Albertsons 2014 Annual Report Download - page 9

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 consists of its Independent Business segment, which
serves approximately 2,240 stores across the country; Save-A-Lot, the Company’s hard discount grocery chain
with approximately 1,330 owned and licensed stores; and SUPERVALU’s Retail Food segment, which consists
of 190 retail food stores under five regionally-based traditional format grocery banners of Cub Foods, Shoppers
Food & Pharmacy, Shop ‘n Save, Farm Fresh and Hornbacher’s.
SUPERVALU is one of the largest wholesale distributors to independent retail customers across the United
States. 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’s
Save-A-Lot format is one of the nation’s largest hard discount grocery retailers by store count.
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 (“AB Acquisition”) an affiliate of a Cerberus Capital
Management, L.P. (“Cerberus”)-led consortium, and NAI, a then wholly owned subsidiary of SUPERVALU,
entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) providing for a sale of NAI stock by
SUPERVALU to AB Acquisition 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”). 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
held a 30 percent equity stake as of the NAI Banner Sale closing), which operates grocery stores in the south and
southwest portions of the United States.
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 ending on
September 21, 2015. In addition, SUPERVALU and New Albertsons entered into a Transition Services
Agreement upon the consummation of the Stock Purchase Agreement (the “NAI TSA”), under which
SUPERVALU is providing to New Albertsons, and New Albertsons is providing to SUPERVALU, certain
services as described therein for an initial term ending on September 21, 2015. Each of Albertson’s LLC and
New Albertsons may extend the TSA beyond the initial term.
Concurrently with the execution of the Stock Purchase Agreement, the Company entered into a Tender Offer
Agreement (the “Tender Offer Agreement”) with Symphony Investors, LLC, a newly formed acquisition entity
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