Albertsons 2002 Annual Report Download

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2002 Annual Report
Strength
& stability

Table of contents

  • Page 1
    2002 Annual Report Strength & stability

  • Page 2
    ... and other items Corporate Profile Headquartered in Minneapolis, Minnesota, SUPERVALU is one of the largest companies in the U.S. grocery channel, generating annual revenues in excess of $20 billion. Integral to the nation's food supply chain, SUPERVALU operates successfully at the center of two...

  • Page 3
    ... distribution centers â- Allocated our capital to growth and efficiency projects, such as accelerating the expansion of the Save-A-Lot network, expanding in key retail markets, increasing our store remodeling program, achieving cost savings in distribution and investing in technology-related...

  • Page 4
    ...margins, increased purchasing power in the supply chain that benefits all our customers and enhanced stock valuation. The changing business mix demonstrates the importance of our retail segment as a growing part of SUPERVALU's overall success. In Fiscal 2002, we opened 103 new Save-A-Lot stores, of...

  • Page 5
    ... chain in the country and the largest operator of extreme value food supermarkets with Save-A-Lot owned and licensed stores. So as I end my career at SUPERVALU, I just want to express my sincere thanks and appreciation to all 57,800 SUPERVALU employees, our talented management team, the board...

  • Page 6
    ... to customer satisfaction. Market Position â- â- Store Expansion â- Save-A-Lot is the largest extreme value grocery retailer in the U.S. SUPERVALU's price superstore and supermarket formats hold the No.1, 2 or 3 market positions in most of their markets 5 Year Compound Annual Growth Rate is...

  • Page 7
    ... centers located across the country: Alabama Colorado Florida Georgia Illinois Indiana Iowa Maine Maryland Massachusetts Minnesota Mississippi â- Products Supplied â- Missouri Montana North Dakota Ohio Pennsylvania Rhode Island Virginia Washington West Virginia Wisconsin Grocery, meat, dairy...

  • Page 8
    ... efficient business model that combines operational simplicity, supply chain benefits, product SKU discipline, national merchandising programs and quality custom brands. Now open: 1,000 Save-A-Lot stores Save-A-Lot opened its 1,000th store in spring of 2002, demonstrating SUPERVALU's commitment...

  • Page 9
    ... in small packages. Save-A-Lot stores average 14,000 square feet - small by grocery store standards. By offering 1,250 of the most frequently purchased products - including fresh produce, meats and dairy products - Save-A-Lot provides the convenience of a small store with prices generally up to 40...

  • Page 10
    ... commitment to the best perishables, differentiate our price superstores. Averaging 63,000 square feet, consumers find savings and selection in every department. During Fiscal 2002, we opened 11 stores in our key markets adding to our strong market positions. Customers love fresh produce Aided by...

  • Page 11
    ... and North Dakota, our overall market share and reputation grows. More than a grocery store SUPERVALU's 60 traditional supermarkets, under the trusted names Farm Fresh, Scott's and Hornbacher's, continue to distinguish themselves with innovative merchandising, product presentation and department...

  • Page 12
    ...refining our product offerings, service solutions and infrastructure to address today's retail grocery environment, SUPERVALU's customers benefit. Customers capitalize on SUPERVALU's scale and proprietary "cost to serve" technology, as well as category management programs to maximize sales and pro...

  • Page 13
    ... SUPERVALU's purchasing scale delivers the best product costs to customers, enhancing their competitive position. Combining this with SUPERVALU's category management programs, customers gain even greater benefits. By using a customized category management program, retailers can tailor merchandising...

  • Page 14
    ... from 11.0 percent last year. The increase is due to the growing proportion of the Company's retail food business, which operates at a higher gross profit margin as a percentage of net sales than does the food distribution business, improved merchandising execution in retail, and benefits of...

  • Page 15
    ... and 2001, the effective tax rate was 40.2 percent for both years. Fiscal 2001 store activity, including licensed units, resulted in 117 new stores opened, five stores acquired, and 45 stores closed or sold for a total of 1,194 stores at year end, an increase in square footage of 6.9 percent over...

  • Page 16
    ... lower of cost or market. Critical Accounting Policies The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets...

  • Page 17
    ... 1, 2011 at a purchase price equal to the accreted value of the debentures, which includes accrued and unpaid cash interest. The debentures will generally be convertible if the closing price of the Company's common stock on the New York Stock Exchange Liquidity and Capital Resources Net cash from...

  • Page 18
    ...fied for use in the Company's retail food business. The budget provides for approximately 10 to 15 new price superstores and approximately 150 to 170 new extreme value stores including the announced acquisition of 45 extreme value general merchandise stores. The balance of the fiscal 2003 capital...

  • Page 19
    ... assets and the associated asset retirement costs. The Company plans to adopt the provisions of SFAS No. 143 in the first quarter of fiscal 2004. Quantitative And Qualitative Disclosures About Market Risk SUPERVALU is exposed to market pricing risk consisting of interest rate risk related to debt...

  • Page 20
    ... of favorable credit and trade terms, and • other risk factors inherent in the retail food and food distribution industries. These risks and uncertainties are set forth in further detail in Exhibit 99(i) to the Company's Annual Report on Form 10-K, for the year ended February 23, 2002. Any forward...

