This discussion relates to Wal-Mart Stores, Inc. and its consolidated subsidiaries and should be read in conjunction with our Condensed Consolidated Financial Statements as of April 30, 2009, and the period then ended and the accompanying notes included under Part I, Item 1, of this Quarterly Report on Form 10-Q, as well as our Consolidated Financial Statements as of January 31, 2009, and for the year then ended and the accompanying notes, and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report to Shareholders for the year ended January 31, 2009, and incorporated by reference in and included as an exhibit to our Annual Report on Form 10-K for the year ended January 31, 2009.

We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from year to year, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. The discussion also provides information about the financial results of the various segments of our business to provide a better understanding of how those segments and their results affect the financial condition and results of operations of the Company as a whole.

Throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations, we discuss segment operating income and comparable store sales. Segment operating income is defined as operating income for each operating segment and excludes unallocated corporate overhead. From time to time, we revise the measurement of each segment's operating income as changes in business needs dictate. When we do, we restate all periods presented for comparative purposes.

Comparable store sales is a measure which indicates the performance of our existing stores by measuring the growth in sales for such stores for a particular period over the corresponding period in the prior year. Our comparable store sales are measured in this report on a calendar basis in relation with our fiscal calendar. Comparable store sales is also referred to as "same-store" sales by others within the retail industry. The method of calculating comparable store sales varies across the retail industry. As a result, our calculation of comparable store sales is not necessarily comparable to similarly titled measures reported by other companies.

In connection with the Company's finance transformation project, we adjusted the classification of certain revenue and expense items within our income statement for financial reporting purposes. The changes, which are effective February 1, 2009, did not impact operating income or consolidated net income attributable to Wal-Mart and had a minimal impact on our comparable store sales.

Company Performance Metrics

Management uses a number of metrics to assess the Company's performance including:

· Total sales;

· Comparable store sales;

· Operating income;

· Diluted net income per common share from continuing operations attributable to Wal-Mart;

· Return on investment; and

† Free cash flow.

Total Sales

                                                    Three Months Ended April 30,
                                        Percent        Percent                       Percent        Percent
(Amounts in millions)     2009         of Total         Change         2008         of Total         Change
Net Sales:
Walmart U.S.              $61,244            65.6 %          3.8 %     $58,991            62.8 %          6.7 %
International              21,263            22.7 %        -11.1 %      23,927            25.4 %         22.0 %
Sam's Club                 10,964            11.7 %         -1.4 %      11,124            11.8 %          7.9 %
Total Net Sales           $93,471           100.0 %         -0.6 %     $94,042           100.0 %         10.4 %

Our total net sales decreased by 0.6% for the first quarter of fiscal 2010 and increased by 10.4% for the first quarter of fiscal 2009. The first quarter of fiscal 2010 decrease primarily resulted from changes in currency exchange rates and one extra selling day in the first quarter of fiscal 2009 due to leap year. For the three months ended April 30, 2009, changes in currency exchange rates had an unfavorable impact of $4.8 billion on the International segment's net sales, causing a decrease in the International segment's net sales as a percentage of total Company net sales. For the three months ended April 30, 2008, changes in currency exchange rates had a favorable impact of $1.3 billion on the International segment's net sales. Although movements in currency exchange rates cannot reasonably be predicted, volatility in currency exchange rates, when compared to prior periods, may continue to impact the International segment's reported net sales in the foreseeable future.

Comparable Store Sales

                                                                      Three Months Ended
                                                                           April 30,
                                                                      2009          2008

Walmart U.S.                                                              1.6 %         2.8 %
Sam's Club (1)                                                           -2.2 %         6.7 %
Total U.S. (2)                                                            0.9 %         3.4 %

(1) Sam's Club comparable club sales include fuel. Fuel sales had a negative impact of 4.5 percentage points for the three months ending April 30, 2009 and a positive impact of 2.8 percentage points for the three months ended April 30, 2008.
(2) Fuel sales had a negative impact of 0.7 percentage points for the three months ended April 30, 2009 and a positive impact of 0.5 percentage points for the three months ended April 30, 2008.

Comparable store sales in the United States, including fuel sales, increased 0.9% for the first quarter of fiscal 2010 compared to 3.4% for the first quarter of fiscal 2009. Comparable store sales in fiscal 2010 were lower than fiscal 2009 primarily due to one extra selling day in the first quarter of fiscal 2009 due to leap year.

