Albertsons 2016 Annual Report Download - page 47

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Facility were $69 at fees of 1.625 percent, and the unused available credit under this facility was $744 with facility fees of 0.25
percent. As of February 28, 2015, letters of credit outstanding under the Revolving ABL Credit Facility were $76 at fees of
1.625 percent, and the unused available credit under this facility was $871 with facility fees of 0.375 percent. As of
February 27, 2016, the Revolving ABL Credit Facility was secured on a first-priority basis by $1,238 of certain inventory assets
included in Inventories, net, $222 of certain receivables included in Receivables, net, $23 of certain amounts included in Cash
and cash equivalents and all of the Company’s pharmacy scripts included in Intangible assets, net, in the Consolidated Balance
Sheets. As of February 28, 2015, the Revolving ABL Credit Facility was secured on a first-priority basis by $1,188 of certain
inventory assets included in Inventories, net, $220 of certain receivables included in Receivables, net, $28 of certain amounts
included in Cash and cash equivalents and all of the Company’s pharmacy scripts included in Intangible assets, net, in the
Consolidated Balance Sheets.
The revolving loans under the Revolving ABL Credit Facility may be voluntarily prepaid in certain minimum principal
amounts, in whole or in part, without premium or penalty, subject to breakage or similar costs. The Company and those
subsidiaries named as borrowers under the Revolving ABL Credit Facility are required to repay the revolving loans in cash and
provide cash collateral under this facility to the extent that the revolving loans and letters of credit exceed the lesser of the
borrowing base then in effect or the aggregate amount of the lenders’ commitments under the Revolving ABL Credit Facility.
During the fiscal year ended February 27, 2016, the Company borrowed $840 and repaid $702 under the Revolving ABL Credit
Facility. During the fiscal year ended February 28, 2015, the Company borrowed $3,268 and repaid $3,268 under the
Revolving ABL Credit Facility. Certain of the Company’s material subsidiaries are co-borrowers under the Revolving ABL
Credit Facility, and this facility is guaranteed by the rest of the Company’s material subsidiaries (the Company and those
subsidiaries named as borrowers and guarantors under the Revolving ABL Credit Facility, the “ABL Loan Parties”). To secure
their obligations under this facility, the ABL Loan Parties have granted a perfected first-priority security interest for the benefit
of the facility lenders in their present and future inventory, credit card, wholesale trade, pharmacy and certain other receivables,
prescription files and related assets. In addition, the obligations under the Revolving ABL Credit Facility are secured by
second-priority liens on and security interests in the collateral securing the Secured Term Loan Facility, subject to certain
limitations to ensure compliance with the Company’s outstanding debt instruments and leases.
Both the Secured Term Loan Facility and the Revolving ABL Credit Facility limit the Company’s ability to make Restricted
Payments (as defined in both the Secured Term Loan Facility and the Revolving ABL Credit Facility), which include dividends
to stockholders. The Secured Term Loan Facility caps the aggregate amount of Restricted Payments that may be made over the
life of the Secured Term Loan Facility. That aggregate cap can fluctuate over time and the cap could be reduced by certain other
actions taken by the Company, including certain debt prepayments and Permitted Investments (as defined in the Secured Term
Loan Facility). As of February 27, 2016, that aggregate cap on Restricted Payments was approximately $401. The Revolving
ABL Credit Facility permits dividends up to $75 per fiscal year, not to exceed $175 in the aggregate over the life of the
Revolving ABL Credit Facility, as long as no Cash Dominion Event (as defined in the Revolving ABL Credit Facility) exists.
Those caps could be reduced by certain debt prepayments made by the Company. The Revolving ABL Credit Facility permits
other Restricted Payments as long as the Payment Conditions (as defined in the Revolving ABL Credit Facility) are met.
Debentures
On January 6, 2016, the Company used borrowings under the Revolving ABL Credit Facility and cash from operations to fund
the redemption of the remaining $278 of 8.00 percent Senior Notes due May 2016 (the "2016 Notes"), and to pay accrued and
unpaid interest on the redeemed 2016 Notes and the applicable redemption premium of approximately $6, which was expensed.
In addition, non-cash charges of $1 for the write-off of the remaining unamortized financing costs on the redeemed 2016 Notes
were incurred.
The $400 of 6.75 percent Senior Notes due June 2021, and the $350 of 7.75 Senior Notes due November 2022 contain, and
before their redemption the 2016 Notes contained, 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.
Capital Expenditures
Capital expenditures in fiscal 2016 were $281 compared with $240 last year, excluding cash paid for business acquisitions but
including $19 of higher capital lease additions related to Retail stores and a Save-A-Lot distribution center in fiscal 2016, and
primarily consisted of capital investments into new Retail and Save-A-Lot corporate stores and a higher number of Save-A-Lot
corporate store remodels. During fiscal 2016, the Company paid $9 to acquire 12 Save-A-Lot and Retail stores. During fiscal
2015, the Company paid $55 for the purchase of certain Rainbow and licensed Save-A-Lot stores.
Capital expenditures for fiscal 2017 are projected to be approximately $325 to $350. The increase in capital expenditures over
fiscal 2016 is primarily due to new and remodeled corporate Save-A-Lot and Retail stores.