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SUPERVALU Reports Fourth Quarter and Fiscal 2013 Results



  SUPERVALU Reports Fourth Quarter and Fiscal 2013 Results

Business Wire

MINNEAPOLIS -- April 24, 2013

SUPERVALU INC. (NYSE: SVU) today reported fourth quarter fiscal 2013 net sales
of $3.89 billion and a net loss of $1.41 billion, or $6.65 per diluted share.
Due to the sale of the Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market
stores and related Osco and Sav-on in-store pharmacies on March 21, 2013 (the
“transaction”), their results are presented as discontinued operations for all
periods.

Net loss from continuing operations for the fourth quarter of fiscal 2013 was
$179 million, or $0.85 per diluted share, and included $149 million in
after-tax charges, or $0.71 per diluted share, primarily related to non-cash
asset impairment charges and employee severance. When adjusted for these
charges, the fourth quarter fiscal 2013 loss from continuing operations was
$30 million, or $0.14 per diluted share. In the fourth quarter of fiscal 2012,
the net loss from continuing operations was $42 million, or $0.20 per diluted
share, and included $47 million in after-tax charges, or $0.22 per diluted
share, primarily related to non-cash asset impairment charges and employee
severance. When adjusted for these charges, fourth quarter fiscal 2012
earnings from continuing operations were $5 million, or $0.02 per diluted
share. [See tables 1-4 for a reconciliation of GAAP and non-GAAP (adjusted)
results appearing in this release]

“This past quarter was largely about transitioning the company for the future,
and I am proud of the many things we accomplished in my first sixty days,”
said Sam Duncan, SUPERVALU’s president and chief executive officer. “I brought
in Ritchie Casteel as Save-A-Lot’s new president and CEO, and he has already
right-sized that organization’s overhead and, along with me, met with a number
of licensees to understand what we can do to help drive sales and improve the
overall operating model.”

“In the Independent Business, I am very pleased that Janel Haugarth will
continue to lead this very important part of our company and am especially
grateful for the support we have received from our retailers. I have talked
and visited with a number of them and we have established a new National
Retailer Advisory Group to facilitate feedback and information sharing,”
Duncan continued.

Commenting on the Retail Food segment, Duncan added, “Our banner presidents
and their leadership teams are in place and have begun to execute on our
decentralized model, with greater autonomy and accountability. They are
energized by this change and excited to drive sales and cash in their stores.”

Duncan went on to state, “We have taken the necessary steps to right-size our
corporate overhead and move specific responsibilities into our business
segments. Simplifying our technology needs is an important part of the
strategy going forward, and Randy Burdick, our new executive vice president,
chief information officer, has a proven history of success that he brings to
SUPERVALU. Also key to the management team as we strive to improve our fresh
offerings and drive private label growth are Mark Van Buskirk, executive vice
president , merchandising, marketing and pharmacy and Steve Fox, senior vice
president, food merchandising.”

“My focus now is on the customer and driving sales increases in all our
business units. I am excited to be leading this company and believe that
operating results can be improved,” Duncan concluded.

Fourth Quarter Results – Continuing Operations

Fourth quarter net sales were $3.89 billion compared to $3.98 billion last
year, a decline of 2.3 percent. The decrease in net sales primarily reflects a
decline in identical store sales of negative 4.1 percent for Retail Food and
negative 2.6 percent for Save-A-Lot network identical store sales.

Gross profit margin for the fourth quarter was $548 million, or 14.1 percent
of net sales, compared to $572 million, or 14.4 percent of net sales last
year. The decrease in gross margin as a percent of net sales reflects
investment in competitive pricing partially offset by lower promotional
spending.

Selling and administrative expenses in the fourth quarter were $759 million,
or 19.5 percent of net sales, and included $238 million in charges primarily
related to non-cash asset impairments and employee severance. Excluding these
items, selling and administrative expenses in the fourth quarter were $521
million, or 13.4 percent of net sales. Selling and administrative expenses in
the fourth quarter of fiscal 2012 were $544 million, or 13.7 percent of net
sales, and included $15 million in employee severance costs. Excluding these
items, selling and administrative expenses in the fourth quarter of fiscal
2012 were $529 million, or 13.3 percent of net sales.

Net interest expense for the fourth quarter was $59 million compared to $57
million last year.

SUPERVALU’s income tax benefit was $97 million, or 35.1 percent of pre-tax
loss, for the fourth quarter, compared to an income tax benefit of $25
million, or 37.3 percent of pre-tax loss in last year’s fourth quarter. The
income tax benefit for both fiscal years reflects the loss from continuing
operations.

