Giant Food Reaches Settlement Agreement on FELRA and MAP Pension Liabilities; No Impact to Previously Issued 2020 Financial Outlook
Zaandam, the Netherlands, January 1, 2021 – Ahold Delhaize today announces the conclusion of negotiations by its U.S. subsidiary, Giant Food, regarding certain of its multi-employer pension plans.
Giant Food, UFCW Locals 27 and 400 (collectively the “Union Locals”) and the Pension Benefit Guaranty Corporation (“PBGC”) have reached an agreement on Giant Food’s funding obligations with respect to two multi-employer pension plans: the Food Employers Labor Relations Association and United Food and Commercial Workers Pension Fund (“FELRA”) and the Mid-Atlantic UFCW and Participating Employers Pension Fund (“MAP”). As a result of this agreement, the PBGC has approved the combining of MAP into FELRA (the “Combined Plan”) and has agreed to provide financial assistance to the Combined Plan following its insolvency, which is currently projected to occur in 2022. The agreement is intended to resolve all of Giant Food’s existing liabilities with respect to the FELRA and MAP Plans and improves the security of pension benefits for associates as well as reduces financial risk for Giant Food. Giant Food will invest approximately $800 million (~€650 million) into pension benefits for associates as part of this agreement. The pension-related investments announced by Ahold Delhaize during the course of 2020 - including those of National, 1500, and today’s announcement - have greatly reduced Ahold Delhaize’s financial exposure to the multi-employer pension plans of its U.S. brands, Giant Food and Stop & Shop, and were achieved without impacting the 2020 financial outlook due to the strong financial performance in the year-to-date, through Q3 2020 at Ahold Delhaize.
This agreement will not impact Ahold Delhaize’s previously issued financial guidance for 2020 and is also not expected to have a material impact on Ahold Delhaize’s free cash flows or underlying financial results beyond 2020. Further, this statement should not be interpreted as an update to any component of the previously issued 2020 outlook, announced in the Q3 2020 earnings release.
The agreement consists of the following components:
- Following the combination of FELRA and MAP, the PBGC will provide financial assistance to the Combined Plan to fund benefit payments up to the level guaranteed by the PBGC. Giant Food will pay the withdrawal liability to the Combined Plan in monthly installments, commencing in February 2021 for the next 25 years.
- Giant Food will create a new single employer plan to cover benefits accrued by Giant Food associates under the Combined Plan that exceed the PBGC’s guarantee level following the Combined Plan’s insolvency (“excess benefits”).
- Giant Food will create a new multi-employer plan with Safeway to provide excess benefits for certain other participants in the Combined Plan for whom Giant Food previously assumed responsibility. Giant Food intends to exercise its option to withdraw from this plan, which is currently estimated to be approximately $10 million (€8 million) in total, at some point during the next few years.
Each of the above plans is a frozen plan, meaning that no further benefits will be accrued. With this agreement, Giant Food has significantly de-risked its pension exposure and has improved the security of pension benefits for plan participants. The above plans, in essence, remain defined benefit plans, as referred to in the ‘How we manage risk’ section of the 2019 Ahold Delhaize Annual Report for related risk factors for pension and other post-employment benefits.
As part of establishing these plans, Giant Food will record an approximately $800 million (~€650 million) pension-related liability, with a corresponding reduction in the Ahold Delhaize FELRA and MAP multi-employer plan off-balance sheet liabilities. This pension-related liability will be recorded as a non-cash, pre-tax charge to pension expense, which will impact Q4 2020 IFRS results. This charge will be excluded from underlying results and will therefore not impact the previously issued underlying operating results outlook for 2020. On an after-tax basis, the charge amounts to approximately $554 million (~€450 million).
Giant Food will also make contributions to a new variable annuity pension plan (“VAP”) for future service benefits for Giant Food associates who are represented by UFCW Locals 27 and 400. The VAP as well as the above plans are designed to protect benefit accrual of participants, with a significantly reduced risk of plan underfunding and improved visibility on annual contributions.
Overall, the total ongoing annual contributions to settle the Combined Plan and for the newly created plans are not expected to impact Ahold Delhaize’s underlying financial results going forward. The total impact to underlying net income does not differ materially to the impact from contribution amounts that have been in place for the previous plans, which totaled $37 million (€33 million) in 2019.
Ahold Delhaize’s full year 2020 free cash flow outlook, as well as future free cash flows beyond 2020, are not expected to be materially impacted by these agreements.
This communication contains information that qualifies as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This communication includes forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words and expressions such as impact, 2020 (financial) outlook, update, obligations, to, following, projected, 2022, will, guidance / outlook for 2020, not expected, beyond 2020, next 25 years, in order to, intends to, estimated, to be, next few years, remains, Q4 2020 IFRS results, agreed to, ongoing, annual or full year 2020, or other similar words or expressions are typically used to identify forward-looking statements.
Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause actual results of Koninklijke Ahold Delhaize N.V. (the “Company”) to differ materially from future results expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the risk factors set forth in the Company’s public filings and other disclosures. Forward-looking statements reflect the current views of the Company’s management and assumptions based on information currently available to the Company’s management. Forward-looking statements speak only as of the date they are made and the Company does not assume any obligation to update such statements, except as required by law.
One Liberty Plaza - 165 Broadway
NY 10006 New York
GlobeNewswire is one of the world's largest newswire distribution networks, specializing in the delivery of corporate press releases financial disclosures and multimedia content to the media, investment community, individual investors and the general public.
Subscribe to releases from GlobeNewswire
Subscribe to all the latest releases from GlobeNewswire by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from GlobeNewswire
CONDITIONS FOR RIKSBANK REVERSED AUCTIONS SEK TREASURY BILLS15.1.2021 16:20:00 CET | Press release
Bid procedure, 2021-01-18BillsSWEDISH T-BILL: SE0014555991. 2021-06-16 SWEDISH T-BILL: SE0014808747, 2021-09-15 Bid date2021-01-18Bid times09.00-10.00 (CET/CEST) on the Bid dateRequested volume (corresponding nominal amount)SE0014555991: 500 mln SEK +/-250 mln SEK SE0014808747: 500 mln SEK +/-250 mln SEK Highest permitted bid volume (corresponding nominal amount)SE0014555991: 500 mln SEK per bid SE0014808747: 500 mln SEK per bid Lowest permitted bid volume (corresponding nominal amount)SEK 50 million per bidExpected allocation timeNot later than 10.15 (CET/CEST) on the Bid dateDelivery and payment date2021-01-20Delivery of billsTo the Riksbank's account in Euroclear Sweden AB's securities settlement system 1 4948 6383 Stockholm, 2021-01-15 This is a translation of the special terms and conditions published on www.riksbank.se. In the case of any inconsistency between the English translation and the Swedish language version, the Swedish language version shall prevail. Complete terms and
CONDITIONS FOR RIKSBANK REVERSED AUCTIONS SEK MUNICIPAL BONDS15.1.2021 16:20:00 CET | Press release
Anbudsförfarande kommuner och regioner, 2021-01-19BondsFloating-rate Notes(FRN) issued in SEK by Municipalities or Regions with maturity in: 2023 The following issuers are accepted for delivery: Borås Stad Göteborgs Stad Helsingborgs Stad Huddinge Kommun Lunds Kommun Malmö Stad Norrköpings Kommun Region Skåne Stockholms Stad Region Stockholm Sundsvalls Kommun Södertälje Kommun Täby Kommun Uppsala Kommun Västerås Stad Örebro Kommun Östersunds Kommun Delivery may not be made in Bonds purchased by the Counterparty from the issuer less than one week prior to the date for announcing the Specific terms, i.e. the purchase may not have been made after: 2021-01-08BidsBids are made to tel 08-696 69 70 and confirmed in writing by a filled-in Bid form by e-mail to EOL@riksbank.se Bid date2021-01-19Bid times10.00-11.00 (CET/CEST) on the Bid dateRequested volume (corresponding nominal amount)SEK 1000 +/- 1000 millionHighest permitted bid volume (corresponding nominal amount)The total bid volume from
CONDITIONS FOR PURCHASES OF CORPORATE BONDS15.1.2021 16:20:00 CET | Press release
Bid procedure, 2021-01-20BondsBonds issued in SEK by Swedish non-financial undertakings. The following bonds are eligible for delivery: AKELIUS RESIDENTIAL AB: XS1692931980, 2021-10-04 AKELIUS RESIDENTIAL AB: XS1889043359, 2023-10-03 FASTIGHETS AB BALDER: SE0013359726, 2022-07-01 FASTIGHETS AB BALDER: SE0012675940, 2022-01-28 WILLHEM AB: SE0012193985, 2025-02-22 WILLHEM AB: SE0011088921, 2022-01-11 LUNDBERGFORETAGEN AB: SE0012676666, 2024-12-06 LUNDBERGFORETAGEN AB: SE0012676609, 2025-11-13 TELE2 AB: XS2187707463, 2025-06-10 TELE2 AB: XS1571151627, 2023-02-24 Delivery of a Bond may not occur if the Counterparty has purchased the Bond from the issuer more recently than one month prior to the date of announcement of the Special terms, that is, the purchase may not have taken place after: 2020-12-20Bid date2021-01-20Bid times10.00-11.00 (CET/CEST) on the Bid dateRequested volume (corresponding nominal amount)XS1692931980: 30 mln SEK +/-30 mln SEK XS1889043359: 30 mln SEK +/-30 mln SEK SE0
