<PAGE> 1
THE INFORMATION IN THIS PROSPECTUS IS SUBJECT TO COMPLETION AND AMENDMENT.
SUBJECT TO COMPLETION. DATED JULY 19, 1999.
Prospectus Supplement to Prospectus Dated February 3, 1999.
$1,000,000,000
[ALBERTSON'S, INC. LOGO] ALBERTSON'S, INC.
$ % Senior Notes due 20
$ % Senior Notes due 20
$ % Senior Debentures due 20
-------------------------------------
Albertson's, Inc. will pay interest on the Notes and Debentures on
and of each year. The first interest payment will be
made on , 2000. The Notes and Debentures will be issued only in
denominations of $1,000 and integral multiples of $1,000.
Albertson's will have the right to redeem all or any portion of the Notes
or Debentures at any time at the redemption price described in this prospectus
supplement, plus accrued interest.
----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
----------------------
<TABLE>
<CAPTION>
Proceeds, before
Initial public Underwriting expenses, to
offering price discount Albertson's
-------------- ------------ ----------------
<S> <C> <C> <C>
Per % Note due 20 ................ % % %
Total................................... $ $ $
Per % Note due 20 ................ % % %
Total................................... $ $ $
Per % Debenture due 20 ........... % % %
Total................................... $ $ $
</TABLE>
The initial public offering prices set forth above do not include accrued
interest, if any. Interest on the Notes and Debentures will accrue from
, 1999 and must be paid by the purchaser if the Notes and Debentures
are delivered after , 1999.
----------------------
The underwriters expect to deliver the Notes and Debentures in book-entry
form only through the facilities of The Depository Trust Company, Euroclear and
Cedelbank against payment in New York, New York on , 1999.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
CHASE SECURITIES INC.
DEUTSCHE BANC ALEX. BROWN
SALOMON SMITH BARNEY
THE WILLIAMS CAPITAL GROUP, L.P.
----------------------
Prospectus Supplement dated , 1999.
<PAGE> 2
STORE LOCATION MAP
Map showing number of supermarkets & combo stores and number of
stand-alone drug stores operated by Abertson's in each state.
<PAGE> 3
NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION BY ALBERTSON'S OR
ANY UNDERWRITER THAT WOULD PERMIT DISTRIBUTION OF A PROSPECTUS IN ANY
JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED, OTHER THAN IN THE UNITED
STATES. ANY PERSON INTO WHOSE POSSESSION THIS PROSPECTUS SUPPLEMENT AND
ACCOMPANYING PROSPECTUS COMES IS ADVISED BY ALBERTSON'S AND THE UNDERWRITERS TO
INFORM THEMSELVES ABOUT, AND TO OBSERVE ANY RESTRICTIONS AS TO, THE OFFERING OF
THE NOTES AND THE DISTRIBUTION OF THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING
PROSPECTUS.
FORWARD-LOOKING STATEMENTS
This prospectus supplement includes or incorporates by reference
forward-looking statements, including those identified by the words "believes,"
"anticipates," "expects" and similar expressions. Albertson's has based these
forward-looking statements on its current expectations and projections about
future events. These forward-looking statements are subject to risks,
uncertainties, and assumptions, including, among other things:
- - changes in the general economy;
- - changes in consumer spending;
- - 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;
- - Albertson's ability to successfully integrate American Stores operations; and
- - adverse effect of failure to achieve Year 2000 compliance.
Albertson's undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this prospectus supplement or in the
incorporated documents might not occur.
----------------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus.
Albertson's has not, and the underwriters have not, authorized any other person
to provide you with different information. If anyone provides you with different
or inconsistent information, you should not rely on it. Albertson's is not, and
the underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information contained or incorporated by reference in this prospectus
supplement and the accompanying prospectus is accurate as of the date on the
front cover of this prospectus supplement only. The business, financial
condition, results of operations and prospects of Albertson's may have changed
since that date.
THE COMPANY
Albertson's, Inc. is incorporated under the laws of the State of Delaware
and is the successor to a business founded by J.A. Albertson in 1939.
Albertson's is one of the largest retail food-drug companies in the United
States.
On June 23, 1999, Albertson's completed its previously announced
combination with American Stores Company ("American Stores"). Pursuant to the
merger agreement between the two companies, American Stores became a
wholly-owned subsidiary of Albertson's. The transaction has been accounted for
as a pooling of interests for accounting and financial reporting purposes. As
part of the merger Albertson's issued approximately 177 million shares of common
stock for all of the shares of
S-2
<PAGE> 4
American Stores common stock. American Stores operates under the names "Acme",
"Jewel-Osco", "Lucky", "Osco Drug" and "Sav-on drugs". American Stores operated
802 combination food-drug stores and supermarkets and 783 stand-alone drugstores
at the end of its 1999 first quarter. The information set forth below on pages
S-3 and S-4 gives effect to this combination and the related divestitures
required by regulatory authorities.
