Wal-Mart Stores, Inc.

- Operating Model and Valuation

Walmart Inc. - Operating Model and Valuation - Cover Page and Navigation

Company Name: Walmart Inc.

Model Name: Operating Model and Valuation (5-Year Forecast)
Author: Breaking Into Wall Street (BIWS)

File Name: #VALUE!

Analysis Date: 2019-06-06

Navigation, Summary, or Graph Worksheet:

Financial Model Worksheet:
Data and Back-End Calculation Worksheet:

# Sheet Name Link to Sheet

2 Model and Valuation Summary Summary
3 Graphs and Dashboard Graphs
5 Operating Scenarios and 3-Statement Model WMT_Model
6 Stub Period Results from Q1 Q1_Results
7 Discounted Cash Flow Analysis and Sensitivities DCF
8 Weighted Average Cost of Capital (WACC) Calculations WACC
9 Valuation Summary - Back-End Calculations ValSum
10 Valuation "Football Field" Chart ValGraph
11 Comparable Public Companies - Output Public_Comps
4 Comparable Public Companies - Data and Calculations Public_Comps_Data
12 Precedent Transactions MA_Comps
Wal-Mart Stores, Inc. - Operating Model and Valuation

Walmart Inc. - Summary of Operating Model and Valuation - Base Case

($ in Millions Except Per Share and Per Unit Data)

Historical: Projected: Projected

Summary of Operational Performance: Units: FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 CAGR:
Segment-Level Statistics:
Segment-Level Net Sales: $M $ 478,614 $ 481,317 $ 495,761 $ 510,329 $ 522,339 $ 542,403 $ 560,295 $ 578,519 $ 595,986
Net Sales Growth Rate: % N/A 0.6% 3.0% 2.9% 2.4% 3.8% 3.3% 3.3% 3.0%

Total Retail Square Feet at Period End: M Sq. Ft. 1,150 1,164 1,158 1,129 1,142 1,155 1,167 1,179 1,189
Average Sales per Square Foot: $ / Sq. Ft. 416.02 426.92 446.13 459.86 472.12 482.50 493.24 503.45

Operating Income: $M 26,253 24,377 23,139 23,789 23,683 24,076 24,414 24,812 25,545
Operating Margin: % 5.5% 5.1% 4.7% 4.7% 4.5% 4.4% 4.4% 4.3% 4.3%

Capital Expenditures: $M 10,353 9,426 8,913 9,145 9,338 9,729 10,144 10,562 10,984
% Revenue: % 2.2% 2.0% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8%

Company-Wide:
Total Revenue: $M $ 482,130 $ 485,873 $ 500,343 $ 514,405 $ 526,618 $ 546,854 $ 564,924 $ 583,287 $ 600,897
Revenue Growth: % N/A 0.8% 3.0% 2.8% 2.4% 3.8% 3.3% 3.3% 3.0%

Operating Income: $M 24,105 22,764 20,437 21,957 21,480 21,788 22,050 22,371 23,031
Operating Margin: % 5.0% 4.7% 4.1% 4.3% 4.1% 4.0% 3.9% 3.8% 3.8%

Net Income to Parent: $M 14,694 13,643 9,862 6,670 13,250 13,504 13,674 13,858 14,248
Basic Earnings per Share (EPS): $ as Stated 4.58 4.40 3.29 2.28 4.60 4.77 4.92 5.09 5.34

Cash Flow from Operations: $M 27,552 31,673 28,337 27,755 28,500 28,454 29,082 29,865 30,787
Cash Flow from Investing: $M (10,675) (13,896) (9,079) (24,036) (12,000) (12,939) (13,895) (14,857) (15,820)
Cash Flow from Financing: $M (16,285) (19,072) (19,875) (2,537) (15,650) (14,799) (14,490) (14,294) (14,257)

Capital Expenditures (CapEx): $M 11,477 10,619 10,051 10,344 10,575 11,013 11,470 11,932 12,395
% Revenue: % 2.4% 2.2% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.1%

Total Assets: $M 199,581 198,825 204,522 219,295 221,673 226,129 230,952 236,385 242,297
Total Debt + Capital Leases: $M 50,034 45,938 46,487 58,033 54,996 53,298 52,357 52,070 52,400
Cash & Cash-Equivalents: $M 8,705 6,958 6,828 7,572 8,036 8,353 8,636 8,923 9,193

EBITDA: $M 33,559 32,844 30,966 32,635 32,012 32,725 33,349 34,037 35,049
EBITDA Margin: % 7.0% 6.8% 6.2% 6.3% 6.1% 6.0% 5.9% 5.8% 5.8%

LTM Projected:
Summary of Valuation Multiples: Units: FY20 FY21 FY22 FY23 FY24
EV / Revenue - Comparables: x
EV / Revenue - Walmart Inc.: x
Projected Revenue Growth - Comparables: %
Projected Revenue Growth - Walmart Inc.: %

EV / EBITDA - Comparables: x
EV / EBITDA - Walmart Inc.: x
Projected EBITDA Growth - Comparables: %
Projected EBITDA Growth - Walmart Inc.: %

P / E - Comparables: x
P / E - Walmart Inc.: x
Graphs and Analysis of Financial Model Output - Walmart Inc.

Walmart - Annual Revenue, EBITDA, and EBITDA Margins

$700 B 7.2 %
7.0 % $601 B 7.0 %
$600 B $565 B $583 B
6.8 % $547 B 6.8 %
$514 B $527 B
Annual Revenue and EBITDA

$482 B $486 B $500 B

$500 B 6.6 %

EBITDA Margin
6.3 % 6.4 %
$400 B
6.2 %
6.1 % 6.2 %
$300 B 6.0 %
5.9 % 6.0 %
5.8 % 5.8 %
$200 B 5.8 %
5.6 %
$100 B
$34 B $33 B $31 B $33 B $32 B $33 B $33 B $34 B $35 B 5.4 %
$0 B 5.2 %
2016-01-01 2017-01-01 2018-01-01 2019-01-01 2020-01-01 2021-01-01 2022-01-01 2023-01-01 2024-01-01

Revenue EBITDA EBITDA Margin

Walmart Inc.: Revenue and Operating Margins Walmart Inc.: Total Retail Square Feet and Sales per Square Foot
$700 B 6.0% 1,200 $600
1,189
$601 B
Total Retail Square Feet (Millions)
$600 B $565 B $583 B 5.0%
1,179
$514 B $527 B $547 B 1,180
1,167
$500
$500 B 1,164
$500 B $482 B $486 B

Sales per Square Foot

1,158
Operating Margin

4.0% 1,160 1,155 $400

1,150
$400 B 1,142
Revenue

3.0% 1,140 $300

1,129
$300 B
2.0% 1,120 $200
$200 B

$100 B 1.0% 1,100 $100

$0 B – 1,080 $0
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

Revenue Operating Margin Total Retail Square Feet at Period End Average Sales per Square Foot

Walmart Inc.: Revenue by Segment Walmart Inc.: Operating Income by Segment

$700 B $30 B

$600 B $25 B

$500 B
$20 B
$400 B
$15 B
$300 B
$10 B
$200 B

$100 B $5 B

$0 B $0 B
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

U.S. Stores International Stores Sam's Club U.S. Stores International Stores Sam's Club
Walmart Inc. - Valuation Graphs and Analysis

Annual Revenue, FY20 - FY21 Annual EBITDA, FY20 - FY21

$600 B $547 B $35 B $33 B
$500 B $30 B
$25 B
$400 B
$20 B
$300 B
$15 B
$200 B $167 B $9 B
$126 B $141 B $10 B $7 B $7 B
$80 B $6 B
$100 B $44 B $5 B $3 B
$0 B $0 B
BBY TGT KR WBA COST WMT BBY TGT KR WBA COST WMT

FY20 FY21 FY20 FY21

Projected Revenue Growth, FY20 - FY21 Projected EBITDA Growth, FY20 - FY21
8.0% 9.0%
7.0% 7.8%
7.0% 8.0%
6.0% 7.0%
6.0%
5.0%
3.8% 5.0%
4.0%
3.0% 4.0%
3.0% 2.6% 2.6% 3.0%
3.0% 2.3% 2.4% 2.2%
2.0% 1.4% 2.0%
1.0% 1.0% 0.2%
0.0% 0.0%
BBY WBA KR TGT WMT COST BBY WBA KR TGT WMT COST