Retail Food

Fourth quarter Retail Food net sales were $1.09 billion compared to $1.14
billion last year, a decline of 4.4 percent, primarily reflecting identical
store sales of negative 4.1 percent driven by competitive pressures in certain
markets and a lower level of promotional spending.

Retail Food operating loss was $238 million, or 21.9 percent of net sales, and
included $207 million in pre-tax charges primarily related to non-cash asset
impairments. Excluding these charges, retail food operating loss was $31
million, or 2.8 percent of net sales. Last year’s retail food operating loss
was $90 million, or 7.9 percent of net sales, and included $48 million in
charges primarily related to non-cash asset impairments and employee
severance. Excluding these charges, last year’s retail food operating loss was
$42 million, or 3.6 percent of net sales. The improvement in retail food
operating loss as a percent of net sales, excluding these charges, was driven
by the benefit from the Company’s cost cutting initiatives which were
partially offset by the deleveraging impact of negative identical store sales.

Save-A-Lot

Fourth quarter Save-A-Lot net sales were $969 million compared to $984 million
last year, a decrease of 1.5 percent, reflecting the impact from network
identical store sales of negative 2.6 percent partially offset by the benefit
from net new store openings.

Save-A-Lot operating earnings in the fourth quarter were $41 million, or 4.3
percent of net sales, and included $8 million in pre-tax non-cash asset
impairment charges. Excluding these costs, Save-A-Lot operating earnings were
$49 million, or 5.1 percent of net sales, compared to $54 million, or 5.5
percent last year. The decline in operating earnings as a percent of net sales
was primarily due to lower gross margin rates attributable to competitive
price investments and the de-leveraging impact of negative identical store
sales.

Independent Business

Fourth quarter Independent Business net sales were $1.83 billion compared to
$1.86 billion last year, a decrease of 1.3 percent. This decline reflects a
lower level of new business during the quarter which resulted from a
challenging affiliation environment since the Company announced it would
review strategic alternatives.

Independent Business operating earnings in the fourth quarter were $25
million, or 1.4 percent of net sales, and included $22 million in pre-tax
non-cash asset impairment charges and employee severance. Excluding these
costs, Independent Business operating earnings in the fourth quarter were $47
million, or 2.6 percent of net sales. Independent Business operating earnings
in the fourth quarter of fiscal 2012 were $43 million, or 2.3 percent of net
sales, and included $5 million in pre-tax charges for employee severance.
Excluding these costs, Independent Business operating earnings in the fourth
quarter of fiscal 2012 were $48 million, or 2.6 percent of net sales.

Fiscal 2013 Results – Continuing Operations

The Company reported full-year net sales of $17.1 billion and a net loss from
continuing operations of $263 million, or $1.24 per diluted share, which
included $187 million in after-tax charges, or $0.88 per diluted share,
primarily related to non-cash asset impairments, employee related costs and
store closure expenses. When adjusted for these charges, net loss from
continuing operations in fiscal 2013 was $76 million, or $0.36 per diluted
share. Full year identical store sales for Retail Food were negative 2.4
percent. Full year Save-A-Lot network identical store sales were negative 3.3
percent.

For fiscal 2013 and fiscal 2012, diluted loss per share is computed using the
basic weighted-average number of shares outstanding and excludes all
outstanding stock options and restricted stock as their effect is
anti-dilutive when applied to losses.

Cash flows

Fiscal 2013 net cash flows from operating activities were $417 million
compared to $328 million in the prior year, reflecting lower levels of working
capital.

Transaction Update - Discontinued Operations

On January 10, 2013, the company announced it had reached a definitive
agreement for the sale of five retail grocery banners (Albertsons, Acme,
Jewel-Osco, Shaw’s and Star Market). This transaction was completed on March
21, 2013. The results from these banners are presented as discontinued
operations for all periods and include the operating results and charges
related to these stores.

Conference Call

A conference call to review the fourth quarter and year end results is
scheduled for 9:00 a.m. central time today. The call will be webcast live at
www.supervaluinvestors.com (click on microphone icon). A replay of the call
will be archived at www.supervaluinvestors.com. To access the website replay
go to the "Investors" link and click on "Presentations and Webcasts."

About SUPERVALU INC.

SUPERVALU Inc. is one of the largest grocery wholesalers and retailers in the
U.S. with annual sales of approximately $17 billion. SUPERVALU serves
customers across the United States through a network of approximately 3,420
stores composed of 1,900 independent stores serviced primarily by the
Company’s food distribution business, 1,331 Save-A-Lot stores, of which 950
are operated by licensee owners; and 191 traditional retail grocery stores.
Headquartered in Minnesota, SUPERVALU has approximately 35,000 employees. For
more information about SUPERVALU visit www.supervalu.com.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE
OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995.