As of April 29, 1999, Albertson's operated 2,430 stores in 38 states,
which are grouped into four formats: combination food-drug stores, conventional
supermarkets, stand-alone drugstores and warehouse stores.
Albertson's 1,256 combination food-drug stores are super grocery/super
drugstores under one roof, which range in size from 35,000 to 84,000 square
feet. Most of these stores offer prescription drugs and an expanded section of
cosmetics and non-foods in addition to specialty departments such as service
seafood and meat, bakery, lobby/ video, service delicatessen, liquor and floral.
Many also offer meal centers, party supply centers, coffee bars, in-store banks,
photo processing and destination departments for beverages, snacks, pet care
products, paper products and baby care merchandise. Food and non-food shopping
areas are served by a common set of checkstands.
Albertson's 362 conventional supermarkets range in size from 8,000 to
35,000 square feet. These stores offer a full selection in the basic departments
of grocery, meat, produce, dairy and limited non-food lines. Many locations have
an in-store bakery and a service delicatessen.
Albertson's 784 stand-alone drugstores average approximately 19,000 square
feet. These stores offer a full range of pharmaceutical products and services as
well as related drug and general merchandise.
Albertson's 28 warehouse stores are operated primarily under the names
"Max Foods" and "Super Saver." These no-frills stores range in size from 17,000
to 66,000 square feet and offer significant savings with special emphasis on
discounted meat and produce.
In addition, 29 of Albertson's stores include fuel center operations.
These centers operate with three to six fuel pumps and a small building, ranging
in size from a pay-only kiosk to a small convenience store, featuring such items
as candy, soft drinks and snack foods.
Albertson's retail operations are supported by 16 food distribution
operations and 5 general merchandise operations strategically located throughout
Albertson's operating area. Albertson's distribution operations supply food and
drug merchandise exclusively to Albertson's retail stores.
Albertson's owns 45% of the retail stores it operates, including owned
buildings on leased land, and leases the remaining stores. Albertson's prefers
to own its stores because it provides control and flexibility with respect to
financing terms, remodeling, expansions, fuel centers and closures.
S-3
<PAGE> 5
RETAIL STORE TYPES AS OF APRIL 29, 1999
(NET OF DIVESTED STORES)
<TABLE>
<CAPTION>
COMBINATION CONVENTIONAL STAND- WAREHOUSE
NAME FOOD-DRUG SUPERMARKETS ALONE DRUG STORES TOTAL
---- ----------- ------------ ---------- --------- -----
<S> <C> <C> <C> <C> <C>
Albertson's................... 787 66 1 -- 854
Osco Drug..................... -- -- 457 -- 457
Lucky......................... 219 182 -- -- 401
Sav-on drugs.................. -- -- 326 -- 326
Jewel-Osco.................... 168 20 -- -- 188
Acme.......................... 74 92 -- -- 166
Max Foods and Super Saver..... -- -- -- 28 28
Seessel's..................... 8 2 -- -- 10
----- --- --- -- -----
Total......................... 1,256 362 784 28 2,430
===== === === == =====
</TABLE>
MERGER WITH AMERICAN STORES
Strategically, the merger with American Stores creates a nationwide
retailer with more than 2,400 retail food and drug stores located throughout 38
states. It strengthens Albertson's position in existing markets such as
California, and it gives Albertson's a strong market presence in important urban
markets such as Chicago and Philadelphia. Additionally the drugstores provide a
new vehicle for growth that will help take advantage of promising opportunities
in the pharmacy business.
Albertson's has identified a number of opportunities for profitable growth
which should result from the combination with American Stores. These
opportunities include increased economies of scale and improved operating
efficiencies related to: the integration of office facilities, information
systems, distribution channels, support functions and the combined purchasing
power of the merged company. Management believes that merger related synergies
will be at least $100 million in the first full year following the merger, $200
million in the second full year and $300 million in the third full year.
BUSINESS STRATEGY
Albertson's mission is to be "The Best Supermarket In Your Neighborhood"
by creating value through superior service and quality products. Historically,
Albertson's has maintained its strength as a performance leader through
consistent growth in sales and earnings. Albertson's business strategy will
focus on the following:
- - Neighborhood Marketing -- Albertson's will seek to continue to be the best by
marketing to each of Albertson's neighborhoods. There are as many different
Albertson's neighborhoods as Albertson's stores. To meet the needs in each
neighborhood, each store is operated as if it were Albertson's only store.
- - New Store Openings -- During the next five years, Albertson's intends to open
750 combination food-drug stores, 500 stand-alone drugstores and 600 fuel
centers. Albertson's intends to fund these openings primarily through
internally-generated cash flow.
- - Stand-Alone Drugstores -- The stand-alone drugstore format creates significant
growth opportunities. Albertson's will continue to position pharmacies to meet
the growing needs of customers, through such programs as Albertson's Better
Care.
- - Financial Strength -- Albertson's will strive to maintain a strong cash flow
and balance sheet to enable it to grow both organically and by acquisition.
