T
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Maryland
|
|
13-1890974
|
|
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
Montvale, New Jersey 07645
|
|
(Address of principal executive offices)
|
||
|
|
|
|
(201) 573-9700
|
|
(Registrant's telephone number, including area code)
|
|
|
12 Weeks Ended
|
|
|
28 Weeks Ended
|
|
||||||||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||||
Sales
|
$
|
1,918,279
|
|
|
$
|
2,065,061
|
|
$
|
4,483,209
|
|
|
$
|
4,855,304
|
|
||
Cost of merchandise sold
|
|
(1,355,572
|
)
|
|
|
(1,441,703
|
)
|
|
(3,156,690
|
)
|
|
|
(3,387,077
|
)
|
||
Gross margin
|
|
562,707
|
|
|
|
623,358
|
|
|
1,326,519
|
|
|
|
1,468,227
|
|
||
Store operating, general and administrative expense
|
|
(631,224
|
)
|
|
|
(631,924
|
)
|
|
(1,452,240
|
)
|
|
|
(1,478,629
|
)
|
||
Long-lived asset impairment
|
(30,250
|
)
|
-
|
(35,648
|
)
|
-
|
||||||||||
Loss from operations
|
|
(98,767
|
)
|
|
|
(8,566
|
)
|
|
(161,369
|
)
|
|
|
(10,402
|
)
|
||
Nonoperating income (loss)
|
|
2,177
|
|
|
|
(7,079
|
)
|
|
10,454
|
|
|
|
(8,954
|
)
|
||
Interest expense, net
|
|
(46,126
|
)
|
|
|
(48,508
|
)
|
|
(107,268
|
)
|
|
|
(102,715
|
)
|
||
Loss from continuing operations before income taxes
|
|
(142,716
|
)
|
|
|
(64,153
|
)
|
|
(258,183
|
)
|
|
|
(122,071
|
)
|
||
(Provision for) benefit from income taxes
|
|
(105
|
)
|
|
|
1,994
|
|
|
(245
|
)
|
|
|
1,608
|
|
||
Loss from continuing operations
|
|
(142,821
|
)
|
|
|
(62,159
|
)
|
|
(258,428
|
)
|
|
|
(120,463
|
)
|
||
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Loss from operations of discontinued businesses, net of tax of $0
|
|
(10,853
|
)
|
|
|
(18,150
|
)
|
|
(17,968
|
)
|
|
|
(25,006
|
)
|
||
Gain on disposal of discontinued businesses, net of tax of $0
|
|
-
|
|
|
|
-
|
|
|
79
|
|
|
|
-
|
|
||
Loss from discontinued operations
|
|
(10,853
|
)
|
|
|
(18,150
|
)
|
|
(17,889
|
)
|
|
|
(25,006
|
)
|
||
Net loss
|
|
$
|
(153,674
|
)
|
|
$
|
(80,309
|
)
|
|
$
|
(276,317
|
)
|
|
$
|
(145,469
|
)
|
Net loss per share – basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(2.73
|
)
|
|
$
|
(1.18
|
)
|
|
$
|
(5.01
|
)
|
|
$
|
(2.29
|
)
|
Discontinued operations
|
|
|
(0.21
|
)
|
|
|
(0.34
|
)
|
|
|
(0.33
|
)
|
|
|
(0.47
|
)
|
Net loss per share – basic
|
|
$
|
(2.94
|
)
|
|
$
|
(1.52
|
)
|
|
$
|
(5.34
|
)
|
|
$
|
(2.76
|
)
|
Net loss per share – diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(2.76
|
)
|
|
$
|
(3.06
|
)
|
|
|
(14.72
|
)
|
|
$
|
(5.90
|
)
|
Discontinued operations
|
|
|
(0.19
|
)
|
|
|
(0.68
|
)
|
|
|
(0.94
|
)
|
|
|
(1.19
|
)
|
Net loss per share – diluted
|
|
$
|
(2.95
|
)
|
|
$
|
(3.74
|
)
|
|
$
|
(15.66
|
)
|
|
$
|
(7.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
53,778,502
|
|
|
|
53,196,728
|
|
|
|
53,618,284
|
|
|
|
53,019,715
|
|
Diluted
|
|
|
56,970,721
|
|
|
|
26,614,466
|
|
|
|
18,949,997
|
|
|
|
21,044,730
|
|
|
|
Common Stock
|
|
|
Additional Paid-in Capital
|
|
|
Accumulated Deficit
|
|
|
Accumulated Other Comprehensive Loss
|
|
|
Total Stockholders’ Deficit
|
|
|||||||||
|
|
Shares
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
||||||||||
28 Weeks Ended September 11, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance as of 2/27/2010, as previously reported
|
|
|
55,868,129
|
|
|
$
|
55,868
|
|
|
$
|
498,144
|
|
|
$
|
(1,003,812
|
)
|
|
$
|
(79,403
|
)
|
|
$
|
(529,203
|
)
|
Retrospective adoption of new accounting guidance for own share-lending arrangements
|
-
|
-
|
|
|
28,277
|
|
|
|
(28,277
|
)
|
-
|
-
|
||||||||||||
Balance as of 2/27/2010, as adjusted
|
|
|
55,868,129
|
|
|
|
55,868
|
|
|
|
526,421
|
|
|
|
(1,032,089
|
)
|
|
|
(79,403
|
)
|
|
|
(529,203
|
)
|
Net loss
|
-
|
-
|
-
|
|
|
(276,317
|
)
|
-
|
|
|
(276,317
|
)
|
||||||||||||
Beneficial conversion feature accretion on preferred stock
|
-
|
-
|
|
|
(2,591
|
)
|
-
|
-
|
|
|
(2,591
|
)
|
||||||||||||
Dividends on preferred stock
|
|
|
|
|
|
|
|
|
|
|
(7,400
|
)
|
-
|
-
|
|
|
(7,400
|
)
|
||||||
Preferred stock financing fees amortization
|
-
|
-
|
|
|
(936
|
)
|
-
|
-
|
|
|
(936
|
)
|
||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
|
|
380
|
|
|
|
380
|
|
||||||||||||
Stock options exercised
|
|
|
4,834
|
|
|
|
5
|
|
|
|
23
|
|
-
|
-
|
|
|
28
|
|
||||||
Other share based awards
|
|
|
407,451
|
|
|
|
407
|
|
|
|
(581
|
)
|
-
|
-
|
|
|
(174
|
)
|
||||||
Balance at end of period
|
|
|
56,280,414
|
|
|
$
|
56,280
|
|
|
$
|
514,936
|
|
|
$
|
(1,308,406
|
)
|
|
$
|
(79,023
|
)
|
|
$
|
(816,213
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28 Weeks Ended September 12, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of 2/28/2009, as previously reported
|
|
|
57,674,799
|
|
|
$
|
57,675
|
|
|
$
|
464,679
|
|
|
$
|
(127,314
|
)
|
|
$
|
(105,147
|
)
|
|
$
|
289,893
|
|
Retrospective adoption of new accounting guidance for own share-lending arrangements
|
-
|
-
|
|
|
28,277
|
|
|
|
(28,277
|
)
|
-
|
-
|
||||||||||||
Balance as of 2/28/2009, as adjusted
|
|
|
57,674,799
|
|
|
|
57,675
|
|
|
|
492,956
|
|
|
|
(155,591
|
)
|
|
|
(105,147
|
)
|
|
|
289,893
|
|
Net loss
|
-
|
-
|
-
|
|
|
(145,469
|
)
|
-
|
|
|
(145,469
|
)
|
||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
|
|
1,550
|
|
|
|
1,550
|
|
||||||||||||
Beneficial conversion feature related to preferred stock
|
-
|
-
|
|
|
10,601
|
|
-
|
-
|
|
|
10,601
|
|
||||||||||||
Dividends on preferred stock
|
-
|
-
|
|
|
(533
|
)
|
-
|
-
|
|
|
(533
|
)
|
||||||||||||
Preferred stock financing fees amortization
|
-
|
-
|
|
|
(70
|
)
|
-
|
-
|
|
|
(70
|
)
|
||||||||||||
Stock options exercised
|
|
|
477
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
Other share based awards
|
|
|
668,934
|
|
|
|
669
|
|
|
|
3,374
|
|
-
|
-
|
|
|
4,043
|
|
||||||
Balance at end of period
|
|
|
58,344,210
|
|
|
$
|
58,344
|
|
|
$
|
506,329
|
|
|
$
|
(301,060
|
)
|
|
$
|
(103,597
|
)
|
|
$
|
160,016
|
|
|
|
12 Weeks Ended
|
|
|
28 Weeks Ended
|
|
||||||||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||||
Net loss
|
|
$
|
(153,674
|
)
|
|
$
|
(80,309
|
)
|
|
$
|
(276,317
|
)
|
|
$
|
(145,469
|
)
|
Net unrealized gain on marketable securities, net of tax
|
|
|
-
|
|
|
|
119
|
|
|
|
-
|
|
|
|
638
|
|
Pension and other post-retirement benefits, net of tax
|
|
|
128
|
|
|
|
53
|
|
|
|
380
|
|
|
|
912
|
|
Other comprehensive income, net of tax
|
|
|
128
|
|
|
|
172
|
|
|
|
380
|
|
|
|
1,550
|
|
Total comprehensive loss
|
|
$
|
(153,546
|
)
|
|
$
|
(80,137
|
)
|
|
$
|
(275,937
|
)
|
|
$
|
(143,919
|
)
|
|
|
Sept. 11, 2010
|
|
|
Feb. 27, 2010
|
|
||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
94,343
|
|
|
$
|
252,426
|
|
Restricted cash
|
|
|
1,691
|
|
|
|
1,993
|
|
Accounts receivable, net of allowance for doubtful accounts of $6,102 and $8,812 at 9/11/2010 and 2/27/2010, respectively
|
|
|
150,523
|
|
|
|
166,143
|
|
Inventories, net
|
|
|
472,939
|
