Walmart FORM 10-K

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http://www.sec.gov/Archives/edgar/data/104169/000010416915000011/wmtform10kx13115.htm 1/53

10K1wmtform10kx13115.htmFORM10K

UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION

Washington,D.C.20549___________________________________________

FORM10K___________________________________________

Annualreportpursuanttosection13or15(d)oftheSecuritiesExchangeActof1934

forthefiscalyearendedJanuary31,2015,or

Transitionreportpursuanttosection13or15(d)oftheSecuritiesExchangeActof1934

Commissionfilenumber16991.___________________________________________

WALMARTSTORES,INC.(Exactnameofregistrantasspecifiedinitscharter)

___________________________________________

Delaware 710415188(Stateorotherjurisdictionofincorporationororganization)

(IRSEmployerIdentificationNo.)

702S.W.8thStreet

Bentonville,Arkansas 72716(Addressofprincipalexecutiveoffices) (ZipCode)

Registrant'stelephonenumber,includingareacode:(479)2734000

SecuritiesregisteredpursuanttoSection12(b)oftheAct:

Titleofeachclass Nameofeachexchangeonwhichregistered

CommonStock,parvalue$0.10pershare NewYorkStockExchange

SecuritiesregisteredpursuanttoSection12(g)oftheAct:None___________________________________________

Indicatebycheckmarkiftheregistrantisawellknownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.YesNo

IndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheExchangeAct.YesNo

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Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforatleastthepast90days.YesNo

IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule405ofRegulationST(232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitandpostsuchfiles).YesNo

IndicatebycheckmarkifdisclosureofdelinquentfilerspursuanttoItem405ofRegulationSKisnotcontainedherein,andwillnotbecontained,tothebestofregistrant'sknowledge,indefinitiveproxyorinformationstatementsincorporatedbyreferenceinPartIIIofthisForm10KoranyamendmenttothisForm10K.

Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anonacceleratedfilerorasmallerreportingcompany.Seethedefinitionsof"largeacceleratedfiler,""acceleratedfiler"and"smallerreportingcompany"inRule12b2oftheExchangeAct.

LargeAcceleratedFiler AcceleratedFiler NonAcceleratedFiler SmallerReportingCompany Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b2oftheExchangeAct).YesNo

AsofJuly31,2014,theaggregatemarketvalueofthevotingcommonstockoftheregistrantheldbynonaffiliatesoftheregistrant,basedontheclosingsalepriceofthosesharesontheNewYorkStockExchangereportedonJuly31,2014,was$116,140,698,613.Forthepurposesofthisdisclosureonly,theregistranthasassumedthatitsdirectors,executiveofficers(asdefinedinRule3b7undertheExchangeAct)andthebeneficialownersof5%ormoreoftheregistrant'soutstandingcommonstockaretheaffiliatesoftheregistrant.

Theregistranthad3,226,062,652sharesofcommonstockoutstandingasofMarch30,2015.

DOCUMENTSINCORPORATEDBYREFERENCE

Document PartsIntoWhichIncorporated

Portionsoftheregistrant'sAnnualReporttoShareholdersfortheFiscalYearEndedJanuary31,2015(the"AnnualReporttoShareholders")includedasExhibit13tothisForm10K

PartsIandII

Portionsoftheregistrant'sProxyStatementfortheAnnualMeetingofShareholderstobeheldJune5,2015(the"ProxyStatement")

PartIII

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CAUTIONARYSTATEMENTREGARDINGFORWARDLOOKINGSTATEMENTSANDINFORMATION

ThisAnnualReportonForm10K,theotherreports,statements,andinformationthatWalMartStores,Inc.(whichindividuallyortogetherwithitssubsidiaries,asthecontextotherwiserequires,ishereinafterreferredtoas"we,""Walmart"orthe"Company")haspreviouslyfiledwithorfurnishedto,orthatwemaysubsequentlyfilewithorfurnishto,theSecuritiesandExchangeCommission("SEC")andpublicannouncementsthatwehavepreviouslymadeormaysubsequentlymakeinclude,mayincludeorincorporate,ormayincorporatebyreference,certainstatementsthatmaybedeemedtobe"forwardlookingstatements"withinthemeaningofthePrivateSecuritiesLitigationReformActof1995,asamended(the"Act"),andthatareintendedtoenjoytheprotectionofthesafeharborforforwardlookingstatementsprovidedbytheAct.

ForwardlookingStatementsTheforwardlookingstatementsincludedorincorporatedbyreferenceinthisAnnualReportonForm10Kandthatareormaybeincludedorincorporatedbyreferenceinthosereports,statements,informationandannouncementsaddressourfutureeconomicperformance,activities,eventsordevelopmentsthatweexpectoranticipatewillormayoccurinthefuture,includingorrelating,butnotlimitedto,ourforecastsoforexpectationsforvariousresults,amounts,itemsandmattersinorforfutureperiodsoratorbycertaindatesinthefuture,including: ourresultsofoperationsandcertainfinancialresultsforcertainperiods ourearningspershareforcertainperiods thecomparablestoresalesorcomparableclubsalesofoneofouroperatingsegmentsoroperationsinaparticular

countryforaperiod oureffectivetaxrateforafiscalyearorfiscalquarter ourtotalrevenue,ourconsolidatednetsalesorourmembershipandotherincome thenetsalesofoneormoreofouroperatingsegmentsorthemembershipandotherincomeofourSam'sClub

segment theperiodoverperiodgrowthinthenetsalesoftheCompany,anoperatingsegmentorparticularoperations theperiodoverperiodchangeinparticularfinancialitemsorfinancialmeasuresormetrics theeffectofexternalfactorsonparticularaspectsofourfinancialperformance ourexpensesinvariouscategoriesorforparticularitemsorrelatingtoparticularoccurrences achievementofcertainfinancialgoalsorplans ourinvestmentinparticularinitiativesandcategories theamount,natureandallocationoffuturecapitalexpenditures theamountofthedividendswepayonourstockandthetimingofthosepayments ourcapitalstructure theexpansionandgrowthofourbusiness,includingtheopeningofcertainnumbersofadditionalstores,clubsand

otherfacilitiesintheUnitedStatesandadditionalunitsintheothercountriesinwhichweoperatewithinaparticularperiod,includingopeningsofunitsofaparticularformat

theincreaseinourretailsquarefootageonaconsolidatedbasisandinourvariousoperatingsegmentsandincountriesinwhichweoperateandtheconversionofdiscountstoresintosupercenters,relocationsofexistingunits,remodelingoforspecialprojectsatexistingunits

theconsummationoftheacquisitionofentities,assetsoroperations,thetimingoftheconsummationofsuchacquisitionsandtheeffectsofsuchacquisitionsonourresultsofoperations

ourplansforintegratingnewlyacquiredoperationsintoourexistingoperations ourbusinessstrategy,businessplans,pricingstrategy,financingstrategyandplansforvariousinitiativeswithin

theCompanyoraparticularreportablesegmentoftheCompany'soperations ourcostofgoods ourinventorylevelsandchangesinthoselevels thesuccessofvariousoperatinginitiatives plansforvariousinitiativeswithintheCompany changesinouroperations,includingthemixofmerchandisesoldglobally,intheUnitedStates,internationallyor

incertainofthemarketsinwhichweoperate changesinexpectedsalesofcertaincategoriesofproducts ourplansforleveragingbestpractices,lessonsfrommultipleformatsandglobalsourcingpractices ourliquidityandplansforaccessingandabilitytoaccessthecapitalmarkets ourneedandabilitytorepatriatecashheldoffshoreoftheUnitedStatesandthetaxeffectofanysuchrepatriation theoutcomeoflitigationandotherlegalproceedingstowhichwearesubjectandthecostswemayincurin

connectiontherewithandwhethertheoutcomeoflitigationwillhaveamaterialeffectonourfinancialcondition,resultsofoperationorliquidity

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ourobjectivesandplansforourbusinessandoperations,includingthebusinessandoperationsofanyofourreportablesegmentsandourecommerceandmobilecommerceoperationsgloballyandwithinoneofourreportablesegmentsand

othersimilarmattersandtheassumptionsunderlyingorrelatingtoanysuchstatement.

SuchforwardlookingstatementsincludestatementsmadeinPartI,Item3."LegalProceedings"inthisAnnualReportonForm10Kastoourbeliefthatthepossiblelossorrangeofanypossiblelossthatmaybeincurredinconnectionwithcertainlegalproceedingswillnotbematerialtoourfinancialcondition,resultsofoperations,orliquidity.Forwardlookingstatementsareoftenidentifiedbytheuseofwordsorphrasessuchas"anticipate,""believe,""couldoccur,""couldresult,""continue,""estimate,""expect,""forecast,""guidance,""plan,""projected,""projections,""willbe,""willcontinue,""willchange,""willdecrease,""willhave,""willincrease,""willremain"and"willresult"orwordsorotherphrasescommencingwiththeword"will,"orwordsorphrasesthatarevariationsoforthatusesuchwordsorphrasesandothersimilarwordsandphrasesthatdenoteanticipatedorexpectedoccurrencesorresults.

RisksFactorsandUncertaintiesAffectingOurBusinessOurbusinessoperationsaresubjecttonumerousrisks,factorsanduncertainties,domesticallyandinternationally,whichareoutsideofourcontrol.One,oracombination,oftheserisks,factorsanduncertaintiescouldmateriallyaffectanyofthosemattersastowhichwehavemadeforwardlookingstatements,includingourresultsofoperations,ourearningspershare,ourconsolidatedoroneormoreofourreportablesegments'netsales,thecomparablestoresalesorcomparableclubsalesofoneormoreofourreportablesegments,oureffectivetaxrateforanyperiod,ourbusinessoperationsorourbusinessstrategy,plans,goalsorobjectives.Thesefactorsinclude,butarenotlimitedto: economic,geopolitical,capitalmarketsandbusinessconditions,trendsandeventsgloballyandinthemarketsin

whichweoperate,includingchangesintheeconomicconditions,economicinstabilityandunemploymentandunderemploymentlevelsgloballyandinoneormoreofthemarketsinwhichweoperate

monetarypoliciesoftheUnitedStatesgovernment,theBoardofGovernorsoftheFederalReserveSystem,othergovernmentsorcentralbanks,economiccrises,includingsovereigndebtcrises,anddisruptionsinthefinancialmarkets

governmentalbudgetdeficits inflationanddeflation,generallyandincertainproductcategories consumerconfidence,disposableincome,creditavailability,spendinglevels,shoppingpatterns,debtlevelsand

demandforcertainmerchandise customertrafficandaverageticketinourstoresandclubsandonourretailwebsites themixofmerchandisewesellgloballyorinoneormoreofthemarketsinwhichweoperate consumeracceptanceofourstoresandclubs,ecommercewebsites,mobileapps,initiatives,programsand

merchandiseofferingsgloballyorinoneormoreofthemarketsinwhichweoperate theavailabilityofattractiveopportunitiesforinvestmentinretailoperationsinthemarketsinwhichwecurrently

operateandinnewmarketsandforinvestmentinecommerceacquisitionsandinitiatives thetimingofconsumers'receiptoftaxrefundchecks changesintheamountofpaymentsmadeunderandtheeligibilityrequirementsofpublicassistanceplans commodityprices,includingthepricesofcrudeoil,naturalgas,refinedpetroleumproductsandelectricity ourhistoricalfinancialperformance,includingourU.S.andWalmartInternationalcashflows,foroneormore

periodsorhistoricalfinancialpositionasofoneormoredatescompletedoroccurringafterthedatethepertinentforwardlookingstatementismade

thecostofthegoodswesell competitiveinitiativesofotherretailersandothercompetitivepressures theentryofnewcompetitorsinourmarkets theseasonalityofourbusiness,seasonalbuyingpatternsintheUnitedStatesandourothermarkets unanticipatedstoreorclubclosures thesizeofandturnoverinourhourlyworkforceintheUnitedStatesandintheothermarketsinwhichweoperate laborcosts,includinghealthcareandotherbenefitcosts,globallyorinoneormoreofthemarketsinwhichwe

operate thelevelofparticipationbyourassociatesinthehealthcareplansweoffertoourassociates marketcostsofmedicalcareandotheressentialservices transportationcosts thesellingpricesofgasolineanddieselfuel casualtyandaccidentrelatedcosts ourcasualtyandotherinsurancecosts

