Wmt Model Template

WALL ST. TRAINING

document.xls<Historical> Hamilton Lin, CFA, www.wallst-training.com

Wal-Mart Stores, Inc.11-Year Financial Summary

($ in millions, except per share data)Actual CAGR/

Fiscal 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 AvgNet Sales $ 89,051 $ 99,627 $ 112,005 $ 130,522 $ 156,249 $ 180,787 $ 204,011 $ 229,616 $ 256,329 $ 285,222 $ 312,427 13.4%COGS 70,485 78,897 88,163 102,490 121,825 140,720 159,097 178,299 198,747 219,793 240,391 13.1%Operating, SG&A Expenses 14,547 16,437 18,831 21,778 26,025 30,822 35,147 39,983 44,909 51,248 56,733 14.6%Net Income 2,689 2,978 3,424 4,240 5,394 6,087 6,448 7,818 8,861 10,267 11,231 15.4%Diluted EPS $ 0.58 $ 0.65 $ 0.76 $ 0.95 $ 1.21 $ 1.36 $ 1.44 $ 1.76 $ 2.03 $ 2.41 $ 2.68 16.5%Dividends 0.10 0.11 0.14 0.16 0.20 0.24 0.28 0.30 0.36 0.52 0.60 19.6%

Net Sales Growth 13.7% 11.9% 12.4% 16.5% 19.7% 15.7% 12.8% 12.6% 11.6% 11.3% 9.5% 13.4%EPS Growth 12.1% 16.9% 25.0% 27.4% 12.4% 5.9% 22.2% 15.3% 18.7% 11.2% 16.7%

COGS, % of Net Sales 79.2% 79.2% 78.7% 78.5% 78.0% 77.8% 78.0% 77.7% 77.5% 77.1% 76.9% 78.1%Op, SG&A Expenses, % of Net Sales 16.3% 16.5% 16.8% 16.7% 16.7% 17.0% 17.2% 17.4% 17.5% 18.0% 18.2% 17.1%Net Income, % of Net Sales 3.0% 3.0% 3.1% 3.2% 3.5% 3.4% 3.2% 3.4% 3.5% 3.6% 3.6% 3.3%Dividend Growth 10.0% 27.3% 14.3% 25.0% 20.0% 16.7% 7.1% 20.0% 44.4% 15.4% 20.0%Dividend Payout Rate 17.2% 16.9% 18.4% 16.8% 16.5% 17.6% 19.4% 17.0% 17.7% 21.6% 22.4% 18.3%

Current assets of continuing operations 16,779 17,385 18,589 20,064 23,478 25,344 26,615 29,543 34,421 38,854 43,824 Current liabilities of continuing operation 10,944 10,432 13,930 16,155 25,525 28,366 26,795 32,225 37,840 43,182 48,826

Working Capital 5,835 6,953 4,659 3,909 (2,047) (3,022) (180) (2,682) (3,419) (4,328) (5,002) 1,118 (2,294) (750) (5,956) (975) 2,842 (2,502) (737) (909) (674)

PPE, net 18,554 19,935 23,237 25,600 35,533 40,461 45,248 51,374 59,023 68,118 79,290 1,381 3,302 2,363 9,933 4,928 4,787 6,126 7,649 9,095 11,172

Discount Stores 1,995 1,960 1,921 1,869 1,801 1,736 1,647 1,568 1,478 1,353 1,209 Supercenters 239 344 441 564 721 888 1,066 1,258 1,471 1,713 1,980 SAM'S CLUBs 433 436 443 451 463 475 500 525 538 551 567 Neighborhoold Markets - - - 4 7 19 31 49 64 85 100 International Stores 276 314 589 703 991 1,054 1,154 1,272 1,355 1,587 2,285

Note: Fiscal year ends January 31 of the next year.

D Working Capital

D Net PPE

A B C D E F G H I J K L M N O P1

23456789101112131415161718192021222324252627282930313233343536373839

WALL ST. TRAINING

document.xls<IS> Hamilton Lin, CFA, www.wallst-training.com

Wal-Mart Stores, Inc.Income Statement

(All figures in millions, except per share data)Actual Estimated Projected

Fiscal 2003 2004 2005 2006 2007 2008 2009 2010 Projection Notes

RevenueNet Sales 229,616 $ 256,329 $ 285,222 $ 312,427 $ 341,602 $ 372,818 $ 406,141 $ 441,631 $ 479,338 % GrowthOther Income, net 1,961 2,352 2,910 3,227 3,550 3,905 4,295 4,725 5,197 % Growth

Total Revenue $ 258,681 $ 288,132 $ 315,654 $ 345,152 $ 376,723 $ 410,437 $ 446,355 $ 484,535 SumCost of Sales (198,747) (219,793) (240,391) (262,156) (285,367) (310,061) (336,271) (364,024) % of Net Sales

