FORM 11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS AND SIMILAR
PLANS PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
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þ |
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
OR
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o |
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 1-5418
A. Full title of the plan and the address of the plan, if different from that of the issuer
named below:
SUPERVALU STAR 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of its principal
executive office:
SUPERVALU INC.
11840 Valley View Road
Eden Prairie, Minnesota 55344
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
TABLE OF CONTENTS
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
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1 |
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FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008 AND 2007, AND FOR THE YEAR ENDED DECEMBER 31, 2008: |
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Statements of Net Assets Available for Benefits |
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2 |
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Statement of Changes in Net Assets Available for Benefits |
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3 |
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Notes to Financial Statements |
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4 |
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SUPPLEMENTAL SCHEDULE |
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Form 5500, Schedule H, Line 4iSchedule of Assets (Held at End of Year) as of December 31, 2008 |
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14 |
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SIGNATURES |
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15 |
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EXHIBIT |
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Ex-23.1 Consent of Independent Registered Public Accounting Firm |
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16 |
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NOTE:
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All other schedules required by Section 2520.103-10 of the Department of Labors Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of
1974 have been omitted because they are not applicable. |
Report of Independent Registered Public Accounting Firm
Benefit Plans Committee of SUPERVALU INC.
SUPERVALU STAR 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits of the SUPERVALU
STAR 401(k) Plan (formerly the SUPERVALU Pre-Tax Savings and Profit Sharing Plan) (the Plan) as
of December 31, 2008 and 2007, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2008. These financial statements are the responsibility of
the Plans management. Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31, 2008 and 2007, and
the changes in net assets available for benefits for the year ended December 31, 2008 in conformity
with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplemental schedule of assets (held at end of year) is presented for
purposes of additional analysis and is not a required part of the basic financial statements, but
is supplementary information required by the Department of Labors Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plans management. The supplemental schedule has
been subjected to the auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects, in relation to the basic financial
statements taken as a whole.
/s/ KPMG
Minneapolis, Minnesota
June 29, 2009
1
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2008 AND DECEMBER 31, 2007
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2008 |
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2007 |
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ASSETS: |
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Plans interest in Master Trusts, at fair value: |
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Bank of New York Master Trust |
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$ |
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$ |
915,991,949 |
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Fidelity Master Trust |
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2,797,745,464 |
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State Street Master Trust |
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4,220,249,083 |
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2,055,602,833 |
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Total interest in Master Trusts |
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4,220,249,083 |
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5,769,340,246 |
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Loans to participants |
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178,156,799 |
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168,441,337 |
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Employer contribution receivable |
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3,206,301 |
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82,654,941 |
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Total assets |
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4,401,612,183 |
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6,020,436,524 |
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LIABILITIES Administrative expenses payable |
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(884,014 |
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(2,110,513 |
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NET ASSETS AVAILABLE FOR BENEFITS BEFORE ADJUSTMENTS |
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4,400,728,169 |
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6,018,326,011 |
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ADJUSTMENTS FROM FAIR VALUE TO CONTRACT VALUE FOR FULLY
BENEFIT-RESPONSIVE INVESTMENT CONTRACTS |
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54,497,647 |
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7,127,510 |
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NET ASSETS AVAILABLE FOR BENEFITS |
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$ |
4,455,225,816 |
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$ |
6,025,453,521 |
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See accompanying notes to the financial statements.
2
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2008
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ADDITIONS: |
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Investment income (loss): |
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Plans interest in State Street Master Trust investment loss |
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$ |
(1,434,209,076 |
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Interest on loans to participants |
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8,601,141 |
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Net investment loss |
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(1,425,607,935 |
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Contributions: |
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Employer |
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95,067,208 |
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Participants |
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181,340,438 |
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Total contributions |
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276,407,646 |
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Plan mergers |
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58,176,728 |
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Total additions, net of investment loss |
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(1,091,023,561 |
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DEDUCTIONS: |
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Benefits paid to participants |
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(474,066,253 |
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Administrative expenses |
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(5,137,891 |
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Total deductions |
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(479,204,144 |
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NET DECREASE |
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(1,570,227,705 |
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NET ASSETS AVAILABLE FOR BENEFITS: |
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Beginning of period |
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6,025,453,521 |
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End of period |
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$ |
4,455,225,816 |
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See accompanying notes to the financial statements.
