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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Supervalu Inc. (delisted) | NYSE:SVU | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 32.49 | 0.00 | 01:00:00 |
|
FORM 10-Q
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
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)
|
|
Large accelerated filer
x
|
|
Accelerated filer
¨
|
|
Non-accelerated filer
¨
|
|
Smaller reporting company
¨
|
|
Item
|
|
Page
|
|
|
|
|
|
|
1.
|
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||
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||
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|
||
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||
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||
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||
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2.
|
||
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|
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3.
|
||
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|
|
4.
|
||
|
|
|
|
|
|
|
|
|
1.
|
||
|
|
|
1A.
|
||
|
|
|
2.
|
||
|
|
|
3.
|
||
|
|
|
4.
|
||
|
|
|
5.
|
||
|
|
|
6.
|
||
|
|
|
|
|
Third Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
||||||||
Net sales
|
|
|
|
|
|
|
|
||||||||
Wholesale
|
$
|
1,906
|
|
|
$
|
1,902
|
|
|
$
|
5,912
|
|
|
$
|
6,195
|
|
% of total
|
63.5
|
%
|
|
62.5
|
%
|
|
61.8
|
%
|
|
61.9
|
%
|
||||
Retail
|
1,060
|
|
|
1,097
|
|
|
3,524
|
|
|
3,662
|
|
||||
% of total
|
35.3
|
%
|
|
36.0
|
%
|
|
36.8
|
%
|
|
36.6
|
%
|
||||
Corporate
|
37
|
|
|
46
|
|
|
137
|
|
|
159
|
|
||||
% of total
|
1.2
|
%
|
|
1.5
|
%
|
|
1.4
|
%
|
|
1.5
|
%
|
||||
Total net sales
|
$
|
3,003
|
|
|
$
|
3,045
|
|
|
$
|
9,573
|
|
|
$
|
10,016
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
||||
Operating earnings (loss)
|
|
|
|
|
|
|
|
||||||||
Wholesale
|
$
|
52
|
|
|
$
|
54
|
|
|
$
|
174
|
|
|
$
|
180
|
|
% of Wholesale sales
|
2.7
|
%
|
|
2.8
|
%
|
|
2.9
|
%
|
|
2.9
|
%
|
||||
Retail
|
(14
|
)
|
|
21
|
|
|
(18
|
)
|
|
64
|
|
||||
% of Retail sales
|
(1.3
|
)%
|
|
2.0
|
%
|
|
(0.5
|
)%
|
|
1.8
|
%
|
||||
Corporate
|
(37
|
)
|
|
(9
|
)
|
|
(8
|
)
|
|
(21
|
)
|
||||
Total operating earnings
|
1
|
|
|
66
|
|
|
148
|
|
|
223
|
|
||||
% of total net sales
|
0.1
|
%
|
|
2.2
|
%
|
|
1.5
|
%
|
|
2.2
|
%
|
||||
Interest expense, net
|
40
|
|
|
45
|
|
|
141
|
|
|
148
|
|
||||
Equity in earnings of unconsolidated affiliates
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
(Loss) earnings from continuing operations before income taxes
|
(38
|
)
|
|
22
|
|
|
10
|
|
|
78
|
|
||||
Income tax (benefit) provision
|
(27
|
)
|
|
6
|
|
|
(11
|
)
|
|
24
|
|
||||
Net (loss) earnings from continuing operations
|
(11
|
)
|
|
16
|
|
|
21
|
|
|
54
|
|
||||
(Loss) income from discontinued operations, net of tax
|
(14
|
)
|
|
19
|
|
|
33
|
|
|
78
|
|
||||
Net (loss) earnings including noncontrolling interests
|
(25
|
)
|
|
35
|
|
|
54
|
|
|
132
|
|
||||
Less net earnings attributable to noncontrolling interests
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(6
|
)
|
||||
Net (loss) earnings attributable to SUPERVALU INC.
|
$
|
(26
|
)
|
|
$
|
34
|
|
|
$
|
51
|
|
|
$
|
126
|
|
|
Third Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
||||||||
Net sales
|
$
|
3,003
|
|
|
$
|
3,045
|
|
|
$
|
9,573
|
|
|
$
|
10,016
|
|
Cost of sales
|
2,596
|
|
|
2,609
|
|
|
8,221
|
|
|
8,573
|
|
||||
Gross profit
|
407
|
|
|
436
|
|
|
1,352
|
|
|
1,443
|
|
||||
Selling and administrative expenses
|
391
|
|
|
364
|
|
|
1,189
|
|
|
1,214
|
|
||||
Goodwill and intangible asset impairment charges
|
15
|
|
|
6
|
|
|
15
|
|
|
6
|
|
||||
Operating earnings
|
1
|
|
|
66
|
|
|
148
|
|
|
223
|
|
||||
Interest expense, net
|
40
|
|
|
45
|
|
|
141
|
|
|
148
|
|
||||
Equity in earnings of unconsolidated affiliates
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
(Loss) earnings from continuing operations before income taxes
|
(38
|
)
|
|
22
|
|
|
10
|
|
|
78
|
|
||||
Income tax (benefit) provision
|
(27
|
)
|
|
6
|
|
|
(11
|
)
|
|
24
|
|
||||
Net (loss) earnings from continuing operations
|
(11
|
)
|
|
16
|
|
|
21
|
|
|
54
|
|
||||
(Loss) income from discontinued operations, net of tax
|
(14
|
)
|
|
19
|
|
|
33
|
|
|
78
|
|
||||
Net (loss) earnings including noncontrolling interests
|
(25
|
)
|
|
35
|
|
|
54
|
|
|
132
|
|
||||
Less net earnings attributable to noncontrolling interests
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(6
|
)
|
||||
Net (loss) earnings attributable to SUPERVALU INC.
|
$
|
(26
|
)
|
|
$
|
34
|
|
|
$
|
51
|
|
|
$
|
126
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net (loss) earnings per share attributable to SUPERVALU INC.:
|
|||||||||||||||
Continuing operations
|
$
|
(0.04
|
)
|
|
$
|
0.05
|
|
|
$
|
0.07
|
|
|
$
|
0.18
|
|
Discontinued operations
|
$
|
(0.06
|
)
|
|
$
|
0.07
|
|
|
$
|
0.12
|
|
|
$
|
0.30
|
|
Basic net (loss) earnings per share
|
$
|
(0.10
|
)
|
|
$
|
0.13
|
|
|
$
|
0.19
|
|
|
$
|
0.48
|
|
Diluted net (loss) earnings per share attributable to SUPERVALU INC.:
|
|||||||||||||||
Continuing operations
|
$
|
(0.04
|
)
|
|
$
|
0.05
|
|
|
$
|
0.07
|
|
|
$
|
0.18
|
|
Discontinued operations
|
$
|
(0.06
|
)
|
|
$
|
0.07
|
|
|
$
|
0.12
|
|
|
$
|
0.29
|
|
Diluted net (loss) earnings per share
|
$
|
(0.10
|
)
|
|
$
|
0.13
|
|
|
$
|
0.19
|
|
|
$
|
0.47
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
265
|
|
|
264
|
|
|
265
|
|
|
263
|
|
||||
Diluted
|
265
|
|
|
268
|
|
|
267
|
|
|
268
|
|
|
Third Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
||||||||
Net (loss) earnings including noncontrolling interests
|
$
|
(25
|
)
|
|
$
|
35
|
|
|
$
|
54
|
|
|
$
|
132
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Recognition of pension and other postretirement benefit obligations
(1)
|
102
|
|
|
27
|
|
|
113
|
|
|
50
|
|
||||
Recognition of interest rate swap cash flow hedge
(2)
|
2
|
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
||||
Total other comprehensive income
|
104
|
|
|
27
|
|
|
115
|
|
|
48
|
|
||||
Comprehensive income including noncontrolling interests
|
79
|
|
|
62
|
|
|
169
|
|
|
180
|
|
||||
Less comprehensive income attributable to noncontrolling interests
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(6
|
)
|
||||
Comprehensive income attributable to SUPERVALU INC.
|
$
|
78
|
|
|
$
|
61
|
|
|
$
|
166
|
|
|
$
|
174
|
|
(1)
|
Amounts are net of tax expense of
$49
,
$15
,
$55
and
$29
for the
third
quarters of fiscal
2017
and
2016
, and for fiscal
2017
and
2016
year-to-date, respectively.
