Carol Schumacher - Vice President, Global IR Doug McMillon - President and CEO Claire Babineaux-Fontenot - EVP and Treasurer Greg Foran - President and CEO of Walmart U.S. Dave Cheesewright - President and CEO of Walmart International Rosalind Brewer - President and CEO of Sam’s Club Charles Holley - Chief Financial Officer

Welcome. This is Carol Schumacher, Vice President of Global Investor Relations for Wal-Mart Stores, Inc. Thanks for joining us today to review our results for the first quarter of fiscal 2016. The date of this call is May 19, 2015. This call is the property of Wal-Mart Stores, Inc. and is intended for the use of Wal-Mart shareholders and the investment community. It should not be reproduced in any way. For those listening on the phone, you may navigate through the call as follows. Press 4 and the # key to rewind playback 20 seconds. Press 5 and the # key to pause and resume playback. Press 6 and the # key to fast-forward playback 20 seconds. This call contains 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. Please note that a cautionary statement regarding the forward-looking statements will be made following Charles Holley’s remarks later in this call. All materials related to today’s news are available on the investors’ portion of our corporate website stock.walmart.com. You’ll see today a redesigned and enhanced investors’ website for Wal-Mart. It has more content. It allows for easier navigation and search functionality. And you can continue to find the updated monthly global unit count data under financial information. The terms used in today’s release including EPS, constant currency, gross profit and gross profit rate, are defined there as well. Now, when we refer to traditional Neighborhood Markets in Wal-Mart U.S., we’re discussing those that average 42,000 square feet of retail space. The smaller Neighborhood Markets range in size from 12,000 to 16,000 square feet. For this fiscal year, we updated our…

Thanks, Carol, and good morning everyone. Overall, we had a solid first quarter. Walmart generated nearly $115 billion in revenue and delivered earnings per share within our guidance range at $1.03. I’ll cover the results for the quarter in just a minute, but I’d like to start with an update on some of our larger strategic choices and the progress we’ve made to bring them to life. Our objective is to make changes to improve our short to mid-term performance while, at the same time, position the company for the long-term. By position, I’m referring to how we set ourselves up to serve customers for years to come and the strategic choices we’re making are in two critical areas, people and technology. In April, we launched a comprehensive set of store and club initiatives that I discussed in last quarter’s call. These are intended to improve our short to mid-term performance in the United States. As you’ll remember, we’re investing in our starting wage rates, an improved store structure, including adding department managers, and wage increases for most positions within our stores and clubs in the U.S. We have pilots under way that will improve our scheduling process and improve our training. This set of initiatives is designed to improve the customer experience and translate into higher comp store sales over time. The rollout of these changes happens throughout this year. We know that we won’t see it overnight, but we’re confident these are the right things to do for our business and our team. I’ve recently visited stores and clubs in the Detroit and Seattle markets and I’m encouraged with our associates’ level of ownership in the business and understanding of the plan. As we improve the experience in our stores, we continue to invest to deliver a stronger…

Thanks, Doug. Today, I’ll highlight some items in the company’s consolidated financial statements. Further details are available in the accompanying presentation posted today with this transcript. For the first quarter of fiscal ‘16, diluted earnings per share from continuing operations attributable to Walmart EPS were $1.03. This compares to last year’s EPS of $1.10, which was negatively impacted by approximately $0.03 from severe weather. Currency exchange rate fluctuations had a greater than anticipated impact on this year’s first quarter results. Fluctuations in currency negatively impacted net sales by approximately $3.3 billion, and similarly impacted EPS by $0.03. As a reminder, our incremental investment in e-commerce was approximately $0.02 per share, and the investment in U.S. associates impacted EPS by approximately $0.02. These investments were also the primary contributor to the 2.8% increase in consolidated operating expenses. Additionally, FCPA and compliance-related costs were approximately $33 million, comprised of $25 million for the ongoing inquiries and investigations, and $8 million for our global compliance program and organizational enhancements. Last year, FCPA and compliance-related costs were $53 million in the first quarter. The company’s consolidated operating income decreased 8.3%. Excluding the impact from currency, operating income decreased 6.1%. The company’s continued investments in e-commerce, as well as wages and training for our U.S. associates, were headwinds on our operating income during the quarter. As you will see on slide two, net interest expense increased 45.1%, primarily due to the cumulative impact of an immaterial accounting correction that I will explain in a moment. Without this cumulative adjustment, interest expense would have been flat. We consolidate a number of entities into our financial statements for which there are minority, or non-controlling, interests. In one of these entities in Canada, we determined that certain historical sales of properties did not qualify for sale accounting, due…

