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FORM 10-Q
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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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
¨
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Non-accelerated filer
¨
|
|
Smaller reporting company
¨
|
|
Emerging growth company
¨
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|
Item
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Page
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1.
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2.
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||
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3.
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4.
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||
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1.
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||
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1A.
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||
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2.
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||
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3.
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||
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4.
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||
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5.
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||
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6.
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||
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Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
||||||||
Net sales
|
$
|
3,512
|
|
|
$
|
3,449
|
|
|
$
|
8,267
|
|
|
$
|
6,966
|
|
Cost of sales
|
3,218
|
|
|
3,109
|
|
|
7,545
|
|
|
6,195
|
|
||||
Gross profit
|
294
|
|
|
340
|
|
|
722
|
|
|
771
|
|
||||
Selling and administrative expenses
|
356
|
|
|
323
|
|
|
784
|
|
|
710
|
|
||||
Operating (loss) earnings
|
(62
|
)
|
|
17
|
|
|
(62
|
)
|
|
61
|
|
||||
Interest expense, net
|
27
|
|
|
30
|
|
|
76
|
|
|
73
|
|
||||
Net periodic benefit income, excluding service cost
|
(9
|
)
|
|
(12
|
)
|
|
(21
|
)
|
|
(29
|
)
|
||||
Equity in earnings of unconsolidated affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
(Loss) earnings from continuing operations before income taxes
|
(80
|
)
|
|
(1
|
)
|
|
(117
|
)
|
|
19
|
|
||||
Income tax (benefit) provision
|
(25
|
)
|
|
—
|
|
|
(35
|
)
|
|
11
|
|
||||
Net (loss) earnings from continuing operations
|
(55
|
)
|
|
(1
|
)
|
|
(82
|
)
|
|
8
|
|
||||
(Loss) income from discontinued operations, net of tax
|
(3
|
)
|
|
(24
|
)
|
|
3
|
|
|
(21
|
)
|
||||
Net loss including noncontrolling interests
|
(58
|
)
|
|
(25
|
)
|
|
(79
|
)
|
|
(13
|
)
|
||||
Less net loss (earnings) attributable to noncontrolling interests
|
1
|
|
|
—
|
|
|
1
|
|
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(1
|
)
|
||||
Net loss attributable to SUPERVALU INC.
|
$
|
(57
|
)
|
|
$
|
(25
|
)
|
|
$
|
(78
|
)
|
|
$
|
(14
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic net loss per share attributable to SUPERVALU INC.:
|
|||||||||||||||
Continuing operations
|
$
|
(1.41
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(2.11
|
)
|
|
$
|
0.20
|
|
Discontinued operations
|
$
|
(0.08
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.55
|
)
|
Basic net loss per share
|
$
|
(1.49
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
(2.04
|
)
|
|
$
|
(0.36
|
)
|
Diluted net loss per share attributable to SUPERVALU INC.:
|
|||||||||||||||
Continuing operations
|
$
|
(1.41
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(2.11
|
)
|
|
$
|
0.20
|
|
Discontinued operations
|
$
|
(0.08
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.55
|
)
|
Diluted net loss per share
|
$
|
(1.49
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
(2.04
|
)
|
|
$
|
(0.36
|
)
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
39
|
|
|
38
|
|
|
39
|
|
|
38
|
|
||||
Diluted
|
39
|
|
|
38
|
|
|
39
|
|
|
38
|
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
||||||||
Net loss including noncontrolling interests
|
$
|
(58
|
)
|
|
$
|
(25
|
)
|
|
$
|
(79
|
)
|
|
$
|
(13
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Recognition of pension and other postretirement benefit obligations
(1)
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Recognition of interest rate swap cash flow hedge
(2)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Comprehensive loss including noncontrolling interest
|
(58
|
)
|
|
(25
|
)
|
|
(79
|
)
|
|
(13
|
)
|
||||
Less comprehensive loss (income) attributable to noncontrolling interests
|
1
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
||||
Comprehensive loss attributable to SUPERVALU INC.
|
$
|
(57
|
)
|
|
$
|
(25
|
)
|
|
$
|
(78
|
)
|
|
$
|
(14
|
)
|
(1)
|
Amounts are net of tax expense (benefit) of
$0
,
$0
,
$0
and
$(1)
for the
second
quarters of fiscal
2019
and
2018
, and for fiscal
2019
and
2018
year-to-date, respectively.
|
(2)
|
Amounts are net of tax expense (benefit) of
$0
,
$(1)
,
$0
and
$0
for the
second
quarters of fiscal
2019
and
2018
, and for fiscal
2019
and
2018
year-to-date, respectively.
|
|
September 8, 2018
|
|
February 24, 2018
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
36
|
|
|
$
|
41
|
|
Receivables, net
|
638
|
|
|
590
|
|
||
Inventories, net
|
1,014
|
|
|
981
|
|
||
Other current assets
|
134
|
|
|
119
|
|
||
Current assets of discontinued operations
|
63
|
|
|
130
|
|
||
Total current assets
|
1,885
|
|
|
1,861
|
|
||
Property, plant and equipment, net
|
994
|
|
|
1,342
|
|
||
Goodwill
|
775
|
|
|
780
|
|
||
Intangible assets, net
|
116
|
|
|
131
|
|
||
Deferred tax assets
|
95
|
|
|
63
|
|
||
Other assets
|
128
|
|
|
126
|
|
||
Long-term assets of discontinued operations
|
63
|
|
|
84
|
|
||
Total assets
|
$
|
4,056
|
|
|
$
|
4,387
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
1,158
|
|
|
$
|
1,139
|
|
Accrued vacation, compensation and benefits
|
179
|
|
|
187
|
|
||
Current maturities of long-term debt and capital lease obligations
|
30
|
|
|
34
|
|
||
Other current liabilities
|
132
|
|
|
106
|
|
||
Current liabilities of discontinued operations
|
62
|
|
|
82
|
|
||
Total current liabilities
|
1,561
|
|
|
1,548
|
|
||
Long-term debt
|
1,423
|
|
|
1,724
|
|
||
Long-term capital lease obligations
|
134
|
|
|
149
|
|
||
Pension and other postretirement benefit obligations
|
239
|
|
|
265
|
|
||
Long-term tax liabilities
|
53
|
|
|
44
|
|
||
Other long-term liabilities
|
197
|
|
|
133
|
|
||
Long-term liabilities of discontinued operations
|
14
|
|
|
17
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Common stock, $0.01 par value: 57 shares authorized; 39 and 38 shares issued, respectively
|
—
|
|
|
—
|
|
||
Capital in excess of par value
|
2,855
|
|
|
2,848
|
|
||
Treasury stock, at cost, 0 and 0 shares, respectively
|
(1
|
)
|
|
(3
|
)
|
||
Accumulated other comprehensive loss
|
(271
|
)
|
|
(210
|
)
|
||
Accumulated deficit
|
(2,147
|
)
|
|
(2,130
|
)
|
||
Total SUPERVALU INC. stockholders’ equity
|
436
|
|
|
505
|
|
||
Noncontrolling interests
|
(1
|
)
|
|
2
|
|
||
Total stockholders’ equity
|
435
|
|
|
507
|
|
||
Total liabilities and stockholders’ equity
|
$
|
4,056
|
|
|
$
|
4,387
|
|
|
Common
Stock
|
|
Capital in Excess of Par Value
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Accumulated
Deficit
|
|
SUPERVALU INC.
