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