2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheet4Other commitments€ millions 2010 2009Seller’s warranty given in connection with the disposal of:(1)• Polish businesses35.2 36.0• Smart & Final shares3.7 3.5Total commitments given 38.9 39.5Written put options (2) 1,294.3 1,261.2Monoprix (3) 1,225.0 1,200.0Uruguay (4) 69.3 61.2Brazil (5) - -Banque du Groupe Casino/Laser Cofinoga/Crédit Mutuel partnership (6) - -TOTAL RECIPROCAL COMMITMENTS 1,294.3 1,261.2(1) The Group gave the customary warranties to the buyers of its Polish businesses in 2006. Casino gave the buyer of its interest in Leader Price Polska a seller’s warranty covering any riskspre-dating the sale that were not covered by provisions in the balance sheet. The amount of the warranty was capped at €17 million and was valid for 18 months. The amount for tax-relatedrisks is capped at €50 million and is valid for a period corresponding to the statute of limitations.Following a claim under this warranty, in September 2009 the arbitration board ordered the Group to pay and recognise as a liability the sum of €14 million. Casino has appealed againstthis ruling. The residual risk of €36 million is purely theoretical as Leader Price Polska has already been subject to two tax audits during the warranty period. However, Casino has receiveda new claim for €6 million, which it believes to be unfounded.(2) Under the terms of the option contracts, the exercise price of written put and call options may be determined using earnings multiples, based on the latest published earnings for optionsexercisable at any time and earnings forecasts or projections for options exercisable as of a given future date. In many cases, the put option written by the Group is matched by a call optionwritten by the other party. For these options, the value shown corresponds to that of the written put.(3) Monoprix: on 22 December 2008, Casino and Galeries Lafayette signed an amendment to their March 2003 strategic agreement which suspends the exercise of their respective put andcall options on Monoprix shares for three years.As a result, Casino’s call on 10% of Monoprix’s outstanding shares and Galeries Lafayette’s put on 50% of Monoprix’s capital will be exercisable as of 1 January 2012. The other terms andconditions of exercise remain unchanged.The other terms of the March 2003 strategic agreement remain unchanged.The Group commissioned an independent valuation at 31 December 2010. The independent expert estimated the value of 100% of Monoprix shares at between €2,300 and €2,600 million.The contingent liability covering 50% of Monoprix shares has been disclosed at a value of €1,225 million.(4) Disco Uruguay: Groupe Casino has granted a put option on 29.3% of Disco’s capital to the family shareholders. The option is exercisable until 21 June 2021 at a price based on the Discosub-group’s consolidated operating profi t, with a fl oor of US$41 million plus interest at 5% per year.(5) Groupe Casino has granted the Diniz family, with whom it exercises joint control over GPA in Brazil, two put options on shares in GPA’s head holding company, covering 0.4% and 7.6% ofGPA’s share capital respectively. The fi rst option is exercisable as of 2012 if the Group exercises its right to elect the Chairman of the Board of Directors of the holding company in that year.If the fi rst put option is exercised, the second will become exercisable for a period of eight years as of June 2014. The Group has a call option on the shares covered by the fi rst put optionrepresenting 0.4% of GPA’s share capital. This option is exercisable under certain conditions.(6) On 20 July 2010, the Company decided to exercise its call option on LaSer Cofi noga’s 40% interest in Banque du Groupe Casino. The shares will be transferred no later than 20 January2012 in accordance with the existing agreements. The Company also signed a long-term partnership with Groupe Crédit Mutuel-CIC, which will have the effect of raising the latter’s interestin Banque du Groupe Casino to 50%. The purchase and sale price of the two transactions are based on the Company’s net earnings and equity in future years and cannot be determinedat present.Maturities of contractual commitmentsPayments due by period€ millionsTotal Due within one year Due in one to five years Due beyond five yearsLong-term borrowings 6,185.0 1,127.5 3,662.0 1,395.5Non-cancellable written puts 1,294.3 69.3 1,225.0TOTAL 7,479.3 1,196.8 4,887.0 1,395.5Registration Document 2010 | Casino Group147