UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
November 13, 2008

Wal-Mart Stores, Inc.
(Exact Name of Registrant as Specified in Charter)

 
					
Delaware	 	001-06991	 	71-0415188	
(State or Other Jurisdiction
of Incorporation)	 	(Commission File Number)	 	(IRS Employer
Identification No.)	
702 Southwest 8th Street
Bentonville, Arkansas 72716-0215
(Address of Principal Executive Offices) (Zip code)
Registrant’s telephone number, including area code:
(479) 273-4000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

Item 2.02.	Results of Operations and Financial Condition.	
Wal-Mart Stores, Inc. is furnishing this Current Report on Form 8-K in order to furnish to the Securities and Exchange Commission a press release (the “Press Release”) that we will issue on November 13, 2008. The Press Release will disclose information regarding our results of operations and financial condition for our fiscal quarter ended October 31, 2008.
The Press Release discusses our free cash flow for the nine months ended October 31, 2008 and 2007, which may be considered a non-GAAP financial measure under the rules of the Securities and Exchange Commission. Our management believes 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 our financial performance. We believe our net cash provided by operating activities to be the financial measure calculated and presented in accordance with generally accepted accounting principles that is most directly comparable to free cash flow. A reconciliation of our free cash flow to our net cash provided by operating activities for the nine months ended October 31, 2008 and 2007 is being furnished as an exhibit to this Current Report on Form 8-K. The Press Release also includes information regarding our comparable store sales for our operations in the United States during the periods discussed in the Press Release excluding the fuel sales of our Sam’s Club segment. This information is included to show the effect of such fuel sales on our comparable store sales for such periods.
 
Item 9.01.	Financial Statements and Exhibits.	
A copy of the Press Release being furnished pursuant to the foregoing Item 2.02 is included herewith as Exhibit 99.1. The reconciliation of our free cash flow to our net cash provided by operating activities for the nine months ended October 31, 2008 and 2007 being furnished pursuant to the foregoing Item 2.02 is included herewith as Exhibit 99.2.
 
2

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 13, 2008

WAL-MART STORES, INC.	
		
By:	 	/s/ Thomas M. Schoewe	
Name:	 	Thomas M. Schoewe	
Title:	 	Executive Vice President and Chief Financial Officer	
 
3

Exhibit 99.1
WAL-MART STORES, INC.
www.walmartstores.com/news

FOR IMMEDIATE RELEASE	  	Investor Relations Contacts	
 
Media Relations Contact	  	Carol Schumacher 479-277-1498
Mike Beckstead 479-277-9558	
John Simley 800-331-0085	  		
	  	Pre-recorded Conference Call	
	  	203-369-1090	
Wal-Mart Reports Third Quarter Fiscal 2009 Earnings
BENTONVILLE, Ark., Nov. 13, 2008 — Wal-Mart Stores, Inc. (NYSE: WMT) today reported its sales and earnings for the quarter ended Oct. 31, 2008. Net sales for the third quarter of fiscal year 2009 were $97.6 billion, an increase of 7.5 percent from $90.8 billion in the third quarter last year.
Income from continuing operations for the third quarter was $3.033 billion, an increase of 6.6 percent from $2.846 billion in the third quarter last year. Diluted earnings per share from continuing operations for the third quarter of fiscal year 2009 increased to $0.77 from the previous year’s third quarter result of $0.70 per share. The prior year included a net benefit of $0.01 per share due to the recognition of $46.5 million in after-tax gains from the sale of certain real estate properties.
During the third quarter of fiscal year 2009, the Company recorded a $107 million after-tax charge related to store closures and property divestitures at Seiyu in Japan and a $212 million after-tax gain on the disposal of Gazeley Limited which was sold in July 2008. These operations have been accounted for as discontinued operations for all periods presented.
“We are very pleased with our results this quarter,” said Lee Scott, Wal-Mart Stores, Inc. president and chief executive officer. “Despite economic difficulties around the world, we achieved solid sales and earnings growth and we are optimistic about the upcoming holidays. At a time when our customer is feeling the pressure of a tough economy, Wal-Mart’s price leadership is more important than ever.
“Improved operating performance and capital efficiency contributed to stronger earnings and free cash flow,” Scott added. “The credit for our performance goes to the more than 2 million associates serving more than 175 million customers in 14 countries every week.”
Net Sales
Net sales were as follows (dollars in billions):