Stockholders’
Equity
|
|
Non-controlling
Interests
|
|
Total
Stockholders’
Equity
|
||||||||||||||||
Balances as of February 25, 2017
|
$
|
—
|
|
|
$
|
2,831
|
|
|
$
|
(2
|
)
|
|
$
|
(278
|
)
|
|
$
|
(2,175
|
)
|
|
$
|
376
|
|
|
$
|
7
|
|
|
$
|
383
|
|
Net (loss) earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
|
1
|
|
|
(13
|
)
|
||||||||
Other comprehensive income, net of tax of $0
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Stock-based compensation
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||||||
Restricted stock issued and vested
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||||
Restricted stock forfeitures
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||||
Acquisition of noncontrolling interests
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(4
|
)
|
||||||||
Balances as of September 9, 2017
|
$
|
—
|
|
|
$
|
2,840
|
|
|
$
|
(3
|
)
|
|
$
|
(278
|
)
|
|
$
|
(2,189
|
)
|
|
$
|
370
|
|
|
$
|
3
|
|
|
$
|
373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balances as of February 24, 2018
|
$
|
—
|
|
|
$
|
2,848
|
|
|
$
|
(3
|
)
|
|
$
|
(210
|
)
|
|
$
|
(2,130
|
)
|
|
$
|
505
|
|
|
$
|
2
|
|
|
$
|
507
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78
|
)
|
|
(78
|
)
|
|
(1
|
)
|
|
(79
|
)
|
||||||||
Cumulative effect of accounting standard adoptions
|
—
|
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
|
61
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other comprehensive income, net of tax of $0
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Sales of common stock under option plans
|
—
|
|
|
(1
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Stock-based compensation
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||||
Shares traded for taxes and other
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||||
Balances as of September 8, 2018
|
$
|
—
|
|
|
$
|
2,855
|
|
|
$
|
(1
|
)
|
|
$
|
(271
|
)
|
|
$
|
(2,147
|
)
|
|
$
|
436
|
|
|
$
|
(1
|
)
|
|
$
|
435
|
|
|
Year-To-Date Ended
|
||||||
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
||||
Cash flows from operating activities
|
|
|
|
||||
Net loss including noncontrolling interests
|
$
|
(79
|
)
|
|
$
|
(13
|
)
|
Income (loss) from discontinued operations, net of tax
|
3
|
|
|
(21
|
)
|
||
Net (loss) earnings from continuing operations
|
(82
|
)
|
|
8
|
|
||
Adjustments to reconcile Net (loss) earnings from continuing operations to Net cash (used in) provided by operating activities – continuing operations:
|
|
|
|
||||
Asset impairment and other charges
|
69
|
|
|
—
|
|
||
Loss on debt extinguishment
|
7
|
|
|
5
|
|
||
Net gain on sale of assets and exits of surplus leases
|
(7
|
)
|
|
(5
|
)
|
||
Depreciation and amortization
|
113
|
|
|
100
|
|
||
LIFO charge
|
4
|
|
|
2
|
|
||
Deferred income taxes
|
4
|
|
|
6
|
|
||
Stock-based compensation
|
12
|
|
|
10
|
|
||
Net pension and other postretirement income
|
(21
|
)
|
|
(29
|
)
|
||
Contributions to pension and other postretirement benefit plans
|
(6
|
)
|
|
(1
|
)
|
||
Other adjustments
|
6
|
|
|
6
|
|
||
Changes in operating assets and liabilities, net of effects from business acquisitions
|
(115
|
)
|
|
(32
|
)
|
||
Net cash (used in) provided by operating activities—continuing operations
|
(16
|
)
|
|
70
|
|
||
Net cash provided by (used in) operating activities—discontinued operations
|
6
|
|
|
(10
|
)
|
||
Net cash (used in) provided by operating activities
|
(10
|
)
|
|
60
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Proceeds from sale of assets
|
386
|
|
|
4
|
|
||
Purchases of property, plant and equipment
|
(110
|
)
|
|
(109
|
)
|
||
Payments for business acquisitions
|
—
|
|
|
(105
|
)
|
||
Other
|
—
|
|
|
2
|
|
||
Net cash provided by (used in) investing activities—continuing operations
|
276
|
|
|
(208
|
)
|
||
Net cash provided by (used in) investing activities—discontinued operations
|
59
|
|
|
(5
|
)
|
||
Net cash provided by (used in) investing activities
|
335
|
|
|
(213
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from revolving credit facility
|
2,479
|
|
|
80
|
|
||
Payments on revolving credit facility
|
(2,423
|
)
|
|
(80
|
)
|
||
Proceeds from issuance of debt
|
18
|
|
|
875
|
|
||
Payments of debt and capital lease obligations
|
(398
|
)
|
|
(824
|
)
|
||
Proceeds from sale of common stock
|
1
|
|
|
—
|
|
||
Payments for shares traded for taxes
|
(3
|
)
|
|
(3
|
)
|
||
Payments for debt financing costs
|
(4
|
)
|
|
(9
|
)
|
||
Payments to acquire noncontrolling interest
|
—
|
|
|
(5
|
)
|
||
Distributions to noncontrolling interests
|
(2
|
)
|
|
(3
|
)
|
||
Net cash (used in) provided by financing activities—continuing operations
|
(332
|
)
|
|
31
|
|
||
Net cash used in financing activities—discontinued operations
|
(1
|
)
|
|
(1
|
)
|
||
Net cash (used in) provided by financing activities
|
(333
|
)
|
|
30
|
|
||
Net decrease in cash and cash equivalents
|
(8
|
)
|
|
(123
|
)
|
||
Cash and cash equivalents at beginning of period
|
48
|
|
|
332
|
|
||
Cash and cash equivalents at end of period
|
$
|
40
|
|
|
$
|
209
|
|
Less cash and cash equivalents of discontinued operations at end of period
|
(4
|
)
|
|
(6
|
)
|
||
Cash and cash equivalents of continuing operations at end of period
|
$
|
36
|
|
|
$
|
203
|
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|||||||
Non-cash investing and financing activities were as follows:
|
|
|
|
||||
Purchases of property, plant and equipment included in Accounts payable
|
$
|
16
|
|
|
$
|
21
|
|
Capital lease asset additions
|
$
|
—
|
|
|
$
|
1
|
|
Interest and income taxes paid:
|
|
|
|
||||
Interest paid, net of amounts capitalized
|
$
|
67
|
|
|
$
|
63
|
|
Income taxes (refunded) paid, net
|
$
|
(2
|
)
|
|
$
|
48
|
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||||||||||
|
September 9, 2017
(12 weeks) |
|
September 9, 2017
(28 weeks) |
||||||||||||||||||||
|
As Previously Reported
|
|
Impact of ASU 2017-07 Adoption
|
|
As Recast
|
|
As Previously Reported
|
|
Impact of ASU 2017-07 Adoption
|
|
As Recast
|
||||||||||||
Selling and administrative expenses
|
$
|
311
|
|
|
$
|
12
|
|
|
$
|
323
|
|
|
$
|
681
|
|
|
$
|
29
|
|
|
$
|
710
|
|
Operating earnings
|
$
|
29
|
|
|
$
|
(12
|
)
|
|
$
|
17
|
|
|
$
|
90
|
|
|
$
|
(29
|
)
|
|
$
|
61
|
|
Net periodic benefit income, excluding service cost
|
$
|
—
|
|
|
$
|
(12
|
)
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
(29
|
)
|
|
$
|
(29
|
)
|
|
|
Second Quarter Ended September 8, 2018
|
|
Year-To-Date Ended September 8, 2018
|
||||||||||||||||||||||||||||
Product or service type
|
|
Wholesale
|
|
Retail
|
|
Corporate
|
|
Total
|
|
Wholesale
|
|
Retail
|
|
Corporate
|
|
Total
|
||||||||||||||||
Nonperishable grocery products
(1)
|
|
$
|
1,946
|
|
|
$
|
348
|
|
|
$
|
—
|
|
|
$
|
2,294
|
|
|
$
|
4,563
|
|
|
$
|
831
|
|
|
$
|
—
|
|
|
$
|
5,394
|
|
Perishable grocery products
(2)
|
|
843
|
|
|
230
|
|
|
—
|
|
|
1,073
|
|
|
1,977
|
|
|
551
|
|
|
—
|
|
|
2,528
|
|
||||||||
Pharmacy products
|
|
—
|
|
|
67
|
|
|
—
|
|
|
67
|
|
|
—
|
|
|
157
|
|
|
—
|
|
|
157
|
|
||||||||
Services revenue
|
|
30
|
|
|
3
|
|
|
25
|
|
|
58
|
|
|
71
|
|
|
8
|
|
|
65
|
|
|
144
|
|
||||||||
Equipment sales
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||||||
Other
|
|
9
|
|
|
2
|
|
|
—
|
|
|
11
|
|
|
22
|
|
|
4
|
|
|
—
|
|
|
26
|
|
||||||||
Net sales
|
|
$
|
2,837
|
|
|
$
|
650
|
|
|
$
|
25
|
|
|
$
|
3,512
|
|
|
$
|
6,651
|
|
|
$
|
1,551
|
|
|
$
|
65
|
|
|
$
|
8,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Type of customer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Retailers
|
|
$
|
2,734
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
2,759
|
|
|
$
|
6,409
|
|
|
$
|
—
|
|
|
$
|
65
|
|
|
$
|
6,474
|
|
Military
|
|
98
|
|
|
—
|
|
|
—
|
|
|
98
|
|
|
231
|
|
|
—
|
|
|
—
|
|
|
231
|
|
||||||||
Individuals
|
|
—
|
|
|
645
|
|
|
—
|
|
|
645
|
|
|
—
|
|
|
1,539
|
|
|
—
|
|
|
1,539
|
|
||||||||
Other
|
|
5
|
|
|
5
|
|
|
—
|
|
|
10
|
|
|
11
|
|
|
12
|
|
|
—
|
|
|
23
|
|
||||||||
Net sales
|
|
$
|
2,837
|
|
|
$
|
650
|
|
|
$
|
25
|
|
|
$
|
3,512
|
|
|
$
|
6,651
|
|
|
$
|
1,551
|
|
|
$
|
65
|
|
|
$
|
8,267
|
|
(1)
|
Includes such items as dry goods, dairy, frozen foods, beverages, general merchandise, specialty products, home, health and beauty care and candy.
|
(2)
|
Includes such items as meat, produce, deli, bakery and floral.
|
|
|
Second Quarter Ended September 9, 2017
|
|
Year-To-Date Ended September 9, 2017
|
||||||||||||||||||||||||||||
Product or service type
|
|
Wholesale
|
|
Retail
|
|
Corporate
|
|
Total
|
|
Wholesale
|
|
Retail
|
|
Corporate
|
|
Total
|
||||||||||||||||
Nonperishable grocery products
(1)
|
|
$
|
1,847
|
|
|
$
|
361
|
|
|
$
|
—
|
|
|
$
|
2,208
|
|
|
$
|
3,596
|
|
|
$
|
849
|
|
|
$
|
—
|
|
|
$
|
4,445
|
|
Perishable grocery products
(2)
|
|
850
|
|
|
236
|
|
|
—
|
|
|
1,086
|
|
|
1,610
|
|
|
555
|
|
|
—
|
|
|
2,165
|
|
||||||||
Pharmacy products
|
|
—
|
|
|
67
|
|
|
—
|
|
|
67
|
|
|
—
|
|
|
159
|
|
|
—
|
|
|
159
|
|
||||||||
Services revenue
|
|
27
|
|
|
5
|
|
|
40
|
|
|
72
|
|
|
55
|
|
|
10
|
|
|
95
|
|
|
160
|
|
||||||||
Equipment sales
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||||
Other
|
|
8
|
|
|
2
|
|
|
—
|
|
|
10
|
|
|
18
|
|
|
4
|
|
|
—
|
|
|
22
|
|
||||||||
Net sales
|
|
$
|
2,738
|
|
|
$
|
671
|
|
|
$
|
40
|
|
|
$
|
3,449
|
|
|
$
|
5,294
|
|
|
$
|
1,577
|
|
|
$
|
95
|
|
|
$
|
6,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Type of customer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Retailers
|
|
$
|
2,627
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
2,667
|
|
|
$
|
5,035
|
|
|
$
|
—
|
|
|
$
|
95
|
|
|
$
|
5,130
|
|
Military
|
|
106
|
|
|
—
|
|
|
—
|
|
|
106
|
|
|
249
|
|
|
—
|
|
|
—
|
|
|
249
|
|
||||||||
Individuals
|
|
—
|
|
|
664
|
|
|
—
|
|
|
664
|
|
|
—
|
|
|
1,563
|
|
|
—
|
|
|
1,563
|
|
||||||||
Other
|
|
5
|
|
|
7
|
|
|
—
|
|
|
12
|
|
|
10
|
|
|
14
|
|
|
—
|
|
|
24
|
|
||||||||
Net sales
|
|
$
|
2,738
|
|
|
$
|
671
|
|
|
$
|
40
|
|
|
$
|
3,449
|
|
|
$
|
5,294
|
|
|
$
|
1,577
|
|
|
$
|
95
|
|
|
$
|
6,966
|
|
(1)
|
Includes such items as dry goods, dairy, frozen foods, beverages, general merchandise, specialty products, home, health and beauty care and candy.