|
(2)
|
Amounts are net of tax expense (benefit) of
$1
,
$0
,
$1
and
$(1)
for the
third
quarters of fiscal
2017
and
2016
, and for fiscal
2017
and
2016
year-to-date, respectively.
|
|
December 3, 2016
|
|
February 27, 2016
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
47
|
|
|
$
|
42
|
|
Receivables, net
|
440
|
|
|
406
|
|
||
Inventories, net
|
895
|
|
|
738
|
|
||
Other current assets
|
74
|
|
|
73
|
|
||
Current assets of discontinued operations
|
394
|
|
|
376
|
|
||
Total current assets
|
1,850
|
|
|
1,635
|
|
||
Property, plant and equipment, net
|
1,014
|
|
|
1,021
|
|
||
Goodwill
|
710
|
|
|
725
|
|
||
Intangible assets, net
|
41
|
|
|
47
|
|
||
Deferred tax assets
|
169
|
|
|
238
|
|
||
Other assets
|
99
|
|
|
91
|
|
||
Long-term assets of discontinued operations
|
591
|
|
|
613
|
|
||
Total assets
|
$
|
4,474
|
|
|
$
|
4,370
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
924
|
|
|
$
|
829
|
|
Accrued vacation, compensation and benefits
|
152
|
|
|
148
|
|
||
Current maturities of long-term debt and capital lease obligations
|
1,091
|
|
|
123
|
|
||
Other current liabilities
|
125
|
|
|
126
|
|
||
Current liabilities of discontinued operations
|
305
|
|
|
346
|
|
||
Total current liabilities
|
2,597
|
|
|
1,572
|
|
||
Long-term debt
|
1,261
|
|
|
2,197
|
|
||
Long-term capital lease obligations
|
193
|
|
|
194
|
|
||
Pension and other postretirement benefit obligations
|
430
|
|
|
578
|
|
||
Long-term tax liabilities
|
73
|
|
|
75
|
|
||
Other long-term liabilities
|
128
|
|
|
145
|
|
||
Long-term liabilities of discontinued operations
|
45
|
|
|
42
|
|
||
Commitments and contingencies
|
—
|
|
|
—
|
|
||
Stockholders’ deficit
|
|
|
|
||||
Common stock, $0.01 par value: 400 shares authorized; 268 and 266 shares issued, respectively
|
3
|
|
|
3
|
|
||
Capital in excess of par value
|
2,820
|
|
|
2,808
|
|
||
Treasury stock, at cost, 0 and 1 shares, respectively
|
—
|
|
|
(5
|
)
|
||
Accumulated other comprehensive loss
|
(307
|
)
|
|
(422
|
)
|
||
Accumulated deficit
|
(2,774
|
)
|
|
(2,825
|
)
|
||
Total SUPERVALU INC. stockholders’ deficit
|
(258
|
)
|
|
(441
|
)
|
||
Noncontrolling interests
|
5
|
|
|
8
|
|
||
Total stockholders’ deficit
|
(253
|
)
|
|
(433
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
4,474
|
|
|
$
|
4,370
|
|
|
Common
Stock
|
|
Capital in Excess of Par Value
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Accumulated
Deficit
|
|
SUPERVALU INC.
Stockholders’
Deficit
|
|
Non-controlling
Interests
|
|
Total
Stockholders’
Deficit
|
||||||||||||||||
Balances as of February 28, 2015
|
$
|
3
|
|
|
$
|
2,810
|
|
|
$
|
(33
|
)
|
|
$
|
(423
|
)
|
|
$
|
(3,003
|
)
|
|
$
|
(646
|
)
|
|
$
|
10
|
|
|
$
|
(636
|
)
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126
|
|
|
126
|
|
|
6
|
|
|
132
|
|
||||||||
Other comprehensive income, net of tax of $28
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
||||||||
Sales of common stock under option plans
|
—
|
|
|
(12
|
)
|
|
22
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||||||
Stock-based compensation
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
||||||||
Tax impact on stock-based awards and other
|
—
|
|
|
(15
|
)
|
|
6
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
||||||||
Balances as of December 5, 2015
|
$
|
3
|
|
|
$
|
2,802
|
|
|
$
|
(5
|
)
|
|
$
|
(375
|
)
|
|
$
|
(2,877
|
)
|
|
$
|
(452
|
)
|
|
$
|
8
|
|
|
$
|
(444
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balances as of February 27, 2016
|
$
|
3
|
|
|
$
|
2,808
|
|
|
$
|
(5
|
)
|
|
$
|
(422
|
)
|
|
$
|
(2,825
|
)
|
|
$
|
(441
|
)
|
|
$
|
8
|
|
|
$
|
(433
|
)
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
51
|
|
|
3
|
|
|
54
|
|
||||||||
Other comprehensive income, net of tax of $56
|
—
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|
—
|
|
|
115
|
|
|
—
|
|
|
115
|
|
||||||||
Sales of common stock under option plans
|
—
|
|
|
(3
|
)
|
|
6
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||||
Stock-based compensation
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||||||
Tax impact on stock-based awards and other
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||||
Balances as of December 3, 2016
|
$
|
3
|
|
|
$
|
2,820
|
|
|
$
|
—
|
|
|
$
|
(307
|
)
|
|
$
|
(2,774
|
)
|
|
$
|
(258
|
)
|
|
$
|
5
|
|
|
$
|
(253
|
)
|
|
Year-To-Date Ended
|
||||||
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
||||
Cash flows from operating activities
|
|
|
|
||||
Net earnings including noncontrolling interests
|
$
|
54
|
|
|
$
|
132
|
|
Income from discontinued operations, net of tax
|
33
|
|
|
78
|
|
||
Net earnings from continuing operations
|
21
|
|
|
54
|
|
||
Adjustments to reconcile Net earnings from continuing operations to Net cash provided by operating activities – continuing operations:
|
|
|
|
||||
Goodwill and intangible asset impairment charges
|
15
|
|
|
6
|
|
||
Asset impairment and other charges
|
4
|
|
|
2
|
|
||
Loss on debt extinguishment
|
7
|
|
|
—
|
|
||
Net gain on sale of assets and exits of surplus leases
|
(1
|
)
|
|
(2
|
)
|
||
Depreciation and amortization
|
159
|
|
|
161
|
|
||
LIFO charge
|
3
|
|
|
6
|
|
||
Deferred income taxes
|
5
|
|
|
(14
|
)
|
||
Stock-based compensation
|
13
|
|
|
17
|
|
||
Net pension and other postretirement benefits expense
|
23
|
|
|
29
|
|
||
Contributions to pension and other postretirement benefit plans
|
(2
|
)
|
|
(38
|
)
|
||
Other adjustments
|
6
|
|
|
18
|
|
||
Changes in operating assets and liabilities, net of effects from business acquisitions
|
(106
|
)
|
|
(85
|
)
|
||
Net cash provided by operating activities – continuing operations
|
147
|
|
|
154
|
|
||
Net cash provided by operating activities – discontinued operations
|
69
|
|
|
98
|
|
||
Net cash provided by operating activities
|
216
|
|
|
252
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Proceeds from sale of assets
|
2
|
|
|
1
|
|
||
Purchases of property, plant and equipment
|
(118
|
)
|
|
(112
|
)
|
||
Payments for business acquisitions
|
(19
|
)
|
|
(6
|
)
|
||
Other
|
(1
|
)
|
|
(24
|
)
|
||
Net cash used in investing activities – continuing operations
|
(136
|
)
|
|
(141
|
)
|
||
Net cash used in investing activities – discontinued operations
|
(65
|
)
|
|
(57
|
)
|
||
Net cash used in investing activities
|
(201
|
)
|
|
(198
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from issuance of debt
|
218
|
|
|
—
|
|
||
Proceeds from sale of common stock
|
3
|
|
|
10
|
|
||
Payments of debt and capital lease obligations
|
(217
|
)
|
|
(34
|
)
|
||
Payments for debt financing costs
|
(6
|
)
|
|
(1
|
)
|
||
Distributions to noncontrolling interests
|
(6
|
)
|
|
(8
|
)
|
||
Net cash used in financing activities – continuing operations
|
(8
|
)
|
|
(33
|
)
|
||
Net cash used in financing activities – discontinued operations
|
—
|
|
|
(1
|
)
|
||
Net cash used in financing activities
|
(8
|
)
|
|
(34
|
)
|
||
Net increase in cash and cash equivalents
|
7
|
|
|
20
|
|
||
Cash and cash equivalents at beginning of period
|
57
|
|
|
114
|
|
||
Cash and cash equivalents at the end of period
|
$
|
64
|
|
|
$
|
134
|
|
