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Walmart reports Q3 EPS of $1.14, updates full year guidance; Aggressive holiday plans to drive sales



  Walmart reports Q3 EPS of $1.14, updates full year guidance; Aggressive
  holiday plans to drive sales

  * Wal-Mart Stores, Inc. (Walmart) reported third quarter diluted earnings
    per share from continuing operations (EPS) of $1.14, a 6.5 percent
    increase compared to last year's $1.07, which reflects $0.01 per share
    from Vips restaurants in Mexico now in discontinued operations.
  * The company forecasted fourth quarter EPS guidance to range between $1.50
    and $1.60. The company's guidance includes the impact of approximately
    $0.10 per share for certain items which we previously disclosed, including
    store closures in Brazil and China and ending our retail franchise
    agreement in India. Accounting for these factors, the company's guidance
    for fourth quarter underlying^1 EPS is a range between $1.60 and $1.70.
  * The company updated its full year EPS guidance to range between $5.01 to
    $5.11. After considering certain items that will impact the fourth
    quarter, the company's guidance for full year underlying^1 EPS will be
    between $5.11 and $5.21.
  * Consolidated net sales reached $114.9 billion, an increase of $1.8
    billion, or 1.6 percent, led by Walmart U.S. with $67.7 billion in net
    sales. On a constant currency basis,^1 consolidated net sales would have
    been $116.2 billion.
  * Consolidated operating income was $6.3 billion, an increase of 3.6
    percent. Walmart U.S. grew operating income by 5.8 percent. Sam's Club
    grew operating income, without fuel,^1 by 9.4 percent. On a constant
    currency basis,^1 International increased operating income by 8.0 percent.
  * Walmart U.S. comp sales declined 0.3 percent in the 13-week period ended
    Oct. 25, 2013. Comp sales for the Neighborhood Market format rose
    approximately 3.4 percent. Walmart U.S. again gained market share^2 in the
    measured category of "food, consumables and health & wellness/OTC."
  * Sam's Club comp sales, without fuel,^1 were up 1.1 percent during the
    13-week period.
  * Walmart International grew net sales to $33.1 billion. On a constant
    currency basis,^1 net sales would have increased 4.1 percent to $34.4
    billion.
  * Walmart reported free cash flow^1 of $3.8 billion for the nine months
    ended Oct. 31, 2013.
  * The company returned $3.2 billion to shareholders through dividends and
    share repurchases in the quarter.

^1 See additional information at the end of this release regarding non-GAAP
financial measures.

^2 Source: The Nielsen Company, 13-weeks ended Oct. 26, 2013.

Business Wire

BENTONVILLE, Ark. -- November 14, 2013

Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for the
third quarter ended Oct. 31, 2013. Net sales were $114.9 billion, an increase
of 1.6 percent over last year. This quarter included the negative impact of
approximately $1.6 billion from currency exchange rate fluctuations. On a
constant currency basis,^1 net sales would have increased 2.7 percent to
$116.2 billion. Membership and other income increased 12.3 percent versus last
year. Total revenue was $115.7 billion, an increase of $1.9 billion, or 1.7
percent over last year.

Consolidated net income attributable to Walmart was $3.7 billion, up 2.8
percent. Diluted earnings per share from continuing operations attributable to
Walmart were $1.14, a 6.5 percent increase, compared to $1.07 last year, which
reflects $0.01 per share from Vips restaurants in Mexico now in discontinued
operations. In our financial statements, Vips operating results are presented
in discontinued operations, both in the current and prior periods.

Solid earnings performance

"Walmart delivered solid earnings growth that was within our guidance range.
We had strong operating income across our segments, with Walmart U.S. growing
almost 6 percent, Sam's Club increasing more than 9 percent, and International
up 8 percent on a constant currency^1 basis," said Mike Duke, Wal-Mart Stores,
Inc. president and chief executive officer.

"Our most important priority is growing top line sales, including comp sales,"
Duke added. "The retail environment, both in stores and online, remains
competitive. Walmart has aggressive plans to help our customers enjoy the
holiday season, and there is no doubt that we plan to win for our customers
and shareholders throughout the holidays."

Leverage

Two years ago, Walmart committed to reduce operating expenses as a percentage
of net sales by 100 basis points by fiscal year 2017. Duke said the company
remains committed to that goal.

"The company's expense leverage metric improved from last quarter. Walmart
U.S. delivered strong expense leverage, and International made good progress
on reducing costs in key markets," said Duke. "Throughout the company, we
constantly focus on managing our costs so we can provide the low prices our
customers count on."

Returns

"We managed our business well and delivered solid returns to shareholders,"
said Charles Holley, executive vice president and chief financial officer.

During the third quarter, the company repurchased approximately 23 million
shares for $1.7 billion. In addition, the company paid $1.5 billion in
dividends. In total, the company returned $3.2 billion to shareholders through
dividends and share repurchases in the quarter.

Return on investment^1 (ROI) for the trailing 12-months ended Oct. 31, 2013
was 17.5 percent, compared to 18.0 percent for the prior period. The decline
was principally due to investments in fixed assets, growth in working capital,
and the impact of acquisitions.

Free cash flow^1 was $3.8 billion for the nine months ended Oct. 31, 2013,
compared to $7.0 billion in the prior year. Timing of payments associated with
taxes and payables, as well as higher capital expenditures were the primary
drivers of the reduction.

^1 See additional information at the end of this release regarding non-GAAP
financial measures.

