Back to GetFilings.com
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 29, 1998 Commission file number 1-6187
ALBERTSON'S, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Delaware 82-0184434
- ------------------------ --------------------------------
(State of Incorporation) (Employer Identification Number)
250 Parkcenter Boulevard, P.O. Box 20, Boise, Idaho 83726
(208) 395-6200
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each class on which registered
------------------------------------------ -----------------------
Common Stock, $1.00 par value, 245,778,957 New York Stock Exchange
shares outstanding on March 27, 1998 Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (17 CFR section 405) is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. ( )
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant, computed by reference to the price at which the stock was sold as of
the close of business on March 27, 1998: $9,448,475,914.
Documents Incorporated by Reference
-----------------------------------
Listed hereunder are the documents, any portions of which are incorporated by
reference, and the Parts of this Form 10-K into which such portions are
incorporated:
1. The Registrant's Annual Report to Stockholders for the fiscal year ended
January 29, 1998, portions of which are incorporated by reference into
Part II and Part IV of this Form 10-K; and
2. The Registrant's definitive proxy statement for use in connection with the
Annual Meeting of Stockholders to be held on May 22, 1998,(the "Proxy
Statement") to be filed within 120 days after the Registrant's fiscal year
ended January 29, 1998, portions of which are incorporated by reference
into Part III of this Form 10-K.
1
Documents Incorporated by Reference
-----------------------------------
Part II
- -------
Item 5 - Market for the Registrant's Inside back cover of the Annual Report
Common Equity and Related to Stockholders for the year ended
Stockholder Matters January 29, 1998
Item 6 - Selected Financial Data Page 44 of the Annual Report to
Stockholders for the year ended
January 29, 1998
Item 7 - Management's Discussion and Pages 19 to 22 of the Annual
Analysis of Financial Report to Stockholders for the
Condition and Results of year ended January 29, 1998
Operations
Item 8 - Financial Statements and Pages 23 to 43 and page 45 of the
Supplementary Data Annual Report to Stockholders for
the year ended January 29, 1998
Part III
- --------
Item 10 - Directors and Executive The material contained under the
Officers of the Registrant headings "Election of Directors,"
"Nominees for Election as Class III
Directors," "Continuing Class I
Directors," "Continuing Class II
Directors" and "Section 16(a)
Beneficial Ownership Reporting
Compliance" in the Proxy Statement
Item 11 - Executive Compensation The material contained under the
headings "Summary Compensation
Table," "Option Grants in Last
Fiscal Year," "Aggregated Option
Exercises in Last Fiscal Year and
Fiscal Year-End Option Values" and
"Retirement Benefits" in the Proxy
Statement
Item 12 - Security Ownership of The material contained under the
Certain Beneficial Owners heading "Voting Securities and
and Management Principal Holders Thereof" in the
Proxy Statement
Item 13 - Certain Relationships and The material contained under the
Related Transactions heading "Certain Transactions" in
the Proxy Statement
Part IV
- -------
Item 14 - Exhibits, Financial Pages 23 to 43 and page 45 of the
Statement Schedules and Annual Report to Stockholders for
Reports on Form 8-K the year ended January 29, 1998
2
ALBERTSON'S, INC.
TABLE OF CONTENTS
Item Page
- ---- ----
PART I
1. Business 4
2. Properties 5
3. Legal Proceedings 7
4. Submission of Matters to a Vote of Security Holders 8
PART II
5. Market for the Registrant's Common Equity and Related
Stockholder Matters 8
6. Selected Financial Data 8
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
7A. Quantitative and Qualitative Disclosures about
Market Risk 9
8. Financial Statements and Supplementary Data 9
9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 9
PART III
10. Directors and Executive Officers of the Registrant 9
11. Executive Compensation 12
12. Security Ownership of Certain Beneficial Owners
and Management 12
13. Certain Relationships and Related Transactions 12
PART IV
14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K 12
3
PART I
------
Item 1. Business
- -----------------
General
The Registrant, Albertson's, Inc. (the "Company"), is incorporated under the
laws of the State of Delaware and is the successor to a business founded by J.
A. Albertson in 1939. The Company is one of the largest retail food-drug chains
in the United States. As of January 29, 1998, the Company operated 878 stores in
20 Western, Midwestern and Southern states. These stores consist of 768
combination food-drug stores, 72 conventional supermarkets and 38 warehouse
stores. Retail operations are supported by 11 Company-owned distribution
centers.
The Company's combination food-drug stores are super grocery/super drugstores
under one roof and range in size from 35,000 to 82,000 square feet. Most of
these stores offer prescription drugs and an expanded section of cosmetics and
nonfoods in addition to specialty departments such as service seafood and meat,
bakery, lobby/video, service delicatessen, liquor and floral. Some also offer
meal centers, party pavilions, coffee bars and destination departments for
beverages, snacks, pet care, paper products and baby care. Food and nonfood
shopping areas are served by a common set of checkstands.
The Company's conventional supermarkets range in size from 15,000 to 35,000
square feet. These stores offer a full selection in the basic departments of
grocery, meat, produce, dairy and limited non-food lines. Many locations have an
in-store bakery and a service delicatessen.
