<PAGE>
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 39 Weeks Ended: November 2, 1995 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) 385-6200
______________
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 December 5, 1995: 252,856,101
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ALBERTSON'S, INC.
CONSOLIDATED EARNINGS
(in thousands except per share data)
(unaudited)
<CAPTION>
13 WEEKS ENDED 39 WEEKS ENDED
________________________ ________________________
November 2, November 3, November 2, November 3,
1995 1994 1995 1994
____________ ___________ ____________ ___________
<S> <C> <C> <C> <C>
Sales $3,103,578 $2,928,012 $9,306,218 $8,825,500
Cost of sales 2,306,793 2,187,602 6,938,422 6,611,423
__________ __________ __________ __________
Gross profit 796,785 740,410 2,367,796 2,214,077
Selling, general and
administrative expenses 614,153 569,744 1,826,516 1,720,913
__________ __________ __________ __________
Operating profit 182,632 170,666 541,280 493,164
Other (expenses) income:
Interest, net (14,334) (15,384) (42,300) (46,857)
Other, net 3,561 (1,906) 8,121 (2,143)
__________ __________ __________ __________
Earnings before income taxes
and cumulative effect of
accounting change 171,859 153,376 507,101 444,164
Income taxes 66,509 59,050 196,248 171,004
__________ __________ __________ __________
Earnings before cumulative
effect of accounting change 105,350 94,326 310,853 273,160
Cumulative effect of
accounting change:
Postemployment benefits (17,006)
__________ __________ __________ __________
NET EARNINGS $ 105,350 $ 94,326 $ 310,853 $ 256,154
Earnings per share before
cumulative effect of
accounting change $ .42 $ .37 $1.23 $1.08
Cumulative effect of accounting
change:
Postemployment benefits (.07)
__________ __________ __________ __________
EARNINGS PER SHARE $ .42 $ .37 $1.23 $1.01
DIVIDENDS DECLARED PER SHARE $ .13 $ .11 $ .39 $ .33
Average number of common
shares outstanding 252,738 253,648 253,321 253,573
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
ALBERTSON'S, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<CAPTION>
November 2, 1995 February 2,
(unaudited) 1995
________________ ____________
ASSETS
______
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 53,443 $ 50,224
Accounts and notes receivable 97,326 109,324
Inventories 1,012,053 948,561
Prepaid expenses 28,269 19,257
Deferred income taxes 61,338 62,223
__________ __________
TOTAL CURRENT ASSETS 1,252,429 1,189,589
OTHER ASSETS 151,374 122,781
LAND, BUILDINGS AND EQUIPMENT 3,913,706 3,496,257
Less accumulated depreciation and amortization 1,313,226 1,186,898
__________ __________
2,600,480 2,309,359
__________ __________
$4,004,283 $3,621,729
LIABILITIES AND STOCKHOLDERS' EQUITY
____________________________________
CURRENT LIABILITIES:
Accounts payable $ 649,574 $ 575,551
Salaries and related liabilities 129,472 114,906
Taxes other than income taxes 67,559 38,212
Income taxes 12,322 37,913
Self-insurance 69,809 63,905
Unearned income 27,211 22,092
Other current liabilities 45,885 34,810
Current maturities of long-term debt 78,238 201,146
Current capitalized lease obligations 7,085 6,904
__________ _________
TOTAL CURRENT LIABILITIES 1,087,155 1,095,439
LONG-TERM DEBT 589,529 382,775
CAPITALIZED LEASE OBLIGATIONS 129,501 129,573
DEFERRED INCOME TAXES 2,017
OTHER LONG-TERM LIABILITIES AND DEFERRED CREDITS 334,140 324,032
STOCKHOLDERS' EQUITY:
Preferred stock - $1 par value; authorized -
10,000,000 shares; issued - none
Common stock - $1 par value; authorized -
600,000,000 shares; issued - 252,829,101
shares and 253,984,381 shares, respectively 252,829 253,984
Capital in excess of par value 2,870 11,322
Retained earnings 1,608,259 1,422,587
__________ __________
1,863,958 1,687,893
__________ __________
$4,004,283 $3,621,729
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
ALBERTSON'S, INC.