|
(2)
|
Includes such items as meat, produce, deli, bakery and floral.
|
|
September 8, 2018
|
|
February 24, 2018
|
||||
Customer accounts receivable
|
$
|
550
|
|
|
$
|
519
|
|
Customer notes receivable
|
19
|
|
|
15
|
|
||
Other receivables
|
81
|
|
|
70
|
|
||
Allowance for doubtful accounts
|
(12
|
)
|
|
(14
|
)
|
||
Accounts receivable, net
|
$
|
638
|
|
|
$
|
590
|
|
|
|
|
|
||||
Long-term notes receivable
|
$
|
41
|
|
|
$
|
39
|
|
|
As Originally Reported
|
|
As
Revised |
||||
Cash and cash equivalents
|
$
|
1
|
|
|
$
|
1
|
|
Accounts receivable
|
49
|
|
|
49
|
|
||
Inventories
|
48
|
|
|
48
|
|
||
Other current assets
|
4
|
|
|
4
|
|
||
Property, plant and equipment
|
84
|
|
|
94
|
|
||
Goodwill
|
44
|
|
|
39
|
|
||
Intangible assets
|
52
|
|
|
48
|
|
||
Deferred tax assets
|
(28
|
)
|
|
(29
|
)
|
||
Other assets
|
4
|
|
|
4
|
|
||
Accounts payable
|
(53
|
)
|
|
(53
|
)
|
||
Other current liabilities
|
(13
|
)
|
|
(13
|
)
|
||
Long-term debt and capital lease obligations
|
(60
|
)
|
|
(60
|
)
|
||
Other liabilities assumed
|
(1
|
)
|
|
(1
|
)
|
||
Total fair value of net assets acquired
|
131
|
|
|
131
|
|
||
Assumed obligations to make patronage payments to member-owners
|
5
|
|
|
5
|
|
||
Less cash acquired
|
(1
|
)
|
|
(1
|
)
|
||
Total consideration for acquisition, less cash acquired
|
$
|
135
|
|
|
$
|
135
|
|
|
Estimated Useful Life (in years)
|
|
Amounts Acquired
|
||
Customer relationships and supply agreements
|
15 years
|
|
$
|
43
|
|
Favorable operating leases
|
2-5 years
|
|
5
|
|
|
Total AG Florida finite-lived intangibles acquired
|
|
|
$
|
48
|
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||
|
September 9, 2017
(12 weeks) (1) |
|
September 9, 2017
(28 weeks) (1) |
||||
Net sales
|
$
|
3,663
|
|
|
$
|
8,532
|
|
Net earnings from continuing operations attributable to SUPERVALU INC.
|
$
|
—
|
|
|
$
|
5
|
|
Basic net (loss) earnings from continuing operations per share attributable to SUPERVALU INC.
|
$
|
(0.01
|
)
|
|
$
|
0.13
|
|
Diluted net (loss) earnings from continuing operations per share attributable to SUPERVALU INC.
|
$
|
(0.01
|
)
|
|
$
|
0.13
|
|
(1)
|
The unaudited pro forma financial information is based on Unified’s and AG Florida’s historical reporting periods. The results of operations attributable to Unified reflect the one week period and the 17 week period prior to the acquisition date of June 23, 2017 for the
second
quarter of fiscal
2018
and for fiscal
2018
year-to-date, respectively. The results of operations attributable to AG Florida reflect the 12 weeks and 28 weeks ended July 29, 2017 for the
second
quarter of fiscal
2018
and for fiscal
2018
year-to-date, respectively. Adjustments have been made to remove historical transaction costs from Unified’s and AG Florida’s historical income statements. No adjustments have been made for direct and indirect merger and integration costs that were incurred subsequent to the respective acquisition dates of Unified and AG Florida.
|
|
September 8,
2018 (28 weeks) |
||
Reserves for closed properties at beginning of the fiscal year
|
$
|
14
|
|
Additions
|
16
|
|
|
Payments
|
(4
|
)
|
|
Reserves for closed properties at the end of period
|
$
|
26
|
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
||||||||
Property, plant and equipment:
|
|
|
|
|
|
|
|
||||||||
Carrying value
|
$
|
145
|
|
|
$
|
—
|
|
|
$
|
150
|
|
|
$
|
—
|
|
Fair value measured using Level 3 inputs
|
100
|
|
|
—
|
|
|
101
|
|
|
—
|
|
||||
Impairment charge
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
February 24,
2018 |
|
Additions
|
|
Impairments
|
|
Other net
adjustments
|
|
September 8,
2018 |
||||||||||
Wholesale goodwill
|
$
|
780
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
775
|
|
|
September 8, 2018
|
|
February 24, 2018
|
||||||||||||||||||||
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Customer lists, supply agreements, prescription files and other
|
$
|
173
|
|
|
$
|
(73
|
)
|
|
$
|
100
|
|
|
$
|
177
|
|
|
$
|
(66
|
)
|
|
$
|
111
|
|
Favorable operating leases
|
21
|
|
|
(10
|
)
|
|
11
|
|
|
21
|
|
|
(6
|
)
|
|
15
|
|
||||||
Total finite-life intangibles
|
194
|
|
|
(83
|
)
|
|
111
|
|
|
198
|
|
|
(72
|
)
|
|
126
|
|
||||||
Indefinite-lived tradename intangibles
|
5
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||
Total intangibles
|
$
|
199
|
|
|
$
|
(83
|
)
|
|
$
|
116
|
|
|
$
|
203
|
|
|
$
|
(72
|
)
|
|
$
|
131
|
|
|
|
Remaining
Fiscal 2019
|
|
|
2020
|
|
|
2021
|
|
|
2022
|
|
|
2023
|
|
|
2024
|
|
||||||
Estimated amortization expense
|
|
$
|
6
|
|
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
10
|
|
|
$
|
10
|
|
|
$
|
8
|
|
|
|
|
September 8, 2018
|
||||||||||||||
|
Balance Sheet Location
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap derivative
|
Other current assets
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Mutual funds
|
Other current assets
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Mutual funds
|
Other assets
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
|
|
February 24, 2018
|
||||||||||||||
|
Balance Sheet Location
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Mutual funds
|
Other assets
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Total
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
Average
Interest Rate at
September 8, 2018
|
|
Maturity Year
|
|
September 8,
2018 |
|
February 24,
2018 |
||||
Secured Term Loan Facility - variable rate
|
5.58%
|
|
2024
|
|
$
|
698
|
|
|
$
|
834
|
|
Senior Notes - fixed rate
|
6.75%
|
|
2021
|
|
180
|
|
|
400
|
|
||
Senior Notes - fixed rate
|
7.75%
|
|
2022
|
|
350
|
|
|
350
|
|
||
Revolving ABL Credit Facility - variable rate
|
3.71%
|
|
2021
|
|
183
|
|
|
127
|
|
||
Other secured loans - variable rate
|
5.11%
|
|
2022-2023
|
|
39
|
|
|
48
|
|
||
Debt financing costs, net
|
|
|
|
|
(19
|
)
|
|
(24
|
)
|
||
Original issue discount on debt
|
|
|
|
|
(2
|
)
|
|
(3
|
)
|
||
Total debt
|
|
|
|
|
1,429
|
|
|
1,732
|
|
||
Less current maturities of long-term debt
|
|
|
|
|
(6
|
)
|
|
(8
|
)
|
||
Long-term debt
|
|
|
|
|
$
|
1,423
|
|
|
$
|
1,724
|
|
Assets securing the Revolving ABL Credit Facility
(1)
:
|
September 8, 2018
|
|
February 24, 2018
|
||||
Certain inventory assets included in Inventories, net and Current assets of discontinued operations
|
$
|
1,286
|
|
|
$
|
1,176
|
|
Certain receivables included in Receivables, net and Current assets of discontinued operations
|
440
|
|
|
410
|
|
||
Certain amounts included in Cash and cash equivalents and Current assets of discontinued operations
|
16
|
|
|
20
|
|
(1)
|
The Revolving ABL Credit Facility is also secured by all of our pharmacy scripts including those within Intangible assets, net.
|
Unused available credit and fees under the Revolving ABL Credit Facility:
|
September 8, 2018
|
|
February 24, 2018
|
||||
Outstanding letters of credit
|
$
|
57
|
|
|
$
|
57
|
|
Letters of credit fees
|
1.375
|
%
|
|
1.375
|
%
|
||
Unused available credit
|
761
|
|
|
816
|
|
||
Unused facility fees
|
0.25
|
%
|
|
0.25
|
%
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
||||||||
Minimum rent
|
$
|
29
|
|
|
$
|
26
|
|
|
$
|
67
|
|
|
$
|
53
|
|
Contingent rent
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Rent expense
(1)
|
30
|
|
|
26
|
|
|
68
|
|
|
54
|
|
||||
Less subtenant rentals
|
(8
|
)
|
|
(7
|
)
|
|
(18
|
)
|
|
(15
|
)
|
||||
Total net rent expense
|
$
|
22
|
|
|
$
|
19
|
|
|
$
|
50
|
|
|
$
|
39
|
|
(1)
|
Rent expense as presented here includes
$1
and
$3
in the
second
quarters of fiscal
2019
and
2018
, respectively, and
$4
and
$7
for fiscal
2019
and
2018
year-to-date, respectively, of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the historical expense to be included within continuing operations, as we expect to remain primarily obligated under these leases.
