Unit 4

Assignment3_BalanceSheet_DebtScheduleS.xlsx

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Income Statement

Consolidated Income Statements
(in US$ millions except per share amounts)			Actuals			Estimates
Period Ending January 31			2010.0	2011.0	2012.0	2013.0	2014.0	2015.0	2016.0	2017.0
Revenue
	Net Sales		405,132.3	418,952.0	443,854.0
		% Growth		3.4%	5.9%
	Membership and Other Income		2,953.0	2,897.0	3,096.0
		% Growth		-1.9%	6.9%
	Total revenue		408,085.0	421,849.0	446,950.0	473,767.0	502,193.0	532,324.6	564,264.1	598,119.9
		Y/Y revenue growth (%)		3.4%	6.0%	6.0%	6.0%	6.0%	6.0%	6.0%
Cost of goods sold
	Cost of goods sold		304,106.0	314,946.0	335,127.0	355,325.3	376,644.8	399,243.5	423,198.1	448,589.9
		COGS as a % of revenue	74.5%	74.7%	75.0%	75.0%	75.0%	75.0%	75.0%	75.0%
	Gross profit		103,979.0	106,903.0	111,823.0	118,441.8	125,548.3	133,081.2	141,066.0	149,530.0
		Gross profit margin (%)	25.5%	25.3%	25.0%	25.0%	25.0%	25.0%	25.0%	25.0%
Operating expenses
	Selling, general and administrative		72,820.0	73,720.0	77,135.0	81,961.7	86,879.4	92,092.2	97,617.7	103,474.7
		SG&A as a % of revenue	17.8%	17.5%	17.3%	17.3%	17.3%	17.3%	17.3%	17.3%
EBITDA			31,159.0	33,183.0	34,688.0	36,480.1	38,668.9	40,989.0	43,448.3	46,055.2
		EBITDA margin (%)	7.6%	7.9%	7.8%	7.7%	7.7%	7.7%	7.7%	7.7%
	Depreciation and amortization		7,157.0	7,641.0	8,130.0	8,591.7	9,194.3	9,833.1	10,510.2	11,227.9
EBIT			24,002.0	25,542.0	26,558.0	27,888.4	29,474.6	31,155.9	32,938.1	34,827.3
		EBIT margin (%)	5.9%	6.1%	5.9%	5.9%	5.9%	5.9%	5.8%	5.8%
Interest
	Interest expense (Debt)		1,787.0	1,928.0	2,034.0
	Interest expense (Capital Leases)		278.0	277.0	288.0
	Interest income		(181.0)	(201.0)	(162.0)
	Net interest expense		1,884.0	2,004.0	2,160.0
EBT			22,118.0	23,538.0	24,398.0	27,888.4	29,474.6	31,155.9	32,938.1	34,827.3
		EBT margin (%)	5.4%	5.6%	5.5%
	Income tax expense		7,156.0	7,579.0	7,944.0	9,203.2	9,726.6	10,281.5	10,869.6	11,493.0
		Tax rate (%)	32.4%	32.2%	32.6%	33.0%	33.0%	33.0%	33.0%	33.0%
Net Income (Adjusted)			14,962.0	15,959.0	16,454.0	18,685.2	19,748.0	20,874.5	22,068.5	23,334.3
Non-recurring events
	Discontinued operations		(79.0)	1,034.0	(67.0)	0.0	0.0	0.0	0.0	0.0
	Other		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
	Total non-recurring events		(79.0)	1,034.0	(67.0)
Net Income (After non-recurring events)			14,883.0	16,993.0	16,387.0	18,685.2	19,748.0	20,874.5	22,068.5	23,334.3
Distributions
	Income attributable to non-controlling interests		(513.0)	(604.0)	(688.0)	(784.8)	(829.4)	(876.7)	(926.9)	(980.0)
		Non-controlling interests % of Net Income	3.4%	3.6%	4.2%	4.2%	4.2%	4.2%	4.2%	4.2%
Net Income (as Reported)			14,370.0	16,389.0	15,699.0	17,900.4	18,918.5	19,997.7	21,141.7	22,354.2
Earnings per share (EPS)
	Basic		3.72	4.48	4.54	5.33	5.80	5.95	6.90	7.54
	Diluted		3.71	4.47	4.52	5.32	5.79	6.31	6.89	7.53
Average common shares outstanding
	Basic		3,866	3,656	3,460	3,361	3,262	3,361	3,064	2,965
	Diluted		3,877	3,670	3,474	3,366	3,267	3,168	3,069	2,970
	Shares repurchased						99.0	99.0	99.0	99.0
Diluted Shares
Share Price				74
Number of basic shares outstanding				361,444,307.0
Number of outstanding options (in the money)				13,596,000.0
Average option strike price				50.5
Total option proceeds				686,462,040.0
Treasury stock method shares repurchased				9,299,133.6
Additional shares outstanding				4,296,866.4
Total diluted shares outstanding				365,741,173.4

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Cash Flow Statement

Consolidated Statements of Cash Flows
(in US$ millions)			Actuals			Estimates
Period Ending January 31			2010.0	2011.0	2012.0	2013.0	2014.0	2015.0	2016.0	2017.0
Cash flows from operating activities
	Net income		14,370.0	16,389.0	15,699.0	17,900.4	18,918.5	19,997.7	21,141.7	22,354.2
	Loss (income) from discontinued operations		79.0	(1,034.0)	67.0	0.0	0.0	0.0	0.0	0.0
	Depreciation and amortization		7,157.0	7,641.0	8,130.0	8,591.7	9,194.3	9,833.1	10,510.2	11,227.9
	Deferred income taxes		(504.0)	651.0	1,050.0	715.8	1,004.6	762.6	609.8	439.3
	Other Operating Activities		318.0	1,087.0	398.0	318.0	318.0	318.0	318.0	318.0
	Changes in operating working capital
		Changes in accounts receivable	(297.0)	(733.0)	(796.0)	146.5	(347.4)	(368.3)	(390.4)	(413.8)
		Changes in inventory	2,213.0	(3,205.0)	(3,727.0)	(148.4)	(2,451.7)	(2,598.8)	(2,754.8)	(2,920.1)
changes in prepaid expenses and other						(773.9)	(147.5)	(156.4)	(165.8)	(175.7)
		Changes in accounts payable	1,052.0	2,676.0	2,687.0	701.2	2,238.5	2,372.9	2,515.2	2,666.1
		Changes in accrued liabilities	1,348.0	(433.0)	59.0	1,425.7	1,174.8	1,245.3	1,320.0	1,399.2
Changes in accrued income taxes						(399.6)	43.5	46.1	48.8	51.8
		Net changes in operating working capital	4,316.0	(1,695.0)	(1,777.0)	951.5	510.1	540.7	573.2	607.5
	Total cash flows from operating activities		25,736.0	23,039.0	23,567.0	28,477.4	29,945.5	31,406.1	33,152.8	34,947.0
Cash flows from investing activities
	Payments for property and equipment (CAPEX)		(12,184.0)	(12,699.0)	(13,510.0)	(14,213.0)	(15,065.8)	(15,969.7)	(16,927.9)	(17,943.6)
		CAPEX % Of Revenue	3.0%	3.0%	3.0%	3.0%	3.0%	3.0%	3.0%	3.0%
	Proceeds from disposal of property and equipment		1,002.0	489.0	580.0
	Investments and business acquisitions, net of cash acquired		0.0	(202.0)	(3,548.0)
	Other investing activities		(438.0)	219.0	(131.0)	(438.0)	219.0	(131.0)	(438.0)	219.0
	Total cash from investing activities		(11,620.0)	(12,193.0)	(16,609.0)	(14,651.0)	(14,846.8)	(16,100.7)	(17,365.9)	(17,724.6)
Cash flows from financing activities
	Short-term borrowings (repayments)		(1,033.0)	503.0	3,019.0	0.0	0.0	0.0	0.0	0.0
	Long-term borrowings (repayments)		(487.0)	7,316.0	466.0	0.0	0.0	0.0	0.0	0.0
	Long-term debt due within one year		0	0	0	0	0	0	0	0
	Obligations under capital leases due within one year		0	0	0	0	0	0	0	0
	Dividends paid		(4,217.0)	(4,437.0)	(5,048.0)	0.0	0.0	(5,029.9)	0.0	0.0
		Dividends paid($/share)				1.59	1.59	1.59	1.59	1.59
	Purchase of common stock [treasury stock]		(7,276.0)	(14,776.0)	(6,298.0)	(7,308.2) Paul: NYSF: Based on 99 shares purchased times $73.82	(7,308.2)	(7,308.2)	(7,308.2)	(7,308.2)
	Purchase of redeemable noncontrolling interest		(436.0)	0.0	0.0	0.0	0.0	0.0	0.0	0.0
	Capital Lease Obligations		(346.0)	(363.0)	(355.0)	0.0	0.0	0.0	0.0	0.0
	Other		(396.0)	(271.0)	(242.0)	(242.0)	(242.0)	(242.0)	(242.0)	(242.0)
	Total cash from financing activities		(14,191.0)	(12,028.0)	(8,458.0)	(7,550.2)	(7,550.2)	(12,580.1)	(7,550.2)	(7,550.2)
		Effect of Exchange Rate on Cash	194.0	66.0	(33.0)	(396.0)	(271.0)	(242.0)	(242.0)	(242.0)
Total change in cash and cash equivalents			119.0	(1,116.0)	(1,533.0)	5,880.3	7,277.6	2,483.3	7,994.8	9,430.3
SUPPLEMENTAL DATA:
	Cash flow before debt paydown		1,985.0	(8,572.0)	(4,663.0)	5,880.3	7,277.6	2,483.3	7,994.8	9,430.3

