Delaware | 1-5418 | 41-0617000 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
11840 Valley View Road Eden Prairie, Minnesota | 55344 |
(Address of principal executive offices) | (Zip Code) |
N/A | ||
(Former name or former address, if changed since last report) |
Dated: | April 28, 2015 | ||
SUPERVALU INC. | |||
By: /s/ Bruce H. Besanko | |||
Bruce H. Besanko | |||
Executive Vice President and | |||
Chief Financial Officer | |||
(Authorized Officer of Registrant) | |||
• | Sales growth continues |
◦ | Sixth consecutive quarter of positive Save-A-Lot network ID sales; Positive 3.6% in Q4 fiscal 2015 |
◦ | Fifth consecutive quarter of positive Retail Food ID sales; Positive 1.1% in Q4 fiscal 2015 |
◦ | Company begins to supply select Haggen stores in Pacific Northwest |
• | Diluted EPS from continuing operations of $0.13 |
◦ | Adjusted Diluted EPS from continuing operations of $0.24 |
• | Operating earnings of $139 million for Q4 fiscal 2015 and $424 million for fiscal 2015 |
◦ | Adjusted EBITDA of $215 million for Q4 fiscal 2015 and $789 million for fiscal 2015 |
Fourth Quarter Ended | Fiscal Year Ended | ||||||||||||||||||||||||||
February 28, 2015 (13 weeks) | February 22, 2014 (12 weeks) | February 28, 2015 (53 weeks) | February 22, 2014 (52 weeks) | ||||||||||||||||||||||||
Net sales | $ | 4,364 | 100.0 | % | $ | 3,953 | 100.0 | % | $ | 17,820 | 100.0 | % | $ | 17,153 | 100.0 | % | |||||||||||
Cost of sales | 3,703 | 84.9 | 3,363 | 85.1 | 15,242 | 85.5 | 14,623 | 85.3 | |||||||||||||||||||
Gross profit(1) | 661 | 15.1 | 590 | 14.9 | 2,578 | 14.5 | 2,530 | 14.7 | |||||||||||||||||||
Selling and administrative expenses(1) | 522 | 12.0 | 469 | 11.9 | 2,154 | 12.1 | 2,107 | 12.3 | |||||||||||||||||||
Operating earnings | 139 | 3.2 | 121 | 3.1 | 424 | 2.4 | 423 | 2.5 | |||||||||||||||||||
Interest expense, net(1) | 87 | 2.0 | 55 | 1.4 | 243 | 1.4 | 407 | 2.4 | |||||||||||||||||||
Equity in earnings of unconsolidated affiliates | (1 | ) | — | — | — | (4 | ) | — | (2 | ) | — | ||||||||||||||||
Earnings from continuing operations before income taxes(1) | 53 | 1.2 | 66 | 1.7 | 185 | 1.0 | 18 | 0.1 | |||||||||||||||||||
Income tax provision | 17 | 0.4 | 24 | 0.6 | 58 | 0.3 | 5 | — | |||||||||||||||||||
Net earnings from continuing operations(1) | 36 | 0.8 | 42 | 1.1 | 127 | 0.7 | 13 | 0.1 | |||||||||||||||||||
Income (loss) from discontinued operations, net of tax | 4 | 0.1 | (14 | ) | (0.3 | ) | 72 | 0.4 | 176 | 1.0 | |||||||||||||||||
Net earnings including noncontrolling interests | 40 | 0.9 | 28 | 0.7 | 199 | 1.1 | 189 | 1.1 | |||||||||||||||||||
Less net earnings attributable to noncontrolling interests | (1 | ) | — | (2 | ) | (0.1 | ) | (7 | ) | — | (7 | ) | — | ||||||||||||||
Net earnings attributable to SUPERVALU INC. | $ | 39 | 0.9 | % | $ | 26 | 0.7 | % | $ | 192 | 1.1 | % | $ | 182 | 1.1 | % | |||||||||||
Basic net earnings (loss) per share attributable to SUPERVALU INC.: | |||||||||||||||||||||||||||
Continuing operations | $ | 0.13 | $ | 0.15 | $ | 0.46 | $ | 0.02 | |||||||||||||||||||
Discontinued operations | $ | 0.02 | $ | (0.05 | ) | $ | 0.28 | $ | 0.69 | ||||||||||||||||||
Basic net earnings per share | $ | 0.15 | $ | 0.10 | $ | 0.74 | $ | 0.71 | |||||||||||||||||||
Diluted net earnings (loss) per share attributable to SUPERVALU INC.: | |||||||||||||||||||||||||||
Continuing operations(1) | $ | 0.13 | $ | 0.15 | $ | 0.45 | $ | 0.02 | |||||||||||||||||||