 	  	Three Months Ended
October 31,	 	 	Nine Months Ended
October 31,	 	
 	  	2008	  	2007	  	Percent
Change	 	 	2008	  	2007	  	Percent
Change	 	
Net Sales:	  			  			  			 			  			  			
Walmart U.S.	  	$	61.155	  	$	57.651	  	6.1	%	 	$	184.281	  	$	172.101	  	7.1	%	
International	  	 	24.857	  	 	22.349	  	11.2	%	 	 	73.949	  	 	63.472	  	16.5	%	
Sam’s Club	  	 	11.622	  	 	10.826	  	7.4	%	 	 	35.018	  	 	32.526	  	7.7	%	
	  	 	 	  	 	 	  	 	 	 	 	 	  	 	 	  	 	 	
Total Company	  	$	97.634	  	$	90.826	  	7.5	%	 	$	293.248	  	$	268.099	  	9.4	%	

“Our sales results reflect the improved customer experience and sharper merchandising presentation at Walmart U.S., as well as higher traffic at Sam’s Club among both Business and Advantage members,” Scott said. “International remains Wal-Mart’s fastest-growing business, proving that our mission of saving people money so they can live better resonates with customers everywhere we do business.”
Free cash flow increased to approximately $2.0 billion for the first nine months of fiscal year 2009, compared to a deficit of $1.3 billion for the same period last year. Wal-Mart defines free cash flow, a non-GAAP measure, as cash provided by operating activities, less capital expenditures. A reconciliation of free cash flow for the first nine months of this fiscal year to the most directly comparable GAAP measure for the same period is available on Form 8-K furnished today with the Securities and Exchange Commission and at www.walmartstores.com/investors .
Segment Operating Income
Segment operating income for each operating segment, which is defined as income from continuing operations before net interest expense, income taxes, unallocated corporate overhead and minority interest, was as follows (dollars in billions):

 	  	Three Months Ended
October 31,	 	 	Nine Months Ended
October 31,	 	
 	  	2008	  	2007	  	Percent
Change	 	 	2008	  	2007	  	Percent
Change	 	
Segment Operating Income:	  			  			  			 			  			  			
Walmart U.S.	  	$	4.286	  	$	3.995	  	7.3	%	 	$	13.363	  	$	12.230	  	9.3	%	
International	  	 	1.182	  	 	1.069	  	10.6	%	 	 	3.450	  	 	2.986	  	15.5	%	
Sam’s Club	  	 	0.365	  	 	0.359	  	1.7	%	 	 	1.183	  	 	1.174	  	0.8	%	
Comparable Store Sales
The Company reports comparable store sales in this earnings release based on the calendar months in the quarters that ended Oct. 31, 2008 and 2007. Comparable store sales for the United States were as follows:

 	  	Without Fuel	 	 	With Fuel	 	 	Fuel Impact	 	
 	  	Three Months Ended
October 31,	 	 	Three Months Ended
October 31,	 	 	Three Months Ended
October 31,	 	
 	  	2008	 	 	2007	 	 	2008	 	 	2007	 	 	2008	 	 	2007	 	
Walmart U.S.	  	2.7	%	 	1.0	%	 	2.7	%	 	1.0	%	 	0.0	%	 	0.0	%	
Sam’s Club	  	4.5	%	 	3.9	%	 	6.7	%	 	3.8	%	 	2.2	%	 	-0.1	%	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total U.S.	  	3.0	%	 	1.5	%	 	3.3	%	 	1.5	%	 	0.3	%	 	0.0	%	
				