|
|
|
467,227
|
|
Prepaid expenses and other current assets
|
|
|
43,224
|
|
|
|
43,374
|
|
Assets held for sale
|
16,466
|
-
|
||||||
Total current assets
|
|
|
779,186
|
|
|
|
931,163
|
|
Non-current assets:
|
|
|
|
|
|
|
|
|
Property:
|
|
|
|
|
|
|
|
|
Property owned, net
|
|
|
1,286,576
|
|
|
|
1,397,971
|
|
Property leased under capital leases, net
|
|
|
78,032
|
|
|
|
89,599
|
|
Property, net
|
|
|
1,364,608
|
|
|
|
1,487,570
|
|
Goodwill
|
|
|
110,412
|
|
|
|
115,197
|
|
Intangible assets, net
|
|
|
141,938
|
|
|
|
147,713
|
|
Other assets
|
|
|
134,888
|
|
|
|
145,574
|
|
Total assets
|
|
$
|
2,531,032
|
|
|
$
|
2,827,217
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
169,706
|
|
|
$
|
191
|
|
Current portion of obligations under capital leases
|
|
|
13,624
|
|
|
|
13,702
|
|
Current portion of real estate liabilities
|
|
|
4,293
|
|
|
|
4,220
|
|
Accounts payable
|
|
|
241,122
|
|
|
|
227,779
|
|
Book overdrafts
|
|
|
38,661
|
|
|
|
60,465
|
|
Accrued salaries, wages and benefits
|
|
|
144,700
|
|
|
|
145,170
|
|
Accrued taxes
|
|
|
41,293
|
|
|
|
31,802
|
|
Other accruals
|
|
|
267,302
|
|
|
|
246,516
|
|
Total current liabilities
|
|
|
920,701
|
|
|
|
729,845
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
832,145
|
|
|
|
990,359
|
|
Long-term obligations under capital leases
|
|
|
127,635
|
|
|
|
136,880
|
|
Long-term real estate liabilities
|
|
|
328,868
|
|
|
|
329,363
|
|
Deferred real estate income
|
|
|
84,487
|
|
|
|
87,061
|
|
Other financial liabilities
|
|
|
3,493
|
|
|
|
13,946
|
|
Other non-current liabilities
|
|
|
913,636
|
|
|
|
936,209
|
|
Total liabilities
|
|
|
3,210,965
|
|
|
|
3,223,663
|
|
|
|
|
|
|
|
|
|
|
Series A redeemable preferred stock – no par value, $1,000 redemption value; authorized – 700,000 shares;
|
||||||||
issued – 175,000 shares
|
|
|
136,280
|
|
|
|
132,757
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Refer to Note 18)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit:
|
|
|
|
|
|
|
|
|
Common stock – $1 par value; authorized – 260,000,000 shares; issued and outstanding – 56,280,414 and 55,868,129 shares at 9/11/2010 and 2/27/2010, respectively
|
|
|
56,280
|
|
|
|
55,868
|
|
Additional paid-in capital
|
|
|
514,936
|
|
|
|
526,421
|
|
Accumulated other comprehensive loss
|
|
|
(79,023
|
)
|
|
|
(79,403
|
)
|
Accumulated deficit
|
|
|
(1,308,406
|
)
|
|
|
(1,032,089
|
)
|
Total stockholders’ deficit
|
|
|
(816,213
|
)
|
|
|
(529,203
|
)
|
Total liabilities and stockholders’ deficit
|
|
$
|
2,531,032
|
|
|
$
|
2,827,217
|
|
|
|
28 Weeks Ended
|
|
|||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(276,317
|
)
|
|
$
|
(145,469
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities (see next page)
|
|
|
197,435
|
|
|
|
206,882
|
|
Other changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
Decrease in receivables
|
|
|
17,534
|
|
|
|
21,454
|
|
Increase in inventories
|
|
|
(7,209
|
)
|
|
|
(17,236
|
)
|
Increase in prepaid expenses and other current assets
|
|
|
(7,560
|
)
|
|
|
(25,054
|
)
|
Increase in other assets
|
|
|
(2,799
|
)
|
|
|
(9,928
|
)
|
Increase in accounts payable
|
|
|
13,319
|
|
|
|
60,147
|
|
Increase (decrease) in accrued salaries, wages and benefits, and taxes
|
|
|
2,308
|
|
|
|
(14,282
|
)
|
Increase (decrease) in other accruals
|
|
|
7,893
|
|
|
|
(8,712
|
)
|
Decrease in other non-current liabilities
|
|
|
(38,928
|
)
|
|
|
(47,916
|
)
|
Other operating activities, net
|
|
|
(99
|
)
|
|
|
1,340
|
|
Net cash (used in) provided by operating activities
|
|
|
(94,423
|
)
|
|
|
21,226
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Expenditures for property
|
|
|
(43,447
|
)
|
|
|
(50,005
|
)
|
Proceeds from disposal of property
|
|
|
8,739
|
|
|
|
3,311
|
|
Proceeds from flood insurance
|
4,910
|
-
|
||||||
Proceeds from sale of joint venture
|
|
|
-
|
|
|
|
5,914
|
|
Decrease in restricted cash
|
|
|
302
|
|
|
|
222
|
|
Proceeds from maturities of marketable securities
|
|
|
-
|
|
|
|
2,224
|
|
Net cash used in investing activities
|
|
|
(29,496
|
)
|
|
|
(38,334
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt
|
|
|
800
|
|
|
|
253,201
|
|
Principal payments on long-term borrowings
|
|
|
(134
|
)
|
|
|
(163
|
)
|
Proceeds under revolving lines of credit
|
201,600
|
|
|
39,450
|
|
|||
Principal payments on revolving lines of credit
|
(200,700
|
)
|
|
|
(238,333
|
)
|
||
Proceeds under line of credit
|
-
|
|
|
378
|
|
|||
Principal payments on line of credit
|
-
|
|
|
(2,224
|
)
|
|||
Proceeds from issuance of preferred stock
|
|
|
-
|
|
|
|
175,000
|
|
Proceeds from long-term real estate liabilities
|
-
|
|
|
170
|
|
|||
Principal payments on long-term real estate liabilities
|
|
|
(631
|
)
|
|
|
(620
|
)
|
Proceeds from sale-leaseback transaction
|
-
|
|
|
3,000
|
|
|||
Principal payments on capital leases
|
|
|
(6,317
|
)
|
|
|
(5,772
|
)
|
Decrease in book overdrafts
|
|
|
(21,804
|
)
|
|
|
(11,913
|
)
|
Deferred financing fees
|
|
|
(6
|
)
|
|
|
(22,648
|
)
|
Dividends paid on preferred stock
|
(7,000
|
)
|
|
|
-
|
|
||
Proceeds from stock options exercised
|
|
|
28
|
|
|
|
1
|
|
Net cash (used in) provided by financing activities
|
|
|
(34,164
|
)
|
|
|
189,527
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(158,083
|
)
|
|
|
172,419
|
|
Cash and cash equivalents at beginning of period
|
|
|
252,426
|
|
|
|
175,375
|
|
Cash and cash equivalents at end of period
|
|
$
|
94,343
|
|
|
$
|
347,794
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
Cash paid during the year for interest
|
|
$
|
80,730
|
|
|
$
|
67,971
|
|
Cash paid during the year for income taxes
|
|
$
|
178
|
|
|
$
|
6,480
|
|
|
|
28 Weeks Ended
|
|
|||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||
Depreciation and amortization
|
|
$
|
121,897
|
|
|
$
|
135,572
|
|
Impairment of long-lived assets
|
|
|
36,792
|
|
|
|
3,739
|
|
Self insurance reserve
|
21,661
|
1,613
|
||||||
Nonoperating (income) loss
|
|
|
(10,454
|
)
|
|
|
8,954
|
|
Non-cash interest expense
|
|
|
23,258
|
|
|
|
27,393
|
|
Stock compensation (income) expense
|
|
|
(101
|
)
|
|
|
4,043
|
|
Pension withdrawal costs
|
|
|
-
|
|
|
|
2,445
|
|
Employee benefit related costs
|
|
|
6,713
|
|
|
|
-
|
|
LIFO adjustment
|
|
|
1,497
|
|
|
|
2,166
|
|
Asset disposition initiatives in the normal course of business
|
|
|
-
|
|
|
|
(2,470
|
)
|
Asset disposition initiatives relating to discontinued operations
|
|
|
4
|
|
|
|
11,468
|
|
Non-cash occupancy charges for stores closed in the normal course of business
|
|
|
466
|
|
|
|
18,374
|
|
Gain on disposal of owned property, net
|
|
|
(1,807
|
)
|
|
|
(3,580
|
)
|
Gain on disposal of discontinued operations
|
|
|
(79
|
)
|
|
|
-
|
|
Amortization of deferred real estate income
|
|
|
(2,412
|
)
|
|
|
(2,835
|
)
|
Total non-cash adjustments to net loss
|
|
$
|
197,435
|
|
|
$
|
206,882
|
|
1.