3
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007,
AND FOR THE YEAR ENDED DECEMBER 31, 2008
The following description of the SUPERVALU STAR 401(k) Plan, formerly the SUPERVALU Pre-Tax
Savings and Profit Sharing Plan (the Plan), provides only general information. Participants
should refer to the Plan document for a more complete description of the Plans provisions.
General
The Plan is a defined contribution plan and is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). The Plan was established for eligible full
time and part time employees of SUPERVALU INC. and certain subsidiaries (SUPERVALU or the
Company). Plan eligibility begins after 250 hours worked in a 90-day period and the attainment
of the age of 21. Employees of collectively bargained units may become eligible and participate
in the Plan under alternative eligibility rules.
Plan Mergers
Effective April 1, 2008, the West Coast Grocery Divisions Profit Sharing Plan was merged into
the Plan and assets of $32,958,142 were transferred into the SUPERVALU INC. Master Investment
Trust held by State Street Corporation, the trustee (State Street Master Trust).
Effective July 1, 2008, the Metro Food Stores 401(k) Plan and the Shoppers Food Warehouse
Bargaining Employees 401(k) PLAN were merged into the Plan and assets of $7,632,834 and
$16,869,340, respectively, were transferred into the State Street Master Trust.
Effective October 1, 2008, the Foodland Distributors Future Plus Plan was merged into the Plan
and assets of $716,413 were transferred into the State Street Master Trust.
Participant Accounts
Individual accounts are maintained for each Plan participant. Each participants account is
credited with the participants contributions, an allocation of the Companys contributions, and
an allocation of Plan earnings, and charged with administrative expenses at a fixed rate.
Allocations are based on participant earnings or contributions, as defined. The benefit to
which a participant is entitled is the benefit that can be provided from the participants
vested account. Participants direct their accounts into one or more of the funds within the
State Street Master Trust.
Participant accounts from the Albertsons Savings and Retirement Estates, the Albertsons Savings
and Retirement Estates II, the SUPERVALU Retail Employees 401(k) Plan, SUPERVALU Wholesale
Employees 401(k) Plan, and Pittsburgh Division Profit Sharing Plan were transferred into the
Pre-Tax Savings and Profit Sharing Plan on December 31, 2007.
Effective January 1, 2008, the Pre-Tax Savings and Profit Sharing Plan was renamed the SUPERVALU
STAR 401(k) Plan.
On January 1, 2008, the recordkeeper for the Plan was changed to ING.
In January 2008, the assets held in the SUPERVALU INC. 401(k) Master Trust held by Bank of New
York, the trustee (Bank of New York Master Trust) and the ABS Retirement Master Trust held by
Fidelity Management Trust Company, the trustee (Fidelity Master Trust) (collectively, along
with the State Street Master Trust, the Master Trusts) were transferred to the State Street
Master Trust. Participant balances previously invested in assets held by the Bank of New York
Master Trust and the Fidelity Master Trust were transferred into funds at the State Street
Master Trust as directed by the participants.
Contributions
Upon initial enrollment, employees are automatically enrolled with a 3% employee contribution in
the Plan after satisfying the eligibility rules unless the employee specifically notifies
SUPERVALU that the employee chooses not to participate. Thereafter, employees must make an
election to change their contribution percentage. The Plan allows for employee contributions to
the Plan of 1% to 50% of their recognized compensation, subject to the limitations by the
Internal Revenue Service (IRS). Participant contributions up to 6% of their recognized
compensation are matched by SUPERVALU at a rate of 100% of the first 4% of compensation and an
additional 50% match on the next 2% of compensation. An additional discretionary employer
contribution of 0 to 3% of compensation may be made by SUPERVALU. Except in the case of death or
retirement after the age of 65, the additional discretionary employer
4
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007,
AND FOR THE YEAR ENDED DECEMBER 31, 2008
contribution is earned by any participant having worked 1,000 hours during the Plan year and
employed on the last day of the Plan year. Employees of collectively bargained units may have
alternative matching and Company contribution arrangements.
Vesting
Participant contributions plus actual earnings thereon are immediately vested. Beginning
January 1, 2008, all employer contributions plus earnings thereon are vested 100% after two
years of employment. Employer contributions plus earnings thereon received for plan years prior
to January 1, 2008, including amounts from plans merged into the Plan, retained their previous
vesting schedules.