 	  	Without Fuel	 	 	With Fuel	 	 	Fuel Impact	 	
 	  	Nine Months Ended
October 31,	 	 	Nine Months Ended
October 31,	 	 	Nine Months Ended
October 31,	 	
 	  	2008	 	 	2007	 	 	2008	 	 	2007	 	 	2008	 	 	2007	 	
Walmart U.S.	  	3.4	%	 	0.7	%	 	3.4	%	 	0.7	%	 	0.0	%	 	0.0	%	
Sam’s Club	  	4.0	%	 	4.8	%	 	6.8	%	 	4.8	%	 	2.8	%	 	0.0	%	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total U.S.	  	3.5	%	 	1.4	%	 	3.9	%	 	1.4	%	 	0.4	%	 	0.0	%	
 
2

Guidance
For the fourth quarter of fiscal year 2009, the Company estimates the comparable store sales increase in the United States to be between one and three percent, according to Tom Schoewe, Wal-Mart Stores, Inc. executive vice president and chief financial officer.
“We estimate diluted earnings per share from continuing operations for the fourth quarter will be between $1.03 and $1.07,” Schoewe said. “The rapid changes in currency exchange rates during the last few weeks are projected to negatively affect this year’s fourth-quarter results by approximately six cents per share. In U.S. dollar terms, strong operating performance in International may be overshadowed by these currency fluctuations.
“For the full year, ending January 31, we have tightened and modestly reduced our guidance and now forecast diluted earnings per share from continuing operations to be within a range of $3.42 to $3.46,” he said.
After this earnings release has been furnished to the SEC, a pre-recorded call offering additional comments on the quarter will be available to all investors. Callers may listen to this call by dialing 203-369-1090. The information included in this release and the pre-recorded phone call are available in the investor information area on the Company’s Web site at www.walmartstores.com/investors .
Wal-Mart Stores, Inc. operates Walmart discount stores, supercenters, Neighborhood Markets and Sam’s Club locations in the United States. The Company operates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom and, through a joint venture, in India. The Company’s common stock is listed on the New York Stock Exchange under the symbol WMT. More information about Wal-Mart can be found by visiting www.walmartstores.com . Online merchandise sales are available at www.walmart.com and www.samsclub.com .
# # #
This release contains statements as to our management’s expectations regarding the comparable store sales increase in the United States in the fourth quarter of fiscal year 2009, the Company’s expectations for its diluted earnings per share from continuing operations for the fourth quarter of fiscal year 2009 and for all of fiscal year 2009, and our management’s expectation that currency exchange rates and related issues will be detrimental to comparisons between results for the fourth quarter of fiscal year 2009 and those for the fourth quarter of fiscal year 2008 that Wal-Mart 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. These statements can be identified by the use of the word “anticipate,” “estimate,” “may be,” forecast” or “projected” in the statements. These forward-looking statements are subject to risks, uncertainties and other factors, domestically and internationally, including general economic conditions, the cost of goods, competitive pressures, geopolitical events and conditions, consumer credit availability, inflation, consumer spending patterns and debt levels, currency exchange fluctuations, trade restrictions, changes in tariff and freight rates, changes in the costs of gasoline, diesel fuel, other energy, transportation, utilities, labor and health care, accident costs, casualty and other insurance costs, interest rate fluctuations, financial and capital market conditions, weather conditions, damage to the Company’s facilities from natural disasters, regulatory matters and other risks. The Company discusses certain of these factors more fully in its additional filings with the SEC, including its last annual report on Form 10-K filed with the SEC, 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 current reports on Form 8-K, made with the SEC through the date of this release. The Company urges you 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 made in this release are made only as of the date of this release, and the Company undertakes no obligation to update them to reflect subsequent events or circumstances.
 
