þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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EXHIBIT |
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Ex-23.1 Consent of Independent Registered Public Accounting Firm |
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EX-23.1 |
NOTE: | 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. |
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2009 | 2008 | |||||||
ASSETS: |
||||||||
Plans interest in Master Trust, at fair value |
$ | 5,072,744 | $ | 4,220,249 | ||||
Loans to participants |
188,247 | 178,157 | ||||||
Employer contribution receivable |
2,995 | 3,206 | ||||||
Total assets |
5,263,986 | 4,401,612 | ||||||
LIABILITIES Administrative expenses payable |
(840 | ) | (884 | ) | ||||
NET ASSETS AVAILABLE FOR BENEFITS BEFORE ADJUSTMENTS |
5,263,146 | 4,400,728 | ||||||
ADJUSTMENTS FROM FAIR VALUE TO CONTRACT VALUE FOR
FULLY BENEFIT-RESPONSIVE INVESTMENT CONTRACTS |
13,122 | 54,498 | ||||||
NET ASSETS AVAILABLE FOR BENEFITS |
$ | 5,276,268 | $ | 4,455,226 | ||||
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ADDITIONS: |
||||
Investment income: |
||||
Plans interest in Master Trust investment income |
$ | 819,270 | ||
Interest on loans to participants |
8,283 | |||
Net investment income |
827,553 | |||
Contributions: |
||||
Employer |
101,315 | |||
Participants |
177,313 | |||
Total contributions |
278,628 | |||
Plan mergers |
55,977 | |||
Total additions, net of investment income |
1,162,158 | |||
DEDUCTIONS: |
||||
Benefits paid to participants |
(334,322 | ) | ||
Administrative expenses |
(6,794 | ) | ||
Total deductions |
(341,116 | ) | ||
NET INCREASE |
821,042 | |||
NET ASSETS AVAILABLE FOR BENEFITS: |
||||
Beginning of period |
4,455,226 | |||
End of period |
$ | 5,276,268 | ||
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1. | Description of Plan | |
The following description of the SUPERVALU STAR 401(k) 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 December 31, 2009, the Farm Fresh, Inc. Retirement Savings Plan was merged into the Plan and participant balances in the amount of $55,977 were transferred to equivalent investment options available in the Plan. | ||
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 SUPERVALU INC. Master Investment Trust held by State Street Corporation, the trustee (Master Trust). | ||
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 or chooses to participate at a different rate. Thereafter, employees must make an election in order to change their contribution percentage. The deferral percentages of participants who were automatically enrolled and have not made an election change will be automatically escalated by 1% per year until they reach 6%. 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 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. For plan years beginning on or after 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 and credited after January 1, 2008, 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 are paid through payroll deductions, with the maximum term of five years, except for loans for the purchase of a primary residence which have a maximum term of 10 years. Loan interest rates range from 3.25% to 10.50% as of December 31, 2009. The loans are valued based on amortized cost which approximates fair value using discounted cash flows as of December 31, 2009 and 2008. |
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Payment of Benefits | ||
Upon termination of service for any reason or attainment of age 59 1/2, 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 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, 2009 and 2008, forfeited nonvested accounts totaled $1,336 and $863, 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, 2009, employer contributions were reduced by $1,336 from forfeited nonvested accounts. | ||
2. | 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). | ||
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. 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 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 | ||
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 at the measurement date. Investments reported at fair value are categorized using defined hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair value measurements, 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 or liabilities. |