REFINANCING OUTSTANDING INDEBTEDNESS
On July 14, 1999, American Stores Company, a wholly-owned subsidiary of
Albertson's, commenced an offer to purchase for cash (the "Tender Offer") all of
the
S-4
<PAGE> 6
outstanding 9 1/8% Notes of American Stores at purchase prices equal to the
amount calculated in a manner intended to result in a yield to maturity equal to
the yield to maturity of the US Treasury 6 5/8% Note due March 31, 2002, plus 35
basis points. The Tender Offer is expected to close on July 21, 1999.
USE OF PROCEEDS
Albertson's intends to use the net proceeds from the sale of the Notes and
Debentures (estimated to be $ )for the repayment and repurchase of debt
and for general corporate purposes. See "Capitalization" with respect to certain
debt to be repaid or repurchased by Albertson's.
S-5
<PAGE> 7
CAPITALIZATION
The following table sets forth the unaudited short-term debt and the
capitalization of the Company as of April 29, 1999 and as adjusted to give
effect to the combination with American Stores, the completion of the Tender
Offer (assuming $175 million of the outstanding 9 1/8% Notes of American Stores
are accepted for payment in the Tender Offer) and this offering. The table
should be read in conjunction with the Company's Consolidated Financial
Statements and accompanying notes incorporated herein by reference. See
"Available Information" and "Information Incorporated by Reference" in the
accompanying Prospectus.
<TABLE>
<CAPTION>
APRIL 29, 1999
------------------------
ACTUAL AS ADJUSTED
--------- -----------
($ IN MILLIONS, EXCEPT
SHARE AMOUNTS)
<S> <C> <C>
Short-Term Debt $ 1,560.6 $ 1,403.9
Long-Term Debt
7.50% Debentures due 2037, put option 2009 200.0 200.0
7.75% Debentures due 2026 200.0 200.0
7.90% Debentures due 2017 100.0 100.0
8.00% Debentures due 2026 350.0 350.0
Medium-Term Notes 901.7 901.7
Industrial Revenue Bonds 13.4 13.4
Mortgage Notes Payable 10.1 10.1
Revolving Credit(1) 500.0 0.0
Other Notes Payable(2)(3) 942.8 674.5
Other Borrowings(4) 129.1 54.1
New Securities offered hereby(5) 1,000.0
Obligations Under Capital Leases 216.8 216.8
Debt Secured by Real Estate 62.6 62.6
--------- ---------
Total Debt $ 5,187.1 $ 5,187.1
========= =========
Stockholders' Equity
Preferred Stock -- $1.00 par value;
authorized -- 10,000,000 shares;
designated -- 3,000,000 shares of Series A Junior
Participating; issued -- none
Common Stock -- $1.00 par value;
authorized -- 1,200,000,000 shares;
issued -- 434,703,837 shares; treasury
stock -- 14,331,621 shares $ 434.7 $ 434.7
Capital in Excess of Par 550.8 550.8
Retained Earnings 5,196.1 5,196.1
Less: Treasury Stock (511.1) (511.1)
--------- ---------
Total Stockholders' Equity $ 5,670.5 $ 5,670.5
--------- ---------
Total Capitalization $10,857.6 $10,857.6
========= =========
</TABLE>
- -------------------------
(1) On June 23, 1999, Albertson's, Inc. prepaid $500 million of debt outstanding
on American Stores Company's $1.5 billion revolving credit agreement.
(2) Assumes the purchase of $175 million of 9 1/8% Notes of American Stores
pursuant to the Tender Offer, at an aggregate purchase price of
approximately $190 million. The Company is unable to predict the exact
aggregate principal amount of 9 1/8% Notes of American Stores that will be
tendered and accepted for payment in the Tender Offer. See "The
Company -- Refinancing Outstanding Indebtedness."
(3) On June 24, 1999 American Stores Company made an offer to prepay $93.3
million of 10.63% Senior Notes Due 2004. The date for prepayment will be
August 2, 1999.
(4) On June 22, 1999, American Stores Company made an offer to prepay $75
million of 6.95% term loan due August 2000 with Bank of Yokohama. The date
for prepayment will be July 22, 1999.
(5) Assumes the receipt of the proceeds from the issuance of $1 billion of
securities in this offering.
S-6
<PAGE> 8
SELECTED CONSOLIDATED FINANCIAL DATA
The financial data below are derived from the audited Supplemental
Consolidated Financial Statements of Albertson's, except for the financial data
for the 13-week periods ended April 29, 1999, and April 30, 1998, which are
derived from unaudited Interim Supplemental Consolidated Financial Statements.
The selected financial data should be read in conjunction with Albertson's
Consolidated Financial Statements and accompanying notes, which are incorporated
herein by reference. See "Available Information" and "Information Incorporated
by Reference" in the accompanying Prospectus. The results of operations for the
13 weeks ended April 29, 1999, and April 30, 1998, contain all adjustments that
are of a normal and recurring nature necessary to present fairly the financial
position and results of operations for such periods. The results for the 13
weeks ended April 29, 1999 are not necessarily indicative of the results
expected for the full year (dollars in millions except per share data).
