Quarterly Financial Information financiera/BMV/BM… · • Agile squads, which are...

Wal-Mart de México, S.A.B. de C.V. Consolidated

Ticker: WALMEX Quarter: 3 Year: 2018

1 of 84

Quarterly Financial Information [105000] Management commentary.................................................................................................................................. 2

[110000] General information about financial statements ........................................................................................... 13

[210000] Statement of financial position, current/non-current ..................................................................................... 15

[310000] Statement of comprehensive income, profit or loss, by function of expense ........................................... 17

[410000] Statement of comprehensive income, OCI components presented net of tax ......................................... 18

[520000] Statement of cash flows, indirect method ...................................................................................................... 20

[610000] Statement of changes in equity - Accumulated Current .............................................................................. 22

[610000] Statement of changes in equity - Accumulated Previous ............................................................................ 25

[700000] Informative data about the Statement of financial position ......................................................................... 28

[700002] Informative data about the Income statement ............................................................................................... 29

[700003] Informative data - Income statement for 12 months ..................................................................................... 30

[800001] Breakdown of credits ......................................................................................................................................... 31

[800003] Annex - Monetary foreign currency position .................................................................................................. 33

[800005] Annex - Distribution of income by product ..................................................................................................... 34

[800007] Annex - Financial derivate instruments .......................................................................................................... 35

[800100] Notes - Subclassifications of assets, liabilities and equities ....................................................................... 40

[800200] Notes - Analysis of income and expense ....................................................................................................... 44

[800500] Notes - List of notes .......................................................................................................................................... 45

[800600] Notes - List of accounting policies .................................................................................................................. 72

[813000] Notes - Interim financial reporting ................................................................................................................... 84



2 of 84

[105000] Management commentary

Management commentary [text block]

This quarter was very special for us, it was marked by innovation and evolut ion. Retai l i s

changing fast , we are evolving with our customers and we are going through a

transformative period that is requir ing us to change from the inside to del iver even stronger

results.

We’re working very hard to posit ion the company for continued success, and we’re doing it

f rom a posit ion of strength.

These are some of the projects that we announced on the third quarter:

On September 13th, 2018, WALMEX announced that it s majority shareholder, Walmart Inc.,

reached a definit ive agreement to acquire Cornershop, Inc. Simultaneously with Walmart

Inc. expects to sel l to WALMEX the Mexican Cornershop business. The transaction is subject

to the approvals of regulatory authorit ies. Cornershop is the leading online m arketplace

platform for on-demand delivery from supermarkets, pharmacies and specialty food

retai lers.

Cornershop’s unique low -cost IT development, world class app, repl icable business model

and on-demand crowd-sourced picking and delivery service, wil l al low us to step-up our

efforts in on-demand. By adding new capabil it ies to our already robust infrastructure wil l

al low us to move even faster.

As a remainder, this platform wil l remain open for al l retai lers, suppliers and customers.

The acquisit ion is subject to regulatory approvals and is expected to close by the end of this

year.

Addit ional ly, we entered into a commercial agreement to l i st Walmex merchandise on

Cornershop at the same price as in our stores in Mexico City, Guadalajara and Monterrey.

We launched our eWallet , Cashi . Driving a seamless omnichannel experience is one of our

three priorit ies, and Cashi i s a great example of how we are moving fast to deliver for our

customers in terms of access and experience.

Cashi simplif ies the use of cash and gives access to onl ine shopping and service payments

to unbanked customers, it wi l l be a key driver for omichannel sales in the future.



3 of 84

Cashi also al lows us to understand our customers better, and by knowing our customers more

thoroughly, we wil l be able to serve them in new and better ways to continue to win their

loyalty.

Stay tuned to see how Cashi evolves. We started with a minimum viable product, but there

are mult iple functionalit ies that we are planning to add to reinforce the product.

During the last quarter we launched our business incubator Zona 18, with the goal of

del ivering value quickly and continuously to support the execution of our st rategy and our

digital t ransformation.

Zona 18 is composed by four areas:

• The labs, whose main purpose is to develop digital products;

• A design center, in charge of developing new experiences and services;

• Agi le squads, which are mult idiscipl inary teams formed to work on st rategic projects;

• And Walmart Laborator ia, through which we create di sruptive solut ions together with

external col laborators.

We are building in the present projects that are the future of the company, combining the

greatness and enthusiasm of Walmart with an alternative and disruptive way of thinking, to

reinvent the rules of retai l .

We are also exploring new traffic drivers, as an example, in August we started a pi lot test of

6 gas stations in Bodega, Walmart and Sam’s Club.

The idea is to complement our value proposit ion and save our customers t ime and money.

Currently the gas stations are operated by a thi rd party, and we wil l measure the response

to customer- t raff ic to inform our decis ion on how to move forward with the project.

Disclosure of nature of business [text block]

Walmart de México y Centroamérica is a leading retai l sector companies in the region.



4 of 84

As of September 30, 2018, it operated 3,205 units, throughout 6 countr ies (Costa Rica,

Guatemala, Honduras, E l Salvador, México and Nicaragua), including self -service stores,

membership clubs, pharmacies and omnichannel sales.

Walmart shares trade in the Mexican Stock Exchange since 1977; the t icker symbol i s

WALMEX .

Disclosure of management's objectives and its strategies for meeting those

objectives [text block]

The objective of the Company is to double total sales in 10 years and to leverage

operating expenses to reinvest in the business.

Sales growth wil l come from:

• Same store sales

• Sales from new stores

• eCommerce

Disclosure of entity's most significant resources, risks and relationships [text block]

The Company is exposed to the effects of future events that could affect the purchasing

power and/or buying habits of its population. These events may be economic, polit ical or

social in nature and some of the most important are described below:



5 of 84

I . Changes in exchange rates. Exchange rate f luctuations tend to put upward pressure on

inflat ion and reduce the population's purchasing power, which could ult imately adversely

effect the Company's sales, in part icular, due to the purchase of import goods.

I I . Competit ion. The retai l sector has become very competit ive in recent years, which has

led to the need for al l the players in the market to constantly look for ways to set

themselves apart from the competit ion. This puts the Company's market share at

r i sk. Other factors affecting the Company's market share could be the business

expansion of it s competitors and the possible entrance of new competitors into the

market.

I I I . Inf lat ion. A s ignif icant increase in inf lat ion rates could have a direct effect on the

purchasing power of the Company's customers and the demand for its products and

services, as wel l as employment and salaries.

IV. Changes in government regulations. The Company is exposed to the changes in different

laws and regulations, which, after becoming effective, they could affect the Company's

operating results, such as an impact on sales, expenses for payrol l indirect taxes and

changes in applicable rates. Currently, the level of scrut iny and discretion by the t ax

authorit ies has greatly increased. Mexican courts have changed their posit ion favoring

those authorit ies ignoring violations of form and procedure.

Disclosure of results of operations and prospects [text block]

Note: The percentages of sales growth related to Central America are determined on a

constant currency basis.

On the third quarter the posit ive momentum in the business continued. At a consolidated

level, total revenues increased a sol id 7.9%.

Mexico del ivered total revenue of $120.7 bi l l ion pesos, an increase of 7.6% over last year. In

Central America, total revenue reached $27.0 bi l l ion pesos, which implied a 4.8% growth.

For the 9 months from January to September, Walmex total revenues grew 8.5%: 9.0% in

Mexico and 6.9% in Cent ral America.

Healthy traffic performance is driving strong same -store sales growth; year to date comp

traffic has increased 2.2% in Mexico.



6 of 84

In Mexico, same-store sales grew 6.3% during the quarter and 7.5% on the 9 months.

In Central America, same-store sales grew 1.5% during the quarter and 3.0% on the 9 months.

Our performance has been consistent and same -store sales continue be our main growth

driver.

As of September, Mexico’s two -year stack for same-store sales growth was a sol id 13.7% and

in Central America it was 7.9%

Growth was broad-based in Mexico. The Center region posted the strongest growth,

fol lowed by the South and the North regions. The Metro area had a lower, but yet sol id

growth. On the thi rd quarter we faced a diff icult comparison base in the region, as last year

we saw a posit ive impact on sales given an increase in demand of goods for donation after

the earthquake.

In Central America we continue to gain share in a market that is growing at a slower pace.

Honduras was the country with the highest same-store sales growth, fol lowed by El Salvador

and Guatemala. Costa Rica del ivered a lower, but posit ive growth. Less favorable economic

condit ions in the country are pressuring customers’ budgets and decelerating consumption.

Sales in Nicaragua continue to be challenged by the socio -polit ical confl ict in the country

that is affecting economic condit ions in general .

The commercial strategies that we implemented in the region are start ing to show results,

but given the nature of the chal lenges that we are facing, we expect growth to resume at a

s low pace. In addit ion to reinforcing commercial activit ies, we expanded the rol l -out of the

Centers of Excel lence program to 176 stores and we improved the pr ice gap methodology

to offer even better prices to our customers and boost growth in the region. Our team in

Central America is working real ly hard and I want to thank them for their commitment and

effort .

PERFORMANCE BY FORMAT:

Bodega del ivered the highest same-store sales growth. Once again we had a successful

“Morral la” campaign. This price -point program is now considered the largest promotional

campaign in Mexico. “Morral la” is a huge traffic driver, and even though it lowers average

t icket, once our customers are in the stores they are surprised by our great merchandise and

unbeatable prices.

Walmart also posted strong growth. The sol id execut ion of the Summer and Back to School

seasonal events, together with the successful execution of the “Markdowns for Everyone”

campaign, were key to the format’s performance.

This quarter was also special for Sam’s that launched “Sam’s Club Plus” membership, which

offers a superior value proposit ion for our members. Together with a 2% cash back, it gives

Plus members access to exclusive events and pr ices, a s well as to special benefits and

discounts through Benefits Travel.



7 of 84

Superama delivered strong growth. Winning in Fresh is one of the top prior it ies of the format.

During the quarter, the team developed in -store activit ies such as “The Sandwich Club” and

“BBQ Masters” where our customers and associates had fun at the stores while learning new

cooking techniques. These type of events are al lowing Superama to differentiate itself from

competitors while capital izing new purchase occasions.

PERFORMANCE BY DIVIS ION:

We saw st rong growth in al l divisions, part icularly in our core division Food and Staples,

where Dairy and Consumables had an outstanding performance.

We are experiencing headwinds from lower food inflat ion, especial ly in the Produce

departments, but we are being able to drive volume to part ial ly offset this impact.

General Merchandise and Apparel also had sol id performance.

We have outpaced the self -service and clubs market measured by ANTAD for 15 consecutive

quarters.

Our associates are doing a great work in improving the shopping experience and operating

with discipl ine, and customers are rewarding us with their loyalty. Year to date we have

grown 410bps ahead of the market, the largest gap since 2009.

Our strong performance has been broad-based: al l formats and divisions individually

outpaced ANTAD.

NEW STORES

On the thi rd quarter we opened 25 stores, 15 in Mexico and 10 in Central America. We are

very pleased with the quality of new-store growth. Our store portfol io is very healthy and we

are growing in a discipl ined way to ensure our stores’ profitabil ity i s sustainable in the long

therm.

New-stores contr ibution in the quarter was 2.1%, which, considering the normal sales ramp -

up of a new store, posit ions us to reach the expected contribution for the year.

OMNICHANNEL

Our marketplace continues to grow: we increased the number of sel lers almost 10 t imes

s ince the launch in September 2017, and we now have more than 690 sel lers offering great

merchandise on our s ite. We are making good progress, but we need to further increase our

assortment in order to expand our reach to new customers.

The omnichannel business in Bodega is also growing fast , we now have 290 kiosks where we

offer customers an extended catalogue and easy payment and pickup. Considerin g the

progress in Bodega we now have more than 560 kiosks operating in our stores.



8 of 84

We are updating our General Merchandise platform. We already performed some of the

updates, however, we expect to have the new platform ready after the holidays season is

over.

During the quarter, omnichannel sales grew 41% and GMV grew 49%, General Merchandise

posted even a higher growth.

Omnichannel sales now represent 1.1% of total Mexico sales and they contr ibuted 40bps to

total sales growth.

THIRD QUARTER & YTD RESULTS

We made certain accounting reclassi f ications that have no effect on EBITDA or EPS but

impact gross profit and SG&A. Such reclassi f ications were included in 2017 figures for

purposes of comparabil ity.

MEXICO:

Thi rd Quarter Results

We del ivered another sol id performance in the thi rd quarter. Total revenues grew 7.6%.

Gross profit increased 7.7% and remained at 23.0% of sales. SG&A grew 7.4% and we

achieved 10bps of leverage. By focusing on “Every Day Low Cost” and productivity, we were

able to grow expenses at a slower pace than revenues.

As a result , operating income and EBITDA grew double digit , 11.7% and 10.3% respectively.

EBITDA margin expanded by 20bps to 10.3%.

Regular operating expenses leveraged by 9bps. Expenses related to store remodeling and

maintenance declined by 10bps, and we invested 17bps in new stores, eCommerce and

digital .

In order to posit ion our company for continuous success, we are going through a period of

heavy investments, but our discipl ined expense management is al lowing us to self -fund these

investments while maintaining our world -class EBITDA margin.

The 5 areas that we are reinvest ing are: in prices, associates salaries, eCommerce and

technology, logist ics and new stores.

An example of the investments we are doing in technology, i s the update of our POS system

to Flex POS. The new POS al lows us to drive sales by expedit ing the processes we make to

implement commercial strategies and by boost ing f inancial services.

On the other hand, it increases productivity by reducing manual pr ocesses and enables

omnichannel init iat ives that help us to serve our customers better.

All Walmarts, Superamas and Sam’s Club now operate with the Flex POS, we also started the

rol l -out in Bodega, and we expect to f inish it in the coming months.



9 of 84

YTD Results

Year to date top l ine growth in Mexico has been strong. Total revenues increased 9.0%. Gross

profit grew 9.1% and gross prof it margin remained at 22.7%. We achieved 10bps of expense

leverage as SG&A grew 8.1%, below total revenue growth.

As a result , operating income increased 12.3% and EBITDA 11.0%, to reach a 10.0% margin.

CENTRAL AMERICA:

Note: The percentages of sales growth related to Central America are determined on a

constant currency basis.


The commercial strategies we are implementing are start ing to show results, but sales growth

continues to be low and we are not satisf ied, there is st i l l a lot of work to be done. Total

revenues increased 4.8%.

Gross profit expanded by 40bps, dr iven by st rategic pricing.

Given the sales situation, the team took a very discipl ined approach toward expenses and

focused in productivity, as a result we achieved 20bps of expense leverage. Operating

income grew 14.7%, and EBITDA margin increased 60bps to 9.0%.

YTD Results

Despite a challenging environment, Central America has improved prof itabil ity. For the 9

months total revenues increased 6.9%. Gross profit expanded 10bps to 24.2% and SG&A grew

6.4%.

Operating income increased 9.6% and EBITDA margin expanded by 30bps to reach 8. 7%.

CONSOLIDATED:


At a consolidated level, total revenues grew 7.9%. Gross profit increased 8.3% to a 23.3%

margin. SG&A grew 7.7%, below total revenues growth.

Operating income posted double-digit growth of 12.8%, and EBITDA margin expanded by

30bps to 10.1%.

Fluctuations in currency exchange rates and discontinued operations negatively impacted

net income, but it i s important to emphasize that our business on a constant currency basis,

remains strong.

Income from continuing operation increased a sol id 8.5%.



10 of 84

YTD Results

Consolidated revenues increased 8.5%. Gross profit margin remained at 23.0%. After

reinvest ing in the business, we achieved 10bps of expense leverage and SG&A grew 7.6%.

Operating income grew 11.8% and EBITDA 10.8% to r each a 9.7% margin.

Income from continuing operations increased double digit , 14.6%, but net income was

impacted due to the sale of Suburbia recorded in 2017.

Financial position, liquidity and capital resources [text block]

We closed the quarter with $33.1 bi l l ion pesos, $6.6 bi l l ion pesos or 25.0% more than last year

driven by the strong cash generation from our operations.

Inventories increased 5.5%, s ignif icantly below total revenue growth, and accounts payable

increased 13.1%, as a result of an increased focus in working capital management.

