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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ÈANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended February 25, 2006
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 41-0617000
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
11840 Valley View Road
Eden Prairie, Minnesota 55344
(Address of principal executive offices) (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 Name of each exchange on which registered
Common Stock, par value $1.00 per share New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ÈNo
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes No È
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ÈNo
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ÈAccelerated filer Non-accelerated filer
Indicate by check mark if the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No È
The aggregate market value of the voting stock held by non-affiliates of the Registrant as of September 10, 2005 was
approximately $4,238,283,124 (based upon the closing price of Registrant’s Common Stock on the New York Stock Exchange on
September 9, 2005.
Number of shares of $1.00 par value Common Stock outstanding as of May 1, 2006: 136,974,770.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant’s definitive Proxy Statement filed for the Registrant’s 2006 Annual Meeting of Stockholders are
incorporated by reference into Part III, as specifically set forth in Part III.

Table of contents

  • Page 1
    ... of incorporation or organization) 41-0617000 (I.R.S. Employer Identification No.) 11840 Valley View Road Eden Prairie, Minnesota (Address of principal executive offices) 55344 (Zip Code) Registrant's telephone number, including area code: (952) 828-4000 Securities registered pursuant to...

  • Page 2
    ..., including 862 licensed extreme value stores. Store counts are adjusted for the planned sale of Deals and corporate owned Shop 'n Save Pittsburgh. SUPERVALU also provides supply chain services, including food distribution and related logistics support services primarily across the United States...

  • Page 3
    ... total of 1,381 retail stores, including 862 licensed extreme value stores. Store counts are adjusted for the planned sale of Deals and corporate owned Shop 'n Save Pittsburgh stores. Its principal retail food formats include extreme value stores, regional price superstores and regional supermarkets...

  • Page 4
    ..., contract manufacturing and logistics engineering and management services. Products Supplied. The company offers and supplies its distribution customers with a wide variety and selection of food and non-food products, including groceries, meats, dairy products, frozen foods, deli, bakery, fresh...

  • Page 5
    ...company supplies private label merchandise over a broad range of products in the majority of departments in the store. These products are produced to the company's specifications by many suppliers. Logistics Network. The company has established a network of strategically located distribution centers...

  • Page 6
    ...and transportation logistics expertise, cost, and the ability to offer both asset and non-asset based solutions as well as to design and manage a customer's entire supply chain. Employees At February 25, 2006, the company had approximately 52,400 employees. Approximately 20,500 employees are covered...

  • Page 7
    ...Region, 2000-2005 Executive Vice President, Retail Pharmacies 2002-2006; Senior Vice President, Corporate Development 1999-2002 J. Andrew Herring 47 2002 Gregory C. Heying 57 David E. Pylipow 48 Senior Vice President, Distribution, Supply Chain Services Senior Vice President, Human Resources...

  • Page 8
    ... Corporate Brands and Global Sourcing for Ahold USA, a food retailing company. Mr. Oliver was elected to his current position in April 2004. From November 1999 to April 2004, he was Chief Financial Officer, Arden Group, Inc., a holding company with supermarket operations in Southern California. ITEM...

  • Page 9
    ...more regional competitors. Both the retail food and supply chain services businesses are subject to competitive practices that may affect: (i) the prices at which we are able to sell products at our retail locations, (ii) sales volume, (iii) the ability of our distribution customers to sell products...

  • Page 10
    ... employee benefits and other labor relations issues may lead to labor disputes and disruption of our businesses. Potential work disruptions from labor disputes may affect sales at our stores as well as our ability to distribute products. We contribute to various multiemployer healthcare and pension...

  • Page 11
    ... Ohio (2), Tennessee (1), Texas (1), Wisconsin (1) Illinois (3), Iowa (3), Minnesota (39), Wisconsin (7) Delaware (1) Maryland (39), Virginia (22) 450,000 4,041,000 - 1,494,000 Save-A-Lot Distribution Centers Price Superstores Cub Foods3 Shoppers Food & Pharmacy bigg's Supermarkets Farm Fresh...

