FORM S-3ASR
As filed with the Securities and Exchange Commission on
April 30, 2009
Registration
No. 333-
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
SUPERVALU INC.
(Exact name of registrant as
specified in its charter)
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Delaware
(State or other jurisdiction
of
incorporation or organization)
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41-0617000
(I.R.S. Employer
Identification No.)
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11840 Valley View Road
Eden Prairie, Minnesota 55344
(952) 828-4000
(Address, including zip code,
and telephone number, including area code, of registrants
principal executive offices)
Burt M. Fealing
Vice President, Corporate Secretary and Chief Securities
Counsel
SUPERVALU INC.
11840 Valley View Road
Eden Prairie, Minnesota 55344
(952) 828-4000
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
Copies to:
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Gary L. Tygesson, Esq.
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, Minnesota 55402
(612) 340-8753
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Robert Evans III, Esq.
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
(212) 848-8830
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Approximate date of commencement of proposed sale to the
public: From time to time after the effective
date of this Registration Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box. o
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box. þ
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following
box. þ
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed
to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following
box. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act. (Check one):
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Large
accelerated
filer þ
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller reporting
company o
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(Do not check if a smaller
reporting company)
CALCULATION
OF REGISTRATION FEE
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Amount
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Proposed Maximum
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Proposed Maximum
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Amount of
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Title of Each Class of
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to be
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Offering
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Aggregate
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Registration
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Securities to be Registered
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Registered(1)
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Price per Unit
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Offering Price(1)
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Fee(1)
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Senior Notes
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$
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100
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%
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$
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$
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(1) |
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An indeterminate amount of securities to be offered at
indeterminate prices is being registered pursuant to this
registration statement. The registrant is deferring payment of
the registration fee pursuant to Rule 456(b) and is
omitting this information in reliance on Rule 456(b) and
Rule 457(r). |
This
prospectus relates to an effective registration statement under
the Securities Act of 1933, but is not complete and may be
changed. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted.
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PRELIMINARY
PROSPECTUS
SUBJECT TO COMPLETION, DATED APRIL 30, 2009
$500,000,000
% Senior
Notes due 2016
We will pay interest
on the notes on May 1 and November 1 of each year, beginning on
November 1, 2009. The notes will mature on May 1,
2016. We may redeem some or all of the notes at any time and
from time to time at our option at the redemption price equal to
the make-whole amount described under the heading
Description of the Notes Optional
Redemption.
If we experience
certain change of control events, we will be required to make an
offer to purchase the notes at a purchase price of 101% of the
principal amount, plus accrued and unpaid interest, if any, to
the date of purchase.
The notes will be
our general unsecured obligations and will rank equally in right
of payment with all of our other existing and future senior
unsecured indebtedness and senior in right of payment to all of
our future subordinated indebtedness. In addition, the notes
will be effectively subordinated in right of payment to all of
our subsidiaries obligations and subordinated in right of
payment to all of our secured obligations, to the extent of the
assets securing such obligations.
The notes will not
be listed on any securities exchange. Currently, there is no
public market for the notes.
Investing in the
notes involves risks that are described in the Risk
Factors section beginning on page 9 of this
prospectus.
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Underwriting
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Proceeds
(Before
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Offering
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Discounts and
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Expenses) to
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Price(1)
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Commissions
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SUPERVALU
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Per Note
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%
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%
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Total
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$
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$
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$
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(1)
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Plus accrued
interest, if any from May , 2009, if settlement
occurs after that date.
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The notes will be
ready for delivery in book-entry form only through The
Depository Trust Company (DTC), on or about
May , 2009.
Neither the
Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Joint
Book-Running Managers
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Credit
Suisse |
Banc
of America Securities LLC |
Citi |
RBS |
Co-Managers
J.P. Morgan Morgan
Stanley UBS Investment
Bank U.S. Bancorp Investments,
Inc.
The
Williams Capital Group, L.P.
The date of this
prospectus
is ,
2009.
TABLE OF
CONTENTS
You should rely only on the information contained or
incorporated by reference in this prospectus. We have 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. We are 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
appearing in this prospectus and the documents incorporated by
reference are accurate only as of the date of this prospectus or
the respective document incorporated by reference, as the case
may be. Our business, financial condition, results of operations
and prospects may have changed since those dates.
Except as otherwise indicated or required by the context,
references in this prospectus to we, us,
our, SUPERVALU or the
company refer to SUPERVALU INC. and its
majority-owned subsidiaries.
Cautionary
Statement Regarding Forward-Looking Statements
This prospectus and the documents incorporated by reference into
this prospectus contain forward-looking statements. These
statements may be made directly in this prospectus or may be
incorporated into this prospectus by reference to other
documents.
Any statements contained in this prospectus regarding the
outlook for our businesses and their respective markets, such as
projections of future performance, statements of our plans and
objectives, forecasts of market trends and other matters, are
forward-looking statements based on our assumptions and beliefs.
Such statements may be identified by such words or phrases as
will likely result, are expected to,
will continue, outlook, will
benefit, is anticipated, estimate,
project, management believes or similar
expressions. These forward-looking statements are subject to
certain risks and uncertainties that could cause actual results
to differ materially from those discussed in such statements and
no assurance can be given that the results in any
forward-looking statement will be achieved. For these
statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Any forward-looking statement
speaks only as of the date on which it is made, and we disclaim
any obligation to subsequently revise any forward-looking
statement to reflect events or circumstances after such date or
to reflect the occurrence of anticipated or unanticipated events.
Certain factors could cause our future results to differ
materially from those expressed or implied in any
forward-looking statements contained in this prospectus. These
factors include the factors discussed under the heading
Risk Factors, the factors discussed below and any
other cautionary statements, written or oral, which may be made
or referred to in connection with any such forward-looking
statements. Since it not possible to foresee all such factors,
these factors should not be considered as complete or exhaustive.
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Economic
and Industry Conditions
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Adverse changes in economic conditions that affect consumer
spending or buying habits.
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Food and drug price inflation or deflation.
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Increases in energy costs and commodity prices, which could
impact consumer spending and buying habits and the cost of doing
business.
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The availability of favorable credit and trade terms.
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Changes in interest rates.
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The outcome of negotiations with partners, governments,
suppliers, unions or customers.
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Narrow profit margins in the grocery industry.
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Competitive
Practices
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Our ability to attract and retain customers.
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Our ability to hire, train or retain employees.
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Competition from other food or drug retail chains, supercenters,
non-traditional competitors and emerging alternative formats in
our retail markets.
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Declines in the retail sales activity of our supply chain
services customers due to competition or increased
self-distribution.
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Changes in demographics or consumer preferences that affect
consumer spending habits.
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The impact of consolidation in the retail food and supply chain
services industries.
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The success of our promotional and sales programs and our
ability to respond to the promotional practices of competitors.
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The ability to successfully improve buying practices and shrink.
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The increase in the penetration of our Own Brands private label
program could impact identical store retail sales growth.
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Food
Safety
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Events that give rise to actual or potential food contamination,
drug contamination or food-borne illness or any adverse
publicity relating to these types of concern, whether or not
valid.
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Integration
of Acquired Businesses
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Our ability to successfully combine our operations with any
businesses we have acquired or may acquire, to achieve expected
synergies and to minimize the diversion of managements
attention and resources.
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Store
Expansion and Remodeling
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Potential delays in the development, construction or
start-up of
planned projects.
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Our ability to locate suitable store or distribution center
sites, negotiate acceptable purchase or lease terms and build or
expand facilities in a manner that achieves appropriate returns
on our capital investment.
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The adequacy of our capital resources for future acquisitions,
the expansion of existing operations or improvements to
facilities.
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Our ability to make acquisitions at acceptable rates of return,
assimilate acquired operations and integrate the personnel of
the acquired business.
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Liquidity
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Additional funding requirements to meet anticipated debt
payments and capital needs.
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The impact of acquisitions on our level of indebtedness, debt
ratings, costs and future financial flexibility.
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The impact of the recent turmoil in the financial markets on the
availability and cost of credit.
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Labor
Relations
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Potential work disruptions resulting from labor disputes.
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Employee
Benefit Costs
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Increased operating costs resulting from rising employee benefit
costs or pension funding obligations.
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Regulatory
Matters
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The ability to timely obtain permits, comply with government
regulations or make capital expenditures required to maintain
compliance with government regulations.
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Changes in applicable laws and regulations that impose
additional requirements or restrictions on the operation of our
businesses.
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Self-Insurance
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Variability in actuarial projection regarding workers
compensation and general and automobile liability.
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Potential increase in the number or severity of claims for which
we are self-insured.
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Significant volatility in the amount and timing of payments.
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Legal and
Administrative Proceedings
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Unfavorable outcomes in litigation, governmental or
administrative proceedings or other disputes.
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Adverse publicity related to such unfavorable outcomes.
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Information
Technology
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Difficulties in developing, maintaining or upgrading information
technology systems.
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Security
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Business disruptions or losses resulting from wartime
activities, acts or threats of terror, data theft, information
espionage, or other criminal activity directed at the food and
drug industry, the transportation industry or computer or
communications systems.
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Severe
Weather, Natural Disasters and Adverse Climate Changes
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Property damage or business disruption resulting from severe
weather conditions and natural disasters that affect us, our
customers or suppliers.
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Unseasonably adverse climate conditions that impact the
availability or cost of certain products in the grocery supply
chain.
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Accounting
Matters
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Changes in accounting standards that impact our financial
statements.
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iii
SUMMARY
This summary represents highlights of information contained
elsewhere or incorporated by reference in this prospectus. This
summary is not complete and does not contain all of the
information that you should consider before investing in the
notes. You should read the entire prospectus carefully,
including Risk Factors and our financial statements
and notes to those financial statements, which are incorporated
by reference, and other information appearing elsewhere or
incorporated by reference in this prospectus.
SUPERVALU
INC.
Our
Business
We are one of the largest companies in the United States grocery
channel. We operate in two segments of the grocery industry:
retail food and supply chain services, which includes wholesale
distribution and related logistics support services. Each
segment has a different customer base, marketing strategy and
management structure.
As of February 28, 2009, we conducted our retail food
operations through 2,421 retail stores, including 874
combination stores (defined as food and pharmacy), 369 food
stores and 1,178 limited assortment food stores, including 862
licensed limited assortment food stores and 131 fuel centers. We
provide supply chain services across the United States retail
grocery channel. As of February 28, 2009, we served as the
primary grocery supplier to approximately 2,000 independently
owned retail food stores in 49 states, in addition to our
own regional banner store network, and as a secondary supplier
to approximately 700 independently owned retail food stores. Our
supply chain activities are supported by 22 major
company-operated distribution centers, located throughout the
United States.
On June 2, 2006, we acquired the core supermarket
businesses of Albertsons Inc., or Albertsons, which we
refer to as the acquisition. The acquisition added approximately
1,125 stores to our retail footprint. Acquired stores operate
under the banners of Acme Markets, Bristol Farms, Jewel-Osco,
Shaws Supermarkets, Star Market and Albertsons in the
Intermountain, Northwest and Southern California regions, and
the related in-store pharmacies operate under the Osco and
Sav-on banners. We also acquired 10 distribution centers,
certain regional offices and certain corporate offices in Boise,
Idaho, Glendale, Arizona and Salt Lake City, Utah. We believe
the acquisition of Albertsons core operations was a unique
strategic opportunity to acquire those assets of Albertsons that
we viewed as the most attractive and profitable. In addition,
the acquired stores give us a strong market presence in many key
urban markets with little overlap with our legacy business. As
part of the acquisition, we acquired the Albertsons, Acme
Markets, Bristol Farms, Jewel, Osco, Sav-on and Shaws
Supermarkets trademarks and trade names. The acquisition has
greatly increased the size of the company and significantly
changed the mix of our segment revenues and operating results.
We are focused on long-term retail growth through targeted new
store development, remodel activities, licensee growth and
acquisitions. During the 2009 fiscal year, we added 44 new
stores through new store development and closed 97 stores.
Retail
Food Operations
Our principal retail food formats include combination stores,
food stores and limited assortment food stores. This
multi-format approach enables us to operate in a variety of
markets under widely differing competitive circumstances.
Combination and Food Stores. Combination
stores and food stores offer a grocery offering, as well as
expanded sections of general merchandise and health and beauty
care. Many combination stores and food stores stores also have
in-store pharmacies. Our combination stores typically carry
approximately 50,000 items and average approximately
60,000 square feet, while our food stores typically carry
approximately 40,000 items and average approximately
40,000 square feet. Our combination and food stores operate
under the Acme Markets, Albertsons, biggs, Bristol Farms, Cub
Foods, Farm Fresh, Hornbachers, Jewel, Jewel-Osco, Lucky,
Sav-on, Shaws Supermarkets, Shoppers Food &
Pharmacy, Shop n Save and Star Market banners.
1
Limited Assortment Food Stores. We operate
limited assortment food stores primarily under the
Save-A-Lot
banner.
Save-A-Lot
holds the number one market position, based on revenues, in the
extreme value grocery-retailing sector.
Save-A-Lot
food stores typically are approximately 15,000 square feet
in size, and stock approximately 1,400 high volume
custom-branded food items generally in a single size for each
product sold, as well as a limited offering of general
merchandise items.
Supply
Chain Services
We are the largest public company food wholesaler in the nation.
We provide supply chain services, including wholesale
distribution and related logistics support services to
independent retail customers for food and non-food products. Our
distribution customers include single and multiple grocery store
independent operators, regional and national chains, mass
merchants and the military. Our customers are located in
49 states, and operate stores ranging in size from small
convenience stores to 200,000 square foot supercenters. We
also offer third-party logistics solutions, including warehouse
management, transportation, procurement, contract manufacturing
and logistics engineering and management services.
We have established a network of 22 strategically located
distribution centers, nine of which supply our own stores in
addition to the stores of independent retail customers,
utilizing a multi-tiered logistics system. The network includes
facilities that carry slow turn or fast turn groceries,
perishables, general merchandise and health and beauty care
products. Deliveries to retail stores are made from our
distribution centers by trucks owned by us, third-party
independent trucking companies or customer-owned trucks. We
believe that our multi-tiered distribution network increases
buying scale, improves operating efficiencies and lowers costs
of operations. In addition, we provide certain facilitative
services between our independent retailers and vendors related
to products that are delivered directly by suppliers to retail
stores under programs established by us. These services include
sourcing, invoicing and payment services.
Own
Brands
Own Brands, our private label program, are products produced to
our specification by many suppliers and compete in many areas of
our stores. Own Brands include: the premium brand Culinary
Circletm,
which offers unique, premium quality products in highly
competitive categories; first-tier brands, including Wild
Harvesttm,
Flavoritetm,
Richfoodtm,
equalinetm,
HomeLifetm
and several others, which provide shoppers quality national
brand equivalent products at a competitive price; and the value
brand, Shoppers
Valuetm,
which offers budget conscious consumers a quality alternative to
national brands at substantial savings.
Tender
Offer
On April 30, 2009, we commenced an offer to purchase for
cash an aggregate principal amount of up to $700.0 million,
which we refer to as the tender cap, of existing debt securities
as follows:
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our 7.875% Notes due August 1, 2009, which we refer to
as the SUPERVALU 2009 notes;
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the 6.95% Notes due August 1, 2009 issued by our
wholly owned subsidiary, New Albertsons, Inc. (New
Albertsons), which we refer to as the Albertsons 2009
notes; and
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the 8.35% Senior Notes due May 1, 2010 issued by New
Albertsons, which we refer to as the Albertsons 2010 notes.
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Together with the issuance of notes in this offering, the
purpose of the tender offer is to provide SUPERVALU with
financial flexibility through the refinancing of a portion of
its consolidated senior indebtedness. As of February 28,
2009, $350.0 million aggregate principal amount of the
SUPERVALU 2009 notes, $350.0 million aggregate principal
amount of the Albertsons 2009 notes and
$275.0 million aggregate principal amount of the
Albertsons 2010 notes were outstanding. The total
consideration payable for notes tendered and accepted by us for
purchase in the tender offer will be $1,010.00 per $1,000
principal amount of the SUPERVALU 2009 notes, $1,008.75 per
$1,000 principal amount of the Albertsons 2009 notes and
$1,025.00 per $1,000 principal amount of the
Albertsons 2010 notes, which total consideration for each
series includes an early tender premium of $30.00 per $1,000
principal amount of notes tendered and not withdrawn
2
prior to 12:01 a.m., New York City time, on May 14, 2009.
Additionally, accrued and unpaid interest will be paid on any
notes of each series accepted for purchase to the applicable
settlement date. The amount of each series of notes purchased in
the tender offer will be subject to the tender cap and the
following order of priority, which we refer to as the acceptance
priority level: the SUPERVALU 2009 notes and the
Albertsons 2009 notes will have an acceptance priority
level of 1 while the Albertsons 2010 notes
will have an acceptance priority level of 2. This
means that in the tender offer, we will purchase the SUPERVALU
2009 notes and the Albertsons 2009 notes before we
purchase the Albertsons 2010 notes, and that the aggregate
principal amount of Albertsons 2010 notes purchased in the
tender offer may be subject to proration if the total aggregate
principal amount of notes tendered in the tender offer exceeds
the tender cap.
The tender offer is being made on the terms and subject to the
conditions set forth in the offer to purchase, dated
April 30, 2009, relating to the tender offer (the Offer to
Purchase). The tender offer is being made solely pursuant to,
and is governed by, the Offer to Purchase.
The tender offer is not conditioned upon any minimum amount of
the SUPERVALU 2009 notes, the Albertsons 2009 notes or the
Albertsons 2010 notes being tendered, and we reserve the
right to increase or modify the tender cap. We intend to fund
our purchase of these notes from the net proceeds of this
offering and, to the extent that such net proceeds are not
sufficient to fund our purchase of these notes, from borrowings
under our senior secured credit facilities. The tender offer is
scheduled to expire at 8:00 a.m., New York City time,
on May 29, 2009 and is conditioned, among other things,
upon the issuance by us, at or prior to 12:01 a.m. on
May 14, 2009, of a minimum of $500 million aggregate
principal amount of notes through this offering. We cannot
assure you that the tender offer will be consummated in
accordance with its terms, or at all, or that a significant
principal amount of the SUPERVALU 2009 notes, the
Albertsons 2009 notes or the Albertsons 2010 notes
will be retired and cancelled pursuant to the tender offer. This
offering is not conditioned upon the successful consummation of
the tender offer. For a discussion of the terms of the SUPERVALU
2009 notes, the Albertsons 2009 notes and the
Albertsons 2010 notes, see Description of Other
Indebtedness and the notes to the financial statements
incorporated by reference in this prospectus.
Other
Information
We are a Delaware corporation, organized in 1925 as the
successor to two wholesale grocery firms established in the
1870s. As of February 28, 2009, we had approximately
178,000 employees. Our principal executive offices are
located at 11840 Valley View Road, Eden Prairie, Minnesota 55344
and our telephone number is
(952) 828-4000.
3
The
Offering
The following is a brief summary of some of the terms of this
offering. For a more complete description of the terms of the
notes, see Description of the Notes contained
elsewhere in this prospectus.
