Albertsons 2012 Annual Report Download - page 81

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At the date the financial statements were issued, Forms 5500 were generally not available for the plan years
ending in 2011.
Multiemployer Postretirement Benefit Plans Other than Pensions
The Company also makes contributions to multiemployer health and welfare plans in amounts set forth in the
related collective bargaining agreements. These plans provide medical, dental, pharmacy, vision, and other
ancillary benefits to active employees and retirees as determined by the trustees of each plan. The vast majority
of the Company’s contributions benefit active employees and as such, may not constitute contributions to a
postretirement benefit plan. However, the Company is unable to separate contribution amounts to postretirement
benefit plans from contribution amounts paid to active plans.
The Company contributed $364, $375 and $358 for 2012, 2011 and 2010, respectively. 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.
Collective Bargaining Agreements
As of February 25, 2012, the Company had approximately 130,000 employees. Approximately, 84,000
employees are covered by collective bargaining agreements. During fiscal 2012, 56 collective bargaining
agreements covering 38,000 employees were renegotiated and 32 collective bargaining agreements covering
approximately 5,500 employees expired without their terms being renegotiated. Negotiations are expected to
continue with the bargaining units representing the employees subject to those agreements. During fiscal 2013,
76 collective bargaining agreements covering approximately 36,000 employees are scheduled to expire.
NOTE 13—COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS
Guarantees
The Company has guaranteed certain leases, fixture financing loans and other debt obligations of various retailers
as of February 25, 2012. These guarantees were generally made to support the business growth of independent
retail customers. The guarantees are generally for the entire terms of the leases or other debt obligations with
remaining terms that range from less than one year to 18 years, with a weighted average remaining term of
approximately eight years. For each guarantee issued, if the independent retail customer defaults on a payment,
the Company would be required to make payments under its guarantee. Generally, the guarantees are secured by
indemnification agreements or personal guarantees of the independent retail customer. The Company reviews
performance risk related to its guarantees of independent retail customers based on internal measures of credit
performance. As of February 25, 2012, the maximum amount of undiscounted payments the Company would be
required to make in the event of default of all guarantees was approximately $108 and represented approximately
$80 on a discounted basis. Based on the indemnification agreements, personal guarantees and results of the
reviews of performance risk, the Company believes the likelihood that it will be required to assume a material
amount of these obligations is remote. Accordingly, no amount has been recorded in the Consolidated Balance
Sheets for these contingent obligations under the Company’s guarantee arrangements.
The Company is contingently liable for leases that have been assigned to various third parties in connection with
facility closings and dispositions. The Company could be required to satisfy the obligations under the leases if
any of the assignees are unable to fulfill their lease obligations. Due to the wide distribution of the Company’s
assignments among third parties, and various other remedies available, the Company believes the likelihood that
it will be required to assume a material amount of these obligations is remote.
In the ordinary course of business, the Company enters into supply contracts to purchase products for resale and
purchase and service contracts for fixed asset and information technology commitments. These contracts
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