Albertsons 2002 Annual Report Download - page 31

Direct financing leases: Under direct financing capital leases, the
Company leases buildings on behalf of independent retailers with terms
ranging from 5 to 20 years. Future minimum rentals to be received under
direct financing leases and related future minimum obligations under capi-
tal leases in effect at February 23, 2002 are as follows:
(In thousands) Direct Financing Capital Lease
Fiscal Year Lease Receivables Obligations
2003 $ 12,821 $ 12,714
2004 11,748 11,706
2005 10,794 10,771
2006 10,046 10,025
2007 9,407 9,511
Later 57,366 56,494
Total minimum lease payments 112,182 111,221
Less unearned income 36,670 —
Less interest —37,810
Present value of net minimum lease payments 75,512 73,411
Less current portion 6,960 7,080
Long-term portion $ 68,552 $ 66,331
Income Taxes
The provision for income taxes consists of the following:
(In thousands) 2002 2001 2000
Current
Federal $ 54,034 $96,022 $187,788
State 8,524 15,450 38,245
Tax credits (750) (600) (479)
Deferred
Restructure and other items 18,590 (63,452) (31,678)
Other 57,770 24,972 10,637
Total provision $138,168 $72,392 $204,513
The difference between the actual tax provision and the tax provision
computed by applying the statutory federal income tax rate to earnings
before taxes is attributable to the following:
(In thousands) 2002 2001 2000
Federal taxes based on
statutory rate $120,296 $54,025 $156,609
State income taxes, net of
federal benefit 11,961 5,267 19,196
Nondeductible goodwill 15,439 22,354 11,118
Asset sale basis difference ——24,238
Audit settlements (4,583) (6,539) —
Other (4,945) (2,715) (6,648)
Total provision $138,168 $72,392 $204,513
Temporary differences which give rise to significant portions of the net
deferred tax asset (liability) as of February 23, 2002 and February 24, 2001
are as follows:
(In thousands) 2002 2001
Deferred tax assets:
Restructure and other items $ 90,207 $ 108,797
Net operating loss from acquired subsidiaries 42,131 48,193
Provision for obligations to be settled in
future periods 133,013 133,647
Inventories 11,062 14,175
Other 25,127 31,022
Total deferred tax assets 301,540 335,834
Deferred tax liabilities:
Depreciation and amortization (76,381) (76,181)
Acquired assets adjustment to fair values (54,842) (48,439)
Tax deductions for benefits to be paid in
future periods (145,086) (114,574)
Other (71,994) (67,043)
Total deferred tax liabilities (348,303) (306,237)
Net deferred tax (liability) asset $ (46,763) $ 29,597
The Company currently has net operating loss (NOL) carryforwards
from acquired companies of $104.1 million for tax purposes, which expire
beginning in 2005 and continuing through 2018.
Temporary differences attributable to obligations to be settled in future
periods consist primarily of accrued post-retirement benefits and vacation
pay, and other expenses that are not deductible for income tax purposes
until paid.
Stock Option Plans
The Company’s 1997, 1993 and SUPERVALU/Richfood 1996 stock option
plans allow the granting of non-qualified stock options and incentive stock
options to key salaried executive employees at prices not less than 100
percent of fair market value, determined by averaging the open and close
price on the date of grant. The Company’s 1983 plan no longer allows
granting of stock options, but outstanding options remain to be exercised.
On August 31, 1999 the Company acquired Richfood, and in connection
therewith assumed all outstanding options and shares available for grant
related to existing Richfood stock option plans, based on the exchange
factor set forth in the merger agreement. In February 2000, the Board of
Directors reserved an additional 3.0 million shares for issuance under stock
option plans. The plans provide that the Board of Directors or the Executive
Personnel and Compensation Committee of the Board (the Committee)
may determine at the time of granting whether each option granted will be
a non-qualified or incentive stock option under the Internal Revenue Code.
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