<TABLE>
<CAPTION>
13 WEEKS 13 WEEKS 52 WEEKS 52 WEEKS 52 WEEKS
4/29/99 4/30/98 1998 1997 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS:
Sales........................................ $9,215.3 $8,720.9 $35,871.8 $33,828.4 $32,454.8
Cost of sales................................ 6,712.7 6,423.2 26,156.0 24,820.8 23,901.6
--------- --------- --------- --------- ---------
Gross profit................................. 2,502.6 2,297.7 9,715.8 9,007.6 8,553.2
Selling, general and administrative
expenses................................... 2,058.1 1,902.6 7,846.1 7,330.2 6,958.1
Merger related stock option charge (income).. (28.9) 195.2
Impairment and restructuring................. 29.4 24.4 13.4 77.1
--------- --------- --------- --------- ---------
Operating profit............................. 473.3 365.7 1,650.1 1,664.0 1,518.0
Other (expense) income:
Interest, net.............................. (82.0) (82.7) (336.4) (293.6) (227.6)
Shareholder related expenses............... (33.9)
Other, net................................. 4.3 9.3 24.6 14.1 9.0
--------- --------- --------- --------- ---------
Earnings before income taxes................. 395.6 292.3 1,338.3 1,350.6 1,299.4
Income taxes................................. 157.1 115.8 537.4 553.2 518.4
--------- --------- --------- --------- ---------
NET EARNINGS................................. $ 238.5 $ 176.5 $ 800.9 $ 797.4 $ 781.0
--------- --------- --------- --------- ---------
EARNINGS PER SHARE:
Basic........................................ $ 0.57 $ 0.42 $ 1.91 $ 1.89 $ 1.79
Diluted...................................... 0.56 0.42 1.90 1.88 1.79
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic........................................ 420.3 418.4 418.8 421.9 435.5
Diluted...................................... 423.3 420.5 421.7 423.5 437.1
FINANCIAL STATISTICS:
Identical store sales........................ 1.80% N.A. 0.50% 0.00% N.A.
Comparable store sales....................... 2.20% N.A. 1.20% 0.40% N.A.
OPERATING ITEMS % TO SALES:
Gross profit................................. 27.16% 26.35% 27.08% 26.63% 26.35%
Selling, general and administrative.......... 22.33% 21.82% 21.87% 21.67% 21.44%
Operating profit............................. 5.14% 4.19% 4.60% 4.92% 4.68%
OTHER DATA:
Depreciation and amortization................ $ 227.0 $ 210.7 $ 862.7 $ 797.7 $ 734.8
Total assets................................. 15,180.9 N.A. 15,131.3 13,766.6 12,608.0
Total debt................................... 5,187.1 N.A. 5,175.6 4,529.6 3,739.8
Stockholders equity.......................... 5,670.5 N.A. 5,521.7 4,740.5 4,794.4
Ratio of earnings to fixed charges........... 3.98 3.31 3.57 3.77 4.22
</TABLE>
S-7
<PAGE> 9
DESCRIPTION OF NOTES AND DEBENTURES
GENERAL
The following description of the particular terms of the Notes and
Debentures supplements and, to the extent inconsistent with the accompanying
prospectus, replaces the description of the general terms and provisions of the
Debt Securities set forth in the accompanying prospectus. Capitalized terms used
but not defined in this prospectus supplement or in the accompanying prospectus
have the meanings assigned to them in the indenture, dated as of May 1, 1992,
between Albertson's and First Trust of New York, National Association, as
trustee (the "Indenture"). The following statements with respect to the Notes
and Debentures are summaries and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Notes, Debentures, the
Indenture and the Trust Indenture Act of 1939.
The Notes and Debentures will be issued as three series of Debt Securities
under the Indenture. For a description of the rights attaching to different
series of Debt Securities under the Indenture, see "Description of Debt
Securities" in the accompanying prospectus.
20 NOTES
The 20 Notes will constitute an additional series of unsecured Debt
Securities and will be limited in aggregate principal amount to
$ . The 20 Notes will mature on , 20 and will accrue
interest from , 1999 at a rate of %.
20 NOTES
The 20 Notes will constitute an additional series of unsecured Debt
Securities and will be limited in aggregate principal amount to $ . The
20 Notes will mature on , 20 and will accrue interest from ,
1999 at a rate of %.
20 DEBENTURES
The 20 Debentures will constitute an additional series of unsecured Debt
Securities and will be limited in aggregate principal amount to $ . The
20 Debentures will mature on , 20 and will accrue interest from
, 1999 at a rate of %.
