Albertsons 2004 Annual Report Download - page 64

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SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In fiscal 2004, the fiscal 2002 restructure charges were increased by $0.6 million due to higher than
anticipated severance costs for certain employees.
Remaining reserves for the fiscal 2002 restructure plan represent future lease payments. Details of the fiscal
2002 restructure activity for fiscal 2004 are as follows:
Balance
February 22,
2003
Fiscal
2004
Usage
Fiscal 2004
Adjustment
Balance
February 28,
2004
(In thousands)
Lease related costs:
Transportation efficiency initiatives $1,054 $ (816) $ (43) $195
1,054 (816) (43) 195
Employee related costs:
Administrative realignment 2,390 (3,019) 629 —
2,390 (3,019) 629 —
Total restructure charges $3,444 $(3,835) $586 $195
Details of the fiscal 2002 restructure activity as it relates to the number of terminated employees are as
follows:
Original
Estimate
Employees
Terminated
in Fiscal 2003
Balance
February 22,
2003
Employees
Terminated
in Fiscal 2004
Balance
February 28,
2004
Employees 800 (650) 150 (150) —
Restructure 2001
In 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 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 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 sale, sublease or assignment in certain markets, including
approximately $5 million relating to the consolidation of distribution centers, $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.
For fiscal 2004, the fiscal 2001 restructure and other charges were increased by $14.4 million, including an
$11.7 million increase to the restructure reserves and a $2.7 million increase in asset impairment charges. The
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