As we grow and reinvest in the business our f inancial strength increases.

Operating cash flow grew 12.0%, ahead of total revenues growth, reaching $59.3 bi l l ion.

After invest ing $17.5 bi l l ion pesos in higher return projects, we returned $23.7 bi l l ion pesos to

our shareholders in the form of dividends.

Internal control [text block]



11 of 84

For the Company, having the highest regulation standards and the proper control

environment is fundamental to meeting its objectives.

The exist ing internal controls are oriented towards guaranteeing safeguarding of assets,

compliance with established policies, accurate recording of operations, rel iable and t imely

f inancial data, prevention, identi f ication and detection of fraud, as well as the ful l f i lment of

laws and regulations.

We have an area devoted to Ethics and Regulatory Compliance, which is in charge of

disseminting and promoting our policies on ethical behavior, corporate governance and

str ict compliance with any and al l legal p rovisions to which we are subject to.

Disclosure of critical performance measures and indicators that management uses to

evaluate entity's performance against stated objectives [text block]

• Total sales

• Same store sales

• Gross margin

• Expenses

• Operating earnings

• EBITDA

• Cash generation

• ROI

• Inventory

• F inancing



12 of 84



13 of 84

[110000] General information about financial statements

Ticker: WALMEX

Period covered by financial statements: 2018-01-01 al 2018-09-30

Date of end of reporting period: 2018-09-30

Name of reporting entity or other means of

identification:

Wal-Mart de México, S.A.B. de C.V.

Description of presentation currency: MXN

Level of rounding used in financial statements: THOUSANDS OF PESOS

Consolidated: Yes

Number of quarter: 3

Type of issuer: ICS

Explanation of change in name of reporting entity or

other means of identification from end of preceding

reporting period:

Description of nature of financial statements:

Disclosure of general information about financial statements [text block]

The accompanying unaudited consolidated interim financial statements have been

prepared in accordance with the International Accounting Standard 34 Interim Financial

Report ing. These financial statements do not include al l information and disclosures requi red

in the annual f inancial statements, and these financial statements should be read in

conjunction with the consolidated financial statements audited as of December 31, 2017

and 2016.

Follow-up of analysis [text block]



14 of 84

Actinver - Carlos Hermosi l lo

Bank of America Merr i l l Lynch - Robert Ford

Banorte - IXE – Valentín Mendoza

Barclays Capital - Benjamin M. Theurer

BBVA Bancomer - Miguel Ul loa

BTG Pactual – Álvaro García

Bradesco – Richard Catchard

Cit i - Accival – Alexander Robarts

Credit Suisse - Antonio González

GBM - Luis Wi l lard

Goldman Sachs - I rma Sgarz

HSBC – Ravi Jain

Intercam - Alejandra Marcos

I taú BBA - Joaquin Ley

J.P. Morgan – Joseph Giordano

Morgan Stanley - Franco Abelardo

Punto Casa de Bolsa - Crist ina Morales

Santander - Reinaldo Santana

Scotiabank - Rodrigo Echagaray

UBS - Gustavo Pi ras Oliveira

Vector Casa de Bolsa – Jorge Plácido Evangelista



15 of 84

[210000] Statement of financial position, current/non-current

Concept Close Current

Quarter

2018-09-30

Close Previous

Exercise

2017-12-31

Statement of financial position [abstract]

Assets [abstract]

Current assets [abstract]

Cash and cash equivalents 33,061,176,000.00 35,596,117,000.00

Trade and other current receivables 6,926,270,000.00 10,098,722,000.00

Current tax assets, current 2,377,879,000.00 735,738,000.00

Other current financial assets 168,228,000.00 0

Current inventories 60,701,754,000.00 59,463,255,000.00

Current biological assets 0 0

Other current non-financial assets 1,106,041,000.00 982,374,000.00

Total current assets other than non-current assets or disposal groups classified as held for sale or as held for

distribution to owners

104,341,348,000.00 106,876,206,000.00

Non-current assets or disposal groups classified as held for sale or as held for distribution to owners 0 0

Total current assets 104,341,348,000.00 106,876,206,000.00

Non-current assets [abstract]

Trade and other non-current receivables 0 0

Current tax assets, non-current 560,883,000.00 499,568,000.00

Non-current inventories 0 0

Non-current biological assets 0 0

Other non-current financial assets 1,533,182,000.00 1,548,007,000.00

Investments accounted for using equity method 0 0

Investments in subsidiaries, joint ventures and associates 0 0

Property, plant and equipment 134,975,646,000.00 134,962,726,000.00

Investment property 4,913,317,000.00 5,118,707,000.00

Goodwill 35,592,840,000.00 37,373,196,000.00

Intangible assets other than goodwill 1,882,426,000.00 1,994,832,000.00

Deferred tax assets 8,322,151,000.00 6,882,422,000.00

Other non-current non-financial assets 0 0

Total non-current assets 187,780,445,000.00 188,379,458,000.00

Total assets 292,121,793,000.00 295,255,664,000.00

Equity and liabilities [abstract]

Liabilities [abstract]

Current liabilities [abstract]

Trade and other current payables 106,735,700,000.00 101,974,307,000.00

Current tax liabilities, current 1,248,325,000.00 3,890,598,000.00

Other current financial liabilities 317,842,000.00 449,239,000.00

Other current non-financial liabilities 0 0

Current provisions [abstract]

Current provisions for employee benefits 0 0

Other current provisions 1,522,399,000.00 1,513,403,000.00

Total current provisions 1,522,399,000.00 1,513,403,000.00

Total current liabilities other than liabilities included in disposal groups classified as held for sale 109,824,266,000.00 107,827,547,000.00

Liabilities included in disposal groups classified as held for sale 0 0

Total current liabilities 109,824,266,000.00 107,827,547,000.00

Non-current liabilities [abstract]

Trade and other non-current payables 4,963,292,000.00 5,211,739,000.00

Current tax liabilities, non-current 0 0

Other non-current financial liabilities 15,166,241,000.00 14,594,540,000.00

Other non-current non-financial liabilities 8,355,000.00 8,835,000.00



16 of 84


Quarter

2018-09-30

Close Previous

Exercise

2017-12-31

Non-current provisions [abstract]

Non-current provisions for employee benefits 1,796,444,000.00 1,991,863,000.00

Other non-current provisions 0 0

Total non-current provisions 1,796,444,000.00 1,991,863,000.00

Deferred tax liabilities 7,623,519,000.00 6,087,187,000.00

Total non-current liabilities 29,557,851,000.00 27,894,164,000.00

Total liabilities 139,382,117,000.00 135,721,711,000.00

Equity [abstract]

Issued capital 45,468,428,000.00 45,468,428,000.00

Share premium (1,308,718,000.00) (2,359,384,000.00)

Treasury shares 0 0

Retained earnings 92,879,852,000.00 96,413,711,000.00

Other reserves 15,700,114,000.00 20,011,198,000.00

Total equity attributable to owners of parent 152,739,676,000.00 159,533,953,000.00

Non-controlling interests 0 0

Total equity 152,739,676,000.00 159,533,953,000.00

Total equity and liabilities 292,121,793,000.00 295,255,664,000.00



17 of 84

[310000] Statement of comprehensive income, profit or loss, by function

of expense

Concept Accumulated

Current Year

2018-01-01 - 2018-

09-30

Accumulated

Previous Year

2017-01-01 - 2017-

09-30

Quarter Current

Year

2018-07-01 - 2018-

09-30

Quarter Previous

Year

2017-07-01 - 2017-

09-30

Profit or loss [abstract]

Profit (loss) [abstract]

Revenue 439,488,768,000.00 405,209,592,000.00 147,767,841,000.00 136,897,724,000.00

Cost of sales 338,356,534,000.00 312,122,978,000.00 113,355,401,000.00 105,129,665,000.00

Gross profit 101,132,234,000.00 93,086,614,000.00 34,412,440,000.00 31,768,059,000.00

Distribution costs 0 0 0 0

Administrative expenses 67,654,366,000.00 62,887,485,000.00 22,618,137,000.00 21,001,853,000.00

Other income 596,499,000.00 597,731,000.00 297,874,000.00 117,203,000.00

Other expense 502,298,000.00 773,472,000.00 281,059,000.00 413,412,000.00

Profit (loss) from operating activities 33,572,069,000.00 30,023,388,000.00 11,811,118,000.00 10,469,997,000.00

Finance income 1,704,899,000.00 963,188,000.00 521,607,000.00 319,768,000.00

Finance costs 1,909,067,000.00 1,389,476,000.00 887,723,000.00 422,171,000.00

Share of profit (loss) of associates and joint ventures accounted for

using equity method

0 0 0 0

Profit (loss) before tax 33,367,901,000.00 29,597,100,000.00 11,445,002,000.00 10,367,594,000.00

Tax income (expense) 8,377,118,000.00 7,786,222,000.00 2,763,339,000.00 2,364,750,000.00

Profit (loss) from continuing operations 24,990,783,000.00 21,810,878,000.00 8,681,663,000.00 8,002,844,000.00

Profit (loss) from discontinued operations 0 7,474,618,000.00 0 673,745,000.00

Profit (loss) 24,990,783,000.00 29,285,496,000.00 8,681,663,000.00 8,676,589,000.00

Profit (loss), attributable to [abstract]

Profit (loss), attributable to owners of parent 24,990,783,000.00 29,285,496,000.00 8,681,663,000.00 8,676,589,000.00

Profit (loss), attributable to non-controlling interests 0 0 0 0

Earnings per share [text block]

Earnings per share [abstract]

Earnings per share [line items]

Basic earnings per share [abstract]

Basic earnings (loss) per share from continuing operations 1.43 1.25 0.5 0.46

Basic earnings (loss) per share from discontinued operations 0 0.43 0 0.04

Total basic earnings (loss) per share 1.43 1.68 0.5 0.5

Diluted earnings per share [abstract]

Diluted earnings (loss) per share from continuing operations 1.43 1.25 0.5 0.46

Diluted earnings (loss) per share from discontinued operations 0 0.43 0 0.04

Total diluted earnings (loss) per share 1.43 1.68 0.5 0.5



18 of 84

[410000] Statement of comprehensive income, OCI components presented

net of tax

Concept Accumulated

Current Year

2018-01-01 - 2018-

09-30

Accumulated

Previous Year

2017-01-01 - 2017-

09-30

Quarter Current

Year

2018-07-01 - 2018-

09-30

Quarter Previous

Year

2017-07-01 - 2017-

09-30

Statement of comprehensive income [abstract]

Profit (loss) 24,990,783,000.00 29,285,496,000.00 8,681,663,000.00 8,676,589,000.00

Other comprehensive income [abstract]

Components of other comprehensive income that will not be

reclassified to profit or loss, net of tax [abstract]

Other comprehensive income, net of tax, gains (losses) from

investments in equity instruments

0 0 0 0

Other comprehensive income, net of tax, gains (losses) on

revaluation

0 0 0 0

Other comprehensive income, net of tax, gains (losses) on

remeasurements of defined benefit plans

0 0 0 0

Other comprehensive income, net of tax, change in fair value of

financial liability attributable to change in credit risk of liability

0 0 0 0

Other comprehensive income, net of tax, gains (losses) on hedging

instruments that hedge investments in equity instruments

0 0 0 0

Share of other comprehensive income of associates and joint

ventures accounted for using equity method that will not be

reclassified to profit or loss, net of tax

0 0 0 0

Total other comprehensive income that will not be reclassified to

profit or loss, net of tax

0 0 0 0

Components of other comprehensive income that will be

reclassified to profit or loss, net of tax [abstract]

Exchange differences on translation [abstract]

Gains (losses) on exchange differences on translation, net of tax (4,311,084,000.00) (9,039,973,000.00) (5,187,457,000.00) 674,763,000.00

Reclassification adjustments on exchange differences on

translation, net of tax

0 0 0 0

Other comprehensive income, net of tax, exchange differences on

translation

(4,311,084,000.00) (9,039,973,000.00) (5,187,457,000.00) 674,763,000.00

Available-for-sale financial assets [abstract]

Gains (losses) on remeasuring available-for-sale financial assets,

net of tax

0 0 0 0

Reclassification adjustments on available-for-sale financial assets,

net of tax

0 0 0 0

Other comprehensive income, net of tax, available-for-sale financial

assets

0 0 0 0

Cash flow hedges [abstract]

Gains (losses) on cash flow hedges, net of tax 0 0 0 0

Reclassification adjustments on cash flow hedges, net of tax 0 0 0 0

Amounts removed from equity and included in carrying amount of

non-financial asset (liability) whose acquisition or incurrence was

hedged highly probable forecast transaction, net of tax

0 0 0 0

Other comprehensive income, net of tax, cash flow hedges 0 0 0 0

Hedges of net investment in foreign operations [abstract]

Gains (losses) on hedges of net investments in foreign operations,

net of tax

0 0 0 0

Reclassification adjustments on hedges of net investments in

foreign operations, net of tax

0 0 0 0

Other comprehensive income, net of tax, hedges of net investments

in foreign operations

0 0 0 0

Change in value of time value of options [abstract]

Gains (losses) on change in value of time value of options, net of

tax

0 0 0 0



19 of 84

Concept Accumulated

Current Year

2018-01-01 - 2018-

09-30

Accumulated

Previous Year

2017-01-01 - 2017-

09-30

Quarter Current

Year

2018-07-01 - 2018-

09-30

Quarter Previous

Year

2017-07-01 - 2017-

09-30

Reclassification adjustments on change in value of time value of

options, net of tax

0 0 0 0

Other comprehensive income, net of tax, change in value of time

value of options

0 0 0 0

Change in value of forward elements of forward contracts

[abstract]

Gains (losses) on change in value of forward elements of forward

contracts, net of tax

0 0 0 0

Reclassification adjustments on change in value of forward

elements of forward contracts, net of tax

0 0 0 0

Other comprehensive income, net of tax, change in value of forward

elements of forward contracts

0 0 0 0

Change in value of foreign currency basis spreads [abstract]

Gains (losses) on change in value of foreign currency basis

spreads, net of tax

0 0 0 0

Reclassification adjustments on change in value of foreign currency

basis spreads, net of tax

0 0 0 0

Other comprehensive income, net of tax, change in value of foreign

currency basis spreads

0 0 0 0

Share of other comprehensive income of associates and joint

ventures accounted for using equity method that will be reclassified

to profit or loss, net of tax

0 0 0 0

Total other comprehensive income that will be reclassified to profit

or loss, net of tax

(4,311,084,000.00) (9,039,973,000.00) (5,187,457,000.00) 674,763,000.00

Total other comprehensive income (4,311,084,000.00) (9,039,973,000.00) (5,187,457,000.00) 674,763,000.00

Total comprehensive income 20,679,699,000.00 20,245,523,000.00 3,494,206,000.00 9,351,352,000.00

Comprehensive income attributable to [abstract]

Comprehensive income, attributable to owners of parent 20,679,699,000.00 20,245,523,000.00 3,494,206,000.00 9,351,352,000.00

Comprehensive income, attributable to non-controlling interests 0 0 0 0



20 of 84

[520000] Statement of cash flows, indirect method

Concept Accumulated

Current Year

2018-01-01 - 2018-

09-30

Accumulated

Previous Year

2017-01-01 - 2017-

09-30

Statement of cash flows [abstract]

Cash flows from (used in) operating activities [abstract]

Profit (loss) 24,990,783,000.00 29,285,496,000.00

Adjustments to reconcile profit (loss) [abstract]

Discontinued operations 0 (7,474,618,000.00)

Adjustments for income tax expense 8,377,118,000.00 7,786,222,000.00

Adjustments for finance costs 233,567,000.00 343,360,000.00

Adjustments for depreciation and amortisation expense 9,211,236,000.00 8,575,984,000.00

Adjustments for impairment loss (reversal of impairment loss) recognised in profit or loss 36,300,000.00 (4,087,000.00)

Adjustments for provisions 0 0

Adjustments for unrealised foreign exchange losses (gains) 0 0

Adjustments for share-based payments 232,935,000.00 203,637,000.00

Adjustments for fair value losses (gains) 0 0

Adjustments for undistributed profits of associates 0 0

Adjustments for losses (gains) on disposal of non-current assets 73,754,000.00 156,679,000.00