3

Wal-Mart Stores, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(Amounts in millions except per share data)
SUBJECT TO RECLASSIFICATION

 	  	Three Months Ended
October 31,	 	 	Nine Months Ended
October 31,	 	
 	  	2008	 	 	2007	 	 	2008	 	 	2007	 	
Revenues:	  				 				 				 				
Net sales	  	$	97,634	 	 	$	90,826	 	 	$	293,248	 	 	$	268,099	 	
Membership and other income	  	 	1,008	 	 	 	1,039	 	 	 	3,243	 	 	 	3,034	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	  	 	98,642	 	 	 	91,865	 	 	 	296,491	 	 	 	271,133	 	
					
Costs and expenses:	  				 				 				 				
Cost of sales	  	 	74,114	 	 	 	69,251	 	 	 	223,557	 	 	 	205,073	 	
Operating, selling, general and administrative expenses	  	 	19,236	 	 	 	17,653	 	 	 	56,513	 	 	 	50,984	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	5,292	 	 	 	4,961	 	 	 	16,421	 	 	 	15,076	 	
					
Interest:	  				 				 				 				
Debt	  	 	464	 	 	 	474	 	 	 	1,402	 	 	 	1,326	 	
Capital leases	  	 	73	 	 	 	63	 	 	 	222	 	 	 	174	 	
Interest income	  	 	(81	)	 	 	(77	)	 	 	(216	)	 	 	(246	)	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest, net	  	 	456	 	 	 	460	 	 	 	1,408	 	 	 	1,254	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations before income taxes and minority interest	  	 	4,836	 	 	 	4,501	 	 	 	15,013	 	 	 	13,822	 	
					
Provision for income taxes	  	 	1,690	 	 	 	1,556	 	 	 	5,186	 	 	 	4,764	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations before minority interest	  	 	3,146	 	 	 	2,945	 	 	 	9,827	 	 	 	9,058	 	
Minority interest	  	 	(113	)	 	 	(99	)	 	 	(365	)	 	 	(305	)	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations	  	 	3,033	 	 	 	2,846	 	 	 	9,462	 	 	 	8,753	 	
Income (loss) from discontinued operations, net of tax	  	 	105	 	 	 	11	 	 	 	146	 	 	 	(118	)	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	3,138	 	 	$	2,857	 	 	$	9,608	 	 	$	8,635	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income per common share:	  				 				 				 				
Basic income per common share from continuing operations	  	$	0.77	 	 	$	0.70	 	 	$	2.40	 	 	$	2.14	 	
Basic income (loss) per common share from discontinued operations	  	 	0.03	 	 	 	0.01	 	 	 	0.04	 	 	 	(0.03	)	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic net income per common share	  	$	0.80	 	 	$	0.71	 	 	$	2.44	 	 	$	2.11	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted income per common share from continuing operations	  	$	0.77	 	 	$	0.70	 	 	$	2.39	 	 	$	2.14	 	
Diluted income (loss) per common share from discontinued operations	  	 	0.03	 	 	 	—  	 	 	 	0.04	 	 	 	(0.03	)	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted net income per common share	  	$	0.80	 	 	$	0.70	 	 	$	2.43	 	 	$	2.11	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-average number of common shares:	  				 				 				 				
Basic	  	 	3,931	 	 	 	4,051	 	 	 	3,944	 	 	 	4,092	 	
Diluted	  	 	3,944	 	 	 	4,056	 	 	 	3,956	 	 	 	4,097	 	
					
Dividends declared per common share	  	$	—  	 	 	$	—  	 	 	$	0.95	 	 	$	0.88	 	
 
4

Wal-Mart Stores, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in millions)
SUBJECT TO RECLASSIFICATION

   	  	October 31,
2008	 	 	October 31,
2007	 	 	January 31,
2008	 	
ASSETS	  				 				 				
Current assets:	  				 				 				
Cash and cash equivalents	  	$	5,920	 	 	$	5,518	 	 	$	5,492	 	
Receivables	  	 	3,250	 	 	 	3,062	 	 	 	3,642	 	
Inventories	  	 	40,416	 	 	 	39,535	 	 	 	35,159	 	
Prepaid expenses and other	  	 	3,245	 	 	 	2,880	 	 	 	2,760	 	
Current assets of discontinued operations	  	 	25	 	 	 	511	 	 	 	532	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total current assets	  	 	52,856	 	 	 	51,506	 	 	 	47,585	 	
Property and equipment, at cost:	  				 				 				
Property and equipment, at cost	  	 	125,173	 	 	 	120,396	 	 	 	122,256	 	
Less accumulated depreciation	  	 	(31,467	)	 	 	(27,537	)	 	 	(28,531	)	
	  	 	 	 	 	 	 	 	 	 	 	 	
