Carol Schumacher - VP of IR Lee Scott - President, CEO Tom Schoewe - EVP, CFO Charles Holley - EVP of Finance, Treasurer Mike Duke - Vice Chairman, Wal-Mart Stores International

This call is the property of Wal-Mart Stores Inc. and intended solely for the use of Wal-Mart shareholders. It should not be reproduced in any way. This call will contain statements that Wal-Mart believes are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and intended to enjoy the protection of the Safe Harbor for forward-looking statements provided by that act. These forward-looking statements generally are identified by the use of words or phrases are projecting, expect, expected, forecast, plan, will continue, will hear, will rise, and will see or a variation of one of those words or phrases in those statements or by the use of words or phrases of similar import. Similarly, descriptions of our objectives, plans, goals, targets, or expectations are forward-looking statements. These statements discuss, among other things: our anticipated U.S. comparable store sales for the current fiscal quarter and our anticipated earnings per share from continuing operations for the current fiscal quarter and for fiscal year 2008; our anticipated tax rate for fiscal year 2008 and quarterly volatility in that rate; the expected impact of interest expense on our financial performance in the fiscal year 2008; our expected focus on the state of growth of our operating income; and, the inventory levels in our SAM'S CLUB segment; our expectation that returns will continue to be driven by margin and inventory improvements and growth will be driven by new stores in our international business; expectations for continuing effect of hurricane recovery-related sales in prior periods on future comparable sales; our expectation for guarding the remodeling of stores and special projects in certain merchandise areas in stores during fiscal year 2008; our expectations for the rate of growth of our capital expenditures in fiscal 2008; and our anticipated expansions of Supercentres in Canada and integration of best practices throughout Wal-Mart; and the anticipation and expectations of Wal-Mart and its management as to future occurrences and trends. These forward-looking statements are subject to risks, uncertainties and other factors domestically and internationally, including: the cost of goods, competitive pressures, inflation, consumer spending patterns and debt levels, currency exchange fluctuation, trade restriction, changes in tariff and freight rates, fluctuations in the cost of gasoline, diesel fuel, and other energy, transportation, utilities, labor and healthcare, accident costs, casualty and other insurance costs, interest rate fluctuations, capital market conditions, geopolitical conditions, weather conditions, storm-related damage to our facilities, regulatory matters, and other risks. We discuss certain of these matters more fully in our filings with the SEC, including our most recent annual report on Form 10-K and our most recently quarterly report on Form 10-Q filed with the SEC, and the information on this call should be read in conjunction with that annual report on Form 10-K and that quarterly report on Form 10-Q, together with all of our other filings, including current reports on Form 8-K we have made with the SEC through the date of this call. We urge you to consider all of these risks, uncertainties and other factors carefully in evaluating the forward-looking statements we make in this call. As a result of these factors, changes in facts, assumptions not being realized or other circumstances, our actual results may differ materially from anticipated results expressed or implied in these forward-looking statements. The forward-looking statements made in this call are made on and as of the date of this call and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances. The comp store sales for our total U.S. operations and for our SAM'S CLUB segment discussed on this call exclude the impact of fuel sales at our SAM'S CLUB segment. We also discuss on this call the ratio of cash flow from operations to average debt. Reconciliations of those non-GAAP financial measures are available for review on the investor relations portion of our corporate website at www.WalmartStores.com.

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Good morning. This is Carol Schumacher in the investor relations department at Wal-Mart Stores. We appreciate you calling us today for more information on both our fourth quarter and fiscal year 2007 results. The replays of this call and related materials as to the quarter and year end results for the fiscal year ended January 31, 2007 are available on our website. Here is the agenda for today's call: Lee Scott, our President and CEO of Wal-Mart Stores, will provide an overall assessment on the company's performance and the direction that we are heading for the new fiscal year. Tom Schoewe, Executive Vice President and Chief Financial Officer, will give you the details behind the consolidated numbers for the fourth quarter, as well as overall fiscal 2007. Tom also will come back and close the call with the outlook for the first quarter of fiscal 2008. Charles Holley, now Executive Vice President of Finance and Treasurer, will cover the details on both Wal-Mart U.S. and SAM'S CLUB. Our guest executive is Mike Duke, Vice Chairman Responsible for International, who will give the results and more insight on our operations outside the United States. The store counts and square footage updates are available on our website www.WalmartStores.com/investor. We will not be giving those details on the call today. Let me remind you that all references to continuing operations reflect the disposition of Wal-Mart Germany and Wal-Mart South Korea, both of which occurred during the third quarter of the fiscal year just ended. As always, the investor relations team is available to take your calls and questions. Now, we would like to start off with Lee Scott.