CONSOLIDATED CASH FLOWS
(in thousands)
(unaudited)
<CAPTION>
39 WEEKS ENDED
______________________________
November 2, November 3,
1995 1994
_____________ _____________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 310,853 $ 256,154
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 185,222 165,886
Net deferred income taxes (8,623) (11,903)
Cumulative effect of accounting change 17,006
Changes in operating assets and liabilities 59,256 (22,230)
__________ __________
Net cash provided by operating activities 546,708 404,913
CASH FLOWS FROM INVESTING ACTIVITIES:
Net capital expenditures excluding
noncash activities (471,563) (311,604)
Increase in other assets (21,102) (28,629)
__________ __________
Net cash used in investing activities (492,665) (340,233)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net line of credit activity (10,000)
Proceeds from long-term borrowings 200,000
Payments on long-term borrowings (205,490) (80,330)
Net commercial paper activity 84,524 104,629
Proceeds from stock options exercised 4,074 5,057
Stock purchases (40,127)
Cash dividends (93,805) (78,593)
__________ __________
Net cash used in financing activities (50,824) (59,237)
__________ __________
NET INCREASE IN CASH AND CASH EQUIVALENTS 3,219 5,443
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 50,224 62,463
__________ __________
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 53,443 $ 67,906
NONCASH ACTIVITIES:
Capital lease obligations incurred $ 5,799 $ 14,081
Capital lease obligations terminated 878 2,658
Liabilities assumed in connection with
acquisition 112
CASH PAYMENTS FOR:
Income taxes 222,964 226,590
Interest, net of amounts capitalized 27,031 37,294
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
ALBERTSON'S, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Basis of Presentation
_____________________
The accompanying unaudited consolidated financial statements include
the results of operations, account balances and cash flows of the
Company and its wholly-owned 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
generally accepted accounting principles 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 the accompanying notes included in
the Company's 1994 Annual Report.
The balance sheet at February 2, 1995 has been taken from the audited
financial statements at that date.
Restatement
___________
The results for the 39 weeks ended November 3, 1994 have been
restated to give effect to a correction of the cumulative effect of the
adoption of Statement of Financial Accounting Standards (SFAS) No. 112,
"Employers' Accounting for Postemployment Benefits" recorded in the
first quarter of 1994. The cumulative effect (net of tax) of the
adoption of SFAS No. 112 amounted to $17.0 million, or $.07 per share,
compared to $6.4 million, or $.03 per share, as previously reported.
Indebtedness
____________
In June 1995, the Company issued $200 million of 6.375% notes under a
shelf registration statement filed with the Securities and Exchange
Commission in 1992. The notes are due June 1, 2000 and interest is paid
semiannually. Proceeds from the issuance were used to reduce borrowings
under the Company's commercial paper program. All debt available for
issuance under the 1992 shelf registration statement has been issued.
In October 1995, the Company amended its $400 million revolving
credit agreement with several banks. The amendment modified the rates
of interest and fees payable, and extended the term to October 25, 2000.
<PAGE>
Recently Issued Accounting Standard
___________________________________
In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation." This new standard defines a fair value based
method of accounting for an employee stock option or similar equity
instrument. Under the fair value based method, compensation cost is
measured at the grant date based on the value of the award and is
recognized over the service period, which is usually the vesting period.
Pursuant to the new standard, companies are encouraged, but are not
required, to adopt the fair value based method of accounting for
employee stock-based transactions. The standard does allow companies to
continue to measure compensation cost for those plans using the
intrinsic value based method of accounting prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees." An entity not electing to change its method of accounting
will be required to disclose in a note to the financial statements pro
forma net income and earnings per share as if the new method of
accounting had been applied. The accounting requirements are effective
for transactions entered into in fiscal years that begin after December
15, 1995. The disclosure provisions are effective for financial
statements for fiscal years beginning after December 15, 1995.
The Company has not yet determined if it will adopt the new
accounting method, nor has it determined what effect the fair value
based method would have on net income and earnings per share. Adoption
of the new standard will have no effect on the Company's cash flows.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
_____________________
Results for the quarter:
Sales for the 13 weeks ended November 2, 1995 increased by $176
million or 6.0% over sales for the 13 weeks ended November 3, 1994.
