annual report - walmex financiera/anual/eng...2 2010 annual report our company knew how to adapt to...

2010Annual Report

Strengtheningour leadership

Our vision Contributing towards

improving the quality

of life for families in Mexico

and Central America.

Central America* Consolidated**

2009 % Var. 2010 2009 % Var. 2010 2009 % Var.$269,397 9.7 $45,976 $43,027 6.9 $334,511 $269,397 24.2

21.7 11.6 22.2 22.1 7.4 22.1 21.7 26.4

13.4 9.9 17.4 17.3 7.5 14.0 13.4 29.4

8.2 14.3 4.8 4.8 7.2 8.1 8.2 21.4

10.0 14.2 6.5 6.5 7.5 9.9 10.0 23.7

We are a young Company, with great potential for growth.In 2010, once again we achieved record figures. We strengthened our leadership in Mexico and with the incorporation of the Central American operations we have further increased our many opportunities for continuous profitable growth.

Income statements

* Information provided only for comparison purposes. It includes calendar-year results for operations in Central America.** Central American operations consolidated in financial statements as of March 2010.

Note 1: these figures are presented on a constant currency basis.Note 2: All amounts and growth figures included in this report are in nominal terms.

Our

resu

lts

Mexico

2010

Net sales (million pesos) $295,574

Gross margin 22.0

General expenses 13.5

Operating income 8.6

EBITDA 10.4% o

f rev

enue

s

Balance sheet (million pesos)

Cash $24,661

Inventories $29,036

Fixed assets & others $141,111

$38,000 Suppliers

$156,808 Shareholders’ equity & others

Total $194,808

Assets Liabilities andshareholders’ equity

Cash-on-hand

billion pesos$24.7

As of December 31, 2010.

1Walmart de México y Centroamérica

Central America* Consolidated**

2009 % Var. 2010 2009 % Var. 2010 2009 % Var.$269,397 9.7 $45,976 $43,027 6.9 $334,511 $269,397 24.2

21.7 11.6 22.2 22.1 7.4 22.1 21.7 26.4

13.4 9.9 17.4 17.3 7.5 14.0 13.4 29.4

8.2 14.3 4.8 4.8 7.2 8.1 8.2 21.4

10.0 14.2 6.5 6.5 7.5 9.9 10.0 23.7

2 2010 Annual Report

Our Company knew how to adapt to a consumer market still in recovery, achieving record figures both in terms of results –with $334.5 billion pesos in sales and an operating income of $27.0 billion pesos– and growth, ending the year with 2,279 units in operation after opening 297 units. Our image as a strong international Company is further enhanced every day by our performance, which is a reflection of our well-known spirit of excellence that will continue driving our leadership in the region.In addition to leveraging our market opportunities, the Company’s multiformat strategy has acquired even more international significance. I am pleased to inform you that our format Bodega Aurrerá has not only been replicated in Brazil (TodoDia) and Argentina (Changomas), but has also reached the Asian continent with the opening of the first

compact discount hypermart in Zhangshu, China. This confirms our leadership in the development of formats, addressing different customer groups and shopping occasions. Not only has the strictest adherence to principles in corporate governance and transparency earned us the confidence of our shareholders, but also allowed us to keep an up-to-date position vis-à-vis best practices. To this end, the Board of Directors is assisted by the Executive, Audit, and Corporate Practices committees, which are in charge of regularly reviewing corporate results and assessing activities throughout the Company, including the proper use of all our assets.As in the past, Walmart de México y Centroamérica continues to have a sound financial structure defined by the absence of debt and a large cash-generation capacity. Growing profitably, remodeling stores, paying dividends, and repurchasing shares are still the pillars upon which we base the value proposition for all our shareholders. In line with these priorities, the Company was able to make a record investment of $13.1 billion pesos to modernize and expand its installed capacity with its own resources. Moreover, in 2010 the Board of Directors proposed the payment of cash dividends at $0.35 pesos per share, amounting to $5.7 billion pesos, and throughout the year we invested some $3.5 billion pesos to repurchase more than 112 million shares. Historically, we have proven and confirmed our respect for and commitment to our shareholders, especially those with a minority stake in the Company. The efforts of all our associates have led

We can say that 2010 was a historic year. In February we became an international company through the acquisition of Walmart Centroamérica. Despite an adverse economy, Walmart de México y Centroamérica achieved sound results through its Corporate Governance, strict financial discipline, and the talent our management team and associates have acquired over many years of experience. It is thanks to all these elements that we have been able to enhance our competitive advantage.

Letter from theChairman of the Board


to better results, as well as to a 22% Walmex share total return in 2010.Our Company continues to be a talent-developing center. Aware of the fact that this is our main strength, this year we defined the new Leadership Model to lay the foundations for future leaders. This initiative will continue to contribute towards the creation of a high-performance organization, so as to support the growth of the Company. It is also with a great sense of pride that I report that the Walmart de México Foundation was honored with a World Business and Development Award 2010. Presented by the United Nations Development Program, the International Chamber of Commerce, and the International Business Leaders Forum, this biennial award acknowledges the contributions of ten private-sector companies for increasing the living standards of marginalized communities through business innovation. The Foundation participated with their Commercialization of Products from Marginalized Communities and Indigenous Groups Program, which offers training and funding to bolster the production processes.Once again, I thank our shareholders for their trust in the Board of Directors. The enthusiastic participation by the Directors in our corporate governance activities must equally be acknowledged. I wish to express my appreciation to the management team and to every Walmart de México y Centroamérica associate for their efforts in taking care of and increasing the equity that our

shareholders entrusted us, and also for what they do on an everyday basis to strengthen our Company’s leadership, thus contributing towards improving the quality of life for families in Mexico and Central America.

eduardo solórzano Chairman of the Board of Directors Wal-Mart de México, S.A.B. de C.V.Mexico City, February 21, 2011


In keeping with our continuous and profitable growth priority, consolidated sales totaled $334.5 billion pesos, representing a 24.2% growth in total units. This sales growth is driven by the acquisition of Walmart Centroamérica and the opening of 297 stores of all our business formats in the six countries of the region. Therefore, we closed 2010 with a total of 2,279 stores in operation, representing an increase in installed capacity of 11.4% in Mexico and 3.7% in Central America.

Sales in Mexico totaled $295.6 billion pesos, with 9.7% growth in total units and 3.2% in comp units. This growth is supported by our performance in the self-service segment, which recorded an increase in installed capacity of 12.1%. Lastly, and based on our constant search for efficiency in operations and logistics, EBITDA grew 14.2%, representing 10.4% of our revenues.

In Central America, sales totaled $46.0 billion pesos; this represents 6.9% growth for total units and 5.2% for comp units. Central America, like Mexico, grew operating income above sales, but in this case by 30 basis points. It is worth mentioning that during this first year of operations in Central America, we have devoted time and efforts to identify synergies between the two operations; although some of them have already been implemented with very good results, we will keep on working in order to provide our customers with the best value proposition in each business format, and continue providing them a unique shopping experience.

We expanded and updated our logistics infrastructure. We opened a fully automated distribution center in Villahermosa, in the state of Tabasco, and automated a section of the Cuautitlán Distribution Center, in Greater Mexico City. We also started incorporating Central America’s logistics network to the systems Walmart uses worldwide.

Aware that the main strength of our Company is the talent of our 219,767 associates, this year we defined the new Leadership Model for Walmart de México y Centroamérica. Based on six competencies, this model is designed to develop leaders that in turn will train leaders for the future. In addition to this, 11 million man-hours have been invested in training. Altogether, these efforts are aimed at ensuring the availability of highly-skilled talent that will allow us to build a high-performance organization and leverage the Company’s growth.

A year ago, we stated that we would have a double challenge for 2010: go beyond our 2009 achievements and further reinforce our value proposition to help our customers overcome the economic crisis. I am very proud to report that in facing this challenge, our Company closed the first decade of the century with record figures in revenues, expansion, employment, and social responsibility, thus highlighting our strategic priorities: continuous profitable growth, talent development, and corporate social responsibility.

Letter from theChief Executive Officer


In line with the development of projects that ensure our Sustainability Plan objectives are met, this year our Wind Farm Oaxaca I Lamatalaventosa started supplying clean energy to some 348 stores, reducing CO2 emissions equivalent to removing 21,000 motor vehicles from the road for a year. We also held our First Sustainability Forum “Together for a Better Planet”, whose objective was sharing best practices and exchanging information with enterprises committed to sustainability.

In the same sense and aware of our commitment to the communities in the region, over 86,900 associate volunteers participated in different activities. Over $491 million pesos were channeled to support 449 social institutions such as food banks, thus benefiting 2.7 million people.

After an outstanding year-end, I can assure all of you that we will continue strengthening the foundations of our future. Today, Walmart de México y Centroamérica is a Company with operations in six countries. We will continue investing and seizing the multiple growth opportunities and enormous potential offered by the region for all our business formats, with confidence and a long term view. We are convinced that our multiformat operation provides the appropriate value proposition to contribute towards improving the quality of life for our customers.

I would like to express my appreciation to our customers for their preference, our associates for their commitment and service, our suppliers for their continuous support as our commercial success

is also theirs, and our shareholders for their trust. With the momentum of these achievements, I

am sure that our people will continue building an even more successful future for Walmart de México y Centroamérica.

scot RankCEO Walmart de México y Centroamérica

Informe Anual 20106

Cont

inuo

uspr

ofita

ble g

row

th ME

XI C O

GUATEMALA

HONDURAS

NICARAGUA

COSTA RICA

EL SALVADOR

ME

XI C O

2000 1 country 42 cities480 units

ME

XI C O

GUATEMALA

HONDURAS

NICARAGUA

COSTA RICA

EL SALVADORM

E

XI C O

2010 6 countries 384 cities 2,279 units

Walmart de México y Centroamérica 7

Year after year, our achievementsbecome new challenges that we are able to face thanks to a series of clear and well-defined principles:

• Results-oriented approach• Disciplined investment• Continuous improvement • Adapting to our customers’ needs

Our continuous and long-term growth has always set us aside from the rest. We are one of the

companies that most generates value for its shareholders, the result of long-term thinking that guides our day-to-day ac-tivities. It is because of this vision that we acquired Walmart Centroamérica, thereby opening new horizons.

Because of the countless opportuni-ties for profitable growth offered by the region, we will continue investing here, supported by our financial strength.

In Mexico, sales amounted to $295.6 billion pesos, representing 9.7% growth for total units and 3.2% for comp units. Furthermore, we honored our commitment to

leverage profits by increasing operating income and EBITDA beyond sales growth (14.3% and 14.2%, respectively). This was possible thanks to enhanced operating and logistics efficiency.

In Central America, sales increased 6.9% for total units and 5.2% for comp units. Operating income and EBITDA were

During 2010, we once again achieved record figures in sales, operating income, and EBITDA. These results are the reflection of a rigorous process to efficiently monitor and control our operations.

2010 Annual Report8

also higher than sales (7.2% and 7.5%, respectively). After consolidating figures, these indicators grew more than 20%.

The integration of both operations -Mexico and Central America- focuses on three main objectives: value generation, a business-centered approach, and single-company operations. In less than one year, since becoming an international retailer, we have already identified synergies between Mexico and Central America that will allow us to generate further value in the medium and long terms.

Results-orientedapproach


Palí Piedades de Santa Ana, Costa Rica

EBITDA

$5.3

$33.3

$71.4

$334.5

20102000

20102000

$3.8

$27.0

20102000

$5.3

$33.3

$71.4

$334.5

20102000

20102000

$3.8

$27.0

20102000

Net salesbillion pesos

billion pesos

*Compounded annual growth rate

*Compounded annual growth rate

Bodega Aurrerá Express Panteón Francés, Mexico

CAGR*20%

CAGR*17%

Our sound financial position, cash-generation capacity, and confidence in the growth opportunities offered by the region allow us to continue investing and bring our value proposition to more customers.

Disciplinedinvestment

Capital expenditure

$3.0

$13.1

20102000

billion pesosIn 2010, we invested a record $13.1 billion pesos to open 297 new stores, remodel over 130 existing stores and further modernize our logistics network. All of our business

formats grew, both in new cities and in those where we were already present.

In Mexico, we opened 267 stores, reaching a final number of 1,730 stores in operation. Bodega Aurrerá opened 220 stores from all its business formats; Walmart, 20; Sam’s Club, 10; Superama, 6; Suburbia, 4; and 7 Vips restaurants. Furthermore, Banco Walmart opened 73 new branches. Altogether, these new units added more than 5,000,000 sq. ft., representing an installed-capacity increase of 11.4%.

Openings248 Bodegas and discount stores

20 Hypermarts

10 Clubs

Record openings

units297

In Central America, we have increased our installed capacity by 3.7% through the opening of 30 stores: 12 Despensa Familiar, 12 Palí, 2 Paiz and 4 Maxi Bodega. In total, we have 549 stores already in operation.

In addition to our investment in fixed assets, we paid $5.7 billion pesos in dividends to our shareholders and $3.5 billion for the repurchase of shares. Our sound financial structure is defined by the absence of debt and a cash balance of $24.7 billion pesos.

Fully confident in the prospects offered by the countries where we operate, we will continue investing to make the best of the many profitable-growth opportunities in the region.


8 Supermarkets

4 Apparel stores

7 Restaurants

2010 Annual Report12

An example of our permanent commitment to greater operational efficiencies can be found in the improve-ments introduced in our 25 Distribution Centers (DCs).