The Company's warehouse stores are operated primarily under the name "Max
Food and Drug." These no-frills stores range in size from 17,000 to 73,000
square feet and offer significant savings with special emphasis on discounted
meat and produce.
In fiscal 1997 the Company opened its first fuel center. The Company plans to
continue to add fuel centers near existing stores. These centers feature three
to six fuel pumps and a small building, ranging in size from a pay-only kiosk to
a small convenience store featuring such items as candy, soft drinks and snack
foods.
The Company's retail operations are organized into regions with each region
comprised of four or five divisions. A senior vice president who also serves as
a regional manager directs the operating divisions in retail strategies,
planning, marketing approaches and employee development. Each operating division
is managed by a division vice president or manager. The division staff includes
district sales managers who oversee the operations of 19 stores on average and
merchandising specialists in areas such as grocery, produce, pharmacy, liquor,
general merchandise, bakery, meat and service delicatessen. Merchandising
specialists serve as advisors to help maintain adherence to overall division
pricing and merchandising policies. Each store has a store director responsible
for overall store operations and a front-end manager responsible for service
levels and efficiencies in the stores' checkstand operations.
The Company's business is highly competitive. Competition is based primarily
on price, product quality and variety, service and location. There is direct
competition from many local, regional and national supermarket chains,
supercenters, club stores, specialty retailers such as pet centers and toy
stores and large-scale drug and pharmaceutical retailers. Increasing competition
also exists from convenience stores, prepared food retailers, liquor and video
stores, film developing outlets and Internet and mail-order retailers.
4
The Company has been able to efficiently supply its stores with merchandise
through various means. Stores are provided with merchandise from the Company's
distribution centers, outside suppliers or directly from manufacturers in an
effort to obtain merchandise at the lowest possible cost. The Company services
all of its retail stores from Company-owned distribution centers.
All of the Company's stores carry a broad range of national brands and offer
"Albertson's Brands" products in many merchandise categories. The Company's
stores provide consumer information such as: nutritional signing in the meat and
produce departments, freshness code dating, unit pricing, meal ideas and food
information pamphlets. The Company also offers a choice of recyclable paper or
plastic bags and collection bins for plastic bag recycling.
As of January 29, 1998, the Company employed approximately 94,000 people,
many of which are covered by collective bargaining agreements. The Company
considers its present relations with employees to be good.
Albertson's stores are located in 20 Western, Midwestern and Southern areas
of the United States. The following is a summary of the stores by state as of
January 29, 1998:
Albertson's Retail Stores
-------------------------
Arizona 37
Arkansas 1
California 176
Colorado 50
Florida 102
Idaho 33
Kansas 6
Louisiana 19
Mississippi 3
Montana 8
Nebraska 8
Nevada 28
New Mexico 21
Oklahoma 24
Oregon 48
South Dakota 1
Texas 187
Utah 39
Washington 78
Wyoming 9
---
878
===
Item 2. Properties
- -------------------
The Company has actively pursued an expansion program of adding new retail
stores, enlarging and remodeling existing stores and replacing smaller stores.
During the past ten years, the Company has built or acquired 543 stores and
approximately 95% of the Company's current retail square footage has been opened
or remodeled during this period. The Company continues to follow the policy of
closing stores that are obsolete or lack satisfactory profit potential.
Prior to 1984 the Company financed a major portion of its stores under sale
and leaseback arrangements. The leases normally require the Company to pay for
property taxes, insurance and general maintenance. Some of the leases provide
for contingent rent in addition to minimum rent if sales exceed specified
amounts. Typically all leases contain renewal options which allow the Company
the right to extend the lease for varying additional periods.
5
Since 1984 the Company has financed most retail store construction
internally, rather than through sale and leaseback arrangements, thus retaining
ownership of its land and buildings. The Company's future expansion plans are
expected to be financed primarily from cash provided by operating activities.
The Company will continue to finance a portion of its new stores through lease
transactions when it does not have the option to own the property.
As of January 29, 1998, the Company operated 878 stores in the states
discussed in Item 1. An analysis of stores listed by division is as follows:
Number
of Stores
---------
Idaho (Southern Idaho (30), Northern Nevada (10),
Eastern Oregon (4) and Wyoming (1)) 45
Inland Empire (Eastern Washington (18),
Montana (8) and Northern Idaho (3)) 29
Utah (Utah (39) and Wyoming (1)) 40
Western Washington 55
Oregon (Western Oregon (44) and Washington (5)) 49
Southern California (California (128) and
Southern Nevada (18)) 146
Northern California 47
Rocky Mountain (Colorado (50), Wyoming (7),
New Mexico (1) and South Dakota (1)) 59
Southwest (Arizona (37), New Mexico (20), Texas (4)
and California (1)) 62
Midwest (Oklahoma (24), Nebraska (8) and Kansas (6)) 38
Houston (Texas (29), Louisiana (16) and Mississippi (3)) 48
San Antonio (Texas (44)) 44
Dallas/Ft. Worth (Texas (110), Louisiana (3) and
Arkansas (1)) 114
Florida 102
---
878
===
The following is a summary of stores, by classification, as of the indicated
fiscal year end:
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Combination Food-Drug 768 715 646 588 536
Conventional Stores 72 72 78 88 96
Warehouse Stores 38 39 40 44 44
--- --- --- --- ---
878 826 764 720 676
=== === === === ===
The following table summarizes the Company's retail square footage by store
type as of the indicated fiscal year end (in thousands):
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
Combination Food-Drug 38,904 35,886 32,217 29,217 26,602
Conventional Stores 2,105 2,113 2,261 2,524 2,741
Warehouse Stores 1,792 1,841 1,881 2,037 2,031
------ ------ ------ ------ ------
42,801 39,840 36,359 33,778 31,374
====== ====== ====== ====== ======
The Company has expanded and improved its distribution facilities when
opportunities exist to improve service to the retail stores and generate an
adequate return on investment. During 1997 approximately 77% of the merchandise
purchased for resale in Company retail stores was received from Company-owned
distribution centers.
