##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    quarterly report pursuant to section 13 or
15(d) of the securities
exchange act of 1934
 For the quarterly period ended June 28, 2009
 OR
 o
    
    transition report pursuant to section 13 or 15(d) of the
securities
exchange act of 1934
 For the transition from  to
 Commission file number 001-13222
 STATER BROS. HOLDINGS INC.
  Delaware
    
    33-0350671(State or other jurisdiction of incorporation or 
organization)
    
    (I.R.S. Employer Identification No.)
 301 S. Tippecanoe AvenueSan Bernardino, California
    
    92408(Address of principal executive offices)
    
    (Zip Code)
 (909) 733-5000
 
  þ o
 o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer þ
(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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##### 



STATER BROS. HOLDINGS INC.
June 28, 2009
 INDEX
 PagePART I
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsConsolidated Balance Sheets as of September 28, 2008 and
June 28, 2009 (Unaudited)
    
    
    3Consolidated Statements of Income (Unaudited) for the 13 weeks ended
June 29, 2008 and June 28, 2009
    
    
    5Consolidated Statements of Income (Unaudited) for the 39 weeks ended
June 29, 2008 and June 28, 2009
    
    
    6Consolidated Statements of Cash Flows (Unaudited) for the 39 weeks
ended June 29, 2008 and June 28, 2009
    
    
    7Notes to Consolidated Financial Statements (Unaudited)
    
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    15Item 3.
    
    Quantitative and Qualitative Disclosure about Market Risk
    
    
    26Item 4.
    
    Controls and Procedures
    
    
    26PART II
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    27Item 1A.
    
    Risk Factors
    
    
    27Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    28Item 3.
    
    Defaults Upon Senior Securities
    
    
    28Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    28Item 5.
    
    Other Information
    
    
    28Item 6.
    
    Exhibits
    
    
    28SIGNATURES


    
    
    29EX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 
 STATER BROS. HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
 ASSETS
 Sept. 28,
    
    
    June 28,2008
    
    
    2009(Unaudited)Current assetsCash and cash equivalents
    
    $
    144,939
    
    
    $
    158,459Restricted cash
    
    
    5,621
    
    
    
    3,121Receivables, net of allowance of $840 in 2008 and $751 in 2009
    
    
    43,888
    
    
    
    40,530Income tax refund receivable
    
    
    4,636
    
    
    
    Inventories
    
    
    230,218
    
    
    
    234,471Prepaid expenses
    
    
    8,607
    
    
    
    9,630Deferred income taxes
    
    
    25,684
    
    
    
    25,344Assets held for sale
    
    
    81,611
    
    
    
    79,057Note receivable, current portion
    
    
    
    
    
    
    300Total current assets
    
    
    545,204
    
    
    
    550,912Property and equipmentLand
    
    
    95,144
    
    
    
    95,070Buildings and improvements
    
    
    529,993
    
    
    
    555,574Store fixtures and equipment
    
    
    378,658
    
    
    
    395,269Property subject to capital leases
    
    
    9,983
    
    
    
    9,9831,013,778
    
    
    
    1,055,896Less accumulated depreciation and amortization
    
    
    353,715
    
    
    
    392,934660,063
    
    
    
    662,962Deferred income taxes, long-term
    
    
    29,163
    
    
    
    32,187Deferred debt issuance cost, net
    
    
    14,478
    
    
    
    12,070Note receivable, less current portion
    
    
    
    
    
    
    493Long-term receivable
    
    
    22,228
    
    
    
    22,228Goodwill
    
    
    2,894
    
    
    
    2,894Other assets
    
    
    5,934
    
    
    
    5,93474,697
    
    
    
    75,806Total assets
    
    $
    1,279,964
    
    
    $
    1,289,680
  3




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS (contd.)
 LIABILITIES AND STOCKHOLDERS EQUITY
 Sept. 28,
    
    
    June 28,2008
    
    
    2009(Unaudited)Current liabilitiesAccounts payable
    
    $
    157,925
    
    
    $
    153,452Accrued payroll and related expenses
    
    
    59,560
    
    
    