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Balance Sheet

Consolidated Balance Sheets
(in US$ millions)			Actuals			Estimates
On January 31			2010.0	2011.0	2012.0	2013.0	2014.0	2015.0	2016.0	2017.0
Assets
	Current assets:
		Cash and cash equivalents		7,395.0	6,550.0	12,430.3	19,707.8	22,191.1	30,185.9	39,616.2
		Receivables, net		5,089.0	5,937.0	5,790.5	6,137.9	6,506.2	6,896.6	7,310.4
		Inventories		36,437.0	40,714.0	40,862.4	43,314.1	45,913.0	48,667.8	51,587.8
		Prepaid expenses and other		2,960.0	1,685.0	2,458.9	2,606.4	2,762.8	2,928.5	3,104.2
		Other current assets (discontinued operations)		131.0	89.0	89.0	89.0	89.0	89.0	89.0
		Total current assets		52,012.0	54,975.0	61,631.0	71,855.3	77,462.0	88,767.7	101,707.6
	Property, plant and equipment, net			107,878.0	112,324.0 tc={BB1B166B-FA66-41C3-A1CD-CAC6727E8181}: [Threaded comment] Your version of Excel allows you to read this threaded comment; however, any edits to it will get removed if the file is opened in a newer version of Excel. Learn more: https://go.microsoft.com/fwlink/?linkid=870924 Comment: Combined PP&E and property under capital lease net	117,945.3	123,816.8	129,953.5	136,371.2	143,086.9
	Goodwill			16,763.0	20,651.0	20,651.0	20,651.0	20,651.0	20,651.0	20,651.0
	Other assets and deferred charges			4,129.0	5,456.0	5,576.0	5,039.0	4,852.0	4,972.0	4,435.0
	Total assets			180,782.0	193,406.0	205,803.3	221,362.1	232,918.5	250,761.9	269,880.5
Liabilities
	Current liabilities:
		Short-term borrowings		1,031.0	4,047.0	4,047.0	4,047.0	4,047.0	4,047.0	4,047.0
		Accounts payable		33,676.0	36,608.0	37,309.2	39,547.7	41,920.6	44,435.8	47,101.9
		Accrued liabilities		18,701.0	18,154.0	19,579.7	20,754.5	21,999.8	23,319.8	24,719.0
		Accrued income taxes		157.0	1,164.0	764.4	807.8	853.9	902.8	954.6
		Long term debt due within one year		4,655.0	1,975.0	1,975.0	1,975.0	1,975.0	1,975.0	1,975.0
		Obligations under capital leases due within one year		336.0	326.0	326.0	326.0	326.0	326.0	326.0
		Current liabilities of discontinued operations		47.0	26.0	26.0	26.0	26.0	26.0	26.0
		Total current liabilities		58,603.0	62,300.0	64,027.3	67,484.1	71,148.3	75,032.4	79,149.5
	Long-term debt			40,692.0	44,070.0	44,070.0	44,070.0	44,070.0	44,070.0	44,070.0
	Long-term obligations under capital leases			3,150.0	3,009.0	3,009.0	3,009.0	3,009.0	3,009.0	3,009.0
	Deferred income taxes and other			6,682.0	7,862.0	8,577.8	9,582.3	10,344.9	10,954.7	11,394.1
	Redeemable noncontrolling interest			408.0	404.0	404.0	404.0	404.0	404.0	404.0
	Total liabilities			109,535.0	117,645.0	120,088.1	124,549.4	128,976.2	133,470.1	138,026.6
Shareholders' equity
	Common stock par value + additional paid-in-capital			3,929.0	4,034.0	4,034.0	4,034.0	4,034.0	4,034.0	4,034.0
	Retained earnings			63,967.0	68,691.0	79,283.3	90,893.6	98,553.3	112,386.8	127,432.8
	Accumulated other comprehensive income (loss)			646.0	(1,410.0)	(2,048.0)	(2,561.0)	(3,045.0)	(3,529.0)	(4,013.0)
	Total shareholders' equity			68,542.0	71,315.0	81,269.3	92,366.6	99,542.3	112,891.8	127,453.8
		Noncontrolling interest		2,705.0	4,446.0	4,446.0	4,446.0	4,446.0	4,446.0	4,446.0
	Total liabilities & equity			180,782.0	193,406.0	205,803.3	221,362.0	232,964.5	250,807.9	269,926.4
SUPPLEMENTAL DATA:
	Balance? (Y/N)			Y	Y	Y	Y	N	N	N

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Depreciation

Depreciation
(in US$ millions)			Actuals			Estimates
Period Ending January 31			2010.0	2011.0	2012.0	2013.0	2014.0	2015.0	2016.0	2017.0
	Property, plant & equipment (beg. of year)		0.0			112,324.0
	Capital expenditures (beg. of year)					14,213.0	15,065.8	15,969.7	16,927.9	17,943.6
Book (GAAP) depreciation
	Useful Life
		PP&E Years				14
		CAPEX Years				25	25	25	25	25
	Depreciation
		Existing PP&E				8,023.1	8,023.1	8,023.1	8,023.1	8,023.1
		2013 CAPEX				568.5	568.5	568.5	568.5	568.5
		2014 CAPEX					602.6	602.6	602.6	602.6
		2015 CAPEX						638.8	638.8	638.8
		2016 CAPEX							677.1	677.1
		2017 CAPEX								717.7
	Total book depreciation					8,591.7	9,194.3	9,833.1	10,510.2	11,227.9
Accelerated depreciation (%)
		Existing PP&E				8.75%	9.13%	8.12%	7.39%	6.65%
		2013 CAPEX				6.56%	7.00%	6.48%	6.00%	5.55%
		2014 CAPEX					6.56%	7.00%	6.48%	6.00%
		2015 CAPEX						6.56%	7.00%	6.48%
		2016 CAPEX							6.56%	7.00%
		2017 CAPEX								6.56%
Accelerated depreciation
		Existing PP&E				9,828.4	10,255.2	9,120.7	8,300.7	7,469.5
		2013 CAPEX				932.4	994.9	921.0	852.8	788.8
		2014 CAPEX					988.3	1,054.6	976.3	903.9
		2015 CAPEX						1,047.6	1,117.9	1,034.8
		2016 CAPEX							1,110.5	1,185.0
		2017 CAPEX								1,177.1
	Total tax depreciation					10,760.7	12,238.4	12,143.9	12,358.1	12,559.2
	Difference in depreciation					2,169.1	3,044.1	2,310.8	1,847.9	1,331.3
		Tax rate (%)				33%	33%	33%	33%	33%
	Deferred taxes					715.8	1,004.6	762.6	609.8	439.3

