Albertsons 2004 Annual Report Download - page 68

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SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS
In the third quarter of fiscal 2004, the company completed an asset exchange with C&S Wholesale Grocers,
Inc. (C&S) whereby the company acquired certain former Fleming Companies’ distribution operations in the
Midwest from C&S in exchange for the company’s New England operations (the “Asset Exchange”). The Asset
Exchange resulted in the addition of approximately $58.6 million of intangible assets related to customer
relationships and trademarks and a reduction in goodwill of $20.0 million related to the company’s New England
operations.
At February 28, 2004, the company had approximately $1.6 billion of goodwill of which $0.9 billion related
to retail food and $0.7 billion related to food distribution.
In the following table, the company has adjusted reported net earnings, diluted net earnings per common
share and basic net earnings per common share to exclude amortization expense related to goodwill, that is no
longer being amortized upon the adoption of SFAS No. 142:
(In thousands, except per share data) 2004 2003 2002
Reported net earnings $280,138 $257,042 $198,326
Goodwill amortization — — 48,363
Adjusted net earnings $280,138 $257,042 $246,689
Diluted net earnings per common share:
Reported net earnings $ 2.07 $ 1.91 $ 1.48
Goodwill amortization — — 0.35
Adjusted net earnings $ 2.07 $ 1.91 $ 1.83
Basic net earnings per common share:
Reported net earnings $ 2.09 $ 1.92 $ 1.49
Goodwill amortization — — 0.35
Adjusted net earnings $ 2.09 $ 1.92 $ 1.84
A summary of changes in the company’s other acquired intangible assets during fiscal 2003 and fiscal 2004
follows:
February
23,
2002
Amorti-
zation Additions
Other net
adjustments
February
22,
2003
Amorti-
zation Additions
Other net
adjustments
February
28,
2004
(in thousands)
Trademarks $ — $ — $ — $ — $15,269 $ — $15,269
Leasehold Rights, Customer lists and
other (accumulated amortization of
$17,836 and $15,396, at February 28,
2004 and February 22, 2003) 47,310 2,660 (307) 49,663 — (294) 49,369
Customer relationships (accumulated
amortization of $495 at February 28,
2004) — — — — 43,361 — 43,361
Non-compete agreements (accumulated
amortization of $3,959 and $4,376 at
February 28, 2004 and February 22,
2003) 8,406 — 100 8,506 502 (1,789) 7,219
Total other acquired intangible assets 55,716 2,660 (207) 58,169 59,132 (2,083) 115,218
Accumulated amortization (16,298) $(3,903) — 429 (19,772) $(4,541) — 2,023 (22,290)
Total other acquired intangible assets, net $ 39,418 $(3,903) $2,660 $ 222 $ 38,397 $(4,541) $59,132 $(60) $92,928
F-21