Less cash and cash equivalents of discontinued operations at end of period
|
$
|
(17
|
)
|
|
$
|
(47
|
)
|
Cash and cash equivalents of continuing operations at end of period
|
$
|
47
|
|
|
$
|
87
|
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|||||||
The Company’s non-cash investing and financing activities were as follows:
|
|
|
|
||||
Purchases of property, plant and equipment included in Accounts payable
|
$
|
25
|
|
|
$
|
31
|
|
Capital lease asset additions
|
$
|
15
|
|
|
$
|
18
|
|
Interest and income taxes paid:
|
|
|
|
||||
Interest paid, net of amounts capitalized
|
$
|
136
|
|
|
$
|
150
|
|
Income taxes paid, net
|
$
|
12
|
|
|
$
|
44
|
|
|
February 27,
2016 |
|
Additions
|
|
Impairments
|
|
Other net
adjustments
|
|
December 3,
2016 |
||||||||||
Goodwill:
|
|
|
|
|
|
|
|
|
|
||||||||||
Wholesale
|
$
|
710
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
710
|
|
Retail
|
15
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|||||
Total goodwill
|
$
|
725
|
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
710
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intangible assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Favorable operating leases, prescription files, customer lists and other (accumulated amortization of $102 and $95 as of December 3, 2016 and February 27, 2016, respectively)
|
$
|
131
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
132
|
|
Trademarks and tradenames – indefinite useful lives
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Non-compete agreements (accumulated amortization of $2 and $2 as of December 3, 2016 and February 27, 2016, respectively)
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Total intangible assets
|
144
|
|
|
2
|
|
|
—
|
|
|
(1
|
)
|
|
145
|
|
|||||
Accumulated amortization
|
(97
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|||||
Total intangible assets, net
|
$
|
47
|
|
|
|
|
|
|
|
|
$
|
41
|
|
|
December 3,
2016 (40 weeks) |
||
Reserves for closed properties at beginning of the fiscal year
|
$
|
29
|
|
Additions
|
3
|
|
|
Payments
|
(8
|
)
|
|
Adjustments
|
(2
|
)
|
|
Reserves for closed properties at the end of period
|
$
|
22
|
|
|
Third Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
||||||||
Property, plant and equipment:
|
|
|
|
|
|
|
|
||||||||
Carrying value
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
1
|
|
Fair value measured using Level 3 inputs
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Impairment charge
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
|
|
December 3, 2016
|
||||||||||||||
|
Balance Sheet Location
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation
|
Other assets
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Total
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation
|
Other current liabilities
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Deferred compensation
|
Other long-term liabilities
|
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
||||
Diesel fuel derivatives
|
Other current liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swap derivative
|
Other current liabilities
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Interest rate swap derivative
|
Other long-term liabilities
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Total
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
|
|
February 27, 2016
|
||||||||||||||
|
Balance Sheet Location
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation
|
Other assets
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
Total
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation
|
Other current liabilities
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Deferred compensation
|
Other long-term liabilities
|
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
||||
Diesel fuel derivatives
|
Other current liabilities
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Interest rate swap derivative
|
Other current liabilities
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Interest rate swap derivative
|
Other long-term liabilities
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Total
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
December 3,
2016 |
|
February 27,
2016 |
||||
5.50% Secured Term Loan Facility due March 2019
|
$
|
1,356
|
|
|
$
|
1,459
|
|
6.75% Senior Notes due June 2021
|
400
|
|
|
400
|
|
||
7.75% Senior Notes due November 2022
|
350
|
|
|
350
|
|
||
1.69% to 3.75% Revolving ABL Credit Facility due February 2021
|
260
|
|
|
138
|
|
||
Debt financing costs, net
|
(37
|
)
|
|
(45
|
)
|
||
Original issue discount on debt
|
(2
|
)
|
|
(5
|
)
|
||
Total debt
|
2,327
|
|
|
2,297
|
|
||
Less current maturities of long-term debt
|
(1,066
|
)
|
|
(100
|
)
|
||
Long-term debt
|
$
|
1,261
|
|
|
$
|
2,197
|
|
|
Year-To-Date Ended
|
|||
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
|
Dividend yield
|
—
|
%
|
|
—%
|
Volatility rate
|
54.2
|
%
|
|
49.0—50.6%
|
Risk-free interest rate
|
1.3
|
%
|
|
1.2—1.4%
|
Expected life
|
5.0 years
|
|
|
4.0—5.0 years
|
|
Third Quarter Ended
|
||||||||||||||
Pension Benefits
|
|
Other Postretirement Benefits
|
|||||||||||||
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|||||||||
Interest cost
|
$
|
20
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Expected return on assets
|
(33
|
)
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service benefit
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(4
|
)
|
||||
Amortization of net actuarial loss
|
10
|
|
|
18
|
|
|
—
|
|
|
1
|
|
||||
Pension settlement charge
|
41
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit expense (income)
|
$
|
38
|
|
|
$
|
10
|
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Contributions to benefit plans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year-To-Date Ended
|
||||||||||||||
Pension Benefits
|
|
Other Postretirement Benefits
|
|||||||||||||
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
|||||||||
Interest cost
|
$
|
66
|
|
|
$
|
81
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Expected return on assets
|
(110
|
)
|
|
(108
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service benefit
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(12
|
)
|
||||
Amortization of net actuarial loss
|
34
|
|
|
60
|
|
|
1
|
|
|
4
|
|
||||
Pension settlement charge
|
41
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit expense (income)
|
$
|
31
|
|
|
$
|
33
|
|
|
$
|
(8
|
)
|
|
$
|
(5
|
)
|
Contributions to benefit plans
|
$
|
(2
|
)
|
|
$
|
(27
|
)
|
|
$
|
—
|
|
|
$
|
(11
|
)
|
|
Third Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
||||||||
Net (loss) earnings from continuing operations
|
$
|
(11
|
)
|
|
$
|
16
|
|
|
$
|
21
|
|
|
$
|
54
|
|
Less net earnings attributable to noncontrolling interests
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(6
|
)
|
||||
Net (loss) earnings from continuing operations attributable to SUPERVALU INC.
|
(12
|
)
|
|
15
|
|
|
18
|
|
|
48
|
|
||||
(Loss) income from discontinued operations, net of tax
|
(14
|
)
|
|
19
|
|
|
33
|
|
|
78
|
|
||||
Net (loss) earnings attributable to SUPERVALU INC.