  • Page 21
    ... Corporate Total Capital expenditures Retail food Food distribution Corporate Total Reportable segment operating earnings were computed as total revenue less associated operating expenses. Fiscal 2002 operating earnings reï¬,ect pre-tax charges of $12.5 million in retail food for store closing...

  • Page 22
    ... of Earnings February 23, 2002 (In thousands, except per share data) (52 weeks) February 24, 2001 (52 weeks) February 26, 2000 (52 weeks) Net sales Costs and expenses Cost of sales Selling and administrative expenses Gain on sale of Hazelwood Farms Bakeries Restructure and other charges Interest...

  • Page 23
    Consolidated Balance Sheets (In thousands, except per share data) February 23, 2002 February 24, 2001 Assets Current Assets Cash and cash equivalents Receivables, less allowance for losses of $22,941 in 2002 and $22,750 in 2001 Inventories Other current assets Total current assets Long-term notes ...

  • Page 24
    ... exchanged for acquisitions Redemption of preferred stock Purchase of shares for treasury Balances at February 26, 2000 Net earnings Sales of common stock under option plans Cash dividends declared on common stock - $0.5475 per share Compensation under employee incentive plans Purchase of shares for...

  • Page 25
    ... end of year Supplemental Cash Flow Information The Company's non-cash investing and financing activities were as follows: Leased asset additions and related obligations Acquisitions: Fair value of assets acquired Cash paid Common stock issued Liabilities assumed Interest paid Income taxes paid See...

  • Page 26
    ... the discount rate, expected long-term rate of return on plan assets, and rates of increases in compensation and healthcare costs. The Reserves for Self Insurance The company is primarily self-insured for workers' compensation and general and automobile liability costs. It is the Company's policy to...

  • Page 27
    ..." for measuring the cost of compensation paid in Company common stock. This method defines the Company's cost as the excess of the stock's market value at the time of the grant over the amount that the employee is required to pay. Net Earnings Per Share Basic earnings per share (EPS) is calculated...

  • Page 28
    ...end of fiscal 2002 for fiscal 2001 restructure charges was $56.0 million, including $50.0 million for lease subsidies, lease terminations and future payments on exited leased facilities and $6.0 million for employee related costs. In fiscal 2000, the Company recorded pre-tax restructure and other...

  • Page 29
    ... 1, 2011 at a purchase price equal to the accreted value of the debentures, which includes accrued and unpaid cash interest. The debentures will generally be convertible if the closing price of the Company's common stock on the New York Stock Exchange for twenty of the last thirty trading days of...

  • Page 30
    ...669 $996,728 Leases Capital and operating leases The Company leases certain retail food stores, food distribution warehouses and office facilities. Many of these leases include renewal options, and to a limited extent, include options to purchase. Amortization of assets under capital leases was $31...

  • Page 31
    ... Plans The Company's 1997, 1993 and SUPERVALU/Richfood 1996 stock option plans allow the granting of non-qualified stock options and incentive stock options to key salaried executive employees at prices not less than 100 percent of fair market value, determined by averaging the open and close price...

  • Page 32
    ...granted to purchase 2.9 million shares of common stock and are exercisable only upon a "change in control." No compensation cost has been recognized for options issued under the stock option plans because the exercise price of all options granted was not less than 100 percent of fair market value of...

  • Page 33
    ...Plan assets are held in trust and invested in separately managed accounts and publicly traded mutual funds holding both equity and fixed income securities. In addition to providing pension benefits, the Company provides certain health care and life insurance benefits for certain retired employees...

  • Page 34
    ... of year Service cost Interest cost Plan amendments Actuarial loss Benefits paid Benefit obligations at end of year Changes in Plan Assets Fair value of plan assets at beginning of year Actual return on plan assets Company contributions Plan participants' contributions Benefits paid Fair value of...

  • Page 35
    ... for 2002, 2001, and 2000, respectively. Segment Information The Company's business is classified by management into two reportable segments: Retail Food and Food Distribution. Retail Food operations include three retail formats: extreme value food stores, price superstores, and supermarkets. The...

  • Page 36
    ...of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform...

  • Page 37
    ... 2002 (In thousands, except per share data) First (16 wks) Second (12 wks) Third (12 wks) Fourth (12 wks) Year (52 wks) Net sales Gross profit Net earnings Net earnings per common share-diluted Dividends declared per common share Weighted average shares-diluted Note: Net earnings include after-tax...

  • Page 38
    ...,757 1.82 Selling and administrative expenses Gain on sale of Hazelwood Farms Bakeries Restructure and other charges Interest, net Equity in earnings and gain on sale of ShopKo Earnings before taxes Provision for income taxes Net earnings Net earnings per common share - diluted Balance Sheet Data...

  • Page 39
    ...Capital Management A private equity company Investor Information Annual Meeting Date: Thursday, May 30, 2002 Time: 10:30 a.m. Central Time Place: Save-A-Lot Headquarters 100 Corporate Office Drive Earth City, Missouri 63045 Transfer Agent & Registrar For inquiries about SUPERVALU common stock, such...

  • Page 40
    PO Box 990 Minneapolis, MN 55440 952-828-4000 www.supervalu.com