Albertsons 2016 Annual Report Download

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2016 Annual Report

Table of contents

  • Page 1
    2016 Annual Report

  • Page 2
    ... bring a new brand to Save-A-Lot, America's Choicesm, which will span most categories. Our weekly ads have been redesigned to give them a stronger price message and attract customers to our stores. We'll also be changing certain aspects of the store layout to better position our fresh departments to...

  • Page 3
    ... For the fiscal year ended February 27, 2016 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 as specified in its charter) DELAWARE (State or other...

  • Page 4
    ... Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes...

  • Page 5
    ... The Company's ability to offer competitive products and services at low prices and maintain high levels of productivity and efficiency • The ability to grow by driving sales, attracting new customers and new licensees and successfully opening new locations • The ability to successfully execute...

  • Page 6
    ... Albertson's acquisition of Safeway on the Company's operating agreement under which the Company operates a distribution center owned by NAI that services both NAI and certain of the Company's independent retail customers Intrusions to and Disruptions of Information Technology Systems • Dependence...

  • Page 7
    ... supply or vendor disputes Changes in Military Business • Competition in the Company's military business • Changes in the commissary system or operating model, reductions in government expenditures or funding, or changes in military staffing levels or the locations of bases Adequacy of Insurance...

  • Page 8
    ...53-week year ended February 28, 2015 and a fiscal 2014 52-week year ended February 22, 2014. On March 21, 2013, the Company completed the sale (the "NAI Banner Sale") of New Albertson's, Inc. ("NAI") to AB Acquisition LLC ("AB Acquisition"). The NAI Banner Sale was completed through a Stock Purchase...

  • Page 9
    ... of the United States. Save-A-Lot's private-label program provides budget conscious customers a high-quality, low-priced alternative to national brands and accounts for approximately 60 percent and 55 percent of corporate stores and licensee store retail sales (excluding fresh meat and produce...

  • Page 10
    ...variety of nationally advertised brand name and private-label products, 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 and Save-A-Lot stores to shoppers and through...

  • Page 11
    ... working capital balances 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...

  • Page 12
    ... negotiate new contracts. A prolonged work stoppage at distribution centers or a significant number of stores may have a material impact on the Company's business, financial condition or results of operations. Where You Can Find More Information The Company's principal executive offices are located...

  • Page 13
    ... Accounting Officer, 2014-2015 Senior Vice President, Human Resources & Labor Relations, 2010-2013; Senior Vice President, Labor & Employee Relations, 2006-2010 Executive Vice President, Legal 2013; Vice President, Employment, Compensation and Benefits Law, 2012-2013; Director, Employment Law, 2011...

  • Page 14
    ... elsewhere in this Annual Report on Form 10-K or the Company's other SEC filings may have a material impact on the Company's business, financial condition or results of operations. The Company's Wholesale, Save-A-Lot and Retail segments face intense competition, and the Company's failure to compete...

  • Page 15
    ... grocery retailing business. The Company's ability to differentiate itself from its competitors and create an attractive value proposition for its customers is dependent upon a combination of price, quality, customer service, convenience, assortment, in-stock levels, brand perception, store location...

  • Page 16
    ... the Company's revenues and gross margins could be negatively affected as a result. If sales trends or profitability worsen for independent retail customers or licensees, their financial results may deteriorate, which could result in, among other things, store closures or delayed or reduced payments...

  • Page 17
    ...indebtedness and fund working capital, store growth opportunities, 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...

  • Page 18
    ...number of stores and distribution centers receiving services as of such date. The Company entered into the Haggen TSA in December 2014 to provide services to 164 stores and also entered into a supply agreement with Haggen to supply certain of the stores in two states. In September 2015, Haggen filed...

  • Page 19
    ... not directly related to providing TSA services), new services relationships, growth strategies and additional investments in the business that accelerate revenue growth. The Company expects that the decline in TSA revenue from stores and distribution centers no longer receiving services under the...

  • Page 20
    ... on third-party systems and software that are critical to the operation of its business, including accepting credit, debit, EBT and gift cards. In response to the information technology intrusions the Company experienced in fiscal 2015, the Company has taken and is continuing to take actions to...

