Albertsons 2013 Annual Report Download

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2013 ANNUAL REPORT

Table of contents

  • Page 1
    2013 ANNUAL REPORT

  • Page 2
    ... sell its Albertsons, Acme, Jewel-Osco, Shaw's and Star Market stores and related Osco and Sav-on in-store pharmacies in a deal valued at $3.3 billion. This transaction closed on March 21, 2013 and marked another important milestone and new chapter in our company's history. As a result, SUPERVALU...

  • Page 3
    ... 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended February 23, 2013 OR ' TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-5418 SUPERVALU INC. (Exact name of registrant...

  • Page 4
    ...About Market Risk ...Financial Statements and Supplementary Data ...Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ...Controls and Procedures ...Other Information ...PART III 10. 11. 12. 13. 14. Directors, Executive Officers and Corporate Governance ...Executive...

  • Page 5
    ... of the Company's promotional and sales programs and the Company's ability to respond to the promotional and pricing practices of competitors Execution of Initiatives Å The effectiveness of cost reduction strategies Å The adequacy of the Company's capital resources to fund new store growth and...

  • Page 6
    ...or buying habits and the cost of doing business Å Changes in interest rates Å Food and drug inflation or deflation Labor Relations Å The Company's ability to renegotiate labor agreements with its unions Å Resolution of issues associated with rising pension, healthcare and employee benefits costs...

  • Page 7
    ... competition or the Company's stock price and market capitalization Accounting Matters Å Changes in accounting standards that impact the Company's financial statements Effect of the NAI Banner Sale on the Company Å Disruptions in current plans, operations and business relationships Å Difficulties...

  • Page 8
    ... by SUPERVALU of NAI which included the stores operating under the Acme, Albertsons, Jewel-Osco, Shaw's and Star Market banners and related Osco and Sav-on in-store pharmacies (collectively, the "NAI Banners") to AB Acquisition, in a stock sale. AB Acquisition is an affiliate of a Cerberus Capital...

  • Page 9
    ... Global Private Equity and Senior Managing Director of Cerberus. Pursuant to the Tender Offer Agreement, four new directors will be added to the Board, consisting of (i) Sam Duncan, the Company's President and Chief Executive Officer, (ii) an additional director to be appointed by Symphony Investors...

  • Page 10
    ..., general merchandise, health and beauty care, and pharmacy. Prior to the NAI Banner Sale, the Company also operated under the Acme, Albertsons, Jewel-Osco, Lucky, Shaw's and Star Market banners, and related Osco and Sav-on in-store pharmacies. Subsequent to February 23, 2013, the Company sold 874...

  • Page 11
    ... vendors related to products that are delivered directly by suppliers to retail stores under programs established by the Company. These services include sourcing, invoicing and payment services. Products The Company offers a wide variety of nationally advertised brand name and private-label products...

  • Page 12
    ...Albertson's LLC, the purchaser of the non-core supermarket business of Albertsons, under which Albertson's LLC was allowed to use legacy Albertsons trademarks related to the NAI Banners that the Company sold, such as ALBERTSONS, SAV-ON and LUCKY. Pursuant to the Stock Purchase Agreement, the Company...

  • Page 13
    ... cost structures in each market in which it operates while meeting its employees' needs for attractive wages and affordable healthcare and retirement benefits. The Company believes that it has generally good relations with its employees and with the labor unions that represent employees covered...

  • Page 14
    ... COO, Supply Chain Services, 2005-2011 Senior Vice President, Human Resources & Labor Relations, 2010-2013 Senior Vice President, Labor & Employee Relations, 2006-2010 Vice President, Employment, Compensation and Benefits Law, 2012-2013 Director, Employment Law, 2011-2012 Senior Labor and Employment...

  • Page 15
    ... March 2013. Prior to joining the Company Mr. Woseth served as Vice President Business Development and Strategy, Albertson's LLC, from 2006-2013. The term of office of each executive officer is from one annual meeting of the Board of Directors until the next annual meeting of Board of Directors or...

  • Page 16
    ..., closure or vertical integration may negatively impact the Company's sales and gross margin. Execution of initiatives Following the Company's sale of New Albertsons, the Company is positioned as a leading food wholesaler, the largest hard discount grocery chain by store count in the United States...

