<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-70967
THE INFORMATION IN THIS PRELIMINARY
PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE CHANGED.
SUBJECT TO COMPLETION. DATED APRIL 28, 2000.
Prospectus Supplement to Prospectus dated February 3, 1999.
$500,000,000
ALBERTSON'S, INC.
[ALBERTSON'S, INC. LOGO]
$ ,000,000 % Senior Notes due 20
$ ,000,000 % Senior Debentures due 20
----------------------
Albertson's, Inc. will pay interest on the Notes and Debentures on May 15
and November 15 of each year, except that the first such payment will be made on
November 15, 2000. The Notes and Debentures will be issued only in denominations
of $1,000 and integral multiples of $1,000.
On or after the date of this prospectus supplement, Albertson's will have
the right to redeem all or any portion of the Notes or Debentures 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 % 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 May ,
2000 and must be paid by the purchaser if the Notes and Debentures are delivered
after May , 2000.
----------------------
The underwriters expect to deliver the Notes and Debentures in book-entry
form only through the facilities of The Depository Trust Company, including for
the accounts of Euroclear and Clearstream Luxembourg against payment in New
York, New York on May , 2000.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
WACHOVIA SECURITIES, INC.
FIRST UNION SECURITIES, INC.
THE WILLIAMS CAPITAL GROUP, L.P.
----------------------
Prospectus Supplement dated May , 2000.
<PAGE> 2
[Store location map showing number of combination/conventional
stores, stand-alone drugstores and warehouse stores operated
by Albertson'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; and
- - Albertson's ability to successfully integrate the operations of acquired or
merged companies.
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. Its stores operate primarily under the names of Albertson's, Acme
Markets, Jewel Food Stores, Seessel's, Super Saver, Max, Osco Drug and Sav-on.
On June 23, 1999, Albertson's completed its combination with American
Stores Company. 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
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<PAGE> 4
issued approximately 177 million shares of common stock for all of the
outstanding shares of American Stores common stock. The information in this
prospectus supplement gives effect to the combination with American Stores.
As of February 3, 2000, Albertson's operated 2,492 stores in 37
Northeastern, Western, Midwestern and Southern states. These stores consist of
1,326 combination food-drug stores (including 76 fuel centers located near these
stores), 802 stand-alone drug stores, 335 conventional supermarkets, 28
warehouse stores and one e-commerce retail site. Retail operations are supported
by 21 major Albertson's distribution centers that provide product exclusively to
Albertson's retail stores.
Albertson's owns over 46% of the retail stores it operates, including
owned buildings on leased land, and leases the remaining stores. Albertson's
also owns most of its administrative offices and distribution centers.
Albertson's prefers to own its properties because it provides control and
flexibility with respect to financing terms, remodeling, expansions (including
the addition of fuel centers) and closures.
Albertson's mission is to be "The Best Store 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. During the next two years, Albertson's
intends to open 190 combination food-drug stores, 115 stand-alone drugstores and
250 fuel centers, funded primarily through internally generated cash flow.
Albertson's strives to maintain a strong cash flow and balance sheet to enable
it to grow both organically and by acquisition and to maintain financial
flexibility.
USE OF PROCEEDS
Albertson's intends to use the $ net proceeds from the sale of
the Notes and Debentures for the repayment of debt and for general corporate
purposes, including potential purchases of shares of its outstanding common
stock. See "Capitalization" with respect to certain debt to be repaid by
Albertson's.
S-4
<PAGE> 5
CAPITALIZATION
The following table sets forth Albertson's actual debt and capitalization
as of February 3, 2000 and as adjusted to give effect to the repayment of
certain debt with the proceeds of this offering. The table should be read in
conjunction with Albertson's consolidated financial statements and accompanying
notes incorporated herein by reference. See "Where You Can Find More
Information" in the accompanying prospectus.
<TABLE>
<CAPTION>
FEBRUARY 3, 2000
------------------------
ACTUAL AS ADJUSTED
--------- -----------
($ IN MILLIONS, EXCEPT
SHARE AMOUNTS)
<S> <C> <C>
Commercial Paper Borrowings................................. $ 1,628.3 $ 1,453.0
Long-Term Debt
6.375% Notes due 2000(1).................................. 200.0 --
6.55% Notes due 2004...................................... 300.0 300.0
6.95% Notes due 2009...................................... 350.0 350.0
7.40% Debentures due 2005................................. 200.0 200.0
7.45% Debentures due 2029................................. 650.0 650.0
7.50% Debentures due 2037................................. 200.0 200.0
7.75% Debentures due 2026................................. 200.0 200.0
7.90% Debentures due 2017................................. 95.5 95.5
8.00% Debentures due 2026................................. 271.8 271.8
9.125% Notes due 2002..................................... 79.5 79.5
Medium-Term Notes(2)...................................... 901.7 777.0
Industrial Revenue Bonds.................................. 13.9 13.9
Mortgage Notes Payable.................................... 67.6 67.6
Other Notes Payable....................................... 200.0 200.0
Other Borrowings.......................................... 69.7 69.7
New Securities offered hereby(3).......................... -- 500.0
Obligations Under Capital Leases.......................... 205.9 205.9
--------- ---------
Total Debt............................................. 5,633.9 5,633.9
--------- ---------
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 -- 423,714,921 shares........................... 423.7 423.7
Capital in Excess of Par.................................. 144.9 144.9
Retained Earnings......................................... 5,132.9 5,132.9
--------- ---------
Total Stockholders' Equity............................. 5,701.5 5,701.5
--------- ---------
Total Capitalization................................... $11,335.4 $11,335.4
========= =========
</TABLE>
- ---------------
(1) On June 1, 2000, $200 million principal amount of the Albertson's, Inc.
6.375% Notes will mature.
(2) In March 2000, $89.7 million principal amount of the Albertson's, Inc.
Series A Medium-Term Notes matured. In April and May 2000, $35 million
principal amount of the American Stores Company Series A Medium-Term Notes
mature.
(3) Assumes the issuance of $500 million of securities in this offering.
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<PAGE> 6
SELECTED CONSOLIDATED FINANCIAL DATA
The financial data below are derived from the audited consolidated
financial statements of Albertson's. The selected data should be read in
conjunction with Albertson's consolidated financial statements and accompanying
notes, which are incorporated herein by reference. See "Where You Can Find More
Information" in the accompanying prospectus.