6
Albertson's distribution system consists of 11 Company-owned centers located
strategically throughout the Company's operating markets. The following is a
summary of the Company's distribution and manufacturing facilities as of January
29, 1998:
Location Square Footage
-------- --------------
Fort Worth, Texas
Groceries, Frozen Food, Produce, Meat and Deli 1,100,000
Brea, California
Groceries, Frozen Food, Produce, Liquor,
Meat and Deli 1,018,000
Central Bakery 41,000
Plant City, Florida
Groceries, Frozen Food, Produce, Liquor, Meat,
Deli and high-volume Health and Beauty Care 979,000
Portland, Oregon
Groceries, Frozen Food, Produce, Meat and Deli 790,000
Houston, Texas
Groceries, Frozen Food, Produce, Meat and Deli 698,000
Phoenix, Arizona
Groceries, Frozen Food, Produce, Liquor, Meat,
Deli and high-volume Health and Beauty Care 687,000
Salt Lake City, Utah
Groceries, Frozen Food, Produce, Meat and Deli 647,000
Sacramento, California
Groceries, Frozen Food, Produce, Liquor, Meat
and Deli 421,000
Ponca City, Oklahoma
Health and Beauty Care, General Merchandise
and Pharmaceuticals 419,000
Denver, Colorado
Groceries, Frozen Food, Produce, Meat and Deli 355,000
Boise, Idaho
Health and Beauty Care and General Merchandise 238,000
Ice Cream Plant 11,000
---------
7,404,000
=========
As of January 29, 1998, the Company held title to the land and buildings of
52% of the Company's stores and held title to the buildings on leased land of an
additional 10% of the Company's stores. The Company also holds title to the land
and buildings of the Company's corporate headquarters in Boise, Idaho, 8
division offices and all of the distribution facilities.
Item 3. Legal Proceedings
- --------------------------
Three civil lawsuits filed in September 1996 as purported statewide class
actions in Washington, California and Florida and two civil lawsuits filed in
April 1997 in federal court in Boise, Idaho, as purported multi-state class
actions (including the remaining states in which the Company operated at the
time) have been brought against the Company raising various issues that include:
(i) allegations that the Company has a widespread practice of permitting its
employees to work "off-the-clock" without being paid for their work and (ii)
allegations that the Company's bonus and workers' compensation plans are
unlawful. Four of these suits are being sponsored and financed by the United
Food and Commercial Workers (UFCW) International Union. The five suits have been
consolidated in Boise, Idaho. In addition, three other similar suits have been
filed as purported class actions in Colorado, New Mexico and Nevada which, in
effect, duplicate the coverage of the UFCW-sponsored suits. These cases may
ultimately be transferred to, or consolidated with, the pending Boise
litigation.
7
The Company is committed to full compliance with all applicable laws.
Consistent with this commitment, the Company has firm and long-standing policies
in place prohibiting off-the-clock work and has structured its bonus and
workers' compensation plans to comply with applicable law. The Company believes
that the UFCW-sponsored suits are part of a broader and continuing effort by the
UFCW and some of its locals to pressure the Company to unionize employees who
have not expressed a desire to be represented by a union. The Company intends to
vigorously defend against all of these lawsuits, and, at this stage of the
litigation, the Company believes that it has strong defenses against them.
Although these lawsuits are subject to the uncertainties inherent in the
litigation process, based on the information presently available to the Company,
management does not expect the ultimate resolution of these actions to have a
material adverse effect on the Company's financial condition, results of
operations or cash flows.
The Company is also involved in routine litigation incidental to operations.
In the opinion of management, the ultimate resolution of these legal proceedings
will not have a material adverse effect on the Company's financial condition,
results of operations or cash flows.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
No matters were submitted during the fourth quarter of 1997 to a vote of
security holders through the solicitation of proxies or otherwise.
PART II
-------
Item 5. Market for the Registrant's Common Equity and Related
- ---------------------------------------------------------------
Stockholder Matters
- -------------------
The principal markets in which the Company's common stock is traded and the
related security holder matters are set forth under the captions "Company Stock
Information" and "Stockholders of Record" on the inside back cover of the
Company's 1997 Annual Report to Stockholders. This information is incorporated
herein by this reference thereto. The market value of the Company's common stock
on March 27, 1998, was $51.0625 per share.
