Item 1. Financial Statements

Walmart Inc.

Condensed Consolidated Statements of Income

(Unaudited)

						Three Months Ended April 30,
(Amounts in millions, except per share data)						2023						2022
Revenues:
Net sales						$	151,004					$	140,288
Membership and other income						1,297						1,281
Total revenues						152,301						141,569
Costs and expenses:
Cost of sales						115,284						106,847
Operating, selling, general and administrative expenses						30,777						29,404
Operating income						6,240						5,318
Interest:
Debt						568						372
Finance lease						96						83
Interest income						(107)						(36)
Interest, net						557						419
Other (gains) and losses						2,995						1,998
Income before income taxes						2,688						2,901
Provision for income taxes						792						798
Consolidated net income						1,896						2,103
Consolidated net income attributable to noncontrolling interest						(223)						(49)
Consolidated net income attributable to Walmart						$	1,673					$	2,054
Net income per common share:
Basic net income per common share attributable to Walmart						$	0.62					$	0.75
Diluted net income per common share attributable to Walmart						0.62						0.74
Weighted-average common shares outstanding:
Basic						2,694						2,754
Diluted						2,704						2,765
Dividends declared per common share						$	2.28					$	2.24

See accompanying notes.

Walmart Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

			Three Months Ended April 30,
(Amounts in millions)			2023						2022
Consolidated net income			$	1,896					$	2,103
Consolidated net income attributable to noncontrolling interest			(223)						(49)
Consolidated net income attributable to Walmart			1,673						2,054
Other comprehensive income (loss), net of income taxes
Currency translation and other			809						232
Net investment hedges			—						—
Cash flow hedges			(69)						42
Minimum pension liability			2						1
Other comprehensive income (loss), net of income taxes			742						275
Other comprehensive (income) loss attributable to noncontrolling interest			(209)						(7)
Other comprehensive income (loss) attributable to Walmart			533						268
Comprehensive income, net of income taxes			2,638						2,378
Comprehensive income attributable to noncontrolling interest			(432)						(56)
Comprehensive income attributable to Walmart			$	2,206					$	2,322

See accompanying notes.

Walmart Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

						April 30,						January 31,						April 30,
(Amounts in millions)						2023						2023						2022
ASSETS
Current assets:
Cash and cash equivalents						$	10,575					$	8,625					$	11,817
Receivables, net						7,647						7,933						7,674
Inventories						56,932						56,576						61,229
Prepaid expenses and other						3,357						2,521						2,500
Total current assets						78,511						75,655						83,220
Property and equipment, net						102,335						100,760						94,741
Operating lease right-of-use assets						13,679						13,555						13,971
Finance lease right-of-use assets, net						5,124						4,919						4,505
Goodwill						28,306						28,174						29,438
Other long-term assets						17,098						20,134						20,267
Total assets						$	245,053					$	243,197					$	246,142
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND EQUITY
Current liabilities:
Short-term borrowings						$	1,711					$	372					$	11,432
Accounts payable						54,268						53,742						52,926
Dividends payable						4,602						—						4,631
Accrued liabilities						27,527						31,126						21,061
Accrued income taxes						1,325						727						904
Long-term debt due within one year						3,975						4,191						3,580
Operating lease obligations due within one year						1,490						1,473						1,485
Finance lease obligations due within one year						607						567						511
Total current liabilities						95,505						92,198						96,530
Long-term debt						38,120						34,649						32,174
Long-term operating lease obligations						12,925						12,828						13,226
Long-term finance lease obligations						5,039						4,843						4,409
Deferred income taxes and other						13,999						14,688						13,943
Commitments and contingencies
Redeemable noncontrolling interest						234						237						260
Equity:
Common stock						269						269						275
Capital in excess of par value						5,248						4,969						4,587
Retained earnings						78,035						83,135						80,532
Accumulated other comprehensive loss						(11,147)						(11,680)						(8,498)
Total Walmart shareholders' equity						72,405						76,693						76,896
Nonredeemable noncontrolling interest						6,826						7,061						8,704
Total equity						79,231						83,754						85,600
Total liabilities, redeemable noncontrolling interest, and equity						$	245,053					$	243,197					$	246,142

See accompanying notes.

Walmart Inc.