Discontinued operations | $ | 0.02 | $ | (0.05 | ) | $ | 0.27 | $ | 0.68 | ||||||||||||||||||
Diluted net earnings per share | $ | 0.14 | $ | 0.10 | $ | 0.73 | $ | 0.70 | |||||||||||||||||||
Weighted average number of shares outstanding: | |||||||||||||||||||||||||||
Basic | 261 | 259 | 260 | 255 | |||||||||||||||||||||||
Diluted | 266 | 261 | 264 | 258 |
(1) | Results from continuing operations for the fourth quarter ended February 28, 2015 include net charges and costs of $49 before tax ($30 after tax, or $0.11 per diluted share), comprised of debt refinancing costs of $35 before tax ($22 after tax, or $0.08 per diluted share) and unamortized financing cost charges of $5 before tax ($3 after tax, or $0.01 per diluted share) included within Interest expense, net, and a benefit plan charge of $5 before tax ($3 after tax, or $0.01 per diluted share), store closure charges of $3 before tax ($2 after tax, or $0.01 per diluted share) and a further pension settlement charge of $1 before tax ($0 after tax, or $0.00 per diluted share) included within Selling and administrative expenses. |
Fourth Quarter Ended | Fiscal Year Ended | ||||||||||||||
February 28, 2015 (13 weeks) | February 22, 2014 (12 weeks) | February 28, 2015 (53 weeks) | February 22, 2014 (52 weeks) | ||||||||||||
Net sales | |||||||||||||||
Independent Business | $ | 1,956 | $ | 1,821 | $ | 8,134 | $ | 8,036 | |||||||
% of total | 44.8 | % | 46.1 | % | 45.6 | % | 46.9 | % | |||||||
Save-A-Lot | 1,136 | 999 | 4,613 | 4,228 | |||||||||||
% of total | 26.1 | % | 25.2 | % | 25.9 | % | 24.6 | % | |||||||
Retail Food | 1,223 | 1,087 | 4,879 | 4,649 | |||||||||||
% of total | 28.0 | % | 27.5 | % | 27.4 | % | 27.1 | % | |||||||
Corporate | 49 | 46 | 194 | 240 | |||||||||||
% of total | 1.1 | % | 1.2 | % | 1.1 | % | 1.4 | % | |||||||
Total net sales | $ | 4,364 | $ | 3,953 | $ | 17,820 | $ | 17,153 | |||||||
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Operating earnings | |||||||||||||||
Independent Business(1) | $ | 63 | $ | 54 | $ | 243 | $ | 235 | |||||||
% of Independent Business sales | 3.2 | % | 3.0 | % | 3.0 | % | 2.9 | % | |||||||
Save-A-Lot(2) | 47 | 43 | 153 | 167 | |||||||||||
% of Save-A-Lot sales | 4.2 | % | 4.3 | % | 3.3 | % | 3.9 | % | |||||||
Retail Food(3) | 44 | 38 | 122 | 77 | |||||||||||
% of Retail Food sales | 3.6 | % | 3.5 | % | 2.5 | % | 1.7 | % | |||||||
Corporate(4) | (15 | ) | (14 | ) | (94 | ) | (56 | ) | |||||||
Total operating earnings | 139 | 121 | 424 | 423 | |||||||||||
% of total net sales | 3.2 | % | 3.1 | % | 2.4 | % | 2.5 | % | |||||||
Interest expense, net(5) | 87 | 55 | 243 | 407 | |||||||||||
Equity in earnings of unconsolidated affiliates | (1 | ) | — | (4 | ) | (2 | ) | ||||||||
Earnings from continuing operations before income taxes | 53 | 66 | 185 | 18 | |||||||||||
Income tax provision | 17 | 24 | 58 | 5 | |||||||||||
Net earnings from continuing operations | 36 | 42 | 127 | 13 | |||||||||||
Income (loss) from discontinued operations, net of tax | 4 | (14 | ) | 72 | 176 | ||||||||||
Net earnings including noncontrolling interests | 40 | 28 | 199 | 189 | |||||||||||
Less net earnings attributable to noncontrolling interests | (1 | ) | (2 | ) | (7 | ) | (7 | ) | |||||||
Net earnings attributable to SUPERVALU INC. | $ | 39 | $ | 26 | $ | 192 | $ | 182 | |||||||
LIFO charge (credit) | |||||||||||||||
Independent Business | $ | 1 | $ | (4 | ) | $ | 4 | $ | (3 | ) | |||||
