UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended February 28, 2003
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
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 RETAIL EMPLOYEES' 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
FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements of SUPERVALU Retail Employees' 401(k)
Plan are included herein:
1. Independent Auditors' Report of KPMG LLP dated August 4, 2003.
2. Statements of Net Assets Available for Benefits as of February 28, 2003
and 2002.
3. Statements of Changes in Net Assets Available for Benefits for the
Fiscal Years Ended February 28, 2003 and 2002.
4. Notes to Financial Statements for the Fiscal Years Ended February 28,
2003 and 2002.
Ex-23 Independent Auditors' Consent of KPMG LLP.
Ex-32.1 Certification by the Chairman of the SUPERVALU INC. Retirement Committee
(Plan Administrator) Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Ex-32.2 Certification by the Chief Financial Officer (Principal Plan Sponsor)
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
plan administrator of the SUPERVALU Retail Employees' 401(k) Plan has duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
SUPERVALU RETAIL EMPLOYEES' 401(k) PLAN
DATE: August 20, 2003 By: SUPERVALU INC., the plan administrator
By: /s/ Pamela K. Knous
----------------------------------
Pamela K. Knous
Executive Vice President and
Chief Financial Officer
SUPERVALU RETAIL EMPLOYEES' 401(k) PLAN
Financial Statements
February 28, 2003 and 2002
(With Independent Auditors' Report Thereon)
SUPERVALU RETAIL EMPLOYEES' 401(k) PLAN
Table of Contents
Page
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Independent Auditors' Report
Administrative Committee
SUPERVALU INC.
Eden Prairie, Minnesota:
We have audited the accompanying statements of net assets available for benefits
of the SUPERVALU Retail Employees' 401(k) Plan (the Plan) as of February 28,
2003 and 2002, and the related statements of changes in net assets available for
benefits for the fiscal years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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
February 28, 2003 and 2002, and the changes in net assets available for benefits
for the fiscal years then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ KPMG LLP
August 4, 2003
SUPERVALU RETAIL EMPLOYEES' 401(k) PLAN
Statements of Net Assets Available for Benefits
February 28, 2003 and 2002
2003 2002
------------ ------------
Assets:
Investments in SUPERVALU INC. 401(k) Master Trust,
at fair value $ 18,292,537 18,197,707
Contributions receivable from participants 45,654 46,844
Contributions receivable from employer 8,790 92,058
Liabilities:
Expenses payable (31,475) (37,715)
------------ ------------
Net assets available for benefits $ 18,315,506 18,298,894
============ ============
See accompanying notes to financial statements.
2
SUPERVALU RETAIL EMPLOYEES' 401(k) PLAN
Statements of Changes in Net Assets Available for Benefits
Fiscal years ended February 28, 2003 and 2002
2003 2002
------------ ------------
Additions:
Investment (loss) income from SUPERVALU INC.
401(k)Master Trust $ (1,772,009) 334,258
Contributions:
Employer 553,995 683,381
Participants 2,794,395 2,795,297
------------ ------------
3,348,390 3,478,678
------------ ------------
Total additions 1,576,381 3,812,936
------------ ------------
Deductions:
Distributions to participants (1,287,150) (2,312,519)
Administrative expenses (191,808) (132,272)
------------ ------------
Total deductions (1,478,958) (2,444,791)
Transfers to other plans within the 401(k) Master Trust, net (80,811) (92,502)
------------ ------------
Net increase 16,612 1,275,643
Net assets available for benefits:
Beginning of year 18,298,894 17,023,251
------------ ------------
End of year $ 18,315,506 18,298,894
============ ============
See accompanying notes to financial statements.
3
SUPERVALU RETAIL EMPLOYEES' 401(k) PLAN
Notes to Financial Statements
February 28, 2003 and 2002
(1) Summary Description of the Plan
The following description of the SUPERVALU Retail Employees' 401(k) Plan
(the Plan) (formerly the Cub Foods Retail Clerks 401(k) Plan) is provided
for general information purposes only. Participants should refer to the
summary plan description for a more complete description of the Plan's
provisions.
The Plan is a defined contribution plan and is subject to the provisions of
Title I of the Employee Retirement Income Security Act of 1974 (ERISA).
The Plan covers employees in numerous local unions and two non-union
groups; therefore, it has six separate fact patterns for eligibility in the
Plan. For union plan participants, each set of eligibility requirements is
governed by the specified collective bargaining agreement for which the
participant is covered. Eligibility in the Plan ranges from the age of 18
to 21 and after service periods between two months and one year. In
addition, employees are automatically enrolled with a 2% contribution in
the Plan after satisfying the eligibility rules unless the participant
specifically notifies SUPERVALU that they will not participate.