Property and equipment, net	  	 	93,706	 	 	 	92,859	 	 	 	93,725	 	
Property under capital lease:	  				 				 				
Property under capital lease	  	 	5,420	 	 	 	5,690	 	 	 	5,736	 	
Less accumulated amortization	  	 	(2,581	)	 	 	(2,563	)	 	 	(2,594	)	
	  	 	 	 	 	 	 	 	 	 	 	 	
Property under capital leases, net	  	 	2,839	 	 	 	3,127	 	 	 	3,142	 	
				
Goodwill	  	 	15,416	 	 	 	14,898	 	 	 	16,071	 	
Other assets and deferred charges	  	 	2,789	 	 	 	3,031	 	 	 	2,748	 	
Non-current assets of discontinued operations	  	 	237	 	 	 	238	 	 	 	243	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total assets	  	$	167,843	 	 	$	165,659	 	 	$	163,514	 	

LIABILITIES AND SHAREHOLDERS’ EQUITY	  				 				 				
Current liabilities:	  				 				 				
Commercial paper	  	$	7,932	 	 	$	9,126	 	 	$	5,040	 	
Accounts payable	  	 	30,782	 	 	 	31,376	 	 	 	30,344	 	
Dividends payable	  	 	993	 	 	 	896	 	 	 	—  	 	
Accrued liabilities	  	 	15,343	 	 	 	14,773	 	 	 	15,725	 	
Accrued income taxes	  	 	355	 	 	 	—  	 	 	 	1,000	 	
Long-term debt due within one year	  	 	4,753	 	 	 	4,412	 	 	 	5,913	 	
Obligations under capital leases due within one year	  	 	314	 	 	 	309	 	 	 	316	 	
Current liabilities of discontinued operations	  	 	128	 	 	 	50	 	 	 	116	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total current liabilities	  	 	60,600	 	 	 	60,942	 	 	 	58,454	 	
				
Long-term debt	  	 	30,803	 	 	 	30,070	 	 	 	29,799	 	
Long-term obligations under capital leases	  	 	3,268	 	 	 	3,520	 	 	 	3,603	 	
Deferred income taxes and other	  	 	5,575	 	 	 	5,590	 	 	 	5,087	 	
Minority interest	  	 	2,034	 	 	 	2,432	 	 	 	1,939	 	
Non-current liabilities of discontinued operations	  	 	24	 	 	 	23	 	 	 	24	 	
				
Commitments and contingencies	  				 				 				
				
Shareholders’ equity:	  				 				 				
Common stock and capital in excess of par value	  	 	4,219	 	 	 	3,421	 	 	 	3,425	 	
Retained earnings	  	 	59,809	 	 	 	55,522	 	 	 	57,319	 	
Accumulated other comprehensive income	  	 	1,511	 	 	 	4,139	 	 	 	3,864	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total shareholders’ equity	  	 	65,539	 	 	 	63,082	 	 	 	64,608	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities and shareholders’ equity	  	$	167,843	 	 	$	165,659	 	 	$	163,514	 	

5

Wal-Mart Stores, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in millions)
SUBJECT TO RECLASSIFICATION

 	  	Nine Months Ended
October 31,	 	
 	  	2008	 	 	2007	 	
Cash flows from operating activities:	  				 				
Net income	  	$	9,608	 	 	$	8,635	 	
(Income) loss from discontinued operations, net of tax	  	 	(146	)	 	 	118	 	
	  	 	 	 	 	 	 	 	