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Operating Working Capital

Operating Working Capital Schedule (OWC)
(in US$ millions)			Actuals			Estimates
On January 31			2010.0	2011.0	2012.0	2013.0	2014.0	2015.0	2016.0	2017.0
Current assets
	Receivables, net			5,089.0	5,937.0	5,790.5	6,137.9	6,506.2	6,896.6	7,310.4
		Days receivable			4.4	4.4	4.4	4.4	4.4	4.4
	Inventories			36,437.0	40,714.0	40,862.4	43,314.1	45,913.0	48,667.8	51,587.8
		Inventory turnover days			41.4	41.4	41.4	41.4	41.4	41.4
	Prepaid expenses and other			2,960.0	1,685.0	2,458.9	2,606.4	2,762.8	2,928.5	3,104.2
		Days prepaid			10.8	10.8	10.8	10.8	10.8	10.8
	Total current assets			44,486.0	48,336.0	49,111.7	52,058.4	55,182.0	58,492.9	62,002.4
Current liabilities
	Accounts payable			33,676.0	36,608.0	37,309.2	39,547.7	41,920.6	44,435.8	47,101.9
		Days payable				37.8	37.8	37.8	37.8	37.8
	Accrued liabilities			18,701.0	18,154.0	19,579.7	20,754.5	21,999.8	23,319.8	24,719.0
		Days payable				86.0	86.0	86.0	86.0	86.0
	Accrued taxes			157.0	1,164.0	764.4	807.8	853.9	902.8	954.6
		Days Payable				29.9	29.9	29.9	29.9	29.9
	Total current liabilities			52,534.0	55,926.0	57,653.3	61,110.1	64,774.3	68,658.4	72,775.5
	Total operating working capital			(8,048.0)	(7,590.0)	(8,541.5)	(9,051.6)	(9,592.3)	(10,165.5)	(10,773.0)
	Change in total operating working capital					(951.5)	(510.1)	(540.7)	(573.2)	(607.5)
	Match? (Y/N)					Y	Y	Y	Y	Y

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Debt Schedule

Debt Schedule
(in US$ millions)			Actuals			Estimates
Period Ending January 31			2010.0	2011.0	2012.0	2013.0	2014.0	2015.0	2016.0	2017.0
Cash available to pay down debt
	Cash at beginning of year					6,550.0	12,430.3	19,707.8	22,191.1	30,185.9
	Cash flow before debt paydown					5,880.3	7,277.6	2,483.3	7,994.8	9,430.3
	Minimum cash cushion					(1,000.0)	(1,000.0)	(1,000.0)	(1,000.0)	(1,000.0)
	Total cash available to pay down debt					11,430.3	18,707.8	21,191.1	29,185.9	38,616.2
Short term borrowings / revolver
	Short term borrowings (beginning of year)					4,047.0	4,047.0	4,047.0	4,047.0	4,047.0
	Mandatory issuances / (retirements)					0.0	0.0	0.0	0.0	0.0
	Non-mandatory issuances / (retirements)					0.0	0.0	0.0	0.0	0.0
	Short term borrowings (end of year)				4,047.0	4,047.0	4,047.0	4,047.0	4,047.0	4,047.0
	Short term interest expense					4.0	4.0	4.0	4.0	4.0
		Short term interest rate				0.1%	0.1%	0.1%	0.1%	0.1%
Long term debt due within one year
	Long term debt due within one year (beginning of year)					1,975.0	1,975.0	1,975.0	1,975.0	1,975.0
	Mandatory issuances / (retirements)					0.0	0.0	0.0	0.0	0.0
	Non-mandatory issuances / (retirements)					0.0	0.0	0.0	0.0	0.0
	Long term debt due within one year (end of year)				1,975.0	1,975.0	1,975.0	1,975.0	1,975.0	1,975.0
	Interest expense					96.8	96.8	96.8	96.8	96.8
		Interest rate				4.9%	4.9%	4.9%	4.9%	4.9%
Obligations under capital leases due within one year
	Obligations under capital leases due within one year (beginning of year)					326.0	326.0	326.0	326.0	326.0
	Mandatory issuances / (retirements)					0.0	0.0	0.0	0.0	0.0
	Non-mandatory issuances / (retirements)					0.0	0.0	0.0	0.0	0.0
	Obligations under capital leases due within one year (end of year)				326.0	326.0	326.0	326.0	326.0	326.0
	Interest expense					27.5	27.5	27.5	27.5	27.5
		Interest rate				8.4%	8.4%	8.4%	8.4%	8.4%
Long term debt
	Long term debt (beginning of year)					44,070.0	44,070.0	44,070.0	44,070.0	44,070.0
	Mandatory issuances / (retirements)					0.0	0.0	0.0	0.0	0.0
	Non-mandatory issuances / (retirements)					0.0	0.0	0.0	0.0	0.0
	Long term debt (end of year)				44,070.0	44,070.0	44,070.0	44,070.0	44,070.0	44,070.0
	Interest expense					1,983.0	1,983.0	1,983.0	1,983.0	1,983.0
		Interest rate				4.5%	4.5%	4.5%	4.5%	4.5%
Long term obligations under capital leases
	Long term obligations under capital leases (beginning of year)					3,009.0	3,009.0	3,009.0	3,009.0	3,009.0
	Mandatory issuances / (retirements)					0.0	0.0	0.0	0.0	0.0
	Non-mandatory issuances / (retirements)					0.0	0.0	0.0	0.0	0.0
	Long term obligations under capital leases (end of year)				3,009.0	3,009.0	3,009.0	3,009.0	3,009.0	3,009.0
	Interest expense					254.1	254.1	254.1	254.1	254.1
		Interest rate				8.4%	8.4%	8.4%	8.4%	8.4%
	Total issuances / (retirements)					0.0	0.0	0.0	0.0	0.0
	Total interest expense					2,365.4	2,365.4	2,365.4	2,365.4	2,365.4
	Cash at the end of the year				6,550.0	12,430.3	19,707.8	22,191.1	30,185.9	39,616.2
	Interest income					237.3	401.7	523.7	654.7	872.5
		Interest rate				2.5%	2.5%	2.5%	2.5%	2.5%
	Match? (Y/N)					Y	Y	Y	Y	Y

&8 The Analyst ExchangeOn - Line Trainingwww.theanalystexchange.com &F, &A&P of &N

---> Valuation

DCF Analysis

Discounted Cash Flow Analysis

(in US$ millions)

Actuals

Estimates

Period Ending January 31

2010.0

2011.0

2012.0

2013.0

2014.0

2015.0

2016.0

2017.0

Unlevered Free Cash Flow

EBIT

Depreciation & Amortization

Deferred Taxes

Other

Changes in Working Capital

Capital Expenditures

Taxes

Total Unlevered Free Cash Flow

Net Present Value Calulation

Period

Discounted Cash Flow

Total Net Present Value

Terminal Value

EBITDA Method

Cost of Capital

Exit Year EBITDA

Risk Free Rate

Debt YE 2012

Multiple

Market Risk Premium

Stock Price

Terminal Value

Beta

Shares Outstanding

Net Present Value

Cost of Equity

Equity Value

Perpetuity Method

Cost of Debt

Unlevered Free Cash Flow

Growth Rate

WACC

Terminal Value

Net Present Value

Discounted Cash Flow Total Valuation

EBITDA Method

Perpetuity Method

Total of Present Value of Cash Flows

Present Value of Terminal Value

Total Enterprise Value

Net Debt, Non-controlling interests, preferred securities

Equity Value

Share Count (millions)

Estimated Equity Value per Share

Comparable Companies

Comparable Companies Analysis

(in US$ millions)

