Supervalu 2015 Annual Report Download

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2015 ANNUAL REPORT
1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
1868 THROUGH

Table of contents

  • Page 1
    1868 THROUGH 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2015 ANNUAL REPORT

  • Page 2
    ... the past two years. In fiscal 2016, our goal is to open up to 100 new Save-A-Lot stores. Our Independent Business began fiscal 2016 with a new contract to supply select Haggen stores, a large west coast retailer for whom we will also provide transition services. Retail Food has plans in place to...

  • Page 3
    ...VALLEY VIEW ROAD EDEN PRAIRIE, MINNESOTA (Address of principal executive offices) 55344 (Zip Code) Registrant's telephone number, including area code: (952) 828-4000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common Stock, par value $0.01 per share Name of each...

  • Page 4
    ... Data Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information PART III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related...

  • Page 5
    ...'s markets • Competition for employees, store sites and products • The ability of the Company's Independent Business to maintain or increase sales due to wholesaler competition, increased competition faced by customers and increased customer self-distribution • Changes in economic conditions...

  • Page 6
    ...health care reform • Pension funding obligations related to current and former employees of the Company and the Company's divested operations • Required funding of multiemployer pension plans and any withdrawal liability • The effect of the financial condition of the Company's pension plans on...

  • Page 7
    ... and distribution network without interruption • Disruptions due to weather, product recalls, crop conditions, regulatory actions, supplier instability, transportation interruptions, labor supply or vendor disputes Changes in Military Business • Competition in the Company's military business...

  • Page 8
    ... and logistics service solutions to independent retail customers and Save-A-Lot licensees, as well as wholesale distribution to the Company's Retail Food and Save-A-Lot stores. On March 21, 2013, the Company completed the sale (the "NAI Banner Sale") of New Albertson's, Inc. ("New Albertsons" or...

  • Page 9
    ... 28, 2015, a fiscal 2014 52-week year ended February 22, 2014 and a fiscal 2013 52-week year ended February 23, 2013. Financial Information About Reportable Segments The Company's business is classified by management into three reportable segments: Independent Business, Save-A-Lot and Retail Food...

  • Page 10
    ... of nationally advertised brand name and private-label products, primarily including grocery (both perishable and nonperishable), general merchandise and home, health and beauty care, and pharmacy, which are sold through Company-operated and licensed Retail Food and Save-A-Lot stores to shoppers and...

  • Page 11
    ... products(2) Services to independent retail customers and other Save-A-Lot: Nonperishable grocery products(1) Perishable grocery products(2) Retail Food: Nonperishable grocery products(1) Perishable grocery products(2) Pharmacy products Fuel Other Corporate: Transition services revenue Net sales...

  • Page 12
    ...the Company, as well as the stores of independent retail customers it supplies, include price, quality, store locations, customer service, convenience, assortment, in-stock levels, brand recognition, store conditions, in-store marketing and merchandising, promotional strategies and other competitive...

  • Page 13
    ... Executive Vice President, General Counsel and Corporate Secretary 2013 Mark Van Buskirk(6) Rob Woseth(7) 57 44 Executive Vice President, Merchandising, Marketing, Retail & Pharmacy Executive Vice President, Chief Strategy Officer 2013 2013 (1) The Company agreed in the Tender Offer Agreement...

  • Page 14
    ... Officer from 2011-2014 and Vice President, Controller and Chief Accounting Officer from 2006-2011 at Best Buy Co., Inc., a retailer of consumer electronics and related products. (6) Mark Van Buskirk was appointed Executive Vice President, Merchandising, Marketing, Retail & Pharmacy in March 2013...

  • Page 15
    ... organization and offer services that provide value. The Company's ability to grow will also depend on many factors, including the Company's ability to attract new customers and licensees throughout the existing networks of distribution centers, the availability of attractive store locations, the...

  • Page 16
    ...pension obligations to current and former employees of the Company as well as some of its divested businesses. The Company's defined benefit pension plan was closed for eligibility and frozen for credited benefit service for the vast majority of participants effective December 2007. In December 2012...

