WAL-MART ANNUAL REPORT 2001

Food Store of the Community Food InnovationsInnovations Store of the Community pagepage 14 14 pagepage 4 4 pagepage 11 11

Culture page 5

Retailtainment page 7

Everything We Do Revolves Around Our Customers.

InternationalInternational pagepage 8 8

GoodGood WorksWorks SAM’S Jewelry page 12 SAM’S Jewelry page 12 page 15 TableTable Of Of Contents: Contents: 2. Lee Looks at 2001 – Lee Scott takes a glance back at fiscal 2001 and to the year ahead. 4. This Store is Your Store Tailoring merchandise to individual communities hits the mark with Customers.

5. The Wal-Mart Way… – For almost 40 years, the Wal-Mart culture of respect for individuals has endured.

6. Every Store Counts – Year end count of Wal-Mart’s operations by state and country. 7. That’s Retailtainment! – From merchandising opportunities with hit movies and DVDs to exclusive concerts by the hottest stars, Wal-Mart “Retailtainment” continues to grow. Wal-Mart Around the World 8. International operations continually adapt to the needs and cultures of Customers around the globe. 11. A Brief History of Innovation Wal-Mart has always been an innovator, and is dedicated to uncovering more and better innovations

for our Customers. 12. Low Prices and High Priorities Being of real benefit to our communities is at the heart of every Wal-Mart Associate. 14. Fresh,Fresh,Fresh Fresh food in Supercenters, SAM’S CLUBS and Neighborhood Markets is just the beginning.

15.SAM’S Sparkles – SAM’S CLUB changes the setting for quality jewelry. 16. Financial$

$ 11-Year Summary $ Management’s Discussion & Analysis $ Financial Statements $ Corporate Information About The Cover: In every store, in every country, in every way, our focus is as it has always been – on our Customers. ANNUAL REPORT 2001

DIRECTORS: John T. Chambers FINANCIAL HIGHLIGHTS Stephen Friedman Stanley C. Gault David D. Glass Roland Hernandez Net Sales Earnings Per Share Dr. Frederick S. Humphries 1997 $104.9 1997 $.67 E. Stanley Kroenke 1998 $118.0 1998 $.78 Elizabeth A. Sanders 1999 $137.6 1999 $.99 H. Lee Scott 2000 $165.0 2000 $1.21 Jack C. Shewmaker 2001 $191.3 2001 $1.41 Donald G. Soderquist Dr. Paula Stern Jose Villarreal John T. Walton S. Robson Walton

OFFICERS: S. Robson Walton Chairman of the Board H. Lee Scott President & CEO David D. Glass Chairman, Executive Committee of the Board Paul R. Carter Executive Vice President & President, Wal-Mart Realty Bob Connolly Return on Assets Return on Shareholder’s Equity Executive Vice President, Merchandise 1997 7.9% 1997 19.2 % Thomas M. Coughlin Executive Vice President & 1998 8.5% 1998 19.8% President & CEO, Wal-Mart Stores Division 1999 9.6% 1999 22.4% David Dible 2000 9.5%* 2000 22.9% Executive Vice President, Specialty Division 2001 8.7% 2001 22.0% Michael Duke Executive Vice President, Administration Thomas Grimm Executive Vice President & President & CEO, SAM’S CLUB Don Harris Executive Vice President, Operations John B. Menzer Executive Vice President & President & CEO, International Division Coleman Peterson Executive Vice President, People Division Thomas M. Schoewe Executive Vice President & Chief Financial Officer Robert K. Rhoads Senior Vice President, General Counsel & Secretary

J. J. Fitzsimmons *Calculated giving effect to the amount by which a lawsuit settlement Senior Vice President, Finance & Treasurer exceeded established reserves. If this settlement was not considered, the return was 9.8%. 1 AA LOOKLOOK ATAT 20012001 ANDAND BEYONDBEYOND

Dear Fellow Shareholder: facilities and adding services, including It is truly an honor to serve pharmacy, optical, 1-Hour as President and CEO of Photo and fuel, to offer the Wal-Mart Stores, Inc., and highest quality shopping I appreciate the opportunity experience to our Members. to share with you some In short, our Members thoughts from fiscal 2001 and continue to respond our outlook for the future. favorably to SAM’S What a year of milestones it unique, high-quality was! But before we get into merchandise at the details, I’d like to touch exceptional values. on a few highlights from the year. The International Division had an excellent year, Net sales in fiscal 2001 growing sales by 41 percent increased almost 16 percent and achieving more than to more than $191 billion, $32 billion in revenues. As representing a growth in we travel internationally, it’s revenue of more than exciting not only to see our $26 billion. In addition, net stores and clubs operating income reached $2 billion at such high standards, but for the fourth quarter and almost clubs and distribution centers, or also to see the Wal-Mart culture $6.3 billion for the year, making it our those in the home office, our people being embraced throughout the first “two-billion-dollar-income truly deserve the credit for all these world. This just shows that treating quarter” and our first accomplishments. Let’s look a little people with respect and raising their “six-billion-dollar-income year.” closer at what our Associates were standard of living through Every Day able to achieve this year. Low Prices knows no boundaries. FORTUNE magazine named Wal-Mart the third “most admired” Fiscal 2001 was clearly one of the I’ll highlight the exceptional company in America and one of the strongest years in recent memory performances by our three largest 100 best companies to work for in for the SAM’S CLUB division. We international operations: Canada, America. Our Company also ranked saw growth in both sales and Mexico and the United Kingdom. fifth on FORTUNE’s Global Most earnings. Moreover, earnings growth Admired Companies list based on outpaced sales growth for the year. Fiscal 2001 was a great year for our characteristics such as leadership, Membership renewals reached Canadian business. Sales and teamwork and the way we treat our record levels, demonstrating strong operating profit increased for the people. In addition, Americans loyalty and Member acceptance, and year by more than 14 percent, named Wal-Mart the company they illustrating that a SAM’S membership continuing the customer-focused think of first in supporting local is the best value in the warehouse retailing traditions established in the causes and issues, according to club business. In fact, one in three U.S. almost 40 years ago. Cone, Inc., a national research firm. households in America now has a SAM’S CLUB membership. SAM’S Mexico also had an outstanding Whether it’s our domestic or has made great progress over the year, exceeding both its sales and international Associates in the stores, past two years in upgrading our profit goals. Our Customers there