|
$
|
(26
|
)
|
|
$
|
34
|
|
|
$
|
51
|
|
|
$
|
126
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding—basic
|
265
|
|
|
264
|
|
|
265
|
|
|
263
|
|
||||
Dilutive impact of stock-based awards
|
—
|
|
|
4
|
|
|
2
|
|
|
5
|
|
||||
Weighted average number of shares outstanding—diluted
|
265
|
|
|
268
|
|
|
267
|
|
|
268
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net (loss) earnings per share attributable to SUPERVALU INC.:
|
|||||||||||||||
Continuing operations
|
$
|
(0.04
|
)
|
|
$
|
0.05
|
|
|
$
|
0.07
|
|
|
$
|
0.18
|
|
Discontinued operations
|
$
|
(0.06
|
)
|
|
$
|
0.07
|
|
|
$
|
0.12
|
|
|
$
|
0.30
|
|
Basic net (loss) earnings per share
|
$
|
(0.10
|
)
|
|
$
|
0.13
|
|
|
$
|
0.19
|
|
|
$
|
0.48
|
|
Diluted net (loss) earnings per share attributable to SUPERVALU INC.:
|
|||||||||||||||
Continuing operations
|
$
|
(0.04
|
)
|
|
$
|
0.05
|
|
|
$
|
0.07
|
|
|
$
|
0.18
|
|
Discontinued operations
|
$
|
(0.06
|
)
|
|
$
|
0.07
|
|
|
$
|
0.12
|
|
|
$
|
0.29
|
|
Diluted net (loss) earnings per share
|
$
|
(0.10
|
)
|
|
$
|
0.13
|
|
|
$
|
0.19
|
|
|
$
|
0.47
|
|
|
Benefit Plans
|
|
Interest Rate Swap
|
|
Total
|
||||||
Accumulated other comprehensive loss at beginning of the fiscal year, net of tax
|
$
|
(418
|
)
|
|
$
|
(4
|
)
|
|
$
|
(422
|
)
|
Other comprehensive loss before reclassifications
(1)
|
69
|
|
|
—
|
|
|
69
|
|
|||
Amortization of amounts included in net periodic benefit cost
(2)
|
15
|
|
|
—
|
|
|
15
|
|
|||
Amortization of cash flow hedge
(3)
|
—
|
|
|
2
|
|
|
2
|
|
|||
Pension settlement charge
(4)
|
29
|
|
|
—
|
|
|
29
|
|
|||
Net current-period Other comprehensive income
(5)
|
113
|
|
|
2
|
|
|
115
|
|
|||
Accumulated other comprehensive loss at the end of period, net of tax
|
$
|
(305
|
)
|
|
$
|
(2
|
)
|
|
$
|
(307
|
)
|
|
Benefit Plans
|
|
Interest Rate Swap
|
|
Total
|
||||||
Accumulated other comprehensive loss at beginning of the fiscal year, net of tax
|
$
|
(423
|
)
|
|
$
|
—
|
|
|
$
|
(423
|
)
|
Other comprehensive loss before reclassifications
(1)
|
18
|
|
|
(2
|
)
|
|
16
|
|
|||
Amortization of amounts included in net periodic benefit cost
(2)
|
32
|
|
|
—
|
|
|
32
|
|
|||
Net current-period Other comprehensive income (loss)
(3)
|
50
|
|
|
(2
|
)
|
|
48
|
|
|||
Accumulated other comprehensive loss at the end of period, net of tax
|
$
|
(373
|
)
|
|
$
|
(2
|
)
|
|
$
|
(375
|
)
|
|
Third Quarter Ended
|
|
Year-To-Date Ended
|
|
|
||||||||||||
|
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
|
Affected Line Item on Condensed Consolidated Statements of Operations
|
||||||||
Pension and postretirement benefit plan obligations:
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of amounts included in net periodic benefit expense
(1)
|
$
|
7
|
|
|
$
|
13
|
|
|
$
|
23
|
|
|
$
|
46
|
|
|
Selling and administrative expenses
|
Amortization of amounts included in net periodic benefit expense
(1)
|
1
|
|
|
2
|
|
|
2
|
|
|
6
|
|
|
Cost of sales
|
||||
Pension settlement charge
|
41
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
Selling and administrative expenses
|
||||
Total reclassifications
|
49
|
|
|
15
|
|
|
66
|
|
|
52
|
|
|
|
||||
Income tax benefit
|
(16
|
)
|
|
(6
|
)
|
|
(22
|
)
|
|
(20
|
)
|
|
Income tax provision
|
||||
Total reclassifications, net of tax
|
$
|
33
|
|
|
$
|
9
|
|
|
$
|
44
|
|
|
$
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap cash flow hedge:
|
|
|
|
|
|
|
|
|
|
||||||||
Reclassification of cash flow hedge
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
Interest expense, net
|
Income tax benefit
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
Income tax provision
|
||||
Total reclassifications, net of tax
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
|
(1)
|
Amortization of amounts included in net periodic benefit expense include amortization of prior service benefit and amortization of net actuarial loss as reflected in
Note 9—Benefit Plans
.
|
|
Third Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
||||||||
Net sales
|
$
|
1,038
|
|
|
$
|
1,069
|
|
|
$
|
3,529
|
|
|
$
|
3,567
|
|
Cost of sales
|
874
|
|
|
905
|
|
|
2,969
|
|
|
3,016
|
|
||||
Gross profit
|
164
|
|
|
164
|
|
|
560
|
|
|
551
|
|
||||
Selling and administrative expenses
|
135
|
|
|
129
|
|
|
454
|
|
|
430
|
|
||||
Goodwill impairment charge
|
37
|
|
|
—
|
|
|
37
|
|
|
—
|
|
||||
Operating (loss) earnings
|
(8
|
)
|
|
35
|
|
|
69
|
|
|
121
|
|
||||
Interest expense (income), net
|
—
|
|
|
—
|
|
|
1
|
|
|
(6
|
)
|
||||
(Loss) earnings from discontinued operations before income taxes
|
(8
|
)
|
|
35
|
|
|
68
|
|
|
127
|
|
||||
Income tax provision
|
6
|
|
|
16
|
|
|
35
|
|
|
49
|
|
||||
(Loss) income from discontinued operations, net of tax
|
$
|
(14
|
)
|
|
$
|
19
|
|
|
$
|
33
|
|
|
$
|
78
|
|
|
December 3, 2016
|
|
February 27, 2016
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
17
|
|
|
$
|
15
|
|
Receivables, net
|
37
|
|
|
45
|
|
||
Inventories, net
|
321
|
|
|
298
|
|
||
Other current assets
|
19
|
|
|
18
|
|
||
Total current assets of discontinued operations
|
394
|
|
|
376
|
|
||
Long-term assets
|
|
|
|
||||
Property, plant and equipment, net
|
473
|
|
|
460
|
|
||
Goodwill
|
106
|
|
|
142
|
|
||
Intangible assets, net
|
8
|
|
|
8
|
|
||
Deferred tax assets
|
(8
|
)
|
|
(10
|
)
|
||
Other assets
|
12
|
|
|
13
|
|
||
Total long-term assets of discontinued operations
|
591
|
|
|
613
|
|
||
Total assets of discontinued operations
|
$
|
985
|
|
|
$
|
989
|
|
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
244
|
|
|
$
|
289
|
|
Accrued vacation, compensation and benefits
|
35
|
|
|
34
|
|
||
Current maturities of capital lease obligations
|
1
|
|
|
1
|
|
||
Other current liabilities
|
25
|
|
|
22
|
|
||
Total current liabilities of discontinued operations
|
305
|
|
|
346
|
|
||
Long-term liabilities
|
|
|
|
||||
Long-term capital lease obligations
|
9
|
|
|
9
|
|
||
Long-term tax liabilities
|
7
|
|
|
6
|
|
||
Other long-term liabilities
|
29
|
|
|
27
|
|
||
Total long-term liabilities of discontinued operations
|
45
|
|
|
42
|
|
||
Total liabilities of discontinued operations
|
350
|
|
|
388
|
|
||
Net assets of discontinued operations
|
$
|
635
|
|
|
$
|
601
|
|
•
|
Net sales were
$3,003
, a decrease of
$42
or
1.4 percent
, primarily due to lost Wholesale customers, lower identical store sales in our Retail business, lower sales to existing Wholesale customers, lower sales from closed Retail stores and lower fees under transition services agreements, offset in part by higher sales to new Wholesale customers and new stores operated by Wholesale customers, and higher sales from acquired and new Retail stores. Wholesale sales increased over last year.
|
•
|
Gross profit was
$407
, a decrease of
$29
or
6.7 percent
, which reflects lower sales in our Retail business, lower fees under transition services agreements and higher employee-related costs.
|
•
|
Operating earnings were
$1
, a decrease of
$65
, which reflects $48 of higher charges and costs compared to last year, primarily due to a pension settlement charge and a goodwill impairment charge in the third quarter, offset by an intangible asset impairment charge and severance costs last year. When adjusted for these items (refer to the Operating Earnings section below for descriptions of these charges and costs), Operating earnings decreased by $17, primarily due to the impact of lower sales in our Retail business, lower fees under transition services agreements and higher employee-related costs, partially offset by lower pension expense.
|
•
|
Net sales were
$9,573
, a
decrease
of
$443
or
4.4 percent
, primarily due to lost Wholesale customers, lower identical store sales in our Retail business, lower sales to existing Wholesale customers and lower sales from closed Retail stores, offset in part by higher sales from new and acquired Retail stores, and new Wholesale customers and stores.
|
•
|
Gross profit was
$1,352
, a decrease of
$91
or
6.3 percent
, which reflects declines in Retail and Wholesale sales, lower fees under transition services agreements and lower base margins, offset in part by higher vendor allowances.
|
•
|
Operating earnings were
$148
, a decrease of
$75
, which reflects $36 of higher net charges and costs compared to last year, primarily due to a pension settlement charge, a goodwill impairment charge and store closure charges and costs, offset by a supply agreement termination fee and other items, this year-to-date, offset by an intangible asset impairment charge and severance costs last year. When adjusted for these items (refer to the Operating Earnings section below for descriptions of these charges and costs), Operating earnings decreased $39, primarily due to lower gross profit from decreased sales and lower base margins, partially offset by lower pension expense and higher vendor allowances.
|
•
|
Net cash provided by operating activities of continuing operations was
$147
, a decrease of
$7
, primarily due to lower cash generated from earnings, partially offset by lower contributions to benefit plans.
