Albertsons 2015 Annual Report Download - page 70

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The Company is currently in various stages of audits, appeals or other methods of review with authorities from various taxing
jurisdictions. The Company establishes liabilities for unrecognized tax benefits in a variety of taxing jurisdictions when, despite
management’s belief that the Company’s tax return positions are supportable, certain positions may be challenged and may
need to be revised. The Company adjusts these liabilities in light of changing facts and circumstances, such as the progress of a
tax audit. The Company also provides interest on these liabilities at the appropriate statutory interest rate, and accrues penalties
as applicable. The Company recognizes interest related to unrecognized tax benefits in Interest expense and penalties in Selling
and administrative expenses in the Consolidated Statements of Operations.
Common and Treasury Stock
Concurrent with the execution of the Stock Purchase Agreement, the Company entered into a Tender Offer Agreement (the
“Tender Offer Agreement”) with Symphony Investors LLC, which is owned by a Cerberus Capital Management, L.P.
(“Cerberus”)-led investor consortium (“Symphony Investors”), and Cerberus, pursuant to which, upon the terms and subject to
the conditions of the Tender Offer Agreement, and contingent upon the NAI Banner Sale, Symphony Investors tendered for up
to 30 percent of the issued and outstanding common stock of the Company at a purchase price of $4.00 per share in cash (the
“Tender Offer”). Approximately 12 shares were validly tendered, representing approximately 5.5 percent of the issued and
outstanding shares at the time of the Tender Offer expiration on March 20, 2013. All shares that were validly tendered and not
properly withdrawn were accepted as tendered in accordance with the terms of Tender Offer.
In addition, pursuant to the terms of the Tender Offer Agreement, on March 21, 2013, the Company issued approximately 42
additional shares of common stock (representing approximately 19.9 percent of the outstanding shares prior to the share
issuance) to Symphony Investors at the Tender Offer price per share of $4.00, resulting in $170 in cash proceeds to the
Company, which brought Symphony Investors' ownership percentage to 21.2 percent after the share issuance. The Tender Offer
Agreement provides that until the second anniversary of the closing of the Tender Offer, which was March 21, 2015, transfers
of shares acquired by Symphony Investors in the Tender Offer and from the Company pursuant to the Tender Offer Agreement
were generally restricted, with more limited restrictions thereafter. The Company has agreed to customary obligations to
register the shares acquired by Symphony Investors with the Securities and Exchange Commission if requested by Symphony
Investors.
Revisions
In the first quarter of fiscal 2015, the Company revised the presentation of noncontrolling interests as reflected in the
Consolidated Financial Statements. Noncontrolling interests primarily include minority ownership interests in entities operating
certain stores under the Cub Foods banner within Retail Food. Pursuant to the terms of the ownership agreements, the
Company is required to distribute cash flows generated by these entities on a proportionate basis based on ownership interest.
Net earnings attributable to noncontrolling interests were previously presented within Selling and administrative expenses in
the Consolidated Statements of Operations and have been revised to a separate presentation in Net earnings attributable to
noncontrolling interests. Noncontrolling interests were previously presented in Other long-term liabilities in the Consolidated
Balance Sheets and have been revised as a component of Stockholders’ deficit. Distributions to noncontrolling interests were
previously presented as a reduction of cash flows from operating activities in the Consolidated Statements of Cash Flows and
have been revised as Distributions to noncontrolling interests within financing activities.
In addition, the Company revised the presentation of equity in earnings of unconsolidated affiliates. Equity in earnings of
unconsolidated affiliates was previously presented in Net sales and has been revised to a separate presentation in Equity in
earnings of unconsolidated affiliates. The revisions did not impact Net earnings (loss) attributable to SUPERVALU INC. or net
earnings per share for any period. Management has determined that the presentation changes are not material to any period
reported. Prior period amounts have been revised to conform to the current period presentation.
Recently Adopted Accounting Standards
In July 2013, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance under accounting standard
update (“ASU”) 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, A Similar
Tax Loss, or a Tax Credit Carryforward Exists. This ASU requires entities to present an unrecognized tax benefit as a reduction
of a deferred tax asset for a net operating loss carryforward (“NOL”) or tax credit carryforward whenever the NOL or tax credit
carryforward would be available to reduce the additional taxable income or tax due if the tax position is disallowed. This ASU
requires entities to assess whether to net the unrecognized tax benefit with a deferred tax asset as of the reporting date. The
Company adopted ASU 2013-11 in the first quarter of fiscal 2015, which resulted in a reclassification of $1 of unrecognized tax
benefits and other credits against deferred tax assets.
In April 2014, the FASB issued authoritative guidance under ASU 2014-08, Reporting Discontinued Operations and
Disclosures of Disposals of Components of an Entity. Under this ASU, disposals classified as discontinued operations must