Albertsons 2003 Annual Report Download - page 52

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SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Remaining reserves for the fiscal 2002 restructure plan represent future lease payments as well as unpaid
severance and employee related costs. Details of the fiscal 2002 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:
Transportation efficiency initiatives $ 3,235 $ (757) $(1,424) $1,054
3,235 (757) (1,424) 1,054
Employee related costs:
Administrative realignment 8,000 (4,186) (1,424) 2,390
Transportation efficiency initiatives 5,065 (4,294) (771) —
13,065 (8,480) (2,195) 2,390
Total restructure and other charges $16,300 $(9,237) $(3,619) $3,444
Details of the fiscal 2002 restructure activity as it relates to the number of terminated employees are as
follows:
Original
Estimate
Employees
Terminated
in Prior Year
Balance
February 23,
2002
Employees
Terminated
in Fiscal 2003
Balance
February 22,
2003
Employees 800 — 800 (650) 150
Restructure 2001
In the fourth quarter of fiscal 2001, the company completed a strategic review that identified certain assets
that did not meet return objectives, provide long-term strategic opportunities or justify additional capital
investments. This review process culminated in the company recording pre-tax restructure and other charges of
$181.6 million, including $89.7 million for asset impairment charges, $52.1 million for lease subsidies, lease
cancellation fees, future payments on exited real estate and guarantee obligations and $39.8 million for severance
and employee related costs.
In the fourth quarter of fiscal 2002, the fiscal 2001 restructure and other charges were increased by
$17.8 million as a result of changes in estimates primarily due to the softening real estate market, including
$19.1 million for increased lease liabilities in exiting the non-core retail markets and the disposal of non-core
assets, offset by a net decrease of $1.3 million in restructure reserves for the consolidation of distribution centers.
In the fourth quarter of fiscal 2003, the fiscal 2001 restructure and other charges were increased by
$8.1 million, including an $11.7 million increase to the restructure reserves offset by a decrease in asset
impairment charges of $3.6 million. The reserve increase of $11.7 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,
including approximately $5 million relating to the consolidation of distribution centers and approximately
$6 million relating to the exit of non-core retail markets and $1.2 million in higher than anticipated employee
related costs primarily in the exit of non-core retail markets.
Included in the asset impairment charges in fiscal 2001 of $89.7 million were $57.4 million of charges
related to retail food properties and $32.3 million of charges related to food distribution properties. Writedowns
F-17