Albertsons 2005 Annual Report Download - page 69

SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At February 26, 2005, the company had an unsecured $650.0 million revolving credit agreement with rates tied
to LIBOR plus 0.650 to 1.400 percent and with facility fees ranging from 0.15 to 0.35 percent on the total amount of
the facility, both based on the company’s credit ratings. The company had no outstanding borrowings under the
credit facility at February 26, 2005 and February 28, 2004. As of February 26, 2005, letters of credit outstanding
under the credit facility were $141.5 million and the unused available credit under the facility was $508.5 million.
Subsequent to fiscal year-end, on February 28, 2005, the company executed a five year unsecured $750.0 million
revolving credit agreement replacing the previous $650.0 million revolving credit agreement which was terminated.
Amounts utilized under this credit agreement have rates tied to LIBOR plus 0.275 to 0.675 percent and with facility
fees ranging from 0.10 to 0.20 percent on the total amount of the facility, both based on the company’s credit
ratings. The agreement contains various financial covenants including ratios for interest coverage and debt leverage.
All letters of credit that had been issued and outstanding under the previous credit facility were transferred under the
new credit facility. See the Subsequent Event note in the Notes to the Consolidated Financial Statements.
In February 2005, as part of the acquisition of Total Logistics, the company assumed approximately $70
million of debt, which was substantially repaid prior to year end.
In August 2004, the company renewed its annual accounts receivable securitization program, under which
the company can borrow up to $200.0 million on a revolving basis, with borrowings secured by eligible accounts
receivable. The company had no outstanding borrowings under this program at February 26, 2005 and February
28, 2004. Facility fees related to the accounts receivable securitization program incurred by the company during
Fiscal 2005 were 0.20 percent on the total amount of the facility.
On May 3, 2004, the company voluntarily redeemed $250.0 million of 7.625 percent notes due September
15, 2004, in accordance with the note redemption provisions. The company incurred $5.7 million in pre-tax costs
related to this early redemption, which is included in interest expense.
In November 2003, the company voluntarily redeemed $100.0 million of its 8.875 percent notes due in 2022
at a redemption price of 103.956 percent of the principal amount of the notes. The company incurred $5.8 million
in pre-tax costs related to this early redemption, which is included in interest expense.
In November 2001, the company sold zero-coupon convertible debentures having an aggregate principal
amount at maturity of $811.0 million. The proceeds from the offering, net of approximately $5.0 million of
expenses, were $208.0 million. The debentures mature in 30 years and are callable at the company’s option on or
after October 1, 2006. Holders may require the company to purchase all or a portion of their debentures on
October 1, 2006 or October 1, 2011 at a purchase price equal to the accreted value of the debentures, which
includes accrued and unpaid cash interest. If the option is exercised, the company has the choice of paying the
holder in cash, common stock or a combination of the two. Generally, except upon the occurrence of specified
events, holders of the debentures are not entitled to exercise their conversion rights until the closing price of the
company’s common stock on the New York Stock Exchange for twenty of the last thirty trading days of any
fiscal quarter exceeds certain levels, or $38.13 per share for the quarter ending June 18, 2005, and rising to
$113.29 per share at September 6, 2031. In the event of conversion, 9.6434 shares of the company’s common
stock will be issued per $1,000 debenture or approximately 7.8 million shares should all debentures be converted.
The debentures have an initial yield to maturity of 4.5 percent, which is being accreted over the life of the
debentures using the effective interest method. The company will pay contingent cash interest for the six-month
period commencing November 3, 2006 and for any six-month period thereafter if the average market price of the
debentures for a five trading day measurement period preceding the applicable six-month period equals 120
percent or more of the sum of the issue price and accrued original issue discount for the debentures. The
debentures are classified as long-term debt based on the company’s ability and intent to refinance the obligation
with long-term debt if the company is required to repurchase the debentures.
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