Income from continuing operations	  	 	9,462	 	 	 	8,753	 	
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:	  				 				
Depreciation and amortization	  	 	5,054	 	 	 	4,656	 	
Other	  	 	749	 	 	 	321	 	
Changes in certain assets and liabilities, net of effects of acquisitions:	  				 				
Decrease in accounts receivable	  	 	394	 	 	 	31	 	
Increase in inventories	  	 	(5,655	)	 	 	(5,037	)	
Increase in accounts payable	  	 	914	 	 	 	1,450	 	
Decrease in accrued liabilities	  	 	(745	)	 	 	(551	)	
	  	 	 	 	 	 	 	 	
Net cash provided by operating activities	  	 	10,173	 	 	 	9,623	 	
			
Cash flows from investing activities:	  				 				
Payments for property and equipment	  	 	(8,174	)	 	 	(10,896	)	
Proceeds from disposal of property and equipment	  	 	779	 	 	 	478	 	
Proceeds from (payments for) disposal of certain international operations, net	  	 	838	 	 	 	(257	)	
Investment in international operations, net of cash acquired	  	 	(74	)	 	 	(461	)	
Other investing activities	  	 	(166	)	 	 	(87	)	
	  	 	 	 	 	 	 	 	
Net cash used in investing activities	  	 	(6,797	)	 	 	(11,223	)	
			
Cash flows from financing activities:	  				 				
Increase in commercial paper	  	 	2,949	 	 	 	6,481	 	
Proceeds from issuance of long-term debt	  	 	5,568	 	 	 	7,967	 	
Payment of long-term debt	  	 	(5,064	)	 	 	(6,671	)	
Dividends paid	  	 	(2,814	)	 	 	(2,707	)	
Purchase of company stock	  	 	(3,521	)	 	 	(5,279	)	
Other financing activities	  	 	88	 	 	 	(669	)	
	  	 	 	 	 	 	 	 	
Net cash used in financing activities	  	 	(2,794	)	 	 	(878	)	
			
Effect of exchange rates on cash	  	 	(231	)	 	 	258	 	
	  	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	  	 	351	 	 	 	(2,220	)	
Cash and cash equivalents at beginning of year (1)	  	 	5,569	 	 	 	7,767	 	
	  	 	 	 	 	 	 	 	
Cash and cash equivalents at end of period (2)	  	$	5,920	 	 	$	5,547	 	

(1)	Includes cash and cash equivalents of discontinued operations of $77 million at January 31, 2008, and $51 million at January 31, 2007 respectively.	
(2)	Includes cash and cash equivalents of discontinued operations of $29 million at October 31, 2007.	
 
6

Exhibit 99.2
Free Cash Flow
We define free cash flow as net cash provided by operating activities in the period minus payments for property and equipment made in the period. We generated positive free cash flow of $2.0 billion for the nine months ended October 31, 2008, compared to a deficit of $1.3 billion in the prior year. The significant increase in our free cash flow is the result of our improved inventory management as well as reduced capital expenditures in connection with our planned slowing of store expansion in the United States.
Free cash flow is considered a non-GAAP financial measure under the SEC’s rules . Management believes, however, that free cash flow is an important financial measure for use in evaluating the Company’s financial performance, which measures our ability to generate additional cash from our business operations. Free cash flow should be considered in addition to, rather than as a substitute for, net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity.
Additionally, our 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. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statement of cash flows.
The following table reconciles net cash provided by operating activities, a GAAP measure, to free cash flow, a non-GAAP measure.

 	  	Nine Months Ended	 	
(Amounts in millions) 	  	October 31, 2008	 	 	October 31, 2007	 	
Net cash provided by operating activities	  	$	10,173	 	 	$	9,623	 	
Payments for property and equipment	  	 	(8,174	)	 	 	(10,896	)	
	  	 	 	 	 	 	 	 	
Free cash flow	  	$	1,999	 	 	$	(1,273	)	
	  	 	 	 	 	 	 	 	
Net cash used in investing activities	  	$	(6,797	)	 	$	(11,223	)	
			
Net cash used in financing activities	  	$	(2,794	)	 	$	(878	)