Albertsons 2006 Annual Report Download - page 20

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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.
Weighted average basic shares increased to 135.0 million in fiscal 2005 compared to 134.0 million in fiscal
2004 and weighted average diluted shares increased to 144.9 million in fiscal 2005 compared with 143.2 million
shares in fiscal 2004, reflecting the net impact of stock option activity and shares repurchased under the treasury
stock program.
RESTRUCTURE AND OTHER CHARGES
In fiscal 2002, 2001 and 2000, 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 2002, 2001 and 2000.
In fiscal 2003, all activity for the fiscal 2002, 2001 and 2000 restructure plans was completed. The company
recognized pre-tax restructure and other charges of $4.5 million, $26.4 million and $15.5 million for fiscal years
2006, 2005 and 2004 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 2006 charges related primarily to restructure 2001 and consisted of
adjustments for changes in estimates on exited real estate of $1.4 million, asset impairment charges of $1.0
million and property holding costs of $2.1 million. Fiscal 2005 charges related primarily to restructure 2001 and
consisted of adjustments of $22.3 million for changes in estimates, 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.
The remaining 2001 restructure reserves include $12.4 million for employee benefit related costs and $12.3
million for lease related costs for exited properties.
The table below shows the remaining restructure reserves for the 2002, 2001 and 2000 plans as of
February 25, 2006, as well as reserve related activity for the three fiscal years then ended.
Restructure
Plan
Fiscal 2003
Reserve
Balance
Fiscal 2004
Activity Fiscal 2004
Reserve
Balance
Fiscal 2005
Activity Fiscal 2005
Reserve
Balance
Fiscal 2006
Activity Fiscal 2006
Reserve
BalanceUsage Adjustment Usage Adjustment Usage Adjustment
(In millions)
2002 $ 3.4 $ (3.8) $ 0.6 $ 0.2 $(0.2) $ — $ — $ — $ — $ —
2001 $32.2 $(17.3) $11.7 $26.6 $(6.6) $22.3 $42.3 $(18.7) $1.1 $24.7
2000 $11.1 $ (9.1) $ 0.5 $ 2.5 $(1.4) $ — $ 1.1 $ (1.4) $0.3 $ —
CRITICAL ACCOUNTING POLICIES
The preparation of consolidated financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Significant accounting policies are discussed in the Summary of Significant Accounting Policies in the
accompanying Notes to Consolidated Financial Statements. Management believes the following critical
accounting policies reflect its more subjective or complex judgments and estimates used in the preparation of the
company’s consolidated financial statements.
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