  • Page 17
    ...'s results of operations. The amount of revenue the Company receives under the TSA is based on the number of NAI and Albertson's LLC stores and distribution centers receiving services under the TSA. Pursuant to the terms of the TSA, and at any time during the transition and wind down of the TSA, NAI...

  • Page 18
    ...impact on its business and future operating results. In the second quarter of fiscal 2015, the Company experienced separate criminal intrusions into the portion of its computer network that processes payment card transactions for some of its owned and franchised retail food stores, including some of...

  • Page 19
    ... adversely affect the Company's results of operations. Some stores owned and operated by Albertson's LLC and NAI experienced related criminal intrusions. The Company provides information technology services to these Albertson's LLC and NAI stores pursuant to the TSA, and the Company has been working...

  • Page 20
    ... other devices to shop in stores and online and provide feedback and public commentary on their shopping experience, including prices. Multichannel retailing is rapidly evolving. If the Company does not keep pace with changing customer expectations and new developments and technology investments by...

  • Page 21
    ... the Company's stores, offices or distribution facilities, lack of an adequate work force in a market, temporary disruption in the supply of products, disruption in the transport of goods, delays in the delivery of goods to the Company's distribution centers or stores, a reduction in customer volume...

  • Page 22
    ... of the Company's military business. The Company's Independent Business segment sells and distributes grocery products to military commissaries and exchanges in the United States. The Company's military business faces competition from large national and regional food distributors as well as smaller...

  • Page 23
    ...or market conditions, changes in business operations and market strategies, changes in competition or changes in the Company's stock price and market capitalization. Changes in these factors, or changes in actual performance compared with estimates of the Company's future performance, may affect the...

  • Page 24
    ... distribution center square footage was approximately 1 million related to an owned facility that provides wholesale distribution to a Retail Food banner, as of February 28, 2015. In addition to its principal executive offices in Eden Prairie, Minnesota, the Company maintains store support centers...

  • Page 25
    ... 2012, Kiefer, a former Assistant Store Manager at Save-A-Lot, filed a class action against Save-A-Lot seeking to represent current and former Assistant Store Managers alleging violations of the Fair Labor Standards Act related to the fluctuating work week method of pay ("FWW") in the United States...

  • Page 26
    ... Note 7-Long-Term Debt in Part II, Item 8 of this Annual Report on Form 10-K. Company Purchases of Equity Securities The following table sets forth the Company's purchases of equity securities for the periods indicated: Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs...

  • Page 27
    ... group to better reflect companies with which it more directly competes. The fiscal 2015 peer group consists of Spartan Stores Inc., Wal-Mart Stores, Inc., Target Corporation, Sysco Corporation, The Fresh Market, Inc., Delhaize Group SA and Roundy's, Inc. (4) The Company's 2014 peer group consisted...

  • Page 28
    material, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. 26

  • Page 29
    ... Primary Stores Independent Business Secondary Stores Save-A-Lot licensee stores Save-A-Lot corporate stores Retail Food stores Total number of stores (1) The presentation of noncontrolling interests and equity earnings in unconsolidated affiliates has been revised to conform with the current year...

  • Page 30
    ...of each fiscal year were as follows: $0 for fiscal 2015 and 2014, $2,701 for fiscal 2013, $1,606 for fiscal 2012 and $1,651 for fiscal 2011. (5) Total assets of continuing operations is calculated as Total assets of the Company excluding current assets and long-term assets of discontinued operations...

  • Page 31
    ... Cub Foods, Shoppers Food & Pharmacy, Shop 'n Save, Farm Fresh and Hornbacher's, and also operates two retail stores under the Rainbow banner. The Company leverages its distribution operations by providing wholesale distribution and logistics service solutions to its independent retail customers and...