Thank you, Carol, and welcome to our call. We are very pleased at Wal-Mart to close yet another fiscal year with both record sales and earnings. The Wal-Mart Associates around the world stepped up and delivered a wonderful fourth quarter and I am encouraged by their achievements, especially as we head into this current fiscal year. They clearly helped make these results possible. We finished fiscal year 2007 with net sales just shy of $345 billion. This is an increase of 11.7% over fiscal 2006. Income from continuing operations for the fiscal year 2007 increased 6.7%. Our company's strong performance for the year was certainly helped by strong sales in the fourth quarter. Net sales for the fourth quarter of fiscal 2007 rose 10.9% over the same quarter of fiscal 2006. Income from continuing operations for the quarter was up 8.8%. Earnings per share from continuing operations for the fourth quarter were $0.95, which brings our earnings per share for the fiscal year just ended to $2.92, up 7.4% from the prior fiscal year. Our customers benefited from low prices around the world. It is a reaffirmation of the proposition that is synonymous with Wal-Mart: saving people money so they can live better. Sam Walton started our company in 1962 with this simple principle and this is the mission that drives our strategy around the world today. We saw strong performances worldwide. Even if you take into account our discontinued operations, we still had record results. Our International segment had a phenomenal quarter, driven by a tremendous performance in Mexico, solid sales in Canada and continued improvements in the UK And we are seeing solid results in markets like Argentina, Brazil, and China. Under Doug McMillon's leadership, SAM'S CLUB continued its progress by growing operating income faster than sales for the sixth quarter in a row. But, Wal-Mart U.S. made the difference in our fourth quarter thanks to Eduardo Castro-Wright and his team for knowing what's right for our customers and staying on strategy, the U.S. stores increased operating profits 11.3% in the fourth quarter. That is well above the 6.7% sales increase for the quarter. Wal-Mart U.S. also continued its trend of improving labor productivity and even more impressively, inventory management. Despite some pressures externally, the Wal-Mart stores expanded the price competitive differential with our competitors. I don't want to steal Charles' thunder later in this call, but with the operating income growth and impressive working capital management at Wal-Mart U.S., one of their greatest accomplishments was not only flattening the return on investment trend for the year just ended, but Eduardo and his team actually reported an increase in ROI. So how did we manage these accomplishments while undergoing so much change? I think it goes back to our people and what we believe; it is our culture, it is our core values, it is why we do what we do every day. Wal-Mart saves people money so they can live better lives and we do this through great people, efficient processes, and innovative technology. Those things are not going to change. As a company, we remain committed to keeping Wal-Mart out in front and our business strategy is designed to deliver tangible results against that commitment. We will continue to drive returns through attention to margin and inventory management. We will continue to drive growth not just through new stores, but also through the company's international business. The key behind our strategy within the international segment is to major in the majors, as Mike Duke is fond of saying. That is why during this past fiscal year, you saw Mike make some difficult decisions in Germany and South Korea. That is why, for example, you will hear more from Mike about the expansion of Wal-Mart Supercentres in Canada and how we are integrating best practices from around the Wal-Mart organization to deliver the best products to our customers, all at low prices. This year, expect to hear more from Wal-Mart about where we are going in emerging markets like India and China. Returns in growth don't come without the support and hard work from thousands of associates behind the scenes who support the Wal-Mart infrastructure. I want to take a minute to thank John Menzer and his teams in logistics, information systems, real estate, financial services, and others whose work helps us deliver sales and customer service. Over the past year, you have also seen Wal-Mart prove that businesses can perform well and do good things at the same time. In the midst of record sales and earnings, we dedicated the time and the resources to focus on some very important initiatives for the U.S. and around the world. Let me mention a few of the highlights. We are working directly with our suppliers at various stages of our supply chain to make products more environmentally friendly. Our sustainability initiatives are making these products even more affordable. Our efforts to promote diversity have been recognized by many organizations. In fact, we just received the American Bar Association's Spirit of Excellence award in support of our legal department's diversity efforts. Last week, we announced a sweeping initiative to extend our diversity efforts to our supplier community. Just this month, we joined with other business leaders, labor, government and nonprofit leaders to help bring meaningful change to America's healthcare system. Finally, through a variety of improvements, we are making Wal-Mart an even better place to work. The fact is, we are a better Wal-Mart than we were one year ago and I am excited about this year. You will hear more details about the future in international from Mike Duke later in this call. SAM'S CLUB, under Doug McMillon, continues to look for new ways to service members and I am most encouraged by the future for Wal-Mart U.S. I believe in the strategic plan that is guiding our U.S. stores. The process that Eduardo Castro-Wright has put in place for the operations team has been successful. Now, he is focused on using that same discipline to transform the merchandising team. We need to remember that his strategic plan is a three-year plan, so there is work ahead, but Wal-Mart U.S. understands the need to focus on top line sales growth as the benefits of the other customer initiatives deliver their results. Let me close by saying how proud I am of the work of the men and women of this company and what they did throughout fiscal 2007. When all is said and done, we had a record year. I look forward to our continued success in the coming fiscal year, both as a business and as a company that understands and believes in the role that it plays in this world. Now, I would like to turn it over to Tom to recap the numbers.

