Summary of Significant Accounting Policies

3 Months Ended

Jun. 18, 2011

Summary of Significant Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Registrant

The accompanying condensed consolidated financial statements of the Company for the first quarter ended June 18, 2011 and June 19, 2010 are unaudited and, in the opinion of management, contain all adjustments that are of a normal and recurring nature necessary to present fairly the financial condition and results of operations for such periods. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes in the Company’s Annual Report on Form 10-K for the fiscal year ended February 26, 2011. The results of operations for the first quarter ended June 18, 2011 are not necessarily indicative of the results expected for the full year. The Condensed Consolidated Balance Sheet as of February 26, 2011 has been derived from the audited Consolidated Balance Sheet as of that date.

Accounting Policies

The summary of significant accounting policies is included in the Notes to Consolidated Financial Statements set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended February 26, 2011.

Fiscal Year

The Company’s fiscal year ends on the last Saturday in February. The Company’s first quarter consists of 16 weeks, while the second, third and fourth quarters each consist of 12 weeks. Because of differences in the accounting calendars of the Company and its wholly-owned subsidiary, New Albertson’s, Inc., the accompanying June 18, 2011 and February 26, 2011 Condensed Consolidated Balance Sheets include the assets and liabilities related to New Albertson’s, Inc. as of June 16, 2011 and February 24, 2011, respectively.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. The Company’s banking arrangements allow the Company to fund outstanding checks when presented to the financial institution for payment, resulting in book overdrafts. Book overdrafts are recorded in Accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets and are reflected as an operating activity in the Condensed Consolidated Statements of Cash Flows. As of June 18, 2011 and February 26, 2011, the Company had net book overdrafts of $292 and $360, respectively.

Net Earnings Per Share

Basic net earnings per share is calculated using net earnings available to common stockholders divided by the weighted average number of shares outstanding during the period. Diluted net earnings per share is similar to basic net earnings per share except that the weighted average number of shares outstanding is after giving effect to the dilutive impacts of stock options, restricted stock awards and other dilutive securities. In addition, for the calculation of diluted net earnings per share, net earnings is adjusted to eliminate the after-tax interest expense recognized during the period related to contingently convertible debentures.

The following table reflects the calculation of basic and diluted net earnings per share:

	First Quarter Ended
	June 18,		June 19,
	2011		2010
Net earnings per share—basic
Net earnings available to common stockholders	$	74	$	67
Weighted average shares outstanding—basic		212		212
Net earnings per share—basic	$	0.35	$	0.31
Net earnings per share—diluted
Net earnings available to common stockholders	$	74	$	67
Weighted average shares outstanding—basic		212		212
Dilutive impact of options and restricted stock outstanding		1		1
Weighted average shares outstanding—diluted		213		213
Net earnings per share—diluted	$	0.35	$	0.31

Options and restricted stock of 21 shares were outstanding during the first quarter ended June 18, 2011 and June 19, 2010, respectively, but were excluded from the calculation of diluted earnings per share because they were antidilutive.

Comprehensive Income

Comprehensive income consisted of the following:

	First Quarter Ended
	June 18,		June 19,
	2011		2010
Net earnings	$	74	$	67
Pension and other postretirement activity, net of tax		17		11
Comprehensive income	$	91	$	78