Loans to Participants
Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to the
lesser of $50,000 or 50% of their account balance. Loans are secured by the balance in the
participants account and bear interest at rates equal to the prime rate as published by the
Wall Street Journal for the last business day of the calendar month preceding the month in which
the loan was granted. Principal and interest is paid through payroll deductions, with the
maximum term of five years, except for loans for the purchase of a primary home which have a
maximum term of 10 years. Loan interest rates range from 3.0% to 10.5% as of December 31, 2008.
The loans are valued based on amortized cost which approximates fair value using discounted cash flows as of December 31, 2008 and 2007.
Payment of Benefits
Upon termination of service due to death, disability, or retirement, a participant may elect to
receive an amount equal to the value of the participants vested account. Benefits under the
Plan are payable in a lump sum or through installment payments. Participants currently employed
by SUPERVALU can withdraw any after-tax contributions and rollover contributions at any time,
subject to required federal withholding. Participants may receive an in-service hardship
distribution from the vested portion of their balances, with the exception of employer
contributions received during the year ended December 31, 2008, after receiving approval from
the Plan administrator.
Voting Rights
Each participant is entitled to exercise voting rights attributable to the shares of SUPERVALU
Common Stock allocated to the participants account. Shares of SUPERVALU Common Stock for which
participants do not timely return proxy or voting instruction cards shall be voted by the
trustee in proportion to the results for those votes returned by participants.
Forfeited Accounts
At
December 31, 2008 and 2007, forfeited nonvested accounts totaled
$863,161 and $5,183,720,
respectively. Forfeitures of nonvested amounts are used to restore forfeited accounts of rehired
participants. Any remaining amounts are used to reduce the employer contributions or pay Plan
expenses. For the year ended December 31, 2008, Plan expenses were reduced by $559,359 from
forfeited nonvested accounts.
2. |
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Summary of Significant Accounting Policies |
Basis of Accounting
The accompanying financial statements have been prepared under the accrual basis method of
accounting in conformity with U.S. generally accepted accounting principles (U.S. GAAP).
As described in Financial Accounting Standards Board Staff Position, FSP AAG INV-1 and SOP
94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment
Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and
Welfare and Pension Plans (the FSP), investment contracts held by a defined contribution plan
are required to be reported at fair value. However, contract value is the relevant measurement
attribute for that portion of the net assets available for benefits of a defined contribution
plan attributable to fully benefit-responsive investment contracts because contract value is the
amount participants would receive if they were to initiate permitted transactions under the
terms of the Plan. As required by the FSP, the Statements of Net Assets Available for Benefits
presents the fair value of the Plans interest in the Master Trusts as well as the adjustment of
the
5
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007,
AND FOR THE YEAR ENDED DECEMBER 31, 2008
fully benefit-responsive investment contracts from fair value to contract value. The Statement
of Changes in Net Assets Available for Benefits is prepared on a contract value basis.
Investments Valuation and Income Recognition
As of January 1, 2008, the Plan adopted Statement of Financial Accounting Standards (SFAS) No.
157, Fair Value Measurements. SFAS No. 157 establishes a framework for measuring fair value.
Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants. The framework provides a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs
(level 3 measurements). The three levels of the fair value hierarchy under SFAS No. 157 are
described as follows:
Level 1Quoted prices in active markets for identical assets or liabilities;
Level 2Observable inputs other than those included in Level 1 including quoted prices for
similar assets or liabilities in active markets or quoted prices for identical assets or
liabilities in inactive markets;
Level 3Unobservable inputs reflecting managements own assumptions about the inputs used in
pricing the asset.
The Plans interests in the Master Trusts are valued based on the beginning of the period value
of the Plans interests in the Master Trusts plus actual contributions and less allocated
investment loss, actual distributions and allocated administrative expenses. If available,
quoted market prices are used to value the underlying investments of the Master Trust. In
instances where quoted market prices are not available, the fair value of investments is
estimated primarily by independent investment brokerage firms, the trustee and insurance
companies. See Note 3, Plans Interest in Master Trusts.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is
recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net
appreciation (depreciation) includes the Plans gains and losses on investments bought and sold
as well as held during the year.
The State Street Master Trust holds a variety of investments, including certain derivative
instruments. Investment managers are generally permitted to use derivative instruments including
swaps, options, futures, and forward contracts to manage portfolio risks (e.g., interest rate
and credit risks and foreign currency exposures). Derivatives may also be used to enhance
portfolio returns and to mimic the investment performance of broad market benchmarks.