Condensed Consolidated Statements of Shareholders' Equity

(Unaudited)

																											Accumulated						Total
															Capital in												Other						Walmart						Nonredeemable
(Amounts in millions)			Common Stock												Excess of						Retained						Comprehensive						Shareholders'						Noncontrolling						Total
Shares						Amount						Par Value						Earnings						Loss						Equity						Interest						Equity
Balances as of February 1, 2023			2,693						$	269					$	4,969					$	83,135					$	(11,680)					$	76,693					$	7,061					$	83,754
Consolidated net income			—						—						—						1,673						—						1,673						223						1,896
Other comprehensive income, net of income taxes			—						—						—						—						533						533						209						742
Dividends declared ($2.28 per share)			—						—						—						(6,139)						—						(6,139)						—						(6,139)
Purchase of Company stock			(5)						(1)						(38)						(632)						—						(671)						—						(671)
Dividends declared to noncontrolling interest			—						—						—						—						—						—						(761)						(761)
Sale of subsidiary stock			—						—						389						—						—						389						94						483
Other			6						1						(72)						(2)						—						(73)						—						(73)
Balances as of April 30, 2023			2,694						$	269					$	5,248					$	78,035					$	(11,147)					$	72,405					$	6,826					$	79,231

See accompanying notes.

																											Accumulated						Total
															Capital in												Other						Walmart						Nonredeemable
(Amounts in millions)			Common Stock												Excess of						Retained						Comprehensive						Shareholders'						Noncontrolling						Total
Shares						Amount						Par Value						Earnings						Loss						Equity						Interest						Equity
Balances as of February 1, 2022			2,761						$	276					$	4,839					$	86,904					$	(8,766)					$	83,253					$	8,638					$	91,891
Consolidated net income			—						—						—						2,054						—						2,054						49						2,103
Other comprehensive income, net of income taxes			—						—						—						—						268						268						7						275
Dividends declared ($2.24 per share)			—						—						—						(6,173)						—						(6,173)						—						(6,173)
Purchase of Company stock			(17)						(2)						(125)						(2,249)						—						(2,376)						—						(2,376)
Sale of subsidiary stock			—						—						24						—						—						24						11						35
Other			4						1						(151)						(4)						—						(154)						(1)						(155)
Balances as of April 30, 2022			2,748						$	275					$	4,587					$	80,532					$	(8,498)					$	76,896					$	8,704					$	85,600

See accompanying notes.

Walmart Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

						Three Months Ended April 30,
(Amounts in millions)						2023						2022
Cash flows from operating activities:
Consolidated net income						$	1,896					$	2,103
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization						2,845						2,680
Investment (gains) and losses, net						3,062						1,989
Deferred income taxes						(725)						(69)
Other operating activities						249						(59)
Changes in certain assets and liabilities, net of effects of acquisitions and dispositions:
Receivables, net						376						837
Inventories						(154)						(4,699)
Accounts payable						971						(1,640)
Accrued liabilities						(4,447)						(4,949)
Accrued income taxes						560						49
Net cash provided by (used in) operating activities						4,633						(3,758)
Cash flows from investing activities:
Payments for property and equipment						(4,429)						(3,539)
Proceeds from the disposal of property and equipment						47						35
Proceeds from disposal of certain operations						48						—
Payments for business acquisitions, net of cash acquired						—						(598)
Other investing activities						(526)						(456)
Net cash used in investing activities						(4,860)						(4,558)
Cash flows from financing activities:
Net change in short-term borrowings						1,343						10,995
Proceeds from issuance of long-term debt						4,967						—
Repayments of long-term debt						(1,784)						(926)
Dividends paid						(1,538)						(1,543)
Purchase of Company stock						(686)						(2,408)
Sale of subsidiary stock						483						35
Other financing activities						(845)						(838)
Net cash provided by financing activities						1,940						5,315
Effect of exchange rates on cash, cash equivalents and restricted cash						154						49
Net increase (decrease) in cash, cash equivalents and restricted cash						1,867						(2,952)
Cash, cash equivalents and restricted cash at beginning of year						8,841						14,834
Cash, cash equivalents and restricted cash at end of period						$	10,708					$	11,882

See accompanying notes.

Walmart Inc.

Notes to Condensed Consolidated Financial Statements

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The Condensed Consolidated Financial Statements of Walmart Inc. and its subsidiaries ("Walmart" or the "Company") and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for the fair presentation of the Condensed Consolidated Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Condensed Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and do not contain certain information included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2023 ("fiscal 2023"). Therefore, the interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K.