Guidance

The company's guidance reflects a view of global economic trends, including
ongoing headwinds from currency exchange rate fluctuations, a competitive
holiday season, and a full-year effective tax rate that is expected to range
between 31 and 33 percent.

"For the fourth quarter, we expect EPS to range between $1.50 and $1.60. Our
guidance includes the impact of approximately $0.10 per share for certain
items described below. Accounting for these factors, we believe our fourth
quarter underlying^1 EPS will range between $1.60 and $1.70," said Holley.

"For the full year, we are updating our EPS guidance to range between $5.01
and $5.11. Accounting for the $0.10 of certain items that will impact the
fourth quarter, our full year underlying^1 EPS will range between $5.11 and
$5.21," added Holley.

Two items impact our guidance by approximately $0.10 per share.

  * The company is closing approximately 50 under-performing stores in Brazil
    and China. The impact of these closures will be dilutive to EPS by about
    $0.06.
  * The company will independently own and operate the wholesale format in
    India and will end its franchise agreement with Bharti Retail for the
    retail business. This transaction is subject to regulatory approval. The
    net impact is expected to be dilutive to EPS by approximately $0.04.

The company agreed to the sale of its Vips restaurants in Mexico, which is
still subject to regulatory approval and is now recorded in discontinued
operations. Outside of diluted earnings per share from continuing operations,
discontinued operations for the fourth quarter is expected to include an
estimated gain of $0.06 per share from the sale of Vips.

U.S. comparable store sales results

The company reported U.S. comparable store sales based on its 13-week and
39-week retail calendar for the periods ended Oct. 25, 2013 and Oct. 26, 2012
as follows:

                                                                           
                Without Fuel                  With Fuel                     Fuel Impact
                13 Weeks Ended                13 Weeks Ended                13 Weeks Ended
                10/25/2013     10/26/2012     10/25/2013     10/26/2012     10/25/2013     10/26/2012
Walmart         -0.3%          1.5%           -0.3%          1.5%           0.0%           0.0%
U.S.
Sam’s           1.1%           2.7%           0.1%           3.8%           -1.0%          1.1%
Club
Total           -0.1%          1.7%           -0.2%          1.9%           -0.1%          0.2%
U.S.

                                                                           
                Without Fuel                  With Fuel                     Fuel Impact
                39 Weeks Ended                39 Weeks Ended                39 Weeks Ended
                10/25/2013     10/26/2012     10/25/2013     10/26/2012     10/25/2013     10/26/2012
Walmart         -0.7%          2.1%           -0.7%          2.1%           0.0%           0.0%
U.S.
Sam’s           1.0%           4.1%           0.5%           4.4%           -0.5%          0.3%
Club
Total           -0.4%          2.4%           -0.5%          2.5%           -0.1%          0.1%
U.S.
                                                                                            

During the 13-week period, Walmart U.S. comp traffic decreased 0.4 percent,
while average ticket increased 0.1 percent. E-commerce sales positively
impacted comp sales by approximately 0.2 percent for the 13-week period.

^1 See additional information at the end of this release regarding non-GAAP
financial measures.

In the third quarter period, excluding fuel,^1 Sam's Club comp traffic was up
2.4 percent, while ticket was down 1.3 percent. E-commerce sales positively
impacted comp sales by approximately 0.2 percent for the 13-week period.

The company's e-commerce sales impact includes those sales initiated through
the company's websites and fulfilled through the company's dedicated
e-commerce distribution facilities, as well as an estimate for sales initiated
online, but fulfilled through the company's stores and clubs.

Net sales results

Net sales, including fuel, were as follows:

                      Three Months Ended                    Nine Months Ended
                      October 31,                           October 31,
(dollars in           2013          2012          Percent   2013          2012        Percent
billions)                                         Change                              Change
Walmart U.S.          $ 67.692      $ 66.113      2.4  %    $ 202.973     $ 199.789   1.6  %
Walmart               33.109        33.046        0.2  %    98.839        96.922      2.0  %
International
Sam’s Club            14.075        13.918        1.1  %    42.478        41.933      1.3  %
Consolidated          $ 114.876     $ 113.077     1.6  %    $ 344.290     $ 338.644   1.7  %

The following explanations provide additional context to the above table.

  * On a constant currency basis,^1 Walmart International's net sales would
    have been $34.4 billion, an increase of 4.1 percent over last year.
    Currency exchange fluctuations negatively impacted net sales by
    approximately $1.6 billion in the quarter and an acquisition favorably
    impacted sales by $314 million.
  * Sam's Club net sales, excluding fuel,^1 were $12.4 billion, an increase of
    2.1 percent from last year.
  * Consolidated net sales on a constant currency basis^1 would have increased
    2.7 percent to $116.2 billion.

"A challenging global economy and negative currency exchange rate fluctuations
impacted our sales growth in the third quarter," said Doug McMillon, Walmart
International president and CEO. "In the fourth quarter, we will continue our
progress on managing expenses well and staying focused on growing sales,
including e-commerce. Still, the slow-growth macroeconomic environment is
persisting through the first month of this quarter, and the markets continue
to be competitive."

Segment operating income

Segment operating income was as follows:

                                                         
                      Three Months Ended                  Nine Months Ended
                      October 31,                         October 31,                     
(dollars in           2013        2012        Percent     2013         2012         Percent
billions)                                     Change                                Change
Walmart U.S.          $ 5.123     $ 4.841     5.8  %      $ 15.973     $ 15.122     5.6  %
Walmart               1.457       1.432       1.7  %      4.144        4.201        -1.4%
International
Sam’s Club            0.474       0.434       9.2  %      1.550        1.458        6.3  %
Sam's Club
(excluding            0.466       0.426       9.4  %      1.537        1.424        7.9  %
fuel)
                                                                                          
^1 See additional information at the end of this release regarding non-GAAP financial
measures.
 