Current Stock Price$

Market Capitalization (Value)$

Enterprise

Price / Earnings

E.V. / Revenue

E.V. / EBIT

E.V. / EBITDA

Value

12A

LTM

13E

12A

LTM

13E

12A

LTM

13E

12A

LTM

13E

Company

$MM

Walmart

$0.00

0.0

51,551.0

0.0x

0.1x

1.9x

1.8x

1.5x

1.4x

COSTCO

Target

$62.79

41,486.5

58,558.5

14.7x

14.2x

13.6x

0.8x

11.0x

11.1x

10.7x

7.9x

7.8x

7.6x

Dollar General

$47.16

15,854.0

18,338.4

20.2x

17.4x

15.4x

1.2x

1.0x

12.3x

11.5x

10.3x

10.4x

9.8x

8.7x

Dollar Tree

$37.74

8,697.1

8,581.6

9.4x

16.1x

15.3x

1.3x

1.2x

11.0x

10.2x

9.8x

9.1x

8.5x

8.1x

Family Dollar Store

$66.12

7,645.8

8,100.9

19.3x

18.6x

16.2x

0.9x

0.8x

12.2x

11.8x

10.6x

9.5x

9.1x

8.1x

Median

17.0x

16.8x

15.3x

1.1x

1.0x

0.9x

11.6x

11.3x

10.5x

9.3x

8.8x

8.1x

High

20.2x

18.6x

16.2x

1.3x

1.2x

12.3x

11.8x

10.7x

10.4x

9.8x

8.7x

Low

9.4x

14.2x

13.6x

0.8x

11.0x

10.2x

9.8x

7.9x

7.8x

7.6x

Operating Statistics

Sales

EBIT

D&A

EBITDA

EPS

12A

LTM

13E

12A

LTM

13E

12A

LTM

13E

12A

LTM

13E

12A

LTM

13E

Company

$MM

$/share

Walmart

446,950.0

460,709.0

473,767.0

26,558.0

27,364.0

27,888.4

8,130.0

8,457.0

8,591.7

34,688.0

35,821.0

36,480.1

$4.54

$4.80

$5.32

COSTCO

Target

69,865.0

71,336.0

73,358.3

5,322.0

5,298.0

5,472.6

2,131.0

2,170.0

2,231.5

7,453

7,468

7,704

$4.28

$4.43

$4.61

Dollar General

14,807.2

15,630.2

17,505.8

1,490.8

1,590.7

1,781.6

275.4

285.8

320.1

1,766

1,876

2,102

$2.33

$2.71

$3.06

Dollar Tree

6,630.5

6,970.4

7,293.6

782.1

839.3

878.2

163.9

169.9

177.8

946

1,009

1,056

$4.03
Paul: NYSF: Shares were not re-adjusted for stock split on 6/2012

$2.34

$2.47

Family Dollar Store

8,829.5

9,265.7

10,264.1

665.2

683.9

763.6

191.5

208.4

232.0

857

892

996

$3.42

$3.55

$4.09

&8 The Analyst ExchangeOn - Line Training www.theanalystexchange.com &F, &A &P of &N

Costco Comp

Costco Income Statement

Actuals

Estimates

Q1 2011A

Q2 2011A

Q3 2011A

Q4 2011E

2011.0

Q1 2012A

Q2 2012A

Q3 2012A

Q4 2012E

2012A

YE Adjusted

LTM 2012

2013E

Revenue

Sales

Membership fees

Total revenue

Y/Y revenue growth (%)

Cost of goods sold

COGS as a % of revenue

Gross profit

Gross profit margin (%)

Operating expenses

Selling, general and administrative

SG&A as a % of revenue

Total operating expenses

EBITDA

EBITDA margin (%)

Depreciation and amortization

D&A % of Revenue

EBIT

EBIT margin (%)

Other income

Equity in earnings of unconsolidated affiliates

Foreign-currency transactions gains (losses), net

Total Other Income

Interest

Interest expense

Interest income

Net interest expense

Earnings before tax (EBT)

IBT margin (%)

Income tax expense

Effective tax rate (%)

Net income (before noncontrolling interests)

Income attributable to noncontrolling interests

% of net income

Net income (adjusted)

Non-recurring events

Preopening expenses

Guest: NYSF: Tax-adjusted based on effective tax rate

Guest: NYSF: Effective tax rate based on 2011 YE Financials

Other items

Total non-recurring events

Net income (as reported)

Earnings per share (As reported)

Basic

Diluted

Earnings per share (adjusted)

Basic

Diluted

Average common shares outstanding

Basic

Diluted

Costco Diluted Shares

Share Price

Number of basic shares outstanding

Number of outstanding options (in the money)

Average option strike price

Total option proceeds

Treasury stock method shares repurchased

Additional shares outstanding

Total diluted shares outstanding

Costco Enterprise Value

Market value

Short-term debt

Long-term debt (includes current portions)

Capital lease obligations

Convertible debt

Preferred securities

Minority interest

Less: Cash & equivalents

Enterprise value

&8 The Analyst ExchangeOn - Line Trainingwww.theanalystexchange.com &F, &A&P of &N

Wal-Mart Comp

Costco Income Statement
			Actuals						Estimates
			Q1 2011A	Q2 2011A	2012.0	Q1 2012A	Q2 2012A	LTM 2012	2013E
Revenue
		Sales	103,415.0	108,638.0	443,854.0	112,272.0	113,534.0
		Membership fees	774.0	728.0	3,096.0	746.0	762.0
	Total revenue		104,189.0	109,366.0	446,950.0	113,018.0	114,296.0	460,709.0	473,767.0
		Y/Y revenue growth (%)
Cost of goods sold			78,177.0	81,770.0	335,127.0	85,186.0	85,657.0	346,023.0	355,325.3
	COGS as a % of revenue		75%	75%	75%	75%	75%	75%	75%
Gross profit			26,012.0	27,596.0	111,823.0	27,832.0	28,639.0	114,686.0	118,441.8
	Gross profit margin (%)		25%	25%	25%	25%	25%	25%	25%
Operating expenses
	Selling, general and administrative		18,131.0	17,186.0	77,135.0	19,339.0	17,708.0	78,865.0	81,961.7
		SG&A as a % of revenue	17%	16%	17%	17%	15%	17%	17%
	Total operating expenses		18,131.0	17,186.0	77,135.0	19,339.0	17,708.0	78,865.0	81,961.7
EBITDA			7,881.0	10,410.0	34,688.0	8,493.0	10,931.0	35,821.0	36,480.1
	EBITDA margin (%)		8%	10%	8%	8%	10%	8%	8%
Depreciation and amortization			1,985.0	4,027.0	8,130.0	2,106.0	4,233.0	8,457.0	8,591.7
	D&A % of Revenue		2%	4%	2%	2%	4%	2%	2%
EBIT			5,896.0	6,383.0	26,558.0	6,387.0	6,698.0	27,364.0	27,888.4
	EBIT margin (%)		6%	6%	6%	6%	6%	6%	6%
Other income
	Equity in earnings of unconsolidated affiliates		0.0	0.0	0.0	0.0	0.0	0.0	0.0
	Foreign-currency transactions gains (losses), net		0.0	0.0	0.0	0.0	0.0	0.0	0.0
	Total Other Income		0.0	0.0	0.0	0.0	0.0	0.0	0.0
Interest
	Interest expense
	Interest income
	Net interest expense		518.0	578.0	2,160.0	535.0	505.0	2,104.0	0.0
Earnings before tax (EBT)			5,378.0	5,805.0	24,398.0	5,852.0	6,193.0	25,260.0	27,888.4
	IBT margin (%)		5%	5%	5%	5%	5%	5%	6%
Income tax expense			1,800.0	1,868.0	7,944.0	1,958.0	2,032.0	8,266.0	9,203.2
	Effective tax rate (%)		33%	32%	33%	33%	33%	33%	35%
Net income (before minority interests)			3,578.0	3,937.0	16,454.0	3,894.0	4,161.0	16,994.0	18,685.2
	Income attributable to noncontrolling interests		151.0	136.0	688.0	152.0	145.0	698.0	784.8
		% of net income	4%	3%	4%	4%	3%	4%	4%
Net income (adjusted)			3,427.0	3,801.0	15,766.0	3,742.0	4,016.0	16,296.0	17,900.4
Non-recurring events
	Loss from discountinued operations		28.0	0.0	0.0	0.0	0.0	(28.0)	0.0
	Other items		0.0	0.0	0.0	0.0	0.0	0.0	0.0
	Total non-recurring events		28.0	0.0	0.0	0.0	0.0	(28.0)	0.0
Net income (as reported)			3,399.0	3,801.0	15,766.0	3,742.0	4,016.0	16,324.0	17,900.4
Earnings per share (As reported)
	Basic		0.97	1.09	4.69	1.10	1.19	4.82	5.33
	Diluted		0.97	1.09	4.54	1.09	1.18	4.80	5.32
Earnings per share (adjusted)
	Basic		0.98	1.09	4.69	1.10	1.19	4.82	5.33
	Diluted		0.98	1.09	4.54	1.09	1.18	4.80	5.32
Average common shares outstanding
	Basic		3,497	3,472	3,361	3,409	3,384	3,384	3,361
	Diluted		3,513	3,485	3,474	3,425	3,398	3,398	3,366
Enterprise Value
Market value			0.0
Short-term debt			6,091.0
Long-term debt (includes current portions)			45,231.0
Capital lease obligations			3,301.0
Convertible debt			0.0
Preferred securities			0.0
Minority interest			4,863.0
Less: Cash & equivalents			(7,935.0)
Enterprise value			$51,551.0

&8 The Analyst ExchangeOn - Line Trainingwww.theanalystexchange.com &F, &A&P of &N