Operating Income

                                                Three Months Ended April 30,
                                       Percent      Percent                    Percent      Percent
 (Amounts in millions)     2009       of Total       Change        2008       of Total       Change
 Operating Income:
 Walmart U.S.              $4,464          85.6 %        3.3 %     $4,320          81.3 %        9.3 %
 International                880          16.9 %      -16.2 %      1,050          19.7 %       19.2 %
 Sam's Club                   393           7.5 %        0.0 %        393           7.4 %        4.8 %
 Other                       (520 )       -10.0 %       16.6 %       (446 )        -8.4 %      -16.8 %
                           $5,217         100.0 %       -1.9 %     $5,317         100.0 %       10.1 %

Operating income growth compared to net sales growth is a meaningful metric to share with investors because it indicates how effectively we manage costs and leverage expenses. Our objective is to grow operating income faster than net sales. Our operating income decreased 1.9% for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009, and net sales decreased by 0.6% over the same period. While the Sam's Club segment met this objective due to deflation in fuel prices, the Walmart U.S. and International segments did not. The Walmart U.S. segment did not meet this objective due to increased expenses relating to health benefit costs. The International segment fell short of this objective primarily due to increased operating expenses associated with the recent acquisition in Chile and closing our Sam's Club operations in Canada.

Diluted Net Income per Share from Continuing Operations Attributable to Wal-Mart

                                                                  Three Months Ended
                                                                       April 30,
                                                                  2009           2008
Diluted net income per share from continuing operations
attributable to Wal-Mart                                            $0.77          $0.76

Diluted net income per share from continuing operations attributable to Wal-Mart increased 1.3% for the first quarter of fiscal year 2010 compared to the first quarter of fiscal year 2009.

Return on Investment

Management believes return on investment ("ROI") is a meaningful metric to share with investors because it helps investors assess how effectively Wal-Mart is employing its assets. ROI was 18.7% and 19.1% for the trailing twelve months ended April 30, 2009 and 2008, respectively. The decrease in ROI resulted from our investment in Chile and the accrual for our settlement of 63 wage and hour class action lawsuits in January 2009.

We define ROI as adjusted operating income (operating income plus interest income, depreciation and amortization and rent expense) for the fiscal year or trailing twelve months divided by average invested capital during that period. We consider average invested capital to be the average of our beginning and ending total assets of continuing operations plus accumulated depreciation and amortization less accounts payable and accrued liabilities for that period, plus a rent factor equal to the rent for the fiscal year or trailing twelve months multiplied by a factor of eight.

ROI is considered a non-GAAP financial measure under the SEC's rules. We consider return on assets ("ROA") to be the financial measure computed in accordance with generally accepted accounting principles ("GAAP") that is the most directly comparable financial measure to ROI as we calculate that financial measure. ROI differs from ROA (which is income from continuing operations attributable to Wal-Mart for the fiscal year or the trailing twelve months divided by average of total assets of continuing operations for the period) because ROI: adjusts operating income to exclude certain expense items and add interest income; adjusts total assets from continuing operations for the impact of accumulated depreciation and amortization, accounts payable and accrued liabilities; and incorporates a factor of rent to arrive at total invested capital.

Although ROI is a standard financial metric, numerous methods exist for calculating a company's ROI. As a result, the method used by management to calculate ROI may differ from the methods other companies use to calculate their ROI. We urge you to understand the methods used by another company to calculate its ROI before comparing our ROI to that of such other company.

The calculation of ROI along with a reconciliation to the calculation of ROA, the most comparable GAAP financial measurement, is as follows:

                                                 For the Twelve Months Ended
                                                          April 30,
(Amounts in millions)                               2009               2008

                      CALCULATION OF RETURN ON INVESTMENT

Numerator
Operating income (1)                                  $22,698           $22,441
+ Interest income (1)                                     271               290
+ Depreciation and amortization (1)                     6,811             6,463
+ Rent (1)                                              1,749             1,667
= Adjusted operating income                           $31,529           $30,861

Denominator

Average total assets of continuing
operations (2)                                       $164,232          $160,535
+ Average accumulated depreciation and
amortization (2)                                       34,684            30,258
- Average accounts payable (2)                         28,784            28,284
- Average accrued liabilities (2)                      15,073            14,118
+ Rent * 8                                             13,992            13,336
= Invested capital                                   $169,051          $161,727

Return on investment (ROI)                               18.7 %            19.1 %

                        CALCULATION OF RETURN ON ASSETS
Numerator
Income from continuing operations
attributable to Wal-Mart(1)                           $13,749           $13,514

Denominator

Average total assets of continuing
operations (2)                                       $164,232          $160,535