"Walmart U.S. delivered almost $68 billion in net sales, and we continued to
deliver strong bottom line results in a difficult sales environment," said
Bill Simon, Walmart U.S. president and CEO. "Operating income grew by 5.8
percent to over $5.1 billion in the quarter."

"We're pleased with our third quarter results, especially our positive comp
sales and steady increase in traffic," said Rosalind Brewer, Sam's Club
president and CEO. "This led to strong growth in operating income, increasing
9.2 percent to $474 million."

U.S. comp sales forecasts

"The team has developed our best holiday plan ever. We are committed to being
the number one retail destination," said Simon. "We're making sure our shelves
are well-stocked with the most popular toys, and we're guaranteeing low prices
all season in the store through the Christmas Ad Match Program."

For the 14-week period ending Jan. 31, 2014, Walmart U.S. expects comp store
sales to be relatively flat. Last year, Walmart's comp sales rose 0.3 percent
for the 14-week period ended Feb. 1, 2013.

"At Sam's Club, the holiday season is well under way, and we're investing in
price for the fourth quarter," said Brewer. "Our members will be rewarded with
two Instant Savings Books and an exclusive VIP event, and we've collaborated
with e-commerce to provide the best online program we've ever had."

Sam's Club expects comp sales, excluding fuel,^1 for the 14-week period ending
Jan. 31, 2014 to range between flat and 2 percent. Last year comp sales,
excluding fuel,^1 increased 1.8 percent for the 14-week period ended Feb. 1,
2013.

Walmart U.S. and Sam's Club will report comparable sales for the 14-week
period ending Jan. 31, 2014 on Feb. 20, 2014, when the company reports fourth
quarter results. For fiscal year 2014, Walmart will report comparable store
sales on a 53-week basis, with 4-5-5 week reporting for the fourth quarter.

Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world save money and
live better -- anytime and anywhere -- in retail stores, online, and through
their mobile devices. Each week, more than 245 million customers and members
visit our 11,096 stores under 69 banners in 27 countries and e-commerce
websites in 10 countries. With fiscal year 2013 sales of approximately $466
billion, Walmart employs more than 2 million associates worldwide. Walmart
continues to be a leader in sustainability, corporate philanthropy and
employment opportunity. Additional information about Walmart can be found by
visiting http://corporate.walmart.com on Facebook at
http://facebook.com/walmart and on Twitter at http://twitter.com/walmart.
Online merchandise sales are available at http://www.walmart.com and
http://www.samsclub.com.

Notes

After this earnings release has been furnished to the Securities and Exchange
Commission (SEC), a pre recorded call offering additional comments on the
quarter will be available to all investors. Information included in this
release, including reconciliations, and the pre-recorded phone call can be
accessed via webcast by visiting the investor information area on the
company's website at www.stock.walmart.com. Callers within the U.S. and Canada
may dial 877-523-5612 and enter passcode 9256278. All other callers can access
the call by dialing 201-689-8483 and entering passcode 9256278.

Editor's Note

High resolution photos of Walmart U.S., Sam's Club and International
operations are available for download at www.stock.walmart.com

^1 See additional information at the end of this release regarding non-GAAP
financial measures.

