Albertsons 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
    ... SUPERVALU can continue the momentum and build on the great work that has been done over 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...

  • Page 3
    ...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 exchange on which registered New York Stock Exchange...

  • Page 4
    ... and Results of Operations Quantitative and Qualitative Disclosures 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 Directors, Executive Officers and...

  • Page 5
    ... more financial markets • The availability of favorable credit and trade terms Labor Relations • The Company's ability to renegotiate labor agreements with its unions • Resolution of issues associated with rising pension, healthcare and employee benefit costs • Potential for work disruption...

  • Page 6
    ... Company's debt ratings Relationships with Albertson's LLC, New Albertson's, Inc. ("NAI") and Haggen • Disruptions in current plans, operations and business relationships • Ability to effectively manage the Company's cost structure to realize benefits from the Transition Services Agreement with...

  • Page 7
    ... of compressed natural gas equipment and a fueling station Asset Impairment Charges • Unfavorable changes in the Company's industry, the broader economy, market conditions, business operations, competition or the Company's stock price and market capitalization that could require impairment to...

  • Page 8
    ... 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 "NAI") to AB Acquisition LLC ("AB Acquisition"), an affiliate of Cerberus Capital Management, L.P. ("Cerberus"). The NAI Banner Sale...

  • 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
    ... 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 through...

  • Page 11
    ... program, a complete business concept, group advertising, private-label products and other benefits. The Company is the franchisor or licensor of certain service marks such as SAVE-A-LOT, CUB FOODS, FESTIVAL FOODS, SENTRY, COUNTY MARKET, SHOP 'N SAVE, NEWMARKET, FOODLAND, JUBILEE and SUPERVALU...

  • Page 12
    ... can result in changes to cash flow from operations presented in the Consolidated Statements of Cash Flows that are not necessarily indicative of long-term operating trends. The Company's working capital needs are generally greater during the months leading up to high sales periods, such as the time...

  • Page 13
    ... Executive Vice President, Merchandising, Marketing, Retail & Pharmacy Executive Vice President, Chief Strategy Officer 2013 2013 (1) The Company agreed in the Tender Offer Agreement that Sam Duncan would replace Wayne C. Sales as Chief Executive Officer of the Company effective as of the closing...

  • Page 14
    ... March 2013. Prior to joining the Company, Mr. Woseth served as Vice President Business Development and Strategy at 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 15
    ... indebtedness and fund working capital, new store growth, capital expenditures, acquisitions and for other purposes; • limit the Company's ability to adjust to changing business and market conditions and to respond to market opportunities, placing the Company at a competitive disadvantage relative...

  • Page 16
    ... for early retirement if applicable under the pension plan formula. The projected benefit obligations of the Company-sponsored plans exceed the fair value of those plans' assets. Required contributions could increase due to a variety of factors, including lower pension discount rates, increased...

  • Page 17
    ... could cause disruptions and adversely impact the Company'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...

  • Page 18
    ...impact the Company's results of operations. In December 2014, the Company entered into the Haggen TSA to provide certain services to all 164 Haggen stores owned and being acquired by Haggen in five states in connection with the Safeway Acquisition as the stores are acquired by Haggen. The Haggen TSA...

  • Page 19
    ... day-to-day operations of the Company's businesses, which could 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...

  • Page 20
    ...sales growth and earnings, while food inflation, combined with reduced consumer spending, could reduce gross profit margins. If these consumer spending patterns continue or worsen, and the economy does not continue to improve or it weakens, the Company's financial condition and results of operations...

  • Page 21
    ...the Company's financial condition and results of operations. The Company's businesses are subject to the risk of legal proceedings by employees, unions, consumers, customers, suppliers, stockholders, debt holders, governmental agencies or others through private actions, class actions, administrative...

  • Page 22
    ... system or decreases in governmental funding could negatively impact the sales and operating performance 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...

  • Page 23
    ..., 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 fair value of...

  • Page 24
    ... any lawsuits, claims and other proceedings will have a material adverse effect on the overall results of the Company's operations, its cash flows or its financial position. In September 2008, a class action complaint was filed against the Company, as well as International Outsourcing Services, LLC...

  • Page 25
    ... complaint will be filed within the next several months. In December 2014, the United States Department of Labor (the "DOL"), in connection with an audit of the SUPERVALU Group Health Plan, the SUPERVALU Retiree Benefit Plan, and the SUPERVALU Group Benefit Plan, under the Employee Retirement...

  • Page 26
    ... amendment in fiscal 2015 to the binding term sheet the Company had entered into with the Pension Benefit Guarantee Corporation in connection with the NAI Banner Sale, the Company is no longer restricted by that term sheet from paying dividends; however, the Company has no current intent to resume...