The value of the Plans interest in the Master Trust is based on the beginning of year value of the Plans interest in the Master Trust plus actual contributions and allocated investment income, less 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 values of certain underlying investments of the Master Trust are estimated primarily by independent investment brokerage firms, the trustee and insurance companies. Where applicable, as a practical expedient, the fair values of certain underlying investments of the Master Trust are at the net asset value per share (NAV), which is based on the value of the underlying securities owned by the fund and divided by the number of shares outstanding. See Note 3, Plans Interest in Master Trust. |
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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. | ||
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. | ||
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 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. | Plans Interest in Master Trust | |
The Plans interest in the Master Trust represents more than 5% of the Plans net assets as of December 31, 2009 and 2008. | ||
Under the terms of the trust agreement, the trustee manages the investments on behalf of the Plan together with the investments that are held for other plans sponsored by SUPERVALU in the Master Trust. |
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2009 | 2008 | |||||||
Investments at fair value: |
||||||||
Common stock: |
||||||||
U.S. small-cap and mid-cap stock |
$ | 406,828 | $ | 359,901 | ||||
U.S. large-cap stock |
602,401 | 415,288 | ||||||
International stock |
370,887 | 260,665 | ||||||
Total common stock |
1,380,116 | 1,035,854 | ||||||
Common collective trusts equity |
2,525,993 | 1,984,919 | ||||||
Common collective trusts fixed income |
448,322 | 304,972 | ||||||
Corporate bonds |
332,344 | 328,601 | ||||||
Government securities |
271,398 | 451,825 | ||||||
Mortgage backed securities |
132,396 | 180,009 | ||||||
Private equity |
31,723 | 13,650 | ||||||
Mutual funds |
198,877 | 146,685 | ||||||
Guaranteed investment contracts |
1,117,275 | 1,092,335 | ||||||
Other |
161,665 | 70,672 | ||||||
Total investments |
6,600,109 | 5,609,522 | ||||||
Net payable for securities purchased |
(1,795 | ) | (242,948 | ) | ||||
Net assets at fair value |
6,598,314 | 5,366,574 | ||||||
Adjustment from fair value to contract value
for fully benefit-responsive investment
contracts |
13,326 | 54,502 | ||||||
Net assets at contract value |
$ | 6,611,640 | $ | 5,421,076 | ||||
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2009 | ||||
Investment income: |
||||
Net appreciation in fair value of investments: |
||||
Common stock: |
||||
U.S. small-cap and mid-cap stock |
$ | 75,211 | ||
U.S. large-cap stock |
156,435 | |||
International stock |
106,498 | |||
Total common stock |
338,144 | |||
Common collective trusts equity |
502,086 | |||
Common collective trusts fixed income |
72,543 | |||
Corporate bonds |
44,916 | |||
Government securities |
6,571 | |||
Mortgage backed securities |
29,622 | |||
Private equity |
1,461 | |||
Mutual funds |
3,046 | |||
Guaranteed investment contracts |
11,606 | |||
Other |
44,287 | |||
1,054,282 | ||||
Dividends |
28,252 | |||
Interest |
51,162 | |||
Net investment income |
$ | 1,133,696 | ||
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Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Common stock: |
||||||||||||||||
U.S. small-cap and mid-cap stock |
$ | 406,828 | $ | | $ | | $ | 406,828 | ||||||||
U.S. large-cap stock |
602,401 | | | 602,401 | ||||||||||||
International stock |
370,887 | | | 370,887 | ||||||||||||
Total common stock |
1,380,116 | | | 1,380,116 | ||||||||||||
Common collective trusts equity |
| 2,525,993 | | 2,525,993 | ||||||||||||
Common collective trusts fixed income |
| 448,322 | | 448,322 | ||||||||||||
Corporate bonds |
| 332,344 | | 332,344 | ||||||||||||
Government securities |
99,669 | 171,729 | | 271,398 | ||||||||||||
Mortgage backed securities |
| 132,396 | | 132,396 | ||||||||||||
Private equity |
| | 31,723 | 31,723 | ||||||||||||
Mutual funds |
178,105 | 20,772 | | 198,877 | ||||||||||||
Guaranteed investment contracts |
| 1,117,275 | | 1,117,275 | ||||||||||||
Other |
| 159,870 | | 159,870 | ||||||||||||
Total net assets at fair value |
$ | 1,657,890 | $ | 4,908,701 | $ | 31,723 | $ | 6,598,314 | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Common stock: |
||||||||||||||||
U.S. small-cap and mid-cap stock |
$ | 358,697 | $ | 1,204 | $ | | $ | 359,901 | ||||||||
U.S. large-cap stock |
415,288 | | | 415,288 | ||||||||||||
International stock |
260,254 | 411 | | 260,665 | ||||||||||||
Total common stock |
1,034,239 | 1,615 | | 1,035,854 | ||||||||||||
Common collective trusts equity |
| 1,984,919 | | 1,984,919 | ||||||||||||
Common collective trusts fixed income |
| 304,972 | | 304,972 | ||||||||||||
Corporate bonds |