<TABLE>
<CAPTION>
53 WEEKS 52 WEEKS 52 WEEKS
1999 1998 1997
-------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT
PER SHARE DATA)
<S> <C> <C> <C>
RESULTS OF OPERATIONS:
Sales....................................................... $37,478 $35,872 $33,828
Cost of sales............................................... 27,164 26,156 24,821
------- ------- -------
Gross profit................................................ 10,314 9,716 9,007
Selling, general and administrative expenses................ 8,641 7,846 7,330
Merger-related and exit costs............................... 396 195 13
Impairment -- store closures................................ -- 24 --
Litigation settlement....................................... 37 -- --
------- ------- -------
Operating profit............................................ 1,240 1,651 1,664
Other (expense) income:
Interest, net............................................. (353) (337) (294)
Stockholder related expenses.............................. -- -- (34)
Other, net................................................ 12 24 14
------- ------- -------
Earnings before income taxes and extraordinary item......... 899 1,338 1,350
Income taxes................................................ 472 537 553
------- ------- -------
Earnings before extraordinary item.......................... 427 801 797
Extraordinary loss on extinguishment of debt, net of tax
benefit of $7............................................. (23) -- --
------- ------- -------
Net Earnings............................................ $ 404 $ 801 $ 797
======= ======= =======
EARNINGS PER SHARE:
Basic
Earnings before extraordinary item...................... $ 1.01 $ 1.91 $ 1.89
Extraordinary item...................................... (0.05) -- --
------- ------- -------
Net earnings............................................ $ 0.96 $ 1.91 $ 1.89
======= ======= =======
Diluted
Earnings before extraordinary item...................... $ 1.00 $ 1.90 $ 1.88
Extraordinary item...................................... (0.05) -- --
------- ------- -------
Net earnings............................................ $ 0.95 $ 1.90 $ 1.88
======= ======= =======
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (IN MILLIONS):
Basic....................................................... 422 419 422
Diluted..................................................... 423 422 423
FINANCIAL STATISTICS:
Identical store sales increase.............................. 1.7% 0.5% 0.0%
Comparable store sales increase............................. 2.1% 1.2% 0.4%
OPERATING ITEMS % TO SALES:
Gross profit................................................ 27.52% 27.08% 26.63%
Selling, general and administrative......................... 23.06% 21.87% 21.67%
Operating profit............................................ 3.31% 4.60% 4.92%
OTHER DATA:
Depreciation and amortization............................... $ 912 $ 863 $ 798
Total assets................................................ 15,701 15,131 13,767
Total debt and capitalized lease obligations................ 5,634 5,175 4,530
Stockholders' equity........................................ 5,702 5,522 4,741
Ratio of earnings to fixed charges (as reported)(1)......... 2.55x 3.56x 3.77x
Ratio of earnings to fixed charges (as adjusted)(2)......... 3.76x 3.98x 3.87x
</TABLE>
- ---------------
(1) Earnings consist of earnings from continuing operations before income taxes
and fixed charges (excluding interest capitalized). Fixed charges consist of
interest and a portion of rental expense deemed representative of the
interest factor.
(2) Due to the significance of merger-related costs and other one-time expenses
and their effects on earnings, as disclosed in Albertson's 1999 Annual
Report, the ratio of earnings to fixed charges has been adjusted to reflect
earnings without these effects.
S-6
<PAGE> 7
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 two 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 $ ,000,000.
The 20 Notes will mature on May 15, 20 and will accrue interest from May ,
2000 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 $ ,000,000.
The 20 Debentures will mature on May 15, 20 and will accrue interest from
May , 2000 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 $500,000,000 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 Clearstream Luxembourg 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 May 15 and November 15 of each year (each, an "Interest Payment
Date"), commencing November 15, 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 May 1 or November 1, respectively,
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 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.
S-7
<PAGE> 8
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 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.
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.
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<PAGE> 9
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 Clearstream Luxembourg. Upon issuance of the Notes and Debentures, DTC,
Euroclear or Clearstream Luxembourg, 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
Clearstream Luxembourg 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 Clearstream Luxembourg, will be subject to the procedures and
requirements of DTC. Those interests, if held through Euroclear or Clearstream
Luxembourg, 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 Clearstream Luxembourg, as the case may be, and,
if such person is not a participant in DTC, Euroclear or Clearstream Luxembourg,
on the procedures of the participant in DTC, Euroclear or Clearstream Luxembourg
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 such nominee to a successor of DTC or a
nominee of such successor.
S-9
<PAGE> 10
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 will 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 Clearstream
Luxembourg 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 CLEARSTREAM LUXEMBOURG
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
Clearstream Luxembourg) 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
Clearstream Luxembourg: Euroclear and Clearstream Luxembourg 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 Clearstream Luxembourg each provide various services,
including safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Euroclear and Clearstream Luxembourg each also deal with domestic securities
markets in several countries through established depository and custodial
relationships. The respective systems of Euroclear and Clearstream Luxembourg
have established an electronic bridge between their two systems across which
their respective account holders may settle trades with each other.
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<PAGE> 11
Account holders in both Euroclear and Clearstream Luxembourg are worldwide
financial institutions, including underwriters, securities brokers and dealers,
banks, trust companies and clearing corporations. Indirect access to both
Euroclear and Clearstream Luxembourg 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
Clearstream Luxembourg are governed by the respective rules and operating
procedures of Euroclear or Clearstream Luxembourg and any applicable laws. Both
Euroclear and Clearstream Luxembourg 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 Clearstream Luxembourg 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
Clearstream Luxembourg 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 Clearstream Luxembourg will receive distributions attributable
to the Global Securities only through DTC, Euroclear or Clearstream Luxembourg
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 that a holder is
entitled to take under the Indenture. The Trustee will not exercise any
discretion in the granting of
S-11
<PAGE> 12
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 Clearstream
Luxembourg, 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 EUROCLEAR AND CLEARSTREAM LUXEMBOURG
Listed below is the Euroclear and Clearstream Luxembourg common code, ISIN
and CUSIP number of the Notes and Debentures.
<TABLE>
<CAPTION>
EUROCLEAR/
CLEARSTREAM
COMMON
CODE ISIN CUSIP
----------- ---- --------
<S> <C> <C> <C>
20 Notes............... US
20 Debentures.......... US
</TABLE>
S-12
<PAGE> 13
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 Principal
Amount of Amount of
Underwriters 20 Notes 20 Debentures
------------ --------- -------------
<S> <C> <C>
Goldman, Sachs & Co........................................ $ $
Merrill Lynch, Pierce, Fenner &
Smith, Incorporated......................................
Banc of America Securities LLC.............................
Banc One Capital Markets, Inc. ............................
Wachovia Securities, Inc. .................................
First Union Securities, 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 0. % and 0. % of the principal amount of the 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 0. % of the
principal amount of the Notes and Debentures. If all the Notes and Debentures
are not sold at the initial public 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
number of Notes or Debentures than they are required to purchase 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 time. These transactions may be effected
in the over-the-counter market or otherwise.