  • Page 17
    ... employees of the Company as well as some of its divested businesses. The Company and AB Acquisition also entered into a binding term sheet with the Pension Benefit Guaranty Corporation (the "PBGC") relating to issues regarding the effect of the NAI Banner Sale on certain SUPERVALU retirement plans...

  • Page 18
    ... may continue to accrue. The defined benefit pension plan associated with the Shaw's banner, which was divested by the Company as part of the NAI Banner Sale, covers a group of employees associated with that banner whose employment terms are governed by a collective bargaining agreement and is...

  • Page 19
    standards, equal employment opportunity, employee benefits, and minimum wages and licensing for the sale of food, drugs and alcoholic beverages. The Company's inability to timely obtain permits, comply with government regulations or make capital expenditures required to maintain compliance with ...

  • Page 20
    ... the Company's customers. Data theft, information espionage or other criminal activity directed at the grocery or drug store industry, the transportation industry, or computer or communications systems may adversely affect the Company's businesses by causing the Company to implement costly security...

  • Page 21
    ... of America ("accounting standards") and interpretations by various governing bodies, including the SEC, for many aspects of the Company's business, such as accounting for insurance and self-insurance, inventories, goodwill and intangible assets, store closures, leases, income taxes and stock-based...

  • Page 22
    ..., 2012, the Office of Self-Insurance Plans, a program within the director's office of the California Department of Industrial Relations (the "DIR"), notified the Company that additional security was required to be posted in connection with the Company's California self-insured workers' compensation...

  • Page 23
    ... in actual outcomes, costs and exposures relative to current predictions and estimates, or material changes in such predictions or estimates, could have a material adverse effect on the Company's financial condition, results of operations or cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not...

  • Page 24
    ... the date on which SUPERVALU's unsecured credit rating is BB+ from Standard & Poor's or Ba1 from Moody's. 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...

  • Page 25
    ... Graph The following graph compares the yearly change in the Company's cumulative shareholder return on its common stock for the period from the end of fiscal 2008 to the end of fiscal 2013 to that of the Standard & Poor's ("S&P") 500 and a group of peer companies in the retail grocery industry. The...

  • Page 26
    ... credit card companies before tax in fiscal 2013. The Company recorded $92 of non-cash goodwill impairment charges before tax and severance costs of $15 before tax in fiscal 2012. The Company recorded $110 of non-cash goodwill impairment charges before tax, $49 of store closures and retail market...

  • Page 27
    ...quarter of fiscal 2013, the Company announced it had entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") for the sale of its wholly owned subsidiary New Albertsons, Inc. ("NAI"), resulting in the sale of the Albertsons, Acme, Jewel-Osco, Shaw's and Star Market stores and related...

  • Page 28
    ... past fiscal years. Refer to Note 15-Discontinued Operations and Divestitures in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for further discussion. (In millions, except per share data) Net sales Cost of sales Gross profit Selling and...

  • Page 29
    ... credit card companies of $10 before tax ($6 after tax, or $0.03 per diluted share). During fiscal 2013, the Company added 69 new stores through new store development, and closed 70 stores, including planned dispositions, all of which were Save-A-Lot stores. Total retail square footage as of the end...

  • Page 30
    ... profit is primarily due to a 50 basis point impact from gross margin investment and change in business mix offset in part by a 20 basis point benefit from a lower LIFO charge and lower employee-related expenses. Selling and Administrative Expenses Selling and administrative expenses for fiscal 2013...

  • Page 31
    ... by a cash settlement received from credit card companies of $10 before tax ($6 after tax, or $0.03 per diluted share). Fiscal 2012 Net loss from continuing operations includes goodwill impairment charges of $92 before tax ($90 after tax, or $0.43 per basic and diluted share) and employee related...

  • Page 32
    ...related expenses of $15 before tax ($10 after tax, or $0.05 per diluted share). During fiscal 2012, the Company added one new store through new store development for Retail Food and sold or closed 3 Retail Food stores, including planned dispositions. During fiscal 2012, the Company added 82 new Save...

  • Page 33
    ... above items, Selling and administrative expense is flat on a rate basis as a percent of sales. Goodwill and Intangible Asset Impairment Charges During fiscal 2012, the Company's stock price experienced a significant and sustained decline. As a result, the Company performed reviews of goodwill and...