|
•
|
Net cash used in investing activities of continuing operations was
$136
, a decrease of
$5
, and included a decrease in cash paid for other intangible assets, offset in part by an increase in cash paid for business combinations and capital expenditures.
|
•
|
Net cash used in financing activities of continuing operations was
$8
, a decrease of
$25
, primarily due to lower net payments on debt and capital lease obligations than last year.
|
•
|
Retaining our existing customers by continuing to differentiate ourselves through our service levels, product offerings and growing professional services offerings, including administrative back-office solutions
|
•
|
Targeting sales growth by continuing to affiliate new customers, including larger chain businesses, and more aggressively pursuing external growth and market opportunities
|
•
|
Driving sales to existing customers with a sales-driven culture, emphasizing fresh product offerings, such as produce, and by enhancing the Company's professional services offerings, including merchandise and promotional planning, design and administrative back-office solutions
|
•
|
Improving the efficiency of the Company's operations, including its information technology infrastructure and maximizing the use of trucking miles and warehouse capacity
|
•
|
Strengthening core merchandising and marketing programs, including leveraging the Company's private-label programs, such as the Essential Everyday® and Equaline® labels, while marketing and adding depth to the Wild Harvest® and Culinary Circle® brands
|
•
|
Driving profitable sales by investing in price and promotions, and enhancing product offerings and merchandising displays
|
•
|
Driving improved store performance, including reducing inventory shrink rates and levels of out-of-stocks, through standardizing certain store processes
|
•
|
Continued development and introduction of the Company's private-label product offerings, including organic products, by providing innovative products in multiple channels across Retail and Wholesale
|
•
|
Investing capital on new stores, relocations and targeted store remodels
|
•
|
Continued management of the Company's overhead cost structure to enable investments in lower prices to customers
|
•
|
Providing high-quality administrative support services by enhancing the Company's service offerings and information technology systems
|
•
|
In November 2016, the Company entered into a long-term supply agreement to serve as a grocery wholesaler and distributor to America's Food Basket, a regional cooperative that serves 47 neighborhood stores located primarily in New York and parts of New England. The Company expects to begin transitioning stores in the fourth quarter of fiscal 2017 and into the first quarter of fiscal 2018.
|
•
|
The Company expects to begin transitioning the over 170 stores operated by The Fresh Market in late February 2017 under the long-term supply agreement that the Company entered into with The Fresh Market in August 2016.
|
•
|
The Company has completed the transition of and is now supplying approximately 70 Marsh Supermarkets and O’Malia Food Markets under the long-term supply agreement the Company entered into with Marsh Supermarkets in August 2016.
|
|
Third Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
Results of Operations
|
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
||||||||
Net sales
|
$
|
3,003
|
|
|
$
|
3,045
|
|
|
$
|
9,573
|
|
|
$
|
10,016
|
|
Cost of sales
|
2,596
|
|
|
2,609
|
|
|
8,221
|
|
|
8,573
|
|
||||
Gross profit
|
407
|
|
|
436
|
|
|
1,352
|
|
|
1,443
|
|
||||
Selling and administrative expenses
|
391
|
|
|
364
|
|
|
1,189
|
|
|
1,214
|
|
||||
Goodwill and intangible asset impairment charges
|
15
|
|
|
6
|
|
|
15
|
|
|
6
|
|
||||
Operating earnings
|
1
|
|
|
66
|
|
|
148
|
|
|
223
|
|
||||
Interest expense, net
|
40
|
|
|
45
|
|
|
141
|
|
|
148
|
|
||||
Equity in earnings of unconsolidated affiliates
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
(Loss) earnings from continuing operations before income taxes
|
(38
|
)
|
|
22
|
|
|
10
|
|
|
78
|
|
||||
Income tax provision
|
(27
|
)
|
|
6
|
|
|
(11
|
)
|
|
24
|
|
||||
Net (loss) earnings from continuing operations
|
(11
|
)
|
|
16
|
|
|
21
|
|
|
54
|
|
||||
(Loss) income from discontinued operations, net of tax
|
(14
|
)
|
|
19
|
|
|
33
|
|
|
78
|
|
||||
Net (loss) earnings including noncontrolling interests
|
(25
|
)
|
|
35
|
|
|
54
|
|
|
132
|
|
||||
Less net earnings attributable to noncontrolling interests
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(6
|
)
|
||||
Net (loss) earnings attributable to SUPERVALU INC.
|
$
|
(26
|
)
|
|
$
|
34
|
|
|
$
|
51
|
|
|
$
|
126
|
|
Diluted continuing operations net (loss) earnings per share attributable to SUPERVALU INC.
|
$
|
(0.04
|
)
|
|
$
|
0.05
|
|
|
$
|
0.07
|
|
|
$
|
0.18
|
|
Weighted average shares outstanding—diluted
|
265
|
|
|
268
|
|
|
267
|
|
|
268
|
|
||||
Other Statistics of Continuing Operations
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
$
|
48
|
|
|
$
|
49
|
|
|
$
|
159
|
|
|
$
|
161
|
|
Capital expenditures
(1)
|
$
|
60
|
|
|
$
|
55
|
|
|
$
|
134
|
|
|
$
|
123
|
|
Adjusted EBITDA
(2)
|
$
|
107
|
|
|
$
|
125
|
|
|
$
|
359
|
|
|
$
|
400
|
|
Financial Position of Continuing Operations
|
|
|
|
|
|
|
|
||||||||
Working capital
(3)
|
|
|
|
|
$
|
(618
|
)
|
|
$
|
117
|
|
||||
Total assets
(4)
|
|
|
|
|
$
|
3,489
|
|
|
$
|
3,653
|
|
||||
Total debt and capital lease obligations
(5)
|
|
|
|
|
$
|
2,545
|
|
|
$
|
2,704
|
|
||||
Stores Supplied and Operated:
|
|
|
|
|
|
|
|
||||||||
Wholesale primary stores
|
|
|
|
|
1,850
|
|
|
1,871
|
|
||||||
Retail stores
|
|
|
|
|
217
|
|
|
200
|
|
||||||
Subtotal
|
|
|
|
|
2,067
|
|
|
2,071
|
|
||||||
Wholesale secondary stores
(6)
|
|
|
|
|
237
|
|
|
224
|
|
||||||
Total number of stores
|
|
|
|
|
2,304
|
|
|
2,295
|
|
(1)
|
Capital expenditures include cash payments for purchases of property, plant and equipment and non-cash capital lease additions, and exclude cash payments for business acquisitions.
|
(2)
|
Adjusted EBITDA is a non-GAAP financial measure that the Company provides as a supplement to its results of operations and related analysis, and should not be considered superior to, a substitute for or an alternative to any financial measure of performance prepared and presented in accordance with GAAP. Refer to the “Non-GAAP Financial Measures” section below for additional information regarding the Company’s use of non-GAAP financial measures.
|
(3)
|
Working capital of continuing operations is calculated using the first-in, first-out method for inventories, after adding back the last-in, first-out method (“LIFO”) reserve. The LIFO reserve was
$218
and
$217
as of
December 3, 2016
and
December 5, 2015
, respectively. Working capital of discontinued operations was
$89
and
$94
as of
December 3, 2016
and
December 5, 2015
, respectively.
|
(4)
|
Total assets of continuing operations are calculated as Total assets of the Company excluding current assets and long-term assets of discontinued operations. Total assets of discontinued operations were
$985
and
$990
as of
December 3, 2016
and
December 5, 2015
, respectively.
|
(5)
|
Total debt and capital lease obligations are calculated as Total debt and capital lease obligations of the Company excluding Total debt and capital leases from discontinued operations of $10 and $10 as of
December 3, 2016
and
December 5, 2015
, respectively.
|
(6)
|
Wholesale secondary stores is defined as a customer location that falls under a certain dollar threshold of Wholesale sales for each of the last three fiscal periods in a given quarter.