The Company's Condensed Consolidated Financial Statements are based on a fiscal year ending January 31 for the United States ("U.S.") and Canadian operations. The Company consolidates all other operations generally using a one-month lag based on a calendar year. There were no significant intervening events during the month of April 2023 related to the consolidated operations using a lag that materially affected the Condensed Consolidated Financial Statements.

The Company's business is seasonal to a certain extent due to calendar events and national and religious holidays, as well as weather patterns. Historically, the Company's highest sales volume has occurred in the fiscal quarter ending January 31.

Use of Estimates

The Condensed Consolidated Financial Statements have been prepared in conformity with GAAP. Those principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Management's estimates and assumptions also affect the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from those estimates.

Supplier Financing Program Obligations

In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which enhances the transparency about the use of supplier finance programs for investors and other allocators of capital. The Company adopted this ASU as of February 1, 2023, other than the roll-forward disclosure requirement which the Company will adopt in fiscal 2025.

The Company has supplier financing programs with financial institutions, in which the Company agrees to pay the financial institution the stated amount of confirmed invoices on the invoice due date for participating suppliers. Participation in these programs is optional and solely up to the supplier, who negotiate the terms of the arrangement directly with the financial institution and may allow early payment. Supplier participation in these programs has no bearing on the Company's amounts due. The payment terms that the Company has with participating suppliers under these programs generally range between 30 and 90 days. The Company does not have an economic interest in a supplier's participation in the program or a direct financial relationship with the financial institution funding the program. The Company is responsible for ensuring that participating financial institutions are paid according to the terms negotiated with the supplier, regardless of whether the supplier elects to receive early payment from the financial institution. The outstanding payment obligations to financial institutions under these programs were $4.7 billion, $5.2 billion and $6.0 billion, as of April 30, 2023, January 31, 2023 and April 30, 2022, respectively. These obligations are primarily recorded within the accounts payable account within the Condensed Consolidated Balance Sheets. The activity related to these programs is reflected within the operating activities section of the Condensed Consolidated Statements of Cash Flows.

Note 2. Net Income Per Common Share

Basic net income per common share attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period. Diluted net income per common share attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period adjusted for the dilutive effect of share-based awards. The Company did not have significant share-based awards outstanding that were anti-dilutive and not included in the calculation of diluted net income per common share attributable to Walmart for the three months ended April 30, 2023 and 2022.

The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted net income per common share attributable to Walmart:

						Three Months Ended April 30,
(Amounts in millions, except per share data)						2023						2022
Numerator
Consolidated net income						$	1,896					$	2,103
Consolidated net income attributable to noncontrolling interest						(223)						(49)
Consolidated net income attributable to Walmart						$	1,673					$	2,054
Denominator
Weighted-average common shares outstanding, basic						2,694						2,754
Dilutive impact of share-based awards						10						11
Weighted-average common shares outstanding, diluted						2,704						2,765
Net income per common share attributable to Walmart
Basic						$	0.62					$	0.75
Diluted						0.62						0.74

Note 3. Accumulated Other Comprehensive Loss

The following tables provide the changes in the composition of total accumulated other comprehensive loss:

(Amounts in millions and net of immaterial income taxes)						Currency Translation and Other						Net Investment Hedges						Cash Flow Hedges						Minimum Pension Liability						Total
Balances as of February 1, 2023						$	(10,816)					$	94					$	(951)					$	(7)					$	(11,680)
Other comprehensive income (loss) before reclassifications, net						600						—						(82)						2						520
Reclassifications to income, net						—						—						13						—						13
Balances as of April 30, 2023						$	(10,216)					$	94					$	(1,020)					$	(5)					$	(11,147)

(Amounts in millions and net of immaterial income taxes)						Currency Translation and Other						Net Investment Hedges						Cash Flow Hedges						Minimum Pension Liability						Total
Balances as of February 1, 2022						$	(8,100)					$	94					$	(748)					$	(12)					$	(8,766)
Other comprehensive income before reclassifications, net						225						—						26						—						251
Reclassifications to income, net						—						—						16						1						17
Balances as of April 30, 2022						$	(7,875)					$	94					$	(706)					$	(11)					$	(8,498)

Amounts reclassified from accumulated other comprehensive loss for derivative instruments are generally recorded in interest, net, in the Company's Condensed Consolidated Statements of Income. Amounts for the minimum pension liability are recorded in other gains and losses in the Company's Condensed Consolidated Statements of Income.