CONDITIONS FOR RIKSBANK REVERSED AUCTIONS SEK COVERED BONDS15.1.2021 16:20:00 CET | Press release
Bid procedure, 2021-01-21BondsSTADSHYPOTEK AB: 1590. SE0012676690. 2025-09-03 NORDEA HYPOTEK AB: 5534, SE0012230415, 2024-09-18 SKANDINAVISKA ENSKILDA: 576, SE0010049841, 2023-12-20 DANSKE HYPOTEK AB: 2312, SE0011116474, 2023-12-20 LANSFORSAKRINGAR HYPOTEK: 518, SE0011309244, 2025-09-17 SWEDISH COVERED BOND: 146, SE0013381571, 2025-06-11 SWEDBANK HYPOTEK AB: 194, SE0012142206, 2024-09-18 Bid date2021-01-21Bid times09.00-10.00 (CET/CEST) on the Bid dateRequested volume (corresponding nominal amount)1590: 1500 mln SEK +/-500 mln SEK 5534: 1300 mln SEK +/-500 mln SEK 576: 900 mln SEK +/-450 mln SEK 2312: 400 mln SEK +/-200 mln SEK 518: 800 mln SEK +/-400 mln SEK 146: 800 mln SEK +/-400 mln SEK 194: 1300 mln SEK +/-500 mln SEK Highest permitted bid volume (corresponding nominal amount)1590: 1500 mln SEK per bid 5534: 1300 mln SEK per bid 576: 900 mln SEK per bid 2312: 400 mln SEK per bid 518: 800 mln SEK per bid 146: 800 mln SEK per bid 194: 1300 mln SEK per bid Lowest permitted bid volume
CONDITIONS FOR RIKSBANK REVERSED AUCTIONS SEK GOVERNMENT BONDS15.1.2021 16:20:00 CET | Press release
Bid procedure, 2021-01-22BondsSWEDEN I/L BOND: 3112. SE0008014062. 2026-06-01 SWEDEN I/L BOND: 3111, SE0007045745, 2032-06-01 Bid date2021-01-22Bid times09.00-10.00 (CET/CEST) on the Bid dateRequested volume (corresponding nominal amount)3112: 500 mln SEK +/-250 mln SEK 3111: 500 mln SEK +/-250 mln SEK Highest permitted bid volume (corresponding nominal amount)3112: 500 mln SEK per bid 3111: 500 mln SEK per bid Lowest permitted bid volume (corresponding nominal amount)SEK 50 million per bidExpected allocation timeNo later than 10.10 (CET/CEST) on the Bid dateDelivery and payment date2021-01-26Delivery of bondsTo the Riksbank's account in Euroclear Sweden AB's securities settlement system 1 4948 6383 Stockholm, 2021-01-15 This is a translation of the special terms and conditions published on www.riksbank.se. In the case of any inconsistency between the English translation and the Swedish language version, the Swedish language version shall prevail. Complete terms and conditions can be r
Nykredit Bank A/S är nytt emissionsinstitut under Klöverns icke-säkerställda MTN-program15.1.2021 13:30:00 CET | Pressemelding
Nykredit Bank A/S har genom ett avtal daterat den 14 januari 2021 tillträtt som emissionsinstitut under Klövern AB (publ)s icke-säkerställda MTN-program (”MTN-programmet”) i enlighet med de allmänna villkoren för MTN-programmet ursprungligen daterade den 4 februari 2020 och såsom ändrade den 6 oktober 2020. Övriga emissionsinstitut under MTN-programmet är Danske Bank A/S, Danmark, Sverige Filial, Nordea Bank Abp och Swedbank AB (publ). Mer information om MTN-programmet finns på Klöverns webbplats (www.klovern.se). Klövern AB (publ) För ytterligare information, vänligen kontakta: Jens Andersson, Finanschef, 076-855 67 02, firstname.lastname@example.org Rutger Arnhult, VD, 070-458 24 70, email@example.com Lars Norrby, IR, 076-777 38 00, firstname.lastname@example.org Klövern är ett fastighetsbolag som med närhet och engagemang erbjuder attraktiva lokaler i tillväxtregioner. Klövern är noterat på Nasdaq Stockholm. Ytterligare information finns på www.klovern.se. Klövern AB (publ), Bredgränd 4,
Nykredit Bank A/S is new dealer under Klövern’s unsecured MTN Program15.1.2021 13:30:00 CET | Press release
Nykredit Bank A/S has through an agreement dated on 14 January 2021 acceded to Klövern AB (publ)’s unsecured MTN program (the ”MTN Program”) as dealer in accordance with the general terms and conditions of the MTN Program originally dated on 4 February 2020 and as amended on 6 October 2020. The other dealers under the MTN Program are Danske Bank A/S, Danmark, Sverige Filial, Nordea Bank Abp and Swedbank AB (publ). Further information about the MTN Program can be found on Klövern’s website (www.klovern.se). Klövern AB (publ) For additional information, please contact: Jens Andersson, Head of Finance, +46 (0)76-855 67 02, email@example.com Rutger Arnhult, CEO, +46 (0)70-458 24 70, firstname.lastname@example.org Lars Norrby, IR, +46 (0)76-777 38 00, email@example.com Klövern is a real estate company committed to working closely with customers to offer them attractive premises in growth regions. Klövern is listed on Nasdaq Stockholm. For further information, see www.klovern.se. Klö