S-13
<PAGE> 14
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 Banc of America Securities LLC, Banc One Capital
Markets, Inc. and Wachovia Securities, Inc. are serving as lead agent banks for
Albertson's $1.9 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 consolidated financial statements of Albertson's and its consolidated
subsidiaries (except American Stores Company as of January 28, 1999 and for each
of the two years in the period ended January 28, 1999) as of February 3, 2000
and January 28, 1999 and for each of the three years in the period ended
February 3, 2000, incorporated by reference in this prospectus supplement from
Albertson's Annual Report on Form 10-K dated April 25, 2000, 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 Albertson's) not presented
separately herein have been audited by Ernst & Young LLP as stated in their
report, which is incorporated herein by reference. Such financial statements of
Albertson's and its consolidated subsidiaries are incorporated by reference
herein in reliance upon the respective reports of such firms upon their
authority as experts in accounting and auditing. Both of the foregoing firms are
independent auditors.
S-14
<PAGE> 15
PROSPECTUS
$2,500,000,000
ALBERTSON'S, INC.
DEBT SECURITIES
- --------------------------------------------------------------------------------
Albertson's, Inc. may sell debt securities to the public, in one or more
series, with an aggregate initial offering price not to exceed $2.5 billion.
We urge you to read this prospectus, and the accompanying prospectus
supplement which describes the specific terms of the debt securities, carefully
before you make your investment decision.
- --------------------------------------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus or the accompanying prospectus supplement is truthful or complete.
Any representation to the contrary is a criminal offense.
- --------------------------------------------------------------------------------
THIS PROSPECTUS MAY NOT BE USED TO SELL SECURITIES UNLESS ACCOMPANIED BY A
PROSPECTUS SUPPLEMENT.
The date of this prospectus is February 3, 1999
<PAGE> 16
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Albertson's, Inc.
("Albertson's" or "we") filed with the Securities and Exchange Commission (the
"SEC") using a "shelf" registration process. Under this shelf process,
Albertson's may sell the securities described in this prospectus in one or more
offerings up to a total dollar amount of $2,500,000,000. This prospectus
provides you with a general description of the securities we may offer. Each
time Albertson's sells securities described in this prospectus, we will provide
a prospectus supplement that will contain specific information about the terms
of that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information described
under the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
Albertson's files reports, proxy statements, and other information with the
SEC. Such reports, proxy statements, and other information concerning
Albertson's can be read and copied at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. Please telephone the SEC at 1-800-SEC-0330
for further information on the Public Reference Room. The SEC maintains an
internet site at http://www.sec.gov that contains reports, proxy statements and
other information regarding issuers that file electronically with the SEC,
including Albertson's. The common stock of Albertson's is listed and traded on
the New York Stock Exchange, Inc. and the Pacific Exchange, Incorporated under
the symbol "ABS". The reports, proxy statements and other information filed by
Albertson's with the SEC are also available for inspection at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York and at the offices
of the Pacific Exchange, 115 Sansome Street, 2nd Floor, San Francisco,
California.
This prospectus is part of a registration statement filed by Albertson's
with the SEC. The full registration statement can be obtained from the SEC as
indicated above or from Albertson's.
The SEC allows Albertson's to "incorporate by reference" the information it
files with the SEC. This permits Albertson's to disclose important information
to you by referring you to these filed documents. Any information referenced
this way is considered part of this prospectus, and information filed with the
SEC subsequent to this prospectus will automatically be deemed to update and
supersede this information, as described in more detail below. Albertson's
incorporates by reference the following documents which have been filed with the
SEC:
- Annual Report on Form 10-K for the year ended January 29, 1998;
- Quarterly Reports on Form 10-Q for the 39 weeks ended October 29, 1998,
the 26 weeks ended July 30, 1998 and the 13 weeks ended April 30, 1998;
- Current Reports on Form 8-K filed on:
- January 11, 1999 (filing the Joint Proxy Statement and Prospectus dated
October 9, 1998, including information relating to the proposed
combination of American Stores Company and Albertson's),
- November 20, 1998 (filing Albertson's press release dated November 12,
1998 announcing stockholder approval of the proposed combination of
American Stores Company and Albertson's),
- November 4, 1998 (filing Albertson's sales trends release for the
four-week and thirteen-week periods ended October 29, 1998) and
- August 5, 1998 (filing Albertson's press release dated August 3, 1998
announcing the proposed combination of American Stores Company and
Albertson's).
2
<PAGE> 17
In addition to the documents listed above, Albertson's incorporates by
reference any future filings made with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until Albertson's
files a post-effective amendment which indicates the termination of the offering
of the securities made by this prospectus.
Albertson's will provide without charge, upon written or oral request, a
copy of any or all of the documents incorporated by reference in this
prospectus, other than exhibits which are specifically incorporated by reference
in such documents. Requests should be directed to Corporate Secretary,
Albertson's, Inc., 250 Parkcenter Boulevard, P.O. Box 20, Boise, Idaho 83726,
telephone (208) 395-6200.
ALBERTSON'S, INC.
Albertson's is one of the largest retail food-drug chains in the United
States. As of October 29, 1998, Albertson's operated 969 stores in 25 western,
midwestern and southern states. These stores consisted of 852 combination
food-drug stores, 86 conventional supermarkets and 31 warehouse stores. Retail
operations are supported by 11 Company-owned distribution centers.
Albertson's combination food-drug stores are super grocery/super drugstores
under one roof and range in size from 35,000 to 82,000 square feet. Most of
these stores offer prescription drugs and an expanded selection of cosmetics and
non-foods in addition to specialty departments such as service seafood and meat,
bakery, lobby/video, service delicatessen, liquor and floral. Some also offer
meal centers, party pavilions, coffee bars and destination departments for
beverages, snacks, pet care, paper products and baby care. Food and non-food
shopping areas are served by a common set of checkstands.
Albertson's 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 warehouse stores are operated primarily under the name "Max
Food and Drug." These no-frills stores range in size from 17,000 to 73,000
square feet and offer significant savings with special emphasis on discounted
meat and produce.
In fiscal 1997, Albertson's opened its first fuel center. Albertson's plans
to continue to add fuel centers in the parking lots of existing stores. These
centers feature 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.
If the combination of Albertson's and American Stores Company is completed
as expected early in 1999, the combined entity will more than double in size and
will operate stand-alone drugstores in addition to the formats described above.
Albertson's is a Delaware corporation organized as a successor to a
business founded by J. A. Albertson in 1939. Albertson's principal executive
offices are located at 250 Parkcenter Boulevard, Boise, Idaho 83706, and its
telephone number at that address is (208) 395-6200.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying prospectus supplement,
Albertson's intends to use the net proceeds of any securities sold pursuant to
this prospectus for general corporate purposes, including retirement of debt,
working capital, acquisitions and other business opportunities.
3
<PAGE> 18
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the periods indicated. Earnings consist of earnings from continuing operations
before income taxes and fixed charges (excluding interest capitalized). Fixed
charges consist of interest and the portion of rental expense deemed
representative of the interest factor.