Participation in associates and joint ventures 0 0

Adjustments for decrease (increase) in inventories (2,126,702,000.00) (5,343,518,000.00)

Adjustments for decrease (increase) in trade accounts receivable 2,271,694,000.00 773,533,000.00

Adjustments for decrease (increase) in other operating receivables (305,241,000.00) 60,997,000.00

Adjustments for increase (decrease) in trade accounts payable (6,276,653,000.00) 24,771,000.00

Adjustments for increase (decrease) in other operating payables (1,516,590,000.00) 325,697,000.00

Other adjustments for non-cash items 0 (1,038,637,000.00)

Other adjustments for which cash effects are investing or financing cash flow 0 0

Straight-line rent adjustment 0 0

Amortization of lease fees 0 0

Setting property values 0 0

Other adjustments to reconcile profit (loss) 0 371,824,000.00

Total adjustments to reconcile profit (loss) 10,211,418,000.00 4,761,844,000.00

Net cash flows from (used in) operations 35,202,201,000.00 34,047,340,000.00

Dividends paid 0 0

Dividends received 0 0

Interest paid 0 0

Interest received 0 0

Income taxes refund (paid) 12,142,267,000.00 9,181,572,000.00

Other inflows (outflows) of cash 0 0

Net cash flows from (used in) operating activities 23,059,934,000.00 24,865,768,000.00

Cash flows from (used in) investing activities [abstract]

Cash flows from losing control of subsidiaries or other businesses 0 20,229,114,000.00

Cash flows used in obtaining control of subsidiaries or other businesses 0 0

Other cash receipts from sales of equity or debt instruments of other entities 0 0

Other cash payments to acquire equity or debt instruments of other entities 0 0

Other cash receipts from sales of interests in joint ventures 0 0

Other cash payments to acquire interests in joint ventures 0 0

Proceeds from sales of property, plant and equipment 162,104,000.00 140,428,000.00

Purchase of property, plant and equipment 10,764,622,000.00 10,687,881,000.00

Proceeds from sales of intangible assets 0 0

Purchase of intangible assets 0 0

Proceeds from sales of other long-term assets 0 0

Purchase of other long-term assets 0 0



21 of 84

Concept Accumulated

Current Year

2018-01-01 - 2018-

09-30

Accumulated

Previous Year

2017-01-01 - 2017-

09-30

Proceeds from government grants 0 0

Cash advances and loans made to other parties 0 0

Cash receipts from repayment of advances and loans made to other parties 0 0

Cash payments for future contracts, forward contracts, option contracts and swap contracts 0 0

Cash receipts from future contracts, forward contracts, option contracts and swap contracts 0 0

Dividends received 0 0

Interest paid 0 0

Interest received 921,911,000.00 734,907,000.00

Income taxes refund (paid) 0 0

Other inflows (outflows) of cash 817,731,000.00 (416,179,000.00)

Net cash flows from (used in) investing activities (8,862,876,000.00) 10,000,389,000.00

Cash flows from (used in) financing activities [abstract]

Proceeds from changes in ownership interests in subsidiaries that do not result in loss of control 0 0

Payments from changes in ownership interests in subsidiaries that do not result in loss of control 0 0

Proceeds from issuing shares 0 0

Proceeds from issuing other equity instruments 0 0

Payments to acquire or redeem entity's shares 0 0

Payments of other equity instruments 0 0

Proceeds from borrowings 0 0

Repayments of borrowings 0 0

Payments of finance lease liabilities 1,171,114,000.00 1,197,144,000.00

Proceeds from government grants 0 0

Dividends paid 14,512,755,000.00 33,607,071,000.00

Interest paid 0 0

Income taxes refund (paid) 0 0

Other inflows (outflows) of cash 0 0

Net cash flows from (used in) financing activities (15,683,869,000.00) (34,804,215,000.00)

Net increase (decrease) in cash and cash equivalents before effect of exchange rate changes (1,486,811,000.00) 61,942,000.00

Effect of exchange rate changes on cash and cash equivalents [abstract]

Effect of exchange rate changes on cash and cash equivalents (1,048,130,000.00) (1,593,361,000.00)

Net increase (decrease) in cash and cash equivalents (2,534,941,000.00) (1,531,419,000.00)

Cash and cash equivalents at beginning of period 35,596,117,000.00 27,975,536,000.00

Cash and cash equivalents at end of period 33,061,176,000.00 26,444,117,000.00



22 of 84

[610000] Statement of changes in equity - Accumulated Current

Components of equity [axis]

Sheet 1 of 3 Issued capital [member]

Share premium

[member]

Treasury shares

[member]

Retained earnings

[member]

Revaluation surplus

[member]

Reserve of exchange

differences on

translation [member]

Reserve of cash flow

hedges [member]

Reserve of gains and

losses on hedging

instruments that hedge

investments in equity

instruments [member]

Reserve of

change in

value of time

value of

options

[member]

Statement of changes in equity [line items]

Equity at beginning of period 45,468,428,000.00 (2,359,384,000.00) 0 96,413,711,000.00 0 20,427,163,000.00 0 0 0

Changes in equity [abstract]

Comprehensive income [abstract]

Profit (loss) 0 0 0 24,990,783,000.00 0 0 0 0 0

Other comprehensive income 0 0 0 0 0 (4,311,084,000.00) 0 0 0

Total comprehensive income 0 0 0 24,990,783,000.00 0 (4,311,084,000.00) 0 0 0

Issue of equity 0 0 0 0 0 0 0 0 0

Dividends recognised as distributions to owners 0 0 0 28,524,642,000.00 0 0 0 0 0

Increase through other contributions by owners, equity 0 0 0 0 0 0 0 0 0

Decrease through other distributions to owners, equity 0 0 0 0 0 0 0 0 0

Increase (decrease) through other changes, equity 0 0 0 0 0 0 0 0 0

Increase (decrease) through treasury share transactions, equity 0 0 0 0 0 0 0 0 0

Increase (decrease) through changes in ownership interests in subsidiaries that do not

result in loss of control, equity

0 0 0 0 0 0 0 0 0

Increase (decrease) through share-based payment transactions, equity 0 1,050,666,000.00 0 0 0 0 0 0 0

Amount removed from reserve of cash flow hedges and included in initial cost or other

carrying amount of non-financial asset (liability) or firm commitment for which fair value

hedge accounting is applied

0 0 0 0 0 0 0 0 0

Amount removed from reserve of change in value of time value of options and included in

initial cost or other carrying amount of non-financial asset (liability) or firm commitment for

which fair value hedge accounting is applied

0 0 0 0 0 0 0 0 0

Amount removed from reserve of change in value of forward elements of forward

contracts and included in initial cost or other carrying amount of non-financial asset

(liability) or firm commitment for which fair value hedge accounting is applied

0 0 0 0 0 0 0 0 0

Amount removed from reserve of change in value of foreign currency basis spreads and

included in initial cost or other carrying amount of non-financial asset (liability) or firm

commitment for which fair value hedge accounting is applied

0 0 0 0 0 0 0 0 0

Total increase (decrease) in equity 0 1,050,666,000.00 0 (3,533,859,000.00) 0 (4,311,084,000.00) 0 0 0

Equity at end of period 45,468,428,000.00 (1,308,718,000.00) 0 92,879,852,000.00 0 16,116,079,000.00 0 0 0



23 of 84


Sheet 2 of 3 Reserve of change in

value of forward

elements of forward

contracts [member]

Reserve of change in

value of foreign


[member]


losses on remeasuring

available-for-sale

financial assets

[member]

Reserve of share-based

payments [member]

Reserve of

remeasurements of

defined benefit plans

[member]

Amount recognised in

other comprehensive

income and

accumulated in equity

relating to non-current

assets or disposal

groups held for sale

[member]


losses from




fair value of financial

liability attributable to

change in credit risk of

liability [member]

Reserve for

catastrophe

[member]


Equity at beginning of period 0 0 0 0 (415,965,000.00) 0 0 0 0



Profit (loss) 0 0 0 0 0 0 0 0 0

Other comprehensive income 0 0 0 0 0 0 0 0 0

Total comprehensive income 0 0 0 0 0 0 0 0 0

Issue of equity 0 0 0 0 0 0 0 0 0

Dividends recognised as distributions to owners 0 0 0 0 0 0 0 0 0







0 0 0 0 0 0 0 0 0

Increase (decrease) through share-based payment transactions, equity 0 0 0 0 0 0 0 0 0




0 0 0 0 0 0 0 0 0




0 0 0 0 0 0 0 0 0




0 0 0 0 0 0 0 0 0




0 0 0 0 0 0 0 0 0

Total increase (decrease) in equity 0 0 0 0 0 0 0 0 0

Equity at end of period 0 0 0 0 (415,965,000.00) 0 0 0 0



24 of 84


Sheet 3 of 3 Reserve for

equalisation [member]

Reserve of

discretionary

participation features

[member]

Other comprehensive

income [member]

Other reserves

[member]

Equity attributable to

owners of parent

[member]

Non-controlling

interests [member]

Equity [member]


Equity at beginning of period 0 0 0 20,011,198,000.00 159,533,953,000.00 0 159,533,953,000.00



Profit (loss) 0 0 0 0 24,990,783,000.00 0 24,990,783,000.00

Other comprehensive income 0 0 0 (4,311,084,000.00) (4,311,084,000.00) 0 (4,311,084,000.00)

Total comprehensive income 0 0 0 (4,311,084,000.00) 20,679,699,000.00 0 20,679,699,000.00

Issue of equity 0 0 0 0 0 0 0

Dividends recognised as distributions to owners 0 0 0 0 28,524,642,000.00 0 28,524,642,000.00

Increase through other contributions by owners, equity 0 0 0 0 0 0 0

Decrease through other distributions to owners, equity 0 0 0 0 0 0 0

Increase (decrease) through other changes, equity 0 0 0 0 0 0 0

Increase (decrease) through treasury share transactions, equity 0 0 0 0 0 0 0



0 0 0 0 0 0 0

Increase (decrease) through share-based payment transactions, equity 0 0 0 0 1,050,666,000.00 0 1,050,666,000.00




0 0 0 0 0 0 0




0 0 0 0 0 0 0




0 0 0 0 0 0 0




0 0 0 0 0 0 0

Total increase (decrease) in equity 0 0 0 (4,311,084,000.00) (6,794,277,000.00) 0 (6,794,277,000.00)

Equity at end of period 0 0 0 15,700,114,000.00 152,739,676,000.00 0 152,739,676,000.00



25 of 84

[610000] Statement of changes in equity - Accumulated Previous


Sheet 1 of 3 Issued capital [member]

Share premium

[member]

Treasury shares

[member]

Retained earnings

[member]

Revaluation surplus

[member]

Reserve of exchange

differences on

translation [member]

Reserve of cash flow

hedges [member]


losses on hedging

instruments that hedge



Reserve of

change in

value of time

value of

options

[member]


Equity at beginning of period 45,468,428,000.00 (2,467,507,000.00) 0 99,650,564,000.00 0 24,530,193,000.00 0 0 0



Profit (loss) 0 0 0 29,285,496,000.00 0 0 0 0 0

Other comprehensive income 0 0 0 0 0 (9,039,973,000.00) 0 0 0

Total comprehensive income 0 0 0 29,285,496,000.00 0 (9,039,973,000.00) 0 0 0

Issue of equity 0 0 0 0 0 0 0 0 0

Dividends recognised as distributions to owners 0 0 0 43,096,657,000.00 0 0 0 0 0







0 0 0 0 0 0 0 0 0

Increase (decrease) through share-based payment transactions, equity 0 (212,542,000.00) 0 0 0 0 0 0 0




0 0 0 0 0 0 0 0 0




0 0 0 0 0 0 0 0 0




0 0 0 0 0 0 0 0 0




0 0 0 0 0 0 0 0 0

Total increase (decrease) in equity 0 (212,542,000.00) 0 (13,811,161,000.00) 0 (9,039,973,000.00) 0 0 0

Equity at end of period 45,468,428,000.00 (2,680,049,000.00) 0 85,839,403,000.00 0 15,490,220,000.00 0 0 0



26 of 84


Sheet 2 of 3 Reserve of change in

value of forward

elements of forward

contracts [member]


value of foreign


[member]


losses on remeasuring

available-for-sale

financial assets

[member]

Reserve of share-based

payments [member]

Reserve of

remeasurements of

defined benefit plans

[member]

Amount recognised in

other comprehensive

income and

accumulated in equity

relating to non-current

assets or disposal


[member]


losses from




fair value of financial

liability attributable to

change in credit risk of

liability [member]

Reserve for

catastrophe

[member]


Equity at beginning of period 0 0 0 0 (155,662,000.00) 0 0 0 0



Profit (loss) 0 0 0 0 0 0 0 0 0

Other comprehensive income 0 0 0 0 0 0 0 0 0

Total comprehensive income 0 0 0 0 0 0 0 0 0

Issue of equity 0 0 0 0 0 0 0 0 0

Dividends recognised as distributions to owners 0 0 0 0 0 0 0 0 0







0 0 0 0 0 0 0 0 0

Increase (decrease) through share-based payment transactions, equity 0 0 0 0 0 0 0 0 0




0 0 0 0 0 0 0 0 0




0 0 0 0 0 0 0 0 0




0 0 0 0 0 0 0 0 0




0 0 0 0 0 0 0 0 0

Total increase (decrease) in equity 0 0 0 0 0 0 0 0 0

Equity at end of period 0 0 0 0 (155,662,000.00) 0 0 0 0



27 of 84


Sheet 3 of 3 Reserve for

equalisation [member]

Reserve of

discretionary

participation features

[member]

Other comprehensive

income [member]

Other reserves

[member]

Equity attributable to

owners of parent

[member]

Non-controlling

interests [member]

Equity [member]


Equity at beginning of period 0 0 0 24,374,531,000.00 167,026,016,000.00 0 167,026,016,000.00



Profit (loss) 0 0 0 0 29,285,496,000.00 0 29,285,496,000.00

Other comprehensive income 0 0 0 (9,039,973,000.00) (9,039,973,000.00) 0 (9,039,973,000.00)

Total comprehensive income 0 0 0 (9,039,973,000.00) 20,245,523,000.00 0 20,245,523,000.00

Issue of equity 0 0 0 0 0 0 0

Dividends recognised as distributions to owners 0 0 0 0 43,096,657,000.00 0 43,096,657,000.00

Increase through other contributions by owners, equity 0 0 0 0 0 0 0

Decrease through other distributions to owners, equity 0 0 0 0 0 0 0

Increase (decrease) through other changes, equity 0 0 0 0 0 0 0

Increase (decrease) through treasury share transactions, equity 0 0 0 0 0 0 0



0 0 0 0 0 0 0

Increase (decrease) through share-based payment transactions, equity 0 0 0 0 (212,542,000.00) 0 (212,542,000.00)




0 0 0 0 0 0 0




0 0 0 0 0 0 0




0 0 0 0 0 0 0




0 0 0 0 0 0 0

Total increase (decrease) in equity 0 0 0 (9,039,973,000.00) (23,063,676,000.00) 0 (23,063,676,000.00)

Equity at end of period 0 0 0 15,334,558,000.00 143,962,340,000.00 0 143,962,340,000.00



28 of 84

[700000] Informative data about the Statement of financial position


Quarter

2018-09-30

Close Previous

Exercise

2017-12-31

Informative data of the Statement of Financial Position [abstract]

Capital stock (nominal) 42,526,627,000.00 42,526,627,000.00

Restatement of capital stock 2,941,801,000.00 2,941,801,000.00

Plan assets for pensions and seniority premiums 698,036,000.00 756,598,000.00

Number of executives 202 198

Number of employees 237,249 236,857

Number of workers 0 0

Outstanding shares 17,461,402,631 17,461,402,631

Repurchased shares 0 0

Restricted cash 0 0

Guaranteed debt of associated companies 0 0



29 of 84

[700002] Informative data about the Income statement

Concept Accumulated

Current Year

2018-01-01 - 2018-

09-30

Accumulated

Previous Year

2017-01-01 - 2017-

09-30

Quarter Current

Year

2018-07-01 - 2018-

09-30

Quarter Previous

Year

2017-07-01 - 2017-

09-30

Informative data of the Income Statement [abstract]