For the year ended December 31, 2008, the State Street Master Trust
had net investment losses of $244,443,035 related to derivative
instruments. Investment managers are prohibited from using derivative securities that leverage the portfolio.
The State Street Master Trust holds To-Be-Announced (TBA) government agency mortgage forward
contracts that require the State Street Master Trust to take delivery of a government agency
mortgage-backed security at a settlement date in the future. A majority of the TBAs are settled
at the first available period allowed under the contract. However, the deliveries of some of
the State Street Master Trusts TBA securities happen at a later date, thus extending the
forward contract date. These securities are reported at fair value as other invested assets
with the changes in fair value reported in net unrealized gains and losses. As of December 31,
2008, the State Street Master Trust had certain TBA mortgage securities in the amount of
$241,429,242 considered to be derivative instruments that are classified
in the net payable for securities purchased.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets, liabilities, and changes
therein, and disclosure of contingent assets and liabilities. Actual results could differ from
those estimates.
Payment of Benefits
Benefit payments to participants are recorded upon distribution.
6
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007,
AND FOR THE YEAR ENDED DECEMBER 31, 2008
Administrative Expenses
Administrative expenses are generally paid by the Plan, except to the extent that SUPERVALU, at
its discretion, directly pays for certain expenses.
Risks and Uncertainties
The State Street Master Trust invests in various investment options. These investment options
are exposed to various risks, such as interest rate, market fluctuation and credit risks. Due to
the level of risk associated with certain investments, it is at least reasonably possible that
changes in the values of the investments will occur in the near term and that such changes could
materially affect participants account balances and the amounts reported in the Statements of
Net Assets Available for Benefits.
3. |
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Plans Interest in Master Trusts
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Each of the Plans interest in the Master Trusts represent 5% or more of the Plans net assets
as of December 31, 2008 and 2007.
Under the terms of the trust agreements, the trustees manage investments on behalf of the Plan
and are held together with assets of other plans sponsored by SUPERVALU in the State Street
Master Trust.
7
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007,
AND FOR THE YEAR ENDED DECEMBER 31, 2008
State Street Master Trust
At December 31, 2008 and 2007, the Plans interest in the net assets of the State Street Master
Trust was 79% and 53%, respectively. As of December 31, 2008 and 2007, fair values of
investments in the State Street Master Trust are as follows:
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2008 |
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2007 |
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Investments at fair value: |
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Common stock |
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$ |
1,008,285,118 |
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$ |
1,421,024,701 |
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Mutual funds / common collective trusts |
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2,417,688,906 |
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905,446,925 |
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Guaranteed investment contracts |
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1,092,335,369 |
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Corporate bonds and debentures |
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280,714,771 |
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123,268,454 |
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U.S. government securities |
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450,520,992 |
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860,131,786 |
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Commercial paper and short-term investments |
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156,762,597 |
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618,703,763 |
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Mortgage backed securities |
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172,113,147 |
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135,897,069 |
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Other |
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31,101,242 |
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(28,585,894 |
) |
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Total investments |
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$ |
5,609,522,142 |
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$ |
4,035,886,804 |
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Net payable for securities purchased |
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(242,948,156 |
) |
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(164,327,114 |
) |
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Net assets at fair value |
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$ |
5,366,573,986 |
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$ |
3,871,559,690 |
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Adjustment from fair value to contract value for
fully benefit-responsive investment contracts |
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54,502,396 |
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Net assets at contract value |
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$ |
5,421,076,382 |
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$ |
3,871,559,690 |
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Investment income (loss) for the State Street Master Trust for the year ended December 31, 2008
is as follows:
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2008 |
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Investment income (loss): |
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Net appreciation (depreciation) in fair value of
investments: |
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Common stock |
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$ |
(801,298,637 |
) |
Mutual funds / common collective trusts |
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|
(932,763,884 |
) |
Guaranteed investment contracts |
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|
43,854,620 |
|
Corporate bonds and debentures |
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|
(295,686,039 |
) |
U.S. government securities |
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|
23,292,550 |
|
Commercial paper and short-term investments |
|
|
98,841 |
|
Mortgage backed securities |
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|
(67,622,712 |
) |
Other |
|
|
(20,033,599 |
) |
|
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(2,050,158,860 |
) |
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Dividends |
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|
42,790,956 |
|
Interest |
|
|
55,116,552 |
|
|
|
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Net investment loss |
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$ |
(1,952,251,352 |
) |
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The State Street Master Trust contains direct investments in a traditional guaranteed investment
contract (GIC) and synthetic GICs (collectively the Stable Value Fund) with Ameriprise Trust
Company (Ameriprise), which is presented at fair value at December 31, 2008 as shown above.
