Safeway 2002 Annual Report Download - page 38

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36 SAFEWAY INC. 2002 ANNUAL REPORT
Safeway’s adoption of SFAS No. 142 eliminated the amorti-
zation of goodwill beginning in the first quarter of 2002. The
following table adjusts net (loss) income and net earnings per
share for the adoption of SFAS No. 142 (in millions):
2002 2001 2000
Reported net (loss) income $ (828.1) $1,253.9 $1,091.9
Add back:
Goodwill amortization(1) –140.4 126.2
Adjusted net (loss) income $ (828.1) $1,394.3 $1,218.1
Basic earnings per share:
Reported net (loss) income $ (1.77) $ 2.49 $ 2.19
Add back:
Goodwill amortization(1) –0.28 0.26
Adjusted net (loss) income $ (1.77) $ 2.77 $ 2.45
Diluted earnings per share:
Reported net (loss) income $ (1.75) $ 2.44 $ 2.13
Add back:
Goodwill amortization(1) –0.28 0.25
Adjusted net (loss) income $ (1.75) $ 2.72 $ 2.38
(1) Includes goodwill amortization from continuing operations and Dominick’s discontinued operations.
NOTE D: STORE CLOSING AND
IMPAIRMENT CHARGES
IMPAIRMENT WRITE-DOWNS Safeway recognized impair-
ment charges on the write-down of long-lived store assets to
be closed of $8.4 million in 2002, $5.3 million in 2001 and
$8.6 million in 2000.
STORE LEASE EXIT COSTS The reserve for store lease exit
costs includes the following activity for 2002, 2001 and 2000
(in millions):
2002 2001 2000
Beginning balance $ 92.9 $103.7 $119.0
Provision for estimated net future
cash flows(1) of additional closed
stores 22.2 6.7 7.2
Estimated net future cash flows(1)
of stores assumed through
acquisitions that are closed or
designated to be closed –2.1 10.8
Net cash flows, interest accretion,
changes in estimates of net
future cash flows (25.8) (19.6) (30.3)
Reversals of reserves for stores that
management has determined will
remain open –– (3.0)
Ending balance $ 89.3 $ 92.9 $103.7
(1) Estimated net future cash flows represents future minimum lease payments and related ancillary
costs from the date of closure to the end of the remaining lease term, net of estimated cost recov-
eries that may be achieved through subletting properties or through favorable lease terminations.
Store lease exit costs related to the Furr’s and Homeland
bankruptcies are not included above but are discussed in
Note M.