2 have responded exceptionally well “Sam Walton set Finally, it is a personal priority of to the high level of customer mine to identify and develop the next service our Associates provide, and the standard for our generation of Wal-Mart leaders. For to the introduction of Every Day vision of leadership, years, it was enough to just develop Low Prices in all our retail formats managers. But as the business in Mexico. and we are carrying environment becomes more it forward.” challenging, it takes true leadership In particular, I’d like to thank our to guide a successful business. Sam ASDA Colleagues (Associates) in as we moved through the second half Walton set the standard for our vision the United Kingdom for their of fiscal 2001, it became evident that of leadership, and we are carrying it exceptional performance over the consumer spending was slowing and forward. We are committed to last year. For the fourth straight would not recover in time for the growing the leaders today who will year, ASDA was voted “Supermarket crucial holiday shopping season. Our propel this Company into tomorrow. of the Year” by Checkout magazine. Associates reacted appropriately, It’s the right thing to do for our The division exceeded the however, by continuing our focus Customers, our Associates and objectives set at the time we on customer satisfaction. our Shareholders. acquired ASDA, and our Colleagues accomplished our ultimate goal – Although we did not end the year the On a more personal note, I would taking care of our Customers and way we would have liked, the keys to like, on behalf of all Wal-Mart providing them with an exceptional our ability to manage a slowdown in Associates, to thank David Glass for value in the marketplace. the economy remain simple and his leadership over the past 25 years. effective. They are what we have built David served as Chief Executive The Wal-Mart Stores Division, our business on since the beginning. Officer for 12 years and presided by far our largest, features our over more revenue and earnings Discount Store, Supercenter and First, we must maintain an in-stock growth than any other CEO in the Neighborhood Market formats. The level unequaled in the retail world. history of retailing. We are fortunate year brought some truly bright spots Our commitment is unchanged: that David has agreed to stay on in for this division as well. provide the products our Customers his present role, providing advice want at the moment they want to and counsel to me and the entire We’ve made exceptional strides in make the purchase. Wal-Mart team. our food offerings through the Supercenters and Neighborhood Second, we must provide the level of At Wal-Mart, we’re passionate about Markets. This year, Wal-Mart service our Customers expect and delivering value to our Customers became the largest retailer in the deserve. It’s not enough to provide and Shareholders. As Shareholders, U.S. grocery industry, according to merchandise and a safe, comfortable you play a vital role in our success as Supermarket News. That is truly a environment in which to shop. We you invest in Wal-Mart stock and remarkable achievement, and I think must generate the excitement and shop at our Wal-Mart stores and Sam Walton would be proud. As enthusiasm necessary to build a SAM’S CLUBS. While our history is always, we will continue to ensure relationship with the Customer and rich with success, there’s no question that we are the best food retailer, not make each shopping experience that our best years are yet to come, just the largest. better than the one before. This and this time next year I expect to includes simple things like saying report another record year for In July, we challenged our Associates thank you and greeting our Wal-Mart. Thank you, and I look to react to the slowing economy by Customers warmly as they enter the forward to visiting with you again reducing inventories by more than store. Sam Walton called it next year. $1 billion, the majority of which “aggressive hospitality,” and it still would come from the Wal-Mart works today. Lee Scott Division. Despite disappointing holiday sales, our Associates not only Third, we must provide our met this goal – they exceeded it. Customers with top-quality merchandise and services at Every The division had a strong first half of Day Low Prices. After all, that’s what the year as our Associates built on the sign says, and that’s our last year’s phenomenal growth. But commitment to our Customers.

3 THISTHIS STORESTORE ISIS YOURYOUR STORESTORE

“Our store Associates live and work in each store’s community and interact with over 100 million Customers each week. If we utilize information from all available resources including Customers, Wal-Mart has Associates and suppliers, our store All store managers, including taken individualized assortment will reflect the interests of its general managers and department to a new level with its Store of the community. We will sell merchandise managers, submit yearly surveys, Community initiative. The Store the Customers want to buy, not which include information such of the Community is not a new line merchandise we want to sell. By as when little league baseball or of stores, but rather an exciting accomplishing this goal, we create a hunting season begins in their model for existing Wal-Mart discount happy, satisfied community. This specific data is stores and Supercenters to meet the Customers because invaluable for developing a Store shopping needs of local store they can of the Community. For example, Customers. Introduced in fiscal 2001, now a Wal-Mart store located near these stores are specifically tailored complete a hospital may need a larger to mirror the demographic makeup all of their pharmacy area. Stores close to of their respective communities. shopping recreational bodies of water stock in one life vests and fishing equipment not “The one-size-fits-all concept simply location, carried in most land-locked stores. doesn’t work anymore in the retail our store,” Other stores offer regional sporting industry. Customers tell us what they Coughlin goods. Softball leagues in Louisiana want and it is our responsibility to added. would not know what to do with a meet those needs,” Tom Coughlin, softball that is four inches larger in President & CEO of the Wal-Mart The detailed knowledge of a diameter like those used in Chicago Stores Division, said. community created by the and other urban areas. Customer/Associate partnership The Store of the Community is allows each store to differentiate In addition to obvious assortment stocked based on a combination of department size, shelf-space flexibility, the program also allows consumer purchasing data, area allocation and departmental seasonal start and end dates to be demographics, customer preferences adjacencies. The result is a more determined by the needs of the and input from our store Associates. efficient distribution of inventory by Customers and not by a store’s Evaluating the buying patterns of stocking our stores based on particular geographic zone. For Customers enables Wal-Mart buyers customer preferences rather than example, turkey-hunting season to determine what is selling best at standardized assortments. It also may extend longer in one state than each store and purchase increases sales, reduces markdowns in an adjacent state. The Store of merchandise based on each and lowers inventory investment in the Community concept allows us to store’s data. the system. Most of all, it keeps tailor the first store’s assortment so Customers coming back into our that it can display turkey stores because we’re attentive to hunting merchandise until their needs. the end of its season. THETHE WAL-MARTWAL-MART WAYWAY OFOF LIFELIFE

