Albertsons 2011 Annual Report Download - page 34

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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 not aware of any matters that are expected to result in a material liability.
Multi-Employer Plans
The Company contributes to various multi-employer pension plans under collective bargaining agreements,
primarily defined benefit pension plans. These plans generally provide retirement benefits to participants
based on their service to contributing employers. Based on available information, the Company believes that
some of the multi-employer plans to which it contributes are underfunded. Company contributions to these
plans could increase in the near term. However, the amount of any increase or decrease in contributions will
depend on a variety of factors, including the results of the Company’s collective bargaining efforts, investment
returns on the assets held in the plans, actions taken by the trustees who manage the plans and requirements
under the Pension Protection Act and Section 412(e) of the Internal Revenue Code. Furthermore, if the
Company was to significantly reduce contributions, exit certain markets or otherwise cease making
contributions to these plans, it could trigger a partial or complete withdrawal that would require the Company
to fund its proportionate share of a plan’s unfunded vested benefits. The Company contributed $135, $143 and
$147 to these plans for fiscal 2011, 2010 and 2009, respectively.
The Company also makes contributions to multi-employer health and welfare plans in amounts set forth in the
related collective bargaining agreements. A small minority of collective bargaining agreements contain reserve
requirements that may trigger unanticipated contributions resulting in increased healthcare expenses. If these
healthcare provisions cannot be renegotiated in a manner that reduces the prospective healthcare cost as the
Company intends, the Company’s Selling and administrative expenses could increase in the future.
CONTRACTUAL OBLIGATIONS
The following table represents the Company’s significant contractual obligations as of February 26, 2011.
Total
Fiscal
2012
Fiscal
2013-
2014
Fiscal
2015-
2016 Thereafter
Payments Due Per Period
Contractual Obligations:
Long-term debt
(1)
$ 5,847 $ 338 $ 1,146 $ 1,082 $ 3,281
Interest on long-term debt
(2)
3,774 361 659 574 2,180
Capital leases
(3)
1,882 144 285 275 1,178
Operating leases
(4)
2,817 321 579 492 1,425
Benefit obligations
(5)
7,005 141 257 276 6,331
Construction commitments 24 24 — — —
Deferred income taxes 247 (57) 32 32 240
Purchase obligations
(6)
877 583 239 55 —
Self-insurance obligations 1,228 275 347 186 420
Total $ 23,701 $ 2,130 $ 3,544 $ 2,972 $ 15,055
(1) Long-term debt amounts exclude the net discount on acquired debt and original issue discounts.
(2) Amounts include contractual interest payments using the interest rate as of February 26, 2011 applicable
to the Company’s variable interest debt instruments and stated fixed rates for all other debt instruments.
(3) Represents the minimum payments under capital leases, excluding common area maintenance, insurance
or tax payments, for which the Company is also obligated, offset by minimum subtenant rentals of $32,
$7, $10, $7 and $8, respectively.
30