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informationsecuritycostsandanycostsandliabilitieswewouldincurwereasuccessfulcyberattackonourinformationsystemstooccur

availabilityandthecostofacceptablebuildingsitesfornewandrelocatedstores,clubsandotherfacilities availabilityofqualifiedlaborpoolsinthespecificmarketsinwhichweoperate,includingtheavailabilityof

personswiththeskillsandabilitiesnecessarytomeetWalmart'sneedsformanagingandstaffingitsnewandrelocatedunitsandconductingtheiroperationsandtomeetseasonalassociatehiringneeds

realestate,zoning,landuseandotherlaws,ordinances,legalrestrictionsandinitiativesthatmaypreventWalmartfrombuilding,orthatimposelimitationsonWalmart'sabilitytobuild,newunitsincertainlocationsorrelocateorexpandexistingunits

availabilityofnecessaryutilitiesforneworexpandedunits availabilityofskilledlaborandlabor,materialandotherconstructioncostsinareasinwhichneworrelocated

unitsareproposedtobeconstructedorexistingunitsareproposedtobeexpandedorremodeled weatherconditions,patternsandevents,climatechange,catastrophiceventsanddisasters,publichealth

emergencies,civildisturbancesandterroristattacksandanyconsequentorrelateddamagetoourstores,clubs,distributioncentersandotherfacilitiesandstoreclosingsandotherlimitationsonourcustomers'accesstoourstoresandclubsresultingfromsuchevents

disruptionintheavailabilityofourecommercewebsitesandmobilecommerceapplications cyberattacksonourinformationsystems,includinganyofthoseusedtooperateourecommercewebsites disruptioninoursupplychain,includingoftheavailabilityandtransportofgoodsfromdomesticandforeign

supplierstoourstoresandotherfacilities traderestrictionsandchangesintariffandfreightrates adoptionoforchangesintax,laborandotherlawsandregulationsthataffectourbusiness,includingchangesin

corporateandpersonaltaxratesandtheimpositionofnewtaxesandsurcharges costsofcompliancewithlawsandregulations themixofourearningsfromourUnitedStatesandforeignoperations changesinourassessmentofcertaintaxcontingencies,increasesordecreasesinvaluationallowances,outcomeof

administrativeaudits,theimpactofdiscreteitemsonoureffectivetaxrateandtheresolutionofothertaxmatters developmentsinandtheoutcomeoflegalandregulatoryproceedingstowhichweareapartyoraresubjectand

theexpensesassociatedtherewith therequirementsforexpendituresinconnectionwithFCPArelatedmatters,includingenhancementstoWalmart's

complianceprogramandongoinginvestigations changesintheratingofanyofourindebtedness currencyexchangeratefluctuationsandvolatility theamountofournetsalesforaperioddenominatedinparticularcurrenciesotherthantheU.S.dollar fluctuationsinmarketratesofinterest otherconditionsandeventsaffectingfinancialandcapitalmarketsgloballyorinoneormoreofthemarketsin

whichweoperate unanticipatedchangesingenerallyacceptedaccountingprinciplesorintheinterpretationsorapplicability

thereof unanticipatedchangesinaccountingestimatesandjudgmentsand unanticipatedrestructuringsandtherelatedexpenses.

Moreover,wetypicallyearnadisproportionatepartofourannualoperatingincomeinthefourthquarterasaresultoftheseasonalbuyingpatterns.Thosebuyingpatternsaredifficulttoforecastwithcertaintyandcanbeaffectedbymanyfactors.

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OtherRiskFactorsNoDutytoUpdateTheforegoinglistoffactorsthatmayaffecttheresults,itemsandothermattersthatarethesubjectoftheforecastsandexpectationsdiscussedinorimpliedorcontemplatedbyforwardlookingstatementswemakeorthataremadeonourbehalfisnotexclusive,andotherfactorsandunanticipatedeventscouldadverselyaffectourbusinessoperationsandfinancialperformance.Ourbusinessoperations,resultsofoperations,financialconditionandliquidityaresubjecttootherriskfactorsanduncertainties,whichwediscussbelowunderthecaption"Item1A.RiskFactors,"andmaydiscussinManagement'sDiscussionandAnalysisofFinancialConditionandResultsofOperationsincorporatedbyreferenceinourAnnualReportsonForm10KandappearinginourQuarterlyReportsonForm10Q.Inaddition,fromtimetotime,wemaydiscloseadditionalriskfactorsandotherrisksinourQuarterlyReportsonForm10QanddiscloseotherrisksinotherreportsfiledwiththeSEC.Investorsandotherreadersareurgedtoconsideralloftheserisks,uncertaintiesandotherfactorscarefullyinevaluatingtheforwardlookingstatements.Forwardlookingstatementsthatwemakeorthataremadebyothersonourbehalfarebasedonaknowledgeofourbusinessandtheenvironmentinwhichweoperateandassumptionsthatwebelievetobereasonableatthetimesuchforwardlookingstatementsaremade.However,asaconsequenceofthefactorsdescribedabove,theotherrisks,uncertaintiesandfactorswedisclosebelowandintheotherreportsmentionedabove,otherrisksnotknowntousatthistime,changesinfacts,assumptionsnotbeingrealizedorothercircumstances,ouractualresultsmaydiffermateriallyfromthosediscussedinorimpliedorcontemplatedbysuchforwardlookingstatements.Consequently,thiscautionarystatementqualifiesalloftheforwardlookingstatementswemakeorthataremadeonourbehalf,includingthosemadehereinandthatareincorporatedbyreferenceherein.Wecannotassurethereaderthattheresultsordevelopmentsexpectedoranticipatedbyuswillberealizedor,evenifsubstantiallyrealized,thatthoseresultsordevelopmentswillresultintheexpectedconsequencesforusoraffectus,ourbusiness,ouroperationsorouroperatingresultsinthemannerweexpect.Wecautionreadersnottoplaceunduerelianceonsuchforwardlookingstatements,whichspeakonlyasoftheirdates.Weundertakenoobligationtoupdateanyoftheforwardlookingstatementstoreflectsubsequenteventsorcircumstancesexcepttotheextentrequiredbyapplicablelaw.

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WALMARTSTORES,INC.ANNUALREPORTONFORM10K

FORTHEFISCALYEARENDEDJANUARY31,2015

PARTI

ITEM1. BUSINESS

GeneralWalMartStores,Inc.("Walmart,"the"Company"or"we")helpspeoplearoundtheworldsavemoneyandlivebetteranytimeandanywhereinretailstoresorthroughourecommerceandmobilecapabilities.Throughinnovation,wearestrivingtocreateacustomercentricexperiencethatseamlesslyintegratesdigitalandphysicalshopping.Physicalretailencompassesourbrickandmortarpresenceineachmarketwhereweoperate.Digitalretailiscomprisedofourecommercewebsitesandmobilecommerceapplications.Eachweek,weservenearly260millioncustomerswhovisitourover11,000storesunder72bannersin27countriesandecommercewebsitesin11countries.Ourstrategyistoleadonprice,investtodifferentiateonaccess,becompetitiveonassortmentanddeliveragreatexperience.Leadingonpriceisdesignedtoearnthetrustofourcustomerseverydaybyprovidingabroadassortmentofqualitymerchandiseandservicesateverydaylowprices("EDLP"),whilefosteringaculturethatrewardsandembracesmutualrespect,integrityanddiversity.EDLPisourpricingphilosophyunderwhichwepriceitemsatalowpriceeverydaysoourcustomerstrustthatourpriceswillnotchangeunderfrequentpromotionalactivity.Priceleadershipiscoretowhoweare.Everydaylowcost("EDLC")isourcommitmenttocontrolexpensessothosecostsavingscanbepassedalongtoourcustomers.Ourdigitalandphysicalpresenceprovidescustomersaccesstoourbroadassortmentanytimeandanywhere.Westrivetogiveourcustomersandmembersagreatdigitalandphysicalshoppingexperience.Ouroperationscomprisethreereportablesegments:WalmartU.S.,WalmartInternationalandSam'sClub.OurfiscalyearendsonJanuary31forourUnitedStates("U.S.")andCanadianoperations.Weconsolidateallotheroperationsgenerallyusingaonemonthlagandonacalendarbasis.OurdiscussionisasofandforthefiscalyearsendedJanuary31,2015("fiscal2015"),January31,2014("fiscal2014")andJanuary31,2013("fiscal2013").Duringfiscal2015,wegeneratedtotalrevenuesof$485.7billion,whichwasprimarilycomprisedofnetsalesof$482.2billion.Wemaintainourprincipalofficesat702S.W.8thStreet,Bentonville,Arkansas72716,USA.OurcommonstocktradesontheNewYorkStockExchangeunderthesymbol"WMT."

TheDevelopmentofOurCompanyAlthoughWalmartwasincorporatedinDelawareinOctober1969,thebusinessesconductedbyourfoundersbeganin1945whenSamM.WaltonopenedafranchiseBenFranklinvarietystoreinNewport,Arkansas.In1946,hisbrother,JamesL.Walton,openedasimilarstoreinVersailles,Missouri.Until1962,ourfounders'businesswasdevotedentirelytotheoperationofvarietystores.Inthatyear,thefirstWalMartDiscountCity,whichwasadiscountstore,openedinRogers,Arkansas.In1983,weopenedourfirstthreeSam'sClubs,andin1988,weopenedourfirstsupercenter.In1998,weopenedourfirstNeighborhoodMarket.In1991,webeganourfirstinternationalinitiativewhenweenteredintoajointventureinMexico.Sincethen,ourinternationalpresencehascontinuedtoexpandandasofJanuary31,2015,ourWalmartInternationalsegmentconductedbusinessin26countries.In2000,webeganourfirstdigitalinitiativebycreatingthewalmart.comretailwebsite.Sincethen,ourdigitalpresencehascontinuedtogrowandasofJanuary31,2015,weoperatedecommercewebsitesin11countries,providingaccesstoWalmartandourvariousbrandsaroundtheworld.

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InformationAboutOurSegmentsTheCompanyisengagedintheoperationofretail,wholesaleandotherunitslocatedthroughouttheU.S.,Africa,Argentina,Brazil,Canada,CentralAmerica,Chile,China,India,Japan,MexicoandtheUnitedKingdom.TheCompany'soperationsareconductedinthreereportablesegments:WalmartU.S.,WalmartInternationalandSam'sClub.TheCompanydefinesitssegmentsasthoseoperationswhoseresultsthechiefoperatingdecisionmaker("CODM")regularlyreviewstoanalyzeperformanceandallocateresources.TheCompanysellssimilarindividualproductsandservicesineachofitssegments.Itisimpracticaltosegregateandidentifyrevenuesforeachoftheseindividualproductsandservices.WalmartU.S.isourlargestsegmentandoperatesretailstoresinall50statesintheU.S.,WashingtonD.C.andPuertoRico,withthreeprimarystoreformats,aswellasdigitalretail.WalmartU.S.generatedapproximately60%ofournetsalesinfiscal2015,andofourthreesegments,WalmartU.S.isthelargestandhashistoricallyhadthehighestgrossprofitasapercentageofnetsales("grossprofitrate").Inaddition,WalmartU.S.hashistoricallycontributedthegreatestamounttotheCompany'snetsalesandoperatingincome.WalmartInternationalconsistsofoperationsin26countriesoutsideoftheU.S.andincludesnumerousformatsdividedintothreemajorcategories:retail,wholesaleandother.Thesecategoriesconsistofnumerousformats,includingsupercenters,supermarkets,hypermarkets,warehouseclubs,includingSam'sClubs,cash&carry,homeimprovement,specialtyelectronics,restaurants,apparelstores,drugstoresandconveniencestores,aswellasdigitalretail.WalmartInternationalgeneratedapproximately28%ofourfiscal2015netsales.TheoverallgrossprofitrateforWalmartInternationalislowerthanthatofWalmartU.S.becauseofitsmerchandisemix.WalmartInternationalisoursecondlargestsegmentandhasgrownthroughacquisitions,aswellasbyaddingretail,wholesaleandotherunits.Sam'sClubconsistsofmembershiponlywarehouseclubsandoperatesin48statesintheU.S.andinPuertoRico,aswellasdigitalretail.Sam'sClubaccountedforapproximately12%ofourfiscal2015netsales.Asamembershiponlywarehouseclub,membershipincomeisasignificantcomponentofthesegment'soperatingincome.Asaresult,Sam'sCluboperateswithalowergrossprofitrateandloweroperatingexpensesasapercentageofnetsalesthanourothersegments.TheCompanymeasurestheresultsofitssegmentsusing,amongothermeasures,eachsegment'snetsalesandoperatingincome,whichincludescertaincorporateoverheadallocations.Fromtimetotime,werevisethemeasurementofeachsegment'soperatingincome,includinganycorporateoverheadallocations,asdeterminedbytheinformationregularlyreviewedbyourCODM.Whenthemeasurementofasegmentchanges,previousperiodamountsandbalancesarereclassifiedtobecomparabletothecurrentperiod'spresentation.