|
|
Third Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||||||||||
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
Variance
|
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
|
Variance
|
|||||||||||||
Wholesale
|
$
|
1,906
|
|
|
$
|
1,902
|
|
|
$
|
4
|
|
|
$
|
5,912
|
|
|
$
|
6,195
|
|
|
$
|
(283
|
)
|
Retail
|
1,060
|
|
|
1,097
|
|
|
(37
|
)
|
|
3,524
|
|
|
3,662
|
|
|
(138
|
)
|
||||||
Corporate
|
37
|
|
|
46
|
|
|
(9
|
)
|
|
137
|
|
|
159
|
|
|
(22
|
)
|
||||||
Total Net sales
|
$
|
3,003
|
|
|
$
|
3,045
|
|
|
$
|
(42
|
)
|
|
$
|
9,573
|
|
|
$
|
10,016
|
|
|
$
|
(443
|
)
|
|
December 3,
2016 (12 weeks) |
|
December 3,
2016 (40 weeks) |
||
Identical store sales percent variance
(1)
|
(5.7
|
)%
|
|
(5.3
|
)%
|
Average basket percent variance
(2)
|
(1.9
|
)%
|
|
(0.9
|
)%
|
Customer count percent variance
(3)
|
(3.8
|
)%
|
|
(4.4
|
)%
|
(1)
|
Retail identical store sales are defined as net sales from stores operating for four full quarters, including store expansions and excluding fuel and planned store dispositions.
|
(2)
|
Average basket is defined as the average purchases by our customers per transaction within our Retail stores operating for four full quarters, including store expansions and excluding fuel and planned store dispositions.
|
(3)
|
Customer count is defined as the number of transactions by our customers within our Retail stores operating for four full quarters, including store expansions and excluding fuel and planned store dispositions.
|
|
Third Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||||||||||
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
Variance
|
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
|
Variance
|
|||||||||||||
Wholesale
|
$
|
83
|
|
|
$
|
94
|
|
|
$
|
(11
|
)
|
|
$
|
271
|
|
|
$
|
299
|
|
|
$
|
(28
|
)
|
% of Wholesale sales
|
4.4
|
%
|
|
4.9
|
%
|
|
(0.5
|
)%
|
|
4.6
|
%
|
|
4.8
|
%
|
|
(0.2
|
)%
|
||||||
Retail
|
288
|
|
|
296
|
|
|
(8
|
)
|
|
944
|
|
|
985
|
|
|
(41
|
)
|
||||||
% of Retail sales
|
27.2
|
%
|
|
27.0
|
%
|
|
0.2
|
%
|
|
26.8
|
%
|
|
26.9
|
%
|
|
(0.1
|
)%
|
||||||
Corporate
|
36
|
|
|
46
|
|
|
(10
|
)
|
|
137
|
|
|
159
|
|
|
(22
|
)
|
||||||
Total Gross profit
|
$
|
407
|
|
|
$
|
436
|
|
|
$
|
(29
|
)
|
|
$
|
1,352
|
|
|
$
|
1,443
|
|
|
$
|
(91
|
)
|
% of total Net sales
|
13.6
|
%
|
|
14.3
|
%
|
|
(0.7
|
)%
|
|
14.1
|
%
|
|
14.4
|
%
|
|
(0.3
|
)%
|
|
Third Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||||||||||
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
Variance
|
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
|
Variance
|
|||||||||||||
Wholesale
|
$
|
52
|
|
|
$
|
54
|
|
|
$
|
(2
|
)
|
|
$
|
174
|
|
|
$
|
180
|
|
|
$
|
(6
|
)
|
% of Wholesale sales
|
2.7
|
%
|
|
2.8
|
%
|
|
(0.1
|
)%
|
|
2.9
|
%
|
|
2.9
|
%
|
|
—
|
%
|
||||||
Retail
|
(14
|
)
|
|
21
|
|
|
(35
|
)
|
|
(18
|
)
|
|
64
|
|
|
(82
|
)
|
||||||
% of Retail sales
|
(1.3
|
)%
|
|
2.0
|
%
|
|
(3.3
|
)%
|
|
(0.5
|
)%
|
|
1.8
|
%
|
|
(2.3
|
)%
|
||||||
Corporate
|
(37
|
)
|
|
(9
|
)
|
|
(28
|
)
|
|
(8
|
)
|
|
(21
|
)
|
|
13
|
|
||||||
Total Operating earnings
|
$
|
1
|
|
|
$
|
66
|
|
|
$
|
(65
|
)
|
|
$
|
148
|
|
|
$
|
223
|
|
|
$
|
(75
|
)
|
% of total Net sales
|
0.1
|
%
|
|
2.2
|
%
|
|
(2.1
|
)%
|
|
1.5
|
%
|
|
2.2
|
%
|
|
(0.7
|
)%
|
|
Third Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
December 3,
2016 (12 weeks) |
|
December 5,
2015 (12 weeks) |
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
||||||||
Net (loss) earnings from continuing operations
|
$
|
(11
|
)
|
|
$
|
16
|
|
|
$
|
21
|
|
|
$
|
54
|
|
Less net earnings attributable to noncontrolling interests
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(6
|
)
|
||||
Income tax (benefit) provision
|
(27
|
)
|
|
6
|
|
|
(11
|
)
|
|
24
|
|
||||
Interest expense, net
|
40
|
|
|
45
|
|
|
141
|
|
|
148
|
|
||||
Depreciation and amortization
|
48
|
|
|
49
|
|
|
159
|
|
|
161
|
|
||||
LIFO charge
|
1
|
|
|
1
|
|
|
3
|
|
|
6
|
|
||||
Pension settlement charge
(1)
|
41
|
|
|
—
|
|
|
41
|
|
|
—
|
|
||||
Goodwill and intangible asset impairment charges
(2)
|
15
|
|
|
6
|
|
|
15
|
|
|
6
|
|
||||
Store closure charges and costs
(3)
|
1
|
|
|
1
|
|
|
5
|
|
|
1
|
|
||||
Severance costs
(4)
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
6
|
|
||||
Sales and use tax refunds
(5)
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Supply agreement termination fees
(6)
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
107
|
|
|
$
|
125
|
|
|
$
|
359
|
|
|
$
|
400
|
|
(1)
|
Pension settlement charge reflects lump sum settlement payments made to certain deferred vested pension plan participants under a lump sum payment option window offered by the Company.
|
(2)
|
The goodwill impairment charge relates to the Company's Retail business as a result of an interim impairment review conducted during the third quarter of fiscal 2017. The intangible asset impairment charge relates to the Company's non-exercise of certain options to purchase operating assets.
|
(3)
|
Store closure charges and costs include impairment, severance and related costs due to store closures.
|
(4)
|
Severance costs include separation-related costs for former employees.
|
(5)
|
Sales and use tax refunds reflect refunds received related to prior years.
|
(6)
|
Supply agreement termination fees reflect cash gains related to the termination of supply agreements.
|
•
|
Unused available credit under the Revolving ABL Credit Facility decreased to
$675
from
$744
as of
December 3, 2016
compared to
February 27, 2016
.
|
•
|
Total debt was
$2,327
and
$2,297
as of
December 3, 2016
and
February 27, 2016
, respectively, net of unamortized debt financing costs and original issue discount, under senior secured credit agreements and debentures.
|
•
|
In connection with the sale of Save-A-Lot and subsequent to the third quarter of fiscal 2017, the Company received proceeds from the sale of approximately $1,300 in cash, including estimated customary closing adjustments, and used the proceeds to:
|
◦
|
prepay $832 of outstanding loans under the Secured Term Loan Facility comprised of (1) 100% of the first $750 of Net Cash Proceeds (as defined in the facility) received and (2) $82 from 50% of the Net Cash Proceeds in excess of $750 that were up to an aggregate amount that reduced the Company's Total Secured Leverage Ratio on a pro forma basis after giving effect to such prepayment to be no higher than 1.50:1.00;
|
◦
|
contribute $25 to the SUPERVALU Retirement Plan, and the Company is further obligated to make additional payments of $25 and $10 on or before March 1, 2017 and November 15, 2017, respectively, under an agreement with the PBGC; and
|
◦
|
pay off the remaining balance of the Revolving ABL Credit Facility with proceeds from the sale of Save-A-Lot, bringing the unused available credit to $841 as of December 5, 2016.
|
•
|
Subsequent to the sale of Save-A-Lot and the related Secured Term Loan Facility prepayments described above, no scheduled debt maturities or required prepayments are due in the remainder of fiscal 2017.
|
•
|
Payments to reduce capital lease obligations are expec
ted to be $4 for the re
mainder of fiscal 2017 and approxi
mately $26 in fiscal 2018.
|
•
|
Working capital decreased
$866
to a working capital deficit of
$618
as of
December 3, 2016
from a positive working capital of
$248
as of
February 27, 2016
, excluding the impacts of the LIFO reserve, primarily due to the increase in current maturities of long-term debt under the Secured Term Loan Facility and the Revolving ABL Credit Facility and higher levels of accounts payable, partially offset by higher inventories within Wholesale and Retail.
