 32,839 24,310 33,901
Net property under capital
leases,
net goodwill and other acquired
intangible assets, and other
assets and deferred charges... 3,112 3,278 4,563 5,190 13,154 5,367 13,361
Total assets................... 37,541 39,604 45,384 49,996 70,349 52,023 72,363
Accounts payable............... 6,442 7,628 9,126 10,257 13,105 11,235 13,160
Commercial paper............... 2,458 -- -- -- 3,323 -- 4,759
Long-term debt due within one
year.......................... 271 523 1,039 900 1,964 878 2,127
Obligations under capital
leases due within one year.... 69 95 102 106 121 114 154
Total current liabilities...... 11,454 10,957 14,460 16,762 25,803 17,939 27,624
Long-term debt................. 8,508 7,709 7,191 6,908 13,672 6,933 12,778
Long-term obligations under
capital leases................ 2,092 2,307 2,483 2,699 3,002 2,846 2,928
Total liabilities.............. 22,785 22,461 26,881 28,884 44,515 30,200 45,222
Total shareholders' equity..... 14,756 17,143 18,503 21,112 25,834 21,823 27,141
Total liabilities and
shareholders' equity.......... 37,541 39,604 45,384 49,996 70,349 52,023 72,363
</TABLE>
Certain balance sheet data as of April 30, 1999 have been adjusted to
reflect the effect of an accounting method change we made in fiscal 2000.
The ratio of our earnings to fixed charges was 6.24x and 6.76x for the
fiscal years ended January 31, 1999 and 2000, respectively, and 6.13x and 5.47x
for the quarters ended April 30, 1999 and 2000, respectively. The ratio of
earnings to fixed charges for the quarter ended April 30, 1999 has been
adjusted to reflect the effect on that quarter of the accounting change
referred to above. Prior to the adjustment, that ratio was 6.11x for that
quarter. See "Ratio of Earnings to Fixed Charges" in the attached prospectus.
S-5
<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 1, 2002 at 100% of their principal amount.
The notes will initially be issued in a total principal amount of
$500,000,000. We may, without the consent of the holders of the notes, create
and issue additional notes ranking equally with the notes that we are offering
and otherwise similar in all respects to the notes so that these additional
notes will be consolidated and form a single series with the notes that we are
offering. 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 on the notes in U.S. dollars.
The notes will bear interest from August 1, 2000 at an annual interest rate
of 6.875%. Interest will be payable semi-annually in arrears on February 1 and
August 1 of each year, beginning on February 1, 2001, to the person in whose
name the note is registered at the close of business on the preceding January
15 or July 15, 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 mailed to such holders and will also
be published in a leading daily newspaper in The City of New York and in
London. We expect that publication will be made in The City of New York in The
Wall Street Journal and in London in the Financial Times. Any notice shall be
deemed to have been given on the date of mailing and publication or, if
published more than once, on the date of first publication.
Bank One Trust Company, NA is the trustee under the indenture governing the
notes and will also be the registrar and paying agent.
The indenture and the notes will be governed by New York law.
Same-Day Settlement and Payment
We will make all payments of principal 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 and interest on that note, after deduction or 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
S-6
<PAGE>
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 United States or being or having been engaged in trade or
business or present in the United States 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 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 (1) 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 (2) 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 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.
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
S-7
<PAGE>
result of any change 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 July 27, 2000 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 of that series 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 to so 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 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
S-8
<PAGE>
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.
Clearstream Banking and Euroclear
Links have been established among DTC, Clearstream Banking 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, Clearstream Banking 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.
Clearstream Banking 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 Clearstream Banking and Euroclear, as
participants in DTC.
When notes are to be transferred from the account of a DTC participant to
the account of a Clearstream Banking participant or a Euroclear participant,
the purchaser must send instructions to Clearstream Banking or Euroclear
through a participant at least one day prior to settlement. Clearstream Banking
or Euroclear, as the case may be, will instruct its U.S. agent to receive notes
against payment. After settlement, Clearstream Banking 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 Clearstream Banking 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 Clearstream Banking or Euroclear participant wishes to transfer notes
to a DTC participant, the seller will be required to send instructions to
Clearstream Banking or Euroclear through a participant at least
S-9
<PAGE>
one business day prior to settlement. In these cases, Clearstream Banking 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 Clearstream
Banking 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 Clearstream Banking or
Euroclear participant's account will instead be valued as of the actual
settlement date.