Gross Profit $ 59,934 $ 68,339 $ 75,263 $ 82,996 $ 91,356 $ 100,376 $ 110,084 $ 120,511 SumOperating, SG&A Expenses (44,909) (51,248) (56,733) (62,725) (69,216) (76,231) (83,795) (91,932) % of Revenue

Operating Income $ 15,025 $ 17,091 $ 18,530 $ 20,271 $ 22,140 $ 24,145 $ 26,289 $ 28,579 SumInterest Expense (729) (934) (1,171) (1,493) (1,811) (1,943) (2,036) (2,096) Debt SweepCapital Lease Interest Expense (267) (253) (249) (250) (250) (250) (250) (250) AssumptionInterest Income 164 201 248 257 240 240 240 240 Debt Sweep

Pre-Tax Income $ 14,193 $ 16,105 $ 17,358 $ 18,785 $ 20,320 $ 22,191 $ 24,243 $ 26,473 SumIncome Taxes (5,118) (5,589) (5,803) (6,575) (7,112) (7,767) (8,485) (9,266) Tax RateMinority Interest (193) (214) (249) (324) (373) (428) (493) (567) (652) % Growth

Net Income $ 8,861 $ 10,267 $ 11,231 $ 11,837 $ 12,779 $ 13,932 $ 15,191 $ 16,556 Sum

Diluted Shares Outstanding 4,373 4,266 4,188 4,188 4,188 4,188 4,188 4,188 Assumption

Diluted Earnings per Share $ 2.03 $ 2.41 $ 2.68 $ 2.83 $ 3.05 $ 3.33 $ 3.63 $ 3.95 Net Income / Diluted S/O

EBITDA $ 18,877 $ 21,355 $ 23,247 $ 25,429 $ 27,770 $ 30,278 $ 32,959 $ 35,820 Op. Inc + Depr + AmortEBITDA Margin 7.3% 7.4% 7.4% EBITDA / Revenue

Income Statement Assumptions

Net Sales Growth (0.2)% 11.6% 11.3% 9.5% 9.3% 9.1% 8.9% 8.7% 8.5% Decrease 20 bpsOther Income, net Growth 19.9% 23.7% 10.9% 10.0% 10.0% 10.0% 10.0% 10.0% Assumption

COGS, % of Net Sales (0.2)% 77.5% 77.1% 76.9% 76.7% 76.5% 76.3% 76.1% 75.9% Decrease 20 bpsOp, SG&A, % of Revenue 0.2% 17.4% 17.8% 18.0% 18.2% 18.4% 18.6% 18.8% 19.0% Increase 20 bps

Minority Interest Growth 10.88% 16.36% 30.12% 15.0% 15.0% 15.0% 15.0% 15.0% Assumption

Effective Tax Rate 36.1% 34.7% 33.4% 35.0% 35.0% 35.0% 35.0% 35.0% Assume normalized tax rate

Depreciation & Amortization $ 3,852 $ 4,264 $ 4,717 $ 5,158 $ 5,630 $ 6,133 $ 6,670 $ 7,241 % of RevenueD&A, % of Net Revenue 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%



2345678910111213141516171819202122232425262728293031323334353637383940414243444546

WALL ST. TRAINING

document.xls<BS> Hamilton Lin, www.wallst-training.com

Wal-Mart Stores, Inc.Balance Sheet

($ in millions)Actual Estimated Projected

Fiscal 2004 2005 2006 2007 2008 2009 2010 NotesASSETS

Current AssetsCash & Equivalents $ 5,488 $ 6,414 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 From CF statementReceivables 1,715 2,662 2,911 3,177 3,461 3,764 4,086 365 Days A/R: Revenue * No. Days / 365Inventories 29,762 32,191 34,962 37,901 41,011 44,293 47,750 365 Days Inv: COGS * No. Days / 365Prepaid Expenses and Other 1,889 2,557 2,796 3,052 3,325 3,616 3,925 % of Revenue

Total Current Assets $ 38,854 $ 43,824 $ 46,669 $ 50,130 $ 53,797 $ 57,673 $ 61,761 Sum

Net PPE $ 65,400 $ 75,875 $ 88,217 $ 97,588 $ 107,454 $ 117,784 $ 128,543 Beg Bal - negative CapEx - DeprNet Capital Leases 2,718 3,415 3,415 3,415 3,415 3,415 3,415 Constant; assume no net changesGoodwill 10,803 12,188 12,188 12,188 12,188 12,188 12,188 Constant; assume no acquisitionsOther Assets and Deferred Charges 2,379 2,885 3,155 3,443 3,751 4,080 4,429 % of Revenue

