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Amendment No. 3 to Form S-1
Table of Contents
NEW ALBERTSON'S BUSINESS OF SUPERVALU INC.
Notes to Combined Financial Statements
February 21, 2013 and February 23, 2012
(Dollars in millions)
contains significant judgments and estimates related to such items as the weighted average cost of capital, future revenue, profitability,
cash flows and fair values of assets and liabilities.
Amortization expense for intangible assets with definite useful lives of $40. $47 and $48 was recorded in fiscal 2012, 2011, and
2010. Future amortization expense will average approximately $22 per year for the next five years.
NAI had unfavorable operating lease intangibles, related to certain above-market leases acquired and pushed down by Parent, of
S110 and $121 as of February 21, 2013 and February 23, 2012, respectively, included as a component of Other long-term liabilities
within the Combined Balance Sheets. Amortization benefit relating to these unfavorable operating leases was $11, $15 and $20 for
fiscal 2012, 2011 and 2010, respectively.
(4) Reserves for Closed Properties and Property, Plant and Equipment-Related Impairment Charges
Reserves for Closed Properties
NAI maintains reserves for costs associated with closures of retail stores, distribution centers and other properties that are no
longer being utilized in current operations. NAI provides for closed property operating lease liabilities based on the present value of the
remaining noncancelable lease payments after the closing date, reduced by estimated subtenant rentals that could be reasonably
obtained for the property. Adjustments to closed property reserves primarily relate to changes in expected subtenant income or actual
exit costs differing from original estimates.
Changes in NAI's reserves for closed properties consisted of the following:
2012
2011
2010
Beginning balance
$ 79
92
74
Additions
26
9
36
Payments
(21)
(26)
(22)
Adjustments
1
4
4
Ending balance
$ 85
79
92
During fiscal 2010. NAI recorded additional reserves primarily related to the closure of nonstrategic stores in the fourth quarter of
fiscal 2010, which resulted in increased payments during fiscal 2011.
During fiscal 2012, the closure of 35 nonstrategic stores was announced. Reserves for operating leases related to these closed
properties were recorded at the time of closing and the majority of these store closings were completed in fiscal 2012. The calculation of
the closed property charges requires significant judgments and estimates related to such items as future subtenant rentals, discount
rates, and future cash flows based on Parent's experience and knowledge of the market in which the closed property is located, and
previous efforts to dispose of similar assets and existing market conditions.
F-163
(Continued)
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