[The balance of this page has intentionally been left blank.]
S-10
<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 material U.S. federal income tax consequences of the ownership of
notes as of the date of this prospectus supplement for beneficial owners of
notes that purchase the notes at their "issue price" on the issue date in
connection with this offering. 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
nonresident 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 material U.S. federal tax consequences that
will apply to you if you are a United States holder of notes.
"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.
S-11
<PAGE>
Sale, Exchange and Retirement of Notes
Your tax basis in a note will, in general, be your cost for that note
reduced by any cash payments on that note other than qualified stated 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 which will be taxable as such if not
previously included in income) 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 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 Section 871(h)(3) of Internal Revenue Code and related 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
. (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.
S-12
<PAGE>
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.
S-13
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement,
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
Underwriters Notes
------------ ------------
<S> <C>
Lehman Brothers Inc................................................ $250,000,000
Goldman, Sachs & Co................................................ $250,000,000
------------
Total............................................................ $500,000,000
============
</TABLE>
The underwriters propose to offer the notes from time to time for sale in
negotiated transactions, or otherwise, at varying prices to be determined at
the time of each sale. In connection with the sale of the notes, the
underwriters may be deemed to have received compensation from us in the form of
underwriting discounts.
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 any 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 any 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 more 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.
We will pay transaction expenses, estimated to be approximately $75,000,
relating to the offering of the notes.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
S-14
<PAGE>
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
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 our financial position since April 30, 2000.
Our independent auditors are Ernst & Young LLP, Tulsa, Oklahoma.
Neither we nor any of our subsidiaries are 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.
The issuance and sale of the notes were authorized by the executive
committee of our board of directors on July 27, 2000.
The notes have been accepted for clearance through DTC, Clearstream Banking
and Euroclear and have been assigned the following identification numbers:
<TABLE>
<S> <C> <C>
Common Code ISIN Number CUSIP Number
----------- ----------- ------------
011570631 US931142BG71 931142BG7
</TABLE>
S-15
<PAGE>
PROSPECTUS
Wal-Mart Stores, Inc.
$10,500,700,000
DEBT SECURITIES
This prospectus forms part of shelf registration statements that we filed
with the SEC. We may use these registration statements to offer and sell, in
one or more offerings at various times, up to a total of $10,500,700,000 of our
debt securities. We may sell the debt securities in different series which have
different terms and conditions.
This prospectus provides you with a general description of the debt
securities that we may offer. When we sell a particular series of the debt
securities, we will provide a prospectus supplement describing the specific
terms and conditions of that series of debt securities, including:
. the public offering price;
. the maturity date;
. the interest rate or rates, which may be fixed or variable;
. the times for payment of principal, interest and any premium; and
. any redemption provisions of the debt securities in the series.
The prospectus supplement may also contain, in the case of some series of
debt securities, important information about U. S. federal income tax
consequences to which you may become subject if you acquire the debt securities
being offered by that prospectus supplement. The prospectus supplement may also
update or change information contained in this prospectus.
You should read both this prospectus and any prospectus supplement together
with the additional information described under the heading "Where You Can Find
More Information."
We maintain our principal executive offices at:
702 S.W. 8th Street
Bentonville, Arkansas 72716
Telephone: (501) 273-4000.
Neither the Securities and Exchange Commission nor any state securities
commission or other regulatory body has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this Prospectus is August 5, 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
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 and in any accompanying prospectus supplement. We
have not authorized anyone to provide you with different information.
We are not offering the debt securities in any jurisdiction in which the
offer is not permitted.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Instead of repeating the information that we have
already filed with the SEC, the SEC allows us to "incorporate by reference" in
this prospectus information contained in documents we have filed with the SEC.
Those documents form an important part of this prospectus. Any documents that
we file with the SEC in the future will also be considered to be part of this
prospectus and will automatically update and supersede the information
contained in this prospectus.
We incorporate by reference in this prospectus the documents listed below
and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until we complete or terminate the
offering of debt securities by this prospectus.
. our Annual Report on Form 10-K for our fiscal year ended January 31,
1999; and
. our Quarterly Report on Form 10-Q for our quarter ended April 30, 1999.
