Walmart 2012 Annual Report Download - page 45
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5 Restructuring Charges
In fi scal 2010, the Company announced several organizational changes,
including the closure of 10 Sam’s Clubs, designed to strengthen and
streamline its operations. As a result, the Company recorded $260 million
in pre-tax restructuring charges in fi scal 2010 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 classifi ed in
operating, selling, general and administrative expenses in the Company’s
Consolidated Statement of Income for fi scal 2010. At January 31, 2010,
the Company had $127 million of severance costs included in accrued
liabilities in the Company’s Consolidated Balance Sheet. These severance
costs were paid during fi scal 2011.
6 Accrued Liabilities
The Company’s accrued liabilities consist of the following:
As of January 31,
(Amounts in millions) 2012 2011
Accrued wages and benefi ts
(1)
$ 5,089 $ 5,895
Self-insurance
(2)
3,638 3,447
Other
(3)
9,427 9,359
Total accrued liabilities $18,154 $18,701
(1) Accrued wages and bene ts 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 bene ts.
(3) Other accrued liabilities consist of various items such as accrued taxes,
maintenance, utilities, advertising and interest.
7 Short-term Borrowings and Long-term Debt
Information on the Company’s short-term borrowings and interest rates
is as follows:
Fiscal Years Ended January 31,
(Dollar amounts in millions) 2012 2011 2010
Maximum amount outstanding
at any month-end $9,594 $9,282 $4,536
Average daily short-term borrowings 6,040 4,020 1,596
Weighted-average interest rate 0.1% 0.2% 0.5%
Short-term borrowings consist of commercial paper and lines of credit.
Short-term borrowings outstanding at January 31, 2012 and 2011 were
$4.0 billion and $1.0 billion, respectively.
The Company has certain lines of credit totaling $18.5 billion, most
of which were undrawn, as of January 31, 2012 and is committed with
26 fi 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 commer-
cial paper and remained undrawn as of January 31, 2012. The committed
lines of credit mature at various times between June 2012 and June 2016,
carry interest rates generally ranging between LIBOR plus 10 basis points
and LIBOR plus 75 basis points, and incur commitment fees ranging
between 1.5 and 10.0 basis points.
In June 2011, the Company renewed and extended its existing 364-day
revolving credit facility (the “364-day Facility”) and its fi ve-year credit facility
(the “5-year Facility”), both of which are used to support its commercial
paper program. The size of the 364-day Facility was increased from
$9.0 billion to $10.0 billion, while the 5-year Facility was increased
from $4.3 billion to $6.3 billion. Fiscal 2012 undrawn and drawn fees
remained relatively flat from fiscal 2011. The 364-day Facility and
the 5-year Facility remained undrawn as of January 31, 2012.
The Company had trade letters of credit outstanding totaling $2.9 billion
and $2.6 billion at January 31, 2012 and 2011, respectively. At January 31,
2012 and 2011, the Company had stand-by letters of credit outstanding
totaling $2.2 billion and $2.0 billion, respectively. The Company renewed
the stand-by letter of credit facility in June 2011, which is used to support
various potential and actual obligations.
Notes to Consolidated Financial Statements