  • Page 34
    ... of $60 after tax, or $0.29 per basic and diluted share. Excluding these items, the $21 decrease in net loss is primarily the result of reduction in Selling and administrative expenses due to lower employee-related costs and increased Gross profit within the Save-A-Lot business from higher sales and...

  • Page 35
    ...stores. The Company also receives vendor funds for buying activities such as volume commitment rebates, credits for purchasing products in advance of their need and cash discounts for the early payment of merchandise purchases. The majority of the vendor fund contracts have terms of less than a year...

  • Page 36
    ... approach results in inventories being valued at the lower of cost or market because of the high inventory turnover and the resulting low inventory days supply on hand combined with infrequent vendor price changes for these items of inventory. The Company uses one of either cost, weighted average...

  • Page 37
    ...$11 in fiscal 2013, 2012 and 2011, respectively. During the fourth quarter of fiscal 2013, the executive management team determined the Company would abandon certain capital projects in process, mainly related to software under development, and would cease use of certain other software support tools...

  • Page 38
    ... local real estate brokers to assist in the valuation. The expectations on timing of disposition and the estimated sales price or subtenant rentals associated with closed properties, owned or leased, are impacted by variable factors including inflation, the general health of the economy, resultant...

  • Page 39
    ...: Reporting Unit Retail Food Save-A-Lot Independent Business $ $ 2013 - 137 710 847 $ $ 2012 - 137 710 847 The Company performed its annual test of goodwill during the fourth quarter of fiscal 2013, utilizing discount rates ranging between 11 percent and 15 percent to discount projected future cash...

  • Page 40
    ... at the end of the year. The Company sets its rate to reflect the yield of a portfolio of high quality, fixed-income debt instruments that would produce cash flows sufficient in timing and amount to settle projected future benefits. The Company's expected long-term rate of return on plan assets...

  • Page 41
    ...asset class, and historical long-term investment performance. The 10-year annual average rate of return on pension assets for fiscal 2013 and fiscal 2012 are lower than the assumed long-term rate of return of 7.25 and 7.50 percent due to the unprecedented decline in the economy and the credit market...

  • Page 42
    ... As a result of the NAI Banner Sale and the retention of liability for California selfinsurance liabilities related to workers compensation by NAI, the Company has significantly reduced the extent of self-insurance obligations. LIQUIDITY AND CAPITAL RESOURCES Management expects that the Company will...

  • Page 43
    ...suspended the payment of the regular quarterly dividend. The Company and AB Acquisition LLC entered into a binding term sheet with the Pension Benefit Guaranty Corporation (the "PBGC") relating to issues regarding the effect of the NAI Banner Sale on certain SUPERVALU retirement plans. The agreement...

  • Page 44
    ... drawn balance each year, payable quarterly, with the entire remaining balance due at the six year anniversary of the inception date. In addition, the Company was required to apply net cash proceeds (as defined in the Secured Term Loan Facility) from certain types of asset sales in amounts ranging...

  • Page 45
    ..., credit card receivables and certain other assets, which will bear interest at the rate of LIBOR plus 1.75 percent to LIBOR plus 2.25 percent, depending on utilization and (ii) a new six-year $1,500 term loan (the "Term Loan Facility"), secured by substantially all of the Company's real estate...

  • Page 46
    ... LLC, the parent entity of the Company's Save-A-Lot business and substantially all of the Term Loan Parties' intellectual property, and agreed to grant first priority liens and security interests on certain of the Term Loan Parties' owned or ground leased real estate within 90 days after the closing...

  • Page 47
    ... of stock-based compensation expense in the first quarter of fiscal 2014 as a result of the deemed change-in-control. Capital Expenditures Capital spending for fiscal 2013 was $241, including $13 of non-cash capital leases additions. Capital spending primarily included store remodeling activity, new...

  • Page 48
    ... ordinary course of business. These contracts primarily relate to the Company's commercial contracts, 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...

  • Page 49
    ... change based on the results of collective bargaining efforts, investment returns on the assets held in the plans, actions taken by trustees who manage the plans' benefit payments and requirements under the Pension Protection Act of 2006 and Section 412(e) of the Internal Revenue Code. The Company...

  • Page 50
    ... primarily related to fixed asset and information technology commitments. In addition, in the ordinary course of business, the Company enters into supply contracts to purchase product for resale to consumers and to Independent Business wholesale customers which are typically of a short-term nature...