TOTAL ASSETS $ 120,154 $ 138,187 $ 153,643 $ 166,763 $ 180,606 $ 195,140 $ 210,336 Sum

LIABILITIESCurrent Liabilities

Commercial Paper $ 3,812 $ 3,754 $ 3,754 $ 3,754 $ 3,754 $ 3,754 $ 3,754 From Debt SweepRevolver - - 10,407 15,975 20,351 25,631 28,126 From Debt SweepAccounts Payable 21,987 25,373 27,921 30,668 33,623 36,792 40,186 365 Days A/P: Expenses * No. Days / 365Accrued Liabilities 12,120 13,465 14,723 16,070 17,508 19,040 20,669 % of RevenueAccrued Income Taxes 1,281 1,340 1,340 1,340 1,340 1,340 1,340 ConstantCurrent Portion of Long-Term Debt 3,759 4,595 3,320 2,858 4,639 2,877 3,000 From Debt SweepCurrent Portion of Capital Leases 223 299 299 299 299 299 299 Constant; assume no net changes

Total Current Liabilities $ 43,182 $ 48,826 $ 61,765 $ 70,964 $ 81,513 $ 89,734 $ 97,373 Sum

Long-Term Debt $ 20,087 $ 26,429 $ 23,109 $ 20,251 $ 15,612 $ 12,735 $ 9,735 From Debt SweepCapital Leases 3,171 3,742 3,742 3,742 3,742 3,742 3,742 Constant; assume no net changesDeferred Income Taxes & Other 2,978 4,552 4,552 4,552 4,552 4,552 4,552 ConstantMinority Interest 1,340 1,467 1,467 1,467 1,467 1,467 1,467 Constant

TOTAL LIABILITIES $ 70,758 $ 85,016 $ 94,635 $ 100,976 $ 106,886 $ 112,230 $ 116,869 Sum

SHAREHOLDERS' EQUITYCommon Stock $ 423 $ 417 $ 417 $ 417 $ 417 $ 417 $ 417 Held constantAPIC(Additional Paid In Capital) 2,425 2,596 2,596 2,596 2,596 2,596 2,596 Beg Bal + Stock IssuedRetained Earnings 43,854 49,105 54,942 61,722 69,653 78,844 89,400 Beg Bal + Net Inc - Dividends - RepurchasesAccumulated Other Comp. Income 2,694 1,053 1,053 1,053 1,053 1,053 1,053 Constant

TOTAL SHAREHOLDERS' EQUITY $ 49,396 $ 53,171 $ 59,008 $ 65,788 $ 73,719 $ 82,910 $ 93,466 Sum

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 120,154 $ 138,187 $ 153,643 $ 166,763 $ 180,606 $ 195,140 $ 210,336 Sum

Check $ - $ - $ - $ - $ - $ - $ - Calculation

Total Revenue $ 288,132 $ 315,654 $ 345,152 $ 376,723 $ 410,437 $ 446,355 $ 484,535 From Income StatementCost of Sales 219,793 240,391 262,156 285,367 310,061 336,271 364,024 From Income StatementOperating, SG&A Expenses 51,248 56,733 62,725 69,216 76,231 83,795 91,932 From Income StatementTotal Expenses 271,041 297,124 324,881 354,583 386,292 420,066 455,956 Sum of COGS and Op, SG&A

Days Receivable Outstanding 2.2 3.1 3.1 3.1 3.1 3.1 3.1 A/R * 365 / RevenueDays Inventories Outstanding -0.2 49.4 48.9 48.7 48.5 48.3 48.1 47.9 Inventory * 365 / COGS, decrease by .2 daysPrepaid, % of Revenue 0.7% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% Prepaid / RevenueOther Assets, % of Revenue 0.8% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% Other Assets / RevenueDays Payable Outstanding 0.2 29.6 31.2 31.4 31.6 31.8 32.0 32.2 A/P * 365 / Total Expenses, increase by .2 days

A B C D E F G H I J K L M N O P Q1

23456789

10111213141516171819202122232425262728293031323334353637383940414243444546474849505152535455565758

WALL ST. TRAINING

document.xls<BS> Hamilton Lin, www.wallst-training.com

Wal-Mart Stores, Inc.Balance Sheet

($ in millions)Actual Estimated Projected

Fiscal 2004 2005 2006 2007 2008 2009 2010 NotesAccrued Liabilities, % of Revenue 4.2% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% Accrued Liabilities / RevenueNote: Fiscal year ends January 31 of the next year.

