Albertsons 2003 Annual Report Download - page 16

Download and view the complete annual report

Please find page 16 of the 2003 Albertsons annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 72

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72

charges of $4.5 million. The reserve increase of $2.9 million was a result of changes in estimates on exited real
estate primarily due to the continued softening of real estate marketed for sublease in certain markets and higher
than anticipated employee related costs.
Included in the asset impairment charges in fiscal 2000 of $17.4 million were writedowns on food
distribution assets of $10.6 million for property, plant and equipment, $5.6 million for goodwill and other
intangibles and $1.2 million for other assets that were reflected in the “Restructure and other charges” line in the
Consolidated Statements of Earnings for fiscal 2000. In the fourth quarter of fiscal 2003, the fiscal 2000 asset
impairment charges for property, plant and equipment on food distribution properties were decreased by
$4.5 million primarily due to changes in estimates on exited real estate in certain markets. The impairment
charges reflect the difference between the carrying value of the assets and the estimated fair values, which were
based on the estimated market values for similar assets.
All activity for the fiscal 2000 restructure plan has been completed. Remaining reserves represent future
payments on exited real estate. Details of the fiscal 2000 restructure activity for fiscal 2003 are as follows:
Balance
February 23,
2002
Fiscal
2003
Usage
Fiscal
2003
Adjustment
Balance
February 22,
2003
(In thousands)
Lease related costs:
Facility consolidation $10,300 $(3,713) $ 1,496 $ 8,083
Non-core store disposal 4,611 (1,818) 249 3,042
14,911 (5,531) 1,745 11,125
Employee related costs:
Facility consolidation 2,938 (3,866) 928 —
Infrastructure realignment 142 (363) 221 —
3,080 (4,229) 1,149 —
Total restructure and other charges $17,991 $(9,760) $ 2,894 $11,125
Previously
Recorded
Fiscal
2003
Adjustment
February 22,
2003
Impairment charges $17,430 $(4,466) $12,964
The number of actual employees terminated under the fiscal 2000 restructure plan was adjusted to a lower
number than originally expected primarily due to higher than anticipated voluntary attrition. There was no
activity in fiscal 2003. Details of the fiscal 2000 restructure activity as it relates to employees are as follows:
Original
Estimate
Employees
Terminated
in Prior Years
Adjustments
in Prior Years
Balance
February 23,
2002
Employees 2,517 (1,693) (824) —
Fiscal 2003 net cash outflows relating to all restructure plans was approximately $30 million. The company
anticipates approximately $7 million of net cash inflows in fiscal 2004 for all restructure plans. As of fiscal year
end 2003, remaining future net cash outflows of all restructure plans is estimated at approximately $16 million.
These amounts primarily relate to expected net future payments on exited real estate and employee related costs,
net of after-tax proceeds from the sale of owned properties. Cash outflows will be funded by cash from
operations. Fiscal 2003 net earnings include $.06 per diluted share of after-tax benefit as a result of the
restructure plans.
16