REA Supplier Summit Jim McClendon

Walmart Stores, Inc

20/12 – 25/09 - 100

June 5, 2008

REA Supplier Summit

Canada Canada 305 Units305 Units

Mexico Mexico 1037 Units1037 Units

Guatemala Guatemala 146 Units146 Units

Honduras Honduras 47 Units47 Units

Nicaragua Nicaragua 46 Units46 Units

Costa Rica Costa Rica 152 Units152 Units

Puerto Rico Puerto Rico 54 Units54 Units

El Salvador El Salvador 72 Units72 Units

Brazil Brazil 315 Units315 Units

Argentina Argentina 23 Units23 Units

China China 206 Units206 Units

Japan Japan 392 Units392 Units

Global Presence Global Presence –– 20072007

UK UK 353 Units353 Units

U.S. Operations: 4,195 U.S. Operations: 4,195 International Operations: 3,148 International Operations: 3,148

Total: 7,343Total: 7,343

Annual Sales: Annual Sales: $375 B$375 B

U.S.4195 Units

India2 Units

Competition for Resources Accelerating with Developing Countries

Competition for Resources Accelerating with Developing Countries

0

20,000

40,000

60,000

80,000

100,000

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

GDP of G6 vs BRIC Countries(US$ Billions)

GDP of G6 vs BRIC Countries(US$ Billions)

BRICsBRICs

G6G6

3

G6 + BRICsG6 + BRICs

Growth Expectations…Growth Expectations…

1995 2005Revenue 4th 1st

Profit 12th 8th

Associates 3rd 1st

Real Estate 1st 1st

Equivalent GDP 32nd 19th

4

2015

1st

5th

1st

1st

13th

….International Driven.….International Driven.

REA Supplier Summit

REA Supplier Summit

REA Supplier Summit

REA Supplier Summit

REA Supplier Summit

#1001 – GUIYANG PEOPLE SQUARE, CHINA – SUP NEW – GO 5/28/04

REA Supplier Summit

REA Supplier Summit

REA Supplier Summit

Business Structure

Wal-Mart Stores, Inc.

Wal-Mart US Wal-Mart InternationalSam’s Club Other Bus

Wal-Mart Realty

GISDesign

REA Supplier Summit

Manage Design and Construction:• Prototype and New Format Development

• Develop, manage, maintain prototype library• One-offs, takeovers, multi-levels

• Site Adapt – Project Floor• Site conditions, constraints, market demands• ~40–50 MM ft2/yr

• GIS; Sourcing per Design Specifications• Global opportunities, scale, common denominators

• Technology – Applications must have program opportunity

• Incentives, rebates, shared programs are tough…

REA Supplier Summit

Looking over the Horizon & Envisioning the Future 16

Energy Use Profile

REA Supplier Summit

Looking over the Horizon & Envisioning the Future 17

Energy Use Profile

REA Supplier Summit

18

Gas

Electric

REA Supplier Summit

Looking over the Horizon & Envisioning the Future 19

Gas

Electric

REA Supplier Summit

Looking over the Horizon & Envisioning the Future 20

Gas

Electric

REA Supplier Summit

Looking over the Horizon & Envisioning the Future 21

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Miami, F

LHous

ton, T

XDalla

s, TX

Louis

ville, K

YChica

go, IL

Minnea

polis,

MN

Phoen

ix, AZ

Denver, C

OCasp

er, WY

Las V

egas,

NVLo

s Ange

les, C

ASac

ramen

to, C

APort

land, O

R

Total cooling Total fans Total heating Total lightingTotal refrigeration Poly. (Total heating) Poly. (Total cooling)

Model Energy Use Profile

REA Supplier Summit

Louisville, KY

35%

22%

25%

18%

Total HVAC

Total refrigeration

Total lighting

Total small power

Model Energy Use Profile

REA Supplier Summit

Looking over the Horizon & Envisioning the Future 23

kWh/ft2

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Miami, F

LHous

ton, T

XDalla

s, TX

Louis

ville, K

YChica

go, IL

Minnea

polis,

MN

Phoen

ix, AZ

Denver, C

OCasp

er, WY

Las V

egas,

NVLo

s Ange

les, C

ASac

ramen

to, C

APort

land, O

R

Model Energy Use Profile

REA Supplier Summit

0%

10%

20%

30%

40%

50%

60%

70%Miami, FL

Houston, TXDallas, TX

Louisville, KYChicago, IL

Minneapolis, MN

Phoenix, AZ

Denver, CO

Casper, WY

Las Vegas, NV

Los Angeles, CA

Sacramento, CA

Portland, OR

Rogers, AR

Urumqi

Beijing

Chengdu

Hong Kong

Lanzhou

QiqiharShanghai

TokyoSapporo

KagoshimaCalgary, AB

Vancouver, BCWinnipeg, MB

Tonronto, ON

Quebec, QC

Buenos Aires

Belem

Brasilia

Manaus

Recife

Rio de Janeiro

Guatemala

Tela

Acapulco

Mexico City

Veracruz

Managua

San Juan

San SalvadorLondon

ManchesterGlasgow Cooling

Fans

Heating

Lighting

Refrigeration

REA Supplier Summit Estimated (2005) kWh/ft2

0

10

20

30

40

50

60

UK

Puerto Rico

Japan

Argentina

China

Mexico

US

Canada

Footer goes here

Global CO2 Footprint (2005)

10.80%

15.70%

6.40%

0.20%

0.20%66.70%

Refrigerants

Gas

Trucks

Cars

Planes

Electricity

80% Bldg Energy

90% Bldg Systems

REA Supplier Summit

Goals: What’s the Limit?

