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62
SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data, unless otherwise noted)
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Description and Principles of Consolidation
SUPERVALU INC. and its subsidiaries (“SUPERVALU” or the “Company”) operates primarily in the United States grocery
channel. SUPERVALU provides supply chain services, primarily wholesale distribution, operates hard discount retail stores and
licenses stores to independent operators under the Save-A-Lot banner, and operates five competitive, regionally-based
traditional format grocery banners under the Cub Foods, Shoppers Food & Pharmacy, Shop 'n Save, Farm Fresh and
Hornbacher’s banners. The Consolidated Financial Statements include the accounts of the Company and all its wholly and
majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
During fiscal 2013, the Company entered into a stock purchase agreement (the “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 Acquisition”). The NAI Banner Sale was completed effective March 21, 2013, during the Company’s
first quarter of fiscal 2014. The NAI operations disposed of under the NAI Banner Sale are reported as discontinued operations
in the Consolidated Statements of Operations for all periods presented. Unless otherwise indicated, references to the
Consolidated Statements of Operations and the Consolidated Balance Sheets in the Notes to the Consolidated Financial
Statements exclude all amounts related to discontinued operations. See Note 16—Discontinued Operations for additional
information regarding these discontinued operations.
Fiscal Year
The Company’s fiscal year ends on the last Saturday in February. During fiscal 2015, the Company’s first quarter consists of 16
weeks, the second and third quarters each consist of 12 weeks, the fourth quarter consists of 13 weeks and the fiscal year ended
February 28, 2015 consists of 53 weeks. For fiscal 2014 and 2013, the Company’s first quarters consist of 16 weeks, the
second, third and fourth quarters each consist of 12 weeks and the fiscal years ended February 22, 2014 and February 23, 2013
each consist of 52 weeks.
Use of Estimates
The preparation of the Company’s Consolidated Financial Statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses for the reporting periods presented. Actual results could differ from those estimates.
Revenue Recognition
Revenues from product sales are recognized upon delivery for the Independent Business segment, at the point of sale for Save-
A-Lot’s retail operations, upon delivery for Save-A-Lot’s independent licensees, and at the point of sale for the Retail Food
segment. Typically, invoicing, shipping, delivery and customer receipt of Independent Business product occur on the same
business day. Revenues from services rendered are recognized immediately after such services have been provided. Discounts
and allowances provided to customers by the Company at the time of sale, including those provided in connection with loyalty
cards, are recognized as a reduction in Net sales as the products are sold to customers. Sales tax is excluded from Net sales.
Revenues and costs from third-party logistics operations and professional services are recorded gross when the Company is the
primary obligor in a transaction, is subject to inventory or credit risk, has latitude in establishing price and selecting suppliers,
or has several, but not all, of these indicators. If the Company is not the primary obligor and amounts earned have little or no
inventory or credit risk, revenue is recorded net as management fees when earned.
Cost of Sales
Cost of sales in the Consolidated Statements of Operations includes cost of inventory sold during the period, including
purchasing, receiving, warehousing and distribution costs, and shipping and handling fees.