Our Culture, Our Attitude, Our Commitment

The cornerstone of Wal-Mart’s Associates are encouraged to exceed Wal-Mart knows the best ideas success has and will always be our Customers’ expectations, and the have come from our front line culture. Customers shop at Wal-Mart results are outstanding customer Associates – greeters, checkers and for the best values and the greatest trust and loyalty. Mr. Sam called it stockers. In fact, the idea to have a selection of merchandise. We believe “aggressive hospitality.” He believed greeter at the door to welcome our it is our culture that allows us to that by exceeding Customers’ Customers came from an Associate. meet their expectations. The roots expectations, they will come back Every Associate is not only of our culture are grounded in three again and again. Wal-Mart’s Ten-Foot empowered but is also driven to fundamental principles: respect for Rule encourages Associates to speak make a difference and strive for the individual (both our Associates to a Customer before that Customer excellence. Our Associates – their and Customers), the highest can speak to them. Wal-Mart ideas and energy – are what will standard of service to our Customers customer service is legendary, and determine our future success and and a constant drive for excellence. the Ten-Foot Rule is one of the we encourage their input. Wal-Mart’s reasons why. Open Door Policy allows Associates Culture is the value system to share suggestions, that directs people’s observations or concerns thoughts, deeds and words. with any supervisor, from Our founder, Sam Walton, a store manager to the established the basic beliefs President and CEO upon which our Company’s of Wal-Mart, with no culture has evolved, but the fear of retaliation. perpetuation of our culture is the responsibility of all Our culture is what makes Associates. Wal-Mart Wal-Mart unique and will understands that a person continue to make us cannot be forced to accept successful. Everyone in our culture. Instead, every our Company is responsible Associate must lead by for upholding the core example and continue to beliefs that help keep our develop the trust that culture alive and well. Our makes our culture work. purpose as a Company is to Managers are expected to provide our Customers and be servant leaders who Members with the very encourage their Associates best value and shopping to take advantage of experience possible. It all opportunities to express begins with our culture. and share ideas with others. It is the cornerstone of This environment of respect what our Company was is one of the most important founded on and it is our aspects of our culture. main focus. Always.

5 Fiscal 2001 End-of-Year Store Count

State State Discount StoresSupercentersSAM’S CLUBSNeighborhood Markets Discount StoresSupercentersSAM’S CLUBSNeighborhood Markets Alabama 41 41 8 0 Montana 6 4 1 0 Alaska 5 0 3 0 Nebraska 12 8 3 0 Arizona 26 13 9 0 Nevada 12 4 4 0 Arkansas 41 36 4 5 New Hampshire 18 4 4 0 California 117 0 26 0 New Jersey 23 0 6 0 Colorado 23 18 12 0 New Mexico 9 13 4 0 Connecticut 19 1 3 0 New York 52 13 18 0 Delaware 3 2 1 0 North Carolina 59 35 16 0 Florida 86 57 34 0 North Dakota 8 0 2 0 Georgia 51 45 16 0 Ohio 76 12 25 0 Hawaii 5 0 1 0 Oklahoma 48 32 6 8 Idaho 7 6 1 0 Oregon 25 0 0 0 Illinois 86 25 27 0 Pennsylvania 49 29 19 0 Indiana 50 33 14 0 Rhode Island 7 0 1 0 Iowa 33 18 7 0 South Carolina 27 32 9 0 Kansas 34 16 5 0 South Dakota 8 0 2 0 Kentucky 36 38 5 0 Tennessee 47 41 15 0 Louisiana 43 37 11 0 Texas 142 112 56 6 Maine 17 3 3 0 Utah 12 3 5 0 Maryland 27 3 11 0 Vermont 4 0 0 0 Massachusetts 36 1 3 0 Virginia 26 41 10 0 Michigan 55 2 21 0 Washington 26 0 2 0 Minnesota 37 2 9 0 West Virginia 8 20 3 0 Mississippi 30 31 4 0 Wisconsin 53 7 11 0 Missouri 66 46 13 0 Wyoming 5 4 2 0 U.S. Totals 1736 888 475 19 International/Worldwide Argentina 0 11 0 0 Mexico 429* 32 38 0 Brazil 0 12 8 0 Puerto Rico 9 0 6 0 Canada 174 0 0 0 United Kingdom 0 241** 00 China 0 10 1 0 INT’l Total: 612 406 53 0 South Korea 0 6 0 0 World Wide Germany 0 94 0 0 Grand Total: 2348 1294 528 19

* Includes: 37 Aurreras, 80 Bodegas, 54 Suburbias, 40 Superamas, and 218 Vips. **Includes: 238 ASDA Stores and 3 ASDA/Wal-Mart Supercentres.