In determining the net assets available for benefits at December 31, 2008, the Stable Value Fund
is recorded at its contract value of $1,146,837,765, which is equal to principal balance plus
accrued interest. As provided in the FSP, an investment contract is generally valued at contract
value, rather than fair value, to the extent it is fully benefit responsive. In addition, the
State Street Master Trust holds a series of wrap guarantee agreements that can be utilized in the
event the issuer of the wrapper contract falls below certain credit rating criteria.
8
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007,
AND FOR THE YEAR ENDED DECEMBER 31, 2008
Contract value, as reported to the Plan by Ameriprise, represents contributions made under the
contract, less losses and participant withdrawals. Participants may ordinarily direct the
withdrawal or transfer of all or a portion of their investment at contract value.
There are no reserves against contract value for credit risk of the contract issuer or
otherwise. The crediting interest rate is based on a formula agreed upon with the issuer. Such
interest rates are reviewed and reset on a quarterly basis. The crediting interest rate at
December 31, 2008 was 4.71%. The average yield at December 31, 2008 was 4.75%.
Certain events limit the ability of the Plan to transact at contract value with the issuer. Such
events include the following: (1) amendments to the Plan documents (including complete or
partial Plan termination or merger with another plan), (2) changes to Plans prohibition on
competing investment options or deletion of equity wash provisions, (3) bankruptcy of the Plan
sponsor or other Plan sponsor events (for example, divestitures or spin-offs of a subsidiary)
that cause a significant withdrawal from the Plan, or (4) the failure of the trust to qualify
for exemption from federal income taxes or any required prohibited transaction exemption under
ERISA. The Plan administrator does not believe that the occurrence of any such event, which
would limit the Plans ability to transact at contract value with participants, is probable.
The Stable Value Fund does not permit the insurance company to terminate the agreement except
under certain circumstances per the terms of the agreement. The Company and Plan may terminate
the agreement upon 30 days notice. The synthetic GICs within the Stable Value Fund are placed
with financial institutions whose Standard & Poors credit rating is A- or higher.
The following is a description of the valuation methodologies used for investments measured at
fair value in the State Street Master Trust:
Common stock Valued at the closing price reported in the active market in which the
individual securities are traded.
Mutual funds / common collective trusts Certain mutual funds are valued at the closing
price reported in the active market in which the mutual fund is traded. Other mutual funds
and pooled separate accounts are valued at its Net Asset Value (NAV), which is based on
the value of the underlying securities owned by the fund and divided by the number of shares
outstanding.
Guaranteed
investment contracts Valued by discounting the related cash flows based on
current yields of similar instruments with comparable durations considering the
credit-worthiness of the issuer.
Corporate bonds and debentures Valued based on yields currently available on comparable
securities of issuers with similar credit ratings. When quoted prices are not available for
identical or similar bonds, the bond is valued under a discounted cash flows approach that
maximizes observable inputs, such as current yields of similar instruments.
U.S. government securities Certain U.S. government securities are valued at the closing
price reported in the active market in which the security is traded. Other U.S. government
securities are valued based on yields currently available on comparable securities of
issuers with similar credit ratings. When quoted prices are not available for identical or
similar securities, the security is valued under a discounted cash flows approach that
maximizes observable inputs, such as current yields of similar instruments, but includes
adjustments for certain risks that may not be observable, such as credit and liquidity
risks.
Commercial paper and short-term investments Certain commercial paper and short-term
investments are valued at the closing price reported in the active market in which the
security is traded. Other commercial paper and short-term investments are valued based on
yields currently available on comparable securities of issuers with similar credit ratings.
When quoted prices are not available for identical or similar securities, the security is
valued under a discounted cash flows approach that maximizes observable inputs, such as
current yields of similar instruments, but includes adjustments for certain risks that may
not be observable, such as credit and liquidity risks.
Mortgage backed securities Valued based on yields currently available on comparable
securities of issuers with similar credit ratings. When quoted prices are not available for
identical or similar securities, the security is valued under a discounted cash flows
approach that maximizes observable inputs, such as current yields of similar instruments.
Swaps Valued using closing prices of comparable securities with similar terms. When quotes
prices are not available for identical or similar securities, the security is valued under
an approach that maximizes observable inputs, such as gathering consensus data from the
market participants best estimate of mid market for actual trades or positions held.