A B C D E F G H I J K L M N O P Q1

23456

5960

WALL ST. TRAINING

document.xls<CF> Hamilton Lin, www.wallst-training.com

Wal-Mart Stores, Inc.Cash Flow Statement

($ in millions)Estimated Projected

Fiscal 2006 2007 2008 2009 2010 Calculation

Cash From Operating Activities:Net Income $ 11,837 $ 12,779 $ 13,932 $ 15,191 $ 16,556 From Income StatementPlus: Depreciation & Amortization 5,158 5,630 6,133 6,670 7,241 From Income Statement

Changes in Working Capital:(Increase)/Decrease in Receivables (249) (266) (284) (303) (322) Prior Year less Current Year(Increase)/Decrease in Inventories (2,771) (2,939) (3,110) (3,283) (3,456) Prior Year less Current Year(Increase)/Decrease in Prepaid Expenses and Other (239) (256) (273) (291) (309) Prior Year less Current Year(Increase)/Decrease in Other Assets and Deferred Charge (270) (289) (308) (328) (349) Prior Year less Current YearIncrease/(Decrease) in Accounts Payable 2,548 2,747 2,954 3,170 3,393 Current Year less Prior Year Increase/(Decrease) in Accrued Liabilities 1,258 1,347 1,438 1,532 1,629 Current Year less Prior Year

Total Change in Working Capital $ 278 $ 344 $ 417 $ 497 $ 586 SumTotal Cash From Operating Activities $ 17,274 $ 18,753 $ 20,482 $ 22,359 $ 24,382 Sum

Cash From Investing Activities:(Increase) in Capital Expenditures $ (17,500) $ (15,000) $ (16,000) $ (17,000) $ (18,000) Assumption

Total Cash From Investing Activities $ (17,500) $ (15,000) $ (16,000) $ (17,000) $ (18,000) Sum

Cash From Financing Activities:Issuance of Common Stock $ - $ - $ - $ - $ - AssumptionCommon Stock Dividends (2,500) (2,500) (2,500) (2,500) (2,500) AssumptionNet (Purchase) / Reissuance of Treasury Stock (3,500) (3,500) (3,500) (3,500) (3,500) AssumptionCash Available / (Required) Before Debt $ (6,226) $ (2,247) $ (1,518) $ (641) $ 382 Sum of CFO, CFI and CFF items

Debt Borrowing / (Repayment) 5,812 2,247 1,518 641 (382) From Debt scheduleTotal Cash From Financing Activities $ (188) $ (3,753) $ (4,482) $ (5,359) $ (6,382) Sum of all CFF items, exclude row 30 !!

Beginning Cash Balance $ 6,414 $ 6,000 $ 6,000 $ 6,000 $ 6,000 From Balance SheetChange in Cash (414) - - - - Sum of CFO, CFI and CFF

Ending Cash Balance $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 Sum => This goes to BSAverage Cash Balance 6,207 6,000 6,000 6,000 6,000 Average of Beg and End Balance


A B C D E F G H I J K L M N1

23456789

10111213141516171819202122232425262728293031323334353637383940

WALL ST. TRAINING

document.xls<Debt Sweep> Hamilton Lin, www.wallst-training.com

Wal-Mart Stores, Inc.Debt Schedule


Fiscal 2006 2007 2008 2009 2010

Cash Available/(Required) Before Debt $ (6,226) $ (2,247) $ (1,518) $ (641) $ 382 Plus: Beginning Cash on Balance Sheet 6,414 6,000 6,000 6,000 6,000 Less: Minimum Cash Balance avg of 05 and 06 (6,000) (6,000) (6,000) (6,000) (6,000)Mandatory Debt Repayment (4,595) (3,320) (2,858) (4,639) (2,877)

Cash Before Discretionary Debt Repayment / (Borrowing) $ (10,407) $ (5,567) $ (4,376) $ (5,280) $ (2,495)

Tranche 1Beginning Balance $ 31,024 $ 26,429 $ 23,109 $ 20,251 $ 15,612

Mandatory Debt Repayment (4,595) (3,320) (2,858) (4,639) (2,877)Ending Balance $ 31,024 $ 26,429 $ 23,109 $ 20,251 $ 15,612 $ 12,735 Average Balance $ 28,727 $ 24,769 $ 21,680 $ 17,932 $ 14,174

Tranche 2Beginning Balance $ - $ - $ - $ - $ -

Mandatory Debt Repayment - - - - - Ending Balance $ - $ - $ - $ - $ - $ - Average Balance $ - $ - $ - $ - $ -

Commercial PaperBeginning Balance $ 3,754 $ 3,754 $ 3,754 $ 3,754 $ 3,754

Mandatory Debt Repayment - - - - - Ending Balance $ 3,754 $ 3,754 $ 3,754 $ 3,754 $ 3,754 $ 3,754 Average Balance $ 3,754 $ 3,754 $ 3,754 $ 3,754 $ 3,754