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Issuer |
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SUPERVALU INC. |
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Notes Offered |
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$500,000,000 aggregate principal amount
of % Senior Notes due 2016. |
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Maturity Date |
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May 1, 2016 |
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Interest Payment Dates |
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May 1 and November 1, beginning November 1, 2009.
Interest will accrue from the issue date. |
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Guarantees |
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The notes will initially not be guaranteed. Any subsidiary of
ours that subsequently guarantees any of our debt securities or
issues any debt securities will also fully and unconditionally
guarantee the notes. See Description of the
Notes Guarantees. |
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Ranking |
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The notes will be our general unsecured obligations. The notes
will rank: |
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equal in right of payment to all of our other
existing and future senior unsecured indebtedness;
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senior in right of payment to all of our future
subordinated indebtedness; and
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effectively subordinated in right of payment to all
of our subsidiaries obligations, including the guarantees
of our senior secured credit facilities, and subordinated in
right of payment to all of our secured obligations, to the
extent of the assets securing such obligations, including up to
$4.0 billion of secured indebtedness that may be incurred
under our senior secured credit facilities.
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As of February 28, 2009, we had approximately
$2.1 billion of secured indebtedness outstanding and no
subordinated indebtedness, we and our subsidiaries had
approximately $5.3 billion of unsecured senior indebtedness
outstanding, of which approximately $4.3 billion was
indebtedness of our subsidiaries (excluding the guarantees of
our senior secured credit facilities and other intercompany
liabilities and capitalized leases of $1.3 billion). |
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Sinking Fund |
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None. |
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Optional Redemption |
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The notes will be redeemable in whole at any time or in part
from time to time, at our option, at a redemption price equal to
the greater of: |
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100% of the principal amount of the notes to be
redeemed; or
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as determined by an independent investment banker,
the sum of the present values of the remaining scheduled
payments of principal and interest on the notes to be redeemed
(exclusive of interest accrued to the date of redemption)
discounted to the date of redemption on a semi-annual basis
(assuming a
360-day year
consisting of twelve
30-day
months) at the then-current U.S. Treasury rate plus
50 basis points.
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4
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In each case we will pay accrued and unpaid interest on the
principal amount being redeemed to the date of redemption. See
Description of the Notes Optional
Redemption. |
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Repurchase at Holders Option Upon
a Change of Control
|
|
If we experience a change of control, we will be required to
offer to purchase all of the notes at a purchase price of 101%
of the principal amount, plus accrued and unpaid interest, if
any, to the date of purchase. See Description of the
Notes Repurchase at Holders Option Upon a
Change of Control. |
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Certain Covenants |
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The indenture governing the notes, as supplemented, contains
restrictive covenants that, among other things, will limit our
ability and the ability of certain of our domestic subsidiaries
to: |
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incur secured indebtedness; and
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engage in sale and leaseback transactions.
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The indenture, as supplemented, does not contain any financial
or operating covenants or restrictions on the payment of
dividends, the incurrence of unsecured indebtedness or
transactions with affiliates or, with limited exceptions,
incurrence of liens or the issuance or repurchase of securities
by us or any of our subsidiaries. |
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Use of Proceeds |
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We expect to receive net proceeds, after deducting underwriting
discounts and estimated offering expenses, of approximately
$466.2 million from this offering. We intend to use the net
proceeds of this offering to fund all or a portion of the
purchase price of the SUPERVALU 2009 notes, the Albertsons
2009 notes and the Albertsons 2010 notes tendered and
accepted by us for purchase in our offer to purchase for cash an
aggregate principal amount of up to $700.0 million of these
notes, including the payment of accrued interest and any
applicable early tender premium. To the extent that there are
net proceeds remaining, or if the tender offer is not
consummated, we intend to use the net proceeds for general
corporate purposes, including the repayment of debt, whether at
maturity, through open market purchases, privately negotiated
transactions or otherwise. See Use of Proceeds. |
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No Listing |
|
We do not intend to apply for the listing of the notes on any
securities exchange or for the quotation of the notes in any
dealer quotation system. The notes are new securities for which
there is currently no public market. We cannot assure you that
any active or liquid market will develop for the notes. See
Underwriting. |
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Risk Factors |
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An investment in the notes involves risks. You should carefully
consider all information contained or incorporated by reference
in this prospectus and, in particular, should carefully read the
section of this prospectus entitled Risk Factors
before deciding whether to invest in the notes. |
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Trustee and Paying Agent |
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Deutsche Bank Trust Company Americas, formerly known as
Bankers Trust Company. |
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Governing Law |
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The indenture and the notes provide that they will be governed
by, and construed in accordance with, the laws of the State of
New York. |
5
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DTC Eligibility |
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The notes will be issued in book-entry form and will be
represented by permanent global certificates deposited with, or
on behalf of, DTC and registered in the name of a
nominee of DTC. Beneficial interests in any of the notes will be
shown on, and transfers will be effected only through, records
maintained by DTC or its nominee, and any such interest may not
be exchanged for certificated securities, except in limited
circumstances. See Description of the Notes
Book-Entry Delivery and Form. |
6
Selected
Consolidated Financial Data and Other Data
The selected consolidated financial data and other data
presented below should be read in conjunction with our
consolidated financial statements, and the notes thereto, and
the section entitled Managements Discussion and
Analysis of Financial Condition and Results of Operations
included in our Annual Report on
Form 10-K
for the fiscal year ended February 28, 2009, which are
incorporated by reference in this prospectus. Our fiscal year
ends on the last Saturday in February. Our first quarter
consists of 16 weeks while the second, third and fourth
quarters each consist of 12 weeks, except for the fourth
quarter of fiscal 2009 which consisted of 13 weeks. Our
fiscal year ended February 28, 2009 consisted of
53 weeks, while each of our fiscal years ended
February 24, 2007 and February 23, 2008 consisted of
52 weeks. The financial data presented below has been
derived from our audited consolidated financial statements.
Because of differences in the accounting calendars of New
Albertsons and SUPERVALU, the February 28, 2009 and
February 23, 2008 balance sheet data include the assets and
liabilities related to New Albertsons as of February 26,
2009 and February 21, 2008, respectively. Statement of
earnings data for fiscal 2007 include 38 weeks of operating
results of these acquired operations.
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Fiscal Year Ended
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February 28,
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February 23,
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February 24,
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2009
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2008
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2007
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(In millions, except ratios and per share amounts)
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Statement of earnings data:(1)
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Net sales
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$
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44,564
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$
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44,048
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$
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37,406
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Cost of sales
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34,451
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33,943
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29,267
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Selling and administrative expenses
|
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8,746
|
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8,421
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6,834
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Goodwill and intangible asset impairment charges(2)
|
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3,524
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Operating earnings (loss)(3)
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(2,157
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)
|
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1,684
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1,305
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Interest expense, net
|
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|
622
|
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|
|
707
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558
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Earnings (loss) before income taxes
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(2,779
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)
|
|
|
977
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|
|
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747
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Income tax provision
|
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76
|
|
|
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384
|
|
|
|
295
|
|
Net earnings (loss)
|
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(2,855
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)
|
|
|
593
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|
|
|
452
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Net earnings (loss) per share basic
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$
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(13.51
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)
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$
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2.80
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$
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2.38
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Net earnings (loss) per share diluted
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$
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(13.51
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)
|
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$
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2.76
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$
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2.32
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Weighted average shares outstanding basic
|
|
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211
|
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|
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211
|
|
|
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189
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Weighted average shares outstanding diluted
|
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211
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|
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215
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|
|
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196
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Balance sheet data (at period end):(1)
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Cash and cash equivalents
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$
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240
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$
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243
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$
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285
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Inventories (FIFO)(4)
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2,967
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2,956
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2,927
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Working capital(4)
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(109
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)
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(280
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)
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(67
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)
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Property, plant and equipment, net
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7,528
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7,533
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8,415
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Total assets
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17,604
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21,062
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21,702
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Debt and capital lease obligations
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8,484
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8,833
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9,478
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Stockholders equity
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2,581
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5,953
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5,306
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Other data:(1)
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Depreciation and amortization
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$
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1,057
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$
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1,017
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$
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879
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Capital expenditures(5)
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$
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1,212
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$
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1,227
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$
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910
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Debt to capital ratio(6)
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76.7
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%
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59.7
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%
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64.1
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%
|
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(1) |
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Fiscal year 2007 information presented above includes results of
our acquisition of the core supermarket businesses formerly
owned by Albertsons beginning June 2, 2006, as well as the
assets and liabilities of these acquired operations as of the
end of fiscal year 2007. |
7
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(2) |
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Consistent with Statement of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets,
we recorded goodwill and intangible asset impairment charges of
$3,524 before tax ($3,326 after tax, or $15.71 per diluted
share) in fiscal year 2009. |
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(3) |
|
Operating loss for the year ended February 28, 2009
included $3,524 of goodwill and intangible asset impairment
charges, $200 of charges related primarily to closure of
non-strategic stores, $24 of settlement costs related to a
pre-acquisition Albertsons litigation matter and $14 of one-time
acquisition-related costs. Operating earnings for the year ended
February 23, 2008 included $73 of one-time
acquisition-related costs. Operating earnings for the year ended
February 24, 2007 included $65 of one-time
acquisition-related costs and $26 of charges related to the
disposal of 18 Scotts banner stores. |
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(4) |
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Inventories (FIFO) and working capital are calculated after
adding back the LIFO reserve. The LIFO reserve for each year is
as follows: $258 for fiscal year 2009, $180 for fiscal year 2008
and $178 for fiscal year 2007. |
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(5) |
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Capital expenditures include fixed asset additions and capital
leases. |
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(6) |
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The debt to capital ratio is calculated as debt and capital
lease obligations divided by the sum of debt and capital lease
obligations and stockholders
equity. |
Ratio of
Earnings to Fixed Charges
The following table shows our ratios of earnings to fixed
charges for the periods indicated. Our fiscal year ended
February 28, 2009 consisted of 53 weeks, while each of
our fiscal years ended February 23, 2008, February 24,
2007, February 25, 2006 and February 26, 2005
consisted of 52 weeks.
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Fiscal Year Ended
|
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February 28,
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February 23,
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February 24,
|
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February 25,
|
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February 26,
|
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2009
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2008
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2007
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2006
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2005
|
|
Deficiency of Earnings to Fixed Charges (in millions)(1)
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$
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2,779
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Ratio of Earnings to Fixed Charges
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2.08
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2.00
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2.82
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4.30
|
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(1) |
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Our loss was insufficient to cover fixed charges due to our
recording non-cash goodwill and intangible asset impairment
charges of approximately $3.5 billion on a pre-tax basis. |
For purposes of these ratios, earnings consist of earnings from
operations before income taxes, adjusted for the portion of
fixed charges deducted from those earnings. Fixed charges
consist of interest on indebtedness (including capital lease
obligations), amortization of debt expense and the portion of
interest expense on operating leases we believe to be
representative of the interest factor.
8
RISK
FACTORS
Investing in the notes involves a high degree of risk. In
addition, our business faces significant risks. The risks
described below may not be the only risks we face. Additional
risks that we do not yet know of or that we currently think are
immaterial may also impair our business operations. You should
carefully consider the following risk factors and all other
information contained or incorporated by reference in this
prospectus before making an investment decision. If any of the
events or circumstances described in the following risks
actually occur, our business, financial condition or results of
operations could suffer, our ability to pay interest on the
notes when due or to repay the notes at maturity could be
adversely affected, and the trading price of the notes could
decline substantially.
Risks
Related to the Business
General
economic conditions, which are largely out of our control, may
adversely affect our financial condition and results of
operations.
The retail food and supply chain services businesses are
sensitive to changes in general economic conditions, both
nationally and locally. Recessionary economic cycles, higher
interest rates, higher fuel and other energy costs, inflation,
increases in commodity prices, higher levels of unemployment,
higher consumer debt levels, higher tax rates and other changes
in tax laws or other economic factors that may affect consumer
spending or buying habits may adversely affect the demand for
products we sell in our stores or distribute to our independent
retail customers. The United States economy and financial
markets have declined and experienced volatility due to
uncertainties related to energy prices, availability of credit,
difficulties in the banking and financial services sectors, the
decline in the housing market, diminished market liquidity,
falling consumer confidence and rising unemployment rates. As a
result, consumers are more cautious. This may lead to additional
reductions in consumer spending, to consumers trading down to a
less expensive mix of products or to consumers trading down to
discounters for grocery items, all of which may affect our
financial condition and results of operations. We are unable to
predict when the economy will improve. If the economy does not
improve, our business, results of operations and financial
condition may be adversely affected.
Furthermore, we may experience additional reductions in traffic
in our own stores or stores of independent retail customers that
we supply, or limitations on the prices we can charge for our
products, either of which may reduce our sales and profit
margins and have a material adverse affect on our financial
condition and results of operations. Also, economic factors such
as those listed above and increased transportation costs,
inflation, higher costs of labor, insurance and healthcare, and
changes in other laws and regulations may increase our cost of
sales and our operating, selling, general and administrative
expenses, and otherwise adversely affect the financial condition
and results of operations of the retail food and supply chain
services businesses.
We
face a high level of competition in the retail food and supply
chain services businesses, which may adversely affect our
financial condition and results of operations.
Our retail food business faces competition for customers,
employees, store sites, products and in other important areas
from traditional grocery retailers, including regional and
national chains and independent food store operators, and
non-traditional retailers, such as supercenters, membership
warehouse clubs, combination food and pharmacy stores, limited
assortment food stores, specialty supermarkets, drug stores,
discount stores, dollar stores, convenience stores and
restaurants. Our ability to attract customers in this business
is dependent, in large part, upon a combination of product
price, quality, assortment, brand recognition, store location,
in-store marketing and design, promotional strategies and
continued growth into new markets. In addition, the nature and
extent to which our competitors implement various pricing and
promotional activities in response to increasing competition and
our response to these competitive actions, can adversely affect
profitability.
Our supply chain services business is primarily wholesale
distribution and includes a third-party logistics component. The
distribution component of our supply chain services business
competes with traditional grocery wholesalers on the basis of
product price, quality, assortment, schedule and reliability of
deliveries, service fees and distribution facility locations.
The third-party logistics component of our supply chain
9
services business competes nationwide in a highly fragmented
marketplace with a number of large international and domestic
companies and many smaller, regional companies on the basis of
warehousing and transportation logistics expertise, cost and the
ability to offer asset and non-asset based solutions and design
and manage customer supply chains. Competitive pressures on our
retail food and supply chain services businesses may cause us to
experience: (i) reductions in the prices at which we are
able to sell products at our retail locations or to our
independent retail customers, (ii) decreases in sales
volume due to increased difficulty in selling our products and
(iii) difficulty in attracting and retaining customers. Any
of these outcomes may adversely affect our financial condition
and results of operations.
In addition, the nature and extent of consolidation in the
retail food and food distribution industries may affect our
competitive position or that of our independent retail customers
in the markets we serve. Although the retail food industry as a
whole is highly fragmented, certain segments are currently
undergoing some consolidation, which may result in increased
competition and significantly alter the dynamics of the retail
food marketplace. Such consolidation may result in competitors
with greatly improved financial resources, improved access to
merchandise, greater market penetration and other improvements
in their competitive positions. Such business combinations may
result in the provision of a wider variety of products and
services at competitive prices by such consolidated companies,
which may adversely affect our financial condition and results
of operations.
We
have been subject to negative operating trends, which may
adversely affect our results of operations.
Our business has experienced negative operating trends,
including negative identical store sales, resulting from the
unprecedented decline in the economy and credit market turmoil
during fiscal 2009, which negatively impacted consumer
confidence and spending and pressured trading down
practices by customers. In addition, the operating trends were
impacted by lower margins resulting from certain ineffective
pricing and promotional efforts to address these trends.
Additional reductions in consumer spending, consumers trading
down to a less expensive mix of products and consumers trading
down to discounters for grocery items, all of which impacted our
results for fiscal 2009, have led to a continuation of these
negative operating trends, and as we begin fiscal 2010, will
continue to negatively impact our results. If our merchandising
and marketing initiatives do not work as planned or if these
negative operating trends continue or worsen, our business,
results of operations and financial condition would be adversely
affected.
Food
and drug safety concerns and related unfavorable publicity may
adversely affect our sales and results of
operations.
There is increasing governmental scrutiny and public awareness
regarding food and drug safety. We may be adversely affected if
consumers lose confidence in the safety and quality of our food
and drug products. Any events that give rise to actual or
potential food contamination, drug contamination or food-borne
illness may result in product liability claims and a loss of
consumer confidence. In addition, adverse publicity about these
types of concerns whether valid or not, may discourage consumers
from buying our products or cause production and delivery
disruptions, which may have an adverse effect on our sales and
results of operations.
Our
inability to successfully negotiate with labor unions or to
maintain good labor relations may lead to labor disputes and the
disruption of our businesses, which may adversely affect our
financial condition and results of operations.
A large number of our employees are unionized, and our
relationship with unions, including labor disputes or work
stoppages, may affect the sale and distribution of our products
and have an adverse impact on our financial condition and
results of operations. As of February 28, 2009, we are a
party to 266 collective bargaining agreements covering
approximately 110,000 of our employees, of which 47 covering
approximately 37,000 employees are scheduled to expire in
fiscal 2010. These expiring agreements cover approximately
34 percent of our union-affiliated employees. In addition,
during fiscal 2009, 62 collective bargaining agreements covering
approximately 4,500 employees expired without their terms
being renegotiated. Negotiations are expected to continue with
the bargaining units representing the employees subject to those
agreements. In future negotiations with labor unions, we expect
that, among other issues, rising healthcare,
10
pension and employee benefit costs will be important topics for
negotiation. There can be no assurance that we will be able to
negotiate the terms of any expiring or expired agreement in a
manner acceptable to us. Therefore, potential work disruptions
from labor disputes may result, which may disrupt our businesses
and adversely affect our financial condition and results of
operations.
Escalating
costs of providing employee benefits may adversely affect our
financial condition and results of operations.
We provide health benefits to and sponsor defined pension and
other post-retirement plans for substantially all employees not
participating in multi-employer health and pension plans. Our
costs to provide such benefits continue to increase annually. In
addition, we participate in various multi-employer health and
pension plans for a majority of our unionized employees, and we
are required to make contributions to these plans in amounts
established under collective bargaining agreements. The costs of
providing benefits through such plans have escalated rapidly in
recent years and contributions to these plans may continue to
create collective bargaining challenges. The amount of any
increase or decrease in our required contributions to these
multi-employer plans will depend upon many factors, including
the outcome of collective bargaining, actions taken by trustees
who manage the plans, government regulations, the actual return
on assets held in the plans and the potential payment of a
withdrawal liability if we choose to exit a market. Increases in
the costs of benefits under these plans coupled with adverse
stock market developments that have reduced the return on plan
assets have caused some multi-employer plans in which we
participate to be underfunded. The unfunded liabilities of these
plans may result in increased future payments by us and the
other participating employers, including costs that may arise
with respect to any potential litigation or that may cause the
acceleration of payments to fund any underfunded plan. Our risk
of such increased payments may be greater if any of the
participating employers in these underfunded plans withdraws
from the plan due to insolvency and is not able to contribute an
amount sufficient to fund the unfunded liabilities associated
with its participants of the plan. If we are unable to control
healthcare and pension costs, we may experience increased
operating costs, which may have a material adverse effect on our
financial condition and results of operations.