This increase was due to the continued expansion of net square footage
and an increase in identical store sales. Identical store sales, sales
in stores that have been in operation for the equivalent 13 week periods
of both years, increased 1.4% and comparable store sales (which include
replacement stores) increased 1.7%. Management estimates that annual
sales inflation in the products the Company sold was approximately 2.4%.
During the quarter 13 stores were opened, 4 stores were closed and 21
store remodels were completed. Net retail square footage increased 7.3%
from November 3, 1994.
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:
<TABLE>
<CAPTION>
Percent to Sales Percentage Incr.(Decr.)
____________________ _________________________
13 weeks ended Third Quarter
____________________ _________________________
11-02-95 11-03-94 1995/1994 1994/1993
________ ________ ___________ __________
<S> <C> <C> <C> <C>
Sales 100.00% 100.00% 6.0% 7.1%
Gross profit 25.67 25.29 7.6 10.8
Selling, general and
administrative
expenses 19.79 19.46 7.8 7.8
Operating profit 5.88 5.83 7.0 22.2
Net interest
expense 0.46 0.53 (6.8) 236.0
Earnings before
income taxes 5.54 5.24 12.1 46.1
Net earnings 3.39 3.22 11.7 50.4
</TABLE>
Gross profit, as a percent to sales, increased due to improved gross
margins at retail stores and increased utilization of the Company's
distribution system. Improvements in retail gross margins resulted from
tight controls and better sales mix (improved sales in departments with
higher gross profit). Increased utilization of the Company's
distribution system enabled the Company to improve efficiencies at the
respective centers. The pre-tax LIFO charge reduced gross profit by
$4,100,000 (0.13% to sales) for the 13 weeks ended November 2, 1995 and
$2,700,000 (0.09% to sales) for the 13 weeks ended November 3, 1994.
<PAGE>
Selling, general and administrative (SG&A) expenses, as a percent to
sales, increased primarily due to additional depreciation and
amortization resulting from the Company's capital expenditure program
and various operating costs. The Company continues to emphasize
increased sales, its cost containment programs as well as increased
productivity to control SG&A expenses as a percent to sales.
Net interest expense decreased due primarily to increased capitalized
interest associated with the Company's capital expenditure program.
The increase in net interest expense in 1994 over 1993 resulted from
an interest expense adjustment recorded in 1993. Net interest expense
for the 13 weeks ended October 28, 1993 included a reduction of
approximately $9.7 million due to the successful resolution of a tax
issue for which interest expense had previously been accrued. Excluding
the 1993 adjustment, net interest expense for the 13 weeks ended
November 3, 1994 would have increased 8.0% over the same quarter in 1993
as a result of increased interest on capitalized lease obligations and
increased interest rates associated with the Company's commercial paper
program.
The increase in earnings before income taxes and net earnings in 1994
over 1993 resulted from certain adjustments recorded in 1993. Net
earnings for the 13 weeks ended October 28, 1993 included a nonrecurring
charge for a lawsuit settlement, a decrease in interest expense due to
the resolution of a tax issue (discussed above) and a retroactive
increase in the Federal income tax rate. Excluding the 1993 adjustments,
earnings before income taxes and net earnings would have increased 22.5%
and 22.4%, respectively over the same quarter in 1993.
Year-to-date results:
Sales for the 39 weeks ended November 2, 1995 increased by $481
million or 5.4% over sales for the 39 weeks ended November 3, 1994. This
increase was due primarily to the continued expansion of net square
footage. Identical store sales, sales in stores that have been in
operation for the equivalent 39 week periods of both years, increased
0.5% and comparable store sales (which include replacement stores)
increased 0.7%. Management estimates that annual sales inflation in the
products the Company sold was approximately 2.4%. During the 39 weeks
26 stores were opened, 12 stores were closed and 36 store remodels were
completed. Net retail square footage increased 7.3% from November 3,
1994.
<PAGE>
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:
<TABLE>
<CAPTION>
Percent to Sales Percentage Incr.(Decr.)
