Albertsons 2006 Annual Report Download - page 18

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Income Taxes
The effective tax rate was 37.4 percent and 35.8 percent for fiscal 2006 and fiscal 2005, respectively. The
fiscal 2005 tax rate reflects the impact of net favorable tax settlements.
Net Earnings
Net earnings were $206.2 million, or $1.52 per basic share and $1.46 per diluted share, for fiscal 2006
compared with net earnings of $385.8 million, or $2.86 per basic share and $2.71 per diluted share last year.
Results for fiscal 2006 include charges of $0.42 per diluted share related to Chicago, $0.26 per diluted share
related to Pittsburgh, $0.06 per diluted share related to Deals and $0.02 per diluted share related to the Hurricane.
Results for fiscal 2005 include a net after-tax gain on the sale of the company’s minority interest in WinCo of
$68.3 million or $0.47 per diluted share.
Weighted average basic shares increased to 136.1 million for fiscal 2006 compared with 135.0 million last
year and weighted average diluted shares increased to 145.7 million for fiscal 2006 compared with 144.9 million
shares last year, reflecting the net impact of stock activity including stock option activity, share repurchases
under the treasury plan and dilution impacts.
Comparison of fifty-two weeks ended February 26, 2005 (fiscal 2005) with fifty-three weeks ended
February 28, 2004 (fiscal 2004):
In fiscal 2005, the company achieved net sales of $19.5 billion compared with $20.2 billion in fiscal 2004.
Net earnings for fiscal 2005 were $385.8 million, basic earnings per share were $2.86 and diluted earnings per
share were $2.71 compared with net earnings of $280.1 million, basic earnings per share of $2.09 and diluted
earnings per share of $2.01 in fiscal 2004. Results for fiscal 2005 include a net after-tax gain on the sale of the
company’s minority interest in WinCo of $68.3 million or $0.51 basic earnings per share and $0.47 diluted
earnings per share. On February 7, 2005, the company completed the acquisition of Total Logistics and its results
were immaterial to fiscal 2005.
Fiscal 2004 was a 53 week fiscal year, resulting in an extra week in the fourth quarter, which generated
approximately $360.0 million in net sales and contributed approximately $0.07 to basic and diluted earnings per
share. Fiscal 2004 operating results include the impact of the asset exchange with C&S Wholesale Grocers
(“Asset Exchange”), the sale and closure of the company’s Denver based operations that included nine retail
stores and a food distribution facility (“Denver Disposition”) and a 28-day strike in St. Louis, where we operate
21 regional supermarkets (“St. Louis Strike”).
Net Sales
Net sales for fiscal 2005 were $19.5 billion compared with $20.2 billion in fiscal 2004, a decrease of $0.7
million or 3.3 percent from fiscal 2004. Retail food sales were 54.0 percent of net sales for fiscal 2005 compared
with 52.2 percent in fiscal 2004. Supply chain services sales were 46.0 percent of net sales for fiscal 2005
compared with 47.8 percent in fiscal 2004.
Retail food sales for fiscal 2005 were $10.5 billion, flat compared to fiscal 2004, primarily reflecting net
new store and same store sales growth, which was fully offset by the absence of last year’s extra week of
approximately $0.2 billion. Fiscal 2005 same store retail sales increased 0.3 percent.
Fiscal 2005 store activity, including licensed units, resulted in 104 new stores opened and 38 stores closed,
for a total of 1,549 stores at year end. Total square footage increased approximately 4.2 percent over fiscal 2004.
Supply chain services sales for fiscal 2005 were $9.0 billion compared with $9.7 billion in fiscal 2004, a
decrease of $0.7 billion. Supply chain services sales decreased 6.9 percent compared with fiscal 2004, reflecting
new business growth of approximately five percent, which was more than offset by customer attrition, the fiscal
2004 Asset Exchange and the absence of the extra week in last year, which accounted for approximately seven
percent, three percent and two percent, respectively.
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