|
|
Lease Obligations
|
||||||
Fiscal Year
|
Operating Leases
|
|
Capital Leases
|
||||
Remaining Fiscal 2019
|
$
|
44
|
|
|
$
|
17
|
|
2020
|
112
|
|
|
37
|
|
||
2021
|
108
|
|
|
33
|
|
||
2022
|
94
|
|
|
30
|
|
||
2023
|
82
|
|
|
23
|
|
||
Thereafter
|
838
|
|
|
84
|
|
||
Total future minimum obligations
|
$
|
1,278
|
|
|
224
|
|
|
Less interest
|
|
|
(66
|
)
|
|||
Present value of net future minimum obligations
|
|
|
158
|
|
|||
Less current capital lease obligations
|
|
|
(24
|
)
|
|||
Long-term capital lease obligations
|
|
|
$
|
134
|
|
|
Lease Receipts
|
||||||
Fiscal Year
|
Operating Leases
|
|
Direct Financing Leases
|
||||
Remaining Fiscal 2019
|
$
|
10
|
|
|
$
|
—
|
|
2020
|
24
|
|
|
1
|
|
||
2021
|
20
|
|
|
—
|
|
||
2022
|
18
|
|
|
—
|
|
||
2023
|
11
|
|
|
—
|
|
||
Thereafter
|
32
|
|
|
—
|
|
||
Total minimum lease receipts
|
$
|
115
|
|
|
$
|
1
|
|
|
Second Quarter Ended
|
||||||||||||||
Pension Benefits
|
|
Other Postretirement Benefits
|
|||||||||||||
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|||||||||
Interest cost
|
$
|
22
|
|
|
$
|
20
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Expected return on assets
|
(31
|
)
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service benefit
|
(1
|
)
|
|
3
|
|
|
(3
|
)
|
|
(3
|
)
|
||||
Amortization of net actuarial loss
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net periodic income expense
|
$
|
(7
|
)
|
|
$
|
(10
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Contributions to benefit plans
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
Year-To-Date Ended
|
||||||||||||||
Pension Benefits
|
|
Other Postretirement Benefits
|
|||||||||||||
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
|||||||||
Interest cost
|
$
|
50
|
|
|
$
|
44
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Expected return on assets
|
(71
|
)
|
|
(73
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service benefit
|
(1
|
)
|
|
6
|
|
|
(7
|
)
|
|
(8
|
)
|
||||
Amortization of net actuarial loss
|
7
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Net periodic benefit income
|
$
|
(15
|
)
|
|
$
|
(23
|
)
|
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
Contributions to benefit plans
|
$
|
(6
|
)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
||||||||
Net (loss) earnings from continuing operations
|
$
|
(55
|
)
|
|
$
|
(1
|
)
|
|
$
|
(82
|
)
|
|
$
|
8
|
|
Less net loss (earnings) attributable to noncontrolling interests
|
1
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
||||
Net (loss) earnings from continuing operations attributable to SUPERVALU INC.
|
(54
|
)
|
|
(1
|
)
|
|
(81
|
)
|
|
7
|
|
||||
(Loss) income from discontinued operations, net of tax
|
(3
|
)
|
|
(24
|
)
|
|
3
|
|
|
(21
|
)
|
||||
Net loss attributable to SUPERVALU INC.
|
$
|
(57
|
)
|
|
$
|
(25
|
)
|
|
$
|
(78
|
)
|
|
$
|
(14
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding—basic
|
39
|
|
|
38
|
|
|
39
|
|
|
38
|
|
||||
Dilutive impact of stock-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average number of shares outstanding—diluted
|
39
|
|
|
38
|
|
|
39
|
|
|
38
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net (loss) earnings per share attributable to SUPERVALU INC.:
|
|||||||||||||||
Continuing operations
|
$
|
(1.41
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(2.11
|
)
|
|
$
|
0.20
|
|
Discontinued operations
|
$
|
(0.08
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.55
|
)
|
Basic net loss per share
|
$
|
(1.49
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
(2.04
|
)
|
|
$
|
(0.36
|
)
|
Diluted net (loss) earnings per share attributable to SUPERVALU INC.:
|
|||||||||||||||
Continuing operations
|
$
|
(1.41
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(2.11
|
)
|
|
$
|
0.20
|
|
Discontinued operations
|
$
|
(0.08
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.55
|
)
|
Diluted net loss per share
|
$
|
(1.49
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
(2.04
|
)
|
|
$
|
(0.36
|
)
|
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive stock-based awards excluded from the calculation of diluted earnings per share
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
Benefit Plans
|
|
Interest Rate Swap
|
|
Total
|
||||||
Accumulated other comprehensive loss at beginning of the fiscal year, net of tax
|
$
|
(210
|
)
|
|
$
|
—
|
|
|
$
|
(210
|
)
|
Amortization of amounts included in net periodic benefit income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Amortization of cash flow hedge
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net current-period Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Adoption of ASU 2018-02
|
(61
|
)
|
|
—
|
|
|
(61
|
)
|
|||
Accumulated other comprehensive loss at the end of period, net of tax
|
$
|
(271
|
)
|
|
$
|
—
|
|
|
$
|
(271
|
)
|
|
Benefit Plans
|
|
Interest Rate Swap
|
|
Total
|
||||||
Accumulated other comprehensive loss at beginning of the fiscal year, net of tax
|
$
|
(276
|
)
|
|
$
|
(2
|
)
|
|
$
|
(278
|
)
|
Amortization of amounts included in net periodic benefit income
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Amortization of cash flow hedge
|
—
|
|
|
1
|
|
|
1
|
|
|||
Net current-period Other comprehensive income
|
(1
|
)
|
|
1
|
|
|
—
|
|
|||
Accumulated other comprehensive loss at the end of period, net of tax
|
$
|
(277
|
)
|
|
$
|
(1
|
)
|
|
$
|
(278
|
)
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
|
|
||||||||||||
|
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
|
Affected Line Item on Condensed Consolidated Statements of Operations
|
||||||||
Pension and postretirement benefit plan obligations:
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of amounts included in net periodic benefit income
(1)
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
Net periodic benefit income, excluding service cost
|
Total reclassifications
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
Income tax (benefit) provision
|
||||
Total reclassifications, net of tax
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap cash flow hedge:
|
|
|
|
|
|
|
|
|
|
||||||||
Reclassification of cash flow hedge
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
Interest expense, net
|
Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
Income tax (benefit) provision
|
||||
Total reclassifications, net of tax
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
(1)
|
Amortization of amounts included in net periodic benefit income includes amortization of prior service benefit and amortization of net actuarial loss as reflected in
Note 10—Benefit Plans
.
|
(in thousands, except per unit amounts)
|
|
Awards
Issued
|
|
Grant Date Fair Value
|
|||
Cash settled RSUs
(1)
|
|
637
|
|
|
$
|
16.53
|
|
RSUs
(1)
|
|
723
|
|
|
$
|
16.53
|
|
PSUs
(2)
|
|
453
|
|
|
$
|
14.93
|
|
(1)
|
Cash settled RSUs and RSUs vest over a three-year period from the date of grant.
|
(2)
|
PSUs have fiscal 2019-2021 and fiscal 2019-2022 performance periods and settle in shares of our common stock.
|
|
Fiscal 2019 Annual Grant
|
|
Dividend yield
|
—
|
%
|
Volatility rate
|
47.0
|
%
|
Risk-free interest rate
|
2.7
|
%
|
Expected life
|
3.8 years
|
|
|
Second Quarter Ended September 8, 2018
|
|
Year-To-Date Ended September 8, 2018
|
||||||||||||||||||||||||||||
|
Wholesale
|
|
Retail
|
|
Corporate
|
|
Total
|
|
Wholesale
|
|
Retail
|
|
Corporate
|
|
Total
|
||||||||||||||||
Net sales
|
$
|
2,837
|
|
|
$
|
650
|
|
|
$
|
25
|
|
|
$
|
3,512
|
|
|
$
|
6,651
|
|
|
$
|
1,551
|
|
|
$
|
65
|
|
|
$
|
8,267
|
|
Cost of sales
|
2,745
|
|
|
473
|
|
|
—
|
|
|
3,218
|
|
|
6,421
|
|
|
1,124
|
|
|
—
|
|
|
7,545
|
|
||||||||
Gross profit
|
92
|
|
|
177
|
|
|
25
|
|
|
294
|
|
|
230
|
|
|
427
|
|
|
65
|
|
|
722
|
|
||||||||
Selling and administrative expenses
|
71
|
|
|
234
|
|
|
51
|
|
|
356
|
|
|
161
|
|
|
504
|
|
|
119
|
|
|
784
|
|
||||||||
Operating earnings (loss)
|
$
|
21
|
|
|
$
|
(57
|
)
|
|
$
|
(26
|
)
|
|
$
|
(62
|
)
|
|
$
|
69
|
|
|
$
|
(77
|
)
|
|
$
|
(54
|
)
|
|
$
|
(62
|
)
|
Interest expense, net
|
|
|
|
|
|
|
27
|
|
|
|
|
|
|
|
|
76
|
|
||||||||||||||
Net periodic benefit income, excluding service cost
|
|
|
|
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
(21
|
)
|
||||||||||||||
Equity in earnings of unconsolidated affiliates
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||
Loss from continuing operations before income taxes
|
|
|
|
|
|
|
$
|
(80
|
)
|
|
|
|
|
|
|
|
$
|
(117
|
)
|
|
Second Quarter Ended September 9, 2017
|
|
Year-To-Date Ended September 9, 2017
|
||||||||||||||||||||||||||||
|
Wholesale
|
|
Retail
|
|
Corporate
|
|
Total
|
|
Wholesale
|
|
Retail
|
|
Corporate
|
|
Total
|
||||||||||||||||
Net sales
|
$
|
2,738
|
|
|
$
|
671
|
|
|
$
|
40
|
|
|
$
|
3,449
|
|
|
$
|
5,294
|
|
|
$
|
1,577
|
|
|
$
|
95
|
|
|
$
|
6,966
|
|
Cost of sales
|
2,623
|
|
|
486
|
|
|
—
|
|
|
3,109
|
|
|
5,060
|
|
|
1,135
|
|
|
—
|
|
|
6,195
|
|
||||||||
Gross profit
|
115
|
|
|
185
|
|
|
40
|
|
|
340
|
|
|
234
|
|
|
442
|
|
|
95
|
|
|
771
|
|
||||||||
Selling and administrative expenses
|
59
|
|
|
195
|
|
|
69
|
|
|
323
|
|
|
120
|
|
|
452
|
|
|
138
|
|
|
710
|
|
||||||||
Operating earnings (loss)
|
$
|
56
|
|
|
$
|
(10
|
)
|
|
$
|
(29
|
)
|
|
$
|
17
|
|
|
$
|
114
|
|
|
$
|
(10
|
)
|
|
$
|
(43
|
)
|
|
$
|
61
|
|
Interest expense, net
|
|
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
73
|
|
||||||||||||||
Net periodic benefit income, excluding service cost
|
|
|
|
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
(29
