Albertsons 2007 Annual Report Download - page 97

SU
PERVAL
U
IN
C
. and
S
ubsidiaries
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
a
remainin
g
principal balance of $1,241, of which $13 was classified as current. Letters of credit outstandin
g
u
nder the Revolving Credit Facility were
$
347 and the unused available credit under the Revolving Credi
t
F
acility was
$
999. The Company also had
$
65 of outstanding letters of credit issued under separate agreement
s
w
ith financial institutions
.
I
n November 2006, the Compan
y
executed a 364-da
y
accounts receivable securitization pro
g
ram, under whic
h
the Company can borrow up to
$
200 on a revolving basis, with borrowings secured by eligible account
s
receivable, which remain under the Company’s control. Facility fees under this program range from 0.15 percent
to 1.
5
0 percent, based on the Compan
y
’s credit ratin
g
s. The facilit
y
fee in effect on Februar
y
24, 2007, based on
the Company’s current credit ratings, is 0.20 percent. As of February 24, 2007, there were
$
159 of outstanding
b
orrowings under this program. As of February 24, 2007, there were
$
225 of accounts receivable pledged a
s
collateral, classified in Accounts receivable in the Compan
y
’s Februar
y
24, 2007 Consolidated Balance Sheet.
Due to the Company’s intent to renew the facility or refinance it with the Revolving Credit Facility, the facility is
c
l
ass
ifi
e
di
n Long-term
d
e
b
t
i
nt
h
eFe
b
ruary 24, 2007 Conso
lid
ate
d
Ba
l
ance S
h
eet
.
I
n November 2001, the Company sold zero-coupon convertible debentures due 2031. On October 2, 200
6
, the
C
ompan
y
purchased $213 of these debentures when over 80 percent of the holders put their debentures to the
C
ompany for cash. Holders of the debentures may require the Company to purchase all or a portion of the
remaining
$
53 debentures on the first day of October 2011 at a purchase price equal to the accreted value of the
d
ebentures (which would include accrued but un
p
aid interest) at $409.08 (not in millions)
p
er debenture. Sinc
e
the current credit ratings of the Company are BB or lower as rated by Standard & Poor’s rating service, and Ba
3
o
r
l
ower as rate
db
y Moo
d
y’s rat
i
ng serv
i
ce, t
h
e
d
e
b
entures are current
l
y convert
ibl
e
i
nto s
h
ares o
f
t
h
e
C
ompan
y
’s common stock at the option of the holders. In the event of conversion, 9.6434 (not in millions) share
s
o
f the Company’s common stock will be issued per each thousand dollars of debentures, or approximately 1.
5
s
h
ares, s
h
ou
ld
a
ll
rema
i
n
i
ng
d
e
b
entures
b
e converte
d
.Aso
f
Fe
b
ruary 24, 2007, no
h
o
ld
ers
h
ave e
l
ecte
d
conversion of the debentures. The Compan
y
ma
y
redeem all or a portion of the remainin
g
debentures at an
y
time
a
t a purchase price equal to the sum of the issue price plus accrued original issue discount as of the redemption
d
ate. Due to t
h
e
h
o
ld
ers’ a
bili
ty to convert t
h
e
d
e
b
entures to common stoc
k
,t
h
e Company’s prev
i
ou
s
a
nnouncement of its intent to settle the debentures in cash and the Compan
y
’s abilit
y
to call the debentures for
cash at any time, the debentures are classified as current debt.
M
edium-term notes of
$
30 due July 2027 contain put options that would require the Company to repay the note
s
i
nJu
l
y 2007
if
t
h
e
h
o
ld
ers o
f
t
h
e notes so e
l
ect
b
yg
i
v
i
ng t
h
e Company 30-
d
ays not
i
ce. Me
di
um-term notes o
f
$
49 due April 2028 contain put options that would require the Compan
y
to repa
y
the notes in April 2008 if th
e
h
olders of the notes so elect by giving the Company 30-days notice. The
$
209 of 7.5 percent debentures due May
2
037 conta
i
n put opt
i
ons t
h
at wou
ld
requ
i
re t
h
e Company to repay t
h
e notes
i
n May 2009
if
t
h
e
h
o
ld
ers o
f
t
h
e
notes so elect b
yg
ivin
g
the Compan
y
30-da
y
s notice
.
M
andator
y
Convertible Securitie
s
T
he Compan
y
assumed 46,000,000 of 7.2
5
percent mandator
y
convertible securities (“Corporate Units”) upo
n
the Ac
q
uisition of New Albertsons. Each Cor
p
orate Unit consisted of a forward stock
p
urchase contract and,
initially, a 2.5 percent ownership interest in one of Albertsons’ senior notes (which were assumed by New
Albertsons in connection with the Ac
q
uisition) with a
p
rinci
p
al amount of one thousand dollars, whic
h
corresponds to a twenty-five dollar principal amount of senior notes. The purchase contracts yield 3.
5
percent pe
r
year on the stated amount of twenty-five dollars and the senior notes yield 3.75 percent per year.
I
n October 200
6
, the Company made an offer to purchase all outstanding Corporate Units. At the close of the
o
ffer the Compan
y
purchased approximatel
y
35,000,000 Corporate Units at a purchase price of $25.22 per
F-
31