WalmartU.S.SegmentTheWalmartU.S.segmentisamassmerchandiserofconsumerproducts,operatingunderthe"Walmart"or"WalMart"brands,aswellaswalmart.com.TheWalmartU.S.segmenthadnetsalesof$288.0billion,$279.4billionand$274.4billionforfiscal2015,2014and2013,respectively.Duringthemostrecentfiscalyear,nosingleunitaccountedforasmuchas1%oftotalCompanynetsales.Physical.TheWalmartU.S.segmentoperatesretailstoresintheU.S.,includinginall50states,WashingtonD.C.andPuertoRico,withsupercentersin49states,WashingtonD.C.andPuertoRico,discountstoresin42statesandPuertoRicoandNeighborhoodMarketsandothersmallstoreformatsin31statesandPuertoRico.ThefollowingtableprovidessquarefootagedetailsoneachofourformatsasofJanuary31,2015:

Minimum

SquareFeet MaximumSquareFeet

AverageSquareFeet

Supercenters(generalmerchandiseandgrocery) 69,000 260,000 178,000Discountstores(generalmerchandiseandlimitedgrocery) 30,000 219,000 105,000NeighborhoodMarketsandothersmallformats(1)(grocery) 1,000 66,000 37,000(1) Othersmallformatsincludevarioustestformatsusedtounderstandmarketdemandsandneeds.TraditionalNeighborhoodMarketsaverage42,000

squarefeet.

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WALMARTU.S.SEGMENTRETAILUNITCOUNTANDRETAILSQUAREFEET(1)

Supercenters DiscountStores

FiscalYear Opened Closed Conversions(2) Total SquareFeet Opened Closed Conversions(2) Total

SquareFeet

Balanceforward 2,755 510,757 810 87,721

2011 50 102 2,907 534,577 (102) 708 75,1162012 43 79 3,029 552,237 (79) 629 66,4022013 55 74 3,158 570,409 7 (1) (74) 561 59,0982014 72 58 3,288 589,858 4 (57) 508 53,4962015 79 40 3,407 607,415 2 (40) 470 49,327 NeighborhoodMarketsandOtherSmallFormats TotalSegment

FiscalYear Opened Closed Conversions(2) Total SquareFeet Opened(3) Closed Total

SquareFeet

Balanceforward 190 7,374 3,755 605,852

2011 2 (3) 189 7,374 52 (3) 3,804 617,0672012 27 (6) 210 8,047 70 (6) 3,868 626,6862013 79 (3) 286 11,226 141 (4) 4,005 640,7332014 122 (1) 407 15,778 198 4,203 659,1322015 235 (3) 639 23,370 316 (3) 4,516 680,112

(1) "Total"and"SquareFeet"columnsareasofJanuary31fortheyearsshown.Retailsquarefeetarereportedinthousands.(2) ConversionsofdiscountstoresorNeighborhoodMarketstosupercenters.(3) Totalopened,netofconversionsofdiscountstoresorNeighborhoodMarketstosupercenters.

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Digital.Accesstoabroadassortmentofmerchandise,includingproductsnotfoundinourphysicalstores,andservicesareavailabletoourcustomersthroughourecommercewebsitesandmobilecommerceapplications.Walmart.comexperiencesonaverage60millionuniquevisitsamonthandoffersaccesstoapproximately8millionSKUs.Digitalretailisintegratedwithourphysicalstoresthroughserviceslike"WalmartPickup"and"PickupToday."TheWalmartU.S.segmentalsooffersdigitalserviceslikeVuduandInstaWatch.Merchandise.WalmartU.S.doesbusinessinsixstrategicmerchandiseunits,listedbelow,acrossseveralstoreformatsincludingsupercenters,discountstores,NeighborhoodMarketsandothersmallstoreformats,aswellaswalmart.com.

Groceryconsistsofafulllineofgroceryitems,includingmeat,produce,deli,bakery,dairy,frozenfoods,alcoholicandnonalcoholicbeverages,floralanddrygrocery,aswellasconsumablessuchashealthandbeautyaids,babyproducts,householdchemicals,papergoodsandpetsupplies

Healthandwellnessincludespharmacy,opticalservices,overthecounterdrugsandclinicalservices Entertainmentcontainselectronics,toys,camerasandsupplies,photoprocessingservices,cellularphones,

cellularserviceplancontractsandprepaidservice,movies,music,videogamesandbooks Hardlinesconsistofstationery,automotive,hardwareandpaint,sportinggoods,fabricsandcraftsandseasonal

merchandise Apparelincludesapparelforwomen,girls,men,boysandinfants,aswellasshoes,jewelryandaccessoriesand Homeincludeshomefurnishings,housewaresandsmallappliances,bedding,homedcor,outdoorlivingand

horticulture.TheWalmartU.S.segmentalsooffersfinancialservicesandrelatedproducts,includingmoneyorders,prepaidcards,wiretransfers,moneytransfers,checkcashingandbillpayment.Theseservicestotallessthan1%ofannualnetsales.NationallyadvertisedmerchandiserepresentsasignificantportionofthemerchandisesoldintheWalmartU.S.segment.Wealsomarketlinesofmerchandiseunderourprivatelabelstorebrands,including:"Equate,""Everstart,""FadedGlory,""George,""GreatValue,""Hometrends,""Mainstays,""Marketside,""NoBoundaries,""Ol'Roy,""OzarkTrail,""Parent'sChoice,""PriceFirst,""PrimaDella,""Sam'sChoice,""SpringValley"and"WhiteStag."TheCompanyalsomarketslinesofmerchandiseunderlicensedbrands,someofwhichinclude:"BetterHomes&Gardens,""DanskinNow,""Farberware,""GeneralElectric,""OP,""Rival,""Russell,""Starter,""StraightTalk"and"WildOats."ThepercentageofnetsalesfortheWalmartU.S.segment,includingonlinesales,representedbyeachstrategicmerchandiseunitwasasfollowsforfiscal2015,2014and2013:

FiscalYearsEndedJanuary31,STRATEGICMERCHANDISEUNITS 2015 2014 2013Grocery 56% 56% 55%Healthandwellness 11% 10% 11%Entertainment 10% 11% 11%Hardlines 9% 9% 9%Apparel 7% 7% 7%Home 7% 7% 7%Total 100% 100% 100%

Periodically,revisionsaremadetothecategorizationofthecomponentscomprisingourstrategicmerchandiseunits.Whenrevisionsaremade,thepreviousperiod'spresentationisadjustedtomaintaincomparability.Operations.Hoursofoperationfornearlyallsupercenters,andanincreasingnumberofdiscountstoresandNeighborhoodMarkets,are24hourseachday.Avarietyofpaymentmethodsareacceptedatourstoresandthroughourecommercewebsitesandmobilecommerceapplications.SeasonalAspectsofOperations.TheWalmartU.S.segment'sbusinessisseasonaltoacertainextentduetocalendareventsandnationalandreligiousholidays,aswellasdifferentweatherpatterns.Historically,itshighestsalesvolumeandsegmentoperatingincomehaveoccurredinthefiscalquarterendingJanuary31.

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Competition.TheWalmartU.S.segmentcompeteswithavarietyoflocal,nationalandglobalchainsinthesupermarket,discount,grocery,department,dollar,drug,varietyandspecialtystores,supercentertypestores,hypermarkets,ecommerceandcatalogbusinesses.Wealsocompetewithothersfordesirablesitesforneworrelocatedretailunits.Ourabilitytodevelop,openandoperateunitsattherightlocationsandtodeliveracustomercentricexperiencethatseamlesslyintegratesdigitalandphysicalshoppinglargelydeterminesourcompetitivepositionwithintheretailindustry.Weemploymanyprogramsdesignedtomeetcompetitivepressureswithinourindustry.Theseprogramsincludethefollowing:

EDLP:ourcommitmenttopriceleadershipandourpricingphilosophyunderwhichwepriceitemsatalowpriceeverydaysoourcustomerstrustthatourpriceswillnotchangeunderfrequentpromotionalactivity

EDLC:everydaylowcostisourcommitmenttocontrolexpensessothosecostsavingscanbepassedalongtoourcustomers

Rollbacks:ourcommitmenttocontinuallypasscostsavingsontothecustomerbyloweringpricesonselectedgoods

SavingsCatcher,SaveEvenMoreandAdMatch:strategiestomeetorbebelowacompetitor'sadvertisedprice WalmartPickup:placeyourorderonlineandpickitupforfreefromastore.Themerchandiseisdelivered

throughourdistributionfacilities PickupToday:placeyourorderonlineandyoupickupatastorewithin4hoursforfree.Theorderisfulfilled

throughexistingstoreinventoryand MoneyBackGuarantee:ourcommitmenttoensurethequalityandfreshnessofthefruitsandvegetablesinour

storesbyofferingourcustomersa100percentmoneybackguaranteeiftheyarenotsatisfied.Weofferabroadassortmentofmerchandisethatprovidesonestopshopping,instocklevelsthatgiveourcustomersconfidencethatwewillhavetheproductstheyneedandoperatinghoursthatallowcustomerstoshopattheirconvenience.Distribution.Forfiscal2015,approximately80%oftheWalmartU.S.segment'spurchasesofmerchandisewereshippedthroughour134distributionfacilities,whicharelocatedstrategicallythroughouttheU.S.Theremainingmerchandisewepurchasedwasshippeddirectlyfromsuppliers.Generalmerchandiseanddrygrocerymerchandiseistransportedprimarilythroughthesegment'sprivatetruckfleet.However,wecontractwithcommoncarrierstotransportthemajorityofourperishablegrocerymerchandise.Thefollowingtableprovidesfurtherdetailsofourdistributionfacilities,includingreturnfacilitiesandelevenecommercededicatedfulfillmentcenters,asofJanuary31,2015:

OwnedandOperated

OwnedandThirdPartyOperated

LeasedandOperated

LeasedandThirdPartyOperated Total

WalmartU.S.distributionfacilities 102 2 6 24 134

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WalmartInternationalSegmentTheWalmartInternationalsegmentconsistsofoperationsin26countriesoutsideoftheU.S.andincludesnumerousformatsdividedintothreemajorcategories:retail,wholesaleandother.Thesecategoriesconsistofnumerousformats,includingsupercenters,supermarkets,hypermarkets,warehouseclubs,includingSam'sClubs,cash&carry,homeimprovement,specialtyelectronics,restaurants,apparelstores,drugstoresandconveniencestores,aswellasdigitalretail.Thesegment'snetsalesforfiscal2015,2014and2013,were$136.2billion,$136.5billionand$134.7billion,respectively.Duringthemostrecentfiscalyear,nosingleunitaccountedforasmuchas1%oftotalCompanynetsales.Physical.OurWalmartInternationalsegmentiscomprisedofphysicalstoresoperatedby:ourwhollyownedsubsidiariesoperatinginArgentina,Brazil,Canada,Chile,China,India,JapanandtheUnitedKingdomourmajorityownedsubsidiariesoperatinginAfrica(whichincludesBotswana,Ghana,Lesotho,Malawi,Mozambique,Namibia,Nigeria,SouthAfrica,Swaziland,Tanzania,UgandaandZambia),CentralAmerica(whichincludesCostaRica,ElSalvador,Guatemala,HondurasandNicaragua),ChinaandMexicoandourjointventuresandothercontrolledsubsidiariesinChina.Generally,retailunitsrangeinsizefrom4,000squarefeetto250,000squarefeet.Ourwholesalestoresgenerallyrangeinsizefrom35,000squarefeetto70,000squarefeet.Other,whichincludesrestaurants,drugstoresandconveniencestoresoperatingundervariousbannersinBrazil,Chile,Japan,MexicoandtheUnitedKingdom,rangeinsizeupto4,200squarefeet.Also,onalimitedbasis,ourWalmartInternationalsegmentoperatesbanksthatprovideconsumerfinancingprograms.