<TABLE>
<CAPTION>
53 52 52 52 52 39 39
WEEKS WEEKS WEEKS WEEKS WEEKS WEEKS WEEKS
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
FEB. 3, FEB. 2, FEB. 1, JAN. 30, JAN. 29, OCT. 30 OCT. 29,
1994 1995 1996 1997 1998 1997 1998
------- ------- ------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges.................... 6.96X 7.45X 8.16X 7.77X 6.98X 6.40X 6.00X
</TABLE>
DESCRIPTION OF DEBT SECURITIES
This prospectus relates to debt securities, including debentures, Notes
and/or other unsecured evidences of indebtedness, which Albertson's may issue
under an Indenture dated as of May 1, 1992 between Albertson's and First Trust
of New York, National Association, as Trustee ("Debt Securities"). We have
summarized selected portions of the Indenture below. The summary is not
complete. Section and article references in the summary below are references to
sections and articles in the Indenture. Capitalized terms used in the summary
have the meanings specified in this prospectus or the Indenture. You can find
the definitions of some of the terms used in the summary under the heading
"Certain Covenants of Albertson's -- Certain Definitions Applicable to
Covenants" below.
When Albertson's offers Debt Securities pursuant to this prospectus, it
will be accompanied by a prospectus supplement which will describe the
particular terms and provisions of the Debt Securities being offered and the
extent to which the general provisions of the Indenture summarized below may
apply to the Debt Securities.
The Indenture has been incorporated as an exhibit to the registration
statement which includes this prospectus and you should read the Indenture for
provisions that are important to you. The Indenture itself, not this summary or
the description in the prospectus supplement, defines your rights as a holder of
Debt Securities.
GENERAL
The Debt Securities will be senior unsecured general obligations of
Albertson's that will rank on a parity with other senior unsecured indebtedness
of Albertson's from time to time outstanding. The Debt Securities offered by
this Prospectus will be limited to $2,500,000,000 aggregate principal amount
(based on the aggregate initial offering price of such Debt Securities (although
the Indenture does not limit the aggregate principal amount that may be issued
thereunder)). The Debt Securities may be issued from time to time in separate
series up to the aggregate amount from time to time authorized by the Company
for such series.
Each prospectus supplement will describe the following terms relating to a
series of Debt Securities:
- the title;
- any limit on the aggregate principal amount that may be issued;
- the person to whom any interest on such series of Debt Securities will be
payable, if other than the person in whose name the Debt Security is
registered on the regular record date;
4
<PAGE> 19
- whether or not such series of Debt Securities will be issued in permanent
global form, and if so, the terms and conditions, if any, upon which
interests in such global Debt Securities may be exchanged, in whole or in
part, for the individual Debt Securities represented thereby;
- the maturity date(s) of the Debt Securities;
- the rate or rate(s) at which such series of Debt Securities will bear
interest, if any, or the method by which such rate or rates are
determined and the date(s) from which any interest will accrue, the
date(s) interest will be payable and the regular record dates for
interest payment dates or the method for determining such date(s);
- the place(s) where the principal and any premium or interest payments
will be payable;
- the period or periods within which, the price(s) at which, and the terms
or conditions upon which such series of Debt Securities may, pursuant to
any optional or mandatory redemption provisions, be redeemed or purchased
at Albertson's option;
- the obligation, if any, of Albertson's, to redeem or repurchase such
series of Debt Securities, and the price(s) at which and terms and
conditions upon which such series of Debt Securities will be redeemed or
repurchased;
- the denominations in which such series of Debt Securities will be issued,
if other than denominations of $1,000 and any integral multiple thereof;
- any index, formula or other method used to determine the amount of
payments of principal of and any premium and interest on such series of
Debt Securities; and
- any other terms not inconsistent with the provisions of the Indenture.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable prospectus supplement, payment
of principal, premium, if any, and interest, if any, on the Debt Securities will
be payable, and the exchange of and the transfer of Debt Securities will be
registerable, at any office or agency maintained for such purpose. (Sections 305
and 1002) Unless otherwise indicated in the applicable prospectus supplement,
the Debt Securities will be issued in denominations of $1,000 and integral
multiples thereof. (Section 302) No service charge will be made for any
registration of transfer or exchange of Debt Securities, but Albertson's may
require payment of a sum sufficient to cover any tax or other governmental
charge imposed in connection therewith. (Section 305)
All moneys paid by Albertson's to a paying agent for the payment of
principal, premium, if any, or interest, if any, on any Debt Security which
remain unclaimed for two years after such principal, premium or interest has
become due and payable may be repaid to Albertson's, and thereafter the holder
of such Debt Security may look only to Albertson's for payment thereof. (Section
1003)
In the event of any redemption of a series of Debt Securities, Albertson's
will not be required to:
- issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Debt Securities of that
series and ending at the close of business on the day of such mailing, or
- register the transfer of or exchange of any Debt Security, or portion
thereof, called for redemption, except the unredeemed portion of any Debt
Security being redeemed in part. (Section 305)
5
<PAGE> 20
BOOK-ENTRY SYSTEM
The provisions set forth in this section headed "Book-Entry System" will
apply to a series of Debt Securities only if the prospectus supplement relating
to such series so indicates.
The Debt Securities of such series will be represented by one or more
global securities (collectively, a "Global Security") registered in the name of
a depositary (the "Depositary") or a nominee of the Depositary identified in the
prospectus supplement relating to such series. The Depositary will maintain such
series of Debt Securities in denominations of $1,000 and larger integral
multiples of $1,000 through its book-entry facilities. Unless and until it is
exchanged in whole or in part for Debt Securities in definitive form, no Global
Security may be transferred except as a whole, and then only to the Depositary
or another nominee of the Depositary.
Ownership of beneficial interests in such series of Debt Securities will be
limited to persons that have accounts with the Depositary ("Participants") or
persons that may hold interests through Participants. Upon the issuance of a
Global Security, the Depositary will credit, on its book-entry registration and
transfer system, the Participants' accounts with the respective principal
amounts of the Debt Securities beneficially owned by such Participants. The
accounts to be credited will be designated by the underwriters, dealers or
agents. Ownership of beneficial interests in a Global Security will be limited
to Participants or persons that may hold interests through Participants.
Ownership of interests in such Global Security will be shown on, and the
transfer of those ownership interests will be effected only through, records
maintained by the Depositary (with respect to Participants' interests) and such
Participants (with respect to the owners of beneficial interests in such Global
Security). The laws of some jurisdictions may require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and laws may impair the ability of such persons to own, pledge or
transfer beneficial interests in a Global Security.
So long as the Depositary, or its nominee, is the registered holder and
owner of a Global Security, the Depositary or such nominee, as the case may be,
will be considered the sole owner and holder of the related Debt Securities for
all purposes of such Debt Securities and for all purposes under the Indenture.