As part of our expansion plan in Mexico, we opened a fully automated DC for dry products in Villahermosa, Tabasco, with the capacity of handling over 350,000 cases per day. It will allow us to more efficiently serve stores in Southeast Mexico. Furthermore, we have automated the operations of a section of our Cuautitlán DC, located in Greater Mexico City. With an investment of more than $1.0 billion pesos, the automation of these two distribution centers will increase productivity by up to 30% for these facilities, allowing us to transport more merchandise to a larger number of stores.

In Central America, the logistics network has started the integration process of implementing Walmart systems used throughout the world. The San Rafael DC in Costa Rica is the first one to use GLS, a flexible and robust logistics platform

Our highest priority is to continue being the retailer with the lowest cost structure in the market, so as to be in a position of giving our customers Every Day Low Prices. We are always looking for new opportunities to improve our operation, so as to invest in those areas that allow us to do more with less.

Continuousimprovement


Automated Sorter, Cuautitlán, Mexico

that gives further visibility to operating areas, increasing productivity vis-à-vis merchandise management.

Throughout the year, in our store operations we developed a number of productivity initiatives that generated significant savings for our Company. The primary initiatives encompassed several operating areas: changes in processes and work routines; headcount based on realistic workloads; and production and display of perishables stemming from each unit’s specific requirements. Savings generated in 2010 amounted to more than $140 million pesos, and represented the beginning of a new project with broader scope that will lead us to the creation of world-class operating standards.

2010

15.1

5.3

8.1

14.0

2000

Financial leverage% of total revenues

General expenses operating income


Aware of the fact that customer needs are continuously changing, we keep on updating our value proposition at stores, clubs, restaurants and bank branches with the purpose of permanently offering the best possible shopping experience.

creating a more family-like environment. The new furniture is more comfortable and modern, the lights are warmer, and the visual elements are more casual. The menu still includes many of our traditional dishes –Tlalpeño soup, Swiss enchiladas, and key lime pie– but we have also introduced creative and innovative recipes, such as the au gratin onion soup, Roquefort sirloin, pastrami Ciabatta sandwich, and apple strudel.

In Central America, we started upgrading our supermarkets. Two Más por Menos stores were remodeled, making them similar to Mexico’s Superama. This upgrade included changing the look of the stores and their logo, as well as providing a broader assortment of gourmet products. The new position in the marketplace allowed these super-markets to improve their value offering, which received great acceptance by our customers.

In the case of Bodega Aurrerá, we introduced important changes pertaining to merchandise distribution and department organization. This has resulted in more

productive and customer-convenient stores. In line with these changes, we also modified Bodega’s look to make it more modern. An important aspect is that this image and layout changes were completed in a matter of just one month.

Suburbia also changed the look of the Junior’s Depart-ment in order to make it more suitable to target customers regarding layout, therefore making it easier for them to find what they need.

Vips’ new concept was launched in several units. It includ-ed a revamped logo, new furniture and innovative menus. The warm colors and organic shapes used in the new logo make it friendlier, more contemporary and appealing, in addition to

Bodega Aurrerá San Mateo, Mexico Suburbia Texcoco, Mexico

customers’ needsAdapting to our

billioncustomers

served

1.6

Vips Querétaro II del Parque, Mexico Más por Menos Santa Ana, Costa Rica



Banco Walmart focused on developing financial products best suited to meet the needs of individual and corporate customers. Throughout the year, over 590,000 individual accounts were opened including checking, payroll accounts, investment, and savings accounts, thus generating $895 million pesos in deposits. Moreover, our credit portfolio includes 112,000 cardholders who, from October to December, received $5.8 million pesos back in cash just by using their cards in our stores. Approximately 25% of these

customers were first-time credit cardholders. We were able to grow our credit portfolio 78% through strict risk control measures, as shown by the 61% reduction in past-due portfolio, currently representing 3.5% of the total consumer credit portfolio, which is fully reserved. Regarding corporate financial services, we granted $700 million pesos in loans to 57 companies, 11 of which had their first credit relationship with a banking institution.


Super Credit Card

• You get an immediate 3% reimbursement on purchases made in any of the group’s units

• With Skip a Payment, you can omit making a minimum or fixed monthly payment once every 6 months

• When paying at Sam’s Club, cash prices apply

• You get the card the same day you apply for it

Super Investment

• You can open your investment with only $1,000 pesos

• No fees

• Investment terms to suit your personal needs: 7, 28, 90, 180 and 360 days

• One of the highest interest rates on the market

Supplier Credit

• Focused on meeting working-capital needs

• Your relationship with Walmart does matter! Analysis is based on the historical performance of Walmart de México suppliers

• No collateral or co-signer required

• Highly efficient approval processes

Prod

ucts

Super Debit

• You can open your account with only $100 pesos

• No fees

• You get a 1% immediate reimbursement on purchases made in any of the group’s units

• Make deposits, withdrawals and check your balance cost-free at bank branches and at more than 20,000 check-outs in our stores, clubs, and restaurants

Informe Anual 201018

By maintaining our focus on exceeding our customers’ expectations,

we are able to exceed our shareholders’ expectations, too

Wal

mex

shar

e

750%

During the last 10 years, shareholder total return* has

amounted to22%

2010total return* for

Walmex share was

* Including dividends

4.80

35.44

20102000

The Boston Consulting Group 2010Value Creator Report listed Walmex among thetop 10 Sustainable Value Creators Worldwide

the only retail company and the only Mexican company to receive this recognition

Top 10Sustainable

Value CreatorsWorldwide


1Average Annual total Shareholder Return, 2000-2009

the BCG 2010 top ten sustainable Value Creators

# Company Location Industry TSR1 (%)

1 Vale Brazil Mining and materials 35.7

2 Reliance Industries India Chemicals 33.1

3 Am Bev Brazil Consumer goods 30.8

4 Gilead Sciences United States Pharmaceuticals and medical technology 29.0

5 British American Tobacco United Kingdom Consumer goods 25.6

6 Research in Motion Canada Technology and telecom 24.3

7 Apple United States Technology and telecom 23.4

8 Reckitt Benckiser United Kingdom Consumer goods 22.3

9 Walmart de México y Centroamérica Mexico Retail 21.4

10 Posco South Korea Mining and materials 20.9


Talen

t dev

elopm

ent


We are in the process of building a high-performance organization capable of developing all of our associates, so as to guarantee quality and quantity of talent to support continuous profitable growth.

talent development is a priority that has resulted in the ongoing effort to help our people achieve

outstanding performance and be ready to occupy positions with greater levels of responsibility.

This year, 20,058 associates were promoted and 11 million man-hours were invested in training. This means that every associate received approximately 50 hours of training throughout the year on topics related to technology and leadership. As for quality of life, we have relocated 6,782 associates to units closer to their homes.

In 2010 we set out to define and implement our own Leadership Model, whose purpose is to clearly establish the process needed to help people grow as high-performers within the organization in line with our six core competencies. Leadership training complements this model and develops leaders capable of developing future leaders.

Due to the importance of being a good business partner and the fact that Merchandising is one of the Company’s key strategic areas, we have created the Merchandising Academy, a

training program that clearly shows the Company’s commitment to developing skills and boosting the growth of our people in line with business needs.

We will continue concentrating our efforts on building a high-performance organization, so as to support the growth of the Company.

associates219,767


Socia

l res

pons

ibili

ty an

d su

stain

able

deve

lopm

ent

We know that being a socially responsible enterprise is just as important as producing good financial statements and developing our people’s talent. That is why we are not only committed to the operation of our stores, but equally so to the environment and the communities we serve.

One very important component of our programs continues to be the active participation of

our associates in volunteer activities. Throughout the year, 86,901 associates from Mexico and Central America participated in different community support activities (i.e. painting walls, maintaining green areas, planting trees, cultivating vegetable gardens and organizing nutrition-related training courses).

Furthermore, we have allocated more than $491 million pesos to 449 social institutions in the region, including food banks, shelters and nursing homes, benefiting more than 2.7 million people.

The Walmart de México Foundation channeled food baskets and economic donations to communities and associates affected by natural disasters, including victims of Hurricane Alex

in Monterrey and Karl in Veracruz, or victims of earthquakes that struck Baja California, Haiti and Chile.

In line with our objective to generate renewable energy, we are now supplying 348 self-service stores, clubs and restaurants, located in greater Mexico City, the State of Mexico and the state of Morelos, with clean energy obtained from the new Wind Farm Oaxaca I Lamatalaventosa,


Wind Farm Oaxaca I Lamatalaventosa, Mexico


reducing CO2 emissions by 137,000 tons per year –an amount equivalent to removing 21,000 motor vehicles from the roads for a year.

Additionally, this year we organized the First Sustainability Forum “Together for a Better Planet” with the purpose of sharing best practices and information with companies deeply committed to the topic of sustainability. At the end of the day, the intention is to have a multiplying effect resulting in further benefits for the community.

For greater details regarding this and other subjects, consult the Walmart de México y Centroamérica 2010 Social Responsibility and Sustainable Development Report, attached hereto.

volunteers86,901

Commercialization of Products from Marginalized Communitiesand Indigenous Groups Program, by the Walmart de México

Foundation was honored as a winner of the

World Business and Development Award 2010,

presented by the United Nations Development Program,the International Chamber of Commerce, and the International

Business Leaders Forum.


Bodegasand discount

stores

38.6%of total sales

27.0%of total sales

3.0%of total sales

1.7%of total sales

910,000account holders

Hypermarts

Apparelstores

Restaurants

Bank

7.0%of total sales

Supermarkets

22.7%of total sales

Clubs

Mul

tifor

mat

oper

atio

n


$129.2 billion pesos in sales

21,759,734 sq. ft. of sales floor

248 openings



4 openings

$1.3 billion pesos in deposits

$1.0 billion pesos in credit portfolio

73 openings



20 openings


83,408 seats

7 openings

86,777 associates

1,336 units

368 cities



8 openings

19,599 associates

169 units

39 cities

7,666 associates

90 units

32 cities

1,824 associates

263 branches

31 cities

58,867 associates

208 units

79 cities



10 openings

24,994 associates

110 units

67 cities

20,040 associates

366 units

65 cities

7.0%of total sales

28

Corporate Governance

Board of Directors

The structure and responsibilities of the Board of Directors, our Code of Ethics and in general all the activities performed by our Company follow corporate governance best practices.

Our Board of Directors is charged with overseeing the management of the business.

Composition• All the members are appointed on a yearly basis by the shareholders

at the annual meeting• Independent Directors must comprise a minimum of 25% of the total

number of Board Directors• Minority shareholders whose shares represent at least 10% of total

owners’ equity shall have the right to appoint a Director and the corresponding Alternate, neither may be removed until the other members of the Board of Directors are also removed

• The Board meets a minimum of four times a year

Primary Responsibilities• Choosing the Chief Executive Officer• Acting as consultant/counsel for Company top management• Working actively with the CEO to develop general corporate strategies

for the Company and any organizations the Company controls

• Overseeing the performance of Company Officers• Approve all information policies and communication with

shareholders and the market

Other Practices• The duties of Chairman of the Board of Directors and of the CEO are

kept separate• The Board evaluates the performance of each Director• Independent Directors have experience in the line of business of the

Company• The Board has access to independent consultants• The Chairman of the Board is forbidden from acting as Secretary or

presiding over Board committees

The Board of Directors has three committees, whose duties include detailed analysis of matters pertaining to its sphere of action and making suggestions to the Board so it may study the information and make the decision most suitable to creating the best possible value for all the shareholders.

ChairmanEduardo Solórzano

Directors

Ann Bordelon

Susan Chambers

David Cheesewright

Rafael Matute

Doug McMillon

Salvador Paiz*

Scot Rank

Cathy R. Smith

Blanca Treviño*

Ernesto Vega* * Independent director

Alternate Directors

Renzo Casillo

Antonio Echebarrena*

José Ángel Gallegos

Marc N. Rosen

Secretary

José Luis Rodríguezmacedo

Assistant Secretary

Antonio Pérez de la Riva

2010 Annual Report

There are three Directors. Among their duties is that of strategic planning for the Company.

Members of the Executive Committee:Doug McMillonScot RankEduardo Solórzano

29

There are three Directors, all of them independent.

Included among the primary responsibilities are appointing the Independent Auditor for the Company; establishing the fees; overseeing internal controls and ensuring they meet all applicable legal and accounting regulations; and reviewing related-party transactions conducted by the Company.

They are also empowered to review Financial Statements to ensure they reflect a true and accurate overview of the financial situation of the Company. These Committees have the necessary procedures to receive, keep and respond to all complaints regarding accounting practices and controls, and all audit-related matters. Also, the Committees are authorized and have the resources needed to retain legal counsel and any other outside consultant service required to meet its obligations.

The purpose is to reduce the potential risk of conducting transactions that could compromise Company assets or that could favor a specific group of shareholders.

Principal Practices and Requirements:• All members are Independent Directors• All members have experience in finance

• Independent auditors are not allowed to perform consultancy services for the Company

• The partner from the Independent Audit firm who renders an opinion on Financial Statements for the Company must be periodically changed

• The Committees hold private meetings and receive periodic reports from Internal Audit, Legal and Compliance, and Ethical Behavior

• Approving policies that govern the use and possession of Company assets

• Authorizing related-party transactions, total compensation for the CEO, and all policies regarding total compensation for top management

• Assisting the Board of Directors in its duty to produce reports on accounting practices

• Calling shareholder meetings and including all pertinent matters in the order of business for the meeting

Members of the Audit and Corporate Practices Committees:Antonio Echebarrena*Blanca Treviño* Ernesto Vega*

* Independent director

executive Committee

Code of ethics

Audit and Corporate Practices Committees

For Walmart de México y Centroamérica, honesty and integrity continue being non-negotiable core values, and we always ensure that they permeate and govern all our activities.

