Investment in Unconsolidated Entities Investment in Unconsolidated Entities

12 Months Ended

Jan. 02, 2016

Equity Method Investments and Joint Ventures [Abstract]

Investments in unconsolidated entities [Text Block]

INVESTMENTS IN UNCONSOLIDATED ENTITIES

In September 2015, the Company acquired, for $445 million, a 50% interest in Multipro Singapore Pte. Ltd. (Multipro), a leading distributor of a variety of food products in Nigeria and Ghana and also obtained an option to acquire 24.5% of an affiliated food manufacturing entity under common ownership based on a fixed multiple of future earnings as defined in the agreement (Purchase Option). The amount paid, which was financed with cash on hand and commercial paper borrowings, is subject to purchase price adjustments, including the finalization of Multipro’s 2015 earnings as defined in the agreement.

The amount attributable to the Purchase Option of $77 million was recorded at cost and will be monitored for impairment through the exercise period. The Purchase Option becomes exercisable upon the earlier of the entity achieving a minimum level of earnings as defined in the agreement, in which case the Company has a one year exercise period, or 2020. The remaining $368 million paid for the 50% interest in Multipro is accounted for under the equity method of accounting

The difference between the amount paid for Multipro and the underlying equity in net assets is primarily attributable to intangible assets, a portion of which will be amortized in future periods, and goodwill.

Summarized combined financial information for the Company’s investments in unconsolidated entities is as follows (on a 100% basis):

Statement of Operations
(since time of investment in millions)	Period ended January 2, 2016
Net sales	$	289
Gross profit	$	44
Income before income taxes	$	12
Net income	$	5
Balance sheets	January 2, 2016
Current assets	$	78
Non-current assets	$	57
Current liabilities	$	(81	)
Non-current liabilities	$	(25	)