-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UXfe4rsak5oLAfroCk8KkhSSkkpZdBNAfhBnDa3iGJLaWJL1xOKz3SE6/6Ylc3d+ X6MgT3l1SxjK6NgPAF8Mwg== /in/edgar/work/20000609/0000003333-00-000030/0000003333-00-000030.txt : 20000919 0000003333-00-000030.hdr.sgml : 20000919 ACCESSION NUMBER: 0000003333-00-000030 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000504 FILED AS OF DATE: 20000609 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALBERTSONS INC /DE/ CENTRAL INDEX KEY: 0000003333 STANDARD INDUSTRIAL CLASSIFICATION: [5411 ] IRS NUMBER: 820184434 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06187 FILM NUMBER: 652646 BUSINESS ADDRESS: STREET 1: 250 PARKCENTER BLVD STREET 2: P O BOX 20 CITY: BOISE STATE: ID ZIP: 83726 BUSINESS PHONE: 2083956200 MAIL ADDRESS: STREET 1: 250 PARKCENTER BLVD STREET 2: P O BOX 20 CITY: BOISE STATE: ID ZIP: 83726 10-Q 1 0001.txt ALBERTSON'S, INC.1ST QUARTER 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------- FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For 13 Weeks Ended: May 4, 2000 Commission File Number: 1-6187 ALBERTSON'S, INC. ----------------------------------------------------- (Exact name of Registrant as specified in its charter) Delaware 82-0184434 - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 250 Parkcenter Blvd., P.O. Box 20, Boise, Idaho 83726 - ----------------------------------------------- ----- (Address) (Zip Code) Registrant's telephone number, including area code: (208) 395-6200 -------------- Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Number of Registrant's $1.00 par value common shares outstanding at June 2, 2000: 423,189,605 Page 1 PART I. FINANCIAL INFORMATION ALBERTSON'S, INC. CONSOLIDATED EARNINGS (in millions, except per share data) (unaudited)
13 WEEKS ENDED ---------------------------------------- May 4, April 29, 2000 1999 ------------------ ------------------ Sales $9,013 $9,215 Cost of sales 6,504 6,712 ------------------ ------------------ Gross profit 2,509 2,503 Selling, general and administrative expenses 2,131 2,058 Merger-related expense (income) 1 (28) ------------------ ------------------ Operating profit 377 473 Other (expenses) income: Interest, net (83) (82) Other, net 4 ------------------ ------------------ Earnings before income taxes 294 395 Income taxes 115 157 ------------------ ------------------ NET EARNINGS $ 179 $ 238 ================== ================== EARNINGS PER SHARE: Basic $0.42 $0.56 Diluted $0.42 $0.56 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic 424 420 Diluted 424 423
See Notes to Consolidated Financial Statements Page 2 ALBERTSON'S, INC. CONSOLIDATED BALANCE SHEETS (in millions)
May 4, 2000 (unaudited) February 3, 2000 ------------------------- ------------------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 47 $ 231 Accounts and notes receivable 540 587 Inventories 3,362 3,481 Prepaid expenses 126 154 Property held for resale 89 100 Deferred income taxes 32 29 ------------------------- ------------------------- TOTAL CURRENT ASSETS 4,196 4,582 OTHER ASSETS 607 631 GOODWILL (net of accumulated amortization of $616 and $602, respectively) 1,568 1,582 LAND, BUILDINGS AND EQUIPMENT (net of accumulated depreciation and amortization of $5,393 and $5,087, respectively) 9,017 8,913 ------------------------- ------------------------- $15,388 $15,708 ========================= ========================= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 2,190 $ 2,162 Salaries and related liabilities 438 555 Taxes other than income taxes 165 172 Income taxes 56 82 Self-insurance 173 187 Unearned income 101 110 Merger related reserves 25 33 Other current liabilities 143 115 Current maturities of long-term debt 316 623 Current portion of capitalized lease obligations 18 19 ------------------------- ------------------------- TOTAL CURRENT LIABILITIES 3,625 4,058 LONG-TERM DEBT 4,837 4,805 CAPITALIZED LEASE OBLIGATIONS 202 187 SELF-INSURANCE 212 223 DEFERRED INCOME TAXES 111 52 OTHER LIABILITIES AND DEFERRED CREDITS 621 681 STOCKHOLDERS' EQUITY: Preferred stock - $1 par value; authorized - 10 shares; issued - none Common stock - $1 par value; authorized - 1,200 shares; issued - 423 shares and 424 shares, respectively 423 424 Capital in excess of par value 126 145 Retained earnings 5,231 5,133 ------------------------- ------------------------- 5,780 5,702 ------------------------- ------------------------- $15,388 $15,708 ========================= =========================
See Notes to Consolidated Financial Statements Page 3 ALBERTSON'S, INC. CONSOLIDATED CASH FLOWS (in millions) (unaudited)