Note 4. Short-term Borrowings and Long-term Debt

The Company has various committed lines of credit in the U.S. that are used to support its commercial paper program. In April 2023, the Company renewed and extended its existing 364-day revolving credit facility of $10.0 billion as well as its five-year credit facility of $5.0 billion. In total, the Company had committed lines of credit in the U.S. of $15.0 billion at April 30, 2023 and January 31, 2023, all undrawn.

The following table provides the changes in the Company's long-term debt for the three months ended April 30, 2023:

(Amounts in millions)						Long-term debt due within one year						Long-term debt						Total
Balances as of February 1, 2023						$	4,191					$	34,649					$	38,840
Proceeds from issuance of long-term debt(1)						—						4,967						4,967
Repayments of long-term debt						(1,784)						—						(1,784)
Reclassifications of long-term debt						1,572						(1,572)						—
Other						(4)						76						72
Balances as of April 30, 2023						$	3,975					$	38,120					$	42,095

(1)Proceeds from issuance of long-term debt are net of deferred loan costs and any related discount or premium.

Debt Issuances

Information on significant long-term debt issued during the three months ended April 30, 2023, for general corporate purposes, is as follows:

(Amounts in millions)
Issue Date						Principal Amount						Maturity Date												Fixed Interest Rate						Net Proceeds
April 18, 2023						$	750					April 15, 2026												4.000%						$	748
April 18, 2023						$	750					April 15, 2028												3.900%						$	746
April 18, 2023						$	500					April 15, 2030												4.000%						$	497
April 18, 2023						$	1,500					April 15, 2033												4.100%						$	1,491
April 18, 2023						$	1,500					April 15, 2053												4.500%						$	1,485
Total																														$	4,967

These issuances are senior, unsecured notes which rank equally with all other senior, unsecured debt obligations of the Company, and are not convertible or exchangeable. These issuances do not contain any financial covenants and do not restrict the Company's ability to pay dividends or repurchase company stock.

Debt Repayments

Information on significant long-term debt repayments during the three months ended April 30, 2023 is as follows:

(Amounts in millions)
Maturity Date												Principal Amount						Fixed vs. Floating						Interest Rate						Repayment
April 11, 2023												$	1,750					Fixed						2.55%						$	1,750

Note 5. Fair Value Measurements

Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:

• Level 1: observable inputs such as quoted prices in active markets;

• Level 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and

• Level 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions.

The Company measures the fair value of certain equity investments, including certain equity method investments, on a recurring basis within other long-term assets in the accompanying Condensed Consolidated Balance Sheets. The fair value of these investments is as follows:

(Amounts in millions)																								Fair Value as of April 30, 2023									Fair Value as of January 31, 2023
Equity investments measured using Level 1 inputs																								$	3,433								$	5,099
Equity investments measured using Level 2 inputs																								4,082									5,570
Total																								$	7,515								$	10,669

Changes in fair value of equity securities, as well as certain immaterial equity method investments where the Company has elected the fair value option measured on a recurring basis, are recognized within other gains and losses in the Condensed Consolidated Statements of Income. These fair value changes, along with certain other immaterial investment activity, resulted in net losses of $3.2 billion and $2.0 billion for three months ended April 30, 2023 and 2022, respectively, primarily due to net changes in the underlying stock prices of those investments. Equity investments without readily determinable fair values are carried at cost and adjusted for any observable price changes or impairments within other gains and losses in the Condensed Consolidated Statements of Income.

Derivatives

The Company also has derivatives recorded at fair value. Derivative fair values are the estimated amounts the Company would receive or pay upon termination of the related derivative agreements as of the reporting dates. The fair values have been measured using the income approach and Level 2 inputs, which include the relevant interest rate and foreign currency forward curves. As of April 30, 2023 and January 31, 2023, the notional amounts and fair values of these derivatives were as follows:

			April 30, 2023												January 31, 2023
(Amounts in millions)			Notional Amount						Fair Value						Notional Amount						Fair Value
Receive fixed-rate, pay variable-rate interest rate swaps designated as fair value hedges			$	6,271					$	(669)		(1)			$	8,021					$	(689)		(1)
Receive fixed-rate, pay fixed-rate cross-currency swaps designated as cash flow hedges			5,920						(1,522)			(1)			5,900						(1,423)			(1)
Total			$	12,191					$	(2,191)					$	13,921					$	(2,112)

(1)Classified primarily in deferred income taxes and other within the Company's Condensed Consolidated Balance Sheets.

