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Walmart Reports Q3 EPS Of $1.08, Reaffirms Top End Of Full-year EPS Guidance; Company Is Well Positioned For Q4 Holidays

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

The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, which we believe to be the GAAP financial measure most directly comparable to free cash flow, as well as information regarding net cash used in investing activities and net cash used in financing activities.

     
 
For the Nine Months Ended
        October 31,
(Amounts in millions)       2012     2011
   
Net cash provided by operating activities $ 15,907 $ 12,914
Payments for property and equipment         (8,921 )       (9,543 )
Free cash flow       $ 6,986       $ 3,371  
 

Net cash used in investing activities (1)

$ (9,352 ) $ (12,814 )
 
Net cash used in financing activities $ (4,694 ) $ (284 )
 

(1)

“Net cash used in investing activities” includes payments for property and equipment, which is also included in our computation of free cash flow.

Calculation of Return on Investment and Return on Assets

Management believes return on investment (“ROI”) is a meaningful metric to share with investors because it helps investors assess how effectively Walmart is deploying its assets. Trends in ROI can fluctuate over time, as management balances long-term potential strategic initiatives with any possible short-term impacts.

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