All the Notes and Debentures will be issued as senior unsecured general
obligations of Albertson's in an aggregate principal amount of $1,000,000,000
and will rank equally with all of Albertson's other senior unsecured
indebtedness. The covenant provisions of the Indenture described under the
caption "Description of Debt Securities -- Certain Covenants of Albertson's" in
the accompanying prospectus will apply to the Notes and Debentures. The Notes
and Debentures will be issued only in book-entry form through the facilities of
The Depository Trust Company ("DTC" or the "Depositary", which term includes any
successor depositary), Euroclear and Cedelbank and in denominations of $1,000
and integral multiples of $1,000. See "Description of Book-Entry System" below.
SEMI-ANNUAL PAYMENTS
Interest on each series of Notes and Debentures will be payable
semi-annually on and of each year (each, an "Interest Payment
Date"), commencing , 2000, at the respective rate set forth on the cover
page of this prospectus supplement, to the persons in whose names the Notes and
Debentures are registered on the or preceding the applicable
Interest Payment Date.
The amount of interest payable for any period will be computed on the
basis of twelve 30-day months and a 360-day year and, for any period shorter
than a full six-month interest period, on the basis of the actual number of days
elapsed in that period. If any Interest Payment Date is not a Business Day, then
payment of the amount payable on that date will be made on the next succeeding
day that is a Business Day with the same force and effect as if made on the
Interest Payment Date, and no interest will accrue for the period from and after
the Interest Payment Date. The term "Business
S-8
<PAGE> 10
Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a
day on which banking institutions in the state of New York are authorized or
obligated by law, regulation or executive order to close.
OPTIONAL REDEMPTION
Albertson's may redeem all or any part of any series of Notes or
Debentures at any time at a price equal to the greater of:
- - 100% of the principal amount of the Notes or Debentures to be redeemed; and
- - an amount, as determined by the Quotation Agent, equal to the sum of the
present values of the remaining scheduled payments of principal and interest
on the Notes or Debentures to be redeemed (not including any portion of
payments of interest accrued as of the redemption date) discounted to the
redemption date on a semi-annual basis (assuming a 360-day year comprised of
twelve 30-day months) at the Adjusted Treasury Rate plus basis points in
the case of the 20 Notes, basis points in the case of the 20 Notes, and
basis points in the case of the 20 Debentures,
plus, in each case, accrued and unpaid interest to the redemption date;
provided, however, that with respect to interest payments that are due on or
prior to the relevant redemption date, Albertson's will make payments of
interest to the record holders of the relevant Notes or Debentures at the close
of business on the relevant regular record date.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for that redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Notes or Debentures of the applicable series to be redeemed that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of that series of Notes or Debentures.
"Comparable Treasury Price" means, with respect to any redemption date,
(1) the average of the Reference Treasury Dealer Quotations for that redemption
date, after excluding the highest and lowest Reference Treasury Dealer
Quotations, or (2) if the Trustee obtains fewer than three Reference Treasury
Dealer Quotations for that redemption date, the average of the Reference
Treasury Dealer Quotations obtained, as determined by the Quotation Agent.
"Quotation Agent" means the Reference Treasury Dealer appointed by
Albertson's.
"Reference Treasury Dealer" means (1) Goldman, Sachs & Co. or its
successors; provided, however, that if any of them ceases to be a primary U.S.
government securities dealer in New York City (a "Primary Treasury Dealer"),
Albertson's will substitute for it another Primary Treasury Dealer, and (2) any
other Primary Treasury Dealers(s) selected by Albertson's.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Quotation Agent, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by the Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding that redemption date.
At least 30 days but not more than 60 days before the relevant redemption
date, Albertson's will send notice of redemption to each holder of Notes or
Debentures to be redeemed. If less than all of the Notes or Debentures of any
series are to be redeemed, the Trustee will select, by such method as it will
deem fair and appropriate, the Notes or Debentures to be redeemed in whole or in
part.
S-9
<PAGE> 11
Unless Albertson's defaults in payment of the redemption price, no
interest will accrue on the Notes or Debentures called for redemption for the
period from and after the redemption date.
The Notes and Debentures will not be entitled to any sinking fund.
DEFEASANCE
The defeasance and covenant defeasance provisions of the Indenture
described under the caption "Description of Debt Securities -- Defeasance and
Covenant Defeasance" in the accompanying prospectus will apply to the Notes and
Debentures.
STRUCTURAL SUBORDINATION
Albertson's rights as the sole stockholder of American Stores to the
assets, income and cash flow of American Stores are subject to the prior claims
of American Stores creditors, which include holders of long term debt and trade
creditors of American Stores. Accordingly, the claims of holders of Notes and
Debentures as creditors of Albertson's will be effectively subordinated to the
claims of American Stores creditors.
FORM OF THE NOTES AND DEBENTURES
The Notes and Debentures will be represented by one or more global
securities in registered form, without coupons (the "Global Securities") which
have been issued in each case in a denomination equal to the outstanding
principal amount of Notes and Debentures represented thereby. The Global
Securities will be deposited with the trustee, as described below under
"-- Description of Book-Entry System."