Lee, thank you very much. And I would like to thank each one of you for joining us here this morning. Let's start at the highest level and then I will drill down into the numbers in just a moment. Let's start with the fourth quarter. Net sales for the company were up 10.9% for the quarter. Embedded in that increase is a U.S. comp store sales increase of 1.6%. Income from continuing operations increased 8.8%. Earnings per share from continuing operations were $0.95. This reflects more than a 9% increase from last year's fourth quarter, $0.02 of the year-on-year improvement related to the resolution of certain tax matters, and the renewal of the Work Opportunity Tax Credit. I will spend more time chatting about this later on in the call. For fiscal 2007, net sales were almost $345 billion, an 11.7% increase over last fiscal year. Net income from continuing operations was $12.2 billion; that is up 6.7%. Earnings per share from continuing operations for the full fiscal year were $2.92 a share; that is a 7.4% increase. Total U.S. comp store sales for the fiscal year were up 2.1%. Wal-Mart U.S. reported a 1.9% increase and SAM'S CLUB a 2.9% increase. Before we dive into the details, let me reiterate something Lee mentioned earlier. Despite a loss of nearly $900 million from discontinued operations and yes, that includes the charge we took in conjunction with the sale of our German operations, the company reported an increase – that’s right, an increase -- in net income for the year. Now, let's look at the details. First, consolidated gross margin was up 30 basis points for the fourth quarter, primarily driven by the international segment. This increase occurred despite various pressures, which include transportation costs and the increased markdown activity in Wal-Mart U.S. during the fourth quarter. Second, consolidated operating expenses as a percentage of sales for the quarter were up 47 basis points over the same period last year. As expected, we did see increases in maintenance and repair expense due to a remodeling and our special projects. In addition, advertising expenses were up for the quarter. Next, consolidated inventories were up 5.6% against a year-to-date sales increase of 11.7% for fiscal 2007. This improved working capital management obviously benefits our return on investment. We were proud to have exceeded our goal of growing inventory at half of the rate of sales growth. Membership and other income were up more than 18% for the fourth quarter. We saw increases in our SAM'S CLUB membership revenue and in rent income from leased space in our stores. We also continue to see increases in our financial services area. Their products include check cashing, money orders and money wires, and product warranties. Let me shift gears and talk about interest expense. Net interest expense was up more than 7% for the quarter, as interest rates continue to be higher than the prior year. Improved working capital management helped offset higher interest rates. The early repayment of selected Seiyu debt during the quarter contributed to the lower growth in interest costs. Having said all of this, we expect interest costs to continue to be a headwind in fiscal 2008. Our tax rate for the quarter was 32.5%. This rate is lower than we had forecast. During the quarter, we had a $98 million benefit from a couple of items: First, the resolution of selected tax matters, specifically some transfer pricing opportunities. Second, the renewal of the Work Opportunity Tax Credit. The anticipated tax rate for fiscal 2008 is expected to be in the 34% to 35% range, although we will see some quarterly volatility. Payables as a percentage of inventories for the corporation were 83.4% at the end of fiscal 2007, and that is up from 78.7% last fiscal year. This improvement continues as a result of our inventory management progress and is complemented by our international acquisitions. In the fourth quarter, we repurchased more than $1.7 billion of our stock, which represented about 38.9 million shares. Under our current $10 billion share repurchase program, we still have the authority to repurchase more than $4 billion of additional stock. As I mentioned last quarter, we have moved to a cash flow coverage ratio to monitor our balance sheet leverage. Historically, we have reported our debt to total capitalization ratio. Our new ratio that we are using is cash flow, or funds from operations, divided by average debt. For the end of the year, are cash from operations to average debt was approximately 40%, which, based on published rating agency criteria, is well within the proper range to maintain a AA rating. Before we get into the individual segment results, I want to briefly touch on operating income and expense items not included in our segments. We refer to this as corporate overhead, but many of you know this as our other segment. These other operating income and expense items primarily consist of expenses for overhead functions, such as legal or finance, which are managed at the corporate level and not included in the operating segments. Since our segment reporting follows our internal management reporting, this other segment can also include unusual or infrequent income and expenses that are accounted for at