13 WEEKS ENDED ------------------------------------- May 4, April 29, 2000 1999 ---------------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 179 $ 238 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 228 212 Goodwill amortization 14 15 Noncash merger-related expense (income) 3 (28) Net loss on asset sales 5 Net deferred income taxes 57 33 Increase in cash surrender value of Company-owned life insurance (4) Changes in operating assets and liabilities: Receivables and prepaid expenses 65 18 Inventories 119 60 Accounts payable 28 (78) Other current liabilities (134) 51 Self-insurance (25) (21) Unearned income (16) (8) Other long-term liabilities (54) (65) ---------------- ----------------- Net cash provided by operating activities 469 423 CASH FLOWS FROM INVESTING ACTIVITIES: Net capital expenditures (301) (374) Decrease in other assets 24 1 ---------------- ----------------- Net cash used in investing activities (277) (373) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on long-term borrowings (103) (180) Net commercial paper and bank line activity (176) 189 Proceeds from stock options exercised 2 7 Cash dividends paid (76) (66) Stock purchased and retired (23) ---------------- ----------------- Net cash used in financing activities (376) (50) ---------------- ----------------- NET DECREASE IN CASH AND CASH EQUIVALENTS (184) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 231 116 ---------------- ----------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 47 $ 116 ================ =================
See Notes to Consolidated Financial Statements Page 4 ALBERTSON'S, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions, except per share data) (unaudited) Business Combination On June 23, 1999, Albertson's, Inc. ("Albertson's" or the "Company") and American Stores Company ("ASC") consummated a merger with the issuance of approximately 177 million shares of Albertson's common stock (the "Merger"). The Merger constituted a tax-free reorganization and has been accounted for as a pooling-of-interests for accounting and financial reporting purposes. The pooling-of-interests method of accounting is intended to present as a single interest, two or more common stockholders' interests that were previously independent; accordingly, the April 29, 1999, consolidated financial statements restate the historical financial statements as though the companies had always been combined. The restated financial statements are adjusted to conform accounting policies and financial statement presentations. Basis of Presentation The accompanying unaudited consolidated financial statements include the results of operations, account balances and cash flows of the Company and its subsidiaries. All material intercompany balances have been eliminated. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary to present fairly, in all material respects, the results of operations of the Company for the periods presented. Such adjustments consisted only of normal recurring items. The statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's 1999 Annual Report. The balance sheet at February 3, 2000, has been taken from the audited consolidated financial statements at that date. The preparation of the Company's consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Historical operating results are not necessarily indicative of future results. Page 5 Reclassifications Certain reclassifications have been made in prior year's financial statements to conform to classifications used in the current year. Reporting Periods The Company's quarterly reporting periods are generally 13 weeks and periodically consist of 14 weeks because the fiscal year ends on the Thursday nearest to January 31 each year. Merger-Related and Exit Costs Results of operations for quarter ended May 4, 2000, include $57 of merger-related costs ($35 after tax). The following table presents the pre-tax costs incurred by category of expenditure and merger-related accruals included in the Company's Consolidated Balance Sheets:
------------------- ------------------ ------------------ ------------------- Exit Merger Period Costs Charge Costs Total ------------------- ------------------ ------------------ ------------------- Merger related accruals at February 3, 2000 $ 26 $3 $ 4 $ 33 Severance costs 1 3 4 Write-down of assets to net realizable value 9 9 Integration and other costs 44 44 ------------------- ------------------ ------------------ ------------------- Total costs 1 56 57 Cash expenditures (9) (56) (65) ------------------- ------------------ ------------------ ------------------- Merger-related accruals at May 4, 2000 $ 17 $4 $ 4 $ 25 =================== ================== ================== ===================
