Harris Teeter 2011 Annual Report Download - page 38

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3. COMPANY OWNED LIFE INSURANCE (COLI)
The Company has purchased life insurance policies to fund its obligations under certain benefit plans for officers, key
employees and directors. The cash surrender value of these policies is recorded net of policy loans and included with other
long-term assets in the Company’s consolidated balance sheets. The cash value of the Company’s life insurance policies were
$64,374,000 as of October 2, 2011 and $61,228,000 as of October 3, 2010, and no policy loans were outstanding at either date.
4. INTANGIBLE ASSETS
The carrying amount of intangible assets as of October 2, 2011 and October 3, 2010 was as follows (in thousands):
2011 2010
Acquired favorable operating leases $18,170 $18,170
Pharmacy Scripts 602 -
Total amortizing intangibles 18,772 18,170
Accumulated amortization (5,163) (4,226)
Total intangible assets, net of accumulated amortization $13,609 $13,944
The Company has no non-amortizing intangible assets. Amortization expense for intangible assets was $937,000, $870,000
and $870,000 in fiscal years 2011, 2010, and 2009, respectively. Amortizing intangible assets have remaining useful lives from
three to 21 years. Projected amortization expense for intangible assets existing as of October 2, 2011 is: $1,071,000, $1,071,000,
$1,004,000, $870,000 and $870,000 for fiscal years 2012, 2013, 2014, 2015 and 2016, respectively.
5. 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. In connection with the sale,
the Company recorded a pre-tax loss on sale of discontinued operations of $48.8 million in the fourth quarter of fiscal 2011.
In addition, A&E’s operating results and assets and liabilities have been classified as discontinued operations in the Company’s
Statements of Consolidated Operations and Consolidated Balance Sheets, respectively.
The major classes of assets and liabilities of the discontinued operations that are included in the Company’s Consolidated
Balance Sheets as of October 2, 2011 and October 3, 2010 were as follows (in thousands):
2011 2010
Cash and Cash Equivalents $ 10,323 $ 13,505
Accounts Receivable, Net of Allowance For Doubtful Accounts of $899 and $1,083 52,137 51,535
Refundable Income Taxes 100 3,162
Inventories 51,967 48,480
Deferred Income Taxes 522 464
Prepaid Expenses and Other Current Assets 6,219 5,689
Current Assets of Discontinued Operations $121,268 $122,835
Property, Net $ 64,834 $ 70,252
Investments 63,652 58,118
Deferred Income Taxes 837 3,324
Goodwill 515 515
Intangible Assets 6,468 7,490
Other Long-Term Assets 4,698 4,617
Impairment Reserve (42,255) -
Long-Term Assets of Discontinued Operations $ 98,749 $144,316
RUDDICK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
34