Carol Schumacher - Vice President of Investor Relations Michael Terry Duke - Chief Executive Officer, President, Director, Chairman of Global Compensation Committee and Chairman of Executive Committee William S. Simon - Executive Vice President, Chief Executive Officer of Walmart U S and President of Walmart U S Rosalind Gates Brewer - Executive Vice President of Walmart U.S. Segment, Chief Executive Officer of Sam's Club Segment and President of Sam's Club Segment Charles M. Holley - Chief Financial Officer and Executive Vice President

Welcome to the Walmart Earnings Call for the Fourth Quarter of Fiscal Year 2012. The date of this call is February 21, 2012. This call is the property of Wal-Mart Stores, Inc. and it’s intended for the use of Walmart shareholders and the investment community. It should not be reproduced in any way. [Operator Instructions]. This call will contain statements that Walmart believes are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended and that are 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 expecting, are forecasting, assumed, can expect, committed to reducing, continuing, expect, expects, forecast, goal, guidance, includes, may be impacted, may continue to fluctuate, may fluctuate, plan, plans to growing, to open, will be, will be accomplished, will begin, will come, will continue, will deliver, will ensure, will grow, will improve, will include, will reduce, will remain and will strengthen 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 Walmart's objectives, plans, goals, targets or expectations are forward-looking statements. The forward-looking statements made in this call discuss, among other matters, management's forecasts of Walmart's diluted earnings per share from continuing operations attributable to Walmart for the 3 months ending April 30, 2012, and the year ending January 31, 2013, and the assumption underlying such forecasts that currency exchange rates will remain at current levels. And the comparable store sales of Walmart's, Walmart U.S. operating segment and the comparable club sales without fuel of Walmart Sam's Club operating segment for the 13-week period from January 28, 2012, through April…

Hello, this is Carol Schumacher, Vice President of Investor Relations for Wal-Mart Stores, Inc. Thanks for joining us today for our earnings call to review the fourth quarter and the full year results of fiscal year 2012. All information for this quarter, including our unit counts, square footage and financial metrics is available on our website at walmartstores.com/investors. Our press release is available as well on the website. A full transcript of this call will be available on the website after 7:00 a.m. Central Time today, that's February 21, 2012. Here's the lineup for today's call. Mike Duke, President and CEO of Wal-Mart Stores, Inc. will open the call with his thoughts about the quarter and the year. Jeff Davis, SVP of Finance and Treasurer, will cover the consolidated financial details. Then we'll go to the operating segments. First up, Bill Simon, President and CEO of Walmart U.S. Next, Doug McMillon, President and CEO of Walmart International. Then we'll close the operating segment discussion with Rosalind Brewer, commonly known as Roz, our new President and CEO of Sam's Club. Charles Holley, our CFO, will wrap up with his thoughts, as well as EPS guidance for the first quarter and fiscal year '13. A few reminders before we get into the details. Walmart's consolidated financial statements are based on a fiscal year ending January 31 for our U.S. and Canadian operations and December 31 for all other operations. Walmart International unit counts, with the exception of Canada, are stated as of December 31. Massmart currently reports on a June 30 fiscal year end, but is consolidated into our results on a calendar year basis with a one-month lag. This year, fiscal '13, is a leap year, and we will have an extra day in our company results for the first quarter and the full fiscal year. Leap year doesn't affect comp sales reporting. We will continue to report comp store sales on the 4-5-4 retail calendar when we announce quarterly earnings. So next year at this time, when we report fourth quarter earnings in February, we'll report a fourth quarter comp on the 4-5-5 basis. Details on comp sales in this call for the countries within Walmart International are on a calendar basis. We look forward to seeing all of you at our annual international meeting for the investment community in Toronto in April when we have an in-depth look at the Walmart Canada business. Now Mike, let's get started with our results. Mike?

Thanks, Carol, and good morning, everyone. Today, every segment of our business is stronger than it was a year ago, and we're in a great position heading into this fiscal year. I'm pleased with Walmart's performance for the fourth quarter and the full year. Let me start with our most important results. We are reporting $1.51 diluted earnings per share from continuing operations for the quarter and $4.54 for the full year. Both of these numbers include net benefits to EPS of $0.07 and $0.05, respectively. Jeff will cover the details behind our EPS shortly. Walmart U.S. reported positive comp sales of 1.5% for the fourth quarter. And let me point out that this includes positive comp traffic. Sam's Club continued its sales momentum. Comps, without fuel, increased 5.4% for the quarter. International continues to be a strong growth engine for the company, delivering $35.5 billion in sales for the quarter and more than $125 billion for the year. Net sales, including acquisitions, rose almost 6% for the year to approximately $444 billion. Our company leveraged expenses for both the quarter and the full year. Walmart has now leveraged operating expenses for 2 consecutive years. The company returned $11.3 billion to shareholders through dividends and share repurchases this year. These results demonstrate our commitment to delivering growth, leverage and returns for our shareholders. They also reinforce our belief that Walmart remains the best positioned global retailer. It's was 50 years ago this year that Sam Walton started our company with a single store in Rogers, Arkansas and the promise to help customers save money so they can live better. He saw an opportunity to deliver on that promise. And today, our associates serve more than 200 million customers every week around the world. Our price leadership is making a difference…