the corporate level rather than the operating segments. For fiscal 2007, these corporate overhead expenses were up 53% from the prior year, primarily from continued pressure on costs related to corporate affairs, compliance, and human resources. In addition, the corporate overhead expenses in fiscal 2006 -- that would be last year -- were impacted by accrual reductions from positive developments in certain legal matters, as well as accrual reductions in various actuarial determined expenses, such as workers compensation and casualty liabilities. Last, let's talk about capital spending for the past year. Our cash flow statement reflects payments for property, plant and equipment of approximately $15.7 billion. Our actual increase for fiscal 2007 from the previous year was about 8%, a number lower than many of you were expecting. This past October, we told you that we expected our capital spending for fiscal 2007 to increase between 15% and 20% from the previous year. So the obvious question, why the reduction? The timing has changed for a number of our international projects, so the budgets for these projects will be shifted from fiscal 2007 to the current fiscal year -- that would be 2008. In addition, we realize savings in logistics and the systems area. This means that our forecast for capital spending for fiscal year 2008 will rise at or less than our square footage growth. In other words, we expect CapEx to be lower than sales growth. Our goal to increase capital spending for Wal-Mart U.S. store expansion remains at 2% to 4% for the current fiscal year. Further, we are committed to the expansion program we outlined in October, to open more than 600 new units worldwide and to add roughly 60 million square feet this year. So let me try to further explain what has happened. If you look at fiscals 2007 and 2008 together, we will still spend at or less than the amount we would have guided you towards at our analyst meeting in October; less in fiscal 2007 and a little bit more in 2008. With that, I would now like to turn it over to Charles to talk to you about Wal-Mart U.S.

Thanks, Tom. We are pleased with the operating performance in the Wal-Mart U.S. segment during the fourth quarter. Our operating profit increase of 11.3% was well above the 6.7% sales increase for the quarter. Our apparel and home sales continue to be softer than we would like. During the fourth quarter, our labor productivity continued to strengthen on the improvements made earlier in the year. We believe we are seeing benefits coming from these three areas: One, our store associates scheduling system; Two, changes made to our Wal-Mart store accounting offices; and, Three, the elimination of layaway last year. Our performance gains in the fourth quarter capped a successful year. Our fiscal 2007 operating profit increased by 11.1% on a sales increase of 7.8%. As we have already discussed, the company's inventory goal is to grow inventory at half the rate of sales. I am very pleased to tell you that the Wal-Mart segment solidly surpassed that goal. We continue to achieve strong inventory productivity. The Wal-Mart segment inventory increased slightly less than 2% on a full-year sales increase of 7.8%. This reflects our commitment to improve our return on investment. Speaking of return on investment, think back to October 2005 when we talked about the downward ROI trend at Wal-Mart U.S. We committed to you our goal, which was to flatten that trend and to see an improvement over the next 12 to 18 months. I am pleased to repeat what Lee said earlier: Wal-Mart U.S. ended the year with an increase in return on investment, a great accomplishment. Now, let's look at the numbers for the fourth quarter in a little more detail. Comp store sales in Wal-Mart U.S. were up 1.3% for the quarter. Comp sales were driven by an increase in the average ticket during the quarter, while customer traffic declined slightly. Similar to the third quarter, we continue to feel a negative impact on comp sales from last year's hurricane recovery sales. As we have stated, we expect the impact from the hurricanes to continue to lessen into the first quarter of fiscal 2008. Our entertainment, food, and pharmacy areas had strong sales for the quarter. Our Supercentre food sales grew by more than 13% and Supercentre food comps were in the mid-single digits. Overall, Wal-Mart gross margin increased by 8 basis points in the quarter. Our initial margin on general merchandise increased from the last year's fourth quarter. This more than offset the increased mark downs we took during the quarter for home and apparel. Inventory is in good shape as we head into the next fiscal year. It is also important to note that while we have increased our initial margin during the quarter in a majority of our merchandise categories, we have also been able to expand, in many cases, our competitive pricing spread. Total expenses as a percentage of sales were down 25 basis points when compared to the fourth quarter last year. This was a result of increased labor productivity in the stores. It is important to note that Wal-Mart has delivered labor productivity gains every quarter for the past two years. Other income as a percentage of sales for the quarter improved when