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 FREE TRANSLATION, NOT TO THE LETTER 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, 2010. TABLE OF CONTENTS 1) GENERAL INFORMATION ................................................................. 4 A) GLOSSARY OF TERMS AND DEFINITIONS ........................................................................... 4 B) EXECUTIVE SUMMARY ............................................................................................................ 6 I) WALMEX IN THE STOCK MARKET............................................................................................ 6 C) RISK FACTORS ............................................................................................................................ 9 D) OTHER SECURITIES ................................................................................................................. 10 E) PUBLIC DOCUMENTS .............................................................................................................. 10 2) THE COMPANY ................................................................................... 12 A) ISSUER BACKGROUND AND DEVELOPMENT ................................................................... 12 B) BUSINESS DESCRIPTION ........................................................................................................ 13 I) MAIN ACTIVITY........................................................................................................................... 13 II) DISTRIBUTION CHANNELS ....................................................................................................... 16 III) PATENTS, PERMITS, BRANDS AND OTHER CONTRACTS ................................................... 16 IV) PRIMARY CUSTOMERS .............................................................................................................. 17 V) APPLICABLE LEGISLATION AND TAX SYSTEM ................................................................... 17 VI) HUMAN RESOURCES .................................................................................................................. 18 VII) ENVIRONMENTAL PERFORMANCE ........................................................................................ 18 VIII) MARKET INFORMATION ........................................................................................................... 18 IX) CORPORATE STRUCTURE ......................................................................................................... 20 X) DESCRIPTION OF MAIN ASSETS .............................................................................................. 21 XI) LEGAL, ADMINISTRATIVE OR ARBITRATION CASES......................................................... 22 XII) REPRESENTATIVE SHARES OF CAPITAL STOCK ................................................................. 22 XIII) DIVIDENDS ................................................................................................................................... 22 3) FINANCIAL INFORMATION ............................................................ 24 A) SELECTED FINANCIAL INFORMATION ............................................................................... 24 B) FINANCIAL INFORMATION BY LINE OF BUSINESS AND GEOGRAPHICAL REGION ....................................................................................................................................... 25 C) MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS ....................................... 26 I) OPERATION RESULTS ................................................................................................................ 27 II) FINANCIAL SITUATION, LIQUIDITY AND CAPITAL RESOURCE ...................................... 27 III) INTERNAL CONTROL ................................................................................................................. 29 D) CRITICAL ACCOUNTING POLICIES ...................................................................................... 30 4) ADMINISTRATION ............................................................................. 31 A) INDEPENDENT AUDITORS ..................................................................................................... 31 B) CONFLICTS OF INTEREST ...................................................................................................... 31 C) ADMINISTRATORS AND SHAREHOLDERS ......................................................................... 32 D) CORPORATE BYLAWS (IN FORCE AS OF MARCH 10, 2011) ............................................ 38 Page 2 of 78 5) STOCK MARKET ................................................................................ 49 A) STOCK STRUCTURE ................................................................................................................. 49 B) STOCK PERFORMANCE IN THE SECURITIES MARKET ................................................... 49 6) PEOPLE IN CHARGE ......................................................................... 51 7) ATTACHMENTS .................................................................................. 53 A) CONSOLIDATED FINANCIAL STATEMENTS AND OPINION OF THE STATUTORY AUDITOR .................................................................................................................................... 53 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. Page 3 of 78 2) GENERAL INFORMATION A) GLOSSARY OF TERMS AND DEFINITIONS ADR American Depositary Receipts ANTAD National Retailers Association Offering the best in fashion for the whole family at the best possible Apparel stores price Associate Employee who works at Walmart de México y Centroamérica Universal banking institution aimed at Walmart de México customers, with an initial offering of basic banking and financial Banco Walmart products and services (Banco Wal-Mart de México Adelante, S.A., Institución de Banca Múltiple) Bodegas & Austere stores offering basic merchandise, food and household discount stores items at the best prices Consisting of the following states: Aguascalientes, Colima, Hidalgo, Center State of Mexico, Guanajuato, Jalisco, Michoacán, Morelos, Puebla, Queretaro, San Luis Potosi and Tlaxcala Membership warehouse clubs focused on businesses and Clubs consumers who seek the best possible prices CNBV Mexican National Banking and Securities Commission Location for the receipt of goods from suppliers DC and store distribution Earnings Before Interest, Taxes, Depreciation, EBITDA and Amortization Permanent philosophy of Walmart de México y Centroamérica, in Every Day order to contribute towards improving the quality of life for the Low Prices region GDP Gross Domestic Product GLS Global Logistics System Self-service stores providing the widest assortment of goods from Hypermarts groceries and fresh, to apparel and general merchandise Instituto de Seguridad y Servicios Sociales de los Trabajadores del ISSSTE Stores Estado (Social Security and Services Institute for Government Employees). Metropolitan Area Consisting of the following: Mexico City Federal District and the Metropolitan Area MSE Mexican Stock Exchange 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 78 Restaurants Leading chain in the restaurant cafeteria segment Sales floor Surface area set aside for merchandise retail Southeast Consisting of the following states: Campeche, Quintana Roo, Tabasco, Veracruz and Yucatán Southwest Consisting of the following states: Guerrero, Chiapas and Oaxaca Supermarkets Self-service stores located in residential areas Total revenues Net sales plus other income UNAM Stores Universidad Nacional Autónoma de México (National Autonomous University of Mexico) WALMEX Stock Symbol for Wal-Mart de México S.A.B. de C.V. Page 5 of 78 B) EXECUTIVE SUMMARY Walmart de México y Centroamérica is one of the most important retail chains in the region with operations in 384 cities located in six countries: Costa Rica, El Salvador, Guatemala, Honduras, Mexico and Nicaragua. As of December 31, 2010 it operates 2,279 units, including self-service stores, warehouse membership clubs, apparel stores, and restaurants as well as 263 bank branches. During 2010, Walmart de México y Centroamérica achieved once again, its best results. Financial Data Million pesos Growth 2010 2009 (%) RESULTS Net sales Ps. 334,511 Ps. 269,397 24.2 Other income 1,346 1,054 27.7 Total