  • Page 32
    ... to acquisitions of Save-A-Lot licensee stores and new corporate stores. Retail Food Retail Food continues to focus on driving sales and performance through competitive pricing and promotional activities, enhanced perishable offerings, store remodels and resets. Private label product offerings...

  • Page 33
    ... when excluding the additional week. Gross profit increased $48 primarily due to higher sales volume and lower logistics and employee-related costs, offset by lower transitional TSA fees and higher incremental investments to lower prices, shrink, private brands pricing support, advertising costs and...

  • Page 34
    ... due to $143 from an additional week of sales in fiscal 2015, and $375 from new accounts, existing customers and new affiliations, offset in part by $421 from lost accounts, including one NAI banner that completed the transition to self-distribution part way through the year and the loss of one of...

  • Page 35
    ... gross profit for fiscal 2015 was approximately flat with last year, but included lower logistics and employee-related costs and higher gross profit from increased sales volume, offset by stronger private brands' pricing support and other margin investments and a higher LIFO charge. Save-A-Lot gross...

  • Page 36
    ... from early supply agreement termination, higher earnings from increased sales and lower depreciation expense, offset in part by lower margins from stronger private brands pricing support and other margin investments, higher employee-related costs and a higher LIFO charge. Save-A-Lot operating...

  • Page 37
    ... year. Net earnings from continuing operations for fiscal 2015 include $70 of after-tax charges and costs related to the non-cash pension settlement charges, debt refinancing costs, unamortized financing cost charges, store closure charges, a benefit plan charge, net information technology intrusion...

  • Page 38
    ...of Retail Food net sales was 27.0 percent for fiscal 2014, compared with 26.6 percent for fiscal 2013. The 40 basis point increase in Retail Food gross profit rate is primarily due to $34 of benefits from cost reduction initiatives including lower employee-related costs, $14 of lower logistics costs...

  • Page 39
    ... from services provided to independent retail customers, $3 of lower bad debt expense and $2 of a LIFO charge decrease, offset in part by $14 of higher allocated corporate overhead costs, including employee-related costs, and $4 of lower sales volume. Save-A-Lot operating earnings for fiscal 2014...

  • Page 40
    ...customers and $17 after tax ($0.07 per diluted share) of higher shrink. Income (Loss) from Discontinued Operations, Net of Income Taxes On January 10, 2013, the Company entered into a stock purchase agreement to sell NAI, which contained components of Retail Food and Corporate functions. The Company...

  • Page 41
    ... with GAAP in this Annual Report on Form 10-K for the fiscal year ended February 28, 2015. The Company utilizes certain non-GAAP measures, including Adjusted EBITDA, to analyze underlying core business trends to understand operating performance and as a compensation performance measure. Adjusted...

  • Page 42
    ...493, or 2.9 percent of Net sales for fiscal 2013, an increase of $279, or 160 basis points. The increase in Adjusted EBITDA is primarily due to $198 of incremental TSA fees earned related to shared service center costs to support back office functions related to the NAI Banners. Such costs have been...

  • Page 43
    ...'s advertising; display of the vendors' products in prominent locations in the Company's stores; supporting the introduction of new products into the Company's retail stores and distribution system; exclusivity rights in certain categories; and to compensate for temporary price reductions offered to...

  • Page 44
    ... at the retail store-level and at the distribution center level include only the cash flows required to operate those individual long-lived assets. The Company recognized Property, plant and equipment-related impairment charges of $3, $24 and $251 in fiscal 2015, 2014 and 2013, respectively. During...

  • Page 45
    ... under five banners: Cub Foods, Shoppers Food & Pharmacy, Shop 'n Save, Farm Fresh and Hornbacher's. The fair values of the Company's reporting units are determined by using both the market approach, applying a multiple of earnings and revenue based on guidelines for publicly traded companies, and...

  • Page 46
    ... on each participant's years of service, compensation, and age at retirement or termination. The Company's defined benefit pension plan, the SUPERVALU Retirement Plan, and certain supplemental executive retirement plans were closed to new participants and service crediting ended for all participants...