RevolverBeginning Balance $ - $ 10,407 $ 15,975 $ 20,351 $ 25,631

Discretionary Sweep 10,407 5,567 4,376 5,280 2,495 Ending Balance $ - $ 10,407 $ 15,975 $ 20,351 $ 25,631 $ 28,126 Average Balance $ 5,204 $ 13,191 $ 18,163 $ 22,991 $ 26,878

Total Debt, Beginning Balance 34,778 40,590 42,838 44,356 44,997 Less: Mandatory Debt Repayment $ (4,595) $ (3,320) $ (2,858) $ (4,639) $ (2,877)Revolver Debt Borrowing / (Repayment) $ 10,407 $ 5,567 $ 4,376 $ 5,280 $ 2,495

Total Debt, Ending Balance 40,590.4 42,837.5 44,355.5 44,996.8 44,614.6 Less: Current Portion (3,320) (2,858) (4,639) (2,877) (3,000)Less: Commercial Paper (3,754) (3,754) (3,754) (3,754) (3,754)Less: Revolver (10,407) (15,975) (20,351) (25,631) (28,126)

Total Long Term Debt $ 23,109 $ 20,251 $ 15,612 $ 12,735 $ 9,735

Beginning Cash Balance $ 6,414 $ 6,000 $ 6,000 $ 6,000 $ 6,000 Ending Cash Balance 6,000 6,000 6,000 6,000 6,000 Average Cash Balance 6,207 6,000 6,000 6,000 6,000 Note: Fiscal year ends January 31 of the next year.

A B C D E F G H I J K L M1

234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950

WALL ST. TRAINING


Wal-Mart Stores, Inc.Interest Schedule


Fiscal Year Ending October 31, 2006 2007 2008 2009 2010

Interest RatesCash & Cash Equivalents 4.0% 4.0% 4.0% 4.0% 4.0%Tranche 1 4.4% 4.4% 4.4% 4.4% 4.4%Tranche 2 5.0% 5.0% 5.0% 5.0% 5.0%Commercial Paper 3.4% 3.4% 3.4% 3.4% 3.4%Revolver 5.0% 5.0% 5.0% 5.0% 5.0%

Interest Income 1 (1 = Beginning balanceCash & Cash Equivalents 2 = Average Balance) $ 257 $ 240 $ 240 $ 240 $ 240

Interest ExpenseTranche 1 $ 1,365 $ 1,163 $ 1,017 $ 891 $ 687 Tranche 2 - - - - - Commercial Paper 128 128 128 128 128 Revolver - 520 799 1,018 1,282

Total Interest Expense $ 1,493 $ 1,811 $ 1,943 $ 2,036 $ 2,096


A B C D E F G H I J K L M52

53545556575859606162636465666768697071727374757677

WALL ST. TRAINING


Calculation

From CF statementBalance SheetAssumptionSum of mandatory pmts belowSum

Equal to prior year's end balanceGiven, Debt FootnoteSumAverage of Beg and End Balance

Equal to prior year's end balanceAssumptionSumAverage of Beg and End Balance

Equal to prior year's end balanceBalancing equationSumAverage of Beg and End Balance

Equal to prior year's end balanceBalancing equationSumAverage of Beg and End Balance

Sum of prior year's end balancesSum of mandatory pmts, to CFReference revolver sweep, to CFSum

From CF statementFrom CF statementCalculation

N1

234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950

WALL ST. TRAINING


Calculation

AssumptionWtg'ed avg estimate, 10K p 39AssumptionGiven, Debt FootnoteAssumption

If switch = 1, take interest rate *beginning balance, else rate *average balance

N52

53545556575859606162636465666768697071727374757677

WALL ST. TRAINING

document.xls<DCF> Hamilton Lin, CFA, www.wallst-training.com

Wal-Mart Stores, Inc.Discounted Cash Flow Analysis

($ in millions, except per share data)Estimated Projected

Fiscal 2006 2007 2008 2009 2010

EBITDA $ 25,429 $ 27,770 $ 30,278 $ 32,959 $ 35,820 EBIT 20,271 22,140 24,145 26,289 28,579

Less: Cash Taxes @ 35.0% 35.0% (7,095) (7,749) (8,451) (9,201) (10,003)Tax-effected EBIT $ 13,176 $ 14,391 $ 15,694 $ 17,088 $ 18,577

Plus: Depreciation & Amortization 5,158 5,630 6,133 6,670 7,241 Less: Capital expenditures (17,500) (15,000) (16,000) (17,000) (18,000)Plus / (Less): Change in net working capital 278 344 417 497 586

Unlevered free cash flow $ 1,112 $ 5,365 $ 6,244 $ 7,255 $ 8,403

WACC @ 10.0%NPV of Unlevered free cash flow @ 10.0% $ 20,309

EBITDA MULTIPLE METHODTerminal Value Undiscounted Discounted

EBITDA Multiple 8.0x $ 286,561 $ 177,932 10.0x 358,201 222,414

DCF Range (Implied Enterprise Value) $ 198,241 $ 242,724 Total Debt 36245Cash -6414

