Albertsons 2009 Annual Report Download - page 20

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may adversely affect the Company’s results of operations. Such conditions may cause physical damage to the
Company’s properties, closure of one or more of the Company’s stores or distribution facilities, lack of an
adequate work force in a market, temporary disruption in the supply of products, disruption in the transport of
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 may disrupt the Company’s businesses and adversely affect the Company’s
financial condition and results of operations.
Changes in accounting standards may materially impact the Company’s financial condition and results
of operations.
Accounting principles generally accepted in the Unites States 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 may 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 may materially impact the Company’s financial condition and results of operations.
An impairment in the carrying value of the Company’s goodwill or other intangible assets may adversely
affect the Company’s financial condition and results of operations.
The Company is required to annually test goodwill and intangible assets with indefinite lives, including the
goodwill associated with past acquisitions and any future acquisitions, to determine if impairment has
occurred. Additionally, interim reviews must be performed whenever events or changes in circumstances
indicate that impairment may have occurred. If the testing performed indicates that impairment has occurred,
the Company is required to record a non-cash impairment charge for the difference between the carrying value
of the goodwill or other intangible assets and the implied fair value of the goodwill or other intangible assets
in the period the determination is made. The testing of goodwill and other intangible assets for impairment
requires the Company to make significant estimates about our future performance and cash flows, as well as
other assumptions. These estimates can be affected by numerous factors, including changes in economic,
industry or market conditions, changes in business operations, changes in competition or potential changes in
the Company’s stock price and market capitalization. Changes in these factors, or changes in actual
performance compared with estimates of our future performance, may affect the fair value of goodwill or other
intangible assets, which may result in an impairment charge. The Company cannot accurately predict the
amount and timing of any impairment of assets. Should the value of goodwill or other intangible assets
become impaired, there may be an adverse effect on the Company’s financial condition and results of
operation.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
16