Forward Looking Statements

This release contains statements as to Wal-Mart Stores, Inc. management's
forecasts or estimates of the company's diluted earnings per share from
continuing operations attributable to Walmart for the three months and fiscal
year ending Jan. 31, 2014, the company’s underlying diluted earnings per share
from continuing operations attributable to Walmart for the three months and
fiscal year ending Jan. 31, 2014 calculated by adjusting for the anticipated
effect on the company’s diluted earnings per share from continuing operations
attributable to Walmart for the three months ending Jan. 31, 2014 of the
ending of the company’s retail franchise agreement in India and the closure of
certain stores in Brazil and China, which are expected to occur during the
three months ending Jan 31, 2014, the anticipated amount of the impact of such
items on the company’s diluted earnings per share from continuing operations
attributable to Walmart for the three months ending Jan. 31, 2014, the
estimated amount by which the sale of the Vips restaurant business will be
accretive to diluted earnings per share from discontinued operations for the
three months ending Jan. 31, 2014, the company’s effective tax rate for the
fiscal year ending Jan. 31, 2014, the comparable store sales of the Walmart
U.S. segment of the company and the comparable club sales, excluding fuel, of
the Sam's Club segment of the company for the 14-week period from Oct. 26,
2013 through Jan. 31, 2014, and certain assumptions on which those forecasts
and estimates are based, as well as statements of the company’s objective to
reduce its operating expenses as a percentage of net sales by 100 basis points
by Jan 31, 2017 and of management's expectations for the company’s Walmart
International segment continuing its progress in managing its expenses well
and staying focused on growing sales, including e-commerce, and the company’s
Sam’s Club segment providing Instant Savings Books and a VIP event to certain
of its members in the 2013 holiday season that the company believes are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, as amended. These statements are intended to
enjoy the protection of the safe harbor for forward-looking statements
provided by that act. Those statements can be identified by the use of the
word or phrase "are updating," "anticipate," “estimated,” "expect,"
“expected,” "expects," "forecast," “goal,” "guidance," “is expected,” "will
be," "will continue," and "will range" in the statements or relating to such
statements. These forward-looking statements are subject to risks,
uncertainties and other factors, domestically and internationally, including:
general economic conditions; business trends in the company's markets;
economic conditions affecting specific markets in which we operate;
competitive pressures; the amount of inflation or deflation that occurs, both
generally and in certain product categories; consumer confidence, disposable
income, credit availability, spending levels, spending patterns and debt
levels; consumer demand for certain merchandise in the 2013 holiday season;
customer traffic in Walmart's stores and clubs and average ticket size;
consumer acceptance of the company’s merchandise offerings; the disruption of
seasonal buying patterns in the United States and other markets; geo-political
conditions and events; weather conditions and events and their effects;
catastrophic events and natural disasters and their effects on Walmart's
business; public health emergencies; civil unrest and disturbances and
terrorist attacks; commodity prices; the cost of goods Walmart sells;
transportation costs; the cost of diesel fuel, gasoline, natural gas and
electricity; the selling prices of gasoline; disruption of Walmart's supply
chain, including transport of goods from foreign suppliers; trade
restrictions; changes in tariff and freight rates; labor costs; the
availability of qualified labor pools in Walmart's markets; changes in
employment laws and regulations; the cost of healthcare and other benefits;
casualty and other insurance costs; accident-related costs; adoption of or
changes in tax and other laws and regulations that affect Walmart's business,
including changes in corporate tax rates; developments in, and the outcome of,
legal and regulatory proceedings to which Walmart is a party or is subject and
the costs associated therewith; the requirements for expenditures in
connection with the FCPA matters, including enhancements to Walmart's
compliance program and ongoing investigations; currency exchange rate
fluctuations; changes in market interest rates; conditions and events
affecting domestic and global financial and capital markets; the company not
obtaining in the three months ending Jan. 31, 2014 the necessary approvals for
the sale of the Vips restaurant business and the ending of the company’s
retail franchise agreement in India; failure of the purchaser of the Vips
restaurant business to perform its obligations regarding the purchase of the
Vips restaurant business; delays in the closure of the stores in Brazil and
China proposed to be closed in the quarter ending Jan. 31, 2014; and other
risks. Factors that may affect the company’s effective tax rate include
changes in the company’s assessment of certain tax contingencies, valuation
allowances, changes in law, outcomes of administrative audits, the impact of
discrete items, and the mix of earnings among the company’s U.S. and
international operations. The company discusses certain of the factors
described above more fully in certain of its filings with the SEC, including
its most recent annual report on Form 10-K filed with the SEC (in which the
company also discusses other factors that may affect its operations, results
of operations and comparable store and club sales) and this release should be
read in conjunction with that annual report on Form 10-K, together with all of
the company's other filings, including its quarterly reports on Form 10-Q and
current reports on Form 8-K, made with the SEC through the date of this
release. The company urges readers to consider all of these risks,
uncertainties and other factors carefully in evaluating the forward-looking
statements contained in this release. As a result of these matters, changes in
facts, assumptions not being realized or other circumstances, the company's
actual results may differ materially from the expected results discussed in
the forward-looking statements contained in this release. The forward-looking
statements contained in this release are as of the date of this release, and
Walmart undertakes no obligation to update these forward-looking statements to
reflect subsequent events or circumstances.

 
Wal-Mart Stores, Inc.

Condensed Consolidated Statements of Income

(Unaudited)
                                                                      
                         Three Months Ended                            Nine Months Ended
SUBJECT TO               October 31,                                   October 31,
RECLASSIFICATION
(Dollars in                                              Percent                                       Percent
millions, except         2013            2012            Change        2013            2012            Change
share data)
Revenues:
Net sales                $ 114,876       $ 113,077       1.6    %      $ 344,290       $ 338,644       1.7   %
Membership and           812             723             12.3   %      2,298           2,231           3.0   %
other income
Total revenues           115,688         113,800         1.7    %      346,588         340,875         1.7   %
Costs and
expenses:
Cost of sales            86,687          85,470          1.4    %      260,098         256,226         1.5   %
Operating,
selling, general
and                      22,691          22,237          2.0    %      66,965          65,504          2.2   %
administrative
expenses
Operating income         6,310           6,093           3.6    %      19,525          19,145          2.0   %
Interest:
Debt                     527             522             1.0    %      1,556           1,512           2.9   %
Capital leases           65              68              (4.4   )%     198             205             (3.4  )%
Interest income          (12       )     (44       )     (72.7  )%     (92       )     (131      )     (29.8 )%
Interest, net            580             546             6.2    %      1,662           1,586           4.8   %
Income from
continuing
operations               5,730           5,547           3.3    %      17,863          17,559          1.7   %
before income
taxes
Provision for            1,860           1,738           7.0    %      5,856           5,718           2.4   %
income taxes
Income from
continuing               3,870           3,809           1.6    %      12,007          11,841          1.4   %
operations
Income from
discontinued             15              16              6.3    %      38              39              2.6   %
operations, net
of income taxes
Consolidated net         3,885           3,825           1.6    %      12,045          11,880          1.4   %
income
Less
consolidated net
income                   (147      )     (190      )     (22.6  )%     (454      )     (487      )     (6.8  )%
attributable to
noncontrolling
interest
Consolidated net
income                   $ 3,738         $ 3,635         2.8    %      $ 11,591        $ 11,393        1.7   %
attributable to
Walmart
                                                                                                        
