WINN DIXIE STORES INC

CIK:0000107681|SEC Filings

Discontinued Operations

6 Months Ended

Jan. 11, 2012

6.	Discontinued Operations

In evaluating whether store closures qualify for discontinued operations classification, the Company considers each store to be a component of a business, as this is the lowest level at which the operations and cash flows can be clearly distinguished, operationally and for financial reporting purposes. If the cash flows of a store to be exited will not be significant to the Company's ongoing operations and cash inflows of nearby Company stores are not expected to increase significantly because of the exit, the results of operations of the store are reported in discontinued operations. Costs incurred to dispose of a location are included in gain (loss) on disposal of discontinued operations only if the location qualifies for discontinued operations classification; otherwise, such costs are reported as continuing operations.

The Company closed one non-remodeled, underperforming store during the 28 weeks ended January 11, 2012. During the 28 weeks ended January 12, 2011, the Company closed 30 non-remodeled, underperforming stores.

Results of operations for the 31 closed stores were classified as discontinued operations. Net sales from discontinued operations for the 16 and 28 weeks ended January 11, 2012, were $0.0 million and $2.2 million, respectively. Net sales from discontinued operations for the 16 and 28 weeks ended January 12, 2011, were $4.0 million and $54.2 million, respectively.

The following summarizes the costs included in gain (loss) on disposal of discontinued operations:

		(33,860)			(33,860)
	16 weeks ended
	Jan. 11, 2012			Jan. 12, 2011
Gain (loss) on sale/retirement, net	$	98			(68	)
Lease termination gain (loss)		496			(362	)
Other location closing costs		(56	)		(265	)

Net gain (loss) on disposal	$	538			(695	)

		(33,860)			(33,860)
	28 weeks ended
	Jan. 11, 2012			Jan. 12, 2011
Gain on sale/retirement, net	$	321			8,351
Lease termination gain (loss)		1,004			(33,860	)
Other location closing costs		(105	)		(3,473	)

Net gain (loss) on disposal	$	1,220			(28,982	)

The following table presents the detail of liability activity for costs related to closed stores.


	Liability for Closed Stores
Balance at June 29, 2011	$	(34,041	)
Expense		(1,454	)
Cash payments		8,639

Balance at January 11, 2012	$	(26,856	)

The balance at June 29, 2011, includes $79 thousand of accrued expenses related to the lease of the closed store that was reclassified to the closed store lease liability in 2012. The expense amount includes the effect on operations from the accretion of the present value of the expected future rental payments and adjustments due to the settlement of two leases and other estimates offset by the additional liability of one store. The cash payments include payments made for rent and related costs.

Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jan. 11, 2012	Jan. 12, 2011
Cash flows from operating activities:
Net loss	$ (42,088)	$ (100,796)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	64,983	62,470
Share-based compensation	5,677	4,990
Deferred income taxes		111
Other, net	1,389	(2,283)
Change in operating assets and liabilities:
Trade, insurance and other receivables	(77)	(2,073)
Merchandise inventories	(961)	59,054
Prepaid expenses and other current assets	(2,650)	668
Accounts payable and accrued expenses	(34,999)	(35,982)
Reserve for self-insurance liabilities	1,964	7,838
Net cash used in operating activities	(6,762)	(6,003)
Cash flows from investing activities:
Purchases of long-lived assets	(69,508)	(44,644)
Sales of assets and other	1,633	10,316
Net cash used in investing activities	(67,875)	(34,328)
Cash flows from financing activities:
Gross borrowings on credit facilities	9,776	7,762
Gross payments on credit facilities	(9,776)	(7,762)
Increase in book overdrafts	6,882	3,258
Principal payments on capital leases	(10,333)	(6,766)
Debt issuance costs	(75)
Other, net	93	74
Net cash used in financing activities	(3,433)	(3,434)
Decrease in cash and cash equivalents	(78,070)	(43,765)
Cash and cash equivalents at beginning of period	207,764	152,327
Cash and cash equivalents at end of period	$ 129,694	$ 108,562

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jan. 11, 2012	Jun. 29, 2011
Current assets:
Cash and cash equivalents	$ 129,694	$ 207,764
Trade and other receivables, less allowance for doubtful receivables of $3,182 ($3,230 at June 29, 2011)	71,159	71,082
Merchandise inventories, less LIFO reserve of $65,794 ($55,627 at June 29, 2011)	581,050	580,089
Prepaid expenses and other current assets	31,644	28,994
Total current assets	813,547	887,929
Property, plant and equipment, net	691,079	658,891
Intangible assets, net	199,770	207,216
Deferred tax assets, non-current	36,646	36,646
Other assets, net	8,142	9,108
Total assets	1,749,184	1,799,790
Current liabilities:
Current obligations under capital leases	17,526	10,888
Accounts payable	338,474	345,944
Reserve for self-insurance liabilities	79,740	74,837
Accrued wages and salaries	72,603	73,929
Deferred tax liabilities	44,740	44,740
Accrued expenses	98,070	115,007
Total current liabilities	651,153	665,345
Reserve for self-insurance liabilities	108,683	111,622
Unfavorable leases	76,571	82,390
Obligations under capital leases	46,530	31,875
Other liabilities	39,309	45,050
Total liabilities	922,246	936,282
Commitments and contingent liabilities (Notes 1 and 7)
Shareholders' equity:
Common stock, $0.001 par value. Authorized 400,000,000 shares; 56,667,269 shares issued and 56,554,662 shares outstanding at January 11, 2012, and 55,932,767 shares issued and 55,820,160 shares outstanding at June 29, 2011.	57	56
Additional paid-in capital	824,778	819,009
(Accumulated deficit) retained earnings	(2,255)	39,833
Accumulated other comprehensive income	4,358	4,610
Total shareholders' equity	826,938	863,508
Total liabilities and shareholders' equity	$ 1,749,184	$ 1,799,790