FY21 Revenue Multiples FY21 EBITDA Multiples

0.8 x 18.0 x
0.7 x 15.7 x
0.7 x 0.6 x 0.7 x 16.0 x
0.6 x 14.0 x
12.0 x 10.8 x
0.5 x
0.4 x 0.4 x 10.0 x
0.4 x 8.1 x
8.0 x 6.7 x
0.3 x 0.3 x 5.8 x 5.7 x
6.0 x
0.2 x 4.0 x
0.1 x 2.0 x
0.0 x 0.0 x
BBY WBA KR TGT WMT COST BBY WBA KR TGT WMT COST
Walmart Inc. and Comparable Public Companies - Price-Volume Graphs
Walmart Valuation - Data for Comparable Public Companies

Ticker: COST WBA KR

Company Name: Costco Wholesale Corporation Walgreens Boots Alliance, Inc. The Kroger Co.
Calendarization: Calendarization: Calendarization:
2018-05-13 2019-05-13 2018-09-02 2019-05-13 2018-02-28 2019-02-28 2018-08-31 2019-02-28 2018-05-26 2019-05-25 2019-02-02 2019-05-25
Old Partial New Partial FY LTM Old Partial New Partial FY LTM Old Partial New Partial FY LTM
LTM Revenue: $ 97,165 $ 105,205 $ 141,576 $ 149,616 $ 63,761 $ 68,321 $ 131,537 $ 136,097 $ 37,722 $ 37,251 $ 121,162 $ 120,691
LTM Reported Net Income: 2,091 2,562 3,134 3,605 2,170 2,279 5,024 5,133 2,026 772 3,110 1,856

LTM Operating Income (EBIT): 3,034 3,274 4,480 4,720 3,386 3,039 6,605 6,258 1,029 901 2,614 2,486
(+) Non-Recurring Items in EBIT: - - - - - - - - - - - -
(+) Depreciation & Amortization: 1,006 1,019 1,437 1,450 858 990 1,770 1,902 741 779 2,465 2,503
LTM EBITDA: $ 6,170 $ 8,160 $ 4,989

Effective Tax Rate: 20.7% 15.5% 22.9%

Balance Sheet Data: Balance Sheet Data: Balance Sheet Data:

(-) Cash & Cash-Equivalents: $ (8,167) $ (818) $ (409)
(-) Equity Investments: - (6,683) (726)
(-) Other Non-Core Assets, Net: - - -
(-) Net Operating Losses: - - (101)
(+) Debt & Capital Leases: 6,529 18,041 13,469
(+) Preferred Stock: - - -
(+) Noncontrolling Interests: 334 643 (51)
(+) Unfunded Pension Obligations: - - 498
(+) Restructuring & Other Liabilities: - - -

Projected Financials: Projected Financials: Projected Financials:

2020-01-31 2021-01-31 2022-01-31 2020-01-31 2021-01-31 2022-01-31 2020-01-31 2021-01-31 2022-01-31
Revenue: $ 156,373 $ 167,371 $ 137,845 $ 141,370 $ 122,995 $ 126,163 $ 129,978
EBITDA: 6,555 7,064 8,617 8,634 5,401 5,532 5,598
Reported Net Income: 3,629 3,822 5,424 5,325 1,748 1,826 1,830

Diluted Shares Calculations: Diluted Shares Calculations: Diluted Shares Calculations:

Share Price: $ 251.21 $ 50.98 $ 23.70
Common Shares Outstanding: 439.79 914.30 798.43
Options and Warrants:
Total Strike Dilution Total Strike Dilution Total Strike Dilution
0.000 0.000 22.700 $ 20.95 2.634
0.000 0.000 0.000
0.000 0.000 0.000
0.000 0.000 0.000
0.000 0.000 0.000
0.000 0.000 0.000
0.000 0.000 0.000
0.000 0.000 0.000
0.000 0.000 0.000

Convertible Bonds: $ Amount Par Value Conv. Price Dilution $ Amount Par Value Conv. Price Dilution $ Amount Par Value Conv. Price Dilution
0.000 0.000 0.000
0.000 0.000 0.000

# RSUs Dilution # RSUs Dilution # RSUs Dilution

Restricted Stock Units (RSUs): 6.535 6.535 0.000 0.000

Total Diluted Shares: 446.32 914.30 801.06

Page 6 of 24
Walmart Valuation - Data for Comparable Public Companies

Ticker: COST WBA KR

Company Name: Costco Wholesale Corporation Walgreens Boots Alliance, Inc. The Kroger Co.
Calendarization: Calendarization: Calendarization:
2018-05-13 2019-05-13 2018-09-02 2019-05-13 2018-02-28 2019-02-28 2018-08-31 2019-02-28 2018-05-26 2019-05-25 2019-02-02 2019-05-25
Old Partial New Partial FY LTM Old Partial New Partial FY LTM Old Partial New Partial FY LTM
Valuation Metrics: Valuation Metrics: Valuation Metrics:

Equity Value: $ 112,121 $ 46,611 $ 18,985

Enterprise Value: 110,817 57,794 31,666
Levered Beta: 0.90 0.76 0.68

Valuation Multiples: Valuation Multiples: Valuation Multiples:

LTM 2020-01-31 2021-01-31 2022-01-31 LTM 2020-01-31 2021-01-31 2022-01-31 LTM 2020-01-31 2021-01-31 2022-01-31
EV / Revenue: 0.7 x 0.7 x 0.7 x N/A 0.4 x 0.4 x 0.4 x N/A 0.3 x 0.3 x 0.3 x 0.2 x
EV / EBITDA: 18.0 x 16.9 x 15.7 x N/A 7.1 x 6.7 x 6.7 x N/A 6.3 x 5.9 x 5.7 x 5.7 x
P / E: 31.1 x 30.9 x 29.3 x N/A 9.1 x 8.6 x 8.8 x N/A 10.2 x 10.9 x 10.4 x 10.4 x

Lookup Variables: Lookup Variables: Lookup Variables:

2020-01-31 Revenue: $ 156,373 $ 137,845 $ 122,995

2020-01-31 EBITDA: 6,555 8,617 5,401
2020-01-31 Reported Net Income: 3,629 5,424 1,748

2021-01-31 Revenue: 167,371 141,370 126,163

2021-01-31 EBITDA: 7,064 8,634 5,532
2021-01-31 Reported Net Income: 3,822 5,325 1,826

2022-01-31 Revenue: - - 129,978

2022-01-31 EBITDA: - - 5,598
2022-01-31 Reported Net Income: - - 1,830

Year 1 Projected Revenue Growth: 7.0% 2.6% 2.6%

Year 1 Projected EBITDA Growth: 7.8% 0.2% 2.4%

LTM EBITDA Margin: 4.1% 6.0% 4.1%

2020-01-31 EBITDA Margin: 4.2% 6.3% 4.4%
2021-01-31 EBITDA Margin: 4.2% 6.1% 4.4%

LTM EV / Revenue: 0.7 x 0.4 x 0.3 x

LTM EV / EBITDA: 18.0 x 7.1 x 6.3 x
LTM P / E: 31.1 x 9.1 x 10.2 x

2020-01-31 EV / Revenue: 0.7 x 0.4 x 0.3 x

2020-01-31 EV / EBITDA: 16.9 x 6.7 x 5.9 x
2020-01-31 P / E: 30.9 x 8.6 x 10.9 x

2021-01-31 EV / Revenue: 0.7 x 0.4 x 0.3 x

2021-01-31 EV / EBITDA: 15.7 x 6.7 x 5.7 x
2021-01-31 P / E: 29.3 x 8.8 x 10.4 x

Corporate Website: http://investor.costco.com/investor-overview https://investor.walgreensbootsalliance.com/home/default.aspx http://ir.kroger.com/

Page 7 of 24
Walmart Valuation - Data for Comparable Public Companies

Ticker: TGT BBY WMT

Company Name: Target Corporation Best Buy Co., Inc. Walmart Inc.
Calendarization: Calendarization: Calendarization:
2018-05-05 2019-05-04 2019-02-02 2019-05-04 2018-05-05 2019-05-04 2019-02-02 2019-05-04 2018-04-30 2019-04-30 2019-01-31 2019-04-30
Old Partial New Partial FY LTM Old Partial New Partial FY LTM Old Partial New Partial FY LTM
LTM Revenue: $ 16,781 $ 17,627 $ 75,356 $ 76,202 $ 9,109 $ 9,142 $ 42,879 $ 42,912 $ 122,690 $ 123,925 $ 514,405 $ 515,640
LTM Reported Net Income: 718 795 2,937 3,014 208 265 1,464 1,521 2,134 3,842 6,670 8,378