9
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007,
AND FOR THE YEAR ENDED DECEMBER 31, 2008
Other Certain securities are valued at the closing price reported in the active market in
which the security is traded. Certain securities are valued at its NAV, which is based on the value of the underlying securities owned by the fund and
divided by the number of shares outstanding. Other securities are valued based on
acquisition cost and adjusted annually based on audited financial statements.
The following sets forth by classification within the fair value hierarchy the State Street
Master Trust investments at fair value as of December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
|
|
|
Common stock |
|
$ |
1,004,143,637 |
|
|
$ |
4,141,481 |
|
|
$ |
|
|
|
$ |
1,008,285,118 |
|
Mutual funds / common collective trusts |
|
|
130,302,170 |
|
|
|
2,287,386,735 |
|
|
|
|
|
|
|
2,417,688,905 |
|
Guaranteed investment contracts |
|
|
|
|
|
|
1,092,335,369 |
|
|
|
|
|
|
|
1,092,335,369 |
|
Corporate bonds and debentures |
|
|
|
|
|
|
280,714,771 |
|
|
|
|
|
|
|
280,714,771 |
|
U.S. government securities |
|
|
22,876,904 |
|
|
|
427,644,088 |
|
|
|
|
|
|
|
450,520,992 |
|
Commercial paper and short-term
investments |
|
|
35,274,278 |
|
|
|
121,488,319 |
|
|
|
|
|
|
|
156,762,597 |
|
Mortgage backed securities |
|
|
|
|
|
|
172,113,147 |
|
|
|
|
|
|
|
172,113,147 |
|
Other |
|
|
(1,545,757 |
) |
|
|
18,996,999 |
|
|
|
13,650,000 |
|
|
|
31,101,242 |
|
|
|
|
Total assets at fair value |
|
$ |
1,191,051,232 |
|
|
$ |
4,404,820,909 |
|
|
$ |
13,650,000 |
|
|
$ |
5,609,522,141 |
|
|
|
|
The following is a summary of changes in the fair value for the State Street Master Trust level
3 investments for the year ended December 31, 2008:
|
|
|
|
|
|
|
Level 3 Assets |
|
|
|
Other |
|
Balance, beginning of year |
|
$ |
|
|
Realized gains |
|
|
|
|
Unrealized gains relating to instruments still held at the reporting date |
|
|
|
|
Purchases, sales, issuances and settlements (net) |
|
|
13,650,000 |
|
|
|
|
|
Balance, end of year |
|
$ |
13,650,000 |
|
|
|
|
|
10
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007,
AND FOR THE YEAR ENDED DECEMBER 31, 2008
Bank of New York Master Trust
At December 31, 2007, the Plans interest in the net assets of the Bank of New York Master Trust
was 100%. In January 2008, all assets held in the Bank of New York Master Trust were
transferred to the State Street Master Trust and there was no investment income for the year
ended December 31, 2008 in the Bank of New York Master Trust. As of December 31, 2007, fair
values of investments in the Bank of New York Master Trust were as follows:
|
|
|
|
|
|
|
2007 |
|
Investments at fair value: |
|
|
|
|
Receivable from liquidated assets |
|
$ |
263,511,630 |
|
Common and preferred stock |
|
|
154,054,108 |
|
SUPERVALU, INC. common stock |
|
|
99,713,752 |
|
Mutual funds / pooled separate accounts |
|
|
89,748,380 |
|
Corporate bonds and debentures |
|
|
99,713,752 |
|
Commercial paper and short-term investments |
|
|
1,957,177 |
|
Synthetic guaranteed investment contract |
|
|
207,293,150 |
|
|
|
|
|
Total investments at fair value |
|
|
915,991,949 |
|
|
|
|
|
Adjustment from fair value to contract value for fully
benefit-responsive investment contracts |
|
|
(1,487,479 |
) |
|
|
|
|
Total investments at contract value |
|
$ |
914,504,470 |
|
|
|
|
|
The
Bank of New York Master Trust held an investment in a GIC (Principal Conservation Fund), which was presented at fair value at December 31, 2007 as shown
above. The Principal Conservation Fund contained direct investments in a traditional GIC and
synthetic GICs. In determining the net assets available for benefits, at December 31, 2007, the
Principal Conservation Fund was recorded at its contract value of $205,805,671, which was equal
to principal balance plus accrued interest. As provided in the FSP, an investment contract is
generally valued at contract value, rather than fair value, to the extent it is fully benefit
responsive.
