Safeway 2013 Annual Report Download - page 57

Table of Contents
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Store Lease Exit Costs and Impairment Charges Safeway regularly reviews its stores’ operating performance and assesses the
Company’s plans for certain store and plant closures. Losses related to the impairment of long-lived assets are recognized when expected
future cash flows are less than the asset’s carrying value. The Company evaluates the carrying value of the assets in relation to its expected
future cash flows. If the carrying value is greater than the future cash flows, a provision is made for the impairment of the assets to write the
assets down to estimated fair value. Fair value is determined by estimating net future cash flows, discounted using a risk-adjusted rate of
return. The Company calculates impairment on a store-by-store basis. These provisions are recorded as a component of operating and
administrative expense.
When stores that are under long-term leases close, the Company records a liability for the future minimum lease payments and related
ancillary costs, net of estimated cost recoveries that may be achieved through subletting properties or through favorable lease terminations,
discounted using a risk-adjusted rate of interest. This liability is recorded at the time the store is closed. Activity included in the reserve for
store lease exit costs is disclosed in Note E.
Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, net of applicable taxes, consisted of the following at
year-end (in millions):

2012
2011
Translation adjustments 
$399.0
$402.1
Pension and post-retirement benefits adjustment to funded status 
(737.8)
(658.1)
Recognition of pension and post-retirement benefits actuarial loss 
265.5
196.0
Other 
(0.5)
(1.5)
Total 
$(73.8)
$(61.5)
At the closing of the Sale of Canadian Operations, the Company recorded the related balance of cumulative translation adjustment, pension
and post-retirement benefit adjustment to funded status and recognition of pension and post-retirement benefits actuarial loss which related to
CSL as part of the gain on the sale. See Note B.
Stock-Based Employee Compensation Safeway accounts for all share-based payments to employees, including grants of employee
stock options, as compensation cost based on the fair value on the date of grant. The Company determines fair value of such awards using
the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates certain assumptions, such as risk-free interest
rate, expected volatility, expected dividend yield and expected life of options, in order to arrive at a fair value estimate.
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In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updated ("ASU") No. 2013-02,
"Comprehensive Income (Topic 220) Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income", to improve the
reporting of reclassifications out of accumulated other comprehensive income. ASU No. 2013-02 requires an entity to report the effect of
significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being
reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts that are not required under U.S.
GAAP to be reclassified in their entirety from accumulated other comprehensive income to net income in the same reporting period, an entity
is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. Safeway
adopted these disclosure amendments in the quarter ended March 23, 2013. The implementation
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