____________________ _________________________
39 weeks ended Year-to-date
____________________ _________________________
11-02-95 11-03-94 1995/1994 1994/1993
________ ________ ___________ __________
<S> <C> <C> <C> <C>
Sales 100.00% 100.00% 5.4% 7.3%
Gross profit 25.44 25.09 6.9 10.6
Selling, general and
administrative
expenses 19.63 19.50 6.1 7.9
Operating profit 5.82 5.59 9.8 21.1
Net interest
expense 0.45 0.53 (9.7) 37.7
Earnings before income
taxes and cumulative
effect of accounting
change 5.45 5.03 14.2 28.5
Net earnings 3.34 2.90 21.4 20.4
</TABLE>
Gross profit, as a percent to sales, increased due primarily to
increased utilization of the Company's distribution system. Increased
utilization of the Company's distribution system enabled the Company to
improve efficiencies at the respective centers. The pre-tax LIFO charge
reduced gross profit by $26,300,000 (0.28% to sales) for the 39 weeks
ended November 2, 1995 and $24,400,000 (0.28% to sales) for the 39 weeks
ended November 3, 1994.
Selling, general and administrative (SG&A) expenses, as a percent to
sales, increased primarily due to additional depreciation and
amortization resulting from the Company's capital expenditure program.
The Company continues to emphasize increased sales, its cost containment
programs as well as increased productivity to control SG&A expenses as a
percent to sales.
Net interest expense decreased due to the reduction of average
outstanding debt during the respective periods and increased capitalized
interest associated with the Company's capital expenditure program.
Net earnings for the 39 weeks ended November 2, 1995, as a percent to
sales, increased due to an increase in operating profit and reductions
of net interest expense discussed previously. In addition, the
cumulative effect of adopting SFAS No. 112, "Employers' Accounting for
Postemployment Benefits" reduced net earnings for the 39 weeks ended
November 3, 1994 by $17 million (.19% to sales).
<PAGE>
Liquidity and Capital Resources
_______________________________
The Company's operating results continue to enhance its financial
position and ability to continue its planned expansion program. Cash
provided by operating activities during the 39 weeks ended November 2,
1995 was $547 million as compared to $405 million in the prior year.
During the 39 weeks ended November 2, 1995 the Company spent $472
million for net capital expenditures, $40 million to purchase shares of
the Company's common stock, $94 million for the payment of dividends and
$205 million to reduce debt. The Company also issued new notes totaling
$200 million. Proceeds from the debt issuance were used to reduce
borrowings under the Company's commercial paper program. The Company's
commercial paper program is utilized to supplement cash requirements
resulting from seasonal fluctuations created by the Company's capital
expenditure program and changes in working capital. Accordingly,
commercial paper borrowings will fluctuate between the Company's
quarterly reporting periods.
Since 1987 the Board of Directors has continuously adopted or renewed
plans under which the Company is authorized, but not required, to
purchase shares of its common stock on the open market. The current
plan was adopted by the Board on March 6, 1995 and authorizes the
Company to purchase up to 5 million shares through March 31, 1996.
During the 39 weeks ended November 2, 1995, 1.4 million shares were
purchased and immediately retired pursuant to this program.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
__________________________
There have not been any material developments in the routine
litigation referred to in the Form 10-K for the fiscal year ended
February 2, 1995.
Item 2. Changes in Securities
______________________________
The Company maintains a revolving credit agreement with several
banks, whereby the Company may borrow, from time to time, principal
amounts up to $400 million at any time prior to October 25, 2000. In
accordance with this revolving credit agreement, the Company's
consolidated tangible net worth, as defined, shall not be less than $750
million.
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
__________________________
Effective February 2, 1996, Warren E. McCain will retire as Chairman
of the Executive Committee of the Board of Directors and as an employee
of the Company. Mr. McCain will continue as a Director of the Company.
John B. Carley, 61, has announced his retirement as President and
Chief Operating Officer effective February 2, 1996. Mr. Carley will
continue to be active in management as Chairman of the Executive
Committee of the Board of Directors and will remain an employee and
Director of the Company. Richard L. King, 46, will replace Mr. Carley
as President and Chief Operating Officer. Currently Senior Vice
President and Regional Manager of the Florida, Northern California and
Southern California divisions, Mr. King has been with Albertson's for 28
years and has served in many retail operations positions.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
_________________________________________
a. Exhibits
10.14.1 Amendment No. 1 to Credit Agreement (dated
October 25, 1995)
27 Financial data schedule for the 39 weeks ended
November 2, 1995
b. The following reports on Form 8-K were filed during the
quarter:
None.