|
Basis of Presentation
|
2.
|
Impact of New Accounting Pronouncements
|
3.
|
Goodwill and Other Intangible Assets
|
|
|
Fresh
|
|
|
Pathmark
|
|
|
Gourmet
|
|
|
Other
|
|
|
Total
|
|
|||||
Goodwill
|
|
$
|
120,817
|
|
|
$
|
321,840
|
|
|
$
|
12,110
|
|
|
$
|
5,974
|
|
|
$
|
460,741
|
|
Accumulated impairment losses
|
|
|
(23,704
|
)
|
|
|
(321,840
|
)
|
-
|
-
|
|
|
(345,544
|
)
|
||||||
Goodwill at February 27, 2010
|
|
$
|
97,113
|
|
|
$
|
-
|
|
|
$
|
12,110
|
|
|
$
|
5,974
|
|
|
$
|
115,197
|
|
Transfer to Assets held for sale*
|
(4,785
|
)
|
-
|
|
-
|
|
-
|
|
(4,785
|
)
|
||||||||||
Goodwill at September 11, 2010
|
$
|
92,328
|
$
|
-
|
|
$
|
12,110
|
$
|
5,974
|
$
|
110,412
|
|
|
Weighted Average Amortization Period (years)
|
|
|
Gross Carrying Amount
|
|
|
Accumulated Amortization at Sept. 11, 2010
|
|
|
Accumulated Amortization at Feb. 27, 2010
|
|
||||
Pathmark trademark
|
|
Indefinite
|
|
|
$
|
60,900
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Loyalty card customer relationships
|
|
|
5
|
|
|
|
19,200
|
|
|
|
9,868
|
|
|
|
7,595
|
|
In-store advertiser relationships
|
|
|
20
|
|
|
|
14,720
|
|
|
|
2,038
|
|
|
|
1,642
|
|
Pharmacy payor relationships
|
|
|
13
|
|
|
|
75,000
|
|
|
|
15,976
|
|
|
|
12,870
|
|
Total
|
|
|
|
|
|
$
|
169,820
|
|
|
$
|
27,882
|
|
|
$
|
22,107
|
|
2010
|
|
$
|
4,950
|
|
2011
|
|
|
10,725
|
|
2012
|
|
|
9,670
|
|
2013
|
|
|
6,505
|
|
2014
|
|
|
6,505
|
|
Thereafter
|
|
|
42,683
|
|
4.
|
Fair Value Measurements
|
|
|
|
|
|
Fair Value Measurements at September 11, 2010 Using
|
|
||||||||||
|
|
Total Carrying Value at Sept. 11, 2010
|
|
|
Quoted Prices in Active Markets
(Level 1)
|
|
|
Significant Other Observable Inputs
(Level 2)
|
|
|
Significant Unobservable Inputs
(Level 3)
|
|
||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents
|
|
$
|
1,601
|
|
|
$
|
-
|
|
|
$
|
1,601
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B Warrant
|
|
$
|
3,493
|
|
|
$
|
-
|
|
|
$
|
3,493
|
|
|
$
|
-
|
|
|
|
|
|
|
Fair Value Measurements at February 27, 2010 Using
|
|
||||||||||
|
|
Total Carrying Value at
Feb. 27, 2010
|
|
|
Quoted Prices in Active Markets
(Level 1)
|
|
|
Significant Other Observable Inputs
(Level 2)
|
|
|
Significant Unobservable Inputs
(Level 3)
|
|
||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents
|
|
$
|
158,695
|
|
|
$
|
-
|
|
|
$
|
158,695
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B Warrant
|
|
$
|
13,946
|
|
|
$
|
-
|
|
|
$
|
13,946
|
|
|
$
|
-
|
|
|
|
At September 11, 2010
|
|
|
At February 27, 2010
|
|
||||||||||
|
|
Carrying Amount
|
|
|
Fair Value
|
|
|
Carrying Amount
|
|
|
Fair Value
|
|
||||
Current portion of long-term debt
|
|
$
|
169,706
|
|
|
$
|
126,184
|
|
|
$
|
191
|
|
|
$
|
191
|
|
Long-term debt, net of related discount
|
|
|
832,145
|
|
|
|
624,152
|
|
|
|
990,359
|
|
|
|
962,040
|
|
5.
|
Valuation of Long-Lived Assets
|
6.
|
Other Accruals
|
|
|
At
Sept. 11, 2010
|
|
|
At
Feb. 27, 2010
|
|
||
Self-insurance reserves
|
|
$
|
74,955
|
|
|
$
|
74,221
|
|
Deferred taxes
|
|
|
10,825
|
|
|
|
3,295
|
|
Closed store and warehouse reserves
|
|
|
65,726
|
|
|
|
62,189
|
|
Pension withdrawal liabilities
|
|
|
10,461
|
|
|
|
10,461
|
|
GHI Contractual Liability
|
|
|
8,229
|
|
|
|
8,066
|
|
Accrued occupancy related costs for open stores
|
|
|
28,439
|
|
|
|
26,952
|
|
Deferred income
|
|
|
28,988
|
|
|
|
26,534
|
|
Deferred real estate income
|
|
|
2,612
|
|
|
|
2,775
|
|
Accrued audit, legal and other
|
|
|
8,724
|
|
|
|
8,758
|
|
Accrued interest
|
|
|
18,049
|
|
|
|
12,509
|
|
Other postretirement and postemployment benefits
|
|
|
2,674
|
|
|
|
2,674
|
|
Accrued advertising
|
|
|
931
|
|
|
|
1,911
|
|
Dividends payable on preferred stock
|
|
|
3,383
|
|
|
|
2,982
|
|
Other share-based awards
|
74
|
-
|
||||||
Other
|
|
|
3,232
|
|
|
|
3,189
|
|
Total
|
|
$
|
267,302
|
|
|
$
|
246,516
|
|
7.
|
Other Non-Current Liabilities
|
|
|
At
Sept. 11, 2010
|
|
|
At
Feb. 27, 2010
|
|
||
Deferred taxes
|
|
$
|
3,836
|
|
|
$
|
11,367
|
|
Self-insurance Reserves
|
|
|
224,262
|
|
|
|
208,419
|
|
Closed Store and Warehouse Reserves
|
|
|
166,566
|
|
|
|
187,911
|
|
Pension Withdrawal Liabilities
|
|
|
86,612
|
|
|
|
89,495
|
|
GHI Contractual Liability for Employee Benefits
|
|
|
88,809
|
|
|
|
87,703
|
|
Pension Plan Benefits
|
|
|
112,673
|
|
|
|
109,549
|
|
Other Postretirement and Postemployment Benefits
|
|
|
36,431
|
|
|
|
36,091
|
|
Corporate Owned Life Insurance Liability
|
|
|
59,352
|
|
|
|
60,436
|
|
Deferred Rent Liabilities
|
|
|
58,468
|
|
|
|
57,963
|
|
Deferred Income
|
|
|
59,767
|
|
|
|
68,250
|
|
Unfavorable Lease Liabilities
|
|
|
4,883
|
|
|
|
5,391
|
|
Other
|
|
|
11,977
|
|
|
|
13,634
|
|
Total
|
|
$
|
913,636
|
|
|
$
|
936,209
|
|
8.
|
Indebtedness and Other Financial Liabilities
|
|
|
At
Sept. 11, 2010
|
|
|
At
Feb. 27, 2010
|
|
||
5.125% Convertible Senior Notes, due June 15, 2011
|
|
$
|
159,434
|
|
|
$
|
155,333
|
|
Related Party Promissory Note, due August 18, 2011
|
|
|
10,000
|
|
|
|
10,000
|
|
9.125% Senior Notes, due December 15, 2011
|
|
|
12,840
|
|
|
|
12,840
|
|
6.750% Convertible Senior Notes, due December 15, 2012
|
|
|
229,010
|
|
|
|
223,838
|
|
11.375% Senior Secured Notes, due August 4, 2015
|
|
|
254,130
|
|
|
|
253,668
|
|
9.375% Notes, due August 1, 2039
|
|
|
200,000
|
|
|
|
200,000
|
|
Borrowings under Credit Agreement
|
|
|
133,800
|
|
|
|
132,900
|
|
Other
|
|
|
2,637
|
|
|
|
1,971
|
|
|
|
|
1,001,851
|
|
|
|
990,550
|
|
Less current portion of long-term debt
|
|
|
(169,706
|
)*
|
|
|
(191
|
)
|
Long-term debt
|
|
$
|
832,145
|
|
|
$
|
990,359
|
|
|
|
At
Sept. 11, 2010
|
|
|
At
Feb. 27, 2010
|
|
||
Expected life
|
|
4.74 years
|
|
|
5.28 years
|
|
||
Volatility
|
|
74.9
|
%
|
|
|
68.6
|
%
|
|
Dividend yield range
|
|
|
0
|
%
|
|
|
0
|
%
|
Risk-free interest rate
|
|
|
1.59
|
%
|
|
|
2.30
|
%
|
9.
|
Redeemable Preferred Stock
|
10.
