Albertsons 2004 Annual Report Download - page 66

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SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Restructure 2000
In fiscal 2000, the company recorded pre-tax restructure and other charges of $103.6 million as a result of
an extensive review to reduce costs and enhance efficiencies. Included in this total was $17.4 million for asset
impairment costs. The restructure and other charges include costs for facility consolidation, non-core store
disposal, and rationalization of redundant and certain decentralized administrative functions. The original reserve
amount was reduced by $10.3 million in fiscal 2001, primarily as a result of a change in estimate for the closure
of a remaining facility. The reserve amount was subsequently increased $12.2 million in fiscal 2002, due to a
change in estimate on a remaining facility primarily due to the softening real estate market.
In fiscal 2003, the fiscal 2000 restructure and other charges were decreased by $1.6 million, including a $2.9
million increase to the restructure reserves offset by a decrease in asset impairment 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 sale, sublease or assignment in certain markets and higher than
anticipated employee related costs.
In fiscal 2004, the fiscal 2000 restructure and other charges were increased by $0.5 million as a result of
changes in estimates on exited real estate due to the continued softening of real estate marketed for sale, sublease
or assignment in certain markets.
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 of 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 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 2004 are as follows:
Balance
February 22,
2003
Fiscal
2004
Usage
Fiscal
2004
Adjustment
Balance
February 28,
2004
(In thousands)
Lease related costs:
Facility consolidation $ 8,083 $(7,667) $ 34 $ 450
Non-core store disposal 3,042 (1,454) 418 2,006
Total restructure and other charges $11,125 $(9,121) $452 $ 2,456
Previously
Recorded
Fiscal
2004
Adjustment
February 28,
2004
Impairment charges $12,964 $ 18 $12,982
F-19