Except for the historical and factual information contained herein, the
matters set forth in this news release, particularly those pertaining to
SUPERVALU’s expectations, guidance, or future operating results, and other
statements identified by words such as "estimates," "expects," "projects,"
"plans," and similar expressions are forward-looking statements within the
meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially, including
competition, ability to execute initiatives, substantial indebtedness, impact
of economic conditions, labor relations issues, escalating costs of providing
employee benefits, regulatory matters, food and drug safety issues,
self-insurance, legal and administrative proceedings, information technology,
severe weather, natural disasters and adverse climate changes, tax matters,
the continuing review of goodwill and other intangible assets, accounting
matters, the effect of the sale of the New Albertsons banners, and other risk
factors relating to our business or industry as detailed from time to time in
SUPERVALU's reports filed with the SEC. You should not place undue reliance on
these forward-looking statements, which speak only as of the date of this news
release. Unless legally required, SUPERVALU undertakes no obligation to update
or revise publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.

                                                                     
                                                      
SUPERVALU INC. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                                                       
                    Fiscal                           Fiscal
                    Quarter Ended                    Quarter
                                                     Ended
                    February 23,                     February 25,
                    2013                             2012
(In millions,                         % of net                        % of net
except per          (12 weeks)        sales          (12 weeks)       sales
share data)
                                                                       
Net sales           $  3,890          100.0  %       $  3,980         100.0 %
Cost of sales          3,342          85.9   %          3,408         85.6  %
Gross profit           548            14.1   %          572           14.4  %
Selling and
administrative         759            19.5   %          544           13.7  %
expenses
Goodwill and
intangible
asset                  6              0.1    %          38            1.0   %
impairment
charges
Operating loss         (217    )      (5.6   )%         (10    )      (0.2  )%
Interest               59             1.5    %          57            1.4   %
expense, net
Loss from
continuing
operations             (276    )      (7.1   )%         (67    )      (1.7  )%
before income
taxes^(1)
Income tax             (97     )      (2.5   )%         (25    )      (0.6  )%
benefit
Net loss from
continuing             (179    )      (4.6   )%         (42    )      (1.1  )%
operations^(1)
Loss from
discontinued           (1,233  )      (31.7  )%         (382   )      (9.6  )%
operations, net
of tax
Net loss            $  (1,412  )      (36.3  )%      $  (424   )      (10.7 )%
                                                                       
Basic and
diluted net
loss per share
Net loss per
share from          $  (0.85   )                     $  (0.20  )
continuing
operations
Net loss per
share from          $  (5.80   )                     $  (1.80  )       
discontinued
operations
Net loss per        $  (6.65   )                     $  (2.00  )       
share
                                                                       
Weighted
average number
of shares
outstanding
Basic                  212                              212
Diluted                212                              212
                                                                       

      Results for the quarter ended February 23, 2013 include net charges of
      $244 before tax ($149 after tax, or $0.71 per diluted share), comprised
      of non-cash property, plant and equipment impairment charges of $210
(1)   before tax ($129 after tax, or $0.61 per diluted share), severance costs
      of $28 before tax ($17 after tax, or $0.08 per diluted share),
      intangible asset impairment charges of $6 before tax ($3 after tax, or
      $0.02 per diluted share).
       
      Results for the quarter ended February 25, 2012 include net charges of
      $54 before tax ($47 after tax, or $0.22 per diluted share), comprised of
      non-cash goodwill impairment charges of $38 before tax ($37 after tax,
      or $0.17 per diluted share), and severance costs of $15 before tax ($10
      after tax, or $0.05 per diluted share).

 
 
SUPERVALU INC. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                                                     
                    Fiscal Year                      Fiscal Year
                    Ended                            Ended
                    February 23,                     February 25,
                    2013                             2012
(In millions,                         % of net                        % of net
except per          (52 weeks)        sales          (52 weeks)       sales
share data)
                                                                       