  • Page 47
    ...' compensation, automobile and general liability costs. It is the Company's policy to record its self-insurance liabilities based on management's estimate of the ultimate cost of reported claims and claims incurred but not yet reported and related expenses, discounted at a risk-free interest rate...

  • Page 48
    ... Company's total assets and certain subsidiary stock are secured under the Company's credit facilities. The Company's primary sources of liquidity are from internally generated funds and from borrowing capacity under its credit facilities. The Company will continue to obtain short-term or long-term...

  • Page 49
    ... to fiscal 2013 is primarily due to the NAI Banner Sale, resulting in reduced cash flow from that business during fiscal 2014, and cash payments made for accrued liabilities and accounts payable related to the Stock Purchase Agreement during the first quarter of fiscal 2014. Investing Activities...

  • Page 50
    ...8 of the Annual Report on Form 10-K for a detailed discussion of the provisions of the Company's credit facilities and certain long-term debt agreements, and additional information. As of February 28, 2015 and February 22, 2014, total debt was $2,489 and $2,504, respectively, under secured loans and...

  • Page 51
    ... Acquisition") entered into a binding term sheet with the PBGC relating to issues regarding the effect of the sale of NAI on certain SUPERVALU retirement plans. The agreement required that the Company not pay any dividends to its stockholders at any time for a period of up to five years. The Company...

  • Page 52
    ...contracts entered into for the purchase and sale of stock or assets, operating leases and other real estate contracts, financial agreements, agreements to provide services to the Company and agreements to indemnify officers, directors and employees in the performance of their work. While the Company...

  • Page 53
    ... in the plans, actions taken by trustees who manage the plans' benefit payments and requirements under the Pension Protection Act of 2006, the Multiemployer Pension Reform Act and Section 412(e) of the Internal Revenue Code. Company contributions can fluctuate from year to year due to store closures...

  • Page 54
    ... customer. The market value of the fixed rate notes is subject to change due to fluctuations in market interest rates. On February 24, 2015, the Company entered into a forward starting interest rate swap agreement effectively converting $300 of variable rate debt under the Company's Secured Term...

  • Page 55
    ...Plan, which is a Company-sponsored qualified pension plan, holds investments in public and private equity, fixed income and real estate securities, which is described further in Note 11-Benefit Plans in Item 8 of this Annual Report on Form 10-K. Changes in SUPERVALU Retirement Plan assets can affect...

  • Page 56
    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index of Financial Statements and Schedules Page Consolidated Financial Statements: Report of Independent Registered Public Accounting Firm Consolidated Segment Financial Information Consolidated Statements of Operations Consolidated Statements ...

  • Page 57
    ... schedule, and an opinion on SUPERVALU INC.'s internal control over financial reporting based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to...

  • Page 58
    ... INFORMATION (In millions) Fiscal Years Ended February 28, 2015 (53 weeks) Net sales Independent Business % of total Save-A-Lot % of total Retail Food % of total Corporate % of total Total net sales Operating earnings (loss) Independent Business % of Independent Business sales Save-A-Lot % of Save...

  • Page 59
    SUPERVALU INC. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) Fiscal Years Ended February 28, 2015 (53 weeks) Net sales Cost of sales Gross profit Selling and administrative expenses Goodwill and intangible asset impairment charge Operating earnings (loss...

  • Page 60
    SUPERVALU INC. and Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In millions) Fiscal Years Ended February 28, 2015 (53 weeks) Net earnings (loss) including noncontrolling interests Other comprehensive (loss) income: Recognition of pension and other postretirement benefits (...

  • Page 61
    ...vacation, compensation and benefits Current maturities of long-term debt and capital lease obligations Other current liabilities Total current liabilities Long-term debt Long-term capital lease obligations Pension and other postretirement benefit obligations Long-term tax liabilities Other long-term...