  • Page 51
    ... information about the Company's financial instruments that are sensitive to changes in interest rates, including notes receivable and debt obligations. For debt obligations, the table presents principal payments and related weighted average interest rates by year of maturity using interest rates...

  • Page 52
    ...23, 2013, February 25, 2012 and February 26, 2011 Consolidated Statements of Cash Flows for the fiscal years ended February 23, 2013, February 25, 2012 and February 26, 2011 Notes to Consolidated Financial Statements Unaudited Quarterly Financial Information Financial Statement Schedule: Schedule II...

  • Page 53
    ... sheets of SUPERVALU INC. and subsidiaries as of February 23, 2013 and February 25, 2012, and the related consolidated statements of operations, comprehensive loss, stockholders' equity, and cash flows for each of the fiscal years in the three-year period ended February 23, 2013. In connection...

  • Page 54
    ... expense of $83, $88, $69 in fiscal 2013, 2012 and 2011 for inactive participants in the SUPERVALU Retirement Plan. This pension expense is anticipated to be reclassified primarily to Corporate Operating earnings (loss) for future periods to reflect the structure of the organization under which the...

  • Page 55
    SUPERVALU INC. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) February 23, 2013 (52 weeks) Net sales Cost of sales Gross profit Selling and administrative expenses Goodwill and intangible asset impairment charges Operating earnings (loss) Interest ...

  • Page 56
    SUPERVALU INC. and Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In millions) February 23, 2013 (52 weeks) Net loss Other comprehensive income (loss): Recognition of pension and other postretirement benefits income (loss), net of tax of $(22), $129 and $(28), respectively Comprehensive...

  • Page 57
    ..., plant and equipment, net Goodwill Intangible assets, net Deferred tax assets Other assets Long-term assets of discontinued operations Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable Accrued vacation, compensation and benefits Current maturities of long-term...

  • Page 58
    ...Stock of Par Value Stock Loss Deficit Equity (Deficit) Balances as of February 27, 2010 Net loss Other comprehensive income, net of tax of $28 Cash dividends declared on common stock $0.3500 per share Stock-based compensation Purchase of shares for treasury Other Balances as of February 26, 2011 Net...

  • Page 59
    ... from issuance of long-term debt Payments of long-term debt and capital lease obligations Dividends paid Net proceeds from the sale of common stock under option plans and related tax benefits Payments for debt financing costs Payments for purchase of treasury shares Other Net cash used in financing...

  • Page 60
    ... fourth quarter of fiscal 2013, the Company entered into a stock purchase agreement to sell the operations of the Company's New Albertson's, Inc. subsidiary ("New Albertsons" or "NAI"), including the Acme, Albertsons, Jewel-Osco, Shaw's and Star Market retail banners and the associated Osco and Sav...

  • Page 61
    ...-line basis over the life of the contracts. Selling and Administrative Expenses Selling and administrative expenses consist primarily of store and corporate employee-related costs, such as salaries and wages, health and welfare, worker's compensation and pension benefits, as well as rent, occupancy...

  • Page 62
    ... approach results in inventories being valued at the lower of cost or market because of the high inventory turnover and the resulting low inventory days supply on hand combined with infrequent vendor price changes for these items of inventory. The Company uses one of either cost, weighted average...

  • Page 63
    ... associated with closures of retail stores, distribution centers and other properties that are no longer being utilized in current operations. The Company provides for closed property lease liabilities based on the present value of the remaining noncancellable lease payments after the closing date...

  • Page 64
    ... 2013, Goodwill balances existed in the Save-A-Lot and Independent Business reporting units. Fair values are determined by using both the market approach, applying a multiple of earnings based on the guideline publicly traded company method, and the income approach, discounting projected future cash...

  • Page 65
    ...' 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 66
    ... is included in Other long-term liabilities in the Consolidated Balance Sheets. The self-insurance liabilities as of the end of the fiscal year are net of discounts of $7 and $8 as of February 23, 2013 and February 25, 2012, respectively. Benefit Plans The Company recognizes the funded status of its...

  • Page 67
    ... appropriate statutory interest rate. The Company recognizes interest related to unrecognized tax benefits in interest expense and penalties in Selling and administrative expenses in the Consolidated Statements of Operations. Net Loss Per Share Basic net earnings (loss) per share is calculated using...