6

“That’s Retailtainment!” Hit Movies, Hot Stars And Hip Merchandising Keep Customers Shopping Wal-Mart understands that The Company, through its today’s consumers have an Wal-Mart Live Concert incredible array of shopping Series, broadcast an exclusive choices from which to satellite concert performance choose. Not only do they by international singing want the best value for their superstar Ricky Martin in hard-earned dollar, but the home entertainment they also demand departments of stores outstanding customer nationwide last year. This service. We realized early televised event coincided on that we must take care with the release of Martin’s of Customers and that second English-language part of doing so is album. Other concerts creating a fun, dynamic presented last year included shopping environment. Garth Brooks, Faith Hill and Backstreet Boys. At Wal-Mart, we call the concept Retailtainment and “The concert series has our goal is to add excitement been an extremely successful to the shopping experience. Retailtainment event. It’s a raised money for the Children’s The result is a fun environment for perfect example of how we provide Miracle Network. the Customers and our Associates, our Customers with a fun, but other benefits include increased entertaining shopping environment. Wal-Mart also organizes system-wide customer traffic and loyalty because Customers can view a free concert in Retailtainment events. Last May, that Customer looks forward to their a comfortable atmosphere and also all Wal-Mart discount stores and trip to Wal-Mart. benefit from coinciding promotions Supercenters participated in an event that are only available at our stores,” to support the direct-to-video release Every store is encouraged to Tom Coughlin, President & CEO of of The Rugrats Discover America. create its own “wild and crazy” Wal-Mart Stores Division, said. Kids were invited to stores to watch Retailtainment events specifically the new Rugrats adventure while designed for its individual Retailtainment is an area that truly they ate snacks. Associates then community. Local stores invite clubs sets our Company apart from took the children on their own and civic organizations to set up others, and it will continue to be an “Discover America” adventure exhibits, or ask police and fire important area of focus for Wal-Mart. through the stores. To enhance the departments to conduct safety Customers can expect to see more educational value of this promotion, a seminars and demonstrations. To events and promotions exclusive to group of teachers developed a raise money for local charities last Wal-Mart stores and their individual complementary lesson plan, which year, stores engaged in everything communities in the future. By was distributed to select schools from a ladder drive (in which creating a friendly, entertaining across the United States. Associates volunteered to sit on atmosphere for our Customers, top of a ladder we provide a until they solicited fun shopping a certain amount in experience that donations) to Bingo keeps them for Seniors, which coming back.

7 Wal-Mart is truly a global company. The Company has proven that ARGENTINA PUERTO RICO its culture transcends borders Wal-Mart expanded into Mendoza In fiscal 2001, Wal-Mart opened with the opening of a new its first distribution center in and translates into many different Supercenter, bringing the total Puerto Rico. Remodeling two of the languages. “All Customers number of discount retail stores Company’s highest volume SAM’S appreciate good service, low pricing in the country to 11. The Company CLUBS also highlighted the year. and great selection and that’s has become an active corporate Of the six clubs on the island, the foundation upon which every citizen in Argentina and has the 106,000-square-foot SAM’S established programs to address CLUB at Bayamon has consistently Wal-Mart store is built,” John B. the needs of the communities in ranked as the top-producing club Menzer, President & CEO of which it does business. Wal-Mart internationally since it opened in Wal-Mart International, explained. donated more than $200,000 to 1993. Another club at Carolina, communities in Argentina during Puerto Rico, is ranked second In fiscal 2001, which ended the year and continues to give internationally in sales. January 31, close to 17 percent of through merchandise donations, Wal-Mart’s sales MEXICO came from its Mexico is home to International Wal-Mart’s oldest Division. and most extensive International international sales during operations, with fiscal 2001 were 499 units at the $32 billion, an end of the year, increase of more featuring six than 41 percent different retail over the formats and the previous year. As country’s largest international sit-down restaurant operations continue to become a sponsorships, marathons and other chain. The Company changed the larger portion of Wal-Mart’s total types of fund-raising events. name from Cifra to Wal-Mart de growth, the Company is focused on Mexico and began trading its stock aggressive, yet strategic expansion BRAZIL as WALMEX on the Bolsa, efforts abroad. Wal-Mart currently has 20 units Mexico’s stock market. Wal-Mart throughout Brazil. The Company de Mexico is the country’s largest As of January 31, 2001, there were entered the Rio de Janeiro market retailer and commands the second 1,071 stores – approximately one- during the year, opening two SAM’S largest market capitalization on fourth of the Company’s total – CLUBS and one Supercenter. It also the Bolsa. outside the United States. Over opened two additional Supercenters 25 percent of Wal-Mart’s new and one SAM’S CLUB in the Wal-Mart de Mexico opened stores in the current year will be country and began construction of 39 new stores in fiscal 2001 and in the nine countries that comprise a distribution center, which opened plans to open several new stores the International Division. This in April 2001. Additionally, several in the current year. Wal-Mart de expansion will be achieved through SAM’S CLUBS were remodeled to Mexico implemented its Every Day a combination of new buildings, offer Customers an expanded fresh Low Price program in all of its expansions and relocations. food selection. retail formats, including its

8 Supercenters, warehouse companies were combined club and discount general to best meet the needs of merchandise stores. As the Customer. a result, Wal-Mart de Mexico has experienced Primarily known as a food extensive growth and retailer, ASDA’s profile has customer support. begun to change with the addition of the ASDA/ GERMANY Wal-Mart Supercentre Dave Ferguson, former concept to the retailing director of Wal-Mart’s mix. There are now three Canadian operations, was ASDA/Wal-Mart named in fiscal 2001 as the new Supercentres in the country and President & CEO of Wal-Mart UNITED KINGDOM plans call for others to be located Europe. He will continue to After joining the Wal-Mart family in there in the near future. ASDA help the Company develop its 1999, ASDA has proven to be a very continues to support the suppliers, business strategies and processes successful international venture. Customers and organizations in Europe. With 241 stores across the United within its communities. To date, Kingdom, 100,000 Associates, or around 200 new suppliers, most of In fiscal 2001, Wal-Mart completed Colleagues as they are called within them British, have been recruited renovation of 23 of its 94 stores ASDA, and an average of 7.8 million to source the new Supercentres in Germany. Wal-Mart Germany Customers each week, ASDA is and more will be added to meet introduced Smart Price® and Great likely to become the second largest the local tastes and demands Value® private-label items in select supermarket chain in Britain in the of Customers. stores across the country, which coming year. proved quite popular with CANADA Customers. There are now more ASDA has long been a favorite place Canada has been an extremely than 250 Great Value® items and to shop for Britons and customer successful and profitable over 120 Smart Price® products loyalty continues to grow under the international market for Wal-Mart available in Germany. The Equate® direction of Wal-Mart Stores, Inc. since the Company entered the private-label body care line was When Wal-Mart purchased ASDA country in 1994. With 174 stores, introduced in June 2000. in 1999, the best practices of both eight of which opened during fiscal