  • Page 21
    ... Company's operations and customers are located in the United States, making its results highly dependent on U.S. consumer confidence and spending habits. In recent economic cycles, the U.S. economy has experienced economic recession, higher unemployment rates, higher energy costs, higher insurance...

  • Page 22
    ... provisions regulating health and sanitation standards, food safety, marketing of natural or organically produced food, facilities, environmental, equal employment opportunity, public accessibility, employee benefits, wages and hours worked and licensing for the sale of food, drugs and alcoholic...

  • Page 23
    ... adversely affect the Company's results of operations. The continued efforts of health maintenance organizations, managed care organizations, pharmacy benefit managers, government entities and other third party payors to reduce prescription drug costs and pharmacy reimbursement rates may impact the...

  • Page 24
    ... the Company's sales and operating results. The Company's sales and operating results could be adversely impacted if the Company is not able to provide goods to the Company's stores and its customers' and licensees' stores in a timely and cost-effective manner, to maintain continued supply, pricing...

  • Page 25
    ... governmental funding could negatively impact the sales and operating performance of the Company's military business. The Company's Wholesale segment sells and distributes grocery products to military commissaries and exchanges in the United States. The Company's military business faces competition...

  • Page 26
    ...the market value of an asset or the Company's plans for store closures. When such events or changes in circumstances occur, a recoverability test is performed by comparing projected undiscounted future cash flows to the carrying value of the group of assets being tested. The Company annually reviews...

  • Page 27
    ... store support centers in Boise, Idaho (which is owned by NAI and leased to the Company, but at which the Company has employees and provides services to NAI and Albertson's LLC) and St. Louis, Missouri. The Company has 3 million of square footage of surplus retail stores and distribution centers...

  • Page 28
    ... EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company's common stock is listed on the New York Stock Exchange under the symbol SVU. As of April 22, 2016, there were 17,081 stockholders of record. Common Stock Price Common Stock Price Range 2016 2015 High Low High...

  • Page 29
    ..., 2011 and reinvestment of dividends on the day they were paid. (2) The Company's fiscal year ends on the last Saturday in February. (3) The Company's peer group consists of SpartanNash Corporation, Wal-Mart Stores, Inc., Target Corporation, Sysco Corporation, The Fresh Market, Inc., Delhaize Group...

  • Page 30
    ... in millions, except per share data and stores) Results of Operations Net sales Cost of sales Gross profit Selling and administrative expenses Goodwill and intangible asset impairment charges Operating earnings (loss) Interest expense, net(3) Equity earnings in unconsolidated affiliates Earnings...

  • Page 31
    ..., net. (4) Working capital of continuing operations is calculated using the first-in, first-out method ("FIFO"), after adding back the last-in, first-out method ("LIFO") reserve. The LIFO reserve for each year is as follows: $215 for fiscal 2016, $211 for fiscal 2015, $202 for fiscal 2014, $211...

  • Page 32
    ... customers across the United States. Save-A-Lot is one of the nation's largest hard discount grocery retailers by store count. The Company's Retail business operates traditional grocery stores under the five regionally-based banners of Cub Foods, Shoppers Food & Pharmacy, Shop 'n Save, Farm Fresh...

  • Page 33
    ... to corporate stores. The Company plans to open approximately 75 new Save-A-Lot stores in fiscal 2017. Within Retail, management believes pricing and promotional adjustments in fiscal 2016 to partially mitigate compressed pharmacy margins due to lower managed care reimbursement rates negatively...

  • Page 34
    ... for fiscal 2016. Changes in merchandising, customer buying habits and competitive pressures create inherent difficulties in measuring the impact of inflation and deflation on Net sales and Gross profit. Competitive Environment The United States grocery channel is highly competitive and management...

  • Page 35
    ... OF OPERATIONS Consolidated results of operations for fiscal 2016, 2015 and 2014 are as follows: Fiscal Years Ended February 27, 2016 (52 weeks) Net sales Cost of sales Gross profit Selling and administrative expenses Intangible asset impairment charge Operating earnings Interest expense, net Equity...

  • Page 36
    ...fiscal 2015 were driven by a lower number of product units sold and product cost deflation passed on to licensees. Management also believes the lower SaveA-Lot corporate stores customer count in fiscal 2016 compared to fiscal 2015 was driven by lower promotional activity. Retail net sales for fiscal...

