Safeway 2005 Annual Report Download - page 64

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SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
44
long-lived assets, based on indications of value received during the sale process. In November 2003, Safeway announced
that it was taking Dominick’s off the market. Safeway reclassified Dominick’s from an “asset held for sale” to “asset held
and used” and adjusted Dominick’s individual long-lived assets to the lower of cost or fair value. As a result, in the fourth
quarter of 2003, Safeway incurred a pre-tax, long-lived asset impairment charge of $190.7 million.
Store Lease Exit Costs The reserve for store lease exit costs includes the following activity for 2005, 2004 and 2003 (in
millions):
2005 2004 2003
Beginning balance $167.1 $129.1 $132.1
Provision for estimated net future cash flows of additional closed stores (1) 67.3 55.1 3.7
Net cash flows, interest accretion, changes in estimates of net future cash flows (36.7) (17.1) (6.7)
Ending balance $197.7 $167.1 $129.1
(1) Estimated net future cash flows represents future minimum lease payments and related ancillary costs from the date of closure to the
end of the remaining lease term, net of estimated cost recoveries that may be achieved through subletting properties or through
favorable lease terminations.
Store lease exit costs are included as a component of operating and administrative expense and the liability is included in
accrued claims and other liabilities.
Store lease exit costs related to the Furr’s and Homeland bankruptcies are not included above but are discussed in Note K.