The following are some of the primary points covered in our Code of Ethics:• Open-door policy• Supplier relations• Non-discrimination• Conflicts of interest• No gifts and gratuities• Privileged information• Health, safety and the environment• Inappropriate behavior• No repercussions• Financial investments

• Fair trade practices• Financial integrity• Anticorruption• No political involvement• International trade

Walmart de México y Centroamérica’s Ethics and Compliance area, which reports to the Senior Vice President of Legal and Corporte Relations, is charged with communicating and fostering observance of our ethical behavior policies and corporate governance, and strict adherence to the statutes governing our Company. The Audit Committee periodically receives reports from this area.

Each year we reply and send to the Mexican Stock Exchange the Code of Corporate Best Practices, which is available on the institution’s website.

Walmart de México y Centroamérica

ADR American Depositary Receipts

Apparel stores Offeringthebestinfashionforthewholefamilyatthebest possible price

Associate Employee who works at Walmart de México y Centroamérica

Banco Walmart Universal banking institution aimed at Walmart de Méxicocustomers,withaninitialofferingofbasicbanking and financial products and services

Bodegas & discount stores

Austerestoresofferingbasicmerchandise,foodandhousehold items at the best prices

BCG The Boston Consulting Group is a global management consulting firm and the world’s leading advisor on business strategy

CAGR Compounded Annual Growth Rate

Clubs Membership warehouse clubs focused on businesses and consumers who seek the best possible prices

Distribution Center Location for the receipt of goods from suppliers and store distribution

EBITDA Earnings Before Interest, Taxes, Depreciation, and Amortization

Every Day Low Prices

Permanent philosophy of Walmart de México y Centroamérica, in order to contribute towards improving the quality of life for the region

GDP Gross Domestic Product

GLS Global Logistics System

Hypermarts Self-service stores providing the widest assortment of goods from groceries and fresh, to apparel and general merchandise

ISR Income Tax

IVA Value Added Tax

MSE Mexican Stock Exchange

Net sales Goods sold in our stores

Restaurants Leading chain in the restaurant cafeteria segment

Sales floor Surface area set aside for merchandise retail

Supermarkets Self-service stores located in residential areas

Total revenues Netsalesplusotherincome

WALMEX Stock Symbol for Wal-Mart de México S.A.B. de C.V.

Glossary

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

Mexico GDP (Growth,%) 5.2 e (6.1) 1.5 3.3 5.2 3.2 4.1 1.3 0.1 (1.0) 6.0 Mexico Annual Inflation (%) 4.4 3.6 6.5 3.8 4.1 3.3 5.2 4.0 5.7 4.4 9.0 Peso Devaluation (%) (5.6) (4.5) 25.5 0.8 1.7 (4.7) (1.2) 8.7 13.3 (4.8) 1.3 Average Exchange Rate 12.6 13.4 11.2 10.9 10.9 10.9 11.3 10.8 9.7 9.3 9.5 Year-end Exchange Rate 12.4 13.1 13.7 10.9 10.8 10.6 11.1 11.3 10.4 9.2 9.6 Mexico Average Interest Rate (28 Day Cetes,%) 4.4 5.4 7.7 7.2 7.2 9.2 6.8 6.2 7.1 11.4 15.3

RESULTS NETSALES 334,511 269,397 244,029 219,714 193,969 161,423 136,546 117,959 103,256 86,947 71,381 % of growth total units 24 10 11 13 20 18 16 14 19 22 22 % of growth comp units 3 3 5 6 10 10 9 8 9 12 15OTHERINCOME 1,346 1,054 888 787 711 640 582 268 474 396 308 % of growth 28 19 13 11 11 10 117 (43) 20 28 46 TOTALREVENUES 335,857 270,451 244,917 220,501 194,680 162,063 137,128 118,227 103,730 87,343 71,689 % of growth 24 10 11 13 20 18 16 14 19 22 22 GROSSPROFIT 74,059 58,600 53,284 47,751 42,032 34,540 28,840 24,524 21,510 18,083 14,612 % of profit margin 22.1 21.7 21.8 21.7 21.6 21.3 21.0 20.7 20.7 20.7 20.4 GENERALEXPENSES 47,015 36,332 33,533 29,428 26,237 22,480 19,514 17,266 15,325 13,044 10,813 % of total revenues 14.0 13.4 13.7 13.3 13.5 13.9 14.2 14.6 14.8 14.9 15.1 OPERATINGINCOME 27,044 22,268 19,751 18,323 15,795 12,060 9,326 7,258 6,185 5,039 3,799 % of total revenues 8.1 8.2 8.1 8.3 8.1 7.4 6.8 6.1 6.0 5.8 5.3 % of growth 21 13 8 16 31 29 28 17 23 33 28 EBITDA 33,294 26,915 23,887 21,973 19,019 15,109 11,877 9,517 8,140 6,696 5,298 % of total revenues 9.9 10.0 9.8 10.0 9.8 9.3 8.7 8.0 7.8 7.7 7.4 COMPREHENSIVEFINANCIALRESULT 460 662 474 1,468 1,378 1,369 998 824 918 1,233 1,328 INCOMEBEFOREINCOMETAX 27,630 23,018 19,857 19,536 17,119 13,110 10,090 7,886 6,927 6,025 4,941 INCOMETAX 8,066 6,212 5,184 5,574 4,943 3,796 2,407 2,514 2,082 1,895 1,474 CONSOLIDATEDNETINCOMEATTRIBUTABLETOTHEPARENT 19,550 16,806 14,673 13,962 12,176 9,314 7,683 5,372 4,845 4,130 3,467 % of growth 16 15 5 15 31 21 43 11 17 19 1

FINANCIAL POSITION CASH 24,661 19,483 11,350 8,984 14,985 14,161 11,846 11,764 9,768 9,399 11,997 INVENTORIES 29,036 22,520 22,808 20,883 18,058 14,098 11,971 10,736 10,774 8,815 7,857 OTHERASSETS 9,043 6,243 5,020 5,355 4,370 3,124 2,292 2,304 2,303 1,897 1,400 FIXEDASSETS 102,300 84,893 79,286 71,522 61,449 53,396 45,762 40,849 36,872 32,161 28,449 GOODWILL 29,768 – – – – – – – – – –TOTALASSETS 194,808 133,139 118,464 106,744 98,862 84,779 71,871 65,653 59,717 52,272 49,703

SUPPLIERS 38,000 30,378 27,005 25,381 25,864 20,429 16,017 14,892 13,883 12,299 12,444 OTHERLIABILITIES 33,948 19,613 17,183 15,179 13,502 12,549 8,906 8,872 7,933 7,125 6,513 SHAREHOLDERS’EQUITY 122,531 83,148 74,276 66,184 59,496 51,801 46,948 41,889 37,901 32,848 30,746 NONCONTROLLINGINTEREST 329 – – – – – – – – – –TOTALLIABILITIES,SHAREHOLDERS’EQUITYAND NONCONTROLLINGINTEREST 194,808 133,139 118,464 106,744 98,862 84,779 71,871 65,653 59,717 52,272 49,703

NUMBER OF UNITS MEXICO Bodega Aurrerá 899 684 442 313 258 203 162 140 116 105 90 Walmart 192 169 153 136 118 105 89 83 75 62 57 Sam’s Club 108 98 91 83 77 69 61 53 50 46 38 Superama 75 69 67 64 60 55 48 44 44 44 40 Suburbia 90 86 84 76 62 53 50 52 50 51 53 Restaurants Vips 366 360 360 348 311 286 268 252 244 226 202 TOTAL 1,730 1,466 1,197 1,020 886 771 678 624 579 534 480

NUMBER OF UNITS CENTRAL AMERICA Discount stores 401 377 – – – – – – – – –Supermarkets 94 92 – – – – – – – – –Bodegas 36 32 – – – – – – – – –Hypermarts 16 16 – – – – – – – – –Clubs 2 2 – – – – – – – – –TOTAL 549 519

Banco WalmartBank branches 263 190 38 16 – – – – – – –

OTHER INFORMATION AT THE END OF THE YEAR NumberofAssociates 219,767 176,463 170,014 157,432 141,704 124,295 109,057 99,881 92,708 84,607 74,790 Share Price 1 (pesos) 35.44 29.35 18.50 18.85 23.78 14.76 9.58 8.01 5.91 6.25 4.80 NumberofOutstandingShares1 (millons) 17,848 16,752 16,870 16,946 17,144 17,292 17,480 17,732 17,848 17,776 17,896 Market Value 632,533 491,671 312,095 319,347 407,684 255,143 167,371 142,033 105,392 111,100 85,901 Earnings per Share 1 (pesos) 1.105 0.999 0.866 0.817 0.705 0.532 0.434 0.302 0.270 0.232 0.193 Payment of Dividends 5,743 5,040 4,902 4,313 3,223 2,708 1,917 1,624 1,363 1,992 –NumberofSharesRepurchased1 (millons) 112 117 152 288 307 409 426 116 123 120 248 InvestmentinSharesRepurchasingOperations 3,472 2,509 2,869 6,065 4,842 4,663 3,824 818 675 614 1,208

1 Adjusted according to split conducted in April 2010

Million pesos

Financial Summary


2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

Mexico GDP (Growth,%) 5.2 e (6.1) 1.5 3.3 5.2 3.2 4.1 1.3 0.1 (1.0) 6.0 Mexico Annual Inflation (%) 4.4 3.6 6.5 3.8 4.1 3.3 5.2 4.0 5.7 4.4 9.0 Peso Devaluation (%) (5.6) (4.5) 25.5 0.8 1.7 (4.7) (1.2) 8.7 13.3 (4.8) 1.3 Average Exchange Rate 12.6 13.4 11.2 10.9 10.9 10.9 11.3 10.8 9.7 9.3 9.5 Year-end Exchange Rate 12.4 13.1 13.7 10.9 10.8 10.6 11.1 11.3 10.4 9.2 9.6 Mexico Average Interest Rate (28 Day Cetes,%) 4.4 5.4 7.7 7.2 7.2 9.2 6.8 6.2 7.1 11.4 15.3

RESULTS NETSALES 334,511 269,397 244,029 219,714 193,969 161,423 136,546 117,959 103,256 86,947 71,381 % of growth total units 24 10 11 13 20 18 16 14 19 22 22 % of growth comp units 3 3 5 6 10 10 9 8 9 12 15OTHERINCOME 1,346 1,054 888 787 711 640 582 268 474 396 308 % of growth 28 19 13 11 11 10 117 (43) 20 28 46 TOTALREVENUES 335,857 270,451 244,917 220,501 194,680 162,063 137,128 118,227 103,730 87,343 71,689 % of growth 24 10 11 13 20 18 16 14 19 22 22 GROSSPROFIT 74,059 58,600 53,284 47,751 42,032 34,540 28,840 24,524 21,510 18,083 14,612 % of profit margin 22.1 21.7 21.8 21.7 21.6 21.3 21.0 20.7 20.7 20.7 20.4 GENERALEXPENSES 47,015 36,332 33,533 29,428 26,237 22,480 19,514 17,266 15,325 13,044 10,813 % of total revenues 14.0 13.4 13.7 13.3 13.5 13.9 14.2 14.6 14.8 14.9 15.1 OPERATINGINCOME 27,044 22,268 19,751 18,323 15,795 12,060 9,326 7,258 6,185 5,039 3,799 % of total revenues 8.1 8.2 8.1 8.3 8.1 7.4 6.8 6.1 6.0 5.8 5.3 % of growth 21 13 8 16 31 29 28 17 23 33 28 EBITDA 33,294 26,915 23,887 21,973 19,019 15,109 11,877 9,517 8,140 6,696 5,298 % of total revenues 9.9 10.0 9.8 10.0 9.8 9.3 8.7 8.0 7.8 7.7 7.4 COMPREHENSIVEFINANCIALRESULT 460 662 474 1,468 1,378 1,369 998 824 918 1,233 1,328 INCOMEBEFOREINCOMETAX 27,630 23,018 19,857 19,536 17,119 13,110 10,090 7,886 6,927 6,025 4,941 INCOMETAX 8,066 6,212 5,184 5,574 4,943 3,796 2,407 2,514 2,082 1,895 1,474 CONSOLIDATEDNETINCOMEATTRIBUTABLETOTHEPARENT 19,550 16,806 14,673 13,962 12,176 9,314 7,683 5,372 4,845 4,130 3,467 % of growth 16 15 5 15 31 21 43 11 17 19 1

FINANCIAL POSITION CASH 24,661 19,483 11,350 8,984 14,985 14,161 11,846 11,764 9,768 9,399 11,997 INVENTORIES 29,036 22,520 22,808 20,883 18,058 14,098 11,971 10,736 10,774 8,815 7,857 OTHERASSETS 9,043 6,243 5,020 5,355 4,370 3,124 2,292 2,304 2,303 1,897 1,400 FIXEDASSETS 102,300 84,893 79,286 71,522 61,449 53,396 45,762 40,849 36,872 32,161 28,449 GOODWILL 29,768 – – – – – – – – – –TOTALASSETS 194,808 133,139 118,464 106,744 98,862 84,779 71,871 65,653 59,717 52,272 49,703