  • Page 37
    employee-related costs and $10 of higher occupancy costs primarily associated with new distribution center capacity and repair and maintenance expenses on existing facilities. Save-A-Lot gross profit was $710 or 15.4 percent of Save-A-Lot net sales, compared with $689 or 14.9 percent last year. The ...

  • Page 38
    ... income. Retail operating earnings for fiscal 2016 were $94, or 2.0 percent of Retail net sales, compared with $122, or 2.5 percent last year. Retail operating earnings for fiscal 2016 include $1 of store closure and impairment charges. The additional week in fiscal 2015 contributed approximately...

  • Page 39
    ... 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 and a 2.1 percent increase in average basket size. Retail net sales for fiscal 2015 were...

  • Page 40
    ... The 50 basis point decrease in Save-A-Lot gross profit rate is primarily due to $15 of higher advertising costs and $12 of incremental investments to lower prices to customers and higher shrink. Retail gross profit was $1,317 or 27.0 percent of Retail net sales for fiscal 2015, compared with $1,261...

  • Page 41
    ... pension settlement charges, a $5 benefit plan charge and $2 of information technology intrusion costs, net of insurance recoverable. Corporate expenses for fiscal 2014 included charges of $24, comprised of severance costs and accelerated stock-based compensation charges of $19, contract breakage...

  • Page 42
    ... to using Adjusted EBITDA as a financial measure including, but not limited to, it not reflecting cash expenditures for capital assets or contractual commitments, changes in working capital, income taxes and debt service expenses that are recurring in the Company's results of operations. 40

  • Page 43
    ... of Net sales last year, a decrease of $18. The additional week in fiscal 2015 contributed approximately $17 to Adjusted EBITDA. When adjusted for the additional week, the decrease of $1 was primarily driven by higher employee-related and occupancy costs from new retail stores and added distribution...

  • Page 44
    ... include debt servicing and maturities, capital expenditures, working capital maintenance, contributions to various benefit 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 45
    ... cash used in capital expenditures reflecting Retail store remodels, new Save-A-Lot stores and supply chain investments, and $55 of cash used in business acquisitions. Financing Activities The increase in net cash used in financing activities in fiscal 2016 compared to last year is primarily due...

  • Page 46
    ... a perfected first-priority security interest for the benefit of the facility lenders in the Term Loan Parties' equity interests in Moran Foods, LLC, the main operating entity of the Company's Save-A-Lot business, and the Term Loan Parties granted a perfected first priority security interest in...

  • Page 47
    ... year, excluding cash paid for business acquisitions but including $19 of higher capital lease additions related to Retail stores and a Save-A-Lot distribution center in fiscal 2016, and primarily consisted of capital investments into new Retail and Save-A-Lot corporate stores and a higher number...

  • Page 48
    ... for sale at retail 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...

  • Page 49
    ... generate revenue for the Company's stores. For fiscal 2016, a 1 percent change in total vendor funds earned, including advertising allowances, with no offsetting changes to the base price on the products purchased, would impact Gross profit by less than 10 basis points. Inventories, Net Inventories...

  • Page 50
    ..., the Company utilizes business plans that take into account operational changes, competitive factors and inflation, among other factors. Using different assumptions or estimates could result in a change in estimated cash flows and fair values that could produce different results. The composition...

  • Page 51
    ... point decrease in the estimated perpetual sales growth rates utilized in the discounted cash flow analysis would not have resulted in any reporting unit failing the first step of the impairment tests. The fair values of the Company's Retail, Wholesale and Save-A-Lot Corporate Stores reporting units...

  • Page 52
    ... benefits associated with these plans are generally based on each participant's years of service, compensation, and age at retirement or termination. The Company's defined benefit pension plan, the SUPERVALU Retirement Plan, and certain supplemental executive retirement plans were closed to new...

  • Page 53
    ..., net of the discount of $6, and $93, net of the discount of $6, as of February 27, 2016 and February 28, 2015, respectively. For the claims that occurred during the fiscal year ending February 27, 2016, each 25 basis point change in the discount rate would impact the net self-insurance liabilities...

