Walmart 2012 Annual Report Download - page 52
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training, and job assignments, and seeking, among other things, injunctive
relief, front pay, back pay, punitive damages, and attorneys’ fees. On
June 21, 2004, the district court issued an order granting in part and
denying in part the plaintiff s’ motion for class certifi cation. As defi ned
by the district court, the class included “[a]ll women employed at any
Wal-Mart domestic retail store at any time since December 26, 1998,
who have been or may be subjected to Wal-Mart’s challenged pay and
management track promotions policies and practices.” The Company
appealed the order to the Ninth Circuit Court of Appeals and subsequently
to the United States Supreme Court. On June 20, 2011, the Supreme
Court issued an opinion decertifying the class and remanding the case
to the district court. On October 27, 2011, the plaintiff s’ attorneys fi led
an amended complaint proposing a class of current and former female
associates at the Company’s California retail facilities, and the Company
fi led a Motion to Dismiss on January 13, 2012. On October 28, 2011, the
plaintiff s’ attorneys fi led a complaint in the United States District Court
for the Northern District of Texas entitled Odle v. Wal-Mart Stores, Inc., pro-
posing a class of current and former female associates at the Company’s
Texas retail facilities and asserting claims and relief similar to Dukes. The
Company fi led a Motion to Dismiss on March 5, 2012. While management
cannot predict the ultimate outcome of these matters, management does
not believe the outcome will have a material eff ect on the Company’s
fi nancial condition or results of operations.
Hazardous Materials Investigations: On November 8, 2005, the
Company received a grand jury subpoena from the United States
Attorney’s Offi ce for the Central District of California, seeking documents
and information relating to the Company’s receipt, transportation,
handling, identifi cation, recycling, treatment, storage and disposal of
certain merchandise that constitutes hazardous materials or hazardous
waste. The Company has been informed by the U.S. Attorney’s Offi ce for
the Central District of California that it is a target of a criminal investigation
into potential violations of the Resource Conservation and Recovery Act
(“RCRA”), the Clean Water Act and the Hazardous Materials Transportation
Statute. This U.S. Attorney’s Offi ce contends, among other things, that
the use of Company trucks to transport certain returned merchandise
from the Company’s stores to its return centers is prohibited by RCRA
because those materials may be considered hazardous waste. The
government alleges that, to comply with RCRA, the Company must ship
from the store certain materials as “hazardous waste” directly to a certifi ed
disposal facility using a certifi ed hazardous waste carrier. The U.S. Attorney’s
Offi ce in the Northern District of California and the U.S. Environmental
Protection Agency subsequently joined in this investigation. The Company
contends that the practice of transporting returned merchandise to its
return centers for subsequent disposition, including disposal by certifi ed
facilities, is compliant with applicable laws and regulations. While
management cannot predict the ultimate outcome of this matter,
management does not believe the outcome will have a material eff ect
on the Company’s fi nancial condition or results of operations.
12 Commitments
The Company and certain of its subsidiaries have long-term leases for
stores and equipment. Rentals (including amounts applicable to taxes,
insurance, maintenance, other operating expenses and contingent rentals)
under operating leases and other short-term rental arrangements
were $2.4 billion, $2.0 billion and $1.8 billion in fi scal 2012, 2011 and
2010, respectively.
Aggregate minimum annual rentals at January 31, 2012, under
non-cancelable leases are as follows:
(Amounts in millions) Operating Capital
Fiscal Year Leases Leases
2013 $ 1,644 $ 608
2014 1,590 580
2015 1,525 532
2016 1,428 497
2017 1,312 457
Thereafter 8,916 3,261
Total minimum rentals $16,415 $5,935
Less estimated executory costs 50
Net minimum lease payments 5,885
Less imputed interest 2,550
Present value of minimum lease payments $3,335
Certain of the Company’s leases provide for the payment of contingent
rentals based on a percentage of sales. Such contingent rentals were
immaterial for fi scal 2012, 2011 and 2010. Substantially all of the Company’s
store leases have renewal options, some of which may trigger an
escalation in rentals.
The Company has future lease commitments for land and buildings for
approximately 425 future locations. These lease commitments have lease
terms ranging from 4 to 50 years and provide for certain minimum
rentals. If executed, payments under operating leases would increase
by $92 million for fi scal 2013, based on current cost estimates.
In connection with certain debt fi nancing, the Company could be liable
for early termination payments if certain unlikely events were to occur. At
January 31, 2012, the aggregate termination payment would have been
$122 million. The arrangements pursuant to which these payments could
be made expire in fi scal 2019.
13 Retirement-Related Bene ts
Through fi scal 2011, the Company maintained separate profi t sharing and
401(k) plans for associates in the United States and Puerto Rico, under
which associates generally became participants following one year of
employment. The profi t sharing component was entirely funded by the
Company, and the Company also made additional contributions to the
401(k) component of the plan. In addition to the Company’s contributions,
associates could elect to contribute a percentage of their earnings to the
401(k) component of the plan.
Eff ective February 1, 2011, the Company terminated the previous profi t
sharing and 401(k) plans and off ered new safe harbor 401(k) plans for
associates in the United States and Puerto Rico, under which associates
generally become participants following one year of employment.
Under the safe harbor 401(k) plans, the Company matches 100% of
participant contributions up to 6% of annual eligible earnings. The
matching contributions immediately vest at 100% for each associate.
Participants can contribute up to 50% of their pretax earnings, but not
more than the statutory limits. Participants age 50 or older may defer
additional earnings in catch-up contributions up to the maximum
statutory limits.
Notes to Consolidated Financial Statements