Albertsons 2013 Annual Report Download - page 8

PART I
ITEM 1. BUSINESS
All dollar and share amounts in this Annual Report on Form 10-K are in millions, except per share data and
where otherwise noted.
General Development
SUPERVALU INC. (“SUPERVALU” or the “Company”), a Delaware corporation, was organized in 1925 as the
successor to two wholesale grocery firms established in the 1870’s. The Company’s principal executive offices
are located at 7075 Flying Cloud Drive, Eden Prairie, Minnesota 55344 (Telephone: [phone]). All
references to the “Company,” “we,” “us,” “our” and “SUPERVALU” relate to SUPERVALU INC. and its
wholly and majority-owned subsidiaries.
SUPERVALU is one of the largest wholesale distributors to independent retail customers across the United
States and continues to develop its distribution network to independent retail customers. The Company leverages
its distribution operations by providing wholesale distribution and logistics service solutions to its independent
retail customers through its Independent Business segment. The Company also operates five regionally-based
traditional format grocery banners and is focused on long-term retail growth through business transformation to
meet the needs of each neighborhood the Company serves. The Company’s Save-A-Lot format is the nation’s
largest hard discount grocery retailer by store count. The Company is focused on the expansion of the Save-A-
Lot format through new store development and growth of its licensee network.
On June 2, 2006, the Company acquired New Albertson’s, Inc. (“New Albertsons” or “NAI”) consisting of the
core supermarket businesses formerly owned by Albertson’s, Inc. operating approximately 1,125 stores under the
banners of Acme, Albertsons, Jewel-Osco, Shaw’s, Star Market, the related in-store pharmacies under the Osco
and Sav-on banners, 10 distribution centers and certain regional and corporate offices (the “Albertsons
Acquisition”).
On January 10, 2013, the Company, AB Acquisition LLC, a Delaware limited liability company (“AB
Acquisition”), and NAI, a direct wholly owned subsidiary of SUPERVALU, entered into a Stock Purchase
Agreement (the “Stock Purchase Agreement”) providing for the sale 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 Management, L.P. (“Cerberus”)-led consortium which also
includes Kimco Realty, Klaff Realty LP, Lubert-Adler Partners and Schottenstein Real Estate Group. The
Company completed the sale of NAI on March 21, 2013 (the “NAI Banner Sale”). Results of operations of NAI
are reported as discontinued operations for all periods presented.
AB Acquisition owns each of New Albertsons and Albertson’s LLC (an affiliate of Cerberus, of which Cerberus
holds a 30 percent equity stake), which owns Albertsons stores in the South and Southwest portions of the United
States. Cerberus has provided two limited guarantees to SUPERVALU guaranteeing certain payment obligations
under the Stock Purchase Agreement and the Tender Offer Agreement (defined below).
Subsequent to the NAI Banner Sale, SUPERVALU consists of its Independent Business segment, which serves
approximately 1,900 stores across the country; SUPERVALU’s 191 regional retail food stores under the Cub
Foods, Farm Fresh, Shoppers, Shop ‘n Save and Hornbacher’s banners; and Save-A-Lot, the Company’s hard
discount grocery chain with approximately 1,300 owned and licensed stores.
Pursuant to the Stock Purchase Agreement, the Company and Albertson’s LLC entered into a Transition Services
Agreement (the “Albertson’s TSA”), under which SUPERVALU is providing to Albertson’s LLC, and
Albertson’s LLC is providing to SUPERVALU, certain services as described therein for an initial term of two
and one-half years. In addition, SUPERVALU and New Albertsons entered into a Transition Services Agreement
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