|
Stock Based Compensation
|
|
|
For the 12 Weeks Ended
|
|
|
For the 28 Weeks Ended
|
|
||||||||||
|
|
Sept. 11,
|
|
|
Sept. 12,
|
|
|
Sept. 11,
|
|
|
Sept. 12,
|
|
||||
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
||||
Stock options
|
|
$
|
122
|
|
|
$
|
443
|
|
|
$
|
(246
|
)
|
|
$
|
815
|
|
Restricted stock units
|
|
|
424
|
|
|
|
336
|
|
|
|
655
|
|
|
|
450
|
|
Performance restricted stock units
|
|
|
27
|
|
|
|
237
|
|
|
|
(946
|
)
|
|
|
2,411
|
|
Common stock granted to Directors
|
|
|
187
|
|
|
|
174
|
|
|
|
436
|
|
|
|
367
|
|
Total stock-based compensation expense (income)*
|
|
$
|
760
|
|
|
$
|
1,190
|
|
|
$
|
(101
|
)
|
|
$
|
4,043
|
|
|
|
Underlying Shares
|
|
|
Weighted-Avg. Grant Date Fair Value
|
|
||
Stock options
|
|
|
6,423,047
|
|
|
$
|
1.98
|
|
Restricted stock units
|
|
|
390,000
|
|
|
|
3.35
|
|
|
|
28 Weeks Ended
Sept. 11, 2010
|
|
|
28 Weeks Ended Sept. 12, 2009
|
|||||
Expected life
|
|
|
6 years
|
|
|
7 years
|
||||
Volatility
|
|
|
70.1% - 70.6%
|
|
|
126
|
%
|
|||
Risk-free interest rate
|
|
|
1.67% - 2.05%
|
|
|
0.05
|
%
|
11.
|
Retirement Plans and Benefits
|
|
|
For the 12 Weeks Ended
|
|
|
For the 28 Weeks Ended
|
|
||||||||||
|
|
Sept. 11,
|
|
|
Sept. 12,
|
|
|
Sept. 11,
|
|
|
Sept. 12,
|
|
||||
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
||||
Service cost
|
|
$
|
1,407
|
|
|
$
|
1,545
|
|
|
$
|
3,565
|
|
|
$
|
3,568
|
|
Interest cost
|
|
|
6,662
|
|
|
|
6,819
|
|
|
|
15,591
|
|
|
|
15,638
|
|
Expected return on plan assets
|
|
|
(6,640
|
)
|
|
|
(5,708
|
)
|
|
|
(15,493
|
)
|
|
|
(13,319
|
)
|
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net prior service cost
|
|
|
-
|
|
|
|
68
|
|
|
|
81
|
|
|
|
159
|
|
Actuarial loss
|
|
|
439
|
|
|
|
1,090
|
|
|
|
1,024
|
|
|
|
2,525
|
|
Special termination benefits
|
|
|
350
|
|
|
|
250
|
|
|
|
400
|
|
|
|
650
|
|
Net pension cost
|
|
$
|
2,218
|
|
|
$
|
4,064
|
|
|
$
|
5,168
|
|
|
$
|
9,221
|
|
|
|
For the 12 Weeks Ended
|
|
|
For the 28 Weeks Ended
|
|
||||||||||
|
|
Sept. 11,
|
|
|
Sept. 12,
|
|
|
Sept. 11,
|
|
|
Sept. 12,
|
|
||||
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
||||
Service cost
|
|
$
|
151
|
|
|
$
|
117
|
|
|
$
|
352
|
|
|
$
|
273
|
|
Interest cost
|
|
|
428
|
|
|
|
449
|
|
|
|
999
|
|
|
|
1,048
|
|
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior service credit
|
|
|
(198
|
)
|
|
|
(310
|
)
|
|
|
(462
|
)
|
|
|
(725
|
)
|
Actuarial gain
|
|
|
(112
|
)
|
|
|
(189
|
)
|
|
|
(262
|
)
|
|
|
(441
|
)
|
Net postretirement benefits cost
|
|
$
|
269
|
|
|
$
|
67
|
|
|
$
|
627
|
|
|
$
|
155
|
|
12.
|
Interest Expense, net
|
|
|
For the 12 weeks ended
|
|
|
For the 28 weeks ended
|
|
||||||||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||||
$655 million Credit Agreement
|
|
$
|
3,104
|
|
|
$
|
3,208
|
|
|
$
|
7,109
|
|
|
$
|
9,378
|
|
Related Party Promissory Note, due Aug. 18, 2011
|
|
|
138
|
|
|
|
137
|
|
|
|
325
|
|
|
|
320
|
|
11.375% Senior Secured Notes, due Aug. 1, 2015
|
|
|
6,808
|
|
|
|
3,565
|
|
|
|
15,958
|
|
|
|
3,565
|
|
9.125% Senior Notes, due December 15, 2011
|
|
|
269
|
|
|
|
270
|
|
|
|
629
|
|
|
|
630
|
|
5.125% Convertible Senior Notes, due June 15, 2011
|
|
|
1,941
|
|
|
|
1,951
|
|
|
|
4,542
|
|
|
|
4,553
|
|
6.750% Convertible Senior Notes, due December 15, 2012
|
|
|
3,950
|
|
|
|
3,972
|
|
|
|
9,245
|
|
|
|
9,268
|
|
9.375% Notes, due August 1, 2039
|
|
|
4,280
|
|
|
|
4,280
|
|
|
|
10,095
|
|
|
|
10,124
|
|
Capital Lease Obligations and Real Estate Liabilities
|
|
|
11,293
|
|
|
|
11,964
|
|
|
|
26,735
|
|
|
|
28,047
|
|
Dividends on Preferred Stock Liability
|
|
|
-
|
|
|
|
1,082
|
|
|
|
-
|
|
|
|
1,082
|
|
Self Insurance and GHI Interest
|
|
|
3,752
|
|
|
|
3,446
|
|
|
|
8,871
|
|
|
|
8,128
|
|
GHI Discount Rate Adjustment and COLI Non-cash Interest
|
|
|
3,759
|
|
|
|
8,443
|
|
|
|
7,648
|
|
|
|
14,087
|
|
Amortization of Deferred Financing Fees and Discounts
|
|
|
6,647
|
|
|
|
6,073
|
|
|
|
15,381
|
|
|
|
13,306
|
|
Other
|
|
|
194
|
|
|
|
168
|
|
|
|
769
|
|
|
|
319
|
|
Total interest expense
|
46,135
|
48,559
|
107,307
|
102,807
|
||||||||||||
Interest income
|
(9
|
)
|
(51
|
)
|
(39
|
)
|
(92
|
)
|
||||||||
Total
|
|
$
|
46,126
|
|
|
$
|
48,508
|
|
|
$
|
107,268
|
|
|
$
|
102,715
|
|
13.
|
Income Taxes
|
14.
|
Discontinued Operations
|
|
|
For the 28 Weeks Ended September 11, 2010
|
|
|||||||||||||||||
|
|
Balance at 2/27/2010
|
|
|
Interest Accretion (1)
|
|
|
Adjustments(2)
|
|
|
Utilization(3)
|
|
|
Balance at 9/11/2010
|
|
|||||
2007 Events
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Occupancy
|
|
$
|
96,909
|
|
|
$
|
4,347
|
|
|
$
|
-
|
|
|
$
|
(11,279
|
)
|
|
$
|
89,977
|
|
Pension withdrawal
|
|
|
58,015
|
|
|
|
1,933
|
|
|
|
-
|
|
|
|
(3,113
|
)
|
|
|
56,835
|
|
2007 events total
|
|
|
154,924
|
|
|
|
6,280
|
|
|
|
-
|
|
|
|
(14,392
|
)
|
|
|
146,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 Event
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
58,974
|
|
|
|
1,769
|
|
|
|
-
|
|
|
|
(3,349
|
)
|
|
|
57,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 Events
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
22,494
|
|
|
|
719
|
|
|
|
-
|
|
|
|
(1,201
|
)
|
|
|
22,012
|
|
Total
|
|
$
|
236,392
|
|
|
$
|
8,768
|
|
|
$
|
-
|
|
|
$
|
(18,942
|
)
|
|
$
|
226,218
|
|
|
(1)
|
The additions to occupancy and severance represent the interest accretion on future occupancy costs and future obligations for early withdrawal from multi-employer union pension plans which were recorded at present value at the time of the original charge. Interest accretion is recorded as a component of “Loss from operations of discontinued businesses” on our Consolidated Statements of Operations.
|
|
(2)
|
At each balance sheet date, we assess the adequacy of the balance of the remaining liability to determine if any adjustments are required as a result of changes in circumstances and/or estimates. These adjustments are recorded as a component of “Loss from operations of discontinued business” on our Consolidated Statements of Operations.
|
|
(3)
|
Occupancy utilization represents payments made during those periods for rent, common area maintenance and real estate taxes. Pension withdrawal utilization represents payments made to the union pension fund during the period.
