Walmart 2012 Annual Report Download - page 53
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Contribution expense associated with these plans was $752 million
in fi scal 2012 and $1.1 billion fi scal 2011 and 2010.
Employees in international countries who are not U.S. citizens are
covered by various post-employment benefi t arrangements. These plans
are administered based upon the legislative and tax requirements in
the countries in which they are established. Annual contributions to
international retirement savings and profi t sharing plans are made at the
discretion of the Company, and were $284 million, $221 million and
$218 million in fi scal 2012, 2011 and 2010, respectively.
The Company’s subsidiaries in the United Kingdom and Japan have
defi ned benefi t pension plans. The plan in the United Kingdom was
underfunded by $339 million and $494 million at January 31, 2012 and
2011, respectively. The plan in Japan was underfunded by $325 million
and $309 million at January 31, 2012 and 2011, respectively. These
underfunded amounts have been recorded in deferred income taxes
and other in the Company’s Consolidated Balance Sheets at January 31,
2012 and 2011. Certain other international operations have defi ned
benefi t arrangements that are not signifi cant.
In February 2011, ASDA and the trustees of ASDA’s defi ned benefi t
plan agreed to remove future benefi t accruals from the plan and, with
the consent of a majority of the plan participants, also removed the
link between past accrual and future pay increases. In return, ASDA paid
approximately $70 million in fi scal 2012 to the plan participants. The
related curtailment gain of approximately $90 million was recorded
in fi scal 2012 as a decrease to deferred actuarial losses in other
comprehensive income.
14 Acquisitions, Investments and Disposals
Acquisitions and Investments
Certain acquisitions completed or in process during fi scal 2012
are as follows:
Massmart Holdings Limited (“Massmart”): In June 2011, the Company
completed a tender off er for approximately 51% ownership in Massmart,
a South African retailer with approximately 290 stores in 13 sub-Saharan
African countries. The purchase price for approximately 51% of Massmart
was approximately ZAR 16.9 billion ($2.5 billion). The assets acquired
were approximately $6.4 billion, including approximately $3.5 billion in
goodwill; liabilities assumed were approximately $1.9 billion; and the
non-controlling interest was approximately $2.0 billion. As of January 31,
2012, the allocation of the Massmart purchase price to the fair value of
the assets acquired and liabilities is provisional. The Company began
consolidating Massmart’s results in its fi scal 2012 third quarter
reporting period.
Netto Food Stores Limited (“Netto”): In April 2011, the Company completed
the regulatory approved acquisition of 147 Netto stores from Dansk
Supermarked in the United Kingdom. The Company converted the majority
of these stores to the ASDA brand during fi scal 2012. The fi nal purchase
price for the acquisition was approximately £750 million ($1.2 billion). The
assets acquired were approximately $1.3 billion, including approximately
$748 million in goodwill, and liabilities assumed were approximately
$103 million. As of January 31, 2012, the allocation of the Netto purchase
price to the fair value of the assets acquired and liabilities is provisional.
Bounteous Company Limited (“BCL”): In February 2007, the Company
purchased an initial 35% interest in BCL, which operates in China under
the Trust-Mart banner. The Company paid $264 million for its initial 35%
interest and, as additional consideration, paid $376 million to extinguish a
third-party loan issued to the selling BCL shareholders that was secured
by the pledge of the remaining equity of BCL. Concurrent with its initial
investment in BCL, the Company entered into a Shareholders’ Agreement,
which provides the Company with voting rights associated with a
portion of the common stock of BCL securing the loan, amounting to an
additional 30% of the aggregate outstanding shares. Pursuant to the
Share Purchase Agreement, the Company was committed to purchase
the remaining interest in BCL on or before November 26, 2010, subject
to certain conditions. The Company and the selling shareholder have
mutually agreed to extend the closing, while certain conditions of the
contract are being completed. The parties are now in the process of
completing the local registrations for the Trustmart stores and expect to
complete the sale of the remaining equity interest in Trustmart as soon
as practicable following that process.
Disposals
At January 31, 2010, the Company had an unrecognized tax benefi t of
$1.7 billion related to a worthless stock deduction from the fi nal 2007
disposition of its German operations. This matter was eff ectively settled
with the Internal Revenue Service, during the fourth quarter of fi scal 2011,
resulting in a $1.0 billion tax benefi t recorded in discontinued operations
in the Company’s Consolidated Statement of Income. In addition, during
fi scal 2012, tax and interest expense of $67 million was recorded to
discontinued operations related to this settlement for U.S. federal and
state income tax purposes. See Note 10 for additional information.
During fi scal 2009, the Company initiated a restructuring program for its
Japanese subsidiary, The Seiyu Ltd., to close approximately 23 stores and
dispose of certain excess properties, which was substantially completed
in fi scal 2010. This restructuring involved incurring costs associated with
lease termination obligations, asset impairment charges and employee
separation benefi ts. The operating results, including the restructuring
and impairment charges were approximately $7 million and $79 million,
net of tax, for fi scal 2011 and 2010, respectively, and are presented as
discontinued operations in the Company’s Consolidated Statements
of Income.
The assets, liabilities, net sales and cash fl ows related to the Company’s
discontinued operations were not signifi cant during fi scal years 2012,
2011 and 2010. The net income or losses related to the Company’s
discontinued operations, including the gain and (losses) upon disposition,
are as follows:
Fiscal Years Ended January 31,
(Amounts in millions)
2012 2011 2010
Germany $(67) $1,041 $ —
Seiyu — (7) (79)
Total $(67) $1,034 $(79)
Notes to Consolidated Financial Statements