Item 6. Selected Financial Data
- --------------------------------
Selected financial data of the Company for the fiscal years 1993 through 1997
is included under the caption "Five Year Summary of Selected Financial Data"
on page 44 of the Company's 1997 Annual Report to Stockholders. This information
is incorporated herein by this reference thereto.
Item 7. Management's Discussion and Analysis of Financial Condition and
- ------------------------------------------------------------------------
Results of Operations
- ---------------------
The information required under this item is included under the caption
"Financial Review" on pages 19 to 22 of the Company's 1997 Annual Report to
Stockholders. This information is incorporated herein by this reference thereto.
8
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
- -------------------------------------------------------------------
The Company is exposed to certain market risks which are inherent in the
Company's financial instruments which arise from transactions entered into in
the normal course of business. Although the Company currently utilizes no
material derivative financial instruments which expose the Company to
significant market risk, the Company is exposed to cash flow and fair value risk
due to changes in interest rates with respect to its long-term debt borrowings.
The Company is subject to interest rate risk on its long-term fixed interest
rate debt borrowings. Commercial paper borrowings do not give rise to
significant interest rate risk because these borrowings have maturities of less
than three months. All things being equal, the fair value of debt with a fixed
interest rate will increase as interest rates fall, and the fair value will
decrease as interest rates rise. The Company manages its exposure to interest
rate risk by utilizing a combination of fixed rate borrowings and commercial
paper borrowings.
The table below presents principal cash flows and related weighted average
interest rates of the Company's long-term debt borrowings (excluding commercial
paper) at January 29, 1998 by expected maturity dates (in millions):
There- Fair
1998 1999 2000 2001 2002 after Total Value
----- ---- ------ ---- ---- ------ ------ ------
Long-Term Debt $86.5 $1.1 $290.9 $1.5 $1.7 $411.2 $792.9 $833.8
Weighted average
interest rate 5.71% 8.73% 6.31% 9.08% 9.34% 7.28% 6.77%
Item 8. Financial Statements and Supplementary Data
- ----------------------------------------------------
The Company's consolidated financial statements and related notes thereto,
together with the Independent Auditors' Report and the selected quarterly
financial data of the Company are presented on pages 23 to 43 and page 45 of the
Company's 1997 Annual Report to Stockholders and are incorporated herein by this
reference thereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
- ------------------------------------------------------------------------
Financial Disclosure
- --------------------
There have been no reports on Form 8-K filed within 24 months prior to the
date of the most recent financial statements reporting a change of accountants
or reporting disagreements on any matter of accounting principle, practice,
financial statement disclosure or auditing scope or procedure.
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
- ------------------------------------------------------------
Directors
- ---------
The information regarding directors and nominees for directors of the Company
is presented under the headings "Election of Directors," "Nominees for Election
as Class III Directors," "Continuing Class I Directors," "Continuing Class II
Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the
Company's definitive proxy statement for use in connection with the 1998 Annual
Meeting of Stockholders (the "Proxy Statement") to be filed within 120 days
after the Company's fiscal year ended January 29, 1998, and is incorporated
herein by this reference thereto.
9
Executive Officers
- ------------------
Age Date First Appointed
as of as an Executive
Name 3/27/98 Position Officer
---- ------- -------- --------------------
Gary G. Michael 57 Chairman of the Board and 12/02/74
Chief Executive Officer
John B. Carley 64 Chairman of the Executive 04/05/76
Committee of the Board
Richard L. King 48 President and Chief Operating 01/01/94
Officer
Carl W. Pennington 60 Executive Vice President, 08/02/87
Corporate Merchandising
Michael F. Reuling 51 Executive Vice President, 12/30/79
Store Development
Thomas R. Saldin 51 Executive Vice President, 12/26/83
Administration and
General Counsel
Ronald D. Walk 54 Executive Vice President, 05/28/84
Retail Operations
Thomas E. Brother 56 Senior Vice President, 07/30/89
Distribution
William H. Emmons 48 Senior Vice President and 02/02/96
Regional Manager
Dennis C. Lucas 50 Senior Vice President and 02/02/96
Regional Manager
A. Craig Olson 46 Senior Vice President, Finance 12/22/86
and Chief Financial Officer
David G. Simonson 51 Senior Vice President and 02/02/96
Regional Manager
Patrick S. Steele 48 Senior Vice President, 06/10/90
Information Systems and
Technology
Steven D. Young 49 Senior Vice President, Human 12/02/91
Resources
Robert K. Banks 48 Group Vice President, 12/02/96
Real Estate
David G. Dean 47 Group Vice President, 12/02/91
Procurement
Peggy Jo Jones 45 Group Vice President, Employee 11/29/93
Development and Communications
Richard J. Navarro 45 Group Vice President and 11/29/93
Controller
10
Gary G. Michael has served as Chairman of the Board and Chief Executive
Officer since 1991.
John B. Carley became Chairman of the Executive Committee of the Board on
February 2, 1996. Previously he served as President and Chief Operating Officer
from 1991.
