There are only two problems with your post:
1) Nowhere does it say historical cost.
2) They could not get a clean audit opinion if they booked the assets at historical cost unless this cost equaled fair value.
There are adjustments sitting on the ledgers in Eden Prairie even if you are not aware of them.
By the way, from the earnings conference call for fiscal year ending 2/27/2010, Pam Knous, the CFO, stated the following: "We finished fiscal '10 with about 66% of our stores either new or newly remodelled within the past seven years. And we plan to remodel approximately 90 to 115 stores this year in addition to touching 300 stores with in-store merchandising initiatives."
Regarding the cost basis of Albertson properties, I looked at Albertsons annual report for fiscal year ending Feb 2, 2006 (remember Albertson was acquired on June 2, 2006). It showed land value of $1,935 million and buildings of $6,180 million; subtotal of $8.115 billion.
These real estate assets would be split between SVU and Cerberus in the subsequent acquistion by the latter two. Of the $26.3 billion price tag for Albertsons' enterprise value including debt assumed, SVU's share was was more than $16 billion and thus should have got most assets.
At the fiscal year ended February 2006 (before Albertson acquisition), SVU already owned $1.3 billion in land and buildings. After the acquisition, SVU's land and buildings' value increased to almost $4.9 billion --- about $3.6 were from Albertson acquistion --- compared with $8.1 billion in book value on Albertsons' balance sheet just before the acquisition.
Take a look at SVU's balance sheet information of fiscal 2007 annual report, we see that: because of Albertsons acquisition, SVU's goodwill increased by $6.4 billion, and intangible increased by another $4.3 billion. See page F-8 of the annual report. http://www.sec.gov/Archives/edgar/data/95521/000119312507090354/d10k.htm
In other words, SVU did not mark up the real estate assets. Instead it added all the excess values into $10.7 billion of additional goodwill and intangible.
Good luck to all!
The Albertsons properties were carried at original cost minus depreciation. The properties were not re-evaluated at acquisition. The excess value of Albertson (over its book value) for the acquisition was booked as billions of goodwill or intangible.
Today's WSJ article valued the assets of SVU at 1 billion. Having trouble finding a buyer for Shaws. With all the money companies have you think they could easily sell. Maybe they are asking too much?
WSJ: “Some analysts have valued the [SVU owned, Shaw’s +175 store] chain’s assets at about $1 billion.”
the current BV does not include the market value of SVU's real estate portfolio. The Book value is calculated by recording an asset at its cost and then depreciating it-many of SVU's properties have seen significant appreciation over the years that is not reflected in the balance sheet. This real estate "hidden value" could be unlocked by a Private equity firm or other buyer!
The 10K claims $1.277 Billion of land alone. Land does not depreciate. The land alone should be worth a minimum of $6.02 per share.
$3.55 billion worth of buildings excluding depreciation. It would only seem logical that these buildings are still worth equal to their cost. That puts a value of buildings at $$16.74 per share.
Combined value for real estate should be minimum $22.76 per share.
Sounds great, but they still have $33 per share of long term debt and capital lease obligations.
The real estate value is there, but it most likely won't be monetized anytime soon.
That said, SVU at five and six times free cash flow should be a great investment regardless of real estate. They just need to continue to repay debt.