SUPPLIERS 38,000 30,378 27,005 25,381 25,864 20,429 16,017 14,892 13,883 12,299 12,444 OTHERLIABILITIES 33,948 19,613 17,183 15,179 13,502 12,549 8,906 8,872 7,933 7,125 6,513 SHAREHOLDERS’EQUITY 122,531 83,148 74,276 66,184 59,496 51,801 46,948 41,889 37,901 32,848 30,746 NONCONTROLLINGINTEREST 329 – – – – – – – – – –TOTALLIABILITIES,SHAREHOLDERS’EQUITYAND NONCONTROLLINGINTEREST 194,808 133,139 118,464 106,744 98,862 84,779 71,871 65,653 59,717 52,272 49,703

NUMBER OF UNITS MEXICO Bodega Aurrerá 899 684 442 313 258 203 162 140 116 105 90 Walmart 192 169 153 136 118 105 89 83 75 62 57 Sam’s Club 108 98 91 83 77 69 61 53 50 46 38 Superama 75 69 67 64 60 55 48 44 44 44 40 Suburbia 90 86 84 76 62 53 50 52 50 51 53 Restaurants Vips 366 360 360 348 311 286 268 252 244 226 202 TOTAL 1,730 1,466 1,197 1,020 886 771 678 624 579 534 480

NUMBER OF UNITS CENTRAL AMERICA Discount stores 401 377 – – – – – – – – –Supermarkets 94 92 – – – – – – – – –Bodegas 36 32 – – – – – – – – –Hypermarts 16 16 – – – – – – – – –Clubs 2 2 – – – – – – – – –TOTAL 549 519

Banco WalmartBank branches 263 190 38 16 – – – – – – –

OTHER INFORMATION AT THE END OF THE YEAR NumberofAssociates 219,767 176,463 170,014 157,432 141,704 124,295 109,057 99,881 92,708 84,607 74,790 Share Price 1 (pesos) 35.44 29.35 18.50 18.85 23.78 14.76 9.58 8.01 5.91 6.25 4.80 NumberofOutstandingShares1 (millons) 17,848 16,752 16,870 16,946 17,144 17,292 17,480 17,732 17,848 17,776 17,896 Market Value 632,533 491,671 312,095 319,347 407,684 255,143 167,371 142,033 105,392 111,100 85,901 Earnings per Share 1 (pesos) 1.105 0.999 0.866 0.817 0.705 0.532 0.434 0.302 0.270 0.232 0.193 Payment of Dividends 5,743 5,040 4,902 4,313 3,223 2,708 1,917 1,624 1,363 1,992 –NumberofSharesRepurchased1 (millons) 112 117 152 288 307 409 426 116 123 120 248 InvestmentinSharesRepurchasingOperations 3,472 2,509 2,869 6,065 4,842 4,663 3,824 818 675 614 1,208

1 Adjusted according to split conducted in April 2010


INCOME STATEMENT

In 2010 we achieved very sound growth figures. We increased our leadership position in Mexico and incorporated the Central American operation to our results, thus becoming an international retailer with presence in six countries.

Central American operations were included in consolidated financial statements as of March 2010. Nonetheless, throughout this analysis,references will be made to annual figures for Central America with the intention of providing a more thorough assessment of performance. SALESTotal sales for 2010 amounted to $334.5 billion pesos, $65.1 billion pesos more than the previous year. This represented an increase of 24.2% over sales figures for 2009.

Sales in Mexico amounted to $295.6 billion pesos, thus representing 9.7% growth as compared to figures posted for 2009 and 88.4% of total consolidated sales.

During the March-December period, sales in Central America amounted to $38.9 billion pesos, thus representing 11.6% of consolidated sales. Total annual sales in Central America amounted to $46.0 billion pesos; this represents an increase of 6.9% versus the same period last year.

Throughouttheyear,weopened297unitsfromdifferentbusinessformats.This represents a sales-floor increase of 11.4% in the case of Mexico, and 3.7% for Central America.

The consolidation of Central American operations and the previously mentioned sales-floor increase resulted in the growth of total sales. This growth was also the result of the performance of units in operation over a year, which recorded a sales increase of 3.2% versus 2009. Central American units are currently growing at an annual comp-store rate of 5.2%.

In Mexico, total and comp-store growth was above that of the domestic market.OursuccessfulEDLPstrategy–basedonhavingthe lowestcoststructure in the market– allowed us to consistently lower prices, thus increasing customer loyalty.

The daily average customer count this year amounted to 4.4 million; this includes stores, clubs and restaurants.

We also invested far more than the rest of the market in opening new units, enhancing our logistics network, and remodeling existing units.

The percentage of total sales for all our formats is as follows:

Business Format % of total sales

Bodegas & discount stores 38.6

Hypermarts 27.0

Clubs 22.7

Supermarkets 7.0

Apparel stores 3.0

Restaurants 1.7

GROSS MARGINOurgrossmarginwas22.1%,some40basispointshigherthanthatpostedin 2009. The gross margin in Central America is slightly higher than that of Mexico, so it does not have a significant impact on the consolidated gross margin.

Despite price investment, Mexico’s gross margin was 22.0%, some 30 basis points higher than that posted in 2009. The gross margin of Central America during both the consolidated period and the full year was 22.2%, some 10 basis points higher than that of the previous year in both cases.

GENERAL EXPENSESGeneral expenses were the toughest challenge of the year. In addition to this, themostsignificanteffectoftheconsolidationofCentralAmericaisfoundingeneral expenses expressed as a percentage of total revenue, as this indicator is significantly higher in Central America than in Mexico.

In the case of Mexico, general expenses increased 9.9%, a figure slightly higher than the total revenues increase of 9.7%. We did a good job in keeping control over expenses and improving productivity measurement at stores and throughoutthedistributionnetwork.However,ourcostsreceivedtheimpactof depreciation and electricity-fee increases. Expenses without depreciation grew 9.3%.

In Central America, general expenses, expressed as a percentage of revenues, are 390 basis points higher than those of Mexico. Throughout the year, general expenses increased 7.5% OPERATING MARGIN AND EBITDA The operating and EBITDA margins went down as a result of the consolidation of Central America, as both indicators are lower in this region;however,theyhaveapositiveeffectintermsofgrowth,i.e.,21.4%for operating income and 23.7% for EBITDA.

EARNINGS PER SHARENetincomeincreased16.3%throughouttheyear,whereasearningspersharegrew10.6%.Ontheonehand,duringthefirstquarteroftheyear,1.2 billion shares were issued to pay for the acquisition of the Central American operations; on the other hand, during the year we continued our ongoing program for the repurchase of shares, this year totaling of 112.1 million shares.

Management’s Discussion and Analysis of ResultsRegarding operation results and the financial standing of the Company


BALANCE SHEET

CASH AND CASH EQUIVALENTSOurcashpositionuponclosingof2010amountedto$24.7billionpesos,$5.2 billion pesos more than the previous year, even after having invested $13.1 billion pesos in fixed assets, repurchased shares in the amount of $3.5 billion pesos, and paid a cash dividend of $5.7 billion pesos.

Ourcashcomesfromourbusinessoperations,where$21.5billionpesosisfrom self-service units in Mexico; $866 million pesos from Banco Walmart; and $2.2 billion pesos from our Central American operations.

Cash is invested in short-term debt securities. The Company neither conducts transactions with derivatives, nor does it invest in the stock market. The Company has not conducted any transactions not recorded in the Financial Statements.

Ourcashgenerationandsoundfinancesallowedustoinvestaggressivelyin prices, open 297 new stores throughout 2010, remodel existing units, in addition to paying dividends and repurchasing own shares.

USES OF CASH• Investment in Fixed Assets: We continue reinvesting our earnings

in projects that allow us to modernize our operating structure, from information systems to logistics networks and the renovation of our stores, clubs and restaurants, including the opening of new andprofitable stores.Over the course of the last five years,wehaveinvested $54.3 billion pesos in fixed assets, thereby representing the reinvestment of 81% of our earnings.

Dividends: The following chart shows the dividends paid during the last four years (with values adjusted due to the split conducted in 2010).

Year 2010 2009 2008 2007

Dividend per share (pesos)

$0.350 $0.305 $0.295 $0.255

% of earnings for the previous year

35% 34% 35% 35%

Shareholder alternatives

– –

Onesharefor every

77.12 shares owned

Onesharefor every

89.37 shares owned

% of shareholders that requesteddividends in shares

– – 35% 48%

Cash spent (billion pesos)

$5.7 $5.0 $3.2 $2.2

• Repurchase of Shares: The shareholders authorize the maximumamount available for the repurchase of shares. Repurchased shares are subtracted from the shareholders’ equity at the moment of repurchase and are formally cancelled during the Shareholders’ Annual Meeting. The following chart shows the investment in the repurchase of shares during the last four years (with values adjusted from the split conducted in 2010).

Program Repurchased Shares (millions)

Invested Amount(billion pesos)

2010 112 $3.5

2009 117 $2.5

2008 152 $2.9

2007 288 $6.1

WORKING CAPITALIn 2010, the Company continued operating with negative working capital requirements, which has historically allowed for the self–financing of growth and modernization.

The inventory balance as of December 31st amounted to $29.0 billion pesos, which was financed by accounts payable to suppliers totaling $38.0 billion pesos.

WALMEX SHAREStock total return for 2010 was 22%, which compares to the 21% generated by the Mexican Stock Exchange Index. Since we began trading in the stock market some 34 years ago, we have always been one of the most consistent and professionally managed Companies, always respectful of our minority shareholder rights.

These corporate governance practices, together with the results obtained from the operation of the Company, have allowed us to become the second most important company in the Mexican Stock Exchange Index and one of the top three in marketability on the Mexican exchange.


To the Board of Directors for Wal-Mart de México, S.A.B. de C.V.

Dear Directors:

InaccordancetoArticle43oftheSecuritiesMarketLawineffect,andtheinternalregulationapprovedbytheBoardofDirectors,wewishtoinformyouof the activities undertaken during the year ended on December 31, 2010.

In the performance of our duties, we have maintained strict compliance not only with the Mexican Securities Market Law, but we have also considered the recommendations contained in the Company’s Code for Corporate Best Practices and the Code of Ethics.

With the purpose of complying with our supervisory process, during the last year the Audit Committee has held five meetings to analize the overview of themostrelevantissuesrelatedtoAccounting,Legal,Operations,andEthicsoftheCompany,complementedbyourinvolvementintheTreasury,RealEstate, Ethics, and Walmart de México Foundation Committees, and in the Year-Beginning and Year-End Meetings, emphasizing the following:

I. As to Corporate Practices:a) We were informed on: 1. The performance assessment processes for relevant executives and the authorization of the replacement plan, with no observations noted. 2. Processes followedduringtheyeartoconducttransactionswithrelatedparties,whicharementionedbythemanagement inNote11ofthe

Company’s Financial Statements, with no observations noted. 3. Processes to determine the comprehensive compensation packages for the CEO and other relevant executives listed under Note 11 of the

Company’s Financial Statements. There were no observations noted. b) The Board of Directors did not grant any waivers to board members, relevant executives nor anyone else in the chain of command for privilege

whatsoever specified under Article 28, Section III, Paragraph f ) of the Security Markets Law.

II. As to Audit:a) We analyzed the status of the internal control system and were informed in detail of the Internal and Independent Audit programs and work

development, as well as the main aspects requiring improvement, and follow-up on preventive and corrective measures deployed. Therefore, our opinionisthatalleffectivenessrequirementshavebeenproperlymetfortheCompanytooperateunderageneralcontrolenvironment.

b) We evaluated the performance of the independent auditors who are in charge of rendering an opinion on the reasonability of the Company’s Financial Statements and their compliance with Mexican Financial Information Standards. We therefore consider that the partners at Mancera, S.C. (a member of Ernst & Young Global) meet the necessary requirements of professional qualification and independence for intellectual and financial action and thus, we recommend their appointment to examine and issue an opinion on the Financial Statements for Wal-Mart de México, S. A. B. de C.V. and Subsidiaries as of December 31, 2010.

c) We attended several meetings to review the quarterly and annual financial statements for the Company and recommended the release of such financial information.

d) We followed up on Walmart Mexico’s operations and accounting integration with Central America.e) Wewereinformedontheapprovedaccountingpoliciesthroughout2010,findingnochangesthatwouldhaveanymaterialeffectonthefigures

reported in the Financial Statements.f ) We followed up on the agreements reached at Shareholders and Board meetings.

Based on the work performed and the report from the independent auditors, it is our opinion that the accounting and reporting policies and criteria followedbytheCompanyareadequateandsufficientandhavebeenconsistentlyappliedandasaresult,theinformationsubmittedbytheCEOreasonablyreflects the financial position and results of the Company.

Therefore, we recommend that the Board of Directors submit the Financial Statements for Wal-Mart de México, S.A.B. de C.V. and Subsidiaries, for the year ended on December 31, 2010 to the Shareholders’ Meeting for their approval.

Sincerely,

Ernesto VegaChairman of the Audit and Corporate Practices Committees Mexico City, February 21, 2011

Audit and Corporate Practices Committees Report


To the Shareholders of

Wal-Mart de México, S.A.B. de C.V.