LTM Operating Income (EBIT): 1,041 1,135 4,110 4,204 265 334 1,900 1,969 5,154 4,945 21,957 21,748
(+) Non-Recurring Items in EBIT: - - - - - - - - - - - -
(+) Depreciation & Amortization: 631 644 2,474 2,487 176 200 770 794 2,678 2,714 10,678 10,714
LTM EBITDA: $ 6,691 $ 2,763 $ 32,462

Effective Tax Rate: 22.4% 19.7% 24.3%

Balance Sheet Data: Balance Sheet Data: Balance Sheet Data:

(-) Cash & Cash-Equivalents: $ (1,173) $ (1,561) $ (9,255)
(-) Equity Investments: - - (4,366)
(-) Other Non-Core Assets, Net: - - -
(-) Net Operating Losses: - (105) (1,843)
(+) Debt & Capital Leases: 12,413 1,393 57,962
(+) Preferred Stock: - - -
(+) Noncontrolling Interests: - - 6,705
(+) Unfunded Pension Obligations: 33 - 175
(+) Restructuring & Other Liabilities: - - -

Projected Financials: Projected Financials: Projected Financials:

2020-01-31 2021-01-31 2022-01-31 2020-01-31 2021-01-31 2022-01-31 2020-01-31 2021-01-31 2022-01-31
Revenue: $ 78,104 $ 80,472 $ 82,236 $ 43,593 $ 44,218 $ 44,813 $ 526,618 $ 546,854 $ 564,924
EBITDA: 6,707 6,911 6,737 2,816 2,881 2,847 32,012 32,725 33,349
Reported Net Income: 3,041 3,154 3,215 1,517 1,537 1,537 13,250 13,504 13,674

Diluted Shares Calculations: Diluted Shares Calculations: Diluted Shares Calculations:

Share Price: $ 85.70 $ 62.30 $ 105.11
Common Shares Outstanding: 512.33 267.04 2,854.72
Options and Warrants:
Total Strike Dilution Total Strike Dilution Total Strike Dilution
2.039 $ 55.38 0.721 2.006 $ 30.21 1.033 0.000
0.000 0.000 0.000
0.000 0.000 0.000
0.000 0.000 0.000
0.000 0.000 0.000
0.000 0.000 0.000
0.000 0.000 0.000
0.000 0.000 0.000
0.000 0.000 0.000

Convertible Bonds: $ Amount Par Value Conv. Price Dilution $ Amount Par Value Conv. Price Dilution $ Amount Par Value Conv. Price Dilution
0.000 0.000 0.000
0.000 0.000 0.000

# RSUs Dilution # RSUs Dilution # RSUs Dilution

Restricted Stock Units (RSUs): 7.438 7.438 6.104 6.104 23.955 23.955

Total Diluted Shares: 520.49 274.18 2,878.68

Page 8 of 24
Walmart Valuation - Data for Comparable Public Companies

Ticker: TGT BBY WMT

Company Name: Target Corporation Best Buy Co., Inc. Walmart Inc.
Calendarization: Calendarization: Calendarization:
2018-05-05 2019-05-04 2019-02-02 2019-05-04 2018-05-05 2019-05-04 2019-02-02 2019-05-04 2018-04-30 2019-04-30 2019-01-31 2019-04-30
Old Partial New Partial FY LTM Old Partial New Partial FY LTM Old Partial New Partial FY LTM
Valuation Metrics: Valuation Metrics: Valuation Metrics:

Equity Value: $ 44,606 $ 17,081 $ 302,578

Enterprise Value: 55,879 16,809 351,955
Levered Beta: 0.60 0.99 0.37

Valuation Multiples: Valuation Multiples: Valuation Multiples:

LTM 2020-01-31 2021-01-31 2022-01-31 LTM 2020-01-31 2021-01-31 2022-01-31 LTM 2020-01-31 2021-01-31 2022-01-31
EV / Revenue: 0.7 x 0.7 x 0.7 x 0.7 x 0.4 x 0.4 x 0.4 x 0.4 x 0.7 x 0.7 x 0.6 x 0.6 x
EV / EBITDA: 8.4 x 8.3 x 8.1 x 8.3 x 6.1 x 6.0 x 5.8 x 5.9 x 10.8 x 11.0 x 10.8 x 10.6 x
P / E: 14.8 x 14.7 x 14.1 x 13.9 x 11.2 x 11.3 x 11.1 x 11.1 x 36.1 x 22.8 x 22.4 x 22.1 x

Lookup Variables: Lookup Variables: Lookup Variables:

2020-01-31 Revenue: $ 78,104 $ 43,593 $ 526,618

2020-01-31 EBITDA: 6,707 2,816 32,012
2020-01-31 Reported Net Income: 3,041 1,517 13,250

2021-01-31 Revenue: 80,472 44,218 546,854

2021-01-31 EBITDA: 6,911 2,881 32,725
2021-01-31 Reported Net Income: 3,154 1,537 13,504

2022-01-31 Revenue: 82,236 44,813 564,924

2022-01-31 EBITDA: 6,737 2,847 33,349
2022-01-31 Reported Net Income: 3,215 1,537 13,674

Year 1 Projected Revenue Growth: 3.0% 1.4% 3.8%

Year 1 Projected EBITDA Growth: 3.0% 2.3% 2.2%

LTM EBITDA Margin: 8.8% 6.4% 6.3%

2020-01-31 EBITDA Margin: 8.6% 6.5% 6.1%
2021-01-31 EBITDA Margin: 8.6% 6.5% 6.0%

LTM EV / Revenue: 0.7 x 0.4 x 0.7 x

LTM EV / EBITDA: 8.4 x 6.1 x 10.8 x
LTM P / E: 14.8 x 11.2 x 36.1 x

2020-01-31 EV / Revenue: 0.7 x 0.4 x 0.7 x

2020-01-31 EV / EBITDA: 8.3 x 6.0 x 11.0 x
2020-01-31 P / E: 14.7 x 11.3 x 22.8 x

2021-01-31 EV / Revenue: 0.7 x 0.4 x 0.6 x

2021-01-31 EV / EBITDA: 8.1 x 5.8 x 10.8 x
2021-01-31 P / E: 14.1 x 11.1 x 22.4 x

Corporate Website: https://investors.target.com/investors http://investors.bestbuy.com/investor-relations/ https://stock.walmart.com/investors/default.aspx

Page 9 of 24
Walmart Model Financial Statement Projections

Walmart Inc. - Operating Model - Base Case

($ in Millions Except Per Share and Per Unit Data)

Assumptions:

Company Name: Walmart Inc. Last Fiscal Year: 2019-01-31

Ticker: WMT Next Fiscal Year: 2020-01-31
Units (for Conversions): 1,000,000 Most Recent Quarter End Date: 2019-04-30
Valuation Date: 2019-06-06
Current Share Price: $ 105.11
Effective Tax Rate: 24.3% LTM Period: 2019-04-30
Forward Year 1: 2020-01-31
<-- Paste in scenario box here if necessary. Forward Year 2: 2021-01-31
Forward Year 3: 2022-01-31

Average Cash and Debt Balances for Interest: No

Historical: Projected:
Segment Projections: Units: FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
U.S. Stores
Net Sales: $M $ 298,378 $ 307,833 $ 318,477 $ 331,666 $ 340,468 $ 350,026 $ 358,098 $ 366,356 $ 374,804
Net Sales Growth Rate: % N/A 3.2% 3.5% 4.1% 2.7% 2.8% 2.3% 2.3% 2.3%

Retail Square Feet at Period End: M Sq. Ft. 690 699 705 705 707 709 711 713 716
Sales per Square Foot: $ / Sq. Ft. 435.59 443.24 453.67 470.45 482.21 494.26 504.15 514.23 524.52

Growth Rate in Retail Square Feet: % N/A 1.3% 0.9% – 0.3% 0.3% 0.3% 0.3% 0.3%
Upside % 1.0% 0.8% 0.6% 0.5% 0.4%
Base % 0.3% 0.3% 0.3% 0.3% 0.3%
Downside % (0.5%) (0.5%) 1.0% 0.5% 0.3%

Growth Rate in Sales per Square Foot: % N/A 1.8% 2.4% 3.7% 2.5% 2.5% 2.0% 2.0% 2.0%
Upside % 4.0% 4.0% 3.5% 3.5% 3.0%
Base % 2.5% 2.5% 2.0% 2.0% 2.0%
Downside % (2.0%) (2.0%) 3.0% 2.0% 1.5%

Segment Operating Income: $M 19,087 17,012 16,995 17,386 17,364 17,501 17,547 17,585 17,991
Segment Operating Margin: % 6.4% 5.5% 5.3% 5.2% 5.1% 5.0% 4.9% 4.8% 4.8%