  • Page 54
    OFF-BALANCE SHEET ARRANGEMENTS Guarantees and Contingent Liabilities The Company has outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various retailers as of February 27, 2016. These guarantees were generally made to support the business growth ...

  • Page 55
    ...adoption impact on its financial statements. For a quantification of the Company's off-balance sheet operating leases subject to capitalization under ASU 2016-02, besides those reserved for as a closed property, refer to the operating lease payments by fiscal year within the "Contractual Obligations...

  • Page 56
    ... 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 Wholesale customers, which are typically of a short-term nature with limited or no purchase...

  • Page 57
    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 rates negotiated with each independent retail customer. The market value of the fixed rate notes is subject to change due to ...

  • Page 58
    ...The SUPERVALU Retirement Plan, which is a Company-sponsored qualified pension plan, holds investments in public and private equity, fixed income and real estate securities, which is described further in Note 11-Benefit Plans in Part II, Item 8 of this Annual Report on Form 10-K. Changes in SUPERVALU...

  • Page 59
    ... DATA Index of Financial Statements and Schedules Page Consolidated Financial Statements: Report of Independent Registered Public Accounting Firm Consolidated Segment Financial Information Consolidated Statements of Operations Consolidated Statements of Comprehensive Income Consolidated Balance...

  • Page 60
    ... statements referred to above present fairly, in all material respects, the financial position of SUPERVALU INC. and subsidiaries as of February 27, 2016 and February 28, 2015, and the results of their operations and their cash flows for each of the fiscal years in the three-year period ended...

  • Page 61
    SUPERVALU INC. and Subsidiaries CONSOLIDATED SEGMENT FINANCIAL INFORMATION (In millions) Fiscal Years Ended February 27, 2016 (52 weeks) Net sales Wholesale % of total Save-A-Lot % of total Retail % of total Corporate % of total Total net sales Operating earnings Wholesale % of Wholesale sales Save...

  • Page 62
    SUPERVALU INC. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) Fiscal Years Ended February 27, 2016 (52 weeks) Net sales Cost of sales Gross profit Selling and administrative expenses Intangible asset impairment charge Operating earnings Interest expense, ...

  • Page 63
    ... CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Fiscal Years Ended February 27, 2016 (52 weeks) Net earnings including noncontrolling interests Other comprehensive income (loss): Recognition of pension and other postretirement benefits income (loss), net of tax(1) Change in fair value...

  • Page 64
    SUPERVALU INC. and Subsidiaries CONSOLIDATED BALANCE SHEETS (In millions, except par value data) February 27, 2016 ASSETS Current assets Cash and cash equivalents Receivables, net Inventories, net Other current assets Total current assets Property, plant and equipment, net Goodwill Intangible assets...

  • Page 65
    ....'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 compensation Distributions to noncontrolling interests Tax impact on stock-based awards and other Balances...

  • Page 66
    SUPERVALU INC. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Fiscal Years Ended February 27, 2016 (52 weeks) Cash flows from operating activities Net earnings including noncontrolling interests $ Income from discontinued operations, net of tax Net earnings from continuing ...

  • Page 67
    ..., 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...

  • Page 68
    ..., net of cooperative advertising reimbursements, were $64, $62 and $77 for fiscal 2016, 2015 and 2014, respectively. Costs related to Wholesale and Save-A-Lot advertising services provided to independent retail customers and licensees, respectively, are included within cost of sales. The Company...

  • Page 69
    ...the Consolidated Statements of Operations, and assets and liabilities of the business component planned to be disposed of are presented as separate lines within the Consolidated Balance Sheets. See Note 16- Discontinued Operations for additional information. Businesses held for sale are reviewed for...

  • Page 70
    ... business: Licensee Distribution and Corporate Stores. Goodwill has been allocated between the Save-A-Lot reporting units on a relative fair value basis. Fair values are determined by using both the market approach, applying a multiple of earnings and revenue based on guidelines for publicly traded...

  • Page 71
    ... 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 operating lease liabilities using a discount rate to calculate the present value of the remaining noncancellable lease payments...

  • Page 72
    ... or liability. The Company utilized fair value measurements in reporting results of operation and financial position within its Consolidated Financial Statements for the following: • Acquired assets and liabilities discussed in Note 2-Business Acquisitions were measured at fair value using Level...

