Wal-Mart Stores, Inc. (WMT)

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Wal-Mart Stores, Inc. (WMT)

F3Q2011 (Qtr End 10/31/10) Earnings Conference Call

November 16, 2010 8:00 AM ET

Executives

Carol Schumacher – VP, Investor Relations

Mike Duke – President and CEO

Charles Holley – EVP, Finance and Treasurer

Bill Simon – President and CEO of Wal-Mart U.S.

Doug McMillon – President and CEO, Wal-Mart International

Brian Cornell – President and CEO, Sam’s Club

Tom Schoewe – EVP and CFO

Presentation

Welcome to the Wal-Mart earnings call for the third quarter of fiscal year 2011. The date of this call is November 16, 2010. This call is the property of Wal-Mart Stores, Incorporated and intended solely for the use of Wal-Mart shareholders. It should not be reproduced in any way. You may navigate through this call as follows: Press 1 to rewind 10 seconds, press 2 to pause and press 8 to resume playing. Press 3 to fast forward 10 seconds.

This call will contain statements that Wal-Mart believes are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, and intended to enjoy the protection of the safe harbor for forward-looking statements provided by that Act. These forward-looking statements generally are identified by the use of the words or phrases anticipate, are anticipating, are expecting, assume, could be, expect, forecasting, goal, guidance, guided, is expected, is planning, may affect, plan, will accelerate, will add, will be, could save, will drive, will ring, will be growing, will come, will continue, will cost, will experience, will generate, will grow, will improve, will not continue, will remodel, will see, will spend, will take, would represent, or a variation of one of those words or phrases in those statements or by the use of words and phrases of similar import. Similarly, descriptions of our objectives, plans, goals, targets, or expectations are forward-looking statements.

The forward-looking statements made in this call discuss, among other things, management’s forecasts of our diluted earnings per share from continuing operations attributable to Wal-Mart for the fourth quarter of fiscal year 2011 and for all of fiscal year 2011, the assumption underlying those forecasts that currency exchange rates will remain at current levels, management’s forecasts for the comparable store sales for our Wal-Mart U.S. segment and comparable club sales without fuel for our Sam’s Club segment, in each case, for the current 13-week period, management’s expectation that the comparable store sales of our Wal-Mart U.S. segment will be positive for the holidays and the fourth quarter of fiscal year 2011 and that the fourth quarter of fiscal year 2011 will be another quarter of sequentially improving comparable store sales for our Wal-Mart U.S. segment, management’s expectations as to our anticipated tax rate for fiscal year 2011, quarterly fluctuations in that tax rate and factors that will affect that tax rate, management’s forecasts for Wal-Mart’s capital expenditures in fiscal year 2011 and fiscal year 2012, management’s goal for return on investment being maintaining a stable return and management’s expectations that Wal-Mart will continue to manage its inventory to be in line with its current business needs, although Wal-Mart will see year-over-year pressure from higher inventories in the fourth quarter of fiscal year 2011, that our Wal-Mart U.S. segment will be the price leader throughout the holidays, that inventory levels at our Wal-Mart U.S. segment will stabilize and Wal-Mart will once again generate even more cash flow, that our operations in Brazil will improve, growth in Wal-Mart’s operations in China and India will accelerate, growth in Wal-Mart’s Mexican operations will continue and supercentres will be added in Canada and that the sales momentum of Wal-Mart’s Sam’s Club segment will continue into the fourth quarter of fiscal year 2011 and into fiscal year 2012, and the Sam’s Club segment will leverage expenses in fiscal year 2012.

Those forward-looking statements also discuss management’s expectations for the Wal-Mart U.S. segment relating bake centers driving the segment’s sales in November and December 2010, supplier recalls in the health and wellness category remaining a headwind in the near term for the segment, a new Medicare Part D prescription drug plan driving incremental pharmacy traffic for the segment, the sales of Straight Talk by the segment in fiscal year 2011 and how the sales of that item could affect comparable store sales of the segment if the full transaction value for those sales was includable in the calculation of comparable store sales, the sales of Straight Talk and third party gift cards will ring through the company’s registers more than $2 billion for the full fiscal year, continued strong online sales in the 2010 holiday season for the segment and the factors to drive those sales, the number of new supercenters and other formats, including new units, to be opened in fiscal year 2012 by the segment, the number of the segment’s stores to be remodeled in fiscal year 2012 and changes in the cost and time of those remodels, and the timing of Christmas spending in 2010.

Those forward-looking statements also address management’s expectations that our Wal-Mart International segment will experience a very competitive fourth quarter in some of its markets, that such segment’s sales will grow although the segment will experience pressure on its overall gross margin, that the sales of that segment’s operations in Mexico will grow by certain means, that such segment’s Brazilian operations will continue to see pressure on those operations’ results from the operating structure in Brazil, changes thereto and the effects of a conversion to an everyday low price approach, and regarding product offerings by that segment’s ASDA subsidiary and the addition of new stores and square footage to that segment through an acquisition by ASDA and the timing for conversion of those new stores to a different format.

Those forward-looking statements also discuss management’s expectations that Wal-Mart’s Sam’s Club segment will not continue to feel the effects of a credit card processing fee in the fourth quarter of fiscal year 2011, that such segment’s small business memberships will continue to pressure net membership income in that fiscal quarter and regarding the occurrence of promotional events in the segment’s units relating to the holiday season. The forward-looking statements also discuss the anticipation and expectations of Wal-Mart and its management as to other future occurrences, objectives, goals, trends and results.

All of these forward-looking statements are subject to risks, uncertainties and other factors, domestically and internationally, including, general economic conditions, geopolitical events and conditions, the cost of goods, competitive pressures, levels of unemployment, levels of consumer disposable income, changes in laws and regulations, consumer credit availability, inflation, deflation, consumer spending patterns and debt levels, currency exchange rate fluctuations, trade restrictions, changes in tariff and freight rates, changes in costs of gasoline, diesel fuel, other energy, transportation, utilities, labor and healthcare, accident costs, casualty and other insurance costs, interest rate fluctuations, financial and capital market conditions, developments in litigation to which Wal-Mart is a party, weather conditions, damage to our facilities resulting from natural disasters, regulatory matters, and other risks.

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