We have audited the accompanying consolidated balance sheets of Wal-Mart de México, S.A.B. de C.V. and Subsidiaries as of December 31, 2010 and

2009, and the related consolidated statements of income, changes in shareholders’ equity and cash flows for the years then ended. These financial

statementsaretheresponsibilityoftheCompany’smanagement.Ourresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatements

based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in Mexico. Those standards require that we plan and perform

the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and are prepared in

conformity with Mexican Financial Reporting Standards. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures

in the consolidated financial statements. An audit also includes assessing the financial reporting standards used and significant estimates made by

management, as well as evaluating the overall consolidated financial statements presentation. We believe that our audits provide a reasonable basis for

our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of

Wal-Mart de México, S.A.B. de C.V. and Subsidiaries at December 31, 2010 and 2009, the consolidated results of their operations, changes in their

shareholders’ equity and cash flows for the years then ended, in conformity with Mexican Financial Reporting Standards.

Ourauditopinion,theaccompanyingconsolidatedfinancialstatementsandfootnoteshavebeentranslatedfromoriginalSpanishversionintoEnglish

for convenience purposes only.

Mancera, S. C. A Member Practice of Ernst & Young Global

Enrique García

MexicoCity,February4th,2011.Note22referringtofinalapprovaloffinancialstatementsisdatedFebruary21,2011.

Report of Independent Auditors


(Notes1,2and3)Thousands of Mexican pesos

Consolidated Balance Sheets

The accompanying notes are an integral part of these financial statements.

WAL-MART DE MÉXICO, S.A.B. DE C.V. AND SUBSIDIARIES

2010 2009AssetsCurrent assets:Cash and cash equivalents Ps. 24,661,050 Ps. 19,482,716Accountsreceivable,net(Note5) 6,876,842 5,540,699Inventories,net(Note6) 29,036,076 22,519,684Prepaid expenses 849,278 703,322

Total current assets 61,423,246 48,246,421

Propertyandequipment,net(Note7) 102,300,004 84,892,733Otherassets(Note8) 1,316,221 –Goodwill(Note9) 29,768,097 –

Total assets Ps. 194,807,568 Ps. 133,139,154

Liabilities, shareholders’ equity and noncontrolling interest Current liabilities:Accountspayabletosuppliers(Note11) Ps. 37,999,509 Ps. 30,377,580Otheraccountspayable(Notes11and12) 12,466,450 9,535,022Short-termdebt(Note13) 259,567 –

Total current liabilities 50,725,526 39,912,602

Otherlong-termliabilities(Note15) 13,532,992 4,451,132Deferredincometax(Note16) 6,954,799 5,476,165Laborobligations(Note17) 734,641 151,477Total liabilities 71,947,958 49,991,376

Shareholders’equity(Note18):Capital stock 52,161,256 23,427,611Legal reserve 4,718,199 4,718,199Retained earnings 67,178,951 56,585,673Cumulative translation adjustment 470,218 ( 22,480)Premium on sale of shares 2,292,985 2,260,365Employee stock option plan fund ( 4,290,556) ( 3,821,590)Total shareholders’ equity 122,531,053 83,147,778Noncontrollinginterest 328,557 –

Total liabilities, shareholders’ equity and noncontrolling interest Ps. 194,807,568 Ps. 133,139,154

December 31




Consolidated Statements of IncomeWAL-MART DE MÉXICO, S.A.B. DE C.V. AND SUBSIDIARIES

2010 2009

Netsales Ps. 334,511,085 Ps. 269,396,831Otherincome 1,346,312 1,054,320Total revenues 335,857,397 270,451,151Cost of sales ( 261,797,921) ( 211,850,788)Gross profit 74,059,476 58,600,363General expenses ( 47,015,002) ( 36,331,864)

Operatingincome 27,044,474 22,268,499

Othernon-operatingincome,net 125,828 87,793Comprehensivefinancingresult(Note19) 459,934 662,090

Income before income tax 27,630,236 23,018,382

Incometax(Note16) ( 8,065,759) ( 6,212,239)Consolidated net income 19,564,477 16,806,143Consolidated net income attributable to noncontrolling interest ( 14,053) –

Consolidated net income attributable to the parent Ps. 19,550,424 Ps. 16,806,143

Earnings per share (in pesos) Ps. 1.105 Ps. 0.999

Year ended December 31


For the years ended December 31, 2010 and 2009(Notes1,2,3and18)Thousands of Mexican pesos

Consolidated Statements of Changes in Shareholders’ Equity



Employee Retained Cumulative translation Premium on stock option Capital stock Legal reserve earnings adjustment sale of shares plan fund Total

Balance at December 31, 2008 Ps. 23,590,996 Ps. 4,421,048 Ps. 47,535,428 Ps. – Ps. 2,274,854 Ps. ( 3,546,132) Ps. 74,276,194

Movements in employee stock option plan fund ( 14,489) ( 275,458) ( 289,947)

Increase in legal reserve 297,151 ( 297,151) –

Repurchase of shares ( 163,385) ( 2,345,647) ( 2,509,032)

Dividends paid ( 5,039,743) ( 5,039,743)

Income tax on subsidiary dividends ( 73,357) ( 73,357)

Comprehensive income 16,806,143 ( 22,480) 16,783,663

Balance at December 31, 2009 23,427,611 4,718,199 56,585,673 ( 22,480) 2,260,365 ( 3,821,590) 83,147,778

Movements in employee stock option plan fund 32,620 ( 468,966) ( 436,346)


Dividends paid ( 5,743,228) ( 5,743,228)

Shares issued for the acquisition of Walmart Central America 29,008,617 29,008,617

Stock premium of noncontrolling interest ( 16,932) ( 16,932)

Comprehensive income 19,550,424 492,698 20,043,122

Balance at December 31, 2010 Ps. 52,161,256 Ps. 4,718,199 Ps. 67,178,951 Ps. 470,218 Ps. 2,292,985 Ps. ( 4,290,556) Ps. 122,531,053


Consolidated Statements of Changes in Shareholders’ Equity

Employee Retained Cumulative translation Premium on stock option Capital stock Legal reserve earnings adjustment sale of shares plan fund Total

Balance at December 31, 2008 Ps. 23,590,996 Ps. 4,421,048 Ps. 47,535,428 Ps. – Ps. 2,274,854 Ps. ( 3,546,132) Ps. 74,276,194

Movements in employee stock option plan fund ( 14,489) ( 275,458) ( 289,947)

Increase in legal reserve 297,151 ( 297,151) –


Dividends paid ( 5,039,743) ( 5,039,743)

Income tax on subsidiary dividends ( 73,357) ( 73,357)

Comprehensive income 16,806,143 ( 22,480) 16,783,663

Balance at December 31, 2009 23,427,611 4,718,199 56,585,673 ( 22,480) 2,260,365 ( 3,821,590) 83,147,778

Movements in employee stock option plan fund 32,620 ( 468,966) ( 436,346)


Dividends paid ( 5,743,228) ( 5,743,228)

Shares issued for the acquisition of Walmart Central America 29,008,617 29,008,617

Stock premium of noncontrolling interest ( 16,932) ( 16,932)

Comprehensive income 19,550,424 492,698 20,043,122

Balance at December 31, 2010 Ps. 52,161,256 Ps. 4,718,199 Ps. 67,178,951 Ps. 470,218 Ps. 2,292,985 Ps. ( 4,290,556) Ps. 122,531,053



Consolidated Statements of Cash Flows



2010 2009Operating activitiesIncome before income tax Ps. 27,630,236 Ps. 23,018,382

Items related to investing activities:Depreciation 6,249,058 4,646,212Loss from disposal of property and equipment 456,736 193,384Stock option compensation expense 248,900 205,954

Items related to financing activities:Interest payable under capital leases 639,324 261,082Accrued interest on contingent liability 158,037 –Gross cash flows 35,382,291 28,325,014

Variances in:Accounts receivable ( 835,453) ( 1,778,833)Inventories ( 3,400,029) 288,259Prepaid expenses and other assets ( 165,954) ( 171,389)Accounts payable to suppliers 4,042,884 3,372,458Otheraccountspayable 1,877,830 779,263Income tax ( 8,113,173) ( 4,521,730)Labor obligations 77,536 24,057Netcashflowsfromoperatingactivities 28,865,932 26,317,099

Investing activitiesPurchase of property and equipment (13,129,968) ( 9,734,557)Employee stock option plan fund, net ( 685,246) ( 495,901)Purchase of shares of noncontrolling interest ( 390,999) –Acquisition of Walmart Central America 508,362 –Proceeds from the sale of property and equipment 127,139 122,392Netcashflowsfrominvestingactivities (13,570,712) (10,108,066)

Cash surplus to be applied to financing activities 15,295,220 16,209,033

Financing activitiesDividends paid ( 5,743,228) ( 5,039,743)Repurchase of shares ( 3,471,958) ( 2,509,032)Payments for property and equipment under capital leases ( 818,831) ( 504,860)Payment of short-term debt ( 5,615) –Netcashflowsfromfinancingactivities (10,039,632) ( 8,053,635)

Netincreaseincashandcashequivalents 5,255,588 8,155,398Adjustment to cash flows for changes in exchange rate ( 77,254) ( 22,480)Cash and cash equivalents at beginning of year 19,482,716 11,349,798

Cash and cash equivalents at end of year Ps. 24,661,050 Ps. 19,482,716

Year ended December 31


NOTE 1 – DESCRIPTION OF THE BUSINESS:

Wal-Mart de México, S.A.B. de C.V. (WALMEX or “the Company”) is a company incorporated under the laws of Mexico and listed on the Mexican Stock Exchange. The principal shareholder of WALMEX is Wal-Mart Stores, Inc., a U.S. corporation, through Intersalt, S. de R.L. de C.V., a Mexican company.

WALMEX has a 99.9% equity interest in the following groups of companies in Mexico and Central America:

Group Line of Business

Nueva Walmart Operationof899(684in2009)BodegaAurrerádiscountstores,192(169in2009)Walmarthypermarkets,108 (98 in 2009) Sam’s Club membership self-service wholesale stores, and 75 (69 in 2009) Superama supermarkets.

Suburbia Operationof90(86in2009)Suburbiastoreswithapparelandaccessoriesfortheentirefamily.

Vips Operationof266(260in2009)Vipsrestaurantsservinginternationalcuisine,93ElPortónrestaurantsservingMexican food and 7 Ragazzi restaurants specializing in Italian food during both years.

Importing companies Import of goods for sale.

Real estate Real estate developments and management of real estate companies.

Services companies Rendering of professional services to Group companies, not-for-profit services to the community at large and shareholding.

Walmart Bank Operationof263(190in2009)bankbranches.

Walmart Central America Operationof401discountstores(DespensaFamiliarandPalí),94supermarkets(Paiz,LaDespensadeDonJuan,LaUniónandMásxMenos),36discountwarehousestores(MaxiBodega),16hypermarkets(HiperPaizandHiperMás)and2ClubComembershipself-servicewholesalestores.

NOTE 2 – NEW FINANCIAL REPORTING STANDARDS:

OnDecember18,2009,theMexicanFinancialReportingStandardsResearchandDevelopmentBoard(Consejo Mexicano para la Investigación y Desarrollo de Normas de Información Financiera, A.C. orCINIF)issuedMexicanFinancialReportingStandards(MexicanFRS)B-16,Financial Statements of Not-For-Profit Organizations; Mexican FRS C-1, Cash and Cash Equivalents; and Mexican FRS E-2, Donations Received or Made by Not-For-Profit Organizations, allofwhichcame into forceasof January1, 2010.TheCINIFalso issuedMexicanFRSB-5,Financial Information by Segment, and Mexican FRS B-9, Interim Financial Information,whichwillbecomeeffectiveasofJanuary1,2011.TheadoptionofthesenewMexicanFRShavenomaterialeffectontheCompany’s financial statements.

OnAugust 31, 2010, the CINIF issued the Interpretation toMexican FRS-19,Changes resulting from the Adoption of International Financial Reporting Standards (IFRS),whichbecameeffectiveasofSeptember30,2010andrequiresentities todisclose theirprogress in transitioningto IFRS.Since theCompany is a public company that is listed in the Mexican Stock Exchange, it must begin to prepare and file financial information under IFRS as of 2012. Atdate,thefinancialstatementcaptionsexpectedtobeaffectedbythisrequirementare: inventories,propertyandequipment,deferredtaxes, laborobligationsandshareholders’equity.TheCompanyisintheprocessofquantifyingtheseeffectsonthefinancialstatements.

At December 31, 2010 and 2009.Thousands of Mexican pesos, unless otherwise indicated

Notes to Consolidated Financial StatementsWAL-MART DE MÉXICO, S.A.B. DE C.V. AND SUBSIDIARIES


NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES:

The significant accounting policies observed by the Company in the preparation of the consolidated financial statements, in conformity with the Mexican FRSissuedbytheCINIF,aredescribedbelow.MexicanFRSareunderstoodtoencompassthenewstandardsissuedbytheCINIFandthebulletinsissuedby the Accounting Principles Board of the Mexican Institute of Public Accountants that have not been modified, replaced or abolished by Mexican FRS and thatweretransferredtotheCINIF.Assuch,anyofthedocumentscomprisingMexicanFRSwillhereinafterbereferredtobytheiroriginalnameorrather,either as “Mexican FRS” or as “accounting Bulletin”, as the case may be.

a. The accompanying consolidated financial statements include the statements of WALMEX and those of its subsidiaries in Mexico and abroad, whicharegroupedasdescribedinNote1andarepreparedforthesameaccountingperiod.Allrelatedpartybalancesandtransactionshavebeeneliminated in the consolidation, in conformity with Mexican FRS B-8, Consolidated and Combined Financial Statements.