  • Page 27
    ... 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 of Delhaize Group SA, Koninklijke Ahold...

  • 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
    ... 381 191 3,864 $ $ $ $ Stores Supplied and Operated: Independent Business 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...

  • Page 30
    ...at the end 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...

  • Page 31
    ... productivity. The Company's multi-year supply agreement to provide wholesale distribution to 64 Haggen stores in Washington and Oregon, comprised of Haggen's 18 existing stores and 46 stores agreed to be divested as part of the merger between Safeway Inc. and Albertson's LLC (the "Safeway Merger...

  • Page 32
    .... Paul market. In fiscal 2015, the Company entered into an agreement to purchase two retail stores to be divested as part of the Safeway Merger, which the Company expects to close on in the first quarter of fiscal 2016 and operate as County Market stores in the state of Washington. Total Retail Food...

  • Page 33
    ...of investments in Retail Food store remodels, new Save-A-Lot stores and the Company's supply chain and information technology, and $55 for business combinations reflecting the acquired Rainbow stores within the Minneapolis/St. Paul market and Save-A-Lot licensee stores acquisitions. Net cash used in...

  • Page 34
    ... Company-operated stores operating for four full quarters, including store expansions and excluding planned store dispositions) were positive 7.6 percent or $127 for fiscal 2015. Save-A-Lot corporate identical store sales performance was primarily a result of a 5.4 percent increase in customer count...

  • Page 35
    ... by lower sales from three store closures. Retail Food positive identical store sales performance was primarily a result of a 2.4 percent customer count increase, offset in part by a 1.4 percent decrease in average basket size. Corporate net sales for fiscal 2015 include fees earned under the TSA...

  • Page 36
    ...lower prices to customers and $12 of higher employee-related and occupancy costs, offset in part by $16 of higher earnings from increased sales. Retail Food operating earnings for fiscal 2015 were $122, or 2.5 percent of Retail Food net sales, compared with $77, or 1.7 percent last year. Retail Food...

  • Page 37
    .... The decrease is primarily due to lower sales to existing customers including military and two larger lost accounts, offset in part by net new business including sales to one NAI banner. Save-A-Lot net sales for fiscal 2014 were $4,228, compared with $4,195 for fiscal 2013, an increase of $33 or...

  • Page 38
    ... independent retail customers, offset in part by a $3 multi-employer pension plan withdrawal charge. Save-A-Lot gross profit as a percent of Save-A-Lot net sales was 15.4 percent for fiscal 2014, compared with 15.9 percent for fiscal 2013. The 50 basis point decrease in Save-A-Lot gross profit rate...

  • Page 39
    ... percent of Independent Business net sales for fiscal 2013. Independent Business operating earnings for fiscal 2014 include net charges and costs of $8, comprised of severance costs and accelerated stock-based compensation costs of $17, a multi-employer pension plan withdrawal charges of $3, asset...

  • Page 40
    ... 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 completed the NAI Banner Sale on March 21, 2013. As a result of the NAI Banner Sale, the financial...

  • Page 41
    ...additional supplement to the Company's financial results reported in accordance with GAAP and should be reviewed in conjunction with the Company's results reported in accordance with GAAP in this Annual Report on Form 10-K for the fiscal year ended February 28, 2015. The Company utilizes certain non...

  • Page 42
    ... insurance costs, $6 of higher advertising costs and $2 of lower sales volume. CRITICAL ACCOUNTING POLICIES The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America ("Accounting Standards") requires management...

  • Page 43
    ... the contracts longer than one year. The Company recognizes vendor funds for merchandising activities as a reduction of Cost of sales when the related products are sold. Vendor funds that have been earned as a result of completing the required performance under the terms of the underlying agreements...

  • Page 44
    ...fourth quarter of fiscal 2015 and 2014, and no changes to geographic market asset groupings were made as a result of these reviews. Due to the highly competitive environment and ongoing business transformation, the Company continues to evaluate its long-lived asset policy and current asset groups to...

  • Page 45
    ...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 the income approach, discounting projected...

  • Page 46
    ... of operating results to plan, the Company would reassess the fair value of the Company's reporting units to their carrying value. The Company completed step one of the annual goodwill impairment evaluation during the fourth quarter for fiscal 2015 and 2014 with each reporting unit's fair value...

  • Page 47
    ...on these liabilities at the appropriate statutory interest rate. The actual benefits ultimately realized for tax positions may differ from the Company's estimates due to changes in facts, circumstances and new information. As of February 28, 2015 and February 22, 2014, the Company had $94 and $76 of...