$ 168,410 $ 212,893 Net Debt 29831 $ 40.21 $ 50.83 S/Out 4188

PERPETUITY GROWTH METHODTerminal Value Undiscounted Discounted

Perpetuity Growth Rate 3.0% $ 273,341 $ 169,724 4.0% $ 321,994 $ 199,933

DCF Range (Implied Enterprise Value) $ 190,033 $ 220,243

$ 160,202 $ 190,412 $ 38.25 $ 45.47

Note: Fiscal year ends January 31 of the next year.Note: Present Values as of January 31, 2005.(a) Assumes $00M of net debt.(b) Assumes 00.0MM shares outstanding.

Equity Value (a)

Implied Price per Share (b)

Equity Value (a)

Implied Price per Share (b)

–

–

–

–

––––

–

––––


234567891011121314151617181920212223242526272829303132333435363738394041424344

WALL ST. TRAINING

document.xlsRetail Comps Hamilton Lin, CFA, www.wallst-training.com

Analysis of Selected Publicly Traded Discount Retailers – Illustrative Training Template Only!Financial Summary

(All figures in millions, except for per share data)Stock Price Equity Enterprise Revenue EBITDA EBIT EPS

Company Ticker 4/10/06 Value 2005A 2006E 2007P 2005A 2006E 2007P 2005A 2006E 2007P 2005A 2006E

Costco COST $ 54.43 $ 26,087 $ 23,235 $ 55,431 $ 61,218 $ 67,658 $ 2,062 $ 2,319 $ 2,614 $ 1,566 $ 1,769 $ 2,001 $ 2.16 $ 2.37 JC Penney JCP 58.47 13,830 14,256 18,781 19,481 20,093 1,954 2,135 2,296 1,582 1,750 1,878 3.63 4.25 Kohl's KSS 53.95 18,805 19,515 13,402 15,096 17,120 1,755 2,026 2,373 1,416 1,633 1,909 2.43 2.86 Sears SHLD 138.31 21,993 21,023 54,261 53,700 53,748 2,969 3,502 4,106 2,148 2,096 2,363 6.03 7.72 Target TGT 51.62 45,347 53,470 52,620 59,050 65,539 5,732 6,466 7,241 4,323 4,916 5,464 2.71 3.12

TOTAL $ 126,062 $ 131,499

Wal-Mart WMT $ 45.70 $ 190,459 $ 220,290 $ 315,654 $ 352,541 $ 388,813 $ 23,299 $ 25,420 $ 29,002 $ 18,582 $ 20,650 $ 23,126 $ 2.63 $ 2.92

Source: Publicly available SEC filings, Bloomberg and IBES estimates.Note: Figures have NOT been adjusted for extraordinary and non-recurring items and should be!Note: All years ending approximately January 31 of the next year.(a) Enterprise Value calculated as Equity Value plus Net Debt (Total Debt less Cash & Cash Equivalents).

Value (a)

A B C D E G K L M N O P Q R S T U V W X Y1

234567891011121314151617181920212223242526272829

F7

Should be latest Basic Shares Outstanding from front of latest 10K or 10Q or proxy (whichever is later) + effect of diluted shares due to treasury adjusted options

H7

From latest balance sheet, EXCLUDING capital leases and INCLUDING correct minority interest figure

I7

From latest balance sheet, don't forget to include short term investments and exclude restricted cash

L9

Want actuals for 12 months ending 1/31/06, so take: 7/12 of 8/05 actual + 5/12 of 8/06 estimate (should really be straight from 10Q filings, but for illustrative training purposes and simplicity in this exercise, take estimate)

M9

Want estimates for 12 months ending 1/31/07, so take: 7/12 of 8/06 estimate + 5/12 of 8/07 estimate

N9


P9


Q9


R9


T9


U9


V9


X9


Y9


L12

Given since Pro Forma figure including full year of Kmart and Sears results

WALL ST. TRAINING


EPS2007P

$ 2.83 4.81 3.44 9.26 3.57

$ 3.34

Z1

234567891011121314151617181920212223242526272829

Z9


WALL ST. TRAINING


Analysis of Selected Publicly Traded Discount Retailers – Illustrative Training Template Only!Valuation Multiples

Revenue/ Enterprise Value as a Multiple of Stock Price as a Multiple of2005 Margins Number Store Revenue EBITDA EBIT Earnings per Share

Company Ticker EBITDA EBIT Stores ($MM's) 2005A 2006E 2007P 2005A 2006E 2007P 2005A 2006E 2007P 2005A 2006E