Nonrecurring Fair Value Measurements

In addition to assets and liabilities recorded at fair value on a recurring basis, the Company's assets and liabilities are also subject to nonrecurring fair value measurements. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. The Company did not have any material assets or liabilities resulting in nonrecurring fair value measurements as of April 30, 2023 in the Company's Condensed Consolidated Balance Sheets.

Other Fair Value Disclosures

The Company records cash and cash equivalents, restricted cash, and short-term borrowings at cost. The carrying values of these instruments approximate their fair value due to their short-term maturities.

The Company's long-term debt is also recorded at cost. The fair value is estimated using Level 2 inputs based on the Company's current incremental borrowing rate for similar types of borrowing arrangements. The carrying value and fair value of the Company's long-term debt as of April 30, 2023 and January 31, 2023, are as follows:

						April 30, 2023												January 31, 2023
(Amounts in millions)						Carrying Value						Fair Value						Carrying Value						Fair Value
Long-term debt, including amounts due within one year						$	42,095					$	41,296					$	38,840					$	38,169

Note 6. Contingencies

Legal Proceedings

The Company is involved in a number of legal proceedings and certain regulatory matters. The Company records a liability for those legal proceedings and regulatory matters when it determines it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses when it is reasonably possible that a material loss may be incurred. From time to time, the Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders.

Unless stated otherwise, the matters discussed below, if decided adversely to or settled by the Company, individually or in the aggregate, may result in a liability material to the Company's financial position, results of operations or cash flows.

Settlement Framework Regarding Multidistrict and State or Local Opioid Related Litigation

During fiscal 2023, the Company accrued a liability for approximately $3.3 billion for the Settlement Framework (described below) and other previously agreed upon state and tribal settlements. Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires judgments about future events. Moreover, the Settlement Framework will only take effect once a sufficient number of political subdivisions join, and there is no assurance regarding such participation. The amount of ultimate loss may thus differ materially from this accrual. The Settlement Framework includes no admission of wrongdoing or liability by the Company, and the Company continues to believe it has substantial factual and legal defenses to opioids-related litigation.

In December 2017, the United States Judicial Panel on Multidistrict Litigation consolidated numerous lawsuits filed against a wide array of defendants by various plaintiffs, including counties, cities, healthcare providers, Native American tribes, individuals, and third-party payers, asserting claims generally concerning the impacts of widespread opioid abuse. The consolidated multidistrict litigation is entitled In re National Prescription Opiate Litigation (MDL No. 2804) (the "MDL") and is pending in the U.S. District Court for the Northern District of Ohio. The Company is named as a defendant in some of the cases included in the MDL.

Similar cases that name the Company also have been filed in state courts by state, local, and tribal governments, healthcare providers, and other plaintiffs. Plaintiffs in these state court cases and in the MDL are seeking compensatory and punitive damages, as well as injunctive relief including abatement. The Company has also been responding to subpoenas, information requests, and investigations from governmental entities related to nationwide controlled substance dispensing and distribution practices involving opioids.

On November 15, 2022, the Company announced it had agreed to financial amounts and payment terms to resolve substantially all opioids-related lawsuits filed against the Company by states, political subdivisions, and Native American tribes whether as part of the MDL (excluding, however, a single, two-county trial described further below) or pending state court, as well as all potential claims that could be made against the Company by states, political subdivisions, and Native American tribes for up to approximately $3.1 billion (the "Settlement Amount"). The Settlement Amount includes amounts for remediation of alleged harms as well as attorneys' fees and costs and also includes some, but not all, amounts from previously agreed recent settlements by the Company. One settlement framework with corresponding conditions and participation thresholds applies for the states and political subdivisions, and another settlement framework with corresponding conditions and participation thresholds applies for the Native American tribes. Both settlement frameworks are referred to collectively as the "Settlement Framework."