Capital Expenditures: $M 6,728 6,090 5,680 6,034 6,143 6,267 6,393 6,519 6,645
CapEx per Square Foot: $ / Sq. Ft. 9.82 8.77 8.09 8.56 8.70 8.85 9.00 9.15 9.30

Page 10 of 24
Walmart Model Financial Statement Projections

International Stores FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Net Sales: $M $ 123,408 $ 116,119 $ 118,068 $ 120,824 $ 122,374 $ 131,087 $ 139,401 $ 147,887 $ 155,747
Net Sales Growth Rate: % N/A (5.9%) 1.7% 2.3% 1.3% 7.1% 6.3% 6.1% 5.3%

Retail Square Feet at Period End: M Sq. Ft. 372 377 373 344 355 365 374 384 391
Sales per Square Foot: $ / Sq. Ft. 333.61 310.08 314.83 336.80 350.27 364.28 377.03 390.22 401.93

Growth Rate in Retail Square Feet: % N/A 1.2% (0.9%) (7.8%) 3.0% 3.0% 2.5% 2.5% 2.0%
Upside % 5.0% 5.0% 4.5% 4.5% 4.0%
Base % 3.0% 3.0% 2.5% 2.5% 2.0%
Downside % 0.5% 0.5% 2.0% 1.5% 1.0%

Growth Rate in Sales per Square Foot: % N/A (7.1%) 1.5% 7.0% 4.0% 4.0% 3.5% 3.5% 3.0%
Upside % 6.0% 5.5% 5.0% 4.5% 4.0%
Base % 4.0% 4.0% 3.5% 3.5% 3.0%
Downside % (2.0%) (2.0%) 4.0% 3.0% 2.0%

Segment Operating Income: $M 5,346 5,737 5,229 4,883 4,773 4,981 5,297 5,620 5,918
Segment Operating Margin: % 4.3% 4.9% 4.4% 4.0% 3.9% 3.8% 3.8% 3.8% 3.8%

Capital Expenditures: $M 2,930 2,697 2,607 2,661 2,725 2,969 3,235 3,506 3,778
CapEx per Square Foot: $ / Sq. Ft. 5.57 7.20 6.95 7.42 7.80 8.25 8.75 9.25 9.75

Sam's Club FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Net Sales: $M $ 56,828 $ 57,365 $ 59,216 $ 57,839 $ 59,497 $ 61,289 $ 62,796 $ 64,276 $ 65,436
Net Sales Growth Rate: % N/A 0.9% 3.2% (2.3%) 2.9% 3.0% 2.5% 2.4% 1.8%

Retail Square Feet at Period End: M Sq. Ft. 88 88 80 80 81 81 81 82 82

Sales per Square Foot: $ / Sq. Ft. 652.96 652.14 703.09 721.60 739.64 758.13 773.29 788.76 800.59

Growth Rate in Retail Square Feet: % N/A 0.9% (9.4%) 0.2% 0.5% 0.5% 0.4% 0.3% 0.3%
Upside % 0.9% 0.7% 0.6% 0.5% 0.4%
Base % 0.5% 0.5% 0.4% 0.3% 0.3%
Downside % (0.5%) (0.5%) 0.8% 0.4% 0.2%

Growth Rate in Sales per Square Foot: % N/A (0.1%) 7.8% 2.6% 2.5% 2.5% 2.0% 2.0% 1.5%
Upside % 3.5% 3.5% 3.0% 3.0% 2.5%
Base % 2.5% 2.5% 2.0% 2.0% 1.5%
Downside % (2.0%) (2.0%) 3.0% 2.0% 1.0%

Segment Operating Income: $M 1,820 1,628 915 1,520 1,547 1,594 1,570 1,607 1,636
Segment Operating Margin: % 3.2% 2.8% 1.5% 2.6% 2.6% 2.6% 2.5% 2.5% 2.5%

Capital Expenditures: $M 695 639 626 450 471 493 516 538 561
CapEx per Square Foot: $ / Sq. Ft. 1.81 7.26 7.43 5.61 5.85 6.10 6.35 6.60 6.86

Page 11 of 24
Walmart Model Financial Statement Projections

Historical: Projected:
Financial Statement Drivers: Units: FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Income Statement Drivers
Corporate Overhead OpEx: $M $ 2,148 $ 1,613 $ 2,702 $ 1,832 $ 2,203 $ 2,288 $ 2,364 $ 2,441 $ 2,514
% Revenue: % 0.4% 0.3% 0.5% 0.4% 0.4% 0.4% 0.4% 0.4% 0.4%

Membership & Other Income Growth Rate: % N/A 29.6% 0.6% (11.0%) 5.0% 4.0% 4.0% 3.0% 3.0%

Effective Interest Rate on Debt: % 4.9% 5.0% 4.4% 4.8% 4.8% 4.8% 4.8% 4.8%
Effective Interest Rate on Capital Leases: % 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Effective Interest Rate on Cash: % 1.3% 2.2% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%

Effective Tax Rate: % 30.3% 30.3% 30.4% 37.4% 24.3% 24.3% 24.3% 24.3% 24.3%
Net Income to NCI % Total Net Income: % 2.6% 4.5% 6.3% 7.1% 7.5% 8.0% 8.5% 9.0% 9.5%

Balance Sheet Drivers

Accounts Receivables % Revenue: % 1.2% 1.2% 1.1% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2%
Days Sales Outstanding: # Days 4.3 4.4 4.1 4.5 4.3 4.3 4.3 4.3 4.3

Inventories % Segment-Level Expenses: % 9.8% 9.4% 9.3% 9.1% 9.0% 8.9% 8.8% 8.7% 8.6%
Prepaid Expenses % Total Expenses: % 0.3% 0.4% 0.7% 0.7% 0.7% 0.8% 0.9% 1.0% 1.1%

Accounts Payable % Total Expenses: % 8.4% 8.9% 9.6% 9.6% 9.8% 10.0% 10.2% 10.4% 10.6%
Accrued Liabilities % Total Expenses: % 4.4% 4.7% 4.7% 4.6% 4.6% 4.6% 4.6% 4.6% 4.6%

Capital Leases per Retail Square Foot: $ / Sq. Ft. 5.54 5.64 6.43 6.56 6.80 6.95 7.10 7.25 7.40

Page 12 of 24
Walmart Model Financial Statement Projections

Cash Flow Statement Drivers

Depreciation & Amortization % Revenue: % 2.0% 2.1% 2.1% 2.1% 2.0% 2.0% 2.0% 2.0% 2.0%
Deferred Income Taxes % Book Taxes: % (10.2%) 12.3% (6.6%) (11.7%) (4.1%) (4.1%) (4.1%) (4.1%) (4.1%)
Other Operating Activities % Revenue: % 0.3% 0.0% 0.2% 0.3% 0.2% 0.2% 0.2% 0.2% 0.2%

Corporate-Level CapEx: $M 1,124 1,193 1,138 1,199 1,236 1,284 1,326 1,370 1,411
% Revenue: % 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2%

Acquisitions, Net of Cash Acquired: $M - (2,463) (375) (14,656) (2,000) (2,500) (3,000) (3,500) (4,000)
Changes in Investments & Other Items: $M 802 (814) 1,347 964 575 575 575 575 575

Cash % Total Expenses: % 1.9% 1.5% 1.4% 1.5% 1.6% 1.6% 1.6% 1.6% 1.6%
Minimum Cash: $M 8,036 8,353 8,636 8,923 9,193

Cash Balance Prior to Debt Issuances: $M 3,929 2,314 1,333 470 115
Required Debt Issuances: $M 4,107 6,039 7,303 8,453 9,078

Share Issuances / Repurchases: $M (4,112) (8,298) (8,296) (7,410) (5,000) (5,250) (5,500) (5,750) (6,000)
Debt Repayments: $M (4,432) (3,728) (13,061) (3,837) (7,500) (8,000) (8,500) (9,000) (9,000)

Dividends Payout Ratio: % 41.7% 43.5% 58.2% 85.0% 42.6% 42.6% 42.6% 42.6% 42.6%
NCI Dividend Payout Ratio: % 186.3% 73.7% 104.4% 84.7% 87.6% 87.6% 87.6% 87.6% 87.6%

Purchase of Noncontrolling Interest: $M (1,326) (90) (8) - - - - - -

Other Activities: $M (676) (398) (3,320) (629) (568) (568) (568) (568) (568)

FX Rate Effects % Revenue: % (0.2%) (0.1%) 0.1% (0.1%) (0.1%) (0.1%) (0.1%) (0.1%) (0.1%)