As allowed by the SEC's rules, we have not included in this prospectus all
of the information that is included in the registration statement. At your
request we will provide you, free of charge, with a copy of the registration
statement, any of the exhibits to the registration statement or a copy of any
other filing we have made with the SEC. If you want more information, write in
care of or call:
Allison D. Garrett, Esq.
Assistant General Counsel and Assistant Secretary
Wal-Mart Stores, Inc.
Corporate Offices
702 S.W. 8th Street
Bentonville, Arkansas 72716
Telephone: (501) 273-4505
You may also obtain a copy of any filing we have made with the SEC directly
from the SEC. You may either:
. read and copy any materials we file with the SEC at the SEC's public
reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 and at
its offices in New York, New York and Chicago, Illinois; or
2
<PAGE>
. visit the SEC's Internet site at http://www.sec.gov, which contains
reports, proxy and information statements and other information regarding
issuers that file electronically.
You can obtain more information about the SEC's public reference room by
calling the SEC at 1-800-SEC-0330.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes and incorporates by reference certain statements
that may be deemed to be "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
may be included, for example, under "Wal-Mart Stores, Inc." and "Use of
Proceeds," and in certain portions of our reports and other information
incorporated in this prospectus by reference. These forward-looking statements
may include statements that address activities, events or developments that we
expect or anticipate will or may occur in the future, including:
. future capital expenditures, including the amount and nature of those
expenditures;
. expansion and other development trends of industry segments in which we
are active;
. our business strategy;
. expansion and growth of our business; and
. operations and other similar matters.
Although we believe the expectations expressed in the forward-looking
statements are based on reasonable assumptions within the bounds of our
knowledge of our business, a number of factors could cause actual results to
differ materially from those expressed in any forward-looking statements,
whether oral or written, made by us or on our behalf. Many of these factors
have previously been identified in filings or statements made by us or on our
behalf.
Our business operations are subject to factors outside our control. Any one,
or a combination, of these factors could materially affect our financial
performance. These factors include:
. the costs of goods;
. competitive pressures;
. inflation;
. consumer debt levels;
. currency exchange fluctuations;
. trade restrictions;
. changes in tariff and freight rates;
. Year 2000 issues;
. unemployment levels;
. interest rate fluctuations; and
. other capital market and economic conditions.
Forward-looking statements that we make or that are made by others on our
behalf are based on a knowledge of our business and the environment in which we
operate, but because of the factors listed above, actual results may differ
from those in the forward-looking statements. Consequently, all of the forward-
looking statements made are qualified by these cautionary statements. We cannot
assure you that the actual results or developments anticipated by us will be
realized or, even if substantially realized, that they will have the expected
consequences to or effects on us or our business or operations. Prospective
investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. We assume no obligation to
update any of the forward-looking statements.
3
<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 January 31, 1999, we operated in the
United States:
. 1,869 Wal-Mart stores;
. 564 Supercenters; and
. 451 SAM'S Clubs.
As of January 31, 1999, we also operated 153 Canadian Wal-Mart stores, 13
units in Argentina, 14 units in Brazil, five units in China, 95 units in
Germany, 416 units in Mexico, four units in Korea and 15 units in Puerto Rico.
The units operated by our International Division represent a variety of retail
formats.
Wal-Mart Stores, Inc. was incorporated in the State of Delaware in 1969.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of our earnings to fixed charges,
for the periods indicated:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Three Months
Ended
Year Ended January 31, April 30,
---------------------------------------------------------------- --------------------------
<CAPTION>
1995 1996 1997 1998 1999 1998 1999
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
4.62x 4.15x 4.59x 5.33x 6.24x 4.98x 6.11x
</TABLE>
For the purpose of computing our ratios of earnings to fixed charges, we
have defined "earnings" to mean our earnings before income taxes and fixed
charges, excluding capitalized interest and earnings attributable to minority
interests owned by others in our subsidiaries.
We have also defined "fixed charges" to mean:
. the interest that we pay; plus
. the capitalized interest that we show on our accounting records; plus
. the portion of the rental expense for real and personal property that we
believe represents the interest factor in those rentals.
We have not disclosed ratios of earnings to fixed charges and preferred
stock dividends because we do not have any shares of preferred stock
outstanding.
4
<PAGE>
USE OF PROCEEDS
Except as we otherwise specifically describe in the applicable prospectus
supplement, we will use the net proceeds from the sale of the debt securities:
. to repay the short-term borrowings that we have incurred to acquire land
and construct stores and other facilities;
. to repay short-term borrowings that we have incurred to acquire other
companies and assets; and
. to meet our other general working capital requirements.
