Albertsons 2007 Annual Report Download - page 86

SU
PERVAL
U
IN
C
. and
S
ubsidiaries
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D
ebt A
ss
ume
d
T
he Compan
y
assumed $6,123 of the Acquired Operations’ outstandin
g
debt. This debt consisted primaril
y
o
f
publicly issued notes and debentures (including mandatory convertible securities), medium term notes and capita
l
l
ease obligations (see Note 9—Debt). The estimated fair value of the debt assumed by the Company was
$
6,088
.
T
he fair value of the
p
ublic notes and debentures were estimated based on market
q
uotes. The fair value of th
e
mandatory convertible securities was estimated based on the closing market price of the security. The fair value
f
or t
h
e rema
i
n
i
ng
d
e
b
t was est
i
mate
db
ase
d
on t
h
e mar
k
et y
i
e
ld
so
f
pu
bli
c
l
y tra
d
e
dd
e
b
tw
i
t
h
s
i
m
il
ar cre
dit
ratin
g
s, interest rates, and maturit
y
dates
.
C
ash Settlement o
f
Stock Options and Restricted Stock Unit
s
As of the Acquisition Date, Albertsons had approximately 31 stock options and 7 restricted stock units
o
utstan
di
ng. As a resu
l
to
f
t
h
e Acqu
i
s
i
t
i
on, a
ll
outstan
di
ng awar
d
s
f
u
ll
y veste
d
ot
h
er t
h
an approx
i
mate
l
y0.
4
restricted stock unit awards. In accordance with the Acquisition a
g
reement, the Compan
y
settled in cash an
d
stock all of the Albertsons stock options held by Albertsons employees who did not become employees of th
e
C
ompany. T
h
e Company a
l
so sett
l
e
d
a
ll
o
f
t
h
eA
lb
ertsons
f
u
ll
y veste
d
restr
i
cte
d
stoc
k
un
i
ts
i
n cas
h
or a
combination of cash and SUPERVALU common stock
.
S
tock O
p
tions and Restricted Stock Units Assume
d
I
n accordance with the Acquisition agreement, the Company assumed the obligation of stock options and
a
pprox
i
mate
l
y 0.4 unveste
d
restr
i
cte
d
stoc
k
un
i
ts o
fi
n
di
v
id
ua
l
sw
h
o
b
ecame emp
l
oyees o
f
t
h
e Company. T
h
e
stock options became full
y
vested and were converted into the ri
g
ht to acquire a total of 21 shares of
SUPERVALU stock, using an exchange ratio based on the Acquisition Consideration
.
D
irect Costs of t
h
e Acquisition
D
i
rect costs o
f
t
h
e Acqu
i
s
i
t
i
on
i
nc
l
u
d
e
i
nvestment
b
an
ki
ng
f
ees,
l
ega
l
an
d
account
i
ng
f
ees an
d
ot
h
er externa
l
costs directl
y
related to the Acquisition.
P
reliminar
y
Purchase Price Allocatio
n
T
he Acquisition was accounted for under the purchase method of accounting with the Company as the acquirer i
n
a
ccor
d
ance w
i
t
h
Statement o
f
F
i
nanc
i
a
l
Account
i
ng Stan
d
ar
d
s No. 141, Bus
i
ness Com
bi
nat
i
ons (“SFA
S
N
o. 141”). As a result, the Compan
y
applied the purchase method of accountin
g
to the separable assets, includin
g
g
oodwill, and liabilities of New Albertsons. The following summarizes the preliminary estimated fair values of
t
h
e assets acqu
i
re
d
an
dli
a
bili
t
i
es assume
d
at t
h
e Acqu
i
s
i
t
i
on Date. T
h
ese pre
li
m
i
nary purc
h
ase pr
i
ce a
ll
ocat
i
on
s
a
re estimates as of Februar
y
24, 2007 based on a combination of third-part
y
valuations and internal anal
y
ses an
d
w
ill be further adjusted during the allocation period as defined in SFAS No. 141. The primary areas of the
purc
h
ase pr
i
ce a
ll
ocat
i
on t
h
at are not yet
fi
na
li
ze
d
re
l
ate to t
h
eva
l
uat
i
on o
fl
ong-
li
ve
d
assets,
i
nventor
i
es,
intan
g
ible assets, capital and operatin
g
lease obli
g
ations, income taxes and deferred income taxes, and residual
g
oodwill. Additionally, the Company is in the process of gathering data and making assessments in other areas
t
h
at cou
ld h
ave an
i
mpact on t
h
e
fi
na
l
purc
h
ase pr
i
ce a
ll
ocat
i
on. T
h
eva
l
uat
i
ons are pre
li
m
i
nary
d
ue pr
i
mar
il
yto
the size and complexit
y
of the Acquisition
.
F-
20