Walmart Stores Inc. (NYSE: WMT) 19th Annual Investment Community Meeting October 10, 2012 Transcript Index Welcome & Introduction Jeff Davis Page 1 Mission & Strategy Mike Duke Page 2 Walmart U.S. Bill Simon & Team Page 7 Walmart U.S. Q&A Page 27 Sam’s Club Rosalind Brewer & Team Page 38 Sam’s Club Q&A Page 49 Walmart International Doug McMillon & Team Page 56 Walmart International Q&A Page 73 Global e-Commerce Neil Ashe & Team Page 88 Global e-Commerce Q&A Page 97 Financial Strategy Charles Holley Page 106 Financial Strategy Q&A Page 111 Strategic Priorities Mike Duke Page 115 Final Q&A Page 117 1 Walmart Stores Inc. (NYSE: WMT) 19th Annual Investment Community Meeting October 10, 2012 ________________________________________________________________ Jeff Davis – SVP Finance & Treasurer Walmart Stores, Inc. Good morning, everyone. Before we get started with the webcast, I wanted to go over a couple of quick housekeeping items. And at the risk of sounding like your flight attendant, I want to make sure everyone knows where the exits are in case there is an evacuation but most importantly if everyone could use the exit and entrance over here to the right as you're entering the presentations. Outside you'll see there is a beverage service set up for you during the course of the day. One thing that many of you are going to be using the iPad® and the conference app. The first app that is downloaded is the Walmart U.S. app presentation. If you have not seen that as of yet it won't come up until bill is ready to come on stage. If you have any issues with your iPad® or the app we have support back here on the right-hand side. Also if you requested a USB for the meeting materials that will be available for you at the end of the meeting and you can get that at the registration desk out front. That won't be available until affiliate meeting is completed. If we can now get ready to start the webcast. ________________________________________________________________ Jeff Davis – SVP Finance & Treasurer Walmart Stores, Inc. Good morning. My name is Jeff Davis. And I am the Senior Vice‑ President and treasurer for Wal-Mart Stores. On behalf of our global leadership team, I would like to thank everyone who has traveled here today to be with us in northwest Arkansas and for those of you webcast for making it part of your day also. Hopefully last night you had an opportunity to enjoy the time at crystal bridges museum. We not only had an opportunity to see some of the finest art, American art here in northwest Arkansas but you also took the opportunity to spend time with our business leadership team to learn a little bit more about Walmart; however, if you didn't have an opportunity to spend some time with us last night we still have an exciting line‑ up for you today. But first I have sort of a shameless commercial for our IR team. As you can see on the screen behind me, in April of this year, we had the opportunity to launch a new application. That app is now available not only on the iPhone® but Android® devices and what we really are excited about this is the fact that we have the opportunity to provide this great tool to you such that you can access information any time any where that you would like to. We believe this tool will be good for you to be able to download certain information like key news, our 2 releases, and all the other types of information that you would normally retrieve from our website; in fact, if you haven't downloaded already, there is a QR code behind us and you can go ahead and download that right now if you would like. So moving on to our next slide, please. As you can see from the agenda today, we have a very exciting line‑ up. In addition to the warehouse clubs that you saw yesterday as well as the stores, you'll see that we have a great line-up. Mike Duke will kick it off for us today. In doing so, he'll have an opportunity to talk to us about the business strategies; in addition, you'll see that we will have our business leadership, and they will go through and discuss with you each of the respected businesses. At the end of each one of their sessions, you'll have an opportunity to ask questions, also. We'll have Charles Holley come up and provide us with a financial update and, also, outline our fiscal 2014 capital expenditure plan. As you'll see, Mike will close with some final comments. And he'll be joined by his Executive Team to take Q and A at the very end. For planning purposes, you'll see that we have a break at 9:25. And you'll have an opportunity during that break to go down the hall and actually spend some time with some of our merchants who have a great display of merchandise for you, something in addition to what you may have seen already in the stores. And, in addition to that, you'll see at 11:45 we'll actually break for lunch. Just as a quick reminder, all of our presentations are actually archived on the investor portion of our website and today's meeting will actually be made available and a transcript on October 11th, which is tomorrow. As you can see we have our obligatory statements and today our business leadership will make a number of forward-looking statements not only during presentations but during the Q and A. As a reminder, many of the statements we'll be making may differ materially from our actual forecast or actual results that compare with what we've talked to you about today. And what you'll see behind me are a number of forward-looking statements if you take a look at that as well as on our website for other filings that we've made to the SEC. Now without any further adieu, I would like to welcome to the stage, Mike Duke, our President and CEO. [Applause] ________________________________________________________________ Mike Duke - President and CEO Walmart Stores Inc. Thank you, Jeff. Good morning! Great to see all of you. Welcome back to Northwest Arkansas. I always enjoy visiting with you and I really enjoyed getting 3 a chance to talk to many of you last night at Crystal Bridges. And I do hope ‑‑ I know Jeff said that ‑‑ I hope you also enjoyed the evening. I know that some of you thought it was a difficult tradeoff from Leslie Dach to Crystal Bridges that we've had ‑‑ Leslie in the past but that is a very special place, I think, for all of us that lived in the Northwest Arkansas and get to take advantage of it. And we certainly really grateful to the Walton family, and especially Alice Walton, for the development of that Crystal Bridges project. But it's just a special, special place and really having a whole ‑‑ an impact on the whole region so I hope some of you can come back when you'll have a little more time and can enjoy it more. I also hope that you enjoyed the store and club visits. I know that many of you ‑‑ I heard that even more than in the past ‑‑ spent a lot of time out visiting local stores in Sam's Clubs and really hope that was worthwhile for you. I will tell you, Jeff just covered the agenda. We have a lot of time on the agenda today for Q and A. That's my favorite part. I like to listen to your questions. I think your questions have great depth and they mean a lot to me and you'll see me taking notes and we may even refer to some of that at the end of the meeting. So again, I look forward to the discussions and have this, especially the Q and A part. You know, last year in my closing remarks, I said that our business was stronger than it was the year before and that it would be even stronger when I stood here today in front of you. Today I want to appreciate all of our managers and our more than 2 million front-line associates, especially all over the world, because working together, this team has made good on that promise. Throughout the day you'll hear the message from our leadership team that you've consistently heard over the last few years: growth, leverage, and returns. With my remarks, I also want to focus you on three additional words: momentum, discipline and investment. Because these are driving growth, leverage and returns. We have momentum in our core business that's producing top line and bottom line results. We're delivering on the productivity loop and we're being even more disciplined about operating expenses and capital spending. We're making investments that are creating a better business. We certain live areas where we can improve. And believe me, we are focused on those area that we need to improve in. But let me be real clear. Walmart is strong and we are getting stronger. In Walmart U.S., our business is in a very good place. Bill and his team have made progress on a number of fronts that are driving stronger comp sales.