  • Page 62
    ... tax of $123 Divestiture of New Albertsons, Inc.'s pension accumulated comprehensive loss, net of tax of $31 Common stock issued and sold in connection with New Albertsons, Inc. divesture Sales of common stock under option plans Stock-based compensation Distributions to noncontrolling interests Tax...

  • Page 63
    ...LIFO charge (credit) Deferred income taxes Stock-based compensation Net pension and other postretirement benefits cost Contributions to pension and other postretirement benefit plans Other adjustments Changes in operating assets and liabilities, net of effects from business combinations: Receivables...

  • Page 64
    ... services, primarily wholesale distribution, operates hard discount retail stores and licenses stores to independent operators under the Save-A-Lot banner, and operates five competitive, regionally-based traditional format grocery banners under the Cub Foods, Shoppers Food & Pharmacy, Shop 'n Save...

  • Page 65
    .... Save-A-Lot and Retail Food advertising expenses, net of cooperative advertising reimbursements, were $69, $63 and $86 for fiscal 2015, 2014 and 2013, respectively. The Company receives allowances and credits from vendors for volume incentives, promotional allowances and, to a lesser extent, new...

  • Page 66
    ... of Independent Business, Save-A-Lot and Retail Food. Fair values are determined by using both the market approach, applying a multiple of earnings and revenue based on guidelines for publicly traded companies, and the income approach, discounting projected future cash flows based on management's 64

  • Page 67
    ... asset groups for which management determined that the cash flows in those geographic market areas were no longer interdependent and at the distribution center level for two distribution centers without corporate stores. Retail Food's long-lived assets are reviewed for impairment at the geographic...

  • Page 68
    ...yet reported and related expenses, discounted at a risk-free interest rate. The present value of such claims was calculated using discount rates ranging from 0.3 percent to 5.1 percent for fiscal 2015, 0.3 percent to 5.1 percent for fiscal 2014 and 0.4 percent to 5.1 percent for fiscal 2013. Changes...

  • Page 69
    ...obligation and related expense for Company-sponsored pension and other postretirement benefits is dependent, in part, on management's selection of certain actuarial assumptions in calculating these amounts. These assumptions include, among other things, the discount rate, the expected long-term rate...

  • Page 70
    ... to which, upon the terms and subject to the conditions of the Tender Offer Agreement, and contingent upon the NAI Banner Sale, Symphony Investors tendered for up to 30 percent of the issued and outstanding common stock of the Company at a purchase price of $4.00 per share in cash (the "Tender...

  • Page 71
    ... is currently evaluating the potential impact of adoption on its Consolidated Financial Statements. NOTE 2-BUSINESS ACQUISITIONS Rainbow Stores During the second quarter of fiscal 2015, the Company completed the purchase of seven Rainbow Foods grocery stores, 11 Rainbow Foods pharmacy locations and...

  • Page 72
    ... 23, 2013 Additions Impairments Other net adjustments February 22, 2014 Additions Impairments Other net adjustments February 28, 2015 Goodwill: Independent Business Save-A-Lot Retail Food Total goodwill Intangible assets: Favorable operating leases, prescription files, customer lists and other...

  • Page 73
    ... Food, and impairments of Independent Business distribution centers and Save-A-Lot stores. Fiscal 2013 impairment charges primarily related to certain capital projects in process, mainly related to software under development and certain other software support tools that the executive management team...

  • Page 74
    ... a discounted cash flow approach applying a market rate for similar instruments using Level 3 inputs. The estimated fair value of the Company's long-term debt (including current maturities) was greater than the book value by approximately $59 and $83 as of February 28, 2015 and February 22, 2014...

  • Page 75
    Future maturities of long-term debt, excluding the net discount on debt, as of February 28, 2015 consist of the following: Fiscal Year 2016 2017 2018 2019 2020 Thereafter $ 10 293 15 15 1,414 750 The Company's credit facilities and certain long-term debt agreements have restrictive covenants and ...

  • Page 76
    ...-priority security interest for the benefit of the facility lenders in its present and future inventory, credit card, wholesale trade, pharmacy and certain other receivables, prescription files and related assets. In addition, the obligations under the Revolving ABL Credit Facility are secured by...

