06 06 Football Field Walmart Model Valuation Before

Wal-Mart Stores, Inc.
- Operating Model and Valuation
Wal-Mart Stores, Inc. - Summary of Financial Statements

($ in Millions, Except per Share Figures)
Historical Projected
January 31, 2011 2012 2013 2014 2015 2016 2017
Revenue: $ 421,849 $ 446,950 $ 471,317 $ 493,709 $ 515,675 $ 534,773 $ 551,404

Revenue Growth: 3.4 % 6.0 % 5.5 % 4.8 % 4.4 % 3.7 % 3.1 %
Operating Income: 25,542 26,558 28,272 29,615 30,932 32,078 33,076

Operating Margin: 6.1 % 5.9 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 %
Net Income: 15,355 15,766 17,215 18,084 18,983 19,592 20,265

Earnings Per Diluted Share: $ 4.18 $ 4.54 $ 5.12 $ 5.55 $ 6.03 $ 6.45 $ 6.92
Cash Flow from Operations: 23,643 24,255 27,687 29,119 30,368 31,304 32,171
Cash Flow from Investing: (12,193) (16,609) (14,139) (14,814) (15,477) (16,053) (16,555)
Cash Flow from Financing: (12,028) (8,458) (9,908) (13,623) (12,948) (14,383) (11,423)
Total Assets: 180,782 193,406 204,606 213,521 223,900 233,126 245,593

Total Debt + Capital Leases: 49,864 53,427 56,847 57,074 58,542 59,187 63,452
Cash & Cash-Equivalents: 7,395 6,550 10,157 10,806 12,717 13,553 17,713
EBITDA: $ 33,183 $ 34,688 $ 36,827 $ 38,576 $ 40,293 $ 41,785 $ 43,084

EBITDA Margin: 7.9 % 7.8 % 7.8 % 7.8 % 7.8 % 7.8 % 7.8 %
Wal-Mart Stores, Inc. - Valuation Multiples
Historical Projected
January 31, 2011 2012 2013 2014 2015 2016 2017
EV / Revenue: 0.7 x 0.6 x 0.6 x 0.6 x 0.6 x 0.6 x

EV / EBITDA: 8.8 x 8.3 x 7.9 x 7.5 x 7.3 x 7.1 x
P / E: 16.0 x 14.6 x 13.9 x 13.3 x 12.9 x 12.4 x
Graphs and Analysis of Financial Model Output - Wal-Mart Stores, Inc.
Wal-Mart: Revenue vs. Gross Margins Wal-Mart: Rev

$600 B 25.4 % $600 B
$535 B $551 B
$516 B
$494 B
$500 B $471 B 25.3 % $500 B $47
$447 B $447 B
$422 B $422 B
Revenue and EBITDA

$400 B 25.2 % $400 B
Gross Margins
Revenue
$300 B 25.1 % $300 B
$200 B 25.0 % $200 B
$100 B 24.9 % $100 B

$33 B $35 B
$0 B 24.8 % $0 B
1/1/2011 1/1/2013 1/1/2015 1/1/2017 1/1/2011 1/1
Revenue Gros s Profit Ma rgi n Revenue
Wal-Mart US Stores: Square Feet and Sales Per Square Foot

700 K $430
680 K 674 K $428

665 K
Sales Per Square Foot

660 K 656 K $426
646 K
Total Square Feet
640 K 637 K $424

627 K
620 K 617 K $422
606 K
600 K $420
580 K $418
560 K $416
1/1/2010 1/1/2012 1/1/2014 1/1/2016
Total Square Feet, US Stores Sa l es Per Squa re Foot
Wal-Mart Stores, Inc. - Valuation Graphs and Analysis
Annual Revenue, FY 2013 - 2014 Annual EB

$600 B $45 B
$494 B $40 B
$500 B
$35 B
$471 B
$400 B $30 B
$25 B
$300 B
$20 B
$200 B $15 B
$116 B $10 B
$100 B $76 B
$107 B $5 B $2 B $2 B $3 B $3 B
$18 B $20 B $73 B
$0 B $19KSS
B $0 B
$16 DG
B TGT COST WMT DG KSS
FY 2013 FY 2014
Projected Revenue Growth, FY 2013 - 2014 Projected EBITD

12% 12%
10% 10% 10%

10%
9%
8% 8%
6% 6%
5%
4% 4% 4%
2% 1% 2% 1%
0% 0%
KSS TGT WMT COST DG KSS TGT
FY 2014 Revenue Multiples FY 2014

1.2 x 12.0 x
1.0 x
1.0 x 10.0 x
0.8 x
0.8 x 0.7 x 8.0 x 7.4 x
0.6 x
0.6 x 6.0 x
4.7 x
0.4 x 0.4 x 4.0 x
0.2 x 2.0 x
0.0 x 0.0 x
0.4 x 0.4 x 4.0 x
0.2 x 2.0 x
0.0 x 0.0 x
Wal-Mart: Revenue, EBITDA, and Margins
$600 B $551 B 7.9 %
$535 B
$516 B 7.9 %
$494 B
$500 B $471 B
$447 B 7.8 %
$422 B
$400 B 7.8 %
EBITDA Margins
7.8 %
$300 B
7.8 %
$200 B 7.8 %
7.7 %
$100 B
$33 B $35 B $37 B $39 B $40 B $42 B $43 B 7.7 %
$0 B 7.7 %
1/1/2011 1/1/2013 1/1/2015 1/1/2017
Revenue EBITDA EBITDA Margi n
Annual EBITDA, FY 2013 - 2014
$39 B
$37 B
$8 B $8 B
$3 B $3 B $4 B $4 B
$2 B $2 B
DG KSS TGT COST WMT

FY 2013 FY 2014
Projected EBITDA Growth, FY 2013 - 2014
10%
9%
5%
4%
1%
KSS TGT WMT COST DG
FY 2014 EBITDA Multiples
9.6 x
8.8 x
7.9 x
7.4 x
4.7 x
KSS TGT WMT COST DG

KSS TGT WMT COST DG
Wal-Mart Stores, Inc. - Operating Model and Valuation
Standalone Operating Model - Assumptions - Wal-Mart Stores, Inc.

Company Name: Wal-Mart Stores, Inc.

Ticker: WMT
Current Share Price: $ 73.26
Last Historical Year: 1/31/2012
Valuation Date: 3/4/2013
Allow Circular References? No
Operating Case: 2 Base

1 Conservative
2 Base
3 Management
Units: 1,000,000
Units for Square Feet: 1,000
Revenue Scenarios - Wal-Mart Stores, Inc.

