Wal-Mart De Mexico, S
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WAL-MART DE MÉXICO, S.A.B. DE C.V. BLVD. MANUEL AVILA CAMACHO # 647, COLONIA PERIODISTAS DELEGACION MIGUEL HIDALGO, ZIP. 11220 MEXICO, D.F. PH. (52) 55 5283-0100 www.walmartmexico.com.mx REPRESENTATIVE SHARES OF CAPITAL STOCK FOR WAL-MART DE MÉXICO, S.A.B. DE C.V., ARE: COMMON REGISTERED NO-PAR VALUE TICKER SYMBOL: WALMEX SAID SHARES ARE REGISTERED WITH THE NATIONAL REGISTRY FOR SECURITIES AND ARE TRADED IN THE MEXICAN STOCK EXCHANGE. REGISTRATION WITH THE NATIONAL REGISTRY FOR SECURITIES DOES NOT IMPLY CERTIFICATION REGARDING THE SOUNDNESS OF THE SECURITY OR THE FINANCIAL STANDING OF THE ISSUER, OR ACCURACY OR VERACITY OF THE INFORMATION CONTAINED IN THE PROSPECT, NOR DOES IT CONFIRM ANY ACTIONS THAT MAY, OR MAY NOT, HAVE BEEN CONDUCTED IN VIOLATION OF THE LAW. ANNUAL REPORT PRESENTED IN KEEPING WITH GENERAL PROVISIONS APPLICABLE TO SECURITIES ISSUERS AND OTHER MARKET PLAYERS: YEAR ENDING DECEMBER 31, 2009. TABLE OF CONTENTS 1) GENERAL INFORMATION.................................................................4 A) GLOSSARY OF TERMS AND DEFINITIONS ........................................................................... 4 B) EXECUTIVE SUMMARY............................................................................................................ 6 I) WALMEX IN THE STOCK MARKET............................................................................................ 7 C) RISK FACTORS............................................................................................................................ 7 D) OTHER SECURITIES ................................................................................................................... 8 E) PUBLIC DOCUMENTS................................................................................................................ 8 2) THE COMPANY...................................................................................10 A) ISSUER BACKGROUND AND DEVELOPMENT ................................................................... 10 B) BUSINESS DESCRIPTION ........................................................................................................ 11 I) MAIN ACTIVITY........................................................................................................................... 11 II) DISTRIBUTION CHANNELS....................................................................................................... 19 III) PATENTS, PERMITS, BRANDS AND OTHER CONTRACTS................................................... 20 IV) PRIMARY CUSTOMERS.............................................................................................................. 21 V) APPLICABLE LEGISLATION AND TAX SYSTEM................................................................... 22 VI) HUMAN RESOURCES.................................................................................................................. 23 VII) ENVIRONMENTAL PERFORMANCE ........................................................................................ 23 VIII) MARKET INFORMATION ........................................................................................................... 26 IX) CORPORATE STRUCTURE ......................................................................................................... 27 X) DESCRIPTION OF MAIN ASSETS .............................................................................................. 29 XI) LEGAL, ADMINISTRATIVE OR ARBITRATION CASES......................................................... 30 XII) REPRESENTATIVE SHARES OF CAPITAL STOCK................................................................. 30 XIII) DIVIDENDS ................................................................................................................................... 31 3) FINANCIAL INFORMATION............................................................32 A) SELECTED FINANCIAL INFORMATION ............................................................................... 32 B) FINANCIAL INFORMATION BY LINE OF BUSINESS AND GEOGRAPHICAL REGION....................................................................................................................................... 33 C) MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS ....................................... 34 I) OPERATION RESULTS ................................................................................................................ 35 II) FINANCIAL SITUATION, LIQUIDITY AND CAPITAL RESOURCE ...................................... 36 III) INTERNAL CONTROL ................................................................................................................. 37 D) CRITICAL ACCOUNTING POLICIES...................................................................................... 