Except as set forth below or as otherwise provided in the applicable prospectus
supplement, owners of beneficial interests in a Global Security will not be
entitled to have the Debt Securities represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities in definitive form and will not be considered to be
the owners or holders of any Debt Securities under the Indenture or such Global
Security. (Section 305)
Accordingly, each person owning a beneficial interest in a Global Security
must rely on the procedures of the Depositary and, if such person is not a
Participant, on the procedures of the Participant through which such person owns
its interest to exercise any rights of a holder of Debt Securities under the
Indenture or such Global Security. Albertson's understands that under existing
industry practice, if Albertson's requests any action of holders of Debt
Securities or if an owner of a beneficial interest in a Global Security desires
to take any action that the Depositary, as the holder of such Global Security,
is entitled to take, the Depositary would authorize the Participants to take
action, and the Participants would authorize beneficial owners owning through
such Participants to take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Payment of principal of and premium, if any, and interest, if any, on Debt
Securities represented by a Global Security will be made to the Depositary or
its nominee, as the case may be, as the registered owner and holder of such
Global Security.
Albertson's expects that the Depositary, upon receipt of any payment of
principal, premium, if any, or interest, if any, in respect of a Global
Security, will credit immediately Participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the
6
<PAGE> 21
principal amount of such Global Security as shown on the records of the
Depositary. Albertson's expects that payments by Participants to owners of
beneficial interests in a Global Security held through such Participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such Participants.
Neither Albertson's nor the Trustee nor any agent of Albertson's or the
Trustee will have any responsibility or liability for any aspect of the records
relating to, or payments made on account of, beneficial ownership interests in a
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests or for any other aspect of the
relationship between the Depositary and its Participants or the relationship
between such Participants and the owners of beneficial interests in such Global
Security owning through such Participants.
Unless otherwise provided in the applicable prospectus supplement, Debt
Securities represented by a Global Security will be exchangeable for Debt
Securities in definitive form of like tenor as such Global Security in
denominations of $1,000 and in any greater amount that is an integral multiple
thereof if:
- the Depositary notifies Albertson's that it is unwilling or unable to
continue as Depositary for such Global Security,
- the Depositary ceases at any time to be a clearing agency registered
under the Securities Exchange Act of 1934,
- Albertson's in its discretion at any time determines not to have all of
the Debt Securities represented by a Global Security and notifies the
Trustee thereof, or
- an Event of Default has occurred and is continuing with respect to the
Debt Securities. (Section 305)
Any Debt Security that is exchangeable pursuant to the preceding sentence is
exchangeable for Debt Securities issuable in authorized denominations and
registered in such names as the Depositary will direct.
CERTAIN COVENANTS OF ALBERTSON'S
Unless otherwise indicated in the applicable prospectus supplement, the
Debt Securities will not have the benefit of any covenants that limit or
restrict the business or operations of Albertson's, the pledging of assets of
Albertson's or the incurrence of indebtedness by Albertson's. The covenants
contained in the Indenture which are summarized below will be applicable (unless
waived or amended) to the series of Debt Securities to which such prospectus
supplement relates, but only to the extent indicated in the applicable
prospectus supplement, and only so long as any of the Debt Securities of such
series are outstanding. The covenants contained in the Indenture and any series
of Debt Securities would not necessarily afford holders of the Debt Securities
protection in the event of a highly leveraged or other transaction involving
Albertson's that may adversely affect holders.
Limitations on Liens
If all of the following conditions are satisfied:
- Albertson's or any Subsidiary directly or indirectly, creates, incurs,
issues, assumes, guarantees or otherwise becomes liable for or suffers to
exist any indebtedness for money borrowed or evidenced by a bond,
debenture, note or other similar instrument, whether or not for money
borrowed ("Debt"),
7
<PAGE> 22
- such Debt is secured by a Lien on any Principal Property of Albertson's
or of any Subsidiary or a Lien on any shares of capital stock or Debt of
any Subsidiary (which Debt of a Subsidiary is then held by Albertson's or
any Subsidiary), and
- the aggregate amount of all such secured Debt, together with all
Attributable Debt of Albertson's and its Subsidiaries with respect to
Sale and Leaseback Transactions involving Principal Properties (with the
exception of such transactions that are excluded as described in
"Limitations on Sale and Leaseback Transactions" below), exceeds 10% of
Consolidated Net Tangible Assets,
then Albertson's will secure or cause such Subsidiary to secure the Debt
Securities of any series entitled to the benefit of such covenant equally and
ratably with such secured Debt, but only for so long as such secured Debt is
secured as described above.
The above restriction does not apply to Debt secured by the Liens described
below, and, in computing the amount of secured Debt, Debt secured by the Liens
described below will not be considered secured Debt:
(1) Liens on property of, or on any shares of capital stock of or on
Debt of, any corporation existing at the date of the Indenture or at the
time such corporation becomes a Subsidiary;
(2) Liens in favor of Albertson's or any Wholly-owned Subsidiary;
(3) Liens in favor of governmental bodies to secure progress, advance
or various other payments;
(4) (a) if made in the ordinary course of business, Liens as security
for the performance of contracts other than in connection with the
borrowing of money, deferred purchase price of property or services, an
advance of moneys or the securing of Debt,
(b) Liens with governmental agencies required or permitted to
qualify Albertson's or any Subsidiary to conduct business, maintain
self-insurance or obtain various other benefits,
(c) mechanics' Liens, landlord Liens or statutory Liens securing
obligations incurred in the ordinary course of business not overdue or
being contested in good faith by appropriate proceedings and not
incurred directly or indirectly in connection with the borrowing of
money, the deferred purchase price of property or services or an
advance of moneys, or
(d) easements, exceptions, reservations or similar encumbrances
on real property that do not materially interfere with the operation of
such property or impair the value of such property for the purposes for
which such property is or may reasonably be expected to be used by
Albertson's or its Subsidiaries;
(5) Liens for taxes, assessments or governmental charges or levies not
yet due and payable or payable without penalty or being contested in good
faith by appropriate proceedings;
(6) Liens created by or resulting from any litigation or legal
proceeding that is being contested in good faith by appropriate
proceedings, Liens arising out of judgments or awards as to which the time
for prosecuting an appeal or proceeding for review has not expired, or
Liens arising out of individual final judgments or awards in amounts of
less than $100,000, provided that the aggregate amount of all such
individual final judgments or awards will not at any one time exceed
$1,000,000;
(7) Liens on property, shares of stock or Debt existing at the time of
acquisition thereof (including acquisition through merger or
consolidation), and purchase money and
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construction Liens that are entered into within 360 days after the latest
to occur of the acquisition, completion of construction or the commencement
of full operation of such property;
(8) Liens securing industrial revenue or pollution control bonds;
(9) Liens created in connection with a project financed with, and
created to secure, a Nonrecourse Obligation; and
(10) Any extension, renewal or refunding of any Lien referred to in the
foregoing clauses 1. through 9., inclusive, to the extent the amount of
Debt secured by such Lien is not increased from the amount originally so
secured. Section 1008
Limitations on Sale and Leaseback Transactions
Neither Albertson's nor any Subsidiary may enter into any Sale and
Leaseback Transaction involving any Principal Property, unless the aggregate
amount of all Attributable Debt of Albertson's and its Subsidiaries with respect
to all such transactions plus all secured Debt (with the exception of secured
Debt which is excluded as described in "Limitations on Liens" above) would not
exceed 10% of Consolidated Net Tangible Assets, or unless
(1) the lease is for a period, including renewal rights, not in excess
of three years;
(2) the sale or transfer of the Principal Property is made within 180
days after the latest to occur of the acquisition, construction or the
commencement of full operation of such property;
(3) the lease secures or relates to industrial revenue or pollution
control bonds;
(4) the transaction is between Albertson's and a Wholly-owned
Subsidiary or between Wholly-owned Subsidiaries;
(5) the lease payment obligation is created in connection with a
project financed with, and such obligation constitutes, a Nonrecourse
Obligation; or
(6) Albertson's or such Subsidiary, within 180 days after the sale is
completed, applies to the retirement of Funded Debt of Albertson's (other
than Funded Debt subordinate to the Debt Securities) or of any Subsidiary
(other than through payment at maturity or a mandatory sinking fund or
other mandatory prepayment) or to the purchase of other property which will
constitute Principal Property of a value at least equal to the value of the
Principal Property leased, an amount not less than the greater of
(a) the net proceeds from the sale of the Principal Property
leased, and
(b) the fair market value of the Principal Property leased.