  • Page 68
    ... lives during the fourth quarter of fiscal 2013. The fair value of goodwill for the Company's Save-ALot reporting was in excess of 100 percent of the $137 carrying value. The fair value of the Company's Independent Business reporting unit exceeded its $710 carrying value by approximately 60 percent...

  • Page 69
    ... risk profile of the tradename and future revenue and profitability. During the third and fourth quarters of fiscal 2012 and 2011 the Company's stock price experienced a significant and sustained decline and the book value per share substantially exceeded the stock price. As a result, the Company...

  • Page 70
    ..., discount rates, and future cash flows based on the Company's experience and knowledge of the market in which the closed property is located, and previous efforts to dispose of similar assets and existing market conditions. During the fourth quarter of fiscal 2013, the executive management team...

  • Page 71
    ... February 25, 2012. In fiscal 2013, long-lived assets with a carrying amount of $79 were written down to their fair value of $40, resulting in an impairment charge of $39, primarily related to the announced closing of approximately 22 nonstrategic Save-A-Lot stores. In fiscal 2012, long-lived assets...

  • Page 72
    ... 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 $57 and $62 as of February 23, 2013 and February 25, 2012...

  • Page 73
    ... drawn balance each year, payable quarterly, with the entire remaining balance due at the six year anniversary of the inception date. In addition, the Company was required to apply net cash proceeds (as defined in the Secured Term Loan Facility) from certain types of asset sales in amounts ranging...

  • Page 74
    ... the Consolidated Financial Statements for information related to the Company's debt refinancing transactions, which occurred subsequent to fiscal 2013 and were related to the sale of New Albertsons. NOTE 7-LEASES The Company leases certain retail stores, distribution centers, office facilities and...

  • Page 75
    ...Fiscal Year 2014 2015 2016 2017 2018 Thereafter Total minimum lease receipts Less unearned income Net investment in direct financing leases Less current portion Long-term portion The carrying value of owned property leased to third parties under operating leases was as follows: 2013 Property, plant...

  • Page 76
    ...the following: 2013 Federal taxes based on statutory rate State income taxes, net of federal benefit Goodwill and intangible asset impairment Tax contingency Change in valuation allowance Other Total income tax benefit $ $ (149) $ (13) - 1 (3) 1 (163) $ 2012 (53) $ (9) 32 (5) (5) (1) (41) $ 2011 (91...

  • Page 77
    ... for financial reporting and income tax purposes. The Company's deferred tax assets and liabilities consisted of the following: 2013 Deferred tax assets: Compensation and benefits Self-insurance Property, plant and equipment and capitalized lease assets Loss on sale of discontinued operations Net...

  • Page 78
    ... Albertsons 2004 Equity and Performance Incentive Plan. The Company's 2012 Stock Plan, as approved by stockholders in fiscal 2013, is the only plan under which stock-based awards may be granted. The 2012 Stock Plan provides that the Board of Directors or the Leadership Development and Compensation...

  • Page 79
    ... Stock Plan as part of the Company's long-term incentive program ("2013 LTIP"). Payout of the award will be 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 date fair value used to determine compensation...

  • Page 80
    ... the Company's 2012 Stock Plan. The Company granted 8 stock options with a weighted average grant date fair value of $0.98 per share as part of a broad-based employee incentive initiative designed to retain and motivate employees across the Company as it pursues its business transformation strategy...

  • Page 81
    ... certain employees under the company's fiscal 2012 bonus plan at a fair value of $6.15 per share. The restricted stock awards will vest over a three year period from the date of grant. Compensation Expense The components of pre-tax stock-based compensation expense (included primarily in Selling and...

  • Page 82
    ... including short-term and long-term disability benefits to inactive disabled employees prior to retirement. The terms of the postretirement benefit plans vary based on employment history, age and date of retirement. For many retirees, the Company provides a fixed dollar contribution and retirees pay...

  • Page 83
    ... at end of year Changes in Plan Assets Fair value of plan assets at beginning of year Actual return on plan assets Employer contributions 1,827 205 93 Pension Benefits 2013 2012 Plan participants' contributions Benefits paid Fair value of plan assets at end of year Funded status at end of year...

  • Page 84
    ...7 $ 2012 70 (60) 10 6 The Company has recognized $49 as Accumulated other comprehensive loss, net of tax of the divested defined benefit pension plan associated with its Shaw's banner. The unfunded benefit obligations of the divested defined benefit pension plan associated with its Shaw's banner of...