Target Comp

Target Income Statement
			Actuals						Estimates
			1Q2011A	2Q2011A	2012.0	1Q2012A	2Q2012A	LTM 2012	2013E
Revenue
		Sales	15,580.0	15,895.0	68,466.0	16,537.0	16,451.0	69,979.0	71,889.3
									5%
		Credit card revenue	355.0	345.0	1,399.0	330.0	328.0	1,357.0	1,469.0
									5%
	Total revenue		15,935.0	16,240.0	69,865.0	16,867.0	16,779.0	71,336.0	73,358.3
		Y/Y revenue growth (%)							5%
Cost of goods sold
		Cost of Sales	10,838.0	10,872.0	47,860.0	11,541.0	11,297.0	48,988.0	50,325.3
		Cost of Sales as a % of revenue	70%	68%	70%	70%	69%	70%	70%
		Credit card expenses	88.0	86.0	446.0	120.0	108.0	500.0	541.2
		Credit Card Expenses as a % of revenue	25%	25%	32%	36%	33%	37%	37%
	Cost of goods sold		10,926.0	10,958.0	48,306.0	11,661.0	11,405.0	49,488.0	50,866.5
		COGS as a % of revenue	69%	67%	69%	69%	68%	69%	69%
	Gross profit		5,009.0	5,282.0	21,559.0	5,206.0	5,374.0	21,848.0	22,491.7
		Gross profit margin (%)	31%	33%	31%	31%	32%	31%	31%
Operating expenses
	Selling, general and administrative		3,233.0	3,473.0	14,106.0	3,392.0	3,588.0	14,380.0	14,787.6
		SG&A as a % of revenue	20%	21%	20%	20%	21%	20%	20%
	Total operating expenses		3,233.0	3,473.0	14,106.0	3,392.0	3,588.0	14,380.0	14,787.6
	EBITDA		1,776.0	1,809.0	7,453.0	1,814.0	1,786.0	7,468.0	7,704.1
		EBITDA margin (%)	11%	11%	11%	11%	11%	10%	11%
	Depreciation and amortization		512.0	509.0	2,131.0	529.0	531.0	2,170.0	2,231.5
		D&A % of Revenue	3%	3%	3%	3%	3%	3%	3%
	EBIT		1,264.0	1,300.0	5,322.0	1,285.0	1,255.0	5,298.0	5,472.6
		EBIT margin (%)	8%	8%	8%	8%	7%	7%	7%
Interest
	Non-recoursed debt		19.0	18.0	72.0	2.0	3.0	40.0	72.0
	Interest expense		164.0	174.0	797.0	182.0	182.0	823.0	797.0
	Interest income		0.0	(1.0)	(3.0)	0.0	(1.0) Guest: NYSF: Assumes same as 2Q 2011 levels	(3.0)	(3.0)
	Net interest expense		183.0	191.0	866.0	184.0	184.0	860.0	866.0
	Income before tax (IBT)		1,081.0	1,109.0	4,456.0	1,101.0	1,071.0	4,438.0	4,606.6
		IBT margin (%)	7%	7%	6%	7%	6%	6%	6%
	Income tax expense		392.0	405.0	1,527.0	404.0	367.0	1,501.0	1,558.0
		All-in effective tax rate (%)	36%	37%	34%	37%	34%	34%	34%
	Net income		689.0	704.0	2,929.0	697.0	704.0	2,937.0	3,048.5
Earnings per share (EPS)
	Basic		0.99	1.03	4.31	1.05	1.07	4.47	4.66
	Diluted		0.99	1.03	4.28	1.04	1.06	4.43	4.61
Average common shares outstanding
	Basic		693	681	679	666	657	657	655
	Diluted		697	685	684	672	663	663	661
				(12.2)	(1.7)	(13.1)	(9.3)
Target Diluted Shares
Share Price			$62.79
Number of basic shares outstanding			654,885,290
Number of outstanding options (in the money)			23,283,000
Average option strike price			$47.06
Total option proceeds			1,095,697,980
Treasury stock method shares repurchased			17,450,198
Additional shares outstanding			5,832,802
Total diluted shares outstanding			660,718,092
Target Enterprise Value
Market value			41,486.5
Short-term debt			3,285.0
Long-term debt (includes current portions)			15,229.0
Capital lease obligations			0.0
Convertible debt			0.0
Preferred securities			0.0
Minority interest			0.0
Less: Cash & equivalents			(1,442.0)
Enterprise value			$58,558.5

&8 The Analyst ExchangeOn - Line Trainingwww.theanalystexchange.com &F, &A&P of &N

Dollar General

Dollar General Income Statement
			Actuals								Estimates
			Q1 2011A	Q2 2011A	2011.0	Q1 2012A	Q2 2012A	2012A	YE Adjusted	LTM 2012	2013E
Revenue
		Sales	3,451.7	3,575.2	14,807.2	3,901.2	3,948.7			15,630.2
	Total revenue		3,451.7	3,575.2	14,807.2	3,901.2	3,948.7			15,630.2	17,505.8
		Y/Y revenue growth (%)									12.0%
Cost of goods sold			2,364.3	2,426.9	10,109.3	2,672.9	2,685.4			10,676.5	11,957.7
	COGS as a % of revenue		68%	68%	68%	69%	68%			68%	68%
Gross profit			1,087.4	1,148.3	4,697.9	1,228.3	1,263.2			4,953.7	5,548.1
	Gross profit margin (%)		32%	32%	32%	31%	32%			32%	32%
Operating expenses
	Selling, general and administrative		698.3	729.9	2,931.7	771.7	802.0			3,077.2	3,446.4
		SG&A as a % of revenue	20%	20%	20%	20%	20%			20%	20%
	Total operating expenses		698.3	729.9	2,931.7	771.7	802.0			3,077.2	3,446.4
EBITDA			389.1	418.4	1,766.2	456.6	461.2			1,876.5	2,101.7
	EBITDA margin (%)		11%	12%	12%	12%	12%			12%	12%
Depreciation and amortization			67.5	68.4	275.4	72.3	74.0			285.8	320.1
	D&A % of Revenue		2%	2%	2%	2%	2%			2%	2%
EBIT			321.6	350.0	1,490.8	384.3	387.2			1,590.7	1,781.6
	EBIT margin (%)		9%	10%	10%	10%	10%			10%	10%
Other income
	Equity in earnings of unconsolidated affiliates		0.0	0.0	0.0	0.0	0.0			0.0	0.0
	Foreign-currency transactions gains (losses), net		0.0	0.0	0.0	0.0	0.0			0.0	0.0
	Total Other Income		0.0	0.0	0.0	0.0	0.0			0.0	0.0
Interest
	Interest expense		65.6	60.7	205.0	37.1	35.7			151.5	151.5
	Interest income		(0.0)	(0.0)	(0.1)	0.0	0.0			(0.0)	(0.0)
	Net interest expense		65.6	60.6	204.9	37.1	35.7			151.4	151.4
Earnings before tax (EBT)			256.0	289.4	1,285.9	347.3	351.5			1,439.3	1,630.1
	IBT margin (%)		7%	8%	9%	9%	9%			9%	9%
Income tax expense			97.7	106.6	481.3	132.8	119.9			529.8	600.0
	Effective tax rate (%)		38% Guest: NYSF: Effective tax rate based on 2011 YE Financials	37% Guest: NYSF: Effective tax rate based on 2011 YE Financials	37% Guest: NYSF: Effective tax rate based on 2011 YE Financials	38% Guest: NYSF: Effective tax rate based on 2011 YE Financials	34% Guest: NYSF: Effective tax rate based on 2011 YE Financials			37% Guest: NYSF: Effective tax rate based on 2011 YE Financials	37%
Net income (before minority interests)			158.4	182.8	804.6	214.4	231.6			909.5	1,030.1
	Income attributable to noncontrolling interests		0.0	0.0	0.0	0.0	0.0			0.0	0.0
		% of net income	0%	0%	0%	0%	0%			0%	0%
Net income (adjusted)			158.4	182.8	804.6	214.4	231.6			909.5	1,030.1
Non-recurring events
	Preopening expenses		0.0	0.0 Guest: NYSF: Tax-adjusted based on effective tax rate	0.0 Guest: NYSF: Tax-adjusted based on effective tax rate	0.0 Guest: NYSF: Tax-adjusted based on effective tax rate	0.0 Guest: NYSF: Tax-adjusted based on effective tax rate			0.0 Guest: NYSF: Tax-adjusted based on effective tax rate	0.0
	Other items		1.4	36.8	37.9 Mark Bottini: Mark Bottini: Net redemption and repurchase of senior notes		Guest: NYSF: Tax-adjusted based on effective tax rate	Mark Bottini: Mark Bottini: This is the net SG&A amount after D&A had been taken out				Guest: NYSF: Tax-adjusted based on effective tax rate	1.0	17.5	18.3	18.3
	Total non-recurring events		1.4	36.8	37.9	1.0	17.5			18.3	18.3
Net income (as reported)			157.0	146.0	766.7	213.4	214.1			891.2	1,011.9
Earnings per share (As reported)
	Basic		0.46	0.43	2.25	0.64	0.64			2.68	3.03
	Diluted		0.45	0.42	2.22	0.63	0.64			2.66	3.01
Earnings per share (adjusted)
	Basic		0.46	0.54	2.36	0.64	0.70			2.73	3.09
	Diluted		0.46	0.53	2.33	0.63	0.69			2.71	3.06
Average common shares outstanding
	Basic		342	342	341	336	333			333	334
	Diluted		345	346	345	339	336			336	336
Dollar General Diluted Shares
Share Price			$47.16
Number of basic shares outstanding			333,695,858
Number of outstanding options (in the money)			3,098,603
Average option strike price			$9.42
Total option proceeds			29,188,840
Treasury stock method shares repurchased			618,932
Additional shares outstanding			2,479,671
Total diluted shares outstanding			336,175,529
Dollar General Enterprise Value
Market value			15,854.0
Short-term debt			0.0
Long-term debt (includes current portions)			2,613.4
Capital lease obligations			5.1
Convertible debt			0.0
Preferred securities			0.0
Minority interest			0.0
Less: Cash & equivalents			(134.2)
Enterprise value			$18,338.4