Net sales           $  17,097         100.0  %       $  17,336        100.0 %
Cost of sales          14,803         86.6   %          14,926        86.1  %
Gross profit           2,294          13.4   %          2,410         13.9  %
Selling and
administrative         2,445          14.3   %          2,222         12.8  %
expenses
Goodwill and
intangible
asset                  6              0.0    %          92            0.5   %
impairment
charges
Operating              (157    )      (0.9   )%         96            0.6   %
earnings (loss)
Interest               269            1.6    %          247           1.4   %
expense, net
Loss from
continuing
operations             (426    )      (2.5   )%         (151    )     (0.9  )%
before income
taxes^(1)
Income tax             (163    )      (1.0   )%         (41     )     (0.2  )%
benefit
Net loss from
continuing             (263    )      (1.5   )%         (110    )     (0.6  )%
operations^(1)
Loss from
discontinued           (1,203  )      (7.0   )%         (930    )     (5.4  )%
operations, net
of tax
Net loss            $  (1,466  )      (8.6   )%      $  (1,040  )     (6.0  )%
                                                                       
Basic and
diluted net
loss per share
Net loss per
share from          $  (1.24   )                     $  (0.52   )
continuing
operations
Net loss per
share from          $  (5.67   )                     $  (4.39   )      
discontinued
operations
Net loss per        $  (6.91   )                     $  (4.91   )      
share
                                                                       
Weighted
average number
of shares
outstanding
Basic                  212                              212
Diluted                212                              212
                                                                       

      Results for fiscal 2013 include net charges of $303 before tax ($187
      after tax, or $0.88 per diluted share), comprised of non-cash property,
      plant and equipment impairment charges of $227 before tax ($140 after
      tax, or $0.66 per diluted share), severance and labor buyout costs of
      $36 before tax ($23 after tax, or $0.10 per diluted share), store
(1)   closure costs of $22 before tax ($13 after tax, or $0.06 per diluted
      share), write-off of unamortized financing costs of $22 before tax ($14
      after tax, or $0.07 per diluted share) and intangible asset impairment
      charges of $6 before tax ($3 after tax, or $0.02 per diluted share),
      offset in party by a cash settlement received from credit card companies
      of $10 before tax ($6 after tax, or $0.03 per diluted share).
       
      Results for fiscal 2012 include net charges of $107 before tax ($100
      after tax, or $0.48 per diluted share), comprised of non-cash goodwill
      impairment charges of $92 before tax ($90 after tax, or $0.43 per
      diluted share), and severance-related expenses of $15 before tax ($10
      after tax, or $0.05 per diluted share).

 
 
SUPERVALU INC. and Subsidiaries
CONDENSED CONSOLIDATED SEGMENT FINANCIAL INFORMATION
(Unaudited)
                                                         
                                 Fiscal Quarter Ended     Fiscal Quarter Ended
                                 February 23, 2013        February 25, 2012
(In millions)                    (12 weeks)               (12 weeks)
                                                           
Net sales
Retail Food^(1)                  $    1,089               $     1,138
% of total                            28.0      %               28.6     %
Save-A-Lot^(1)                        969                       984
% of total                            24.9      %               24.7     %
Independent Business                  1,832                     1,858
% of total                            47.1      %               46.7     %
Total net sales                       3,890                     3,980
                                      100.0     %               100.0    %
                                                           
Operating earnings (loss)
Retail Food^(2)                  $    (238      )         $     (90      )
% of sales                            (21.9     )%              (7.9     )%
Save-A-Lot^(3)                        41                        54
% of sales                            4.3       %               5.5      %
Independent Business^(4)              25                        43
% of sales                            1.4       %               2.3      %
Corporate^(5)                         (45       )               (17      )
Total operating earnings              (217      )               (10      )
(loss)
% of sales                            (5.6      )%              (0.2     )%
Interest expense, net                 59                        57        
Loss from continuing
operations before income              (276      )               (67      )
taxes
Income tax benefit                    (97       )               (25      )
Net loss from continuing              (179      )               (42      )
operations
Loss from discontinued                (1,233    )               (382     )
operations, net of tax
Net loss                         $    (1,412    )         $     (424     )
                                                           
                                                           
LIFO charge
Retail Food                      $    1                   $     -
Independent Business                  (2        )               1         
Total                            $    (1        )         $     1         
                                                           
Depreciation and
amortization
Retail Food                      $    52                  $     50
Save-A-Lot                            16                        15
Independent Business                  14                        16        
Total                            $    82                  $     81        
                                                                          

(1) The Save-A-Lot reportable segment was formerly aggregated with the Retail
Food reportable segment.
 