|
|
|
2007 Events
|
|
|
2005 Event
|
|
|
2003 Events
|
|
|
Total
|
|
||||
Total severance payments made to date
|
|
$
|
36,200
|
|
|
$
|
2,650
|
|
|
$
|
22,528
|
|
|
$
|
61,378
|
|
Expected future pension withdrawal payments
|
|
|
56,835
|
|
-
|
|
|
-
|
|
|
|
56,835
|
|
|||
Total severance and pension withdrawal payments expected to be incurred
|
|
|
93,035
|
|
|
|
2,650
|
|
|
|
22,528
|
|
|
$
|
118,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total occupancy payments made to date
|
|
|
91,859
|
|
|
|
60,560
|
|
|
|
33,948
|
|
|
|
186,367
|
|
Expected future occupancy payments, excluding interest accretion
|
|
|
89,977
|
|
|
|
57,394
|
|
|
|
22,012
|
|
|
|
169,383
|
|
Total occupancy payments expected to be incurred, excluding interest accretion
|
|
|
181,836
|
|
|
|
117,954
|
|
|
|
55,960
|
|
|
|
355,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total severance and occupancy payments made to date
|
|
|
128,059
|
|
|
|
63,210
|
|
|
|
56,476
|
|
|
|
247,745
|
|
Expected future pension withdrawal and occupancy payments, excluding interest accretion
|
|
|
146,812
|
|
|
|
57,394
|
|
|
|
22,012
|
|
|
|
226,218
|
|
Total severance, pension withdrawal and occupancy payments expected to be incurred, excluding interest accretion
|
|
$
|
274,871
|
|
|
$
|
120,604
|
|
|
$
|
78,488
|
|
|
$
|
473,963
|
|
|
|
At September 11, 2010
|
|
|||||||||||||
|
|
2007 Events
|
|
|
2005 Event
|
|
|
2003 Events
|
|
|
Total
|
|
||||
Other accruals
|
|
$
|
27,888
|
|
|
$
|
12,651
|
|
|
$
|
4,052
|
|
|
$
|
44,591
|
|
Other non-current liabilities
|
|
$
|
118,924
|
|
|
$
|
44,743
|
|
|
$
|
17,960
|
|
|
$
|
181,627
|
|
|
|
At February 27, 2010
|
|
|||||||||||||
|
|
2007 Events
|
|
|
2005 Event
|
|
|
2003 Events
|
|
|
Total
|
|
||||
Other accruals
|
|
$
|
28,528
|
|
|
$
|
10,773
|
|
|
$
|
3,490
|
|
|
$
|
42,791
|
|
Other non-current liabilities
|
|
$
|
126,396
|
|
|
$
|
48,201
|
|
|
$
|
19,004
|
|
|
$
|
193,601
|
|
15.
|
Asset Disposition Initiatives
|
|
|
For the 28 Weeks Ended September 11, 2010
|
|
|||||||||||||||||
2005 Event
|
|
Balance at 2/27/2010
|
|
|
Interest Accretion (1)
|
|
|
Adjustments(2)
|
|
|
Utilization(3)
|
|
|
Balance at 9/11/2010
|
|
|||||
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Health benefits
|
|
$
|
687
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(133
|
)
|
|
$
|
554
|
|
2005 event total
|
|
|
687
|
|
-
|
|
|
-
|
|
|
|
(133
|
)
|
|
|
554
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2001 Event
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
6,324
|
|
|
|
219
|
|
|
|
-
|
|
|
|
(361
|
)
|
|
|
6,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
10,009
|
|
|
|
308
|
|
|
|
-
|
|
|
|
(690
|
)
|
|
|
9,627
|
|
2001 event total
|
|
|
16,333
|
|
|
|
527
|
|
|
|
-
|
|
|
|
(1,051
|
)
|
|
|
15,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 Event
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
4,098
|
|
|
|
43
|
|
|
|
-
|
|
|
|
(541
|
)
|
|
|
3,600
|
|
Pension withdrawals and health benefits
|
|
|
666
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(76
|
)
|
|
|
590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
13
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13
|
|
1998 event total
|
|
|
4,777
|
|
|
|
43
|
|
|
|
-
|
|
|
|
(617
|
)
|
|
|
4,203
|
|
Total
|
|
$
|
21,797
|
|
|
$
|
570
|
|
|
$
|
-
|
|
|
$
|
(1,801
|
)
|
|
$
|
20,566
|
|
|
(1)
|
The additions to occupancy represent the interest accretion on future occupancy costs which were recorded at present value at the time of the original charge. These adjustments are recorded to “Store operating, general and administrative expense” for continuing operations and “Loss from operations of discontinued businesses” for discontinued operations on our Consolidated Statements of Operations.
|
|
(2)
|
At each balance sheet date, we assess the adequacy of the balance to determine if any adjustments are required as a result of changes in circumstances and/or estimates. These adjustments are recorded to “Store operating, general and administrative expense” for continuing operations and “Loss from operations of discontinued businesses” for discontinued operations on our Consolidated Statements of Operations.
|
|
(3)
|
Occupancy utilization represents payments made during those periods for rent, common area maintenance and real estate taxes. Severance and benefits utilization represents payments made to terminated employees during the period.
|
|
|
2005 Event
|
|
|
2001 Event
|
|
|
1998 Event
|
|
|
Total
|
|
||||
Total severance payments made to date
|
|
$
|
49,128
|
|
|
$
|
28,205
|
|
|
$
|
30,874
|
|
|
$
|
108,207
|
|
Expected future severance payments
|
|
|
554
|
|
|
|
-
|
|
|
|
590
|
|
|
|
1,144
|
|
Total severance payments expected to be incurred
|
|
|
49,682
|
|
|
|
28,205
|
|
|
|
31,464
|
|
|
|
109,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total occupancy payments made to date
|
|
|
13,856
|
|
|
|
66,833
|
|
|
|
119,733
|
|
|
|
200,422
|
|
Expected future occupancy payments, excluding interest accretion
|
|
|
-
|
|
|
|
15,809
|
|
|
|
3,613
|
|
|
|
19,422
|
|
Total occupancy payments expected to be incurred, excluding interest accretion
|
|
|
13,856
|
|
|
|
82,642
|
|
|
|
123,346
|
|
|
|
219,844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total severance and occupancy payments made to date
|
|
$
|
62,984
|
|
|
$
|
95,038
|
|
|
$
|
150,607
|
|
|
$
|
308,629
|
|
Expected future severance and occupancy payments, excluding interest accretion
|
|
|
554
|
|
|
|
15,809
|
|
|
|
4,203
|
|
|
|
20,566
|
|
Total severance and occupancy payments expected to be incurred, excluding interest accretion
|
|
$
|
63,538
|
|
|
$
|
110,847
|
|
|
$
|
154,810
|
|
|
$
|
329,195
|
|
|
|
September 11, 2010
|
|
|||||||||||||
|
|
2005 Event
|
|
|
2001 Event
|
|
|
1998 Event
|
|
|
Total
|
|
||||
Other accruals
|
|
$
|
305
|
|
|
$
|
3,134
|
|
|
$
|
2,693
|
|
|
$
|
6,132
|
|
Other non-current liabilities
|
|
$
|
249
|
|
|
$
|
12,675
|
|
|
$
|
1,510
|
|
|
$
|
14,434
|
|
|
|
February 27, 2010
|
|
|||||||||||||
|
|
2005 Event
|
|
|
2001 Event
|
|
|
1998 Event
|
|
|
Total
|
|
||||
Other accruals
|
|
$
|
336
|
|
|
$
|
2,992
|
|
|
$
|
2,235
|
|
|
$
|
5,563
|
|
Other non-current liabilities
|
|
$
|
351
|
|
|
$
|
13,341
|
|
|
$
|
2,542
|
|
|
$
|
16,234
|
|
16.
|
Assets Held for Sale
|
Property owned, net
|
$
|
11,681
|
Goodwill
|
4,785
|
|
$
|
16,466
|
17.