Operating depreciation and amortization 9,211,236,000.00 8,575,984,000.00 3,092,307,000.00 2,885,843,000.00



30 of 84

[700003] Informative data - Income statement for 12 months

Concept Current Year

2017-10-01 - 2018-

09-30

Previous Year

2016-10-01 - 2017-

09-30

Informative data - Income Statement for 12 months [abstract]

Revenue 607,650,118,000.00 562,706,384,000.00

Profit (loss) from operating activities 47,386,220,000.00 42,670,902,000.00

Profit (loss) 35,570,242,000.00 39,681,889,000.00

Profit (loss), attributable to owners of parent 35,570,242,000.00 39,685,603,000.00

Operating depreciation and amortization 12,280,128,000.00 11,404,456,000.00



31 of 84

[800001] Breakdown of credits

Institution [axis] Foreign institution

(yes/no)

Contract

signing date

Expiration

date

Interest

rate

Denomination [axis]

Domestic currency [member] Foreign currency [member]

Time interval [axis] Time interval [axis]

Current year

[member]

Until 1 year

[member]

Until 2 years

[member]

Until 3 years

[member]

Until 4 years

[member]

Until 5 years or more

[member]

Current year

[member]

Until 1 year

[member]

Until 2 years

[member]

Until 3 years

[member]

Until 4 years

[member]


[member]

Banks [abstract]

Foreign trade

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0

Banks - secured

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0

Commercial banks

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0

Other banks

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0

Total banks

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0

Stock market [abstract]

Listed on stock exchange - unsecured

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0

Listed on stock exchange - secured

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0

Private placements - unsecured

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0

Private placements - secured

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0

Total listed on stock exchanges and

private placements

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0

Other current and non-current

liabilities with cost [abstract]


liabilities with cost

OTHER CURRENT LIABILITIES WITH

COST 1

NO 2018-10-16 2018-10-16 0 248,842,000.00 0 0 0 0 0 0 0 0 0 0

OTHER CURRENT LIABILITIES WITH

COST 2

SI 2018-10-16 2018-10-16 0 0 0 0 0 0 0 46,988,000.00 0 0 0 0

OTHER NO-CURRENT LIABILITIES

WITH COST A1

NO 2018-10-16 2018-10-16 0 0 249,791,000.00 291,472,000.00 284,765,000.00 11,476,495,000.00 0 0 0 0 0 0

OTHER NO-CURRENT LIABILITIES

WITH COST A2

SI 2018-10-16 2018-10-16 0 0 0 0 0 0 0 0 54,800,000.00 68,041,000.00 72,123,000.00 1,726,188,000.00

TOTAL 0 248,842,000.00 249,791,000.00 291,472,000.00 284,765,000.00 11,476,495,000.00 0 46,988,000.00 54,800,000.00 68,041,000.00 72,123,000.00 1,726,188,000.00

Total other current and non-current

liabilities with cost

TOTAL 0 248,842,000.00 249,791,000.00 291,472,000.00 284,765,000.00 11,476,495,000.00 0 46,988,000.00 54,800,000.00 68,041,000.00 72,123,000.00 1,726,188,000.00

Suppliers [abstract]

Suppliers

SELF SERVICE SUPPLIER B1 NO 2018-10-16 2018-10-16 56,870,620,000.00 0 0 0 0 0 0 0 0 0 0 0

SELF SERVICE SUPPLIER B2 SI 2018-10-16 2018-10-16 0 0 0 0 0 0 15,875,765,000.00 0 0 0 0 0

TOTAL 56,870,620,000.00 0 0 0 0 0 15,875,765,000.00 0 0 0 0 0

Total suppliers

TOTAL 56,870,620,000.00 0 0 0 0 0 15,875,765,000.00 0 0 0 0 0



32 of 84

Institution [axis] Foreign institution

(yes/no)

Contract

signing date

Expiration

date

Interest

rate

Denomination [axis]

Domestic currency [member] Foreign currency [member]

Time interval [axis] Time interval [axis]

Current year

[member]

Until 1 year

[member]

Until 2 years

[member]

Until 3 years

[member]

Until 4 years

[member]


[member]

Current year

[member]

Until 1 year

[member]

Until 2 years

[member]

Until 3 years

[member]

Until 4 years

[member]


[member]


liabilities [abstract]


liabilities

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0

Total other current and non-current

liabilities

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0

Total credits

TOTAL 56,870,620,000.00 248,842,000.00 249,791,000.00 291,472,000.00 284,765,000.00 11,476,495,000.00 15,875,765,000.00 46,988,000.00 54,800,000.00 68,041,000.00 72,123,000.00 1,726,188,000.00



33 of 84

[800003] Annex - Monetary foreign currency position

Currencies [axis]

Dollars [member] Dollar equivalent in

pesos [member]

Other currencies

equivalent in dollars

[member]

Other currencies

equivalent in pesos

[member]

Total pesos

[member]

Foreign currency position [abstract]

Monetary assets [abstract]

Current monetary assets 336,066,000.00 6,289,965,000.00 430,652,000.00 8,060,303,000.00 14,350,268,000.00

Non-current monetary assets 0 0 0 0 0

Total monetary assets 336,066,000.00 6,289,965,000.00 430,652,000.00 8,060,303,000.00 14,350,268,000.00

Liabilities position [abstract]

Current liabilities 493,991,000.00 9,245,781,000.00 575,597,000.00 10,773,156,000.00 20,018,937,000.00

Non-current liabilities 32,823,000.00 614,327,000.00 147,437,000.00 2,759,507,000.00 3,373,834,000.00

Total liabilities 526,814,000.00 9,860,108,000.00 723,034,000.00 13,532,663,000.00 23,392,771,000.00

Net monetary assets (liabilities) (190,748,000.00) (3,570,143,000.00) (292,382,000.00) (5,472,360,000.00) (9,042,503,000.00)



34 of 84

[800005] Annex - Distribution of income by product

Income type [axis]

National income

[member]

Export income

[member]

Income of

subsidiaries abroad

[member]

Total income

[member]

SALES

SALES 354,627,708,000.00 0 81,436,234,000.00 436,063,942,000.00

LEASE

LEASE 1,275,415,000.00 0 214,842,000.00 1,490,257,000.00

OTHER REVENUES

OTHER REVENUES 1,903,454,000.00 0 31,115,000.00 1,934,569,000.00

TOTAL 357,806,577,000.00 0 81,682,191,000.00 439,488,768,000.00



35 of 84

[800007] Annex - Financial derivate instruments

Management discussion about the policy uses of financial derivate instruments,

explaining if these policies are allowed just for coverage or for other uses like trading

[text block]

Wal-Mart de México, S.A.B. de C.V., (“WALMEX” or “the Company”) disclosure, concerning

the use of derivative f inancial instruments (IFD, per it s acronym in Spanish), in compliance

with Mexican National Banking and Securit ies Commission (CNBV, per it s acronym in Spanish)

regulations so that investors have information regarding the s ignif icance of derivatives in the

Company’s f inancial posit ion and results, and can ful ly assess the inherent r i sks.

WALMEX has adopted the use of IFD to hedge foreign exchange rates, with the sole purpose

of hedging against f luctuations in the exchange rate. The Company seeks to mit igate

exchange rate fluctuat ion r isk in “foreign currency - accounts payable” related to goods

imports for resale. Hedging is only executed based on the support ing documentation of

these accounts payable commitments. This process is subjected to the Company’s policy,

which l imits the amount and use of IFD, and provides specific requirements for purchase and

payment.

The IFD authorized by our “Exposure to foreign currency exchange ra te r i sk- reduction” policy

i s the FX-Forward. The FX-Forward contract is a specif ic agreement between WALMEX and

the counterparty. That is why it is t raded on the “over the counter” or OTC market through

an ISDA contract (International Swap Dealers Associat ion).

The Company only enters into IFD with counterpart ies that are solvent f inancial inst itut ions

with sol id credit capacity, and that are l icensed and regulated to perform this kind of

operation in the market. WALMEX’s f inance committee authorizes al l co unterpart ies based

on credit quality rat ings determined by international rat ing agencies. In order to reduce the

r isk of non-compliance and to ensure that the market value of open posit ions does not

exceed the Company’s maximum exposure and credit l imits, the volume of operations

executed with each authorized counterparty is permanently monitored.

FX-Forward are contracted for the purpose of economic hedging. The Company decided to

designate them as hedges of negotiat ion from an accounting perspective, without

effectiveness tests. The f luctuations in “fair value” of these inst ruments, at matur ity, are

recognized directly to P&L during the correspondent period, as a financial income/expense.



36 of 84

General description about valuation techniques, standing out the instruments

valuated at cost or fair value, just like methods and valuation techniques [text block]

The calculation agent or valuation DFI are counterparts which have held the respective

operations. In addit ion, the Company through its valuations Bloomberg® platform performs

independently, which are compared monthly with those reported by the counterpart ies. The

DFI concluded with counterpart ies do not provide col lateral or margin cal ls. They also do not

have negotiated credit l ines for the operation of the DFI .

In the calculation of the fai r value for FX -Forward, standard valuation methodologies are

used as well as widely accepted market variabl es that are endorsed international ly. The fai r

value is effectively the present value of the difference between the value of the underlying

forward and value agreed at contract init iat ion, mult ipl ied by the number of units of the

underlying. These est imates are reviewed and approved by the Treasury department, which

veri f ies the reasonableness of the results in relat ion to the valuations provided by authorized

counterpart ies.

Management discussion about intern and extern sources of liquidity that could be

used for attending requirements related to financial derivate instruments [text block]

The Company’s operations provide resources to meet IFD contract requirements. The

Company also has various l ines of credit that could be used i f necessary to meet its IFD

obligations.

Changes and management explanation in principal risk exposures identified, as

contingencies and events known by the administration that could affect future reports

[text block]

As of September 30, 2018, the Company has not identif ied signif icant changes in the risk

exposure previously identif ied. These include possible contingencies and events known or

expected by the Administ rat ion.

The Company has identi f ied the fol lowing main r isks within it s IFD portfol io:



37 of 84

a. Market r isk : The Company is exposed to market r i sks related to variat ions in currency

exchange rates result ing from changes in economic condit ions at the local and international

level , tax and monetary policies, l iquidity, polit ical events, disasters, etc. As a result, one of

the primary objectives of the Company’s IFD policy is to mit igate foreign exchange risk

through the purchase of FX-Forward in order to protect the Company against exchange rate

f luctuation in “foreign currency -accounts payable” and related to goods imports for resale.

The Company does not authorize the purchase of IFD instruments for the purpose of

speculation.

b. Liquidity r isk : Resources available to manage hedge operations are generated by the

Company’s operat ions.

c. Counterparty Credit r isk : Credit r i sk related to IFD is mit igated and monitored through the

established approval procedures to select the counterparty f inancial inst itut ions. The

Treasury department regular ly monitors and updates (annually or more frequently if

necessary), the required credit quality assessment and ratings of f inancial inst itut ion

counterpart ies. In addit ion, the Company has established l imits to the amount of IFDs that

can be executed with approved counterpart ies in order to furth er mit igate r isk.

d. Operational Risk . WALMEX’s Board of Directors specifically authorized the st rategy for the

use of IFD and the Finance Committee approved the related pol icy. The policy regarding

the use of IFD describes: the objective, the al lowed der ivative instruments, the l imits and the

control mechanisms required to ensure that derivative transactions are properly

conducted. Al l this, in order to manage and minimize: market, l iquidity, credit and

operational r i sk. The level of r i sk tolerance defin ed for the FX-Forward t ransactions is

periodically reviewed by the Finance Committee, however, compliance with the established

parameters i s reviewed monthly in order to detect opportunit ies and, when appropriate,

propose action plans.

Execution and compliance with the approved strategy is regular ly monitored internally by

the Treasury and Accounting department. The results of that monitor ing as well as

identif ications of inherent r i sks are periodically reported to the Treasury Vice -president and,

i f necessary, to the Board of Directors.

Addit ional ly, the Treasury director i s responsible for continuous monitor ing and report ing to

Treasury Vice-president of any events that may affect current IFD operations. In this case,

the Treasury director i s also respons ible to propose to the Finance Committee actions to

mitigate any events that may put the Company’s results at r isk.

The Company is also subject to periodic reviews of it s IFD transactions by internal and

external auditors who evaluate established processes and controls and the proper

application thereof. The internal and external auditors also evaluate accounting records

and the effect of IFD in the income statement and / or balance sheet accounts.



38 of 84

Quantitative information for disclosure [text block]

As of September 30, 2018, Fx-Forward contracts have a term of no more than three months,

which are shown below:

Number of

Contracts

Notional

Amount

Million (Dolar)

Equivalent in

Million (Pesos)

New Contracts current quarter 41 $ 56 $ 1,077

Maturity current quarter 57 $ 57 $ 1,142

Open contracts current 29 $ 82 $ 1,579

The change in fai r value during the three-months period ended September 30, 2018 that was

recognized for such contracts, amounts to mxn$ ($55.7mil l ion), net and it i s presented in the

consolidated income (expense) of comprehensive results.

The fair value of these instruments represents less than 3% of total consol idated sales for the

quarter or 5% of the assets. Therefore the potential r i sk from the Company’s use of these

inst ruments is not signif icant.

Addit ional ly, at September 30, 2018, there are no instances of non -compliance with IFD

contracts, nor are there any margin calls or col lateral required for any contracts. A summary

of the outstanding IFD is as fol lows:

Summary derivatives Financial Instruments

Type: Forward Purpose: Economic Position: Large

Current quarter Counterpart 1 Counterpart 2 Counterpart 3 Counterpart 4 Counterpart 5 Total

Underliying value assets

USD/MXN $18.7165

Notional Amount (million pesos) $ 64 $ 308 $ - $ 1,207 $ - $ 1,579

Fair Value $ ( 0.47) $ ( 2.27) $ - $ ( 43.98) $ - $ ( 46.72)

Settlements Next 12 months $ 1,579

Q22018

Underliying value assets

USD/MXN $19.9231



39 of 84

Notional Amount (million pesos) $ 128 $ 345 $ 240 $ 931 $ - $ 1,644

Fair Value $ ( 0.77) $ ( 4.06) $ ( 4.46) $ 18.25 $ - $ 8.96

Settlements Next 12 months $ 1,644

Market r i sk

Concerning the sensit ivity analysis of market r i sks to which the Company is exposed, the

currency exchange rate of the Mexican peso against the US dollar would have impact as

demonstrated in the table below. The effect would not be material .

Scenarios of charges in currency exchange rate

Remote Possible Probable Remote Possible Probable

Exchange rate 18.7165

-50% -25% -5% 50% 25% 5%

9.3583 14.0374 17.7807 28.0748 23.3956 19.6523

Sensitivity Scenario

(million pesos) -763.10 -381.51 -76.30 763.10 381.51 76.30

Liquidity and credit r isk

The Company does not have l iquidity r i sk from its IFD at September 30, 2018.

The Company manages credit r i sk related to its portfol io of derivatives transactions by

engaging only with recognized and creditworthy counterpart ies. At September 30, 2018,

counterparty credit r isk i s immaterial .