Severance costs consist of obligations to employees who were terminated or were notified of termination under a plan authorized by senior management. Approximately 670 employees will be severed as a result of the Merger, of which 567 were terminated as of May 4, 2000. The write-down of assets to net realizable value includes the loss on disposal of stores divested as required and information technology equipment which was abandoned by the Company. Integration and other costs consist primarily of incremental transition and integration costs associated with integrating the operations of Albertson's and ASC and are being expensed as incurred. These costs include such costs as advertising, labor associated with system conversions and training and relocation costs. One-Time Charge A one-time charge of $20 was incurred and included in selling, general and administrative expenses to reflect liabilities related to certain previously assigned leases and subleases to tenants who are in bankruptcy. Page 6 Indebtedness The Company has two revolving credit agreements which provide for borrowings up to $1,900. These agreements contain certain covenants, the most restrictive of which requires the Company to maintain consolidated tangible net worth, as defined, of at least $2,100. As of May 4, 2000, no amounts were outstanding under these agreements. On May 9, 2000, the Company issued $500 of term notes under a shelf registration statement filed with the Securities and Exchange Commission in February 1999 (the "1999 Registration Statement"). The notes are comprised of $275 of principal bearing interest at 8.35% due May 2010 and $225 of principal bearing interest at 8.70% due May 2030. Proceeds were used to repay amounts outstanding under the Company's commercial paper program. Additional securities up to $700 remain available for issuance under the Company's 1999 Registration Statement. In conjunction with the debt issuance, on April 26, 2000, and May 3, 2000, the Company entered into a 10-year treasury hedge for $250 and a 30-year treasury hedge for $125. The hedges were settled on May 9, 2000, the date of the issuance of the $500 debt, resulting in gains of $6. The gains will be amortized over the term of the related 10-year and 30-year debt. Supplemental Cash Flow Information Selected cash payments and noncash transactions were as follows:
13 Weeks Ended 13 Weeks Ended May 4, 2000 April 29, 1999 ------------------------ ------------------------ Cash payments for: Income taxes $ 76 $ 75 Interest, net of amounts capitalized 57 59 Noncash transactions: Capitalized leases incurred 19 2 Tax benefits related to stock options 1
Page 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (dollars in millions, except per share data) Results of Operations The following table sets forth certain income statement components expressed as a percent to sales and the year-to-year percentage changes in the amounts of such components:
Percent to Sales Percentage 13 weeks ended Increase 5-4-00 4-29-99 (Decrease) ---------------- ----------------- ------------------ Sales 100.00% 100.00% (2.2%) Gross profit 27.84 27.16 0.3 Selling, general and administrative expenses 23.65 22.33 3.6 Merger-related expense (income) 0.02 (0.31) n.m. Operating profit 4.17 5.14 (20.5) Interest expense, net 0.92 0.89 1.4 Earnings before income taxes 3.26 4.29 (25.8) Net earnings 1.98 2.59 (25.1) n.m. - not meaningful
Sales for the quarter ended May 4, 2000, increased by 4.2% over the same quarter of the prior year, excluding sales from stores required to be divested. Identical store sales increase 0.5% and comparable store sales, which include replacement stores, increased 0.8%. Increases in sales are primarily attributable to the continued development of new stores and identical and comparable store sales increases. During the quarter the Company opened 15 combination food and drug stores, 1 warehouse store and 6 stand alone drugstores, while closing 11 supermarkets and 2 drugstores. The new stores include 6 stores that were acquired in two separate transactions. Net retail square footage decreased by 1.8% from the prior year. This decrease includes the impact of the 6.1 million square feet, or 6.2%, lost due to the required divested stores. Management estimates that there was overall inflation in products the Company sells of approximately 0.3% (annualized). In addition to store development, the Company has increased sales through implementation of best practices across the Company and its investment in programs initiated in recent years which are designed to provide solutions to customer needs. These programs include the Front End Manager program; the home meal solutions process called "Quick Fixin' Ideas;" special destination categories; and increased emphasis on training programs utilizing Computer Guided Training. To provide additional solutions to customer needs, the Company has added new gourmet-quality bakery products and organic grocery and produce items. Other solutions include neighborhood marketing, targeted advertising and exciting new and remodeled stores. Page 8 Gross profit, as a percent to sales, increased primarily as a result of the