The Settlement Framework, among other applicable conditions, provides that payments to states and political subdivisions are contingent upon the number of states and political subdivisions, including those states and political subdivisions who have not yet sued the Company, that agree to participate in the Settlement Framework or otherwise have their claims foreclosed within a prescribed deadline. On December 20, 2022, the Company announced that it had settlement agreements with all 50 states, including four states that previously settled with the Company, as well as the District of Columbia, Puerto Rico, and three other U.S. territories (the "Settling States"), thus satisfying the initial threshold of required participation by Settling States. The settlement with the Settling States is now contingent upon, among other applicable terms and conditions, a sufficient number of political subdivisions also agreeing to participate in the Settlement Framework, which condition the Company believes will be satisfied. The Settlement Framework will become effective 15 days following a settlement administrator's determination that this condition has been satisfied. If the Settlement Framework becomes effective, then the Company will be required to deposit into an account up to the full portion of the Settlement Amount attributable to the Settling States within 15 days following the effective date of the Settlement Framework.

If all conditions for the Settlement Framework, including, but not limited to, the minimum participation thresholds applicable for the political subdivisions have been satisfied within the prescribed deadlines, then the Company would expect to pay up to the full portion of the Settlement Amount attributable to the Settling States, beginning as early as the second quarter of fiscal 2024 and being completed during fiscal 2024. However, unless and until the settlement administrator has determined as such, the Company cannot predict if, when, or to what extent the Settlement Framework will be finalized with any of the Settling States.

Through May 2023, the Company has paid approximately $0.6 billion in the aggregate for separate settlements with Cherokee Nation, New Mexico, Florida, West Virginia, and Alabama, as well as various Native American tribes (excluding Cherokee Nation) that agreed to participate in the Settlement Framework or otherwise have their claims foreclosed within a prescribed deadline. Of the original approximately $3.3 billion accrued liability for the Settlement Framework and other settlements, approximately $2.8 billion remains and is recorded in accrued liabilities within the Company's Condensed Consolidated Balance Sheet as of April 30, 2023.

Other Opioid Related Litigation

The Company will continue to vigorously defend against any opioid-related litigation not covered or otherwise resolved by the Settlement Framework, including, but not limited to, each of the matters described below; any other actions filed by healthcare providers, individuals, and third-party payers; as well as any action filed by a political subdivision or Native American tribe that is not resolved by the Settlement Framework. Accordingly, the Company has not accrued a liability for these opioid-related litigation matters nor can the Company reasonably estimate any loss or range of loss that may arise from these matters. The Company can provide no assurance as to the scope and outcome of any of these matters and no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected.

Two-county Trial and MDL Bellwethers; and Canada. The liability phase of a single, two-county trial in one of the MDL cases resulted in a jury verdict on November 23, 2021, finding in favor of the plaintiffs as to the liability of all defendants, including the Company. The abatement phase of the single, two-county trial resulted in a judgment on August 17, 2022, that ordered all three defendants, including the Company, to pay an aggregate amount of approximately $0.7 billion over fifteen years, on a joint and several liability basis, and granted the plaintiffs injunctive relief. On September 7, 2022, the Company filed an appeal with the Sixth Circuit Court of Appeals. The monetary aspect of the judgment is stayed pending appeal, and the injunctive aspect of the judgment went into effect on February 20, 2023.

The MDL has designated five additional single-county cases as bellwethers to proceed through discovery; however, these five counties ultimately may elect to participate in the Settlement Framework and receive a portion of the Settlement Amount rather than go to trial.

Wal-Mart Canada Corp. and certain other subsidiaries of the Company have been named as defendants in two putative class action complaints filed in Canada related to dispensing and distribution practices involving opioids.

DOJ Opioid Civil Litigation. On December 22, 2020, the U.S. Department of Justice (the "DOJ") filed a civil complaint in the U.S. District Court for the District of Delaware alleging that the Company unlawfully dispensed controlled substances from its pharmacies and unlawfully distributed controlled substances to those pharmacies. The complaint alleges that this conduct resulted in violations of the Controlled Substances Act. The DOJ is seeking civil penalties and injunctive relief. The Company initially moved to dismiss the DOJ complaint on February 22, 2021. After that motion was fully briefed, the DOJ filed an amended complaint on October 7, 2022. On November 7, 2022, the Company filed a partial motion to dismiss the amended complaint. That motion remains pending.