  • Page 77
    ...2014 143 $ 5 148 (27) 121 $ 2013 143 6 149 (29) 120 $ The Company leases certain property to third parties under operating, capital and direct financing leases. Under the direct financing leases, the Company leases buildings to independent retail customers with terms ranging from one to five years...

  • Page 78
    ... to the following: 2015 Federal taxes (benefit) based on statutory rate State income taxes, net of federal benefit Tax contingency Change in valuation allowance Pension Other Total income tax provision (benefit) $ 62 $ 12 (1) - (8) (7) 58 $ 2014 4 $ - (1) (1) - 3 5 $ 2013 (149) (13) 1 (3) - 1 (163...

  • Page 79
    ... in fiscal 2019. Uncertain Tax Positions Changes in the Company's unrecognized tax benefits consisted of the following: 2015 Beginning balance Increase based on tax positions related to the current year Decrease based on tax positions related to the current year Increase based on tax positions...

  • Page 80
    ... starting in fiscal 2013 stock-based awards granted generally have a term of ten years. Stock options are granted to key salaried employees and have been granted to the Company's non-employee directors to purchase common stock at an exercise price not less than 100 percent of the fair market value...

  • Page 81
    ... share. These options vest over three years. In fiscal 2013, the Company's Board of Directors granted non-qualified stock options to the Company's Chief Executive Officer, and the Board of Directors granted non-qualified stock options to certain other employees, under the Company's 2012 Stock Plan...

  • Page 82
    ... to certain employees under the SUPERVALU INC. 2007 Stock Plan as part of the Company's long-term incentive program ("2013 LTIP"). Payout of the award was based on the increase in share price over the three-year service period ending May 1, 2015, and will be settled in the Company's stock. The grant...

  • Page 83
    ... and non-contributory pension, profit sharing or 401(k) plans. The Company's primary defined benefit pension plan, the SUPERVALU INC. Retirement Plan (the "SUPERVALU Retirement Plan"), and certain supplemental executive retirement plans were closed to new participants and service crediting ended for...

  • Page 84
    ... tax $ $ $ Net periodic benefit cost (income) and other changes in plan assets and benefit obligations recognized in Other comprehensive (loss) income for defined benefit pension and other postretirement benefit plans consist of the following: 2015 $ Pension Benefits 2014 2013 - $ 121 (141) - 101...

  • Page 85
    ... $8. Pension Plan Assets Plan assets are held in a master trust and invested in separately managed accounts and other commingled investment vehicles holding domestic and international equity securities, domestic fixed income securities and other investment classes. The Company employs a total return...

  • Page 86
    ... studies and quarterly investment portfolio reviews. The asset allocation targets and the actual allocation of pension plan assets are as follows: Asset Category Domestic equity International equity Private equity Fixed income Real estate Total Target 24.4% 11.0% 6.2% 48.7% 9.7% 100.0% 2015 24.8% 11...

  • Page 87
    ...of the Company's defined benefit pension plans held in a master trust as of February 28, 2015, by asset category, consisted of the following: Common stock Common collective trusts-fixed income Common collective trusts-equity Government securities Mutual funds Corporate bonds Real estate partnerships...

  • Page 88
    ... benefit plans, which reflect expected future service, are as follows: Fiscal Year 2016 2017 2018 2019 2020 Years 2021-2025 Defined Contribution Plans The Company sponsors several defined contribution and profit sharing plans pursuant to Section 401(k) of the Internal Revenue Code. Employees...

  • Page 89
    ... long-term liabilities Total Multiemployer Plans The Company contributes to various multiemployer pension plans under collective bargaining agreements, primarily defined benefit pension plans. These multiemployer plans generally provide retirement benefits to participants based on their service...

