Harris Teeter 2011 Annual Report Download - page 32

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Ruddick Corporation and subsidiaries,
including its wholly owned operating companies, Harris Teeter, Inc. (“Harris Teeter”) and American & Efird, Inc. (“A&E”),
collectively referred to herein as the Company. All material intercompany amounts have been eliminated. To the extent that
non-affiliated parties held minority equity investments in joint ventures of the Company, such investments are classified as
noncontrolling interest.
The Company reviews its investments in entities to determine if such entities are deemed to be variable interest entities
(VIE’s) as defined by ASC paragraph 810-10-05-8. The Company will consolidate those VIE’s in which the Company is the
primary beneficiary of the entity. The Company concluded that it did not have any VIE’s that required consolidation in the
reported fiscal years.
Basis of Presentation - Discontinued Operations
On November 7, 2011, the Company completed the sale of all of its ownership interest in A&E to two newly formed
affiliates of KPS Capital Partners, LP. The purchase price was $180 million in cash consideration, subject to adjustments for
working capital and certain liabilities, including under funded pension liabilities and foreign debt. As a result of the sale
subsequent to the fiscal year ended October 2, 2011, A&E’s operating results and assets and liabilities have been classified as
discontinued operations in the Company’s Consolidated Balance Sheets and Statements of Consolidated Operations.
Operations
The Company operates one primary business segment, retail grocery (including related real estate and store development
activities) – through its wholly-owned subsidiary Harris Teeter. Harris Teeter is a regional supermarket chain operating primarily
in the southeastern and mid-Atlantic United States, and the District of Columbia.
New Accounting Standards
In June 2009, the FASB issued a new standard that changed the definition of a variable interest entity (“VIE”), contained
new criteria for determining the primary beneficiary of a VIE, required enhanced disclosures to provide more information about
a company’s involvement in a VIE and increased the frequency of required reassessments to determine whether a company is
the primary beneficiary of a VIE. The adoption of this standard at the beginning of the fiscal 2011 had no impact on the
Company’s financial position, results of operations or cash flows.
Fiscal Year
The Company’s fiscal year ends on the Sunday nearest to September 30. However, the Company’s Harris Teeter subsidiary’s
fiscal periods end on the Tuesday following the Company’s fiscal period end. Fiscal year 2011 includes the 52 weeks ended
October 2, 2011 (October 4, 2011 for Harris Teeter), fiscal year 2010 includes the 53 weeks ended October 3, 2010
(October 5, 2010 for Harris Teeter), and fiscal year 2009 includes the 52 weeks ended September 27, 2009 (September 29, 2009
for Harris Teeter).
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual amounts could differ from those estimates.
Cash and Cash Equivalents
For purposes of the statements of consolidated cash flows, the Company considers all highly liquid cash investments
purchased with a maturity of three months or less to be cash equivalents.
RUDDICK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
28