9 2001, Wal-Mart is now Canada’s largest retailer. Canadian Wal-Mart FROM SUPERCENTER Stores have also become leaders TO SUPERCENTRE in terms of generating new retailing from local Avon and Somerset concepts and merchandising cheeses and breads to techniques, which have been sporting goods and optical adopted both in the U.S. and abroad. services. Among other things, each store features fresh CHINA produce, a deli with more Wal-Mart began operations in the than 200 products including world’s most populous nation in 1996, specialty meats, and ready-to- opening a Wal-Mart Supercenter and eat meals. The Supercentres a SAM’S CLUB. China is an ideal also include an electronics example of how Wal-Mart department and a photo synthesizes practices to adapt to the In July 2000, ASDA opened center. Among many other communities it serves. Wal-Mart the first ASDA/Wal-Mart offerings found at ASDA/ modified its shopping bags to fit the Supercentre in Patchway, Wal-Mart Supercentres are a Bristol, which instantly large number of global brands needs of Chinese Customers who changed the face of U.K. and products. usually shop daily for products and retailing. With the addition often arrive on a motorcycle or of Supercentres in Havant According to Wal-Mart bicycle. During fiscal 2001, Wal-Mart in late October and Minworth International President & CEO, opened a new underground store in in November, the format John B. Menzer, “ASDA has Dalian beneath a new soccer has become an exciting proven to be a good fit for stadium. The subterranean format growth vehicle for our Wal-Mart. The cultures of both was chosen to accommodate local U.K. operations. companies mesh well and the needs and to address citizens’ Supercentres have been aesthetic concerns. Traditionally, ASDA has been embraced by Customers who a food-oriented retailer, want the widest range of SOUTH KOREA choosing to devote products at the best value With the world’s 11th largest approximately 80 to 85 with the friendliest service.” economy and a population of percent of available retail square footage to food Wal-Mart is committed to 47 million, South Korea holds a merchandising. Currently, continued growth in the wealth of opportunity to introduce each ASDA/Wal-Mart U.K. The Company plans Customers to the Wal-Mart retailing Supercentre dedicates to open three Supercentres practices of Every Day Low Prices, approximately 60 percent of in fiscal 2002. great value and outstanding its space for grocery items customer service. Wal-Mart entered compared to the typical “This is an exciting time for this new market with a Supercenter Supercenter in the United ASDA in the United Kingdom in Taegu and now has six units. States which only has 30 and we are particularly The Taegu Supercenter features percent allotted for groceries. excited about the strong three floors of merchandise – two consumer acceptance of below ground and one above – and Supercentres offer Britons our new ASDA/Wal-Mart six floors of parking above the store. over 40,000 products ranging Supercentres,” Menzer said. The Company plans to increase Wal-Mart’s presence in the country during the current fiscal year.

10 A HISTORY OF INNOVATION Forward-thinking is a Wal-Mart tradition.

suppliers to track merchandise to Wal-Mart works with suppliers to study how products sell in any store develop PDQ displays for stores. by region or by individual unit. They PDQs are self-contained displays that can also review inventory levels, eliminate stocking individual returns and inventory adjustments. merchandise on a shelf or hanger. Many times merchandise can go “We think sharing information with directly from the stockroom to the suppliers allows for better input floor with little more than opening a from them about how to maximize box. One example of how PDQs save sales and profits. We can then time and money is our new battery Wal-Mart has long been an implement best practices and pass display. Before PDQs, an Associate innovator. Our founder, Sam Walton, the savings on to Customers,” Kevin had to hang each battery pack by spent his life coming up with ways to Turner, the Company’s Chief hand, which was labor-intensive. better serve Customers. Mr. Sam’s Information Officer, said. Now, batteries come in prepackaged culture of innovation still drives disposable trays and an Associate Wal-Mart today during the most Wal-Mart also uses its computer only has to remove plastic wrap to dynamic growth plan in our history. network to directly enhance service move it onto the sales floor. in specialty divisions like Tire and Technology and logistics are among Lube Express. Using it, Associates Drive-thru pharmacy service is the Company’s most innovative can quickly identify vehicle service relatively new in retailing. All areas. Our computer system is the records, and Customers can use Neighborhood Markets built last most powerful in the corporate bar-coded cards at price scanners year feature this service. “Customer world – only the U.S. government in the store to see when their service convenience is the focus of our has a larger computer network. is completed. Neighborhood Markets and we see Wal-Mart’s philosophy of building drive-thru pharmacies as yet another “people supportive” systems has Wal-Mart’s sophisticated distribution service we can offer Customers,” given us a competitive edge that has system has allowed the Company to said Ed Kolodzieski, Senior Vice and will be instrumental in the easily manage over 3,100 domestic President of Neighborhood Company’s success. stores in all 50 states. The Company Markets. continues to make advancements in Wal-Mart believes in building a distribution and transportation and Wal-Mart loves to test new ideas and collaborative environment with our now moves over 50 million cartons of has little resistance to change. We suppliers in which we work together merchandise per believe the surest way to predict to grow both businesses and lower week to stores the future is to continue to retail prices for Customers. While and clubs. This invent it and all of our some retailers have been reluctant to allows continued Associates are encouraged to share sales or other proprietary data improvements in share ideas. Their thoughts and with suppliers, Wal-Mart has allowed inventory ideas have helped establish suppliers this type of access since turnover and Wal-Mart as a pacesetter in the early 1991. This system evolved into merchandise dynamic world of retail and will a web-based product called Retail in stock. continue to push us forward. LinkTM. It allows the Company and

