Albertsons 2006 Annual Report Download - page 26

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equaled the purchase option. The company’s obligation under its guaranty arrangements related to this synthetic
lease had a carrying balance of $0.4 million, which is reflected as a component of other liabilities in the
Consolidated Balance Sheet at February 25, 2006.
The company had $176.8 million of outstanding letters of credit as of February 25, 2006, of which $148.4
million were issued under the credit facility and $28.4 million were issued under separate agreements with
financial institutions. These letters of credit primarily support workers’ compensation, merchandise import
programs and payment obligations. The company pays fees, which vary by instrument, of up to 0.70 percent on
the outstanding balance of the letters of credit.
The company is a party to various legal proceedings arising from the normal course of business activities,
none of which, in management’s opinion, is expected to have a material adverse impact on the company’s
consolidated financial position.
The company is a party to a variety of contractual agreements under which the company may be obligated to
indemnify the other party for certain matters, which indemnities may be secured by operation of law or
otherwise, in the ordinary course of business. These contracts primarily relate to the company’s commercial
contracts, operating leases and other real estate contracts, financial agreements, agreements to provide services to
the company, and agreements to indemnify officers, directors and employees in the performance of their work.
While the company’s aggregate indemnification obligation could result in a material liability, the company is
aware of no current matter that it expects to result in a material liability.
The following table represents the company’s significant contractual obligations and off-balance sheet
arrangements at February 25, 2006.
Amount of Commitment Expiration Per Period
Total
Amount
Committed
Fiscal
2007
Fiscal
2008-2009
Fiscal
2010-2011 Thereafter
(In thousands)
Contractual Obligations & Off-Balance
Sheet Arrangements:
Debt $1,049,110 $ 74,650 $ 19,151 $368,264 $ 587,045
Operating Leases 929,813 154,849 301,752 159,126 314,086
Interest on Long-Term Debt (1) 801,658 54,497 104,884 59,635 582,642
Capital and Direct Financing Leases 515,713 37,071 88,104 80,981 309,557
Benefit Obligations (2) 1,027,404 47,981 96,609 103,413 779,401
Construction Commitments 183,884 183,884 — — —
Retailer Loan and Lease Guarantees 226,330 27,248 45,724 34,552 118,806
Deferred Income Taxes 27,738 (18,697) 17,024 34,363 (4,952)
Purchase Option on Synthetic Lease 60,000 — 60,000 — —
Purchase Obligations (3) 39,998 30,410 9,588 — —
Total $4,861,648 $591,893 $742,836 $840,334 $2,686,585
(1) The interest on long-term debt for fiscal 2032 reflects the company’s zero-coupon debentures accreted
interest for fiscal 2007 through fiscal 2032, should the debentures remain outstanding to maturity.
(2) The company’s benefit obligations include obligations related to sponsored defined benefit pension and post
retirement benefit plans and deferred compensation plans. The defined benefit pension plan has plan assets
of approximately $556 million at the end of fiscal 2006.
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