Walmart 2011 Annual Report Download - page 42

40 Walmart 2011 Annual Report
5 Restructuring Charges
In the fourth quarter of scal 2010, the Company announced several
organizational changes, including the closure of 10 Sam’s Clubs, designed
to strengthen and streamline our operations. As a result, the Company
recorded $260 million in pre-tax restructuring charges as follows:
Fiscal Year Ended January 31, 2010
Asset Severance
(Amounts in millions) Impairment Costs Total
Walmart U.S. $ — $ 73 $ 73
Sam’s Club 133 41 174
Other — 13 13
Total $133 $127 $260
The asset impairment charges generally relate to the real estate of the
Sam’s Club closures, which was written down to their estimated fair
value of $46 million. The fair value was determined based on comparable
market values of similar properties or on a rental income approach, using
Level 2 inputs of the three-tier fair value hierarchy discussed in Note 8.
The pre-tax restructuring charges of $260 million are classied in oper-
ating, selling, general and administrative expenses on the accompanying
Consolidated Statement of Income for the scal year ended January 31,
2010. At January 31, 2010, we had $127 million of severance costs included
in accrued liabilities on the accompanying Consolidated Balance Sheet.
These severance costs were paid during scal 2011.
6 Accrued Liabilities
Accrued liabilities consist of the following:
As of January 31,
(Amounts in millions)
2011 2010
Accrued wages and benets
(1)
$ 5,895 $ 5,986
Self-insurance
(2)
3,447 3,224
Other
(3)
9,359 9,524
Total accrued liabilities $18,701 $18,734
(1)
Accrued wages and benefits include accrued wages, salaries, vacation, bonuses and
other incentive plans.
(2)
Self-insurance consists of all insurance-related liabilities, such as workers’
compensation, general liability, vehicle liability, property and employee-related
health care benefits.
(3)
Other accrued liabilities consists of various items such as accrued taxes, maintenance,
utilities, advertising, interest, and severance liabilities.
7 Short-Term Borrowings and Long-Term Debt
Information on short-term borrowings and interest rates is as follows:
Fiscal Years Ended January 31,
(Dollar amounts in millions) 2011 2010 2009
Maximum amount outstanding
at any month-end $9,282 $4,536 $7,866
Average daily short-term borrowings 4,020 1,596 4,520
Weighted-average interest rate 0.2% 0.5% 2.1%
Short-term borrowings consist of commercial paper and lines of credit.
Short-term borrowings outstanding at January 31, 2011 and 2010 were
$1.0 billion and $523 million, respectively. The Company has certain lines
of credit totaling $11.5 billion, most of which were undrawn as of January 31,
2011 and is committed with 28 nancial institutions. In conjunction with
these lines of credit, the Company has agreed to observe certain covenants,
the most restrictive of which relates to maximum amounts of secured
debt and long-term leases. Committed lines of credit are primarily used
to support commercial paper. The portion of committed lines of credit
used to support commercial paper remained undrawn as of January 31,
2011. The committed lines of credit mature at various times between
June 2011 and June 2012, carry interest rates in some cases equal to the
Company’s one-year credit default swap mid-rate spread and is con-
stricted between LIBOR plus 10 basis points and LIBOR plus 75 basis
points, and incur commitment fees of 2.5 to 10.0 basis points.
The Company had trade letters of credit outstanding totaling $2.6 billion
and $2.4 billion at January 31, 2011 and 2010, respectively. At January 31, 2011
and 2010, the Company had standby letters of credit outstanding totaling
$2.0 billion and $2.4 billion, respectively. These letters of credit were
issued primarily for the purchase of inventory and self-insurance purposes.
Notes to Consolidated Financial Statements