Thank you, Claire. Back on April the 1st in New York, we provided an update on the Walmart U.S. business. We discussed what was working well, and what needed improvement in order to meet, both the expectations of customers and the goals of the company. We laid out a multi-year plan that includes several large and specific projects, all of which fit within our broader strategic focus on assortment, price, access, and customer experience. As we discussed, we’re not only interested in reaching our goals, but reaching them in a way which is sustainable for the long-term. This requires a steady execution, a pace that is fast but calculated, and one that allows us to get it right. This quarter we began executing this plan. We took the initial steps in April towards a stronger investment in our associates by raising the minimum starting wage for all hourly associates to $9 per hour. As a part of our $1 billion investment in our associates, we also raised the floor and ceiling on pay bands in our stores, creating raises for many full and part-time hourly associates at every level. More than 500,000 associates benefited from this change. We’re also restructuring the management teams in the stores, adding back almost 8,000 department managers. These department managers will have responsibility for a smaller area of the store ensuring that they have the knowledge and the time to engage with both the customers and store associates driving an overall better experience. The $1 billion investment in our associates this year includes training programs as well. Also included in our wage investments we’ve continued our Checkout Promise initiative we began over the holidays ensuring more registers are open during peak times to drive a fast and friendly experience as customers are completing their shopping…

Thank you, Greg. Over the past few months, I’ve had the opportunity to visit the majority of our markets, and I continue to be pleased with the progress I see. Overall, we’ve had a solid start to the fiscal year financially and continue to make progress on our key strategic priorities. As a reminder, these key priorities include, actively managing the existing portfolio; driving comp sales; accelerating e-commerce; delivering market priorities, particularly in China, Brazil and Mexico; and finally, strengthening key enablers such as being the lowest cost operator, building world-class talent, and building trust. Before we discuss the financials, here are a few highlights from the first quarter. First, I’m particularly pleased with our overall performance in Mexico, which not only had its strongest net quarterly sales growth in over two years, but also grew operating income faster than sales. Our results in Mexico were due to better comps in all key formats, including Sam’s Club. Also, I want to call out our performance in Canada, which had a positive comp for the fourth consecutive quarter. In addition to Canada and Mexico, we achieved comp growth in most of our other markets, as we remain committed to delivering positive comp sales across the board. I’m energized by the execution I’ve seen from our teams. In addition, I’m excited about our efforts in accelerating e-commerce. In the UK, grocery home shopping continues to report double-digit comps, and we’re leveraging our UK experience in other markets across the globe. Earlier, Doug mentioned some of our change initiatives that we’re working on across the enterprise. One of these initiatives is built around this experience in grocery home shopping. We have a newly created International Acceleration Team based in the UK that is building close partnerships with our markets to speed up the…