WALMARTINTERNATIONALSEGMENTUNITCOUNT(1)ANDRETAILSQUAREFEET(2)

Africa Argentina Brazil Canada CentralAmerica Chile

FiscalYear UnitCount

SquareFeet

UnitCount

SquareFeet

UnitCount

SquareFeet

UnitCount

SquareFeet

UnitCount

SquareFeet

UnitCount

SquareFeet

Balanceforward 43 5,185 434 28,695 317 40,225 519 8,441 252 10,437

2011 63 6,211 479 30,272 325 42,005 549 8,739 279 11,1152012 347 18,529 88 7,270 512 31,575 333 43,738 622 9,501 316 11,7852013 377 19,775 94 7,531 558 32,494 379 48,354 642 9,873 329 12,6712014 379 20,513 104 8,062 556 32,501 389 49,914 661 10,427 380 13,6972015 396 21,223 105 8,119 557 33,028 394 50,927 690 11,094 404 14,762

China India Japan Mexico(3) UnitedKingdom TotalSegment

FiscalYear UnitCount

SquareFeet

UnitCount

SquareFeet

UnitCount

SquareFeet

UnitCount

SquareFeet

UnitCount

SquareFeet

UnitCount

SquareFeet

Balanceforward 279 49,401 1 50 414 24,292 1,109 66,504 371 30,053 3,739 263,283

2011 328 56,317 5 270 414 24,513 1,364 73,620 385 31,009 4,191 284,0712012 370 62,124 15 826 419 24,521 1,724 82,611 541 33,765 5,287 326,2452013 393 65,801 20 1,083 438 24,448 1,988 88,833 565 34,810 5,783 345,6732014 405 67,205 20 1,083 438 24,489 2,199 94,900 576 35,416 6,107 358,2072015 411 68,269 20 1,083 431 24,429 2,290 98,419 592 36,277 6,290 367,630

(1) "UnitCount"includesretailstores,wholesaleclubsandother,whichincludesrestaurants,drugstoresandconveniencestores.WalmartInternationalunitcounts,withtheexceptionofCanada,arestatedasofDecember31,tocorrespondwiththebalancesheetdateoftherelatedgeographicmarket.CanadaunitcountsarestatedasofJanuary31.Forthebalanceforward,allcountrybalancesarestatedasofJanuary31,2010.

(2) "SquareFeet"columnsarereportedinthousands.(3) AllperiodspresentedexcludeunitsandsquarefeetfortheVipsrestaurantbusiness.TheCompanycompletedthesaleoftheVipsrestaurant

businessinfiscal2015.

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Unitcounts(1)asofJanuary31,2015forWalmartInternationalaresummarizedbymajorcategoryforeachgeographicmarketasfollows:

GeographicMarket Retail Wholesale Other(2) TotalAfrica(3) 302 94 396Argentina 105 105Brazil 468 76 13 557Canada 394 394CentralAmerica(4) 689 1 690Chile 377 3 24 404China 400 11 411India 20 20Japan 372 59 431Mexico 2,120 160 10 2,290UnitedKingdom 589 3 592Total 5,816 365 109 6,290

(1) WalmartInternationalunitcounts,withtheexceptionofCanada,arestatedasofDecember31,2014,tocorrespondwiththebalancesheetdateoftherelatedgeographicmarket.CanadaunitcountsarestatedasofJanuary31,2015.

(2) "Other"includesrestaurants,drugstores,conveniencestoresandbanksoperatingundervaryingbanners.(3) AfricaunitcountsbycountryareBotswana(11),Ghana(1),Lesotho(3),Malawi(2),Mozambique(5),Namibia(4),Nigeria(6),SouthAfrica

(360),Swaziland(1),Tanzania(1),Uganda(1)andZambia(1).(4) CentralAmericaunitcountsbycountryareCostaRica(217),ElSalvador(89),Guatemala(217),Honduras(81)andNicaragua(86).

Digital.TheWalmartInternationalsegmentoperatesecommercewebsitesin10countries(Argentina,Brazil,Canada,Chile,China,India,Japan,Mexico,SouthAfricaandtheUnitedKingdom).Customershaveaccessthroughourecommercewebsitesandmobilecommerceapplicationstoabroadassortmentofmerchandiseandservices,bothofwhichvarybycountry.Digitalretailsupportsourphysicalstoreswithcapabilitieslike"Click&Collect"intheUnitedKingdomandourgroceryhomedeliverybusinessinMexico.Merchandise.ThemerchandisingstrategyfortheWalmartInternationalsegmentissimilartothatofouroperationsintheU.S.intermsofthebreadthandscopeofmerchandiseofferedforsale.Whilebrandnamemerchandiseaccountsforamajorityofoursales,wehavebothleveragedU.S.privatebrandsanddevelopedmarketspecificprivatebrandstoserveourcustomerswithhighquality,lowerpriceditems.Alongwiththeprivatebrandswemarketglobally,suchas"Equate,""George,""GreatValue,""HolidayTime,""Hometrends,""Mainstays,""Ol'Roy"and"ParentsChoice,"ourinternationalmarketshavedevelopedmarketspecificbrandsincluding"Aurrera,""Cambridge,""ChosenbyYou,""ExtraSpecial"and"SmartPrice."Inaddition,wehavedevelopedrelationshipswithregionalandlocalsuppliersineachmarkettoensurereliablesourcesofqualitymerchandisethatisequaltonationalbrandsatlowprices.Operations.ThehoursofoperationforoperatingunitsintheWalmartInternationalsegmentvarybycountryandbyindividualmarketswithincountries,dependinguponlocalandnationalordinancesgoverninghoursofoperation.Eachcountryacceptsavarietyofpaymentmethods.SeasonalAspectsofOperations.TheWalmartInternationalsegment'sbusinessisseasonaltoacertainextent.Historically,thesegment'shighestsalesvolumeandoperatingincomehaveoccurredinthefourthquarterofourfiscalyear.Theseasonalityofthebusinessvariesbycountryduetodifferentnationalandreligiousholidays,festivalsandcustoms,aswellasdifferentweatherpatterns.Competition.TheWalmartInternationalsegmentcompeteswithavarietyoflocal,nationalandglobalchainsinthesupermarket,discount,grocery,department,drug,varietyandspecialtystores,hypermarkets,wholesaleclubs,homeimprovement,specialtyelectronic,ecommerceandcatalogbusinessesineachofthemarketsinwhichweoperate.Wealsooperatesomerestaurantsand,onalimitedbasis,consumerfinanceoperations.Wecompetewithothersfordesirablesites.Ourabilitytodevelop,openandoperateunitsattherightlocationsandtodeliveracustomercentricexperiencethatseamlesslyintegratesdigitalandphysicalshoppingdetermines,toalargeextent,ourcompetitivepositioninthemarketsinwhichWalmartInternationaloperates.WebelieveEDLPistherightbusinessmodelforourcustomersandforallofourmarketsandweareinthemidstofamultiyearplantotransitionallofourmarketstoEDLP.Additionally,ourabilitytooperatefooddepartmentseffectivelyhasasignificantimpactonourcompetitivepositioninthemarketswhereweoperate.

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Distribution.Weutilizeatotalof156distributionfacilitieslocatedinArgentina,Brazil,Canada,CentralAmerica,Chile,China,Japan,Mexico,SouthAfricaandtheUnitedKingdom.Throughthesefacilities,weprocessanddistributebothimportedanddomesticproductstotheoperatingunitsoftheWalmartInternationalsegment.Duringfiscal2015,approximately80%oftheWalmartInternationalsegment'spurchasespassedthroughthesedistributionfacilities.SuppliersshipthebalanceoftheWalmartInternationalsegment'spurchasesdirectlytoourstoresinthevariousmarketsinwhichweoperate.ThefollowingtableprovidesfurtherdetailsofourinternationaldistributionfacilitiesasofJanuary31,2015:

OwnedandOperated


LeasedandOperated


Internationaldistributionfacilities 41 11 70 34 156

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Sam'sClubSegmentTheSam'sClubsegmentoperatesmembershiponlywarehouseclubs,aswellassamsclub.com,intheU.S.andhadnetsalesof$58.0billion,$57.2billionand$56.4billionforfiscal2015,2014and2013,respectively.Duringthemostrecentfiscalyear,nosingleclublocationaccountedforasmuchas1%oftotalCompanynetsales.Membership.Thefollowingmembershipoptionsareavailabletobusinessownersandindividualconsumers:

MembershipType BusinessPlus SavingsPlus Business SavingsMemberType BusinessOwner Individual BusinessOwner IndividualAnnualMembershipFee $100 $100 $45 $45NumberofAddonMemberships($45each) Upto16 Upto8 EligibleforCashRewards Yes Yes No NoAllmembershipsincludeaspouse/householdcardatnoadditionalcost.PlusMembersareeligibleforCashRewards,whichisanewbenefitthatprovides$10forevery$500inqualifyingSam'sClubpurchasesuptoa$500cashrewardannually.Theamountearnedcanbeusedforpurchases,membershipfeesorredeemedforcash.Physical.Asamembershiponlywarehouseclub,Sam'sClubfacilitysizesgenerallyrangebetween71,000and190,000squarefeet,withanaveragesizeofapproximately134,000squarefeet.

SAM'SCLUBSEGMENTCLUBCOUNTANDRETAILSQUAREFEET(1)

FiscalYear Opened Closed Total SquareFeet

Balanceforward 605 80,5392011 4 609 81,2022012 3 (1) 611 81,5862013 9 620 82,6532014 12 632 84,3822015 16 (1) 647 86,510(1) "Total"and"SquareFeet"columnsareasofJanuary31fortheyearsshown.Retailsquarefeetarereportedinthousands.

Digital.Sam'sClubprovidesitsmembersaccesstoabroadassortmentofmerchandiseandservicesonlineatwww.samsclub.com.Digitalretailsupportsourclubsandmembersthroughservicessuchas"ClubPickup"(formerly"Click'N'Pull").Merchandise.Sam'sCluboffersbrandnamemerchandise,includinghardgoods,somesoftgoodsandselectedprivatelabelitemssuchas"Member'sMark"anditsownproprietarybrands,"DailyChef"and"SimplyRight,"infivemerchandisecategories,listedbelow.

Groceryandconsumablesincludesdairy,meat,bakery,deli,produce,dry,chilledorfrozenpackagedfoods,alcoholicandnonalcoholicbeverages,floral,snackfoods,candy,othergroceryitems,healthandbeautyaids,papergoods,laundryandhomecare,babycare,petsuppliesandotherconsumableitems

Fuelandothercategoriesconsistsofgasolinestations,tobacco,toolsandpowerequipment,andtireandbatterycenters

Homeandapparelincludeshomeimprovement,outdoorliving,grills,gardening,furniture,apparel,jewelry,housewares,toys,seasonalitems,mattressesandsmallappliances

Technology,officeandentertainmentincludeselectronics,wireless,software,videogames,movies,books,music,officesupplies,officefurniture,photoprocessingandthirdpartygiftcardsand

Healthandwellnessincludespharmacy,opticalandhearingservicesandoverthecounterdrugs.

TheSam'sClubsegmentalsoofferssmallbusinessservicesandrelatedproducts,includingaffordablehealthcareplansthroughtheAetnaMarketplaceforSamsClub,legalsolutionsfromLegalZoom,aswellaspayrollservices,merchantpaymentprocessing,andtravelbookingprovidedbythirdparties.

