EFTA01382434.pdf

Amendment No. 3 to Form S-1 Table of Contents AB ACQUISITION LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements The Safeway acquisition allows the Company to expand into various new and existing markets and provides the Company access to a broad range of brands and own brand products. The acquisition was accounted for under the acquisition method of accounting. In a business combination, the purchase price is allocated to the fair values of the identifiable assets and liabilities, with any excess of purchase price over the fair value recognized as goodwill. The fair values of the identifiable assets and liabilities assumed were based on the Company's estimates and assumptions using various market, income and cost valuation approaches. The following table summarizes the assets acquired and liabilities assumed at the date of the Safeway acquisition (in millions): January 30, 2015 Cash 2,202.9 Receivables 348.4 Inventories 2,493.7 Other current assets 614.1 Property and equipment 8.078.2 Intangible assets 3,102.2 Other assets 719.6 Total assets acquired 17,559.1 Current liabilities 3,009.9 Long-term capital lease obligations 514.2 Long-term debt 2,470.3 Long-term deferred taxes 1,782.6 Other long-term liabilities 2,204.9 Total liabilities assumed 9,981.9 Net assets purchased 7,577.2 Goodwill 957.2 Total purchase consideration 8,534.4 The identifiable intangible assets acquired consisted of the following as of the date of the Safeway acquisition (in millions): Trade names $ 1,458.0 Beneficial lease rights 367.2 Customer lists, including prescription files and licenses 865.2 Internally developed software and loyalty program technology 375.3 Total finite intangible assets 3,065.7 Liquor licenses 36.5 Total identifiable intangible assets S 3,102.2 The above amounts represent the Company's allocation of purchase price. The goodwill recorded of $957.2 million is primarily attributable to the operational and administrative synergies expected to arise from the acquisition. The acquisition is treated as a stock purchase for income tax purposes, and the assets acquired and liabilities assumed as part of the acquisition did not result in a step up of tax basis, and goodwill is not deductible for tax purposes. Third-party acquisition-related costs of $110.5 million in fiscal 2014 and $5.9 million in fiscal 2013 were expensed as incurred as a component of Selling and administrative expenses. F-42 (Continued) hitt) UMW ICC go% Archo.c. edgar data 1646972 000119312515335826 d900395dsla.htm110 14 2015 9.03.02 AR CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0081791 CONFIDENTIAL SDNY_GM_00227975 EFTA01382434