Noncontrolling interest represents the equity interest in thenet assets of the subsidiary not heldby the controlling company.Noncontrollinginterest is shown separate from the shareholder´s equity.

b. WALMEX prepares its financial information in conformity with Mexican FRS B-10, Effects of Inflation, based on the economic environments (accumulated rates of inflation) during the prior three years of the countries in which it operates. Accordingly, since El Salvador (10.4%), Mexico (14.5%),Guatemala(18.6%)andHonduras(24.3%)havenon-inflationaryenvironment,assodefinedinMexicanFRSB-10,theirfinancialinformationispresentedinthousandsofnominalpesos.However,thefinancialinformationforCostaRica(31.3%)andNicaragua(34.2%)includestheeffectsofinflation of such countries using the comprehensive inflation recognition method set forth in Mexican FRS B-10.

In Mexico, beginning January 1st, 2008, WALMEXstoppedtorecognizetheeffectsofinflationonitsfinancialinformationandthus,thedatethroughwhich the Company’s financial information was restated for inflation is December 31, 2007.

c. In order to provide a better understanding of the Company’s business performance, the consolidated statements of income were prepared on a functional basis, which allows for the disclosure of the cost of sales separately from other costs and expenses, and of operating income as well, as established under Mexican FRS B-3, Statements of Income.

d. The Walmart Bank’s financial statements, which are included in the Company’s consolidated financial statements, were prepared based on the accountingcriteriaestablishedby theNationalBankingandSecuritiesCommission (CNBV),as issuedaspartof theGeneralProvisions forCreditInstitutions,whichconsidertheguidelinesofMexicanFRS.Atdate,therearenosignificantdifferencesbetweenthesetwosetsofstandards.

Also, before the financial statements of Walmart Central America are consolidated, they are adjusted to conform to Mexican FRS and translated to Mexican pesos in conformity with Mexican FRS B-15, Foreign Currency Translation.

e. ThepreparationoffinancialstatementsinconformitywithMexicanFRSrequirestheuseofestimatesinsomeitems.Actualresultsmightdifferfromthese estimates.

f. Cash and cash equivalents consist basically of bank deposits and highly liquid investments. Such investments are stated at acquisition cost plus accrued interest, not in excess of market value.

Walmart Bank makes the monetary regulation deposits required by Banco de México, the amounts of which are determined based on traditional deposits in Mexican pesos.

The Company has no transactions with derivative financial instruments.

g. The balance of the Walmart Bank’s receivables portfolio is represented by amounts actually given to borrowers, plus uncollected earned interest. The preventive allowance for credit risks is presented net of the portfolio balances.

h. WALMEX recognizes bad debt reserves at the time the legal collection process begins in conformity with its internal procedures.


i. Inventories are stated at average cost, determined largely using the retail method, not in excess of market value.

Inventory pertaining to Agro-industrial Development of grains, edibles and meat is valued using the average-cost method.

The buying allowances are charged to the results of operations based on the turnover of inventories that gave rise to them.

j. Propertyandequipmentareinitiallyrecordedatacquisitioncost.InCostaRicaandNicaraguaarecomprehensivelyrestatedbasedonthepriceindexof each country.

Fixed asset depreciation is computed using the straight-line method, at annual rates ranging from 2.5% to 33%.

k. The Company classifies its operating and capital leases for the rental of property following the guidelines established in accounting Bulletin D-5, Leases.

l. Based on the guidelines of Mexican accounting Bulletin C-15, impairment in the value of long-lived assets and disposal of such is recognized by applying the expected present value method to determine value in use, considering each store or restaurant as the minimum cash generating unit.

m. Goodwill represents the excess cost of the acquisition of the shares over the total fair value of the net assets of Walmart Central America at the date of acquisition and the fair value of the noncontrolling interest, as determined in conformity with the guidelines of Mexican FRS B-7, Business Acquisitions. Goodwill is not amortized, but is evaluated for impairment tests at least once a year in conformity with the guidelines of Mexican accounting Bulletin C-15.

n. Foreign currency denominated monetary assets and liabilities are translated to Mexican pesos at the prevailing exchange rate as of the balance sheet date.Exchangedifferencesdeterminedarechargedorcreditedtoincomeandarepresentedaspartofcomprehensivefinancingresult,asrequiredbyMexican FRS B-15, Foreign Currency Translation.

The financial statements of subsidiaries abroad are translated from the local currency into Mexican pesos using average exchange rate for income statements and the year-end exchange rate for balance sheets. The cumulative translation adjustment is the effect of translating the financialstatements of the Company’s foreign subsidiaries into Mexican pesos. This item is recorded directly in shareholders’ equity.

o. Liabilities for traditional deposits of the Walmart Bank are comprised of demand deposits in debit card accounts. These liabilities are recorded at either deposit or placement cost, plus accrued interest.

p. Liability provisions are recognized whenever the Company has current obligations (legal or assumed) derived from past events that can be reasonably estimated and that will most likely give rise to a future cash disbursement for their settlement.

q. Deferred income tax is determined using the asset and liability method established in Mexican FRS D-4, Taxes on Profits. Under this method, deferred incometaxisrecognizedonalltemporarydifferencesbetweenthefinancialreportingandtaxbasisofassetsandliabilities,applyingtheenactedincometaxrateortheflat-ratebusinesstaxrateeffectiveasofthebalancesheetdate,ortheenactedrateatthebalancesheetdatethatwillbeineffectwhenthedeferredtaxassetsandliabilitiesareexpectedtoberecoveredorsettled.

Deferred tax assets are evaluated periodically in order to determine their recoverability.

r. In conformity with the laws of each country in which the Company operates, the termination benefits for dismissal or death to which the Company’s employees are entitled, as shown in the next page.


Mexico: Seniority premiums accruing to employees under the Mexican Labor Law and termination payments made at the end of employment, except when

resulting from corporate restructuring, are recognized as a cost of the years in which services are rendered, based on actuarial computations made by an independent expert, using the projected unit-credit method, in conformity with Mexican FRS D-3, Employee Benefits.

Actuarial gains and losses are amortized based on the expected remaining working life of the Company’s employees.

All other payments accruing to employees or their beneficiaries in the event of involuntary retirement or death, in terms of the Mexican Labor Law, are expensed as incurred.

Central America: Termination benefits to which employees of the Walmart Central America companies are entitled according to the Labor Law applicable in each

country are recognized as liabilities based on actuarial valuations carried out by independent experts.

In Guatemala employees are entitled to termination benefits after working three or more years in the Company, except in the case of justified dismissals.

InElSalvadorandHondurasemployeesareentitledtoterminationbenefitsafterworkingoneormoreyearsintheCompany,exceptinthecaseofjustified dismissals.

TerminationbenefitsarepaidinNicaraguainconformitywiththeLaborLawofsuchcountry.Payoutsvaryfromonetofivemonthsofsalaryoftheperiod during which the services were provided.

In the case of the companies in Costa Rica, termination benefits are paid to employees based on current corporate policy and in conformity with the laws of such country.

s. Employee profit sharing is presented in the income statement under the other non-operating income, net caption and represents a liability due and payable in less than one year.

t. In conformity with the Mexican Corporations Act, the Company is required to appropriate at least 5% of the net income of each year to increase the legal reserve. This practice must be continued until the legal reserve reaches 20% of capital stock.

u. The employee stock option plan fund is comprised of WALMEX shares presented at acquisition cost. The plan is designed to grant stock options to executivesofthecompaniesintheGroup,asapprovedbytheCNBV.

All employee stock options are granted to executives of subsidiary companies at a value that is no less than the market value on the date of grant.

In accordance with current policies, WALMEX executives may exercise their option to acquire the shares in equal parts over five years. The right to exercise an employee stock option expires in a period of ten years from the date the option is granted, or up to sixty days following the executive’s labor termination with the Company.

Stock-based compensation is determined using the Black-Scholes financial valuation technique, in conformity with Mexican FRS D-8, Share-Based Payments.

v. Thepremiumonthesaleofshares represents thedifferencebetweenthecostof theshares, restatedthroughDecember31,2007basedontheMexicanNationalConsumerPriceIndex(NCPI),andthevalueatwhichsuchshareswereassignedtoexecutivesofcompaniesintheGroup,netofthecorresponding income tax.

w. TheCompany’scomprehensiveincomeconsistsofitsnetincomefortheyearandthecumulativetranslationeffect.


x. Sales revenues are recognized at the time the customer takes ownership of the products, in conformity with International Accounting Standard No.18,issuedbytheInternationalAccountingStandardsCommittee,appliedonasupplementarybasis.

Sam’s Club and ClubCo membership revenues are deferred over the twelve-month term of the membership, in conformity with the requirements of StaffAccountingBulletinNo.104,Revenue Recognition in Financial Statements, issued by the U.S. Securities and Exchange Commission, applied on a supplementary basis. Such revenues are presented in the other income caption in the statement of income.

The Walmart Bank’s interest and fee revenues are recognized in the other income caption in the statement of income.

y. Earnings per share is computed by dividing net income attributable to the parent by the weighted average number of shares outstanding, as specified in Mexican accounting Bulletin B-14, Earnings per Share.

z. Segment financial information is prepared using the management approach established in accounting Bulletin B-5, which is based on the information used by Company management to make business decisions and monitor the Company’s performance.

NOTE 4 - BUSINESS ACQUISITIONS:

Atanextraordinaryshareholders’meetingheldonDecember22,2009,theshareholdersapprovedtheacquisitionofthesharesofTFBCorporationN.V.and Subsidiaries (Walmart Central America) through the merger of such company into WALMEX via a related party. This operation came in full force and effectonFebruary15th, 2010, date on which WALMEX acquired the assets and assumed the liabilities of Walmart Central America, which was paid by issuing 1,207,937,278 series “V” Class 2 WALMEX shares and by making a cash payment of Ps. 1,497,777 from the Company’s own resources.

Furthermore, WALMEX acknowledged a contingent payment as part of the purchase acquisition price, which shall be paid in subsequent installments bothinsharesandcash.Onthesubjectofpaymentofshares,88,062,722wereissuedandshallremainunpaidandunsubscribedtreasurystock,sotheycan be handed over to the former shareholders of Walmart Central America, provided the acquired company reaches a certain level of profitability during a period no longer than 10 years. Cash payments shall be fixed and payable during a five-year period at a rate of 10 million dollars annually. Present values havebeenusedtoestimatebothpayments,buttheymaydifferduetoexchangeratedifferences,asthetransactionwasagreeduponinAmericandollarsand based on the Company’s results.

The purchase price acquisition of Walmart Central America is as follows:

Thousands of Mexican pesos

Payment in shares Ps. 29,008,617Payment in cash 1,497,777Contingent liability 5,941,484

Total purchase price Ps. 36,447,878

This acquisition strengthens the Company’s growth strategy, as it creates a solid platform permitting higher levels of income and profitability. The merger of Walmart Mexico and Walmart Central America is expected to create synergies, thus making it possible to increase sales, streamline administrative and operational processes, and leverage best practices.

This transaction was recorded as a business acquisition in conformity with Mexican FRS B-7. For such purpose, the Company determined the fair values of the net assets acquired, in conformity with valuation guidelines provided in this standard.

Additional expenditures related to the acquisition do not represent part of the value of the business acquired and are charged to the income statement at the time they are incurred.


In order to provide a broader view of the operating performance of the Company, a breakdown of the amounts from March to December and the percentage contributed by Walmart Central America in the consolidated figures of WALMEX as of December 31, 2010, are shown below:

Walmart Consolidated Central America %

Statement of income:Netsales Ps. 334,511,085 Ps. 38,936,736 11.6Otherincome 1,346,312 251,643 18.7Total revenues 335,857,397 39,188,379 11.7Gross profit 74,059,476 8,689,713 11.7General expenses ( 47,015,002) ( 7,100,046) 15.1Operatingincome 27,044,474 1,589,667 5.9Income before income tax 27,630,236 1,582,385 5.7Consolidated net income 19,564,477 1,008,461 5.2Consolidated net income attributable to the parent Ps. 19,550,424 Ps. 994,408 5.1

Balance sheet:Current assets Ps. 61,423,246 Ps. 6,831,421 11.1Property and equipment, net 102,300,004 9,482,981 9.3Otherassets 1,316,221 1,187,825 90.2Goodwill 29,768,097 29,768,097 100.0

Total assets Ps. 194,807,568 Ps. 47,270,324 24.3

Current liabilities Ps. 50,725,526 Ps. 6,315,733 12.5Long-term liabilities 21,222,432 8,529,510 40.2Shareholders’ equity 122,531,053 32,096,524 26.2Noncontrollinginterest 328,557 328,557 100.0

Total liabilities, shareholders’ equity andnoncontrolling interest Ps. 194,807,568 Ps. 47,270,324 24.3

NOTE 5 – ACCOUNTS RECEIVABLE, NET:

An analysis of accounts receivable is as follows:

December 31 2010 2009

Trade receivables Ps. 3,537,958 Ps. 2,902,040Recoverable taxes 2,547,742 2,222,536Otheraccountsreceivable 943,841 551,614Allowance for bad debts ( 152,699) ( 135,491)

Total Ps. 6,876,842 Ps. 5,540,699


NOTE 6 – INVENTORIES, NET:

An analysis of inventories is as follows:

December 31 2010 2009

Inventory of merchandise for sale Ps. 27,348,731 Ps. 21,797,162Merchandise in transit 1,161,172 682,728Agro-industrial Development 488,978 –Others 37,195 39,794

Total Ps. 29,036,076 Ps. 22,519,684

NOTE 7 – PROPERTY AND EQUIPMENT, NET:

An analysis of property and equipment is as follows:

December 31 2010 2009

Investments subject to depreciation:Buildings Ps. 33,664,586 Ps. 29,114,493Facilities and leasehold improvements 29,053,302 24,462,360 62,717,888 53,576,853Less:Accumulated depreciation ( 17,489,368) ( 15,139,162)Property, net 45,228,520 38,437,691

Fixtures and equipment 39,194,838 32,260,293Less:Accumulated depreciation ( 18,397,990) ( 15,865,572)Fixtures and equipment, net 20,796,848 16,394,721

Capital lease:Property 8,817,555 5,438,747Fixtures and equipment 1,152,465 878,132 9,970,020 6,316,879Less:Accumulated depreciation ( 1,675,886) ( 1,344,036)Capital lease, net 8,294,134 4,972,843Investments subject to depreciation, net Ps. 74,319,502 Ps. 59,805,255

Investments not subject to depreciation:Land Ps. 25,787,774 Ps. 23,221,885Construction in progress 2,192,728 1,865,593Investments not subject to depreciation Ps. 27,980,502 Ps. 25,087,478

Total Ps. 102,300,004 Ps. 84,892,733


NOTE 8 - OTHER ASSETS:

At December 31, 2010 an analysis of other assets is as follows:

2010

Licenses and brands Ps. 804,151Held–to–maturitysecurities 259,567Otherinvestments 152,620Royalties 75,514Patents 24,369

Total Ps. 1,316,221

Held-to-maturitycorrespondstoarestrictedinvestmentheldinHSBCbankpledgedinguaranteeoverthebankloanofthesubsidiaryCARHCO.Thisinvestment matures on September 11, 2011 and bears annual interest of 3.75%.