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ThepercentageofnetsalesfortheSam'sClubsegment,includingonlinesales,bymerchandisecategory,wasasfollowsforfiscal2015,2014and2013:

FiscalYearsEndedJanuary31,MERCHANDISECATEGORY 2015 2014 2013Groceryandconsumables 57% 56% 55%Fuelandothercategories 23% 23% 24%Homeandapparel 8% 8% 8%Technology,officeandentertainment 7% 8% 8%Healthandwellness 5% 5% 5%Total 100% 100% 100%

Operations.OperatinghoursforSam'sClubsaregenerallyMondaythroughFridayfrom10:00a.m.to8:30p.m.,Saturdayfrom9:00a.m.to8:30p.m.andSundayfrom10:00a.m.to6:00p.m.Additionally,allclublocationsofferBusinessMembersandPlusMemberstheabilitytoshopbeforetheregularoperatinghoursMondaythroughSaturday,startingat7:00a.m.Avarietyofpaymentmethodsareacceptedatourclubsandonline,includingtheSam'sClubcashbackMasterCard.SeasonalAspectsofOperations.TheSam'sClubsegment'sbusinessisseasonaltoacertainextentduetocalendareventsandnationalandreligiousholidays,aswellasdifferentweatherpatterns.Historically,itshighestsalesvolumeandsegmentoperatingincomehaveoccurredinthefiscalquarterendingJanuary31.Competition.Sam'sClubcompeteswithothermembershiponlywarehouseclubs,thelargestofwhichareCostcoWholesaleandBJ'sWholesaleClub,aswellaswithdiscountretailers,retailandwholesalegrocers,generalmerchandisewholesalersanddistributors,gasolinestations,ecommerceandcatalogbusinesses.Sam'sClubalsocompeteswithotherretailersandwarehouseclubsfordesirablenewclubsites.AtSam'sClub,weprovidevalueatmembersonlyprices,aqualitymerchandiseassortment,andbulksizingtoservebothourSavingsandBusinessmembers.Ourstrategyallowsustodifferentiateourselveswithinthemembershiponlywarehouseclubindustryandtheoverallretailindustry.Distribution.Duringfiscal2015,approximately66%oftheSam'sClubsegment'snonfuelpurchaseswereshippedfromtheSam'sClubsegment's24dedicateddistributionfacilitieslocatedstrategicallythroughouttheU.S.,orfromsomeoftheWalmartU.S.segment'sdistributionfacilities,whichservicetheSam'sClubsegmentforcertainitems.SuppliersshippedthebalanceoftheSam'sClubsegment'spurchasesdirectlytoSam'sClublocations.ThetablebelowprovidesfurtherdetailsofourdedicateddistributionfacilitiesasofJanuary31,2015.

OwnedandOperated


LeasedandOperated


Sam'sClubdistributionfacilities 3 3 2 16 24

TheprincipalfocusofSam'sClub'sdistributionoperationsisoncrossdockingmerchandise,whilestoredinventoryisminimized.Crossdockingisadistributionprocessunderwhichshipmentsaredirectlytransferredfrominboundtooutboundtrailers.Shipmentstypicallyspendlessthan24hoursinacrossdockfacility,andsometimeslessthananhour.Sam'sClubusesacombinationofaprivatetruckfleet,aswellascommoncarriers,totransportnonperishablemerchandisefromdistributionfacilitiestoclubs.Thesegmentcontractswithcommoncarrierstotransportperishablegrocerymerchandisefromdistributionfacilitiestoclubs.

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OtherSegmentInformationCertainfinancialinformationrelatingtooursegmentsisincludedinourAnnualReporttoShareholdersforthefiscalyearendedJanuary31,2015("AnnualReporttoShareholders")underthecaption"Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations"andinNote14inthe"NotestoConsolidatedFinancialStatements"includedtherein,whichinformationisincorporatedhereinbyreference.Note14alsoincludesinformationregardingtotalrevenuesandlonglivedassetsaggregatedbyourU.S.andnonU.S.operations.PortionsoftheAnnualReporttoShareholdersareincludedasExhibit13tothisAnnualReportonForm10Kandincorporatedbyreferencehereinasexpresslyprovidedherein.

EmployeesAsoftheendoffiscal2015,theCompanyanditssubsidiariesemployedapproximately2.2millionemployees("associates")worldwide,withnearly1.4millionassociatesintheU.S.and0.8millionassociatesinternationally.Similartootherretailers,theCompanyhasalargenumberofparttime,hourlyornonexemptassociatesandalargenumberofassociatesturnovereachyear.Webelieveourrelationshipswithourassociatesaregood.OnFebruary19,2015,theCompanyannouncedasignificantinitiativeonpayandtrainingforU.S.associates.Approximately500,000fulltimeandparttimeassociatesatWalmartU.S.storesandSam'sClubswillreceivepayraisesinthefirsthalfoffiscal2016.Alsoincludedintheannouncementwerecomprehensivechangestoourhiring,training,compensationandschedulingprograms,aswellastoourstoremanagementstructure.ThesechangeswillgiveourU.S.associatestheopportunitytoearnhigherpayandadvanceintheircareers.CertaininformationrelatingtoretirementrelatedbenefitsweprovidetoourassociatesisincludedinourAnnualReporttoShareholdersinNote12inthe"NotestoConsolidatedFinancialStatements"includedtherein,whichinformationisincorporatedhereinbyreference.Inadditiontoretirementrelatedbenefits,intheU.S.,theCompanyoffersabroadrangeofCompanypaidbenefitstoourassociates,includingstorediscountcardsorSam'sClubmemberships,bonusesbasedonCompanyperformance,matchingaportionofpurchasesthroughtheAssociateStockPurchasePlanandlifeinsurance.TheCompanyalsooffershealthcarebenefitstoeligiblefulltimeandparttimeassociatesintheU.S.TheCompany'smedicalplanintheU.S.hasnolifetimemaximumbenefitformostexpenses.Similarly,intheoperationsoutsidetheU.S.,theCompanyprovidesavarietyofassociatebenefitsthatvarybasedoncustomarylocalpracticesandstatutoryrequirements.

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ExecutiveOfficersoftheRegistrantThefollowingchartnamestheexecutiveofficersoftheCompany,eachofwhomiselectedbyandservesatthepleasureoftheBoardofDirectors.Thebusinessexperienceshownforeachofficerhasbeenhisorherprincipaloccupationforatleastthepastfiveyears,unlessotherwisenoted.

Name BusinessExperience CurrentPosition

HeldSince AgeNeilM.Ashe

ExecutiveVicePresident,PresidentandChiefExecutiveOfficer,GlobaleCommerce,beginninginJanuary2012.FromApril2011toJuly2011,heservedasSpecialAdvisortotheChiefExecutiveOfficerofCBSCorporation,amassmediacompany.FromJuly2008toApril2011,heservedasPresidentofCBSInteractive,Inc.,anInternetcontentpublisher.

2012

47

DanielJ.Bartlett

ExecutiveVicePresident,CorporateAffairs,beginninginJune2013.FromNovember2007toJune2013,heservedastheChiefExecutiveOfficerandPresidentofU.S.OperationsatHill&Knowlton,Inc.,apublicrelationscompany.

2013

43

RosalindG.Brewer

ExecutiveVicePresident,PresidentandChiefExecutiveOfficer,Sam'sClub,effectiveFebruary1,2012.FromFebruary2011toJanuary2012,sheservedasExecutiveVicePresidentandPresidentoftheEastbusinessunitofWalmartU.S.FromFebruary2010toJanuary2011,sheservedasExecutiveVicePresidentandPresidentoftheSouthbusinessunitofWalmartU.S.FromMarch2007toJanuary2010,sheservedasDivisionalSeniorVicePresidentofWalmartU.S.,responsibleforoperationsintheSoutheast.

2012

52

M.SusanChambers ExecutiveVicePresident,GlobalPeople. 2006 57 DavidCheesewright

ExecutiveVicePresident,PresidentandChiefExecutiveOfficer,WalmartInternational,effectiveFebruary1,2014.FromSeptember2011toJanuary2014,heservedasPresidentandChiefExecutiveOfficerforWalmartInternational'sEurope,MiddleEastandAfrica(EMEA)andCanadaregion.FromFebruary2008toSeptember2011,heservedasPresidentandChiefExecutiveOfficerofWalmartCanada.

2014

52

GregoryForan

ExecutiveVicePresident,PresidentandChiefExecutiveOfficer,WalmartU.S.beginninginAugust2014.FromMay2014toAugust2014,heservedasPresidentandChiefExecutiveOfficerfortheWalmartAsiaregion.FromMarch2012toMay2014,heservedasPresidentandChiefExecutiveOfficerofWalmartChina.FromOctober2011toMarch2012,heservedasSeniorVicePresidentresponsibleforvariousinternationalprojects.From2009untilJuly2011,heservedasDirectorofSupermarkets,LiquorandPetrolatWoolworthsLimited,thelargestretailerinAustraliaandNewZealand.

2014

53

RollinL.Ford

ExecutiveVicePresidentandChiefAdministrativeOfficer,effectiveFebruary1,2012.FromMay2006toJanuary2012,heservedasExecutiveVicePresident,ChiefInformationOfficer.

2012

52

JeffreyJ.Gearhart

ExecutiveVicePresident,GlobalGovernanceandCorporateSecretary,effectiveFebruary1,2013.FromJuly2010toJanuary2013,heservedasExecutiveVicePresident,GeneralCounselandCorporateSecretary.FromFebruary2009toJuly2010,heservedasExecutiveVicePresident,GeneralCounsel.

2013

50

CharlesM.Holley,Jr.

ExecutiveVicePresidentandChiefFinancialOfficer.FromJanuary2007toNovember2010,heservedasExecutiveVicePresident,FinanceandTreasurer.

2010

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C.DouglasMcMillon

PresidentandChiefExecutiveOfficer,effectiveFebruary1,2014.FromFebruary2009toJanuary2014,heservedasExecutiveVicePresident,PresidentandChiefExecutiveOfficer,WalmartInternational.

2014

48

StevenP.Whaley SeniorVicePresidentandController. 2007 55

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OurWebsiteandAvailabilityofSECReportsandOtherInformationOurcorporatewebsiteislocatedatwww.corporate.walmart.com.WefilewithorfurnishtotheSECAnnualReportsonForm10K,QuarterlyReportsonForm10Q,CurrentReportsonForm8Kandanyamendmentstothosereports,proxystatementsandannualreportstoshareholders,and,fromtimetotime,otherdocuments.ThereportsandotherdocumentsfiledwithorfurnishedtotheSECareavailabletoinvestorsonorthroughourcorporatewebsitefreeofchargeassoonasreasonablypracticableafterweelectronicallyfilethemwithorfurnishthemtotheSEC.Inaddition,thepublicmayreadandcopyanyofthematerialswefilewiththeSECattheSEC'sPublicReferenceRoomat100FStreet,NE,WashingtonDC20549.ThepublicmayobtaininformationontheoperationofthePublicReferenceRoombycallingtheSECat1800SEC0330.TheSECmaintainsawebsitethatcontainsreports,proxyandinformationstatementsandotherinformationregardingissuers,suchastheCompany,thatfileelectronicallywiththeSEC.Theaddressofthatwebsiteiswww.sec.gov.OurSECfilings,ourCodeofEthicsforourCEOandSeniorFinancialOfficersandourStatementofEthicscanbefoundontheInvestorRelationspageofourwebsiteatwww.stock.walmart.com.ThesedocumentsareavailableinprinttoanyshareholderwhorequestsacopybywritingorcallingourInvestorRelationsDepartment,whichislocatedatourprincipaloffices.AdescriptionofanysubstantiveamendmentorwaiverofWalmart'sCodeofEthicsfortheCEOandSeniorFinancialOfficersorourStatementofEthicswillbedisclosedontheInvestorRelationspageofourwebsiteatwww.stock.walmart.comundertheCorporateGovernancesection.Anysuchdescriptionwillbelocatedonourwebsiteforaperiodof12monthsfollowingtheamendmentorwaiver.