Historical
1/31/2009 1/31/2010 1/31/2011 1/31/2012 1/31/2013
Total Revenue, Selected Case: $ 408,085 $ 421,849 $ 446,950 $ 471,317
US Stores - Sales ($MM): $ 259,919 $ 260,261 $ 264,186 $ 268,413

US Stores Sales Growth %: 0.1 % 1.5 % 1.6 %
US Stores - Square Feet: 592,256 605,852 617,067 626,686 636,713
US Stores - $ per Sq. Ft.: $ 429.01 $ 421.77 $ 421.56 $ 421.56
US Stores - Square Feet - YoY Growth:

Conservative Case: 2.3 % 1.9 % 1.6 % 1.4 %
Base Case: 2.3 % 1.9 % 1.6 % 1.6 %
Management Case: 2.3 % 1.9 % 1.6 % 1.7 %
Selected Case: Base 1.6 %
US Stores - $ per Sq. Ft. - YoY Growth:

Conservative Case: (1.7%) (0.0%) 0.0 %
Base Case: (1.7%) (0.0%) 0.0 %
Management Case: (1.7%) (0.0%) 0.0 %
Int'l Stores - Sales ($MM): $ 97,407 $ 109,232 $ 125,873 $ 142,614

Int'l Stores Sales Growth %: 12.1 % 15.2 % 13.3 %
Int'l Stores - Square Feet: 244,802 265,846 286,680 328,887 361,776
Int'l Stores - $ per Sq. Ft.: $ 366.40 $ 381.02 $ 382.72 $ 394.21
Int'l Stores - Square Feet - YoY Growth:

Conservative Case: 8.6 % 7.8 % 14.7 % 9.0 %
Base Case: 8.6 % 7.8 % 14.7 % 10.0 %
Management Case: 8.6 % 7.8 % 14.7 % 11.0 %
Int'l Stores - $ per Sq. Ft. - YoY Growth:

Conservative Case: 4.0 % 0.4 % 2.0 %
Base Case: 4.0 % 0.4 % 3.0 %
Management Case: 4.0 % 0.4 % 3.5 %
Other - Sales ($MM): $ 47,806 $ 49,459 $ 53,795 $ 57,308

Other Sales Growth %: 3.5 % 8.8 % 6.5 %
Other - Square Feet: 80,986 80,539 81,202 81,586 81,994
Other - $ per Sq. Ft.: $ 593.58 $ 609.09 $ 659.37 $ 698.93
Other - Square Feet - YoY Growth:

Conservative Case: (0.6%) 0.8 % 0.5 % 0.4 %
Base Case: (0.6%) 0.8 % 0.5 % 0.5 %
Management Case: (0.6%) 0.8 % 0.5 % 0.7 %
Other - $ per Sq. Ft. - YoY Growth:

Conservative Case: 2.6 % 8.3 % 4.0 %
Base Case: 2.6 % 8.3 % 6.0 %
Management Case: 2.6 % 8.3 % 8.0 %
Membership Fees ($MM): $ 2,953 $ 2,897 $ 3,096 $ 2,982

Income Statement - Wal-Mart Stores, Inc.

($ in Millions, Except per Share Figures) Historical
1/31/2011 1/31/2012 1/31/2013
Revenue: $ 421,849 $ 446,950 $ 471,317

Revenue Growth: 6.0 % 5.5 %
Cost of Revenue: 314,946 335,127 352,638
Cost of Revenue % Revenue: 74.7 % 75.0 % 74.8 %
Gross Profit: 106,903 111,823 118,679

Gross Margin: 25.3 % 25.0 % 25.2 %
Sales, General & Administrative Expenses: 81,361 85,265 90,408

% Revenue: 19.3 % 19.1 % 19.2 %
Operating Income: 25,542 26,558 28,272

Investment Income: 201 162 131
Interest Expense: (2,205) (2,322) (2,137)
Pre-Tax Income: 23,538 24,398 26,265
Provision for Income Taxes: 7,579 7,944 8,405
% Pre-Tax Income: 32.2 % 32.6 % 32.0 %
Consolidated Net Income: $ 15,959 $ 16,454 $ 17,861

Less: Noncontrolling Interest Earnings: (604) (688) (646)
Net Income Attributable to Parent: $ 15,355 $ 15,766 $ 17,215
Diluted Shares: 3,670.00 3,474.00 3,364.80

Diluted Earnings per Share (EPS): $ 4.18 $ 4.54 $ 5.12
EBITDA: $ 33,183 $ 34,688 $ 36,827

EBITDA Margin: 7.9 % 7.8 % 7.8 %
EBIT: $ 25,542 $ 26,558 $ 28,272
EBIT Margin: 6.1 % 5.9 % 6.0 %
Balance Sheet - Wal-Mart Stores, Inc.

1/31/2011 1/31/2012 1/31/2013
Assets:
Current Assets:
Cash and Cash Equivalents: $ 7,395 $ 6,550 $ 10,157
Accounts Receivable, Net: 5,089 5,937 5,957
Inventory: 36,437 40,714 41,820
Prepaid Expenses & Other: 3,091 1,774 2,658
Total Current Assets: 52,012 54,975 60,592
Long-Term Assets:
Net PP&E: 105,098 109,603 114,731
Goodwill: 16,763 20,651 20,651
Capital Lease Assets: 2,780 2,721 2,721
Other Long-Term Assets: 4,129 5,456 5,912
Total Long-Term Assets: 128,770 138,431 144,015
Total Assets: $ 180,782 $ 193,406 $ 204,606
Liabilities & Shareholders' Equity

Current Liabilities:
Revolver / Short-Term Debt: $ 1,031 $ 4,047 $ 4,797
Accounts Payable: 33,676 36,608 38,009
Accrued Liabilities & Other: 18,748 18,180 20,055
Accrued Income Taxes: 157 1,164 252
Total Current Liabilities: 53,612 59,999 63,113
Long-Term Liabilities:
Total Long-Term Debt (All Portions): 45,347 46,045 49,070
Total Capital Leases (All Portions): 3,486 3,335 2,980
Deferred Income Taxes: 6,682 7,862 8,778
Redeemable Noncontrolling Interests: 408 404 404
Total Long-Term Liabilities: 55,923 57,646 61,232
Total Liabilities: $ 109,535 $ 117,645 $ 124,346
Equity:
Common Stock & APIC: 3,929 4,034 4,034
Treasury Stock: - - (8,000)
Retained Earnings: 63,967 68,691 80,578
Accumulated Other Comprehensive Income: 646 (1,410) (1,443)
Total Shareholders' Equity: 68,542 71,315 75,169
Noncontrolling Interests: 2,705 4,446 5,092
Total Equity: $ 71,247 $ 75,761 $ 80,261
Total Liabilities & Equity: $ 180,782 $ 193,406 $ 204,606
Balance Check: OK! OK! OK!

Cash Flow Statement - Wal-Mart Stores, Inc.

