Walmart 2015 Annual Report Download - page 58

56 2015 Annual Report
These matters may require the involvement of certain members of the
Company’s senior management that could impinge on the time they
have available to devote to other matters relating to the business. The
Company expects that there will be on-going media and governmental
interest, including additional news articles from media publications on
these matters, which could impact the perception among certain
audiences of the Company’s role as a corporate citizen.
The Company’s process of assessing and responding to the governmental
investigations and the shareholder lawsuits continues. While the Company
believes that it is probable that it will incur a loss from these matters,
given the on-going nature and complexity of the review, inquiries and
investigations, the Company cannot reasonably estimate any loss or
range of loss that may arise from these matters. Although the Company
does not presently believe that these matters will have a material adverse
effect on its business, given the inherent uncertainties in such situations,
the Company can provide no assurance that these matters will not be
material to its business in the future.
11 Commitments
The Company has 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 $2.8 billion in both fiscal 2015
and 2014 and $2.6 billion in fiscal 2013.
Aggregate minimum annual rentals at January 31, 2015, under
non-cancelable leases are as follows:
(Amounts in millions) Operating Capital
Fiscal Year Leases Leases
2016 $ 1,759 $ 504
2017 1,615 476
2018 1,482 444
2019 1,354 408
2020 1,236 370
Thereafter 10,464 3,252
Total minimum rentals $17,910 $5,454
Less estimated executory costs 49
Net minimum lease payments 5,405
Less imputed interest 2,512
Present value of minimum lease payments $2,893
Certain of the Company’s leases provide for the payment of contingent
rentals based on a percentage of sales. Such contingent rentals were not
material for fiscal 2015, 2014 and 2013. 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 282 future locations. These lease commitments have lease
terms ranging from 1 to 30 years and provide for certain minimum
rentals. If executed, payments under operating leases would increase
by $58 million for fiscal 2016, based on current cost estimates.
In connection with certain long-term debt issuances, the Company
could be liable for early termination payments if certain unlikely events
were to occur. At January 31, 2015, the aggregate termination payment
would have been $64 million. The arrangement pursuant to which this
payment could be made will expire in fiscal 2019.
12 Retirement-Related Benets
The Company offers a 401(k) plan for associates in the U.S. under which
eligible associates can begin contributing to the plan immediately upon
hire. The Company also offers a 401(k) type plan for associates in Puerto
Rico under which associates can begin to contribute generally after one
year of employment. Under these plans, after one year of employment,
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.
Associates in international countries who are not U.S. citizens are covered
by various defined contribution post-employment benefit arrangements.
These plans are administered based upon the legislative and tax
requirements in the countries in which they are established.
Additionally, the Company’s subsidiaries in the United Kingdom and
Japan have sponsored defined benefit pension plans. The plan in the
United Kingdom was underfunded by $85 million and $69 million at
January 31, 2015 and 2014, respectively. The plan in Japan was under-
funded by $223 million and $281 million at January 31, 2015 and 2014,
respectively. These underfunded amounts are recorded as liabilities in
the Company’s Consolidated Balance Sheets in deferred income taxes
and other. Certain other international operations also have defined
benefit arrangements that are not significant.
The following table summarizes the contribution expense related to the
Company’s retirement-related benefits for fiscal 2015, 2014 and 2013:
Fiscal Years Ended January 31,
(Amounts in millions) 2015 2014 2013
Dened contribution plans:
U.S. $ 898 $ 877 $ 818
International 167 165 166
Dened benet plans:
International 5 20 26
Total contribution expense for
retirement-related benefits $1,070 $1,062 $1,010
Notes to Consolidated Financial Statements