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ITEM1A. RISKFACTORS

Therisksdescribedbelowcouldmateriallyandadverselyaffectourbusiness,resultsofoperations,financialconditionandliquidity.OurbusinessoperationscouldalsobeaffectedbyadditionalfactorsthatapplytoallcompaniesoperatingintheU.S.andglobally.

GlobalandDomesticEconomicRisksandConsumerDemandRisks

Generalormacroeconomicfactors,bothdomesticallyandinternationally,maymateriallyadverselyaffectourfinancialperformance.Generaleconomicconditions,globallyorinoneormoreofthemarketsweserve,mayadverselyaffectourfinancialperformance.Higherinterestrates,higherfuelandotherenergycosts,weaknessinthehousingmarket,inflation,deflation,increasedcostsofessentialservices,suchasmedicalcareandutilities,higherlevelsofunemployment,decreasesinconsumerdisposableincome,unavailabilityofconsumercredit,higherconsumerdebtlevels,changesinconsumerspendingandshoppingpatterns,fluctuationsincurrencyexchangerates,highertaxrates,impositionofnewtaxesandsurcharges,otherchangesintaxlaws,otherregulatorychanges,overalleconomicslowdownandothereconomicfactorscouldadverselyaffectconsumerdemandfortheproductsandserviceswesellthroughourbusiness,changethemixofproductsweselltoonewithaloweraveragegrossmargin,causeaslowdownindiscretionarypurchasesofgoodsandresultinslowerinventoryturnoverandgreatermarkdownsoninventory.Higherlevelsofunemployment,inflation,deflation,decreasesinconsumerdisposableincome,unavailabilityofconsumercredit,changesinconsumerspendingandshoppingpatterns,changesintaxandotherlaws,higherfuelandotherenergycosts,weaknessinthelocalhousingmarket,fluctuationsincurrencyexchangerates,currencydevaluationsandotheradversedevelopmentsintheeconomiesoftheothercountriesinwhichweoperatemayadverselyaffectconsumerdemandforourmerchandiseinthosecountries,especiallythosecountriesinwhichaverageincomesaresignificantlylowerthanaverageincomesintheU.S.Theseconditionsmayadverselyaffectourgrossmargins,costofsales,inventoryturnoverandmarkdownsorotherwiseadverselyaffectouroperationsandconsolidatedoperatingresults.Higherinterestrates,higherfuelandotherenergycosts,transportationcosts,inflation,highercostsoflabor,insuranceandhealthcare,currencyexchangeratefluctuations,highertaxratesandotherchangesintaxlaws,changesinhealthcarelaws,theimpositionofmeasuresthatcreatebarrierstoorincreasethecostsassociatedwithinternationaltrade,changesinotherlawsandregulationsandothereconomicfactorsintheU.S.andothercountriesinwhichwehaveoperationscanincreaseourcostofsalesandoperating,selling,generalandadministrativeexpenses,andotherwiseadverselyaffectourdomesticandinternationaloperationsandouroperatingresults.Theeconomicfactorsthataffectouroperationsalsoaffecttheoperationsandeconomicviabilityofoursuppliersfromwhomwepurchasegoods,afactorthatcanresultinanincreaseinthecosttousofthegoodsweselltoourcustomersor,inmoreextremecases,couldresultincertainsuppliersnotproducinggoodsinthevolumetypicallyavailabletousforsale.

Wemaynottimelyidentifyoreffectivelyrespondtoconsumertrendsorpreferences,whetherinvolvingphysicalretail,digitalretailoracombinationofbothretailofferings,whichcouldnegativelyaffectourrelationshipwithourcustomers,thedemandforourproductsandservices,andourmarketshare.Itisdifficulttopredictconsistentlyandsuccessfullytheproductsandservicesourcustomerswilldemand.Thesuccessofourbusinessdependsinpartonhowaccuratelywepredictconsumerdemand,availabilityofmerchandise,therelatedimpactonthedemandforexistingproductsandthecompetitiveenvironment,whetherforcustomerspurchasingproductsatourstoresandclubs,throughourdigitalretailbusinessesorthroughthecombinationofbothretailofferings.Acriticalpieceofidentifyingconsumerpreferencesinvolvespricetransparency,assortmentofproducts,customerexperienceandconvenience.Thesefactorsareofprimaryimportancetocustomersandtheycontinuetoincreaseinimportance,particularlyasaresultofdigitaltoolsandsocialmediaavailabletoconsumersandthechoicesavailabletoconsumersforpurchasingproductsonline,atphysicallocationsorthroughacombinationofbothretailofferings.Failuretotimelyidentifyoreffectivelyrespondtochangingconsumertastes,preferences(includingthekeyfactorsdescribedabove)andspendingpatterns,whetherforourphysicalretailofferings,digitalretailofferingsoracombinationoftheseretailofferings,couldnegativelyaffectourrelationshipwithourcustomers,thedemandforourproductsandservicesandourmarketshare.

Fluctuationsinforeignexchangeratesmayadverselyaffectourfinancialperformanceandourreportedresultsofoperations.OuroperationsincountriesotherthantheU.S.areconductedprimarilyinthelocalcurrenciesofthosecountries.OurconsolidatedfinancialstatementsaredenominatedinU.S.dollars,andtopreparethosefinancialstatementswemusttranslatetheamountsoftheassets,liabilities,netsales,otherrevenuesandexpensesofouroperationsoutsideoftheU.S.fromlocalcurrenciesintoU.S.dollarsusingexchangeratesforthecurrentperiod.Asaresultofsuchtranslations,futurefluctuationsincurrencyexchangerateovertimethatareunfavorabletousmayresultinourconsolidatedfinancial

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statementsreflectingsignificantadverseperiodoverperiodchangesinourfinancialperformance.Suchunfavorablecurrencyexchangerate

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fluctuationswilladverselyaffectthereportedperformanceofourWalmartInternationaloperatingsegmentandhaveacorrespondingadverseaffectonourreportedconsolidatedresultsofoperations.Wemaypayforproductswepurchaseforsaleinourstoresandclubsaroundtheworldwithacurrencyotherthanthelocalcurrencyofthecountryinwhichthegoodswillbesold.Whenwemustacquirethecurrencytopayforsuchproductsandtheexchangeratesforthepaymentcurrencyfluctuateinamannerunfavorabletous,ourcostofgoodssoldmayincreaseandwemaybeunableorunwillingtochangethepricesatwhichwesellthosegoodstoaddressthatincreaseinourcosts.Consequently,fluctuationsincurrencyexchangeratesmayadverselyaffectourresultsofoperations.

CapitalInvestmentandInformationSystemsRisks

WemayfaceimpedimentstoourexpansionintheU.S.,includingconversionsofdiscountstoresintosupercentersandopeningotherstoreformats,whichmayadverselyaffectourfinancialperformance.OurexpansionstrategyintheU.S.dependsuponourabilitytoexecuteourretailconceptssuccessfullyinnewmarketswithintheU.S.anduponourabilitytoincreasethenumberofstoresinmarketsinwhichwecurrentlyhaveoperations.Ourabilitytoopenadditionalsupercenters,discountstores,NeighborhoodMarkets,otherstoreformats,andSam'sClubsandtoconvertexistingdiscountstoresintosupercentersdependsinlargemeasureuponourabilitytolocate,hireandretainqualifiedpersonnelandtoacquirenewstoresitesonacceptableterms.Localrealestate,landuse,zoning,andotherregulationsrestrictingtheconstructionofbuildingsofthetypeinwhichweoperateourvariousformats,aswellaslocalcommunityactionopposedtothelocationofspecificstoresatspecificsitesandtheadoptionofcertainlocallawsrestrictingouroperations,mayaffectourabilitytoopennewstoresandclubs,toconvertdiscountstoresintosupercentersortorelocateorexpandexistingunitsincertaincitiesandstates.Increasedrealestate,constructionanddevelopmentcostscouldlimitourgrowthopportunitiesandourabilitytoconvertourdiscountstoresintosupercenters.Ifweareunabletoopennewsupercenters,discountstores,NeighborhoodMarkets,othersmallformatsorSam'sClubsorcontinuetoconvertdiscountstoresintosupercenters,ourfinancialperformance,suchasnetsalesandoperatingincomegrowth,couldbeadverselyaffected.Inaddition,ifconsumersinthemarketsintowhichweexpandarenotreceptivetoourretailconceptsorareotherwisenotreceptivetoourpresenceinamarket,ourfinancialperformancecouldbeadverselyaffected.

ImpedimentstotheexpansionofourWalmartInternationaloperationscouldadverselyaffectourfinancialperformance.OurbusinessstrategyforourWalmartInternationalsegmentincludesexpansionbyselectiveacquisitionsandstrategicalliancesthataddnewstoresandmarketstoourexistingWalmartInternationalbusiness,aswellasopeningnewunitsinthecountriesinwhichwehaveexistingoperations.Inthecountriesinwhichwehaveexistingoperations,newunitsmaybeopenedintheformatsalreadyexistinginthosecountriesormaybeopenedinnewlyintroducedformats,suchassupercentersorSam'sClubs,notpreviouslyoperatedinthosemarkets.AsintheU.S.,ourabilitytoopennewstoresortoexpandorrelocateexistingstoresinamarketservedbyourWalmartInternationalsegmentdependsinlargemeasureuponourabilitytolocate,hireandretainqualifiedpersonnelandourabilitytoacquirenewstoresitesonacceptableterms.Locallawscanaffectourabilitytoacquireattractivepreexistingbuildingsinwhichtolocateunitsorsitesonwhichtobuildnewunitsortoexpandexistingunits.Inaddition,accesstolocalsuppliersofcertaintypesofgoodsmaylimitourabilitytoaddnewunitsortoexpandproductselectionsinexistingunitsincertainmarkets,especiallyinthosemarketsinwhichconsumersdesiretopurchaselocallyproducedgoods.Moreover,culturaldifferencesinsomemarketsintowhichweexpandorintowhichweintroducenewretailconceptsmayresultintheconsumersinthosemarketsnotbeingasreceptivetoourretailconceptsasweanticipatethoseconsumerswillbeandmaymakeaneffectiveresponsetosuchissuesmoredifficulttoachieve.IfwedonoteffectivelyexecuteourexpansionplansforourWalmartInternationalsegment,ourfinancialperformancecouldbeadverselyaffected.Wemaybeunabletocontinuetoidentifysuitableacquisitioncandidatesatacceptablepricesandmaynotbesuccessfulincompletingtheacquisitionofanysuchcandidateidentified.Althoughweultimatelybelievewewillbeabletosuccessfullyintegrateanynewlyacquiredoperationsintoourexistingoperations,nocertaintyexiststhatfutureacquisitionsorallianceswillbesuccessfullyintegratedintoouroperationsorcanbesuccessfullyintegratedinareasonabletime.OurfailuretoidentifyappropriatecandidatesforacquisitionorallianceortointegrateeffectivelyfutureacquisitionsandalliancesintoourexistingoperationscouldadverselyaffectthegrowthofourWalmartInternationalsegmentandourfuturefinancialperformance.

Werelyextensivelyoninformationsystemstoprocesstransactions,summarizeresultsandmanageourbusiness.Disruptionsinbothourprimaryandsecondary(backup)systemscouldharmourabilitytorunourbusiness.Althoughwehaveindependent,redundantandphysicallyseparateprimaryandsecondaryinformationsystems,giventhenumberofindividualtransactionswehaveeachyear,itiscriticalthatwemaintainuninterruptedoperationofour

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businesscriticalinformationsystems.Ourinformationsystems,includingourbackupsystems,aresubjecttodamageorinterruptionfrompoweroutages,computerandtelecommunicationsfailures,computerviruses,worms,othermaliciouscomputerprograms,denialofserviceattacks,securitybreaches(throughcyberattacksfromcomputerhackersandsophisticatedorganizations),catastrophiceventssuchasfires,tornadoes,earthquakesandhurricanes,andusageerrorsbyourassociates.Ifourinformationsystemsandourbackupsystemsaredamaged,breachedorceasetofunctionproperly,wemayhavetomakeasignificant

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investmenttorepairorreplacethem,andwemaysufferinterruptionsinouroperationsintheinterim.Anymaterialinterruptioninbothourinformationsystemsandbackupsystemsmayhaveamaterialadverseaffectonourbusinessorresultsofoperations.Inaddition,wearepursuingcomplexinitiativestotransformourinformationtechnologyprocessesandsystems,whichwillinclude,formanyofourinformationsystems,establishingcommonprocessesacrossourlinesofbusiness.Theriskofsystemdisruptionisincreasedwhensignificantsystemchangesareundertaken,althoughwebelievethatourchangemanagementprocesswillmitigatethisrisk.Ifwefailtointegrateourinformationsystemsandprocesses,wemayfailtorealizethecostsavingsanticipatedtobederivedfromtheseinitiatives.