compared to last year. This is because of the continued strong performance of our financial services area, as Tom mentioned earlier. Now, let's cover the Wal-Mart U.S. remodeling and special projects program. During the fiscal year, between the home, apparel, and electronic areas, we completed almost 1,300 special projects. In addition, we also completed 322 full remodels. Full remodels scheduled for the fiscal year began again in late January and we are projecting completing 325 remodels through this fiscal year. Work is underway across the country and we expect to have the remodels completed by the end of the third quarter. We completed two-thirds of the 1,800 special projects in calendar 2006. We expect to complete all planned electronic and apparel projects by the end of the third quarter, also. We plan to do just a few more of the home special projects, which will be completed in the first half of this year. As always, we will continue to evaluate our efforts. Now, let's talk about our SAM'S CLUB results. In the U.S., SAM'S CLUB showed improved results in the fourth quarter. Total sales grew by 4.4% for the quarter and 4.5% for the year. Excluding fuel, comp sales at SAM'S CLUB increased 3.1% during the quarter and 2.9% for the year. For the quarter ending January 31, 2007, fuel sales negatively impacted SAM'S CLUB comparable club sales figures by 120 basis points. For the full year, fuel sales had a negative impact of 40 basis points on comp club sales at SAM'S CLUB. For the sixth quarter in a row, SAM'S CLUB grew operating income faster than sales. Operating income increased 15.4% for the quarter and 9.2% for the full year. Operating income growth for both the quarter and the year was the result of higher membership revenues and expanded gross margins. While operating expenses were down as a percentage of sales with the prior year quarter, they were up slightly for the year. Inventory levels grew at a faster rate than sales. The increase was primarily due to inventory build-ups in electronics and spring seasonal merchandise. SAM’s will continue to focus on growing operating income at a faster rate than sales and on bringing inventory levels into line with our targeted growth rate, which, like Wal-Mart U.S., is one half the rate of sales growth. During the quarter, we added six new clubs and relocated or expanded five clubs. We now operate 579 clubs in the United States. Next Mike Duke will cover our international results.

Thank you, Charles. I am very excited to talk about the international business and the great results, or rather like Lee Scott said, the phenomenal results that our associates achieved in the fourth quarter and for the fiscal year that just concluded. Today, I would first like to summarize recent developments in our business and then we will move to a discussion of financial results. Finally, I will conclude with a discussion of our recent acquisitions. Many times in the past year, I have used the phrase “major in the majors”. And by this, I just mean putting our resources, our financial and people resources, to work on what is most important. This led to a strategic planning process, resulting in several actions in recent months, such as: First, we have focused on accelerating our presence where the greatest growth and greatest returns exist. I am excited about the growth we continue to see in Mexico, the launch of Supercentres in Canada, and our operations in South America and Central America. Second, we have exited businesses that did not have growth and profit potential, as was the case with our business in Germany and in South Korea. Third, we are focused on growing comp sales and operating income from existing stores through a focus on the basics, as we are seeing at ASDA, for example, in the U.K. Fourth, we are investing in customer and market research, and we are developing a foundation for greater long-range business plans that focus on emerging markets like India and China. Last, we are leveraging the strength of Wal-Mart to provide innovation and benefits to all markets. We are focused on leveraging our procurement capabilities, our experience with many formats of retailing, and of course, our technology and our infrastructure. Now, let's discuss our financial results for the fourth quarter and for the full year. The disposition of our operations in South Korea and Germany were completed during the third quarter of this fiscal year and are considered to be discontinued operations. This means the results of operations for these countries are excluded from the following discussion and the figures for international. Our fourth quarter performance was a story of sales momentum, resulting in increased worldwide market share. International sales from continuing operations for the fourth quarter were $22.7 billion. That is a 29.6% increase over the prior year. This sales increase, and that for fiscal year 2007 as a whole, included the impact of our acquisitions in southern Brazil and the consolidation of Seiyu and Wal-Mart Central America. Sales from these entities contributed 14.5 percentage points to the fourth quarter sales increase. Our strongest sales performance in the quarter came from Mexico, Brazil, China and increasing sales momentum at ASDA in the