|
Earnings (Loss) Per Share
|
|
|
12 Weeks Ended
|
|
|
28 Weeks Ended
|
|
||||||||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||||
Stock options
|
|
3,123,723
|
|
|
|
2,608,718
|
|
|
2,475,006
|
|
|
|
2,174,533
|
|
||
Warrants
|
|
7,652,135
|
|
|
|
686,277
|
|
|
686,277
|
|
|
|
686,277
|
|
||
Performance restricted stock units
|
|
154,499
|
|
|
|
512,578
|
|
|
190,689
|
|
|
|
657,242
|
|
||
Restricted stock units
|
|
926,387
|
|
|
|
1,440,176
|
|
|
1,015,039
|
|
|
|
808,262
|
|
||
Financing warrant
|
|
11,278,988
|
|
|
|
11,278,988
|
|
|
11,278,988
|
|
|
|
11,278,988
|
|
||
Preferred stock
|
|
|
35,000,000
|
|
|
|
11,590,600
|
|
|
|
35,000,000
|
|
|
|
11,590,600
|
|
Convertible debt
|
|
|
8,086,769
|
|
|
|
3,553,806
|
|
|
|
11,278,988
|
|
|
|
8,086,769
|
|
|
12 Weeks Ended
|
|
|
28 Weeks Ended
|
|
||||||||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||||
Loss from continuing operations
|
$
|
(142,821
|
)
|
|
$
|
(62,159
|
)
|
$
|
(258,428
|
)
|
|
$
|
(120,463
|
)
|
||
Preferred stock dividends
|
|
(3,093
|
)
|
|
|
(533
|
)
|
|
(7,400
|
)
|
|
|
(533
|
)
|
||
Beneficial conversion feature amortization
|
|
(1,110
|
)
|
|
|
(178
|
)
|
|
(2,591
|
)
|
|
|
(178
|
)
|
||
Loss from continuing operations – basic
|
|
(147,024
|
)
|
|
|
(62,870
|
)
|
|
(268,419
|
)
|
|
|
(121,174
|
)
|
||
Adjustments for convertible debt (1)
|
|
|
(10,270
|
)
|
|
|
(25,573
|
)
|
|
-
|
|
|
|
(11,971
|
)
|
|
Adjustments on Other financial liabilities (2)
|
|
|
-
|
|
|
|
7,080
|
|
|
(10,454
|
)
|
|
|
8,955
|
|
|
Loss from continuing operations–diluted
|
$
|
|
(157,294
|
)
|
|
$
|
(81,363
|
)
|
|
|
(278,873
|
)
|
|
$
|
(124,190
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
56,206,446
|
|
|
|
58,124,672
|
|
|
|
56,046,228
|
|
|
|
57,947,659
|
|
Share lending agreement (3)
|
|
|
(2,427,944
|
)
|
|
|
(4,927,944
|
)
|
|
|
(2,427,944
|
)
|
|
|
(4,927,944
|
)
|
Common shares outstanding–basic
|
|
|
53,778,502
|
|
|
|
53,196,728
|
|
|
|
53,618,284
|
|
|
|
53,019,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible debt (1)
|
|
|
3,192,219
|
|
|
|
7,725,182
|
|
|
|
-
|
|
|
|
3,192,219
|
|
Convertible financial liabilities (2)
|
|
|
-
|
|
|
|
(34,307,444
|
)
|
|
|
(34,668,287
|
)
|
|
|
(35,167,204
|
)
|
Common shares outstanding–diluted
|
|
|
56,970,721
|
|
|
|
26,614,466
|
|
|
|
18,949,997
|
|
|
|
21,044,730
|
|
(1)
|
We have debt instruments with a bifurcated conversion feature that were recorded at a significant discount. (Refer to Note 8 – Indebtedness and Other Financial Liabilities). For purposes of determining if an application of the “if-converted method” to these convertible instruments produces a dilutive result, we consider the combined impact of the numerator and denominator adjustments, including a numerator adjustment for gains and losses, which would have been incurred had the instruments been converted on the first day of the period presented.
|
(2)
|
Our Series B Warrants are classified as a liability because a third party has the right to determine their cash or share settlement. (Refer to Note 8 – Indebtedness and Other Financial Liabilities). These warrants are marked-to-market on our Consolidated Statements of Operations. For example, in periods when the market price of our common stock decreases, our income from continuing operations is increased. For purposes of determining if an application of the treasury stock method produces a dilutive result, we assume proceeds are used to repurchase common stock and we adjust the numerator similar to the adjustments required under the “if-converted” method. We consider the combined impact of the numerator and denominator adjustments, including a denominator adjustment to reduce shares, even when the average market price of our common stock for the period is below the warrant’s strike price.
|
(3)
|
As of September 11, 2010 and September 12, 2009, we had 5,634,002 and 8,134,002, respectively, of loaned shares under our share lending agreements, which were considered issued and outstanding. The obligation of the financial institutions to return the borrowed shares has been accounted for as prepaid forward contract and, accordingly, shares underlying this contract are removed from the computation of basic and diluted earnings per share, unless the borrower defaults on returning the related shares. On September 15, 2008, Lehman Europe, who is a party to a 3,206,058 share lending agreement with our Company filed under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court and/or commenced equivalent proceedings in jurisdictions outside of the United States (collectively, the “Lehman Bankruptcy”). As such, we have included these loaned shares as issued and outstanding effective September 15, 2008 for purposes of computing our basic and diluted weighted average shares and (loss) income per share. This treatment is consistent with the new accounting guidance relating to accounting for own share lending arrangements in contemplation of convertible debt issuance, which we adopted during the first quarter of fiscal 2010 (Refer to Note 2 – Impact of New Accounting Pronouncements). For the 12 and 28 weeks ended September 11, 2010, weighted average common shares relating to share lending agreements of 2,427,944 were excluded from the computation of earnings per share. For the 12 and 28 weeks ended September 12, 2009, weighted average common shares relating to share lending agreement of 4,927,944 were excluded from the computation of earnings per share.
|
18.
|
Commitments and Contingencies
|
19.
|
Reportable Segments
|
|
|
Sales by Category
|
|
|||||||||||||
|
|
For the 12 weeks ended
|
|
|
For the 28 weeks ended
|
|
||||||||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||||
Grocery (1)
|
|
$
|
1,310,388
|
|
|
$
|
1,429,161
|
|
|
$
|
3,069,232
|
|
|
$
|
3,368,761
|
|
Meat (2)
|
|
|
375,868
|
|
|
|
391,877
|
|
|
|
867,350
|
|
|
|
918,648
|
|
Produce (3)
|
|
|
232,023
|
|
|
|
244,023
|
|
|
|
546,627
|
|
|
|
567,895
|
|
Total
|
|
$
|
1,918,279
|
|
|
$
|
2,065,061
|
|
|
$
|
4,483,209
|
|
|
$
|
4,855,304
|
|
(1)
|
The grocery category includes grocery, frozen foods, dairy, general merchandise/health and beauty aids, wine, beer & spirits, and pharmacy.
|
(2)
|
The meat category includes meat, deli, bakery and seafood.
|
(3)
|
The produce category includes produce and floral.
|
|
|
For the 12 weeks ended
|
|
|
For the 28 weeks ended
|
|
||||||||||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||||||
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fresh
|
|
$
|
976,952
|
|
|
$
|
1,042,713
|
|
|
$
|
2,255,521
|
|
|
$
|
2,429,453
|
|
||
Pathmark(1)
|
|
816,304
|
|
|
|
898,655
|
|
|
1,927,705
|
|
|
|
2,137,878
|
|
||||
Gourmet
|
|
55,122
|
|
|
|
56,010
|
|
|
137,994
|
|
|
|
141,391
|
|
||||
Other
|
|
69,901
|
|
|
|
67,683
|
|
|
161,989
|
|
|
|
146,582
|
|
||||
Total sales
|
|
$
|
1,918,279
|
|
|
$
|
2,065,061
|
|
|
$
|
4,483,209
|
|
|
$
|
4,855,304
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Segment income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Fresh
|
|
|
10,255
|
|
|
|
32,768
|
|
|
|
23,727
|
|
|
|
74,009
|
|
||
Pathmark(1)
|
|
|
(27,771
|
)
|
|
|
(15,313
|
)
|
|
|
(52,579
|
)
|
|
|
(17,088
|
)
|
||
Gourmet
|
|
|
2,371
|
|
|
|
3,311
|
|
|
|
8,882
|
|
|
|
11,430
|
|
||
Other
|
|
|
254
|
|
|
|
734
|
|
|
|
991
|
|
|
|
1,657
|
|
||
Total segment (loss) income
|
|
|
(14,891
|
)
|
|
|
21,500
|
|
|
|
(18,979
|
)
|
|
|
70,008
|
|
||
Corporate (2)
|
|
|
(28,955
|
)
|
|
|
(14,731
|
)
|
|
|
(76,197
|
)
|
|
|
(59,628
|
)
|
||
Reconciling items (3)
|
|
|
(54,921
|
)
|
|
|
(15,335
|
)
|
|
|
(66,193
|
)
|
|
|
(20,782
|
)
|
||
Loss from continuing operations
|
|
|
(98,767
|
)
|
|
|
(8,566
|
)
|
|
|
(161,369
|
)
|
|
|
(10,402
|
)
|
||
Nonoperating income (loss)
|
|
|
2,177
|
|
|
|
(7,079
|
)
|
|
|
10,454
|
|
|
|
(8,954
|
)
|
||
Interest expense
|
|
|
(46,135
|
)
|
|
|
(48,559
|
)
|
|
|
(107,307
|
)
|
|
|
(102,807
|
)
|
||
Interest and dividend income
|
|
|
9
|
|
|
|
51
|
|
|
|
39
|
|
|
|
92
|
|
||
Loss from continuing operations before income taxes
|
|
$
|
(142,716
|
)
|
|
$
|
(64,153
|
)
|
|
$
|
(258,183
|
)
|
|
$
|
(122,071
|
)
|
(1)
|
Includes results from Fresh stores that have been subsequently converted to Pathmark stores.
|
(2)
|
Represents a $6.0 million decline in corporate and administrative costs, which was more than offset by a $22.6 million increase in corporate costs attributable to store-related activities, primarily benefits and occupancy costs which are not allocated to segments.
