Albertsons 2011 Annual Report Download - page 25

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Net Interest Expense
Net interest expense was $547 in fiscal 2011, compared with $569 last year, primarily reflecting lower debt
levels in fiscal 2011.
Provision for Income Taxes
The income tax benefit was $13, or 0.9 percent of loss before income taxes, for fiscal 2011 compared with a
tax expense of $239, or 37.8 percent of earnings before income taxes, last year. The tax rate for fiscal 2011
reflects the impact of the goodwill and intangible asset impairment charges, the majority of which are non-
deductible for income tax purposes.
Net Earnings (Loss)
Net loss was $1,510, or $7.13 per basic and diluted share, for fiscal 2011 compared with net earnings of $393,
or $1.86 per basic share and $1.85 per diluted share last year. Net loss for fiscal 2011 includes goodwill and
intangible asset impairment charges, store closure and exit costs and certain other costs consisting primarily of
labor buyout costs, severance and the impact of a labor dispute of $1,806 after tax, or $8.52 per diluted share,
partially offset by a gain on the sale of Total Logistic Control of $65 after tax, or $0.31 per diluted share. Net
earnings for fiscal 2010 includes net charges of $39 after tax, or $0.18 per diluted share, related to planned
retail market exits, closure of non-strategic stores and fees received from the early termination of a supply
agreement.
Comparison of fifty-two weeks ended February 27, 2010 (fiscal 2010) with fifty-three weeks ended
February 28, 2009 (fiscal 2009):
For fiscal 2010, Net sales were $40,597, compared with $44,564 in fiscal 2009. Net earnings for fiscal 2010
were $393 and diluted net earnings per share were $1.85, compared with net loss of $2,855 and diluted net
loss per share of $13.51 in fiscal 2009. Results for fiscal 2010 include net charges of $62 before tax ($39 after
tax, or $0.18 per diluted share) related to planned retail market exits, closure of non-strategic stores announced
in fiscal 2009 and fees received from the early termination of a supply agreement. Results for fiscal 2009
include charges of $3,762 before tax ($3,470 after tax, or $16.40 per diluted share) comprised of goodwill and
intangible asset impairment charges of $3,524 before tax ($3,326 after tax, or $15.71 per diluted share),
charges primarily related to the closure of non-strategic stores announced in fiscal 2009 of $200 before tax
($121 after tax, or $0.58 per diluted share), settlement costs for a pre-Acquisition Albertsons litigation matter
of $24 before tax ($15 after tax, or $0.07 per diluted share) and other Acquisition-related costs (defined as
one-time transaction costs, which primarily include supply chain consolidation costs, employee-related benefit
costs and consultant fees) of $14 before tax ($8 after tax, or $0.04 per diluted share).
Net Sales
Net sales for fiscal 2010 were $40,597, compared with $44,564 in fiscal 2009. Retail food sales were
77.9 percent of Net sales and Supply chain services sales were 22.1 percent of Net sales for fiscal 2010,
compared with 77.8 percent and 22.2 percent, respectively, in fiscal 2009.
Retail food sales for fiscal 2010 were $31,637, compared with $34,664 in fiscal 2009. Approximately $578 of
fiscal 2009 Retail food sales is attributable to the extra week. The remaining decrease primarily reflects
negative identical store retail sales growth (defined as stores operating for four full quarters, including store
expansions and excluding fuel and planned store dispositions) and the impact of store dispositions. For fiscal
2010, as compared to fiscal 2009, identical store retail sales growth was negative 5.1 percent based on the
same 52-week period for both years. Identical store retail sales performance was primarily the result of a
challenging economic environment, heightened competitive activity and investments in price and promotions.
During fiscal 2010, the Company added 40 new stores through new store development and sold or closed 112
stores, including planned dispositions.
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