|
•
|
Management expects that the Company will be able to fund debt maturities through internally generated funds, borrowings under the Revolving ABL Credit Facility, additional term loans under the Secured Term Loan Facility (subject to identifying term loan lenders or other institutional lenders and satisfying certain terms and conditions) or through new debt issuances.
|
•
|
No minimum pension contributions are required under ERISA for fiscal 2017; however, the Company has agreed to make additional contributions pursuant to its agreement with the PBGC, as discussed below.
|
|
Year-To-Date Ended
|
||||||||||
|
December 3,
2016 (40 weeks) |
|
December 5,
2015 (40 weeks) |
|
Variance
|
||||||
Cash flow activities
|
|
|
|
|
|
||||||
Net cash provided by operating activities – continuing operations
|
$
|
147
|
|
|
$
|
154
|
|
|
$
|
(7
|
)
|
Net cash used in investing activities – continuing operations
|
(136
|
)
|
|
(141
|
)
|
|
5
|
|
|||
Net cash used in financing activities – continuing operations
|
(8
|
)
|
|
(33
|
)
|
|
25
|
|
|||
Net cash provided by discontinued operations
|
4
|
|
|
40
|
|
|
(36
|
)
|
|||
Net increase in cash and cash equivalents
|
7
|
|
|
20
|
|
|
(13
|
)
|
|||
Cash and cash equivalents at beginning of period
|
57
|
|
|
114
|
|
|
(57
|
)
|
|||
Cash and cash equivalents at the end of period
|
$
|
64
|
|
|
$
|
134
|
|
|
$
|
(70
|
)
|
|
Payments Due Per Period
|
||||||||||||||||||||||
|
Total
|
|
Remaining Fiscal 2017
|
|
Fiscal 2018
|
|
Fiscal 2019-2020
|
|
Fiscal 2021-2022
|
|
Thereafter
|
||||||||||||
Contractual obligations
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
(3)
|
$
|
1,274
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
524
|
|
|
$
|
400
|
|
|
$
|
350
|
|
Interest on long-term debt
(4)
|
361
|
|
|
6
|
|
|
86
|
|
|
146
|
|
|
68
|
|
|
55
|
|
||||||
Operating leases
(5)
|
336
|
|
|
11
|
|
|
64
|
|
|
107
|
|
|
67
|
|
|
87
|
|
||||||
Capital leases
(6)
|
271
|
|
|
7
|
|
|
41
|
|
|
74
|
|
|
55
|
|
|
94
|
|
||||||
Purchase obligations
(7)
|
275
|
|
|
107
|
|
|
90
|
|
|
58
|
|
|
20
|
|
|
—
|
|
||||||
Self-insurance obligations
(8)
|
74
|
|
|
5
|
|
|
22
|
|
|
21
|
|
|
10
|
|
|
16
|
|
||||||
Total contractual obligations
|
$
|
2,591
|
|
|
$
|
136
|
|
|
$
|
303
|
|
|
$
|
930
|
|
|
$
|
620
|
|
|
$
|
602
|
|
(1)
|
Because the timing of future payments beyond fiscal 2018 cannot be reasonably determined, contractual obligations payments due per period presented here exclude the Company’s discretionary funding of its pension and required funding of its postretirement benefit obligations, which totaled
$2 for fiscal
2017 year-to-date, and multiemployer pension plan contributions, which totaled
$31
for fiscal 2017 year-to-date. Pension and postretirement benefit obligations were $436 as
of
December 3, 2016
. The Company expects to contribute
$30
to
$35
to pension and postretirement benefit plans during fiscal
2017
, but is not required to make minimum pension contributions.
In connection with the Sale, the Company entered into an agreement with the PBGC under which, among other things, the Company has agreed to make certain contributions to its qualified pension plan (the “SUPERVALU Retirement Plan”) in excess of any required minimum contributions. Subsequent to December 3, 2016, the Company contributed
$25
to the SUPERVALU Retirement Plan pursuant to the agreement with the PBGC. In addition, under this same agreement with the PBGC, the Company is obligated to make additional payments of
$25
and
$10
on or before March 1, 2017 and November 15, 2017, respectively.
|
(2)
|
Unrecognized tax benefits, which totaled $6
6 as
of
December 3, 2016
, were excluded from the contractual obligations table because an estimate of the timing of future tax settlements cannot be reasonably determined.
|
(3)
|
Long-term debt amounts exclude any original issue discounts and deferred financing costs. Long-term debt payments due per period for fiscal 2018 through thereafter exclude any Excess Cash Flow prepayments required under the provisions of the Secured Term Loan Facility because the amount of future prepayment amounts, if any, are not reasonably estimable as of
December 3, 2016
.
|
(4)
|
Amounts include contractual interest payments using the interest rate as of
December 3, 2016
applicable to the Company’s variable interest debt instruments (including variable interest rates under the Secured Term Loan Facility that have been swapped to fixed interest rates) and stated fixed rates for all other debt instruments.
|
(5)
|
Represents the minimum rents payable under operating leases, excluding common area maintenance, insurance or tax payments, for which the Company is also obligated, offset by minimum subtenant rentals of $58, $2, $13, $19, $8 and $16, respectively.
|
(6)
|
Represents the minimum payments under capital leases, excluding common area maintenance, insurance or tax payments, for which the Company is also obligated, offset by minimum subtenant rentals of $21, $1, $5, $5, $4 and $6, respectively.
|
(7)
|
The Company’s purchase obligations include various obligations that have annual purchase commitments of $1 or greater. As of
December 3, 2016
, future purchase obligations existed that primarily 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 commitments. The majority of the Company's supply contracts are short-term in nature and relate to fixed assets, information technology and contracts to purchase product for resale. These supply contracts typically include either volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations. The supply contracts that are cancelable have not been included above.
|
(8)
|
The Company’s insurance reserves include the undiscounted obligations related to workers’ compensation, general and automobile liabilities at the estimated ultimate cost of reported claims and claims incurred but not yet reported and related expenses.