Opioid Related Securities Class Actions and Derivative Litigation. In addition, the Company is the subject of two securities class actions alleging violations of the federal securities laws regarding the Company's disclosures with respect to opioids, filed in the U.S. District Court for the District of Delaware on January 20, 2021 and March 5, 2021, purportedly on behalf of a class of investors who acquired Walmart stock from March 30, 2016 through December 22, 2020. Those cases have been consolidated. On October 8, 2021, the defendants filed a motion to dismiss the consolidated securities action. After the parties had fully briefed the motion to dismiss, on September 9, 2022, the Court entered an order permitting the plaintiffs to file an amended complaint, which was filed on October 14, 2022, and which revised the applicable putative class of investors to those who acquired Walmart stock from March 31, 2017 through December 22, 2020. On November 16, 2022, the defendants filed a motion to dismiss the amended complaint. That motion remains pending.

Derivative actions were also filed by two of the Company's shareholders in the U.S. District Court for the District of Delaware on February 9, 2021 and April 16, 2021, alleging breach of fiduciary duties against certain of its current and former directors with respect to oversight of the Company's distribution and dispensing of opioids and also alleging violations of the federal securities laws and other breaches of duty by current directors and two current officers in connection with the Company's opioids disclosures. Those cases have been stayed pending developments in other opioids litigation matters. On September 27, 2021, three shareholders filed a derivative action in the Delaware Court of Chancery alleging that certain members of the current Board and certain former officers breached their fiduciary duties in failing to adequately oversee the Company's prescription opioids business. The defendants moved to dismiss and/or to stay proceedings on December 21, 2021, and the plaintiffs responded by filing an amended complaint on February 22, 2022. On April 20, 2022, the defendants moved to dismiss and/or to stay proceedings with respect to the amended complaint. In two orders issued on April 12 and 26, 2023, the Court of Chancery granted the defendants' motion to dismiss with respect to claims involving the Company's distribution practices and denied the remainder of the motion, including the Company's request to stay the litigation. On May 5, 2023, the Company's Board of Directors appointed an independent Special Litigation Committee (the "SLC") to investigate the allegations regarding certain current and former officers and directors named in the various derivative proceedings regarding oversight with respect to opioids. The Board has authorized the SLC to retain independent legal counsel and such other advisors as the SLC deems appropriate in carrying out its duties.

Other Legal Proceedings

Asda Equal Value Claims. Asda, formerly a subsidiary of the Company, was and still is a defendant in certain equal value claims that began in 2008 and are proceeding before an Employment Tribunal in Manchester in the United Kingdom on behalf of current and former Asda store employees, as well as additional claims in the High Court of the United Kingdom (the "Asda Equal Value Claims"). Further claims may be asserted in the future. Subsequent to the divestiture of Asda in February 2021, the Company continues to oversee the conduct of the defense of these claims. While potential liability for these claims remains with Asda, the Company has agreed to provide indemnification with respect to certain of these claims up to a contractually determined amount. The Company cannot predict the number of such claims that may be filed, and cannot reasonably estimate any loss or range of loss that may arise related to these proceedings. Accordingly, the Company can provide no assurance as to the scope and outcome of these matters.

Money Transfer Agent Services Matters. The Company has responded to grand jury subpoenas issued by the United States Attorney's Office for the Middle District of Pennsylvania on behalf of the DOJ seeking documents regarding the Company's consumer fraud prevention program and anti-money laundering compliance related to the Company's money transfer services, where Walmart is an agent. The most recent subpoena was issued in August 2020. The Company continues to cooperate with and provide information in response to requests from the DOJ. The Company has also responded to civil investigative demands from the United States Federal Trade Commission (the "FTC") in connection with the FTC's investigation related to money transfers and the Company's anti-fraud program in its capacity as an agent. On June 28, 2022, the FTC filed a complaint against the Company in the U.S. District Court for the Northern District of Illinois alleging that Walmart violated the Federal Trade Commission Act and the Telemarketing Sales Rule regarding its money transfer agent services and is requesting non-monetary relief and civil penalties. On August 29, 2022, the Company filed a motion to dismiss the complaint. On October 5, 2022, the FTC responded to the motion, and on October 28, 2022, the Company filed its reply. On March 27, 2023, the Court issued an opinion dismissing the FTC's claim under the Telemarketing Sales Rule and denying Walmart's motion to dismiss the claim under Section 5 of the FTC Act. On April 12, 2023, Walmart filed a motion to certify the Court's March 27, 2023, order for interlocutory appeal. The FTC's response to Walmart's motion to certify an interlocutory appeal was filed on May 8, 2023; Walmart's reply was filed on May 18, 2023. The FTC's amended complaint is due on June 30, 2023, subject to any further changes based upon the Court's ruling on the interlocutory appeal. The Company intends to vigorously defend these matters. However, the Company can provide no assurance as to the scope and outcome of these matters and cannot reasonably estimate any loss or range of loss that may arise. Accordingly, the Company can provide no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected.

