Pauline Mohler - Senior Director, Global Investor Relations Doug McMillon - President, Chief Executive Officer & Director Claire Babineaux-Fontenot - Executive Vice President & Treasurer Greg Foran - President and CEO of Wal-Mart U.S. Rosalind Brewer - President and CEO of Sam's Club Charles Holley - Executive Vice President and Chief Financial Officer

Welcome. This is Pauline Mohler, Senior Director of Global Investor Relations for Wal-Mart Stores, Inc. Thanks for joining us today to review the results for the third quarter of fiscal 2016. The date of this call is November 17, 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. [Operator Instructions] This call contains statements that Wal-Mart 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 Investor's portion of our corporate website, stock.walmart.com. The terms used in today's release, including EPS, constant currency, gross profit, gross profit rate and gross merchandise value, are defined there as well. We recommend that you review the earnings press release in conjunction with the transcript of this call and the accompanying slide presentation. Global unit count data is also on our Investors website. When we refer to traditional neighborhood markets in Wal-Mart U.S., we're discussing those that average 42,000 ft.² of retail space. The smaller neighborhood markets range in size from 12,000 to 16,000 ft.². As a reminder, for fiscal 2016, we utilized a 52-week comp reporting calendar. For this year, quarter-to-date and year-to-date comps will be based upon 13- and 52-week periods respectively. Our Q3 reporting period ran from Saturday, August 1, through Friday, October 30, 2015. Now let's get on to today's call. Doug McMillon, President and CEO of Wal-Mart Stores, Inc., will provide his thoughts about our results in the context of our overall strategy. Claire Babineaux-Fontenot, EVP and Treasurer, will cover the financial details. Next we'll begin our operating segments with Greg Foran, President and CEO of Wal-Mart U.S.; followed by Dave Cheesewright, President and CEO of Wal-Mart International; and then Roz Brewer, President and CEO of Sam's Club. Last, Charles Holley, Wal-Mart's CFO, will wrap up with details on guidance for fourth quarter and the full year. Now I'd like to introduce our CEO, Doug McMillon. Doug?

Thanks, Pauline, and good morning, everyone. Thank you for joining us to hear more about our third-quarter earnings, as well as the strategy we shared at our annual meeting to the investment community last month. Overall we had a good quarter. We delivered earnings per share well within our guidance range, recorded our fifth straight quarter of positive comps at Wal-Mart U.S. and had solid international sales and profit growth on a constant currency basis. At the same time, we still have plenty of work to do and there are areas of our business that must perform better. Our earnings per share were $1.03 and we posted total revenue of $117.4 billion. I want to highlight that on a constant currency basis, our total revenue would have been $122.4 billion. That's growth of $3.4 billion or 2.8% on a constant currency basis, which is solid growth. Even if the percentage doesn't sound high because we have such a large denominator, not many companies grow by this amount in a quarter. I call this out because I don't want the currency impacts to obscure the strength of our business. We are a growth company and we're growing. As we expected, operating income continued to be pressured by our decision to invest in our frontline associates. To improve the store experience for our customers and create a bridge to our future where digital capabilities will play an increasing role in our stores, we're making a $1.2 billion planned investment in our people this year that we understood what impact near-term operating income. This is by far the biggest driver of the decline in consolidated operating income. Before going into the details, I want to take a step back to talk about our strategy. At our investor meeting last month, we shared more…

