Albertsons 2013 Annual Report Download - page 70

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Changes in the Company’s reserves for closed properties consisted of the following:
2013 2012 2011
Beginning balance $ 72 $ 96 $ 64
Additions 16 9 42
Payments (22) (26) (23)
Adjustments (5) (7) 13
Ending balance $ 61 $ 72 $ 96
During fiscal 2013, the Company recorded additional reserves primarily related to the closure of non-strategic
stores announced during the second quarter and closed in the third and fourth quarters of fiscal 2013. During
fiscal 2011, the Company recorded additional reserves primarily related to the closure of non-strategic stores
announced and closed in the fourth quarter of fiscal 2011, which resulted in increased payments during fiscal
2012. Adjustments to reserves for closed properties are primarily related to changes in subtenant income.
Property, Plant and Equipment-Related Impairment Charges
During the second quarter of fiscal 2013, the Company announced the closure of approximately 22 non-strategic
Save-A-Lot stores, resulting in impairment charges of $16, and during the third quarter of fiscal 2013, the
Company recorded an impairment charge related to these closed stores’ operating leases of $10. The calculation
of the closed property charges requires significant judgments and estimates including estimated subtenant rentals,
discount rates, and future cash flows based on the Company’s experience and knowledge of the market in which
the closed property is located, and previous efforts to dispose of similar assets and existing market conditions.
During the fourth quarter of fiscal 2013, the executive management team determined the Company would
abandon certain capital projects in process, mainly related to software under development, and would cease use
of certain other software support tools, all within the Retail Food and Corporate segments, resulting in an
impairment of $191.
During the second quarter of fiscal 2013, the Company recorded $13 of property, plant and equipment charges
related to abandoned software under development within the Retail Food segment.
During fiscal 2012, the Company recorded $3 of property, plant and equipment-related impairment charges.
During fiscal 2011, the Company recorded $11 of property, plant and equipment-related impairment charges, of
which $7 were recorded in the fourth quarter as a result of the closure of the non-strategic stores.
Additions and adjustments to the reserves for closed properties and property, plant and equipment-related
impairment charges for fiscal 2013, 2012 and 2011 were primarily related to the Retail Food and Save-A-Lot
segments, and were recorded as a component of Selling and administrative expenses in the Consolidated
Statements of Operations.
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