Page 13 of 24
Walmart Model Financial Statement Projections

Historical: Projected:
Income Statement: FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Revenue:
(+) Net Sales: $M $ 478,614 $ 481,317 $ 495,761 $ 510,329 $ 522,339 $ 542,403 $ 560,295 $ 578,519 $ 595,986
(+) Membership & Other Income: $M 3,516 4,556 4,582 4,076 4,280 4,451 4,629 4,768 4,911
Total Revenue: $M 482,130 485,873 500,343 514,405 526,618 546,854 564,924 583,287 600,897
Revenue Growth: % N/A 0.8% 3.0% 2.8% 2.4% 3.8% 3.3% 3.3% 3.0%

Operating Income: $M 24,105 22,764 20,437 21,957 21,480 21,788 22,050 22,371 23,031
Operating Margin: % 5.0% 4.7% 4.1% 4.3% 4.1% 4.0% 3.9% 3.8% 3.8%

Other Income / (Expense):

(-) Interest Expense on Debt: $M (2,027) (2,044) (1,978) (1,975) (2,425) (2,263) (2,169) (2,112) (2,085)
(-) Interest Expense on Capital Leases: $M (521) (323) (352) (371) (371) (389) (402) (415) (428)
(+) Interest Income: $M 81 100 152 217 228 242 252 260 269
(-) Goodwill Impairment: $M - - - - - - - - -
(+) Gains / (-) Losses: $M - - (3,136) (8,368) - - - - -
Total Other Income / (Expense): $M (2,467) (2,267) (5,314) (10,497) (2,568) (2,409) (2,319) (2,266) (2,244)

Pre-Tax Income: $M 21,638 20,497 15,123 11,460 18,912 19,379 19,731 20,105 20,787
(-) Provision for Income Taxes: $M (6,558) (6,204) (4,600) (4,281) (4,588) (4,701) (4,786) (4,877) (5,042)
Net Income: $M 15,080 14,293 10,523 7,179 14,324 14,678 14,945 15,228 15,744
(-) Net Income Attrib. to Noncontrolling Interest: $M (386) (650) (661) (509) (1,074) (1,174) (1,270) (1,371) (1,496)
Net Income to Parent: $M 14,694 13,643 9,862 6,670 13,250 13,504 13,674 13,858 14,248

Basic Shares Outstanding: # Millions 3,207.0 3,101.0 2,995.0 2,929.0 2,881.4 2,831.5 2,779.2 2,724.5 2,667.4
Basic Earnings per Share (EPS): $ as Stated $ 4.58 $ 4.40 $ 3.29 $ 2.28 $ 4.60 $ 4.77 $ 4.92 $ 5.09 $ 5.34

EBITDA: $M 33,559 32,844 30,966 32,635 32,012 32,725 33,349 34,037 35,049
EBITDA Margin: % 7.0% 6.8% 6.2% 6.3% 6.1% 6.0% 5.9% 5.8% 5.8%

Page 14 of 24
Walmart Model Financial Statement Projections

Historical: Projected:
Balance Sheet: Units: FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
ASSETS
Current Assets:
Cash & Cash-Equivalents: $M $ 8,705 $ 6,958 $ 6,828 $ 7,572 $ 8,036 $ 8,353 $ 8,636 $ 8,923 $ 9,193
Accounts Receivable: $M 5,624 5,835 5,614 6,283 6,206 6,427 6,658 6,874 7,082
Inventories: $M 44,469 43,046 43,783 44,269 44,879 46,131 47,158 48,173 49,058
Prepaid Expenses & Other Assets: $M 1,441 1,941 3,511 3,623 3,536 4,201 4,886 5,609 6,357
Total Current Assets: $M 60,239 57,780 59,736 61,747 62,657 65,112 67,338 69,579 71,689

Long-Term Assets:
Net PP&E: $M 116,516 114,178 114,818 111,395 113,438 116,014 119,185 122,951 127,328
Goodwill: $M 16,695 17,037 18,242 31,181 31,181 31,181 31,181 31,181 31,181
Other Long-Term Assets: $M 6,131 9,830 11,726 14,972 14,397 13,823 13,248 12,673 12,098
Total Long-Term Assets: $M 139,342 141,045 144,786 157,548 159,016 161,017 163,614 166,805 170,608

Total Assets: $M $ 199,581 $ 198,825 $ 204,522 $ 219,295 $ 221,673 $ 226,129 $ 230,952 $ 236,385 $ 242,297

LIABILITIES & EQUITY

Current Liabilities:
Accounts Payable: $M $ 38,487 $ 41,433 $ 46,092 $ 47,060 $ 49,504 $ 52,507 $ 55,373 $ 58,335 $ 61,254
Accrued Liabilities: $M 20,128 21,575 22,767 22,587 23,216 24,132 24,950 25,780 26,559
Total Current Liabilities: $M 58,615 63,008 68,859 69,647 72,720 76,639 80,324 84,115 87,813

Long-Term Liabilities:
Debt: $M 43,667 39,370 39,040 50,621 47,228 45,268 44,071 43,524 43,602
Capital Leases: $M 6,367 6,568 7,447 7,412 7,768 8,030 8,286 8,546 8,797
Deferred Tax Liabilities: $M 7,321 9,344 8,354 11,981 11,795 11,604 11,409 11,211 11,006
Total Long-Term Liabilities: $M 57,355 55,282 54,841 70,014 66,790 64,902 63,766 63,281 63,406

Total Liabilities: $M 115,970 118,290 123,700 139,661 139,510 141,540 144,090 147,396 151,219

Common Shareholders' Equity: $M 80,546 77,798 77,869 72,496 74,892 77,172 79,287 81,243 83,148
Noncontrolling Interest: $M 3,065 2,737 2,953 7,138 7,271 7,417 7,575 7,745 7,931
Total Equity: $M 83,611 80,535 80,822 79,634 82,163 84,589 86,862 88,988 91,078

Total Liabilities & Equity: $M $ 199,581 $ 198,825 $ 204,522 $ 219,295 $ 221,673 $ 226,129 $ 230,952 $ 236,385 $ 242,297

Balance Check: OK OK OK OK OK OK OK OK OK

Page 15 of 24
Walmart Model Financial Statement Projections

Historical: Projected:
Consolidated Statement of Cash Flows: Units: FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income to Parent: $M $ 14,694 $ 13,643 $ 9,862 $ 6,670 $ 13,250 $ 13,504 $ 13,674 $ 13,858 $ 14,248
Adjustments for Non-Cash Charges:
(+) Net Income Attrib. to NCI: $M 386 650 661 509 1,074 1,174 1,270 1,371 1,496
(+) Depreciation & Amortization: $M 9,454 10,080 10,529 10,678 10,532 10,937 11,298 11,666 12,018
(+) Loss / (-) Gains: $M - - 3,136 8,368 - - - - -
(+) Goodwill Impairment: $M - - - - - - - - -
(+/-) Deferred Income Taxes: $M (672) 761 (304) (499) (186) (191) (194) (198) (205)
(+/-) Other Operating Activities: $M 1,410 206 1,210 1,734 1,203 1,249 1,291 1,332 1,373
Changes in Operating Assets and Liabilities:
Accounts Receivable: $M (19) (402) (1,074) (368) 77 (221) (231) (216) (208)
Inventories: $M (703) 1,021 (140) (1,311) (610) (1,252) (1,027) (1,015) (885)
Prepaid Expenses & Other Assets: $M 2,008 - - - 87 (665) (685) (723) (747)
Accounts Payable: $M 1,466 3,942 4,086 1,831 2,444 3,003 2,867 2,962 2,919
Accrued Liabilities: $M (472) 1,772 371 143 629 916 818 829 779
Cash Flow from Operations: $M $ 27,552 $ 31,673 $ 28,337 $ 27,755 $ 28,500 $ 28,454 $ 29,082 $ 29,865 $ 30,787

CASH FLOWS FROM INVESTING ACTIVITIES

(-) CapEx: $M $ (11,477) $ (10,619) $ (10,051) $ (10,344) $ (10,575) $ (11,013) $ (11,470) $ (11,932) $ (12,395)
(-) Acquisitions, Net of Cash Acquired: $M - (2,463) (375) (14,656) (2,000) (2,500) (3,000) (3,500) (4,000)
(+/-) Changes in Investments & Other Items: $M 802 (814) 1,347 964 575 575 575 575 575
Cash Flow from Investing: $M $ (10,675) $ (13,896) $ (9,079) $ (24,036) $ (12,000) $ (12,939) $ (13,895) $ (14,857) $ (15,820)

