DISCONTINUED OPERATIONS

4 Months Ended

Jun. 14, 2014

Discontinued Operations And Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

NOTE 15 – DISCONTINUED OPERATIONS

On March 21, 2013, the Company sold NAI to AB Acquisition, which resulted in the sale of the NAI banners, including Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market and related Osco and Sav-on in-store pharmacies (collectively, the “NAI Banners”). The operating results and cash flows of the NAI Banners have been presented separately as discontinued operations in the Condensed Consolidated Financial Statements for all periods presented.

During the first quarter of fiscal 2014, the Company received net proceeds of approximately $100 and a short-term note receivable of approximately $44 for the stock of NAI. AB Acquisition assumed approximately $3,200 of debt and capital leases, excluding original issue discounts. In addition, AB Acquisition assumed the underfunded status of NAI’s share of the multiemployer pension plans to which the Company contributed. AB Acquisition’s portion of the underfunded status of the multiemployer pension plans was estimated to be approximately $1,138 before tax, based on the Company’s estimated “proportionate share” of underfunding calculated as of February 23, 2013.

In connection with the sale of NAI, the Company entered into various agreements with AB Acquisition and its affiliates related to on-going operations, including a Transition Services Agreement with each of NAI and Albertson’s LLC (collectively, the “TSA”) and operating and supply agreements. These arrangements had initial terms that range from 12 months to 5 years, are generally subject to renewal upon mutual agreement by the parties thereto and also include termination provisions that can be exercised by each party. The initial terms of the TSA run through September 2015 and may be extended in one year increments with a one year notice. The Company recognized $58 and $84 in TSA fees earned during the first quarters of fiscal 2015 and 2014, respectively, including $36 under the first-year transitional fee provisions recognized during the first quarter of fiscal 2014. TSA fees earned are reflected in Net sales in the Condensed Consolidated Statements of Operations. The shared service center costs incurred to support back office functions related to the NAI Banners represent administrative overhead and are recorded in Selling and administrative expenses.

During fiscal 2013, the Company recorded a preliminary estimated pre-tax loss on contract for the disposal of NAI of approximately $1,150 and a pre-tax property, plant and equipment-related impairment of $203. The loss on sale calculation was finalized during fiscal 2014, including the finalization of the working capital adjustment. The total loss on sale of NAI was $1,263, comprised of $1,081 of contract loss and $182 of property, plant and equipment-related impairment, resulting in pre-tax reductions to the preliminary estimated loss on sale of NAI of $85 and $5 during the first and second quarters of fiscal 2014, respectively, which was recorded as a component of (Loss) income from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations. The Company determined the pre-tax property, plant and equipment-related impairment using Level 3 inputs.

The following is a summary of the Company’s operating results and certain other directly attributable expenses that are included in discontinued operations:

	First Quarter Ended
	June 14, 2014			June 15, 2013
	(16 weeks)			(16 weeks)
Net sales	$	—		$	1,235
Income before income taxes from discontinued operations		2			117
Income tax provision (benefit)		5			(73	)
(Loss) income from discontinued operations, net of tax	$	(3	)	$	190

Income before income taxes from discontinued operations for the first quarter of fiscal 2015 reflects $2 of interest income resulting from settlement of income tax audits. The income tax provision included as a component of Loss (income) from discontinued operations, net of tax for the first quarter of fiscal 2015 included $4 of discrete tax expenses. The income tax benefit included as a component of (Loss) income from discontinued operations, net of tax for the first quarter of fiscal 2014 included $118 of discrete tax benefits primarily resulting from the settlement of Internal Revenue Service audits for the fiscal 2010, 2009 and 2008 tax years.

The Company recorded $38 and $53 within Net sales of continuing operations related to wholesale distribution to certain NAI Banners for the first quarters of fiscal 2015 and 2014, respectively. In addition, the Company recorded $54 within Net sales of continuing operations for first quarters of fiscal 2015 and 2014 related to wholesale distribution of certain products to stores owned by Albertson’s LLC that were not part of AB Acquisition’s purchase of NAI.