|
•
|
The Company’s ability to attract and retain customers, and the success of the Company’s wholesale customers and their ability to maintain and grow sales
|
•
|
Increased competition resulting from consolidation and new store openings in the grocery industry, and the Company’s ability to effectively respond
|
•
|
Competition from other food or drug retail chains, supercenters, hard discount, dollar stores, online retailers, non-traditional competitors and alternative formats in the Company’s markets
|
•
|
Customer reaction to the increased presence of competitors, including non-traditional competitors, in the Company’s markets
|
•
|
Competition for employees, store sites and products
|
•
|
The ability of the Company’s Wholesale business to maintain or increase sales and profitability due to wholesaler competition, increased competition faced by customers and increased customer self-distribution
|
•
|
The Company's ability to maintain or improve levels of identical store sales and operating margins
|
•
|
Changes in economic conditions or consumer preferences that affect consumer spending or buying habits
|
•
|
The success of the Company’s promotional and sales programs and the Company’s ability to respond to the promotional and pricing practices of competitors
|
•
|
The Company's ability to keep pace with changing customer expectations and new developments and technology investments by competitors
|
•
|
The Company’s ability to identify and effectively execute on performance improvement and customer service initiatives
|
•
|
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 successfully opening new locations
|
•
|
The ability to successfully execute on initiatives involving acquisitions or dispositions
|
•
|
The Company’s ability to continue to become a more cost-efficient organization
|
•
|
The Company’s ability to respond appropriately to competitors’ initiatives
|
•
|
The Company’s ability to satisfy its obligations efficiently under the Services Agreement for its former Save-A-Lot business
|
•
|
The impact of the Company’s substantial indebtedness, including the restrictive operating covenants in the underlying debt instruments, on its business and financial flexibility
|
•
|
The Company’s ability to comply with debt covenants or to refinance or amend the Company’s debt obligations
|
•
|
A downgrade in the Company’s debt ratings, which may increase the cost of borrowing or adversely affect the Company’s ability to access one or more financial markets
|
•
|
The availability of favorable credit and trade terms
|
•
|
Increased operating costs resulting from rising employee benefit costs
|
•
|
Potential increases in health plan costs resulting from health care reform
|
•
|
Pension funding obligations related to current and former employees of the Company and the Company’s divested operations
|
•
|
Required funding of multiemployer pension plans and any withdrawal liability
|
•
|
The effect of the financial condition of the Company’s pension plans on the Company’s debt ratings
|
•
|
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 from labor disputes
|
•
|
The Company's ability to effectively manage its cost structure and identify new revenue opportunities as the Transition Services Agreement with each of Albertson’s LLC and NAI (collectively, the “TSA”) wind down and with the wind down of the Transition Services Agreement with Haggen in the second quarter of fiscal 2017
|
•
|
The Company's ability to provide services and transition and wind down services to NAI and Albertson’s LLC under the TSA and the letter agreement regarding the transition and wind down of the TSA in an efficient manner that is not disruptive to the Company, while eliminating costs directly and not directly tied to providing these services
|
•
|
The Company's ability to attract and retain qualified personnel to perform services under the TSA
|
•
|
The effect of the information technology intrusions that also impacted Albertson’s LLC and NAI
|
•
|
Impact of the 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 wholesale customers
|
•
|
Dependence of the Company’s businesses on computer hardware and software systems that are vulnerable to technical malfunction or security breach by computer hackers and cyber terrorists
|
•
|
Risk of misappropriation of sensitive data, including customer and employee data, as a result of the information technology intrusions or any future cyber-attack or breach and potential related claims
|
•
|
Costs of responding to inquiries, claims or enforcement actions in connection with the information technology intrusions or any future attack or breach resulting in fees and penalties, the loss, damage or misappropriation of information, and potential related damage to the Company’s reputation
|
•
|
Inability to timely obtain future PCI DSS report on compliance that could result in fines or assessments
|
•
|
Costs of complying with stricter privacy and information security laws
|
•
|
Ability of the information technology systems of the Company or its vendors to operate properly and to prevent, contain or detect cyber-attacks or security breaches
|
•
|
Difficulties in developing, maintaining or upgrading information technology systems
|
•
|
Major disasters, business disruptions or losses resulting from failure of these systems to perform as anticipated for any reason or data theft, information espionage, or other criminal activity directed at the Company’s computer or communications systems
|
•
|
Inability to keep pace with changing customer expectations and new developments and technology investments by the Company’s competitors, including relating to the increase in information sharing and multichannel retailing
|
•
|
Worsening economic conditions, consumer confidence or unemployment rates, each of which affect consumer spending or buying habits
|
•
|
Increases in unemployment, insurance, healthcare or energy costs and changes in commodity prices, which could impact consumer spending or buying habits and the cost of doing business
|
•
|
Increases in interest rates, labor costs and tax rates, and other changes in applicable law
|
•
|
Food and drug inflation or deflation
|
•
|
The Company's ability to address the compression of pharmacy gross margins
|
•
|
Costs of compliance with existing laws and regulations and changes in applicable laws and regulations that impose additional requirements or restrictions on the operation of the Company’s businesses
|
•
|
The ability to timely obtain permits, comply with government regulations or make capital expenditures required to maintain compliance with government regulations, including those governing ethical, anti-bribery and similar business practices
|
•
|
Potential costs of compliance with additional foreign laws and regulations if the Company seeks and attains a larger international footprint
|
•
|
Potential costs of compliance with environmental laws and regulations, including relating to disposal of hazardous waste and any required removal or remediation of contamination at current or former locations
|
•
|
Events that give rise to actual or potential food contamination, drug contamination or foodborne illness or injury or any adverse publicity relating to these types of concerns, whether valid or not
|
•
|
Potential recall costs and product liability claims or claims that the Company's products are not of the quality or composition claimed
|
•
|
Unfavorable outcomes and the costs to defend litigation, governmental or administrative proceedings or other disputes, including those related to the information technology intrusions experienced by the Company
|
•
|
Adverse publicity related to such unfavorable outcomes
|
•
|
Risks related to infringement of the Company's intellectual property rights
|
•
|
Property damage or business disruption resulting from severe weather conditions and natural disasters that affect the Company and the Company’s customers or suppliers
|
•
|
Unseasonably adverse climate conditions that impact the availability or cost of certain products in the grocery supply chain
|
•
|
The Company’s ability to effectively maintain its supply chain and distribution network without interruption
|
•
|
Disruptions due to weather, product recalls, crop conditions, regulatory actions, supplier instability, transportation interruptions, labor supply or vendor disputes
|
•
|
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
|
•
|
Variability in actuarial projections regarding workers’ compensation liability and associated medical costs and automobile and general liability
|
•
|
Potential increase in the number or severity of claims for which the Company is self-insured
|
•
|
Adequacy of cybersecurity insurance maintained by the Company to offset any losses or damages related to the information technology intrusions and any future intrusions experienced by the Company
|
•
|
Availability and cost of energy and fuel to store and transport products
|
•
|
Volatility of fuel, energy and natural gas prices
|
•
|
Risks associated with possession of compressed natural gas equipment and a fueling station
|
•
|
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 intangible assets, including goodwill, and tangible assets, including property, plant and equipment
|
•
|
Fluctuations in the Company’s stock price related to actual or perceived operating performance, any of the factors listed above or general stock market fluctuations
|
(in millions, except shares and per share amounts)
Period
(1)
|
|
Total Number of Shares Purchased
(2)
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
|
||||||
First four weeks
|
|
|
|
|
|
|
|
|
||||||
September 11, 2016 to October 8, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Second four weeks
|
|
|
|
|
|
|
|
|
||||||
October 9, 2016 to November 5, 2016
|
|
5,344
|
|
|
$
|
4.47
|
|
|
—
|
|
|
$
|
—
|
|
Third four weeks
|
|
|
|
|
|
|
|
|
||||||
November 6, 2016 to December 3, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Totals
|
|
5,344
|
|
|
$
|
4.47
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
The reported periods conform to the Company's fiscal calendar composed of thirteen 28-day periods. The
third
quarter of fiscal
2017
contains three 28-day periods.
|
(2)
|
These amounts include the deemed surrender by participants in the Company's compensatory stock plans of 5,344 shares of previously issued common stock. These are from the vesting of restricted stock awards and restricted stock units granted under such plans.
|
2.1
|
|
Agreement and Plan of Merger, dated as of October 16, 2016, by and among Smith Acquisition Corp., Smith Merger Sub Corp., Moran Foods, LLC and SUPERVALU INC. (incorporated by referenced to Exhibit 2.1 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2016)*
|
|
|
|
2.2
|
|
Separation Agreement, dated as of October 16, 2016, by and among SUPERVALU INC. and Moran Foods, LLC (incorporated by referenced to Exhibit 2.2 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2016)*
|
|
|
|
12.1
|
|
Ratio of earnings to fixed charges.
|
|
|
|
31.1
|
|
Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
The following information from the SUPERVALU INC. Quarterly Report on Form 10-Q for the fiscal quarter ended December 3, 2016, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Segment Financial Information, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Balance Sheets, (v) the Condensed Consolidated Statements of Stockholders’ Deficit, (vi) the Condensed Consolidated Statements of Cash Flows and (vii) the Notes to Condensed Consolidated Financial Statements.
|
|
|
|
SUPERVALU INC. (Registrant)
|
|
|
|
|
Dated: January 11, 2017
|
|
|
/s/ BRUCE H. BESANKO
|
|
|
|
Bruce H. Besanko
Executive Vice President, Chief Operating Officer and Chief Financial Officer
(principal financial officer)
|
|
|
|
SUPERVALU INC. (Registrant)
|
|
|
|
|
Dated: January 11, 2017
|
|
|
/s/ SUSAN S. GRAFTON
|
|
|
|
Susan S. Grafton
Senior Vice President, Finance, and Chief Accounting Officer
(principal accounting officer)
|
2.1
|
|
Agreement and Plan of Merger, dated as of October 16, 2016, by and among Smith Acquisition Corp., Smith Merger Sub Corp., Moran Foods, LLC and SUPERVALU INC. (incorporated by referenced to Exhibit 2.1 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2016)*
|
|
|
|
2.2
|
|
Separation Agreement, dated as of October 16, 2016, by and among SUPERVALU INC. and Moran Foods, LLC (incorporated by referenced to Exhibit 2.2 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2016)*
|
|
|
|
12.1
|
|
Ratio of earnings to fixed charges.
|
|
|
|
31.1
|
|
Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
The following information from the SUPERVALU INC. Quarterly Report on Form 10-Q for the fiscal quarter ended December 3, 2016, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Segment Financial Information, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Balance Sheets, (v) the Condensed Consolidated Statements of Stockholders’ Deficit, (vi) the Condensed Consolidated Statements of Cash Flows and (vii) the Notes to Condensed Consolidated Financial Statements.
|
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