Albertsons 2008 Annual Report Download - page 85

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SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
NOTE 3—BUSINESS ACQUISITION
Albertsons Acquisition
The Company acquired New Albertsons for a purchase price of approximately $11,370, net of approximately
$4,911 of cash for the sale of the Albertsons’ standalone drug store business to CVS Corporation and the sale of
Albertsons’ non-core supermarket business (“Albertsons LLC”) to an investment group led by Cerberus Capital
Management, L.P. (the “Cerberus Group”). The consideration paid by the Company consisted of approximately
$2,661 in cash, $2,251 of SUPERVALU common stock, $6,123 of debt assumed and approximately $335 related
to cash settlement and assumption of restricted stock unit and stock option awards and direct costs of the
acquisition of New Albertsons.
The acquisition of New Albertsons was accounted for under the purchase method of accounting with the
Company as the acquirer in accordance with SFAS No. 141, “Business Combinations.” As a result, the Company
applied the purchase method of accounting to the separable assets, including goodwill and liabilities of New
Albertsons. The Company completed the purchase price allocation during the first quarter of fiscal 2008, with the
exception of income taxes which are adjusted in accordance with EITF No. 93-7, “Uncertainties Related to
Income Taxes in a Purchase Business Combination.” The purchase price allocations are based on the use of
multiple valuation techniques, including the cost, income and market approaches. The following table
summarizes the assets acquired and liabilities assumed as of the Acquisition Date, with purchase price
adjustments since the preliminary purchase price allocation as previously disclosed as of February 24, 2007:
Purchase
Price
Allocation
February 24,
2007
Purchase
Price
Adjustments
Purchase
Price
Allocation
February 23,
2008
Current assets $ 3,339 $ 56 $ 3,395
Property, plant and equipment 6,613 (954) 5,659
Goodwill 4,333 1,004 5,337
Intangible assets 2,410 (440) 1,970
Other assets 376 94 470
Total assets acquired 17,071 (240) 16,831
Current liabilities 3,948 (30) 3,918
Long-term debt and obligations under capital leases 6,045 15 6,060
Deferred income taxes 610 (437) 173
Other liabilities 1,356 208 1,564
Total liabilities assumed 11,959 (244) 11,715
Net assets acquired $ 5,112 $ 4 $ 5,116
The purchase price adjustments relate primarily to the receipt of additional information regarding the fair values
of long-lived assets, inventories, intangible assets, capital and operating lease obligations, income taxes and
deferred income taxes and residual goodwill.
Transition Services Agreement
In connection with the purchase of Albertsons LLC by the Cerberus Group, the Company entered into a
Transition Services Agreement (“TSA”). The TSA provided for a two-year term and a combination of fixed and
F-19