40 of 84

[800100] Notes - Subclassifications of assets, liabilities and equities


Quarter

2018-09-30

Close Previous

Exercise

2017-12-31

Subclassifications of assets, liabilities and equities [abstract]

Cash and cash equivalents [abstract]

Cash [abstract]

Cash on hand 263,073,000.00 252,250,000.00

Balances with banks 19,021,778,000.00 16,438,317,000.00

Total cash 19,284,851,000.00 16,690,567,000.00

Cash equivalents [abstract]

Short-term deposits, classified as cash equivalents 0 0

Short-term investments, classified as cash equivalents 13,776,325,000.00 18,905,550,000.00

Other banking arrangements, classified as cash equivalents 0 0

Total cash equivalents 13,776,325,000.00 18,905,550,000.00

Other cash and cash equivalents 0 0

Total cash and cash equivalents 33,061,176,000.00 35,596,117,000.00

Trade and other current receivables [abstract]

Current trade receivables 255,713,000.00 2,385,635,000.00

Current receivables due from related parties 73,691,000.00 108,052,000.00

Current prepayments [abstract]

Current advances to suppliers 0 0

Current prepaid expenses 0 0

Total current prepayments 0 0

Current receivables from taxes other than income tax 4,920,788,000.00 5,486,325,000.00

Current value added tax receivables 4,920,788,000.00 5,486,325,000.00

Current receivables from sale of properties 0 0

Current receivables from rental of properties 0 0

Other current receivables 1,676,078,000.00 2,118,710,000.00

Total trade and other current receivables 6,926,270,000.00 10,098,722,000.00

Classes of current inventories [abstract]

Current raw materials and current production supplies [abstract]

Current raw materials 0 0

Current production supplies 0 0

Total current raw materials and current production supplies 0 0

Current merchandise 60,701,754,000.00 59,463,255,000.00

Current work in progress 0 0

Current finished goods 0 0

Current spare parts 0 0

Property intended for sale in ordinary course of business 0 0

Other current inventories 0 0

Total current inventories 60,701,754,000.00 59,463,255,000.00

Non-current assets or disposal groups classified as held for sale or as held for distribution to owners [abstract]

Non-current assets or disposal groups classified as held for sale 0 0

Non-current assets or disposal groups classified as held for distribution to owners 0 0

Total non-current assets or disposal groups classified as held for sale or as held for distribution to owners 0 0

Trade and other non-current receivables [abstract]

Non-current trade receivables 0 0

Non-current receivables due from related parties 0 0

Non-current prepayments 0 0

Non-current lease prepayments 0 0

Non-current receivables from taxes other than income tax 0 0

Non-current value added tax receivables 0 0



41 of 84


Quarter

2018-09-30

Close Previous

Exercise

2017-12-31

Non-current receivables from sale of properties 0 0

Non-current receivables from rental of properties 0 0

Revenue for billing 0 0

Other non-current receivables 0 0

Total trade and other non-current receivables 0 0

Investments in subsidiaries, joint ventures and associates [abstract]

Investments in subsidiaries 0 0

Investments in joint ventures 0 0

Investments in associates 0 0

Total investments in subsidiaries, joint ventures and associates 0 0

Property, plant and equipment [abstract]

Land and buildings [abstract]

Land 29,922,531,000.00 29,931,705,000.00

Buildings 56,894,213,000.00 58,329,268,000.00

Total land and buildings 86,816,744,000.00 88,260,973,000.00

Machinery 0 0

Vehicles [abstract]

Ships 0 0

Aircraft 0 0

Motor vehicles 510,398,000.00 511,735,000.00

Total vehicles 510,398,000.00 511,735,000.00

Fixtures and fittings 0 0

Office equipment 27,944,500,000.00 28,958,802,000.00

Tangible exploration and evaluation assets 0 0

Mining assets 0 0

Oil and gas assets 0 0

Construction in progress 6,903,044,000.00 4,521,242,000.00

Construction prepayments 0 0

Other property, plant and equipment 12,800,960,000.00 12,709,974,000.00

Total property, plant and equipment 134,975,646,000.00 134,962,726,000.00

Investment property [abstract]

Investment property completed 4,913,317,000.00 5,118,707,000.00

Investment property under construction or development 0 0

Investment property prepayments 0 0

Total investment property 4,913,317,000.00 5,118,707,000.00

Intangible assets and goodwill [abstract]

Intangible assets other than goodwill [abstract]

Brand names 788,300,000.00 853,138,000.00

Intangible exploration and evaluation assets 0 0

Mastheads and publishing titles 0 0

Computer software 1,064,241,000.00 1,093,451,000.00

Licences and franchises 0 0

Copyrights, patents and other industrial property rights, service and operating rights 0 0

Recipes, formulae, models, designs and prototypes 0 0

Intangible assets under development 0 0

Other intangible assets 29,885,000.00 48,243,000.00

Total intangible assets other than goodwill 1,882,426,000.00 1,994,832,000.00

Goodwill 35,592,840,000.00 37,373,196,000.00

Total intangible assets and goodwill 37,475,266,000.00 39,368,028,000.00

Trade and other current payables [abstract]

Current trade payables 72,746,385,000.00 80,099,063,000.00

Current payables to related parties 1,014,985,000.00 716,406,000.00

Accruals and deferred income classified as current [abstract]



42 of 84


Quarter

2018-09-30

Close Previous

Exercise

2017-12-31

Deferred income classified as current 1,375,376,000.00 1,382,740,000.00

Rent deferred income classified as current 336,329,000.00 338,861,000.00

Accruals classified as current 8,922,508,000.00 7,594,870,000.00

Short-term employee benefits accruals 0 0

Total accruals and deferred income classified as current 10,297,884,000.00 8,977,610,000.00

Current payables on social security and taxes other than income tax 569,408,000.00 1,546,638,000.00

Current value added tax payables 569,408,000.00 1,546,638,000.00

Current retention payables 74,579,000.00 93,099,000.00

Other current payables 22,032,459,000.00 10,541,491,000.00

Total trade and other current payables 106,735,700,000.00 101,974,307,000.00

Other current financial liabilities [abstract]

Bank loans current 0 0

Stock market loans current 0 0

Other current iabilities at cost 295,830,000.00 381,204,000.00

Other current liabilities no cost 0 0

Other current financial liabilities 22,012,000.00 68,035,000.00

Total Other current financial liabilities 317,842,000.00 449,239,000.00

Trade and other non-current payables [abstract]

Non-current trade payables 0 0

Non-current payables to related parties 0 0

Accruals and deferred income classified as non-current [abstract]

Deferred income classified as non-current 4,963,292,000.00 5,211,739,000.00

Rent deferred income classified as non-current 4,963,292,000.00 5,211,739,000.00

Accruals classified as non-current 0 0

Total accruals and deferred income classified as non-current 4,963,292,000.00 5,211,739,000.00

Non-current payables on social security and taxes other than income tax 0 0

Non-current value added tax payables 0 0

Non-current retention payables 0 0

Other non-current payables 0 0

Total trade and other non-current payables 4,963,292,000.00 5,211,739,000.00

Other non-current financial liabilities [abstract]

Bank loans non-current 0 0

Stock market loans non-current 0 0

Other non-current liabilities at cost 14,223,675,000.00 13,726,180,000.00

Other non-current liabilities no cost 0 0

Other non-current financial liabilities 942,566,000.00 868,360,000.00

Total Other non-current financial liabilities 15,166,241,000.00 14,594,540,000.00

Other provisions [abstract]

Other non-current provisions 0 0

Other current provisions 1,522,399,000.00 1,513,403,000.00

Total other provisions 1,522,399,000.00 1,513,403,000.00

Other reserves [abstract]

Revaluation surplus 0 0

Reserve of exchange differences on translation 16,116,079,000.00 20,427,163,000.00

Reserve of cash flow hedges 0 0

Reserve of gains and losses on hedging instruments that hedge investments in equity instruments 0 0

Reserve of change in value of time value of options 0 0

Reserve of change in value of forward elements of forward contracts 0 0

Reserve of change in value of foreign currency basis spreads 0 0

Reserve of gains and losses on remeasuring available-for-sale financial assets 0 0

Reserve of share-based payments 0 0

Reserve of remeasurements of defined benefit plans (415,965,000.00) (415,965,000.00)

Amount recognised in other comprehensive income and accumulated in equity relating to non-current assets or disposal 0 0



43 of 84


Quarter

2018-09-30

Close Previous

Exercise

2017-12-31


Reserve of gains and losses from investments in equity instruments 0 0

Reserve of change in fair value of financial liability attributable to change in credit risk of liability 0 0

Reserve for catastrophe 0 0

Reserve for equalisation 0 0

Reserve of discretionary participation features 0 0

Reserve of equity component of convertible instruments 0 0

Capital redemption reserve 0 0

Merger reserve 0 0

Statutory reserve 0 0

Other comprehensive income 0 0

Total other reserves 15,700,114,000.00 20,011,198,000.00

Net assets (liabilities) [abstract]

Assets 292,121,793,000.00 295,255,664,000.00

Liabilities 139,382,117,000.00 135,721,711,000.00

Net assets (liabilities) 152,739,676,000.00 159,533,953,000.00

Net current assets (liabilities) [abstract]

Current assets 104,341,348,000.00 106,876,206,000.00

Current liabilities 109,824,266,000.00 107,827,547,000.00

Net current assets (liabilities) (5,482,918,000.00) (951,341,000.00)



44 of 84

[800200] Notes - Analysis of income and expense

Concept Accumulated

Current Year

2018-01-01 - 2018-

09-30

Accumulated

Previous Year

2017-01-01 - 2017-

09-30

Quarter Current

Year

2018-07-01 - 2018-

09-30

Quarter Previous

Year

2017-07-01 - 2017-

09-30

Analysis of income and expense [abstract]

Revenue [abstract]

Revenue from rendering of services 0 0 0 0

Revenue from sale of goods 436,063,942,000.00 402,027,838,000.00 146,635,003,000.00 135,653,654,000.00

Interest income 0 0 0 0

Royalty income 0 0 0 0

Dividend income 0 0 0 0

Rental income 1,490,257,000.00 1,294,518,000.00 502,922,000.00 572,314,000.00

Revenue from construction contracts 0 0 0 0

Other revenue 1,934,569,000.00 1,887,236,000.00 629,916,000.00 671,756,000.00

Total revenue 439,488,768,000.00 405,209,592,000.00 147,767,841,000.00 136,897,724,000.00

Finance income [abstract]

Interest income 921,911,000.00 734,907,000.00 334,192,000.00 257,826,000.00

Net gain on foreign exchange 647,349,000.00 129,582,000.00 129,570,000.00 34,587,000.00

Gains on change in fair value of derivatives 135,639,000.00 76,923,000.00 57,845,000.00 27,355,000.00

Gain on change in fair value of financial instruments 0 0 0 0

Other finance income 0 21,776,000.00 0 0

Total finance income 1,704,899,000.00 963,188,000.00 521,607,000.00 319,768,000.00

Finance costs [abstract]

Interest expense 0 0 0 0

Net loss on foreign exchange 453,621,000.00 116,958,000.00 371,145,000.00 36,410,000.00

Losses on change in fair value of derivatives 207,808,000.00 68,784,000.00 113,523,000.00 0

Loss on change in fair value of financial instruments 0 0 0 0

Other finance cost 1,247,638,000.00 1,203,734,000.00 403,055,000.00 385,761,000.00

Total finance costs 1,909,067,000.00 1,389,476,000.00 887,723,000.00 422,171,000.00

Tax income (expense)

Current tax 8,302,323,000.00 8,920,671,000.00 2,771,495,000.00 2,996,798,000.00

Deferred tax 74,795,000.00 (1,134,449,000.00) (8,156,000.00) (632,048,000.00)

Total tax income (expense) 8,377,118,000.00 7,786,222,000.00 2,763,339,000.00 2,364,750,000.00



45 of 84

[800500] Notes - List of notes

Disclosure of notes and other explanatory information [text block]

A. Interim consolidated f inancial statements

The accompanying unaudited consolidated f inancial statements have been prepared in

conformity with International Financial Report ing Standards (IFRS) i ssued by the International

Accounting Standards Board (IASB), the interpretations issued by the International Financial

Report ing Interpretation Committee (IFRIC), including those issued previously by the former

Standard Interpretations Committee (SIC).

B. New accounting pronouncements

I . Standards that wil l be effective in 2018

- IFRS 9, Financial instruments. Outl ines the new requirements for classif ication,

measurement, impairment and hedge accounting. The Company has evaluated this

standard and concluded it wi l l not have a material effect in the consolidated

f inancial statements.

- IFRS 15, Revenue from contracts with customers. According to this standard, an entity

recognizes the revenue when the obl igation is satisf ied, that is, when the "control" of

the goods or services underlying the performance obligation has been t ransferred to

the customer. L ikewise, guides have been included to deal with specific situations. In

addit ion, the number of disclosures required is increased. The Company concluded

that the appl ication of this standard wil l not have a material effect in the

consolidated financial statements. The adoption of this standard was made on

January 1, 2018 under the modified retrospective method.

-Amendments to IFRS 2 - Classi f ication and measurement of share-based payments - The

amendments contain clari f ications and modifications related to accounting for

transactions share-based payment paid in cash; the classif ication of this k ind of

transactions with net sett lement characterist ics; and accounting for changes in

share-based payments t ransactions sett led in cash and payable through equity

inst ruments.

I I . Standards that wil l be effective in 2019

- IFRS 16, Leases. In 2016, the IASB issued IFRS-16 "Leases", which establishes the

principles for the recognit ion, measurement, presentation and disclosure of leases.

This rule enters into force on January 1, 2019. WALMEX has decided to adopt IFRS

16, using the modified ret rospective approach and, therefore, the comparative

information wil l not be re-issued and wil l continue under IAS 17. Addit ionally, the

Company wil l use the exemptions proposed by the standard in the lease



46 of 84

agreements whose lease terms end within 12 months a from the in it ial appl ication

date and lease contracts for which the underlying asset is of low value.

The Company's management continues to evaluate the impact of the adoption of

this standard in the consol idated financial statements.

- IFRIC 23, Uncertainty over income tax t reatments. This interpretation seeks to clari fy

the application of the recognit ion and measurement criteria established in IAS 12 -

" Income taxes", when there are uncertain tax posit ions. The uncertain tax posit ions

are those tax posi t ions where there is uncertainty about whether the competent

tax authority wil l accept the tax posit ion under the current tax laws.

The interpretation is effective for annual report ing periods beginning on or after

January 1, 2019. WALMEX wi l l apply the interpretation from its effective date. Since

WALMEX operates in a complex mult inational f i scal environment, the application of

the Interpretation may affect it s consol idated f inancial statements. In addit ion,

WALMEX may require the establishment of processes and procedures to obtain the

information that is necessary to apply the interpretation in a t imely manner.

The Company's Management is in the process of quanti fying the potential impacts

on the consolidated f inancial statements by the adoption of this in terpretation.

C. Legal proceedings

WALMEX i s a subsidiary of Walmart , Inc. (“WMT”). WMT owns approximately 70% of the

shares and voting power in WALMEX and has the abil ity to designate at least a major ity of

the directors of WALMEX . The remaining share of WALMEX are publicly t raded on the

Mexican Stock Exchange and, to the best of the knowledge of WALMEX , no shareholder

other than WMT and its affi l iates owns more than 2% of the outstanding shares of

WALMEX .

Currently, the Board of Directors of WALMEX i s composed of 11 directors. The Audit

Committee and the Corporate Governance Committee of the Board of Directors are

composed exclusively of independent directors.

WMT is subject to a wide variety of laws and regulations in the United States of America

and in the countries in which it operates, including but not l imited to the U.S. Foreign

Corrupt Practices Act (the “FCPA”).

As WALMEX publ icly disclosed on Apri l 23, 2012, WMT is the subject of an invest igation

under the FCPA by the U.S. Department of Just ice and the U.S. Securit ies and Exchange

Commission fol lowing a disclosure that WMT made to those agencies in November 2011.

The Audit Committee of the Board of Directors of WMT, which is composed solely of

independent directors, i s conducting an internal invest i gation into, among other things,

al leged violations of the FCPA and other al leged cr imes or misconduct in connection

with foreign subsidiaries, including WALMEX and whether prior al legations of such



47 of 84

violations and/or misconduct were appropriately handled b y WMT. The Audit Committee

of WMT and WMT have engaged outside counsel f rom a number of law firms and other

advisors who are assist ing in the on-going invest igation of these matters. WALMEX has also

engaged outside counsel to assist in these matters.

WMT is also conducting a voluntary global review of it s policies, practices and internal

controls for FCPA compliance. WMT is engaged in strengthening its global anti -corruption

compliance programs through appropriate remedial anti -corruption measures. WALMEX is

taking part in such voluntary global review and strengthening of programs.

Furthermore, lawsuits relat ing to the matters under invest igation have been fi led by

several of WMT’s shareholders against it and against WALMEX , i t s current directors,

certain of it s former directors, certain of it s current and former officers and certain of

WALMEX’s current and former off icers.

WALMEX i s cooperating with WMT in the review of these matters and it intends to continue

ful ly cooperating in such regard.