Thank you, Dave. Our first quarter results were disappointing, as comp sales missed guidance, and we delivered softer net sales and profit than last year. We continued to invest in our initiatives to drive growth, and while we made progress in some areas, we still have upside opportunity in others. This year is one of investment and testing, and we’re very focused on strengthening our foundation for business improvement in the longer-term. We’ve been focused on four initiatives designed to improve our foundation. The first initiative is improving our merchandise assortment, where we are driving newness and differentiation. For example, we increased our organic offerings by 20% since the beginning of the year, and these are important to various demographic groups, including millennials. Our second initiative is focused on membership and decision sciences. We created a new Chief Member Officer, reporting to me, that will own membership data and analytics. This role, which was put in place at the beginning of the quarter, oversees a new team of data scientists, marketing and insights professionals. I’m pleased that the team’s recent new targeted membership efforts give us optimism for the rest of the year. Our third initiative is launching new programs to enhance member value. One example is a groundbreaking new pharmacy program called “Free/4/10,” which provides Plus members with free or discounted prescriptions for five costly diseases, including Alzheimer’s, diabetes, mental health, vitamin D deficiency, and prostate health. This program contributed to a number of Plus upgrades since its rollout. Our fourth initiative is a significant long-term investment in our e-commerce business. We re-launched Club Pickup in every club in the country, resulting in a 37% sales increase in the Club Pickup Program. Members love the convenience benefits of online ordering and easy pickup at the club. I am encouraged…

Thanks, Roz. I will wrap up today’s discussion by providing some thoughts on our performance. As you heard, currency exchange negatively impacted our sales by $3.3 billion and earnings per share by $0.03, which was more than we anticipated. Even though our Walmart U.S. comp sales were around the bottom of our guidance, we are pleased with our earnings per share coming in at $1.03, in the middle of our range. Before I move on to our second quarter guidance, it’s important to reiterate that we continue to execute our enterprise strategy, which we feel is creating a stronger foundation for the future. It’s still early days, but it’s important to note, we are managing our capital in a very disciplined way, seeking the right balance between sales growth and profitability as we integrate digital and physical. Based on our views of the global macro-economic environment, and assuming currency exchange rates remain at current levels, we expect second quarter fiscal 2016 earnings per share to range between $1.06 and $1.18. Our second quarter guidance includes the impact of approximately $0.04 per share from our previously announced investments in both associate wages and training, as well as $0.04 per share from currency. Now as a reminder, our full year earnings per share guidance assumes the impact of approximately $0.20 per share from our strategic investments in both associate wages and training, as well as an incremental $0.06 to $0.09 per share in e-commerce investment. In our first quarter, we incurred approximately $0.02 per share from our investment in associate wages and training and an incremental $0.02 per share from our e-commerce investments. In addition to the impact from these two significant investments, we expect currency to remain a significant headwind for the year. Assuming exchange rates remain where they are today,…

This call included certain forward-looking statements intended to enjoy the safe harbor protections of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements relate to management’s forecasts and expectations for Walmart’s EPS for the second quarter of fiscal year 2016; U.S. comparable store and club sales for the 13 weeks ending July 31, 2015; the impact of currency exchange rate fluctuations on Walmart’s reported net sales and EPS for fiscal year 2016; the range within which Walmart’s effective tax rate for fiscal year 2016 will be and that such effective tax rate will fluctuate from quarter to quarter; Walmart being opportunistic with share repurchases in the remainder of fiscal year 2016; Walmart continuing to reinforce EDLP in all of its markets; Walmart’s priority of driving growth across the enterprise; Walmart U.S.’s financial plan providing for significant investments in assortment discipline, pricing and in-stock goals in fiscal year 2016; Walmart U.S. traffic remaining strong; Walmart International’s key strategic priorities and focus on improving its sales and operating performance through certain means, and focus on the segment’s low cost operating model and efficiencies to reduce expenses; positive performance trend continuing; Brazilian operations being focused on turnaround initiatives to deliver profitability in the second half of fiscal year 2016; operations in China continue to grow and part of that growth coming from opening 33 stores and clubs in fiscal year 2016; objectives of providing better services and widening customer reach through expansion of its omni-channel platforms and accelerating e-commerce in fiscal year 2016; anticipation of solid growth of its operations in Mexico and Canada; Sam’s Club continuing to invest to improve assortment and member value; membership growth being Sam’s Club’s highest priority and constant focus; Sam’s Club continuing to build on its success in some strategic areas and to…