|
)
|
||||||||||||||
Equity in earnings of unconsolidated affiliates
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
(2
|
)
|
||||||||||||||
(Loss) earnings from continuing operations before income taxes
|
|
|
|
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
$
|
19
|
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
||||||||
Net sales
|
$
|
189
|
|
|
$
|
351
|
|
|
$
|
539
|
|
|
$
|
838
|
|
Cost of sales
|
147
|
|
|
263
|
|
|
414
|
|
|
630
|
|
||||
Gross profit
|
42
|
|
|
88
|
|
|
125
|
|
|
208
|
|
||||
Selling and administrative expenses
|
47
|
|
|
124
|
|
|
159
|
|
|
239
|
|
||||
Gain on sales
|
(2
|
)
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
||||
Operating (loss) earnings
|
(3
|
)
|
|
(36
|
)
|
|
5
|
|
|
(31
|
)
|
||||
Interest expense, net
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
(Loss) earnings from discontinued operations before income taxes
|
(4
|
)
|
|
(37
|
)
|
|
4
|
|
|
(32
|
)
|
||||
Income tax (benefit) provision
|
(1
|
)
|
|
(13
|
)
|
|
1
|
|
|
(11
|
)
|
||||
(Loss) income from discontinued operations, net of tax
|
$
|
(3
|
)
|
|
$
|
(24
|
)
|
|
$
|
3
|
|
|
$
|
(21
|
)
|
|
September 8, 2018
|
|
February 24, 2018
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4
|
|
|
$
|
7
|
|
Receivables, net
|
5
|
|
|
8
|
|
||
Inventories, net
|
51
|
|
|
109
|
|
||
Other current assets
|
3
|
|
|
6
|
|
||
Total current assets of discontinued operations
|
63
|
|
|
130
|
|
||
Long-term assets
|
|
|
|
||||
Property, plant and equipment, net
|
54
|
|
|
74
|
|
||
Intangible assets, net
|
—
|
|
|
1
|
|
||
Deferred tax assets
|
8
|
|
|
8
|
|
||
Other assets
|
1
|
|
|
1
|
|
||
Total long-term assets of discontinued operations
|
63
|
|
|
84
|
|
||
Total assets of discontinued operations
|
$
|
126
|
|
|
$
|
214
|
|
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
31
|
|
|
$
|
51
|
|
Accrued vacation, compensation and benefits
|
18
|
|
|
20
|
|
||
Current maturities of capital lease obligations
|
2
|
|
|
2
|
|
||
Other current liabilities
|
11
|
|
|
9
|
|
||
Total current liabilities of discontinued operations
|
62
|
|
|
82
|
|
||
Long-term liabilities
|
|
|
|
||||
Long-term capital lease obligations
|
13
|
|
|
14
|
|
||
Other long-term liabilities
|
1
|
|
|
3
|
|
||
Total long-term liabilities of discontinued operations
|
14
|
|
|
17
|
|
||
Total liabilities of discontinued operations
|
76
|
|
|
99
|
|
||
Net assets of discontinued operations
|
$
|
50
|
|
|
$
|
115
|
|
•
|
Retaining existing customers by anticipating, listening to and meeting our customer needs, and differentiating ourselves through our service levels, pricing, product offerings and professional services
|
•
|
Growing our business with existing customers by marketing our fresh product offerings, such as produce, and our ethnic and specialty capabilities and our professional service offerings to help our customers compete and grow their business, including retail store support, advertising, couponing, e-commerce, network and data hosting solutions, training and certifications classes, as well as administrative back-office solutions
|
•
|
Affiliating new customers, including traditional and non-traditional formats, and aggressively pursuing external growth and market opportunities
|
•
|
Integrating and realizing synergies from the acquisitions of Unified and AG Florida, including optimizing our distribution network, leveraging combined procurement volume and expanding enhanced professional services offerings to acquired customers
|
•
|
Expanding the Market Centre
®
product offerings into our supply chain and continuing to optimize our product offerings to anticipate and meet our customer’s needs
|
•
|
Improving the efficiency and optimization of our distribution network, real estate, information technology infrastructure and logistics, and scaling the use of trucking miles and warehouse capacity as we grow our wholesale business
|
•
|
Strategically investing in and optimizing additional warehouse capacity, including our distribution center in Joliet, IL, and the consolidation of distribution centers in the Pacific Northwest, to support the growth of our Wholesale business
|
•
|
Strengthening core merchandising and marketing programs, including leveraging our 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 through competitive pricing and strong, event-based promotions, and enhancing merchandising displays and product offerings such as Quick & Easy meal solutions including meal kits and grab ‘n go options for Retail stores and Wholesale customers
|
•
|
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 our private-label products, including organic products, by providing innovative products in multiple channels across Retail and Wholesale
|
•
|
Targeted and innovative capital investments in our continuing operations banners for new stores, relocations and store remodels
|
•
|
Continued management of overhead cost structure to ensure competitive pricing to customers
|
•
|
Providing high-quality administrative support services by enhancing service offerings and information technology systems
|
•
|
Leveraging our professional services capabilities to grow our services business
|
•
|
Net sales were
$3,512
,
an increase
of
$63
or
1.9 percent
, primarily due to sales from the acquired AG Florida and Unified businesses and higher sales to new customers, offset in part by lower sales due to stores no longer operated by customers and lower sales to existing customers, lower sales from closed Retail stores, lower TSA fees and lower military sales.
|
•
|
Gross profit was
$294
,
a decrease
of
$46
or
13.5 percent
. Wholesale gross profit
decreased
by
$23
, Corporate gross profit
decreased
by
$15
and Retail gross profit
decreased
by
$8
. The decrease in Gross profit primarily reflects lower legacy Wholesale gross profit from increased costs from realigning our distribution network, lower TSA fees and lower Retail sales.
|
•
|
Operating loss was
$62
,
a decrease
in operating earnings of
$79
, which primarily reflects lower gross profit, including the effect of increased costs as we realign our distribution network, a Retail asset impairment charge, store closure charges and costs, and strategic consulting costs, offset in part by lower merger and integration costs.
|
•
|
Net sales were
$8,267
,
an increase
of
$1,301
or
18.7 percent
, primarily due to higher sales from the acquired Unified and AG Florida businesses and higher sales to new customers, offset in part by lower sales due to stores no longer operated by customers, lower sales to existing customers, lower TSA fees, lower sales from closed Retail stores and lower military sales.
|
•
|
Gross profit was
$722
,
a decrease
of
$49
or
6.4 percent
. Corporate gross profit decreased
$30
, Retail gross profit decreased
$15
and Wholesale gross profit
decreased
$4
. The decrease in Gross profit primarily reflects lower TSA fees, lower legacy Wholesale gross profit from increased costs as we realign our distribution network, lower gross margin from decreased sales, and increased occupancy and other operating costs, which was offset in part by gross profit attributable to the acquired Unified and AG Florida businesses.
|
•
|
Operating loss was
$62
,
a decrease
in operating earnings of
$123
, which primarily reflects a Retail asset impairment charge, lower TSA fees, lower gross profit from increased costs from realigning our distribution network, higher employee-related costs driven by the acquired Unified and AG Florida business, occupancy and other operating costs, store closure charges and costs, and strategic consulting costs, offset in part by lower merger and integration costs.
|
•
|
Interest expense, net was
$76
,
an increase
of
$3
, primarily due to higher costs and charges associated with debt refinancing this year and higher average outstanding borrowings.
|
•
|
Net loss from continuing operations was
$82
,
a decrease
in earnings of
$90
, and diluted net loss per share from continuing operations decreased
$2.31
, in each case, primarily due to the after-tax effect of the items described above.
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
Results of Operations
|
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
||||||||
Net sales
|
$
|
3,512
|
|
|
$
|
3,449
|
|
|
$
|
8,267
|
|
|
$
|
6,966
|
|
Cost of sales
|
3,218
|
|
|
3,109
|
|
|
7,545
|
|
|
6,195
|
|
||||
Gross profit
|
294
|
|
|
340
|
|
|
722
|
|
|
771
|
|
||||
Selling and administrative expenses
|
356
|
|
|
323
|
|
|
784
|
|
|
710
|
|
||||
Operating (loss) earnings
|
(62
|
)
|
|
17
|
|
|
(62
|
)
|
|
61
|
|
||||
Interest expense, net
|
27
|
|
|
30
|
|
|
76
|
|
|
73
|
|
||||
Net periodic benefit income, excluding service cost
|
(9
|
)
|
|
(12
|
)
|
|
(21
|
)
|
|
(29
|
)
|
||||
Equity in earnings of unconsolidated affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
(Loss) earnings from continuing operations before income taxes
|
(80
|
)
|
|
(1
|
)
|
|
(117
|
)
|
|
19
|
|
||||
Income tax (benefit) provision
|
(25
|
)
|
|
—
|
|
|
(35
|
)
|
|
11
|
|
||||
Net (loss) earnings from continuing operations
|
(55
|
)
|
|
(1
|
)
|
|
(82
|
)
|
|
8
|
|
||||
(Loss) income from discontinued operations, net of tax
|
(3
|
)
|
|
(24
|
)
|
|
3
|
|
|
(21
|
)
|
||||
Net loss including noncontrolling interest
|
(58
|
)
|
|
(25
|
)
|
|
(79
|
)
|
|
(13
|
)
|
||||
Less net loss (earnings) attributable to noncontrolling interests
|
1
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
||||
Net loss attributable to SUPERVALU INC.