4,565 | 324,036 | | 328,601 | ||||||||||||
Government securities |
29,555 | 422,270 | | 451,825 | ||||||||||||
Mortgage backed securities |
| 180,009 | | 180,009 | ||||||||||||
Private equity |
| | 13,650 | 13,650 | ||||||||||||
Mutual funds |
130,303 | 16,382 | | 146,685 | ||||||||||||
Guaranteed investment contracts |
| 1,092,335 | | 1,092,335 | ||||||||||||
Other |
(7,611 | ) | (164,665 | ) | | (172,276 | ) | |||||||||
Total net assets at fair value |
$ | 1,191,051 | $ | 4,161,873 | $ | 13,650 | $ | 5,366,574 | ||||||||
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Level 3 | ||||
Private Equity | ||||
Beginning balance |
$ | 13,650 | ||
Realized gains |
| |||
Unrealized gains relating to instruments still held at the reporting date |
289 | |||
Purchases, sales, issuances and settlements (net) |
17,784 | |||
Ending balance |
$ | 31,723 | ||
Interest | Foreign | |||||||||||||||||||||||
Rate | Exchange | Credit | Equity | Other | ||||||||||||||||||||
Contracts | Contracts | Contracts | Contracts | Contracts | Total | |||||||||||||||||||
Asset-value Derivatives: |
||||||||||||||||||||||||
Swaps |
$ | 5,286 | $ | | $ | 932 | $ | 7,015 | $ | | $ | 13,233 | ||||||||||||
Forward Contracts |
| 2,399 | | | | 2,399 | ||||||||||||||||||
Other |
1,664 | 4 | | | 1,542 | 3,210 | ||||||||||||||||||
$ | 6,950 | $ | 2,403 | $ | 932 | $ | 7,015 | $ | 1,542 | $ | 18,842 | |||||||||||||
Liability-value Derivatives: |
||||||||||||||||||||||||
Swaps |
$ | (954 | ) | $ | | $ | (1,142 | ) | $ | (1,599 | ) | $ | | $ | (3,695 | ) | ||||||||
Forward Contracts |
| (1,901 | ) | | | (91,161 | ) | (93,062 | ) | |||||||||||||||
Other |
(3,299 | ) | (2 | ) | | | (970 | ) | (4,271 | ) | ||||||||||||||
$ | (4,253 | ) | $ | (1,903 | ) | $ | (1,142 | ) | $ | (1,599 | ) | $ | (92,131 | ) | $ | (101,028 | ) | |||||||
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The following is a summary of the net change in appreciation (depreciation) in fair value of the derivative instruments for the Master Trust categorized by risk exposure for the year-ended December 31, 2009: |
Interest | Foreign | |||||||||||||||||||||||
Rate | Exchange | Credit | Equity | Other | ||||||||||||||||||||
Contracts | Contracts | Contracts | Contracts | Contracts | Total | |||||||||||||||||||
Swaps |
$ | 5,646 | $ | | $ | 2,626 | $ | 32,589 | $ | | $ | 40,861 | ||||||||||||
Forward Contracts |
| 2,512 | | | 4,306 | 6,818 | ||||||||||||||||||
Other |
(219 | ) | 10 | | | 11,123 | 10,914 | |||||||||||||||||
$ | 5,427 | $ | 2,522 | $ | 2,626 | $ | 32,589 | $ | 15,429 | $ | 58,593 | |||||||||||||
4. | Plan Termination | |
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 believes 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 Trust are shares of mutual funds managed by the trustee. Transactions with the trustee 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, 2009 and 2008 to Form 5500: |
2009 | 2008 | |||||||
Net assets available for benefits per the financial statements |
$ | 5,276,268 | $ | 4,455,226 | ||||
Adjustment from contract value to fair value for fully
benefit-responsive investment contracts |
(13,122 | ) | (54,498 | ) | ||||
Net assets available for benefits per Form 5500 |
$ | 5,263,146 | $ | 4,400,728 | ||||
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The following is a reconciliation of investment income per the financial statements to Form 5500 for the year ended December 31, 2009: |
Net Investment income per the financial statements |
$ | 827,553 | ||
Less: Net adjustment from contract value to fair value
for fully benefit-responsive investment contracts
current year |
(13,122 | ) | ||
Add: Net adjustment from contract value to fair value
for fully benefit-responsive investment contracts
prior year |
54,498 | |||
Investment income per Form 5500 |
$ | 786,177 | ||
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Identity of | Description of Investment, Including Maturity | |||||||
Issuer, Borrower, | Date, Rate of Interest, Collateral, Par or Maturity | |||||||
Lessor or Similar Party | Value | Cost | Current Value | |||||
*Loans to Participants |
22,324 Loans to Participants (maturing 2010 to 2019) at interest rates of 3.25% to 10.50% | ** | 188,247 |
* | Party in interest | |
** | Cost of asset information is not required and, therefore, is not included. |
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SUPERVALU STAR 401(k) Plan |
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DATE: June 15, 2010 | By: | SUPERVALU INC., the plan administrator | ||
By: | /s/ Sherry M. Smith | |||
Sherry M. Smith | ||||
Senior Vice President, Finance |
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