  • Page 90
    ...- Pension Plan Number Plan Month/ Day End Date Pension Protection Act Zone Status 2015 2014 FIP/RP Status Pending/ Implemented Contributions 2015 2014 2013 Pension Fund Minneapolis Food Distributing Industry Pension Plan Central States, Southeast and Southwest Areas Pension Fund Minneapolis Retail...

  • Page 91
    ...Postretirement Benefit Plans Other than Pensions The Company also makes contributions to multiemployer health and welfare plans in amounts set forth in the related collective bargaining agreements. These plans provide medical, dental, pharmacy, vision and other ancillary benefits to active employees...

  • Page 92
    ... period and relates to pension and other postretirement benefit obligation adjustments, net of tax. Changes in Accumulated other comprehensive loss by component are as follows: 2015 Pension and postretirement benefit plan accumulated other comprehensive $ loss at beginning of the fiscal year, net of...

  • Page 93
    ...contracts entered into for the purchase and sale of stock or assets, operating leases and other real estate contracts, financial agreements, agreements to provide services to the Company and agreements to indemnify officers, directors and employees in the performance of their work. While the Company...

  • Page 94
    ... future purchase obligations. The Company and AB Acquisition entered into a binding term sheet with the PBGC relating to issues regarding the effect of the sale of NAI on certain SUPERVALU retirement plans. The agreement required that the Company not pay any dividends to its stockholders at any time...

  • Page 95
    ... meet certain conditions in the Secured Term Loan Facility and the Revolving ABL Credit Facility before paying a dividend. During fiscal 2015, the Company recognized $69 of discrete tax benefits attributable to discontinued operations (see Note 16- Discontinued Operations), which relates to tangible...

  • Page 96
    ... 2012, Kiefer, a former Assistant Store Manager at Save-A-Lot, filed a class action against Save-A-Lot seeking to represent current and former Assistant Store Managers alleging violations of the Fair Labor Standards Act related to the fluctuating work week method of pay ("FWW") in the United States...

  • Page 97
    ... products(2) Services to independent retail customers and other Save-A-Lot: Nonperishable grocery products(1) Perishable grocery products(2) Retail Food: Nonperishable grocery products(1) Perishable grocery products(2) Pharmacy products Fuel Other Corporate: Transition services revenue Net sales...

  • Page 98
    ..." in Part I, Item 1A of this Annual Report on Form 10-K. TSA fees earned are reflected in Net sales in the Consolidated Statements of Operations. The shared service center costs incurred to support back office functions related to the NAI banners represent administrative overhead and are recorded in...

  • Page 99
    ... TSA could take approximately four years. This estimate is based on the information currently known to the Company and could change materially. For additional discussion of the TSA and this letter agreement, see "Risk Factors-Changes in the Company's relationships with NAI, Albertson's LLC or Haggen...

  • Page 100
    ... (In millions, except per share data) Unaudited quarterly financial information for SUPERVALU INC. and subsidiaries is as follows: First (16 weeks) $ 5,234 $ 752 $ 48 $ 43 0.18 0.17 - 262 Second (12 weeks) $ 4,018 $ 572 $ 31 $ 31 $ $ $ 0.11 0.11 - 264 2015 Third (12 weeks) $ 4,204 $ 593 $ 12 $ 79...

  • Page 101
    by a gain on sale of property of $15 before tax ($10 after tax, or $0.04 per diluted share) recorded in Selling and administrative expenses. 99

  • Page 102
    SUPERVALU INC. and Subsidiaries SCHEDULE II-Valuation and Qualifying Accounts (In millions) Balance at Beginning of Fiscal Year $ 19 16 13 Balance at End of Fiscal Year 18 19 16 Description Allowance for losses on accounts and notes receivable: 2015 2014 2013 Additions 6 16 11 Deductions (7) $ (...

  • Page 103
    ... by the SEC's rules and forms and (2) accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure. Management's Annual Report on Internal Control Over...