A number of federal and local government agencies in Mexico have also init iated

invest igations of these matters. WALMEX i s cooperating with the Mexican governmental

agencies conducting these invest igations.

The Audit Committee and the Corporate Governance Committee of the Board of

Directors of WALMEX , as well as the Board of Directors of WALMEX , have been informed

about these matters and have determined, by an unanimous vote of the independent

directors only, that it i s in the best interests of WALMEX to continue to cooperate at this

t ime with WMT and the U.S. and Mexican agencies conducting these invest igations.

WALMEX could be exposed to a variety of negative consequences as a result of the

matters noted above. There could be one or more enforcement actio ns in respect of the

matters that are the subject of some or al l of the ongoing government invest igations, and

such actions, i f brought, may result in judgments, sett lements, f ines, penalt ies, injunctions,

cease and desists orders or other rel ief, criminal convictions and/or penalt ies. The

shareholder lawsuits may result in judgments against WMT and WALMEX and to current

and former directors and current and former officers of WMT and WALMEX named in those

proceedings. WALMEX cannot predict accurately at thi s t ime the outcome or impact of

the government´s invest igations, the shareholder lawsuits, the internal invest igation and

review. In addit ion, WALMEX expects to incur costs in responding to requests for

information or subpoenas seeking documents, test imony and other information in

connection with the government invest igations, and it cannot predict at this t ime the

ult imate amount of al l such costs. These matters may require the involvement of certain

members of WALMEX’s senior management that could impinge on the t ime they have

available to devote to other matters relat ing to the business. WALMEX may also see

ongoing media and governmental interest in these matters that could impact the

perception among certain audiences of its role as a corporate cit izen.



48 of 84

WALMEX , i t s Board of Directors and its Audit Committee and Corporate Governance

Committee wi l l at al l t imes ensure compliance with applicable Mexican law and ensure

that they create value to WALMEX , acting di l igently and adopting reasoned decis ions,

without favoring any shareholder or group of shareholders.

Although WALMEX does not presently believe, based on the information currently

available and the advice of its external Mexican counsel , that these matters wil l have a

material adverse effect on its business, given the inherent uncertaint ies in such situations,

WALMEX can provide no assurance that these matters wil l not be material to its business

in the future.

D. Relevant event

Cornershop

On September 13th, 2018, the Company announced that it s majority sha reholder,

Walmart Inc., reached a definit ive agreement to acquire Cornershop, Inc.

Simultaneously with Walmart Inc. expects to sel l to WALMEX the Mexican Cornershop

business. The transaction is subject to the approvals of regulatory authorit ies.

GESSA

As of July 19th, 2018, the Company reached an agreement with Grupo Empresarial de

Supermercados S.A. (GESSA) to acquire it s Per imercados, Supercompro and Saretto stores

located in Costa Rica. The transaction is subject to the approval of regulatory authorit ies

and other condit ions.

WALMEX wi l l acquire from GESSA 52 stores to strengthen the presence of the Company in

the region by adding 39,000 m2 of sales f loor.

Disclosure of accounting judgements and estimates [text block]

The preparation of consol idated financial statements requires the use of accounting

est imates and assumptions based on histor ical experience and other factors and therefore

the actual results may differ from est imates. The est imates and assumptions are rev iewed

periodically and are as fol lows:

-Account ing est imates for inventory shrinkage; impairment of property and equipment,

investment propert ies and goodwil l .



49 of 84

-Assumptions used l ike the discount rates to determine finance leases; useful l ives for

property and equipment and intangible assets with definite -l ives; labor obligation present

value factors determined through actuarial valuations using economic assumptions such

discount rate, inflat ion rate, salary increase rate and minimum salary increase rate;

determination of the recoverable value involves signif icant judgments such as future cash

f lows, the discount rate and the interest rate; and fair value of derivative financial

inst ruments.

Disclosure of authorisation of financial statements [text block]

The consolidated financial statements and accompanying notes for the nine -month period

ended September 30, 2018 and 2017 were approved by the Company´s management and

Board of Directors on October 18, 2018. The subsequent events are considered unti l this

date.

Disclosure of basis of consolidation [text block]

The accompanying consolidated financial statements include the financial statements of

WALMEX and those of it s Mexican and foreign subsidiaries in which has control , which are

grouped as described in “Disclosure of subsidiar ies”, and prepared considering the same

accounting period.

Subsidiar ies are consolidated from the date on which control i s assumed by WALMEX , and

unti l such control is lost . The results of subsidiaries ac quired or disposed of dur ing the year

are included in the consolidated statements of comprehensive income from the date of

acquis it ion or up to the date of sale, as appropriate.

Transactions and related party balances are el iminated in consolidation.

Disclosure of basis of preparation of financial statements [text block]



50 of 84

The consol idated statements of comprehensive income were prepared based on the

function of it s components, which al lows disclosure of cost of sales separately from other

costs, operating and administrat ive expenses, both expenses are recognized in the

statement of income at the t ime they are incurred.

Prior to the consolidation process, the f inancial statement s of the Company’s foreign

subsidiaries are prepared under IFRS and t ranslated to Mexican pesos using the average

exchange rate for the consolidated statement of comprehensive income and the year -end

exchange rate for the consolidated statement of f inancia l posit ion.

The cumulative t ranslat ion adjustment is the effect of t ranslat ing the f inancial statements of

the Company’s foreign subsidiaries into Mexican pesos. This effect is recognized in equity.

The statement of cash flows is prepared using the indirec t method.

In the notes to consolidated financial statements the amounts are expressed in thousands of

Mexican pesos, except where otherwise indicated.

Disclosure of cash and cash equivalents [text block]

The balances for this concept are presented in the Cash and Cash Equivalents section in

[800100] Notes - Subclassi f ications of assets, l iabi l i t ies and equit ies.

Disclosure of cash flow statement [text block]

In the item “other inf lows (outflows) of cash corresponding to in cash flows from (used in)

invest ing activit ies” is presented the input and output of resources related to employee

stock option plan fund-net of $817,731 ($416,179 in 2017).



51 of 84

Disclosure of commitments [text block]

a. Commitments

At September 30, 2018, the Company has entered into agreements with suppl iers for the

acquis it ion of inventor ies, property and equipment, maintenance services, as well as

renewable energy supply services which are shown below:

Year Amount

October 2018 – September 2019 $ 29,776,934





October 2023 and thereafther $ 13,735,270

The Company has lease commitments as explained in section “Disclosure of leases”.

b. Cont ingencies

The company is subject to several lawsuits and contingencies for legal proceedings

(labor, civi l , commercial and administrat ive proceedings) and tax proceedings. The

Company has recognized a provision of $1,522,399 as of September 30, 2018 ($1,513,403

in December 31, 2017), which is presented in other current provisions. In the opinion of

the Company, none of the legal proceedings are signif icant either individually or as a

whole.

c. Other contingencies

Tax authorit ies have conducted a review of the sale of the restaurant division, Vips to

Alsea and issued a l iquidation document, in which they claim the pa yment of al leged

differences in the payment of taxes, of $3,665 mi l l ion, including taxes, f ines, surcharges

and inflat ion effects.

The Company is not creating a provision in this regard, since the external attorneys and

the Company's management consider that they have al l the elements to support the

validity of the operations carried out and prevai l , either by the administ rat ive or judicial

way.

We fi led an appeal for revocation before the tax authorit ies, in order to make an

adequate assessment of al l arguments that they have, before going to the competent

courts.



52 of 84

Disclosure of deferred income [text block]

The Company has deferred income classi f ied as current, for layaway merchandise, unearned

membership fees and rent. This information is presented in accruals and deferred income

classi f ied as current section in [800100] Notes - Subclassi f ications of assets, l iabi l i t ies

and equit ies.

Disclosure of deferred taxes [text block]

The balances for this concept are presented in Non -current assets as Deferred Tax Assets

item and in Non-current provis ions as deferred tax l iabil i t ies item in [210000] Statement of

f inancial posit ion, current/non-current.

Disclosure of depreciation and amortisation expense [text block]

The balances for this concept are presented in [700002] Informative data about the income

statement.

Disclosure of derivative financial instruments [text block]

Such information is presented in [800007] Annex – Financial derivate inst ruments.



53 of 84

Disclosure of dividends [text block]

In an ordinary meeting held on March 22, 2018, the shareholders a dopted the fol lowing

resolut ion:

The shareholders declared an ordinary cash dividend of $0.76 pesos per share, paid in four

instal lments of $0.19 pesos each on Apri l 26, 2018; August 30, 2018; November 28, 2018; and

February 27, 2019. The shareholders also declared an extraordinary cash dividend of $0.89

pesos per share in four instal lments: one of $0.20 pesos on Apri l 26, 2018, $0.10 pesos on

August 30, 2018, $0.45 pesos on November 28, 2018 and $0.14 pesos on February 27, 2019.

Once the dividend declared i s approved by Shareholders’ meeting, the Company reduces

retained earnings and recognizes the accounts payable in the consolidated statement of

f inancial posit ion.

Disclosure of earnings per share [text block]

This information is presented in basic earnings per share and di luted earnings per share items

in [310000] Statement of comprehensive income, profit or loss, by function of expense.

Disclosure of effect of changes in foreign exchange rates [text block]

As of September 30, 2018, the exchange rates used to translate the foreign currency

denominated assets and l iabil i t ies into mexican pesos, are as fol lows:

Country Currency

Close exchange

rate with respect

to peso

Costa Rica Colón C 31.292710

Guatemala Quetzal Q 0.411514

Honduras Lempira L 1.285326



54 of 84

Nicaragua Córdoba C$ 1.705810

El Salvador US Dólar US$ 0.053429

As of September 30, 2018, the exchange rate used to translate assets and l iabil i t ies

denominated in USD was $18.72.

Disclosure of employee benefits [text block]

As of September 30, 2018 and December 31, 2017, an analysis of the Company’s assets and

l iabi l i t ies for seniority premiums and ret irement benefits i s as fol lows:

Seniority premiums Retirement benefits

September 30,

2018

December 31,

2017

September 30,

2018

December 31,

2017

Defined benefit obligations $ 1,091,150 $ 1,020,340 $ 1,403,330 $ 1,728,121

Plan Assets ( 698,036) ( 756,598) - -

Net projected liability $ 393,114 $ 263,742 $ 1,403,330 $ 1,728,121

Valuation techniques used by the Company to determine and disclose the fai r value of it s

f inancial inst ruments is based on a level 1 hierarchy (See Descript ion of accounting pol icy

for fai r value measurements).

As of September 30, 2018, the plan assets have been invested through the t rust in money

market inst ruments.

Disclosure of entity's operating segments [text block]

Segment f inancial information is prepared based on the information used by the Company’s

senior management to make business decis ions.

The Company analyzes and manage it operations through the fol lowing geographical

segments and by format:



55 of 84

Nine-months ended September 30, 2018

Total

revenues

Operating

income

Financial (expenses)

– net

Income

before

taxes on

profits

Mexico

$ 357,806,577 $ 28,607,155 $ ( 166,880) $ 28,440,275

Central

America

81,682,191 4,964,914 ( 37,288) 4,927,626

Consolidated

$ 439,488,768 $ 33,572,069 $ ( 204,168) $ 33,367,901

Of the total net sales of Walmart Mexico, approximately $4.19 bi l l ion pesos relates to e -

Commerce for the nine months ended September 30, 2018.

Nine-months ended September 30, 2017

Total

revenues

Operating

income

Financial

(expenses)

– net

Income

before

taxes on

profits

Mexico

$ 328,325,489 $ 25,470,520 $ ( 399,756) $ 25,070,764

Central America

76,884,103 4,552,868 ( 26,532) 4,526,336

Consolidated

$ 405,209,592 $ 30,023,388 $ ( 426,288) $ 29,597,100

Disclosure of expenses by nature [text block]

Cost of sales and general expenses are presented in the consolidated statement of

comprehensive income and mainly include the purchase of merchandise, personnel

expenses, depreciation and amort ization, rent, advert ising, maintenance, ut i l i t ies, royalt ies,

and technical assistance.

Disclosure of fair value measurement [text block]

See Descript ion of accounting policy for fai r value measurements in [800600] Notes - L ist of

accounting policies.



56 of 84

Disclosure of finance cost [text block]

Other f inance cost item includes interest on finance leases and other minor expenses; the

balances for this concept are presented in the finance costs section in [800200] Notes –

Analysis of income and expense.

Disclosure of finance income [text block]

The balances for this concept are presented in Finance Income section in [800200] Notes –

Analysis of income and expense.

Disclosure of financial instruments at fair value through profit or loss [text block]

Such information is presented in [800007] Annex – Financial Derivate inst ruments.

Disclosure of financial risk management [text block]

a. General r i sk factors:

The Company is exposed to the effects of future events that could affect the purchasing

power and/or buying habits of it s population. These events may be economic, polit ical or

social in nature and some of the most important are described below:



57 of 84

I . Changes in exchange rates. Exchange rate f luctuations tend to put upward pressure

on inflat ion and reduce the population’s purchasing power, which could ult imately

adversely the affect Company’s sales, in part icular , due to the purchase of imported

goods.

I I . Competit ion. The retai l sector has become very competit ive in recent years, which has

led to the need for al l the players in the market to constantly look for ways to set

themselves apart f rom the competit ion. This puts the Company’s market share at

r i sk. Other factors affecting the Company’s market share could be the business

expansion of it s competitors and the possible entrance of new competitors into the

market.

I I I . Inf lat ion. A s ignif icant increase in inflat ion rat es could have a direct effect on the

purchasing power of the Company’s customers and the demand for its products and

services, as wel l as employment and salaries.

IV. Changes in government regulations. The Company is exposed to the changes in

different laws and regulations, which, after becoming effective, they could affect the

Company’s operating results, such as an impact on sales, expenses for payrol l indirect

taxes and changes in applicable rates. Currently, the level of scrut iny and discretion

by the tax authorit ies has greatly increased. Mexican courts have changed their

posit ion favoring those authorit ies ignoring violations of form and procedure.

b. Financial r i sk factor:

The Company’s activit ies are exposed to various f inancial r i sks such as market r i sk,

exchange rate r i sk and interest rate r i sk. The Company’s r i sk management plan seek to

minimize the potential negative effects through of these risks.

Exchange rate r i sk :

The Company operates with foreign companies and therefore is exposed to the r isk of

exchange rate operations with foreign currencies, part icularly the US dollar.

At September 30, 2018, the exchange rate used to translate assets and l iabil i t ies

denominated in US dollars was $18.72 per dollar ($19.65 in December 31, 2017).

Considering the net monetary posit ion in dollars at September 30, 2018, whether an

increase or decrease in the exchange rate of the US dollar against the Mexican peso of

5% arose, a favorable or unfavorable effect would be taken into the financial income

(expenses) of the Company of $52,442.

The Company has entered into Fx -forward contracts of foreign currency in order to

protect itsel f f rom exposure to variabil ity in the exchange rate for the payment of

l iabi l i t ies in Mexico related to the purchase of imported goods agreed in US dollars. More

details of those operations are described in [800007] Annex – Financial Derivate

Instruments.



58 of 84

The valuation techniques used by the Company to determin e and disclose the fair value

of it s f inancial instruments, are based on the fai r value hierarchy level 2 (See Descript ion

of accounting policy for fai r value measurements).

Interest rate r i sk :

The Company has temporary investments which generate f inancial income. By reducing

the interest rate the financial income of the Company also decreases. The interest rate of

these investments f luctuated during the year between 4.2% and 8.0%. As of September

30, 2018 the interest income amounted to $ 921,911 ($734,907 in 2017).

Considering the highly l iquid instruments as of September 30, 2018, whether an increase

or decrease in the interest rate of 50 pb, favorable or unfavorable effect would have on

the interest income of the Company of $55,843.

Disclosure of general information about financial statements [text block]

The accompanying unaudited consolidated interim financial statements have been

prepared in accordance with the International Accounting Standard 34 Interim Financial

Report ing. These financial statements do not include al l information and disclosures requi red

in the annual f inancial statements, and these financial statements should be read in

conjunction with the consolidated financial statements audited as of December 31, 2017

and 2016.