11 CARINGCARING ININ ACTIONACTION

Wal-Mart’s Associates Lead by Example On June 6th, Associates and World War II veterans presented a gift of Wal-Mart Stores, Inc. is committed for their local schools. In addition, almost $14.8 million to Senator to strengthening and enhancing the Wal-Mart awarded scholarships Bob Dole, Chairman of the National quality of life in the communities totaling nearly $12 million to World War II Memorial Campaign, where our Customers and graduating high school seniors during a special ceremony in Associates live and work. In fiscal and other students pursuing Washington, D.C. The donation was 2001, over $190 million was raised higher education. Our commitment the largest gift given toward the and contributed by our Associates to education includes the Teacher construction of the memorial. There and Customers and given back to of the Year awards, Students in are approximately 1,900 World War II our local communities. This is an Free Enterprise, the United veterans who are Wal-Mart increase of over $32 million, all given Negro College Fund and the Associates. The memorial will back to those who need it most. Hispanic Association of Colleges honor the 16 million Americans and Universities. who served in uniform during the Associates are the lifeblood of war, the more than 400,000 who Wal-Mart’s community support. The Community Matching Grants gave their lives and the millions Associates direct 97 percent of program is one of Wal-Mart’s who supported the war effort Wal-Mart’s community involvement largest community initiatives with from home. initiatives. “Our Associates know over 3,000 locations participating. best what organizations and causes Last year, the Company awarded One of Wal-Mart’s fastest growing are the most important in their more than 50,000 grants to local programs is Volunteerism Always communities, so we believe that organizations that held fundraisers Pays, or V.A.P. This program they should be the ones who with our Associates. donates funds to local non-profit determine how their Company organizations where Associates supports the organizations who Throughout the year, Associates volunteer at least 15 hours a are making a difference in the lives in the United States and Canada quarter. According to Jay Allen, of our Associates and Customers,” sponsored a variety of fundraising Vice President of Wal-Mart Tom Coughlin, activities to support children’s Corporate Affairs, Wal-Mart President & CEO, hospitals across North America Associates give back to their Wal-Mart Stores through the Children’s Miracle communities 80 work years in Division, said. Network. Our Associates’ hard volunteer hours annually. In work will help over 14 million addition to the Associates’ valuable Wal-Mart Associates children receive the best medical contribution of time, Wal-Mart are dedicated to care possible as well as address donated $1,500,000 to various local a wide range of overall health care in our charitable organizations across programs. Since communities. Last year, our the United States in honor of the Foundation’s Associates and Customers raised our Associates. inception in 1979, and contributed around $31 million one of our primary dollars for their children’s hospitals. Wal-Mart’s corporate citizenship areas of focus has One hundred percent of the funds extends well beyond U.S. borders been education. remain with the children’s hospital and into every country in which the In 2000, our to fund medical research, provide Company operates. For example, Community Community Associates raised medical treatment to local children Associates and suppliers in China and contributed and supply money for hospitals to donated time and provided financial nearly $11 million purchase new equipment. assistance last year to senior

12 citizens and orphans. Wal-Mart integral way Germany Associates raised money of life at REUNITING to fight Duchenne Muscular Wal-Mart. FAMILIES Dystrophy (DMD), a debilitating Our pledge is disease for which there is no cure. that we will Wal-Mart’s In South Korea, Wal-Mart’s Inchon never lose sight Missing Children’s Network store donated glasses to needy of the children and provided scholarships responsibilities Every day, thousands of children for students in their local of good are reported missing from their communities. Wal-Mart de Mexico, corporate families, according to the National along with the National Vaccine citizenship, and Center for Missing and Exploited Center, organized three national that Education Education Children (NCMEC). Thanks to weeks throughout the year when Wal-Mart Wal-Mart and SAM’S CLUB people were given free vaccinations will continue Customers and Associates, in stores across the country. to support 20 children – a record number – worthy were reunited last year as a These are just a few of the many programs direct result of recognizing and ways in which Wal-Mart Associates through financial grants, responding to the pictures on are making a difference in their in-kind donations, and most our Missing Children’s Network communities. Their generous importantly, through the leadership bulletin boards. donation of time, talent and money and volunteer efforts of our has made corporate citizenship an caring Associates. In 1996, Wal-Mart teamed with NCMEC to begin the Missing Children’s Network bulletin boards, which include photos of missing children, relevant personal data Wal-Mart Stores, Inc. Community Involvement In Fiscal Year 2001 about each child and the toll-free

NCMEC hotline. The boards are Grand Total: $190,330,200 $71,365,980 posted in Wal-Mart stores, SAM’S CLUBS and Neighborhood Markets across the country.

Since the program began, 3,400 children have been featured on our boards and more than 2,100 have been recovered. $31,195,296 There have been more than 50 recoveries as a direct result $20,432,657 $19,391,752

of our Customers or Associates $14,751,360 recognizing one of the photos and $7,365,342 reporting it to the NCMEC hotline. $7,630,946 $5,200,000 $3,024,752 $3,145,186 $1,302,817 $2,132,001 $1,513,000 $1,879,111 “The Missing Children’s Network is a program that our Associates and Customers feel strongly about. Every parent can empathize with the heartache a family must feel each and every day their child is missing. I really have to give credit to our Customers and Associates for the tremendous success of this program,” H. Lee Scott, President & CEO of Wal-Mart

Stores, Inc., said. Miracle Network Children’s Always Pays Volunteerism Holiday Charitable Contribution Environment Store Contribution Account In-Kind Contributions Scholarships Make A Difference Day Other Donations Economic Development of the Year Teacher United Way II Memorial War World Community Matching Grants AA FRESHFRESH LOOKLOOK ATAT FOOD.FOOD.

