Albertsons 2008 Annual Report Download - page 87

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SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
NOTE 5—RESERVES FOR CLOSED PROPERTIES AND RELATED ASSET IMPAIRMENT
CHARGES
Reserves for Closed Properties
The Company maintains reserves for costs associated with closures of retail stores, distribution warehouses and
other properties that are no longer being utilized in current operations. The Company provides for closed
property operating lease liabilities using a discount rate to calculate the present value of the remaining
noncancellable lease payments after the closing date, reduced by estimated subtenant rentals that could be
reasonably obtained for the property.
A summary of changes in the Company’s reserves for closed properties is as follows:
2008 2007 2006
Beginning balance $118 $ 62 $ 81
Additions 18 36 10
Payments (40) (42) (30)
Adjustments 162 1
Ending balance $ 97 $118 $ 62
Fiscal 2007 additions included approximately $19 of reserves for closed properties from the Acquired
Operations, which were recorded in purchase accounting. Fiscal 2007 adjustments related to the fair value of
liabilities recognized in purchase accounting at the Acquisition Date for acquired closed property lease liabilities.
Asset Impairment Charges
During the fourth quarter of fiscal 2008, the Company recorded $14 of property, plant and equipment-related
impairments and other charges.
During fiscal 2007, the Company recorded a charge of $26 related to the disposal of 18 Scott’s retail stores which
included property, plant and equipment-related impairment charges of $6, goodwill impairment charges of $19
and other charges of $1.
During fiscal 2006, the Company recorded a charge of $65 related to the disposal of 20 Company operated Shop
‘n Save retail stores in Pittsburgh which included property, plant and equipment-related impairment charges of
$52, goodwill impairment charges of $7 and other charges of $6. In addition, the Company recognized asset
impairment charges of $14 for certain assets following the disposition of the Deals banner stores.
During fiscal 2006, the Company sold 26 Cub Foods stores located primarily in the Chicago area to the Cerberus
Group for a loss of approximately $95.
Additions and adjustments to the reserves for closed properties and asset impairment charges for fiscal 2008,
2007 and 2006 were all related to the Retail food segment, and were recorded as a component of Selling and
administrative expenses in the Consolidated Statements of Earnings, except for amounts related to the Acquired
Operations as noted above.
F-21