1/31/2011 1/31/2012 1/31/2013
Net Income: $ 15,959 $ 16,454 $ 17,861

Adjustments to Reconcile Net Income:
Depreciation & Amortization: 7,641 8,130 8,555
Goodwill Impairment: - - -
Deferred Income Taxes: 651 1,050 916
Changes in Operating Assets & Liabilities:
Accounts Receivable, Net: (733) (796) (20)
Prepaid Expenses & Other: 1,087 398 (884)
Inventory: (3,205) (3,727) (1,106)
Accounts Payable: 2,676 2,687 1,401
Accrued Liabilities & Income Taxes: (433) 59 963
Net Cash Provided by Operating Activities: 23,643 24,255 27,687
Cash Flow from Investing:

Capital Expenditures, Net: (12,699) (13,510) (14,217)
Sale of Property & Equipment: 489 580 535
Acquisitions, Net of Cash Acquired: (202) (3,548) (500)
Acquisitions of Capital Lease Assets: - - -
Other Investing Activities, Net: 219 (131) 44
Net Cash Used in Investing Activities: (12,193) (16,609) (14,139)
Cash Flow from Financing:

Net Change In Short-Term Borrowings: 503 3,019 750
Proceeds From Issuance Of Long-Term Debt: 11,396 5,050 5,000
Payments Of Long-Term Debt: (4,080) (4,584) (1,975)
Common Stock Cash Dividends: (4,437) (5,048) (5,328)
Common Stock Issued: - - -
Common Stock Repurchased: (14,776) (6,298) (8,000)
Payment Of Capital Lease Obligations (363) (355) (355)
Other Financing Activities, Net: (271) (242) -
Net Cash Used in Financing Activities: (12,028) (8,458) (9,908)
Effect of Exchange Rates: 66 (33) (33)

Net Change in Cash: $ (512) $ (845) $ 3,607
Beginning Cash Balance: 7,907 7,395 6,550
Ending Cash Balance: $ 7,395 $ 6,550 $ 10,157
Operating Model Assumptions - Wal-Mart Stores, Inc.

1/31/2010 1/31/2011 1/31/2012 1/31/2013
Days in Year: 365 365 366
Effective Cash Interest Rate: 2.7% 2.5% 2.0%

Effective Debt Interest Rate: 4.4% 4.3% 4.0%
Accounts Receivable % Sales: 1.2% 1.3% 1.3%

Accounts Receivable Days: 4.4 4.8 4.6
Inventory % COGS: 11.6% 12.1% 11.9%
Prepaid Expenses % OpEx: 3.8% 2.1% 2.9%
Accounts Payable % COGS: 10.7% 10.9% 10.8%

Accounts Payable Days: 39.0 39.9 39.4
Accrued Liabilities % OpEx: 23.0% 21.3% 22.2%
Accrued Income Taxes % Total Taxes: 2.1% 14.7% 3.0%
Depreciation & Amortization % Revenue: 1.8% 1.8% 1.8%

Deferred Income Taxes % Total Taxes: 8.6% 13.2% 10.9%
Capital Expenditures % Revenue: 3.0% 3.0% 3.0%
Dividends Per Common Share: $ 1.09 $ 1.21 $ 1.46 $ 1.59

Growth in Dividends Per Share: 10.9% 20.7% 8.9%
Basic Shares Outstanding: 3,656.0 3,460.0 3,350.8

Diluted Shares Outstanding: 3,670.0 3,474.0 3,364.8
Effective Tax Rate: 32%
Blue indicates hard-coded numbers.

Black indicates formulas and text.
Green indicates links from other worksheets.
Labels for Public Company Comparables:
Trailing Twelve Months: TTM

Forward Year 1: 1/31/2013
Projected
1/31/2014 1/31/2015 1/31/2016 1/31/2017
$ 493,709 $ 515,675 $ 534,773 $ 551,404
$ 272,439 $ 276,526 $ 280,397 $ 284,323

1.5 % 1.5 % 1.4 % 1.4 %
646,264 655,958 665,141 674,453
$ 421.56 $ 421.56 $ 421.56 $ 421.56
1.2 % 1.0 % 0.8 % 0.6 %

1.5 % 1.5 % 1.4 % 1.4 %
1.7 % 1.8 % 1.9 % 2.0 %
1.5 % 1.5 % 1.4 % 1.4 %
(0.1%) (0.1%) (0.2%) (0.2%)

0.0 % 0.0 % 0.0 % 0.0 %
0.1 % 0.1 % 0.2 % 0.2 %
0.0 % 0.0 % 0.0 % 0.0 %
$ 157,874 $ 173,148 $ 186,290 $ 197,561

10.7 % 9.7 % 7.6 % 6.1 %
390,718 418,068 443,152 465,310
$ 404.06 $ 414.16 $ 420.37 $ 424.58
7.0 % 5.0 % 5.0 % 4.0 %

8.0 % 7.0 % 6.0 % 5.0 %
10.0 % 9.0 % 7.0 % 6.0 %
8.0 % 7.0 % 6.0 % 5.0 %
2.0 % 1.0 % 1.0 % 0.5 %

2.5 % 2.5 % 1.5 % 1.0 %
3.0 % 3.0 % 2.0 % 1.5 %
2.5 % 2.5 % 1.5 % 1.0 %
$ 60,414 $ 63,019 $ 65,104 $ 66,539

5.4 % 4.3 % 3.3 % 2.2 %
82,322 82,569 82,817 82,982
$ 733.87 $ 763.23 $ 786.13 $ 801.85
0.3 % 0.2 % 0.2 % 0.1 %

0.4 % 0.3 % 0.3 % 0.2 %
0.6 % 0.5 % 0.5 % 0.4 %
0.4 % 0.3 % 0.3 % 0.2 %
3.5 % 3.0 % 2.0 % 1.0 %

5.0 % 4.0 % 3.0 % 2.0 %
7.0 % 6.0 % 5.0 % 4.0 %
5.0 % 4.0 % 3.0 % 2.0 %
$ 2,982 $ 2,982 $ 2,982 $ 2,982

Projected
1/31/2014 1/31/2015 1/31/2016 1/31/2017
$ 493,709 $ 515,675 $ 534,773 $ 551,404

4.8 % 4.4 % 3.7 % 3.1 %
369,391 385,826 400,116 412,559
74.8 % 74.8 % 74.8 % 74.8 %
124,318 129,849 134,658 138,845

25.2 % 25.2 % 25.2 % 25.2 %
94,703 98,916 102,580 105,770

19.2 % 19.2 % 19.2 % 19.2 %
29,615 30,932 32,078 33,076

203 216 318 339
(2,274) (2,283) (2,634) (2,663)
27,544 28,865 29,761 30,751
8,814 9,237 9,524 9,840
32.0 % 32.0 % 32.0 % 32.0 %
$ 18,730 $ 19,629 $ 20,238 $ 20,911

(646) (646) (646) (646)
$ 18,084 $ 18,983 $ 19,592 $ 20,265
3,255.60 3,146.40 3,037.20 2,928.00

$ 5.55 $ 6.03 $ 6.45 $ 6.92
$ 38,576 $ 40,293 $ 41,785 $ 43,084

7.8 % 7.8 % 7.8 % 7.8 %
$ 29,615 $ 30,932 $ 32,078 $ 33,076
6.0 % 6.0 % 6.0 % 6.0 %
Projected
1/31/2014 1/31/2015 1/31/2016 1/31/2017
$ 10,806 $ 12,717 $ 13,553 $ 17,713