  • Page 73
    ... Statements of Operations. Common and Treasury Stock Concurrent with the execution of the Stock Purchase Agreement in fiscal 2013, the Company entered into a Tender Offer Agreement (the "Tender Offer Agreement") with Symphony Investors LLC, which was owned by a Cerberus Capital Management...

  • Page 74
    ... previously reported results, and the revised amounts as reported in this Annual Report on Form 10-K: February 28, 2015 (53 weeks) As Originally Reported As Originally Reported February 22, 2014 (52 weeks) Revision As Revised Revision As Revised Net sales Cost of sales Gross profit Selling and...

  • Page 75
    ... since the results of operations of the acquired businesses, both individually and in the aggregate, are not material to the Company's Consolidated Financial Statements. Recognized goodwill represents future economic benefits expected to arise from the Company's presence in the retail market. 73

  • Page 76
    .... The remaining terms of the favorable operating leases ranged from five to ten years. During fiscal 2015, the Company paid $19 to acquire 38 licensed Save-A-Lot stores from multiple licensee operators through 20 separate purchase agreements. The fair value of acquired store assets were recognized...

  • Page 77
    .... The Company conducted an annual impairment test of the net book value of goodwill and intangible assets with indefinite useful lives during the fourth quarter of fiscal 2016, which indicated the fair value of the Retail, Wholesale and the Save-A-Lot Corporate Stores reporting units exceeded their...

  • Page 78
    ... Payments Adjustments Ending balance $ 34 $ 8 (12) (1) 29 $ 2015 47 $ 4 (12) (5) 34 $ 2014 61 4 (16) (2) 47 $ In fiscal 2016, the Company determined it would close 15 non-strategic Save-A-Lot corporate stores and recorded an impairment charge of $5 related to the operating leases for these stores...

  • Page 79
    ... adjustments to determine fair values. Fuel derivative losses are included within Cost of sales in the Consolidated Statements of Operations and were $3, $1 and $0 for fiscal 2016, 2015 and 2014, respectively. Interest Rate Swap Derivatives On February 24, 2015, the Company entered into a forward...

  • Page 80
    ... as of February 27, 2016 and February 28, 2015, respectively. The estimated fair value of notes receivable was calculated using 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 was less than...

  • Page 81
    ... a perfected first-priority security interest for the benefit of the facility lenders in the Term Loan Parties' equity interests in Moran Foods, LLC, the main operating entity of the Company's Save-A-Lot business, and the Term Loan Parties granted a perfected first priority security interest in...

  • Page 82
    ... of its retail stores and certain distribution centers, office facilities and equipment from third parties. Many of these leases include renewal options and, to a limited extent, include options to purchase. Future minimum lease payments to be made by the Company for noncancellable operating leases...

  • Page 83
    ...2015 148 $ 6 154 (29) 125 $ 2014 143 5 148 (27) 121 $ 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 84
    ... for financial reporting and income tax purposes. The Company's deferred tax assets and liabilities consisted of the following: 2016 Deferred tax assets: Compensation and benefits Self-insurance Property, plant and equipment and capitalized lease assets Loss on sale of discontinued operations Net...

  • Page 85
    ...Balance Sheets. At February 27, 2016 and February 28, 2015, the Company had accrued penalties of $5 and $0, respectively, related to uncertain tax positions recorded in Long-term tax liabilities in the Consolidated Balance Sheets. The Company is currently under examination or other methods of review...

  • Page 86
    ... to retain and motivate employees across the Company. In fiscal 2016, the Company's Board of Directors granted 2 stock options to the Company's Chief Executive Officer. The stock options have a grant date fair value of $2.08 per share and vest over three years. The Company used the Black Scholes...

  • Page 87
    ... Selling and administrative expenses in the Consolidated Statements of Operations. The expense recognized and related tax benefits were as follows: 2016 Stock-based compensation Income tax benefits Stock-based compensation, net of tax $ $ 25 $ (10) 15 $ 2015 23 $ (9) 14 $ 2014 22 (8) 14 The Company...

  • Page 88
    ... of the following: Pension Benefits 2016 2015 Changes in Benefit Obligation Benefit obligation at beginning of year Plan amendment Service cost Interest cost Actuarial (gain) loss Settlements paid Benefits paid Benefit obligation at end of year Changes in Plan Assets Fair value of plan assets at...