Retail Food | — | (3 | ) | 4 | (6 | ) | |||||||||
Total LIFO charge (credit) | $ | 1 | $ | (7 | ) | $ | 8 | $ | (9 | ) | |||||
Depreciation and amortization | |||||||||||||||
Independent Business | $ | 12 | $ | 11 | $ | 48 | $ | 51 | |||||||
Save-A-Lot | 15 | 14 | 65 | 64 | |||||||||||
Retail Food | 39 | 42 | 172 | 187 | |||||||||||
Total depreciation and amortization | $ | 66 | $ | 67 | $ | 285 | $ | 302 |
(1) | Independent Business operating earnings for the fourth quarter ended February 22, 2014 include severance costs of $4. Independent Business operating earnings for the fiscal year ended February 28, 2015 include severance costs of $1. Independent Business operating earnings for the fiscal year ended February 22, 2014 include severance costs of $17, a multi-employer pension withdrawal charge of $3, non-cash asset impairment and other charges of $2 and contract breakage and other costs of $1, offset in part by a gain on sale of property of $15. |
(2) | Save-A-Lot operating earnings for the fourth quarter and fiscal year ended February 28, 2015 include store closure charges of $3. Save-A-Lot operating earnings for the fiscal year ended February 22, 2014 include a legal settlement charge of $5, non-cash asset impairment and other charges of $3 and severance costs and accelerated stock-based compensation charges of $2. |
(3) | Retail food operating earnings for the fourth quarter ended February 22, 2014 include severance costs of $2. Retail Food operating earnings for the fiscal year ended February 22, 2014 include non-cash asset impairment charges related to software projects abandoned during the period of $9, severance costs and accelerated stock-based compensation charges of $8 and contract breakage costs of $2. |
(4) | Corporate operating loss for the fourth quarter ended February 28, 2015 includes a benefit plan charge of $5 and a non-cash pension settlement charge of $1. Corporate operating loss for the fourth quarter ended February 22, 2014 includes severance costs of $2. Corporate operating loss for the fiscal year ended February 28, 2015 includes a non-cash pension settlement charge of $64, a benefit plan charge of $5 and information technology intrusion costs, net of insurance recoverable, of $2. Corporate operating loss for the fiscal year ended February 22, 2014 includes severance costs and accelerated stock-based compensation charges of $19, contract breakage and other costs of $3 and non-cash asset impairment and other charges of $2. |
(5) | Interest expense, net for the fourth quarter ended February 28, 2015 includes debt refinancing costs $35 and unamortized financing costs charges of $5. Interest expense, net for the fourth quarter ended February 22, 2014 includes debt refinancing costs of $4 and the write-off of unamortized financing charges of $1 related to the January 2014 term loan amendment. Interest expense, net for the fiscal year ended February 28, 2015 includes debt refinancing costs of $37 and unamortized financing costs charges of $6. Interest expense, net for the fiscal year ended February 22, 2014 includes charges for the write-off of unamortized financing costs and original issue discount acceleration of $99 and debt refinancing costs of $75. |
February 28, 2015 | February 22, 2014 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 114 | $ | 83 | |||
Receivables, net | 482 | 493 | |||||
Inventories, net | 984 | 861 | |||||
Other current assets | 120 | 106 | |||||