(2) Retail Food operating loss for the fourth quarter ended February 23, 2013
includes $190 of non-cash asset impairment charges related to software
projects abandoned during the quarter and $17 of severance costs. Retail Food
operating loss for the fourth quarter ended February 25, 2012 includes $38 of
non-cash goodwill impairment charges and $10 of severance costs.
                                         
(3) Save-A-Lot operating earnings for the fourth quarter ended February 23,
2013 includes $8 of non-cash operating store impairments.
                                         
(4) Independent Business operating earnings for the fourth quarter ended
February 23, 2013 includes $6 of non-cash intangible asset impairment charges,
$5 of non-cash distribution center impairments and $11 of severance costs.
Independent Business operating earnings for the fourth quarter ended February
25, 2012 includes $5 of severance costs.
                                         
(5) Corporate operating loss for the quarter ended February 23, 2013 includes
$7 of non-cash asset impairment charges.

                                                            
                                                              
SUPERVALU INC. and Subsidiaries
CONDENSED CONSOLIDATED SEGMENT FINANCIAL INFORMATION
(Unaudited)
                                                              
                                       Fiscal Year Ended     Fiscal Year Ended
                                       February 23, 2013     February 25, 2012
(In millions)                          (52 weeks)            (52 weeks)
                                                              
Net sales
Retail Food^(1)                        $   4,736             $   4,921
% of total                                 27.7     %            28.4     %
Save-A-Lot^(1)                             4,195                 4,221
% of total                                 24.5     %            24.3     %
Independent Business                       8,166                 8,194
% of total                                 47.8     %            47.3     %
Total net sales                            17,097                17,336
                                           100.0    %            100.0    %
                                                              
Operating earnings (loss)
Retail Food^(2)(7)                     $   (420     )        $   (328     )
% of sales                                 (8.9     )%           (6.7     )%
Save-A-Lot^(3)(7)                          146                   232
% of sales                                 3.5      %            5.5      %
Independent Business^(4)(7)                189                   243
% of sales                                 2.3      %            3.0      %
Corporate^(5)(7)                           (72      )            (51      )
Total operating earnings (loss)            (157     )            96
% of sales                                 (0.9     )%           0.6      %
Interest expense, net^(6)                  269                   247       
Loss from continuing operations            (426     )            (151     )
before income taxes
Income tax benefit                         (163     )            (41      )
Net loss from continuing                   (263     )            (110     )
operations
Loss from discontinued operations,         (1,203   )            (930     )
net of tax
Net loss                               $   (1,466   )        $   (1,040   )
                                                              
                                                              
LIFO charge
Retail Food                            $   5                 $   11
Independent Business                       (1       )            5         
Total                                  $   4                 $   16        
                                                              
Depreciation and amortization
Retail Food                            $   233               $   226
Save-A-Lot                                 68                    62
Independent Business                       64                    67        
Total                                  $   365               $   355       
                                                              

(1) The Company's Save-A-Lot reportable segment was formerly aggregated with
the Retail Food reportable segment.
 
(2) Retail Food operating loss for the fiscal year-to-date ended February 23,
2013 includes $203 of non-cash asset impairment charges related to abandoned
software projects and $21 of severance and labor buyout costs, offset in part
by $10 in a cash settlement received from credit card companies. Retail Food
operating loss for the fiscal year-to-date ended February 25, 2012 includes
$92 of non-cash goodwill impairment charges and $10 of severance costs.
 
(3) Save-A-Lot operating earnings for the fiscal year-to-date ended February
23, 2013 includes $22 of charges for previously announced store closures and
$13 of non-cash operating store impairments.
 
(4) Independent Business operating earnings for the fiscal year-to-date ended
February 23, 2013 includes $6 of non-cash intangible asset impairments, $5 of
non-cash operating distribution center impairments and $12 of severance costs.
Independent Business operating earnings for the fiscal year-to-date ended
February 25, 2012 includes $5 of severance costs.
 
(5) Corporate operating loss for the fiscal year-to-date ended February 23,
2013 includes $3 of severance costs and $6 of non-cash asset impairment
charges.
 
(6) Interest expense, net for the fiscal year-to-date ended February 23, 2013
includes $22 for the write-off of unamortized costs related to debt which was
replaced as a result of the second quarter fiscal 2013 debt refinancing.
 
(7) Operating segment earnings (loss), primarily Retail Food, includes pension
expense of $83, $88, $69 in fiscal 2013, 2012 and 2011 for inactive
participants in the SUPERVALU Retirement Plan. This pension expense is
anticipated to be reclassified primarily to Corporate Operating earnings
(loss) for future periods to reflect the structure of the organization under
which the business will be managed. Upon the change in structure all
corresponding balances for earlier periods will be recast for comparability.