  • Page 48
    ... debt maturities and servicing, capital expenditures, working capital maintenance, contributions to various retirement plans and income tax payments. The Company's working capital needs are generally greater during the months leading up to high sales periods, such as the time period from prior...

  • Page 49
    ... operations in fiscal 2014 compared 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...

  • Page 50
    ... met. Capital Expenditures Capital expenditures for fiscal 2015 were $240, excluding cash paid for business acquisitions, and primarily consisted of investments in new Save-A-Lot stores, store remodels for Retail Food and Save-A-Lot, the Company's supply chain and information technology. In addition...

  • Page 51
    ... LLC ("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 for a period of up to five years...

  • 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
    ...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 and...

  • Page 54
    ... debt issuances are required to fund fixed rate debt maturities, future results of operations or cash flows may be impacted. Long-term loans are extended to certain independent retail customers in the normal course of business through notes receivable. The notes generally bear fixed interest...

  • Page 55
    ..., 2015, a 10 percent unfavorable change in the value of investments held by the SUPERVALU Retirement Plan would not have an impact on our Company's minimum contributions required under ERISA for fiscal 2016, but would result in an unfavorable change in net periodic pension expense for fiscal 2016 by...

  • Page 56
    ...(Deficit) Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Unaudited Quarterly Financial Information Financial Statement Schedule: Schedule II-Valuation and Qualifying Accounts All other schedules are omitted because they are not applicable or not required. 55...

  • Page 57
    ... and financial statement 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...

  • Page 58
    SUPERVALU INC. and Subsidiaries CONSOLIDATED SEGMENT FINANCIAL 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 ...

  • 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
    ... AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable Accrued 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...

  • Page 62
    ... 23, 2013 Net earnings Other comprehensive income, net of 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...

  • Page 63
    ... 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 Inventories Accounts payable and...

  • Page 64
    ... "Stock Purchase Agreement") to sell 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-on in-store pharmacies (the "NAI Banner Sale") to AB Acquisition LLC ("AB...

  • Page 65
    ... of one year or less. The Company recognizes vendor funds for merchandising and buying activities as a reduction of Cost of sales when the related products are sold. Vendor funds that have been earned as a result of completing the required performance under the terms of the underlying agreements but...

  • Page 66
    ...The Company's reporting units are the operating segments of the business which consist 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...

  • Page 67
    ... future operating environment. The rates used to discount projected future cash flows reflect a weighted average cost of capital based on the Company's industry, capital structure and risk premiums in each reporting unit, including those reflected in the current market capitalization. If management...

  • Page 68
    ...related Impairment Charges for additional information. Reserves for Closed Properties The Company maintains reserves for costs 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...

  • Page 69
    ... The Company also contributes to several employee 401(k) retirement savings plans. Derivatives The Company uses derivatives only to manage well-defined risks. The Company does not use financial instruments or derivatives for any trading or other speculative purposes. Interest rate swap contracts are...

  • Page 70
    ... in the Consolidated Financial Statements. Noncontrolling interests primarily include minority ownership interests in entities operating certain stores under the Cub Foods banner within Retail Food. Pursuant to the terms of the ownership agreements, the Company is required to distribute cash flows...

  • Page 71
    ... the retail market. These Consolidated Financial Statements reflect the final purchase accounting allocations. Pro forma information for this acquisition is not presented as the results of operations of the acquired businesses are not material to the Company's Consolidated Financial Statements. Save...

  • 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
    ... 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 determined the Company would...

  • Page 74
    ... Operations, and were measured at fair value using Level 3 inputs. Derivative Financial Instruments 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 Loan Facility...

  • Page 75
    ... the Secured Term Loan Facility, the Company granted a perfected first-priority security interest for the benefit of the facility lenders in the Term Loan Parties' equity interest in Moran Foods, LLC, the main operating entity of the Company's Save-A-Lot business, and the Term Loan Parties granted...

  • Page 76
    ..., 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 second-priority liens on and security interests in the collateral securing the Secured Term Loan Facility...

  • 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
    ... by applying the statutory federal income tax rate to Earnings (loss) from continuing operations before income taxes is attributable 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...

  • Page 79
    ... for financial reporting and income tax purposes. The Company's deferred tax assets and liabilities consisted of the following: 2015 Deferred tax assets: Compensation and benefits Self-insurance Property, plant and equipment and capitalized lease assets Loss on sale of discontinued operations Net...

  • Page 80
    ...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 of the Company...

  • Page 81
    ... 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. The Company granted 8 stock options...