Total current assets | 1,700 | 1,543 | |||||
Property, plant and equipment, net | 1,470 | 1,497 | |||||
Goodwill | 865 | 847 | |||||
Intangible assets, net | 48 | 43 | |||||
Deferred tax assets | 265 | 287 | |||||
Other assets | 137 | 157 | |||||
Total assets | $ | 4,485 | $ | 4,374 | |||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||
Current liabilities | |||||||
Accounts payable | $ | 1,121 | $ | 1,043 | |||
Accrued vacation, compensation and benefits | 204 | 190 | |||||
Current maturities of long-term debt and capital lease obligations | 35 | 45 | |||||
Other current liabilities | 173 | 213 | |||||
Total current liabilities | 1,533 | 1,491 | |||||
Long-term debt | 2,480 | 2,486 | |||||
Long-term capital lease obligations | 213 | 246 | |||||
Pension and other postretirement benefit obligations | 602 | 536 | |||||
Long-term tax liabilities | 119 | 140 | |||||
Other long-term liabilities | 174 | 205 | |||||
Commitments and contingencies | |||||||
Stockholders’ deficit | |||||||
Common stock, $0.01 par value: 400 shares authorized; 262 and 260 shares issued, respectively | 3 | 3 | |||||
Capital in excess of par value | 2,810 | 2,862 | |||||
Treasury stock, at cost, 2 and 4 shares, respectively | (33 | ) | (101 | ) | |||
Accumulated other comprehensive loss | (423 | ) | (307 | ) | |||
Accumulated deficit | (3,003 | ) | (3,195 | ) | |||
Total SUPERVALU INC. stockholders’ deficit | (646 | ) | (738 | ) | |||
Noncontrolling interests | 10 | 8 | |||||
Total stockholders’ deficit | (636 | ) | (730 | ) | |||
Total liabilities and stockholders’ deficit | $ | 4,485 | $ | 4,374 |
Fiscal Year Ended | |||||||
February 28, 2015 (53 weeks) | February 22, 2014 (52 weeks) | ||||||
Cash flows from operating activities | |||||||
Net earnings including noncontrolling interests | $ | 199 | $ | 189 | |||
Income from discontinued operations, net of tax | 72 | 176 | |||||
Net earnings from continuing operations | 127 | 13 | |||||
Adjustments to reconcile Net earnings from continuing operations to Net cash provided by operating activities – continuing operations: | |||||||
Asset impairment and other charges | 45 | 194 | |||||
Net gain on sale of assets and exits of surplus leases | (14 | ) | (17 | ) | |||
Depreciation and amortization | 285 | 302 | |||||
LIFO charge (credit) | 8 | (9 | ) | ||||
Deferred income taxes | 4 | (39 | ) | ||||
Stock-based compensation | 23 | 22 | |||||
Net pension and other postretirement benefits cost | 96 | 79 | |||||
Contributions to pension and other postretirement benefit plans | (169 | ) | (124 | ) | |||
Other adjustments | 30 | 34 | |||||
Changes in operating assets and liabilities, net of effects from business combinations: | |||||||
Receivables | 9 | (54 | ) | ||||
Inventories | (124 | ) | 2 | ||||
Accounts payable and accrued liabilities | 75 | (127 | ) | ||||
Income taxes | (15 | ) | (79 | ) | |||
Other changes in operating assets and liabilities | (47 | ) | (68 | ) | |||
Net cash provided by operating activities – continuing operations | 333 | 129 | |||||
Net cash provided by (used in) operating activities – discontinued operations | 75 | (101 | ) | ||||
Net cash provided by operating activities | 408 | 28 | |||||
Cash flows from investing activities | |||||||
Proceeds from sale of assets | 7 | 14 | |||||
Purchases of property, plant and equipment | (239 | ) | (111 | ) | |||
Payments for business acquisition | (55 | ) | — | ||||
Other | 2 | 11 | |||||