  • Page 12
    ...) Region Location and Number of Distribution Centers Central Region Midwest Region Northern Region Northwest Region Southeast Region Eastern Region Indiana (1), Ohio (1), Pennsylvania (2), West Virginia (1) Illinois (3), Missouri (1), Texas (1), Wisconsin (2) Minnesota (1), North Dakota...

  • Page 13
    ... and supply chain services, which includes food distribution and related logistics support services. At February 25, 2006, we conducted our retail operations through a total of 1,381 stores of which 862 are licensed locations. Store counts are adjusted for the planned sale of Deals and Shop 'n Save...

  • Page 14
    ... SUPERVALU will acquire the operations of Acme Markets, Bristol Farms, Jewel-Osco, Shaw's Supermarkets, Star Markets, and the Albertsons' banner stores in the Intermountain, Northwest and Southern California regions, and the related in-store pharmacies under the Osco and Save-On banners, for a total...

  • Page 15
    ...low-cost supply chain and economies of scale as we leverage our retail and supply chain services operations. Save-A-Lot, our extreme value format, has nationwide potential, and currently operates in 39 states. We plan to expand regional retail banner square footage through selective new store growth...

  • Page 16
    ... Katrina primarily at Save-A-Lot locations in Louisiana ("Hurricane"). Results for fiscal 2005 year-to-date include a net after-tax gain on the sale of the company's minority interest in WinCo Foods, Inc. ("WinCo"), a privately held grocery chain that operates stores primarily in the northwestern...

  • Page 17
    ...units, resulted in 68 new stores opened and 85 stores closed. Exclusive of the Chicago, Pittsburgh and Deals stores, total retail square footage, including licensed stores, increased approximately two percent over the prior year. Supply chain services sales for fiscal 2006 were $9.2 billion compared...

  • Page 18
    ... activity, including licensed units, resulted in 104 new stores opened and 38 stores closed, for a total of 1,549 stores at year end. Total square footage increased approximately 4.2 percent over fiscal 2004. Supply chain services sales for fiscal 2005 were $9.0 billion compared with $9.7 billion...

  • Page 19
    ... at a higher gross profit margin as a percentage of net sales than does the supply chain services business, benefits of retail merchandising execution, customer mix and the benefit of volume throughput including labor productivity improvements in supply chain services. Selling and Administrative...

  • Page 20
    ... 2000, the company commenced restructuring programs designed to reduce costs and enhance efficiencies and included facility consolidation and disposal of non-core assets and assets not meeting return objectives or providing long-term strategic opportunities. The restructuring plans resulted in the...

  • Page 21
    ... collectibility based on the information considered and further deterioration of accounts. LIFO and Retail Inventory Method Inventories are stated at the lower of cost or market. Market is replacement value. Substantially all of the company's inventory is finished goods. For a significant portion of...

  • Page 22
    ...-insured for workers' compensation, health care for certain employees and general and automobile liability costs. It is the company's policy to record its self-insurance liabilities based on claims filed and an estimate of claims incurred but not yet reported, discounted at a risk free interest rate...

  • Page 23
    ...Poor's rating service or Moody's rating service to be BB or higher or Ba2 or higher, respectively. The company has met the covenants under the annual accounts receivable program as of February 25, 2006. See Subsequent Events note. In November 2001, the company sold zero-coupon convertible debentures...

  • Page 24
    ...purchase under the 5.0 million share repurchase program authorized by the Board of Directors in May 2004. SFAS No. 87, "Employers' Accounting for Pension," requires that a prepaid pension asset or minimum pension liability, based on the current market value of plan assets and the accumulated benefit...

  • Page 25
    ...the company's common stock. Also as a result of this rating downgrade, the company amended its annual accounts receivable securitization program on April 24, 2006 to allow that the rating assigned to the company's long-term unsecured debt by Standard & Poor's rating service or Moody's rating service...