Income from
continuing
operations
attributable to
Walmart:
Income from
continuing               $ 3,870         $ 3,809         1.6    %      $ 12,007        $ 11,841        1.4   %
operations
Less income from
continuing
operations               (143      )     (185      )     (22.7  )%     (443      )     (475      )     (6.7  )%
attributable to
noncontrolling
interest
Income from
continuing
operations               $ 3,727         $ 3,624         2.8    %      $ 11,564        $ 11,366        1.7   %
attributable to
Walmart
                                                                                                        
                                                                                                        
Basic net income
per common
share:
Basic net income
per common share
from continuing          $ 1.14          $ 1.08          5.6    %      $ 3.52          $ 3.35          5.1   %
operations
attributable to
Walmart
Basic net income
per common share
from
discontinued             $ 0.01          —               100.0  %      0.01            0.02            (50.0 )%
operations
attributable to
Walmart
Basic net income
per common share         $ 1.15          $ 1.08          6.5    %      $ 3.53          $ 3.37          4.7   %
attributable to
Walmart
                                                                                                        
Diluted net
income per
common share:
Diluted net
income per
common share
from continuing          $ 1.14          $ 1.07          6.5    %      $ 3.51          $ 3.34          5.1   %
operations
attributable to
Walmart
Diluted net
income per
common share
from                     —               0.01            (100.0 )%     0.01            0.01            —     %
discontinued
operations
attributable to
Walmart
Diluted net
income per
common share             $ 1.14          $ 1.08          5.6    %      $ 3.52          $ 3.35          5.1   %
attributable to
Walmart
                                                                                                        
Weighted-average
common shares
outstanding:
Basic                    3,257           3,364                         3,279           3,385
Diluted                  3,271           3,379                         3,293           3,400
                                                                                                        
Dividends
declared per             $ —             $ —                           $ 1.88          $ 1.59
common share

                                                                  
Wal-Mart Stores, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)
                                                                    
SUBJECT TO
RECLASSIFICATION
(Dollars in millions)              October 31,     January 31,     October 31,
ASSETS                             2013            2013            2012
Current assets:
Cash and cash equivalents          $ 8,736         $ 7,781         $ 8,643
Receivables, net                   6,206           6,768           5,567
Inventories                        49,673          43,803          47,487
Prepaid expenses and other         2,160           1,588           1,654
Current assets of                  367             —               80         
discontinued operations
Total current assets               67,142          59,940          63,431
Property and equipment:
Property and equipment             170,967         165,825         163,011
Less accumulated                   (56,313   )     (51,896   )     (50,450   )
depreciation
Property and equipment,            114,654         113,929         112,561
net
Property under capital
leases:
Property under capital             5,668           5,899           5,900
leases
Less accumulated                   (3,095    )     (3,147    )     (3,208    )
amortization
Property under capital             2,573           2,752           2,692
leases, net
                                                                    
Goodwill                           19,729          20,497          20,572
Other assets and deferred          5,778           5,987           6,562      
charges
Total assets                       $ 209,876       $ 203,105       $ 205,818  
                                                                    
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings              $ 12,817        $ 6,805         $ 8,740
Accounts payable                   39,221          38,080          40,272
Dividends payable                  1,573           —               1,381
Accrued liabilities                18,606          18,808          18,536
Accrued income taxes               255             2,211           1,010
Long-term debt due within          4,147           5,587           6,550
one year
Obligations under capital          315             327             331
leases due within one year
Current liabilities of             87              —               25         
discontinued operations
Total current liabilities          77,021          71,818          76,845
                                                                    
Long-term debt                     41,702          38,394          38,872
Long-term obligations              2,841           3,023           2,964
under capital leases
Deferred income taxes and          8,298           7,613           8,044
other
Redeemable noncontrolling          1,492           519             492
interest
                                                                    
Commitments and
contingencies
                                                                    
Equity:
Common stock                       324             332             336
Capital in excess of par           2,364           3,620           3,861
value
Retained earnings                  72,888          72,978          70,256
Accumulated other
comprehensive income               (2,183    )     (587      )     (562      )
(loss)
Total Walmart                      73,393          76,343          73,891
shareholders’ equity
Nonredeemable                      5,129           5,395           4,710      
noncontrolling interest
Total equity                       78,522          81,738          78,601     
Total liabilities and              $ 209,876       $ 203,105       $ 205,818  
equity

                                                  
Wal-Mart Stores, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)
                                                    
                                                   Nine Months Ended
SUBJECT TO RECLASSIFICATION                        October 31,
(Dollars in millions)                              2013             2012
Cash flows from operating activities:
Consolidated net income                            $ 12,045         $ 11,880
Income from discontinued operations, net           (38      )       (39      )
of income taxes
Income from continuing operations                  12,007           11,841
Adjustments to reconcile consolidated net
income to net cash provided by operating
activities:
Depreciation and amortization                      6,600            6,304
Deferred income taxes                              594              279
Other operating activities                         465              138
Changes in certain assets and liabilities:
Receivables, net                                   191              501
Inventories                                        (6,230   )       (6,459   )
Accounts payable                                   2,089            3,545
Accrued liabilities                                (95      )       (82      )
Accrued income taxes                               (2,301   )       (160     )
Net cash provided by operating activities          13,320           15,907
                                                                     
Cash flows from investing activities:
Payments for property and equipment                (9,506   )       (8,921   )
Proceeds from the disposal of property and         521              343
equipment
Investments and business acquisitions, net         (15      )       (716     )
of cash acquired
Other investing activities                         58               (58      )
Net cash used in investing activities              (8,942   )       (9,352   )
                                                                     