Merger creating buying synergies and margin improvements from the implementation of best practices across the Company. Gross profit improvements were also realized through the continued utilization of Company-owned distribution facilities and increased buying efficiencies. The pre-tax LIFO charge reduced gross profit by $6 (0.07% to sales) for the 13 weeks ended May 4, 2000, as compared to $9 (0.10% to sales) for the 13 weeks ended April 29, 1999. The lower LIFO charge is partially driven by the decrease in inventory during the quarter due to the Company's focus on inventory reduction. Selling, general and administrative expenses, as a percent to sales, increased due to the impact of a one-time charge of $20 to reflect liabilities related to certain previously assigned leases and subleases to tenants who are in bankruptcy. Expense increases have also been driven by integration costs associated with the Merger, higher labor costs and related benefits associated with the Company's sales initiatives and depreciation expense as a result of the Company's expansion program. Net interest expense for the 13 weeks ended May 4, 2000, included a $16 interest expense reversal due to a favorable income tax settlement. The increase in net interest expense, as adjusted by the interest expense reversal, resulted from higher average outstanding debt during the 13 weeks ended May 4, 2000, as compared to the 13 weeks ended April 29, 1999. Merger-Related and Exit Costs Results of operations for the 13 weeks ended May 4, 2000, include $57 of merger related and exit costs ($35 after tax). The following table presents the pre-tax costs incurred by category of expenditure:
------------- ------------- ------------- Merger Period Charge Costs Total ------------- ------------- ------------- Severance costs $ 1 $ 3 $ 4 Write-down of assets to net realizable value 9 9 Integration and other costs 44 44 ------------- ------------- ------------- Total costs $ 1 $56 $57 ============= ============= =============
Severance costs consist of obligations to employees who were terminated or were notified of termination under a plan authorized by senior management. Approximately 670 employees will be severed as a result of the Merger, of which 567 were terminated as of May 4, 2000. The write-down of assets to net realizable value includes the loss on disposal of stores divested as required and information technology equipment which was abandoned by the Company. Integration and other costs consist primarily of incremental transition and integration costs associated with integrating the operations of Albertson's and ASC and are being expensed as incurred. These costs include such costs as advertising, labor associated with system conversions and training and relocation costs. Page 9 The Company expects to incur additional after-tax merger related and exit costs of approximately $122 over the next two years which consist primarily of expected integration costs and costs associated with other consolidation activities for which plans have not yet been finalized. Due to the significance of the merger-related costs and other one-time expenses and their effect on operating results, the following table is presented to assist in the comparison of income statement components without these costs and expenses:
----------------------------------------------------- ----------------------------------------------------- 13 Weeks Ended May 4, 2000 13 Weeks Ended April 29, 1999 ----------------------------------------------------- ----------------------------------------------------- As W/O Percent As W/O Percent Reported One-Time One-Time To Sales Reported One-Time One-Time To Sales ------------- ------------- ------------ ------------ ------------ ------------ ----------- --------------- Sales $9,013 $9,013 100.00% $9,215 $9,215 100.00% Cost of sales 6,504 $(22) 6,482 71.92 6,712 6,712 72.84 ------------- ------------- ------------ ------------ ------------ ------------ ------------- ------------- Gross profit 2,509 22 2,531 28.08 2,503 2,503 27.16 Selling, general and administrative expense 2,131 (54) 2,077 23.05 2,058 $ (4) 2,054 22.29 Merger-related expense (income) 1 (1) (28) 28 ------------- ------------- ------------ ------------ ------------ ------------ ------------- ------------- Operating profit 377 77 454 5.03 473 (24) 449 4.87 Interest expense, net (83) (83) (0.92) (82) (82) (0.89) Other income, net 4 4 0.05 ------------- ------------- ------------ ------------ ------------ ------------ ------------- ------------- Earnings before income taxes 294 77 371 4.12 395 (24) 371 4.03 Income taxes 115 30 145 1.61 157 (10) 147 1.60 ------------- ------------- ------------ ------------ ------------ ------------ ------------- ------------- Net Earnings $179 $ 47 $ 226 2.50% $238 $(14) $224 2.43% ============= ============= ============ ============ ============ ============ ============= =============