Our
inability to open and remodel a significant number of stores as
planned may have an adverse effect on our financial condition
and results of operations.
In fiscal 2010, pursuant to our 2010 capital plan, we expect to
complete 75 to 80 major store remodels, 30 to 40 minor store
remodels, three new combination and food stores and 50 to 60
limited assortment stores, including licensed stores. If, as a
result of labor relations issues, supply issues or environmental
and real estate delays, a significant portion of these capital
projects do not stay reasonably within the time and financial
budgets that we have forecasted, our financial condition and
results of operations may be adversely affected. Furthermore, we
cannot ensure that the new or remodeled stores will achieve
anticipated results. As a result, our inability to open and
remodel a significant number of stores as planned may have an
adverse effect on our financial condition and results of
operations.
If we
fail to realize the synergies from combining our businesses with
the businesses we acquired from Albertsons in a successful and
timely manner, it may have an adverse effect on our business,
financial condition and results of operations.
We may not be able to realize the synergies, business
opportunities and growth prospects anticipated in connection
with the acquisition. We may experience increased competition
that limits our ability to expand our business, we may not be
able to capitalize on expected business opportunities, including
retaining our current customers, assumptions underlying
estimates of expected cost savings may be inaccurate or general
industry and business conditions may deteriorate. In addition,
combining certain of our operations with these acquired
operations has required significant effort and expense.
Personnel have left and additional associates may be terminated
as part of the integration plan. Our management may have its
attention diverted as it continues to combine certain operations
of both companies. If these factors limit our ability to combine
such operations successfully or on a timely basis, our
expectations of future results of operations, including certain
cost savings and synergies expected to result from the
acquisition, may not be met. If such difficulties are
11
encountered or if such synergies, business opportunities and
growth prospects are not realized, it may have an adverse effect
on our business, financial condition and results of operations.
The
industries in which we operate have narrow profit margins, which
may adversely affect our business.
Profit margins in the grocery industry are very narrow. In order
to increase or maintain our profit margins, strategies are used
to reduce costs, such as productivity improvements, shrink
reduction, distribution center efficiencies, energy efficiency
programs and other similar strategies. Changes in product mix
also may negatively affect certain financial measures. If we are
unable to achieve forecasted cost reductions there may be an
adverse effect on our business.
If we
are unable to comply with governmental regulations or if there
are unfavorable changes in such government regulations, our
financial condition and results of operations may be adversely
affected.
Our businesses are subject to various federal, state and local
laws, regulations and administrative practices. These laws
require us to comply with numerous provisions regulating health
and sanitation standards, equal employment opportunity, minimum
wages and licensing for the sale of food, drugs and alcoholic
beverages. Our inability to timely obtain permits, comply with
government regulations or make capital expenditures required to
maintain compliance with governmental regulations may affect our
ability to open new stores or expand existing facilities, which
may adversely impact our business operations and prospects for
future growth. In addition, we cannot predict the nature of
future laws, regulations, interpretations or applications, nor
can we determine the effect that additional governmental
regulations or administrative orders, when and if promulgated,
or disparate federal, state and local regulatory schemes would
have on our future business. They may, however, impose
additional requirements or restrictions on the products we sell
or manner in which we operate our businesses. Any or all of such
requirements may have an adverse effect on our financial
condition and results of operations.
If the
number or severity of claims for which we are self-insured
increases, or we are required to accrue or pay additional
amounts because the claims prove to be more severe than our
recorded liabilities, our financial condition and results of
operations may be adversely affected.
We use a combination of insurance and self-insurance to provide
for potential liabilities for workers compensation,
automobile and general liability, property insurance and
employee healthcare benefits. We estimate the liabilities
associated with the risks retained by us, in part, by
considering historical claims experience, demographic and
severity factors and other actuarial assumptions which, by their
nature, are subject to a degree of variability. Any actuarial
projection of losses concerning workers compensation and
general and automobile liability is subject to a degree of
variability. Among the causes of this variability are
unpredictable external factors affecting future inflation rates,
discount rates, litigation trends, legal interpretations,
benefit level changes and actual claim settlement patterns.
Some of the many sources of uncertainty in our reserve estimates
include changes in benefit levels, medical fee schedules,
medical utilization guidelines, vocation rehabilitation and
apportionment. If the number or severity of claims for which we
are self-insured increases, or we are required to accrue or pay
additional amounts because the claims prove to be more severe
than our original assessments, our financial condition and
results of operations may be adversely affected.
Our policy is to discount our self-insurance liabilities at a
risk-free interest rate, which is appropriate based on our
ability to reliably estimate the amount and timing of cash
payments. If, in the future, we were to experience significant
volatility in the amount and timing of cash payments compared to
our earlier estimates, we would assess whether it is appropriate
to continue to discount these liabilities.
Litigation
may adversely affect our businesses, financial condition and
results of operations.
Our businesses are subject to the risk of litigation by
employees, consumers, suppliers, stockholders or others through
private actions, class actions, administrative proceedings,
regulatory actions or other litigation. The outcome of
litigation, particularly class action lawsuits and regulatory
actions, is difficult to assess or
12
quantify. Plaintiffs in these types of lawsuits may seek
recovery of very large or indeterminate amounts, and the
magnitude of the potential loss relating to such lawsuits may
remain unknown for substantial periods of time. The cost to
defend future litigation may be significant. There may also be
adverse publicity associated with litigation that may decrease
consumer confidence in our businesses, regardless of whether the
allegations are valid or whether we are ultimately found liable.
As a result, litigation may adversely affect our businesses,
financial condition and results of operations.
Difficulties
with our information technology systems may adversely affect our
results of operations.
We have complex information technology systems that are
important to the operation of our businesses. We may encounter
difficulties in developing new systems or maintaining and
upgrading existing systems. Such difficulties may lead to
significant expenses or losses due to disruption in business
operations and, as a result, may adversely affect our results of
operations.
Threats
or potential threats to security or the occurrence of a
widespread health epidemic may adversely affect our financial
condition and results of operations.
Our businesses may be severely impacted by wartime activities,
threats or acts of terror or a widespread regional, national or
global health epidemic, such as pandemic flu. Such activities,
threats or epidemics may adversely impact our businesses by
disrupting production and delivery of products to our stores or
to our independent retail customers, by affecting our ability to
appropriately staff our stores and by causing customers to avoid
public gathering places or otherwise change their shopping
behaviors.
Additionally, data theft, information espionage or other
criminal activity directed at the grocery or drug store
industry, the transportation industry, or computer or
communications systems may adversely affect our businesses by
causing us to implement costly security measures in recognition
of actual or potential threats, by requiring us to expend
significant time and expense developing, maintaining or
upgrading our information technology systems and by causing us
to incur significant costs to reimburse third parties for
damages. Such activities may also adversely affect our financial
condition and results of operations by reducing consumer
confidence in the marketplace and by modifying consumer spending
habits.
Severe
weather, natural disasters and adverse climate changes may
adversely affect our financial condition and results of
operations.
Severe weather conditions such as hurricanes, earthquakes or
tornadoes, as well as other natural disasters, in areas in which
we have stores or distribution facilities or from which we
obtain products may adversely affect our results of operations.
Such conditions may cause physical damage to our properties,
closure of one or more of our stores or distribution facilities,
lack of an adequate work force in a market, temporary disruption
in the supply of products, disruption in the transport of goods,
delays in the delivery of goods to our distribution centers or
stores and a reduction in the availability of products in our
stores. In addition, adverse climate conditions and adverse
weather patterns, such as drought or flood, that impact growing
conditions and the quantity and quality of crops yielded by food
producers may adversely affect the availability or cost of
certain products within the grocery supply chain. Any of these
factors may disrupt our businesses and adversely affect our
financial condition and results of operations.
Changes
in accounting standards may materially impact our financial
condition and results of operations.
Accounting principles generally accepted in the Unites States
and related accounting pronouncements, implementation
guidelines, and interpretations for many aspects of our
business, such as accounting for insurance and self-insurance,
inventories, goodwill and intangible assets, store closures,
leases, income taxes and stock-based compensation, are complex
and involve subjective judgments. Changes in these rules or
their interpretation may significantly change or add significant
volatility to our reported earnings without a comparable
underlying change in cash flow from operations. As a result,
changes in accounting standards may materially impact our
financial condition and results of operations.
13
An
impairment in the carrying value of our goodwill or other
intangible assets may adversely affect our financial condition
and results of operations.
We are required to annually test goodwill and intangible assets
with indefinite lives, including the goodwill associated with
past acquisitions and any future acquisitions, to determine if
impairment has occurred. Additionally, interim reviews must be
performed whenever events or changes in circumstances indicate
that impairment may have occurred. If the testing performed
indicates that impairment has occurred, we are required to
record a non-cash impairment charge for the difference between
the carrying value of the goodwill or other intangible assets
and the implied fair value of the goodwill or other intangible
assets in the period the determination is made. The testing of
goodwill and other intangible assets for impairment requires us
to make significant estimates about our future performance and
cash flows, as well as other assumptions. These estimates can be
affected by numerous factors, including changes in economic,
industry or market conditions, changes in business operations,
changes in competition or potential changes in our stock price
and market capitalization. Changes in these factors, or changes
in actual performance compared with estimates of our future
performance, may affect the fair value of goodwill or other
intangible assets, which may result in an impairment charge. We
cannot accurately predict the amount and timing of any
impairment of assets. Should the value of goodwill or other
intangible assets become impaired, there may be an adverse
effect on our financial condition and results of operations.
Risks
Related to the Notes
Our
substantial indebtedness and below investment grade credit
rating may adversely affect our financial condition and results
of operations and prevent us from fulfilling our obligations
under the notes.
We have, and after the offering, we will continue to have a
substantial amount of debt and a significantly lower debt
coverage ratio as compared to what we had before the
acquisition. In addition, as a result of the acquisition, our
debt no longer has an investment-grade rating. On
February 28, 2009, after giving pro forma effect to this
offering and the anticipated application of the net proceeds of
this offering, we would have had total outstanding indebtedness
of approximately $8.5 billion, including capital lease
obligations, $347 million face amount of letters of credit
outstanding, and approximately $1.1 billion of undrawn
commitments under our senior secured credit facilities. See
Use of Proceeds.
Our indebtedness and lower credit rating may:
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make it more difficult for us to satisfy our obligations with
respect to the notes;
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increase our vulnerability to general adverse economic and
industry conditions;
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require us to dedicate a substantial portion of our cash flow
from operations to the payment of principal of, and interest on,
our indebtedness, thereby reducing the availability of our cash
flow to fund working capital, capital expenditures,
acquisitions, development efforts and other general corporate
purposes;
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limit our ability to obtain, or increase the cost at which we
are able to obtain, additional financing to fund working
capital, capital expenditures, additional acquisitions or
general corporate requirements, particularly if the ratings
assigned to our debt securities by rating organizations were
revised downward;
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limit our flexibility in planning for, or reacting to, changes
in our business and changes in the industries we serve and the
industry in which we operate; and
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place us at a competitive disadvantage relative to our
competitors that have lower debt service obligations and
consequently, greater operating and financial flexibility.
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In addition, our ability to make scheduled payments or to
refinance our obligations with respect to our indebtedness,
including the notes, will depend upon our operating and
financial performance, which, in turn, is subject to prevailing
economic conditions and to financial, business and other factors
beyond our control. As a result, our substantial indebtedness
and below investment grade credit rating may increase our
borrowing costs, decrease our business flexibility and adversely
affect our financial condition and results of operations.
14
Furthermore, the turmoil in the financial markets, including the
bankruptcy or restructuring of certain financial institutions,
may adversely impact the availability and cost of credit in the
future. There can be no assurances that government responses to
the disruptions in the financial markets will stabilize the
markets or increase liquidity and the availability of credit.
Restrictive
covenants in the agreements governing our debt may limit our
operating and financial flexibility.
Our senior secured credit facilities and, to a more limited
extent, the indenture governing the notes and certain of our
other existing indebtedness, such as certain series of notes
that are currently outstanding, contain a number of restrictive
covenants that impose significant operating and financial
covenants on us and certain subsidiaries, including restrictions
on our ability to:
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incur additional debt and provide guarantees;
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engage in certain transactions with affiliates;
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create or permit certain liens;
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engage in sale and leaseback transactions;
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make certain asset sales;
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create or permit restrictions on the ability of our restricted
subsidiaries to pay dividends or make other
distributions; and
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consolidate, merge or transfer all or substantially all of our
assets and the assets of our subsidiaries on a consolidated
basis.
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Our senior secured credit facilities also require us to maintain
certain financial ratios. Complying with these covenants and
financial ratios, as well as those that may be contained in any
agreements governing our future indebtedness, may impair our
ability to finance our operations or capital needs or to take
advantage of other favorable business opportunities. They may
also limit our ability to pay interest or principal on the
notes. Our ability to comply with these restrictive covenants
and financial ratios will depend on our future performance,
which may be affected by events beyond our control. If we are
unable to comply with these covenants and are unable to obtain
waivers from our lenders or noteholders, we would be unable to
make additional borrowings under our senior secured credit
facilities, and our indebtedness under these facilities or other
agreements governing our indebtedness would be in default and
may be accelerated by our lenders or noteholders and may cause a
cross-default under our other indebtedness, including the notes.
If our indebtedness is accelerated, we may not be able to repay
our indebtedness or borrow sufficient funds to refinance it. In
addition, if we incur additional indebtedness in the future, we
may be subject to additional covenants, which may be more
restrictive than those that we are subject to now.
The
indenture governing the notes does not restrict our ability to
incur future indebtedness or complete other
transactions.
The indenture governing the notes does not contain any financial
or operating covenants or restrictions on the payment of
dividends, the incurrence of unsecured indebtedness or
transactions with affiliates, the repurchase of securities by us
or any of our subsidiaries or the issuance of securities by us
or our subsidiaries. We therefore may, subject to the
restrictions contained in our senior secured credit facilities
and the other agreements governing our indebtedness, incur
additional debt, including a certain amount of secured
indebtedness, that would be effectively senior to the notes to
the extent of the value of the assets securing such debt or the
amount of such indebtedness, whichever is less, or indebtedness
at the subsidiary level to which the notes would be structurally
subordinated. We have capacity under our senior secured credit
facilities to incur up to approximately $1.4 billion in
additional secured indebtedness, all of which is secured and
would effectively rank senior to the notes. To the extent that
additional indebtedness ranks in right of payment ahead of the
notes, in the event of a liquidation or insolvency or
acceleration of our indebtedness, we may not be able to repay
the notes after repayment of such indebtedness.
15
The
notes are structurally subordinated. This may affect your
ability to receive payments on the notes.
The notes are obligations exclusively of SUPERVALU. The notes
will not initially be guaranteed by any of our subsidiaries and
our subsidiaries will not be required to guarantee the notes in
the future, except in very limited circumstances. We currently
conduct a significant portion of our operations through our
subsidiaries and our subsidiaries have significant liabilities.
As of February 28, 2009, our subsidiaries had approximately
$4.3 billion of indebtedness. In addition, we may conduct
additional operations through our subsidiaries in the future
and, accordingly, our subsidiaries liabilities will
increase. Our cash flow and our ability to service our debt,
including the notes, therefore, partially depends upon the
earnings of our subsidiaries, and we depend on the distribution
of earnings, loans or other payments by those subsidiaries to us.
Our subsidiaries are separate and distinct legal entities. In
the absence of a subsidiary guarantee, our subsidiaries have no
obligation to pay any amounts due on the notes or, subject to
existing or future contractual obligations between us and our
subsidiaries, to provide us with funds for our payment
obligations, whether by dividends, distributions, loans or other
payments. In addition, any payment of dividends, distributions,
loans or advances by our subsidiaries to us may be subject to
statutory or contractual restrictions and taxes on
distributions. Payments to us by our subsidiaries will also be
contingent upon our subsidiaries earnings and business
considerations.
Our right to receive any assets of any of our subsidiaries upon
liquidation or reorganization, and, as a result, the right of
the holders of the notes to participate in those assets, will be
effectively subordinated to the claims of that subsidiarys
creditors, including trade creditors. The notes do not restrict
us or our subsidiaries from incurring additional liabilities,
except in the limited circumstances described under
Description of the Notes. In addition, even if we
were a creditor of any of our subsidiaries, our rights as a
creditor would be subordinated in right of payment to any
security interest in the assets of our subsidiaries and any
indebtedness of our subsidiaries senior to indebtedness held by
us.
To
service our indebtedness, we will require a significant amount
of cash. Our ability to generate cash depends on many factors
beyond our control.
Our ability to make payments on and to refinance our
indebtedness, including these notes, and to fund planned capital
expenditures, will depend on our ability to generate cash in the
future. This, to a certain extent, is subject to general
economic, financial, competitive, legislative, regulatory and
other factors that are beyond our control.
We cannot assure you that our business will generate sufficient
cash flow from operations or that future borrowings will be
available to us under our senior secured credit facilities in an
amount sufficient to enable us to pay our indebtedness,
including the notes, or to fund our other liquidity needs. We
may need to refinance all or a portion of our indebtedness,
including the notes, on or before maturity. We cannot assure you
that we will be able to refinance any of our indebtedness,
including our senior secured credit facilities and the notes, on
commercially reasonable terms or at all.
We may
not have the ability to raise the funds necessary to finance the
change of control offer required by the notes.
Upon the occurrence of certain specific kinds of change of
control events, we will be required to offer to repurchase all
outstanding notes at 101% of the principal amount thereof plus
accrued and unpaid interest and additional interest, if any, to
the date of repurchase. However, it is possible that we will not
have sufficient funds at the time of the change of control to
make the required repurchase of notes or any other outstanding
debt securities that we would be required to repurchase, or that
restrictions in our senior secured credit facilities will not
allow such repurchases. In addition, certain important corporate
events that would increase the level of our indebtedness, would
not constitute a Change of Control under the notes.
See Description of the Notes Repurchase at
Holders Option upon a Change of Control.
The agreement governing our senior secured credit facilities
contains provisions that provide that a change in control
constitutes an event of default and future credit agreements may
also prohibit the
16
redemption or repurchase of the notes. If a change of control
occurs at a time when we are prohibited from purchasing the
notes, we could seek the consent of our lenders to purchase the
notes or could attempt to refinance this debt. If we do not
obtain consent, we could not purchase the notes. Our failure to
purchase tendered notes would constitute an event of default
under the indenture, which might constitute a default under the
terms of our other debt.
A
decline in our credit ratings or changes in the financial and
credit markets may adversely affect the market prices of the
notes.
The future market prices of the notes will be affected by a
number of factors, including:
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our ratings with major credit rating agencies;
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the prevailing interest rates being paid by companies similar to
us; and
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the overall condition of the financial and credit markets.