6,257 6,535 6,777 6,969
43,806 45,755 47,450 48,926
2,784 2,908 3,016 3,109
63,654 67,916 70,796 76,717
120,127 125,788 131,678 137,768

20,651 20,651 20,651 20,651
2,721 2,721 2,721 2,721
6,368 6,824 7,280 7,736
149,867 155,984 162,330 168,876
$ 213,521 $ 223,900 $ 233,126 $ 245,593
$ 5,547 $ 6,297 $ 7,047 $ 7,797

39,924 41,701 43,245 44,468
21,007 21,942 22,755 23,462
264 277 286 295
66,743 70,217 73,332 76,023
48,902 49,975 50,225 54,095

2,625 2,270 1,915 1,560
9,739 10,747 11,785 12,858
404 404 404 404
61,670 63,396 64,329 68,917
$ 128,414 $ 133,612 $ 137,661 $ 144,940
4,034 4,034 4,034 4,034

(16,000) (24,000) (32,000) (40,000)
92,812 105,379 117,942 130,519
(1,476) (1,509) (1,542) (1,575)
79,370 83,904 88,434 92,978
5,738 6,384 7,030 7,676
$ 85,108 $ 90,288 $ 95,464 $ 100,654
$ 213,521 $ 223,900 $ 233,126 $ 245,593
OK! OK! OK! OK!

Projected
1/31/2014 1/31/2015 1/31/2016 1/31/2017
$ 18,730 $ 19,629 $ 20,238 $ 20,911
8,962 9,360 9,707 10,009

- - - -
961 1,007 1,038 1,073
(300) (278) (242) (192)

(126) (124) (108) (94)
(1,987) (1,949) (1,695) (1,476)
1,915 1,776 1,544 1,223
965 947 821 717
29,119 30,368 31,304 32,171
(14,893) (15,555) (16,132) (16,633)

535 535 535 535
(500) (500) (500) (500)
- - - -
44 44 44 44
(14,814) (15,477) (16,053) (16,555)
750 750 750 750

5,000 5,000 5,000 5,000
(5,168) (3,927) (4,750) (1,130)
(5,850) (6,416) (7,028) (7,688)
- - - -
(8,000) (8,000) (8,000) (8,000)
(355) (355) (355) (355)
- - - -
(13,623) (12,948) (14,383) (11,423)
(33) (33) (33) (33)

$ 649 $ 1,911 $ 836 $ 4,160
10,157 10,806 12,717 13,553
$ 10,806 $ 12,717 $ 13,553 $ 17,713
Projected
1/31/2014 1/31/2015 1/31/2016 1/31/2017
365 365 365 366
2.0% 2.0% 2.5% 2.5%

4.0% 4.0% 4.5% 4.5%
1.3% 1.3% 1.3% 1.3%

4.6 4.6 4.6 4.6
11.9% 11.9% 11.9% 11.9%
2.9% 2.9% 2.9% 2.9%
10.8% 10.8% 10.8% 10.8%

39.4 39.4 39.4 39.4
22.2% 22.2% 22.2% 22.2%
3.0% 3.0% 3.0% 3.0%
1.8% 1.8% 1.8% 1.8%

10.9% 10.9% 10.9% 10.9%
3.0% 3.0% 3.0% 3.0%
$ 1.80 $ 2.05 $ 2.32 $ 2.64

13.5% 13.5% 13.5% 13.5%
3,241.6 3,132.4 3,023.2 2,914.0

3,255.6 3,146.4 3,037.2 2,928.0
Valuation Summary - Wal-Mart Stores, Inc.

Valuation Statistics - Wal-Mart Stores, Inc. Wal-Mart Stores, Inc. - Range of Valuation Multiples Wal-Mart Stores, Inc. - Implied Per Share Value Range
75th 25th Applicable 25th 75th

Maximum Percentile Median Percentile Minimum Wal-Mart Stores, Inc. Minimum Percentile Median Percentile Maximum
Methodology Name Multiple Multiple Multiple Multiple Multiple Figure Multiple Multiple Multiple Multiple Multiple
Public Company Comparables:

TTM TEV / Revenue: 1.2 x 1.0 x 0.8 x 0.7 x 0.4 x $ 446,950 $ 38.79 $ 71.54 $ 88.73 $ 107.61 $ 145.44
01/31/2013 TEV / Revenue: 1.1 x 0.9 x 0.8 x 0.7 x 0.4 x 471,317 37.78 73.60 90.55 106.87 140.80
01/31/2014 TEV / Revenue: 1.0 x 0.8 x 0.8 x 0.6 x 0.4 x 493,709 35.84 75.56 92.71 105.89 133.69
TTM TEV / EBITDA: 11.3 x 10.7 x 9.2 x 7.2 x 4.8 x 34,688 33.50 57.17 77.25 91.51 97.74
01/31/2013 TEV / EBITDA: 10.5 x 9.8 x 8.6 x 6.9 x 4.7 x 36,827 35.37 58.35 76.55 89.41 96.36
01/31/2014 TEV / EBITDA: 9.6 x 9.0 x 8.1 x 6.7 x 4.7 x 38,576 37.00 59.34 74.62 84.90 92.26
TTM Pro-Forma P/E: 25.3 x 21.9 x 17.7 x 13.4 x 9.7 x $ 4.54 44.11 60.98 80.54 99.55 114.75
01/31/2013 Pro-Forma P/E: 22.3 x 17.8 x 15.1 x 13.3 x 11.1 x 5.12 56.97 67.82 77.31 90.96 114.27
01/31/2014 Pro-Forma P/E: 20.1 x 15.6 x 13.7 x 12.4 x 10.1 x 5.55 56.16 68.94 75.84 86.72 111.46
Discounted Cash Flow Analysis:

5.0% - 7.0% Discount Rate and 0.8% - 2.8% Terminal FCF Growth Rate: $ 63.27 $ 76.49 $ 95.90 $ 127.21 $ 186.29
Comparable Public Companies - Diversified US-Based Retailers with Greater Than $10 Billion in TTM Revenue
Operating Statistics Capitalization