    58,034Other accrued liabilities
    
    
    76,637
    
    
    
    52,307Accrued income taxes
    
    
    
    
    
    
    3,088Liabilities held for sale
    
    
    15,984
    
    
    
    11,309Current portion of capital lease obligations
    
    
    1,148
    
    
    
    1,286Total current liabilities
    
    
    311,254
    
    
    
    279,476Long-term debt
    
    
    810,000
    
    
    
    810,000Capital lease obligations, less current portion
    
    
    5,104
    
    
    
    4,121Long-term portion of self-insurance and other reserves
    
    
    35,164
    
    
    
    39,296Long-term deferred benefits
    
    
    66,340
    
    
    
    74,616Other long-term liabilities
    
    
    11,596
    
    
    
    11,861Total liabilities
    
    
    1,239,458
    
    
    
    1,219,370Commitment and contingenciesStockholders equityCommon Stock, $.01 par value:Authorized
shares  100,000Issued and
outstanding shares  0
    
    
    
    
    
    
    Class A Common Stock, $.01 par value:Authorized
shares  100,000Issued and
outstanding shares  35,152
    
    
    
    
    
    
    Additional paid-in capital
    
    
    8,939
    
    
    
    8,939Accumulated other comprehensive loss
    
    
    (5,200
    )
    
    
    (5,200
    )Retained earnings
    
    
    36,767
    
    
    
    66,571Total stockholders equity
    
    
    40,506
    
    
    
    70,310Total liabilities and stockholders equity
    
    $
    1,279,964
    
    
    $
    1,289,680
  4




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED STATEMENTS OF INCOME
 13 Weeks EndedJune 29,
    
    
    June 28,2008
    
    
    2009Sales
    
    $
    932,668
    
    
    $
    928,641Cost of goods sold
    
    
    683,447
    
    
    
    674,425Gross profit
    
    
    249,221
    
    
    
    254,216Operating expensesSelling, general and
administrative expenses
    
    
    207,853
    
    
    
    203,277Depreciation and amortization
    
    
    12,996
    
    
    
    13,146Total operating expenses
    
    
    220,849
    
    
    
    216,423Operating profit
    
    
    28,372
    
    
    
    37,793Interest income
    
    
    962
    
    
    
    86Interest expense
    
    
    (14,904
    )
    
    
    (16,923
    )Other income, net
    
    
    99
    
    
    
    601Income before income taxes
    
    
    14,529
    
    
    
    21,557Income taxes
    
    
    5,350
    
    
    
    6,415Net income
    
    $
    9,179
    
    
    $
    15,142Earnings per average common share outstanding
    
    $
    256.61
    
    
    $
    430.76Average common shares outstanding
    
    
    35,770
    
    
    
    35,152Shares outstanding at end of period
    
    
    35,770
    
    
    
    35,152
  5




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED STATEMENTS OF INCOME
 39 Weeks EndedJune 29,
    
    
    June 28,2008
    
    
    2009Sales
    
    $
    2,801,059
    
    
    $
    2,818,890Cost of goods sold
    
    
    2,051,131
    
    
    
    2,061,986Gross profit
    
    
    749,928
    
    
    
    756,904Operating expensesSelling, general and administrative expenses
    
    
    620,703
    
    
    
    620,593Depreciation and amortization
    
    
    39,069
    
    
    
    40,058Total operating expenses
    
    
    659,772
    
    
    
    660,651Operating profit
    
    
    90,156
    
    
    
    96,253Interest income
    
    
    4,975
    
    
    
    416Interest expense
    
    
    (42,907
    )
    
    
    (51,371
    )Other income, net
    
    
    2,839
    
    
    
    707Income before income taxes
    
    
    55,063
    
    
    
    46,005Income taxes
    
    
    21,602
    
    
    
    16,201Net income
    
    $
    33,461
    
    
    $
    29,804Earnings per average common share outstanding
    
    $
    935.45
    
    
    $
    847.86Average common shares outstanding
    
    
    35,770
    
    
    