Before we apply the net proceeds to one or more of these uses, we may invest
those net proceeds in short-term marketable securities.
We may also incur from time to time additional debt other than through the
offering of debt securities under this prospectus.
DESCRIPTION OF THE DEBT SECURITIES
We will issue the debt securities in one or more series under an indenture,
dated as of April 1, 1991, that was supplemented by a supplemental indenture
dated as of September 9, 1992 (which we refer to together as the "indenture"),
between us and The First National Bank of Chicago, as the trustee.
The indenture is a contract between us and the trustee. The trustee has two
main roles. First, the trustee can enforce your rights against us if an "event
of default," as that term is described below, occurs. Second, the trustee
performs certain administrative duties for us.
We have summarized below the material provisions of the debt securities to
which this prospectus relates and the indenture. However, you should understand
that this is only a summary, and we have not included all of the provisions of
the indenture. We have filed the indenture with the SEC, and we suggest that
you read the indenture. We are incorporating by reference the provisions of the
indenture referred to in the following summary, whether by reference to
articles, sections or defined terms. The summary is qualified in its entirety
by those provisions of the indenture. The section numbers set forth below refer
to the sections of the indenture.
We will describe the particular terms and conditions of any series of debt
securities offered in the applicable prospectus supplement. The prospectus
supplement, which we will file with the SEC, may or may not modify the general
terms found in this prospectus. For a complete description of any series of
debt securities, you should read both this prospectus and the prospectus
supplement relating to that series of debt securities.
General
As a holder of these debt securities, you will be one of our unsecured
creditors and will have a right to payment equal to that of the other unsecured
creditors of Wal-Mart Stores, Inc.
The debt securities offered by this prospectus will be limited to a total of
$10,500,700,000, or the equivalent amount in any non-U.S. currency. The
indenture, however, does not limit the amount of debt securities that may be
issued under it and provides that debt securities may be issued under it from
time to time in one or more series.
5
<PAGE>
The prospectus supplement will describe the following terms of each series
of debt securities:
. the title of the series;
. the aggregate principal amount of the debt securities of the series;
. the date or dates on which the principal will be paid;
. the percentage of the principal amount at which the debt securities in
the series will be issued and, if less than the face amount, the portion
of the principal amount payable if the holders or the trustee accelerates
the maturity of those debt securities;
. the annual interest rate or rates payable on the debt securities in the
series, which may be fixed or variable;
. the date or dates from which interest, if any, will accrue;
. the dates on which interest will be payable and the record dates for the
interest payment dates;
. the place or places where principal, interest and any premium will be
paid;
. the times when we may redeem some or all of the debt securities in the
series or you may cause us to redeem some or all of those debt securities
and terms of any of those redemptions;
. the price at which we may redeem, at our option, the debt securities in
the series;
. whether we will be obligated to redeem or purchase any of the debt
securities in the series with funds from a sinking fund and the times and
terms, including price, on which we must redeem or purchase, those debt
securities;
. if other than denominations of $1,000 or a multiple of $1,000, the
denominations, which may include other currencies, in which the debt
securities in the series will be issuable and payable;
. the currency of payment of principal of and interest and any premium on
the debt securities in the series;
. any index, formula or other method that we must use to determine the
amount of payment of principal of and interest and any premium on the
debt securities in the series;
. the portion of the principal amount of the debt securities in the series
which will be payable upon the acceleration of their maturity if the
principal amount payable will be less than the total unpaid principal
amount;
. whether you may elect to be paid or we may pay you in a currency other
than the currency in which the debt securities in the series are stated
to be payable, and when and on what terms we must or may make that
payment;
. whether the debt securities in the series will be issued in certificated
or book-entry form;
. the applicability, if any, of the defeasance provisions of the indenture,
or any modification thereof; and
. any other specific terms and conditions of the series of debt securities.
If we sell any series of debt securities for, that we may pay in, or that
are denominated in, one or more foreign currencies, currency units or composite
currencies, we will disclose applicable restrictions, elections, tax
consequences, specific terms and other information with respect to that series
of debt securities and the relevant currencies, currencies units or composite
currencies in the prospectus supplement relating to the offer of that series.