Share Equity Enterprise Revenue EBITDA EPS
Company Name Ticker Price Value Value TTM 1/31/2013 1/31/2014 TTM 1/31/2013 1/31/2014 TTM 1/31/2013 1/31/2014
Costco Wholesale Corporation COST $ 100.73 $ 44,680 $ 41,365 $ 99,137 $ 106,560 $ 115,890 $ 3,667 $ 3,942 $ 4,287 $ 3.98 $ 4.51 $ 5.02
Target Corporation TGT 63.12 42,987 59,676 69,865 73,301 76,050 7,453 7,820 8,113 4.30 4.52 4.79
Kohl's Corporation KSS 46.10 11,342 14,228 18,804 19,220 19,500 2,936 3,001 3,045 4.74 4.14 4.56
Dollar General Corp. DG 46.34 15,961 18,453 14,807 16,080 17,650 1,766 1,918 2,105 2.23 2.85 3.28
Maximum: $ 100.73 $ 44,680 $ 59,676 $ 99,137 $ 106,560 $ 115,890 $ 7,453 $ 7,820 $ 8,113 $ 4.74 $ 4.52 $ 5.02
75th Percentile: 72.52 43,410 45,943 77,183 81,616 86,010 4,614 4,911 5,243 4.41 4.51 4.85
Median: $ 54.73 29,474 29,909 44,335 46,261 47,775 3,302 3,471 3,666 $ 4.14 $ 4.33 $ 4.68
25th Percentile: 46.28 14,806 17,397 17,805 18,435 19,038 2,644 2,730 2,810 3.54 3.82 4.24
Minimum: 46.10 11,342 14,228 14,807 16,080 17,650 1,766 1,918 2,105 2.23 2.85 3.28
Wal-Mart Stores, Inc. WMT $ 73.26 $ 252,188 $ 303,915 $ 446,950 $ 471,317 $ 493,709 $ 34,688 $ 36,827 $ 38,576 $ 4.78 $ 5.12 $ 5.55
Valuation Statistics Capitalization Enterprise Value / Enterprise Value /

Share Equity Enterprise Revenue EBITDA P / E Multiple
Company Name Price Value Value TTM 1/31/2013 1/31/2014 TTM 1/31/2013 1/31/2014 TTM 1/31/2013 1/31/2014
Costco Wholesale Corporation COST $ 100.73 $ 44,680 $ 41,365 0.4 x 0.4 x 0.4 x 11.3 x 10.5 x 9.6 x 25.3 x 22.3 x 20.1 x
Target Corporation TGT 63.12 42,987 59,676 0.9 x 0.8 x 0.8 x 8.0 x 7.6 x 7.4 x 14.7 x 14.0 x 13.2 x
Kohl's Corporation KSS 46.10 11,342 14,228 0.8 x 0.7 x 0.7 x 4.8 x 4.7 x 4.7 x 9.7 x 11.1 x 10.1 x
Dollar General Corp. DG 46.34 15,961 18,453 1.2 x 1.1 x 1.0 x 10.4 x 9.6 x 8.8 x 20.8 x 16.3 x 14.1 x
Maximum: $ 100.73 $ 44,680 $ 59,676 1.2 x 1.1 x 1.0 x 11.3 x 10.5 x 9.6 x 25.3 x 22.3 x 20.1 x
75th Percentile: 72.52 43,410 45,943 1.0 x 0.9 x 0.8 x 10.7 x 9.8 x 9.0 x 21.9 x 17.8 x 15.6 x
Median: $ 54.73 29,474 29,909 0.8 x 0.8 x 0.8 x 9.2 x 8.6 x 8.1 x 17.7 x 15.1 x 13.7 x
25th Percentile: 46.28 14,806 17,397 0.7 x 0.7 x 0.6 x 7.2 x 6.9 x 6.7 x 13.4 x 13.3 x 12.4 x
Minimum: 46.10 11,342 14,228 0.4 x 0.4 x 0.4 x 4.8 x 4.7 x 4.7 x 9.7 x 11.1 x 10.1 x
Wal-Mart Stores, Inc. WMT $ 73.26 $ 252,188 $ 303,915 0.7 x 0.6 x 0.6 x 8.8 x 8.3 x 7.9 x 15.3 x 14.3 x 13.2 x
COST
Costco Wholesale Corporation
Calendarization Calendarization
Old Partial New Partial FY TTM Old Partial New Partial
Revenue: $99,137 $99,137
COGS: $86,823 $86,823
Gross Profit: $0 $0 $12,314 $12,314 $0 $0
Operating Expenses: $9,555 $9,555
Other Income / (Expense): $8 $8
Pre-Tax Income: $0 $0 $2,767 $2,767 $0 $0
Taxes: $1,000 $1,000
Net Income: $0 $0 $1,767 $1,767 $0 $0
Amortization: $259 $259
Depreciation: $649 $649
Non-Recurring Charges: $0 $0
Tax Rate: 35%
Net Income: $0 $0 $1,767 $1,767 $0 $0

EPS: $3.98
EBITDA: $0 $0 $3,667 $3,667 $0 $0

EBIT: $0 $0 $2,759 $2,759 $0 $0
Balance Sheet Data Balance Sheet Data

Cash & Cash-Equivalents: $4,854
Debt & Capital Leases: $1,382
Preferred Stock: $0
Noncontrolling Interests: $157
Equity Research Projections Equity Research Projections

1/31/2013 1/31/2014 1/31/2015 1/31/2013 1/31/2014
Bank: NA
COST
Date: 2/27/2013
Revenue: $106,560 $115,890 NA $73,301 $76,050
EBITDA: $3,942 $4,287 NA $7,820 $8,113
EBIT: $2,966 $3,225 NA $5,584 $5,793
EPS: $4.51 $5.02 NA $4.52 $4.79
COST
Diluted Shares Calculation Diluted Shares Calculation
Current Share Price: $100.73
Common Shares: 432.42
Options:
Total Strike Dilution Total
1.23 35.95 0.79 38.15
1.70 43.77 0.96 1.55
0.23 46.19 0.12 1.61
9.26 9.26 0.00
0.00 $0.00 0.00 0.00
0.00 $0.00 0.00 0.00
0.00 $0.00 0.00 0.00
0.00 $0.00 0.00 0.00
0.00 0.00
Total Diluted Shares: 443.56
Valuation Metrics Valuation Metrics
Equity Value: $44,680

Enterprise Value: $41,365
Beta: 0.69
Valuation Multiples Valuation Multiples

TTM 1/31/2013 1/31/2014 1/31/2015 TTM 1/31/2013
TEV / Revenue: 0.4 x 0.4 x 0.4 x N/A 0.9 x 0.8 x
TEV / EBITDA: 11.3 x 10.5 x 9.6 x N/A 8.0 x 7.6 x
TEV / EBIT: 15.0 x 13.9 x 12.8 x N/A 11.2 x 10.7 x
Pro-Forma P/E: 25.3 x 22.3 x 20.1 x N/A 14.7 x 14.0 x
Lookup Variables Lookup Variables

COST
01/31/2013 Revenue: $106,560

01/31/2013 EBITDA: $3,942
01/31/2013 EBIT: $2,966
01/31/2013 EPS: $4.51
01/31/2014 Revenue: $115,890

01/31/2014 EBITDA: $4,287
01/31/2014 EBIT: $3,225
01/31/2014 EPS: $5.02
01/31/2015 Revenue: NA
01/31/2015 EBITDA: NA
01/31/2015 EBIT: NA
01/31/2015 EPS: NA
TTM TEV / Revenue: 0.4 x

TTM TEV / EBITDA: 11.3 x
TTM TEV / EBIT: 15.0 x
TTM Pro-Forma P/E: 25.3 x
01/31/2013 TEV / Revenue: 0.4 x

01/31/2013 TEV / EBITDA: 10.5 x
01/31/2013 TEV / EBIT: 13.9 x
01/31/2013 Pro-Forma P/E: 22.3 x
01/31/2014 TEV / Revenue: 0.4 x

