Monday, June 04, 2007

The results of the original September 2004 Share Repurchase Plan

On June 1, 2007, Wal-Mart unveiled plans for a new share repurchase plan to replace the previous plan instituted in September of 2004.

The new plan: $15 billion (wow!)

The old plan: $6.7 billion in actual purchases + $3.3 billion left unpurchased

The new plan cancels out the remaining $3.3 billion on the older (Sep 2004) plan.

Here are the details on how the old Sep 2004 $10 billion plan was carried out:

In calendar 2005, Wal-Mart repurchased $3.6 billion in shares (the average price per share is unknown). … [In Wal-Mart parlance, this occurred in the first 9 months of Fiscal 2006.]

On October 31, 2006, in their quarterly filing, Wal-Mart announced that $6.1 billion was left remaining on the Sep 2004 plan. This means $300,000 in share repurchases were carried out somewhere along the way (presumably share repurchases from employees to satisfy the exercise price and tax withholding of certain stock option exercises.)

On January 31, 2007, in their Form 10-K, Wal-Mart announced that 38,861,500 shares were purchased for an average price of $46.96 in November, December, and January. This totals about $1.8 billion in total repurchases over those three months, leaving $4.3 billion left to go on the Sep 2004 plan.

In the April 30, 2007 quarterly filing they announced they repurchased $943 million of shares. This leaves $3.357 million left to go on the program. They also announced that $3.3 billion was left on the Sep 2004 plan, so we take out $570,000 in additional minor buybacks somewhere along the way to get to $3.3 billion left on the Sep 2004 plan.

From that April 30, 2007 quarterly filing (filed on June 1), they disclosed that the total number of shares outstanding on May 24, 2007 is exactly: 4,108,777,695

If we go look for the share count number at the beginning of the Sep 2004 plan, we find 4,233,002,095 shares outstanding on March 21, 2005.

This means that net of awarded stock options exercised & stock issued for compensation, Wal-Mart spent $6.7 billion to repurchase a total of 124,224,400 shares. Using these numbers we get to an average purchase price of $53.93 per share.

That’s a bit of a backdoor number because of shares issued for stock options along the way, meaning the net effect of those share issuances were captured in my average price of $53.93.

But regardless, Wal-Mart spent $6.7 billion and there are 124.2 million shares less in circulation during the life of the Sep 2004 Plan.