We may also offer and sell a series of the debt securities as original issue
discount securities, bearing no interest or interest at a rate which at the
time of issuance is below market rates, at a substantial discount below their
stated principal amount. We will describe the U.S. federal income tax
consequences and other special considerations applicable to any original issue
discount securities of that kind described in the prospectus supplement
relating to that series.
6
<PAGE>
Covenants
We summarize below the covenants contained in the indenture. Following the
summary of these covenants, we provide the definitions of the capitalized terms
that are used in the summary.
Restrictions on Liens. We will not, and will not permit any of our
subsidiaries to issue, assume or guarantee any debt for money we borrow if that
debt is secured by any mortgage, deed of trust, security interest, pledge, lien
or other encumbrance upon any Operating Property belonging to us or of any of
our subsidiaries or any shares of stock or indebtedness of any of our
subsidiaries, whether owned at the date of the indenture or thereafter
acquired, without effectively securing the debt securities equally and ratably
with that debt. This restriction does not, however, apply to:
. mortgages on any property acquired, constructed or improved by us or any
of our subsidiaries after January 31, 1991, created or assumed within 60
months after the acquisition, or construction or improvement is complete,
or within six months after completion pursuant to a firm commitment for
financing arrangement that we enter into within that 60-month period, to
secure or provide for the payment of the purchase price or cost;
. mortgages existing on any property at the time of its acquisition;
. mortgages existing on any property, shares of stock or debt acquired from
a corporation merged with or into us or one of our subsidiaries;
. mortgages on property of any corporation existing at the time it becomes
our subsidiary;
. mortgages to secure debt of any of our subsidiaries to us or to another
of our subsidiaries;
. mortgages in favor of governmental bodies to secure partial progress,
advance or other payments pursuant to any contract or statute or to
secure indebtedness incurred to finance the purchase price or cost of
constructing or improving the property subject to those mortgages; or
. mortgages for extending, renewing or replacing debt secured by any
mortgage referred to in the foregoing items or in this item or any
mortgages existing on January 31, 1991.
This restriction does not apply to the issuance, assumption or guarantee by us
or any of our subsidiaries of debt secured by a mortgage which would otherwise
be subject to the restrictions described above up to an aggregate amount which,
together with all of our and our subsidiaries' secured debt, not including
secured debt permitted under the foregoing exceptions, and the Value of Sale
and Lease-back Transactions existing at that time other than those Sale and
Lease-back Transactions the proceeds of which have been applied to the
retirement of certain long-term debt or to the purchase of other operating
property, and other than those Sale and Lease-back Transactions in which the
property involved would have been permitted to be mortgaged under the principle
described in the first item above, does not exceed the greater of 10% of our
Consolidated Net Tangible Assets or 15% of Consolidated Capitalization.
(Section 3.03)
Restrictions on Sale and Lease-back Transactions. We will not and will not
permit any of our subsidiaries to, engage in Sale and Lease-back Transactions
relating to any Operating Property, except for temporary leases for a term,
including renewals, of not more than 48 months and except for leases between us
and one of our subsidiaries or between our subsidiaries. However, we or our
subsidiaries can engage in that type of transaction if the net proceeds of the
Sale and Lease-back Transaction are at least equal to the sum of all costs
incurred by us in connection with the acquisition of, and construction of any
improvement on, the Operating Property to be leased and either:
. we or our subsidiary would be entitled to incur debt secured by a
mortgage on the property to be leased without securing the debt
securities pursuant to the first exception to the prohibition on liens
stated under "Restrictions on Liens" above; or
7
<PAGE>
. the Value thereof would be an amount permitted under the last sentence
under "Restrictions on Liens" above; or
. we apply an amount equal to the sum of all costs incurred by us in
connection with the acquisition of, and the construction of any
improvements on, that property (1) to the payment or other retirement of
certain of our or one of our subsidiary's long-term debt or (2) to the
purchase of Operating Property, other than that involved in that Sale and
Lease-back Transaction. (Section 3.04)
Mergers, Consolidations and Sale of Our Assets. We may merge with or
consolidate into another corporation or sell or convey all or substantially all
of our property to another corporation that is authorized to purchase and
operate our property, as long as:
. immediately after the merger, consolidation, sale or conveyance, the
surviving or acquiring corporation is not in default under the indenture;
. the surviving or acquiring corporation is a U.S. corporation; and
. the surviving or acquiring corporation assumes, by a supplemental
indenture satisfactory to the trustee, the obligation to pay the
principal of and interest and any premium on all of the debt securities
and to perform our covenants under the indenture. (Section 10.01)
In the case of a merger or consolidation or a sale or conveyance of all or
substantially all of our assets and the assumption of our liabilities under the
indenture by a successor corporation, the successor corporation will assume our
place in the indenture as if it had originally been a party to the indenture.
