Albertsons 2016 Annual Report Download - page 46

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The decrease in cash used in financing activities in fiscal 2015 compared to fiscal 2014 is primarily due to lower proceeds from
the sale of common stock, offset in part by lower debt financing costs.
The Company has no current intent to pay dividends and such payments are subject to limitations under the Company's credit
facilities as discussed in Note 7—Long-Term Debt in Part II, Item 8 of this Annual Report on Form 10-K.
Credit Facilities and Debt Agreements
The Company’s credit facilities and certain long-term debt agreements have restrictive covenants and cross-default provisions
which generally provide, subject to the Company’s right to cure, for the acceleration of payments due in the event of a breach
of a covenant or a default in the payment of a specified amount of indebtedness due under certain other debt agreements. The
Company was in compliance with all such covenants and provisions for all periods presented. Refer to Note 7—Long-Term
Debt in Part II, Item 8 of this Annual Report on Form 10-K for a detailed discussion of the provisions of the Company's credit
facilities and certain long-term debt agreements and additional information.
Senior Secured Credit Agreements
As of February 27, 2016 and February 28, 2015, the Company had outstanding borrowings of $1,459 and $1,469, respectively,
under its Secured Term Loan Facility, which is secured by substantially all of the Company’s real estate, equipment and certain
other assets, and bears interest at the rate of LIBOR plus 3.50 percent subject to a floor on LIBOR of 1.00 percent. The Secured
Term Loan Facility is guaranteed by the Company’s material subsidiaries (together with the Company, the “Term Loan
Parties”). To secure their obligations under the Secured Term Loan Facility, the Company granted a perfected first-priority
security interest for the benefit of the facility lenders in the Term Loan Parties’ equity interests in Moran Foods, LLC, the main
operating entity of the Company’s Save-A-Lot business, and the Term Loan Parties granted a perfected first priority security
interest in substantially all of their intellectual property and a first priority mortgage lien and security interest in certain owned
or ground-leased real estate and associated equipment pledged as collateral. As of February 27, 2016 and February 28, 2015,
there was $781 and $776, respectively, of owned or ground-leased real estate and associated equipment pledged as collateral,
which was included in Property, plant and equipment, net in the Consolidated Balance Sheets. In addition, the obligations of the
Term Loan Parties under the Secured Term Loan Facility are secured by second-priority security interests in the collateral
securing the Revolving ABL Credit Facility. Including the original issue discount, current debt financing costs, and the Excess
Cash Flow (as defined in the facility) prepayment required under the Secured Term Loan Facility as described below, $102 and
$11 of the Secured Term Loan Facility was classified as current as of February 27, 2016 and February 28, 2015, respectively.
The loans under the Secured Term Loan Facility may be voluntarily prepaid in certain minimum principal amounts, subject to
the payment of breakage or similar costs. Pursuant to the Secured Term Loan Facility, the Company must, subject to certain
customary reinvestment rights, apply 100 percent of Net Cash Proceeds (as defined in the facility) from certain types of asset
sales (excluding proceeds of the collateral security of the Revolving ABL Credit Facility and other secured indebtedness) to
prepay the loans outstanding under the Secured Term Loan Facility. The Company must also prepay loans outstanding under
the facility no later than 90 days after the fiscal year end in an aggregate principal amount equal to a percentage (which
percentage ranges from 0 to 50 percent depending on the Company’s Total Secured Leverage Ratio (as defined in the facility)
as of the last day of such fiscal year) of Excess Cash Flow (as defined in the facility) for the fiscal year then ended minus any
voluntary prepayments made during such fiscal year with Internally Generated Cash (as defined in the facility). Based on the
Company's Excess Cash Flow for the fiscal year ended February 27, 2016, a $99 prepayment will be required under the
Secured Term Loan Facility no later than 90 days after the fiscal year ended February 27, 2016.
On February 3, 2016, the Company entered into Amendment No. 3 (the "Third ABL Amendment") to the Revolving ABL
Credit Facility that extended the maturity date of the facility to February 3, 2021 from its prior maturity date of September 30,
2019. The Third ABL Amendment also reduced the rate at which interest is paid on loans under the Revolving ABL Credit
Facility by 25 basis points to, at the Company's election, LIBOR plus an interest rate margin between 1.25 percent to 1.75
percent or prime plus an interest rate margin between 0.25 percent to 0.75 percent, in each case, depending on quarterly average
excess availability. This Third ABL Amendment also reduced the letter of credit fee under the Revolving ABL Credit Facility to
1.25 percent to 1.75 percent, depending on quarterly average excess availability. Further, the amount of the facility fee required
to be paid quarterly in arrears by the Company was reduced to 0.25 percent multiplied by the aggregate unused commitments
under the Revolving ABL Credit Facility. The Third ABL Amendment also permits the Company and its subsidiaries to
undertake certain transactions reasonably determined by the Company to be necessary to effectuate a spin-off of Save-A-Lot. In
addition, the Third ABL Amendment also modifies certain representations and warranties, covenants and events of default set
forth in the Revolving ABL Credit Facility, and provides for the adjustment of certain covenants in the event a spin-off of Save-
A-Lot is consummated.
As of February 27, 2016 and February 28, 2015, the Company had $138 and $0 of outstanding borrowings under the Revolving
ABL Credit Facility, respectively. As of February 27, 2016, letters of credit outstanding under the Revolving ABL Credit