Albertsons 2007 Annual Report Download - page 84

SU
PERVAL
U
IN
C
. and
S
ubsidiaries
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
C
omprehensive Income
T
he Company reports comprehensive income in accordance with SFAS No. 130, “Reporting Comprehensive
I
ncome.” Compre
h
ens
i
ve
i
ncome re
f
ers to revenues, expenses, ga
i
ns an
dl
osses t
h
at are not
i
nc
l
u
d
e
di
nne
t
earnin
g
s but rather are recorded directl
y
in stockholders’ equit
y
in the Consolidated Statements of Stockholders’
E
quity
.
U
se of Estimate
s
T
he preparation of the Compan
y
’s consolidated financial statements in conformit
y
with accountin
g
principle
s
g
enerally accepted in the United States of America requires management to make estimates and assumptions that
aff
ect t
h
e reporte
d
amounts o
f
assets an
dli
a
bili
t
i
es an
ddi
sc
l
osure o
f
cont
i
ngent assets an
dli
a
bili
t
i
es at t
h
e
d
at
e
o
f the financial statements and the reported amounts of revenues and expenses durin
g
the reportin
g
period. Som
e
o
f those estimates require difficult, subjective or complex judgments about matters that are inherently uncertain
.
Actua
l
resu
l
ts cou
ld diff
er
f
rom t
h
ose est
i
mates
.
Reclassification
s
C
ertain reclassifications have been made to conform prior years’ data to the current presentation including
reclassifications between Cash and Accounts payable in the fiscal 200
6
Consolidated Balance Sheet and fisca
l
2
006 and 200
5
Consolidated Statements of Cash Flows to properl
y
classif
y
cash book overdrafts. The reclass
resulted in an increase in Cash and Accounts payable of
$
115 in the fiscal 2006 Consolidated Balance Sheet. Th
e
reclass resulted in an increase in cash inflow related to Accounts payable of
$
22 and
$
9 on the Consolidate
d
Statements of Cash Flow in fiscal 2006 and 200
5
, respectivel
y
. These reclassifications had no effect on reported
earnings
.
NOTE 3—BU
S
INE
SS
AC
Q
UI
S
ITION
On the Acquisition Date, the Compan
y
, CVS Corporation (“CVS”), an investment
g
roup led b
y
Cerberus Capital
M
anagement, L.P. (the “Cerberus Group”) and Albertsons entered into a series of agreements providing for th
e
sa
l
eo
f
A
lb
ertsons to t
h
e Company, CVS an
d
t
h
e Cer
b
erus Group. T
h
ose agreements prov
id
e
df
or t
h
e
f
o
ll
ow
i
ng
:
• First, Albertsons became a subsidiar
y
of New Albertsons.
• Next, Albertsons was converted to a limited liability company (“Albertsons LLC”) and a series of
reorgan
i
zat
i
ons occurre
d
. As a resu
l
to
f
t
h
ose reorgan
i
zat
i
ons, New A
lb
ertsons
h
e
ld
su
b
stant
i
a
ll
ya
ll
o
f
the assets and liabilities of the Ac
q
uired O
p
erations. Albertsons LLC and its subsidiaries held
substantially all of the assets of Albertsons’ standalone drug store business (the “Standalone Dru
g
B
us
i
ness”) an
d
t
h
e non-core supermar
k
et
b
us
i
ness (t
h
e “Non-Core Bus
i
ness”) an
d
certa
i
n
li
a
bili
t
i
es o
f
Albertsons’ historical business
.
• Next, CVS purchased substantially all of the assets and assumed specified liabilities of the Standalone
Drug Bus
i
ness
.
• The Cerberus Group then acquired the equit
y
interests of Albertsons LLC
.
• Then, the Company acquired New Albertsons (the “Acquisition”)
.
Th
e Acqu
i
s
i
t
i
on a
ll
owe
d
t
h
e Company to acqu
i
re t
h
e prem
i
er reta
il
operat
i
ons o
f
A
lb
ertsons a
ddi
ng
a
pproximatel
y
1,12
5
stores to the Compan
y
’s retail footprint. The Acquisition was a unique strate
g
ic opportunit
y
to acquire those assets of Albertsons that the Company viewed as the most attractive and profitable. The acquire
d
F-
18