The successor corporation may then issue debt securities under the indenture.
(Section 10.02)
Definitions. The indenture contains the following defined terms that are
used in the covenants. (Section 1.01)
"Consolidated Capitalization" means the total of all the assets appearing on
our and our subsidiaries' consolidated balance sheets less current liabilities
and deferred income taxes.
"Consolidated Net Tangible Assets" means the total of all the assets
appearing on our and our subsidiaries' consolidated balance sheets less:
. current liabilities;
. reserves for depreciation and other asset valuation reserves;
. intangible assets such as goodwill, trademarks, trade names, patents, and
unamortized debt discount and expense; and
. appropriate adjustments on account of minority interests of other persons
holding stock in any of our majority-owned subsidiaries.
"Operating Property" means any manufacturing or processing plant, office
facility, retail store, wholesale club, Supercenter, hypermart, warehouse,
distribution center or equipment located within the United States of America or
its territories or possessions and owned and operated now or hereafter by us or
any of our subsidiaries and having a book value on the date as of which the
determination is being made of more than 0.60% of Consolidated Net Tangible
Assets; provided, however, that separate items of equipment with an aggregate
book value in excess of $200,000,000 that are secured pursuant to the same
financing transaction will constitute one "Operating Property."
"Sale and Lease-back Transaction" means any arrangement with any person
providing for the leasing to us or any of our subsidiaries of any Operating
Property, except for temporary leases for a term, including any renewal
thereof, of not more than 48 months and except for leases between us and one of
our subsidiaries or between our subsidiaries, which Operating Property has been
or is to be sold or transferred by us or one of our subsidiaries to that
person.
8
<PAGE>
"Value" means, with respect to a Sale and Lease-back Transaction, as of any
particular time, the amount equal to the greater of:
. the net proceeds from the sale or transfer of the property leased
pursuant to that Sale and Lease-back Transaction; or
. the sum of all of our costs incurred in connection with the acquisition
of that property and the construction of any improvements thereon, as
determined in good faith by us at the time of entering into that Sale
and Lease-back Transaction,
in either case multiplied by a fraction, the numerator of which shall be equal
to the number of full years of the term of the lease remaining at the time of
determination and the denominator of which shall be equal to the number of full
years of that term, without regard to any renewal or extension options
contained in the lease.
Events of Default, Notice and Waiver
An event of default with respect to any series of debt securities is:
. a default in payment of principal or premium, if any, at maturity;
. a default for 30 days in payment of any interest;
. our failure for 60 days after notice to perform any other of the
covenants or agreements in the indenture;
. our default in the payment of any of our debt or acceleration of any of
that debt under the terms of the instrument under which that debt is
issued, if that default in payment is not cured or that acceleration is
not annulled within 10 days after written notice;
. certain events in the case of our bankruptcy, insolvency or
reorganization; or
. any other event of default provided with respect to any series of debt
securities. (Section 5.01)
If an event of default occurs and is continuing with respect to any series
of debt securities, either the trustee or the holders of 25% in principal
amount then outstanding of the debt securities of that series may declare the
principal of all the debt securities to be due and payable immediately, but
upon certain conditions that declaration may be annulled. The holders of a
majority in principal amount then outstanding of the debt securities of a
series may waive defaults, except an uncured default in the payment of
principal of or interest or any premium on the debt securities. (Sections 5.01
and 5.06)
We are required to file annually with the trustee a certificate either
stating the absence of any default or specifying any default that exists.
(Section 3.09) The trustee is required, within 90 days after the occurrence of
a default with respect to the debt securities of any series, to give to the
holders of the debt securities notice of all uncured defaults known to it.