|
(3)
|
Reconciling items, which are not included in segment income, consist of the following:
|
|
|
For the 12 weeks ended
|
|
|
For the 28 weeks ended
|
|
||||||||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||||
Long-lived asset impairment
|
|
$
|
(30,250
|
)
|
|
$
|
-
|
|
|
$
|
(35,648
|
)
|
|
$
|
-
|
|
Net restructuring and other
|
|
|
(9,297
|
)
|
|
|
(1,756
|
)
|
|
|
(13,229
|
)
|
|
|
(2,900
|
)
|
Real estate related activity
|
|
|
2,179
|
|
|
|
(11,461
|
)
|
|
|
232
|
|
|
|
(9,228
|
)
|
Stock-based compensation
|
|
|
(760
|
)
|
|
|
(1,190
|
)
|
|
|
101
|
|
|
|
(4,043
|
)
|
Pension withdrawal costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,445
|
)
|
Self insurance reserve
|
(16,152
|
)
|
-
|
(16,152
|
)
|
-
|
||||||||||
LIFO adjustment
|
|
|
(641
|
)
|
|
|
(928)
|
|
|
|
(1,497
|
)
|
|
|
(2,166
|
)
|
Total reconciling items
|
|
$
|
(54,921
|
)
|
|
$
|
(15,335
|
)
|
|
$
|
(66,193
|
)
|
|
$
|
(20,782
|
)
|
|
|
For the 12 weeks ended
|
|
|
For the 28 weeks ended
|
|
||||||||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||||
Segment depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fresh
|
|
$
|
17,329
|
|
|
$
|
19,152
|
|
|
$
|
40,721
|
|
|
$
|
45,446
|
|
Pathmark (1)
|
|
|
19,761
|
|
|
|
22,925
|
|
|
|
46,532
|
|
|
|
53,483
|
|
Gourmet
|
|
|
1,951
|
|
|
|
2,148
|
|
|
|
4,702
|
|
|
|
5,049
|
|
Other
|
|
|
1,241
|
|
|
|
1,015
|
|
|
|
2,904
|
|
|
|
2,235
|
|
Total segment depreciation and amortization
|
|
|
40,282
|
|
|
|
45,240
|
|
|
|
94,859
|
|
|
|
106,213
|
|
Corporate
|
|
|
11,236
|
|
|
|
12,544
|
|
|
|
27,038
|
|
|
|
29,359
|
|
Total company depreciation and amortization
|
|
$
|
51,518
|
|
|
$
|
57,784
|
|
|
$
|
121,897
|
|
|
$
|
135,572
|
|
(1)
|
Includes results from Fresh stores that have been subsequently converted to Pathmark stores.
|
·
|
Overview – a general description of our business and segment structure.
|
·
|
Operating Results – a discussion of the value drivers of our business; measurements; opportunities; challenges and risks; and initiatives.
|
·
|
Outlook – a discussion of certain trends or business initiatives for the remainder of fiscal 2010 to assist in understanding the business.
|
·
|
Results of Operations and Liquidity and Capital Resources – a discussion of results for the 12 weeks ended September 11, 2010 compared to the 12 weeks ended September 12, 2009; results for the 28 weeks ended September 11, 2010 compared to the 28 weeks ended September 12, 2009; and current and expected future liquidity.
|
·
|
Critical Accounting Estimates – a discussion of significant estimates made by our management.
|
|
|
12 Weeks Ended September 11, 2010
|
|
|
12 Weeks Ended September 12, 2009
|
|
|
Favorable (Unfavorable)
Dollar Change
|
|
|
% Change
|
|
||||
|
|
(in millions, except percentages)
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales
|
|
$
|
1,918.3
|
|
|
$
|
2,065.1
|
|
|
$
|
(146.8
|
)
|
|
|
(7.1
|
)%
|
Decrease in comparable store sales
|
|
|
(6.6
|
)%
|
|
|
(3.8
|
)%
|
|
NA
|
|
|
NA
|
|
||
Loss from continuing operations
|
|
$
|
(142.8
|
)
|
|
$
|
(62.2
|
)
|
|
$
|
(80.6
|
)
|
|
|
>100
|
%
|
Loss from discontinued operations
|
|
$
|
(10.9
|
)
|
|
$
|
(18.1
|
)
|
|
$
|
7.2
|
|
|
|
39.8
|
%
|
Net loss
|
|
$
|
(153.7
|
)
|
|
$
|
(80.3
|
)
|
|
$
|
(73.4
|
)
|
|
|
(91.4
|
)%
|
Net loss per share – basic
|
|
$
|
(2.94
|
)
|
|
$
|
(1.52
|
)
|
|
$
|
(1.42
|
)
|
|
|
(93.4
|
)%
|
Net loss per share – diluted
|
|
$
|
(2.95
|
)
|
|
$
|
(3.74
|
)
|
|
$
|
0.79
|
|
|
|
21.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1)
|
|
$
|
7.7
|
|
|
$
|
64.6
|
|
|
$
|
(56.9
|
)
|
|
|
(88.1
|
)%
|
|
|
For the 12 weeks ended
|
|
|||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||
|
|
(in thousands)
|
|
|||||
Fresh
|
|
$
|
976,952
|
|
|
$
|
1,042,713
|
|
Pathmark
|
|
|
816,304
|
|
|
|
898,655
|
|
Gourmet
|
|
|
55,122
|
|
|
|
56,010
|
|
Other
|
|
|
69,901
|
|
|
|
67,683
|
|
Total sales
|
|
$
|
1,918,279
|
|
|
$
|
2,065,061
|
|
|
|
Sales Volume
|
|
|
Gross Margin Rate
|
|
|
Total
|
|
|||
Total Company
|
|
$
|
(44.3)
|
|
|
$
|
(16.4
|
)
|
|
$
|
(60.7
|
)
|
|
|
For the 12 weeks ended
|
|
|||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||
|
|
(in thousands)
|
|
|||||
Fresh
|
|
$
|
10,255
|
|
|
$
|
32,768
|
|
Pathmark
|
|
|
(27,771
|
)
|
|
|
(15,313
|
)
|
Gourmet
|
|
|
2,371
|
|
|
|
3,311
|
|
Other
|
|
|
254
|
|
|
|
734
|
|
Total segment (loss) income
|
|
$
|
(14,891
|
)
|
|
$
|
21,500
|
|
|
|
28 Weeks Ended September 11, 2010
|
|
|
28 Weeks Ended September 12, 2009
|
|
|
Favorable (Unfavorable) Dollar Change
|
|
|
% Change
|
|
||||
|
|
(in millions, except percentages)
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales
|
|
$
|
4,483.2
|
|
|
$
|
4,855.3
|
|
|
$
|
(372.1
|
)
|
|
|
(7.7
|
)%
|
Decrease in comparable store sales
|
|
|
(6.9
|
)%
|
|
|
(3.6
|
)%
|
|
NA
|
|
|
NA
|
|
||
Loss from continuing operations
|
|
$
|
(258.4
|
)
|
|
$
|
(120.5
|
)
|
|
$
|
(137.9
|
)
|
|
|
>100
|
%
|
Loss from discontinued operations
|
|
$
|
(17.9
|
)
|
|
$
|
(25.0
|
)
|
|
$
|
7.1
|
|
|
|
28.4
|
%
|
Net loss
|
|
$
|
(276.3
|
)
|
|
$
|
(145.5
|
)
|
|
$
|
(130.8
|
)
|
|
|
(89.9
|
)%
|
Net loss per share – basic
|
|
$
|
(5.34
|
)
|
|
$
|
(2.76
|
)
|
|
$
|
(2.58
|
)
|
|
|
(93.5
|
)%
|
Net loss per share – diluted
|
|
$
|
(15.66
|
)
|
|
$
|
(7.09
|
)
|
|
$
|
(8.57
|
)
|
|
|
(120.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1)
|
|
$
|
26.7
|
|
|
$
|
146.0
|
|
|
$
|
(119.3
|
)
|
|
|
(81.7
|
)%
|
|
|
For the 28 weeks ended
|
|
|||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||
|
|
(in thousands)
|
|
|||||
Fresh
|
|
$
|
2,255,521
|
|
|
$
|
2,429,453
|
|
Pathmark
|
|
|
1,927,705
|
|
|
|
2,137,878
|
|
Gourmet
|
|
|
137,994
|
|
|
|
141,391
|
|
Other
|
|
|
161,989
|
|
|
|
146,582
|
|
Total sales
|
|
$
|
4,483,209
|
|
|
$
|
4,855,304
|
|
|
|
Sales Volume
|
|
|
Gross Margin Rate
|
|
|
Total
|
|
|||
Total Company
|
|
$
|
(112.5
|
)
|
|
$
|
(29.2
|
)
|
|
$
|
(141.7
|
)
|
|
|
For the 28 weeks ended
|
|
|||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||
|
|
(in thousands)
|
|
|||||
Fresh
|
|
$
|
23,727
|
|
|
$
|
74,009
|
|
Pathmark
|
|
|
(52,579
|
)
|
|
|
(17,088
|
)
|
Gourmet
|
|
|
8,882
|
|
|
|
11,430
|
|
Other
|
|
|
991
|
|
|
|
1,657
|
|
Total segment (loss) income
|
|
$
|
(18,979
|
)
|
|
$
|
70,008
|
|
|
|
12 Weeks Ended
|
|
|
28 Weeks Ended
|
|
||||||||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||||
Net Loss
|
|
$
|
(153,674
|
)
|
|
$
|
(80,309
|
)
|
|
$
|
(276,317
|
)
|
|
$
|
(145,469
|
)
|
Loss from discontinued operations
|
|
|
10,853
|
|
|
|
18,150
|
|
|
|
17,889
|
|
|
|
25,006
|
|
Provision for income taxes
|
|
|
105
|
|
|
|
(1,994
|
)
|
|
|
245
|
|
|
|
(1,608
|
)
|
Interest expense, net
|
|
|
46,126
|
|
|
|
48,508
|
|
|
|
107,268
|
|
|
|
102,715
|
|
Depreciation and amortization
|
|
|
51,518
|
|
|
|
57,784
|
|
|
|
121,897
|
|
|
|
135,572
|
|
EBITDA
|
|
|
(45,072
|
)
|
|
|
42,139
