Albertsons 2006 Annual Report Download - page 65

SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
application as the required method for reporting a change in accounting principle, unless impracticable or unless
a pronouncement includes alternative transition provisions. SFAS No. 154 also requires that a change in
depreciation, amortization or depletion method for long-lived, non-financial assets be accounted for as a change
in accounting estimate effected by a change in accounting principle. This statement carries forward the guidance
in APB Opinion No. 20, “Accounting Changes,” for the reporting of a correction of an error and a change in
accounting estimate. SFAS No. 154 is effective for the year beginning February 26, 2006.
In March 2005 the FASB issued FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement
Obligations—an Interpretation of FASB Statement No. 143” (“FIN 47”). FIN 47 clarifies that the term
“conditional asset retirement obligation” as used in FASB Statement No. 143, “Accounting for Asset Retirement
Obligations,” refers to a legal obligation to perform an asset retirement activity in which the timing and
(or) method of settlement are conditional on a future event that may or may not be within the control of the
entity. Accordingly, an entity is required to recognize a liability for the fair value of a conditional asset retirement
obligation if the fair value of the liability can be reasonably estimated. FIN 47 became effective for the company
during the fiscal year ended February 25, 2006 and did not have a material effect on the company’s consolidated
financial statements.
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 $ —
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