Net cash used in investing activities – continuing operations | (285 | ) | (86 | ) | |||
Net cash provided by investing activities – discontinued operations | — | 135 | |||||
Net cash (used in) provided by investing activities | (285 | ) | 49 | ||||
Cash flows from financing activities | |||||||
Proceeds from issuance of debt | 350 | 2,098 | |||||
Proceeds from the sale of common stock | 7 | 177 | |||||
Payments of debt and capital lease obligations | (400 | ) | (2,221 | ) | |||
Payments for debt financing costs | (42 | ) | (151 | ) | |||
Distributions to noncontrolling interests | (8 | ) | (9 | ) | |||
Other | 1 | (1 | ) | ||||
Net cash used in financing activities – continuing operations | (92 | ) | (107 | ) | |||
Net cash used in financing activities – discontinued operations | — | (36 | ) | ||||
Net cash used in financing activities | (92 | ) | (143 | ) | |||
Net increase (decrease) in cash and cash equivalents | 31 | (66 | ) | ||||
Cash and cash equivalents at beginning of period | 83 | 149 | |||||
Cash and cash equivalents at the end of period | $ | 114 | $ | 83 | |||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||
The Company’s non-cash activities were as follows: | |||||||
Capital lease asset additions | $ | 1 | $ | 2 | |||
Purchases of property, plant and equipment included in Accounts payable | $ | 21 | $ | 19 | |||
Interest and income taxes paid: | |||||||
Interest paid, net of amounts capitalized | $ | 180 | $ | 227 | |||
Income taxes (refunded) paid, net | $ | (7 | ) | $ | 118 |
Table 1 | ||||||||||||
Fourth Quarter Ended February 28, 2015 | ||||||||||||
(In millions, except per share data) | Earnings Before Tax | Earnings After Tax | Diluted Earnings Per Share | |||||||||
Continuing operations | $ | 53 | $ | 36 | $ | 0.13 | ||||||
Adjustments: | ||||||||||||
Debt refinancing costs | 35 | 22 | 0.08 | |||||||||
Unamortized financing cost charges | 5 | 3 | 0.01 | |||||||||
Benefit plan charge | 5 | 3 | 0.01 | |||||||||
Store closure charges | 3 | 2 | 0.01 | |||||||||
Pension settlement charge | 1 | — | — | |||||||||
Continuing operations after adjustments | $ | 102 | $ | 66 | $ | 0.24 |
Table 2 | ||||||||||||
Fiscal Year Ended February 28, 2015 | ||||||||||||
(In millions, except per share data) | Earnings Before Tax | Earnings After Tax | Diluted Earnings Per Share | |||||||||
Continuing operations | $ | 185 | $ | 127 | $ | 0.45 | ||||||
Adjustments: | ||||||||||||
Pension settlement charge | 64 | 36 | 0.14 | |||||||||
Debt refinancing costs | 37 | 23 | 0.08 | |||||||||
Unamortized financing cost charges | 6 | 4 | 0.02 | |||||||||
Benefit plan charge | 5 | 3 | 0.01 | |||||||||
Store closure charges | 3 | 2 | 0.01 | |||||||||
Information technology intrusion costs, net of insurance recoverable | 2 | 1 | 0.01 | |||||||||
Severance costs | 1 | 1 | — | |||||||||
Continuing operations after adjustments | $ | 303 | $ | 197 | $ | 0.72 |
Table 3 | ||||||||||||
Fourth Quarter Ended February 22, 2014 | ||||||||||||
(In millions, except per share data) | Earnings Before Tax | Earnings After Tax | Diluted Earnings Per Share | |||||||||
Continuing operations | $ | 66 | $ | 42 | $ | 0.15 | ||||||
Adjustments: | ||||||||||||
Severance costs | 8 | 5 | 0.02 | |||||||||
Debt refinancing costs | 4 | 3 | 0.01 | |||||||||
Unamortized financing cost charges | 1 | — | — | |||||||||
Continuing operations after adjustments | $ | 79 | $ | 50 | $ | 0.18 |
Table 4 | ||||||||||||