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The financial and credit markets have recently experienced
significant turmoil. Additionally, the condition of the
financial and credit markets and prevailing interest rates have
fluctuated in the past and are likely to fluctuate in the
future. Further disruptions in the financial and credit markets
and future fluctuations in these markets and prevailing interest
rates may have an adverse effect on the prices of the notes.
Additionally, the credit ratings assigned to us and the notes
are limited in scope, and do not address all material risks
relating to an investment in the notes, but rather reflect only
the view of each rating agency at the time the rating is issued.
An explanation of the significance of such rating may be
obtained from such rating agency. Credit rating agencies
continually revise their ratings for companies that they follow,
including us. There can be no assurance that the credit ratings
on us or the notes will remain in effect for any given period of
time or that a rating will not be lowered, suspended or
withdrawn entirely by the applicable rating agencies, if, in
such rating agencys judgment, circumstances so warrant.
Agency credit ratings are not a recommendation to buy, sell or
hold any security. Each agencys rating should be evaluated
independently of any other agencys rating. Actual or
anticipated changes or downgrades in our credit ratings,
including any announcement that our ratings are under further
review for a downgrade, may affect the market value of the notes
and increase our corporate borrowing costs.
An
active trading market for the notes may not
develop.
Prior to the offering, there was no existing trading market for
the notes. We do not intend to apply for listing of the notes on
any securities exchange or for quotation of the notes in any
dealer quotation system. Although the underwriters have informed
us that they currently intend to make a market in the notes
after we complete the offering, they have no obligation to do so
and may discontinue making a market at any time without notice.
If an active trading market does not develop or is not
maintained, the market price and liquidity of the notes may be
adversely affected. In that case, you may not be able to sell
your notes at a particular time or you may not be able to sell
your notes at a favorable price. The liquidity of any market for
the notes will depend on a number of factors, including:
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the number of holders of the notes;
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our ratings published by major credit rating agencies;
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our financial performance or the perception thereof;
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the market for similar securities;
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the price, and volatility in the price, of our shares of common
stock;
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general market conditions;
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the interest of securities dealers in making a market in the
notes; and
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17
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prevailing interest rates.
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We cannot assure you that an active market for the notes will
develop or, if developed, that it will continue.
The
notes may be issued with original issue discount, in which case
you would be required to accrue income before you receive cash
attributable to that original issue discount.
The notes may be issued with original issue discount (OID)
within the meaning of section 1273 of the Internal Revenue
Code of 1986, as amended. In the event the notes are issued with
OID, if you are an individual or entity subject to
U.S. tax, you generally will be required to accrue interest
in the form of OID on a current basis in respect of the notes,
include such accrued interest in income and pay tax accordingly,
even before you receive cash attributable to that income.
For further discussion of the computation and reporting of OID,
see Material U.S. Federal Income Tax
Considerations.
USE OF
PROCEEDS
We estimate that the net proceeds from the offering of the notes
will be approximately $466.2 million after deducting the
underwriting discount and estimated offering expenses.
We intend to use the net proceeds of this offering to fund all
or a portion of the purchase price of the SUPERVALU 2009 notes,
the Albertsons 2009 notes and the Albertsons 2010
notes tendered and accepted by us for purchase in our offer to
purchase for cash an aggregate principal amount of up to
$700.0 million of these notes, which we commenced on
April 30, 2009, including the payment of accrued interest
and any applicable early tender premium, as described under
Summary Tender Offer. To the extent the
proceeds from this offering are insufficient to pay for all of
the notes tendered in our tender offer, we will pay for the
remainder of the purchase price for the notes purchased in the
tender offer from borrowings under our senior secured credit
facilities. To the extent that there are net proceeds remaining,
or if the tender offer is not consummated, we intend to use the
net proceeds for general corporate purposes, including the
repayment of debt, whether at maturity, through open market
purchases, privately negotiated transactions or otherwise.
As of February 28, 2009, $350.0 million aggregate
principal amount of the SUPERVALU 2009 notes,
$350.0 million aggregate principal amount of the
Albertsons 2009 notes and $275.0 million aggregate
principal amount of the Albertsons 2010 notes were
outstanding. The total consideration payable for notes tendered
and accepted by us for purchase in the tender offer will be
$1,010.00 per $1,000 principal amount of the SUPERVALU 2009
notes, $1,008.75 per $1,000 principal amount of the
Albertsons 2009 notes and $1,025.00 per $1,000
principal amount of the Albertsons 2010 notes, which total
consideration for each series includes an early tender premium
of $30.00 per $1,000 principal amount of notes tendered and not
withdrawn prior to 12:01 a.m., New York City time, on
May 14, 2009. Additionally, accrued and unpaid interest
will be paid on any notes of each series accepted for purchase
to the settlement date. The amount of each series of notes
purchased in the tender offer will be subject to the tender cap
and the acceptance priority levels described under
Summary Tender Offer.
Pending final use, we may invest the net proceeds from this
offering in short-term, investment grade, interest-bearing
securities.
18
CAPITALIZATION
The following table sets forth our cash and cash equivalents and
capitalization as of February 28, 2009:
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on an actual basis; and
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on an as adjusted basis to give effect to the issue and sale of
$500.0 million aggregate principal amount of notes offered
by this prospectus and the application of the net proceeds from
the notes together with approximately $255.1 million of
borrowings under our senior secured credit facilities to fund
the purchase of an aggregate principal amount of
$700.0 million of the SUPERVALU 2009 notes, the
Albertsons 2009 notes and the Albertsons 2010 notes
in our tender offer described under Summary
Tender Offer. This table should be read in conjunction
with our consolidated financial statements and related notes
incorporated by reference into this prospectus. The amounts for
each individual line item reflect the face amount of the debt
issued before the adjustment for purchase accounting, if
applicable, with respect to the acquisition. The due date in
each line item refers to the calendar year in which the debt
matures.
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As of February 28,
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2009
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As
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Actual
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Adjusted
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(In millions, except par value data)
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Cash and cash equivalents
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$
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240
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$
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240
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Long-term debt, including current portion:
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Senior secured credit facilities:
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1.32% current Variable rate note due 2011
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$
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506
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$
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506
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1.70% current Variable rate note due 2012
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1,116
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1,116
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Revolving credit facility
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298
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|
553
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7.50% Notes due 2011
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700
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700
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7.45% Debentures due 2029
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650
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650
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7.50% Notes due 2014
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500
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500
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8.00% Debentures due 2031
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400
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400
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7.875% Notes due 2009
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350
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(1)(2)
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6.95% Notes due 2009
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350
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(1)(2)
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7.50% Notes due 2012
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300
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300
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8.35% Notes due 2010
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275
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275
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(1)(3)
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8.00% Debentures due 2026
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272
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272
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8.70% Debentures due 2030
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225
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|
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225
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7.75% Debentures due 2026
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200
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200
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7.25% Notes due 2013
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200
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200
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7.50% Debentures due 2037
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191
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191
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7.90% Debentures due 2017
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96
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96
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Notes offered hereby
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500
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Medium Term Notes due
2009-2028
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512
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512
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Accounts Receivable Securitization Facility
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120
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120
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Other
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97
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97
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Fair value adjustment for purchase accounting
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(208
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(208
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)
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Capital lease obligations
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1,334
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1,334
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Total debt and capital lease obligations
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$
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8,484
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$
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8,539
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19
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As of February 28,
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2009
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As
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Actual
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Adjusted
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(In millions, except par value data)
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Stockholders equity:
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Common stock, $1.00 par value; 400 shares authorized;
230 issued and outstanding at February 28, 2009
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230
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230
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Additional paid-in capital
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2,853
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2,853
|
|
Retained earnings
|
|
|
542
|
|
|
|
542
|
|
Treasury stock, at cost, 18 shares
|
|
|
(541
|
)
|
|
|
(541
|
)
|
Accumulated other comprehensive loss
|
|
|
(503
|
)
|
|
|
(503
|
)
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
$
|
2,581
|
|
|
$
|
2,581
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
11,065
|
|
|
$
|
11,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents debt securities that are the subject of our tender
offer. |
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(2) |
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Assumes that we will purchase the entire aggregate principal
amount outstanding of these debt securities in our tender offer
and pay accrued interest and any applicable early tender premium
with respect thereto. |
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(3) |
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Assumes that we will not purchase any of these debt securities
in our tender offer. To the extent any of these debt securities
are purchased in our tender offer, the amount of additional
borrowings under our senior secured credit facilities will
differ from the amount reflected in this table. |
20
DESCRIPTION
OF THE NOTES
We will issue the notes under an indenture dated as of
July 1, 1987, (as supplemented, the Indenture) between us
and Deutsche Bank Trust Company Americas, formerly known as
Bankers Trust Company, as trustee. We have summarized the
material provisions of the notes below. The following
description is not complete and is subject to, and qualified by
reference to, all of the provisions of the Indenture and the
notes, which we urge you to read because they define your rights
as a note holder. Copies of the Indenture and the form of note
are available from us upon request. See Incorporation Of
Certain Documents by Reference.
Capitalized terms used in this Description of the
Notes section that are not defined in this prospectus have
the meanings given to them in the Indenture or the notes. As
used in this Description of the Notes section, the
words we, us and our refer
only to SUPERVALU INC. and do not include any of our current or
future Subsidiaries.
General
The notes will initially be issued in an aggregate principal
amount of $500,000,000. The Indenture does not limit the
aggregate principal amount of debt securities that we may issue
and we may, without the consent of the existing holders of
notes, issue additional notes (the Additional Notes) having the
same ranking and the same interest rate, maturity and other
terms as the notes. Any Additional Notes having such similar
terms, together with the notes, will constitute a single series
of notes under the Indenture.
The notes will mature on May 1, 2016 unless earlier
redeemed or repurchased. The notes will be issued in book-entry
form. The notes will be represented by global notes and will be
issued only in fully registered form without coupons and only in
minimum denominations of $1,000 and integral multiples of $1,000
in excess thereof. The global notes will be deposited with DTC.
Book-entry interests will be shown on, and transfers thereof
will be effected only through, records maintained in book-entry
form by DTC and its participants. See Form,
Denomination and Registration and Global
Notes and Book-Entry System.
We may redeem all or a part of the notes at any time or from
time to time at our option upon the terms set forth under
Optional Redemption. We are also
obligated to make an offer to each holder of notes to repurchase
all or part of the notes held by such holder in connection with
a Change of Control upon the terms set forth under
Repurchase at Holders Option upon a
Change of Control.
In some circumstances, we may elect to discharge our obligations
on the notes through defeasance or covenant defeasance. See
Defeasance Provisions Defeasance
and Discharge below.
Ranking
The notes will be our general unsecured obligations. The notes
will rank:
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equal in right of payment to all of our other existing and
future senior unsecured indebtedness;
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senior in right of payment to all of our future subordinated
indebtedness; and
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effectively subordinated in right of payment to all of our
Subsidiaries obligations, including the guarantees of our
senior secured credit facilities, and subordinated in right of
payment to our secured obligations, to the extent of the assets
securing such obligations, including up to $4.0 billion of
secured indebtedness that may be incurred under our senior
secured credit facilities.
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As of February 28, 2009, we had approximately
$2.1 billion of secured indebtedness outstanding and no
subordinated indebtedness, and we and our Subsidiaries had
approximately $5.3 billion of unsecured senior indebtedness
outstanding, of which approximately $4.3 billion was
indebtedness of our Subsidiaries (excluding the guarantees of
our senior secured credit facilities and other intercompany
liabilities and capitalized leases of $1.3 billion).
Unless otherwise described below under
Repurchase at Holders Option upon a
Change of Control, Certain
Covenants Restrictions on Liens and
Consolidation, Merger and Sale of
Assets, the Indenture does not contain any provisions that
would limit our ability or the ability of our Subsidiaries to
21
incur indebtedness or that would afford holders of the notes
protection in the event of a sudden and significant decline in
our credit quality or a takeover, recapitalization or highly
leveraged similar transaction involving us. Accordingly, we
could in the future enter into transactions that could increase
the amount of our or our Subsidiaries indebtedness
outstanding at that time or otherwise affect our capital
structure or credit rating.
Interest
Each note will bear interest at the rate
of % per year from the issue date
or from the most recent date on which interest has been paid or
provided for.
Interest is payable semi-annually in arrears on May 1 and
November 1 of each year (each, an interest payment date),
commencing on November 1, 2009, to holders of record on
April 15 and October 15, as the case may be (each, a record
date), immediately preceding such interest payment date. The
amount of interest payable will be computed on the basis of a
360-day year
consisting of twelve
30-day
months. If any date on which interest is payable on the notes is
not a Business Day, then payment of the interest payable on that
date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any
delay).
Methods
of Receiving Payments on the Notes
If a Holder has given wire transfer instructions to us for an
account maintained by the Holder with a bank located in the
United States, we will pay all principal, interest and premium,
if any, on that Holders notes in accordance with those
instructions. All other payments on notes will be made at the
office or agency of the Paying Agent and Security Registrar
within the City and State of New York, unless we elect to make
interest payments by check mailed to the Holders at their
addresses set forth in the register of Holders.
Paying
Agent and Security Registrar for the Notes
The trustee will initially act as Paying Agent and Security
Registrar. We may change the Paying Agent or Security Registrar
without prior notice to the Holders, and we or any of our
Subsidiaries may act as Paying Agent or Security Registrar.
Transfer
and Exchange
A Holder may transfer or exchange notes in accordance with the
Indenture. The Security Registrar and the trustee may require a
Holder, among other things, to furnish appropriate endorsements
and transfer documents and we may require a Holder to pay any
taxes and fees required by law or permitted by the Indenture. We
are not required to transfer or exchange any note or any portion
of a note that has been selected for redemption. Also, we are
not required to transfer or exchange any note for a period of
15 days before a selection of notes to be redeemed.
The Holder of a note will be treated as the owner of the note
for all purposes.
Optional
Redemption
As explained below, we may redeem the notes before they mature.
This means that we may repay them early. Other than as described
under Repurchase at Holders Option upon
a Change of Control, Holders have no right to require us
to redeem any of the notes.
The notes will be redeemable in whole at any time or in part
from time to time, at our option, at a redemption price equal to
the greater of:
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100% of the principal amount of the notes to be redeemed; or
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as determined by an Independent Investment Banker, the sum of
the present values of the remaining scheduled payments of
principal and interest on the notes to be redeemed (exclusive of
interest accrued to the date of redemption) discounted to the
date of redemption on a semi-annual basis (assuming a
360-day year
consisting of twelve
30-day
months) at the then-current Treasury Rate plus 50 basis
points.
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22
In each case, we will pay accrued and unpaid interest on the
principal amount being redeemed to the date of redemption. In
connection with such optional redemption, the following defined
terms apply:
Comparable Treasury Issue means the United
States Treasury security selected by an Independent Investment
Banker as having a maturity comparable to the remaining term
(Remaining Life) of the notes 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 Life.
Comparable Treasury Price means, with respect
to any redemption date, (1) the average of the Reference
Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest Reference Treasury Dealer
Quotations, or (2) if the trustee obtains fewer than four
such Reference Treasury Dealer Quotations, the average of all
such quotations.
Independent Investment Banker means one of
the Reference Treasury Dealers appointed by us.
Reference Treasury Dealer means each of
Credit Suisse Securities (USA) LLC, Banc of America Securities
Inc., Citigroup Global Markets Inc. and RBS Securities Inc. and
their respective successors and one other nationally recognized
investment banking firm that is a primary U.S. Government
securities dealer in the United States (a Primary Treasury
Dealer) which we specify from time to time, except that if
any of the foregoing ceases to be a Primary Treasury Dealer, we
are required to designate as a substitute another nationally
recognized investment banking firm that is a Primary Treasury
Dealer.
Reference Treasury Dealer Quotations means,
with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the trustee, 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 such Reference Treasury
Dealer as of 5:00 p.m., in the City of New York, on the
third business day preceding such redemption date.
Treasury Rate means, with respect to any
redemption date, the rate per year equal to: (1) the yield,
under the heading which represents the average for the
immediately preceding week, appearing in the most recently
published statistical release designated H.15(519)
or any successor publication which is published weekly by the
Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury
securities adjusted to constant maturity under the caption
Treasury Constant Maturities, for the maturity
corresponding to the Comparable Treasury Issue; provided that,
if no maturity is within three months before or after the
Remaining Life of the notes to be redeemed, yields for the two
published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined and the Treasury
Rate shall be interpolated or extrapolated from those yields on
a straight-line basis, rounding to the nearest month; or
(2) if such release (or any successor release) is not
published during the week preceding the calculation date or does
not contain such yields, the rate per year equal to the
semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such
redemption date. The Treasury Rate shall be calculated on the
third business day preceding the redemption date.
No notes of $1,000 or less will be redeemed in part. Notices of
redemption will be mailed by first class mail at least 30 but
not more than 60 days before the redemption date to each
Holder of notes to be redeemed at its registered address. The
notice of redemption for the notes will state, among other
things, the amount of notes to be redeemed, the redemption date,
the redemption price and the place or places that payment will
be made upon presentation and surrender of notes to be redeemed.
Notices of redemption may not be conditional.
If less than all of the notes are to be redeemed at our option,
we will notify the trustee at least 45 days prior to the
redemption date, or any shorter period as may be satisfactory to
the trustee, of the aggregate principal amount of the notes to
be redeemed and the redemption date. The trustee will select, in
the manner as it deems fair and appropriate, the notes to be
redeemed. If any note is to be redeemed in part only, the
23
notice of redemption that relates to that note will state the
portion of the principal amount thereof to be redeemed. A new
note in principal amount equal to the unredeemed portion of the
original note will be issued in the name of the Holder thereof
upon cancellation of the original note.
Notes called for redemption become due on the date fixed for
redemption. Unless we default in payment of the redemption
price, on and after the redemption date, interest ceases to
accrue on notes or portions of them called for redemption even
if Holders do not collect their money.
Mandatory
Redemption and Sinking Fund
We are not required to make mandatory redemption or sinking fund
payments with respect to the notes.
Repurchase
at Holders Option upon a Change of Control
If a Change of Control shall occur at any time, then we will be
required to make an offer to each Holder of notes to purchase
such Holders notes in whole or in part (equal to $1,000,
or an integral multiple of $1,000 in excess thereof), at a
purchase price (the Change of Control Purchase Price) in cash in
an amount equal to 101% of the principal amount of such notes,
plus accrued and unpaid interest to, but not including, the date
of purchase (the Change of Control Purchase Date)
(subject to the rights of holders of record on relevant record
dates to receive interest due on an interest payment date),
pursuant to the offer mechanics described below (the
Change of Control Offer) and in accordance with the
other procedures set forth in the notes; provided, however,
that we shall not be obliged to repurchase notes as
described under this heading in the event and to the extent that
we have unconditionally exercised our right to redeem all of the
notes pursuant to the provisions described under
Optional Redemption.
