Discontinued Operations

3 Months Ended

Jun. 18, 2011

Discontinued Operations

Discontinued Operations

 

16.  Discontinued Operations

We have had multiple transactions throughout the years which met the criteria for discontinued operations.  These events are described based on the year the transaction was initiated.

Summarized below is a reconciliation of the liabilities related to restructuring obligations resulting from these activities (in thousands):

	For the 16 Weeks Ended June 18, 2011
	Balance at		Interest								Balance at
	2/26/2011		Accretion(1)		Adjustments(2)			Utilization(3)			6/18/2011
2007 Events
Occupancy	$	49,317	$	80	$	(6,716	)	$	-		$	42,681
Pension withdrawal		57,581		1,079		-			-			58,660
2007 events total		106,898		1,159		(6,716	)		-			101,341
2005 Event
Occupancy		21,390		-		-			-			21,390
2003 Events
Occupancy		8,451		12		(1,641	)		(35	)		6,787
Total	$	136,739	$	1,171	$	(8,357	)	$	(35	)	$	129,518

 (1) The additions to occupancy and severance represent the interest accretion on future occupancy costs and future obligations for early withdrawal from multi-employer union pension plans which were recorded at present value at the time of the original charge.   Interest accretion is recorded as a component of "Loss from operations of discontinued businesses" in our Consolidated Statements of Operations.

(2)   At each balance sheet date, we assess the adequacy of the balance of the remaining liability to determine if any adjustments are required as a result of changes in circumstances and/or estimates.   These adjustments are recorded as a component of "Loss from operations of discontinued business" in our Consolidated Statements of Operations.

For the 16 Weeks Ended June 18, 2011

During the 16 weeks ended June 18, 2011, we recorded adjustments for the 2007 and 2003 events to reduce occupancy liabilities by $6.7 million and $1.6 million, respectively, due to an estimated allowable claim amount for property leases that were rejected in bankruptcy court during the first quarter.

(3)   Occupancy utilization represents payments made during those periods for rent, common area maintenance and real estate taxes.  Pension withdrawal utilization represents payments made to the union pension fund during the period.

Summarized below are the payments made to date from the time of the original charge and expected future payments related to these events (in thousands):

	2007 Events		2005 Event		2003 Event		Total
Total severance payments made to date	$	37,089	$	2,650	$	22,528	$	62,267
Expected future pension withdrawal payments		58,660		-		-		58,660
Total severance and pension withdrawal payments expected to be incurred		95,749		2,650		22,528		120,927
Total occupancy payments made to date		92,140		60,866		34,119		187,125
Expected future occupancy payments,
excluding interest accretion		42,681		21,390		6,787		70,858
Total occupancy payments expected to be incurred,
excluding interest accretion	$	134,821	$	82,256	$	40,906	$	257,983
Total severance and occupancy payments made to date	$	129,229	$	63,516	$	56,647	$	249,392
Expected future pension withdrawal and occupancy payments
expected to be incurred, excluding interest accretion		101,341		21,390		6,787		129,518
Total severance, pension withdrawal and occupancy payments expected to be incurred, excluding interest accretion	$	230,570	$	84,906	$	63,434	$	378,910

Payments to date were primarily for occupancy related costs such as rent, common area maintenance, real estate taxes, lease termination costs, severance, and benefits.  The remaining obligation relates to expected future payments under long term leases and expected future payments for early withdrawal from multi-employer union pension plans.  The expected completion dates for the 2007, 2005 and 2003 events are 2028, 2012 and 2012, respectively.

Summarized below are the amounts included in our balance sheet captions in our Company's Consolidated Balance Sheets related to these events (in thousands):

	June 18, 2011
	2007 Events		2005 Event		2003 Events		Total
Other accruals	$	-	$	-	$	-	$	-
Other non-current liabilities	$	-	$	-	$	-	$	-
Liabilities subject to compromise	$	101,341	$	21,390	$	6,787	$	129,518
	February 26, 2011
	2007 Events		2005 Event		2003 Events		Total
Other accruals	$	-	$	-	$	-	$	-
Other non-current liabilities	$	-	$	-	$	-	$	-
Liabilities subject to compromise	$	106,898	$	21,390	$	8,451	$	136,739

We evaluated the closed locations reserves balances as of June 18, 2011 based on current information and have concluded that they are adequate to cover future costs.  We will continue to monitor the status of the vacant and subsidized properties, severance and benefits, and pension withdrawal liabilities, and adjustments to the closed locations reserves balances may be recorded in the future, if necessary.