Albertsons 2008 Annual Report Download - page 19

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goods, delays in the delivery of goods to the Company’s distribution centers or stores and a reduction in the
availability of products in the Company’s stores. In addition, adverse climate conditions and adverse weather
patterns, such as drought or flood, that impact growing conditions and the quantity and quality of crops yielded
by food producers may adversely affect the availability or cost of certain products within the grocery supply
chain. Any of these factors could disrupt the Company’s businesses and adversely affect the Company’s financial
condition and results of operations.
The obligation to provide transition support services to the purchasers of the non-core supermarket
business of Albertsons could adversely affect the Company’s results of operations.
In connection with the Acquisition, the Company entered into a Transition Services Agreement (“TSA”) with the
purchaser of the non-core supermarket business of Albertsons. That agreement is structured to provide the
Company payments from the purchaser to cover the historical costs of providing support services to the
operations. There is no assurance that the payments will be sufficient to cover the Company’s costs of providing
the services or that the Company will be able to reduce its costs as fast as those payments may decrease during
the term of the TSA. The Company’s management may have its attention diverted while trying to provide the
services required by the TSA and the TSA may otherwise limit the Company’s ability to achieve the synergies
and other cost savings anticipated in the Acquisition. Disputes in connection with the TSA could lead to
reductions in the payments due to the Company under the agreement or unanticipated costs that could adversely
affect the Company’s results of operations.
Changes in accounting standards could materially impact the Company’s financial condition and results of
operations.
Generally accepted accounting principles and related accounting pronouncements, implementation guidelines,
and interpretations for many aspects of the Company’s business, such as accounting for insurance and self-
insurance, inventories, goodwill and intangible assets, store closures, leases, income taxes and stock-based
compensation, are complex and involve subjective judgments. Changes in these rules or their interpretation could
significantly change or add significant volatility to the Company’s reported earnings without a comparable
underlying change in cash flow from operations. As a result, changes in accounting standards could materially
impact the Company’s financial condition and results of operations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
13