8176

7528

6130

1841

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Act Base Model Base Goal Theo

25%

20/12 – 25/09 - 100

REA Supplier Summit

Current EEMs in Place:

• New Prototype:• Integrated design approach• Water source heat pump• 100% fridge heat reclaim• Radiant floors for heating and cooling• Indirect evaporative processes• LED case lighting, exterior and parking lots, product • Controls….????

• Retrofits:• Variable-frequency drive applications• HVAC upgrades• Lighting retrofits…LED• EB commissioning• Controls….????

REA Supplier Summit

The Opportunity; A Business Case• WMT; Largest Private Energy Consumer in the US.

• < 1%• ~ $2 B• > 1/2 B ft2

• REA Factor;• Will exceed 3 billion ft2• You do the math…• $100s Millions of Energy Savings Potential

• Retail Is a Strategic Point of Injection• Prototype based for quick penetration• Scale factor bridges technology and commercialization gaps quickly• Natural migration path to other building sectors

• New Industry and Business Opportunities Will Emerge

REA Supplier Summit

Inhibitors:• Integrated Solutions

• Not mutually exclusive…

• Understanding and Acknowledging the Business Case• Has to be a line of sight toward a ROI• Energy, operation and maintenance…VOEs

• Do Your Homework:• Identify the right application; does it address a need, does it work…• Identify energy savings budget; best case, worst case…• Build economic case with real sensitivities…• Product/system development strawman…• Market acceptance/transformation strategy…

REA Supplier Summit

Energy Use by Technology: Lighting• Areas of Need or Focus:

– Integrated design– LED solutions; product, parking, ambient

• Current Technologies Employed:– Interior lighting; HET8 with daylight harvesting– Solid-state sighting; LED exterior signage, LED cases, LED jewelry– Controls; open loop

• Industry/Supplier Focus – R&D focus:– Identify the need– LED applications; ambient, parking, product, CRI

REA Supplier Summit

Energy Use by Technology: HVAC• Areas of Need or Focus

– Integrated design– Drop conventional barriers– EER →

8760– Integrate-embed control functionality into design and fabrication

• Load-capacity matching

• Current Technologies Employed:– Unitary packaged equipment; RTUs, WSHPs, AHUs, etc– New prototype; water-based systems: IDEC, radiant…

• Industry/Supplier Focus – R&D Focus:– Identify the need

REA Supplier Summit

Energy Use by Technology: Refrigeration• Area of Need or Focus

– Integrated design…no longer a silo industry– Modular design and fabrication– Integrate-embed control functionality into design and fabrication

• Current Technologies Employed:– Secondary loops; Glycol & CO2

– Variable-frequency drive compressors and fans– High-efficiency motors; cases and walk-ins– Dynamic LED case lighting

• Industry/Supplier Focus – R&D Focus:– Identify the need…– Control: intelligent, dynamic, open

REA Supplier Summit

Energy Use by Technology: Water

• Areas of Need or Focus– Modular, scalable reuse technologies; rain, storm,…– Treatment, quality

• Current Technologies Employed:– Urinals: from 1.0 to 0.13 gpf; – Toilets: from 1.6 to 1.28 gpf; – Lav’s: from 2.2 to 0.5 gpm;

• Industry/Supplier Focus – R&D Focus:– Identify the need

REA Supplier Summit

Energy Use by Technology: Envelope

• Roof:– 195 prototype, ~200,000 ft2

• Roof to Walls = 5:1

REA Supplier Summit

Energy Use by Technology: O&M

• Maintenance-free battery

• Diminishing skill set and resource base

• Modular, prefab, plug and play– High-quality manufacturing– Low failure/warranty– High reliability, low service requirement

REA Supplier Summit

Prioritize: • Integrated Solutions

• Not mutually exclusive…no silo applications

• Understanding and Acknowledging the Business Case• Has to be a line of sight toward a return• Energy, O&M…volatile organic compounds

• Do Your Homework:• Identify the right application; does it address a need, does it work…• Identify energy savings budget; best case, worst case…• Build economic case with real sensitivities…• Product/system development strawman…• Market acceptance/transformation strategy…

• REA: Strategy Point, Leveraging Point, Scale Factor

REA Supplier Summit

Thank You