  • Page 85
    ...the total present value with the stream of future cash flows. This resulting weighted average discount rate is then used in evaluating the final discount rate to be used by the Company. (3) Expected long-term return on plan assets is estimated by utilizing forward-looking, long-term return, risk and...

  • Page 86
    ... closing price reported in the active market in which the individual securities are traded. Common collective trusts-Valued at net asset value ("NAV"), which is based on the fair value of the underlying securities owned by the fund and divided by the number of shares outstanding. The NAV unit price...

  • Page 87
    ... flows or expected changes in fair value. Mutual funds-Mutual funds are valued at the closing price reported in the active market in which the individual securities are traded. Synthetic guaranteed investment contract-Valued by discounting the related cash flows based on current yields of similar...

  • Page 88
    ...fair value of assets of the Company's benefit plans held in a master trust as of February 25, 2012, by asset category, consisted of the following: Level 1 Common stock Common collective trusts-fixed income Common collective trusts-equity Government securities Mutual funds Corporate bonds Real estate...

  • Page 89
    ... Financial Statements for additional information on the Company's benefit plan agreements related to the sale of New Albertsons, which occurred subsequent to fiscal 2013. Estimated Future Benefit Payments The estimated future benefit payments to be paid from the Company's defined benefit pension...

  • Page 90
    ...and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act zone status ("PPA") available in 2013 and 2012 relates to the plans' two most recent fiscal year-ends. The zone status is based on information that the Company received from the plan and is...

  • Page 91
    ... 9 9 9 Plan EIN-Pension Month/Day Plan Number End Date 2013 No No No Yes No Yes Yes FIP/RP Status Contributions Pending/ Surcharges Amortization 2012 Implemented 2013 2012 2011 Imposed (1) Provisions Yes Yes No Yes Yes Yes Yes 89 Minneapolis Food Distributing Industry Pension Plan Central States...

  • Page 92
    ... Date % of Associates under Collective Bargaining Agreement (1) 100.0% 32.8% 96.8% 67.8% 43.5% 100.0% 100.0% Over 5% Contribution 2013 Yes No Yes Yes No Yes Yes Minneapolis Food Distributing Industry Pension Plan Central States, Southeast and Southwest Areas Pension Fund Minneapolis Retail Meat...

  • Page 93
    ... course of business, the Company enters into supply contracts to purchase products for resale and purchase and service contracts for fixed asset and information technology commitments. These contracts typically include either volume commitments or fixed expiration dates, termination provisions...

  • Page 94
    ... Plans, a program within the director's office of the California Department of Industrial Relations (the "DIR"), notified the Company that additional security was required to be posted in connection with the Company's California self-insured workers' compensation obligations of New Albertsons...

  • Page 95
    ... Executive Officer. The Company offers a wide variety of grocery products, general merchandise and health and beauty care, pharmacy, fuel and other items and services. The Company's business is classified by management into three reportable segments: Retail Food, Save-A-Lot and Independent Business...

  • Page 96
    ... Purchase Agreement (the "Stock Purchase Agreement") providing for the sale by the Company of its Albertsons, Acme, Jewel-Osco, Shaw's and Star Market banners and related Osco and Sav-on in-store pharmacies (collectively, the "NAI Banners") to AB Acquisition. The stock sale (or "divestiture") closed...

  • Page 97
    ... sale closing date of March 21, 2013, which is in the Company's first fiscal quarter of 2014, and may differ materially to this preliminary estimate. The Company determined the pre-tax Property, plant and equipment related impairment using level 3 inputs. The net assets, operating results, and cash...

  • Page 98
    ... cash equivalents Receivables, net Inventories, net Other current assets Total current assets Property, plant and equipment, net Intangible assets, net Other assets Total assets Liabilities Accounts payable Accrued vacation, compensation and benefits Current maturities of long-term debt and capital...

  • Page 99
    ..., credit card receivables and certain other assets, which will bear interest at the rate of LIBOR plus 1.75 percent to LIBOR plus 2.25 percent, depending on utilization and (ii) a new six-year $1,500 term loan (the "Term Loan Facility"), secured by substantially all of the Company's real estate...

  • Page 100
    ... LLC, the parent entity of the Company's Save-A-Lot business and substantially all of the Term Loan Parties' intellectual property, and agreed to grant first priority liens and security interests on certain of the Term Loan Parties' owned or ground leased real estate within 90 days after the closing...