Within 30 days of any Change of Control, we shall notify
the trustee thereof and give written notice of such Change of
Control to each Holder of notes by first-class mail, postage
prepaid, at such Holders address appearing in the security
register, stating, among other things:
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that a Change of Control has occurred and the date of such event;
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the circumstances and relevant facts regarding such Change of
Control;
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the Change of Control Purchase Price and the Change of Control
Purchase Date which shall be fixed by us on a Business Day no
earlier than 30 days nor later than 60 days from the
date such notice is mailed, or such later date as is necessary
to comply with requirements under the Securities Exchange Act of
1934, as amended (the Exchange Act), and any other applicable
securities laws and regulations;
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that any Note not tendered will continue to accrue interest and,
unless we default in payment of the Change of Control Purchase
Price, any notes accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Purchase Date; and
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certain other procedures that a Holder of notes must follow to
accept a Change of Control Offer or to withdraw such acceptance.
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A Change of Control Offer may be made in advance of a Change of
Control, and conditioned upon the occurrence of such Change of
Control, if a definitive agreement is in place for the Change of
Control at the time of making of the Change of Control Offer. To
the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of
the notes, we will comply with the applicable securities laws
and regulations and will not be deemed to have breached our
obligations under the Change of Control provisions of the notes
by virtue of such compliance.
Our ability to repurchase notes pursuant to a Change of Control
Offer may be limited by a number of factors. The occurrence of
certain of the events that constitute a Change of Control would
constitute an event of default under our senior secured credit
facilities. In addition, certain events that may constitute a
change of control under our senior secured credit facilities may
not constitute a Change of Control under the notes.
Our future Debt and the Debt of our Subsidiaries may also
contain prohibitions of certain events that would constitute a
Change of Control or require such Debt to be repurchased upon a
Change of Control.
24
Moreover, the exercise by the holders of the notes of their
right to require us to make an offer to repurchase the notes
could cause a default under such Debt, even if the Change of
Control itself does not, due to the financial effect of such
repurchase on us. Finally, our ability to pay cash to the
Holders of the notes upon a repurchase may be limited by our
then existing financial resources. There can be no assurance
that sufficient funds will be available when necessary to make
any required repurchases.
The Change of Control provisions described above will be
applicable whether or not any other provisions of the Indenture
or the notes are applicable. Except as described above with
respect to a Change of Control, the Indenture and the notes do
not contain provisions that permit the Holders of the notes to
require that we repurchase or redeem the notes or to make an
offer to repurchase or redeem the notes in the event of a
takeover, recapitalization or similar transaction. The existence
of a Holders right to require us to make an offer to
repurchase such Holders notes upon the occurrence of a
Change of Control may deter a third party from seeking to
acquire us or our Subsidiaries in a transaction that would
constitute a Change of Control.
We will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance
with the requirements set forth in the Indenture and the notes
applicable to a Change of Control Offer made by us and purchases
all notes validly tendered and not withdrawn under such Change
of Control Offer.
The trustee will promptly authenticate and deliver a new note or
notes equal in principal amount to any unpurchased portion of
notes surrendered, if any, to the Holder of notes in global form
or to each Holder of certificated notes; provided that each such
new note will be in a principal amount of $1,000, or an integral
multiple of $1,000 in excess thereof. We will publicly announce
the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Purchase Date.
The definition of Change of Control includes a
disposition of all or substantially all of our
assets. Although there is a limited body of case law
interpreting the phrase all or substantially all,
there is no precise established definition of the phrase under
applicable law. Accordingly, in certain circumstances there may
be a degree of uncertainty as to whether a particular
transaction would involve a disposition of all or
substantially all of our assets. As a result, it may be
unclear as to whether a Change of Control has occurred and
whether we must make an offer to repurchase the notes as
described above.
We will comply, to the extent applicable, with the applicable
tender offer rules, including
Rule 14e-1
under the Exchange Act, and any other applicable securities laws
or regulations in connection with a Change of Control Offer. To
the extent that the provisions of any applicable securities laws
or regulations conflict with the provisions of this covenant
(other than the obligation to make an offer pursuant to this
covenant), we will comply with the securities laws and
regulations and will not be deemed to have breached our
obligations described in this covenant by virtue thereof.
Guarantees
The notes will not be guaranteed by any of our Subsidiaries on
the date of original issuance. We may not permit any of our
Subsidiaries to guarantee, or become a co-obligor on, any of our
Debt Securities or the Debt Securities of any other of our
Subsidiaries, or issue any Debt Securities, unless such
Subsidiaries also fully and unconditionally guarantee the notes
on a senior basis; provided, that a Subsidiary shall not
be required to guarantee the notes with respect to Debt existing
on the Issue Date, so long as (1) the existing Debt is not
subsequently guaranteed by such Subsidiary, (2) the
existing Debt is not refinanced with Debt that is guaranteed by
such Subsidiary, except for Debt that is refinanced on
substantially similar terms as exist on the Issue Date,
including Guarantees of such Debt, or (3) such Subsidiary
does not subsequently become a co-obligor on the existing Debt.
Each Subsidiary delivering a Guarantee of the notes is referred
to as a Subsidiary Guarantor.
The obligations of the Subsidiary Guarantors under their Notes
Guarantees may be limited as necessary to recognize certain
defenses generally available to guarantors (including those that
relate to fraudulent conveyance or transfer, voidable
preference, financial assistance, corporate purpose, capital
maintenance or
25
similar laws, regulations or defenses affecting the rights of
creditors generally) or other considerations under applicable
law.
A Subsidiary Guarantors Notes Guarantee will be
automatically and unconditionally released:
(1) in connection with any sale or other disposition of all
or substantially all of the Capital Stock (or the shares of any
holding company of such Subsidiary Guarantor (other than us)) of
that Subsidiary Guarantor to a Person that is not (either before
or after giving effect to such transaction) us or a Subsidiary,
if the liability with respect to any Debt Securities in
connection with which the Notes Guarantee was executed, or would
have been executed pursuant to this covenant had a Notes
Guarantee not been executed previously, is also released;
(2) upon defeasance and discharge of the notes as provided
below under the caption Defeasance Provisions
Defeasance and Discharge; or
(3) so long as no Event of Default has occurred and is
continuing, such Subsidiary Guarantor is unconditionally
released and discharged from its liability with respect to all
such Debt Securities in connection with which such Notes
Guarantee was executed, or would have been executed pursuant to
the second preceding paragraph if such Subsidiary Guarantor had
not already executed a Notes Guarantee; or
(4) upon the full and final payment and performance of all
of our obligations under the notes.
Certain
Covenants
Restrictions
on Liens
The Indenture provides that we will not, and will not permit any
Domestic Subsidiary to, issue, assume or guarantee any Debt if
the Debt is secured by any mortgage, security interest, pledge,
lien or other encumbrance (Lien) upon any Operating
Property of ours or of any Domestic Subsidiary or upon any
shares of stock or indebtedness of any Domestic Subsidiary,
whether owned at the date of the Indenture or thereafter
acquired, without effectively securing the notes equally and
ratably with the Debt. This restriction does not apply to:
(1) Liens on any property acquired, constructed or improved
by us or any Domestic Subsidiary after July 1, 1987, which
are created or assumed contemporaneously with, or within
180 days after, that acquisition or completion of that
construction or improvement (or within six months thereafter
pursuant to a firm commitment for financing arrangements entered
into within the
180-day
period) to secure or provide for the payment of all or any part
of the purchase price or cost thereof incurred after
July 1, 1987, or Liens existing on property at the time of
its acquisition (including acquisition through merger or
consolidation); provided that such Liens were in existence prior
to the contemplation of such acquisition, merger or
consolidation and do not extend to any assets other than those
of the Person merged into or consolidated with us or the
Domestic Subsidiary;
(2) Liens on property of any corporation existing at the
time it becomes a Domestic Subsidiary;
(3) Liens to secure Debt of a Domestic Subsidiary to us or
to another Domestic Subsidiary;
(4) Liens in favor of governmental bodies to secure partial
progress, advance or other payments pursuant to any contract or
statute or to secure Debt incurred to finance the purchase price
or cost of constructing or improving the property subject to the
Liens; or
(5) Liens for extending, renewing or replacing Debt secured
by any Lien referred to in clauses (1) to (4), inclusive,
above or in this clause (5) or any Lien existing on the
date that notes were first issued under the Indenture, provided
that the principal amount of the new Debt secured by the
relevant Lien does not exceed the principal amount of the Debt
so secured at the time of the extension, renewal or replacement
and that the extension, renewal or replacement is limited to all
or a part of the property which secured the Lien so extended,
renewed or replaced and improvements on that property.
This restriction does not apply to the issuance, assumption or
guarantee by us or any Domestic Subsidiary of Debt subject to a
Lien which would otherwise be subject to the foregoing
restrictions up to an aggregate
26
amount which, together with all other secured Debt of us and our
Domestic Subsidiaries (not including secured Debt permitted
under the foregoing exceptions) and the Value of Sale and
Lease-back Transactions existing at that time (other than Sale
and Lease-back Transactions the proceeds of which have been
applied to the retirement of debt securities, including the
notes, or of Funded Debt or to the purchase of other Operating
Property, and other than Sale and Lease-back Transactions in
which the property involved would have been permitted to be
secured with a Lien under clause (1) above), does not
exceed the greater of $200,000,000 or 10% of Consolidated Net
Tangible Assets.
Restrictions
on Sale and Lease-back Transactions
The Indenture provides that we will not, and will not permit any
Domestic Subsidiary to, enter into any Sale and Lease-back
Transaction unless the net proceeds of the Sale and Lease-back
Transactions are at least equal to the fair value (as determined
by the Board of Directors or our President or any of our Vice
Presidents) of the Operating Property to be leased and either:
(1) we or the Domestic Subsidiary would be entitled to
incur Debt secured by a Lien on the property to be leased
without securing the notes or any other debt securities issued
under the Indenture, pursuant to clause (1) of the first
paragraph or pursuant to the second paragraph under
Certain Covenants Restrictions on
Liens; or
(2) the Value thereof would be an amount permitted under
the second paragraph under Certain
Covenants Restrictions on Liens; or
(3) we, within 120 days of the effective date of any
such arrangement (or in the case of (c) below, within six
months thereafter pursuant to a firm purchase commitment entered
into within such 120 day period), apply an amount equal to
the fair value (as so determined) of the Operating Property:
(a) to the redemption or repurchase of debt securities
issued under the Indenture;
(b) to the payment or other retirement of our Funded Debt
that ranks pari passu with the notes or of Funded Debt of a
Domestic Subsidiary (other than, in either case, Funded Debt
owned by us or a Domestic Subsidiary); or
(c) to the purchase of Operating Property (other than that
involved in the Sale and Lease-back Transaction).
Other than the above-described covenants, there are no covenants
or provisions contained in the Indenture which may afford
holders of notes protection in the event of a highly leveraged
transaction involving us.
Consolidation,
Merger and Sale of Assets
The Indenture provides that we may, without the consent of any
Holders of the notes, consolidate or merge with or into, or
convey, transfer or lease our property and assets substantially
as an entirety to, any Person, and any other Person may
consolidate or merge with or into us, or convey, transfer or
lease its property and assets substantially as an entirety to
us, so long as:
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the Person (if other than us) formed by the consolidation or
into which we are merged or which acquires or leases our assets
substantially as an entirety is organized and existing under the
laws of any United States jurisdiction and assumes our
obligations under the notes and the Indenture;
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after giving effect to the transaction, no Event of Default with
respect to the notes and any other debt securities issued under
the Indenture, and no event which, after notice or lapse of time
or both, would become an Event of Default with respect to the
notes and such debt securities shall have happened and be
continuing;
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if, as a result of that consolidation or merger or that
conveyance, transfer or lease, our properties or assets would
become subject to a mortgage, pledge, lien, security interest or
other encumbrance which would not be permitted by the Indenture,
we or the successor corporation, as the case may be,
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effectively secure the notes and the other debt securities
issued under the Indenture equally and ratably with (or prior
to) all indebtedness secured thereby; and
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certain other conditions are met.
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Events of
Default
Event of Default under the Indenture will
mean with respect to the notes, any of the following:
(1) default in the payment of principal or premium, if any,
on the notes when due;
(2) default in the payment of any interest on any notes
when due, continued for 30 days;
(3) there shall be a default in the performance or breach
of the provisions described in Consolidation,
Merger and Sale of Assets, or Repurchase
at Holders Option upon a Change of Control;
(4) default in the performance, or breach, of any of our
other covenants in the Indenture (other than a covenant included
in the indenture solely for the benefit of a series of debt
securities other than the notes), continued for 60 days
after written notice to us by the trustee or the Holders of at
least 10% in principal amount of the notes;
(5) there shall be a default under any mortgage, indenture
or instrument under which there may be incurred or by which
there may be secured or evidenced any Debt by us or any Domestic
Subsidiary whether such Debt now exists, or is created after the
Issue Date, if that default:
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is caused by a failure to make any payment when due at the final
maturity of such Debt (a Payment Default); or
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results in the acceleration of such Debt prior to its express
maturity,
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and, in each case, the amount of any such Debt, together with
the amount of any other such Debt under which there has been a
Payment Default or the maturity of which has been so
accelerated, aggregates $100.0 million or more;
(6) failure by us or any of our Domestic Subsidiaries to
pay final judgments (to the extent such judgments are not paid
or covered by insurance provided by a reputable carrier that has
the ability to perform and has acknowledged coverage in writing)
aggregating in excess of $100.0 million, which judgments
are not paid, discharged or stayed for a period of 60 days;
(7) any Notes Guarantee shall for any reason cease to be,
or shall for any reason be asserted in writing by any Subsidiary
Guarantor not to be, in full force and effect and enforceable in
accordance with its terms, except to the extent contemplated by
the Indenture and any such Notes Guarantee;
(8) certain events in bankruptcy, insolvency or
reorganization pertaining to us and our Significant Subsidiaries.
If an Event of Default described in clauses (1) through
(7) of the prior paragraph with respect to the notes occurs
and is continuing, either the trustee or the Holders of at least
25% in principal amount of the notes, by notice to us, may
declare the principal of all of the notes to be due and payable
immediately and upon such declaration the principal amount will
become immediately due and payable. If an Event of Default
described in clause (8) of the prior paragraph occurs and
is continuing, then all the notes shall ipso facto become and be
due and payable immediately in an amount equal to the principal
amount of the notes, together with accrued and unpaid interest
to the date the notes become due and payable, without any
declaration or other act on the part of the trustee or any
Holder. However, at any time after a declaration of acceleration
with respect to the notes has been made, but before a judgment
or decree based on the acceleration has been obtained, the
holders of a majority in principal amount of the notes may,
under certain circumstances, rescind and annul such
acceleration. For information as to waiver of defaults, see
Modification and Waiver.
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The Indenture provides that, subject to the duty of the trustee
during a default to act with the required standard of care, 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 those Holders offer to the trustee
reasonable indemnity. Subject to the provisions for
indemnification of the trustee, the Holders of a majority in
principal amount of the notes 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, with respect to the notes.
No Holder of the notes will have any right to institute any
proceeding related to the Indenture or for any remedy thereunder
unless:
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the Holder previously has given written notice to the trustee of
a continuing Event of Default with respect to the notes;
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the Holders of at least 25% in aggregate principal amount of the
notes have made written request to the trustee to institute the
proceeding as trustee, and offered to the trustee reasonable
indemnity against costs, expenses and liabilities incurred in
compliance with the request;
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in the
60-day
period following receipt of the notice, request and offer of
indemnity referred to above, the trustee has failed to initiate
the proceeding; and
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during the
60-day
period, the trustee has not received from the Holders of a
majority of the aggregate principal amount of the notes a
direction inconsistent with that request.
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Notwithstanding the provisions described in the immediately
preceding paragraph or any other provision of the Indenture, the
Holder of any note will have the right, which is absolute and
unconditional, to receive payment of the principal, premium, if
any, and interest on the notes and to institute suit for
enforcement of any payment, and that right will not be impaired
without the consent of that Holder.
We will be required to furnish to the trustee annually a
statement as to the performance by us of certain of our
obligations under the Indenture.
Defeasance
Provisions
Defeasance and Discharge. The Indenture
provides that we will be discharged from any and all obligations
in respect of the notes (except for certain obligations to
register the transfer or exchange of debt securities, replace
stolen, lost, destroyed or mutilated debt securities, maintain
offices or agencies and hold moneys for payment in trust) upon
the deposit with the trustee, in trust, of money, Government
Obligations or a combination thereof, which through the payment
of interest and principal thereof in accordance with their terms
will provide money in an amount sufficient to pay the principal,
premium, if any, and interest on, the notes on the Stated
Maturity of such payments in accordance with the terms of the
Indenture and the notes.
This type of discharge may only occur if there has been a change
in applicable federal law or we have received from, or there has
been published by, the Internal Revenue Service a ruling to the
effect that the Holders of the notes will not recognize income,
gain or loss for federal income tax purposes as a result of that
discharge and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have
been the case if the discharge had not occurred. In addition,
this type of discharge may only occur so long as no Event of
Default or event which, with notice or lapse of time, would
become an Event of Default with respect to the notes occurs
during the period ending on the 91st day after the cash or
Government Obligations are deposited in trust and other
conditions specified in the Indenture are satisfied.
Covenant Defeasance. The Indenture also
provides that, if the debt securities of any series are payable
in United States dollars, we may omit to comply with the
covenants described above under Certain Covenants
with respect to the notes if we comply with the following
conditions. To exercise this option, we must:
(1) deposit with the trustee money, Government Obligations
or a combination thereof, which through the payment of interest
and principal thereof in accordance with their terms will
provide money
29
in an amount sufficient to pay the principal, premium, if any,
and interest on, the notes on the Stated Maturity of the
payments in accordance with the terms of the Indenture and the
notes; and
(2) deliver to the trustee an opinion of counsel to the
effect that the deposit and related covenant defeasance will not
cause the Holders of the notes to recognize income, gain or loss
for federal income tax purposes and that those Holders will be
subject to federal income tax on the same amount, in the same
manner and at the same times as would have been the case if the
deposit and covenant defeasance had not occurred, and to satisfy
other conditions specified in the Indenture.
Covenant Defeasance and Events of Default. In
the event we exercise our option to effect covenant defeasance
with respect to the notes and those notes are declared due and
payable because of the occurrence of any Event of Default, the
amount of money and government obligations on deposit with the
trustee will be sufficient to pay amounts due on the notes at
their Stated Maturity but may not be sufficient to pay amounts
due on the Notes at the time of the acceleration resulting from
the Event of Default. However, we shall remain liable for those
payments.