<PAGE>
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: December 8, 1995 A. Craig Olson
_____________________ _________________________________
A. Craig Olson
Senior Vice President, Finance
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ALBERTSON'S
QUARTERLY REPORT TO STOCKHOLDERS FOR THE QUARTER ENDED NOVEMBER 2, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-01-1996
<PERIOD-START> FEB-03-1995
<PERIOD-END> NOV-02-1995
<CASH> 53,443
<SECURITIES> 0
<RECEIVABLES> 98,826
<ALLOWANCES> 1,500
<INVENTORY> 1,012,053
<CURRENT-ASSETS> 1,252,429
<PP&E> 3,913,706
<DEPRECIATION> 1,313,226
<TOTAL-ASSETS> 4,004,283
<CURRENT-LIABILITIES> 1,087,155
<BONDS> 719,030
<COMMON> 252,829
0
0
<OTHER-SE> 1,611,129
<TOTAL-LIABILITY-AND-EQUITY> 4,004,283
<SALES> 9,306,218
<TOTAL-REVENUES> 9,306,218
<CGS> 6,938,422
<TOTAL-COSTS> 6,938,422
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 42,300
<INCOME-PRETAX> 507,101
<INCOME-TAX> 196,248
<INCOME-CONTINUING> 310,853
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 310,853
<EPS-PRIMARY> 1.23
<EPS-DILUTED> 1.23
</TABLE>
<PAGE> EXHIBIT 10.14.1
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT dated as of October 25, 1995 among ALBERTSON'S, INC. (the
"Borrower"), the BANKS listed on the signature pages hereof (the "Banks"),
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Co-Agent and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a Credit
Agreement dated as of October 5, 1994 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to modify the
rates of interest and fees payable thereunder and to extend the term thereof;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
SECTION 2. Amendment of the Agreement.
(a) Each reference to "1993" in the definition of "Borrower's 1993
Form 10-K" and in Section 4.04(a) is changed to "1994".
(b) The date "February 3, 1994" in Section 4.04(a) is changed to
"February 2, 1995".
(c) The date "August 4, 1994" in Sections 4.04(b) and (c) is changed
to "August 3, 1995".
<PAGE>
(d) The date "October 5, 1999" in the definition of "Termination Date"
is changed to "October 25, 2000".
(e) The phrase "or such lesser amount as may be acceptable to the
Borrower and the Agent" is added to the second parenthetical in Section
9.06(c) immediately following "$10,000,000" and the phrase "or was a Bank
immediately prior to such assignment" is deleted from the first proviso to
such Section.
(f) The Pricing Schedule is amended to read as the Pricing Schedule
annexed to this Amendment.
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts; Effectiveness. This Amendment may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument. This Amendment shall become effective as of the date hereof when
the Agent shall have received duly executed counterparts hereof signed by the
Borrower and the Banks (or, in the case of any party as to which an executed
counterpart shall not have been received, the Agent shall have received
telegraphic, telex or other written confirmation from such party of execution
of a counterpart hereof by such party).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
ALBERTSON'S, INC.
By A. Craig Olson
_____________________________
A. Craig Olson
Title: Senior Vice President,
Finance & Chief
Financial Officer
$75,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By Carl J. Mehldau, Jr.
______________________________
Carl J. Mehldau, Jr.
Title: Associate
$75,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By Steven F. Sterling
______________________________
Steven F. Sterling
Title: Vice President
$50,000,000 NATIONSBANK OF TEXAS, N.A.