CASH FLOWS FROM FINANCING ACTIVITIES

(+) Share Issuances / (-) Repurchases: $M $ (4,112) $ (8,298) $ (8,296) $ (7,410) $ (5,000) $ (5,250) $ (5,500) $ (5,750) $ (6,000)
(+) Debt Issuances: $M 1,274 137 11,624 15,872 4,107 6,039 7,303 8,453 9,078
(-) Debt Repayments: $M (4,432) (3,728) (13,061) (3,837) (7,500) (8,000) (8,500) (9,000) (9,000)
(+/-) Net Change in Capital Leases: $M - - - - 356 263 256 260 251
(-) Dividends: $M (6,294) (6,216) (6,124) (6,102) (6,104) (6,255) (6,369) (6,489) (6,709)
(-) Dividends to Noncontrolling Interest: $M (719) (479) (690) (431) (941) (1,028) (1,113) (1,200) (1,310)
(-) Purchase of Noncontrolling Interest: $M (1,326) (90) (8) - - - - - -
(+/-) Other Activities: $M (676) (398) (3,320) (629) (568) (568) (568) (568) (568)
Cash Flow from Financing: $M $ (16,285) $ (19,072) $ (19,875) $ (2,537) $ (15,650) $ (14,799) $ (14,490) $ (14,294) $ (14,257)

FX Rate Effects: $M (1,022) (452) 487 (438) (386) (400) (414) (427) (440)

Net Change in Cash: $M $ (430) $ (1,747) $ (130) $ 744 $ 464 $ 317 $ 283 $ 287 $ 270
Beginning Cash: $M 9,135 8,705 6,958 6,828 7,572 8,036 8,353 8,636 8,923
Ending Cash: $M $ 8,705 $ 6,958 $ 6,828 $ 7,572 $ 8,036 $ 8,353 $ 8,636 $ 8,923 $ 9,193

Page 16 of 24
Walmart Inc. - Q1 Financial Results
($ in Millions Except Per Share and Per Unit Data)

Reported Income Statement and Cash Flow Statement Figures from Q1: FY20 - Q1
Revenue: $ 123,925
Annual Revenue Growth Rate: 1.0%
Operating Income (EBIT): 4,945
Annual Operating Margin: 4.0%

(-) Taxes, Excluding Effect of Interest: (1,200)

Net Operating Profit After Tax (NOPAT): 3,745

Adjustments for Non-Cash Charges:

(+) Depreciation & Amortization: 2,714
(+/-) Deferred Income Taxes: 124
(+/-) Other Operating Activities: 75
Total Adjustments for Non-Cash Charges: 2,913

Net Change in Working Capital:

Accounts Receivable: 970
Inventories: (421)
Prepaid Expenses and Other Current Assets: -
Accounts Payable: (1,854)
Accrued Liabilities: (1,168)
Total Net Change in Working Capital: (2,473)

(-) Capital Expenditures and Acquisitions: (2,261)

Q1 Unlevered Free Cash Flow: 1,924

Walmart Inc. - Discounted Cash Flow Analysis - Base Case
($ in Millions Except Per Share and Per Unit Data)

DCF Assumptions & Output:

Discount Rate (WACC): 5.04% Terminal Value - Multiples Method: Terminal Value - Perpetuity Growth Method:
Selected Scenario: Base
Median EV / EBITDA of Comps: 10.0 x Expected Long-Term GDP Growth: 2.00%
Stub Period Fraction: 0.655
Baseline Terminal EBITDA Multiple: 9.5 x Baseline Terminal FCF Growth Rate: 0.20%
Current Equity Value: $ 302,578 Upside 10.9 x Upside 0.50%
(-) Cash & Cash-Equivalents: (9,255) Base 9.5 x Base 0.20%
(-) Equity Investments: (4,366) Downside 6.9 x Downside (0.75%)
(-) Other Non-Core Assets, Net: -
(-) Net Operating Losses: (1,843) Baseline Terminal Value: $ 381,969 Baseline Terminal Value: $ 381,969
(+) Total Debt & Capital Leases: 57,962 Implied Terminal FCF Growth Rate: 0.20% Implied Terminal EBITDA Multiple: 9.5 x
(+) Preferred Stock: -
(+) Noncontrolling Interests: 6,705 (+) PV of Terminal Value: 237,598 (+) PV of Terminal Value: 237,598
(+) Unfunded Pension Obligations: 175 (+) Sum of PV of Free Cash Flows: 133,812 (+) Sum of PV of Free Cash Flows: 133,812
(+) Restructuring & Other Liabilities: - Implied Enterprise Value: 371,410 Implied Enterprise Value: 371,410
Current Enterprise Value: $ 351,955
% of Implied EV from Terminal Value: 64.0% % of Implied EV from Terminal Value: 64.0%

(+) Cash & Cash-Equivalents: 9,255 (+) Cash & Cash-Equivalents: 9,255
(+) Equity Investments: 4,366 (+) Equity Investments: 4,366
(+) Other Non-Core Assets, Net: - (+) Other Non-Core Assets, Net: -
(+) Net Operating Losses: 1,843 (+) Net Operating Losses: 1,843
(-) Total Debt & Capital Leases: (57,962) (-) Total Debt: (57,962)
(-) Preferred Stock: - (-) Preferred Stock: -
(-) Noncontrolling Interests: (6,705) (-) Noncontrolling Interests: (6,705)
(-) Unfunded Pension Obligations: (175) (-) Unfunded Pension Obligations: (175)
(-) Restructuring & Other Liabilities: - (-) Restructuring & Other Liabilities: -
Implied Equity Value: 322,032 Implied Equity Value: 322,032

Diluted Shares Outstanding: 2,878.677 Diluted Shares Outstanding: 2,878.677

Implied Share Price from DCF: $ 111.87 Implied Share Price from DCF: $ 111.87
Premium / (Discount) to Current: 6.4% Premium / (Discount) to Current: 6.4%
 Historical: Projected:
Unlevered Free Cash Flow Projections: Units: FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29

Total Revenue: $M $ 482,130 $ 485,873 $ 500,343 $ 514,405 $ 526,618 $ 546,854 $ 564,924 $ 583,287 $ 600,897 $ 618,924 $ 637,492 $ 653,429 $ 669,765 $ 686,509
Growth Rate: % N/A 0.8% 3.0% 2.8% 2.4% 3.8% 3.3% 3.3% 3.0% 3.0% 3.0% 2.5% 2.5% 2.5%
Upside % 4.5% 4.5% 4.0% 4.0% 3.5%
Base % 3.0% 3.0% 2.5% 2.5% 2.5%
Downside % 2.0% 2.0% 1.5% 1.5% 1.5%

Operating Income (EBIT): $M 24,105 22,764 20,437 21,957 21,480 21,788 22,050 22,371 23,031 23,722 24,433 25,044 25,670 26,312
Operating (EBIT) Margin: % 5.0% 4.7% 4.1% 4.3% 4.1% 4.0% 3.9% 3.8% 3.8% 3.8% 3.8% 3.8% 3.8% 3.8%

(-) Taxes, Excluding Effect of Interest: $M (5,847) (5,522) (4,958) (5,326) (5,211) (5,285) (5,349) (5,427) (5,587) (5,754) (5,927) (6,075) (6,227) (6,383)

Net Operating Profit After Tax (NOPAT): $M 18,258 17,242 15,479 16,631 16,269 16,503 16,701 16,944 17,444 17,967 18,506 18,969 19,443 19,929

Adjustments for Non-Cash Charges:

(+) Depreciation & Amortization: $M 9,454 10,080 10,529 10,678 10,532 10,937 11,298 11,666 12,018 12,378 12,750 13,069 13,395 13,730
% Revenue: % 2.0% 2.1% 2.1% 2.1% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

(+/-) Deferred Income Taxes: $M (599) 677 (328) (621) (212) (215) (217) (220) (227) (234) (241) (247) (253) (259)
% Book Taxes: % (10.2%) 12.3% (6.6%) (11.7%) (4.1%) (4.1%) (4.1%) (4.1%) (4.1%) (4.1%) (4.1%) (4.1%) (4.1%) (4.1%)

(+/-) Other Operating Activities: $M 1,410 206 1,210 1,734 1,203 1,249 1,291 1,332 1,373 1,414 1,456 1,493 1,530 1,568
% Revenue: % 0.3% 0.0% 0.2% 0.3% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2%

Net Change in Working Capital:

Accounts Receivable: $M (19) (402) (1,074) (368) 77 (221) (231) (216) (208)
Inventories: $M (703) 1,021 (140) (1,311) (610) (1,252) (1,027) (1,015) (885)
Prepaid Expenses & Other Assets: $M 2,008 - - - 87 (665) (685) (723) (747)
Accounts Payable: $M 1,466 3,942 4,086 1,831 2,444 3,003 2,867 2,962 2,919
Accrued Liabilities: $M (472) 1,772 371 143 629 916 818 829 779
(+/-) Net Change in Working Capital: $M 2,280 6,333 3,243 295 2,626 1,781 1,743 1,837 1,857 1,901 1,958 1,681 1,723 1,766
% Change in Revenue: % N/A 169.2% 22.4% 2.1% 21.5% 8.8% 9.6% 10.0% 10.5% 10.5% 10.5% 10.5% 10.5% 10.5%

(-) Capital Expenditures & Acquisitions: $M (11,477) (13,082) (10,426) (25,000) (12,575) (13,513) (14,470) (15,432) (16,395) (16,887) (17,394) (17,828) (18,274) (18,731)
% Revenue: % 2.4% 2.7% 2.1% 4.9% 2.4% 2.5% 2.6% 2.6% 2.7% 2.7% 2.7% 2.7% 2.7% 2.7%

Annual Unlevered Free Cash Flow: $M 19,325 21,456 19,708 3,717 17,844 16,742 16,346 16,127 16,070 16,540 17,036 17,136 17,564 18,003
Growth Rate: % N/A 11.0% (8.1%) (81.1%) 380.1% (6.2%) (2.4%) (1.3%) (0.4%) 2.9% 3.0% 0.6% 2.5% 2.5%

Unlevered Free Cash Flow for Remainder: $M 15,920 16,742 16,346 16,127 16,070 16,540 17,036 17,136 17,564 18,003

Discount Rate (WACC): % 5.04% 5.04% 5.04% 5.04% 5.04% 5.04% 5.04% 5.04% 5.04% 5.04%
Cumulative Discount Factor - Normal: # 0.968 0.922 0.878 0.836 0.795 0.757 0.721 0.686 0.653 0.622
Cumulative Discount Factor - Mid-Year: # 0.984 0.945 0.899 0.856 0.815 0.776 0.739 0.703 0.670 0.638

Normal Discount Period: # 0.655 1.655 2.655 3.655 4.655 5.655 6.655 7.655 8.655 9.655
Mid-Year Discount Period: # 0.327 1.155 2.155 3.155 4.155 5.155 6.155 7.155 8.155 9.155

PV of Unlevered FCF: $M 15,666 15,818 14,702 13,810 13,100 12,837 12,587 12,053 11,762 11,477

EBITDA: $M $ 33,559 $ 32,844 $ 30,966 $ 32,635 $ 32,012 $ 32,725 $ 33,349 $ 34,037 $ 35,049 $ 36,100 $ 37,183 $ 38,113 $ 39,065 $ 40,042
Growth Rate: % N/A (2.1%) (5.7%) 5.4% (1.9%) 2.2% 1.9% 2.1% 3.0% 3.0% 3.0% 2.5% 2.5% 2.5%
Sensitivity Tables:

Sensitivity - Terminal FCF Growth Rate vs. Discount Rate and Implied Share Price from DCF Analysis:

Terminal FCF Growth Rate:

11186.8% (0.75%) (0.63%) (0.50%) (0.38%) (0.25%) (0.13%) - 0.13% 0.25% 0.38% 0.50%
Discount Rate (WACC): 6.00%
5.75%
5.50%
5.25%
5.00%
4.75%
4.50%
4.25%
4.00%

Sensitivity - Terminal EBITDA Multiple vs. Discount Rate and Implied Share Price from DCF Analysis:

Terminal EBITDA Multiple:

11186.8% 6.9 x 7.3 x 7.7 x 8.1 x 8.5 x 8.9 x 9.3 x 9.7 x 10.1 x 10.5 x 10.9 x
Discount Rate (WACC): 6.00%
5.75%
5.50%
5.25%
5.00%
4.75%
4.50%
4.25%
4.00%

Sensitivity - Operating Scenario vs. Discount Rate and Implied Share Price from DCF Analysis:

Operating Scenario:
11186.8% Downside Base Upside
Discount Rate (WACC): 6.00%
5.75%
5.50%
5.25%
5.00%
4.75%
4.50%
4.25%
4.00%
WACC Analysis - Walmart Inc.
($ in Millions Except Per Share and Per Unit Data)

Discount Rate Calculations - Assumptions:

Risk-Free Rate: 2.12%
Equity Risk Premium: 5.96%
Pre-Tax Cost of Debt: 3.77%
Cost of Preferred Stock: –

Comparable Companies - Unlevered Beta Calculation:

Levered Preferred Equity Unlevered
Name Beta Debt % Debt Stock % Preferred Value % Equity Tax Rate Beta
Costco Wholesale Corporation 0.90 $ 6,529 5.5% $ - – $ 112,121 94.5% 20.7% 0.86
Walgreens Boots Alliance, Inc. 0.76 18,041 27.9% - – 46,611 72.1% 15.5% 0.57
The Kroger Co. 0.68 13,469 41.5% - – 18,985 58.5% 22.9% 0.44
Target Corporation 0.60 12,413 21.8% - – 44,606 78.2% 22.4% 0.49
Best Buy Co., Inc. 0.99 1,393 7.5% - – 17,081 92.5% 19.7% 0.93

Median: 0.76 $ 12,413 21.8% $ - – $ 44,606 78.2% 20.7% 0.57

Walmart Inc. 0.37

Walmart Inc. - Levered Beta & WACC Calculation:

Unlevered Preferred Equity Levered
Beta Debt % Debt Stock % Preferred Value % Equity Tax Rate Beta
Current Capital Structure: 0.57 $ 57,962 16.1% $ - – $ 302,578 83.9% 24.3% 0.66
"Optimal" Capital Structure: 0.57 78,489 21.8% - – 282,051 78.2% 24.3% 0.69

Cost of Equity Based on Comparables, Current Capital Structure: 6.03%

Cost of Equity Based on Comparables, "Optimal" Capital Structure: 6.25%
Cost of Equity Based on Historical Beta: 4.33%

WACC = Cost of Equity * % Equity + Cost of Debt * % Debt * (1 - Tax Rate) + Cost of Preferred Stock * % Preferred Stock

WACC, Current Capital Structure: 5.52%

WACC, Current Capital Structure and Historical Cost of Equity: 4.09%
WACC, "Optimal" Capital Structure: 5.51%

Average WACC Produced by All Methods: 5.04%

Valuation Summary - Walmart Inc. - Base Case
($ in Millions Except Per Share and Per Unit Data)

Valuation Statistics - Walmart Inc. Range of Valuation Multiples / Premiums Implied Per-Share Value Range

75th 25th Applicable 25th 75th

Maximum Percentile Median Percentile Minimum Company Minimum Percentile Median Percentile Maximum
Methodology Name Multiple Multiple Multiple Multiple Multiple Figure Multiple Multiple Multiple Multiple Multiple

Public Company Comparables:

2019-04-30 EV / Revenue: 0.7 x 0.7 x 0.4 x 0.4 x 0.3 x $ 515,640 $ 29.84 $ 53.01 $ 58.91 $ 114.20 $ 115.52
FY 20 E EV / Revenue: 0.7 x 0.7 x 0.4 x 0.4 x 0.3 x 526,618 29.94 53.38 59.55 112.49 113.73
FY 21 E EV / Revenue: 0.7 x 0.7 x 0.4 x 0.4 x 0.3 x 546,854 30.53 55.06 60.51 108.63 114.76
2019-04-30 EV / EBITDA: 18.0 x 8.4 x 7.1 x 6.3 x 6.1 x 32,462 51.45 54.42 62.72 77.02 185.38
FY 20 E EV / EBITDA: 16.9 x 8.3 x 6.7 x 6.0 x 5.9 x 32,012 48.04 49.22 57.43 75.49 170.84
FY 21 E EV / EBITDA: 15.7 x 8.1 x 6.7 x 5.8 x 5.7 x 32,725 47.92 49.17 58.94 74.77 161.18
2019-04-30 Reported P / E: 31.1 x 14.8 x 11.2 x 10.2 x 9.1 x 8,378 26.43 29.77 32.68 43.07 90.52
FY 20 E Reported P / E: 30.9 x 14.7 x 11.3 x 10.9 x 8.6 x 13,250 39.55 50.00 51.82 67.51 142.21
FY 21 E Reported P / E: 29.3 x 14.1 x 11.1 x 10.4 x 8.8 x 13,504 41.06 48.77 52.14 66.34 137.60