    35,152Shares outstanding at end of period
    
    
    35,770
    
    
    
    35,152
  6




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##### Table of Contents



STATER BROS. HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 39 Weeks EndedJune 29,
    
    
    June 28,2008
    
    
    2009Operating activities:Net income
    
    $
    33,461
    
    
    $
    29,804Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    45,779
    
    
    
    48,509Amortization of debt issuance costs
    
    
    2,399
    
    
    
    2,408Increase in deferred income taxes
    
    
    (6,354
    )
    
    
    (2,684
    )Gain on disposals of assets
    
    
    (1,943
    )
    
    
    (572
    )Changes in operating assets and liabilities:Decrease in restricted cash
    
    
    2,500
    
    
    
    2,500Increase in receivables
    
    
    (2,376
    )
    
    
    (3,306
    )Increase in inventories
    
    
    (18,666
    )
    
    
    (4,253
    )(Increase) decrease in prepaid expenses
    
    
    673
    
    
    
    (1,023
    )Decrease in assets held for sale
    
    
    3,134
    
    
    
    2,554Decrease in other assets
    
    
    9
    
    
    
    Increase (decrease) in accounts payable
    
    
    644
    
    
    
    (4,473
    )Increase (decrease) in accrued income
taxes
    
    
    (4,696
    )
    
    
    7,724Decrease in other accrued liabilities
    
    
    (32,036
    )
    
    
    (25,856
    )Decrease in liabilities held for sale
    
    
    (5,074
    )
    
    
    (4,675
    )Increase in long-term reserves
    
    
    14,380
    
    
    
    12,673Net cash provided by operating activities
    
    
    31,834
    
    
    
    59,330Investing activities:(Increase) decrease in store construction reimbursements
    
    
    (6,223
    )
    
    
    6,664Note receivable
    
    
    
    
    
    
    (793
    )Purchase of property and equipment
    
    
    (140,108
    )
    
    
    (51,826
    )Proceeds from sale of property and equipment
    
    
    2,229
    
    
    
    990Net cash used in investing activities
    
    
    (144,102
    )
    
    
    (44,965
    )Financing activities:Principal payments on capital lease obligations
    
    
    (730
    )
    
    
    (845
    )Net cash used in financing activities
    
    
    (730
    )
    
    
    (845
    )Net increase (decrease) in cash and cash equivalents
    
    
    (112,998
    )
    
    
    13,520Cash and cash equivalents at beginning of period
    
    
    277,059
    
    
    
    144,939Cash and cash equivalents at end of period
    
    $
    164,061
    
    
    $
    158,459Interest paid
    
    $
    65,437
    
    
    $
    65,581Income taxes paid
    
    $
    34,550
    
    
    $
    11,175
  7




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STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 28, 2009
 Note 1  Basis of Presentation
    Note 2  Principles of Consolidation
  Note 3  Reclassifications
   Note 4  Subsequent Events
  Note 5  Recent Accounting Pronouncements
  8




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STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 28, 2009
 Note 5  Recent Accounting Pronouncements (contd.)
   Note 6  Use of Estimates
  Note 7  Restricted Cash
  Note 8  Income Taxes
     9




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STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 28, 2009
 Note 9  Retirement Plans
   Thirteen Weeks Ended
    
    
    Thirty-Nine Weeks EndedJune 29,
    
    
    June 28,
    
    
    June 29,
    
    
    June 28,2008
    
    
    2009
    
    
    2008
    
    
    2009(in thousands)
    
    
    (in thousands)Expected return on assets
    
    $
    (769
    )
    
    $
    (805
    )
    
    $
    (2,307
    )
    
    $
    (2,417
    )Service cost
    
    
    658
    
    
    
    579
    
    
    
    1,974
    
    
    
    1,739Interest cost
    
    
    876
    
    
    
    972
    
    
    
    2,628
    
    
    
    2,917Amortization of prior service cost
    
    
    (1
    )
    
    
    (1
    )
    
    
    (2
    )
    