|
$
|
(57
|
)
|
|
$
|
(25
|
)
|
|
$
|
(78
|
)
|
|
$
|
(14
|
)
|
Diluted continuing operation net (loss) earnings per share attributable to SUPERVALU INC.
|
$
|
(1.41
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(2.11
|
)
|
|
$
|
0.20
|
|
Weighted average shares outstanding—diluted
|
39
|
|
|
38
|
|
|
39
|
|
|
38
|
|
||||
Other Statistics of Continuing Operations
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
$
|
46
|
|
|
$
|
47
|
|
|
$
|
113
|
|
|
$
|
100
|
|
Capital expenditures
(1)
|
$
|
40
|
|
|
$
|
28
|
|
|
$
|
110
|
|
|
$
|
110
|
|
Adjusted EBITDA
(2)
|
$
|
64
|
|
|
$
|
94
|
|
|
$
|
162
|
|
|
$
|
212
|
|
Financial Position of Continuing Operations
|
|
|
|
|
|
|
|
||||||||
Working capital
(3)
|
|
|
|
|
$
|
526
|
|
|
$
|
504
|
|
||||
Total assets
|
|
|
|
|
$
|
3,930
|
|
|
$
|
4,179
|
|
||||
Total debt and capital lease obligations
|
|
|
|
|
$
|
1,587
|
|
|
$
|
1,791
|
|
||||
Stores Supplied and Operated:
|
|
|
|
|
|
|
|
||||||||
Wholesale primary stores
(4)
|
|
|
|
|
3,394
|
|
|
3,120
|
|
||||||
Retail stores
|
|
|
|
|
107
|
|
|
115
|
|
||||||
Subtotal
|
|
|
|
|
3,501
|
|
|
3,235
|
|
||||||
Wholesale secondary stores
(5)
|
|
|
|
|
2,340
|
|
|
2,133
|
|
||||||
Total number of stores
|
|
|
|
|
5,841
|
|
|
5,368
|
|
(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 provided as a supplement to our 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 our 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
$203
and
$201
as of
September 8, 2018
and
September 9, 2017
, respectively.
|
(4)
|
Wholesale primary stores is defined as a customer location that has received over a certain dollar threshold of Wholesale product for each of the last three fiscal periods in a given quarter and purchases two or more product groups.
|
(5)
|
Wholesale secondary stores is defined as a customer location that has received over a certain dollar threshold of Wholesale product for each of the last three fiscal periods in a given quarter but fails to meet the criteria to be a primary store. The acquisition of Unified increased the secondary store count substantially because of its smaller Wholesale customer store size and its distribution of one product group to certain customer stores.
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||||||||||
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
Variance
|
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
|
Variance
|
|||||||||||||
Wholesale
|
$
|
2,837
|
|
|
$
|
2,738
|
|
|
$
|
99
|
|
|
$
|
6,651
|
|
|
$
|
5,294
|
|
|
$
|
1,357
|
|
Retail
|
650
|
|
|
671
|
|
|
(21
|
)
|
|
1,551
|
|
|
1,577
|
|
|
(26
|
)
|
||||||
Corporate
|
25
|
|
|
40
|
|
|
(15
|
)
|
|
65
|
|
|
95
|
|
|
(30
|
)
|
||||||
Total Net sales
|
$
|
3,512
|
|
|
$
|
3,449
|
|
|
$
|
63
|
|
|
$
|
8,267
|
|
|
$
|
6,966
|
|
|
$
|
1,301
|
|
Wholesale
|
September 8,
2018 (12 weeks) |
|
September 8,
2018 (28 weeks) |
||||
Net sales from comparative fiscal 2018 periods
|
$
|
2,738
|
|
|
$
|
5,294
|
|
Unified’s net sales
|
80
|
|
|
1,220
|
|
||
AG Florida’s net sales
|
142
|
|
|
346
|
|
||
Increase in net sales to new stores operated by existing customers
(1)
|
44
|
|
|
85
|
|
||
Increase in net sales to new customers
(2)
|
12
|
|
|
62
|
|
||
Lower net sales to existing customer stores
(3)
|
(80
|
)
|
|
(128
|
)
|
||
Lower net sales due to stores no longer operated by customers
(4)
|
(91
|
)
|
|
(206
|
)
|
||
Lower military net sales
|
(8
|
)
|
|
(18
|
)
|
||
Other revenue
|
—
|
|
|
(4
|
)
|
||
Net sales for the current fiscal year
|
$
|
2,837
|
|
|
$
|
6,651
|
|
(1)
|
Increases in net sales to new stores operated by existing customers primarily reflect organic new store growth from existing customers.
|
(2)
|
Increases in net sales to new customers are primarily attributable to the affiliations of certain larger new customers.
|
(3)
|
Lower net sales to existing customers is primarily driven by lower center store product sales, which was impacted by several factors.
|
(4)
|
Lower net sales due to stores no longer operated by customers primarily reflects the carryover effect of sales lost as a result of the Marsh bankruptcy, temporary opportunistic wholesale supply provided to a customer last year and store locations we no longer supply for existing customers.
|
Retail
|
September 8,
2018 (12 weeks) |
|
September 8,
2018 (28 weeks) |
||||
Net sales from comparative fiscal 2018 periods
|
$
|
671
|
|
|
$
|
1,577
|
|
Identical store sales of 0.0 percent and positive 0.2 percent, respectively
(1)
|
—
|
|
|
3
|
|
||
Lower sales from closed stores
|
(20
|
)
|
|
(29
|
)
|
||
Increased sales from new stores
|
—
|
|
|
1
|
|
||
Other revenue
|
(1
|
)
|
|
(1
|
)
|
||
Net sales for the current fiscal year
|
$
|
650
|
|
|
$
|
1,551
|
|
(1)
|
Average basket size variance was
positive
1.8 percent
and average customer count was
negative
1.8 percent
for the
second
quarter of fiscal 2019. Average basket size variance was
positive
1.9 percent
and average customer count was
negative
1.7 percent
for fiscal 2019 year-to-date. Retail identical store sales are defined as net sales from stores operating for four full quarters, including store expansions and excluding fuel and announced planned store dispositions. Average basket size is defined based on average purchases and customer count is defined as the number of transactions, both over the same four full quarters, including store expansions and excluding fuel and planned store dispositions.
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||||||||||
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
Variance
|
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
|
Variance
|
|||||||||||||
Wholesale
|
$
|
92
|
|
|
$
|
115
|
|
|
$
|
(23
|
)
|
|
$
|
230
|
|
|
$
|
234
|
|
|
$
|
(4
|
)
|
% of Wholesale sales
|
3.3
|
%
|
|
4.2
|
%
|
|
(0.9
|
)%
|
|
3.5
|
%
|
|
4.4
|
%
|
|
(0.9
|
)%
|
||||||
Retail
|
177
|
|
|
185
|
|
|
(8
|
)
|
|
427
|
|
|
442
|
|
|
(15
|
)
|
||||||
% of Retail sales
|
27.2
|
%
|
|
27.6
|
%
|
|
(0.4
|
)%
|
|
27.5
|
%
|
|
28.0
|
%
|
|
(0.5
|
)%
|
||||||
Corporate
|
25
|
|
|
40
|
|
|
(15
|
)
|
|
65
|
|
|
95
|
|
|
(30
|
)
|
||||||
Total Gross profit
|
$
|
294
|
|
|
$
|
340
|
|
|
$
|
(46
|
)
|
|
$
|
722
|
|
|
$
|
771
|
|
|
$
|
(49
|
)
|
% of total Net sales
|
8.4
|
%
|
|
9.8
|
%
|
|
(1.4
|
)%
|
|
8.7
|
%
|
|
11.1
|
%
|
|
(2.4
|
)%
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||||||||||
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
Variance
|
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
|
Variance
|
|||||||||||||
Wholesale
|
$
|
21
|
|
|
$
|
56
|
|
|
$
|
(35
|
)
|
|
$
|
69
|
|
|
$
|
114
|
|
|
$
|
(45
|
)
|
% of Wholesale sales
|
0.7
|
%
|
|
2.1
|
%
|
|
(1.4
|
)%
|
|
1.0
|
%
|
|
2.2
|
%
|
|
(1.2
|
)%
|
||||||
Retail
|
(57
|
)
|
|
(10
|
)
|
|
(47
|
)
|
|
(77
|
)
|
|
(10
|
)
|
|
(67
|
)
|
||||||
% of Retail sales
|
(8.7
|
)%
|
|
(1.5
|
)%
|
|
(7.2
|
)%
|
|
(4.9
|
)%
|
|
(0.7
|
)%
|
|
(4.2
|
)%
|
||||||
Corporate
|
(26
|
)
|
|
(29
|
)
|
|
3
|
|
|
(54
|
)
|
|
(43
|
)
|
|
(11
|
)
|
||||||
Total Operating earnings
|
$
|
(62
|
)
|
|
$
|
17
|
|
|
$
|
(79
|
)
|
|
$
|
(62
|
)
|
|
$
|
61
|
|
|
$
|
(123
|
)
|
% of total Net sales
|
(1.7
|
)%
|
|
0.5
|
%
|
|
(2.2
|
)%
|
|
(0.7
|
)%
|
|
0.9
|
%
|
|
(1.6
|
)%
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
|||||||||
Interest expense on long-term debt, net of capitalized interest
|
$
|
21
|
|
|
$
|
23
|
|
|
$
|
53
|
|
|
$
|
50
|
|
Interest expense on capital lease obligations
|
4
|
|
|
4
|
|
|
9
|
|
|
10
|
|
||||
Amortization of financing costs and discount
|
1
|
|
|
1
|
|
|
2
|
|
|
4
|
|
||||
Other
|
1
|
|
|
3
|
|
|
4
|
|
|
6
|
|
||||
Unamortized financing charges
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||
Debt refinancing costs
|
—
|
|
|
—
|
|
|
5
|
|
|
2
|
|
||||
Interest income
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Interest expense, net
|
$
|
27
|
|
|
$
|
30
|
|
|
$
|
76
|
|
|
$
|
73
|
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
|
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
||||||||
Net (loss) earnings from continuing operations
|
$
|
(55
|
)
|
|
$
|
(1
|
)
|
|
$
|
(82
|
)
|
|
$
|
8
|
|
Less net loss (earnings) attributable to noncontrolling interests
|
1
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
||||
Income tax (benefit) provision
|
(25
|
)
|
|
—
|
|
|
(35
|
)
|
|
11
|
|
||||
Interest expense, net
|
27
|
|
|
30
|
|
|
76
|
|
|
73
|
|
||||
Net periodic benefit income, excluding service cost
|
(9
|
)
|
|
(12
|
)
|
|
(21
|
)
|
|
(29
|
)
|
||||
Depreciation and amortization
|
46
|
|
|
47
|
|
|
113
|
|
|
100
|
|
||||
Stock-based compensation
|
6
|
|
|
4
|
|
|
12
|
|
|
10
|
|
||||
LIFO charge
|
2
|
|
|
1
|
|
|
4
|
|
|
2
|
|
||||
Asset impairment charges
(1)
|
46
|
|
|
2
|
|
|
46
|
|
|
2
|
|
||||
Store closure charges and costs
(2)
|
12
|
|
|
—
|
|
|
23
|
|
|
—
|
|
||||
Strategic consulting costs
(3)
|
11
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Severance costs
(4)
|
—
|
|
|
—
|
|
|
9
|
|
|
2
|
|
||||
Merger and integration costs
(5)
|
2
|
|
|
23
|
|
|
8
|
|
|
27
|
|
||||
Legal reserve charge
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Gain on sale of property
(7)
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(2
|
)
|
||||
Adjusted EBITDA
|
$
|
64
|
|
|
$
|
94
|
|
|
$
|
162
|
|
|
$
|
212
|
|
(1)
|
Asset impairment charges include non-cash charges related to operating Retail and Wholesale assets that are no longer recoverable.