Cash flows from financing activities:
Net change in short-term borrowings                6,046            4,700
Proceeds from issuance of long-term debt           7,053            199
Payments of long-term debt                         (4,943   )       (639     )
Dividends paid                                     (4,625   )       (4,034   )
Purchase of Company stock                          (5,806   )       (4,657   )
Other financing activities                         (960     )       (263     )
Net cash used in financing activities              (3,235   )       (4,694   )
                                                                     
Effect of exchange rates on cash and cash          (188     )       232       
equivalents
                                                                     
Net increase in cash and cash equivalents          955              2,093
Cash and cash equivalents at beginning of          7,781            6,550     
year
Cash and cash equivalents at end of period         $ 8,736          $ 8,643   
                                                                              

                            Wal-Mart Stores, Inc.
Reconciliations of and Other Information Regarding Non-GAAP Financial Measures
                                 (Unaudited)
                     (In millions, except per share data)

The following information provides reconciliations of certain non-GAAP
financial measures presented in the press release to which this reconciliation
is attached to the most directly comparable financial measures calculated and
presented in accordance with generally accepted accounting principles
("GAAP"). The company has provided the non-GAAP financial information
presented in the press release, which is not calculated or presented in
accordance with GAAP, as information supplemental and in addition to the
financial measures presented in the press release that are calculated and
presented in accordance with GAAP. Such non-GAAP financial measures should not
be considered superior to, as a substitute for, or as an alternative to, and
should be considered in conjunction with the GAAP financial measures presented
in the press release. The non-GAAP financial measures in the press release may
differ from similar measures used by other companies.

Calculation of Return on Investment and Return on Assets

Management believes return on investment ("ROI") is a meaningful metric to
share with investors because it helps investors assess how effectively Walmart
is deploying its assets. Trends in ROI can fluctuate over time as management
balances long-term potential strategic initiatives with any possible
short-term impacts.

ROI was 17.5 percent and 18.0 percent for the trailing twelve months ended
October 31, 2013 and 2012, respectively. The decline was principally due to
investments in fixed assets, growth in working capital, and the impact of
acquisitions.

We define ROI as adjusted operating income (operating income plus interest
income, depreciation and amortization, and rent expense) for the trailing
twelve months divided by average invested capital during that period. We
consider average invested capital to be the average of our beginning and
ending total assets, plus average accumulated depreciation and average
amortization less average accounts payable and average accrued liabilities for
that period, plus a rent factor equal to the rent for the fiscal year or
trailing twelve months multiplied by a factor of eight. When we have
discontinued operations, we exclude the impact of the discontinued operations.

Our calculation of ROI is considered a non-GAAP financial measure because we
calculate ROI using financial measures that exclude and include amounts that
are included and excluded in the most directly comparable GAAP financial
measure. For example, we exclude the impact of depreciation and amortization
from our reported operating income in calculating the numerator of our
calculation of ROI. In addition, we include a factor of eight for rent expense
that estimates the hypothetical capitalization of our operating leases. We
consider return on assets ("ROA") to be the financial measure computed in
accordance with generally accepted accounting principles ("GAAP") that is the
most directly comparable financial measure to our calculation of ROI. ROI
differs from ROA (which is consolidated net income for the period divided by
average total assets for the period) because ROI: adjusts operating income to
exclude certain expense items and adds interest income; adjusts total assets
for the impact of accumulated depreciation and amortization, accounts payable
and accrued liabilities; and incorporates a factor of rent to arrive at total
invested capital.

Although ROI is a standard financial metric, numerous methods exist for
calculating a company's ROI. As a result, the method used by Walmart's
management to calculate ROI may differ from the methods other companies use to
calculate their ROI. We urge you to understand the methods used by other
companies to calculate their ROI before comparing our ROI to that of such
other companies.

The calculation of ROI, along with a reconciliation to the calculation of ROA,
the most comparable GAAP financial measure, is as follows:

 
Wal-Mart Stores, Inc.
Return on Investment and Return on Assets
                                           
                                             Trailing Twelve Months Ended
                                             October 31,
(Dollars in                                  2013                  2012
millions)
CALCULATION OF RETURN ON INVESTMENT
Numerator
Operating income                             $  28,181             $ 27,546
+ Interest                                   148                   162
income
+ Depreciation                               8,797                 8,367
and amortization
+ Rent                                       2,688                 2,560      
Adjusted                                     $  39,814             $ 38,635   
operating income
                                                                    
Denominator
Average total
assets of                                    $  207,624            $ 200,447
continuing
operations^1
+ Average
accumulated                                  56,533                50,382
depreciation and
amortization^1
- Average
accounts                                     39,747                38,914
payable^1
- Average
accrued                                      18,571                17,713
liabilities^1
+ Rent x 8                                   21,504                20,480     
Average invested                             $  227,343            $ 214,682  
capital
Return on                                    17.5        %         18.0      %
investment (ROI)
                                                                    
CALCULATION OF RETURN ON ASSETS
Numerator
Income from
continuing                                   $  17,922             $ 17,278   
operations
Denominator
Average total
assets of                                    $  207,624            $ 200,447  
continuing
operations^1
Return on assets                             8.6         %         8.6       %
(ROA)
                                                                    
                    As of October 31,
Certain Balance     2013                     2012                  2011
Sheet Data
Total assets of
continuing          $  209,509               $  205,738            $ 195,155
operations^2
Accumulated
depreciation and    59,408                   53,658                47,106
amortization
Accounts payable    39,221                   40,272                37,555
Accrued             18,606                   18,536                16,890
liabilities
                                                                              
^1 The average is based on the addition of the account balance at the end of
the current period to the account balance at the end of the prior period and
dividing by 2.