Modification
and Waiver
We and the trustee may modify and amend the Indenture with
respect to the notes with the consent of the holders of a
majority in principal amount of the notes. However, without the
consent of each affected Holder, no modification or amendment
may:
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change the Stated Maturity of the principal, or any installment
of principal or interest, on the notes or alter the
provisions with respect to the redemption of the notes;
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reduce the principal, premium, if any, or any interest rate on
the notes;
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change our obligation to maintain an office or agency in the
places and for the purposes specified in the Indenture or the
currency of payment of principal or interest on the notes;
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impair the right to institute suit to enforce any payment after
the Stated Maturity or redemption date;
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reduce the percentage of the principal amount of notes required
to approve any modification or amendment of the Indenture;
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reduce the percentage of the principal amount of notes required
to approve any waiver of compliance with provisions of the
Indenture or the notes or waiver of defaults;
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impair the right to institute suit for the enforcement of any
payment on or with respect to the notes;
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amend, change or modify our obligation to make and consummate a
Change of Control Offer in the event of a Change of Control in
accordance with the covenant described under the caption
Repurchase at Holders Option upon a
Change of Control, including, in each case, amending,
changing or modifying any definition relating thereto;
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except as otherwise permitted under the covenant described under
the caption Merger, Consolidation and Sale of
Assets, consent to the assignment or transfer by us of any
of our rights or obligations under the Indenture;
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modify certain provisions of the Indenture.
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We and the trustee may, without the consent of any Holders of
the notes, modify the Indenture with respect to the notes to,
among other things:
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evidence the succession of another Person as obligor under the
Indenture and the notes;
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add to our covenants under the Indenture or add additional
Events of Default;
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change or eliminate any provision of the Indenture, provided
that the change or elimination becomes effective only when there
is no outstanding note which is entitled to the benefit of that
provision;
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30
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secure the notes pursuant to the requirement described above
under Certain Covenants
Restrictions on Liens;
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establish the form or terms of a series of debt
securities; or
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cure any ambiguity, correct or supplement any provision which
may be inconsistent, or make any other provision as to matters
or questions under the Indenture, provided that action does not
adversely affect the interests of Holders of the notes in any
material respect.
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The Holders of a majority in principal amount of the notes may,
on behalf of the holders of all notes, waive, insofar as that
series is concerned, our compliance with specified restrictive
covenants in the Indenture, including those described above
under Certain Covenants.
The holders of a majority in principal amount of the outstanding
notes may, on behalf of the Holders of all notes, waive any past
default under the Indenture with respect to the notes. However,
they may not waive a default in the payment of principal,
premium, if any, or interest on any note or in respect of a
provision which under the Indenture cannot be modified or
amended without the consent of the Holder of each outstanding
note.
The
Trustee
The trustee under the Indenture is Deutsche Bank
Trust Company Americas, formerly known as Bankers
Trust Company. In the ordinary course of business, we may
borrow money from, and maintain other banking relationships
with, the trustee and its affiliates. Deutsche Bank National
Trust Company Americas also serves as trustee under other
indentures under which our securities are outstanding.
Form,
Denomination and Registration
The notes will be issued in fully registered form, without
coupons, in denominations of $1,000 in principal amount and
integral multiples thereof. The notes will be evidenced by one
or more global securities, which we refer to as global notes.
The global notes will be deposited with, or on behalf of, DTC or
its nominee. Except as set forth in Global
Notes and Book Entry System immediately below, the global
notes may be transferred, in whole or in part, only to another
nominee of DTC or to a successor of DTC or its nominee.
Global
Notes and Book Entry System
DTC will act as securities depository for the notes. DTC has
advised us that it is:
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a limited-purpose trust company organized under the New York
Banking Law;
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a banking organization within the meaning of the New
York Banking Law;
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a member of the Federal Reserve System;
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a clearing corporation within the meaning of the New
York Uniform Commercial Code; and
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a clearing agency registered under Section 17A
of the Securities Exchange Act of 1934, as amended.
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DTC has indicated that it would follow the operations and
procedures described below for book-entry notes. We have
provided these descriptions of the operations and procedures of
DTC solely as a matter of convenience. These operations and
procedures are solely within the control of DTC and are subject
to change by DTC from time to time. None of us, the underwriters
or the trustee take any responsibility for these operations or
procedures, and you are urged to contact DTC or its participants
directly to discuss these matters.
Only participants that have accounts with DTC for the global
note or persons that hold interests through these participants
may own beneficial interests in book-entry notes. Upon the
issuance of a global note, DTC will credit, on its book-entry
registration and transfer system, each participants
account with the principal amount of the book-entry notes
represented by the global note that is beneficially owned by
that participant.
31
The accounts to be credited will be designated by any dealers,
underwriters or agents participating in the distribution of the
book-entry notes. Ownership of book-entry notes will be shown
on, and the transfer of the ownership interests will be effected
only through, records maintained by DTC for the global note
(with respect to interests of participants) and on the records
of participants (with respect to interests of persons holding
through participants). The laws of some states may require that
certain purchasers of securities take physical delivery of the
securities in definitive form. These laws may impair your
ability to own, transfer or pledge beneficial interests in
book-entry notes.
So long as DTC, or its nominee, is the registered owner of the
global note, DTC or its nominee will be considered the sole
owner or Holder of the book-entry notes represented by the
global note for all purposes under the Indenture. Except as set
forth in the Indenture or the notes, beneficial owners of
book-entry notes will not be entitled to have these securities
registered in their names, will not receive or be entitled to
receive physical delivery of a certificate in definitive form
representing these securities and will not be considered the
owners or Holders of these securities under the Indenture.
Accordingly, each person who beneficially owns book-entry notes
and desires to exercise rights as a Holder under the Indenture
must rely on the procedures of DTC for the global note and, if
this person is not a participant, on the procedures of the
participant through which that person owns its interest, to
exercise such rights. We understand, however, that under
existing industry practice, DTC will authorize the persons on
whose behalf it holds a global note to exercise certain rights
of Holders of notes.
Payments of principal and, if applicable, premium and interest,
on book-entry notes will be made to DTC or its nominee, as the
case may be, as the registered Holder of the global note. We and
our agents and the trustee and any of its agents will not have
any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership
interests in the global note or for maintaining, supervising or
reviewing any records relating to the beneficial ownership
interests.
We expect that DTC, upon receipt of any payment of principal of,
premium, if any, or interest on a global note, will immediately
credit participants accounts with payments in amounts
proportionate to the amounts of book-entry notes held by each
participant as shown on the records of DTC. We also expect that
payments by participants to owners of beneficial interests in
book-entry notes held through these participants will be
governed by standing customer instructions and customary
practices, as is now the case with the securities held for the
accounts of customers in bearer form or registered in
street name. These payments will be the
responsibility of the participants.
Certain
Definitions
Set forth below are certain defined terms that will be used in
the Indenture or notes. Reference is made to the Indenture, as
supplemented, for a full disclosure of all such terms, as well
as any other capitalized terms used herein for which no
definition is provided.
Beneficial Owner has the meaning assigned to
such term in
Rule 13d-3
and
Rule 13d-5
under the Exchange Act, except that in calculating the
beneficial ownership of any particular person (as
that term is used in Section 13(d)(3) of the Exchange Act),
such person will be deemed to have beneficial
ownership of all securities that such person has the
right to acquire by conversion or exercise of other securities,
whether such right is currently exercisable or is exercisable
only upon the occurrence of a subsequent condition. The terms
Beneficially Owns and Beneficially Owned
will have a corresponding meaning.
Board of Directors means, either our board of
directors or our duly authorized executive committee of that
board.
Business Day as used in this prospectus,
means each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in The City of New
York are authorized or obligated by law or executive order to
close.
Capital Stock means:
(1) in the case of a corporation, corporate stock;
32
(2) in the case of an association or business entity, any
and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or
limited); and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person.
Change of Control means the occurrence of any
of the following:
(1) the direct or indirect sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation)
substantially as an entirety, in one or a series of related
transactions, of the properties or assets of us and our
Subsidiaries, taken as a whole, to any person (as
that term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934 (the Exchange Act);
(2) the adoption of a plan relating to our liquidation or
dissolution;
(3) any person or group (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the Beneficial Owner, directly or indirectly, of 40% or
more of the voting power of our Voting Stock;
(4) the first day on which a majority of the members of our
Board of Directors are not Continuing Directors; or
(5) we consolidate with, or merge with or into, any Person,
or any Person consolidates with, or merges with or into us, in
any such event pursuant to a transaction in which any of our
outstanding Voting Stock or the outstanding Voting Stock of such
other Person is converted into or exchanged for cash, securities
or other property, other than any such transaction where
(A) our Voting Stock outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock
(other than Disqualified Stock) of the surviving or transferee
Person constituting a majority of the outstanding shares of such
Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance) and (B) immediately
after such transaction, no person or
group (as such terms are used in Section 13(d)
and 14(d) of the Exchange Act) becomes, directly or indirectly,
the Beneficial Owner of 40% or more of the voting power of the
Voting Stock of the surviving or transferee Person.
Consolidated Net Tangible Assets means the
total of all the assets appearing on the consolidated balance
sheet of us and our Subsidiaries less the following:
(1) current liabilities, including liabilities for
indebtedness maturing more than 12 months from the date of
original creation thereof but maturing within 12 months
from the date of determination;
(2) reserves for depreciation and other asset valuation
reserves;
(3) intangible assets including, without limitation, such
items as goodwill, trademarks, trade names, patents and
unamortized debt discount and expense carried as an asset on the
balance sheet; and
(4) appropriate adjustments on account of minority
interests of other Persons holding stock in any Subsidiary.
Continuing Directors means, as of any date of
determination, any member of our Board of Directors who:
(1) was a member of the Board of Directors on the Issue
Date; or
(2) was nominated for election or elected to the Board of
Directors with the approval of a majority of the Continuing
Directors who were members of the Board of Directors at the time
of such nomination or election.
Debt means all indebtedness for money
borrowed.
Debt Securities means any Debt (including any
Guarantee) issued in the form of a security in connection with a
public offering, in a private placement pursuant to
Rule 144A, Regulation S or otherwise under the
Securities Act of 1933, as amended (the Securities Act), or sold
on an agency basis by a broker-
33
dealer or one of its affiliates and traded or able to be traded
on a public or private basis; provided that Debt Securities
shall not mean any industrial revenue bonds.
Disqualified Stock means any Capital Stock
that, by its terms (or by the terms of any security into which
it is convertible, or for which it is exchangeable, in each case
at the option of the Holder thereof), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the
option of the Holder thereof, in whole or in part, on or prior
to the date that is one year after the date on which the notes
mature. Notwithstanding the preceding sentence, any Capital
Stock that would constitute Disqualified Stock solely because
the holders thereof have the right to require us to repurchase
such Capital Stock upon the occurrence of a change of control or
an asset sale will not constitute Disqualified Stock. The term
Disqualified Stock will also include any options,
warrants or other rights that are convertible into Disqualified
Stock or that are redeemable at the option of the Holder, or
required to be redeemed, prior to the date that is one year
after the date on which the notes mature.
Domestic Subsidiary means any Subsidiary
which owns an Operating Property.
Funded Debt means any Debt which by its terms
matures at or is extendible or renewable at the sole option of
the obligor without requiring the consent of the obligee to a
date more than 12 months after the date of the creation of
such Debt.
Government Obligations means securities of
the government which issued the currency in which the notes are
denominated or in which interest is payable or of government
agencies backed by the full faith and credit of that government.
Guarantee means, as to any Person, a
guarantee other than by endorsement of negotiable instruments
for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of
a pledge of assets or through letters of credit or reimbursement
agreements in respect thereof, of all or any part of any Debt of
another Person.
Issue Date means the date of original
issuance of the notes under the Indenture.
Notes Guarantee means the Guarantee of the
notes by a Subsidiary.
Operating Property means any manufacturing or
processing plant, office facility, retail store, warehouse,
distribution center or equipment located within the United
States of America or its territories or possessions and owned
and operated now or hereafter by us or any Domestic Subsidiary
and having a book value on the date as of which the
determination is being made of more than 0.65% of Consolidated
Net Tangible Assets.
Person means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency
or political subdivision thereof.
Sale and Lease-back Transaction means any
arrangement with any Person providing for the leasing to us or
any Domestic Subsidiary of any Operating Property (except for
temporary leases for a term, including any renewal thereof, of
not more than 36 months and except for leases between us
and a Domestic Subsidiary or between Domestic Subsidiaries),
which Operating Property has been or is to be sold or
transferred by us or such Domestic Subsidiary to that Person.
Significant Subsidiary means any Subsidiary
that would constitute a significant subsidiary
within the meaning of Article 1 of
Regulation S-X
of the Securities Act; provided, however, that 5% will be
substituted for 10% in each place that it appears in such
definition.
Stated Maturity, when used with respect to
the notes and any payment of principal thereof or interest
thereon, means the date specified in such note as the fixed date
on which the principal of such note or interest payment is due
and payable.
Subsidiary means a corporation more than 50%
of the outstanding Voting Stock of which is owned, directly or
indirectly, by us or by one or more other Subsidiaries, or by us
and one or more other Subsidiaries.
Value means, with respect to a Sale and
Lease-back Transaction, as of any particular time, the amount
equal to the greater of (1) the net proceeds from the sale
or transfer of the property leased pursuant to that Sale and
Lease-back Transaction or (2) the fair value in the opinion
of our Board of Directors or our President
34
or any of our Vice Presidents of that property at the time of
entering into the Sale and Lease-back Transaction, in either
case multiplied by a fraction, the numerator of which shall be
equal to the number of full years of the term of the lease which
is part of the Sale and Lease-back Transaction remaining at the
time of determination and the denominator of which shall be
equal to the number of full years of such term, without regard
to any renewal or extension options contained in the lease.
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.
35
DESCRIPTION
OF OTHER INDEBTEDNESS
Senior
Secured Credit Facility
On June 1, 2006, we entered into a credit agreement with a
group of lenders led by the Royal Bank of Scotland plc, as the
administrative agent for the lenders, and on March 8, 2007,
we amended this credit agreement to amend the applicable
interest rate margins for advances made under the credit
agreement. The facility provided for under the credit agreement
consists of a $2 billion five-year secured revolving credit
facility, a $750 million five-year secured Term A loan, and
a $1.25 billion six-year secured Term B loan. Rates on the
senior secured credit facilities carry interest rates of LIBOR
plus 0.375% to 1.75% or the Prime Rate plus 0.00% to 0.75%,
depending on the type of borrowing, with facility fees ranging
from 0.10% to 0.50%, both based on our credit ratings. The rates
in effect on February 28, 2009, based on our current credit
ratings, were 0.20% for the facility fees, LIBOR plus 1.00% for
the revolving credit facility advances, LIBOR plus 0.875% for
the Term A loan, LIBOR plus 1.25% for the Term B loan and Prime
Rate plus 0.00% for base rate advances.
Borrowings under the Term A loan and Term B loan may be repaid,
in full or in part, at any time without penalty. The Term A loan
has required repayments of 2.50% of the initial drawn balance
per quarter for the first four quarters followed by payments of
3.75% of the initial drawn balance per quarter for years two
through five, with the remaining balance due five years from the
date of the initial borrowing. The Term B loan has required
repayments of 0.25% of the initial drawn balance per quarter
with the remaining balance due six years from the date of the
initial borrowing. Prepayments will be applied pro rata to the
remaining amortized payments.
As of February 28, 2009, there were $298 million of
outstanding borrowings under the revolving credit facility, the
Term A loan had a remaining principal balance of
$506 million, of which $113 million was classified as
current, and the Term B loan had a remaining principal balance
of $1,116 million, of which $11 million was classified
as current. As of that date, we had $345 million
outstanding for letters of credit under the revolving credit
facility, leaving $1,357 million in available capacity. We
also had $2 million of outstanding letters of credit issued
under separate agreements with financial institutions. These
letters of credit primarily support workers compensation,
merchandise import programs and payment obligations. We pay
fees, which vary by instrument, of up to 1.40% on the
outstanding balance of the letters of credit.
All obligations under the senior secured credit facilities are
guaranteed by each of our material subsidiaries. The obligations
are also secured by a pledge of the equity interests in the same
material subsidiaries, limited as required by our existing
public indentures and those of our subsidiaries, such that the
debt issued under those indentures need not be equally and
ratably secured.
The credit agreement contains covenants customary for agreements
of this type, including, but not limited to, limitations on our
ability to (i) create additional liens and other
encumbrances on our present or future assets, (ii) merge,
consolidate, sell or otherwise dispose of all or substantially
all of our assets, (iii) sell, lease, transfer or otherwise
dispose of, or permit any of our subsidiaries to sell, lease,
transfer or otherwise dispose of its assets or grant any option
or other right to purchase, lease, or otherwise acquire its
assets, (iv) permit any of our subsidiaries to incur
additional indebtedness, (v) enter into sale and lease-back
transactions, (vi) enter into certain transactions with our
affiliates, (vii) change the character of our business or
that of our subsidiaries, and (viii) enter into certain
restrictive agreements. We are also required to comply with
certain financial tests and maintain certain financial ratios,
including a minimum interest expense coverage ratio, and a
maximum debt leverage ratio. The interest expense coverage ratio
shall not be less than 2.25 to 1.00 for each of the fiscal
quarters ending up through December 30, 2009, and moves
progressively to a ratio of not less than 2.30 to 1.00 for the
fiscal quarters ending December 31, 2009 or thereafter. The
debt leverage ratio shall not exceed 4.00 to 1.00 for each of
the fiscal quarters ending up through December 30, 2009,
and moves progressively to a ratio not to exceed 3.75 to 1.00
for each of the fiscal quarters ending December 31, 2009 or
thereafter. As of February 28, 2009, we were in compliance
with these covenants.
The credit agreement also includes customary representations,
warranties, and events of default, including but not limited to
events of default relating to non-payment of principal, interest
or fees, inaccuracy of
36
representations and warranties, violation of covenants, the
failure to pay when due principal of or premium or interest on
any debt that is outstanding in a principal amount of at least
$100,000,000 in the aggregate (excluding debt outstanding under
the credit agreement) if the failure to pay continues after the
applicable grace period, if any, and bankruptcy and insolvency
events.
Medium-Term
Notes, Debentures and Other Unsecured Senior Notes
We currently have outstanding $191 million of
7.50% Debentures due 2037 that contain a put option
exercisable in May 2009 that would require us to repay the
borrowed amounts prior to the scheduled maturity in May 2037.
This put option was exercised by holders of approximately
$190.8 million aggregate principal amount of these
debentures and we expect to settle this put option on
May 1, 2009.
In addition, we have several medium-term notes and other notes
outstanding, which are scheduled to mature during the second
quarterly period (12 weeks) of fiscal year 2010. These
include $72.0 million of medium-term notes, which are
scheduled to mature in late July 2009, the SUPERVALU 2009 notes,
which are scheduled to mature on August 1, 2009, and the
Albertsons 2009 notes, which are scheduled to mature on
August 1, 2009.
On April 30, 2009, we commenced an offer to purchase for
cash an aggregate principal amount of up to $700.0 million
of existing debt securities as follows:
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the SUPERVALU 2009 notes;
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the Albertsons 2009 notes; and
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the Albertsons 2010 notes.