However, except in the case of default in the payment of principal and premium,
if any, or interest on any of the debt securities of that series, the trustee
will be protected in withholding that notice if the trustee in good faith
determines that the withholding of that notice is in the interest of the
holders of the debt securities of that series. The term "default," for the
purpose of this provision only, means the occurrence of any of the events of
default specified above excluding any grace periods. (Section 5.07)
The trustee is entitled, subject to the duty of the trustee during a default
to act with the required standard of care, to be indemnified by the holders of
the debt securities of any series before proceeding to exercise any right or
power under the indenture at the request of those holders. The indenture
provides that the holders of a majority in principal amount of each series of
outstanding debt securities may direct, with regard to that series, the time,
method and place of conducting any proceeding for any remedy available to the
trustee, or exercising any trust or power conferred on the trustee, provided
that the trustee may decline to act if that direction is contrary to law or if
the trustee determines in good faith that the proceeding so directed would be
illegal or would involve it in personal liability. (Section 5.06)
9
<PAGE>
Modification of the Indenture
The trustee and we, with the consent of the holders of not less than 66 2/3%
in aggregate principal amount of each series of the debt securities at the time
outstanding affected thereby, may execute supplemental indentures amending,
changing or eliminating the provisions of the indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of those debt
securities. However, no supplemental indenture of that kind may:
. extend the fixed maturity of any debt securities or the time of payment
of interest, reduce the interest rate, the principal amount or any
premium to be paid upon redemption or the amount of principal of an
original issue discount security that would be payable upon acceleration
of maturity, or impair or affect the right of any debt security holder
to institute suit for payment or the right of repayment, if any, at the
option of the holder of debt securities, without the consent of the
holder of each debt securities so affected; or
. reduce the above percentage of debt securities, the holders of which are
required to consent to any supplemental indenture of that kind, without
the consent of the holders of all the affected debt securities then
outstanding.
(Section 9.02) In some circumstances, the holders of a majority in aggregate
principal amount of each series of debt securities may waive all defaults and
rescind and annul a declaration that the series of debt securities has become
due and payable and the consequences of a declaration of that kind. (Section
5.01)
The trustee and we, without the consent of the holders of the debt
securities, may execute an indenture or supplemental indentures to:
. evidence the succession of another corporation to us and our successor's
assumption to our agreements and obligations with respect to the debt
securities and the indenture;
. add to our covenants further restrictions or conditions that our board
of directors and the trustee consider to be for the protection of
holders of all or any series of the debt securities and to make the
occurrence of a default in any of those additional covenants,
restrictions or conditions a default or an event of default permitting
enforcement of all or any of the several remedies provided in the
indenture with some permissible limitations;
. cure ambiguities or correct or supplement any provision contained in the
indenture or any supplemental indenture that may be defective or
inconsistent with another provision;
. provide for the issuance of debt securities whether or not then
outstanding under the indenture in coupon form and to provide for
exchangeability of the coupon form securities with debt securities
issued under the indenture in fully registered form;
. establish the form or terms and to provide for the issuance of any
series of debt securities under the indenture; and
. evidence and provide for the acceptance of appointment of a successor
trustee and to change the indenture as necessary to have more than one
trustee under the indenture. (Section 9.01)
Defeasance of Offered Debt Securities in Certain Circumstances
The indenture provides that our board of directors may provide by resolution
that we will be discharged from any and all obligations in respect of the debt
securities of any series upon the deposit with the trustee, in trust, of money
and/or obligations of, or obligations the principal of and interest on which
are fully guaranteed by, the United States of America, which through the
payment of interest and principal those debt securities in accordance with
their terms will provide money in an amount sufficient to pay any installment
of principal of and interest on the debt securities of that series on the
stated maturity of those payments in accordance with the terms of the indenture
and those debt securities. A discharge may only occur if we have received from,
or there has been published by, the U.S. Internal Revenue Service a ruling to
the effect that the discharge will not be deemed, or result in, a taxable event
with respect to holders of the debt securities of that series. (Section 11.05)
10
<PAGE>
Global Securities
Unless otherwise stated in a prospectus supplement, the debt securities of
a series will be issued in whole or in part in the form of one or more global
securities that will be deposited with, or on behalf of, a depositary
identified in the applicable prospectus supplement relating to that series.
The global securities may be issued in either registered or bearer form and in
either temporary or permanent form. The specified terms of the depositary
arrangement with respect to a series of debt securities will be described in
the applicable prospectus supplement relating to that series.
Concerning the Trustee
The First National Bank of Chicago, a national banking association with its
principal offices in Chicago, Illinois, is the trustee under the indenture and
will also serve as paying agent and registrar.