U.K. The fourth quarter impact of currency valuation on sales was a net benefit of $759 million, driven primarily by the strengthening in British pound. For fiscal 2007, sales were over $77.1 billion, up 30.2% from last year. The impact of currency valuation on fiscal 2007 sales was a positive $1.5 billion, driven mainly by significant strengthening in the Canadian dollar, British pound, and the Brazilian real. Operating income from continuing operations for the fourth quarter was $1.5 billion, up 32% over the prior year. This reflects a slight improvement as a percent of sales. Operating income growth was impacted by the dilutive effect of the recent acquisitions, which added 4.3 percentage points to the growth in international operating income. Gross margin improved versus the fourth quarter of the last fiscal year largely as a result of the acquisitions and the improvements in the United Kingdom, Canada and Mexico. Operating expenses were up as a percentage of sales primarily as a result of the acquisitions. There was a $43 million positive impact from currency on fourth quarter operating income. For the year, operating income was more than more than $4.2 billion, up 21.5% from last year. The impact of currency valuation was a positive $90 million. Now, let's talk about the results around the world, starting off with Wal-Mart Mexico, where our operations have experienced an extraordinary year. Wal-Mart Mexico had an outstanding quarter, continuing positive trends from recent quarters. Mexico's operating income in the fourth quarter and for fiscal 2007 grew faster than sales when compared to the same prior-year period. Total sales for the fourth quarter were up 16.4% in real terms, adjusted for inflation. The real comp store sales increase during the quarter was 7.1%. For the full year, sales increased 15.9% in real terms, with a comp store sales increase of 5.9%. We continue to see very consistent growth among all formats in Mexico. The main driver of the sales increase continues to be customer count, with a 15% total increase during the fourth quarter. Average ticket was up as well. Fourth quarter operating expenses in Mexico grew 14.3% in real terms, reflecting leverage of the sales increase. The leverage was driven mainly by associate productivity. For fiscal 2007, Mexico's operating expenses were 13.5% of sales. This is the lowest level ever achieved by Mexico, beating the record set in fiscal 2006. Our expansion program in Mexico added 47 units during the fourth quarter, which for the year, ended at a total of 120 new units across its six retail formats, a 14% increase in sales floor. We are pleased to note that as we continue to add units in Mexico, our returns continue to increase. In fact, since 1999, each and every quarter we have seen returns increase versus the previous year. Our management team in Mexico is focused on improving the shopping experience through the offering of additional services to our customers. This will be the goal of the Mexico banking operations authorized this past November. The bank will focus on the unbanked customer, with the first branch opening scheduled for later this year. Rollout of the bank operation will proceed cautiously. We do not expect any significant impact on our company's results during the first years of the bank's operation. Now let's head north to Canada. In Canada, our business is performing well, especially in food and consumables, electronics, and infants. We continue to see positive results in our new Canadian Supercentres, both in terms of customer traffic and ticket. January saw us open four more Supercentres, in addition to the three opened in November. We are pleased with how our Canadian customers have embraced this concept. The Canadian team has taken our food offerings in the Supercentres to a new level of quality and freshness. During the coming year, we will continue to expand the number of Supercentres both through new and expanded stores, as well as invest in the supply chain infrastructure to support this growth. We look forward to sharing further developments with you next month at the analyst field trip in Toronto. Now turning our focus to the U.K., ASDA. Fiscal 2007 was a turnaround year for ASDA. Sales improved from each quarter to the next, and we ended the year with the strongest comp sales growth in over two years, exceeding business plan sales for the full year. We are very encouraged by this trend, as we have seen positive momentum in both customer traffic and average ticket. For the year as a whole, sales were up in the mid single-digits and profit increased slightly. Comp sales, excluding the positive impact from fuel, were positive in the low single digits for the year. ASDA started with a negative comp in the first quarter and by the fourth quarter, the comp improved into a healthy positive. Progress on cost reduction and an improved gross margin mix enabled ASDA to grow operating income faster than sales in the fourth quarter. These improvements have resulted from ASDA executing their customer-focused strategy over three horizons. The first horizon was fixing the basics. Improvements in price, service and in-stock have restored customer confidence and contributed to rising customer count, with 1 