Richard L. King was promoted to President and Chief Operating Officer on
February 2, 1996. Previously he served as Senior Vice President and Regional
Manager from November 1994; Group Vice President, Merchandising from January
1994; and Vice President, Rocky Mountain Division from 1992.
Carl W. Pennington was promoted to Executive Vice President, Corporate
Merchandising on February 2, 1996. Previously he served as Senior Vice
President, Corporate Merchandising from 1994 and Senior Vice President and
Regional Manager from 1988.
Michael F. Reuling has served as Executive Vice President, Store
Development since 1986.
Thomas R. Saldin has served as Executive Vice President, Administration and
General Counsel since 1991.
Ronald D. Walk was promoted to Executive Vice President, Retail Operations
on February 2, 1996. Previously he served as Senior Vice President and Regional
Manager from 1984.
Thomas E. Brother has served as Senior Vice President, Distribution since
1991.
William H. Emmons was promoted to Senior Vice President and Regional
Manager on February 2, 1996. Previously he served as Vice President, North Texas
Division from 1993 and Vice President, Texas Division from 1988.
Dennis C. Lucas was promoted to Senior Vice President and Regional Manager
on February 2, 1996. Previously he served as Vice President, Oregon Division
from 1995; Vice President, Midwest Division from 1993; Division Manager, Midwest
Division from July 1992; and Director of Operations, Southern California
Division from February 1992.
A. Craig Olson has served as Senior Vice President, Finance and Chief
Financial Officer since 1991.
David G. Simonson was promoted to Senior Vice President and Regional
Manager on February 2, 1996. Previously he served as Vice President, Southern
California Division from 1991.
Patrick S. Steele was promoted to Senior Vice President, Information
Systems and Technology in 1993. Previously he served as Group Vice President,
Management Information Systems from 1990.
Steven D. Young was promoted to Senior Vice President, Human Resources in
1993. Previously he served as Group Vice President, Human Resources from 1991.
Robert K. Banks was promoted to Group Vice President, Real Estate on
December 2, 1996. Previously he served as Vice President, Real Estate from 1990.
David G. Dean has served as Group Vice President, Procurement since 1991.
Peggy Jo Jones was promoted to Group Vice President, Employee Development
and Communications in November 1993. Previously she served as Vice President,
Employee Development and Communications from September 1993; and Vice President,
Retail Accounting from 1992.
11
Richard J. Navarro was promoted to Group Vice President and Controller in
1993. Previously he served as Vice President and Controller from 1989.
Item 11. Executive Compensation
- --------------------------------
Information concerning executive compensation is presented under the headings
"Summary Compensation Table," "Option Grants in Last Fiscal Year," "Aggregated
Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values" and
"Retirement Benefits" in the Proxy Statement. This information is incorporated
herein by this reference thereto.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- ------------------------------------------------------------------------
Information with respect to security ownership of certain beneficial owners
and management is set forth under the heading "Voting Securities and Principal
Holders Thereof" in the Proxy Statement. This information is incorporated herein
by this reference thereto.
Item 13. Certain Relationships and Related Transactions
- --------------------------------------------------------
Information concerning related transactions is presented under the heading
"Certain Transactions" in the Proxy Statement. This information is incorporated
herein by this reference thereto.
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
- -------------------------------------------------------------------------
(a)1 Financial Statements:
The Independent Auditors' Report, together with the Consolidated
Financial Statements and the related notes thereto, are listed below
and are incorporated herein by this reference thereto from pages 23 to
43 of the Company's Annual Report to Stockholders for the year ended
January 29, 1998:
Consolidated Earnings -- years ended January 29, 1998; January 30,
1997; February 1, 1996.
Consolidated Balance Sheets -- January 29, 1998; January 30, 1997;
February 1, 1996.
Consolidated Cash Flows -- years ended January 29, 1998; January
30, 1997; February 1, 1996.
Consolidated Stockholders' Equity -- years ended January 29, 1998;
January 30, 1997; February 1, 1996.
Notes to Consolidated Financial Statements.
Independent Auditors' Report.
12
Quarterly Financial Data:
Quarterly Financial Data for the years ended January 29, 1998 and
January 30, 1997 is set forth on page 45 of the Annual Report to
Stockholders for the year ended January 29, 1998, and is incorporated
herein by this reference thereto.
(a)2 Schedules:
All schedules are omitted because they are not required or because
the required information is included in the consolidated financial
statements or notes thereto.
(a)3 Exhibits:
A list of the exhibits required to be filed as part of this report
is set forth in the Index to Exhibits on page 17 hereof.
(b) Reports on Form 8-K:
There were no reports on Form 8-K during the quarter ended January
29, 1998.
For the purposes of complying with the amendments to the rules governing Form
S-8 (effective July 13, 1990) under the Securities Act of 1933, the Company
hereby undertakes as follows, which undertaking shall be incorporated by
reference into Company's Registration Statements on Form S-8 Nos. 2-80776,
33-2139, 33-7901, 33-15062, 33-43635, 33-62799 and 33-59803.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the Act) may be permitted to directors, officers and controlling
persons of the Company, the Company 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 Company of expenses incurred or paid by a director, officer or controlling
person of the Company 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 Company 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.
