Segment Information

12 Months Ended

Dec. 29, 2012

Segment Reporting Disclosure [Text Block]

(18)        Segment Information

We sell and distribute products that are typically found in supermarkets and operate three reportable operating segments.  The Military segment consists of eight distribution centers that distribute products primarily to military commissaries and exchanges.  During fiscal 2010, our military distribution centers in Columbus, Georgia and Bloomington, Indiana became operational.  During fiscal 2012, our renovated Oklahoma City, Oklahoma facility became operational.  Our Food Distribution segment consists of 13 distribution centers that sell to independently operated retail food stores, our corporate owned stores and other customers.  During the third quarter of fiscal 2010, we closed our food distribution center in Bridgeport, Michigan at the end of its lease term.  During the fourth quarter of fiscal 2012, we closed our food distribution center in Cedar Rapids , Iowa.  The Retail segment consists of 75 corporate-owned stores that sell directly to the consumer.  During fiscal 2012, we acquired eighteen No Frills supermarkets, twelve Bag ‘N Save supermarkets and one additional supermarket.  We also sold two retail stores during fiscal 2012.  We sold four retail stores and closed two retail stores during fiscal 2011.  We closed two retail stores during fiscal 2010.

We evaluate segment performance and allocate resources based on profit or loss before income taxes, interest associated with corporate debt and other discrete items.  The accounting policies of the reportable segments are the same as those described in the summary of accounting policies.

Inter‑segment sales are recorded on a market price-plus-fee and freight basis.  For segment financial reporting purposes, a portion of the operational profits recorded at our distribution centers related to corporate-owned stores is allocated to the Retail segment.  Certain revenues and costs from our distribution centers are specifically identifiable to either the independent or corporate-owned stores that they serve.  The revenues and costs that are specifically identifiable to corporate-owned stores are allocated to the Retail segment.  Those that are specifically identifiable to independent customers are recorded in the Food Distribution segment.  The remaining revenues and costs that are not specifically identifiable to either the independent or corporate-owned stores are allocated to the Retail segment as a percentage of corporate-owned store distribution sales to total distribution center sales. For fiscal 2012, 25% of such warehouse operational profits were allocated to the Retail segment compared to 24% and 23% in fiscal 2011 and 2010, respectively.

Major Segments of the Business

Year end December 29, 2012

(in thousands)		Military		Food Distribution		Retail		Total
Revenue from external customers	$	2,309,455	$	1,844,929	$	666,413	$	4,820,797
Inter-segment revenue		-		350,893		-		350,893
Interest income		-		(35)		-		(35)
Interest expense (including interest related to capital leases)		(6)		(35)		4,998		4,957
Depreciation expense		12,353		15,777		9,704		37,834
Segment profit		33,319		10,355		14,610		58,284
Assets		447,743		325,256		187,381		960,380
Expenditures for long-lived assets		10,075		13,838		15,586		39,499

Major Segments of the Business

Year end December 31, 2011

(in thousands)		Military		Food Distribution		Retail		Total
Revenue from external customers (1)	$	2,352,918	$	2,032,570	$	469,971	$	4,855,459
Inter-segment revenue		-		237,328		-		237,328
Interest income		-		(39)		-		(39)
Interest expense (including interest related to capital leases)		(1)		(39)		3,603		3,563
Depreciation expense		10,044		17,920		7,740		35,704
Segment profit		50,412		23,745		5,602		79,759
Assets		497,224		460,498		113,895		1,071,617
Expenditures for long-lived assets		53,501		9,038		6,061		68,600

Major Segments of the Business

Year end January 1, 2011

(in thousands)		Military		Food Distribution		Retail		Total
Revenue from external customers (1)	$	$ 2,299,014	$	$ 2,217,649	$	$ 518,263	$	$ 5,034,926
Inter-segment revenue		-		258,175		-		258,175
Interest income		-		(37)		-		(37)
Interest expense (including interest related to capital leases)		12		(36)		3,633		3,609
Depreciation expense		6,269		19,674		10,176		36,119
Segment profit		51,301		33,650		6,660		91,611
Assets		441,866		490,467		115,470		1,047,803
Expenditures for long-lived assets		48,356		8,777		2,162		59,295

(1) Prior year amounts have been reclassified to present fees received for shipping, handling, and the performance of certain other services in accordance with ASC Topic 605.  Please refer to Note 1 of the Notes to Consolidated Financial Statements of this Form 10-K for a further discussion.

Reconciliation

(in thousands)		2012		2011		2010
Revenues
Total external revenue for segments	$	4,820,797	$	4,855,459	$	5,034,926
Inter-segment revenue from reportable segments		350,893		237,328		258,175
Elimination of inter-segment revenues		(350,893)		(237,328)		(258,175)
Total consolidated revenues	$	4,820,797	$	4,855,459	$	5,034,926
Profit
Total profit for segments	$	58,284	$	79,759	$	91,611
Unallocated amounts:
Interest		(19,987)		(21,331)		(19,485)
Goodwill impairment		(166,630)		-		-
Gain on acquisition of a business		6,639		-		-
Earnings before income taxes	$	(121,694)	$	58,428	$	72,126
Assets
Total assets for segments	$	960,380	$	1,071,617	$	1,047,803
Unallocated corporate assets		43,237		2,151		2,872
Total consolidated assets	$	1,003,617	$	1,073,768	$	1,050,675

All revenues are attributed to and all assets are held in the United States.  Our market areas are primarily in the Midwest, Mid-Atlantic, Great Lakes and Southeast United States.