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HENRY SCHEIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(In thousands, except share and per share data)
65
Note 1 – Significant Accounting Policies – (Continued)
In April 2009, the FASB issued guidance within ASC Topic 805, “Business Combinations.” ASC
Topic 805 amends the initial recognition and measurement, subsequent measurement and accounting, and
disclosure of assets and liabilities arising from contingencies in a business combination. This guidance is
effective for assets or liabilities arising from contingencies in business combinations for which the
acquisition date is on or after the beginning of the first annual reporting period beginning on or after
December 15, 2008. The adoption of this guidance did not have a material impact on our consolidated
financial statements.
Effective December 28, 2008, we have adopted the provisions of ASC Topic 480-10. ASC Topic 480-
10 is applicable for noncontrolling interests where we are or may be required to purchase (for a price equal
to fair value based on third-party valuations) all or a portion of the outstanding interest in a consolidated
subsidiary from the noncontrolling interest holder under the terms of put options contained in contractual
agreements. As a result of the adoption of the provisions of ASC Topic 480-10, we have recorded the
maximum redemption amount, which approximates fair value of the noncontrolling interests subject to put
options as redeemable noncontrolling interests ($178.6 million, $233.0 million and $150.0 million at
December 26, 2009, December 27, 2008 and December 29, 2007, respectively) and reduced Additional
paid-in capital and Noncontrolling interests within the Stockholders’ equity section of our consolidated
balance sheets. The components of the change in fair value of put options at December 26, 2009,
December 27, 2008 and December 29, 2007 are presented in the following table:
December 26,
2009
December 27,
2008
December 29,
2007
Balance, beginning of year ......................................................... 233,035$ 150,028$ 111,902$
Acquisitions of additional ownership from
noncontrolling interests ......................................................... (69,157) - -
Initial noncontrolling interests and adjustments related to
business acquisitions ............................................................. (3,270) 14,994 270
Net income attributable to noncontrolling interests .................... 21,975 21,929 17,350
Dividends paid ........................................................................... (5,973) (2,994) (1,362)
Effect of foreign currency translation attributable to
noncontrolling interests ......................................................... 2,541 (2,060) 854
Change in fair value of redeemable securities ............................ (581) 51,138 21,014
Balance, end of year ................................................................... 178,570$ 233,035$ 150,028$
Changes in the estimated redemption amounts of the noncontrolling interests subject to put options are
adjusted at each reporting period with a corresponding adjustment to Additional paid-in capital. Future
changes to the estimated redemption amounts are subject to a “floor” amount that is equal to the fair value
of the redeemable put option at the time it was originally issued. The recorded value of the redeemable put
option cannot go below the floor level. These adjustments will not impact the calculation of earnings per
share.
In June 2008, the FASB issued guidance within ASC Topic 815-40, “Contracts in Entity’s Own
Equity.” This guidance provides that an entity should use a two step approach to evaluate whether an
equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating
the instrument’s contingent exercise and the instruments settlement provisions. ASC Topic 815-40
clarifies the impact of foreign currency denominated strike prices and market-based employee stock option
valuation instruments on the evaluation. This guidance is effective for fiscal years beginning after