DESCRIPTION OF BOOK-ENTRY SYSTEM
GENERAL
The Global Securities will be deposited with the trustee as custodian for
DTC and registered in the name of Cede & Co. as nominee of DTC, for credit to
the accounts of DTC participants and indirect participants, including Euroclear
and Cedelbank. Upon issuance of the Notes and Debentures, DTC, Euroclear or
Cedelbank, as the case may be, will credit on its book-entry registration and
transfer system the participants' accounts with the respective interests owned
by such participants (the "Book-Entry Interests"). Ownership of Book-Entry
Interests is shown on, and the transfer of such interests will be effected only
through, records maintained by DTC, Euroclear or Cedelbank and, with respect to
interests of indirect participants, their respective participants. The laws of
some countries and some states in the United States may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to own, transfer or
pledge the Book-Entry Interests.
All interests in the Notes and Debentures, including those held through
Euroclear or Cedelbank, will be subject to the procedures and requirements of
DTC. Those interests, if held through Euroclear or Cedelbank, will also be
subject to the procedures and requirements of such systems.
So long as DTC, or its nominee, is the registered holder of the Global
Securities, such party will be considered the sole holder of such Global
Securities for all purposes under the Indenture. Participants or indirect
participants are not entitled to have Notes, Debentures or Book-Entry Interests
registered in their names, will not receive or be entitled to receive physical
delivery of Notes, Debentures or Book-Entry Interests in definitive form and
will not be considered the owners or holders thereof under the Indenture.
Accordingly, each person owning a Book-Entry Interest must rely on the
procedures of DTC, Euroclear or Cedelbank, as the case may be, and, if such
person is not a participant in DTC, Euroclear or Cedelbank, on the procedures of
the participant in DTC, Euroclear or Cedelbank through which such person owns
its interest, to exercise any rights and remedies of a holder under the
Indenture. See "-- Action by Owners of Book-Entry Interests" below. The
certificated depositary interest held by DTC may not be transferred except as a
whole by DTC to its nominee or by its nominee to DTC or another nominee of DTC
or by DTC or any
S-10
<PAGE> 12
such nominee to a successor of DTC or a nominee of such successor.
PAYMENTS ON THE GLOBAL SECURITIES
Payments of any amounts owing in respect of the Global Securities will be
made through one or more paying agents (the "Paying Agents") appointed under the
Indenture (which initially will include the trustee) to DTC, as the holder of
the Global Securities. Payment to or to the order of the holder of the Global
Securities shall discharge Albertson's payment obligations in respect of the
Notes or Debentures represented thereby. Upon receipt of any such amounts, DTC
should distribute such payments to its respective participants. Payments of all
such amounts will be made without deduction or withholding for or on account of
any present or future taxes, duties, assessments or governmental charges of
whatever nature except as may be required by law. If withholding for taxes is
required by law, such withholding will occur in accordance with applicable law.
Under the provisions of the Indenture, the holder of the Global Securities
is treated as the owner of the Notes or the Debentures, as the case may be,
represented thereby, and Albertson's has no responsibility or liability for the
payment of amounts owing in respect of the depositary interests held by DTC to
owners of Book-Entry Interests that represent interests in the Global
Securities. Payments by DTC participants or by Euroclear or Cedelbank
participants to owners of Book-Entry Interests held through such participants
are the responsibility of such participants as is the case with securities held
for the account of customers in bearer form or registered in "street name".
None of Albertson's, the Trustee or any agent of Albertson's or the
Trustee have any responsibility or liability for any aspect of the records
relating to or payments made on account of Book-Entry Interests or for
maintaining, supervising or reviewing any records relating to such Book-Entry
Interests.
INFORMATION CONCERNING DTC, EUROCLEAR AND CEDELBANK
Albertson's understands as follows with respect to DTC: DTC is a limited
purpose trust issuer organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934. DTC was
created to hold securities of its participants and to facilitate the clearance
and settlement of transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. DTC
participants include securities brokers and dealers, including the underwriters,
banks, trust companies, clearing corporations (including Euroclear or Cedelbank)
and certain other organizations, some of whom (and/or their representatives) own
DTC. Access to the DTC book-entry system is also available to others, such as
banks, broker-dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Albertson's understands as follows with respect to Euroclear and
Cedelbank: Euroclear and Cedelbank each hold securities for their account
holders and facilitate the clearance and settlement of securities transactions
by electronic book-entry transfer between their respective account holders,
thereby eliminating the need for physical movements of certificates and any risk
from lack of simultaneous transfers of securities.
Euroclear and Cedelbank each provide various services including
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Euroclear and Cedelbank each
also deal with domestic securities markets in several countries through
established depository and custodial relationships. The respective systems of
Euroclear and Cedelbank have established an
S-11
<PAGE> 13
electronic bridge between their two systems across which their respective
account holders may settle trades with each other.
Account holders in both Euroclear and Cedelbank are world-wide financial
institutions including underwriters, securities brokers and dealers, banks,
trust companies and clearing corporations. Indirect access to both Euroclear and
Cedelbank is available to other institutions that clear through or maintain a
custodial relationship with an account holder of either system.