  • Page 104
    ...'s 2012 Stock Plan, with a grant date of April 30, 2015, which is the date the trading window opens following release of the Company's fourth quarter earnings, and the units will vest in full at the end of fiscal 2016. The form of Restricted Stock Unit Award Agreement relating to this award is filed...

  • Page 105
    ... who submits a request to: Corporate Secretary, SUPERVALU INC., P.O. Box 990, Minneapolis, Minnesota 55440. Information on the Company's website is not deemed to be incorporated by reference into this Annual Report on Form 10-K. ITEM 11. EXECUTIVE COMPENSATION The information called for by Item 11...

  • Page 106
    ...,934. The 2012 Plan states that shares subject to awards as of May 22, 2014 under the 2007 Stock Plan that cease to be subject to such awards are added back into the 2012 Plan for issuance. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information called for...

  • Page 107
    ... or Succession: 2.1 Stock Purchase Agreement, dated January 10, 2013, by and among SUPERVALU INC., AB Acquisition LLC and New Albertson's, Inc., is incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the SEC on January 14, 2013 (Schedules have been...

  • Page 108
    ... (12 weeks) ended September 12, 1998.* SUPERVALU INC. Directors Retirement Program, as amended, is incorporated herein by reference to Exhibit 10.18 to the Company's Annual Report on Form 10-K for the year ended February 22, 2003.* SUPERVALU INC. Deferred Compensation Plan for Non-Employee Directors...

  • Page 109
    ... Restricted Stock Unit Award Terms and Conditions for Officers, is incorporated herein by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed with the SEC on April 20, 2010.* SUPERVALU INC. 2007 Stock Plan Fiscal 2013-2015 Multi-Year Performance Award Terms and Conditions is...

  • Page 110
    ... 21, 2014.* SUPERVALU INC. 2012 Stock Plan Form of Stock Option Agreement is incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on July 18, 2012.* SUPERVALU INC. 2012 Stock Plan Form of Stock Option Terms and Conditions (For Employees) is...

  • Page 111
    ... is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on October 1, 2014. Transition Services Agreement, dated as of March 21, 2013, by and between SUPERVALU INC. and Albertson's LLC, is incorporated herein by reference to Exhibit 10.1 to...

  • Page 112
    ...24, 2013.* SUPERVALU INC. 2012 Stock Plan Form of Restricted Stock Unit Award Agreement and Restricted Stock Unit Award Terms and Conditions for Employees (Cash-Settled) is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on May 20, 2014...

  • Page 113
    ...Act of 2002. (101) Interactive Data File. 101. The following materials from the SUPERVALU INC. Annual Report on Form 10-K for the fiscal year ended February 28, 2015 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Segment Financial Information (ii) the Consolidated...

  • Page 114
    ...) By: Dated: April 28, 2015 /s/ SAM DUNCAN Sam Duncan Chief Executive Officer and President Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of SUPERVALU and in the capacities and on...

  • Page 115
    ... 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. Date: April 28, 2015 /s/ Sam Duncan Sam Duncan Chief Executive Officer and President

  • Page 116
    ... 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. Date: April 28, 2015 /s/ Bruce H. Besanko Bruce H. Besanko Executive Vice President, Chief Financial Officer

  • Page 117
    ... officer of SUPERVALU INC. (the "Company") certifies that the Annual Report on Form 10-K of the Company for the fiscal year ended February 28, 2015, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in that Annual...

  • Page 118
    ... officer of SUPERVALU INC. (the "Company") certifies that the Annual Report on Form 10-K of the Company for the fiscal year ended February 28, 2015, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in that Annual...

  • Page 119
    ... Executive Vice President, Chief Strategy Officer INVESTOR INFORMATION The annual meeting of SUPERVALU INC. will take place on July 22, 2015 at 9:30 a.m. Central Time at the SUPERVALU Corporate Headquarters 11840 Valley View Road Eden Prairie, MN 55344 SUPERVALU's common stock is listed on the New...

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    P.O. BOX 990 MINNEAPOLIS, MN 55440 952.828.4000 supervalu.com