                                                            
                                                              
SUPERVALU INC. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                              
(In millions)                          February 23, 2013     February 25, 2012
                                                              
ASSETS
Current assets
Cash and cash equivalents              $    72               $      64
Receivables, net                            466                     499
Inventories, net                            854                     908
Other current assets                        84                      186
Current assets of discontinued              1,494                   1,616
operations
Total current assets                        2,970                   3,273
Property, plant and equipment, net          1,700                   2,099
Goodwill                                    847                     847
Intangible assets, net                      51                      64
Deferred tax assets                         345                     268
Other assets                                144                     122
Long-term assets of discontinued            4,977                   5,428
operations
                                                                     
Total assets                           $    11,034           $      12,101
                                                              
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable and accrued           $    1,364            $      1,466
liabilities
Current maturities of long-term             74                      345
debt and capital lease obligations
Other current liabilities                   211                     222
Current liabilities of                      2,701                   1,606
discontinued operations
Total current liabilities                   4,350                   3,639
Long-term debt and capital lease            2,815                   2,881
obligations
Pension and other postretirement            962                     1,024
benefit obligations
Long-term tax liabilities                   308                     278
Other long-term liabilities                 223                     272
Non-current liabilities of                  3,791                   3,986
discontinued operations
Commitments and contingencies
Total stockholders' equity                  (1,415   )              21
(deficit)
                                                                     
Total liabilities and                  $    11,034           $      12,101
stockholders’ equity
                                                                     

                                                            
SUPERVALU INC. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Unaudited)
                                       Fiscal Year Ended     Fiscal Year Ended
                                       February 23, 2013     February 25, 2012
(In millions)                          (52 weeks)            (52 weeks)
                                                              
Cash flows from operating
activities
Net loss                               $    (1,466   )       $    (1,040   )
Net loss from discontinued                  (1,203   )            (930     )
operations
Net loss from continuing                    (263     )            (110     )
operations
Adjustments to reconcile net loss
from continuing operations to net
cash provided by operating
activities:
Goodwill and intangible asset               6                     92
impairment charges
Asset impairment and other charges          283                   6
Net gain on sale of assets and              (6       )            (25      )
exits of surplus leases
Depreciation and amortization               365                   355
LIFO charge                                 4                     16
Deferred income taxes                       (50)                  13        
Stock-based compensation                    13                    13
Net pension and other                       102                   106
postretirement benefits cost
Contributions to pension and other          (98      )            (83      )
postretirement benefit plans
Other adjustments                           26                    21
Changes in operating assets and
liabilities
Receivables                                 30                    (6       )
Inventories                                 51                    10
Accounts payable and accrued                (69      )            (108     )
liabilities
Income taxes payable                        75                    55
Other changes in operating assets           (52      )            (27      )
and liabilities
Net cash provided by operating              417                   328
activities - continuing operations
Net cash provided by operating
activities - discontinued                   481                   728       
operations
Net cash provided by operating              898                   1,056     
activities
                                                              
Cash flows from investing
activities
Proceeds from sale of assets                38                    29
Purchases of property, plant and            (228     )            (402     )
equipment
Other                                       1                     3         
Net cash used in investing                  (189     )            (370     )
activities - continuing operations
Net cash used in investing
activities - discontinued                   (175     )            (114     )
operations
Net cash used in investing                  (364     )            (484     )
activities
                                                              
Cash flows from financing
activities
Proceeds from issuance of debt              1,713                 291
Payments of debt and capital lease          (2,099   )            (700     )
obligations
Payments of debt financing costs            (66      )            (8       )
Dividends paid                              (37      )            (74      )
Other                                       (7       )            (2       )
Net cash used in financing                  (496     )            (493     )
activities - continuing operations
Net cash used in financing
activities - discontinued                   (46      )            (94      )
operations
Net cash used in financing                  (542     )            (587     )
activities
Net decrease in cash and cash               (8       )            (15      )
equivalents
Cash and cash equivalents at                157                   172       
beginning of year
Cash and cash equivalents at the       $    149              $    157       
end of period
Less cash and cash equivalents of      $    77               $    93        
discontinued operations
Cash and cash equivalents of           $    72               $    64        
continuing operations
                                                                            

SUPERVALU INC. and Subsidiaries
SUPPLEMENTAL INFORMATION
(Unaudited)