(Section 1009)
In addition, Sale and Leaseback Transactions which meet any of the above tests
will not be counted when computing the amount of Attributable Debt for purposes
of the foregoing restriction.
Certain Definitions Applicable to Covenants
Certain terms defined in the Indenture and applicable to the covenants are
summarized below:
"Attributable Debt" means, as to any particular lease under which
Albertson's or any Subsidiary is at the time liable and at any date as of which
the amount thereof is to be determined, the total net amount of rent required to
be paid under such lease during the remaining term thereof (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended), discounted from the respective due dates thereof to such
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<PAGE> 24
date at a rate per annum equal to the weighted average interest rate per annum
borne by the Debt Securities of each series outstanding pursuant to the
Indenture compounded semi-annually. The net amount of rent required to be paid
under any such lease for any such period will be the aggregate amount of the
rent payable by the lessee with respect to such period after excluding amounts
required to be paid on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges. In the case of any lease which is
terminable by the lessee upon the payment of a penalty, such net amount will
also include the amount of such penalty, but no rent shall be considered as
required to be paid under such lease subsequent to the first date upon which it
may be so terminated.
"Capital Lease Obligations" means any rental obligation which, under
generally accepted accounting principles, is or will be required to be
capitalized on the books of Albertson's or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expense) in accordance
with such principles.
"Consolidated Net Tangible Assets" means the net book value of all assets
of Albertson's and its consolidated Subsidiaries, excluding any amounts carried
as assets for shares of capital stock held in treasury, debt discount and
expense, goodwill, patents, trademarks and other intangible assets, less all
liabilities of Albertson's and its consolidated subsidiaries (except Funded
Debt, minority interests in consolidated Subsidiaries, deferred taxes and
general contingency reserves of Albertson's and its consolidated Subsidiaries),
which in each case would be included on a consolidated balance sheet of
Albertson's and its consolidated Subsidiaries as of the date of determination,
all as determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Funded Debt" means:
(1) all indebtedness of Albertson's and its Subsidiaries for money
borrowed, or evidenced by a bond, debenture, note or other similar
instrument, whether or not for money borrowed, maturing on, or renewable or
extendible at the option of the obligor to, a date more than one year from
the date of the determination thereof (but not including indebtedness under
any revolving credit arrangement with banks except for any indebtedness
converted pursuant to any such arrangement into a term loan which meets the
requirements of this clause (1),
(2) Capital Lease Obligations payable on a date more than one year from
the date of the determination thereof,
(3) guarantees, direct or indirect, and other contingent obligations of
Albertson's and its Subsidiaries in respect of, or to purchase or otherwise
acquire or be responsible or liable for (through the investment of funds or
otherwise), any obligations of the type described in the foregoing clauses
(1) or (2) of others (but not including contingent liabilities on
customers' receivables sold with recourse), and
(4) amendments, renewals, extensions and refundings of any obligations
of the type described in the foregoing clauses (1), (2), or (3).
"Lien" means any mortgage, pledge, lien, security interest, charge or
encumbrance of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give any of the
foregoing).
"Nonrecourse Obligation" means indebtedness or lease payment obligations
substantially related to:
(1) the acquisition of assets not previously owned by Albertson's or
any Subsidiary, or
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(2) the financing of a project involving the development or expansion
of properties of Albertson's or any Subsidiary, as to which the obligee
with respect to such indebtedness or obligation has no recourse to
Albertson's or any Subsidiary or any assets of Albertson's or any
Subsidiary other than the assets which were acquired with the proceeds of
such transaction or the project financed with the proceeds of such
transaction (and the proceeds thereof).
"Principal Property" means:
(1) any real property of Albertson's or any Subsidiary (including,
without limitation, leasehold interests) together with the improvements
thereon and the equipment, if any, constituting a part of the facility
located thereon (including, without limitation, any warehouse, service
center, shopping center or distribution center, wherever located) and
(2) other equipment of Albertson's or any Subsidiary,
in each case which has a book value on the date as of which the determination is
being made of more than 1% of Consolidated Net Tangible Assets as most recently
determined prior to such date.
However, for purposes of clause 1. above, separate parcels of real property
which are operated generally as part of a single facility (such as a single
warehouse, service center, shopping center or distribution center) will be
deemed to be a single property, and for purposes of clause 2. above, separate
items of equipment that are secured by Liens will be deemed to be a single
property to the extent they are secured by such Liens pursuant to the same
financing transaction or a series of related financing transactions.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by Albertson's or by one or
more other Subsidiaries, or by Albertson's and one or more other Subsidiaries.