  • Page 101
    ...of stock-based compensation expense in the first quarter of fiscal 2014 as a result of the deemed change-incontrol. The Company and AB Acquisition entered into a binding term sheet with the PBGC relating to issues regarding the effect of the NAI Banner Sale on certain SUPERVALU retirement plans. The...

  • Page 102
    ... data) Unaudited quarterly financial information for SUPERVALU INC. and subsidiaries is as follows: 2013 First Second Third Fourth Fiscal Year (16 wks) (12 wks) (12 wks) (12 wks) (52 wks) Net sales Gross profit Net loss from continuing operations (1) Dividends declared per share Weighted average...

  • Page 103
    SUPERVALU INC. and Subsidiaries SCHEDULE II-Valuation and Qualifying Accounts (In millions) Balance at Beginning of Fiscal Year Balance at End of Fiscal Year Description Allowance for losses on receivables: 2013 2012 2011 Additions Deductions $ 3 4 5 11 6 11 (9) $ (7) (12) 5 3 4 101

  • Page 104
    ... Company in the reports that it files or submits under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms and (2) accumulated and communicated to the Company's management, including the Company's Chief Executive Officer...

  • Page 105
    ... control over financial reporting as of February 23, 2013. Changes in Internal Control Over Financial Reporting During the fiscal quarter ended February 23, 2013, there has been no change in the Company's internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act...

  • Page 106
    ... "Board Practices-Compensation Risk Assessment," "Director Compensation," "Compensation Discussion and Analysis," "Executive Compensation" and "Report of the Leadership Development and Compensation Committee." ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED...

  • Page 107
    ... Plan may not have an exercise price less than 100 percent of the fair market value of the Company's common stock on the date of the grant. Unless the Board of Directors otherwise specifies, restricted stock and restricted stock units will be forfeited and reacquired by the Company if an employee...

  • Page 108
    ... Statement to be filed with the SEC pursuant to Regulation 14A in connection with the Company's 2013 Annual Meeting of Stockholders under the heading "Board Practices- Policy and Procedures Regarding Transactions with Related Persons." ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information...

  • Page 109
    ... and Exchange Commission upon request.) Tender Offer Agreement, dated January 10, 2013, by and between SUPERVALU INC., Symphony Investors LLC and Cerberus Capital Management, L.P., is incorporated herein by reference to Exhibit 2.2 to the Company's Current Report on Form 8-K filed with the SEC on...

  • Page 110
    ...'s Quarterly Report on Form 10-Q for the quarterly period (16 weeks) ended September 11, 1999. Indenture dated as of May 1, 1992, between Albertson's, Inc. and Morgan Guaranty Trust Company of New York, as Trustee, is incorporated herein by reference to Exhibit 4.1 to the Registration Statement on...

  • Page 111
    ...2006.* Form of SUPERVALU INC. 2002 Stock Plan Stock Option Agreement for NonEmployee Directors and Stock Option Terms and Conditions for Non-Employee Directors is incorporated herein by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended...

  • Page 112
    ... the Company's Annual Cash Bonus Plan for Designated Corporate Officers and the Executive Incentive Bonus Plan is incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended December 4, 2004.* Albertson's, Inc. 2004 Equity...

  • Page 113
    ... the Current Report on Form 8-K of Albertson's, Inc. (Commission File Number 1-6187) filed with the SEC on December 20, 2004.* SUPERVALU INC. Deferred Compensation Plan for Non-Employee Directors, as amended, is incorporated herein by reference to Exhibit 10.11 to the Company's Annual Report on Form...

  • Page 114
    ...connection with the Company's Executive Post Retirement Survivor Benefit Program is incorporated herein by reference to Exhibit (10)I. to the Company's Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended September 12, 1998.* SUPERVALU INC. Directors Retirement Program, as amended...

  • Page 115
    .... 2000 Deferred Compensation Plan, dated as of April 28, 2006, is incorporated herein by reference to Exhibit 10.10.5 to the Quarterly Report on Form 10-Q of Albertson's, Inc. (Commission File Number 1-6187) for the quarter ended May 4, 2006.* Albertson's, Inc. Executive Pension Makeup Plan, amended...