SUPERVALU INC's consolidated financial statements are prepared and presented
in accordance with generally accepted accounting principles ("GAAP"). The
measures and items identified below are provided as a supplement to our
consolidated financial statements and should not be considered an alternative
to any GAAP measure of performance or liquidity. The presentation of these
financial measures and items is not intended to be a substitute for or be
superior to any financial information prepared and presented in accordance
with GAAP. Investors are cautioned that there are material limitations
associated with the use of non-GAAP financial measures as an analytical tool.
Certain adjustments to our GAAP financial measures reflected below exclude
certain items that are occasionally recurring in nature and may be reflected
in our financial results for the foreseeable future. These measurements and
items may be different from non-GAAP financial measures used by other
companies. All measurements are provided as a reconciliation from a GAAP
measurement. Management believes the measurements and items identified below
are important measures of business performance that provide investors with
useful supplemental information. Additionally, SUPERVALU utilizes certain
non-gaap measures as a compensation performance measure. The items below
should be reviewed in conjunction with SUPERVALU INC.'s financial results
reported in accordance with GAAP.

 
 
TABLE 1: FOURTH QUARTER FISCAL 2013 RECONCILIATION OF NET LOSS TO ADJUSTED NET
LOSS
                                                                 
                                        Fiscal Quarter Ended February 23, 2013
                                                                  Diluted
                                                                  Earnings Per
(in millions, except per share data)    Before Tax    After Tax   Share
                                                                   
Net loss from continuing operations     $   (276  )   $  (179 )   $  (0.85  )
Adjustments:
Asset impairment and other charges          210          129         0.61
Severance costs                             28           17          0.08
Intangible asset impairment charges         6            3           0.02
                                                                   
Net loss after adjustments              $   (32   )   $  (30  )   $  (0.14  )
                                                                   
                                                                   
TABLE 2: FISCAL 2013 RECONCILIATION OF NET LOSS TO ADJUSTED NET LOSS
                                                                   
                                        Fiscal 2013 Ended February 23, 2013
                                                                  Diluted
                                                                  Earnings Per
(in millions, except per share data)    Before Tax    After Tax   Share
                                                                   
Net loss from continuing operations     $   (426  )   $  (263 )   $  (1.24  )
Adjustments:
Asset impairment and other charges          227          140         0.66
Severance and labor buy-out costs           36           23          0.10
Store closure impairment charges            22           13          0.06
Unamortized financing cost charge           22           14          0.07
Intangible asset impairment charge          6            3           0.02
Cash settlement received from credit        (10   )      (6   )      (0.03  )
card companies
                                                                   
Net loss after adjustments              $   (123  )   $  (76  )   $  (0.36  )
                                                                   
                                                                   
TABLE 3: FOURTH QUARTER FISCAL 2012 RECONCILIATION OF NET LOSS TO ADJUSTED NET
LOSS
                                                                   
                                        Fiscal Quarter Ended February 25, 2012
                                                                  Diluted
                                                                  Earnings Per
(in millions, except per share data)    Before Tax    After Tax   Share
                                                                   
Net loss from continuing operations     $   (67   )   $  (42  )   $  (0.20  )
Adjustments:
Goodwill impairment charge                  38           37          0.17
Severance costs                             15           10          0.05
                                                                   
Net earnings (loss) after adjustments   $   (14   )   $  5        $  0.02    
                                                                   
 
TABLE 4: FISCAL 2012 RECONCILIATION OF NET LOSS TO ADJUSTED NET LOSS
                                                                   
                                        Fiscal 2013 Ended February 25, 2012
                                                                  Diluted
                                                                  Earnings Per
(in millions, except per share data)    Before Tax    After Tax   Share
                                                                   
Net loss from continuing operations     $   (151  )   $  (110 )   $  (0.52  )
Adjustments:
Goodwill impairment charges                 92           90          0.43
Severance costs                             15           10          0.05
                                                                   
Net loss after adjustments              $   (44   )   $  (10  )   $  (0.04  )
                                                                             

 
TABLE: 5 RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA FOR 52 WEEKS ENDED
FEBRUARY 23, 2013 AND FEBRUARY 25, 2012
                                                              
                                        52 Weeks Ended
                                        February 23,             February 25,
(in millions)                           2013                     2012
                                                                  
Net loss from continuing                $    (263    )           $   (110   )
operations
Adjustments:
Depreciation and amortization                365                     355
Interest expense, net ^ (1)                  247                     247
Asset impairment and other                   227                     -
charges
Severance and labor buy-out                  36                      15
costs
Store closure and other                      22                      -
impairment charges
Unamortized financing cost                   22                      -
charge
Goodwill and intangible asset                6                       92
impairment charges
Cash received on settlement                  (10     )               -
from credit card companies
Income tax benefit                           (163    )               (41    )
Adjusted EBITDA                         $    489                 $   558     
Pro forma adjustments:
Incremental administrative                   148                     143     
expense reimbursements ^ (2)
Pro forma adjusted EBITDA               $    637                 $   701     
 

(1) Interest expense, net for the 52 weeks ended February 23, 2013 is
exclusive of the unamortized financing cost impairment charge related to the
second quarter fiscal 2013 debt refinancing, which is reported in Unamortized
financing cost charge below.
 