NOTE 9 – GOODWILL:

As of February 2010, the Company recognized goodwill as a result of the acquisition of Walmart Central America which corresponds to the excess of purchase price over the fair value of net assets acquired and the noncontrolling interest of Walmart Central America. This goodwill is subject to the treatment provided for under Mexican FRS B-7.

An analysis of goodwill at December 31, 2010 is as follows:

Amount

Payment in shares Ps. 29,008,617Payment in cash 1,497,777Total acquisition cost 30,506,394Contingent liability 5,941,484

Total purchase price Ps. 36,447,878

The assets acquired and liabilities assumed in the acquisition are as follows:

Fair value

Assets acquiredCash and cash equivalents Ps. 2,006,132Inventories 3,114,290Othercurrentassets 558,370Property and equipment, net 8,760,614Otherassets 1,221,211

Total assets acquired Ps. 15,660,617


Fair value

Liabilities assumedCurrent liabilities Ps. 4,786,552Long-term liabilities 1,603,208Labor obligations 530,142Long-term debt 268,199Deferred taxes 1,123,669

Total liabilities assumed Ps. 8,311,770

Netassetsacquired Ps. 7,348,847Noncontrollinginterest 669,066 Ps. 6,679,781

Goodwill Ps. 29,768,097

The Company engaged the services of an independent expert to determine the fair values of the assets acquired and liabilities assumed shown above.

NOTE 10 - FOREIGN CURRENCY DENOMINATED ASSETS AND LIABILITIES:

The Company has the following monetary assets and liabilities translated into U.S. dollars:

Thousands of U.S. dollars

December 31 2010 2009

Monetary assets: Mexico $ 121,978 $ 103,437Central America 229,566 –

$ 351,544 $ 103,437

Monetary liabilities:Mexico $ 601,377 $ 118,193Central America 593,259 –

$ 1,194,636 $ 118,193Netmonetaryposition $ ( 843,092) $ ( 14,756)

The Company had the following U.S. dollar denominated transactions (excluding property and equipment):

Thousands of U.S. dollars

December 31 2010 2009

Revenues $ 3,115,168 $ –

Cost and expenses $ 3,955,752 $ 816,264

The majority of these transactions in 2010 correspond to Walmart Central America.


The costs and expenses shown above include imported merchandise for sale of US$ 839,531 (US$ 691,698 in 2009) and technical assistance, services and royalties of US$ 139,196 (US$ 124,566 in 2009) that correspond to Walmart Mexico.

The exchange rates at December 31, 2010 (Ps. 13.0903 per U.S. dollar in 2009) used to translate assets, liabilities and transactions in foreign currency to Mexican pesos are as follows:

Year-end exchange rate Average exchange with respect to rate withCountry Currency U.S. dollar Peso respect to peso

Mexico Peso Ps. 12.3603 Ps. 1.0000 Ps. 12.6340El Salvador U.S. dollar US$ 1.0000 US$ 0.0809 US$ 0.0792Guatemala Quetzal Q 8.0155 Q 0.6485 Q 0.6152Honduras Lempira L 18.8950 L 1.5287 L 1.4960Costa Rica Colon C 512.9700 C 41.5014 C 41.6047Nicaragua Cordoba C$ 21.8825 C$ 1.7704 C$ 1.6910

At the date of the issuance of these financial statements, the exchange rate with respect to Mexican peso was Ps. 12.0145, per U.S. dollar.

Balances and transactions with Walmart Central America are translated to Mexican pesos using the year-end exchange rate and the average monthly exchange rate, respectively.

NOTE 11 – RELATED PARTY BALANCES AND TRANSACTIONS:

An analysis of balances due to related parties at December 31, are as follows:

2010 2009

Accounts payable to suppliers:C.M.A. – U.S.A., L.L.C. (affiliated company) Ps. 434,746 Ps. 467,582Global George, LTD. (affiliated company) 11,584 5,320

Ps. 446,330 Ps. 472,902

Otheraccountspayable:Wal-Mart Stores, Inc. (holding company) Ps. 358,993 Ps. 363,229Global George, LTD. (affiliated company) 832 33,065

Ps. 359,825 Ps. 396,294


The Company carried out the following transactions with related parties:

December 31 2010 2009

Imported merchandise for sale Ps. 2,632,921 Ps. 2,717,272

Technical assistance, services and royalties Ps. 1,683,979 Ps. 1,539,110

During the year ended December 31, 2010, the Company paid its primary officers compensations aggregating Ps. 696,397 (Ps. 480,635 in 2009). Such compensation is primarily comprised of direct short-term benefits as defined in Mexican FRS D-3.

NOTE 12 – OTHER ACCOUNTS PAYABLE:

An analysis of other accounts payable is as follows:

December 31 2010 2009

Accrued liabilities and others Ps. 10,285,106 Ps. 7,133,035Taxes payable 1,454,379 1,728,056Relatedparties(Note11) 359,825 396,294Capitalleases(Note15) 349,588 261,639Laborobligations(Note17) 17,552 15,998

Total Ps. 12,466,450 Ps. 9,535,022

The accrued liabilities and others caption includes provisions in the amount of Ps. 708,643 (Ps. 671,013 in 2009).

NOTE 13 – SHORT-TERM DEBT:

OnSeptember8,2008,CARHCOCompanyasubsidiaryofWalmartCentralAmerica,obtainedaloanfromHSBCoftwentyonemillionofdollarsthatbearsannualinterestof4.15%andmaturesonSeptember8,2011.AsmentionedinNote8,thisloanisguaranteedwithalong-terminvestment.

NOTE 14 – COMMITMENTS:

At December 31, 2010, the Company has entered into commitments for the purchase of inventory, property and equipment and maintenance services for Ps. 7,504,837 (Ps. 6,751,765 in 2009).


NOTE 15 – LEASES:

The Company has entered into operating leases with third parties for compulsory terms ranging from 2 to 15 years. Rent paid under capital leases may either be fixed or variable, based on a percentage of sales.

The Company has entered into property lease agreements that are qualified for consideration as capital leases. These agreements are recorded at the present value of future minimum payments or at the market value of the property, whichever is less, and are amortized over the term of the lease agreements, including renewal periods.

The Company has also entered into capital leases for the rental of residual water treatment plants used to meet environmental protection standards. The term of payment ranges from 7 to 10 years.

Future rental payments are as follows:

Operating Capital Lease LeaseYear (Compulsory term) (Minimum payments)

2011 Ps. 268,399 Ps. 349,5882012 Ps. 258,819 Ps. 324,7322013 Ps. 241,683 Ps. 322,8392014 Ps. 221,093 Ps. 304,2462015 Ps. 204,313 Ps. 330,7882016 and thereafter Ps. 445,604 Ps. 6,770,989

Total rent under operating leases recorded to results of operations for the years ended December 31, 2010 and 2009 was Ps. 2,849,261 and Ps. 2,039,433, respectively.

NOTE 16 – INCOME TAX:

The Company and its subsidiaries, except Walmart Bank and Walmart Central America, have been authorized by the Ministry of Finance and Public Credit to determine their tax results on a consolidated basis.

An analysis of taxes recorded to results of operations is as follows:

December 31 2010 2009

Current income tax Ps. 7,722,616 Ps. 6,252,431Deferred income tax 343,143 ( 40,192)

Total Ps. 8,065,759 Ps. 6,212,239


Ananalysisofthedeferredtaxliabilities(assets)derivedfromtemporarydifferencesisasfollows:

December 31 2010 2009

Property and equipment Ps. 7,812,433 Ps. 6,862,736Inventories 24,409 33,934Repatriation of earnings of Walmart Central America 890,390 –Unamortized tax loss for Walmart Bank

and Walmart Central America ( 667,230) ( 468,864)Advance collections ( 191,267) ( 159,472)Otherlong-termliabilities ( 401,530) ( 168,600)Otheritems,net ( 512,406) ( 623,569)

Total Ps. 6,954,799 Ps. 5,476,165

AtDecember31,2010,theeffectiveconsolidatedtaxrateis29.2%(27.0%in2009).

In Mexico, the applicable income tax rate will be 30% for 2010 to 2012 (28% in 2009), 29% in 2013 and 28% beginning 2014 and thereafter. The applicable income tax rates for the other countries are as follows:

Rate

Guatemala 31%El Salvador 25%Honduras 30%Costa Rica 30%Nicaragua 30%

In Mexico, the Company’s current income tax for 2010 and 2009 includes the partial taxation of the inventory held at December 31, 2004, since as provided for under the Income Tax Law, the Company had opted to consider such inventories as taxable over a number of years for purposes of deducting cost of sales at merchandise sold.

ThegoodwillresultingfromtheacquisitionofWalmartCentralAmericaisnotdeductibleunderMexicanincometaxlawandthus,ithasnoeffectontheCompany’s deferred taxes.

The Company has tax losses from Walmart Bank and Walmart Central America, and in conformity with the current income tax laws of each of the countries where these subsidiaries operate, such losses may be carried forward against the taxable income generated in future years.


An analysis of the available tax loss carryforward at December 31, 2010 is as follows:

Year of expiration Walmart Bank Walmart Central America

2012 Ps. – Ps. 4,577 2013 – 4,622 2014 – 1,949 2015 – 1,896 2016 25,186 – 2017 251,472 – 2018 611,048 – 2019 748,900 – 2020 687,773 –

Ps. 2,324,379 Ps. 13,044

Based on the forecast of its taxable income, the Company will continue generating income tax in upcoming years.

NOTE 17 – LABOR OBLIGATIONS:

Mexico:The Company has set up a defined benefits trust fund to cover seniority premiums accruing to employees. Workers make no contributions to this fund. The Company also recognizes the liability for employee termination payments. Both these obligations are computed using the projected unit credit method.

At December 31, the Company’s assets, liabilities and costs related to seniority premiums and employee termination payments for reasons other than corporate restructuring are as follows:

Employee termination Seniority premiums payments

2010 2009 2010 2009

Vested benefit obligation Ps. 247,908 Ps. 185,204 Ps. 84,789 Ps. 44,616

Defined benefit obligation Ps. 528,164 Ps. 448,637 Ps. 140,165 Ps. 122,375Plan assets ( 478,853) ( 421,623) – –Unamortized items ( 1,110) 12,844 2,545 5,242Netprojectedliability Ps. 48,201 Ps. 39,858 Ps. 142,710 Ps. 127,617

Labor cost for current service Ps. 70,080 Ps. 61,621 Ps. 9,889 Ps. 8,975Financial cost 38,806 33,947 10,297 9,354Return on plan assets ( 35,367) ( 32,485) – –Actuarial loss (gain) 7,959 3,782 ( 5,093) ( 6,815)Netperiodcost Ps. 81,478 Ps. 66,865 Ps. 15,093 Ps. 11,514


Benefits paid from and contributions made to the trust for seniority premiums in Mexico at December 31, 2010 aggregated Ps. 36,523 (Ps. 32,822 in 2009) and Ps. 73,135 (Ps. 53,760 in 2009), respectively.

At December 31, 2010, the plan assets have been invested through the trust as follows: 98% in the money market and 2% in mutual funds.

The following is an analysis at December 31 of the Company’s assets and liabilities that make up its labor obligations related to seniority premiums and employee termination payments for reasons other than corporate restructuring:

Employee termination Seniority premiums payments

Defined Defined benefit Unamortized benefit Unamortized Year obligation Plan assets Plan status items obligation items

2010 Ps. 528,164 Ps. (478,853) Ps. 49,311 Ps. ( 1,110) Ps. 140,165 Ps. 2,545 2009 Ps. 448,637 Ps. (421,623) Ps. 27,014 Ps. 12,844 Ps. 122,375 Ps. 5,242 2008 Ps. 382,977 Ps. (367,145) Ps. 15,832 Ps. 11,438 Ps. 108,543 Ps. 7,605 2007 Ps. 347,421 Ps. (319,792) Ps. 27,629 Ps. ( 3,009) Ps. 99,378 – 2006¹ Ps. 298,380 Ps. (279,399) Ps. 18,981 Ps. 6,349 Ps. 42,600 –

(1) Figures in thousands of Mexican pesos with purchasing power at December 31, 2007.

