Albertsons 2002 Annual Report Download - page 33

Company is authorized to purchase up to 5.0 million shares for reissuance
upon the exercise of employee stock options and for other compensation
programs utilizing the Company’s stock. In fiscal 2002, the Company
repurchased 1.3 million shares at an average cost of $22.16 per share
under the 2002 program.
Earnings Per Share
The following table reflects the calculation of basic and diluted earnings
per share:
(In thousands, except per share amounts) 2002 2001 2000
Earnings per share – basic
Earnings available to common
shareholders $205,535 $ 81,965 $242,941
Weighted average shares
outstanding 132,940 132,251 129,162
Earnings per share – basic $ 1.55 $ 0.62 $ 1.88
Earnings per share – diluted
Earnings available to common
shareholders $205,535 $ 81,965 $242,941
Weighted average shares
outstanding 132,940 132,251 129,162
Dilutive impact of options
outstanding 1,038 578 928
Weighted average shares and
potential dilutive shares
outstanding 133,978 132,829 130,090
Earnings per share – diluted $ 1.53 $ 0.62 $ 1.87
Commitments, Contingencies and Off-Balance
Sheet Arrangements
The Company has guaranteed mortgage loan and other debt obligations
of $6.7 million. The Company has also guaranteed the leases and fixture
financing loans of various affiliated retailers with a present value of
$174.8 million and $33.7 million, respectively.
On December 4, 1998, the Company entered into an agreement to
sell notes receivable to a special purpose entity, which qualifies to be
accounted for as an unconsolidated subsidiary. The entity is designed to
acquire qualifying notes receivable from the Company and sell them to a
third party. No notes have been sold since February 29, 2000. Assets and
related debt off-balance sheet were $27.0 million at February 23, 2002 and
$46.4 million at February 24, 2001. At February 23, 2002, the Company’s
limited recourse with respect to notes sold was $12.1 million.
The Company is party to synthetic leasing programs for two of its major
warehouses. At the expiration of each lease, the Company has the option
to either renew the lease if agreed to through negotiations with the applica-
ble third party, purchase the property based on a fixed purchase price as
established in the original agreement, or remit a contingent rental payment
to the applicable third party. The two synthetic leases expire in fiscal 2004
and fiscal 2005. The synthetic lease that expires in fiscal 2004 has a renewal
option available through fiscal 2009, an approximate purchase option of
$60 million or a contingent rental liability of $50 million. The synthetic lease
that expires in fiscal 2005 has a renewal option available through fiscal
2007, an approximate purchase option of $25 million or a contingent rental
liability of $20 million. At February 23, 2002, the estimated market value of
the properties underlying these leases equals or exceeds the purchase
option and the contingent rental liability.
The Company is a party to various legal proceedings arising from the
normal course of business activities, none of which, in management’s
opinion, is expected to have a material adverse impact on the Company’s
consolidated statement of earnings or consolidated financial position.
Retirement Plans
Substantially all non-union employees of the Company and its subsidiaries
are covered by various contributory and non-contributory pension or profit
sharing plans. The Company also participates in several multi-employer
plans providing defined benefits to union employees under the provisions
of collective bargaining agreements.
Contributions under the defined contribution 401(k) and profit sharing
plans are determined at the discretion of the Board of Directors and were
$16.1, $11.9 and $14.1 million for fiscal 2002, 2001 and 2000, respectively.
Amounts charged to union pension expense were $38.4, $42.7 and
$39.3 million for fiscal 2002, 2001 and 2000, respectively.
Benefit calculations for the Company’s defined benefit pension plans are
based on years of service and the participants’ highest compensation dur-
ing five consecutive years of employment. Annual payments to the pension
trust fund are determined in compliance with the Employee Retirement
Income Security Act (ERISA). Plan assets are held in trust and invested in
separately managed accounts and publicly traded mutual funds holding
both equity and fixed income securities.
In addition to providing pension benefits, the Company provides certain
health care and life insurance benefits for certain retired employees. Certain
employees become eligible for these benefits upon meeting certain age
and service requirements.
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