Growing food sales is a major they look for every day,” Doug Degn, focused on expanding its private-label emphasis as Wal-Mart seeks to offer Executive Vice President of Food items. The Great Value® line offers Customers exceptional value and Merchandising, said. Every Day Low Price alternatives to quality in food. Wal-Mart understands brand names, while maintaining Customers want to purchase all Freshness in food is a strategic quality equal to or better than their food and general advantage at Wal-Mart and is a key competing name brands. The Sam’s merchandise in one location. element to our growth. Wal-Mart buys Choice® line offers products with Our goal is to provide them products from all over the world to unique and innovative features with the freshest, most well ensure Customers have the best each demonstrating the highest quality rounded assortment at the season offers. Our logistics team available at Wal-Mart. Our private lowest possible prices. quickly moves the merchandise label products are very well received through the distribution network. by Customers and continue to grow According to Supermarket News, Turning merchandise quickly is key as an important part Wal-Mart became the largest to all fresh food areas. Associates of our business. domestic food retailer during fiscal ensure food is stocked immediately 2001. Sales in Supercenters now after it arrives. Last year, Wal-Mart Wal-Mart’s growth in routinely exceed those achieved by opened six new food distribution food translates into discount stores. This accomplishment centers to support the growth of unique job opportunities alone demonstrates the great Supercenters, SAM’S CLUBS and for Associates. Our success in food Customer acceptance of our Neighborhood Markets. will be led by Associates who are food offering. willing to try new approaches and are “Freshness is the most committed to providing Customers Supercenters have important indicator the outstanding service and value been the Company’s of value and quality. they expect. “Our Associates are natural vehicle for Price is meaningless dedicated, driven people and we expanded food sales. if products do not meet encourage them to seek any Customers look to or exceed Customers’ opportunities that arise within the Supercenters to expectations of freshness Company. Our food operations allow provide one-stop because Customers lose confidence them another avenue for career shopping, and a larger food selection and trust,” Degn said. One initiative advancement,” Tom Coughlin, addresses their need for convenience, to enhance the fresh food concept is President & CEO of Wal-Mart Stores selection and Every Day Low Prices. “Fresh and Alive at Five.” This Division, said. “Customers told us what they want – program emphasizes rotation, a wider selection of fresh bakery presentation and efficient distribution “We are bringing Wal-Mart’s items, meat and produce. We’re of fresh items when Customers are traditional philosophy of great quality simply meeting their needs by most likely to be shopping – after at the lowest price to food. We providing the items work and on weekends. In this way, understand the differences involved in Wal-Mart can provide Customers with food retailing and we strive to provide the freshest assortment possible. Customers with the freshest product at the lowest price, Always! In return, In addition to they come back and allow us to serve national them again. That’s what it’s all about,” brands, Degn said. Wal-Mart has also SAM’S SPARKLES!

SAM’S CLUB has The transition started with dynamically redesigned its almost 30 clubs in select test jewelry program and now markets and rapidly features a wider expanded to include every array of high-quality SAM’S CLUB in the jewelry, crystal and nation. Jewelry designer fragrances. selections vary by SAM’S CLUB Jewelry location, but every departments are no club offers longer leased but are International merchandise at the best possible now operated solely by Gemological Institute (IGI)- prices. In every area, SAM’S CLUB our SAM’S Associates, certified diamond solitaires, three- jewelry ranks as high or higher than enabling clubs stone rings and diamond stud other retail chain jewelry stores. to deliver exceptional earrings. IGI is the world’s most items to our Members recognizable standard for Just one example of the at extraordinary determining the values of outstanding value provided through values. Members can precious stones and this program is a 14k yellow find an impressive assures Members gold oval sapphire (8.60cttw) selection of items they are receiving the and diamond (.96cttw) bracelet from such well-known highest quality and value. that sells at SAM’S CLUB for designers as Waterford, $733.97. The same bracelet Versace, Cartier and Mont Other jewelry selections at SAM’S sells at other jewelry Blanc, for a fraction of CLUB include gold merchandise, retailers for $1,695.00. jewelry-store prices. cultured and fresh water pearls and seasonal merchandise, such as “By bringing diamond heart-shaped “Our Members the SAM’S pendants. In addition, can always count on us to select fine CLUB jewelry SAM’S CLUB offers a diamonds, gemstones and gift items operations variety of quality that both meet their needs and in-house, diamond engagement reflect an exceptional we can now rings, anniversary value. Our goal is to bring better bands, earrings and provide Members with jewelry and pendants. the merchandise luxury gifts to they desire at the our Members. The quality and The Company’s buyers very best possible pricing of our fine jewelry items carefully select diamonds price. This new offer amazing value, and we are to ensure Members jewelry program is excited to be able to pass these receive top-quality simply another savings on to our Members,” jewelry way in which we Tom Grimm, President & CEO are doing just that,” of SAM’S CLUB, said. Grimm said.