Cautionary Statement for Purposes of "Safe Harbor Provisions"
- -------------------------------------------------------------
of the Private Securities Litigation Reform Act of 1995
- -------------------------------------------------------
From time to time, information provided by the Company, including written or
oral statements made by its representatives, may contain forward-looking
information as defined in the Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical facts, which address
activities, events or developments that the Company expects or anticipates will
or may occur in the future, including such things as expansion and growth of the
Company's business, future capital expenditures and the Company's business
strategy, contain forward-looking information. In reviewing such information it
should be kept in mind that actual results may differ materially from those
projected or suggested in such forward-looking information. This forward-looking
information is based on various factors and was derived utilizing numerous
assumptions. Many of these factors have previously been identified in filings or
statements made by or on behalf of the Company.
13
Important assumptions and other important factors that could cause actual
results to differ materially from those set forth in the forward-looking
information include changes in the general economy, changes in consumer
spending, competitive factors and other factors affecting the Company's business
in or beyond the Company's control. These factors include changes in the rate of
inflation, changes in state or federal legislation or regulation, adverse
determinations with respect to litigation or other claims (including
environmental matters), labor negotiations, adverse effects of failure to
achieve Year 2000 compliance, the Company's ability to recruit and develop
employees, its ability to develop new stores or complete remodels as rapidly as
planned, its ability to successfully implement new technology and stability of
product costs.
Other factors and assumptions not identified above could also cause the
actual results to differ materially from those set forth in the forward-looking
information. The Company does not undertake to update forward-looking
information contained herein or elsewhere to reflect actual results, changes in
assumptions or changes in other factors affecting such forward-looking
information.
14
Signatures
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Albertson's, Inc. has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
ALBERTSON'S, INC.
By GARY G. MICHAEL
---------------------------
Gary G. Michael
(Chairman of the Board and
Chief Executive Officer)
15
Date: April 9, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated as of April 9, 1998.
GARY G. MICHAEL JOHN B. CARLEY
- --------------------------------- --------------------------------
Gary G. Michael John B. Carley
(Chairman of the Board and (Chairman of the Executive
Chief Executive Officer and Committee of the Board and
Director) Director)
A. CRAIG OLSON RICHARD J. NAVARRO
- --------------------------------- --------------------------------
A. Craig Olson Richard J. Navarro
(Senior Vice President, Finance (Group Vice President and
and Chief Financial Officer) Controller)
(Chief Accounting Officer)
KATHRYN ALBERTSON A. GARY AMES
- --------------------------------- --------------------------------
Kathryn Albertson A. Gary Ames
(Director) (Director)
CECIL D. ANDRUS PAUL I. CORDDRY
- -------------------------------- --------------------------------
Cecil D. Andrus Paul I. Corddry
(Director) (Director)
JOHN B. FERY CLARK A. JOHNSON
- -------------------------------- --------------------------------
John B. Fery Clark A. Johnson
(Director) (Director)
CHARLES D. LEIN WARREN E. McCAIN
- --------------------------------- --------------------------------
Charles D. Lein Warren E. McCain
(Director) (Director)
BEATRIZ RIVERA J. B. SCOTT
- --------------------------------- --------------------------------
Beatriz Rivera J. B. Scott
(Director) (Director)
THOMAS L. STEVENS, JR. WILL M. STOREY
- --------------------------------- --------------------------------
Thomas L. Stevens, Jr. Will M. Storey
(Director) (Director)
STEVEN D. SYMMS
- ---------------------------------
Steven D. Symms
(Director)
16
Index to Exhibits
Filed with the Annual Report
on Form 10-K for the
Year Ended January 29, 1998
Number Description
- ------ -----------
2 Inapplicable
3.1 Restated Certificate of Incorporation(1)
3.1.1 Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock(2)
3.2 By-Laws dated December 2, 1996(3)
4.1 Stockholder Rights Plan Agreement(4)
4.2 Indenture, dated as of May 1, 1992, between Albertson's, Inc., and
Morgan Guaranty Trust Company of New York as Trustee(5)
9 Inapplicable
10.1 J. A. and Kathryn Albertson Foundation Inc. Stock Agreement
(dated May 21, 1997)(6)*
10.1.1 Waiver regarding Alscott Limited Partnership #1 Stock
Agreement (dated May 21, 1997)(6)*