Return on assets (ROA)                                    8.4 %             8.4 %

Certain Balance Sheet Data                                   As of April 30,
                                                    2009               2008         2007

Total assets of continuing operations (1)            $161,935          $166,528    $154,542
Accumulated depreciation and amortization              36,762            32,606      27,910
Accounts payable                                       28,541            29,027      27,541
Accrued liabilities                                    15,263            14,882      13,353

(1) Based on continuing operations only and therefore excludes the impact of Gazeley Limited, a United Kingdom property development subsidiary, which was sold in the second quarter of fiscal 2009, and the closure of 23 stores and divesture of other properties of The Seiyu, Ltd. in Japan pursuant to restructuring program adopted during the third quarter of fiscal 2009. All of these activities have been disclosed as discontinued operations. Total assets as of April 30, 2009, 2008 and 2007 in the table above exclude assets of discontinued operations that are reflected in the Condensed Consolidated Balance Sheets of $155, $955 and $880, respectively.

(2) The average is based on the addition of the account balance at the end of the current period to the account balance at the end of the prior period and dividing by 2.

Free Cash Flow

We define free cash flow as net cash provided by operating activities in a period minus payments for property and equipment made in that period. We generated positive free cash flow of $964 million for the three months ended April 30, 2009, compared to $1.3 billion for the comparative period in the prior year. The decline in our free cash flow is the result of increased capital spending coupled with the timing effect of the payments in our U.S. associate payroll cycle.

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, income from continuing operations 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 or payments made for business acquisitions. 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.

Although other companies report their free cash flow, numerous methods may exist for calculating a company's free cash flow. As a result, the method used by our management to calculate free cash flow may differ from the methods other companies use to calculate their free cash flow. We urge you to understand the methods used by another company to calculate its free cash flow before comparing our free cash flow to that of such other company.

The following table reconciles net cash provided by operating activities, a GAAP measure, to free cash flow, a non-GAAP measure.

                                                                  Three Months Ended April 30,
                                                                    2009                 2008
(Amounts in millions)
Net cash provided by operating activities                              $3,571               $3,779
Payments for property and equipment                                    (2,607 )             (2,447 )
Free cash flow                                                           $964               $1,332

Net cash used in investing activities                                 $(2,683 )            $(2,233 )

Net cash (used in) provided by financing activities                   $(1,503 )               $791

Results of Operations

The following discussion of our Results of Operations is based on our continuing operations and excludes any results or discussion of our discontinued operations.

Consolidated

Three Months Ended April 30, 2009

Our total net sales decreased by 0.6% for the first quarter of fiscal 2010 and increased by 10.4% for the first quarter of fiscal 2009. The decrease in fiscal 2010 resulted from changes in currency exchange rates and one extra selling day in the first quarter in fiscal 2009 due to leap year. Currency exchange rates had a $4.8 billion unfavorable impact on the International segment's net sales for the first quarter of fiscal 2010 which contributed to the decrease in the International segment's net sales as a percentage of total Company net sales. Currency exchange rates had a $1.3 billion favorable impact on the International segment's net sales for the first quarter of fiscal 2009.

Our gross profit margin increased from 24.1% for the first quarter of fiscal 2009 to 24.7% in the first quarter of fiscal 2010. This increase is primarily due to more effective merchandising and strong inventory management in the Walmart U.S. segment. Gross profit margin was also positively impacted by a change in sales mix in the Sam's Club segment driven by strong sales in higher margin categories and a decrease in lower margin fuel sales.

Operating, selling, general and administrative expenses ("operating expenses"), as a percentage of net sales, increased 0.5 percentage points for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009. Operating expenses as a percentage of net sales increased in the first quarter of fiscal 2010 primarily due to higher health benefit costs in the U.S. businesses, as well as changes in currency exchange rates.

Corporate expenses have increased primarily due to our long-term transformation projects to enhance our information systems for merchandising, finance and human resources. We expect these increased expenses from the transformation projects to continue for the foreseeable future.

Membership and other income, as a percentage of net sales, which includes a variety of income categories such as Sam's Club membership income and tenant lease income, decreased 0.2 percentage points due to a decline in several miscellaneous income categories compared to the first quarter of fiscal 2009.

Interest, net, for the first quarter of fiscal 2010 decreased by 5.8% compared to the first quarter of fiscal 2009 due to lower short-term borrowing levels.

Our effective income tax rate from continuing operations decreased from 34.6% for the first quarter of fiscal 2009 to 33.7% for the first quarter of fiscal 2010 due to the mix of income between domestic and international operations, as well as the recent fluctuations in currency exchange rates.