  • Page 116
    ... to Exhibit 10.13.8 to the Quarterly Report on Form 10-Q of Albertson's, Inc. (Commission File Number 1-6187) for the quarter ended May 4, 2006.* Third Amendment to the Albertson's, Inc. Executive Pension Makeup Plan, dated as of April 28, 2006, is incorporated herein by reference to Exhibit...

  • Page 117
    ...the Albertson's Inc. Executive ASRE Makeup Plan, dated as of April 28, 2006, is incorporated herein by reference to Exhibit 10.14.3 to the Quarterly Report on Form 10-Q of Albertson's, Inc. (Commission File Number 1-6187) for the quarter ended May 4, 2006.* Albertson's, Inc. Executive Pension Makeup...

  • Page 118
    ... Compensation Plan, dated as of April 28, 2006, is incorporated herein by reference to Exhibit 10.20.7 to the Quarterly Report on Form 10-Q of Albertson's, Inc. (Commission File Number 1-6187) for the quarter ended May 4, 2006.* Albertson's, Inc. Non-Employee Directors' Deferred Compensation Plan...

  • Page 119
    ... the American Stores Company Supplemental Executive Retirement Plan, dated as of April 28, 2006, is incorporated herein by reference to Exhibit 10.30.2 to the Quarterly Report on Form 10-Q of Albertson's, Inc. (Commission File Number 1-6187) for the quarter ended May 4, 2006.* Albertsons Inc. Change...

  • Page 120
    ... the quarter ended June 14, 2008.* SUPERVALU INC. 2007 Stock Plan Form of Restricted Stock Award Terms and Conditions is incorporated herein by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 14, 2008.* Summary of Non-Employee Director Compensation...

  • Page 121
    ... Terms and Conditions for the Fiscal 2012-2014 Performance Period is incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed with the SEC on July 28, 2011. Amendment No. 1 to Restricted Stock Unit Award Agreement between SUPERVALU INC. and Jeffrey Noddle, dated...

  • Page 122
    ...the Company's Annual Report on Form 10-K filed with the SEC on April 19, 2012.* SUPERVALU INC. Fiscal 2013-2015 Multi-Year Performance Award under the 2007 Stock Plan Award Terms and Conditions is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with...

  • Page 123
    ...Managing Agents, and Wells Fargo Capital Finance, LLC, U.S. Bank, National Association, Barclays Bank PLC, Credit Suisse Securities (USA) LLC, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", New York Branch, BMO Harris Bank N.A., RBS Citizens, N.A. and GE Capital Markets...

  • Page 124
    ...Inc., Regions Bank and Union Bank, N.A., as Senior Managing Agents, and Wells Fargo Bank, National Association, U.S. Bank, National Association, Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding, Inc., Barclays Bank PLC, Rabobank Nederland, New York Branch and...

  • Page 125
    ...(101) Interactive Data File. 101. The following materials from the SUPERVALU INC. Annual Report on Form 10-K for the fiscal year ended February 23, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Segment Financial Information (ii) the Consolidated Statements of...

  • Page 126
    ... of SUPERVALU and in the capacities and on the dates indicated: Signature /s/ SAM DUNCAN Sam Duncan Title Chief Executive Officer and President (principal executive officer) Executive Vice President, Chief Financial Officer (principal financial and accounting officer) Director Date April 24, 2013...

  • Page 127
    ... 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 24, 2013 /s/ Sam Duncan Sam Duncan Chief Executive Officer and President

  • Page 128
    ... 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 24, 2013 /s/ Sherry M. Smith Sherry M. Smith Executive Vice President, Chief Financial Officer

  • Page 129
    ... of SUPERVALU INC. (the "Company") certifies that the Annual Report on Form 10-K of the Company for the fiscal year ended February 23, 2013, 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 Report on...

  • Page 130
    ... of SUPERVALU INC. (the "Company") certifies that the Annual Report on Form 10-K of the Company for the fiscal year ended February 23, 2013, 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 Report on...

  • Page 131
    ...on the New York Stock Exchange under symbol SVU. INVESTOR INQUIRIES KEY CONTACTS For general inquiries about SUPERVALU common stock, such as: • Certificate replacements • Account Maintenance • Transfer of shares • Name or address change Please contact SUPERVALU's transfer agent: Wells Fargo...

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    supervalu.com P.O. BOX 990 MINNEAPOLIS, MN 55440 952-828-4000