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The SUPERVALU 2009 notes were issued under the Indenture, which
contains certain covenants including, but not limited to,
restrictions on our ability and that of our domestic
subsidiaries to enter into certain liens and sale and lease-back
transactions. For a more detailed description of these
covenants, see Description of the Notes
Certain Covenants. The Albertsons 2009 notes and the
Albertsons 2010 notes were issued under an indenture dated
as of May 1, 1992, as supplemented, between Albertsons and
Morgan Guaranty Trust Company of New York, as trustee. This
indenture contains covenants customary for agreements of this
type, including, but not limited to, limitations on the ability
of our subsidiary, New Albertsons (as successor to Albertsons
under such indenture), and its subsidiaries to (1) secure
indebtedness with liens and other encumbrances on its or their
assets and (2) enter into sale and lease-back transactions.
For a description of the tender offer, see
Summary Tender Offer.
Accounts
Receivable Securitization Program
Our 364-day
accounts receivable securitization program permits us to borrow
up to $300.0 million on a revolving basis, with borrowings
secured by eligible accounts receivable, which remain under our
control. The facility fees under this program range from 0.225%
to 2.00%, based on our credit ratings. The facility fee in
effect on February 28, 2009, based on our current credit
ratings, was 0.25%. As of February 28, 2009, there were
$354.4 million of accounts receivable pledged as collateral
under this program. We expect to renew this program in May 2009.
37
MATERIAL
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of the material U.S. federal
income tax considerations and, in the case of
non-U.S. Holders
(defined below), material U.S. federal estate tax
considerations applicable to the purchase, ownership and
disposition of the notes. This discussion applies only to
initial purchasers who hold the notes as capital assets within
the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended (the Code), and who purchase the notes at their
issue price, which is generally the first price at
which notes are issued to the public, pursuant to this offering.
In this discussion, we do not purport to address all tax
considerations that may be important to a particular holder in
light of the holders circumstances, or to certain
categories of investors that may be subject to special rules,
such as:
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dealers in securities or currencies;
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traders in securities;
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U.S. holders whose functional currency is not the
U.S. dollar;
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persons holding notes as part of a hedge, straddle, conversion
or other synthetic security or integrated
transaction;
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certain U.S. expatriates;
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financial institutions or insurance companies;
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entities that are tax-exempt for U.S. federal income tax
purposes; and
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partnerships and other pass-through entities.
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If a partnership or other entity treated as a partnership for
U.S. federal income tax purposes holds notes, the tax
treatment of a partner will generally depend on the status of
the partner and on the activities of the partnership. We
encourage partners of partnerships holding notes to consult
their tax advisors.
This discussion does not address all of the aspects of
U.S. federal income taxation that may be relevant to you in
light of your particular investment or other circumstances. In
addition, this discussion does not address any state, local or
foreign income or other tax consequences.
This discussion is based on U.S. federal income tax law,
including the provisions of the Code, Treasury regulations,
administrative rulings and judicial authority, all as in effect
as of the date of this document. Subsequent developments in
U.S. federal income tax law, including changes in law or
differing interpretations, which may be applied retroactively,
could have a material effect on the U.S. federal income tax
consequences of purchasing, owning and disposing of the notes as
described in this discussion.
We encourage you to consult your own tax advisor regarding
the particular U.S. federal, state, local and foreign
income and other tax consequences of purchasing, owning and
disposing of the notes that may be applicable to you.
U.S.
Holders
The following summary applies to you if you are a
U.S. holder. You are a U.S. holder for
purposes of this discussion if you are a beneficial owner of
notes that is for U.S. federal income tax purposes:
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a citizen or resident of the United States,
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a corporation, or other entity treated as a corporation, created
or organized in or under the laws of the United States, any
state thereof, or the District of Columbia,
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an estate, the income of which is subject to U.S. federal
income taxation regardless of the source of that income, or
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a trust (1) if a U.S. court is able to exercise
primary supervision over the trusts administration and one
or more U.S. persons are authorized to control all
substantial decisions of the trust or (2) that has a valid
election in effect under applicable Treasury regulations to be
treated as a U.S. person.
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Payment of Interest. Generally, interest on
the notes will be taxable as ordinary interest income at the
time it is paid or accrued in accordance with your method of
accounting for U.S. federal income tax purposes.
Original Issue Discount. In addition to
reporting taxable income on account of stated interest, you, as
a U.S. holder, will be required to include other amounts in
income if the notes are issued with original issue discount
(OID) for U.S. federal income tax purposes. The
notes will be issued with OID for U.S. federal income tax
purposes if they are sold at initial issue for a price that is
less than their principal amount by more than a de minimis
amount. You must include OID in income as ordinary interest
income as such discount accrues under an economic accrual method
in advance of the receipt of cash attributable to the discount
income, regardless of your regular method of accounting.
As a general rule, a note will bear OID if the excess of the
principal amount at maturity of the note over its issue price is
equal to or greater than a de minimis amount (generally
1/4
of 1% of the notes principal amount multiplied by the
number of complete years to its maturity from its issue date).
The issue price of the note will be the first price at which a
substantial amount of such notes has been sold (ignoring sales
to bond houses, brokers, or similar persons or organizations
acting in the capacity of underwriters, placement agents, or
wholesalers).
If the notes are issued with OID that is not de minimis,
the amount of OID that you must include in income is calculated
using a constant-yield method, and generally you will include
increasingly greater amounts of OID in income over the life of
your note. More specifically, you can calculate the amount of
OID that you must include in income by adding the daily portions
of OID with respect to your note for each day during the taxable
year or portion of the taxable year that you hold your note. You
can determine the daily portion by allocating to each day in any
accrual period a pro rata portion of the OID allocable to that
accrual period. We expect the accrual period to be generally six
months in length, corresponding to the interval between interest
payments dates, with the final accrual period ending on the
maturity date of the notes.
You can determine the amount of OID allocable to an accrual
period by:
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multiplying your notes adjusted issue price at the
beginning of the accrual period by your notes yield to
maturity, and then
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subtracting from this figure the sum of the payments of
qualified stated interest on your note allocable to the accrual
period.
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The stated interest payments on your note are qualified stated
interest for the purpose of this calculation. You must determine
the notes yield to maturity on the basis of compounding at
the close of each accrual period and adjusting for the length of
each accrual period. Further, you determine your notes
adjusted issue price at the beginning of any accrual period by:
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adding your notes issue price and any accrued OID for each
prior accrual period, and then
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subtracting any payments previously made on your note that were
not qualified stated interest payments.
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The amount of OID allocable to the final accrual period is equal
to the difference between:
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the amount payable at the maturity of your note, other than any
payment of qualified stated interest, and
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your notes adjusted issue price as of the beginning of the
final accrual period.
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You may elect to include in gross income all interest that
accrues on your note using the constant-yield method described
above, with the modifications described below. For purposes of
this election, interest will include stated interest and OID.
39
Generally, this election will apply only to the note for which
you make it. You may not revoke any election to apply the
constant-yield method to all interest on a note without the
consent of the Internal Revenue Service.
Sale or Other Disposition of Notes. When you
sell or otherwise dispose of a note in a taxable transaction,
you generally will recognize taxable gain or loss equal to the
difference, if any, between your adjusted tax basis in the note
and the amount realized on the sale or other disposition (which
does not include for this purpose any amount attributable to
accrued interest, which will be taxed as ordinary interest
income as discussed below and as described under
U.S. Holders Payment of
Interest). Your adjusted tax basis in your note generally
will be your cost in acquiring the note plus any OID previously
included in income with respect to your note.
Gain or loss realized on the sale or other disposition of a note
will generally be capital gain or loss and will be long-term
capital gain or loss if the note has been held for more than one
year. Long-term capital gains recognized by certain
non-corporate holders, including individuals, generally will be
subject to a lower tax rate than applicable to ordinary income.
The deductibility of capital losses is subject to limitations.
If you dispose of a note between interest payment dates, a
portion of the amount received by you will reflect interest that
has accrued on the note but has not been paid as of the
disposition date. That portion is treated as ordinary interest
income and not as sale proceeds. If you acquire a note for a
price that is less than or more than its stated principal amount
(other than on account of accrued interest), there may be market
discount or premium associated with that note, the treatment of
which is subject to special rules under the Code.
Information Reporting and Backup
Withholding. Generally, we must report annually
to the Internal Revenue Service (IRS) and to you the
amount of interest (including OID) and principal payments on
your notes and the proceeds of sales or other dispositions of
your notes before maturity unless you are an exempt recipient
such as a corporation. In general, backup
withholding (currently at a rate of 28%) may apply to any
payments of interest on your notes, and to payment of the
proceeds of a sale or other disposition of your notes before
maturity, if you are a non-corporate U.S. holder and you
fail to provide a correct taxpayer identification number
certified under penalties of perjury, or otherwise fail to
comply with applicable requirements of the backup withholding
rules. The backup withholding tax is not an additional tax and
may be credited against your U.S. federal income tax
liability if the required information is timely provided to the
IRS.
Non-U.S.
Holders
The following summary applies to you if you are a
non-U.S. holder.
You are generally a
non-U.S. holder
for purposes of this discussion if you are a beneficial owner
(other than a partnership) of notes that is not a
U.S. holder, as described above. Special rules may apply to
non-U.S. holders
that are subject to special treatment under the Code, including
controlled foreign corporations, passive foreign investment
companies, certain U.S. expatriates, and foreign persons
eligible for benefits under an applicable income tax treaty with
the United States. Such
non-U.S. holders
should consult their own tax advisors to determine the United
States federal, state, local and other tax consequences that may
be relevant to them.
Taxation of Interest. Under current
U.S. federal income tax laws, and subject to the discussion
below, U.S. federal withholding tax will not apply to
payments of interest (including accrued OID) on the notes
pursuant to the portfolio interest exemption of the
Code, provided that:
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the interest is not effectively connected with the conduct by
you of a trade or business in the United States;
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you do not, actually or constructively, own 10% or more of the
total combined voting power of all classes of our shares;
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you are not a controlled foreign corporation that is related,
directly or indirectly, to us within the meaning of the Code;
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you are not a bank whose receipt of interest on a note is
described in Section 881(c)(3)(A) of the Code; and
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the U.S. payor does not have actual knowledge or reason to
know that you are a U.S. person and either (1) you
certify to the applicable payor or its agent, under penalties of
perjury, that you are not a U.S. holder and provide your
name and address on IRS Form
W-8BEN (or a
suitable substitute form) or (2) if you hold your note
through a securities clearing organization or certain other
intermediaries, you and the intermediaries satisfy the
certification requirements of applicable Treasury regulations.
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If you cannot satisfy the requirements described above, payments
of interest (including accrued OID) made to you will be subject
to a 30% U.S. federal withholding tax, unless you provide a
properly executed IRS
Form W-8BEN
or successor form establishing an exemption from or a reduction
of withholding under the benefit of a U.S. income tax
treaty, or you provide a properly executed IRS
Form W-8ECI
claiming that the payments of interest are effectively connected
with your conduct of a trade or business in the United States.
Gain on Disposition of Notes. You generally
will not be subject to U.S. federal income and withholding
tax on gain realized on the sale, exchange, redemption or other
taxable disposition of a note unless:
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you are an individual present in the United States for
183 days or more in the year of such taxable disposition
and certain other conditions are present, or
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the gain is effectively connected with your conduct of a
U.S. trade or business, and, if a U.S. income tax
treaty applies, is attributable to a U.S. permanent
establishment you maintain. Please read the section below
titled
Non-U.S. Holders
Income Effectively Connected with a U.S. Trade or
Business.
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Income Effectively Connected with a U.S. Trade or
Business. If you are engaged in a trade or
business in the United States and the interest (including OID),
gain or other income in respect of your notes is effectively
connected with the conduct of your trade or business, and, if a
U.S. income tax treaty applies, you maintain a
U.S. permanent establishment to which the
interest, gain or other income is attributable, you may be
subject to U.S. income tax on a net income basis on such
interest, gain or other income. In this case, however, the
interest on your notes will be exempt from the 30%
U.S. withholding tax discussed under the caption
Non-U.S. Holders
Taxation of Interest, if you provide a properly executed
IRS
Form W-8ECI
or appropriate substitute form to the payor on or before any
payment date.
In addition, if you are a foreign corporation, you may be
subject to a U.S. branch profits tax equal to 30% of your
effectively connected earnings and profits for the taxable year,
as adjusted for certain items, unless a lower rate applies to
you under a U.S. income tax treaty with your country of
residence. For this purpose, you must include interest
(including accrued OID), gain and other income on your notes in
the earnings and profits subject to the U.S. branch profits
tax if these amounts are effectively connected with the conduct
of your U.S. trade or business.
Treatment of Notes for United States Federal Estate Tax
Purposes. A note held, or beneficially held, by
an individual who is neither a citizen nor a resident (as
determined for estate tax purposes) of the United States at the
time of his or her death will not be includable in the
individuals gross estate for United States federal estate
tax purposes, provided that (i) you do not at the time of
death actually or constructively own 10% or more of the combined
voting power of all classes of our stock entitled to vote and
(ii) at the time of death, payments with respect to such
note would not have been effectively connected with the conduct
by you of a trade or business in the United States. In addition,
under the terms of an applicable estate tax treaty, United
States federal estate tax may not apply or its application may
be modified with respect to a note.
Information Reporting and Backup
Withholding. Generally, we must report annually
to the IRS and to you the amount of interest (including OID) and
principal payments on your notes and the amount of tax, if any,
withheld with respect to those payments. Copies of the
information returns reporting such payments and withholding may
also be made available to the tax authorities in the country in
which you reside under the provisions of an applicable treaty.
41
In general, you will not be subject to backup withholding with
respect to payments of interest and principal on your notes if
you have provided the required certification that you are a
non-U.S. holder,
as described in
Non-U.S. Holders
Taxation of Interest above, or have otherwise established
an exemption, provided that the payor does not have actual
knowledge or reason to know that you are a U.S. holder or
that the conditions of any other exemptions are not in fact
satisfied. You will be subject to information reporting and,
depending on the circumstances, backup withholding with respect
to payments of the proceeds of the sale of your notes within the
United States or sales conducted through certain
U.S.-related
financial intermediaries, unless you have provided the required
certification that you are a
non-U.S. holder,
as described in
Non-U.S. Holders
Taxation of Interest above, or have otherwise established
an exemption, provided that the payor does not have actual
knowledge or reason to know that you are a U.S. holder or
that the conditions of any other exemptions are not in fact
satisfied. The backup withholding tax is not an additional tax
and may be credited against your U.S. federal income tax
liability if the required information is timely provided to the
IRS.
We encourage you to consult your own tax advisor regarding
application of backup withholding in your particular
circumstances and the availability of and procedure for
obtaining an exemption from backup withholding under current
Treasury regulations. Any amounts withheld under the backup
withholding rules from a payment to you will be allowed as a
refund or credit against your U.S. federal income tax
liability, provided that the required information is timely
furnished to the IRS.
42
UNDERWRITING
We intend to offer the notes through the underwriters listed in
the table below. Credit Suisse Securities (USA) LLC, Banc of
America Securities LLC, Citigroup Global Markets Inc. and RBS
Securities Inc. are acting as representatives of the
underwriters named below. Subject to the terms and conditions
contained in an underwriting agreement among us and the
underwriters, we have agreed to sell to the underwriters, and
the underwriters severally and not jointly have agreed to
purchase from us, the principal amount of notes listed opposite
their names in the table below.
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Underwriter
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Principal Amount
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Credit Suisse Securities (USA) LLC
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$
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Banc of America Securities LLC
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Citigroup Global Markets Inc.
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RBS Securities Inc.
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J.P. Morgan Securities Inc.
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Morgan Stanley & Co. Incorporated
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UBS Securities LLC
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U.S. Bancorp Investments, Inc.
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The Williams Capital Group, L.P.
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Total
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$
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500,000,000
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The underwriters have agreed to purchase all of the notes being
sold pursuant to the underwriting agreement if any of these
notes are purchased. If an underwriter defaults, the
underwriting agreement provides that the purchase commitments of
the nondefaulting underwriters may be increased or the
underwriting agreement may be terminated.
We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act, or
to contribute to payments the underwriters may be required to
make in respect of those liabilities.
The underwriters are offering the notes, subject to prior sale,
when, as and if issued to and accepted by them, subject to
approval of legal matters by their counsel, including the
validity of the notes, and other conditions contained in the
underwriting agreement, such as the receipt by the underwriters
of officers certificates and legal opinions. The
underwriters reserve the right to withdraw, cancel or modify
offers to investors and to reject orders in whole or in part.
The underwriters propose to offer the notes initially at the
public offering price on the cover page of this prospectus and
to selling group members at that price less a selling concession
of % of the principal amount of the
notes. The underwriters and selling group members may allow a
discount of % of the principal
amount of the notes on sales to other broker-dealers. After the
initial public offering, the representatives may change the
public offering price and concession and discount to
broker-dealers.
The following table summarizes the compensation and estimated
expenses we will pay:
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Per Note
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Total
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Underwriting Discounts and Commissions paid by SUPERVALU
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%
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$
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Expenses payable by SUPERVALU
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%
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$
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New Issue
of Notes
The notes are a new issue of securities with no established
trading market. We do not intend to apply for listing of the
notes on any national securities exchange or for quotation of
the notes on any automated dealer quotation system. The
underwriters have advised us that they presently intend to make
a market in the notes after completion of the offering. However,
they are under no obligation to do so and may discontinue any
market-making activities at any time without any notice. We
cannot assure the liquidity of the trading market
43
for the notes or that an active public trading market for the
notes will develop. If an active trading market for the notes
does not develop, the market price and liquidity of the notes
may be adversely affected.
We expect that the delivery of the notes will be made against
payment therefor on or about the date specified in the last
paragraph of the cover page of this prospectus, which will be
the fifth business day following the pricing of the notes. Under
Rule 15c6-1
of the Exchange Act, trades in the secondary market are
generally required to settle in three business days unless the
parties to any such trade expressly agree otherwise.
Accordingly, the purchasers who wish to trade the notes on the
date of pricing or on the next two succeeding business days will
be required to specify an alternate settlement cycle at the time
of any such trade to prevent failed settlement. Purchasers of
the notes who wish to trade the notes on the date of this
prospectus or the next two succeeding business days should
consult their own advisors.
Price
Stabilization and Short Positions
In connection with the offering, the underwriters may engage in
stabilizing transactions, over-allotment transactions, syndicate
covering transactions and penalty bids.
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Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a
specified maximum.
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Over-allotment involves sales by the underwriters of notes in
excess of the principal amount of notes the underwriters are
obligated to purchase, which creates a syndicate short position.
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Syndicate covering transactions involve purchases of the notes
in the open market after the distribution has been completed in
order to cover syndicate short positions.
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Penalty bids permit the representatives to reclaim a selling
concession from a syndicate member when the notes originally
sold by the syndicate member are purchased in a stabilizing
transaction or a syndicate covering transaction to cover
syndicate short positions.
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These stabilizing transactions, syndicate covering transactions
and penalty bids may have the effect of raising or maintaining
the market price of the notes or preventing or retarding a
decline in the market price of the notes. As a result the price
of the notes may be higher than the price that might otherwise
exist in the open market. These transactions, if commenced, may
be discontinued at any time.
