Albertsons 2013 Annual Report Download - page 47

vesting under certain stock-based awards. The deemed change-in-control may result in the immediate
acceleration of the award, or may allow acceleration of the award only if certain other events occur. As a result of
this action, the 2013 and 2012 long-term incentive program awards were immediately accelerated resulting in the
recognition of the remaining unamortized stock-based compensation and, as nearly all the awards were
underwater, the pay-out to employees was insignificant. Outstanding options granted prior to May of fiscal 2011
were also immediately accelerated resulting in the recognition of the remaining unamortized costs. The deemed
change-in-control resulted in acceleration of options granted after May of fiscal 2011 and outstanding restricted
stock awards for certain employees also meeting certain qualifying criteria. The Company recognized $10 of
stock-based compensation expense in the first quarter of fiscal 2014 as a result of the deemed change-in-control.
Capital Expenditures
Capital spending for fiscal 2013 was $241, including $13 of non-cash capital leases additions. Capital spending
primarily included store remodeling activity, new retail stores and technology expenditures. The Company’s
capital spending for fiscal 2014 is projected to be approximately $150 to $160 including capital leases.
Pension and Other Postretirement Benefit Obligations
Cash contributions to defined benefit pension plans and other postretirement benefit plans were $98, $83 and
$154 in fiscal 2013, 2012 and 2011, respectively, in accordance with minimum Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) requirements. Cash contributions decreased in fiscal 2012
compared to fiscal 2011 due to pre-funding of $63 in fiscal 2011 for fiscal 2012 contributions. Fiscal 2014 total
defined benefit pension plans and other postretirement benefit plan contributions are estimated to be
approximately $120 to $130.
Liquidity Requirements
Subsequent to the Refinancing Transactions, the Company has approximately $22, $33 and $15 in aggregate debt
maturities due in fiscal 2014, 2015 and 2016, respectively. Payments to reduce capital lease obligations will
approximate $30 for fiscal 2014, 2015, and 2016.
The Company’s funding policy for the defined benefit pension plans is to contribute the minimum contribution
amount required under ERISA and the Pension Protection Act of 2006 as determined by the Company’s external
actuarial consultant. At the Company’s discretion, additional funds may be contributed to the pension plan. The
Company may accelerate contributions or undertake contributions in excess of the minimum requirements from
time to time subject to the availability of cash in excess of operating and financing needs or other factors as may
be applicable. The Company assesses the relative attractiveness of the use of cash including expected return on
assets, discount rates, cost of debt, reducing or eliminating required PBGC variable rate premiums or in order to
achieve exemption from participant notices of underfunding. In addition, the Company has entered into an
agreement with the PBGC relating to the NAI Banner Sale where it has agreed to contribute in excess of the
minimum required amounts by additional contributions of $25 by the end of fiscal 2015, an additional $25 by the
end of fiscal 2016 and an additional $50 by the end of fiscal 2017.
OFF-BALANCE SHEET ARRANGEMENTS
Guarantees
The Company has guaranteed certain leases, fixture financing loans and other debt obligations of various retailers
as of February 23, 2013. 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 17 years, with a weighted average remaining term of
approximately nine years. For each guarantee issued, if the independent retail customer defaults on a payment,
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