Henry Schein 2012 Annual Report Download - page 62
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Redeemable noncontrolling interests
Some minority shareholders in certain of our subsidiaries have the right, at certain times, to require us to
acquire their ownership interest in those entities at fair value. ASC Topic 480-10 is applicable for noncontrolling
interests where we are or may be required to purchase all or a portion of the outstanding interest in a consolidated
subsidiary from the noncontrolling interest holder under the terms of a put option contained in contractual
agreements. The components of the change in the Redeemable noncontrolling interests for the years ended
December 29, 2012, December 31, 2011 and December 25, 2010 are presented in the following table:
December 29, December 31, December 25,
2012 2011 2010
Balance, beginning of period ................................................................. $ 402,050 $ 304,140 $ 178,570
Decrease in redeemable noncontrolling interests due to
redemptions ....................................................................................... (23,637) (160,254) (141,415)
Increase in redeemable noncontrolling interests due to
business acquisitions ........................................................................... 30,935 13,618 203,729
N
et income attributable to redeemable noncontrolling interests ............ 34,803 36,514 26,054
Dividends declared ................................................................................. (21,013) (15,212) (12,360)
Effect of foreign currency translation gain (loss) attributable to
redeemable noncontrolling interests .................................................. 904 (889) (2,281)
Change in fair value of redeemable securities ....................................... 53,769 224,133 51,843
Other adjustment to redeemable noncontrolling interests ...................... (42,636) - -
Balance, end of period ............................................................................ $ 435,175 $ 402,050 $ 304,140
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 reductions in the
carrying amounts are subject to a “floor” amount that is equal to the fair value of the redeemable noncontrolling
interests at the time they were originally recorded. The recorded value of the redeemable noncontrolling interests
cannot go below the floor level. These adjustments do not impact the calculation of earnings per share.
Additionally, some prior owners of such acquired subsidiaries are eligible to receive additional purchase price
cash consideration if certain financial targets are met. For acquisitions completed prior to 2009, we accrue
liabilities that may arise from these transactions when we believe that the outcome of the contingency is
determinable beyond a reasonable doubt. For 2009 and future acquisitions, as required by ASC Topic 805,
“Business Combinations,” we have and will accrue liabilities for the estimated fair value of additional purchase
price adjustments at the time of the acquisition. Any adjustments to these accrual amounts are recorded in our
consolidated statement of income.
On December 30, 2011, we acquired all of Oak Hill Capital Partners’ (“OHCP”) remaining direct and indirect
interests in BAHS (including its interest in W.A. Butler Company) for $155 million in cash. As a result of this
transaction, our ownership in BAHS increased to approximately 71.7% at December 31, 2011. The amount paid to
OHCP for their remaining interests in BAHS was in excess of the previously agreed upon annual limits (see Note 9.
“Business Acquisitions and Other Transaction” within our notes to our consolidated financial statements), but such
limits were waived by all parties involved. At December 29, 2012, our ownership in BAHS is approximately
73.7%.
Unrecognized tax benefits
As more fully disclosed in Note 12 of “Notes to Consolidated Financial Statements,” we cannot reasonably
estimate the timing of future cash flows related to the unrecognized tax benefits, including accrued interest, of
$40.7 million as of December 29, 2012.