|
(2)
|
Store closure charges and costs include lease reserve charges and impairment and severance related costs due to store closures, including the sale of pharmacy prescription files.
|
(3)
|
Strategic consulting costs primarily reflect expenses for professional fees and legal entity reorganization related to our pending acquisition by UNFI, proposed reorganization into a holding company structure and other expense.
|
(4)
|
Severance costs primarily reflect termination costs for employees who are not part of our on-going business.
|
(5)
|
Merger and integration costs relate to the acquisitions and integration of Unified and AG Florida and primarily reflect employee severance and transition costs. We expect to incur approximately
$20
of merger and integration costs related to Unified and AG Florida in fiscal 2019.
|
(6)
|
Legal reserve charge reflects a settlement for certain legal proceedings.
|
(7)
|
Gain on sale of property reflects a gain on the sale of a distribution center in fiscal 2019 and surplus corporate property in fiscal 2018.
|
|
|
Second Quarter Ended
|
|
Year-To-Date Ended
|
||||||||||||
(In millions)
|
|
September 8,
2018 (12 weeks) |
|
September 9,
2017 (12 weeks) |
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
||||||||
Reconciliation of segment operating earnings to total operating earnings, as reported
|
|
|
|
|
|
|
|
|
||||||||
Wholesale operating earnings
|
|
$
|
21
|
|
|
$
|
56
|
|
|
$
|
69
|
|
|
$
|
114
|
|
Retail operating loss
|
|
(57
|
)
|
|
(10
|
)
|
|
(77
|
)
|
|
(10
|
)
|
||||
Corporate operating loss
|
|
(26
|
)
|
|
(29
|
)
|
|
(54
|
)
|
|
(43
|
)
|
||||
Total operating (loss) earnings
|
|
$
|
(62
|
)
|
|
$
|
17
|
|
|
$
|
(62
|
)
|
|
$
|
61
|
|
Reconciliation of segment operating (loss) earnings, as reported, to segment Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
||||||||
Wholesale operating earnings, as reported
|
|
$
|
21
|
|
|
$
|
56
|
|
|
$
|
69
|
|
|
$
|
114
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Asset impairment charge
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Severance costs
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Gain on sale of property
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||
Legal reserve charge
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Wholesale operating earnings, as adjusted
|
|
23
|
|
|
56
|
|
|
65
|
|
|
123
|
|
||||
Wholesale depreciation and amortization
|
|
25
|
|
|
22
|
|
|
62
|
|
|
40
|
|
||||
LIFO charge
|
|
2
|
|
|
1
|
|
|
4
|
|
|
2
|
|
||||
Wholesale adjusted EBITDA
|
|
$
|
50
|
|
|
$
|
79
|
|
|
$
|
131
|
|
|
$
|
165
|
|
|
|
|
|
|
|
|
|
|
||||||||
Retail operating loss, as reported
|
|
$
|
(57
|
)
|
|
$
|
(10
|
)
|
|
$
|
(77
|
)
|
|
$
|
(10
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Asset impairment charge
|
|
44
|
|
|
—
|
|
|
44
|
|
|
—
|
|
||||
Severance costs
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
Store closure charges and costs
|
|
7
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||
Retail operating loss, as adjusted
|
|
(6
|
)
|
|
(10
|
)
|
|
(12
|
)
|
|
(10
|
)
|
||||
Retail depreciation and amortization
|
|
17
|
|
|
22
|
|
|
43
|
|
|
53
|
|
||||
Equity in earnings of unconsolidated affiliates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Net loss (earnings) attributable to noncontrolling interests
|
|
1
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
||||
Retail adjusted EBITDA
|
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
32
|
|
|
$
|
44
|
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate operating loss, as reported
|
|
$
|
(26
|
)
|
|
$
|
(29
|
)
|
|
$
|
(54
|
)
|
|
$
|
(43
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Store closure charges and costs
|
|
5
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||
Merger and integration costs
|
|
2
|
|
|
23
|
|
|
8
|
|
|
27
|
|
||||
Strategic consulting costs
|
|
11
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Asset impairment charge
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Severance costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Gain on sale of property
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Corporate operating loss, as adjusted
|
|
(8
|
)
|
|
(4
|
)
|
|
(21
|
)
|
|
(14
|
)
|
||||
Corporate depreciation and amortization
|
|
4
|
|
|
3
|
|
|
8
|
|
|
7
|
|
||||
Stock-based compensation
|
|
6
|
|
|
4
|
|
|
12
|
|
|
10
|
|
||||
Corporate adjusted EBITDA
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
$
|
3
|
|
Total adjusted EBITDA
|
|
$
|
64
|
|
|
$
|
94
|
|
|
$
|
162
|
|
|
$
|
212
|
|
•
|
Unused available credit under the Revolving ABL Credit Facility
decreased
$55
to
$761
as of
September 8, 2018
from
$816
as of
February 24, 2018
.
|
•
|
Total debt
decreased
$303
to
$1,429
as of
September 8, 2018
from
$1,732
as of
February 24, 2018
, net of unamortized debt financing costs and original issue discount, primarily related to our redemption of $220 of the outstanding
6.75 percent
Senior Notes due June 2021, $134 of mandatory prepayments under the Secured Term Loan Facility and the $26 pay-off of the Harrisburg, PA distribution center mortgage, offset in part by higher borrowings under the Revolving ABL Credit Facility. The decrease in debt was primarily driven by available proceeds received from the sale-leaseback of seven distribution centers and the sale of 21 Farm Fresh stores and Farm Fresh pharmacy assets in the first quarter of fiscal 2019.
|
•
|
There are
$3
scheduled debt maturities in the remainder of fiscal
2019
.
|
•
|
Working capital of continuing operations
increased
$62
to
$526
as of
September 8, 2018
from
$464
as of
February 24, 2018
, excluding the impacts of the LIFO reserve, primarily due to inventory and accounts receivable increases.
|
•
|
We expect to 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 the remainder of fiscal
2019
.
|
|
Year-To-Date Ended
|
||||||||||
|
September 8,
2018 (28 weeks) |
|
September 9,
2017 (28 weeks) |
|
Variance
|
||||||
Cash flow activities
|
|
|
|
|
|
||||||
Net cash (used in) provided by operating activities—continuing operations
|
$
|
(16
|
)
|
|
$
|
70
|
|
|
$
|
(86
|
)
|
Net cash provided by (used in) investing activities—continuing operations
|
276
|
|
|
(208
|
)
|
|
484
|
|
|||
Net cash (used in) provided by financing activities—continuing operations
|
(332
|
)
|
|
31
|
|
|
(363
|
)
|
|||
Net cash provided by (used in) discontinued operations
|
64
|
|
|
(16
|
)
|
|
80
|
|
|||
Net decrease in cash and cash equivalents
|
(8
|
)
|
|
(123
|
)
|
|
115
|
|
|||
Cash and cash equivalents at beginning of period
|
48
|
|
|
332
|
|
|
(284
|
)
|
|||
Cash and cash equivalents at the end of period
|
40
|
|
|
209
|
|
|
(169
|
)
|
|||
Less cash and cash equivalents of discontinued operations at end of period
|
(4
|
)
|
|
(6
|
)
|
|
2
|
|
|||
Cash and cash equivalents of continuing operations at end of period
|
$
|
36
|
|
|
$
|
203
|
|
|
$
|
(167
|
)
|
|
Payments Due Per Period
|
||||||||||||||||||||||
|
Total
|
|
Remaining Fiscal 2019
|
|
Fiscal 2020
|
|
Fiscal 2021-2022
|
|
Fiscal 2023-2024
|
|
Thereafter
|
||||||||||||
Contractual obligations
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
(3)
|
$
|
1,450
|
|
|
$
|
3
|
|
|
$
|
7
|
|
|
$
|
378
|
|
|
$
|
364
|
|
|
$
|
698
|
|
Interest on long-term debt
(4)
|
408
|
|
|
40
|
|
|
87
|
|
|
160
|
|
|
107
|
|
|
14
|
|
||||||
Operating leases
(5)
|
1,194
|
|
|
36
|
|
|
92
|
|
|
174
|
|
|
142
|
|
|
750
|
|
||||||
Capital leases
(6)
|
189
|
|
|
13
|
|
|
31
|
|
|
54
|
|
|
42
|
|
|
49
|
|
||||||
Purchase obligations
(7)
|
371
|
|
|
166
|
|
|
78
|
|
|
100
|
|
|
27
|
|
|
—
|
|
||||||
Self-insurance obligations
(8)
|
70
|
|
|
12
|
|
|
16
|
|
|
18
|
|
|
9
|
|
|
15
|
|
||||||
Total contractual obligations
|
$
|
3,682
|
|
|
$
|
270
|
|
|
$
|
311
|
|
|
$
|
884
|
|
|
$
|
691
|
|
|
$
|
1,526
|
|
(1)
|
Because the timing of certain future payments beyond fiscal
2019
cannot be reasonably determined, contractual obligations payments due per fiscal period presented here exclude our discretionary funding of our pension plans and required funding of our postretirement benefit obligations, which totaled
$6
for fiscal
2019
year-to-date, and multiemployer pension plan contributions, which totaled
$25
for fiscal
2019
year-to-date. Pension and postretirement benefit obligations were
$246
as
of
September 8, 2018
. We expect to contribute
$5
to
$10
t
o pension and postretirement benefit plans during fiscal
2019
, but are not required to make minimum pension contributions.