For the purpose of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Debt Securities of any series (unless such event
is specifically inapplicable to a particular series as described in the
prospectus supplement relating thereto):
(1) failure to pay any interest on any Debt Security of that series
when due, if such failure continues for 30 days;
(2) failure to pay principal of or any premium on any Debt Security of
that series when due;
(3) failure to deposit any sinking fund payment, when due, relating to
any Debt Security of that series;
(4) failure to perform any other covenant of Albertson's in the
Indenture (other than a covenant included in the Indenture solely for the
benefit of a series of Debt Securities other than that series), if such
failure continues for 60 days after written notice as provided in the
Indenture;
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(5) default under indebtedness for money borrowed of Albertson's or any
Significant Subsidiary having an aggregate outstanding principal amount of
at least $25,000,000 or under any mortgage, Indenture or other instrument
under which there may be issued or by which there may be secured or
evidenced any such indebtedness of Albertson's or any Significant
Subsidiary, which default either
(a) will constitute a failure to make a principal payment of at
least $25,000,000 when due and payable after the expiration of any
applicable grace period with respect thereto, or
(b) will have resulted in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise
have become due and payable, without, in either case, such indebtedness
having been discharged or such default rescinded or annulled within 10
days after notice to Albertson's by the Trustee or to Albertson's and
the Trustee by the holders of at least 10% in aggregate principal
amount of the Outstanding Debt Securities of that series specifying
such default and requiring Albertson's or such Significant Subsidiary
to cause such indebtedness to be discharged or such acceleration to be
rescinded or annulled;
(6) various events of bankruptcy, insolvency or reorganization
involving Albertson's or a Significant Subsidiary; and
(7) any other Event of Default provided with respect to Debt Securities
of that series. (Section 501)
No Event of Default described above with respect to a particular series of
Debt Securities necessarily constitutes an Event of Default with respect to any
other series of Debt Securities.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default will occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the holders, unless such holders
will have offered to the Trustee reasonable security or indemnity. (Sections 601
and 603) Subject to various provisions, including those requiring security and
indemnification of the Trustee, the holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee. (Section 512)
Albertson's is required to deliver annually to the Trustee a statement by
certain of its officers as to whether or not Albertson's, to their knowledge, is
in default in the performance and observance of any obligations of Albertson's
under the Indenture and, if so, specifying all such known defaults. (Section
1004)
If an Event of Default will occur and be continuing with respect to Debt
Securities of any series, either the Trustee or the holders of at least 25% in
aggregate principal amount of all Outstanding Debt Securities of that series may
accelerate the maturity of all Debt Securities of that series. However, after
such acceleration, but before a judgment or decree based on acceleration, the
holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of that series may, under various circumstances, rescind and annul
such acceleration if all Events of Default, other than the non-payment of
accelerated principal, have been cured or waived as provided in the Indenture.
(Section 502) For information as to waiver of defaults, see "Meetings,
Modifications and Waiver" below.
No holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such holder will have previously given to the Trustee written
notice of a continuing Event of Default and unless the holders of at least 25%
in aggregate principal amount of the Outstanding Debt Securities of that
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<PAGE> 27
series will have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as Trustee, and the Trustee will not have
received from the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of that series a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
(Section 507) However, such limitations generally do not apply to a suit
instituted by a holder of a Debt Security for the enforcement of payment of the
principal or interest on such Debt Security on or after the respective due dates
expressed in such Debt Security. (Section 508)
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by Albertson's
and the Trustee with the consent of the holders of not less than 66 2/3% in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such modification or amendment. However, no such modification or
amendment may, without the consent of the holder of each Outstanding Debt
Security affected thereby,
- change the Stated Maturity of the principal of, or any installment of
principal of or interest on any Debt Security,
- reduce the principal amount or rate of interest on or any premium payable
upon the redemption of any Debt Security,
- reduce the amount of principal of an Original Issue Discount Security
payable upon acceleration of the Maturity thereof,
- change the Place of Payment where, or the coin or currency in which,
principal, premium, if any, or interest, if any, on any Debt Security is
payable,
- impair the right to institute suit for the enforcement of any payment on
or with respect to any Debt Security after the Stated Maturity or
Redemption Date,
- reduce the percentage in principal amount of Outstanding Debt Securities
of any series, the consent of whose holders is required for modification
or amendment of the Indenture or for waiver of compliance with various
provisions of the Indenture or for waiver of various defaults, or
- modify any of the provisions set forth in this paragraph except to
increase any such percentage or to provide that various other provisions
of the Indenture may not be modified or waived without the consent of the
holder of each Outstanding Debt Security affected thereby. (Section 902)
The holders of at least 66 2/3% in aggregate principal amount of the
Outstanding Debt Securities of each series may, on behalf of the holders of all
the Debt Securities of that series, waive, insofar as that series is concerned,
compliance by Albertson's with various restrictive provisions of the Indenture.
(Section 1010) The holders of not less than a majority in aggregate principal
amount of the Outstanding Debt Securities of each series may, on behalf of all
holders of Debt Securities of that series, waive any past default under the
Indenture with respect to Debt Securities of that series, except a default
- in the payment of principal of, any premium on or any interest on any
Debt Security of such series, or
- in respect of a covenant or provision of the Indenture which cannot be
modified or amended without the consent of the holder of each Outstanding
Debt Security of such series affected thereby. (Section 513)
The Indenture provides that in determining whether the holders of the
requisite principal amount of the Outstanding Debt Securities have given any
request, demand, authorization,
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<PAGE> 28
direction, notice, consent or waiver thereunder or whether a quorum is present
at a meeting of holders of Debt Securities, the principal amount of an Original
Issue Discount Security that will be deemed to be Outstanding will be the amount
of the principal thereof that would be due and payable as of the date of such
determination upon acceleration of the Maturity thereof. (Section 101)
CONSOLIDATION, MERGER AND SALE OF ASSETS
Albertson's may consolidate with or merge into, or transfer or lease its
assets substantially as an entirety to, any person which is a corporation,
partnership or trust organized and validly existing under the laws of any
domestic jurisdiction, or may permit any such person to consolidate with or
merge into Albertson's or convey, transfer or lease its properties and assets
substantially as an entirety to Albertson's, without the consent of the holders
of any of the Outstanding Debt Securities under the Indenture. However, such
consent will be required if
- the successor person fails to assume the obligations of Albertson's on
the Debt Securities,
- after giving effect to the transaction (treating any indebtedness which
becomes an obligation of Albertson's or any Subsidiary as a result of
such transaction as having been incurred by Albertson's or such
Subsidiary at the time of such transaction), an Event of Default, or an
event which, after notice or lapse of time, would become an Event of
Default, will have occurred and be continuing, or
- various other conditions are not met. (Section 801)
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that, if such provision is made applicable to the
Debt Securities of any series, Albertson's may elect:
(1) to defease and be discharged from any and all obligations in
respect of such Debt Securities except for various obligations to register
the transfer or exchange of such Debt Securities, to replace temporary,
destroyed, stolen, lost or mutilated Debt Securities, to maintain paying
agencies and to hold moneys for payment in trust ("Defeasance") or
(2) (a) to omit to comply with various restrictive covenants in
Sections 1005 through 1009 of the Indenture (including the covenants
referred to above under "Certain Covenants of Albertson's"), and
(b) to deem the occurrence of any event referred to in clauses
(4) (with respect to Sections 1005 through 1009 inclusive), (5) or (7)
under "Events of Default" above not to be or result in an Event of
Default if, in each case with respect to the Outstanding Debt
Securities of such series as provided in Section 1303 of the Indenture
on or after the date the conditions set forth in Section 1304 of the
Indenture are satisfied ("Covenant Defeasance"),
in either case upon the deposit with the Trustee (or other qualifying Trustee),
in trust, of money and/or U.S. Government Obligations, which through the payment
of interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of and any premium
and interest on the Debt Securities of such series on the respective Stated
Maturities and any mandatory sinking fund payments or analogous payments on the
days payable, in accordance with the terms of the Indenture and the Debt
Securities of such series. Such a trust may be established only if, among other
things, Albertson's has delivered to the Trustee an Opinion of Counsel to the
effect that the holders of the Outstanding Debt Securities of such series will
not recognize gain or loss for Federal income tax purposes as a result of such
deposit, Defeasance or Covenant Defeasance and will be subject to Federal
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income tax on the same amount, and in the same manner and at the same times as
would have been the case if such deposit, Defeasance or Covenant Defeasance had
not occurred. Such opinion, in the case of Defeasance under clause 1. above,
must refer to and be based upon a ruling of the Internal Revenue Service or a
change in applicable Federal income tax law occurring after the date of the
Indenture. The prospectus supplement relating to a series of Debt Securities may
further describe the provisions, if any, permitting such Defeasance or Covenant
Defeasance with respect to such Debt Securities. (Article Thirteen)
If Albertson's omits to comply with various covenants of the Indenture with
respect to the Debt Securities of any series as described above, and the Debt
Securities of such series are declared due and payable because of the occurrence
of an Event of Default, the amount of money and U.S. Government Obligations on
deposit with the Trustee will be sufficient to pay amounts due on the Debt
Securities of such series at the time of their Stated Maturity but may not be
sufficient to pay amounts due on the Debt Securities of such series at the time
of the acceleration resulting from such Event of Default. Albertson's will,
however, remain liable for such payments.