million more regular shoppers compared to last year. The second horizon was differentiation. ASDA began a process of upgrading the departments that drive loyalty, extending the organic assortment, relaunching the premium extra-special ranges, and remodeling the pet and baby departments. Also just yesterday, ASDA formally relaunched the premium clothing range Collections by George, with new styles replacing what was previously called George Collection. The final horizon was about future growth channels. We are encouraged with new store results, as well as results from our new format called ASDA Living. We continue to be encouraged by the growth in ASDA's market share, which increased two-tenths of a percent to 10.8% based on the 12 weeks ending January 28, according to TNS data. The most impressive share gains came in those departments that were upgraded or remodeled in fiscal 2007, including fresh food, health and beauty aids, pets, and baby. I am also pleased to report that we have seen a further strengthening in our comp sales at ASDA in the early weeks of fiscal 2008. Now let's talk about Brazil. Brazil comps were in the upper single-digits for the fourth quarter. Our total country operations there were ahead of plan in sales for the fourth quarter, and for fiscal 2007, were ahead of plan for operating income. We are pleased with the performance of our two recent acquisitions in the northeast and in southern Brazil, both of which are growing sales above our initial expectations and delivering financial results ahead of plan. I will talk more about the integration process in southern Brazil in just a moment. Argentina continues to deliver a strong performance, with a strong double-digit sales increase in the fourth quarter. Comps in real terms were up in the high single-digits for the fourth quarter. Puerto Rico sales were up in the low single-digits for the fourth quarter as a result of store expansion activities. Comp sales were slightly below last year, impacted by a continuing trend of lower consumption. As we saw throughout the year, Puerto Rico is experiencing an economic downturn. Turning now to China, we saw strong fiscal 2007 sales, where comps grew in the high single-digits for the fourth quarter. Our Chinese customers are reacting positively to Wal-Mart's Everyday Low Price philosophy, as they see the savings our stores provide to their cost of living. The key is that China was ahead of plan in the fourth quarter. Finally, let me spend a few moments commenting on our recent acquisitions. In Southern Brazil, we are seeing positive results quicker than expected. Our associates there are embracing the Wal-Mart culture, and as a result, we are seeing huge improvements in associate engagement. All remodeled units are performing better than planned following the remodel. We are excited about this trend, because we are planning to remodel 44 stores there in fiscal 2008. In Central America, we are pleased with the results of our first full year. Fourth quarter sales growth was ahead of plan, in the low double-digits over the same period last year. Operating income for the fourth quarter was slightly short of plan. At Wal-Mart Central America, we have new leadership in place with a strong regional focus and are aggressively addressing synergies as a part of our business integration efforts. In Japan, we have provided a new value proposition to our customers with the 73 remodels that occurred in fiscal 2007. Additionally, we are seeing supply chain efficiencies being delivered countrywide by our distribution network, specifically at the new Misato distribution center, and are continuing our efforts to better leverage our systems to gain overall efficiencies across the Seiyu organization. Japan is the world's second-largest economy and retailing there is very fragmented. Our customer research is showing very positive feedback as we implement changes there. Fiscal 2007 comp sales in Japan were positive for the first time in 15 years, while fourth quarter sales were ahead of plan. Fourth quarter expenses continue to track below plan, while operating income was below plan due to continued retail price investment in targeted categories. Let me now conclude by saying that I am proud of our achievements in fiscal 2007. I am also excited about the prospects for fiscal 2008. Now I would like to turn it over to Tom who will discuss our expectations for the first quarter and 2008 fiscal year.

Thanks, Mike. It is obvious we have got a lot of exciting things going on in international. What I would like to now is a shift gears and chat a little bit about our guidance for fiscal 2008. For the first quarter, we expect U.S. comp store sales to increase in the range of 1% to 3%. This is based on the current trends we are seeing in our business today. We expect earnings per share from continuing operations for the first quarter to be between $0.68 and $0.71 per share. For fiscal year 2008, we forecast EPS from continuing operations to be between $3.15 and $3.23 per share. With that, I would like to thank you for listening in this morning. As usual, Carol and Pauline will be available to answer any of your questions. Thanks, and have just a great day.

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