The First National Bank of Chicago also serves as trustee under an
indenture dated as of December 1, 1986 covering secured bonds issued in the
aggregate principal amount of $137,082,000 by the owner-trustees of
approximately 24 SAM'S Clubs store properties which are leased to us. We have
issued notes in the aggregate principal amount of $1.00 billion under this
indenture as originally executed and, as of the date of this prospectus, $7.05
billion under the indenture as supplemented. First Chicago Leasing
Corporation, an affiliate of The First National Bank of Chicago, established a
business trust which purchased 15 Wal-Mart discount department stores for
$53,661,785 and leased the stores back to us for an initial term of 20 years
in a transaction which was consummated on December 22, 1992. On November 10,
1994, a second business trust of which First Chicago Leasing Corporation is a
beneficiary purchased an additional 23 Wal-Mart discount department stores for
$128,842,5000 and leased the stores back to us for an initial term of 20
years. We expect that we will also maintain banking relationships in the
ordinary course of business with The First National Bank of Chicago.
U.S. FEDERAL INCOME TAX CONSEQUENCES TO HOLDERS
A prospectus supplement may describe the principal U. S. federal income tax
consequences of acquiring, owning and disposing of debt securities of some
series in the following circumstances:
. payment of the principal, interest and any premium in a currency other
than the U. S. dollar;
. the issuance of any debt securities with "original issue discount," as
defined for U. S. federal income tax purposes; and
. the inclusion of any special terms in debt securities that may have a
material effect for U. S. federal income tax purposes.
PLAN OF DISTRIBUTION
General
We may sell the debt securities being offered hereby:
. directly to purchasers;
. through agents;
. through dealers;
. through underwriters; or
. through a combination of any of those methods of sale.
We may effect the distribution of the debt securities from time to time in
one or more transactions either:
. at a fixed price or prices which may be changed;
. at market prices prevailing at the time of sale; or
. at prices related to the prevailing market prices; or
. at negotiated prices.
11
<PAGE>
We may directly solicit offers to purchase the debt securities. Offers to
purchase debt securities may also be solicited by agents designated by us from
time to time. Any of those agents, who may be deemed to be an "underwriter," as
that term is defined in the Securities Act of 1933, involved in the offer or
sale of the debt securities in respect of which this prospectus is delivered
will be named, and any commissions payable by us to that agent will be set
forth in the prospectus supplement.
If a dealer is utilized in the sale of the debt securities in respect of
which this prospectus is delivered, we will sell those debt securities to the
dealer, as principal. The dealer, who may be deemed to be an "underwriter," as
that term is defined in the Securities Act of 1933, may then resell those debt
securities to the public at varying prices to be determined by that dealer at
the time of resale.
If we use an underwriter or underwriters in the sales, we will execute an
underwriting agreement with those underwriters at the time of sale of the debt
securities and the name of the underwriters will be set forth in the prospectus
supplement, which will be used by the underwriters to make resales of the debt
securities in respect of which this prospectus is delivered to the public. The
compensation of any underwriters will also be set forth in the prospectus
supplement.
Underwriters, dealers, agents and other persons may be entitled, under
agreements that may be entered into with us, to indemnification by us against
certain civil liabilities, including liabilities under the Securities Act of
1933, or to our contributing to payments those underwriters, dealers, agents
and other persons are required to make.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, us or any of our subsidiaries in the ordinary course of business.
LEGAL MATTERS
The validity of the debt securities offered by this prospectus and any
prospectus supplement will be passed upon for us by Hughes & Luce, L.L.P., our
counsel.
EXPERTS
The consolidated financial statements of Wal-Mart Stores, Inc. and
subsidiaries incorporated by reference in our Annual Report on Form 10-K for
the fiscal year ended January 31, 1999, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon incorporated by
reference therein and incorporated herein by reference. Such financial
statements are, and audited financial statements to be included in subsequently
filed documents will be, incorporated herein in reliance upon the reports of
Ernst & Young LLP pertaining to such financial statements (to the extent
covered by consents filed with the Securities and Exchange Commission) given
upon the authority of such firm as experts in accounting and auditing.
12
<PAGE>
$500,000,000
Wal-Mart Stores, Inc.
6.875% Notes Due 2002
--------------------------
PROSPECTUS SUPPLEMENT
July 27, 2000
--------------------------
Lehman Brothers Goldman, Sachs & Co.