    
    (2
    )Amortization of recognized losses
    
    
    146
    
    
    
    49
    
    
    
    438
    
    
    
    149Net pension expense
    
    $
    910
    
    
    $
    794
    
    
    $
    2,731
    
    
    $
    2,386Actuarial assumptions used to determine net pension expense
were:Discount rate
    
    
    6.25
    %
    
    
    7.50
    %
    
    
    6.25
    %
    
    
    7.50
    %Rate of increase in compensation levels
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.00
    %Expected long-term rate of return on
assets
    
    
    6.50
    %
    
    
    6.50
    %
    
    
    6.50
    %
    
    
    6.50
    %
  10




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 28, 2009
 Note 10  Segment Information
   Thirteen Weeks
    
    Thirty-Nine WeeksRetail
    
    All Other
    
    Total
    
    Retail
    
    All Other
    
    Total(in thousands)
    
    (in thousands)Sales to external
customers
    
    $
    908,169
    
    
    $
    24,499
    
    
    $
    932,668
    
    
    $
    2,719,826
    
    
    $
    81,233
    
    
    $
    2,801,059Intersegment sales
    
    
    
    
    
    
    23,786
    
    
    
    23,786
    
    
    
    
    
    
    
    76,000
    
    
    
    76,000Operating profit (loss)
    
    
    28,889
    
    
    
    (517
    )
    
    
    28,372
    
    
    
    90,306
    
    
    
    (150
    )
    
    
    90,156Net income (loss)
    
    
    17,636
    
    
    
    (8,457
    )
    
    
    9,179
    
    
    
    56,056
    
    
    
    (22,595
    )
    
    
    33,461
   Thirteen Weeks
    
    Thirty-Nine WeeksRetail
    
    All Other
    
    Total
    
    Retail
    
    All Other
    
    Total(in thousands)
    
    (in thousands)Sales to external
customers
    
    $
    905,597
    
    
    $
    23,044
    
    
    $
    928,641
    
    
    $
    2,742,716
    
    
    $
    76,174
    
    
    $
    2,818,890Intersegment sales
    
    
    
    
    
    
    17,684
    
    
    
    17,684
    
    
    
    
    
    
    
    88,703
    
    
    
    88,703Operating profit
    
    
    36,555
    
    
    
    1,238
    
    
    
    37,793
    
    
    
    94,741
    
    
    
    1,512
    
    
    
    96,253Net income (loss)
    
    
    24,069
    
    
    
    (8,927
    )
    
    
    15,142
    
    
    
    58,182
    
    
    
    (28,378
    )
    
    
    29,804
  11




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##### Table of Contents



STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 28, 2009
 Note 11  Subsidiary Guarantee
   Note 12  Credit Facilities
 Markets Credit Facility
      12




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STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 28, 2009
 Note 12  Credit Facilities (contd.)
 Santees Revolver
        Note 13  Litigation Matters
  Note 14  Asset Sale
  13




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STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   JUNE 28, 2009
 Note 15  Fair Value of Financial Instruments
   Cash and Cash Equivalents
  Receivables
  Long-Term Receivable
  Note Receivable
  Long-Term Debt and Capital Lease Obligations
   As ofJune 28, 2009(In thousands)Carrying
    
    FairAmount
    
    ValueCash and cash equivalents
    
    $
    158,459
    
    
    $
    158,459Receivables
    
    $
    40,530
    
    
    $
    40,530Long-term receivable
    
    $
    22,228
    
    
    $
    22,228Note receivable
    
    $
    793
    
    
    $
    793Long-term debt
    
    $
    810,000
    
    
    $
    789,901Capitalized lease obligations
    
    $
    5,407
    
    
    $
    5,407
 14




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 PART  I FINANCIAL INFORMATION  (contd.)
 
 Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
 CRITICAL ACCOUNTING POLICIES
  Self-Insurance Reserves
  Employee Benefit Plans
   15




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 CRITICAL ACCOUNTING POLICIES (contd.)
 Employee Benefit Plans (contd.)
  Long-Lived Assets
   Income Taxes
  Goodwill
  16




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 CRITICAL ACCOUNTING POLICIES (contd.)
 Facility Closing Costs
  Advertising Allowances
   Gift Cards and Certificates
  Significant Accounting Policies
  OWNERSHIP OF THE COMPANY
  17




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 EXECUTIVE OVERVIEW
       18




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STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS
 Sales and Cost of Sales
 Thirteen Weeks Ended
    
    ChangeJune 29,
    
    June 28,
    
    2009 to 2008($ in thousands)
    
    2008
    
    2009
    
    Dollar
    
    %Sales
    
    $
    932,668
    
    
    $
    928,641
    
    
    $
    (4,027
    )
    
    
    (0.43
    )%Gross Profit
    
    $
    249,221
    
    
    $
    254,216
    
    
    $
    4,995
    
    
    
    2.00
    %as a % of sales
    
    
    26.72
    %
    
    
    27.38
    %
 Thirty-Nine Weeks Ended
    
    ChangeJune 29,
    
    June 28,
    
    2009 to 2008($ in thousands)
    
    2008
    
    2009
    
    Dollar
    
    %Sales
    
    $
    2,801,059
    
    
    $
    2,818,890
    
    
    $
    17,831
    
    
    
    0.64
    %Gross Profit
    
    $
    749,928
    
    
    $
    756,904
    
    
    $
    6,976
    
    
    
    0.93
    %as a % of sales
    
    
    26.77
    %
    
    
    26.85
    %
 Sales
  Like Store Sales
     19




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
 Like Store Sales (contd.)
   Gross Profit
  Operating Expenses and Operating Profit
 Thirteen Weeks Ended
    
    ChangeJune 29,
    
    June 28,
    
    2009 to 2008($ in thousands)
    
    2008
    
    2009
    
    Dollar
    
    %Operating Expenses:Selling, general and
administrative expenses
    
    $
    207,853
    
    
    $
    203,277
    
    
    $
    (4,576
    )
    
    
    (2.20
    )%as a % of sales
    
    
    22.29
    %
    
    
    21.89
    %Depreciation and amortization
    
    $
    12,996
    
    
    $
    13,146
    
    
    $
    150
    
    
    
    1.15
    %as a % of sales
    
    
    1.39
    %
    
    
    1.42
    %Operating profit
    
    $
    28,372
    
    
    $
    37,793
    
    
    $
    9,421
    
    
    
    33.21
    %as a % of sales
    
    
    3.04
    %
    
    
    4.07
    %Thirty-Nine Weeks Ended
    
    ChangeJune 29,
    
    June 28,
    
    2009 to 2008($ in thousands)
    
    2008
    
    2009
    
    Dollar
    
    %Operating Expenses:Selling, general and
administrative expenses
    
    $
    620,703
    
    
    $
    620,593
    
    
    $
    (110
    )
    
    
    (0.02
    )%as a % of sales
    
    
    22.16
    %
    
    
    22.02
    %Depreciation and amortization
    
    $
    39,069
    
    
    $
    40,058
    
    
    $
    989
    
    
    
    2.53
    %as a % of sales
    
    
    1.39
    %
    
    
    1.42
    %Operating profit
    
    $
    90,156
    
    
    $
    96,253
    
    
    $
    6,097
    
    
    
    6.76
    %as a % of sales
    
    
    3.22
    %
    
    
    3.41
    %
 20




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
 Selling, General and Administrative Expenses
    Depreciation and Amortization
  Interest Income
  Interest Expense
  21




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS (contd.)
 Other Income, net
  Income Before Income Taxes
  Income Taxes
  Net Income
  LIQUIDITY AND CAPITAL RESOURCES
   22




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 LIQUIDITY AND CAPITAL RESOURCES (contd.)
  Contractual Cash Obligations(in thousands)Less than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 Years8.125% Senior Notes due June 2012Principal
    
    $
    525,000
    
    
    $
    
    
    
    $
    525,000
    
    
    $
    
    
    
    $
    Interest
    
    
    127,969
    
    
    
