Albertsons 2005 Annual Report Download - page 65

SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The remaining 2001 restructure reserves includes $25.9 million for employee benefit related costs and $16.4
million for lease related costs for exited properties. In fiscal 2005, there was an increase in 2001 restructure reserves
of $22.3 million for employee benefit related costs for multiemployer plan liabilities resulting from withdrawal
notices received in fiscal 2005 for previously exited distribution facilities and changes in estimates on exited real
estate of $18.0 million and $4.3 million, respectively.
RESERVES FOR CLOSED PROPERTIES AND ASSET IMPAIRMENT CHARGES
Reserves for Closed Properties:
The company maintains reserves for estimated losses on retail stores, distribution warehouses and other
properties that are no longer being utilized in current operations. The reserves for closed properties include
management’s estimates for lease subsidies, lease terminations and future payments on exited real estate. Details
of the activity in the closed property reserves for fiscal 2005, 2004 and 2003 are as follows:
2005 2004 2003
(in thousands)
Beginning balance $ 47,205 $ 49,873 $ 74,996
Additions 12,889 10,809 3,169
Usage (22,648) (13,477) (28,292)
Ending balance $ 37,446 $ 47,205 $ 49,873
Asset Impairment:
The company recognized asset impairment charges of $4.8 million, $7.6 million and $15.6 million in fiscal
2005, 2004 and 2003, respectively, on the write-down of property, plant and equipment for closed properties. For
fiscal 2005, the asset impairment charge related to the retail food segment. For fiscal 2004, of the $7.6 million
asset impairment charge recognized, $6.2 million related to the retail food segment and $1.4 million related to the
food distribution segment. For fiscal 2003, of the $15.6 million asset impairment charge recognized, $8.7 million
related to the retail food segment and $6.9 million related to the food distribution segment. Impairment charges, a
component of selling and administrative expenses in the Consolidated Statements of Earnings, 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.
ASSETS HELD FOR SALE
At February 28, 2004, the company had $9.7 million of assets classified as held for sale included in other
current assets in the Consolidated Balance Sheets. These assets were for closed distribution centers that the
company was actively marketing for sale.
NOTES RECEIVABLE
Notes receivable arise from financing activities with independent retail food customers. Loans to retailers,
as well as trade accounts receivable, are primarily collateralized by the retailers’ inventory, equipment and
fixtures. The notes range in length from 1 to 15 years with an average term of 7 years, and may be non-interest
bearing or bear interest at rates ranging from approximately 4 to 12 percent.
Notes receivable, net due within one year of $13.8 million and $25.5 million at February 26, 2005 and
February 28, 2004, respectively, are included in current receivables, net in the Consolidated Balance Sheets.
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