10.1.2 Waiver regarding Kathryn Albertson Stock Agreement (dated
May 21, 1997)(6)*
10.5 Form of Beneficiary Agreement for Key Executive Life Insurance(7)*
10.6 Executive Deferred Compensation Plan (amended and restated
February 1, 1989)(8)*
10.6.1 Amendment to Executive Deferred Compensation Plan (dated
December 4, 1989)(9)*
10.7 Senior Operations Executive Officer Bonus Plan(2)*
10.9 Description of Bonus Incentive Plans (amended December 3,
1984)(10)*
10.10 Agreement Among Albertson's, Inc., Theo Albrecht Stiftung and
Theo Albrecht dated as of February 15, 1980(11)
10.10.1 Letter Amendment of October 13, 1982 regarding Exhibit 10.10(12)
10.10.2 First Amendment dated April 11, 1984 to Agreement among
Albertson's, Inc., Theo Albrecht Stiftung and Theo Albrecht(13)
10.10.3 Second Amendment dated September 25, 1989 to Agreement among
Albertson's, Inc., Markus Stiftung and Theo Albrecht(9)
10.10.4 Third Amendment dated December 5, 1994 to Agreement among
Albertson's, Inc., Markus Stiftung and Theo Albrecht(14)
10.11 1982 Incentive Stock Option Plan (amended March 4, 1991)(15)*
17
Number Description
- ------ -----------
10.12 Form of 1982 Incentive Stock Option Agreement (amended
November 30, 1987)(16)*
10.12.1 Form of 1982 Incentive Stock Option Agreement (used in connection with
certain options granted pursuant to the 1982 Incentive Stock Option
Plan on or after September 5, 1989)(17)*
10.13 Executive Pension Makeup Plan (amended and restated February 1,
1989)(8)*
10.13.1 First Amendment to Executive Pension Makeup Plan (dated June 8,
1989)(18)*
10.13.2 Second Amendment to Executive Pension Makeup Plan (dated January 12,
1990)(19)*
10.13.3 Third Amendment to Executive Pension Makeup Plan (dated January 31,
1990)(20)*
10.13.4 Fourth Amendment to Executive Pension Makeup Plan (effective
January 1, 1995)(14)*
10.13.5 Amendment to Executive Pension Makeup Plan (retroactive to January 1,
1990)(21)*
10.14 Credit Agreement (dated October 5, 1994)(22)
10.14.1 Amendment No. 1 to Credit Agreement (dated October 25, 1995)(23)
10.14.2 Amended and Restated Credit Agreement (dated December 17, 1996)(2)
10.15 Senior Executive Deferred Compensation Plan (amended and
restated February 1, 1989)(8)*
10.15.1 Amendment to Senior Executive Deferred Compensation Plan (dated
December 4, 1989)(9)*
10.16 1986 Nonqualified Stock Option Plan (amended March 4, 1991)(15)*
10.17 Form of 1986 Nonqualified Stock Option Plan Stock Option Agreement
(amended November 30, 1987)(16)
10.18 Executive Pension Makeup Trust (dated February 1, 1989)(8)*
10.19 Executive Deferred Compensation Trust (dated February 1, 1989)(8)*
10.20 1990 Deferred Compensation Plan(15)*
10.20.1 Amendment to 1990 Deferred Compensation Plan (dated April 12,
1994)(24)*
10.20.2 Amendment to 1990 Deferred Compensation Plan (dated November 5,
1997)*
10.21 Non-Employee Directors' Deferred Compensation Plan(15)*
10.22 1990 Deferred Compensation Trust (dated November 20, 1990)(15)*
10.23 Letter Agreement with John B. Carley (dated December 4, 1995)(21)*
10.24 1995 Stock-Based Incentive Plan (dated May 26, 1995)(25)*
18
Number Description
- ------ -----------
10.24.1 Form of 1995 Stock-Based Incentive Plan Stock Option Agreement
(dated December 4, 1995)(21)*
10.25 1995 Stock Option Plan for Non-Employee Directors (dated
May 26, 1995)(25)*
10.25.1 Form of 1995 Stock Option Plan for Non-Employee Directors Agreement
(dated May 30, 1995)(25)*
11 Inapplicable
12 Inapplicable
13 Exhibit 13 consists of pages 19 to 45 and the inside back cover of
Albertson's, Inc. 1997 Annual Report to Stockholders which are
numbered as pages 1 to 28 of Exhibit 13. Such report, except to the
extent incorporated herein by reference, has been sent to and
furnished for the information of the Securities and Exchange
Commission only and is not to be deemed filed as part of this Annual
Report on Form 10-K. The references to the pages incorporated by
reference are to the printed Annual Report. The references to the
pages of Exhibit 13 are as follows: Item 5--page 28; Item 6--page 26;
Item 7--pages 1 through 4; and Items 8 and 14--pages 5 through 25 and
page 27.
16 Inapplicable
18 Inapplicable
21 Inapplicable
22 Inapplicable
23 Independent Auditors' Consent
24 Inapplicable
27 Financial Data Schedule - Fiscal Year 1997
27.1 Restated Financial Data Schedule - Quarters 1, 2 and 3 of 1997
27.2 Restated Financial Data Schedule - Fiscal Year and Quarters 1, 2 and
3 of 1996
27.3 Restated Financial Data Schedule - Fiscal Year 1995
99.1 Agreement and Plan of Merger among Albertson's, Inc., Locomotive
Acquisition Corp. and Buttrey Food and Drug Stores Company (dated as
of January 19, 1998)(26)
99.2 Tender and Option Agreement (dated as of January 19, 1998)(26)
* Identifies management contracts or compensatory plans or arrangements
required to be filed as an exhibit hereto.
(1) Exhibit 3.1 is incorporated herein by reference to Exhibit 3.1 of Form
10-Q for the quarter ended May 2, 1991.