    42,656
    
    
    
    85,313
    
    
    
    
    
    
    
    652,969
    
    
    
    42,656
    
    
    
    610,313
    
    
    
    
    
    
    
    7.75% Senior Note due April 2015Principal
    
    
    285,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    285,000Interest
    
    
    132,526
    
    
    
    22,088
    
    
    
    44,175
    
    
    
    44,175
    
    
    
    22,088417,526
    
    
    
    22,088
    
    
    
    44,175
    
    
    
    44,175
    
    
    
    307,088Capital lease obligations (1)Principal
    
    
    5,430
    
    
    
    1,300
    
    
    
    2,854
    
    
    
    1,276
    
    
    
    Interest
    
    
    1,968
    
    
    
    809
    
    
    
    940
    
    
    
    219
    
    
    
    7,398
    
    
    
    2,109
    
    
    
    3,794
    
    
    
    1,495
    
    
    
    Operating leases (1)
    
    
    368,043
    
    
    
    37,697
    
    
    
    66,600
    
    
    
    53,151
    
    
    
    210,595Total contractual cash obligations
    
    $
    1,445,936
    
    
    $
    104,550
    
    
    $
    724,882
    
    
    $
    98,821
    
    
    $
    517,683Other Commercial Commitments(in thousands)Less than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 YearsStandby letters of credit (2)
    
    $
    49,762
    
    
    $
    49,762
    
    
    $
    
    
    
    $
    
    
    
    $
    Total other commercial commitments
    
    $
    49,762
    
    
    $
    49,762
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    We lease the majority of our retail stores. We have subleased our old office
and dry and refrigerated warehouses located in Colton, California under an initial 15 year
term for an amount equal to our lease payments. For purposes of contractual cash obligations
shown
here, minimum lease payments on this lease are shown without sub-lease offset. Certain of
our operating leases provide for minimum annual payments that change over the primary term of
the lease. For purposes of contractual cash obligations shown here, contractual step
increases or decreases are shown in the period they are due. Certain leases provide for
additional rents based on sales. Primary lease terms range from 3 to 55 years and
substantially all leases provide for renewal options.(2)
    
    Standby letters of credit are committed as security for workers compensation
obligations. Including approximately $2.9 million under Santees Revolver used as security for
workers compensation obligations. We will retain the workers compensation liability of Santee
after the sale of Santees assets is completed. Outstanding letters of credit expire between
September 2009 and February 2010. 23




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 LIQUIDITY AND CAPITAL RESOURCES (contd.)
      Labor Relations
  24




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##### Table of Contents



STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RECENT ACCOUNTING PRONOUNCEMENTS
    CAUTIONARY STATEMENT FOR PURPOSES OF SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995.
  25




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##### Table of Contents



STATER BROS. HOLDINGS INC.
JUNE 28, 2009
 PART I FINANCIAL INFORMATION  (contd.)
 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
  
 Item 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  26




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##### Table of Contents



STATER BROS. HOLDINGS INC.
JUNE 28, 2009
 
 PART II  OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
   
 Item 1A. RISK FACTORS
    27




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##### Table of Contents



STATER BROS. HOLDINGS INC.
JUNE 28, 2009
 
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 Item 3. DEFAULTS UPON SENIOR SECURITIES
  
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 Item 5. OTHER INFORMATION
  
 Item 6. EXHIBITS
 (a)
    
    Exhibits31.1
    
    Certification of Principal Executive Officer pursuant to Section 302
(a) of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Principal Financial Officer pursuant to Section 302
(a) of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Principal Executive Officer and Principal Financial
Officer pursuant to18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
 28




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STATER BROS. HOLDINGS INC.
 
   Date: August 11, 2009
    /s/ Jack H. BrownJack H. BrownChairman of the Board, President, and 
Chief Executive Officer

(Principal Executive Officer)Date: August 11, 2009
    /s/ Phillip J. SmithPhillip J. SmithExecutive Vice President
and 
Chief Financial Officer 
(Principal Financial Officer) 29