Albertsons 2005 Annual Report Download - page 64

SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
outstanding contingently convertible debentures which were issued in November 2001. The company adopted the
provisions of EITF 04-8 in the fourth quarter of fiscal 2005 and restated prior years’ diluted earnings per share
amounts. The impact of the EITF 04-8 restatement reduced diluted earnings per share by approximately $0.11,
$0.06 and $0.05 in fiscal 2005, fiscal 2004 and fiscal 2003, respectively.
In December 2004, the FASB issued FASB Statement 123 (Revised 2004), “Share-Based Payment.” This
revised statement, which is effective for fiscal years beginning after June 15, 2005, requires all share-based
payments to employees to be recognized in the financial statements based on their fair values. The company
currently accounts for its share-based payments to employees under the intrinsic value method of accounting set
forth in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issues to Employees.”
Additionally, the company complies with the stock-based employer compensation disclosure requirements of
SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure, an amendment of
FASB Statement No. 123.” The company is in the process of evaluating the use of certain option-pricing models
as well as the assumptions to be used in such models. The company plans to adopt the revised statement in its
first quarter of its fiscal year 2007, which begins on February 26, 2006.
RESTRUCTURE AND OTHER CHARGES
In fiscal 2000, 2001, and 2002, the company commenced restructuring programs designed to reduce costs
and enhance efficiencies and included facility consolidation and disposal of non-core assets and assets not
meeting return objectives or providing long-term strategic opportunities. The restructuring plans resulted in the
company recording pre-tax restructure and other charges in fiscal 2000, 2001 and 2002.
In fiscal 2003, all activity for the fiscal 2002, 2001 and 2000 restructure plans was completed. The table
below shows the remaining restructure reserves for the 2002, 2001, and 2000 plans as of February 26, 2005, as
well as reserve related activity for the three fiscal years then ended.
Restructure
Plan
Fiscal 2002
Reserve
Balance
Fiscal 2003
Activity Fiscal 2003
Reserve
Balance
Fiscal 2004
Activity Fiscal 2004
Reserve
Balance
Fiscal 2005
Activity Fiscal 2005
Reserve
BalanceUsage Adjustment Usage Adjustment Usage Adjustment
(In millions)
2002 $16.3 $ (9.3) $ (3.6) $ 3.4 $ (3.8) $ 0.6 $ 0.2 $(0.2) $ — $ 0.0
2001 $56.0 $(35.5) $11.7 $32.2 $(17.3) $11.7 $26.6 $(6.6) $22.3 $42.3
2000 $18.0 $ (9.8) $ 2.9 $11.1 $ (9.1) $ 0.5 $ 2.5 $(1.4) $ — $ 1.1
The company recognized pre-tax restructure and other charges of $26.4 million, $15.5 million and $2.9
million for fiscal years 2005, 2004, and 2003 respectively. These charges reflect changes in liabilities associated
with employee benefit related costs from previously exited distribution facilities as well as changes in estimates
on exited real estate, including asset impairment. Fiscal 2005 charges related primarily to restructure 2001 and
consisted of reserve adjustments of $22.3 million, asset impairment charges of $0.5 million, and property holding
costs of $3.6 million. Fiscal 2004 charges reflect the net adjustments to the restructure reserves of $12.8 million,
as well as asset impairment adjustments of $2.7 million for restructure 2001. Fiscal 2003 charges reflect the net
adjustments to the restructure reserves of $11.0 million, as well as asset impairment adjustments of $(3.6) million
and $(4.5) million for restructure 2001 and 2000, respectively.
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