Albertsons 2015 Annual Report Download - page 71

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69
represent a strategic shift that is expected to have a major effect on operations and financial results. The ASU no longer
precludes presentation as discontinued operations if there is significant continuing involvement after disposal. Certain
disclosures for disposals of individually significant components of an entity that do not qualify for discontinued operations
presentation are also required. This ASU is effective prospectively for disposals that have not been reported in previously
issued financial statements. The Company adopted ASU 2014-08 in fiscal 2015 and the adoption did not have an impact on the
Company’s Consolidated Financial Statements.
Recently Issued Accounting Standards
In May 2014, the FASB issued authoritative guidance under ASU 2014-09, Revenue from Contracts with Customers. ASU
2014-09 supersedes existing revenue recognition requirements and provides a new comprehensive revenue recognition model
and requires entities to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the
consideration it expects to receive in exchange for those goods or services. This ASU will be adopted by the Company during
the first quarter of fiscal 2018. Adoption is allowed by either the full retrospective or modified retrospective approach. The
Company believes it will apply the modified retrospective approach and is currently evaluating the potential impact of adoption
on its Consolidated Financial Statements.
NOTE 2—BUSINESS ACQUISITIONS
Rainbow Stores
During the second quarter of fiscal 2015, the Company completed the purchase of seven Rainbow Foods grocery stores, 11
Rainbow Foods pharmacy locations and one Rainbow Foods liquor store from RBF, LLC and Roundy’s Supermarkets, Inc.
(“Roundy’s”). Five of the grocery stores, each of the pharmacies and the liquor store are operating under the Cub Foods banner,
and two of the grocery stores are operating as Rainbow Foods grocery stores. In addition, several independent retail customers
and franchisees, including Diamond Lake 1994 L.L.C., in which the Company has a minority ownership interest, also
consummated their purchase of certain Rainbow Foods grocery stores. The three grocery stores acquired by Diamond Lake
1994 L.L.C are operating under the Cub Foods banner.
Total consideration for the stores and pharmacies acquired by the Company was $34 plus cash payments of $5 for
inventories. The Company assumed certain off-balance sheet obligations, including operating leases and multiemployer pension
obligations with respect to the acquired stores. In addition, the Company also acquired Roundy’s RAINBOW™ trademark.
The fair value of assets acquired was $39, including property, plant and equipment of $15, goodwill of $14, inventories of $5,
identifiable finite-lived intangible assets of $4 and other current assets of $1. Recognized goodwill represents future economic
benefits expected to arise from the Company’s presence in the retail market. These Consolidated Financial Statements reflect
the final purchase accounting allocations. Pro forma information for this acquisition is not presented as the results of operations
of the acquired businesses are not material to the Company’s Consolidated Financial Statements.
Save-A-Lot Licensee Stores
During the fiscal year ended February 28, 2015, the Company paid $19 to acquire equipment and leasehold improvements,
identifiable finite-lived intangibles and inventories associated with 38 licensed Save-A-Lot stores from multiple licensee
operators. These Consolidated Financial Statements reflect the final purchase accounting allocations. Pro forma information for
these acquisitions is not presented as the results of operations of the acquired businesses are not material to the Company’s
Consolidated Financial Statements.