Disclosure of going concern [text block]

WALMEX has sufficient resources to continue operating as a going concern. The

accompanying consolidated financial statements have been prepared on a going -concern

basis and on a histor ical -cost basis, except for f inancial assets and l iabil i t ies, derivative

f inancial instruments and assets held for sale, which are fai r valued as of the end of every

period.



59 of 84

Disclosure of impairment of assets [text block]

The balances for this concept are presented in Adjustments to reconcile profit (loss) section

in [520000] Statement of Cash Flows, indirect method.

Disclosure of income tax [text block]

WALMEX as an integrating entity and its integrated subsidiaries in Mexico, determine and

pay its income tax under the optional integration regime for groups of entit ies. Also, the tax

provision includes the tax income of subsidiaries located abroad, which is det ermined in

accordance with applicable tax laws of each country.

Income taxes recorded on the income statement are presented in tax income section in

[800200] Notes – Analysis of income and expense.

As of September 30, 2018 and 2017 , the Company’s effective tax rate is 25.1% and 26.3%,

respectively. The difference between the statutory tax rate and Company’s effective tax

rate is due to inflat ionary effects and other permanent items.

Income tax legal rates appl icable to each country are shown below:

Rate

Mexico 30%

Costa Rica 30%

Guatemala 25%

Honduras 30%

Nicaragua 30%

El Salvador 30%

Disclosure of information about employees [text block]



60 of 84

Such information is presented in the secction [700000] Informative data about the Statement

of f inancial posit ion.

Disclosure of information about key management personnel [text block]

For the nine-month period ended September 30, 2018 and 2017, the benefits of the

Company’s pr incipal off icers amounted to $1,056,627 and $1,031,379 respectively.

Disclosure of intangible assets and goodwill [text block]

An analysis of intangible assets i s as fol lows:

September 30,

2018

December 31,

2017

Balance at the beginning of the year $ 39,368,028 $ 41,339,532

Additions 180,880 482,220

Disposals ( 3,982) 518

Amortization ( 233,158) ( 335,701)

Transfers 20,425 7,967

Translation effect ( 1,856,927) ( 2,126,508)

Balance at the end of the period $ 37,475,266 $ 39,368,028

Disclosure of interest expense [text block]

Other f inance costs include interest by finance lease; such information is presented in

[800200] Notes - Analysis of income and expense.



61 of 84

Disclosure of interest income [text block]

Those balances are presented in [800200] Notes - Analysis of income and expense.

Disclosure of inventories [text block]

Inventories consist of the fol lowing:

September 30,

2018

December 31,

2017

Merchandise for sale $ 56,511,515 $ 56,640,916

Agro-industrial development 898,537 909,313

57,410,052 57,550,229

Merchandise in transit 3,291,702 1,913,026

$ 60,701,754 $ 59,463,255

Disclosure of investment property [text block]

An analysis of investment propert ies i s as fol lows:

September

30, 2018

December

31, 2017

Balance at the beginning of the

period

$ 5,118,707

$ 2,315,193

Disposals - ( 65,578)

Depreciation ( 177,257) ( 215,274)

Transfers ( 28,133) 3,084,366




62 of 84

The fair value of investment propert ies as of December 31, 2017 is $8,325,199. This fair value

has been determined by applying an appropriate rental approach to the rental earned by

the investment property and is updated annual ly. A valuation has not been performed by an

independent expert .

Disclosure of issued capital [text block]

Capital stock is represented by shares of one series, nominatives, common or ordinary, f reely

subscribed and registered shares with no par value. The Company’s capital stock must be

represented by a minimum of three bi l l ion shares and a maximum of one hundred bi l l ion

shares.

As of September 30, 2018, an analysis of paid - in stock and the number of shares represent ing

it i s as fol lows:

Valid

Coupon

Numbers of shares Capital Stock

Fixed Portion

Variable

Portion

Free

Subscription Fixed Variable Total

78 2,295,809,324 15,165,593,307 17,461,402,631 $5,591,362 $36,935,265 $42,526,627

Disclosure of leases [text block]

As of September 30, 2018 and December 31, 2017, the other long -term l iabi l i t ies l ine includes

the Company’s obl igations that are due over one year and that are related to its f inance

leases.

The Company has entered into property lease agreements with third part ies with compulsory

terms of 1 to 15 years.

The Company has also entered into finance leases for the rental of residual water treatment

plants used to meet environmental protection standards. The terms of these agreements are

7 and 10 years.

Future rental payments are as fol lows:

Finance leases

(minimum payments)



63 of 84

Year

Operating

leases

(compulsory

term)

Present

Value

Future

value

October 2018 – September 2019 $ 1,346,396 $ 295,831 $ 1,850,366




October 2022 – September 2023 $ 902,244 $ 350,109 $ 1,767,640

October 2023 and thereafter $ 5,512,575 $ 12,853,554 $ 30,110,323

As of September 30, 2018 and December 31, 2017, the l iabil i ty derived from the use of the

straight- l ine method under operating leases was $964,578 and $927,680, respectively, f rom

which $22,012 and $59,320 are presented in the current l iabi l i t ies l ine.

Total rent under operating leases charged to the income statement during the nine months

period ended September 30 , 2018 and 2017 was $5,040,634 and $4,592,103, respectively, and

it i s included in general expenses l ine in the statement of consol idated of comprehensive

income.

Disclosure of non-current assets held for sale and discontinued operations [text

block]

The summary of discontinued operations reported in the consolidated statements of

comprehensive income that includes the results of operations of the entit ies that comprised

Suburbia stores sold Liverpool in Apri l 4, 2017 for the nine months period ended September

30, 2017, are as fol lows:

Amount

Total revenue $ 12,688,568

Costs and expenses ( 2,658,436)

Income tax ( 2,555,514)

Net income from discontinued

operations* $ 7,474,618

* Net income discontinued operations includes the profit related to the sale of Suburbia of

$7,225 bi l l ion pesos, which is subject to the corresponding closing adjustment.



64 of 84

The net cash flows of Suburbia for the nine months period ended September 30, 2017 were of

$(666,813).

Disclosure of other current assets [text block]

This item includes prepaid advert is ing, property tax and insurance, principally; such

balances are presented in [210000] Statement of f inancial posit ion, current/non current.

Disclosure of other current liabilities [text block]

This item mainly includes short term obligations from finance leases contracts and the

straight- l ine deferred rent related to operating leases; such information is presented in other

current f inancial l iabi l i t ies section in [800100] Notes - Subclassi f ications of assets, l iabi l i t ies

and equit ies.

Disclosure of other non-current assets [text block]

This item many includes guarantee deposits and long -term investments; such information is

presented in other non-current f inancial assets item in [210000] Statement of f inancial

posit ion, current / non-current.

Disclosure of other non-current liabilities [text block]



65 of 84

This item includes long-term finance lease obligations and the straight - l ine deferred rent

related to operating leases; such information is presented in the other non -current f inancial

l iabi l i t ies section in [800100] Notes - Subclassi f ications of assets, l iabi l i t ies and equit ies.

Disclosure of prepayments and other assets [text block]

Advanced payments are recorded at cost and recognized as current assets in the

consolidated statement of f inancial posit ion as from the date the prepayments are made.

On the goods or services related to the advance payment are received, they should be

charged to the income statement or capital ized in the corresponding asset l ine where there

is certainty that the acquired goods wil l ge nerate future economic benefits.

Disclosure of property, plant and equipment [text block]

Propert ies, plant and equipment are as fol lows:

September 30,

2018

December 31,

2017

Owned:


Additions 10,583,742 16,943,415

Disposals ( 219,537) ( 996,914)

Depreciation ( 8,282,307) ( 10,510,223)

Transfers 40,429 ( 3,211,110)

Translation effect ( 2,200,393) ( 1,662,722)


Leased:


Additions 1,147,946 1,200,618

Disposals ( 400,754) ( 164,967)

Depreciation ( 518,514) ( 697,522)

Transfers ( 37,437) 118,867

Translation effect ( 100,255) ( 91,126)



66 of 84


Disclosure of related party [text block]

a)Related party balances

The consolidated statement of f inancial posit ion includes the fol lowing balances with

related part ies:

September 30,

2018

December 31,

2017

Accounts receivable:

Walmart Inc. (holding company) $ 73,691 $ 108,052

Accounts payable:

C.M.A. - U.S.A. L.L.C. (affiliate) $ 697,707 $ 712,442

Swiss Asia Minor GMBH (affiliate)

(before Global George, LTD.) 79,662 207,225

$ 777,369 $ 919,667

Other accounts payable:

Walmart Inc. (holding company) $ 1,014,985 $ 716,406

Balances with related part ies consist of current accounts that bear no interest , payable in

cash and without guarantees.

b)Related party t ransactions

WALMEX has entered into the fol lowing open-ended agreements with related part ies:

- Imports of merchandise for sale, interest -free and payable monthly.

-Purchase commissions with Swiss Asia Minor GMBH (previously Global George, LTD.)that

are payable on a recurring basis.

-Technical assistance and services with Walmart Inc. that are payable monthly.

-Royalt ies for trademark use with Walmart Inc., payable quarter ly based on a percentage

of sales of the retai l businesses.



67 of 84

The terms of the re lated party t ransactions are consistent with those of an arm’s length

transaction.

The Company had the fol lowing t ransactions with related part ies during the nine -months

period ended September 30:

2018 2017

Purchases and commissions by

import of goods for sale:

C.M.A. - U.S.A. L.L.C. (affiliate) $ 3,388,686 $ 3,184,324

Swiss Asia Minor GMBH (affiliate)

(before Global George, LTD.) 145,185 178,938

$ 3,533,871 $ 3,363,262

Costs and expenses related to

technical assistance, services and

royalties:

Walmart Inc. (holding company) $ 3,105,451 $ 2,386,672

Disclosure of reserves within equity [text block]

As of September 30, 2018, the legal reserve of the Company amounts to $9,104,745 that

represents 20% of the equity, which have reached the maximum level according to the

Mexican Corporations Act.

Disclosure of revenue [text block]

As of September 30, 2018 and 2017 , the revenue l ine item includes revenues from sales of

goods of $436,063,942 and $402,027,838, respectively.

Addit ional ly, other revenues related to the Company’s primary business activit ies i s as

fol lows:

2018 2017

Rental $ 1,179,654 $ 1,100,461



68 of 84

Memberships 1,490,257 1,294,518

Sale of waste 425,337 484,029

Bank bonuses 299,414 246,817

Parking 30,164 55,929

$ 3,424,826 $ 3,181,754

During the nine months period ended September 30, 2018, rental income includes $429,582

($336,245 in 2017) of investment propert ies.

Disclosure of share capital, reserves and other equity interest [text block]

a)In an ordinary meet ing held on March 22, 2018, the shareholders approved a cap of

$5,000,000 on the amount the Company would use in 2018 to repurchase its own shares.

As of September 30, 2018, there is no own shares in Treasury.

b)Distr ibuted earnings and capital reductions that exceed the net taxed profits account

(CUFIN per its acronym in Spanish) and restated contributed capital account (CUCA per

it s acronym in Spanish) balances are subject to income tax, in conformity with Art icles 10

and 78 of the Mexican Income Tax Law.

As of September 30, 2018, the total balance of the tax accounts related to e quity is

$79,155,721 ($71,829,298 in December 31, 2017), in conformity of the current tax laws

effective January 1, 2014.

Disclosure of share-based payment arrangements [text block]

As of September 30, 2018, the employee stock option plan fund consists of 165,276,012

WALMEX shares, which have been placed in a trust created for the plan.

The total compensation cost charged to operating results in the nine months period ended

September 30, 2018 and 2017 was $232,935 and $203,637, respectively, which represented no

cash outflow for the Company.



69 of 84

As of September 30, 2018, the granted and exercisable share under the stock option plan

fund is 165,276,012 and 63,810,931, respectively.

In the share premium l ine in the statement of f inancial posit ion and statement of changes

equity, include the premium on sale of shares and employee stock option plan fund,

because there is not a row for such purpose.

Breakdown is as fol lows:

September 30,

2018

December 31,

2017

Employee stock option plan fund $ ( 5,276,247) $ ( 5,918,442)

Premium on sale of shares 3,967,529 3,559,058

$ ( 1,308,718) $ ( 2,359,384)

The premium on sale of shares represents the difference between the cost of shares and the

value at which such shares were sold, net of the corresponding income tax.

Disclosure of subsidiaries [text block]

WALMEX holds equity interest in the fol lowing groups of companies in Mexico and Central

America, as are shown below:

Group Line of Business

Nueva Walmart

Operation of 1,866 Bodega Aurrerá discount stores, 273

Walmart hypermarkets, 163 Sam’s Club membership self-

service wholesale stores, 94 Superama supermarkets and 10

Medimart pharmacies.

Import companies

Import goods for sale.

Real estate

Property developments and management of real estate

companies.

Service companies

Rendering of professional services to Group companies and

non-for-profit services to the community at large, and

shareholding.

Walmart Central Operation of 534 discount stores (Despensa Familiar and



70 of 84

America Palí), 95 supermarkets (Paiz, La Despensa de Don Juan, La

Unión and Más x Menos), 139 Bodegas (Maxi Bodega and

Maxi Palí), 31 Walmart hypermarkets. These stores are

located in Costa Rica, Guatemala, Honduras, Nicaragua

and El Salvador.

Disclosure of summary of significant accounting policies [text block]

The signif icant accounting policies used to prepare the consolidated financial statement as

of September 30, 2018 have been applied consistently with those applied in the year ended

December 31, 2017, except in the revenues policy which is being updated in accordance to

new IFRS 15 Revenue from Contracts with Customers ; although the adoption of this standard

had not matter ial effects in the amounts that were reported in the financial statements.

Disclosure of tax receivables and payables [text block]

The balances for this concept are presented in the current tax assets and l iabil i t ies items in

[210000] Statement of f inancial posit ion, current / non -current.

Disclosure of trade and other payables [text block]

The balances for this concept are presented in t rade and other payables section in [800100]

Notes - Subclassi f ications of assets, l iabi l i t ies and equit ies.

Other current payables includes dividends payables of $16,890,753 ($2,874,633 in December

31, 2017).



71 of 84

Disclosure of trade and other receivables [text block]

Those balances are presented in trade and other receivables sections in [800100] Notes -

Subclassi f ications of assets, l iabi l i t ies and equit ies.

Average aging to collect the accounts receivable to customers is from 30 to 90 days.



72 of 84

[800600] Notes - List of accounting policies

Disclosure of summary of significant accounting policies [text block]

The signif icant accounting policies used to prepare the consolidated financial statement as

of September 30, 2018 have been applied consistently with those applied in the year ended

December 31, 2017, except in the revenues policy which is being updated in accordance to

new IFRS 15 Revenue from Contracts with Customers ; although the adoption of this standard

had not matter ial effects in the amounts that were reported in the financial statements.

Description of accounting policy for construction in progress [text block]

Construction in progress mostly consists of investments in the construction of new stores and

is recognized at cost . Upon completion of each project, the Company reclassi f ies work in

process to property and the depreciation begins.

Description of accounting policy for depreciation expense [text block]

Depreciation of property and equipment is computed on a st raight - l ine method at the

fol lowing annual rates:

Buildings, facil i t ies and leasehold improvements:

- Constructions and structure 2.5% a 5.0%

- Facil it ies and adaptations 5.0% a 12.5%

- Finishes of construction 10.0% a 25.0%

Furniture and equipment 5.0% a 33.3%

Computer equipment 12.5% a 33.3%

Transport equipment 10.0% a 33.3%



73 of 84

Description of accounting policy for derivative financial instruments [text block]

The Company has entered into currency hedging through Over the Counter (OTC) currency

forward transactions (Fx -forwards) to mit igate the effects caused by variabi l ity in the

exchange rate of foreign currency on its accounts payable related to import goods for sale.

The maximum length of these contracts i s s ix months.

Derivatives are init ial ly recognized at fair value at the date the derivative contract is

subscribed and subsequently revalued at fai r value at the end of the report ing period. The

result ing gain or loss i s recognized immediately as a part of the financial income (expense)

l ine in the consolidated statement of comprehensive income.

In accordance with our standards of corporate governance, the Company manages only Fx -

forwards derivative financial inst ruments.