By Frank M. Johnson
______________________________
Frank M. Johnson
Title: Senior Vice President
<PAGE>
$35,000,000 UNION BANK OF SWITZERLAND
By Philip A. Stephens
______________________________
Philip A. Stephens
Title: Assistant Vice President
By Peter S. Humber
______________________________
Peter S. Humber
Title: Vice President
$40,000,000 WACHOVIA BANK OF GEORGIA, NATIONAL
ASSOCIATION
By William F. Hamlet
______________________________
William F. Hamlet
Title: Senior Vice President
$15,000,000 CREDIT SUISSE
By David J. Worthington
______________________________
David J. Worthington
Title: Member of Senior Management
By Marilou Palenzuela
______________________________
Marilou Palenzuela
Title: Member of Senior Management
$30,000,000 FIRST INTERSTATE BANK OF OREGON, N.A.
By Ronald J. Kallis
______________________________
Ronald J. Kallis
Title: Vice President & Senior Lender
<PAGE>
$30,000,000 SUN BANK, NATIONAL ASSOCIATION
By J. Carol Doyle
______________________________
J. Carol Doyle
Title: Senior Vice President
$20,000,000 FIRST SECURITY BANK OF IDAHO, N.A.
By Mary G. Monroe
______________________________
Mary G. Monroe
Title: Vice President
$15,000,000 U.S. BANK OF WASHINGTON, N.A.
By Arnold J. Conrad
______________________________
Arnold J. Conrad
Title: Vice President
$15,000,000 WEST ONE BANK, IDAHO
By James W. Henken
______________________________
James W. Henken
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Co-Agent
By Steven F. Sterling
______________________________
Steven F. Sterling
Title: Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent
By Carl J. Mehldau, Jr.
______________________________
Carl J. Mehldau, Jr.
Title: Associate
<PAGE>
PRICING SCHEDULE
The "Facility Fee Rate", "Euro-Dollar Margin" and "CD Margin" for any
day are the respective percentages set forth below in the applicable row under
the column corresponding to the Status that exists on such day:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
_______________________________________________________________________________
Status Level Level Level Level Level Level
I II III IV V VI
___________ _______ _______ _______ _______ _______ _______
Facility 0.070% 0.0750% 0.0850% 0.100% 0.150% 0.250%
Fee Rate
Euro-Dollar 0.120% 0.1250% 0.1650% 0.200% 0.250% 0.500%
Margin
CD Margin 0.2450% 0.250% 0.290% 0.3250% 0.3750% 0.6250%
_______________________________________________________________________________
</TABLE>
For purposes of this Schedule, the following terms have the following
meanings, subject to the concluding paragraphs of this Schedule:
"Level I Status" exists at any date if, at such date, the Borrower's
long-term debt is rated at least AA by S&P or Aa2 by Moody's.
"Level II Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated at least AA- by S&P or Aa3 by Moody's and
(ii) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated at least A by S&P or A2 by Moody's and (ii)
neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (i) the Borrower's
long-term debt is rated at least A- by S&P and A3 by Moody's and (ii) none of
Level I Status, Level II Status and Level III Status exists.
<PAGE>
"Level V Status" exists at any date if, at such date, (i) the Borrower's
long-term debt is rated at least BBB by S&P and Baa2 by Moody's and (ii) none
of Level I Status, Level II Status, Level III Status or Level IV Status
exists.
"Level VI Status" exists at any date if, at such date, no other Status
exists.
"Status" refers to the determination of which of Level I Status, Level
II Status, Level III Status, Level IV Status, Level V Status or Level VI
Status exists at any date.
The credit ratings to be utilized for purposes of this Schedule are those
assigned to the senior unsecured long-term debt securities of the Borrower
without third-party credit enhancement, and any rating assigned to any other
debt security of the Borrower shall be disregarded. The rating in effect at
any date is that in effect at the close of business on such date.
The following provisions are applicable so long as the Borrower's long-
term debt is rated at least A- by S&P and at least A3 by Moody's: If the
Borrower is split-rated and the ratings differential is one level, the higher
of the two ratings will apply (e.g., A/A3 results in Level III Status). If
the Borrower is split-rated and the ratings differential is more than one
level, the average of the two ratings (or the higher of two intermediate
ratings) shall be used (e.g., AA/A1 results in Level II Status, while AA/A3
results in Level III Status).
If the Borrower's long-term debt is not rated at least A- by S&P and at
least A3 by Moody's, then either Level V Status or Level VI Status exists, as
determined in accordance with the respective definitions of such terms above.