In Mexico, the Company computed deferred employee profit sharing for the years ended December 31, 2010 and 2009 using the asset and liability method, as required by Mexican FRS D-3. The result of these computations is that the Company had no deferred employee profit sharing in such years.

Central America:At December 31, 2010, an analysis of the liabilities and costs associated to employee’s termination payments in Central America are as follows:

Defined benefit Labor costCountry obligation for current service

Guatemala Ps. 421,511 Ps. 100,893El Salvador 42,749 18,394Honduras 66,117 20,746Costa Rica 21,484 37,958Nicaragua 9,421 7,158

Total Ps. 561,282 Ps. 185,149

At December 31, 2010, termination payments aggregated Ps. 138,438.


At December 31, 2010, the actuarial assumptions used in the valuation of each country are as follows:

Salary Return rate of Discount rate increase rate the plan assets

Mexico 9.0% 5.25% 8.75%Guatemala 9.0% 5.4% N/AElSalvador 8.0% 3.4% N/AHonduras 11.0% 6.5% N/ACostaRica 7.0% 4.4% N/ANicaragua 15.8% 11.7% N/A

NOTE 18 – SHAREHOLDERS’ EQUITY:

a. At a Board of Directors’ meeting held on February 11, 2010, the members of the Board approved a two-to-one stock split. As a result, the Company’s capital stock is now represented by 17,926,000,000 shares. The stock split was carried out on April 23, 2010 by having the shareholders exchange their oldsharesthroughcouponNo.49.Theissuanceofthenewshareshadnoeffectontheamountofcapitalstockandalldatarelatedtothenumberofshares has been adjusted by the split.

b. Ordinaryandextraordinaryshareholders’meetings: At an ordinary meeting held on March 11, 2010, the shareholders adopted the following resolutions: 1. Approval of a cap of Ps. 8,000,000 on the amount the Company will use in 2010 to repurchase its own shares. 2. Cancellation of 137,158,124 series “V” shares resulting from the repurchase of shares. 3. A declared dividend, for which shareholders will receive a cash payment at the rate of $ 0.35 pesos per share. Such dividend will be paid on April 16, 2010.

At an extraordinary shareholders’ meeting held on December 22, 2009, the shareholders approved the acquisition of the shares of TFBCorporationN.V.andSubsidiaries(WalMartCentralAmerica)throughthemergerofsuchcompanyintoWALMEX via a related party.

At an ordinary meeting held on March 12, 2009, the shareholders adopted the following resolutions: 1. Approval of a cap of Ps. 8,000,000 on the amount the Company will use in 2009, to repurchase its own shares. 2. Cancellation of 139,880,200 series “V” shares resulting from the repurchase of shares. 3. Increase in the legal reserve of Ps. 297,151, charged to retained earnings. 4. A declared dividend, for which shareholders will receive a cash payment at the rate of $ 0.305 pesos per share. Such dividend will be paid on April 30, 2009.

c. The Company’s capital stock is comprised of unlimited registered shares with no par value. At December 31, unrestated capital and the number of shares are as follows:

Capital stock 2010 2009

Fixed Ps. 5,574,801 Ps. 1,844,173 Variable 37,586,089 12,525,307

Total Ps. 43,160,890 Ps. 14,369,480


Number of freely subscribed common series “V” shares 2010 2009

Fixed (Class 1) 2,305,357,888 2,150,012,148 Variable (Class 2) 15,543,045,112 14,602,516,298

Total 17,848,403,000 16,752,528,446

Capital stock at December 31, 2010 and 2009 includes in both years capitalized earnings of Ps. 11,451,328 and Ps. 899,636 in capitalized restatement accounts.

During the year ended December 31, 2010, WALMEX repurchased 112,062,724 (116,832,400 in 2009) of its own shares, of which 34,465,724 (14,140,000 in 2009) were cancelled as per the resolution adopted at the shareholders’ meeting held on March 11, 2010 (March 12, 2009). As a result of the share repurchases,historicalcapitalstockwasreducedbyPs.217,207(Ps.100,213in2009).Thedifferencebetweenthetheoreticalvalueandtherepurchasecost of the shares acquired was applied against retained earnings.

d. Distributedearningsandcapitalreductionsinexcessofthebalanceofthenettaxprofitaccount(CUFIN)andtherestatedcontributedcapitalaccount(CUCA) will be subject to taxation in terms of Articles 11 and 89 of the Mexican Income Tax Law.

At December 31, 2010 and 2009, the total balance of the aforesaid tax accounts is Ps. 117,570,192 and Ps. 76,682,126, respectively. e. The employee stock option plan fund consists of 278,834,298 WALMEX shares, of which 273,581,106 shares have been placed in a trust created for

such purpose.

The amount recorded to results of operations for this item aggregates Ps. 248,900 in 2010 and Ps. 205,954 in 2009, which represents no cash disbursement.

An analysis of movements in the Company’s employee stock option plan is as follows:

Weighted Number averageprice of shares per share (pesos)

Balance at December 31, 2008 266,793,314 12.67Granted 63,212,136 15.97Exercised ( 39,272,738) 9.24Cancelled ( 4,720,176) 20.06Balance at December 31, 2009 286,012,536 13.75Granted 38,942,702 29.69Exercised ( 50,287,056) 11.17Cancelled ( 9,458,231) 19.73

Balance at December 31, 2010 265,209,951 16.37

Shares available for option grant:December 31, 2010 13,624,347

December 31, 2009 2,492,818


Regarding the information at December 31, 2009, there was a change in the number of granted shares compared to the number shares available on the samedate.ThischangehadnomaterialeffectontheCompany’sresultofoperations,inconformitywithMexicanFRSD-8,Share-based Payments.

At December 31, 2010, the employee stock options granted and exercisable, included in the employee stock option plan fund were as shown below:

Granted Exercisable

Range of Average Weighted average Weighted average exerciseprice Number remaininglife pricepershare Number pricepershare (pesos) of shares (in years) (pesos) of shares (pesos)

4.98 – 5.71 5,253,192 0.1 5.68 5,253,192 5.68 5.37 – 6.32 10,116,268 1.2 6.26 10,116,268 6.26 5.78 – 6.88 16,080,688 2.2 6.29 16,080,688 6.29 8.45 – 9.09 21,958,621 3.2 8.46 21,958,621 8.46 9.90 26,772,152 4.2 9.90 26,772,152 9.90 14.40 – 15.02 28,260,710 5.2 14.40 19,960,213 14.39 21.55 25,934,349 6.2 21.55 13,514,590 21.55 19.35 39,355,149 7.2 19.35 12,727,131 19.35 15.85 – 22.80 54,407,575 8.2 15.94 7,572,212 15.98 29.69 – 31.05 37,071,247 9.2 29.70 – –

265,209,951 6.0 16.37 133,955,067 13.24

NOTE 19 – COMPREHENSIVE FINANCING RESULT:

An analysis of comprehensive financing result is as follows:

December 31 2010 2009

Financial income, net Ps. 498,027 Ps. 672,723Exchange gain (loss), net 61,341 ( 10,633)Monetary position gain 58,603 –Accrued interest on contingent liability ( 158,037) –

Total Ps. 459,934 Ps. 662,090

ThemonetarypositiongainistheresultoftheapplicationofMexicanFRSB-10inCostaRicaandNicaragua.Suchgainwasdeterminedbyapplyingfactorsresulting from changes in the purchasing power of each country’s currency to the net monetary assets and liabilities during the year.

As a result of the acquisition of Walmart Central America, the Company recognized a contingent liability at present value in its financial statements at February28,2010.SinceMarch2010,thedifferencebetweenfuturevalueandpresentvalueofsuchliabilityhasgivenrisetointerestthatrequiresnocash disbursement.


NOTE 20 – SEGMENT FINANCIAL INFORMATION:

The Company’s segment financial information was prepared based on a managerial approach and the criteria established in Mexican FRS B-5. The Company operates in Mexico and Central America, its sales are made to the general public, and it is primarily engaged in operating self-service stores.

The Company has identified the following operating segments and by geographical area:

Mexico:• Self-service:Operationofdiscountstores,hypermarkets,membershipself-servicewholesalestoresandsupermarkets.• Financialservices:Operationofbankbranchestoprovidebankingandcreditservices.• Other:Consistsofdepartmentstores,restaurantsandtherealestatetransactionswiththirdparties.

Central America:Operationofdiscountstores,supermarkets,hypermarketsdiscount,warehousestoresandmembershipself-servicewholesalestoresinGuatemala,ElSalvador,Honduras,NicaraguaandCostaRica.

An analysis of segment information and geographical area at December 31 is as follows:

Totalrevenues Operatingincome

Segment 2010 2009 2010 2009

Mexico: Self service Ps. 280,778,127 Ps. 256,313,101 Ps. 24,179,330 Ps. 21,429,255Financial services 181,797 173,081 ( 723,222) ( 745,328)Others 15,709,094 13,964,969 1,998,699 1,584,572Subtotal 296,669,018 270,451,151 25,454,807 22,268,499

Central America: Self-service 39,188,379 – 1,589,667 –

Consolidated Ps. 335,857,397 Ps. 270,451,151 Ps. 27,044,474 Ps. 22,268,499

Purchase of property and equipment Depreciation

Segment 2010 2009 2010 2009

Mexico: Self service Ps. 10,506,652 Ps. 9,107,442 Ps. 4,535,342 Ps. 3,895,827Financial services 130,098 203,344 49,642 64,837Others 910,141 423,771 695,501 685,548Subtotal 11,546,891 9,734,557 5,280,485 4,646,212

Central America:Self-service 1,583,077 – 968,573 –



Total assets Current liabilities

Segment 2010 2009 2010 2009

Mexico: Self service Ps. 124,208,356 Ps. 109,641,979 Ps. 37,383,055 Ps. 33,859,456Financial services 2,236,009 1,399,093 1,424,884 541,748Others 14,636,370 14,483,375 2,298,213 2,033,073Unassignable items 6,456,509 7,614,707 3,303,641 3,478,325Subtotal 147,537,244 133,139,154 44,409,793 39,912,602

Central America: Self-service 47,270,324 – 6,315,733 –


Unassignable items refer primarily to reserve land, cash and cash equivalents of the parent and real estate companies, as well as income tax payable.

NOTE 21 – NEW ACCOUNTING PRONOUNCEMENTS:

In 2010, the CINIF approved the publication ofMexican FRS C-4, Inventories; Mexican FRS C-5, Prepayments; Mexican FRS C-6, Property, Plant and Equipment; and Mexican FRS C-18, Obligations Related to the Retirement of Property, Plant and Equipment. All of these new pronouncements will become effectiveasofJanuary1st,2011,exceptforthechangesresultingfromthesegregationofproperty,plantandequipmentthatclearlyhavedifferentusefullives,whichwillberequiredasof2012.TheapplicationofthesenewstandardswillhavenomaterialeffectontheCompany’sfinancialstatements.

NOTE 22 – APPROVAL OF FINANCIAL STATEMENTS:

The accompanying financial statements and their notes at and for the years ended December 31, 2010 and 2009 were approved by the Company’s Board of Directors at a meeting held on February 21, 2011.


This Report may contain certain references to the future performance of Walmart de México y Centroamérica and thus should be considered estimates made in good faith by the Company. Said references only reflect management’s expectations and are based on assumptions and information available at that time.As such, everything shall always be dependent on future events, risks and matters that cannot be analyzed with precision and which could affect Company results.

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All efforts are important and, although the press run of this

Annual Report is relatively small, we reiterate our commitment

to the environment by using environmentally–safe materials.

The following are savings resulting from the use of recycled

fiber, instead of virgin fiber for this project. We used 7,500 lbs

of paper, meaning 10% of post-consumer recycled fiber,

thereby allowing us to:

Preserve 9 trees

save 3,697 gallons of water

Prevent the generation of 767 lbs of greenhouse gas emissions

stop using 2 million BtUs of energy

this Report was printed on sterling Ultra Paper, FsC certified, free of elemental chlorine and acids

InVestOR InFORMAtIOn

ListingMexican Stock Exchange

Investor Relations ContactMariana Rodrí[email protected](52) 55 5283 0289

Corporate AffairsMaría Gisela [email protected](52) 55 5283 0100, ext. 8106

ADR sponsored ProgramThe Bank of New YorkInvestor ServicesP.O. Box 11258Church Street StationNew York, NY 10286-1258

toll free number (domestic Us)1 888 218 [email protected]

ticker symbol

Mexican Stock ExchangeWALMEX V

ADR sponsored ProgramWMMVY

InteRnAtIOnAL OtCQXMARKET TIERWMMVY

BloombergWALMEXV MMWMMVY

ReutersWALMEXV.MxWMMVY.Pk

Blvd. M. Ávila Camacho 647Colonia Periodistas

Delegación Miguel Hidalgo11220 México, D.F.

Phone: (52) 55 5283 0100

www.walmartmexico.com.mx

annual report - walmex financiera/anual/eng...2 2010 annual report our company knew how to adapt to...

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