  • Page 82
    ...in Selling and administrative expenses in the Consolidated Statements of Operations. The expense recognized and related tax benefits were as follows: 2015 Stock-based compensation Income tax benefits Stock-based compensation, net of tax $ $ 23 $ (9) 14 $ 2014 22 $ (8) 14 $ 2013 13 (5) 8 The Company...

  • Page 83
    .... 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 contributions to fund the remaining cost. Effective February 21, 2014, the Company amended the SUPERVALU...

  • Page 84
    ... loss into net periodic benefit cost during fiscal 2016 is $10. During fiscal 2015, the Company converted to the RP-2014 Aggregate mortality table for calculating the pension and other postretirement obligations and the annual expense. This change increased the projected benefit obligation by...

  • Page 85
    ...Long-term trends are also evaluated relative to market factors such as inflation, interest rates, and fiscal and monetary policies in order to assess the capital market assumptions. The Company calculates its expected return on plan assets by using the market related value of plan assets. The market...

  • Page 86
    ... 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 87
    ...includes a provision for interest rate stabilization for defined benefit employee pension plans. As a result of this stabilization provision, the Company expects its required pension contributions to the SUPERVALU Retirement Plan to decrease significantly compared to fiscal 2015 for the next several...

  • Page 88
    ... plans and postretirement benefit plans in fiscal 2016. The Company's funding policy for the defined benefit pension plans is to contribute the minimum contribution required under the Employee Retirement Income Security Act of 1974, as amended, the Pension Protection Act of 2006 and other applicable...

  • Page 89
    ...the Employer Identification Number ("EIN") and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act ("PPA") zone status available in 2015 and 2014 relates to the plans' two most recent fiscal yearends. The zone status is based on information that...

  • Page 90
    ... 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 Meat...

  • 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
    ... benefit plan accumulated other comprehensive $ loss at the end of fiscal year, net of tax (307) $ (188) 39 33 (116) - (423) $ 2014 (612) $ 202 - 55 257 48 (307) $ 2013 (657) (20) - 65 45 - (612) Upon completion of the sale of NAI in the first quarter of fiscal 2014, the Company disposed...

  • 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
    ... 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 for a period of up to five years...

  • Page 95
    ... any lawsuits, claims and other proceedings will have a material adverse effect on the overall results of the Company's operations, its cash flows or its financial position. In September 2008, a class action complaint was filed against the Company, as well as International Outsourcing Services, LLC...

  • Page 96
    ... complaint will be filed within the next several months. In December 2014, the United States Department of Labor (the "DOL"), in connection with an audit of the SUPERVALU Group Health Plan, the SUPERVALU Retiree Benefit Plan, and the SUPERVALU Group Benefit Plan, under the Employee Retirement...

  • Page 97
    ... as meat, produce, deli and bakery NOTE 16-DISCONTINUED OPERATIONS NAI Banner Sale On March 21, 2013, the Company sold NAI to AB Acquisition, which resulted in the sale of the NAI banners, including Albertsons, Acme, Jewel-Osco, Shaw's and Star Market and related Osco and Sav-on in-store pharmacies...

  • Page 98
    ... NAI, Albertson's LLC or Haggen could adversely impact the Company's results of operations" 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...

  • Page 99
    ... 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 could adversely impact the Company's results of operations" in...

  • Page 100
    ..., net. (2) In the first quarter of fiscal 2015, the Company revised the presentation of noncontrolling interests and equity in earnings of unconsolidated affiliates as reflected in the Consolidated Financial Statements. Prior period information has been revised to conform with the current year...

  • 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
    ... 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 Financial Reporting The financial statements, financial analyses and...

  • 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
    ... Statement to be filed with the SEC pursuant to Regulation 14A in connection with the Company's 2015 Annual Meeting of Stockholders under the heading "Election of Directors (Item 1)." The Company has adopted a code of ethics called the Code of Business Conduct that applies to its principal executive...

  • Page 106
    ... Statement to be filed with the SEC pursuant to Regulation 14A in connection with the Company's 2015 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 107
    ....) 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 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 Agreement and 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...

  • Page 110
    ...INC. Executive and Officer Severance Pay Plan is incorporated herein by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the SEC on January 14, 2013.* Summary of Non-Employee Director Compensation.* SUPERVALU INC. 2012 Stock Plan (As Amended and Restated July 16, 2014...

  • Page 111
    ...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 the Company's Current Report on Form 8-K filed with the SEC...

  • 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
    ... 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 Statements of Operations...

  • 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
    ... financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer...

  • Page 116
    ... financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer...

  • Page 117
    ... 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 Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of...

  • Page 118
    ... 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 Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of...

  • Page 119
    ..., 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 York Stock Exchange under...

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