Liquidity and Capital Resources Cash provided by operating activities during the first quarter of 2000 increased to $469, compared to $423 in the prior year. The positive effects of lower inventories and higher accounts payable leverage offset by lower earnings due to the merger-related and one-time expenses were the primary drivers of this change. The Company has implemented several initiatives designed to enhance working capital which include reducing inventory and accounts receivable levels and increasing accounts payable leverage. These improvements are expected to reduce the cash requirements of the business. The Company's financing activities during the quarter ended May 4, 2000, include the net reduction of debt of $279 and the payment of dividends of $76. Pursuant to the stock buyback program approved by Albertson's Board of Directors on April 25, 2000, the Company purchased and retired 697,000 shares of its common stock during the first quarter at a total cost of $23. The Company utilizes its commercial paper and bank line programs primarily to supplement cash requirements for seasonal fluctuations in working capital and to fund its capital expenditure program. Accordingly, commercial paper and bank line borrowings will fluctuate between reporting periods. The Company had $1,453 of commercial paper borrowings outstanding at May 4, 2000, compared to $1,278 outstanding as of April 29, 1999. Page 10 The Company has two revolving credit agreements which provide for borrowings up to $1,900. These agreements contain certain covenants, the most restrictive of which requires the Company to maintain consolidated tangible net worth, as defined, of at least $2,100. In addition, the Company has uncommitted bank lines of credit totaling $345. As of May 4, 2000, no amounts were outstanding under the credit facilities or bank lines. On May 9, 2000, the Company issued $500 of term notes under a shelf registration statement filed with the Securities and Exchange Commission in February 1999 (the "1999 Registration Statement"). The notes are comprised of $275 of principal bearing interest at 8.35% due May 2010 and $225 of principal bearing interest at 8.70% due May 2030. Proceeds were used to repay amounts outstanding under the Company's commercial paper program. Additional securities up to $700 remain available for issuance under the Company's 1999 Registration Statement. In conjunction with the debt issuance, on April 26, 2000, and May 3, 2000, the Company entered into a 10-year treasury hedge for $250 and a 30-year treasury hedge for $125. The hedges were settled on May 9, 2000, the date of the issuance of the $500 debt, resulting in gains of $6. The gains will be amortized over the term of the related 10-year and 30-year debt. Recent Accounting Standards In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." This new standard establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. This standard, as amended by SFAS No. 137, is effective for the Company's 2001 fiscal year. The Company has not yet completed its evaluation of this standard or its impact on the Company's accounting and reporting requirements. Environmental The Company has identified environmental contamination sites related primarily to underground petroleum storage tanks and ground water contamination at various store, warehouse, office and manufacturing facilities (related to current operations as well as previously disposed of businesses). The Company conducts an ongoing program for the inspection and evaluation of new sites proposed to be acquired by the Company and the remediation/ monitoring of contamination at existing and previously owned sites. Undiscounted reserves have been established for each environmental contamination site unless an unfavorable outcome is remote. Although the ultimate outcome and expense of environmental remediation is uncertain, the Company believes that required remediation and continuing compliance with environmental laws, in excess of current reserves, will not have a material adverse effect on the financial condition of the Company. Charges against earnings for environmental remediation were not material for the 13 weeks ended May 4, 2000, or the 13 weeks ended April 29, 1999. Cautionary Statement for Purposes of "Safe Harbor Provisions" of the Private Securities Litigation Reform Act of 1995 From time to time, information provided by the Company, including written or oral statements made by its representatives, may contain forward-looking information as defined in the Private Securities Litigation Reform Act of 1995. Page 11 All statements, other than statements of historical facts, which address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as integration of the operations of acquired