Costco COST 3.7% 2.9% 471 $ 117.7 0.42x 0.38x 0.34x 11.3x 10.0x 8.9x 14.8x 13.1x 11.6x 25.2x 23.0xJC Penney JCP 10.4% 9.0% 1,019 18.4 0.76 0.73 0.71 7.3 6.7 6.2 9.0 8.1 7.6 16.1 13.8 Kohl's KSS 13.1% 10.8% 732 18.3 1.46 1.29 1.14 11.1 9.6 8.2 13.8 12.0 10.2 22.2 18.9 Sears SHLD 5.5% 3.9% 3,843 14.1 0.39 0.39 0.39 7.1 6.0 5.1 9.8 10.0 8.9 22.9 17.9 Target TGT 10.9% 8.3% 1,397 37.7 1.02 0.91 0.82 9.3 8.3 7.4 12.4 10.9 9.8 19.0 16.5

HIGH 13.1% 10.8% $ 117.7 1.46x 1.29x 1.14x 11.3x 10.0x 8.9x 14.8x 13.1x 11.6x 25.2x 23.0xAVERAGE 8.7% 7.0% 41.2 0.81 0.74 0.68 9.2 8.1 7.2 12.0 10.8 9.6 21.1 18.0

MEDIAN 10.4% 8.3% 18.4 0.76 0.73 0.71 9.3 8.3 7.4 12.4 10.9 9.8 22.2 17.9 LOW 3.7% 2.9% 14.1 0.39 0.38 0.34 7.1 6.0 5.1 9.0 8.1 7.6 16.1 13.8

Wal-Mart WMT 7.4% 5.9% 6,141 $ 51.4 0.70x 0.62x 0.57x 9.5x 8.7x 7.6x 11.9x 10.7x 9.5x 17.4x 15.7x

Source: Publicly available SEC filings, Bloomberg and IBES estimates.Note: Figures have NOT been adjusted for extraordinary and non-recurring items and should be!Note: All years ending approximately January 31 of the next year.(a) Enterprise Value calculated as Equity Value plus Net Debt (Total Debt less Cash & Cash Equivalents).

AA AB AC AD AE AF AG AH AI AJ AK AL AM AN AO AP AQ AR AS AT AU AV AW1

234567891011121314151617181920212223242526272829

WALL ST. TRAINING


Stock Price as a Multiple ofEarnings per Share

2007P

19.2x 12.2 15.7 14.9 14.5

19.2x 15.3 14.9 12.2

13.7x

AX1

234567891011121314151617181920212223242526272829

WALL ST. TRAINING

document.xlsComments Hamilton Lin, CFA, www.wallst-training.com

Should be latest BasicShares Outstanding from front of latest 10K or 10Q or proxy (whichever is later) + effect of diluted shares due to treasury adjusted options

F7:

From latest balance sheet, EXCLUDING capital leases and INCLUDING correct minority interest figureH7:

From latest balance sheet, don't forget to include short term investments and exclude restricted cashI7:

Want actuals for 12 months ending 1/31/06, so take:7/12 of 8/05 actual +5/12 of 8/06 estimate (should really be straight from 10Q filings, but for illustrative training purposes and simplicity in this exercise, take estimate)

L9:

Given since Pro Forma figure including full year of Kmart and Sears resultsL12:

Want estimates for 12 months ending 1/31/07, so take:7/12 of 8/06 estimate +5/12 of 8/07 estimate

M9:


N9:


P9:


Q9:


R9:


T9:


U9:


V9:


X9:


Y9:


Z9:

WALL ST. TRAINING

document.xlsRef Range Hamilton Lin, CFA, www.wallst-training.com

Wal-Mart Stores, Inc.Illustrative Reference Range

(All figures in millions, except per share data)Relevant Multiple Implied Enterprise Implied Equity Implied Price per

Methodology Statistic Range Value Value Share

Analysis of Selected Publicly Traded Discount RetailersNet Revenue 2005A $ 315,654 0.75x – 0.80x $ 236,741 – $ 252,523 $ 206,910 – $ 222,692 $ 49.41 – $ 53.17

2006E 345,152 0.70x – 0.75x $ 241,606 – $ 258,864 $ 211,775 – $ 229,033 $ 50.57 – $ 54.69 2007P 376,723 0.65x – 0.70x $ 244,870 – $ 263,706 $ 215,039 – $ 233,875 $ 51.35 – $ 55.84

EBITDA 2005A $ 23,247 9.0x – 9.5x $ 209,223 – $ 220,847 $ 179,392 – $ 191,016 $ 42.83 – $ 45.61 2006E 25,429 8.0x – 8.5x $ 203,429 – $ 216,143 $ 173,598 – $ 186,312 $ 41.45 – $ 44.49 2007P 27,770 7.0x – 7.5x $ 194,390 – $ 208,275 $ 164,559 – $ 178,444 $ 39.29 – $ 42.61