 
                                                                              
^2 Total assets of continuing operations as of October 31, 2013, 2012 and 2011
in the table above exclude assets of discontinued operations that are
reflected in the Company's Condensed Consolidated Balance Sheets of $367
million, $80 million and $89 million, respectively.

Free Cash Flow

We define free cash flow as net cash provided by operating activities in a
period minus payments for property and equipment made in that period. Free
cash flow was $3.8 billion and $7.0 billion for the nine months ended October
31, 2013 and 2012, respectively. Timing of payments associated with taxes and
payables, as well as higher capital expenditures were the primary drivers of
the reduction.

Free cash flow is considered a non-GAAP financial measure. Management
believes, however, that free cash flow, which measures our ability to generate
additional cash from our business operations, is an important financial
measure for use in evaluating the company's financial performance. Free cash
flow should be considered in addition to, rather than as a substitute for
consolidated net income as a measure of our performance and net cash provided
by operating activities as a measure of our liquidity.

Additionally, Walmart's definition of free cash flow is limited, in that it
does not represent residual cash flows available for discretionary
expenditures due to the fact that the measure does not deduct the payments
required for debt service and other contractual obligations or payments made
for business acquisitions. Therefore, we believe it is important to view free
cash flow as a measure that provides supplemental information to our condensed
consolidated statements of cash flows.

Although other companies report their free cash flow, numerous methods may
exist for calculating a company's free cash flow. As a result, the method used
by our management to calculate our free cash flow may differ from the methods
other companies use to calculate their free cash flow. We urge you to
understand the methods used by other companies to calculate their free cash
flow before comparing our free cash flow to that of such other companies.

The following table sets forth a reconciliation of free cash flow, a non-GAAP
financial measure, to net cash provided by operating activities, which we
believe to be the GAAP financial measure most directly comparable to free cash
flow, as well as information regarding net cash used in investing activities
and net cash used in financing activities.

                                    Nine Months Ended
                                    October 31,
(Dollars in                         2013                         2012
millions)
Net cash provided
by operating                        $   13,320                   $  15,907
activities
Payments for
property and                        (9,506       )               (8,921     )
equipment
Free cash flow                      $   3,814                    $  6,986    
                                                                  
Net cash used in
investing                           $   (8,942   )               $  (9,352  )
activities^1
Net cash used in
financing                           $   (3,235   )               $  (4,694  )
activities
                                                                             
^1 "Net cash used in investing activities" includes payments for property and
equipment, which is also included in our computation of free cash flow.
                                                                             

Constant Currency

In discussing our operating results, the term currency exchange rates refers
to the currency exchange rates we use to convert the operating results for all
countries where the functional currency is not the U.S. dollar. We calculate
the effect of changes in currency exchange rates as the difference between
current period activity translated using the current period's currency
exchange rates, and the comparable prior year period's currency exchange
rates. Throughout our discussion, we refer to the results of this calculation
as the impact of currency exchange rate fluctuations. When we refer to
constant currency operating results, this means operating results without the
impact of the currency exchange rate fluctuations and without the impact of
acquisitions until the acquisitions are included in both comparable periods.
The disclosure of constant currency amounts or results permits investors to
understand better Walmart's underlying performance without the effects of
currency exchange rate fluctuations or acquisitions.

The table below reflects the calculation of constant currency for net sales
and operating income for the three and nine months ended October 31, 2013.

                       Three Months Ended                                     Nine Months Ended
                       October 31, 2013                                       October 31, 2013
                       International              Consolidated                International               Consolidated          
(Dollars in            2013           Percent     2013            Percent     2013            Percent     2013            Percent
millions)                             Change                      Change                      Change                      Change
Net sales:
As reported            $ 33,109       0.2  %      $ 114,876       1.6  %      $ 98,839        2.0  %      $ 344,290       1.7  %
Currency
exchange rate          1,622                      1,622                       3,324                       3,324            
fluctuations^1
                       34,731                     116,498                     102,163                     347,614
Net sales from         (314     )                 (314      )                 (730      )                 (730      )      
acquisitions
Constant
currency net           $ 34,417       4.1  %      $ 116,184       2.7  %      $ 101,433       4.7  %      $ 346,884       2.4  %
sales
                                                                                                                           
Operating
income:
As reported            $ 1,457        1.7  %      $ 6,310         3.6  %      $ 4,144         (1.4 )%     $ 19,525        2.0  %
Currency
exchange rate          16                         16                          (10       )                 (10       )      
fluctuations^1
                       1,473                      6,326                       4,134                       19,515
Operating loss
from                   74                         74                          156                         156              
acquisitions
Constant
currency               $ 1,547        8.0  %      $ 6,400         5.0  %      $ 4,290         2.1  %      $ 19,671        2.7  %
operating
income
                                                                                                                                
^1 Excludes currency exchange rate fluctuations related to acquisitions until the acquisitions are included in both comparable
periods.
 