  • Page 26
    ...zero-coupon debentures accreted interest for fiscal 2007 through fiscal 2032, should the debentures remain outstanding to maturity. (2) The company's benefit obligations include obligations related to sponsored defined benefit pension and post retirement benefit plans and deferred compensation plans...

  • Page 27
    ...of the Proposed Transaction. COMMON STOCK PRICE SUPERVALU's common stock is listed on the New York Stock Exchange under the symbol SVU. At fiscal 2006 year end, there were 6,206 shareholders of record compared with 6,483 at the end of fiscal 2005. Common Stock Price Range 2006 2005 High Low High Low...

  • Page 28
    ... with fixed interest rates is used to assist in managing debt maturities and to diversify sources of debt capital. The company makes long-term loans to certain retail customers (see Notes Receivable in the accompanying Notes to Consolidated Financial Statements for further information) and as such...

  • Page 29
    ...of the Safe Harbor Provisions of the Securities Litigation Reform Act Any statements contained in this report regarding the outlook for our businesses and their respective markets, such as projections of future performance, statements of our plans and objectives, forecasts of market trends and other...

  • Page 30
    ... or food-borne illness • Labor Relations and Employee Benefit Costs Potential work disruptions resulting from labor disputes Increased operating costs resulting from rising employee benefit costs or pension funding obligations The ability to hire, train or retain employees Expansion and...

  • Page 31
    ..., summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Management's Annual Report on Internal Control Over Financial Reporting The financial statements, financial analyses and all other information included in this Annual Report on Form 10...

  • Page 32
    ... effectiveness of internal controls may vary over time. Management assessed the design and effectiveness of the company's internal control over financial reporting as of February 25, 2006. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations...

  • Page 33
    ... Proxy Statement to be filed with the SEC pursuant to Regulation 14A in connection with the Registrant's 2006 Annual Meeting of Stockholders under the headings "Compensation of Directors," "Compensation of Executive Officers" and "Change-of-Control Agreements." ITEM 12. SECURITY OWNERSHIP OF CERTAIN...

  • Page 34
    ... security holders (2)(6) Total 1) 7,194,146 5,126,540 12,320,686 $25.91(3) $26.40 $26.12(3) 10,156,921(4) 261,437(5) 10,418,358(4)(5) Includes the company's 1989 Stock Appreciation Rights Plan, 1983 Employee Stock Option Plan, 1993 Stock Plan, 2002 Stock Plan, SUPERVALU/Richfood Stock Incentive...

  • Page 35
    ... ACCOUNTANT FEES AND SERVICES The information called for by Item 14 is incorporated by reference to the Registrant's definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A in connection with the Registrant's 2006 Annual Meeting of Stockholders under the heading "Independent...

  • Page 36
    ... public accountants, are filed as part of this report. (3) Exhibits: (3) Articles of Incorporation and Bylaws: (3)(i) Restated Certificate of Incorporation is incorporated by reference to Exhibit (3)(i) to the Registrant's Annual Report on Form 10-K for the year ended February 28, 2004. (3)(ii...

  • Page 37
    ...29 to the Registrant's Annual Report on Form 10-K for the year ended February 24, 2001.* SUPERVALU INC. 1983 Employee Stock Option Plan, as amended, is incorporated by reference to Exhibit (10)a. to the Registrant's Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended September 12...

  • Page 38
    10.8. SUPERVALU INC. Executive Incentive Bonus Plan is incorporated by reference to Exhibit (10)c. to the Registrant's Annual Report on Form 10-K for the year ended February 22, 1997.* SUPERVALU INC. Annual Cash Bonus Plan for Designated Corporate Officers, as amended, is incorporated by reference ...

  • Page 39
    ... to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended September 11, 2004.* 10.34 Form of SUPERVALU INC. 2002 Stock Plan Restoration Stock Option Agreement for Non-Employee Directors and Restoration Stock Option Terms and Conditions for Non...