EBIT 2005A $ 18,530 12.0x – 12.5x $ 222,360 – $ 231,625 $ 192,529 – $ 201,794 $ 45.97 – $ 48.18 2006E 20,271 10.5x – 11.0x $ 212,843 – $ 222,979 $ 183,012 – $ 193,148 $ 43.70 – $ 46.12 2007P 22,140 9.5x – 10.0x $ 210,334 – $ 221,404 $ 180,503 – $ 191,573 $ 43.10 – $ 45.74

EPS 2005A $ 2.68 21.5x – 22.5x $ 271,298 – $ 282,529 $ 241,467 – $ 252,697 $ 57.66 – $ 60.34 2006E 2.83 17.5x – 18.0x $ 236,986 – $ 242,905 $ 207,155 – $ 213,074 $ 49.46 – $ 50.88 2007P 3.05 15.0x – 15.5x $ 221,519 – $ 227,908 $ 191,688 – $ 198,077 $ 45.77 – $ 47.30

Reference Range $ 45.00 $ 55.00

Analysis of Selected Retail Acquisitions2005A Net Revenue $ 315,654 0.75x – 1.00x $ 236,741 – $ 315,654 $ 206,910 – $ 285,823 $ 49.41 – $ 68.25

EBITDA 23,247 9.0x – 9.5x $ 209,223 – $ 220,847 $ 179,392 – $ 191,016 $ 42.83 – $ 45.61 EBIT 18,530 14.0x – 15.0x $ 259,420 – $ 277,950 $ 229,589 – $ 248,119 $ 54.82 – $ 59.25 EPS 2.68 19.5x – 22.5x $ 248,835 – $ 282,529 $ 219,004 – $ 252,697 $ 52.29 – $ 60.34


Analysis of Selected Premiums PaidStock Price 4 Weeks Prior $ 45.33 10.0% – 20.0% – – –4/7/2006 1 Day Prior 46.02 5.0% – 15.0% – – –


Discounted Cash Flow AnalysisEBITDA Multiple Method 8.0x – 10.0x $ 198,241 – $ 242,724 $ 168,410 – $ 212,893 $ 40.21 – $ 50.83 Perpetuity Growth Method 3.0% – 4.0% 190,033 – 220,243 160,202 – 190,412 38.25 – 45.47



A B C D E F G H I J K L M N O P Q R S T U1

23456789101112131415161718192021222324252627282930313233343536373839404142434445464748495051

WALL ST. TRAINING

document.xlsFootball Hamilton Lin, CFA, www.wallst-training.com

Wal-Mart Stores, Inc.Illustrative Reference Range

min max52-week Trading Range $ 42.49 8.08 $ 50.57 Analysis of Selected Publicly Traded Discount Retailers $ 45.00 10.00 $ 55.00 Analysis of Selected Acquisitions $ 50.00 10.00 $ 60.00 Analysis of Selected Premiums Paid $ 50.00 5.00 $ 55.00 Discounted Cash Flow Analysis $ 40.00 10.00 $ 50.00 Reference Range $ 45.00 $ 55.00

Current Stock Price $ 45.70 0 $ 45.70 1

52-week Trading RangeAnalysis of Selected Publicly Traded Discount RetailersAnalysis of Selected AcquisitionsAnalysis of Selected Premiums PaidDiscounted Cash Flow AnalysisReference Range

$30.00 $35.00 $40.00 $45.00 $50.00 $55.00 $60.00 $65.00 $70.00

$42.49 $45.00

$50.00 $50.00

$40.00 $45.00

$50.57 $55.00

$60.00 $55.00

$50.00 $55.00

Illustrative WMT Price per Share

METHODOLOGY

A B C D E F G H I J1

2345678910111213141516171819202122232425262728293031323334353637383940414243444546

Treasury Method Calculation

Number of Options 10.000 Exercise Price $ 45.00 Current Stock Price $ 100.00

Proceeds to Company $ 450.0 Proceeds to Holder $ 1,000.0 Difference $ 550.0 Share Dilution 5.500

Treasury Method 5.500 =max(0, # options * (1 - Exercise Price / Current Price))

The max function sets the equation to zero in the event that the exerciseprice is greater than the current stock price, in which event, the optionis out-of-the-money and does not cause extra shares to be issued.Try the math yourself.

Apply the formula for EACH tranche of options

Treasury Adjusted Diluted Shares Outstanding =Basic Shares Outstanding + MAX ( 0, # options * (1 - Exercise Price / Current Price))

WALL ST. TRAINING ® (212) 537-6631 Hamilton Lin, [email protected] President

[email protected]

Wall St. Training is a registered servicemark of HL Capital Partners, Ltd. www.wallst-training.com

Documents

Wmt Model Template