Fiscal Year Ended February 22, 2014 | ||||||||||||
(In millions, except per share data) | Earnings Before Tax | Earnings After Tax | Diluted Earnings Per Share | |||||||||
Continuing operations | $ | 18 | $ | 13 | $ | 0.02 | ||||||
Adjustments: | ||||||||||||
Unamortized financing cost charges and original issue discount acceleration | 99 | 60 | 0.24 | |||||||||
Debt refinancing costs | 75 | 47 | 0.18 | |||||||||
Severance costs and accelerated stock-based compensation charges | 46 | 29 | 0.11 | |||||||||
Asset impairment and other charges | 16 | 11 | 0.04 | |||||||||
Contract breakage and other costs | 6 | 2 | 0.01 | |||||||||
Legal settlement charge | 5 | 3 | 0.01 | |||||||||
Multiemployer pension withdrawal charge | 3 | 2 | 0.01 | |||||||||
Gain on sale of property | (15 | ) | (10 | ) | (0.04 | ) | ||||||
Continuing operations after adjustments | $ | 253 | $ | 157 | $ | 0.58 |
RECONCILIATION OF OPERATING EARNINGS FROM CONDENSED CONSOLIDATED SEGMENT FINANCIAL INFORMATION AS REPORTED TO SUPPLEMENTALLY PROVIDED ADJUSTED EBITDA AND PRO FORMA ADJUSTED EBITDA | ||||||||||||||||
TABLE 5 | ||||||||||||||||
Fourth Quarter Ended | Fiscal Year Ended | |||||||||||||||
(In millions) | February 28, 2015 (13 weeks) | February 22, 2014 (12 weeks) | February 28, 2015 (53 weeks) | February 22, 2014 (52 weeks) | ||||||||||||
Independent Business operating earnings, as reported | $ | 63 | $ | 54 | $ | 243 | $ | 235 | ||||||||
Adjustments: | ||||||||||||||||
Severance costs and accelerated stock-based compensation charges | — | 4 | 1 | 17 | ||||||||||||
Multiemployer pension withdrawal charge | — | — | — | 3 | ||||||||||||
Asset impairment and other charges | — | — | — | 2 | ||||||||||||
Contract breakage and other costs | — | — | — | 1 | ||||||||||||
Gain on sale of property | — | — | — | (15 | ) | |||||||||||
Independent Business operating earnings, as adjusted | 63 | 58 | 244 | 243 | ||||||||||||
Independent Business depreciation and amortization | 12 | 11 | 48 | 51 | ||||||||||||
LIFO charge (credit) | 1 | (4 | ) | 4 | (3 | ) | ||||||||||
Independent Business adjusted EBITDA(1) | $ | 76 | $ | 65 | $ | 296 | $ | 291 | ||||||||
Save-A-Lot operating earnings, as reported | $ | 47 | $ | 43 | $ | 153 | $ | 167 | ||||||||
Adjustments: | ||||||||||||||||
Store closure charges | 3 | — | 3 | — | ||||||||||||
Severance costs | — | — | — | 2 | ||||||||||||
Asset impairment and other charges | — | — | — | 3 | ||||||||||||
Legal settlement charge | — | — | — | 5 | ||||||||||||
Save-A-Lot operating earnings, as adjusted | 50 | 43 | 156 | 177 | ||||||||||||
Save-A-Lot depreciation and amortization | 15 | 14 | 65 | 64 | ||||||||||||
Save-A-Lot adjusted EBITDA(1) | $ | 65 | $ | 57 | $ | 221 | $ | 241 | ||||||||
Retail Food operating earnings, as reported | $ | 44 | $ | 38 | $ | 122 | $ | 77 | ||||||||
Adjustments: | ||||||||||||||||
Severance costs and accelerated stock-based compensation charges | — | 2 | — | 8 | ||||||||||||
Asset impairment and other charges | — | — | — | 9 | ||||||||||||
Contract breakage and other costs | — | — | — | 2 | ||||||||||||
Retail Food operating earnings, as adjusted | 44 | 40 | 122 | 96 | ||||||||||||
Retail Food depreciation and amortization | 39 | 42 | 172 | 187 | ||||||||||||
LIFO (credit) charge | — | (3 | ) | 4 | (6 | ) | ||||||||||
Equity in earnings of unconsolidated affiliates(2) | 1 | — | 4 | 2 |
Less Net earnings attributable to noncontrolling interests(2) | (1 | ) | (2 | ) | (7 | ) | (7 | ) | ||||||||