Contract value, as reported to the Plan by the trustee, represents contributions made under the
contract, plus earnings, less participant withdrawals. Participants may ordinarily direct the
withdrawal or transfer of all or a portion of their investment at contract value.
There were no reserves against contract value for credit risk of the contract issuer or
otherwise. The crediting interest rate was based on a formula agreed upon with the issuer. Such
interest rates were reviewed and reset on a quarterly basis. The crediting interest rate at
December 31, 2007 was 4.37%. The average yield at December 31, 2007 was 5.01%.
Certain events limit the ability of the Plan to transact at contract value with the issuer. Such
events include the following: (1) amendments to the Plan documents (including complete or
partial Plan termination or merger with another plan), (2) changes to Plans prohibition on
competing investment options or deletion of equity wash provisions, (3) bankruptcy of the Plan
sponsor or other Plan sponsor events (for example, divestitures or spin-offs of a subsidiary)
that cause a significant withdrawal from the Plan or (4) the failure of the trust to qualify for
exemption from federal income taxes or any required prohibited transaction exemption under
ERISA. The Plan administrator does not believe that the occurrence of any such event, which
would limit the Plans ability to transact at contract value with participants, is probable.
The Principal Conservation Fund does not permit the insurance company to terminate the agreement
except under certain circumstances per the terms of the agreement. The Company and Plan may
terminate the agreement upon 30 days notice. The Principal Conservation Fund was placed with a
financial institution with a credit rating of A.
11
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007,
AND FOR THE YEAR ENDED DECEMBER 31, 2008
Fidelity Master Trust
At December 31, 2007, the Plans interest in the net assets of the Fidelity Master Trust was
100%. In January 2008, all assets held in the Fidelity Master Trust were transferred to the
State Street Master Trust and there was no investment income for the year ended December 31,
2008 in the Fidelity Master Trust. As of December 31, 2007, fair values of investments in the
Fidelity Master Trust are as follows:
|
|
|
|
|
|
|
2007 |
|
Investments at fair value: |
|
|
|
|
SUPERVALU INC. Common Stock |
|
$ |
56,860,434 |
|
Mutual funds / pooled separate accounts |
|
|
2,120,930,701 |
|
U.S. government securities |
|
|
4,568 |
|
Commercial paper and short-term investments |
|
|
39,331,766 |
|
Synthetic guaranteed investment contracts |
|
|
580,617,995 |
|
|
|
|
|
Total investments at fair value |
|
|
2,797,745,464 |
|
Adjustment from fair value to contract value
for fully-benefit responsive investment contracts |
|
|
8,614,989 |
|
|
|
|
|
Total investments at contract value |
|
$ |
2,806,360,453 |
|
|
|
|
|
The Fidelity Master Trust held an investment in a synthetic GIC, which was presented at fair
value at December 31, 2007 as shown above. In determining the net assets available for benefits
at December 31, 2007 the synthetic GIC was recorded at its contract value of $589,232,984, which
was equal to principal balance plus accrued interest. As provided in the FSP, an investment
contract is generally valued at contract value, rather than fair value, to the extent it is
fully benefit responsive. In addition, the Fidelity Master Trust held a wrap guarantee agreement
that could have been utilized in the event the issuer of the wrapper contract fell below certain
credit rating criteria.
Contract value, as reported to the Plan by Principal Global Investors, represented contributions
made under the contract, plus earnings, less participant withdrawals. Participants may
ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract
value.
There were no reserves against contract value for credit risk of the contract issuer or
otherwise. The crediting interest rate was based on a formula agreed upon with the issuer. Such
interest rates were reviewed and reset on a quarterly basis. The crediting interest rate at
December 31, 2007 was 5.40%. The average yield at December 31, 2007 was 5.55%.
Certain events limit the ability of the Plan to transact at contract value with the issuer. Such
events include the following: (1) amendments to the Plan documents (including complete or
partial Plan termination or merger with another plan), (2) changes to Plans prohibition on
competing investment options or deletion of equity wash provisions, (3) bankruptcy of the Plan
sponsor or other Plan sponsor events (for example, divestitures or spin-offs of a subsidiary)
that cause a significant withdrawal from the Plan, or (4) the failure of the trust to qualify
for exemption from federal income taxes or any required prohibited transaction exemption under
ERISA. The Plan administrator does not believe that the occurrence of any such event, which
would limit the Plans ability to transact at contract value with participants, is probable.
