Albertsons 2016 Annual Report Download - page 43

41
The following summarizes the calculation of Adjusted EBITDA for fiscal 2016, 2015, 2014, 2013 and 2012:
2016
(52 weeks) 2015 (53 weeks) 2014 (52 weeks) 2013 (52 weeks) 2012 (52 weeks)
Net earnings (loss) from continuing operations $ 178 $ 127 $ 13 $ (253) $ (97)
Less net earnings attributable to noncontrolling interests (8) (7) (7) (10) (13)
Income tax provision (benefit) 85 58 5 (163) (41)
Interest expense, net 196 243 407 269 247
Depreciation and amortization 276 285 302 365 355
LIFO charge (credit) 3 8 (9) 4 16
Unusual employee-related costs and pension related items 8 70 49 36 15
Asset impairment and other charges, net of gains 12 3 1 249 —
Intangible asset and goodwill impairment charges 6 — — 6 92
Costs related to the potential separation of Save-A-Lot 15————
Legal settlement charges (gains) — — 5 (10) —
Contract breakage costs and certain other charges —— 6——
Information technology intrusion costs, net of insurance
recoverable — 2———
Adjusted EBITDA $ 771 $ 789 $ 772 $ 493 $ 574
Comparison of Fiscal 2016 Adjusted EBITDA to Fiscal 2015 Adjusted EBITDA
Adjusted EBITDA for fiscal 2016 was $771, or 4.4 percent of Net sales, compared to $789, or 4.4 percent of Net sales last year,
a decrease of $18. The additional week in fiscal 2015 contributed approximately $17 to Adjusted EBITDA. When adjusted for
the additional week, the decrease of $1 was primarily driven by higher employee-related and occupancy costs from new retail
stores and added distribution center capacity, higher inventory shrink and other costs, offset in part by higher gross profit from
increased base margins, lower logistics costs, higher TSA fees and back-haul trucking income.
Comparison of Fiscal 2015 Adjusted EBITDA to Fiscal 2014 Adjusted EBITDA
Adjusted EBITDA for fiscal 2015 was $789, or 4.4 percent of Net sales, compared to $772, or 4.5 percent of Net sales for fiscal
2014, an increase of $17. The increase in Adjusted EBITDA is primarily due to $43 of lower net periodic pension expense, $39
of higher earnings from increased sales, including the additional week in fiscal 2015, and $12 of lower logistics costs, $9 of
lower occupancy costs and $3 of lower other administrative costs, offset in part by $46 of lower TSA fees primarily due to the
one-year transition fee recognized in fiscal 2014, which covered transitional employee and occupancy costs included within
Adjusted EBITDA, $33 of incremental investments to lower prices to customers, higher shrink, stronger private brands pricing
support and other margin investments, and $12 of higher advertising costs.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity and Capital Resource Highlights
• Unused available credit under the Revolving ABL Credit Facility decreased to $744 from $871 as of February 27, 2016
compared to February 28, 2015, primarily due to the Company's net increase of $138 of borrowings under the Revolving
ABL Credit Facility to partially fund the redemption of the $278 balance of the 2016 Notes in the fourth quarter of fiscal
2016. The borrowings under the Revolving ABL Credit Facility were used together with cash from operations to fund the
redemption of the remaining 2016 Notes and to pay accrued and unpaid interest on the redeemed 2016 Notes, and the
applicable redemption premium of approximately $6.
• Amended, repriced and extended the Company's Revolving ABL Credit Facility to reduce the rates on borrowings and
letters of credit and the facility fees, as well as extend its maturity by approximately sixteen months to February 3, 2021.
This amendment also provides flexibility for a spin-off of Save-A-Lot.
• As of February 27, 2016, scheduled debt maturities and mandatory prepayments due in fiscal 2017 and fiscal 2018 were
$102 and $0, respectively. The Company has classified $99 of its Secured Term Loan Facility as a current maturity due to
the requirement under the facility to prepay loans outstanding under the facility no later than 90 days after the fiscal year
end based on the Company's excess cash flow, as defined by the Secured Term Loan agreement.