15 Corporate Information

Registrar and Transfer Agent: Independent Auditors: EquiServe Trust Company, N.A. Ernst & Young LLP 525 Washington Blvd. 3900 One Williams Center Jersey City, New Jersey 07310 Tulsa, Oklahoma 74172 1-800-438-6278 (GET-MART) TDD for hearing impaired inside the U.S.: 1-201-222-4955 Corporate Address: Internet: http://www.equiserve.com Wal-Mart Stores, Inc. Dividend Reinvestment and Direct Stock Purchase Available Bentonville, Arkansas 72716 Telephone: 501-273-4000 Listings – Stock Symbol: WMT Retail Internet Site: http://www.wal-mart.com New York Stock Exchange Corporate Internet Site: http://www.walmartstores.com Pacific Stock Exchange The following reports are available upon request by writing the Annual Meeting: Company or by calling 501-273-8446. Our Annual Meeting of Shareholders will be held on Friday, Annual Report on Form 10-K* June 1, 2001, at 9:00 a.m. in Bud Walton Arena on the University Quarterly Financial Information on Form 10-Q* of Arkansas campus, Fayetteville, Arkansas. Current Press Releases* Current Sales and Earnings Releases* Communication with Shareholders: Copy of Proxy Statement* Wal-Mart Stores, Inc. periodically communicates with its Diversity Programs Report Shareholders and other members of the investment community about our operations. For further information regarding those Vendor Standards Report communications, please refer to our Form 8-K filing with the SEC dated October 20, 2000. * These reports are also available via fax or corporate website.

Market Price of Common Stock Dividends Paid Per Share

Fiscal years ended January 31, Fiscal years ended January 31, 2001 2000 Quarterly Quarter Ended Hi Low Hi Low 2000 1999 April 30 $63.56 $44.50 $52.44 $40.47 April 10 $0.0600 April 19 $0.0500 July 31 $62.00 $51.00 $49.19 $41.13 July 10 $0.0600 July 12 $0.0500 October 31 $57.63 $43.25 $57.06 $40.19 October 10 $0.0600 October 12 $0.0500 January 31 $58.44 $43.69 $69.44 $54.75 January 8 $0.0600 January 10 $0.0500

Trustees 5.75%, 5 7/8%, 5.955%, Sale/Leaseback Transaction Sale/Leaseback Transaction Sale/Leaseback Transaction 6.15%, 6 3/8%, 6 1/2%, Series A - 8.25% WMS I Series B - 8.01% (Wal-Mart Retail Trust I, II, III): 6.55%, 6 3/4%, 6.875%, Series B - 8.75% WMS I Series C - 8.72% State Street Bank and Trust 7 1/4%, 7 1/2%, 7.55%, Series C - 8.875% WMS II Series A - 7.39% Company of Connecticut, N.A. 8.0%, 8 1/2%, 8 5/8% Bank One Trust Company, N.A. WMS II Series B - 8.27% C/O State Street Corporation Notes, MarksSM, 13 month (Formerly known as The First Bank One Trust Company, N.A. Global Investor Services Group Floating Rate Notes: National Bank of Chicago) (Formerly known as The First Corporate Trust Bank One Trust Company, N.A. Attn: Global Corp. Trust Services National Bank of Chicago) P.O. Box 778 (Formerly known as The First 1 Bank One Plaza Suite IL 1-0126 Attn: Global Corp. Trust Services Boston, Massachusetts 02102-0778 National Bank of Chicago) Chicago, Illinois 60670-0126 1 Bank One Plaza Suite IL 1-0126 Attn: Global Corp. Trust Services Chicago, Illinois 60670-0126 Pass Through Certificates 1 Bank One Plaza Suite IL 1-0126 Pass Through Certificates 1992-A-1-7.49% Chicago, Illinois 60670-0126 1994-A-1-8.57% Pass Through Certificates First Security Bank, N.A. 1994-A-2-8.85% (Wal-Mart Retail Trust IV, V): Company of Nevada Pass Through Certificates 1994-B-1-8.45% 1994-B-3-8.80% 79 South Main Street 1992-A-2-8.07% 1994-B-2-8.62% Bank One Trust Company, N.A. 3rd Floor First Security Trust Bank One Trust Company, N.A. (Formerly known as The First Salt Lake City, Utah 84111 Company of Nevada (Formerly known as The First National Bank of Chicago) 79 South Main Street National Bank of Chicago) Attn: Global Corp. Trust Services 6 3/4% Eurobonds: 3rd Floor Attn: Global Corp. Trust Services 1 Bank One Plaza Suite IL 1-0126 Bank One, N.A. Salt Lake City, Utah 84151 1 Bank One Plaza Suite IL 1-0126 Chicago, Illinois 60670-0126 1 Triton Square Chicago, Illinois 60670-0126 London, England NW13FN Picture Them Home . . . Where They Belong

When Wal-Mart teamed up with the National Center for Missing & Exploited Children in 1996, there were high hopes of a happy reunion. If we could help find even one child featured on our missing children’s boards, all involved would have considered the effort a resounding success. With the help of our Customers and Associates more than 50 missing children have been reunited with their families. All of us at Wal-Mart, SAM’S CLUB, and the National Center for Missing & Exploited Children applaud you for making this dream a reality.

® www.missingkids.com

Nadia Dabbagh Fred Wright Rachel Mellon Manuel Mendez Crystal Marler Uchechi Anyanwu Joshua Adams DOB: 2/3/90 DOB: 2/4/85 DOB: 10/13/82 DOB: 11/15/84 DOB: 11/28/82 DOB: 6/1/85 DOB: 3/14/91 Missing Date: 12/25/92 Missing Date: 12/6/98 Missing Date: 1/31/96 Missing Date: 12/22/96 Missing Date: 10/8/98 Missing Date: 7/15/97 Missing Date: 12/26/95 Age Now: 11 Age Now: 16 Age Now: 18 Age Now: 16 Age Now: 19 Age Now: 15 Age Now: 10 Missing From: Missing From: Missing From: Missing From: Missing From: Missing From: Missing From: Medina, OH Tuskegee, AL Bolingbrook, IL Modesto, CA Whitley City, KY Boonton, NJ Houston, TX If you recognize one of these children, please • • • Call 1 800 THE LOST© 2001 Wal-Mart Stores, Inc.