38 4) ADMINISTRATION.............................................................................39 A) INDEPENDENT AUDITORS ..................................................................................................... 39 B) CONFLICTS OF INTEREST ...................................................................................................... 39 C) ADMINISTRATORS AND SHAREHOLDERS......................................................................... 40 D) CORPORATE BYLAWS (IN FORCE AS OF MARCH 11, 2010) ............................................ 50 Page 2 of 85 5) STOCK MARKET ................................................................................61 A) STOCK STRUCTURE................................................................................................................. 61 B) STOCK PERFORMANCE IN THE SECURITIES MARKET ................................................... 61 6) PEOPLE IN CHARGE .........................................................................63 7) ATTACHMENTS..................................................................................65 A) CONSOLIDATED FINANCIAL STATEMENTS AND OPINION OF THE STATUTORY AUDITOR.................................................................................................................................... 65 Page 3 of 85 1) GENERAL INFORMATION A) GLOSSARY OF TERMS AND DEFINITIONS ADR American Depositary Receipt. ANTAD National Retailers Association. ASDA Wal-Mart Stores, Inc. self-service chain in the United Kingdom. Associate Employee who works at Walmart de México. Bodega Aurrerá Austere discount stores offering basic merchandise, food and household items at the best prices. Center Consisting of the following states: Aguascalientes, Colima, Hidalgo, State of Mexico, Guanajuato, Jalisco, Michoacan, Morelos, Puebla, Queretaro, San Luis Potosi and Tlaxcala. ClubCo Warehouse membership clubs, where members can purchase large volumes in institutional-size packages. CNBV Mexican National Banking and Securities Commission. Despensa Familiar, Discount stores that offer limited assortment at very low prices. Palí Devaluation Mexican Peso devaluation against US dollar. Distribution center Location for the receipt of goods from suppliers and store distribution. Dollar, Dollars, or Dollar, American legal currency. US$ EBITDA Earnings Before Interest, Taxes, Depreciation, and Amortization. Every Day Low Permanent philosophy which focuses on contributing towards improving the quality of Prices life for families in Mexico and Central America. GDP Gross Domestic Product. Hiper Paiz, Hiper Más Hypermarkets that operate under the premise of one-stop shopping. Located in the periphery of, or main entrances to, large cities throughout Central America. IETU Mexican flat-rate business tax. IPC Price and Quotation Index. ISR Income Tax. ISSSTE Stores Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado (Social Security and Services Institute for Government Employees). IVA Value Added Tax. Maxi Bodega Warehouse–type stores, which are a different style of discount stores, larger in size and with a wider assortment, at equally competitive prices. Metropolitan Area Consisting of the following: Mexico City Federal District and the Metropolitan Area. MSE Mexican Stock Exchange. NCPI National Consumer Price Index. Net sales Goods sold in our stores. North Consisting of the following states: Coahuila, Chihuahua, Durango and Zacatecas. Northeast Consisting of the following states: Nuevo Leon and Tamaulipas. Northwest Consisting of the following states: Baja California Norte, Baja California Sur, Nayarit, Sinaloa and Sonora. Page 4 of 85 Paiz, La Despensa Supermarkets focused on customer service in large urban centers, or the surrounding de Don Juan, La areas. Unión, Más x Menos PTU Employee Profit Sharing. Sales floor Appointed area for merchandise retail. SKUs Stock Keeping Units. SME Small and Medium Enterprise Southeast Consisting of the following states: Campeche, Quintana Roo, Tabasco, Veracruz and Yucatán. Southwest Consisting of the following states: Guerrero, Chiapas and Oaxaca . Total Revenue Net sales plus other income. UNAM Stores Universidad Nacional Autonoma de México (National Autonomous University of Mexico). Walmart de México Universal banking institution aimed at Walmart de México customers, with an initial Bank offering of basic banking and financial products and services. WALMEX Stock symbol for Wal-Mart de México, S.A.B. de C.V. Notes: 1. For comparison purposes, all securities are shown with an adjustment due to the 2-to-1 split which took place on April 23, 2010, except in audited financial statements. 2. The purchasing of Walmart Centroamérica took place in February 2010, and therefore the information