  • Page 89
    ...net of tax $ $ $ Net periodic benefit cost (income) and other changes in plan assets and benefit obligations recognized in Other comprehensive income (loss) for defined benefit pension and other postretirement benefit plans consist of the following: 2016 Net Periodic Benefit Cost (Income) Service...

  • Page 90
    ...in October 2014, named MP-2015. This updated scale was created using two additional years of historical data and the same RPEC 2014 model that was used to produce MP-2014. The Company used MP-2015 to calculate its fiscal 2016 projected benefit obligation. During fiscal 2015, the Company converted to...

  • Page 91
    ... classes, multiple investment manager portfolios and both general and portfolio-specific investment guidelines. Risk tolerance is established through careful consideration of the plan liabilities, plan funded status and the Company's financial condition. This asset allocation policy mix is reviewed...

  • Page 92
    ...The fair value of assets of the Company's defined benefit pension plans held in a master trust as of February 27, 2016, by asset category, consisted of the following: Common stock Common collective trusts-fixed income Common collective trusts-equity Government securities Mutual funds Corporate bonds...

  • Page 93
    ... the SUPERVALU Retirement Plan in excess of the minimum required contributions pursuant to a term sheet entered into with the Pension Benefit Guarantee Corporation (the "PBGC") in connection with the sale of NAI. On September 11, 2014, the Company, AB Acquisition and the PBGC amended the term sheet...

  • Page 94
    .... The Company is self-insured for certain disability plan programs, which comprise the primary benefits paid to inactive employees prior to retirement. Amounts recognized in the Consolidated Balance Sheets consisted of the following: Post-Employment Benefits 2016 2015 $ 5 $ 8 8 10 $ 13 $ 18 Pension...

  • Page 95
    ... for fiscal 2016, 2015 and 2014. At the date the financial statements were issued, Forms 5500 were generally not available for the plan years ending in 2015. The following table contains information about the Company's multiemployer plans: EIN- Pension Plan Number Plan Month/ Day End Date Pension...

  • Page 96
    ... Food Distributing Industry Pension Plan Central States, Southeast and Southwest Areas Pension Fund Minneapolis Retail Meat Cutters and Food Handlers Pension Fund UFCW Unions and Participating Employers Pension Plan Western Conference of Teamsters Pension Plan UFCW Union Local 655 Food Employers...

  • Page 97
    ...represents the cumulative balance of other comprehensive income (loss), net of tax, as of the end of the reporting period and relates to pension and other postretirement benefit obligation adjustments, net of tax, and interest rate swaps designated as hedges, net of tax. Changes in Accumulated other...

  • Page 98
    ... of fiscal 2014, the Company disposed of approximately $48 of Accumulated other comprehensive loss, which was a component of Stockholders' deficit in the Consolidated Balance Sheet as of February 23, 2013, due to NAI's assumption of a defined benefit pension plan established and operated under...

  • Page 99
    ... Services Agreement with each of NAI and Albertson's LLC (collectively, the "TSA") and operating and supply agreements. At the time of the sale of NAI, these arrangements had initial terms ranging from 12 months to five years, and are generally subject to renewal upon mutual agreement by the parties...

  • Page 100
    ... 2014 (the "Haggen TSA") to provide certain services to 164 stores owned and being acquired by Haggen in five states. The Company also entered into a supply agreement with Haggen to supply goods and products to Haggen stores in Washington and Oregon. On September 8, 2015, Haggen filed voluntary...

  • Page 101
    ...overall results of the Company's operations, its cash flows or its financial position is remote. In September 2008, a class action complaint was filed against the Company, as well as International Outsourcing Services, LLC ("IOS"); Inmar, Inc.; Carolina Manufacturer's Services, Inc.; Carolina Coupon...

  • Page 102
    ... to consider whether to certify a narrower class of purchasers supplied from the Company's Champaign, Illinois distribution center and potentially other distribution centers. On January 16, 2015, the Company filed a Petition for Certiorari to the United States Supreme Court seeking to appeal certain...

  • Page 103
    .... The Company's chief operating decision maker is the Chief 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...