(2) Exhibits 3.1.1, 10.7 and 10.14.2 are incorporated herein by reference to
Exhibits 3.1.1, 10.7 and 10.14.2, respectively, of Form 10-K for the year
ended January 30, 1997.
19
(3) Exhibit 3.2 is incorporated herein by reference to Exhibit 3.2 of Form
10-Q for the quarter ended October 31, 1996.
(4) Exhibit 4.1 is incorporated herein by reference to Exhibit 1 of Form 8-A
Registration Statement filed with the Commission on March 4, 1997.
(5) Exhibit 4.2 is incorporated herein by reference to Exhibit 4.1 of Form S-3
Registration Statement 333-41793 filed with the Commission on December 9,
1997. In reliance upon Item 601(b)(4)(iii)(A) of Regulation S-K, various
other instruments defining the rights of holders of long-term debt of the
Registrant and its subsidiaries are not being filed herewith, because the
total amount of securities authorized under each such instrument does not
exceed 10% of the total assets of the Registrant and its subsidiaries on a
consolidated basis. The Registrant hereby agrees to furnish a copy of any
such instrument to the Commission upon request.
(6) Exhibits 10.1, 10.1.1 and 10.1.2 are incorporated herein by reference to
Exhibits 10.1, 10.1.1 and 10.1.2, respectively, of Form 10-Q for the
quarter ended May 1, 1997.
(7) Exhibit 10.5 is incorporated herein by reference to Exhibit 10.5.1 of Form
10-K for the year ended January 30, 1986.
(8) Exhibits 10.6, 10.13, 10.15, 10.18 and 10.19 are incorporated herein by
reference to Exhibits 10.6, 10.13, 10.15, 10.18 and 10.19, respectively,
of Form 10-K for the year ended February 2, 1989.
(9) Exhibits 10.6.1, 10.10.3 and 10.15.1 are incorporated herein by reference
to Exhibits 10.6.1, 10.10.3 and 10.15.1, respectively, of Form 10-Q for
the quarter ended November 2, 1989.
(10) Exhibit 10.9 is incorporated herein by reference to Exhibit 10.9 of Form
10-K for the year ended January 31, 1985.
(11) Exhibit 10.10 is incorporated herein by reference to exhibit 10.10 of Form
10-K for the year ended January 29, 1981.
(12) Exhibit 10.10.1 is incorporated herein by reference to Exhibit 10.10.1 of
the Form 10-K for the year ended February 3, 1983.
(13) Exhibit 10.10.2 is incorporated herein by reference to Exhibit 10.10.2 of
Form 10-Q for the quarter ended May 3, 1994.
(14) Exhibits 10.10.4 and 10.13.4 are incorporated herein by reference to
Exhibits 10.10.4 and 10.13.4 of Form 10-K for the year ended February 2,
1995.
(15) Exhibits 10.11, 10.16, 10.20, 10.21 and 10.22 are incorporated herein by
reference to Exhibits 10.11, 10.16, 10.20, 10.21 and 10.22, respectively,
of Form 10-K for the year ended January 31, 1991. Exhibit 10.11 expired by
its terms February 29, 1992. Notwithstanding such expiration, certain
agreements for the options granted under this option plan remain
outstanding.
(16) Exhibits 10.12 and 10.17 are incorporated herein by reference to Exhibits
10.12 and 10.17, respectively, of Form 10-Q for the quarter ended October
29, 1987.
(17) Exhibit 10.12.1 is incorporated herein by reference to Exhibit 10.12.1 of
Form 10-Q for the quarter ended August 3, 1989.
20
(18) Exhibit 10.13.1 is incorporated herein by reference to Exhibit 10.13.1 of
Form 10-Q for the quarter ended May 4, 1989.
(19) Exhibit 10.13.2 is incorporated herein by reference to Exhibit 10.13.2 of
Form 10-K for the year ended February 1, 1990.
(20) Exhibit 10.13.3 is incorporated herein by reference to Exhibit 10.13.3 of
Form 10-Q for the quarter ended August 2, 1990.
(21) Exhibits 10.13.5, 10.23 and 10.24.1 are incorporated herein by reference
to Exhibits 10.13.5, 10.23 and 10.24.1, respectively, of Form 10-K for the
year ended February 1, 1996.
(22) Exhibit 10.14 is incorporated herein by reference to Exhibit 10.14 of Form
10-Q for the quarter ended November 3, 1994.
(23) Exhibit 10.14.1 is incorporated herein by reference to Exhibit 10.14.1 of
Form 10-Q for the quarter ended November 2, 1995.
(24) Exhibit 10.20.1 is incorporated herein by reference to Exhibit 10.20.1 of
Form 10-Q for the quarter ended August 4, 1994.
(25) Exhibits 10.24, 10.25 and 10.25.1 are incorporated herein by reference to
Exhibits 10.24, 10.25 and 10.25.1, respectively, of Form 10-Q for the
quarter ended May 4, 1995.
(26) Exhibits 99.1 and 99.2 are incorporated herein by reference to Exhibits
99.1 and 99.2, respectively, of the Company's Tender Offer Statement on
Schedule 14D-1 dated January 26, 1998.
21