Retail Food adjusted EBITDA(1)(2) | $ | 83 | $ | 77 | $ | 295 | $ | 272 | ||||||||
Corporate operating loss, as reported | $ | (15 | ) | (14 | ) | $ | (94 | ) | $ | (56 | ) | |||||
Adjustments: | ||||||||||||||||
Pension settlement charge | 1 | — | 64 | — | ||||||||||||
Benefit plan charge | 5 | — | 5 | — | ||||||||||||
Information technology intrusion costs, net of insurance recoverable | — | — | 2 | — | ||||||||||||
Severance costs and accelerated stock-based compensation charges | — | 2 | — | 19 | ||||||||||||
Contract breakage and other costs | — | — | — | 3 | ||||||||||||
Asset impairment and other charges | — | — | — | 2 | ||||||||||||
Corporate operating loss, as adjusted | (9 | ) | (12 | ) | (23 | ) | (32 | ) | ||||||||
Corporate depreciation and amortization | — | — | — | — | ||||||||||||
Corporate adjusted EBITDA(1) | $ | (9 | ) | $ | (12 | ) | $ | (23 | ) | $ | (32 | ) | ||||
Total adjusted EBITDA(1)(2) | $ | 215 | $ | 187 | $ | 789 | $ | 772 | ||||||||
Pro forma adjustment: | ||||||||||||||||
Incremental administrative expense reimbursements(3) | — | — | — | 11 | ||||||||||||
Total pro forma adjusted EBITDA(1)(2)(3) | $ | 215 | $ | 187 | $ | 789 | $ | 783 |
(1) | The Company's measure of adjusted EBITDA includes SUPERVALU INC.'s segment operating earnings (loss), as reported, plus depreciation and amortization, LIFO charge (credit), equity earnings of unconsolidated affiliates and any unusual items, and less net earnings attributable to noncontrolling interests. |
(2) | In the first quarter of fiscal 2015, the Company revised its definition of Adjusted EBITDA to include equity in earnings of unconsolidated affiliates and remove net earnings attributable to noncontrolling interests in order for previously reported Adjusted EBITDA measures to remain unchanged when reconciling from segment operating earnings after corrections to certain condensed consolidated financial statement line items were made. |
(3) | Incremental administrative expense reimbursements represents additional fees that the Company would have received under the Transition Services Agreements between SUPERVALU INC. and New Albertson's, Inc. ("NAI") and between SUPERVALU INC. and Albertson's LLC ("ABS") 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 previous agreement between SUPERVALU INC. and ABS, which was terminated on the closing of the NAI Banner Sale. The NAI TSA provides NAI and ABS with certain administrative and other services following the closing of the NAI Banner Sale for an initial term of 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 and ABS. Upon commencement of discontinued operations presentation in accordance with GAAP, SUPERVALU INC. retained certain administrative functions for which SUPERVALU INC. agreed to provide transitional services to NAI similar to those previously provided to ABS. This pro forma adjustment is intended to provide investors an understanding as to the effects of administrative expenses reported by SUPERVALU INC. under discontinued operations presentation in accordance with GAAP, which subsequent to the NAI Banner Sale are covered under the NAI TSA. This pro forma adjustment is directly attributable to the NAI Banner Sale and the presentation of reporting thereon, is derived from the terms of the NAI TSA, and will have a continuing impact on SUPERVALU INC.'s results. |
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