Other
Relationships
Certain of the underwriters and their affiliates have provided
from time to time, and may provide in the future, investment and
commercial banking and financial advisory services to us and our
affiliates in the ordinary course of business, for which they
have received and may continue to receive customary fees and
commissions. An affiliate of RBS Securities Inc. acts as the
administrative agent and a lender, and affiliates of Banc of
America Securities LLC and Citigroup Global Markets, Inc. act as
co-syndication agents, and are lenders, under our
$4 billion senior secured credit facilities that we entered
into in June 2006. Affiliates of Credit Suisse Securities (USA)
LLC, Citigroup Global Markets Inc., UBS Securities LLC and
U.S. Bancorp Investments, Inc. are also lenders under the
facilities. In addition, Credit Suisse Securities (USA) LLC,
Banc of America Securities LLC, Citigroup Global Markets Inc.
and RBS Securities Inc. are acting as dealer managers in
connection with our offer to purchase for cash an aggregate
principal amount of up to $700.0 million of the SUPERVALU
2009 notes, the Albertsons 2009 notes and the
Albertsons 2010 notes as described under
Summary Tender Offer.
44
WHERE YOU
CAN FIND MORE INFORMATION
We have filed this prospectus with the Securities and Exchange
Commission (SEC) as part of a registration statement on
Form S-3
under the Securities Act of 1933. This prospectus does not
contain all of the information set forth in the registration
statement because some parts of the registration statement are
omitted in accordance with the rules and regulations of the SEC.
You can obtain a copy of the registration statement from the SEC
at the address listed below or from the SECs web site.
We are currently subject to the reporting and other
informational requirements of the Exchange Act and, in
accordance therewith, file reports, proxy statements and other
information with the SEC. These reports, proxy statements and
other information can be inspected and copied at the Public
Reference Section of the SEC located at 100 F Street,
N.E., Room 1580, Washington, D.C., 20549. Copies of
these materials can be obtained from the Public Reference
Section of the SEC at prescribed rates. Please call the SEC at
(800) SEC-0330
for further information on the public reference facilities and
their copy charges. These materials may also be accessed
electronically by means of the SECs home page on the
Internet at www.sec.gov. These reports and other information
concerning us may also be inspected at the office of the New
York Stock Exchange (NYSE) located at 20 Broad Street, New
York, NY 10005. For further information on obtaining copies of
our public filings at the NYSE, you should call
(212) 656-3000.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the
information we file with it, which means that we can disclose
important information to you by referring you to those
documents. The information that we incorporate by reference is
considered to be part of this prospectus, and later information
that we file with the SEC will automatically update and
supersede more dated information. We incorporate by reference
the documents listed below and any future filings made by us
with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of the initial filing of the
registration statement of which this prospectus is a part and
before the completion of the offering of all notes offered
hereunder or the filing of a post-effective amendment that
deregisters all notes then remaining unsold:
|
|
|
|
|
our Annual Report on
Form 10-K
for the fiscal year ended February 28, 2009;
|
|
|
|
our Current Report on
Form 8-K
filed on April 30, 2009; and
|
|
|
|
the information specifically incorporated by reference into our
Annual Report on
Form 10-K
for the fiscal year ended February 23, 2008 from our
Definitive Proxy Statement on Schedule 14A filed with the
SEC on May 16, 2008.
|
Any statement made in a document incorporated by reference into
this prospectus is deemed to be modified or superseded for
purposes of this prospectus to the extent that a statement in
this prospectus or in any other subsequently filed document,
which is also incorporated by reference, modifies or supersedes
such statement. Any statement made in this prospectus is deemed
to be modified or superseded to the extent a statement in any
subsequently filed document, which is incorporated by reference
into this prospectus, modifies or supersedes such statement.
You may request a free copy of any and all of the information
incorporated by reference herein that we file with the SEC by
written or oral request to SUPERVALU INC., 11840 Valley View
Road, Eden Prairie, Minnesota 55344, Attention: Investor
Relations, telephone
(952) 828-4000.
You may also access our reports and documents via the Internet
at
http://www.supervalu.com.
Information on our web site does not form a part of this
prospectus.
45
LEGAL
MATTERS
The validity of the notes will be passed upon for us by
Dorsey & Whitney LLP. The underwriters in this
offering are being represented by Shearman & Sterling
LLP.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The consolidated financial statements and related schedule of
SUPERVALU INC. and subsidiaries as of February 28, 2009 and
February 23, 2008, and for each of the fiscal years in the
three-year period ended February 28, 2009, and
managements assessment of the effectiveness of internal
control over financial reporting as of February 28, 2009
have been incorporated by reference in the registration
statement in reliance upon the report of KPMG LLP, independent
registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in
accounting and auditing. The audit report covering the
February 28, 2009 consolidated financial statements refers
to adoption of the measurement provisions of Statement of
Financial Accounting Standards No. 158, Employers
Accounting for Defined Benefit Pension and Other Postretirement
Plans, as of February 25, 2007.
46
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
|
|
Item 14.
|
Other
Expenses of Issuance and Distribution
|
The following table sets forth all expenses, other than the
underwriting discounts and commissions, payable by SUPERVALU
INC. (the Company) in connection with the sale of
the securities being registered. All amounts shown are estimates
except for the SEC registration fee.
|
|
|
|
|
SEC registration fee
|
|
$
|
*
|
|
Legal fees and expenses
|
|
|
150,000
|
|
Accounting fees and expenses
|
|
|
50,000
|
|
Printing and engraving expenses
|
|
|
75,000
|
|
Rating agency fees and expenses
|
|
|
500,000
|
|
Trustees fees and expenses
|
|
|
7,500
|
|
Miscellaneous expenses
|
|
|
*
|
|
|
|
|
|
|
Total
|
|
$
|
*
|
|
|
|
|
* |
|
Omitted because the registration fee is being deferred pursuant
to Rule 456(b) of the Securities Act of 1933, as amended. |
|
|
Item 15.
|
Indemnification
of Directors and Officers
|
Section 145 of the Delaware General Corporation Law, as
amended (the DGCL), provides that, under certain
circumstances, a corporation may indemnify any person who was or
is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason
of the fact that the person is or was a director, officer,
employee or agent of the corporation, or is or was serving at
its request in such capacity in another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
the person in connection with such action, suit or proceeding if
the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal
action or proceeding, if they had no reasonable cause to believe
the persons conduct was unlawful.
In accordance with the DGCL, Article Eighth of the
Companys Restated Certificate of Incorporation provides
that a director shall not be liable to the Company or its
stockholders for monetary damages for a breach of the
directors fiduciary duty except:
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|
for any breach of the directors duty of loyalty to the
Company or its stockholders,
|
|
|
|
for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law,
|
|
|
|
under Section 174 of the DGCL providing for liability of
directors for unlawful dividends or unlawful stock repurchases
or redemptions,
|
|
|
|
for any transaction from which the director derived an improper
personal benefit, or
|
|
|
|
for any act or omission occurring prior to the date when said
Article Eighth became effective.
|
The Companys Restated Bylaws provide that the Company will
indemnify any director or officer of the Company and may
indemnify any employee or agent of the Company in the discretion
of the board of directors for such liabilities in such manner
under such circumstances and to such extent as permitted by
Section 145 of the DGCL or its successor.
II-1
In addition, the Companys Restated Bylaws provide that the
Company will indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, including an action by or in
the right of the Company, by reason of the fact that such person
is or was a director or officer of the Company, or is or was
serving at the request of the Company as a director or officer
of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by such person in connection with such
action, suit or proceeding (even if such wrongful act arose out
of neglect or breach of duty not involving willful misconduct),
so long as such person did not act out of personal profit or
advantage which was undisclosed to the Company and such person
acted in a manner he or she reasonably believed to be in or not
opposed to the best interests of the Company and, with respect
to any criminal action or proceeding, such person had no
reasonable cause to believe his or her conduct was unlawful.
Further, the Companys Restated Bylaws provide that the
Company will pay expenses incurred by any person entitled to
indemnification in defending a civil or criminal action, suit or
proceeding in advance of the final disposition of such action,
provided that a determination has not been made by an
independent legal counsel (who may be the regular counsel for
the Company) in a written opinion that it is reasonably likely
that the person has not met the applicable standards of conduct
for indemnification and provided that the Company has received
an undertaking by or on behalf of the person to repay such
expenses unless it shall ultimately be determined that such
person is entitled to be indemnified by the Company.
Finally, the Companys Restated Bylaws provide that the
Company may, to the fullest extent permitted by applicable law
from time to time in effect, indemnify any and all persons whom
the Company shall have power to indemnify under said law from
and against any and all of the expenses, liabilities or other
matters referred to in or covered by said law, if and whenever
the board of directors of the Company deems it to be in the best
interest of the Company to do so.
The Company maintains directors and officers
liability insurance that covers certain liabilities and expenses
of our directors and officers and that covers the Company for
reimbursement of payments to our directors and officers in
respect of such liabilities and expenses.
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|
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|
|
Exhibit
|
|
|
Number
|
|
Description of Exhibit
|
|
|
1
|
.1
|
|
Form of Underwriting Agreement between the Registrant and Credit
Suisse Securities LLC, Banc of America Securities LLC, Citigroup
Global Markets Inc. and RBS Securities Inc., as representatives
of the several underwriters.*
|
|
4
|
.1
|
|
Restated Certificate of Incorporation (incorporated by reference
to Exhibit (3)(i) to the Registrants Annual Report on
Form 10-K
for the year ended February 28, 2004).
|
|
4
|
.2
|
|
Restated Bylaws, as amended (incorporated herein by reference to
Exhibit 3.1 to the Registrants Current Report on
Form 8-K
filed with the SEC on December 3, 2008).
|
|
4
|
.3
|
|
Indenture dated as of July 1, 1987, between the Registrant
and Bankers Trust Company, as Trustee, relating to certain
outstanding debt securities of the Registrant (incorporated by
reference to Exhibit 4.1 to the Registrants
Registration Statement on
Form S-3
(Registration
No. 33-52422)).
|
|
4
|
.4
|
|
First Supplemental Indenture dated as of August 1, 1990,
between the Registrant and Bankers Trust Company, as
Trustee, to Indenture dated as of July 1, 1987, between the
Registrant and Bankers Trust Company, as Trustee
(incorporated by reference to Exhibit 4.2 to the
Registrants Registration Statement on
Form S-3
(Registration
No. 33-52422)).
|
|
4
|
.5
|
|
Second Supplemental Indenture dated as of October 1, 1992,
between the Registrant and Bankers Trust Company, as
Trustee, to Indenture dated as of July 1, 1987, between the
Registrant and Bankers Trust Company, as Trustee
(incorporated by reference to Exhibit 4.1 to the
Registrants Current Report on
Form 8-K
filed with the SEC on November 13, 1992).
|
II-2
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description of Exhibit
|
|
|
4
|
.6
|
|
Third Supplemental Indenture dated as of September 1, 1995,
between the Registrant and Bankers Trust Company, as
Trustee, to Indenture dated as of July 1, 1987, between the
Registrant and Bankers Trust Company, as Trustee
(incorporated by reference to Exhibit 4.1 to the
Registrants Current Report on
Form 8-K
filed with the SEC on October 2, 1995).
|
|
4
|
.7
|
|
Fourth Supplemental Indenture dated as of August 4, 1999,
between the Registrant and Bankers Trust Company, as
Trustee, to Indenture dated as of July 1, 1987, between the
Registrant and Bankers Trust Company, as Trustee
(incorporated by reference to Exhibit 4.2 to the
Registrants Quarterly Report on
Form 10-Q
for the quarterly period (16 weeks) ended
September 11, 1999).
|
|
4
|
.8
|
|
Fifth Supplemental Indenture dated as of September 17,
1999, between the Registrant and Bankers Trust Company, as
Trustee, to Indenture dated as of July 1, 1987, between the
Registrant and Bankers Trust Company, as Trustee
(incorporated by reference to Exhibit 4.3 to the
Registrants Quarterly Report on
Form 10-Q
for the quarterly period (16 weeks) ended
September 11, 1999).
|
|
5
|
.1
|
|
Opinion of Dorsey & Whitney LLP.*
|
|
12
|
.1
|
|
Computation of Ratio of Earnings to Fixed Charges (incorporated
by reference to Exhibit 12 to the Registrants Annual
Report on
Form 10-K
for the year ended February 28, 2009).
|
|
23
|
.1
|
|
Consent of Dorsey & Whitney LLP (included in
Exhibit 5.1).*
|
|
23
|
.2
|
|
Consent of KPMG LLP.*
|
|
24
|
.1
|
|
Powers of Attorney.*
|
|
25
|
.1
|
|
Form T-1
Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of Deutsche Bank
Trust Company Americas, as Trustee, under the Indenture.*
|
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the Calculation of
Registration Fee table in the effective registration
statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(1)(i), (a)(1)(ii)
and (a)(1)(iii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Commission
by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement, or
is contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of the registration statement.
II-3
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under
the Securities Act of 1933 to any purchaser:
(i) Each prospectus filed by the registrant pursuant to
Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was
deemed part of and included in the registration
statement; and
(ii) Each prospectus required to be filed pursuant to
Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii) or
(x) for the purpose of providing the information required
by Section 10(a) of the Securities Act of 1933 shall be
deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first
used after effectiveness or the date of the first contract of
sale of securities in the offering described in the prospectus.
As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such
date shall be deemed to be a new effective date of the
registration statement relating to the securities in the
registration statement to which that prospectus relates, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement
or prospectus that is part of the registration statement or made
in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of
the registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or
made in any such document immediately prior to such effective
date.
(5) That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser in
the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering
of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method
used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell
such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the
undersigned registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used
or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
the undersigned registrant or its securities provided by or on
behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the
offering made by the undersigned registrant to the purchaser.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrants annual report
pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be
II-4
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Eden Prairie, State of Minnesota, on April 30, 2009.
SUPERVALU INC.
Sherry M. Smith
Senior Vice President, Finance
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on April 30, 2009 by
the following persons in the capacities indicated.
|
|
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|
|
Signature
|
|
Title
|
|
|
|
|
/s/ Jeffrey
Noddle
Jeffrey
Noddle
|
|
Chairman of the Board, Chief Executive Officer and Director
(principal executive officer)
|
|
|
|
/s/ Pamela
K. Knous
Pamela
K. Knous
|
|
Executive Vice President and Chief Financial Officer
(principal financial and accounting officer)
|
|
|
|
*
A.
Gary Ames
|
|
Director
|
|
|
|
*
Irwin
Cohen
|
|
Director
|
|
|
|
*
Ronald
E. Daly
|
|
Director
|
|
|
|
*
Lawrence
A. Del Santo
|
|
Director
|
|
|
|
*
Susan
E. Engel
|
|
Director
|
|
|
|
*
Philip
L. Francis
|
|
Director
|
|
|
|
*
Edwin
C. Gage
|
|
Director
|
|
|
|
*
Garnett
L. Keith, Jr.
|
|
Director
|
II-6
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
|
*
Charles
M. Lillis
|
|
Director
|
|
|
|
*
Marissa
T. Peterson
|
|
Director
|
|
|
|
*
Steven
S. Rogers
|
|
Director
|
|
|
|
*
Wayne
C. Sales
|
|
Director
|
|
|
|
*
Kathi
P. Seifert
|
|
Director
|
|
|
|
*
By: /s/ Burt
M. Fealing
Burt
M. Fealing
Attorney-in-Fact
|
|
|
II-7
EXHIBIT INDEX
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description of Exhibit
|
|
|
1
|
.1
|
|
Form of Underwriting Agreement between the Registrant and Credit
Suisse Securities LLC, Banc of America Securities LLC, Citigroup
Global Markets Inc. and RBS Securities Inc., as representatives
of the several underwriters.*
|
|
4
|
.1
|
|
Restated Certificate of Incorporation (incorporated by reference
to Exhibit(3)(i) to the Registrants Annual Report on
Form 10-K
for the year ended February 28, 2004).
|
|
4
|
.2
|
|
Restated Bylaws, as amended (incorporated by reference to
Exhibit 3.1 to the Registrants amendment on
Form 8-K/A
to Current Report on
Form 8-K
filed with the SEC on December 21, 2007).
|
|
4
|
.3
|
|
Indenture dated as of July 1, 1987, between the Registrant
and Bankers Trust Company, as Trustee, relating to certain
outstanding debt securities of the Registrant (incorporated by
reference to Exhibit 4.1 to the Registrants
Registration Statement on
Form S-3
(Registration
No. 33-52422)).
|
|
4
|
.4
|
|
First Supplemental Indenture dated as of August 1, 1990,
between the Registrant and Bankers Trust Company, as
Trustee, to Indenture dated as of July 1, 1987, between the
Registrant and Bankers Trust Company, as Trustee
(incorporated by reference to Exhibit 4.2 to the
Registrants Registration Statement on
Form S-3
(Registration
No. 33-52422)).
|
|
4
|
.5
|
|
Second Supplemental Indenture dated as of October 1, 1992,
between the Registrant and Bankers Trust Company, as
Trustee, to Indenture dated as of July 1, 1987, between the
Registrant and Bankers Trust Company, as Trustee
(incorporated by reference to Exhibit 4.1 to the
Registrants Current Report on
Form 8-K
filed with the SEC on November 13, 1992).
|
|
4
|
.6
|
|
Third Supplemental Indenture dated as of September 1, 1995,
between the Registrant and Bankers Trust Company, as
Trustee, to Indenture dated as of July 1, 1987, between the
Registrant and Bankers Trust Company, as Trustee
(incorporated by reference to Exhibit 4.1 to the
Registrants Current Report on
Form 8-K
filed with the SEC on October 2, 1995).
|
|
4
|
.7
|
|
Fourth Supplemental Indenture dated as of August 4, 1999,
between the Registrant and Bankers Trust Company, as
Trustee, to Indenture dated as of July 1, 1987, between the
Registrant and Bankers Trust Company, as Trustee
(incorporated by reference to Exhibit 4.2 to the
Registrants Quarterly Report on
Form 10-Q
for the quarterly period (16 weeks) ended
September 11, 1999).
|
|
4
|
.8
|
|
Fifth Supplemental Indenture dated as of September 17,
1999, between the Registrant and Bankers Trust Company, as
Trustee, to Indenture dated as of July 1, 1987, between the
Registrant and Bankers Trust Company, as Trustee
(incorporated by reference to Exhibit 4.3 to the
Registrants Quarterly Report on
Form 10-Q
for the quarterly period (16 weeks) ended
September 11, 1999).
|
|
5
|
.1
|
|
Opinion of Dorsey & Whitney LLP.*
|
|
12
|
.1
|
|
Computation of Ratio of Earnings to Fixed Charges (incorporated
by reference to Exhibit 12 to the Registrants Annual
Report on
Form 10-K
for the year ended February 28, 2009).
|
|
23
|
.1
|
|
Consent of Dorsey & Whitney LLP (included in
Exhibit 5.1).*
|
|
23
|
.2
|
|
Consent of KPMG LLP.*
|
|
24
|
.1
|
|
Powers of Attorney.*
|
|
25
|
.1
|
|
Form T-1
Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of Deutsche Bank
Trust Company Americas, as Trustee, under the Indenture.*
|