Walmart 2009 Annual Report Download - page 19

Operating Income
Fiscal Year Ended January 31,
(Amounts in millions) 2009 2008 2007
Operating Percent Percent Operating Percent Percent Operating Percent
Income of Total Increase Income of Total Increase Income of Total
Walmart U.S. $18,763 82.3% 7.1% $17,516 79.8% 5.4% $16,620 81.1%
International 4,940 21.7% 4.6% 4,725 21.5% 10.8% 4,265 20.8%
Sam’s Club 1,610 7.1% -0.5% 1,618 7.4% 9.3% 1,480 7.2%
Other (2,515) -11.1% 31.9% (1,907) -8.7% 2.1% (1,868) -9.1%
Total operating income $22,798 100.0% 3.9% $21,952 100.0% 7.1% $20,497 100.0%
17Wal-Mart 2009 Annual Report
Operating income growing faster than net sales is a meaningful
measure because it indicates how e ectively we manage costs and
leverage expenses. For  scal 2009, our operating income increased
by 3.9% when compared to  scal 2008, while net sales increased by
7.2% over the same period. For the individual segments, our Walmart
U.S. segment met this target; however, our International and Sam’s
Club segments did not. The International segment fell short of this
objective due to  uctuations in foreign currency exchange rates. The
Sam’s Club segment fell short of this objective due to increases in
operating, selling, general and administrative expenses (“operating
expenses”).
Diluted Income per Share from Continuing Operations
Fiscal Year Ended January 31,
2009 2008 2007
Diluted income per share
from continuing operations $3.35 $3.16 $2.92
Diluted income per share from continuing operations increased in
 scal 2009 and 2008 as a result of increases in income from continu-
ing operations in conjunction with share repurchases reducing the
number of weighted average shares outstanding.
Return on Investment
Management believes return on investment (“ROI”) is a meaningful
metric to share with investors because it helps investors assess how
e ciently Wal-Mart is employing its assets. ROI was 19.3% for  scal
2009 and 19.6% for  scal 2008. The decrease in ROI in  scal 2009
resulted from our recent investment in Chile and the accrual for
our settlement of 63 wage and hour class action lawsuits, as further
discussed in footnotes 6 and 8, respectively, of the Notes to Consoli-
dated Financial Statements.
We de ne ROI as adjusted operating income (operating income plus
interest income and depreciation and amortization and rent from
continuing operations) for the  scal year or trailing twelve months
divided by average investment during that period. We consider
average investment to be the average of our beginning and ending
total assets of continuing operations plus accumulated depreciation
and amortization less accounts payable and accrued liabilities for
that period, plus a rent factor equal to the rent for the  scal year or
trailing twelve months multiplied by a factor of eight.
ROI is considered a non-GAAP  nancial measure under the SEC’s
rules. We consider return on assets (“ROA”) to be the  nancial mea-
sure computed in accordance with generally accepted accounting
principles (“GAAP”) that is the most directly comparable  nancial
measure to ROI as we calculate that  nancial measure. ROI di ers
from return on assets (income from continuing operations before
minority interest for the  scal year or the trailing twelve months
divided by average of total assets of continuing operations for the
period) because: ROI adjusts operating income to exclude certain
expense items and add interest income; it adjusts total assets from
continuing operations for the impact of accumulated depreciation
and amortization, accounts payable and accrued liabilities; and it
incorporates a factor of rent to arrive at total invested capital.
Although ROI is a standard financial metric, numerous methods
exist for calculating a company’s ROI. As a result, the method used
by management to calculate ROI may di er from the method other
companies use to calculate their ROI. We urge you to understand
the method used by another company to calculate its ROI before
comparing our ROI to that of the other company.
WAL-MART STORES, INC.
OPERATING INCOME
(in millions)
$18,000
$24,000
$12,000
$06,000
007 08 09
Wal-Mart Stores, Inc. operating
income increased 3.9% in  scal
2009, driven by a 7.1% increase
in Walmart U.S.