01/31/2014 TEV / EBITDA: 9.6 x
01/31/2014 TEV / EBIT: 12.8 x
01/31/2014 Pro-Forma P/E: 20.1 x
COST
01/31/2015 TEV / Revenue: N/A

01/31/2015 TEV / EBITDA: N/A
01/31/2015 TEV / EBIT: N/A
01/31/2015 Pro-Forma P/E: N/A
TGT
Target Corporation
Calendarization
FY TTM
Revenue: $69,865 $69,865
COGS: $47,860 $47,860
Gross Profit: $22,005 $22,005
Other Income / (Expense): ($866) ($866)
Pre-Tax Income: $4,456 $4,456
Taxes: $1,527 $1,527
Net Income: $2,929 $2,929
Depreciation: $2,107 $2,107
Tax Rate: 35%
Net Income: $2,929 $2,929

EPS: $4.30
EBITDA: $7,453 $7,453

EBIT: $5,322 $5,322
Balance Sheet Data

Cash & Cash-Equivalents: $794
Preferred Stock: $0
Equity Research Projections

1/31/2015
Bank: NA
TGT
Target Corporation
Date: 2/27/2013
Revenue: $81,440
EBITDA: $8,688
EBIT: $6,204
EPS: $5.75
TGT
Target Corporation
Diluted Shares Calculation
Options:
Strike Dilution
$47.59 9.39
1.55
1.61
$0.00 0.00
$0.00 0.00
$0.00 0.00
$0.00 0.00
$0.00 0.00
$0.00 0.00
Valuation Metrics

Beta: 0.92
Valuation Multiples
1/31/2014 1/31/2015
TEV / Revenue: 0.8 x 0.7 x
TEV / EBITDA: 7.4 x 6.9 x
TEV / EBIT: 10.3 x 9.6 x
Pro-Forma P/E: 13.2 x 11.0 x
Lookup Variables
TGT
Target Corporation
01/31/2013 Revenue: $73,301

01/31/2013 EBITDA: $7,820
01/31/2013 EBIT: $5,584
01/31/2013 EPS: $4.52
01/31/2014 Revenue: $76,050

01/31/2014 EBITDA: $8,113
01/31/2014 EBIT: $5,793
01/31/2014 EPS: $4.79
01/31/2015 Revenue: $81,440

01/31/2015 EBITDA: $8,688
01/31/2015 EBIT: $6,204
01/31/2015 EPS: $5.75

01/31/2013 TEV / Revenue: 0.8 x

01/31/2013 TEV / EBITDA: 7.6 x
01/31/2013 TEV / EBIT: 10.7 x
01/31/2013 Pro-Forma P/E: 14.0 x
01/31/2014 TEV / Revenue: 0.8 x

01/31/2014 TEV / EBITDA: 7.4 x
01/31/2014 TEV / EBIT: 10.3 x
01/31/2014 Pro-Forma P/E: 13.2 x
TGT
Target Corporation
01/31/2015 TEV / Revenue: 0.7 x

01/31/2015 TEV / EBITDA: 6.9 x
01/31/2015 TEV / EBIT: 9.6 x
01/31/2015 Pro-Forma P/E: 11.0 x
KSS
Kohl's Corporation
Old Partial New Partial FY TTM Old Partial New Partial
Revenue: $18,804 $18,804
COGS: $11,625 $11,625
Gross Profit: $0 $0 $7,179 $7,179 $0 $0
Other Income / (Expense): ($299) ($299)
Pre-Tax Income: $0 $0 $1,859 $1,859 $0 $0
Taxes: $692 $692
Net Income: $0 $0 $1,167 $1,167 $0 $0
Depreciation: $354 $354
Tax Rate: 35%
Net Income: $0 $0 $1,167 $1,167 $0 $0

EPS: $4.74
EBITDA: $0 $0 $2,936 $2,936 $0 $0

EBIT: $0 $0 $2,158 $2,158 $0 $0

Cash & Cash-Equivalents: $1,358
Preferred Stock: $0

1/31/2013 1/31/2014 1/31/2015 1/31/2013 1/31/2014
Bank: NA
KSS
Kohl's Corporation
Date: 2/27/2013
Revenue: $19,220 $19,500 NA $16,080 $17,650
EBITDA: $3,001 $3,045 NA $1,918 $2,105
EBIT: $2,206 $2,238 NA $1,619 $1,777
EPS: $4.14 $4.56 NA $2.85 $3.28
KSS
Kohl's Corporation
Options:
Total Strike Dilution Total
1.45 $29.54 0.52 4.26
0.12 $37.35 0.02 3.97
1.85 $41.58 0.18 0.00
1.48 $43.06 0.10 0.00
2.18 $48.25 0.00 0.00
2.15 $51.35 0.00 0.00
3.65 $57.65 0.00 0.00
1.24 $68.70 0.00 0.00
1.95 1.95 0.00

Beta: 0.85

TTM 1/31/2013 1/31/2014 1/31/2015 TTM 1/31/2013
TEV / Revenue: 0.8 x 0.7 x 0.7 x N/A 1.2 x 1.1 x
TEV / EBITDA: 4.8 x 4.7 x 4.7 x N/A 10.4 x 9.6 x
TEV / EBIT: 6.6 x 6.5 x 6.4 x N/A 12.4 x 11.4 x
Pro-Forma P/E: 9.7 x 11.1 x 10.1 x N/A 20.8 x 16.3 x

KSS
Kohl's Corporation
01/31/2013 Revenue: $19,220

01/31/2013 EBITDA: $3,001
01/31/2013 EBIT: $2,206
01/31/2013 EPS: $4.14
01/31/2014 Revenue: $19,500

01/31/2014 EBITDA: $3,045
01/31/2014 EBIT: $2,238
01/31/2014 EPS: $4.56
01/31/2015 Revenue: NA
01/31/2015 EBITDA: NA
01/31/2015 EBIT: NA
01/31/2015 EPS: NA

01/31/2013 TEV / Revenue: 0.7 x

01/31/2013 TEV / EBITDA: 4.7 x
01/31/2013 TEV / EBIT: 6.5 x
01/31/2013 Pro-Forma P/E: 11.1 x
01/31/2014 TEV / Revenue: 0.7 x

01/31/2014 TEV / EBITDA: 4.7 x
01/31/2014 TEV / EBIT: 6.4 x
01/31/2014 Pro-Forma P/E: 10.1 x
KSS
Kohl's Corporation
01/31/2015 TEV / Revenue: N/A

