Albertsons 2004 Annual Report Download - page 63

SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
coupons should reflect the value of the coupon as revenue and not as a reduction in cost of sales. EITF Issue No.
03-10 was effective for the first interim period beginning after November 25, 2003. The adoption of EITF Issue
No. 03-10 did not have an impact on the company’s consolidated financial statements.
In November 2002, the FASB issued FASB Interpretation No. (FIN) 45, “Guarantor’s Accounting and
Disclosures Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”. FIN 45
requires that upon issuance of a guarantee, a guarantor must recognize a liability for the fair value of an
obligation assumed under a guarantee. FIN 45 also requires statements about the obligations associated with
guarantees issued. The recognition provisions of FIN 45 were effective for guarantees issued after December 31,
2002, while the disclosure requirements were effective for financial statements for periods ending after
December 15, 2002. The adoption of FIN 45 did not have a material effect on the company’s consolidated
financial statements.
In December 2003, the FASB issued FIN 46 (revised December 2003), “Consolidation of Variable Interest
Entities” (FIN 46R), which addresses how a business should evaluate whether it has a controlling financial
interest in an entity through means other than voting rights and accordingly should consolidate the entity. FIN
46R replaced FIN 46 which was issued in January 2003. FIN 46 or FIN 46R applied immediately to entities
created after January 31, 2003 and no later than the end of the first reporting period that ended after December
15, 2003 to entities considered to be special-purpose entities (SPEs). FIN 46R is effective for all other entities no
later than the end of the first interim or annual reporting period ending after March 15, 2004. The adoption of the
provisions of FIN 46 or FIN 46R relative to SPEs and for entities created after January 31, 2003 did not have an
impact on the company’s consolidated financial statements. Additionally, the company does not expect the other
provisions of FIN 46R to have an impact on the its consolidated financial statements.
RESTRUCTURE AND OTHER CHARGES
For fiscal 2004, the company recognized pre-tax restructure and other charges of $15.5 million. The charges
reflect the net adjustments to the restructure reserves and asset impairment charges of $0.6 million, $14.4 million
and $0.5 million for restructure 2002, 2001 and 2000, respectively. The increases are due to continued softening
of real estate in certain markets and higher than anticipated employee benefit related costs.
The information within this note includes only those restructure and other charges that are the result of
previously initiated restructure activities. In addition, the company maintains reserves and has recorded certain
impairments for properties that have been closed as part of management’s ongoing operating decisions. Those
reserves and impairment charges are disclosed within the Reserves for Closed Properties and Asset Impairment
note in the Notes to Consolidated Financial Statements.
Restructure 2002
In fiscal 2002, the company identified additional efforts that would allow it to extend its food distribution
efficiency program that began early in fiscal 2001. The additional food distribution efficiency initiatives
identified resulted in pre-tax restructure charges of $16.3 million, primarily related to personnel reductions in
administrative and transportation functions. Management began the initiatives in fiscal 2003 and the majority of
these actions were completed by the end of fiscal 2003.
In fiscal 2003, the fiscal 2002 restructure charges were decreased by $3.6 million, including a decrease of
$1.4 million due to lower than anticipated lease related costs in transportation efficiency initiatives and a
decrease of $2.2 million in employee related costs due to lower than anticipated severance costs.
F-16