NOTICES
Notices to holders of Debt Securities will be given by mail to the
addresses of such holders as they appear in the Debt Security Register.
(Sections 101 and 106)
REPLACEMENT OF SECURITIES
Any mutilated Debt Security will be replaced by Albertson's at the expense
of the holder upon surrender of such Debt Security to the Trustee. Debt
Securities that become destroyed, stolen or lost will be replaced by Albertson's
at the expense of the holder upon delivery to the Trustee of the Debt Security
or evidence of the destruction, loss or theft thereof satisfactory to
Albertson's and the Trustee. In the case of a destroyed, lost or stolen Debt
Security, an indemnity satisfactory to the Trustee and Albertson's may be
required at the expense of the holder of such Debt Security before a replacement
Debt Security will be issued. (Section 306)
GOVERNING LAW
The Indenture and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York. (Section 112)
REGARDING THE TRUSTEE
The Indenture contains various limitations on the right of the Trustee, if
it becomes a creditor of Albertson's, to obtain payment of claims in various
cases or to realize for its own account on various property received in respect
of any such claim as security or otherwise. (Section 613) The Trustee will be
permitted to engage in various other transactions; however, if it acquires any
conflicting interest and there is a default under the Debt Securities of any
series for which the Trustee serves as Trustee, the Trustee must eliminate such
interest or resign. (Section 608) The Trustee currently provides various banking
and financial services to Albertson's in the ordinary course of business and may
provide such services in the future.
PLAN OF DISTRIBUTION
Albertson's may sell any series of Debt Securities being offered hereby in
one or more of the following ways from time to time:
- to underwriters for resale to the public or to institutional investors;
or
- directly or through agents to other purchasers.
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<PAGE> 30
The accompanying prospectus supplement will set forth the terms of the
offering of the Debt Securities, including the name or names of any underwriters
or agents involved in the sale of the Debt Securities in respect of which this
prospectus is being delivered, the principal amounts, if any, to be purchased by
underwriters, and the compensation, if any, of such underwriters or agents.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters or agents may
receive compensation from Albertson's or from purchasers of Debt Securities for
whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell Debt Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions received by them from Albertson's and any profit on the
resale of Debt Securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act of 1933, as amended. Any such underwriter
or agent will be identified, and any such compensation received from Albertson's
will be described, in the applicable prospectus supplement.
Under agreements which may be entered into by Albertson's, underwriters and
agents who participate in the distribution of Debt Securities may be entitled to
indemnification by Albertson's against various liabilities, including
liabilities under the Securities Act of 1933.
If so indicated in the applicable prospectus supplement, Albertson's will
authorize underwriters or other persons acting as agents for Albertson's to
solicit offers by various institutions to purchase Debt Securities from
Albertson's pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by Albertson's. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the offered Debt Securities will not at the time of delivery be prohibited under
the laws of the jurisdiction to which such purchaser is subject. The
underwriters and such other agents will not have any responsibility in respect
of the validity or performance of such contracts.
Various of the underwriters who participate in the distribution of Debt
Securities and their affiliates may perform various commercial banking and
investment banking services for Albertson's from to time in the ordinary course
of business.
The place and time of delivery for the Debt Securities in respect of which
this prospectus is delivered are set forth in the applicable prospectus
supplement.
Unless otherwise indicated in the applicable prospectus supplement, each
series of Debt Securities will be in a new issue of securities, will not have an
established trading market when issued and will not be listed on any securities
exchange. Any underwriters or agents to or through whom Debt Securities are sold
by Albertson's for public offering and sale may make a market in such Debt
Securities, but such underwriters or agents will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for any Debt Securities.
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<PAGE> 31
LEGAL OPINIONS
Certain legal matters relating to the validity of the Debt Securities
offered hereby will be passed upon for Albertson's by Thomas R. Saldin, Esq.,
Executive Vice President, Administration and General Counsel of Albertson's.
EXPERTS
The consolidated financial statements and the related financial statement
schedules incorporated in this prospectus by reference from Albertson's Annual
Report on Form 10-K for the year ended January 29, 1998 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and has been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
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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 only the Notes and Debentures 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
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<S> <C>
Prospectus Supplement
Forward-Looking Statements............... S-3
The Company.............................. S-3
Use of Proceeds.......................... S-4
Capitalization........................... S-5
Selected Consolidated Financial Data..... S-6
Description of Notes and Debentures...... S-7
Underwriting............................. S-13
Legal Matters............................ S-14
Experts.................................. S-14
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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$500,000,000
ALBERTSON'S, INC.
$ ,000,000
% Senior Notes due 20
$ ,000,000
% Senior Debentures due 20
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ALBERTSON'S, INC. LOGO
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GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
WACHOVIA SECURITIES, INC.
FIRST UNION SECURITIES, INC.
THE WILLIAMS CAPITAL GROUP, L.P.
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