Dollar Tree

Dollar Tree Income Statement
(in $ millions except for per share data)				Actuals						Estimates
				Q1 2011A	Q2 2011A	2011A	Q1 2012A	Q2 2012A	LTM	2013E
Net sales				Ksh 1,546	Ksh 1,542	Ksh 6,631	Ksh 1,724	Ksh 1,705	Ksh 6,970	Ksh 7,294
	Y/Y revenue growth (%)									10.0%
Cost of sales				966	960	4,088	1,079	1,062	Ksh 4,303	4,503
	Cost of sales as a % of revenue			62.5%	62.3%	61.7%	62.6%	62.3%	61.7%	61.7%
Gross profit				Ksh 580	Ksh 582	Ksh 2,542	Ksh 644	Ksh 643	Ksh 2,667	Ksh 2,791
	Gross profit as a % of revenue			37.5%	37.7%	38.3%	37.4%	37.7%	38.3%	38.3%
Selling, general and administrative expenses				379	389	1,596	415	415	1,658	1,735
	SG&A profit as a % of revenue			24.5%	25.2%	24.1%	24.1%	24.4%	23.8%	23.8%
EBITDA				Ksh 201	Ksh 193	Ksh 946	Ksh 230	Ksh 227	Ksh 1,009	Ksh 1,056
	EBITDA margin (%)			13.0%	12.5%	14.3%	13.3%	13.3%	14.5%	14.5%
Depreciation				39	40	164	42	43	170	178
	Depreciation as a % of revenue			2.5%	2.6%	2.5%	2.4%	2.5%	2.4%	2.4%
EBIT				162	154	782	188	184	839	878
	EBIT margin (%)			10.5%	10.0%	11.8%	10.9%	10.8%	12.0%	12.0%
Interest expense, net				1	1	3	1	1	3	3
Other income, net				(1)	1	(0)	(1)	0	(1)	(1)
Income before income taxes (EBT)				Ksh 162	Ksh 152	Ksh 780	Ksh 189	Ksh 183	Ksh 838	Ksh 877
	EBT margin (%)			10.4%	9.9%	11.8%	10.9%	10.8%	12.0%	12.0%
Provision for income taxes				61	57	291	73	64	293	307
		Reported EBT		162	152	780	189	183
		Provision for income taxes		61	57	291	73	64
	Effective tax rate			37.5%	37.7%	37.4%	38.4%	35.0%	35.0%	35.0%
Net income				Ksh 101	Ksh 95	Ksh 488	Ksh 116	Ksh 119	Ksh 545	Ksh 570
Net income per share
	Basic			$ 0.82	$ 0.39	$ 4.06	$ 1.00	$ 0.52	$ 2.35	$ 2.47
	Diluted			$ 0.82	$ 0.39	$ 4.03	$ 1.00	$ 0.51	$ 2.34	$ 2.47
Weighted average shares outstanding (millions)
	Basic			122.6	244.6	120.3	115.8	231.3	231	230
	Diluted			123.5	246.1	121.2	116.4	232.6	233	230
Dollar Tree Diluted Shares
Share Price			$37.74
Number of basic shares outstanding			230,325,396
Number of outstanding options (in the money)			675,980 camp0880: camp0880: from 10-K filed Mar 15, 2012
Average option strike price			$30.94 camp0880: camp0880: from 10-K filed Mar 15, 2012
Total option proceeds			20,914,821
Treasury stock method shares repurchased			554,181
Additional shares outstanding			121,799
Total diluted shares outstanding			230,447,195
Dollar Tree Enterprise Value
Market value			8,697.1
Short-term debt			14.3
Long-term debt (includes current portions)			250.0
Capital lease obligations			0.0
Convertible debt			0.0
Preferred securities			0.0
Minority interest			0.0
Less: Cash & equivalents			(379.8)
Enterprise value			$8,581.6

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Family Dollar Store

Family Dollar Stores Income Statement
			Actuals												Estimates
			1Q2011A	2Q2011A	3Q2011A	4Q2011E	2010.0	1Q2012A	2Q2012A	3Q2012A	4Q2012E	2011A	YE Adjustments	LTM 2012	2013E
Revenue
		Sales	1,996.9	2,263.2	2,153.4	2,134.3	8,547.8	2,148.3	2,458.6	2,360.0	2,364.1	9,331.0	8,829.5	9,265.7	10,264.1
	Total revenue		1,996.9	2,263.2	2,153.4	2,134.3	8,547.8	2,148.3	2,458.6	2,360.0	2,364.1	9,331.0	8,829.5	9,265.7	10,264.1
		Y/Y revenue growth (%)					9%	8%	9%	10%	11%	9%			10%
Cost of goods sold
		Cost of Sales	1,277.4	1,455.8	1,373.6	1,408.7	5,515.5	1,390.7	1,601.2	1,514.7	1,564.4	6,071.1	5,725.8	6,024.8	6,671.7
		Cost of Sales as a % of revenue	64%	64%	64%	66%	65%	65%	65%	64%	66%	65%	65%	65%	65%
	Gross profit		719.6	807.4	779.8	725.6	3,032.3	757.6	857.4	845.3	799.7	3,259.9	3,103.7	3,241.0	3,592.4
		Gross profit margin (%)	36%	36%	36%	34%	35%	35%	35%	36%	34%	35%	35%	35%	35%
Operating expenses
	Selling, general and administrative		554.0	562.1	549.3	546.4	2,211.8	573.5	585.4	592.7	609.4	2,361.1	2,246.9	2,348.7	2,596.8
		SG&A as a % of revenue	28%	25%	26%	26%	26%	27%	24%	25%	26%	25.3%	25%	25.3%	25%
	Total operating expenses		554.0	562.1	549.3	546.4	2,211.8	573.5	585.4	592.7	609.4	2,361.1	2,246.9	2,348.7	2,596.8
	EBITDA		165.6	245.3	230.4	179.2	820.5	184.0	272.0	252.6	190.3	898.8	856.8	892.3	995.6
		EBITDA margin (%)	8%	11%	11%	8%	10%	9%	11%	11%	8%	10%	10%	10%	10%
	Depreciation and amortization		44.0	44.9	46.1	47.4	182.5	49.1	50.8	53.2	57.6	210.7	191.5	208.4	232.0
		D&A % of Revenue	2%	2%	2%	2%	2%	2%	2%	2%	2%	2%	2%	2%	2%
	EBIT		121.6	200.4	184.4	131.8	638.1	134.9	221.1	199.4	132.7	688.1	665.2	683.9	763.6
		EBIT margin (%)	6%	9%	9%	6%	7%	6%	9%	8%	6%	7%	8%	7%	7%
Interest
	Interest expense		3.5	4.6	7.1	7.2	22.4	6.7	6.4	5.6	6.3	25.1	26.9	24.9	25.1
	Interest income		0.4	0.4	0.5	0.3	1.5	0.2	0.2 Guest: NYSF: Assumes same as 2Q 2011 levels	0.3	0.2	0.9	1.2	1.0	0.9
	Net interest expense		(3.1)	(4.2)	(6.7)	(6.9)	(20.9)	(6.5)	(6.2)	(5.4)	(6.1)	(24.2)	(25.6)	(23.9)	(24.2)
	Income before tax (IBT)		118.5	196.2	177.7	124.8	617.2	128.4	214.9	194.0	126.5	663.9	639.6	660.0	739.5
		IBT margin (%)	6%	9%	8%	6%	7%	6%	9%	8%	5%	7%	7%	7%	7%
	Income tax expense		44.1	73.0	66.6	45.0	228.7	48.1	78.5	69.5	45.6	241.7	236.3	240.6	266.2
		All-in effective tax rate (%)	37%	37%	37%	36%	37%	37%	37%	36%	36%	36%	37%	36%	36%
	Net income		74.3	123.2	111.1	79.8	388.4	80.3	136.4	124.5	80.9	422.2	403.3	419.4	473.3
Earnings per share (EPS)
	Basic		0.58	0.99	0.91	0.65	3.15	0.68	1.16	1.07	0.69	3.61	3.45	3.58	4.10
	Diluted		0.58	0.98	0.91	0.65	3.12	0.68	1.15	1.06	0.69	3.58	3.42	3.55	4.09
Average common shares outstanding
	Basic		128	125	122	122	123	118	118	117	117	117	117	117	115
	Diluted		129	126	123	123	124	119	118	118	118	118	118	118	116
				(3.4)	(3.1)	0.5	(1.3)	(5.7)	(0.1)	(0.7)	0.2	0.1	(0.1)		(1.6)
Target Diluted Shares
Share Price			$66.12
Number of basic shares outstanding			115,402,997
Number of outstanding options (in the money)			377,000
Average option strike price			$25.50
Total option proceeds			9,613,500
Treasury stock method shares repurchased			145,394
Additional shares outstanding			231,606
Total diluted shares outstanding			115,634,603
Target Enterprise Value
Market value			7,645.8
Short-term debt			31.2
Long-term debt (includes current portions)			516.3
Capital lease obligations			0.0
Convertible debt			0.0
Preferred securities			0.0
Minority interest			0.0
Less: Cash & equivalents			(92.3)
Enterprise value			$8,100.9