The synthetic GIC does not permit the insurance company to terminate the agreement except under
certain circumstances per the terms of the agreement. The Company and Plan may terminate the
agreement upon 30 days notice. The synthetic GIC was placed with a financial institution with a
credit rating of A.
12
SUPERVALU STAR 401(k) PLAN
(FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007,
AND FOR THE YEAR ENDED DECEMBER 31, 2008
Although the Company has not expressed
any intent to terminate the Plan, the Company has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants
will become 100% vested in their accounts. Any unallocated assets of the Plan shall be allocated to participant
accounts and distributed in such a manner as the Company may determine.
5. |
|
Federal Income Tax Status |
The IRS has determined and informed
the Company by letter dated May 8, 2002, that the Plan is designed in accordance with applicable sections of the
Internal Revenue Code (IRC). Although the Plan has been amended and restated since receiving the determination letter,
the Plan administrator and the Plans ERISA counsel believe that the Plan is designed and is currently being operated
in compliance with the applicable requirements of the IRC.
6. |
|
Related-Party Transactions |
Certain investments in the Master Trusts are shares of mutual funds managed by the trustees.
Transactions with the trustees qualify as party-in-interest transactions. Fees paid by the Plan
for investment management services were included as a reduction of the return earned on each
fund.
7. |
|
Reconciliation of the Financial Statements to Form 5500 |
The following is a reconciliation of net assets available for benefits per the financial
statements as of December 31, 2008 and 2007 to Form 5500:
|
|
|
|
|
|
|
|
|
|
|
2008 |
|
2007 |
Net assets available for benefits per the financial statements |
|
$ |
4,455,225,816 |
|
|
$ |
6,025,453,521 |
|
Adjustment from contract value to fair value for fully
benefit-responsive investment contracts |
|
|
(54,497,647 |
) |
|
|
(7,127,510 |
) |
|
|
|
Net assets available for benefits per Form 5500 |
|
$ |
4,400,728,169 |
|
|
$ |
6,018,326,011 |
|
|
|
|
The following is a reconciliation of investment income per the financial statements to Form
5500 for the year ended December 31, 2008:
|
|
|
|
|
Net Investment loss per the financial statements |
|
$ |
(1,425,607,935 |
) |
Less: Net adjustment from contract value to fair value
for fully benefit-responsive investment contracts
current year |
|
|
(54,497,647 |
) |
Add: Net adjustment from contract value to fair value
for fully benefit-responsive investment contracts
prior year |
|
|
7,127,510 |
|
|
|
|
|
Investment loss per Form 5500 |
|
$ |
(1,472,978,072 |
) |
|
|
|
|
Net assets available for benefits are reported at contract value in the financial statements
and at fair value in the Form 5500.
13
SUPERVALU STAR 401(K) PLAN
FORMERLY THE SUPERVALU PRE-TAX SAVINGS AND PROFIT SHARING PLAN
FORM 5500, SCHEDULE H, LINE 4iSCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2008
|
|
|
|
|
|
|
|
|
|
|
Description of Investment, Including Maturity |
|
|
|
|
Identity of Issuer, Borrower, |
|
Date, Rate of Interest, Collateral, Par or Maturity |
|
|
|
|
Lessor or Similar Party |
|
Value |
|
Cost |
|
Current Value |
*Loans to Participants |
|
20,999 Loans to Participants (maturing 2009 to
2018) at interest rates of 3.0% to 10.5% |
|
** |
|
|
178,156,799 |
|
|
|
* |
|
Party - in - interest |
|
** |
|
Cost of asset information is not required for participant-directed investments and, therefore, is not included. |
See accompanying report of independent registered public accounting firm.
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the plan administrator of
the SUPERVALU STAR 401(k) Plan, formerly the SUPERVALU Pre-Tax Savings and Profit Sharing Plan, has
duly caused this annual report to be signed on its behalf by the undersigned thereunto duly
authorized.
SUPERVALU STAR 401(k) Plan
|
|
|
|
|
DATE: June 29, 2009 |
By: |
SUPERVALU INC., the plan administrator |
|
|
|
|
|
|
|
By: |
/s/ Sherry M. Smith
|
|
|
|
Sherry M. Smith |
|
|
|
Senior Vice President, Finance |
|
15