EPS and Underlying EPS Guidance

The estimated range for the underlying diluted earnings per share from
continuing operations attributable to Walmart ("Underlying EPS") for the three
months and the fiscal year to end Jan. 31, 2014 is considered a non-GAAP
financial measure under the SEC’s rules because the Underlying EPS for each
such period includes certain amounts not included in the estimated range of
diluted earnings per share from continuing operations attributable to Walmart
("EPS") calculated in accordance with GAAP for the three months and the fiscal
year to end Jan. 31, 2014. Management believes that the Underlying EPS for the
three months and the fiscal year to end Jan. 31, 2014 is a meaningful metric
to share with investors because that metric, which adjusts EPS for each of
such periods for certain items expected to be recorded in the three months to
end Jan. 31, 2014, is the metric that best compares with the EPS for the three
months and the fiscal year ended Jan. 31, 2013, respectively. In addition, the
metric affords investors a view of management’s expectations for Walmart’s
core earnings performance for the three months and the fiscal year to end Jan.
31, 2014 and the ability to make a more informed assessment of such expected
core earnings performance for each of such periods when compared to Walmart’s
earnings performance for the three months and the fiscal year ended Jan. 31,
2013, respectively.

We have calculated the range of Underlying EPS for the three months and the
fiscal year to end Jan. 31, 2014 by adding to the range of EPS for each such
period the approximate amount of the expected dilutive impact of: (1) the
ending of Walmart’s retail franchise agreement in India (the "India
Transaction"); and (2) the planned closure of approximately 50
under-performing stores in Brazil and China (the "Store Closures") on EPS for
the three months to end Jan. 31, 2014.

EPS for the three months and the fiscal year to end Jan. 31, 2014 is the
financial measure calculated in accordance with GAAP that is most directly
comparable to the Underlying EPS for the three months and the fiscal year to
end Jan. 31, 2014, respectively. The calculation of the Underlying EPS for
each such period and the reconciliation of the Underlying EPS for each such
period to EPS for such period are as follows:

                         EPS Guidance for the Three Months to End January 31,
                         2014
                                    Adjustments to EPS              
                                    Guidance
                         EPS        Store         India            Underlying
                                    Closures      Transaction      EPS
Diluted net income                                                
per common share:
  Diluted income
  per common share
  from continuing        1.50 -     0.06          0.04             1.60 - 1.70
  operations             1.60
  attributable to
  Walmart

                          EPS Guidance for the Twelve Months to End January
                          31, 2014
                                    Adjustments to EPS              
                                    Guidance
                          EPS       Store         India            Underlying
                                    Closures      Transaction      EPS
Diluted net
income per common                                                 
share:
  Diluted income
  per common
  share from              5.01
  continuing              -         0.06          0.04             5.11 - 5.21
  operations              5.11
  attributable to
  Walmart

Comparable Sales Measures and Sam's Club Measures

The following financial measures presented in the press release to which this
reconciliation is attached are non-GAAP financial measures as defined by the
SEC's rules:

  * the comparable club sales of the company's Sam's Club operating segment
    ("Sam's Club") for the thirteen-week and thirty-nine week periods ended
    Oct. 25, 2013 and Oct. 26, 2012, projected comparable club sales of Sam's
    Club for the fourteen weeks ending Jan. 31, 2014 and comparable club sales
    of Sam's Club for the fourteen weeks ended Feb. 1, 2013, in each case
    calculated by excluding Sam's Club's fuel sales for such periods (the
    "Comparable Sales Measures");
  * the net sales of Sam's Club for the three months and nine months ended
    Oct. 31, 2013 and the percentage increase in the net sales of Sam's Club
    for the three months and nine months ended Oct. 31, 2013 over the net
    sales Sam's Club for the three months and nine months ended Oct. 31, 2012,
    in each case calculated by excluding Sam's Club's fuel sales for the
    relevant period; and
  * the segment operating income of Sam's Club for the three months and nine
    months ended Oct. 31, 2013 and 2012 and the percentage increase in the
    segment operating income of Sam's Club for the three months and nine
    months ended Oct. 31, 2013 over the segment operating income of Sam's Club
    for the three months and nine months ended Oct. 31, 2012, in each case
    calculated by excluding Sam's Club's fuel sales for the relevant period.

The measures described in the second and third bullet points above are
referred to herein as the "Sam's Club Measures."

We believe the Sam's Club's comparable club sales for the historical periods
for which the corresponding Comparable Sales Measures are presented calculated
by including fuel sales and their effects are the financial measures computed
in accordance with GAAP most directly comparable to the respective Comparable
Sales Measures. We believe the Sam's Club's projected comparable club sales
for the fourteen weeks ending Jan. 31, 2014 calculated by including fuel sales
and their effects is the financial measure computed in accordance with GAAP
most directly comparable to the projected comparable club sales of Sam's Club
for the fourteen weeks ending Jan. 31, 2014 calculated by excluding fuel
sales. We believe the reported Sam's Club's net sales, percentage increase in
net sales, segment operating income and percentage increase in segment
operating income for the periods for which the corresponding Sam's Club
Measures are presented are the most directly comparable financial measures
computed in accordance with GAAP to the respective Comparable Sales Measures.

We believe that the presentation of the Comparable Sales Measures and the
Sam's Club Measures provides useful information to investors regarding the
company's financial condition and results of operations because that
information permits investors to understand the effect of the fuel sales of
Sam's Club, which are affected by the volatility of fuel prices, on Sam's
Club's comparable club sales and on Sam's Club's net sales and operating
income for the periods presented.

Contact:

Wal-Mart Stores, Inc.
Media Relations Contact
Randy Hargrove, 800-331-0085
or
Investor Relations Contact
Carol Schumacher, 479-277-1498
or
Pre-recorded management call
877-523-5612 (U.S. and Canada)
201-689-8483 (other countries)
Passcode: 9256278 (Walmart)
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