Albertsons 2013 Annual Report Download - page 45

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included in Inventories, all of the Company’s pharmacy scripts, included in Intangible assets, net and all credit
card receivables of wholly-owned stores, included in Cash and cash equivalents in the Consolidated Balance
Sheets.
In November 2011, the Company amended and extended its accounts receivable securitization program until
November 2014. The Company had the ability to borrow up to $200 on a revolving basis, with borrowings
secured by eligible accounts receivable, which remained under the Company’s control. As of February 23, 2013,
there was $40 of outstanding borrowings under this facility at 1.98 percent. Facility fees on the unused portion
are 0.70 percent. As of February 23, 2013, there was $282 of accounts receivable pledged as collateral, classified
in Receivables in the Consolidated Balance Sheet. As discussed below, this facility was repaid and terminated on
March 21, 2013 in connection with the NAI Banner Sale.
In 2006, the Company issued $500 of senior unsecured notes bearing an interest rate of 7.50% due in 2014. In
2009, the Company issued $1,000 of senior unsecured notes bearing an interest rate of 8.00% due in 2016. These
senior unsecured notes contain operating covenants, including limitations on liens and on sale and leaseback
transactions. The Company was in compliance with all such covenants and provisions for all periods presented.
As of February 23, 2013 and February 25, 2012, the Company had $18 and $28, respectively, of debt with
current maturities that are classified as long-term debt due to the Company’s intent to refinance such obligations
with the Revolving Credit Facility or other long-term debt.
On March 21, 2013, the Company completed the sale NAI for $100 in cash subject to working capital
adjustments, and the assumption of certain debt and capital lease obligations of approximately $3,200, which
were retained by NAI.
Concurrently with the execution of the Stock Purchase Agreement, the Company entered into a Tender Offer
Agreement (the “Tender Offer Agreement”) with Symphony Investors, LLC, owned by a Cerberus Capital
Management, L.P. (“Cerberus”)-led investor consortium (“Symphony Investors”) and Cerberus, pursuant to
which, upon the terms and subject to the conditions of the Tender Offer Agreement, and contingent upon the NAI
Banner Sale, Symphony Investors tendered for up to 30 percent of the issued and outstanding common stock of
the Company at a purchase price of $4.00 per share in cash (the “Tender Offer”). Approximately 12 shares were
validly tendered, representing approximately 5.5 percent of the issued and outstanding shares at the time of the
Tender Offer expiration on March 20, 2013. All shares that were validly tendered and not properly withdrawn
were accepted for payment in accordance with the terms of Tender Offer. In addition, pursuant to the terms of the
Tender Offer Agreement, on March 21, 2013, SUPERVALU issued approximately 42 additional shares of
common stock (approximately 19.9 percent of outstanding shares prior to the share issuance) to Symphony
Investors at the Tender Offer price per share of $4.00, resulting in $170 in cash proceeds to the Company, which
brought Symphony Investors ownership percent to 21.2 percent after the share issuance. Cash proceeds from the
share issuance provided additional cash inflows from financing activities of $170 during the first quarter of fiscal
2014, which were used to reduce outstanding borrowings under the ABL Facility described below. The share
issuance will have a dilutive effect on future net earnings (loss) per share due to the additional 42 shares
outstanding.
On March 21, 2013, the Company entered into (i) an amended and restated five-year $1,000 asset-based
revolving credit facility (the “ABL Facility”), secured by the Company’s inventory, credit card receivables and
certain other assets, which will bear interest at the rate of LIBOR plus 1.75 percent to LIBOR plus 2.25 percent,
depending on utilization and (ii) a new six-year $1,500 term loan (the “Term Loan Facility”), secured by
substantially all of the Company’s real estate, equipment and certain other assets, which will bear interest at the
rate of LIBOR plus 5.00 percent and include a floor on LIBOR set at 1.25 percent (collectively, the “Refinancing
Transactions”).
The proceeds of the Refinancing Transactions were used to replace the Company’s existing five-year $1,650
Revolving ABL Credit Facility, the existing $850 Secured Term Loan Facility and the $200 accounts receivable
securitization facility, and refinanced the $490 of 7.5% senior notes due 2014.
43