Albertsons 2014 Annual Report Download - page 56

“2016 Senior Notes”), in accordance with the terms and subject to the conditions set forth in an Offer to Purchase
dated May 2, 2013 and the accompanying Letter of Transmittal. On May 15, 2013 (the “Early Tender Time”), an
aggregate principal amount of $372 of the 2016 Senior Notes were validly tendered (and not validly withdrawn)
pursuant to the Debt Tender Offer. All notes validly tendered (and not validly withdrawn) pursuant to the Debt
Tender Offer at or prior to the Early Tender Time were accepted for purchase and settled by the Company on
May 21, 2013. As a result of the Debt Tender Offer being fully subscribed at the Early Tender Time, no 2016
Senior Notes tendered after the Early Tender Time were accepted for purchase.
On May 21, 2013, the Company issued $400 of 6.75 percent Senior Notes due June 2021 (the “2021 Senior
Notes”). The Company filed a registration statement on Form S-4 with the Securities and Exchange Commission
(the “SEC”) for the exchange of registered 2021 Senior Notes for any and all unregistered 2021 Senior Notes that
were issued on May 21, 2013. The exchange offer was completed on December 19, 2013, with all unregistered
2021 Senior Notes that were issued on May 21, 2013 being exchanged for registered 2021 Senior Notes. In
connection with the Debt Tender Offer and the issuance of the 2021 Senior Notes, the Company paid financing
costs and tender premiums of approximately $52 during the first quarter ended June 15, 2013, of which
approximately $3 was capitalized and $49 was expensed. In addition, the Company recognized non-cash charges
of $11 for the write-off of existing unamortized financing costs and accelerated amortization of original issue
discount on the Secured Term Loan Facility due March 2019 during fiscal 2014.
The remaining $628 of 2016 Senior Notes and the $400 of 2021 Senior 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.
Other
Prior to the completion of the Refinancing Transactions and at February 23, 2013, the Company had the ability to
borrow up to $200 on a revolving basis under its accounts receivable securitization facility, 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
were 0.70 percent. As of February 23, 2013, there was $282 of accounts receivable pledged as collateral,
classified in Receivables, net, in the Consolidated Balance Sheet. As discussed above, this facility was repaid and
terminated on March 21, 2013 in connection with the Refinancing Transactions.
As of February 23, 2013, the Company had $18 of debt with current maturities that were classified as long-term
debt due to the Company’s intent to refinance such obligations with the Revolving ABL Credit Facility due
March 2018 or other long-term debt.
Capital Expenditures
Capital expenditures for fiscal 2014 were $113, including $2 of non-cash capital lease additions. Capital
expenditures primarily included store remodeling activity, technology expenditures and new retail stores. The
Company’s capital expenditures for fiscal 2015 are projected to be approximately $230 to $240 including capital
leases.
Pension and Other Postretirement Benefit Obligations
Cash contributions to defined benefit pension plans and other postretirement benefit plans were $124, $98 and
$83 in fiscal 2014, 2013 and 2012, respectively, in accordance with Employee Retirement Income Security Act
of 1974, as amended (“ERISA”) minimum requirements. Cash contributions increased in fiscal 2014 due to the
incremental $25 required under the binding term sheet with the PBGC. Fiscal 2015 total defined benefit pension
plans and other postretirement benefit plan contributions are estimated to be approximately $130 to $140.
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