Walmart 2009 Annual Report Download - page 50

48 Wal-Mart 2009 Annual Report
Notes to Consolidated Financial Statements
In connection with the development of our grocery distribution
network in the United States, we have agreements with third parties
which would require us to purchase or assume the leases on certain
unique equipment in the event the agreements are terminated. These
agreements, which can be terminated by either party at will, cover up
to a  ve-year period and obligate the Company to pay up to approxi-
mately $66 million upon termination of some or all of these agreements.
The Company has potential future lease commitments for land and
buildings for approximately 321 future locations. These lease com-
mitments have lease terms ranging from 1 to 35 years and provide
for certain minimum rentals. If executed, payments under operat-
ing leases would increase by $72 million for  scal 2010, based on cur-
rent cost estimates.
10 Retirement-Related Bene ts
In the United States, the Company maintains a Pro t Sharing and
401(k) Plan under which associates generally become participants
following one year of employment. The Pro t Sharing component of
the plan is entirely funded by the Company, and the Company makes
an additional contribution to the associates’ 401(k) component of the
plan. In addition to the Company contributions, associates may elect
to contribute a percentage of their earnings to the 401(k) component
of the plan. During  scal 2009, participants could contribute up to 50%
of their pretax earnings, but not more than statutory limits.
Associates may choose from among 13 di erent investment options
for the 401(k) component of the plan and 14 investment options for
the Pro t Sharing component of the plan. For associates who do not
make an investment election, their 401(k) balance in the plan is placed
in a balanced fund. Associates’ 401(k) funds immediately vest, and
associates may change their investment options at any time. Associ-
ates with three years of service have full diversi cation rights with
the 14 investment options for the Pro t Sharing component of the
plan. Prior to January 31, 2008, associates were fully vested in the
Pro t Sharing component of the plan after seven years of service,
with vesting starting at 20% at three years of service and increasing
20% each year until year seven. E ective January 31, 2008, associates
are fully vested in the Pro t Sharing component of the plan after six
years of service, with vesting starting at 20% at two years of service
and increasing 20% each year until year six.
Annual contributions made by the Company to the United States
and Puerto Rico Pro t Sharing and 401(k) Plans are made at the sole
discretion of the Company. Contribution expense associated with
these plans was $1.0 billion, $945 million and $890 million in  scal
2009, 2008 and 2007, respectively.
Employees in foreign countries who are not U.S. citizens are covered
by various post-employment bene t arrangements. These plans
are administered based upon the legislative and tax requirements in
the countries in which they are established. Annual contributions to
foreign retirement savings and pro t sharing plans are made at the
discretion of the Company, and were $210 million, $267 million and
$274 million in  scal 2009, 2008 and 2007, respectively.
The Company’s subsidiaries in the United Kingdom and Japan have
de ned bene t pension plans. The plan in the United Kingdom was
underfunded by $34 million at January 31, 2009 and overfunded by
$5 million at January 31, 2008. The plan in Japan was underfunded
by $289 million and $202 million at January 31, 2009 and 2008, respec-
tively. These underfunded amounts have been recorded in our
Consolidated Balance Sheets in accordance with SFAS 158, “Employ-
ers’ Accounting for De ned Bene t Pension and Other Postretirement
Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)”
(“SFAS 158”). Certain other foreign operations have de ned bene t
arrangements that are not signi cant.
11 Segments
The Company is engaged in the operations of retail stores located in
all 50 states of the United States, Argentina, Brazil, Canada, Chile,
China, Costa Rica, El Salvador, Guatemala, Honduras, India, Japan,
Mexico, Nicaragua, Puerto Rico and the United Kingdom. The Com-
pany identi es segments in accordance with the criteria set forth in
SFAS No. 131, “Disclosures about Segments of an Enterprise and
Related Information” (“SFAS 131”) and is primarily based on the opera-
tions of the Company that our chief operating decision maker regu-
larly reviews to analyze performance and allocate resources among
business units of the Company. We sell similar individual products
and services in each of our segments. It is impractical to segregate
and identify revenue and pro ts for each of these individual products
and services.
The Walmart U.S. segment includes the Company’s mass merchant
concept in the United States under the Walmart brand, as well as
walmart.com. The Sam’s Club segment includes the warehouse
membership clubs in the United States as well as samsclub.com. The
International segment consists of the Company’s operations outside
of the United States. The amounts under the caption “Other” in the
table below relating to operating income are unallocated corporate
overhead items.