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A summary of Wal-Mart’s financial performance in fiscal year 2008 can be found in Wal-Mart’s 2008 Annual Report, which is available on walmartstores.com. Wal-Mart’s fiscal year 2008 ended on January 31, 2008. Unless otherwise stated, references to years in this report relate to fiscal years, rather than to calendar years. Key highlights from the Annual Report are discussed below.

Item 1. Revenue Recognition

Wal-Mart Stores, Inc. reported record sales for fiscal year 2008. During this period, total net sales (sales net of sales taxes and estimated sales returns) were $374,526 million, which represents an increase of 8.6 percent over the previous fiscal year. Wal-Mart recognizes sales revenue at the time the merchandise is sold to the customers. Two exceptions to this are layaway transactions and gift card purchases. Sales revenue from layaway transactions is recognized when the item is fully paid for and the customer has the item in his/her possession. Sales revenue from gift card purchases is recognized when the card is redeemed.

In addition to sales revenue, Wal-Mart also recognized $1,038 million in Sam’s Club membership fees in fiscal year 2008. Sam’s Club membership fee revenue is recognized over the term of the membership. Membership fees that are not recognized are recorded as deferred membership fee revenue (unearned revenue) and are rolled over until the following fiscal year.

Item 2. Income Trends for 2004 to 2008

In order to get a better idea of Wal-Mart’s future earning potential, it is important to look at trends in income over time. To do this, five graphs were constructed to show the change over time (for fiscal years 2004 to 2008) for the following items – comprehensive income, net income, income from continuing operation, operating income, and gross profit. These graphs are shown below.

[pic][pic][pic] 2008 growth

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