  • Page 40
    ...for Awards Under the Company's Annual Cash Bonus Plan for Designated Corporate Officers and the Executive Incentive Bonus Plan is incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended December 4, 2004.* 10.39 Performance...

  • Page 41
    ...behalf by the undersigned, thereunto duly authorized. SUPERVALU INC. (Registrant) DATE: May 9, 2006 By: /s/ JEFFREY NODDLE Jeffrey Noddle Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf...

  • Page 42
    ..., process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 9, 2006 /s/ JEFFREY NODDLE Chief Executive Officer 42

  • Page 43
    ... and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 9, 2006 /s/ PAMELA K. KNOUS Executive Vice President, Chief Financial Officer...

  • Page 44
    ... officer of SUPERVALU INC. (the "company") certifies that the annual report on Form 10-K of the company for the fiscal year ended February 25, 2006, 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 Form...

  • Page 45
    ...information contained in that 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: May 9, 2006 PAMELA K. KNOUS Pamela K. Knous Executive Vice President, Chief Financial Officer...

  • Page 46
    SUPERVALU INC. Annual Report on Form 10-K Items 6, 8 and 15(a) Index of Selected Financial Data and Financial Statements and Schedules Page(s) Selected Financial Data: Five Year Financial and Operating Summary ...Financial Statements: Reports of Independent Registered Public Accounting Firm ......

  • Page 47
    SUPERVALU INC. and Subsidiaries FIVE YEAR FINANCIAL AND OPERATING SUMMARY 2006 2005 2004 2003 2002 Statement of Earnings Data (a) Net sales Cost of sales Selling and administrative expenses Gain on sale of WinCo Foods, Inc. Restructure and other charges Operating earnings Interest, net Earnings ...

  • Page 48
    ... include 52 weeks. Dollars in thousands except per share and percentage data. Historical data is not necessarily indicative of the company's future results of operations or financial condition. See discussion of "Risk factors" in Item 1A of this report. (b) Inventories (FIFO), working capital and...

  • Page 49
    ... Organizations of the Treadway Commission (COSO), and our report dated May 9, 2006 expressed an unqualified opinion on management's assessment of, and an unqualified opinion on the effective operation of, internal control over financial reporting. /S/ KPMG LLP Minneapolis, Minnesota May 9, 2006...

  • Page 50
    ... ACCOUNTING FIRM The Board of Directors and Stockholders SUPERVALU INC.: We have audited management's assessment, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting, that SUPERVALU INC. maintained effective internal control over financial reporting...

  • Page 51
    ... of earnings, cash flows and stockholders' equity for each of the fiscal years in the three-year period ended February 25, 2006, and our report dated May 9, 2006, expressed an unqualified opinion on those consolidated financial statements. /S/ KPMG LLP Minneapolis, Minnesota May 9, 2006 F-6

  • Page 52
    ... regional price superstores and regional supermarkets. The retail formats include results of food stores owned and results of sales to extreme value stores licensed by the company. Supply chain services operations include results of sales to affiliated food stores, mass merchants and other customers...

  • Page 53
    SUPERVALU INC. and Subsidiaries CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share data) February 25, 2006 (52 weeks) February 26, 2005 (52 weeks) February 28, 2004 (53 weeks) Net sales Costs and expenses Cost of sales Selling and administrative expenses Gain on sale of WinCo Foods...

  • Page 54
    ..., plant and equipment Goodwill Other assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable Accrued vacation, compensation and benefits Current maturities of long-term debt Current obligations under capital leases Income taxes currently payable Other current...

  • Page 55
    ... Earnings Total BALANCES AT FEBRUARY 24, 2003 Net earnings Other comprehensive loss Sales of common stock under option plans Cash dividends declared on common stock $0.5775 per share Compensation under employee incentive plans Purchase of shares for treasury BALANCES AT FEBRUARY 28, 2004 Net...