Precedent Transactions:
2019-04-30 EV / Revenue: 0.9 x 0.7 x 0.3 x 0.2 x 0.2 x $ 515,640 $ 16.96 $ 21.90 $ 36.82 $ 115.62 $ 141.38
2019-04-30 EV / EBITDA: 11.3 x 9.4 x 6.8 x 5.7 x 4.8 x 32,462 36.47 46.63 60.08 89.38 109.98
1-Day Premiums: 67.1% 26.0% 17.4% 7.9% (17.7%) $ 105.11 86.53 113.43 123.35 132.42 175.63
1-Week Premiums: 51.7% 21.6% 18.0% 10.7% (12.9%) 102.19 89.02 113.13 120.54 124.23 154.98
1-Month Premiums: 52.7% 15.9% 12.8% 8.4% 2.1% 102.46 104.58 111.03 115.58 118.79 156.48

Discounted Cash Flow Analysis:

4.00% - 6.00% WACC, (0.13%) - 0.50% Terminal FCF Growth Rate: $ 88.68 $ 99.82 $ 113.85 $ 132.10 $ 156.82
Comparable Companies - U.S.-Based Diversified Retailers and Grocers with Over $40 Billion in LTM Revenue
($ in Millions Except Per Share and Per Unit Data)

Operating Statistics: Capitalization Projected Projected

Equity Enterprise Revenue EBITDA Reported Net Income Revenue EBITDA EBITDA Margin
Company Name Value Value LTM 2020-01-31 2021-01-31 LTM 2020-01-31 2021-01-31 LTM 2020-01-31 2021-01-31 Growth Growth LTM 2020-01-31 2021-01-31
Costco Wholesale Corporation $ 112,121 $ 110,817 $ 149,616 $ 156,373 $ 167,371 $ 6,170 $ 6,555 $ 7,064 $ 3,605 $ 3,629 $ 3,822 7.0% 7.8% 4.1% 4.2% 4.2%
Walgreens Boots Alliance, Inc. 46,611 57,794 136,097 137,845 141,370 8,160 8,617 8,634 5,133 5,424 5,325 2.6% 0.2% 6.0% 6.3% 6.1%
The Kroger Co. 18,985 31,666 120,691 122,995 126,163 4,989 5,401 5,532 1,856 1,748 1,826 2.6% 2.4% 4.1% 4.4% 4.4%
Target Corporation 44,606 55,879 76,202 78,104 80,472 6,691 6,707 6,911 3,014 3,041 3,154 3.0% 3.0% 8.8% 8.6% 8.6%
Best Buy Co., Inc. 17,081 16,809 42,912 43,593 44,218 2,763 2,816 2,881 1,521 1,517 1,537 1.4% 2.3% 6.4% 6.5% 6.5%

Maximum $ 112,121 $ 110,817 $ 149,616 $ 156,373 $ 167,371 $ 8,160 $ 8,617 $ 8,634 $ 5,133 $ 5,424 $ 5,325 7.0% 7.8% 8.8% 8.6% 8.6%
75th Percentile 46,611 57,794 136,097 137,845 141,370 6,691 6,707 7,064 3,605 3,629 3,822 3.0% 3.0% 6.4% 6.5% 6.5%
Median 44,606 55,879 120,691 122,995 126,163 6,170 6,555 6,911 3,014 3,041 3,154 2.6% 2.4% 6.0% 6.3% 6.1%
25th Percentile 18,985 31,666 76,202 78,104 80,472 4,989 5,401 5,532 1,856 1,748 1,826 2.6% 2.3% 4.1% 4.4% 4.4%
Minimum 17,081 16,809 42,912 43,593 44,218 2,763 2,816 2,881 1,521 1,517 1,537 1.4% 0.2% 4.1% 4.2% 4.2%

Walmart Inc. $ 302,578 $ 351,955 $ 515,640 $ 526,618 $ 546,854 $ 32,462 $ 32,012 $ 32,725 $ 8,378 $ 13,250 $ 13,504 3.8% 2.2% 6.3% 6.1% 6.0%

Valuation Statistics: Capitalization Enterprise Value / Enterprise Value /

Equity Enterprise Revenue EBITDA P / E Multiple
Company Name Value Value LTM 2020-01-31 2021-01-31 LTM 2020-01-31 2021-01-31 LTM 2020-01-31 2021-01-31
Costco Wholesale Corporation $ 112,121 $ 110,817 0.7 x 0.7 x 0.7 x 18.0 x 16.9 x 15.7 x 31.1 x 30.9 x 29.3 x
Walgreens Boots Alliance, Inc. 46,611 57,794 0.4 x 0.4 x 0.4 x 7.1 x 6.7 x 6.7 x 9.1 x 8.6 x 8.8 x
The Kroger Co. 18,985 31,666 0.3 x 0.3 x 0.3 x 6.3 x 5.9 x 5.7 x 10.2 x 10.9 x 10.4 x
Target Corporation 44,606 55,879 0.7 x 0.7 x 0.7 x 8.4 x 8.3 x 8.1 x 14.8 x 14.7 x 14.1 x
Best Buy Co., Inc. 17,081 16,809 0.4 x 0.4 x 0.4 x 6.1 x 6.0 x 5.8 x 11.2 x 11.3 x 11.1 x

Maximum $ 112,121 $ 110,817 0.7 x 0.7 x 0.7 x 18.0 x 16.9 x 15.7 x 31.1 x 30.9 x 29.3 x
75th Percentile 46,611 57,794 0.7 x 0.7 x 0.7 x 8.4 x 8.3 x 8.1 x 14.8 x 14.7 x 14.1 x
Median 44,606 55,879 0.4 x 0.4 x 0.4 x 7.1 x 6.7 x 6.7 x 11.2 x 11.3 x 11.1 x
25th Percentile 18,985 31,666 0.4 x 0.4 x 0.4 x 6.3 x 6.0 x 5.8 x 10.2 x 10.9 x 10.4 x
Minimum 17,081 16,809 0.3 x 0.3 x 0.3 x 6.1 x 5.9 x 5.7 x 9.1 x 8.6 x 8.8 x

Walmart Inc. $ 302,578 $ 351,955 0.7 x 0.7 x 0.6 x 10.8 x 11.0 x 10.8 x 36.1 x 22.8 x 22.4 x
Precedent Transactions - U.S.-Based Retail Sellers with Transaction Enterprise Value Above $1 Billion
Announced Between January 1st, 2010 and June 6th, 2019
($ in Millions Except Per Share and Per Unit Data)

Walmart Inc. - Comparable M&A Transactions Operating Metrics Valuation Multiples Premiums Paid
Transaction EV / EV /
Enterprise LTM LTM LTM LTM 1-Day 1-Week 1-Month
Acquirer Name Target Name Date Value Revenue EBITDA Revenue EBITDA Prior Prior Prior
CVC Capital Partners Limited BJ's Wholesale Club Inc. 2011-06-29 $ 2,627 $ 11,134 $ 385 0.2 x 6.8 x 6.6% 8.4% 2.1%
Cerberus Capital Management, L.P. / Safeway Inc. 2014-03-06 7,663 36,139 1,611 0.2 x 4.8 x (17.7%) (12.9%) 7.3%
Albertsons Companies, Inc.
Dollar Tree, Inc. Family Dollar Stores Inc. 2014-07-28 9,185 10,378 815 0.9 x 11.3 x 22.8% 22.6% 11.5%
Amazon.com, Inc. Whole Foods Market, Inc. 2017-06-16 13,733 15,856 1,333 0.9 x 10.3 x 27.0% 17.5% 16.5%
Sycamore Partners Staples, Inc. 2017-06-28 6,614 18,033 1,255 0.4 x 5.3 x 11.9% 18.4% 14.1%
United Natural Foods, Inc. SUPERVALU INC. 2018-07-26 2,932 15,395 426 0.2 x 6.9 x 67.1% 51.7% 52.7%

Maximum $ 13,733 $ 36,139 $ 1,611 0.9 x 11.3 x 67.1% 51.7% 52.7%

75th Percentile 8,804 17,489 1,314 0.7 x 9.4 x 26.0% 21.6% 15.9%
Median 7,138 15,626 1,035 0.3 x 6.8 x 17.4% 18.0% 12.8%
25th Percentile 3,852 12,200 523 0.2 x 5.7 x 7.9% 10.7% 8.4%
Minimum 2,627 10,378 385 0.2 x 4.8 x (17.7%) (12.9%) 2.1%