CompetitiveandReputationalRisks

Ourfailuretoattractandretainqualifiedassociates,increasesinwageandbenefitcosts,changesinlawsandotherlaborissuescouldmateriallyadverselyaffectourfinancialperformance.Ourabilitytocontinuetoexpandouroperationsdependsonourabilitytoattractandretainalargeandgrowingnumberofqualifiedassociates.Ourabilitytomeetourlaborneeds,includingourabilitytofindqualifiedpersonneltofillpositionsthatbecomevacantatourexistingstores,clubsanddistributioncenters,whilecontrollingourassociatewageandrelatedlaborcosts,isgenerallysubjecttonumerousexternalfactors,includingtheavailabilityofasufficientnumberofqualifiedpersonsintheworkforceofthemarketsinwhichwearelocated,unemploymentlevelswithinthosemarkets,prevailingwagerates,changingdemographics,healthandotherinsurancecostsandadoptionofneworrevisedemploymentandlaborlawsandregulations.Ifweareunabletolocate,toattractortoretainqualifiedpersonnel,thequalityofserviceweprovidetoourcustomersmaydecreaseandourfinancialperformancemaybeadverselyaffected.Thewageincreasesforover500,000associatesinouroperationsintheU.S.andinvestmentinotherinitiativesforourassociatesintheU.S.thatweannouncedinFebruary2015willincreaseourwageandotherlaborexpensessignificantly.Ifthecombinedimpactoftheincreaseinourgrossprofitanddecreaseincertainoperatingexpensesinfiscal2015andthereafterdoesnotoffsettheadditionalwageexpense,ourconsolidatedoperatingincomeandourconsolidatedincomefromcontinuingoperationscouldbelessthanourconsolidatedoperatingincomeandconsolidatedincomefromcontinuingoperationsforrecentfiscalyears.Inaddition,ifourcostsoflabororrelatedcostsincreasesignificantlyforotherreasonsorifneworrevisedlaborlaws,rulesorregulationsorhealthcarelawsareadoptedorimplemented,ourfinancialperformancecouldbemateriallyadverselyaffected.

Wefacestrongcompetitionfromotherretailersandwholesalecluboperators(whetherthroughphysicalretail,digitalretailorthroughacombinationofbothareas),whichcouldmateriallyadverselyaffectourfinancialperformance.Theretailbusinessishighlycompetitive.Eachofoursegmentscompetesforcustomers,employees,storesites,productsandservicesandinotherimportantaspectsofitsbusinesswithmanyotherlocal,regional,nationalandglobalretailers,aswellasothernationalandinternationalinternetbasedretailers.OurWalmartU.S.segmentcompeteswithretailersoperatingdiscount,department,drug,dollar,varietyandspecialtystores,supermarkets,supercentertypestoresandhypermarkets,aswellasecommerceandcatalogbusinesses.OurSam'sClubsegmentcompeteswithotherwholesalecluboperators,aswellasdiscountretailers,retailandwholesalegrocersandgeneralmerchandisewholesalersanddistributors,gasolinestations,aswellasinternetbasedretailers,wholesalersandcatalogbusinesses.Internationally,wecompetewithretailerswhooperatedepartment,drug,dollarstores,varietyandspecialtystores,supermarkets,supercentertypestores,hypermarkets,wholesaleclubs,ecommerceandcatalogbusinesses.Suchretailers,wholesalecluboperatorsandecommerceretailerscompeteinavarietyofways,includingthepricesatwhichwesellourmerchandise,themerchandiseselectionandavailability,servicesofferedtocustomers,location,storehours,instoreamenities,theshoppingconvenienceandoverallshoppingexperienceweoffer,theattractivenessandeaseofuseofourecommercewebsitesandmobilecommerceapplications,speedofandoptionsfordeliverytoourcustomersofthemerchandisetheypurchasefromusonlineandtheintegrationofourphysicallocationswithourdigitalretailoperations.Wherenecessary,tocompeteeffectivelywithcompetitorswhopricemerchandiseatpointslowerthanthepriceswesetunderourEDLPphilosophy,wewilllowerourpricesongoodsforsale.Ourabilitytorespondeffectivelytocompetitivepressuresandchangesintheretailmarketscouldmateriallyadverselyaffectourfinancialperformance.See"Item1.Business"aboveforadditionaldiscussionofourcompetitivesituationineachofourreportablesegments.Althoughtheretailindustryasawholeishighlyfragmented,certainsegmentsoftheretailindustrymayundergoconsolidationfromtimetotime,whichcouldresultinincreasedcompetitionandsignificantlyalterthedynamicsoftheretailmarketplace.Suchconsolidationmayresultincompetitorswithgreatlyimprovedfinancialresources,improvedaccesstomerchandise,greatermarketpenetrationthantheypreviouslyenjoyedandotherimprovementsintheircompetitivepositions.Suchbusinesscombinationscouldresultintheprovisionofawidervarietyofproductsandservicesatcompetitivepricesbysuchconsolidatedcompanies,whichcouldadverselyaffectourfinancialperformance.

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Ifthetechnologybasedsystemsthatgiveourcustomerstheabilitytoshopwithusonlinedonotfunctioneffectively,ouroperatingresults,aswellasourabilitytogrowourecommercebusinessglobally,couldbemateriallyadverselyaffected.Manyofourcustomersshopwithusoverourecommercewebsitesandmobilecommerceapplications,includingwalmart.comandsamsclub.com,whichareapartofourmultichannelsalesstrategy.Increasingly,customersareusingcomputers,tablets,andsmartphonestoshoponlinewithusandwithourcompetitorsandtodocomparisonshopping.Weareincreasinglyusingsocialmediatointeractwithourcustomersandasameanstoenhancetheirshoppingexperience.Asapartofourmultichannelsalesstrategy,weoffer"WalmartPickup"and"ClubPickup"programsunderwhichmanyproductsavailableforpurchaseonlinecanbeshippedtoandpickedupbythecustomerathisorherlocalWalmartstoreorSam'sClub,whichprovidesadditionalcustomertrafficatsuchstoresandclubs.MultichannelretailingisarapidlyevolvingpartoftheretailindustryandofouroperationsintheU.S.andinanumberofmarketsinwhichourWalmartInternationalsegmentoperates.Anyfailureonourparttoprovideattractive,userfriendlyecommerceplatformsthatofferawideassortmentofmerchandiseatcompetitivepricesandwithrapiddeliveryoptionsandthatcontinuallymeetthechangingexpectationsofonlineshoppersanddevelopmentsinonlinemerchandisingandrelatedtechnologycouldplaceusatacompetitivedisadvantage,resultinthelossofecommerceandothersales,harmourreputationwithcustomers,haveamaterialadverseimpactonthegrowthofourecommercebusinessgloballyandcouldhaveamaterialadverseimpactonourbusinessandresultsofoperations.

DataandPrivacyRisks

Anyfailuretomaintainthesecurityoftheinformationrelatingtoourcompany,customers,associatesandvendorsthatwehold,whetherasaresultofcybersecurityattacksonourinformationsystemsorotherwise,coulddamageourreputationwithcustomers,associates,vendorsandothers,couldcauseustoincursubstantialadditionalcostsandtobecomesubjecttolitigation,andcouldmateriallyadverselyaffectouroperatingresults.Asdomostretailers,wereceiveandstoreinourdigitalinformationsystemscertainpersonalinformationaboutourcustomers,andwereceiveandstorepersonalinformationconcerningourassociatesandvendors.Wealsoutilizethirdpartyserviceprovidersforavarietyofreasons,including,withoutlimitation,encryptionandauthenticationtechnology,contentdeliverytocustomers,backofficesupport,andotherfunctions.Inaddition,ouronlineoperationsatwww.walmart.com,www.samsclub.comandourwebsitesincertainofourforeignmarketsdependuponthesecuretransmissionofconfidentialinformationoverpublicnetworks,includinginformationpermittingcashlesspayments.Eachyear,computerhackers,cyberterrorists,andothersmakenumerousattemptstoaccesstheinformationstoredinourinformationsystems.Wemaintainsubstantialsecuritymeasurestoprotect,andtopreventunauthorizedaccessto,suchinformationandhavesecurityprocesses,protocolsandstandardsthatareapplicabletoourthirdpartyserviceproviderstoprotectinformationfromoursystemstowhichtheyhaveaccesstoundertheirengagementswithus.Asaresultofthesemeasuresandourmonitoringprocessesandprocedures,webelievethatpastattemptsbycomputerhackers,cyberterroristsandotherstogainaccesstotheinformationstoredonourinformationsystemshavebeenunsuccessful.However,weorourthirdpartyserviceprovidersmaybeunabletoanticipateoneormoreoftherapidlyevolvingandincreasinglysophisticatedmeansbywhichcomputerhackers,cyberterroristsandothersmayattempttodefeatoursecuritymeasuresorthoseofourthirdpartyserviceprovidersandbreachourorourthirdpartyserviceprovidersinformationsystems.Cyberthreatsarerapidlyevolvingandarebecomingincreasinglysophisticated.Ascyberthreatsevolveandbecomemoredifficulttodetectandsuccessfullydefendagainst,oneormorecyberthreatsmightdefeatoursecuritymeasuresorthoseofourthirdpartyserviceprovidersinthefutureandobtainthepersonalinformationofcustomers,associatesandvendorsthatweholdortowhichourthirdpartyserviceprovidershaveaccess,andweorourthirdpartyserviceprovidersmaynotdiscoveranysecuritybreachandlossofinformationforasignificantperiodoftimeafterthesecuritybreachoccurs.Moreover,associateerrorormalfeasance,faultypasswordmanagementorotherirregularitiesmayresultinadefeatofourorourthirdpartyserviceproviderssecuritymeasuresandbreachourorourthirdpartyserviceprovidersinformationsystems(whetherdigitalorotherwise).Anybreachofoursecuritymeasuresorthoseofourthirdpartyserviceprovidersandlossofourconfidentialinformation,whichcouldbeundetectedforaperiodoftime,oranyfailurebyustocomplywithapplicableprivacyandinformationsecuritylawsandregulationscouldcauseustoincursignificantcoststoprotectanycustomerswhosepersonaldatawascompromisedandtorestorecustomerconfidenceinusandtomakechangestoourinformationsystemsandadministrativeprocessestoaddresssecurityissuesandcompliancewithapplicablelawsandregulations.Inaddition,sucheventscouldmateriallyadverselyaffectourreputationwithourcustomers,associates,vendorsandshareholders,aswellasouroperations,resultsofoperations,financialconditionandliquidity,couldresultinthereleasetothepublicofconfidentialinformationaboutouroperationsandfinancialconditionandperformanceandcouldresultinlitigationagainstusortheimpositionofpenaltiesorliabilities,whichmaynotbecoveredbyourinsurancepolicies.Moreover,asecuritybreachcouldrequireustodevotesignificantmanagementresourcestoaddresstheproblemscreatedbythesecuritybreachandtoexpendsignificantadditionalresourcestoupgradefurtherthesecuritymeasuresthatwe

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employtoguardsuchimportantpersonalinformationagainstcyberattacksandotherattemptstoaccesssuchinformationandcouldresultinadisruptionofouroperations,particularlyourdigitalretailoperations.