01/31/2015 TEV / EBITDA: N/A
01/31/2015 TEV / EBIT: N/A
01/31/2015 Pro-Forma P/E: N/A
DG WMT
Dollar General Corp. Wal-Mart Stores, Inc.
FY TTM Old Partial New Partial FY TTM
Revenue: $14,807 $14,807 $ 446,950 $446,950
COGS: $10,109 $10,109 335,127 $335,127
Gross Profit: $4,698 $4,698 $0 $0 $111,823 $111,823
Operating Expenses: $3,207 $3,207 85,265 $85,265
Other Income / (Expense): ($266) ($266) (2,160) ($2,160)
Pre-Tax Income: $1,225 $1,225 $0 $0 $24,398 $24,398
Taxes: $459 $459 7,944 $7,944
Net Income: $767 $767 $0 $0 $16,454 $16,454
Amortization: $32 $32 $0 $0
Depreciation: $244 $244 8,130 $8,130
Non-Recurring Charges: $0 $0 $0 $0
Tax Rate: 35% 35%
Net Income: $767 $767 $0 $0 $16,454 $16,454

EPS: $2.23 $4.78
EBITDA: $1,766 $1,766 $0 $0 $34,688 $34,688

EBIT: $1,491 $1,491 $0 $0 $26,558 $26,558

Cash & Cash-Equivalents: $126 $6,550
Debt & Capital Leases: $2,618 $53,427
Preferred Stock: $0 $0
Noncontrolling Interests: $0 $4,850

1/31/2015 1/31/2013 1/31/2014 1/31/2015
Bank: NA NA
DG WMT
Date: 2/27/2013 2/27/2013
Revenue: NA $ 471,317 $ 493,709 $ 515,675
EBITDA: NA 36,827 38,576 40,293
EBIT: NA 28,272 29,615 30,932
EPS: NA $5.12 $5.55 $6.03
DG WMT
Current Share Price: $46.34 $73.26
Common Shares: 338.09 3,404.54
Options:
Strike Dilution Total Strike Dilution
$10.55 3.29 20.15 $48.21 6.89
$10.75 3.05 30.94 $0.00 30.94
$0.00 0.00 0.00 $0.00 0.00
$0.00 0.00 0.00 $0.00 0.00
$0.00 0.00 0.00 $0.00 0.00
$0.00 0.00 0.00 $0.00 0.00
$0.00 0.00 0.00 $0.00 0.00
$0.00 0.00 0.00 $0.00 0.00
$0.00 0.00 0.00 $0.00 0.00
Total Diluted Shares: 344.43 3,442.37
Equity Value: $15,961 $252,188

Enterprise Value: $18,453 $303,915
Beta: 0.10 0.36

1/31/2014 1/31/2015 TTM 1/31/2013 1/31/2014 1/31/2015
TEV / Revenue: 1.0 x N/A 0.7 x 0.6 x 0.6 x 0.6 x
TEV / EBITDA: 8.8 x N/A 8.8 x 8.3 x 7.9 x 7.5 x
TEV / EBIT: 10.4 x N/A 11.4 x 10.7 x 10.3 x 9.8 x
Pro-Forma P/E: 14.1 x N/A 15.3 x 14.3 x 13.2 x 12.1 x

DG WMT
01/31/2013 Revenue: $16,080 $471,317

01/31/2013 EBITDA: $1,918 $36,827
01/31/2013 EBIT: $1,619 $28,272
01/31/2013 EPS: $2.85 $5.12
01/31/2014 Revenue: $17,650 $493,709

01/31/2014 EBITDA: $2,105 $38,576
01/31/2014 EBIT: $1,777 $29,615
01/31/2014 EPS: $3.28 $5.55
01/31/2015 Revenue: NA $515,675

01/31/2015 EBITDA: NA $40,293
01/31/2015 EBIT: NA $30,932
01/31/2015 EPS: NA $6.03
TTM TEV / Revenue: 1.2 x 0.7 x

TTM TEV / EBITDA: 10.4 x 8.8 x
TTM TEV / EBIT: 12.4 x 11.4 x
TTM Pro-Forma P/E: 20.8 x 15.3 x
01/31/2013 TEV / Revenue: 1.1 x 0.6 x

01/31/2013 TEV / EBITDA: 9.6 x 8.3 x
01/31/2013 TEV / EBIT: 11.4 x 10.7 x
01/31/2013 Pro-Forma P/E: 16.3 x 14.3 x
01/31/2014 TEV / Revenue: 1.0 x 0.6 x

01/31/2014 TEV / EBITDA: 8.8 x 7.9 x
01/31/2014 TEV / EBIT: 10.4 x 10.3 x
01/31/2014 Pro-Forma P/E: 14.1 x 13.2 x
DG WMT
01/31/2015 TEV / Revenue: N/A 0.6 x

01/31/2015 TEV / EBITDA: N/A 7.5 x
01/31/2015 TEV / EBIT: N/A 9.8 x
01/31/2015 Pro-Forma P/E: N/A 12.1 x
Discounted Cash Flow Analysis

Wal-Mart Stores, Inc. - DCF Cash Flow Projections Wal-Mart Stores, Inc. - Assumptions & Output
1/31/2013 1/31/2014 1/31/2015 1/31/2016 1/31/2017 Use Multiples Method? No
Revenue: $ 471,317 $ 493,709 $ 515,675 $ 534,773 $ 551,404 Discount Rate: 5.9%

EBITDA: 36,827 38,576 40,293 41,785 43,084
Operating Income: 28,272 29,615 30,932 32,078 33,076 Terminal EBITDA Multiple: 9.0 x
Terminal Growth Rate: 2.0%
Less: Taxes: (9,047) (9,477) (9,898) (10,265) (10,584) Terminal Value: $ 442,330
Implied EBITDA Multiple: 10.3 x
Plus: Depreciation & Amortization: 8,555 8,962 9,360 9,707 10,009
Plus: Goodwill Impairment: - - - - - PV of Terminal Value: 341,064
Plus: Deferred Income Taxes: 916 961 1,007 1,038 1,073 Sum of PV of Cash Flows: 69,667
Change in Working Capital (from CFS): 355 467 372 321 179 Enterprise Value: $ 410,731
Less: Capital Expenditures: (14,217) (14,893) (15,555) (16,132) (16,633)
Terminal Value % EV: 83.0%
Unlevered Free Cash Flow $ 14,834 $ 15,635 $ 16,218 $ 16,748 $ 17,119
Present Value of Free Cash Flow $ 14,411 $ 14,337 $ 14,037 $ 13,682 $ 13,200 Enterprise Value: $ 410,731
Plus: Cash & Cash Equivalents: 6,550
Projection Year: 0.000 1.000 2.000 3.000 4.000 5.000 Plus: Equity Interests: –
Normal Mid-Year Convention Discount: 0.500 1.500 2.500 3.500 4.500 Less: Debt & Capital Leases: (53,427)
Less: Preferred Stock: –
Free Cash Flow Growth Rate: 5.4 % 3.7 % 3.3 % 2.2 % Less: Noncontrolling Interests: (4,850)
Implied Equity Value: $ 359,004
Wal-Mart Stores, Inc. - Net Present Value Sensitivity - Terminal Growth Rates
Discount Rate Diluted Shares Outstanding: 3,474
$103.34 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% Implied Share Price: $ 103.34
2.8% $ 243.20 $ 186.29 $ 150.07 $ 125.00 $ 106.61 $ 92.55 $ 81.45 $ 72.46
Terminal Growth
2.3% $ 189.56 $ 152.72 $ 127.21 $ 108.51 $ 94.21 $ 82.92 $ 73.78 $ 66.23