Note 7. Segments and Disaggregated Revenue

Segments

The Company is engaged in the operation of retail and wholesale stores and clubs, as well as eCommerce websites, located throughout the U.S., Africa, Canada, Central America, Chile, China, India and Mexico. The Company's operations are conducted in three reportable segments: Walmart U.S., Walmart International and Sam's Club. The Company defines its segments as those operations whose results the chief operating decision maker ("CODM") regularly reviews to analyze performance and allocate resources. The Company sells similar individual products and services in each of its segments. It is impractical to segregate and identify revenues for each of these individual products and services.

The Walmart U.S. segment includes the Company's mass merchandising concept in the U.S., as well as eCommerce, which includes omni-channel initiatives and certain other business offerings such as advertising services through Walmart Connect. The Walmart International segment consists of the Company's operations outside of the U.S., as well as eCommerce and omni-channel initiatives. The Sam's Club segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives. Corporate and support consists of corporate overhead and other items not allocated to any of the Company's segments.

The Company measures the results of its segments using, among other measures, each segment's net sales and operating income, which includes certain corporate overhead allocations. From time to time, the Company revises the measurement of each segment's operating income and other measures, including any corporate overhead allocations, as determined by the information regularly reviewed by its CODM. When the measurement of a segment significantly changes, previous period amounts and balances are reclassified to be comparable to the current period's presentation.

Net sales by segment are as follows:

						Three Months Ended April 30,
(Amounts in millions)						2023						2022
Net sales:
Walmart U.S.						$	103,901					$	96,904
Walmart International						26,604						23,763
Sam's Club						20,499						19,621
Net sales						$	151,004					$	140,288

Operating income by segment, as well as unallocated operating expenses for corporate and support, interest, net, and other gains and losses are as follows:

						Three Months Ended April 30,
(Amounts in millions)						2023						2022
Operating income (loss):
Walmart U.S.						$	4,984					$	4,462
Walmart International						1,164						772
Sam's Club						458						460
Corporate and support						(366)						(376)
Operating income						6,240						5,318
Interest, net						557						419
Other (gains) and losses						2,995						1,998
Income before income taxes						$	2,688					$	2,901

Disaggregated Revenues

In the following tables, segment net sales are disaggregated by either merchandise category or by market. From time to time, the Company revises the assignment of net sales of a particular item to a merchandise category. When the assignment changes, previous period amounts are reclassified to be comparable to the current period's presentation.

In addition, net sales related to eCommerce are provided for each segment, which include omni-channel sales, where a customer initiates an order digitally and the order is fulfilled through a store or club.

(Amounts in millions)						Three Months Ended April 30,
Walmart U.S. net sales by merchandise category						2023						2022
Grocery						$	63,407					$	56,764
General merchandise						25,765						27,379
Health and wellness						12,848						10,894
Other categories						1,881						1,867
Total						$	103,901					$	96,904

Of Walmart U.S.'s total net sales, approximately $14.5 billion and $11.4 billion related to eCommerce for the three months ended April 30, 2023 and 2022, respectively.

(Amounts in millions)						Three Months Ended April 30,
Walmart International net sales by market						2023						2022
Mexico and Central America						$	10,958					$	9,088
Canada						5,140						5,150
China						4,924						4,127
Other						5,582						5,398
Total						$	26,604					$	23,763

Of Walmart International's total net sales, approximately $5.4 billion and $4.3 billion related to eCommerce for the three months ended April 30, 2023 and 2022, respectively.

(Amounts in millions)						Three Months Ended April 30,
Sam's Club net sales by merchandise category						2023						2022
Grocery and consumables						$	13,498					$	12,301
Fuel, tobacco and other categories						3,188						3,558
Home and apparel						2,079						2,115
Health and wellness						1,156						1,010
Technology, office and entertainment						578						637
Total						$	20,499					$	19,621

Of Sam's Club's total net sales, approximately $2.2 billion and $1.9 billion related to eCommerce for the three months ended April 30, 2023 and 2022, respectively.