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Asaretailerwhoacceptsdebitandcreditcardsforpayment,wearesubjecttothePaymentCardIndustryDataSecurityStandard("PCIDSS"),issuedbythePaymentCardIndustrySecurityStandardsCouncil.PCIDSScontainscomplianceguidelinesandstandardswithregardtooursecuritysurroundingthephysicalandelectronicstorage,processingandtransmissionofindividualcardholderdata.Byacceptingdebitcardsforpayment,wearealsosubjecttocompliancewiththeAmericanNationalStandardsInstituteencryptionstandardsandpaymentnetworksecurityoperatingguidelines.Eventhoughwecomplywiththeseguidelinesandstandardsandotherinformationsecuritymeasures,wecannotbecertainthatthesecuritymeasureswemaintaintoprotectallofourinformationtechnologysystemsareabletoprevent,containordetectanycyberattacks,cyberterrorism,orsecuritybreachesfromknownmalwareormalwarethatmaybedevelopedinthefuture.Totheextentthatanydisruptionresultsintheloss,damageormisappropriationofinformation,wemaybemateriallyadverselyaffectedbyclaimsfromcustomers,financialinstitutions,regulatoryauthorities,paymentcardnetworksandothers.Inaddition,thecostofcomplyingwithstricterprivacyandinformationsecuritylawsandstandardscouldbesignificanttous.

SupplyChainandThirdPartyRisks

Risksassociatedwiththesuppliersfromwhomourproductsaresourcedandthesafetyofthoseproductscouldmateriallyadverselyaffectourfinancialperformance.Theproductswesellaresourcedfromawidevarietyofdomesticandinternationalsuppliers.Globalsourcingofmanyoftheproductswesellisanimportantfactorinourfinancialperformance.Allofoursuppliersmustcomplywithapplicablelaws,includinglabor,safetyandenvironmentallaws,andotherwisebecertifiedasmeetingourrequiredsupplierstandardsofconduct.Ourabilitytofindqualifiedsupplierswhomeetourstandards,andtoaccessproductsinatimelyandefficientmannerisasignificantchallenge,especiallywithrespecttosupplierslocatedandgoodssourcedoutsidetheU.S.Politicalandeconomicinstabilityinthecountriesinwhichforeignsuppliersarelocated,thefinancialinstabilityofsuppliers,suppliers'failuretomeetoursupplierstandards(includingourresponsiblesourcingstandards),laborproblemsexperiencedbyoursuppliersandtheirmanufacturers,theavailabilityofrawmaterialstosuppliers,merchandisesafetyandqualityissues,disruptioninthetransportationofmerchandisefromthesuppliersandmanufacturerstoourstores,clubs,andotherfacilities,includingasaresultoflaborslowdownsatanyportatwhichamaterialamountofmerchandisewepurchaseentersintotheU.S.,currencyexchangerates,transportavailabilityandcost,transportsecurity,inflationandotherfactorsrelatingtothesuppliersandthecountriesinwhichtheyarelocatedarebeyondourcontrol.Inaddition,theU.S.'sforeigntradepolicies,tariffsandotherimpositionsonimportedgoods,tradesanctionsimposedoncertaincountries,thelimitationontheimportationofcertaintypesofgoodsorofgoodscontainingcertainmaterialsfromothercountriesandotherfactorsrelatingtoforeigntradearebeyondourcontrol.Theseandotherfactorsaffectingoursuppliersandouraccesstoproductscouldadverselyaffectourfinancialperformance.Ourcustomerscountonustoprovidethemwithsafeproducts.Concernsregardingthesafetyoffoodandnonfoodproductsthatwesourcefromoursuppliersandthensellcouldcausecustomerstoavoidpurchasingcertainproductsfromus,ortoseekalternativesourcesofsupplyforalloftheirfoodandnonfoodneeds,evenifthebasisfortheconcernisoutsideofourcontrol.Anylostconfidenceonthepartofourcustomerswouldbedifficultandcostlytoreestablish.Assuch,anyissueregardingthesafetyofanyfoodandnonfooditemswesell,regardlessofthecause,couldadverselyaffectourfinancialperformance.

Legal,RegulatoryandOtherExternalRisks

OurWalmartInternationaloperationssubjectustorisksassociatedwiththelegislative,judicial,accounting,regulatory,politicalandeconomicrisksandconditionsspecifictothecountriesorregionsinwhichweoperate,whichcouldadverselyaffectourbusinessorfinancialperformance.WearecurrentlyengagedintheoperationofretailthroughourwhollyownedsubsidiariesoperatinginArgentina,Brazil,Canada,Chile,China,India,JapanandtheUnitedKingdomourmajorityownedsubsidiariesoperatinginAfrica,CentralAmerica,ChinaandMexicoandourjointventuresandothercontrolledsubsidiariesinChina.Duringfiscal2015,ourWalmartInternationaloperationsgeneratedapproximately28%ofourconsolidatednetsales.AsaresultofourexpansionactivitiesincountriesoutsidetheU.S.,weexpectthatourWalmartInternationaloperationscouldaccountforalargerportionofournetsalesinfutureyears.Ourfutureoperatingresultsinthesecountriesorinothercountriesorregionsthroughouttheworldcouldbenegativelyaffectedbyavarietyoffactors,mostofwhicharebeyondourcontrol.Thesefactorsincludepoliticalconditions,includingpoliticalinstability,localandglobaleconomicconditions,legalandregulatoryconstraints,taxregulations,locallaborlaws,antimoneylaunderinglawsandregulations,tradepolicies,currencyregulations,andothermattersinanyofthecountriesorregionsinwhichweoperate,noworinthefuture.Inparticular,Brazilianfederal,stateandlocallawsarecomplexandsubjecttovaryinginterpretations.AlthoughtheCompanybelievesitcomplieswiththoselaws,theCompany'ssubsidiariesinBrazilarepartytoalargenumberoflaborclaimsandnonincometaxassessments,whichhavearisenduringthenormalcourseofbusinessinBrazil.ThesemattersaresubjecttoinherentuncertaintiesandifdecidedadverselytotheCompany,couldadverselyaffectourfinancial

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performance.Moreover,theeconomiesofsomeofthecountriesinwhichwehaveoperationshaveinthepastsufferedfromhighratesofinflationandcurrencydevaluations,which,iftheyoccurredagain,couldadverselyaffectourfinancialperformance.Other

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factorswhichmayimpactourWalmartInternationaloperationsincludeforeigntrade,monetaryandfiscalpoliciesbothoftheU.S.andofothercountries,laws,regulationsandotheractivitiesofforeigngovernments,agenciesandsimilarorganizations,andrisksassociatedwithhavingnumerousfacilitieslocatedincountrieswhichhavehistoricallybeenlessstablethantheU.S.AdditionalrisksinherentinourWalmartInternationaloperationsgenerallyinclude,amongothers,thecostsanddifficultiesofmanaginginternationaloperations,adversetaxconsequencesandgreaterdifficultyinenforcingintellectualpropertyrightsincountriesotherthantheU.S.ThevariousrisksinherentindoingbusinessintheU.S.generallyalsoexistwhendoingbusinessoutsideoftheU.S.,andmaybeexaggeratedbythedifficultyofdoingbusinessinnumeroussovereignjurisdictionsduetodifferencesinculture,lawsandregulations.Inforeigncountriesinwhichwehaveoperations,ariskexiststhatourassociates,contractorsoragentscould,incontraventionofourpolicies,engageinbusinesspracticesprohibitedbyU.S.lawsandregulationsapplicabletous,suchastheForeignCorruptPracticesActandthelawsandregulationsofothercountriessuchastheUKBriberyAct.Wemaintainpoliciesprohibitingsuchbusinesspracticesandhaveinplaceenhancedglobalanticorruptioncomplianceprogramsdesignedtoensurecompliancewiththeselawsandregulations.Nevertheless,weremainsubjecttotheriskthatoneormoreofourassociates,contractorsoragents,includingthosebasedinorfromcountrieswherepracticesthatviolatesuchU.S.lawsandregulationsorthelawsandregulationsofothercountriesmaybecustomary,willengageinbusinesspracticesthatareprohibitedbyourpolicies,circumventourcomplianceprogramsand,bydoingso,violatesuchlawsandregulations.Anysuchviolations,evenifprohibitedbyourinternalpolicies,couldadverselyaffectourbusinessorfinancialperformance.

Naturaldisasters,changesinclimate,andgeopoliticaleventscouldadverselyaffectourfinancialperformance.Theoccurrenceofoneormorenaturaldisasters,suchashurricanes,cyclones,typhoons,tropicalstorms,floods,earthquakes,tsunamis,weatherconditionssuchasmajororextendedwinterstorms,droughtsandtornadoes,whetherasaresultofclimatechangeorotherwise,severechangesinclimateandgeopoliticalevents,suchascivilunrestorterroristattacksinacountryinwhichweoperateorinwhichoursuppliersarelocatedcouldadverselyaffectouroperationsandfinancialperformance.Sucheventscouldresultinphysicaldamageto,orthecompletelossof,oneormoreofourproperties,theclosureofoneormorestores,clubsanddistributionfacilities,thelackofanadequateworkforceinamarket,theinabilityofcustomersandourassociatestoreachorhavetransportationtoourstoresandclubsdirectlyaffectedbysuchevents,theevacuationofthepopulacefromareasinwhichourstores,clubsanddistributionfacilitiesarelocated,changesinthepurchasingpatternsofconsumersandinconsumers'disposableincome,thetemporaryorlongtermdisruptioninthesupplyofproductsfromsomelocalandoverseassuppliers,thedisruptioninthetransportofgoodsfromoverseas,thedisruptionordelayinthedeliveryofgoodstoourdistributionfacilitiesorstoreswithinacountryinwhichweareoperating,thereductionintheavailabilityofproductsinourstores,thedisruptionofutilityservicestoourstoresandourfacilities,anddisruptioninourcommunicationswithourstores.Theseeventsandtheirimpactscouldotherwisedisruptandadverselyaffectouroperationsintheareasinwhichthesetypesofeventsoccur,suchasSuperstormSandyintheU.S.in2012,ornumerouswinterstormsystemsintheU.S.in2013,2014and2015,andcouldadverselyaffectourfinancialperformance.Inlightofthesubstantialpremiumspayableforinsurancecoverageforlossescausedbycertainnaturaldisasters,suchashurricanes,cyclones,typhoons,tropicalstorms,earthquakes,floodsandtsunamisinthecurrentinsurancemarket,aswellasthelimitationsonavailablecoverageforsuchlosses,wehavechosentobeprimarilyselfinsuredwithrespecttosuchlosses.Althoughwemaintaincertainspecificcoveragesforlossesfromphysicaldamagesinexcessofcertainamountstoguardagainstcatastrophiclossessufferedfromsuchcauses,westillbeartheriskoflossesthatwouldbeincurredasaresultofanyphysicaldamageto,orthedestructionof,anystores,clubsanddistributionfacilities,lossorspoilageofinventory,andbusinessinterruptioncausedbyanysucheventsbelowcatastrophiclevelsofcoverage,aswellasintheeventofacatastrophe,inexcessoftheaggregatelimitsofapplicablecoverages.Significantlossescausedbysucheventscouldmateriallyadverselyaffectourfinancialperformance.

Wearesubjecttocertainlegalproceedingsthatmaymateriallyadverselyaffectourresultsofoperations,financialconditionandliquidity.Weareinvolvedinanumberoflegalproceedings,whichincludeconsumer,employment,tortandotherlitigation.Certainoftheselawsuits,ifdecidedadverselytousorsettledbyus,mayresultinliabilitymaterialtoourresultsofoperations,financialconditionandliquidity.Wearecurrentlyadefendantinanumberofcasescontainingclassactionallegationsinwhichtheplaintiffshavebroughtclaimsunderfederalandstatewageandhourlaws,aswellasanumberofcasescontainingclassactionallegationsinwhichtheplaintiffshavebroughtclaimsunderfederalandstateconsumerlaws.Inaddition,ASDAStores,Ltd.("ASDA"),awhollyownedsubsidiaryoftheCompany,hasbeennamedasadefendantinover4,000"equalvalue"claimsthatarependingintheManchesterEmploymentTribunal(the"EmploymentTribunal")intheUnitedKingdom.Theclaimants,whoarecurrentandformerASDAstoreemployees,allegethattheworkperformedbyfemaleemployeesinASDA'sretailstoresisofequalvalueintermsof,amongotherthings,thedemandsoftheirjobstothatofmaleemployeesworkinginASDA'swarehousesanddistributionfacilities,

11/23/2015 WMTFORM10K1/31/15

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