Walmart U.S. Segment

Three Months Ended April 30, 2009
(Amounts in millions)

                                                                                                           Segment
                                             Segment net                         Segment operating        operating
                                            sales increase                        income increase        income as a
                                              from prior          Segment        from prior fiscal       percentage
   Three months ended        Segment         fiscal year         operating          year first           of segment
       April 30,            net sales       first quarter         income              quarter             net sales
          2009                 $61,244                  3.8 %        $4,464                     3.3 %             7.3 %
          2008                  58,991                  6.7 %         4,320                     9.3 %             7.3 %

Net sales for the Walmart U.S. segment increased 3.8% for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009. The increase resulted from our continued expansion activities, strength in the grocery and health and wellness categories and a comparable store sales increase of 1.6%. Comparable store sales for the first quarter of fiscal 2010 increased primarily due to an increase in customer traffic in our comparable stores.

Gross profit margin increased 0.5 percentage points for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009 due to higher initial margins and lower inventory shrinkage.

Operating expenses as a percentage of segment net sales increased 0.4 percentage points for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009 primarily due to higher health benefit costs.

Other income as a percentage of segment net sales for the first quarter of fiscal 2010 decreased 0.1 percentage points due to a decline in several miscellaneous income categories compared to the first quarter of fiscal 2009.

International Segment

At April 30, 2009, our International segment was comprised of wholly-owned subsidiaries in Argentina, Brazil, Canada, Japan, Puerto Rico and the United Kingdom, our majority-owned subsidiaries in Central America, Chile and Mexico and our joint ventures in China and India and our other controlled subsidiaries in China.

Three Months Ended April 30, 2009
(Amounts in millions)

                                                                                                                  Segment
                                             Segment net sales                         Segment operating         operating
                                             decrease/increase                               income             income as a
                                                from prior             Segment         decrease/increase        percentage
   Three months ended        Segment            fiscal year           operating        from prior fiscal        of segment
       April 30,            net sales          first quarter            income         year first quarter        net sales
          2009                 $21,263                     -11.1 %           $880                    -16.2 %             4.1 %
          2008                  23,927                      22.0 %          1,050                     19.2 %             4.4 %

Net sales for the International segment decreased 11.1% for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009. The decrease resulted from the negative $4.8 billion impact of the strengthening of the U.S. dollar. This negative impact was offset by increased sales from comparable units as well as acquisitions and new store growth.

Gross profit margin for the first quarter of fiscal 2010 was consistent with the first quarter of 2009.

Operating expenses as a percentage of segment net sales increased 0.4 percentage points for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009 due to expenses from the closure of Sam's Clubs in Canada and the impact of the acquisition of Distribución y Servicio D&S S.A. ("D&S") in Chile, partially offset by expense improvements in the United Kingdom, China and Japan.

Other income as a percentage of segment net sales increased 0.1 percentage points for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009 primarily as a result of the consolidation of D&S.

Operating income as a percentage of segment net sales decreased 0.3 percentage points for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009 primarily due to the increase in operating expenses.

Sam's Club Segment

Three Months Ended April 30, 2009
(Amounts in millions)

                                                                                                                Segment
                                            Segment net sales                         Segment operating        operating
                                            decrease/increase                          income increase        income as a
                                                from prior            Segment         from prior fiscal       percentage
   Three months ended        Segment           fiscal year           operating           year first           of segment
       April 30,            net sales         first quarter            income              quarter             net sales
          2009                 $10,964                     -1.4 %           $393                     0.0 %             3.6 %
          2008                  11,124                      7.9 %            393                     4.8 %             3.5 %

Net sales for the Sam's Club segment decreased 1.4% for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009. The decrease resulted from a comparable store sales decrease of 2.2% which was driven primarily by lower fuel sales. Comparable club sales in the first quarter of fiscal 2010 were negatively impacted by 4.5 percentage points due to the decline in fuel sales.

Gross profit margin increased 1.1 percentage points for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009 due to a change in the merchandise sales mix driven by strong sales in fresh food and consumable categories and a decrease in lower margin fuel sales.

Operating expenses as a percentage of segment net sales increased 0.9 percentage points for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009 due to the impact of declining fuel prices on total sales as well as increased health benefit and utility costs.

Membership and other income, as a percentage of segment net sales, which includes membership, tenant lease and a variety of other income categories, decreased 0.2 percentage points for the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009. Membership income, which is recognized over the term of the membership, decreased slightly compared to the first quarter of fiscal 2009.

. . .