|
|
|
|
(29,018
|
)
|
|
|
116,216
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-lived asset impairment
|
|
|
30,250
|
|
|
|
-
|
|
|
|
35,648
|
|
|
|
-
|
|
Net restructuring and other
|
|
|
9,297
|
|
|
|
1,756
|
|
|
|
13,229
|
|
|
|
2,900
|
|
Real estate related activity
|
|
|
(2,179
|
)
|
|
|
11,461
|
|
|
|
(232
|
)
|
|
|
9,228
|
|
Stock-based compensation
|
|
|
760
|
|
|
|
1,190
|
|
|
|
(101
|
)
|
|
|
4,043
|
|
Pension withdrawal costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,445
|
|
LIFO adjustment
|
|
|
641
|
|
|
|
928
|
|
|
|
1,497
|
|
|
|
2,166
|
|
Self insurance reserve
|
|
|
16,152
|
|
|
|
-
|
|
|
|
16,152
|
|
|
|
-
|
|
Nonoperating (income) loss
|
(2,177
|
)
|
7,079
|
(10,454
|
)
|
8,954
|
||||||||||
Total adjustments to EBITDA
|
|
|
52,744
|
|
|
|
22,414
|
|
|
|
55,739
|
|
|
|
29,736
|
|
Adjusted EBITDA
|
|
$
|
7,672
|
|
|
$
|
64,553
|
|
|
$
|
26,721
|
|
|
$
|
145,952
|
|
|
|
12 Weeks Ended
|
|
|
28 Weeks Ended
|
|
||||||||||
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
|
Sept. 11, 2010
|
|
|
Sept. 12, 2009
|
|
||||
Net cash (used in) provided by operating activities
|
|
$
|
(36,158
|
)
|
|
$
|
24,184
|
|
|
$
|
(94,423
|
)
|
|
$
|
21,226
|
|
Long-lived asset impairment
|
|
|
(30,902
|
)
|
|
|
(2,683
|
)
|
|
|
(36,792
|
)
|
|
|
(3,739
|
)
|
Nonoperating income (loss)
|
|
|
2,177
|
|
|
|
(7,079
|
)
|
|
|
10,454
|
|
|
|
(8,954
|
)
|
Net interest expense
|
|
|
46,126
|
|
|
|
48,508
|
|
|
|
107,268
|
|
|
|
102,715
|
|
Non-cash interest expense
|
|
|
(10,473
|
)
|
|
|
(14,516
|
)
|
|
|
(23,258
|
)
|
|
|
(27,393
|
)
|
Asset disposition initiatives
|
|
|
-
|
|
|
|
(10,010
|
)
|
|
|
(4
|
)
|
|
|
(8,998
|
)
|
Occupancy charges for normal store closures
|
|
|
-
|
|
|
|
(17,114
|
)
|
|
|
(466
|
)
|
|
|
(18,374
|
)
|
Gain on disposal of owned property
|
|
|
2,832
|
|
|
|
324
|
|
|
|
1,807
|
|
|
|
3,580
|
|
Amortization of deferred real estate income
|
|
|
1,041
|
|
|
|
1,331
|
|
|
|
2,412
|
|
|
|
2,835
|
|
Loss from operations of discontinued operations
|
|
|
10,853
|
|
|
|
18,150
|
|
|
|
17,968
|
|
|
|
25,006
|
|
Benefit from (provision for) income taxes
|
|
|
105
|
|
|
|
(1,994
|
)
|
|
|
245
|
|
|
|
(1,608
|
)
|
Pension withdrawal costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,445
|
)
|
Self insurance reserve
|
(21,661
|
)
|
(1,613
|
)
|
(21,661
|
)
|
(1,613
|
)
|
||||||||
Employee benefit related costs
|
|
|
(4,748
|
)
|
|
|
-
|
|
|
|
(6,713
|
)
|
|
|
-
|
|
LIFO adjustment
|
|
|
(641
|
)
|
|
|
(928
|
)
|
|
|
(1,497
|
)
|
|
|
(2,166
|
)
|
Stock compensation (expense) income
|
|
|
(760
|
)
|
|
|
(1,190
|
)
|
|
|
101
|
|
|
|
(4,043
|
)
|
Changes in working capital
|
|
|
(22,347
|
)
|
|
|
(27,707
|
)
|
|
|
(26,285
|
)
|
|
|
(16,317
|
)
|
Other assets
|
|
|
1,575
|
|
|
|
7,715
|
|
|
|
2,799
|
|
|
|
9,928
|
|
Other non-current liabilities
|
|
|
17,839
|
|
|
|
26,887
|
|
|
|
38,928
|
|
|
|
47,916
|
|
Other, net
|
|
|
70
|
|
|
|
(126
|
)
|
|
|
99
|
|
|
|
(1,340
|
)
|
EBITDA
|
|
|
(45,072
|
)
|
|
|
42,139
|
|
|
|
(29,018
|
)
|
|
|
116,216
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-lived asset impairment
|
|
|
30,250
|
|
|
|
-
|
|
|
|
35,648
|
|
|
|
-
|
|
Net restructuring and other
|
|
|
9,297
|
|
|
|
1,756
|
|
|
|
13,229
|
|
|
|
2,900
|
|
Real estate related activity
|
|
|
(2,179
|
)
|
|
|
11,461
|
|
|
|
(232
|
)
|
|
|
9,228
|
|
Stock-based compensation
|
|
|
760
|
|
|
|
1,190
|
|
|
|
(101
|
)
|
|
|
4,043
|
|
Pension withdrawal costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,445
|
|
LIFO adjustment
|
|
|
641
|
|
|
|
928
|
|
|
|
1,497
|
|
|
|
2,166
|
|
Self insurance reserve
|
16,152
|
-
|
16,152
|
-
|
||||||||||||
Nonoperating (income) loss
|
|
|
(2,177
|
)
|
|
|
7,079
|
|
|
|
(10,454
|
)
|
|
|
8,954
|
|
Total adjustments to EBITDA
|
|
|
52,744
|
|
|
|
22,414
|
|
|
|
55,739
|
|
|
|
29,736
|
|
Adjusted EBITDA
|
|
$
|
7,672
|
|
|
$
|
64,553
|
|
|
$
|
26,721
|
|
|
$
|
145,952
|
|
|
|
For the 28 Weeks Ended
|
|
|||||
|
|
September 11, 2010
|
|
|
September 12, 2009
|
|
||
Net cash (used in) provided by operating activities
|
|
$
|
(94,423
|
)
|
|
$
|
21,226
|
|
Net cash used in investing activities
|
|
$
|
(29,496
|
)
|
|
$
|
(38,334
|
)
|
Net cash (used in) provided by financing activities
|
|
$
|
(34,164
|
)
|
|
$
|
189,527
|
|
|
|
Amount
|
|
|
Expiration Date
|
|
||
Amended $655.0 million Credit Agreement
|
|
$
|
655,000
|
|
|
December 2012
|
|
|
Borrowing base collateral adjustment
|
|
|
(142,138
|
)
|
|
|
|
|
Available for borrowing
|
|
|
512,862
|
(1)
|
|
|
|
|
Loans outstanding
|
|
|
(133,800
|
)
|
|
|
|
|
Letters of credit outstanding
|
|
|
(197,740
|
)
|
|
|
|
|
Net available borrowings at September 11, 2010
|
|
$
|
181,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Invested cash
|
|
$
|
137
|
(2)
|
|
|
|
|
|
·
|
Failure to execute on our turnaround plan could adversely affect our Company’s liquidity, financial condition and results of operations.
|
|
·
|
Our substantial indebtedness could impair our financial condition and our ability to fulfill our debt obligations.
|
|
·
|
We are affected by increasing labor, benefit and other operating costs and a competitive labor market and are subject to the risk of unionized labor disruptions.
|
(a)
|
Exhibits required by Item 601 of Regulation S-K
|
|
EXHIBIT NO.
|
DESCRIPTION
|
|
10.1
|
Executive Employment Agreement, made and entered into as of the 22nd day of July, 2010, by and between The Great Atlantic & Pacific Tea Company, Inc. and Mr. Sam Martin (incorporated herein by reference to Exhibit 10.1 to Form 8-K filed on July 23, 2010)
|
|
10.2*
|
Offer letter entered into as of the 4th day of August, 2010 by and between The Great Atlantic & Pacific Tea Company, Inc. and Thomas O’Boyle
|
|
10.3*
|
Offer letter entered into as of the 8th day of August, 2010 by and between The Great Atlantic & Pacific Tea Company, Inc. and Paul Hertz
|
|
10.4*
|
Offer letter entered into as of the 19th day of August, 2010 by and between The Great Atlantic & Pacific Tea Company, Inc. and Frederic Brace
|
|
31.1*
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
31.2*
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
32*
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
*
|
Filed herewith
|
Date: October 21, 2010
|
By:
|
/s/ Melissa E. Sungela
|
|
|
|
Melissa E. Sungela, Vice President,
|
|
|
|
Corporate Controller
|
|
|
|
(Chief Accounting Officer and Duly Authorized Officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Great Atlantic & Pacific Tea Company, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Great Atlantic & Pacific Tea Company, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: October 21, 2010
|
/s/ Samuel Martin
|
|
Samuel Martin
|
|
President and
|
|
Chief Executive Officer
|
|
|
|
|
Dated: October 21, 2010
|
/s/ Brenda M. Galgano
|
|
Brenda M. Galgano
|
|
Senior Vice President,
|
|
Chief Financial Officer and Treasurer
|