An account holder's overall contractual relations with either Euroclear or
Cedelbank are governed by the respective rules and operating procedures of
Euroclear or Cedelbank and any applicable laws. Both Euroclear and Cedelbank act
under such rules and operating procedures only on behalf of their respective
account holders, and have no record of or relationship with persons holding
through their respective account holders.
Because DTC, Euroclear and Cedelbank can act only on behalf of
participants, who in turn act on behalf of indirect participants and certain
banks, the ability of an owner of a Book-Entry Interest to pledge such interest
to persons or entities that do not participate in the DTC, Euroclear or
Cedelbank systems, or otherwise take actions in respect of such interest, may be
limited by the lack of a definitive certificate for such interest. The laws of
some countries and some states in the United States require that certain persons
take physical delivery of securities in definitive form. Consequently, the
ability to transfer Book-Entry Interests to such persons may be limited. In
addition, beneficial owners of Book-Entry Interests through DTC, Euroclear or
Cedelbank will receive distributions attributable to the Global Securities only
through DTC, Euroclear or Cedelbank participants.
Albertson's understands that under existing industry practices, if either
Albertson's or the Trustee requests any action of holders of Notes or Debentures
or if an owner of a Book-Entry Interest desires to give instructions or take any
action that a holder is entitled to give or take under the Indenture, DTC would
authorize their respective participants owning the relevant Book-Entry Interests
to give instructions or take such action, and such participants would authorize
indirect participants to give instructions or take such action or would
otherwise act upon the instructions of such indirect participants.
TRANSFERS
All transfers of Book-Entry Interests are recorded in accordance with the
book-entry system maintained by DTC pursuant to customary procedures established
by DTC and its participants.
ACTION BY OWNERS OF BOOK-ENTRY INTERESTS
As soon as practicable after receipt by the Trustee of notice of any
solicitation of consents or request for a waiver or other action by the holders
of Notes or Debentures, the Trustee will send to DTC a notice containing (a)
such information as is contained in such notice received by the Trustee, (b) a
statement that at the close of business on a specified record date DTC will be
entitled to instruct the Trustee as to the consent, waiver or other action, if
any, pertaining to such Notes or Debentures, as the case may be, and (c) a
statement as to the manner in which such instructions may be given. In addition,
the Trustee will forward to DTC or, based upon instructions received from DTC,
to owners of Book-Entry Interests, all materials pertaining to any such
solicitation, request, offer or other action. Upon the written request of DTC
the Trustee shall endeavor insofar as practicable to take such action regarding
the requested consent, waiver, offer or other action in respect of such Notes or
Debentures, as the case may be, in accordance with any instructions set forth in
such request. DTC may grant proxies or otherwise authorize their respective
participants, or persons owning Book-Entry Interests through their respective
participants, to provide such instructions to the Trustee so that it may
exercise any rights of a holder or take any other actions which a holder is
entitled to take under the Indenture. The Trustee will not exercise any
discretion in the
S-12
<PAGE> 14
granting of consents or waivers or the taking of any other action relating to
the Indenture.
REPORTS
The Trustee will immediately send to DTC a copy of any notices, reports
and other communications received relating to Albertson's, the Notes or
Debentures or the Book-Entry Interests.
SETTLEMENT
Any secondary market trading activity in the Book-Entry Interests is
expected to occur through the Participants of DTC, Euroclear and Cedelbank, and
the securities custody accounts of investors will be credited with their
holdings against payment in same-day funds on the settlement date.
CLEARANCE THROUGH CEDELBANK AND EUROCLEAR
Listed below is the Cedelbank and Euroclear common code, ISIN and CUSIP
number of each of the series of Notes and Debentures.
<TABLE>
<CAPTION>
EUROCLEAR/
CEDEL
COMMON
CODE ISIN CUSIP
---------- ------ ------
<S> <C> <C> <C>
20 Notes.............
20 Notes.............
20 Debentures........
</TABLE>
S-13
<PAGE> 15
UNDERWRITING
Albertson's and the underwriters for the offering named below have entered
into an underwriting agreement and a pricing agreement with respect to the Notes
and Debentures. Subject to certain conditions, each underwriter has severally
agreed to purchase the principal amount of Notes and Debentures indicated in the
following table.
<TABLE>
<CAPTION>
Principal Amount Principal Amount Principal Amount
Underwriters of 20 Notes of 20 Notes of 20 Debentures
------------ ---------------- ---------------- ----------------
<S> <C> <C> <C>
Goldman, Sachs & Co................ $ $ $
Merrill Lynch Pierce Fenner & Smith
Incorporated.....................
Banc of America Securities LLC.....
Banc One Capital Markets, Inc......
Chase Securities Inc. .............
Deutsche Bank Securities Inc. .....
Salomon Smith Barney Inc. .........
The Williams Capital Group, L.P....