Thanks, Doug. Today I'll provide commentary on the company's consolidated financial statements. Further details are available in the accompanying presentation posted with this transcript. Prior to discussing our results, let me talk about an item that, although immaterial, impacts comparability against last year. As we disclosed in the second quarter, we conducted a global review of the accounting treatment for leases, which included a focus on leases where our payment of certain structural component costs during a lessor's construction of the leased store causes us to be deemed the owner of the property for accounting purposes. In the third quarter, we finalized this review and recorded an immaterial cumulative adjustment. On a consolidated basis, the immaterial adjustment increased total assets by approximately $1.7 billion, which was primarily an increase in property under capital lease and financing obligations; increased total liabilities by approximately $1.6 billion, which was primarily an increase in current and long-term capital lease and financing obligations; and it positively impacted earnings per share by approximately $0.04. Let's now move to our results for the quarter. Diluted earnings per share from continuing operations attributable to Wal-Mart EPS were $1.03, which includes the items mentioned above. Additionally, there were significant items that negatively impacted EPS including investments and wages and training, in the U.S. of approximately $0.10 and currency exchange rate movements totaling $0.04. Last year's EPS was $1.15. Total revenue reached $117.4 billion. Currency negatively impacted net sales by approximately $5 billion. On a constant currency basis, total revenue was $122.4 billion. Operating expenses as a percentage of net sales increased 91 basis points compared to last year. Primarily as a result of investments in store wages and labor hours in the U.S. Additionally, as CPA and compliance related cost were $30 million. Comprised of $22 million for ongoing inquiries and investigation, and $8 million for our global compliance program and organizational enhancements. Last year FCPA and compliance related costs were approximately $41 million. The company's consolidated operating income decreased 8.8% to $5.7 billion. Excluding the impact from currency of approximately $214 million, operating income decreased by 5.4%. Primarily related to the factors that increased our operating expenses. I'll close today's discussion with a few comments on returns. At Wal-Mart we remain committed to providing good returns for our shareholders. During last month's meeting for the investment community, we announced a new share purchase authorization of $20 billion, and said that our intention is to utilize this authorization over a two-year period. The company repurchased approximately 6.1 million shares for $437 million during the third quarter. Return on investment ROI for the trailing 12 months ended October 31, 2015 was 15.9% versus 16.4% for the prior comparable period. The decline in ROI was primarily due to our decrease in operating income as well as continued capital investments. Thank you for listening. And now I will turn it over to Greg. Greg?

Thank you, Clair. Last month at our annual meeting for the investment community I spoke in detail about how Wal-Mart U.S. will execute our part of the plan to be the first to deliver a seamless shopping experience of scale. We will drive growth and deliver shareholder returns by winning with stores, delivering value, being great merchants, and providing our customers with the convenient shopping experience that is fast and easy. Although we are in the early stages of our journey we are confident in our plan and we are executing against it. Now let's talk about our Q3 performance. As we've said before, we continue to measure our success in terms of traffic, in-stock and customer experience. Overall, we are pleased with the momentum in the top line. Net sales increased $2.7 billion or 3.8%. Unit sales picked up, and traffic strengthened improving 40 basis points from Q2 to 1.7%. This is now the fourth consecutive quarter of positive comp traffic growth for Wal-Mart U.S. Our comp sales growth of 1.5% was solidly within our guidance despite minimal food inflation. In-stocks improved while comp store inventory declined. Our customers told us they are happy with the improvements we're making in the shopping experience as reflected in our customer experience scores. To date, 70% of our stores have achieved the initial goal we set for them. And we will raise the bar for next year. We also saw some progress this quarter in gross margin with the work we've put in on pharmacy markdowns and shrink. However, as we've discussed before, the investments in our stores and our associates are significant and will continue to pressure the bottom line. All formats in our portfolio had positive comps this quarter. We are happy with the progress we've made in our Supercenters…