Precedent Transactions

Precedent Transactions
(in US$ millions)
		Transaction Date	Purchase Price		Equity Value /	Enterprise Value /
			Market Value	Enterprise Value	Earnings	Revenue	EBIT	EBITDA
	Transaction		$MM	$MM	x	x	x	x
	KKR / Dollar General	7/6/07
	The Great Atlantic & Pacific Tea Co. / Pathmark Stores Inc.	2/27/07	818.1	1,400.0	N.M.	0.3x	54.1x	11.7x
	Whole Foods Market Inc. / Wild Oats Markets Inc	2/21/07	565.0	672.8	0.04x	0.6x	37.2x	15.2x
	Rite Aid Corporation / Jean Coutu Group (Brooks-Eckerd)	8/24/06	2,550.0	3,400.0	N/A	N/A	N/A	N/A
	Supervalu Inc., CVS Corporation, Cerberus Capital Management, L.P. / Albertson's, Inc	1/23/06	N/A	17,400.0	N/A	N/A	N/A	N/A
	Bon-Ton Stores Inc. / Saks Inc. (Northern)	10/31/05	N/A	1,047.3	N/A	0.5x	N/A	N/A
	Bain Capital LLC / Dollarama Inc	11/18/04	927.4	885.0	24.14x	1.8x	13.9x	12.4x
	Median		872.8	1,223.6	12.1x	0.5x	37.2x	12.4x
	High		2,550.0	17,400.0	24.1x	1.8x	54.1x	15.2x
	Low		565.0	672.8	0.0x	0.3x	13.9x	11.7x

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A&P - Pathmark

x	Income Statement - Pathmark Stores Inc.											x
	(In $ millions except for per share amounts)
						13-Weeks-	13-Weeks-	53-Weeks-	13-Weeks-	13-Weeks-
						Ended	Ended	Ended	Ended	Ended
						29-Apr-06	29-Jul-06	3-Feb-07	5-May-07	4-Aug-07	LTM
		Sales				$ 998.5	$ 1,002.9	$ 4,058.0	$ 999.0	$ 998.5	$ 4,054.1
		Cost of merchandise sold				(709.0)	(718.0)	(2,875.2)	(702.7)	(709.2)	(2,860.1)
		Gross margin				289.5	284.9	1,182.8	296.3	289.3	1,194.0
		Store operating, general and administrative expenses				(259.8)	(261.1)	(1,056.8)	(267.3)	(271.3)	(1,074.5)
		EBITDA				29.7	23.8	126.0	29.0	18.0	119.5
		Depreciation and amortization				(23.0)	(23.1)	(92.6)	(23.5)	(23.6)	(93.6)
		EBIT				6.7	0.7	33.4	5.5	(5.6)	25.9
		Interest expense				(15.5)	(15.4)	(62.3)	(15.9)	(15.9)	(63.2)
		Interest and dividend income				0.0	0.0	0.0	0.0	0.0	0.0
		Loss from continuing operations before income taxes				(8.8)	(14.7)	(28.9)	(10.4)	(21.5)	(37.3)
		Benefit from income taxes				3.4	5.9	10.6	1.9	4.4	9.3
				Loss from continuing operations before income taxes		(8.8)	(14.7)	(28.9)	(10.4)	(23.7)
				Benefit from income taxes		3.4	5.9	10.6	1.9	4.9
			Effective tax rate			38.6%	40.1%	36.7%	18.3%	20.7%	25.0%
		Net (loss) income from continuing operations camp0880: camp0880: after taxes and before non-recurring charges or credits directly attributable to the transaction				$ (5.4)	$ (8.8)	$ (18.3)	$ (8.5)	$ (17.1)	$ (28.0)
		Impariment of a long-lived asset				0.0	0.0	0.0	0.0	(1.7)	(1.7)
		Net (loss) income				$ (5.4)	$ (8.8)	$ (18.3)	$ (8.5)	$ (18.8)	$ (29.7)
x	x											x
x	Net Debt - Pathmark Stores Inc.					x						x
	(In $ millions except for per share amounts)
					As of
					16-Jun-07
		Net debt
			Current portion of long-term debt		$ 23.3
			Current portion of obligations under capital leases		10.9
			Long-term debt		422.9
			Long-term obligations under capital leases		156.6
			Less: Cash and cash equivalents		(31.8)
		Total net debt			$ 581.9
x	x					x
		Sources:
			DEFM14A (2007.10.10) camp0880: camp0880: http://www.sec.gov/Archives/edgar/data/95585/000093041307007842/c50663_defm14a.htm#unaudited1
			10-Q (2007.09.12)
			10-Q (2007.06.13)

WFM - Wild Oats

Income Statement - Wild Oats Markets

(In $ thousands except for per share amounts)

Year ended December 31

2006A

Sales

Ksh 1,183,022

Cost of goods sold and occupancy costs

801,770

Gross profit

381,252

Operating expenses

Direct store expenses

277,043

Selling, general and administrative expenses

54,848

Pre-opening expenses

5,209

EBITDA

44,152

Depreciation

26,057

EBIT

18,095

Interest income

2,647

Interest expense

(7,387)

Income (loss) before income taxes

13,355

Income tax expense

(551)

Income (loss) before income taxes

(15,931)

Income tax expense

657

Effective tax rate

4.1%

Net income (loss) from continuing operations

13,906

Nonrecurring events

Loss on disposal of assets, net

1,162

Restructuring and asset impairment charges (income), net

29,332

Total nonrecurring events

30,494

Net income (loss)

-Ksh 16,588

Net Debt - Wild Oats Markets

(In $ thousands except for per share amounts)

2006A

Net debt

Current portion of long-term debt

$ 573.0
camp0880: camp0880: Current portion of debt, capital leases and financing obligations

Current portion of obligations under capital leases

Long-term debt

147,662.0
camp0880: camp0880: Long-term debt, capital leases and financing obligations

Long-term obligations under capital leases

Less: Cash and cash equivalents

(40,420.0)