---------- ---------- ----------
Total....................
========== ========== ==========
</TABLE>
----------------------
Notes and Debentures sold by the underwriters to the public will initially
be offered at the initial public offering prices set forth on the cover of this
prospectus supplement. Any Notes and Debentures sold by the underwriters to
securities dealers may be sold at a discount from the initial public offering
price of up to %, % and % of the principal amount of the 20
Notes, 20 Notes and 20 Debentures, respectively. Any such securities
dealers may resell any Notes and Debentures purchased from the underwriters to
certain other brokers or dealers at a discount from the initial public offering
price of up to %, %, and % of the principal amount of the 20
Notes, 20 Notes and 20 Debentures, respectively. If all the Notes and
Debentures are not sold at the initial offering prices, the Underwriters may
change the offering prices and the other selling terms.
The Notes and Debentures are new issues of securities with no established
trading market. Albertson's has been advised by the underwriters that the
underwriters intend to make a market in the Notes and Debentures, but they are
not obligated to do so and may discontinue market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
the Notes and Debentures.
In connection with the offering, the underwriters may purchase and sell
the Notes or Debentures in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
aggregate principal amount of Notes or Debentures than they are required to
purchase from Albertson's in the offering. Stabilizing transactions consist of
certain bids or purchases made for the purpose of preventing or retarding a
decline in the market price of the Notes or the Debentures while the offering is
in progress.
The Underwriters may also impose a penalty bid. This occurs when a
particular Underwriter repays to the Underwriters a portion of the underwriting
discount received by it because the representatives have repurchased Notes or
Debentures sold by or for the account of that Underwriter in stabilizing or
short covering transactions.
These activities by the underwriters may stabilize, maintain or otherwise
affect the market prices of the Notes and Debentures. As a result, the prices of
the Notes and Debentures may be higher than the prices that otherwise might
exist in the open market. If these activities are commenced, they may be
discontinued by the underwriters at any
S-14
<PAGE> 16
time. These transactions may be effected in the over-the-counter market or
otherwise.
Certain of the underwriters or their affiliates from time to time have
been, and certain of them continue to be, commercial lenders to Albertson's and
have performed, and certain of them continue to perform, various commercial
banking and investment banking services for Albertson's, for which customary
compensation has been received. In particular, as of the date of this prospectus
supplement, affiliates of Chase Securities Inc., Banc of America Securities LLC
and Banc One Capital Markets, Inc. are serving as lead agent banks for
Albertson's $1.5 billion revolving credit facility.
Albertson's estimates that its share of the total expenses of the
offering, excluding underwriting discounts and commissions, will be
approximately $ .
Albertson's has agreed to indemnify the several underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.
LEGAL MATTERS
Certain legal matters relating to the validity of the Notes and Debentures
will be passed upon for Albertson's by Thomas R. Saldin, Esq., Executive Vice
President and General Counsel of Albertson's, and for the Underwriters by Wilson
Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto, California.
EXPERTS
The supplemental consolidated financial statements of the Company and its
consolidated subsidiaries, except American Stores Company, as of January 28,
1999, January 29, 1998, and January 30, 1997, and for each of three years in the
period ended January 28, 1999 incorporated by reference in this prospectus from
the Company's 8-K dated July 15, 1999 have been audited by Deloitte & Touche LLP
as stated in their report, which is incorporated herein by reference. The
consolidated financial statements of American Stores Company and subsidiaries
(consolidated with those of the Company) not presented separately herein have
been audited by Ernst & Young LLP, as stated in their report incorporated by
reference herein. Such financial statements of the Company and its consolidated
subsidiaries are incorporated by reference herein in reliance upon the
respective reports of such firms given upon their authority as experts in
accounting and auditing. Both of the foregoing firms are independent auditors.
S-15
<PAGE> 17
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No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell or to buy only the Notes offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of its date.
----------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Supplement
Forward-Looking Statements............... S-2
The Company.............................. S-2
Use of Proceeds.......................... S-5
Capitalization........................... S-6
Selected Consolidated Financial Data..... S-7
Description of Notes and Debentures...... S-8
Underwriting............................. S-14
Legal Matters............................ S-15
Experts.................................. S-15
Prospectus
About This Prospectus.................... 2
Where You Can Find More Information...... 2
Albertson's, Inc. ....................... 3
Use of Proceeds.......................... 3
Ratio of Earnings to Fixed Charges....... 4
Description of Debt Securities........... 4
Plan of Distribution..................... 15
Legal Opinions........................... 17
Experts.................................. 17
</TABLE>
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- ----------------------------------------------------------
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$1,000,000,000
ALBERTSON'S, INC.
$
% Senior Notes due 20
$
% Senior Notes due 20
$
% Senior Debentures due 20
----------------------
LOGO
----------------------
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
CHASE SECURITIES INC.
DEUTSCHE BANC ALEX. BROWN
SALOMON SMITH BARNEY
THE WILLIAMS CAPITAL GROUP, L.P.
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