Description of accounting policy for determining components of cash and cash

equivalents [text block]

Cash and cash equivalents principally consist of bank deposits, credit and debit card

transfer transactions that process in less than seven days, and highly l iquid investments with

maturit ies of less than 90 days, plus accrued interest . Cash is stated at f ai r value.

Description of accounting policy for earnings per share [text block]

The basic earnings per share is the result of dividing the net income of the year attr ibutable

to owners of the parent by the weighted average number of outstanding shares. Di luted

earnings per share are the same as basic earnings per share since there is currently no

potential ly di lut ive common stock.

Description of accounting policy for employee benefits [text block]



74 of 84

Employees in Mexico are entit led to a seniority premium in accordance with the Mexican

Federal Labor Law. WALMEX employees in each of the nine countr ies are entit led to

termination benefits to be paid in accordance to each country’s respective labor laws.

These employee benefits are recognized as expense during the years in which services are

rendered, based on actuarial computations performed b y independent experts using the

projected unit credit method.

In Mexico, the seniority premium is granted to employees who ret i re from the Company with

a minimum of f i fteen years of seniority. The amount paid to the associate is equivalent to

twelve days for each year worked, without exceeding the amount for each day of twice the

minimum wage. The Company has set up a defined benefits t rust fund to cover seniority

premiums accruing to employees. Employees make no contributions to this fund.

In Central America, the termination benefits for associates are paid when in case of

unjust i f ied dismissal or death, in accordance with the Labor Law of each country where it

operates. The benefits range from 20 days to one month of salary for each year of

uninterrupted service.

All other payments accruing to which employees or their beneficiaries are entit le to in the

event of involuntary ret i rement or death are expensed as incurred, in accordance with

federal labor laws of each country.

Actuarial gains and losses are recognized as they accrue directly in the consolidated

statement of comprehensive income, and in the statement of change in equity.

Description of accounting policy for expenses [text block]

Expenses are recognized in the income statement when they are incurred.

Description of accounting policy for fair value measurement [text block]

Assets and l iabil i t ies carried at fai r value are measured using the fai r value hierarchy, which

priorit izes the inputs used in measuring fair value. The levels of the fair value hierarchy are as

fol lows:



75 of 84

- Level 1. Quoted prices for identical instruments in active markets,

- Level 2. Other valuations included quoted prices similar instruments in active markets that

are directly or indirectly observabl e, and

- Level 3. Unobservable data inputs, so that the Company develops it s own assumptions and

valuations.

Subsequent measurement of the Company’s f inancial assets and l iabi l i t ies i s determined

based on classi f ication.

WALMEX considers that a t ransfer between level in the fair value hierarchy have occurred on

the date of the event or change in circumstances that caused such t ransfer.

Description of accounting policy for financial assets [text block]

These assets are classi f ied in one of the fol lowing categories, as required: f inancial assets at

fai r value through profit or loss, accounts receivable, investments held to maturity or

f inancial assets held for sale. The Company’s f inancial assets primari ly consist of cash and

cash equivalents, trade receivables and other accounts receivable which are init ial ly

recognized at fair value. Fair value of an asset is the pr ice in which such asset could be sold

in an ordinary transaction with thi rd part ies.

Assets are recorded at fai r value and are measured using the fai r value hierarchy, as

mentioned in the accounting policy for fair value measurements.

Description of accounting policy for financial liabilities [text block]

These l iabi l i t ies are classi f ied in accounts payable, other accounts payable and financial

leases; these l iabil i t ies are init ial ly recognized at fair value and subsequently valued to

amort ized cost using effective interest rate method. The l iabi l i t ies f rom derivatives are

recognized in it ial ly and subsequently at fair value. Fair value of a l iabil i ty is the amount that

would be paid to transfer the responsibi l i ty to a new creditor in an ordinary t ransaction

among those part ies.



76 of 84

Description of accounting policy for foreign currency translation [text block]

The Company’s foreign currency denominated assets and l iabil i t ies are t ranslated to

functional currency at the prevail ing exchange rate at the date of the consol idated

statement of f inancial posit ion. Exchange differences are recognized in the consolidated

statement of comprehensive income in the financial income (expenses) l ines.

Description of accounting policy for functional currency [text block]

The Mexican peso is the Company’s functional and report ing currency.

Description of accounting policy for goodwill [text block]

Goodwil l represents the excess of the purchase pr ice over the fai r value of the net assets of

Walmart Central America at the acquisit ion date and is not amort ized.

Goodwil l was assigned applying the perpetuity value technique to determine the goodwil l ’s

value in use, considering each Central American country (Costa Rica, Guatemala,

Honduras, Nicaragua and El Salvador) as a minimum cash generating unit .

Goodwil l i s tested for impairment annually. The Company engages the services of an

independent expert to test it s goodwil l for impairment. In assessing value in use, the

est imated future cash flows are discounted to their present value using a pre -tax discount

rate that reflects current market assessments of value of money, over t ime and the specific

r i sks affecting such assets.

Future cash flows consider the business plan and projections used by management in its

decision making for the fol lowing five years.

Goodwil l i s t ranslated at the closing exchange rate and the effect is recognized in other

comprehensive income.



77 of 84

Description of accounting policy for impairment of assets [text block]

Management reviews long-l ived assets for indicators of impairment whenever events or

changes in ci rcumstances indicate that the carrying amount may not be recoverable. The

evaluation is performed at the lowest level of identi f iable cash flows, which is at the

individual store or club level. Undiscounted cash flows expected to be generated by the

related assets are est imated over the assets’ useful l ives based on updated projections. I f

the evaluation indicates that the carrying amount of the assets may not be recoverable, any

potential impairment is measured based upon the fai r va lue of the related asset of asset

group as determined by an appropriate market appraisal or other valuation technique.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash -

generating unit) is increased to the revised est imate of the recoverable amount, but so that

the increased carrying amount does not exceed the carrying amount that would have been

determined i f no impairment loss had been recognized for the asset (or cash -generating

unit) in prior years. A reversal o f an impairment loss i s recognized immediately as a credit to

the income statement.

Description of accounting policy for income tax [text block]

Income taxes are classi f ied as current and deferred, and are recognized in the consolidated

statement of comprehensive income in the year they are expensed or accrued, except

when they come from items directly recognized in other comprehensive income, in which

case, the corresponding taxes are recognized in equity.

Current income taxes are determined based on the tax laws approved in the countries

where WALMEX has operations, and is the result of applying the applicable tax rates at the

date of the consol idated financial statements on the taxable profits of each entity of the

Group. I t i s presented as a current l iabi l i ty/asset net of prepayments made during the year.

Deferred income taxes result from applying the applicable enacted or substantively

enacted income tax rate at the report ing date to al l temporary differences between

f inancial report ing and tax values of assets and l iabi l i t ies.



78 of 84

Deferred tax assets are only recognized when it i s probable that sufficient taxable profit wi l l

be avai lable against which the deductions for temporary differences can be taken. The

deferred tax l iabil i t ies are general ly recognized for al l taxable temporary differences.

The carrying amount of deferred tax assets are reviewed at each report ing date and

reduced to the extent that it is no longer probable that suff icient taxable profit wi l l be

available to al low the deferred assets to be used. Unrecognized deferred tax assets are re-

assessed at each report ing date and are recognized to the extent that it has become

probable that future taxable profits wil l al low the deferred tax asset to be recovered.

The deferred income tax on temporary differences arising from investments in su bsidiaries

and associates is recognized, unless the period of reversal of temporary differences is

control led by WALMEX and it i s probable that the temporary differences wil l not reverse in

the near future.

Deferred tax assets and l iabil i t ies are offset w hen a legal r ight exists and when the taxes are

levied by the same tax authority.

Description of accounting policy for intangible assets and goodwill [text block]

Intangible assets are recognized when they have the fol lowing characterist ics: they are

identif iable, they give future economic benefits and the Company has control over such

benefits.

Intangible assets are valued at the lower of acquisit ion cost or fai r value at the acquis it ion

date and are classi f ied based on their useful l ives, which may be finite or

indefinite. Indefinite-l i fe assets are not amort ized; however, they are subject to annual

impairment tests. Fin ite l i fe assets are amort ized using the str aight- l ine method at rates

between 7.7% and 33.3%.

Description of accounting policy for investment property [text block]

Investment propert ies (land, bui lding and constructions and facil it ies in propert ies that are

given in lease) are maintained to obtain economic benefits through the collection of rents.

Investment propert ies are measured init ial ly at cost , including t ransa ction costs. After the



79 of 84

init ial recognit ion, they continue being valued at cost less depreciation and accumulated

losses due to impairment.

Description of accounting policy for leases [text block]

The Company classi f ies it s property lease agreements as either f inance or operating leases.

WALMEX as a lessee

WALMEX considers as f inance leases those where substantial ly al l of the risks and rewards of

ownership are substantial ly transferred. Finance leases are recorded at the lower of the fair

value of the leased property and the present value of the minimum lease payments, and are

amort ized over the term of the lease agreement and considering the renewals

contemplated in each lease agreement.

Lease agreements that do not quali fy as f inance leas es are t reated as operating leases.

Payments made under operated leases are recognized in the income statement on a

straight- l ine method over the lease term. The start ing date of a lease is considered the

possession date of the leased property, including t he lessee’s r ights to renewal. Variable

lease payments are based on a percentage of the Company’s sales, and are recognized as

an expense in the period in which they are incurred.

The Company analyzes it s service agreements that do not have the legal form of a lease,

but which involve obtaining the right of use of an asset in exchange for payment.

WALMEX as a lessor

WALMEX obtains rental income from investment propert ies: the variable rent income is

recognized as revenue in the period in which they are ear ned and; the fixed rent income is

recognized on a straight - l ine method over the lease term. Such revenues are presented as a

part of other revenues l ine within the consolidated statement of comprehensive income.

Description of accounting policy for measuring inventories [text block]



80 of 84

Inventories are valued using the retai l method, except for merchandise for the Sam’s Club,

distr ibut ion centers, Agro-Industr ial development (grains, edibles and meat) and perishable

divis ion, which are stated using the average-cost method. These methods are consistent with

those applied in the prior year. Inventories, including obsolete, s low -moving and defective

items or items in poor condit ion, are stated at the lower of cost and net real izable value.

Freight and buying al lowances are capital ized in inventory and are recognized in the cost of

sales based on the turnover of the inventor ies that gave rise to them.

Description of accounting policy for non-current assets or disposal groups classified

as held for sale and discontinued operations [text block]

The Company classi f ies as assets held for sale if their carrying amount wil l be recovered

principally through a sale transaction rather than through continuing use. These assets are

not subject to depreciation and are measured at the lower of their previou s carrying amount

and the fair value less to costs to sel l .

Revenues, expenses and costs related to such transactions are separately disclosed and

recognized as part of the discontinued operations l ine in the consolidated statement of

comprehensive income. The results must be comparable in both periods.

Description of accounting policy for property, plant and equipment [text block]

Property and equipment are recorded at acquisit ion cost and are presented net of

accumulated depreciation.

Description of accounting policy for provisions [text block]



81 of 84

Accrued l iabil i tes represent current obl igations (legal or assumed) for past events where

outflow of economic resources is possible and that can be reasonably est imated. These

provisions have been recorded based on management's best est imation. Reimbursements

are recognized net of any related obligation when it i s certain that the reimbursement wil l

be obtained. Provis ion expenses are presented in the consolidated statement of

comprehensive income net of any corresponding reimbursements.

Description of accounting policy for recognition of revenue [text block]

Revenue from merchandise sales is recognized in the consolidated statement of

comprehensive income at the t ime the obligation is satisf ied, that is , (when the "control" of

the goods has been transferred to the customer), and income from services is recognized at

the t ime they are rendered.

Extended warranties, service commissions and cell phone airt ime are recognized in the net

sales l ine in the consolidated statement of comprehensive income at t ime the s ervice is

provided.

Sam’s Club membership income is deferred over the twelve -month term of the membership

and presented in the other revenues l ine in the consolidated statement of comprehensive

income.

Rental income is recognized as it accrues over the ter ms of the lease agreements entered

into with thi rd part ies and presented in the other revenues l ine in the consolidated

statement of comprehensive income.

Revenues from the sale of waste are recognized in the other revenues l ine in the

consolidated statement of comprehensive income at the t ime ownership of the products

sold is t ransferred to the customer.

Description of accounting policy for segment reporting [text block]

Segment f inancial information is prepared based on the information used by the Company’s

senior management to make business decisions and assess the Company’s performance.

Segment information is presented based on the geographical zones in which the Company

operates.



82 of 84

Description of accounting policy for share-based payment transactions [text block]

The employee stock option plan fund is comprised of WALMEX shares which are acquired in

the secondary market and are presented at acquisit ion cost . The plan is designed to grant i )

stock options to executives of the companies in the Group and i i ) restr icted stock, as

approved by the Mexican National Banking and Securit ies Commission.

The shares subject to the plan are assigned taking as a reference the weighted average

price of the purchase and sale transactions in th e secondary market of such shares.

In the stock option plan, executive’s shares are released to be acquired in four years in two

equal parts, 50% in two years and the remaining 50% in four years. The exercised period is 10

years as of the assigned.

In the plan based on restr icted shares, the vest ing period is 3 years and the term to exercise

the rights is up to 10 years from the assignment. The amount of the restr icted shares is

subject to compl iance with certain metrics that are evaluated for each grant in the fi rst

subsequent year, which may cause the or iginal al location to decrease or increase, in a

range of 0% to 150%.

The compensation cost of the share-based payments is recognized in the consolidated

statement of comprehensive income at fai r value.

Description of accounting policy for subsidiaries [text block]

Subsidiar ies are consolidated from the date on which control is assumed by to WALMEX , and

unti l such control is lost . The results of subsidiaries acquired or disposed of dur ing the year

are included in the consolidated statements of comprehensive income from the date of

acquis it ion or up to the date of sale, as appropriate.

Description of accounting policy for trade and other receivables [text block]



83 of 84

WALMEX recognizes t rade receivable impairment applying the s impli f ied approach

permitted by IFRS 9, with expected l i fet ime credit losses recognized from init ial recognit ion

of the receivable. These assets are grouped based on shared credit r i sk characterist ics and

days past due, with expected loss al lowances for each risk grouping determined based on

the Company historical credit loss experience, adjusted for forward -looking factors specific

to the debtors and the economic environment.

Description of other accounting policies relevant to understanding of financial

statements [text block]

As of September 30, 2018, the Company has no other relevant policies to understanding the

consolidated f inancial statements.

Reclassif ications:

The Company has done certain reclassi f ications in the consolidated statement of

comprehensive income for the nine months period ended on September 30, 2017 due to

comparabi l ity purposes and to get a better understanding of it s f inancial information:

Nine-months ended September 30

2017

reported

Reclassif ication

2017

reclassi f ied

Net sales $ 402,250,863 $ ( 223,025) $ 402,027,838

Other revenues 2,829,015 352,739 3,181,754

Total revenues 405,079,878 129,714 405,209,592

Cost of sales (314,358,781) 2,235,803 (312,122,978)

Gross profit 90,721,097 2,365,517 93,086,614

General expenses ( 60,651,135) ( 2,236,350) ( 62,887,485)

Income before other income

and expenses

30,069,962

129,167

30,199,129

Other income 726,898 ( 129,167) 597,731



84 of 84

[813000] Notes - Interim financial reporting

Disclosure of interim financial reporting [text block]

The disclosure of notes, statement of compliance with IFRS and other explanatory

information to the unaudited consolidated interim f inancial statements of Wal -Mart de

Mexico, S.A.B. de C.V. and Subsidiaries as of September 30, 2018, are included in the rep ort

[800500] Notes - List as well as the disclosure of the summary of s ignif icant accounting

policies is included in the report [800600] Notes - L ist of Accounting Policies; and have been

prepared in accordance with International Accounting Standard 34 “I nterim Financial

Information".

Dividends paid, ordinary shares: 14,512,755.00

Dividends paid, other shares: 0.54

Dividends paid, ordinary shares per share: 0

Dividends paid, other shares per share: 0

Quarterly Financial Information financiera/BMV/BM… · • Agile squads, which are...

Documents

Transcript of Quarterly Financial Information financiera/BMV/BM… · • Agile squads, which are...