Albertsons 2007 Annual Report Download - page 81

SU
PERVAL
U
IN
C
. and
S
ubsidiaries
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
T
he expectations on timin
g
of disposition or sublease and the estimated sales price or sublease income associated
w
ith closed properties are impacted by variable factors such as inflation, the general health of the economy
,
resu
l
tant
d
eman
df
or commerc
i
a
l
property, t
h
ea
bili
ty to secure su
bl
eases, t
h
e cre
di
twort
hi
ness o
f
su
bl
essees an
d
the Compan
y
’s success at ne
g
otiatin
g
earl
y
termination a
g
reements with lessors. While mana
g
ement believes th
e
current estimates on closed
p
ro
p
erties are ade
q
uate, it is
p
ossible that market conditions in the real estate marke
t
cou
ld
cause c
h
anges
i
nt
h
e Company’s assumpt
i
ons an
d
may requ
i
re a
ddi
t
i
ona
l
reserves an
d
asset
i
mpa
i
rment
char
g
es to be recorded
.
Reserves for Se
l
f-Insuranc
e
Th
e Compan
yi
spr
i
mar
ily
se
lf
-
i
nsure
df
or wor
k
ers’ compensat
i
on,
h
ea
l
t
h
care
f
or certa
i
n emp
l
o
y
ees an
dg
enera
l
a
nd automobile liabilit
y
costs. It is the Compan
y
’s polic
y
to record its self-insurance liabilities based on claim
s
fil
e
d
an
d
an est
i
mate o
f
c
l
a
i
ms
i
ncurre
db
ut not yet reporte
d
,
di
scounte
d
at a r
i
s
kf
ree
i
nterest rate. T
h
e present
v
alue of such claims was calculated usin
g
discount rates ran
g
in
g
from 4.7 to 5.0 percent for fiscal 2007 and 3.7 to
6.8 percent for both fiscal 2006 and fiscal 200
5
.An
y
pro
j
ection of losses concernin
g
workers’ compensation,
h
ea
l
t
h
care an
d
genera
l
an
d
automo
bil
e
li
a
bili
ty
i
ssu
bj
ect to a cons
id
era
bl
e
d
egree o
f
var
i
a
bili
ty. Among t
h
e
causes o
f
t
hi
s var
i
a
bili
t
y
are unpre
di
cta
bl
e externa
lf
actors a
ff
ect
i
n
gf
uture
i
n
fl
at
i
on rates,
di
scount rates
,
l
iti
g
ation trends, le
g
al interpretations, benefit level chan
g
es and claim settlement patterns.
A summary o
f
c
h
anges
i
nt
h
e Company’s reserves
f
or se
lf
-
i
nsurance
i
sas
f
o
ll
ows
:
2
007
2
006
2
005
C
laims and claim adjustment expense reserves at beginning of year
$
58
$
59
$
5
4
Ac
q
uisition of New Albertsons (net of reinsurance receivable of
$
35) 922 —
—
C
laim and claim ad
j
ustment expenses 193
5
160
T
otal increases 1,115 51 60
)
C
laim payments (217) (52) (55
Net reserves 956 58 59
R
einsurance receivable 36 — —
C
laims and claim ad
j
ustment expense reserves at end of
y
ear 992
5
8
5
9
)Less current port
i
on (329) (27) (29
Long-term portion
$
663
$
31
$
30
T
he current portion of the reserves for self-insurance is included in Other current liabilities, and the long-ter
m
port
i
on
i
s
i
nc
l
u
d
e
di
nOt
h
er
li
a
bili
t
i
es
i
nt
h
e Conso
lid
ate
d
Ba
l
ance S
h
eets. T
h
ec
l
a
i
ms an
d
c
l
a
i
ma
dj
ustmen
t
expense reserves at end of
y
ear are net of the discount in the amount of $148, $11 and $12 for 2007, 2006, and
200
5
respectively.
P
roperty, Plant and E
q
uipment
Propert
y
, plant and equipment are carried at cost. Depreciation, as well as amortization of assets under capital
l
eases,
i
s
b
ase
d
on t
h
e est
i
mate
d
use
f
u
lli
ves o
f
t
h
e assets us
i
ng t
h
e stra
i
g
h
t-
li
ne met
h
o
d
. Est
i
mate
d
use
f
u
lli
ve
s
g
enerall
y
are 10 to 40
y
ears for buildin
g
s and ma
j
or improvements, three to 10
y
ears for equipment, and the
shorter of the term of the lease or expected life for leasehold improvements. Interest on propert
y
unde
r
construction of
$
11,
$
2 and less than
$
1 was capitalized in fiscal years 2007, 2006 and 2005, respectively
.
F-1
5