Thank you, Jeff. Last quarter, I kicked things off by getting right to the good news, and I'd like to do that again. Most of my comments will be about the fourth quarter, and then I'll summarize the full year results. For the fourth quarter, Walmart U.S. achieved a 1.5% comp, our fourth consecutive quarter of comp improvement and our second consecutive positive quarterly comp. As Mike mentioned earlier, we also achieved our first positive traffic quarter in quite a while. January was our strongest performance in the quarter with every business unit showing strong traffic improvements versus last year's fourth quarter. All 3 geographic units delivered positive comps for the quarter as well. We had a great holiday season. We started off with layaway services in October, spurring traffic improvements in the fourth quarter. Black Friday sales were strong, and consumers continued to respond favorably throughout Christmas and in to the new year. Our comprehensive marketing campaign helped tie it all together and drive traffic as we secured a very large share of voice with strong, creative and innovative social media initiatives. Throughout the quarter, we implemented strategic initiatives to better serve our core customer. To put it simply, our business model is working, and we continue to drive progress on 3 major fronts: First, our commitment to price leadership has never been stronger. As we outlined last quarter, we invested in price and reduced our gross margin by 13 basis points or about $100 million in the fourth quarter alone. We'll continue building on this initial investment in fiscal '13. Second, our focus on expanded assortment has resonated with customers. We've completed the initial phases of our SKU add-back program, returning more than 10,000 items to the shelves. Initially, add-backs drove higher tickets as customers discovered their favorite…

Thanks, Doug. It is an honor and a privilege to take on the leadership role for the Sam's Club business, and I am so impressed by this team. We just finished a great overall fourth quarter and a complete and outstanding fiscal year for Sam's Club. Our entire organization is highly motivated to continue this great momentum. Member experience survey results are at an all-time high. Our merchandising team is doing a fantastic job of finding items that members want at a great value. And the club operators are doing a great job of getting those items in front of the Sam's Club members. First, I'll review our Q4 results and then provide analysis on the full year. Including fuel, fourth quarter net sales were $14 billion, a 6.8% increase over last year. Gross profit increased by 4.4%. SG&A expense, as a percentage of sales, increased by 26 basis points and operating income increased 7.6% to $524 million for the quarter. Our fuel business has been strong all year, including the fourth quarter. Fuel profit was relatively flat in Q4, but overall volume was very good. Fuel prices in this year's fourth quarter were approximately 13% higher than a year ago and gallons sold were up 8%. As we have said before, we look to fuel to set the first price impression for Sam's Club. It is clearly a traffic driver for existing and potential members. Volatility in fuel prices can have a notable impact on our financial results. The remainder of our discussion today, therefore, is focused on our core business and excludes fuel for comparative purposes unless otherwise noted. We were very pleased with Sam's top line performance this quarter. Net sales for the fourth quarter were $12.6 billion, up 5.4% from last year. For the 13-week period,…

Thanks, Roz. We are pleased with our full year performance and especially our results for the fourth quarter. We were disciplined and focused on improving our business, and I'm happy to say that we made good progress this year, especially in the back half of the year. We have leveraged expenses for 2 consecutive years and improved all areas of our business. Last year at this time, Walmart U.S. was in the early stages of reintroducing action alley and adding merchandise assortment and strengthening our focus on EDLP. In a challenging economy and a highly promotional competitive environment, our U.S. businesses won in the fourth quarter and in the year. Sam's Club continued its strong sales momentum. And we believe that both Walmart and Sam's are extremely well positioned in the retail market. International remains our growth engine. Between acquisitions and new store growth, we added record square footage and units this year. Sales were strong and we are gaining market share. We continue to be focused on the improving profitability and returns of our international operations. We have a strong and consistent underlying business that positions us well for this year. Today, we are reiterating some our fiscal 2013 goals that we shared in October. Net sales will grow between 5% and 7%, representing an additional $22 billion to $31 billion in sales. We expect to grow square footage by 4% to 5% this year or 45 million to 49 million square feet. Recall that we are adding units and square footage with an eye toward continued capital efficiency and reduced costs for construction and remodels. We will continue to make investments where we see we can better serve our customers and provide for returns to our shareholders. You've heard about leverage throughout this call. It is our standard.…