Cost Structure

While a projected compounded average growth rate of 14% is certainly worth considering; WMT has many other positive factors to consider. Given WMT's long history of increasingly expanding sales, earnings, and dividends combined with the domestic and ever-increasing international market-share, the company could serve as a solid, consistent performer both in terms of operating results and market price.

WMT Highlights: (Lesson in consistency)

- Avg. Net Sales growth of 15% over last 10 years

- Avg. Net Income growth of 14% over last 10 years

- Avg. Dividend growth of 17% over last 10 years

- Avg. ROE of 21% over last 10 years

- Avg. Cumulative Store increases of 7% over last 10 years

- Dominant retailer with 8% of market share, goal of 15%

- Same store sales is not the WMT internal metric, market share is the metric

o Example - prefer to have two stores at $100M sales or three stores at $80M sales? WMT prefers the latter, which supports their market share strategy, but negatively impacts same-stores sales.

o WMT projects they can add 4,000 Superstores over next 10-15 years, which would directly affect same-store sales, since some portion of that 4,000 would come from closing or upgrading discount stores.

- Assumptions through 2008:

o Continues to grow Net Sales at 11%, below the past ten year avg. rate of 15%

o Continues to grow Net Income (earnings) at 14%, in line with past ten year avg. of 14%

o Continues to grow Dividends at 16.5%, in line with past ten year avg. of 17%

-