or merged companies, expansion and growth of the Company's business, future capital expenditures and the Company's business strategy, contain forward-looking information. In reviewing such information it should be kept in mind that actual results may differ materially from those projected or suggested in such forward-looking information. This forward-looking information is based on various factors and was derived utilizing numerous assumptions. Many of these factors have previously been identified in filings or statements made by or on behalf of the Company. Important assumptions and other important factors that could cause actual results to differ materially from those set forth in the forward-looking information include changes in the general economy, changes in consumer spending, competitive factors and other factors affecting the Company's business in or beyond the Company's control. These factors include changes in the rate of inflation, changes in state or federal legislation or regulation, adverse determinations with respect to litigation or other claims (including environmental matters), labor negotiations, the Company's ability to recruit and develop employees, its ability to develop new stores or complete remodels as rapidly as planned, its ability to implement new technology successfully, stability of product costs and the Company's ability to integrate the operations of ASC. Other factors and assumptions not identified above could also cause the actual results to differ materially from those set forth in the forward-looking information. The Company does not undertake to update forward-looking information contained herein or elsewhere to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information. Quantitative And Qualitative Disclosures About Market Risk There have been no material changes regarding the Company's market risk position from the information provided under the caption "Quantitative and Qualitative Disclosures About Market Risk" on page 27 of the Company's 1999 Annual Report to Stockholders. PART II. OTHER INFORMATION Legal Proceedings An agreement in principle has been reached to settle eight purported multi-state cases combined in the United States District Court in Boise, Idaho, which raise various issues including "off the clock" work allegations. The proposed settlement is subject to court approval. Under the proposed settlement agreement, current and former employees who meet eligibility criteria may present their claims to a settlement administrator. While the Company cannot specify the exact number of individuals who are likely to submit claims and the exact amount of their claims, the $37 pre-tax ($22 after tax) one-time charge recorded by the Company in 1999 is the Company's current estimate of the total monetary liability, including attorney fees, for all eight cases. The Company is also involved in routine litigation incidental to operations. The Company utilizes various methods of alternative dispute resolution, including settlement discussions, to manage the costs and uncertainties inherent in the litigation process. In the opinion of management, the ultimate resolution of these legal proceedings will not have a material adverse effect on the Company's financial condition. Page 12 Item 2. Changes in Securities In accordance with the Company's $1,900 revolving credit agreement, the Company's consolidated tangible net worth, as defined, shall not be less than $2,100. Item 3. Defaults upon Senior Securities Not applicable. Item 4. Submission of Matters to a Vote of Security Holders Not applicable. Item 5. Other Information Not applicable. Item 6. Exhibits and Reports on Form 8-K a. Exhibits Number Description ------- ----------- 27 Financial data schedule for the 13 weeks ended May 4, 2000 b. The following reports on Form 8-K were filed during the quarter ended May 4, 2000: Current Report on Form 8-K dated March 3, 2000, regarding the Company's 14 week fourth quarter and 53 week annual sales for the period ended February 3, 2000. Current Report on Form 8-K dated April 27, 2000, announcing the Company's stock purchase program. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALBERTSON'S, INC. --------------------------------- (Registrant) Date: June 9, 2000 /S/ A. Craig Olson --------------------- --------------------------------- A. Craig Olson Executive Vice President and Chief Financial Officer Page 13 EX-27.1 2 0002.txt FDS
5 THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM ALBERTSON'S FORM 10-Q FOR THE 13 WEEKS ENDED MAY 4, 2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000,000 3-MOS FEB-01-2001 FEB-04-2000 MAY-04-2000 47 0 570 30 3,362 4,196 14,410 5,393 15,388 3,625 5,039 0 0 423 5,357 15,388 9,013 9,013 6,504 6,504 0 0 83 294 115 179 0 0 0 179 0.42 0.42
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