  • Page 56
    ... net Accounts payable Income taxes currently payable Other assets and liabilities Net cash provided by operating activities Cash flows from investing activities Proceeds from sale of assets Proceeds from sale of WinCo Foods, Inc. Purchases of property, plant and equipment Purchase of Total Logistics...

  • Page 57
    SUPPLEMENTAL CASH FLOW INFORMATION The company's non-cash activities were as follows: Leased asset additions and related obligations Minimum pension liability, net of deferred taxes Interest and income taxes paid: Interest paid (net of amount capitalized) Income taxes paid (net of refunds) $116,902 ...

  • Page 58
    ..., including 862 licensed extreme value stores. Store counts are adjusted for the planned sale of Deals and corporate owned Shop 'n Save Pittsburgh. SUPERVALU also provides supply chain services, including food distribution and related logistics support services primarily across the United States...

  • Page 59
    ... gross. If the company is not the primary obligor and amounts earned have little or no credit risk, the company generally records the net amounts as management fees earned. Cost of Sales: Cost of sales includes cost of inventory sold during the period, including purchasing and distribution costs...

  • Page 60
    ...for estimated losses on retail stores, distribution warehouses 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...

  • Page 61
    ...-insured for workers' compensation, health care for certain employees and general and automobile liability costs. It is the company's policy to record its self-insurance liabilities based on claims filed and an estimate of claims incurred but not yet reported, discounted at a risk free interest rate...

  • Page 62
    ... the company's cost as the excess of the stock's market value at the time of the grant over the amount that the employee is required to pay. In accordance with APB Opinion No. 25, no compensation expense was recognized for options issued under the stock option plans in fiscal 2006, 2005 or 2004 as...

  • Page 63
    ... 148, "Accounting for Stock-Based Compensation," to stock-based employee compensation: 2006 2005 2004 (In thousands, except per share data) Net earnings, as reported Add: stock-based compensation expense included in reported net earnings, net of related tax effect Deduct: total stock-based employee...

  • Page 64
    ... 123 (Revised 2004), "Share-Based Payment." This revised statement, which is effective for fiscal years beginning after June 15, 2005, requires all share-based payments to employees to be recognized in the financial statements based on their fair values. The company currently accounts for its share...

  • Page 65
    ...fiscal year ended February 25, 2006 and did not have a material effect on the company's consolidated financial statements. RESTRUCTURE AND OTHER CHARGES In fiscal 2002, 2001 and 2000, the company commenced restructuring programs designed to reduce costs and enhance efficiencies and included facility...

  • Page 66
    ... corporate operated Shop 'n Save retail stores in Pittsburgh and the impairment of certain assets following the planned disposition of Deals stores, including charges of $12.7 million in the fourth quarter. For fiscal 2006, the asset impairment charges related to the retail food segment. The company...

  • Page 67
    ... trademarks, tradenames and customer relationships and approximately $116.6 million of goodwill. At February 25, 2006 and at February 26, 2005, the company had approximately $0.8 billion of goodwill related to retail food and $0.8 billion related to supply chain services. A summary of changes in the...

  • Page 68
    ...International Data, LLC, a strategic outsourcing services provider, specializing in, among other things, data services, check and remittance processing and coupon promotions processing. At year-end 2006, the retail food segment held investments in various retail properties. The supply chain services...

  • Page 69
    ... excess of the carrying value by approximately $0.1 million at February 25, 2006. Notes receivable are valued based on a discounted cash flow approach applying a rate that is comparable to publicly traded debt instruments of similar credit quality. The estimated fair value of the company's long-term...

  • Page 70
    ... has met the financial covenants under the revolving credit agreements as of February 25, 2006. In August 2005, the company renewed its annual accounts receivable securitization program, under which the company can borrow up to $200.0 million on a revolving basis, with borrowings secured by eligible...