Total net debt

$ 107,815.0

Sources:

Conversion Factor:

1,000

PREM14A (2007.06.15)
camp0880: camp0880: http://www.sec.gov/Archives/edgar/data/909990/000103570407000482/d47515prem14a.htm

10-K (2007.03.15)
camp0880: camp0880: http://www.sec.gov/Archives/edgar/data/909990/000136231007000276/0001362310-07-000276-index.htm - announcement on Feb 2, 2007 - used 10-K year ended Dec 31

Football field

	52-week			Comparable			Precedent			Discounted
	high / low			company analysis			transactions			cash flow analysis
	Low	—	High	Low	—	High	Low	—	High	Low	—	High
Share price		—			—			—			—
Shares outstanding		—											Category
Equity value		—											52-Week high/low	$00 / $0.00		$00 / $0.00
Net debt & other		—											Selected companies analysis	$00 / $0.00		$00 / $0.00
Enterprise value		—			—			—			—		Precedent transaction	$00 / $0.00		$00 / $0.00
2012A EBITDA													Discounted cash flow analysis	$00 / $0.00		$00 / $0.00
Multiple		—			—			—			—
													Category	Lower end	variance	Higher end
	Current value												52-Week high/low	$0.00	$0.00	$0.00
	0.00												Comparable company analysis	$0.00	$0.00	$0.00
													Precedent transactions	$0.00	$0.00	$0.00
													Discounted cash flow analysis	$0.00	$0.00	$0.00
													Category	Lower end	variance	Higher end
													52-Week high/low	$0.00	$0.00	$0.00
													Comparable company analysis	$0.00	$0.00	$0.00
													Precedent transactions	$0.00	$0.00	$0.00
													Discounted cash flow analysis	$0.00	$0.00	$0.00

Lower end

52-Week high/low Comparable company analysis Precedent transactions Discounted cash flow analysis 0 0 0 0 variance 52-Week high/low Comparable company analysis Precedent transactions Discounted cash flow analysis 0 0 0 0 Higher end

52-Week high/low Comparable company analysis Precedent transactions Discounted cash flow analysis 0 0 0 0

WALMART DATA

Item	2010	2011	2012	2013	2014	2015	2016	2017
Net Sales (Revenue)	408,085	421,849	446,950	468,651	476,294	485,651	482,130	485,873
COGS (Cost of Goods Sold)	304,106	314,946	335,127	352,297	358,069	365,086	360,984	361,256
Operating Expenses	72,820	81,361	85,025	88,629	91,353	93,418	97,041	101,853
Tax Expense	7,156	7,579	7,944	8,105	8,105	7,985	6,558	6,204
Item	2010	2011	2012	2013	2014	2015	2016	2017
Net Income	14,370	16,389	15,699	16,999	16,022	16,363	14,694	13,643
Adjustments for Non-Cash Items
Depreciation & Amortization	10,500	11,200	12,000	12,500	12,800	13,200	13,500	14,000
Other Non-Cash Items	1,200	1,400	1,500	1,600	1,650	1,700	1,750	1,800
Changes in Working Capital
Increase/(Decrease) in Accounts Receivable	-2,000	-2,200	-1,800	-2,000	-1,500	-1,600	-1,700	-1,800
Increase/(Decrease) in Inventory	-1,500	-1,600	-1,700	-1,800	-1,900	-2,000	-2,100	-2,200
Increase/(Decrease) in Accounts Payable	2,500	2,700	2,800	2,900	3,000	3,100	3,200	3,300
Cash Flow from Operating Activities (CFO)	24,070	27,089	28,199	30,199	30,072	32,763	30,344	29,743
Investing Activities (CFI)
Capital Expenditures (CapEx)	-8,000	-8,500	-9,000	-9,500	-10,000	-10,500	-11,000	-11,500
Sale of Assets	1,200	1,500	1,800	2,000	2,200	2,500	2,800	3,000
Net Cash from Investing Activities	-6,800	-7,000	-7,200	-7,500	-7,800	-8,000	-8,200	-8,500
Financing Activities (CFF)
Issuance/(Repayment) of Debt	2,000	2,200	2,500	2,700	2,800	3,000	3,200	3,500
Dividends Paid	-4,000	-4,200	-4,500	-4,700	-4,900	-5,000	-5,200	-5,500
Issuance/(Repurchase) of Equity	0	0	0	0	0	0	0	0
Net Cash from Financing Activities	-2,000	-2,000	-2,000	-2,000	-2,100	-2,000	-2,000	-2,000
Net Increase/(Decrease) in Cash	15,270	18,089	19,199	20,699	20,172	22,763	20,144	19,243
Opening Cash Balance	8,000	23,270	41,359	60,558	81,257	101,429	124,192	144,336
Closing Cash Balance	23,270	41,359	60,558	81,257	101,429	124,192	144,336	163,579

WALMART INCOME STATEMENT

Item	2010	2011	2012	2013	2014	2015	2016	2017
Net Sales (Revenue)	408,085	421,849	446,950	468,651	476,294	485,651	482,130	485,873
COGS (Cost of Goods Sold)	304,106	314,946	335,127	352,297	358,069	365,086	360,984	361,256
Gross Profit	103,979	106,903	111,823	116,354	118,225	120,565	121,146	124,617
Operating Expenses	72,820	81,361	85,025	88,629	91,353	93,418	97,041	101,853
EBT (Earnings Before Tax)	31,159	25,542	26,798	27,725	26,872	27,147	24,105	22,764
Tax Expense	7,156	7,579	7,944	8,105	8,105	7,985	6,558	6,204
Non-Operating Expenses	9,633	1,574	3,155	2,621	2,745	2,799	2,853	2,917
Net Income	14,370	16,389	15,699	16,999	16,022	16,363	14,694	13,643

CASHFLOW STATEMENT

ITEM	2010	2011	2012	2013	2014	2015	2016	2017
NET INCOME	14,370	16,389	15,699	16,999	16,022	16,363	14,694	13,643
DEPRECIATION & AMORTIZATION	10,500	11,200	12,000	12,500	12,800	13,200	13,500	14,000
OTHER NON-CASH ITEMS	1,200	1,400	1,500	1,600	1,650	1,700	1,750	1,800
INCREASE/(DECREASE) IN ACCOUNTS RECEIVABLE	-2,000	-2,200	-1,800	-2,000	-1,500	-1,600	-1,700	-1,800
INCREASE/(DECREASE) IN INVENTORY	-1,500	-1,600	-1,700	-1,800	-1,900	-2,000	-2,100	-2,200
INCREASE/(DECREASE) IN ACCOUNTS PAYABLE	2,500	2,700	2,800	2,900	3,000	3,100	3,200	3,300
CASH FLOW FROM OPERATING ACTIVITIES	24,070	27,089	28,199	30,199	30,072	32,763	30,344	29,743
CAPITAL EXPENDITURES (CapEx)	-8,000	-8,500	-9,000	-9,500	-10,000	-10,500	-11,000	-11,500
SALE OF ASSETS	1,200	1,500	1,800	2,000	2,200	2,500	2,800	3,000
NET CASH FROM INVESTING ACTIVITIES	-6,800	-7,000	-7,200	-7,500	-7,800	-8,000	-8,200	-8,500
ISSUANCE/(REPAYMENT) OF DEBT	2,000	2,200	2,500	2,700	2,800	3,000	3,200	3,500
DIVIDENDS PAID	-4,000	-4,200	-4,500	-4,700	-4,900	-5,000	-5,200	-5,500
NET CASH FROM FINANCING ACTIVITIES	-2,000	-2,000	-2,000	-2,000	-2,100	-2,000	-2,000	-2,000
NET INCREASE/(DECREASE) IN CASH	15,270	18,089	19,199	20,699	20,172	22,763	20,144	19,243
OPENING CASH BALANCE	8,000	23,270	41,359	60,558	81,257	101,429	124,192	144,336
CLOSING CASH BALANCE	23,270	41,359	60,558	81,257	101,429	124,192	144,336	163,579

Unit 4

Income Statement

Cash Flow Statement

Balance Sheet

Depreciation

Operating Working Capital

Debt Schedule

---> Valuation

DCF Analysis

Comparable Companies

Costco Comp

Wal-Mart Comp

Target Comp

Dollar General

Dollar Tree

Family Dollar Store

Precedent Transactions

A&P - Pathmark

WFM - Wild Oats

Football field

WALMART DATA

WALMART INCOME STATEMENT

CASHFLOW STATEMENT

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