Albertsons 2014 Annual Report Download - page 26

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ITEM 2. PROPERTIES
Total Independent Business distribution center square footage as of February 22, 2014 was approximately
12 million, of which 16 percent was leased, comprised of 7 million used to provide wholesale distribution to
independent retail customers, of which 6 percent was leased, and 5 million used to provide wholesale distribution
to independent retail customers and Company-operated retail stores in the Retail Food segment, of which 30
percent was leased. Total Save-A-Lot corporate-owned store square footage as of February 22, 2014 was
approximately 6 million, of which 93 percent was leased. The Company’s Save-A-Lot operations are supplied by
distribution centers with total square footage of 5 million, of which approximately 27 percent was leased, as of
February 22, 2014. Total Retail Food retail store square footage was 11 million, of which approximately 84
percent was leased, and dedicated distribution center square footage was approximately 1 million related to an
owned facility which provides wholesale distribution to a Retail Food banner, as of February 22, 2014.
In addition to its principal executive offices in Eden Prairie, Minnesota, the Company maintains store support
centers in Boise, Idaho (which is owned by NAI and leased to the Company, but at which the Company has
employees and provides services to NAI and Albertson’s LLC) and St. Louis, Missouri. The Company’s
properties are in good condition, well maintained and suitable to carry on its business. Additional information on
the Company’s properties can be found in Part I, Item 1 of this Annual Report on Form 10-K.
Substantially all of the Company’s owned and ground-leased real estate are subject to mortgages to secure the
Company’s bank credit facilities.
ITEM 3. LEGAL PROCEEDINGS
The Company is subject to various lawsuits, claims and other legal matters that arise in the ordinary course of
conducting business. In the opinion of management, based upon currently-available facts, it is remote that the
ultimate outcome of any lawsuits, claims and other proceedings will have a material adverse effect on the overall
results of the Company’s operations, its cash flows or its financial position.
In September 2008, a class action complaint was filed against the Company, as well as International Outsourcing
Services, LLC (“IOS”); Inmar, Inc.; Carolina Manufacturer’s Services, Inc.; Carolina Coupon Clearing, Inc.; and
Carolina Services in the United States District Court in the Eastern District of Wisconsin. The plaintiffs in the
case are a consumer goods manufacturer, a grocery co-operative and a retailer marketing services company who
allege on behalf of a purported class that the Company and the other defendants (i) conspired to restrict the
markets for coupon processing services under the Sherman Act and (ii) were part of an illegal enterprise to
defraud the plaintiffs under the Federal Racketeer Influenced and Corrupt Organizations Act. The plaintiffs seek
monetary damages, attorneys’ fees and injunctive relief. The Company intends to vigorously defend this lawsuit,
however all proceedings have been stayed in the case pending the result of the criminal prosecution of certain
former officers of IOS.
In December 2008, a class action complaint was filed in the United States District Court for the Western District
of Wisconsin against the Company alleging that a 2003 transaction between the Company and C&S Wholesale
Grocers, Inc. (“C&S”) was a conspiracy to restrain trade and allocate markets. In the 2003 transaction, the
Company purchased certain assets of the Fleming Corporation as part of Fleming Corporation’s bankruptcy
proceedings and sold certain assets of the Company to C&S which were located in New England. Since
December 2008, three other retailers have filed similar complaints in other jurisdictions. The cases have been
consolidated and are proceeding in the United States District Court for the District of Minnesota. The complaints
allege that the conspiracy was concealed and continued through the use of non-compete and non-solicitation
agreements and the closing down of the distribution facilities that the Company and C&S purchased from each
other. Plaintiffs are seeking monetary damages, injunctive relief and attorneys’ fees. On July 5, 2011, the District
Court granted the Company’s Motion to Compel Arbitration for those plaintiffs with arbitration agreements and
plaintiffs appealed. On July 16, 2012, the District Court denied plaintiffs’ Motion for Class Certification and on
January 11, 2013, the District Court granted the Company’s Motion for Summary Judgment and dismissed the
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