Albertsons 2013 Annual Report Download - page 78

Changes in the Company’s unrecognized tax benefits consisted of the following:
2013 2012 2011
Beginning balance $ 165 $ 182 $ 133
Increase based on tax positions related to the current year 5 14 18
Decrease based on tax positions related to the current year (1) (1) (1)
Increase based on tax positions related to prior years 83 21 41
Decrease based on tax positions related to prior years (62) (46) (9)
Decrease due to lapse of statute of limitations (3) (5) —
Ending balance $ 187 $ 165 $ 182
Included in the balance of unrecognized tax benefits as of February 23, 2013, February 25, 2012 and
February 26, 2011 are tax positions of $60 net of tax, $67 net of tax, and $82 net of tax, respectively, which
would reduce the Company’s effective tax rate if recognized in future periods.
The Company expects to resolve $5, net, of unrecognized tax benefits within the next 12 months, representing
several individually insignificant income tax positions. These unrecognized tax benefits represent items in which
the Company may not prevail with certain taxing authorities, based on varying interpretations of the applicable
tax law. The Company is currently in various stages of audits, appeals or other methods of review with taxing
authorities from various taxing jurisdictions. The resolution of these unrecognized tax benefits would occur as a
result of potential settlements from these negotiations. Based on the information available as of February 23,
2013, the Company does not anticipate significant additional changes to its unrecognized tax benefits.
The Company recognized expense related to interest and penalties, net of settlement adjustments, of $20, $2 and
$10 for fiscal 2013, 2012 and 2011, respectively. In addition to the liability for unrecognized tax benefits, the
Company had a liability of $60 and $40 as of February 23, 2013 and February 25, 2012, respectively, related to
accrued interest and penalties for uncertain tax positions recorded in Other current liabilities and Other long-term
liabilities in the Consolidated Balance Sheets. The Company settled various audits during fiscal 2013 and fiscal
2012 resulting in payments of less than $1 for interest and penalties.
The Company is currently under examination or other methods of review in several tax jurisdictions and remains
subject to examination until the statute of limitations expires for the respective taxing jurisdiction or an
agreement is reached between the taxing jurisdiction and the Company. As of February 23, 2013, the Company is
no longer subject to federal income tax examinations for fiscal years before 2008 and in most states is no longer
subject to state income tax examinations for fiscal years before 2006.
NOTE 9—STOCK-BASED AWARDS
As of February 23, 2013, the Company has stock options, restricted stock awards and performance awards
(collectively referred to as “stock-based awards”) outstanding under the following plans: 2012 Stock Plan, 2007
Stock Plan, 2002 Stock Plan, 1997 Stock Plan, 1993 Stock Plan, Albertsons Amended and Restated 1995 Stock-
Based Incentive Plan and the Albertsons 2004 Equity and Performance Incentive Plan. The Company’s 2012
Stock Plan, as approved by stockholders in fiscal 2013, is the only plan under which stock-based awards may be
granted. The 2012 Stock Plan provides that the Board of Directors or the Leadership Development and
Compensation Committee of the Board (the “Compensation Committee”) may determine at the time of grant
whether each stock-based award granted will be a non-qualified or incentive stock-based award under the
Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The terms of each stock-based
award will be determined by the Board of Directors or the Compensation Committee. Generally, stock-based
awards granted prior to fiscal 2006 have a term of 10 years, from fiscal 2006 to fiscal 2012 stock-based awards
granted generally have a term of seven years and starting in fiscal 2013 stock-based awards granted generally
have a term of 10 years.
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