(2) Incremental administrative expense reimbursements represents additional
income that would have been earned under the Transition Services Agreement
between SUPERVALU INC. and New Albertson's, Inc. ("NAI") entered into in
connection with the sale of the NAI retail banners to AB Acquisition, LLC (the
"NAI TSA") on March 21, 2013 (the "NAI Banner Sale"), net of the fees
recognized under the existing agreement between SUPERVALU, INC. and
Albertson's, LLC. The NAI TSA provides NAI with certain administrative and
other services following the closing of the NAI Banner Sale for an initial
term is two and a half years following the sale and is subject to certain
adjustments under the terms of the agreement, such as a decrease in the number
of stores and distribution centers operated by NAI.
 

                                                                 
TABLE 6: RECONCILIATION OF CONSOLIDATED SEGMENT FINANCIAL INFORMATION AS
REPORTED TO SUPPLEMENTALLY PROVIDED ADJUSTED CONSOLIDATED SEGMENT FINANCIAL
INFORMATION
                                                                     
                        Fiscal Year       Fiscal         Fiscal       Fiscal
                        Ended             Year Ended     Quarter      Quarter
                                                         Ended        Ended
                        February          February       February     February
                        23, 2013          25, 2012       23, 2013     25, 2012
                        (52 weeks)        (52 weeks)     (12          (12
                                                         weeks)       weeks)
                                                                       
                                                                       
Operating
earnings (loss):
                                                                       
Retail Food
Operating loss,         $  (420  )        $  (328  )     $ (238 )     $  (90 )
as reported
Adjustments:
Goodwill and
intangible asset                             92                          38
impairment
charges
Asset impairment           203                             190
and other charges
Severance and
other                      21                10            17            10
employee-related
costs
Cash settlement
received from              (10   )                                     
credit card
companies
Retail Food
Operating               $  (206  )        $  (226  )     $ (31  )     $  (42 )
earnings, as
adjusted
                                                                       
                                                                       
Save-A-Lot
Operating               $  146            $  232         $ 41         $  54
earnings, as
reported
Adjustments:
Asset impairment           13                              8
and other charges
Store closure
impairment                 22                                          
charges
Save-A-Lot
Operating               $  181            $  232         $ 49         $  54   
earnings, as
adjusted
                                                                       
Independent
Business
Operating               $  189            $  243         $ 25         $  43
earnings, as
reported
Adjustments:
Intangible asset
impairment                 6                               6
charges
Asset impairment           5                               5
and other charges
Severance costs            12                5             11            5    
Independent
Business
Operating               $  212            $  248         $ 47         $  48   
earnings, as
adjusted
                                                                       
Corporate
Operating loss,         $  (72   )        $  (51   )     $ (45  )     $  (17 )
as reported
Adjustments:
Severance costs            3
Asset impairment           6                               7           
and other charges
Corporate
Operating loss,         $  (63   )        $  (51   )     $ (38  )     $  (17 )
as adjusted
                                                                       
Total Operating
earnings (loss),        $  (157  )        $  96          $ (217 )     $  (10 )
as reported
Total adjustments          281               107           244           53   
Total Operating
earnings (loss),        $  124            $  203         $ 27         $  43   
as adjusted

 
TABLE 7: RETAIL FOOD HISTORICAL IDENTICAL STORE SALES
                                                                     
                               Fourth       Third        Second       First
                               Quarter      Quarter      Quarter      Quarter
                  Fiscal       Fiscal       Fiscal       Fiscal       Fiscal
                  2013         2013         2013         2013         2013
Identical         -2.4  %      -4.1  %      -2.8  %      -2.4  %      -0.7   %
Sales
Identical
Customer          -1.9  %      -3.5  %      -1.9  %      -1.6  %      -1.0   %
Count
Identical         -0.5  %      -0.6  %      -0.9  %      -0.8  %      0.3    %
Basket
                                                                              

Contact:

SUPERVALU INC.
Investor Contact:
Steve Bloomquist, 952-828-4144
steve.j.bloomquist@supervalu.com
or
Media Contact:
Jeff Swanson, 952-903-1645
jeffrey.s.swanson@supervalu.com
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