1.8% $ 155.42 $ 129.48 $ 110.45 $ 95.90 $ 84.42 $ 75.12 $ 67.44 $ 60.99
Rate
1.3% $ 131.79 $ 112.44 $ 97.64 $ 85.95 $ 76.49 $ 68.68 $ 62.12 $ 56.53

0.7% $ 114.46 $ 99.40 $ 87.52 $ 77.89 $ 69.95 $ 63.27 $ 57.58 $ 52.68
0.2% $ 101.21 $ 89.11 $ 79.32 $ 71.24 $ 64.45 $ 58.66 $ 53.67 $ 49.33
Wal-Mart Stores, Inc. - Net Present Value Sensitivity - Terminal EBITDA Multiples
Discount Rate
$103.34 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0%
11.0 x $ 170.78 $ 140.13 $ 118.24 $ 101.81 $ 89.04 $ 78.82 $ 70.47 $ 63.50
Terminal EBITDA
10.0 x $ 170.78 $ 140.13 $ 118.24 $ 101.81 $ 89.04 $ 78.82 $ 70.47 $ 63.50

Multiple
9.0 x $ 170.78 $ 140.13 $ 118.24 $ 101.81 $ 89.04 $ 78.82 $ 70.47 $ 63.50

8.0 x $ 170.78 $ 140.13 $ 118.24 $ 101.81 $ 89.04 $ 78.82 $ 70.47 $ 63.50
7.0 x $ 170.78 $ 140.13 $ 118.24 $ 101.81 $ 89.04 $ 78.82 $ 70.47 $ 63.50
6.0 x $ 170.78 $ 140.13 $ 118.24 $ 101.81 $ 89.04 $ 78.82 $ 70.47 $ 63.50
Discount Rate Calculations

Discount Rate Calculation - Assumptions

Risk-Free Rate: 2.72%
Equity Risk Premium: 5.00%
Interest Rate on Debt: 4.50%
Comparable Companies - Unlevered Beta Calculation

Levered Equity Unlevered
Name Ticker Beta Debt Value Tax Rate Beta
Costco Wholesale Corporation COST 0.69 $ 1,382 $ 44,680 35% 0.68
Target Corporation TGT 0.92 17,483 42,987 35% 0.73
Kohl's Corporation KSS 0.85 4,244 11,342 35% 0.68
Dollar General Corp. DG 0.10 2,618 15,961 35% 0.09
Median 0.68
Wal-Mart Stores, Inc. WMT 0.36
Wal-Mart Stores, Inc. - Levered Beta & WACC Calculation

Unlevered Equity Levered
Ticker Beta Debt Value Tax Rate Beta
Wal-Mart Stores, Inc. WMT 0.68 $ 53,427 $ 252,188 35% 0.77
Cost of Equity Based on Comparables: 6.59%

Cost of Equity Based on Historical Beta: 4.52%
WACC = Cost of Equity * % Equity + Cost of Debt * % Debt * (1 - Tax Rate) + Cost of Preferred Stock * % Preferred Stock
WACC 5.95%

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Wal-Mart Stores, Inc.

- Operating Model and Valuation

Wal-Mart Stores, Inc. - Summary of Financial Statements

Revenue: $ 421,849 $ 446,950 $ 471,317 $ 493,709 $ 515,675 $ 534,773 $ 551,404

Operating Income: 25,542 26,558 28,272 29,615 30,932 32,078 33,076

Net Income: 15,355 15,766 17,215 18,084 18,983 19,592 20,265

Total Assets: 180,782 193,406 204,606 213,521 223,900 233,126 245,593

EBITDA: $ 33,183 $ 34,688 $ 36,827 $ 38,576 $ 40,293 $ 41,785 $ 43,084

Wal-Mart Stores, Inc. - Valuation Multiples

EV / Revenue: 0.7 x 0.6 x 0.6 x 0.6 x 0.6 x 0.6 x

Wal-Mart: Revenue vs. Gross Margins Wal-Mart: Rev

Revenue and EBITDA

$300 B 25.1 % $300 B

$200 B 25.0 % $200 B

$100 B 24.9 % $100 B

Wal-Mart US Stores: Square Feet and Sales Per Square Foot

680 K 674 K $428

Sales Per Square Foot

640 K 637 K $424

Annual Revenue, FY 2013 - 2014 Annual EB

Projected Revenue Growth, FY 2013 - 2014 Projected EBITD

10% 10% 10%

FY 2014 Revenue Multiples FY 2014

DG KSS TGT COST WMT

Projected EBITDA Growth, FY 2013 - 2014

KSS TGT WMT COST DG

FY 2014 EBITDA Multiples

KSS TGT WMT COST DG

Standalone Operating Model - Assumptions - Wal-Mart Stores, Inc.

Company Name: Wal-Mart Stores, Inc.

Operating Case: 2 Base

Revenue Scenarios - Wal-Mart Stores, Inc.

Total Revenue, Selected Case: $ 408,085 $ 421,849 $ 446,950 $ 471,317

US Stores - Sales ($MM): $ 259,919 $ 260,261 $ 264,186 $ 268,413

US Stores - Square Feet - YoY Growth:

US Stores - $ per Sq. Ft. - YoY Growth:

Int'l Stores - Sales ($MM): $ 97,407 $ 109,232 $ 125,873 $ 142,614

Int'l Stores - Square Feet - YoY Growth:

Int'l Stores - $ per Sq. Ft. - YoY Growth:

Other - Sales ($MM): $ 47,806 $ 49,459 $ 53,795 $ 57,308

Other - Square Feet - YoY Growth:

Other - $ per Sq. Ft. - YoY Growth:

Membership Fees ($MM): $ 2,953 $ 2,897 $ 3,096 $ 2,982

Income Statement - Wal-Mart Stores, Inc.

Revenue: $ 421,849 $ 446,950 $ 471,317

Gross Profit: 106,903 111,823 118,679

Sales, General & Administrative Expenses: 81,361 85,265 90,408

Operating Income: 25,542 26,558 28,272

Consolidated Net Income: $ 15,959 $ 16,454 $ 17,861

Diluted Shares: 3,670.00 3,474.00 3,364.80

EBITDA: $ 33,183 $ 34,688 $ 36,827

Balance Sheet - Wal-Mart Stores, Inc.

Total Assets: $ 180,782 $ 193,406 $ 204,606

Liabilities & Shareholders' Equity

Total Liabilities: $ 109,535 $ 117,645 $ 124,346

Total Liabilities & Equity: $ 180,782 $ 193,406 $ 204,606

Balance Check: OK! OK! OK!

Cash Flow Statement - Wal-Mart Stores, Inc.

Net Income: $ 15,959 $ 16,454 $ 17,861

Cash Flow from Investing:

Cash Flow from Financing:

Effect of Exchange Rates: 66 (33) (33)

Operating Model Assumptions - Wal-Mart Stores, Inc.