  • Page 104
    ... reviewed by executive management. 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 105
    ... sale of NAI reported at February 23, 2013. UNAUDITED QUARTERLY FINANCIAL INFORMATION (In millions, except per share data) Unaudited quarterly financial information for SUPERVALU INC. and subsidiaries is as follows: 2016 Third (12 weeks) $ 4,114 $ 601 $ 35 $ 34 $ $ $ 0.13 Net sales Gross profit Net...

  • Page 106
    (2) Results from continuing operations for the fiscal year ended February 28, 2015 include net charges and costs of $118 before tax ($70 after tax, or $0.27 per diluted share). Refer to Item 6 Selected Financial Data in Part II, Item 8 of this Annual Report on Form 10-K for a discussion of these ...

  • Page 107
    SUPERVALU INC. and Subsidiaries SCHEDULE II-Valuation and Qualifying Accounts (In millions) Balance at Beginning of Fiscal Year $ 18 19 16 Balance at End of Fiscal Year 13 18 19 Description Allowance for losses on accounts and notes receivable: 2016 2015 2014 Additions 6 6 16 Deductions (11) $ ...

  • Page 108
    ...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 all other information included...

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    ITEM 9B. None. OTHER INFORMATION 107

  • Page 110
    ... executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions and all other employees, and a Code of Business Conduct and Ethics that applies to its directors. The Codes are posted on the Company's website (www.supervalu...

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    ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information called for by Item 14 is incorporated by reference to the Company's definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A in connection with the Company's 2016 Annual Meeting of Stockholders under the heading ...

  • Page 112
    ... or Succession: 2.1 Stock Purchase Agreement, dated January 10, 2013, by and among SUPERVALU INC., AB Acquisition LLC and New Albertson's, Inc., is incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the SEC on January 14, 2013 (Schedules have been...

  • Page 113
    ... 1999, each between the Company and Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company), as Trustee, is incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on May 21, 2013). Officers' Certificate and Authentication...

  • Page 114
    ... 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 Performance Award Terms and Conditions...

  • Page 115
    ... Report on Form 8-K filed with the SEC on January 14, 2013.* Summary of Non-Employee Director Compensation is incorporated herein by reference to the Company's Annual Report on Form 10-K filed with the SEC on April 28, 2015.* SUPERVALU INC. 2012 Stock Plan (As Amended and Restated July 16, 2014...

  • Page 116
    ... Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the SEC on March 26, 2013.** Term Loan Credit Agreement, dated March 21, 2013, among SUPERVALU INC., as Borrower, the subsidiaries of the Company named as guarantors therein, the lenders parties thereto, Goldman Sachs Bank USA, as...

  • Page 117
    ..., 2014.* 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 the Company's Annual Report on Form 10-K filed with the SEC on April 28, 2015.* SUPERVALU INC...

  • Page 118
    ... Data File. 101. The following materials from the SUPERVALU INC. Annual Report on Form 10-K for the fiscal year ended February 27, 2016 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Segment Financial Information (ii) the Consolidated Statements of Operations...

  • Page 119
    ... Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of SUPERVALU INC. and in the capacities and on the dates indicated: Signature /s/ MARK GROSS Mark Gross Title Chief Executive Officer, President and Director (principal executive officer...

  • Page 120
    ... that: 1. I have reviewed this Annual Report on Form 10-K of SUPERVALU INC. for the fiscal year ended February 27, 2016; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of...

  • Page 121
    ... that: 1. I have reviewed this Annual Report on Form 10-K of SUPERVALU INC. for the fiscal year ended February 27, 2016; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of...

  • Page 122
    ...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 the Company for the period and as of the dates covered thereby. Dated: April 26, 2016 /S/ MARK GROSS Mark Gross Chief Executive Officer and...

  • Page 123
    ... ended February 27, 2016, 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 the Company...

  • Page 124
    ..., Chief Strategy Officer INVESTOR INFORMATION The annual meeting of SUPERVALU INC. will take place on July 20, 2016 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...

  • Page 125
    ... foods, ingredients, snacks and everyday products your family needs. Discover our entire family of private brands. Our private brands program offers more than 5,000 products within 11 brands in over 100 categories across the store. PO Box 990 Minneapolis, MN, 55440 952-828-4000 supervalu.com