  • Page 71
    SUPERVALU INC. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) LEASES Capital and operating leases: The company leases certain retail food stores, food distribution warehouses and office facilities. Many of these leases include renewal options, and to a limited extent, ...

  • Page 72
    ... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The company is party to a synthetic leasing program for one of its major warehouses. The lease qualifies for operating lease accounting treatment under SFAS No. 13, "Accounting for Leases." For additional information on the synthetic...

  • Page 73
    SUPERVALU INC. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Direct financing leases: Under direct financing capital leases, the company leases buildings to independent retailers with terms ranging from 5 to 20 years. Future minimum rentals to be received under direct ...

  • Page 74
    ... which give rise to significant portions of the net deferred tax asset (liability) as of February 25, 2006 and February 26, 2005 are as follows: 2006 2005 (In thousands) Deferred tax assets: Restructure Net operating loss from acquired subsidiaries Pension liability Other health and benefit plans...

  • Page 75
    ..., determined based on the average of the opening and closing sale price of a share on the date of grant. The company's 1997 stock plan allows only the granting of non-qualified stock options to purchase common shares to salaried employees at fair market value determined on the same basis. In April...

  • Page 76
    ... million for fiscal 2006, 2005 and 2004, respectively. See Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements for the impact of stock based compensation on pro forma net earnings and earnings per common share. The fair value of each option grant is estimated...

  • Page 77
    ... stock for reissuance upon the exercise of employee stock options and for other compensation programs utilizing the company's stock. In fiscal 2005, the company purchased approximately 0.4 million shares under the program at an average cost of $27.73 per share. In fiscal 2006, the company purchased...

  • Page 78
    ... into a Proposed Transaction to acquire certain assets of Albertson's, Inc. See additional discussion of the Proposed Transaction in the Subsequent Events note in the Notes to the Consolidated Financial Statement. BENEFIT PLANS Substantially all employees of the company and its subsidiaries are...

  • Page 79
    ... service and the participants' highest compensation during five consecutive years of employment. Annual payments to the pension trust fund are determined in compliance with the Employee Retirement Income Security Act (ERISA). Plan assets are held in trust and invested in separately managed accounts...

  • Page 80
    ...6,899 - $ 1,350 7,457 - The company utilized the following assumptions in the calculations for pension and post retirement benefit plans: 2006 2005 2004 Weighted-average assumptions used to determine benefit obligations: Discount rate Rate of compensation increase Weighted-average assumptions used...

  • Page 81
    .... The company reviews and selects the discount rate to be used in connection with its postretirement obligations annually. In determining the discount rate, the company uses the yield on corporate bonds (rated Aa or better) that coincides with the cash flows of the plans' estimated benefit payouts...

  • Page 82
    ... many variables that affect future funding requirements such as investment returns and benefit levels. SHAREHOLDER RIGHTS PLAN On April 24, 2000, the company announced that the Board of Directors adopted a Shareholder Rights Plan under which one preferred stock purchase right is distributed for each...

  • Page 83
    ...the company's common stock. Also as a result of this rating downgrade, the company amended its annual accounts receivable securitization program on April 24, 2006 to allow that the rating assigned to the company's long-term unsecured debt by Standard & Poor's rating service or Moody's rating service...

  • Page 84
    ... QUARTERLY FINANCIAL INFORMATION (In thousands, except per share data) Unaudited quarterly financial information for SUPERVALU INC. and subsidiaries is as follows: First (16 wks) Fiscal Year Ended February 25, 2006 Second Third Fourth (12 wks) (12 wks) (12 wks) Year (52 wks) Net sales Gross profit...

  • Page 85
    ... SCHEDULE II-Valuation and Qualifying Accounts (In thousands) COLUMN A COLUMN B Balance at beginning of year COLUMN C COLUMN D COLUMN E Balance at end of year Description Additions Deductions Allowance for doubtful accounts: Year ended: February 25, 2006 February 26, 2005 February 28, 2004...