|
(2)
|
Unrecognized tax benefits, which totaled
$45
as
of
September 8, 2018
, 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 original issue discounts and deferred financing costs. Long-term debt payments due per fiscal period for
2019
through thereafter exclude any Excess Cash Flow prepayments that may be required under the provisions of the Secured Term Loan Facility because the amount of such future prepayment amounts, if any, are not reasonably estimable as of
September 8, 2018
.
|
(4)
|
Amounts include contractual interest payments using the interest rate as of
September 8, 2018
applicable to our 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 we are also obligated, offset by minimum subtenant rentals of
$83
,
$8
,
$19
,
$28
,
$11
and
$17
, respectively.
|
(6)
|
Represents the minimum payments under capital leases, excluding common area maintenance, insurance or tax payments, for which we are also obligated, offset by minimum subtenant rentals of
$33
,
$2
,
$6
,
$10
,
$7
, and
$8
, respectively.
|
(7)
|
Our purchase obligations include various obligations that have annual purchase commitments of $1 or greater. As of
September 8, 2018
, future purchase obligations existed that primarily related to fixed asset and information technology commitments. In addition, in the ordinary course of business, we enter into supply contracts to purchase product for resale to Wholesale customers and to consumers, which are typically of a short-term nature with limited or no purchase commitments. The majority of our supply contracts
|
(8)
|
Our 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 attention of our management may be directed to transaction-related considerations and may be diverted from the day-to-day operations of our business;
|
•
|
our employees may experience uncertainty about their future roles with us, which might adversely affect our ability to hire, retain and motivate key personnel and other employees;
|
•
|
customers, suppliers or other parties that we maintain business relationships with may experience uncertainty prior to the closing of the Merger and seek alternative relationships with third parties or seek to terminate or re-negotiate their relationships with us; and
|
•
|
the Merger Agreement restricts us from engaging in certain actions without the consent of UNFI, which could prevent us from pursuing opportunities that may arise prior to the consummation of the Merger.
|
(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
|
|
|
|
|
|
|
|
|
||||||
June 17, 2018 to July 14, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Second four weeks
|
|
|
|
|
|
|
|
|
||||||
July 15, 2018 to August 11, 2018
|
|
9,780
|
|
|
$
|
32.09
|
|
|
—
|
|
|
$
|
—
|
|
Third four weeks
|
|
|
|
|
|
|
|
|
||||||
August 12, 2018 to September 8, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Totals
|
|
9,780
|
|
|
$
|
32.09
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
The reported periods conform to our fiscal calendar composed of thirteen 28-day periods. The
second
quarter of fiscal
2019
contains
three
28-day periods.
|
(2)
|
These amounts include the deemed surrender by participants in our compensatory stock plans of
9,780
shares of previously issued common stock. These are from the vesting of restricted stock awards and restricted stock units granted under such plans.
|
|
Agreement and Plan of Merger, dated as of July 25, 2018, by and among SUPERVALU INC., SUPERVALU Enterprises, Inc., United Natural Foods, Inc. and Jedi Merger Sub, Inc. is incorporated herein by reference to Exhibit 2.1 to Supervalu’s Current Report on Form 8-K filed with the SEC on July 26, 2018 (Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementary to the SEC upon request.)
|
|
|
|
|
|
First Amendment to Agreement and Plan of Merger, dated as of October 10, 2018, by and among SUPERVALU INC., SUPERVALU Enterprises, Inc., United Natural Foods, Inc. and Jedi Merger Sub, Inc. is incorporated herein by reference to Exhibit 2.1 to Supervalu’s Current Report on Form 8-K filed with the SEC on October 10, 2018.
|
|
|
|
|
|
Letter Agreement Amendment, dated July 25, 2018, between SUPERVALU INC. and Mark Gross is filed herewith.*
|
|
|
|
|
|
Agreement, dated July 30, 2018, by and among SUPERVALU INC., Blackwells Capital LLC and Mr. Jason Aintabi is incorporated herein by reference to Exhibit 10.1 to Supervalu’s Current Report on Form 8-K filed with the SEC on July 31, 2018.
|
|
|
|
|
|
Ratio of earnings to fixed charges.
|
|
|
|
|
|
Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
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 second quarter ended September 8, 2018, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Stockholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.
|
*
|
Indicates management contracts, compensatory plans or arrangements required to be filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K.
|
|
|
|
SUPERVALU INC. (Registrant)
|
|
|
|
|
Dated: October 15, 2018
|
|
|
/s/ ROB N. WOSETH
|
|
|
|
Rob N. Woseth
Executive Vice President and Chief Financial Officer
(principal financial officer)
|
1)
|
The definition of “
Business of the Company
” shall mean any business or activity involved in (a) grocery wholesale (including, without limitation, distribution of traditional grocery, organic, specialty, ethnic, meat or produce items of the type provided by the Company or which the Company has taken substantial steps toward providing at any time during your employment with the Company) and (b) grocery retail.
|
2)
|
Notwithstanding the foregoing, for purposes of the Business of the Company as defined in clause (b) above, the “geographic market” referred to in the Restrictive Covenant Agreements shall be limited to Minnesota, North Dakota, Washington D.C., and Maryland.
|
Date:
|
|
Stuart McFarland, General Counsel
|
|
|
|
|
|
AGREED AND ACCEPTED:
|
|
|
|
Date:
|
|
Mark Gross
|
|
|
|
|
|
|
|
Not accepted until signed and dated by Stuart McFarland, General Counsel. Not effective until executed by both parties.
|
|
Year-To-Date Ended
|
|
Fiscal Year Ended
|
||||||||||||||||
|
September 8,
2018 (1) (28 weeks) |
|
February 24, 2018
(52 weeks) |
|
February 25, 2017
(52 weeks) |
|
February 27, 2016
(52 weeks) |
|
February 28, 2015
(2)
(53 weeks) |
||||||||||
Net (loss) earnings from continuing operations before income taxes
|
$
|
(117
|
)
|
|
$
|
77
|
|
|
$
|
20
|
|
|
$
|
53
|
|
|
$
|
(73
|
)
|
Less net loss (earnings) attributable to noncontrolling interests
|
1
|
|
|
(1
|
)
|
|
(4
|
)
|
|
(8
|
)
|
|
(7
|
)
|
|||||
Net overdistributed earnings of less than fifty percent owned affiliates
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Fixed charges
|
99
|
|
|
159
|
|
|
200
|
|
|
214
|
|
|
261
|
|
|||||
Amortized capitalized interest
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Earnings available to cover fixed charges
|
$
|
(18
|
)
|
|
$
|
235
|
|
|
$
|
216
|
|
|
$
|
259
|
|
|
$
|
180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense
|
75
|
|
|
136
|
|
|
181
|
|
|
194
|
|
|
241
|
|
|||||
Capitalized interest
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Interest on operating leases
|
23
|
|
|
22
|
|
|
19
|
|
|
19
|
|
|
19
|
|
|||||
Total fixed charges
|
$
|
99
|
|
|
$
|
159
|
|
|
$
|
200
|
|
|
$
|
214
|
|
|
$
|
261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(Deficiency) excess of earnings to fixed charges
|
$
|
(117
|
)
|
|
$
|
76
|
|
|
$
|
16
|
|
|
$
|
45
|
|
|
$
|
(81
|
)
|
Ratio of earnings to fixed charges
|
N/A
|
|
|
1.48
|
|
|
1.08
|
|
|
1.21
|
|
|
N/A
|
|
(1)
|
Our earnings available to cover fixed charges were insufficient to cover fixed charges for the second quarter of fiscal 2019 due to depreciation and amortization, including amounts attributable to acquired businesses, and after-tax charges and costs of
$71
, including asset impairment charges, store closure charges and costs, strategic consulting costs, severance costs, merger and integration costs, debt refinancing costs and unamortized financing charges, offset in part by a deferred income tax benefit and a gain on sale of property.
|
(2)
|
Our earnings available to cover fixed charges were insufficient to cover fixed charges for fiscal 2015 due to $69 of pension, multi-employer and benefit plan settlement charge, $1 of severance costs and $1 Information technology intrusion costs, net of insurance recoverable before tax.
|
Date: October 15, 2018
|
|
/S/ MARK GROSS
|
|
|
Mark Gross
|
|
|
Chief Executive Officer and President
|
Date: October 15, 2018
|
|
/S/ ROB N. WOSETH
|
|
|
Rob N. Woseth
|
|
|
Executive Vice President and Chief Financial Officer
|
Dated: October 15, 2018
|
|
/S/ MARK GROSS
|
|
|
Mark Gross
|
|
|
Chief Executive Officer and President
|
Dated: October 15, 2018
|
|
/S/ ROB N. WOSETH
|
|
|
Rob N. Woseth
|
|
|
Executive Vice President and Chief Financial Officer
|