Thanks, Dave. Today I'll share details about our third-quarter performance along with comp guidance for the fourth quarter. Members are at the center of the decisions we make and I'll talk about our ongoing efforts this year to deliver value for them. I'll also share with you specifics around our strategy, which is based on an in-depth review of the business that we've conducted this year. Before I get started, let me recognize Charles Redfield for his many contributions to Sam's Club over the last three years as our Chief Merchandising Officer. His passion for merchandising was experienced throughout the organization. We are excited for Charles as he takes on his new role as Head Merchant for Food in the Wal-Mart U.S. business. With Charles's transition, we are thrilled to have John Furner back at Sam's Club as our new Chief Merchandising Officer after having served as the Chief Merchandising and Marketing Officer in China for nearly three years. Let's move on to a few specifics around our third quarter results. Unless otherwise noted, today's financial discussion will exclude fuel for purposes of comparability. For results with fuel and additional information, please refer to the accompanying presentation posted with this transcript. Comp sales for the third quarter were at the low end of our guidance. In key food categories we faced comparisons to last year's steep inflationary environment, and in our Wireless business we continued to experience headwinds from changing industry dynamics. We saw positive results in areas of the business that introduced more newness such as Health and Wellness and Consumables. Net sales grew 1.6% as comp sales increased 0.4%. Slide 10 provides the components of our comp increase. Ticket grew 70 basis points during the period. Positive momentum in traffic from savings members continued, but softness from our…

Thanks, Roz. I'd like to start by highlighting that we are pleased with the sales increases we experienced at Wal-Mart U.S. as well as in our international business when considering constant currency. Stronger traffic in our Wal-Mart U.S. stores and a fifth consecutive quarter of positive comp sales indicate that we are taking the right steps to win with customers, grow sales and deliver a seamless shopping experience at scale. From in e-commerce standpoint we have long-term plans in place to grow our business. We are making progress on several of our key initiatives and recognize we have more work to do. As expected, the investments we are making in people and technology impacted both operating expenses and profits in the quarter. However, we delivered earnings per share well within our guidance and remain confident that these investments will better position Wal-Mart for the future. Now let's turn our attention to guidance for the fourth quarter and the full-year. Last quarter we indicated that we expected our full year fiscal 2016 earnings-per-share to range between $4.40 and $4.70. Today we are narrowing our full-year earnings per share guidance to a range between $4.50 and $4.65 including a range of $1.40 and $1.55 for the fourth quarter. These ranges include the assumptions we provided in the second quarter which consists of the impact of our investments in wages, training and additional labor hours in our stores, the incremental investment in global e-commerce and the headwinds in the U.S. from pharmacy margins and shrink. Currency remains a significant headwind for us. As I indicated at our analyst meeting last month we expect our total net sales growth to be relatively flat for fiscal year 2016. It's important to note that if we were to exclude the impact of currency our total net…

This call include 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 guidance and forecast as to and expectations for, with respect to Wal-Mart as a whole, Wal-Mart's earnings per share for all of fiscal 2016 and the fourth quarter of fiscal 2016; the total amount of Wal-Mart's investment in people in fiscal 2016 and that such investment will impact near-term operating income; Wal-Mart's positioning of itself in five key areas with such steps driving faster growth; Wal-Mart adding $45 to $60 billion of revenue in the next three fiscal years; Wal-Mart's total net sales growth for fiscal 2016 and Wal-Mart's total net sales growth for fiscal 2016 calculated, excluding the impact of currency exchange rate fluctuations; the impact of currency exchange rate fluctuations on Wal-Mart's earnings per share for fiscal 2016; the range of growth of Wal-Mart's e-commerce sales and merchandise value in fiscal 2016; the range of Wal-Mart's effective tax rate for fiscal 2016; the area in such range in which Wal-Mart's effective tax rate will fall if certain legislation is passed; Wal-Mart's effective tax rate fluctuating quarterly and factors that may affect such effective tax rate; Wal-Mart's investments in people and technology helping to deliver sustainable growth and returns to shareholders over time; Wal-Mart utilizing its $20 billion repurchase authorization over a two-year period; Wal-Mart's goals of being powered by 100% renewable energy, creating zero waste and selling products that sustain people and the environment; the number of visits to Wal-Mart's mobile shopping in November 2015 and December 2015. With respect to Wal-Mart U.S., Wal-Mart U.S.'s comparable store sales for the 13-week period ending January 29, 2016; Wal-Mart U.S.'s plan to be the first to deliver a seamless shopping…