The Plan allows for employee contributions under Section 401(k) of the
Internal Revenue Code, under which participants may contribute from 2% to
20% of their recognized compensation to the Plan, as defined in the Plan
document. Prior to March 1, 2002, employee contribution rates were 2% to
15%. Employee contributions are limited by the Internal Revenue Service
limitation of $12,000, $11,000, and $10,500 in calendar 2003, 2002, and
2001, respectively. Employer matching contributions are deferred as a
percentage of the participants' compensation deferred and is in accordance
with the matching formula specified in the collective bargaining agreement.
All amounts contributed by employees are 100% vested at all times. Employer
contributions are vested 20% after two years, 40% after three years, 60%
after four years, and 100% at five years, if applicable to the collective
bargaining agreement. Forfeitures of nonvested amounts shall be used to pay
plan expenses or restore forfeited accounts of rehired participants. Any
remaining amounts are used to reduce the employer contributions.
Forfeitures of nonvested amounts totaling $27,932 and $31,700 were used to
pay plan expenses in fiscal 2003 and 2002, respectively. Participant and
employer matching contributions may be directed into one or more of the
funds within the SUPERVALU INC. 401(k) Master Trust (the 401(k) Master
Trust).
The Plan accounts of participants within the 401(k) Master Trust are
consolidated, resulting in each participant having only one account within
the 401(k) Master Trust. Therefore, participant movement between plans
results in asset transfers within the 401(k) Master Trust. Transfers to
other plans within the 401(k) Master Trust of $80,811 and $92,502 in fiscal
2003 and fiscal 2002, respectively, reflect the net result of this activity
in the Plan.
Although the Company has not expressed any intent to terminate the Plan, it
may do so at any time. Each participant's account would immediately vest
and the balance would be distributed to the participant in full upon
termination.
Benefits under the Plan are payable in a lump sum.
4 (Continued)
SUPERVALU RETAIL EMPLOYEES' 401(k) PLAN
Notes to Financial Statements
February 28, 2003 and 2002
Participants currently employed by the Company can withdraw their employee
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 accounts after completing the
appropriate application forms and receiving approval from the
Administrative Committee.
Effective December 1, 1998, the Plan added a participant loan provision.
Loans are available to all participants of the Plan and may not exceed the
lesser of 50% of the vested amount of the borrower's total account or
$50,000. The interest rate on any loan shall be 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, plus 1%.
Principal and interest are repaid monthly through payroll deductions, and
the maximum term of any loan is five years. Loan interest rates range from
5.25% to 10.50%.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements of the Plan are presented on the
accrual basis of accounting.
(b) Investments
Investment assets of the Plan are stated at current fair value.
Investments in various funds represent the Plan's pro-rata share of
the quoted market value of the funds' net assets as reported by the
Trustee (as defined in note 3). Investment contracts in the Principal
Conservation Fund are stated at contract value which approximates fair
value.
Purchases and sales of securities are recorded on a trade-date basis.
(c) Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of net assets available for benefits and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of changes in net assets available
for benefits during the reporting period. Actual results could differ
from those estimates.
(d) Expenses
The reasonable expenses of administering the Plan shall be payable out
of the Plan's funds except to the extent that SUPERVALU, in its
discretion, directly pays the expenses. In fiscal 2003 and 2002,
SUPERVALU did pay certain expenses on behalf of the Plan.
(e) Risk and Uncertainties
The Plan provides for various investment fund options. Investment
securities are exposed to various risks, such as interest rate, market
fluctuation, and credit risks. Due to the level of risk associated
with certain investment securities, it is at least reasonably possible
that changes in the values of investment securities 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.
5 (Continued)
SUPERVALU RETAIL EMPLOYEES' 401(k) PLAN
Notes to Financial Statements
February 28, 2003 and 2002
(3) Trustee
On May 24, 2002, Bank of New York (the Trustee) was appointed the Trustee
and custodian of the Plan's assets by the Retirement Committee. Prior to
May 24, 2002, Bankers Trust Company was the appointed Trustee and custodian
of the Plan's assets. The Plan's assets were transferred to Bank of New
York on August 1, 2002.
(4) Investments
Under the terms of the trust agreement, the Trustee manages investments on
behalf of the Plan. In accordance with the trust agreement, certain assets
of the Plan are held together with assets of other plans sponsored by
SUPERVALU in the 401(k) Master Trust. The Trustee has been granted
discretionary authority concerning the purchases and sales of the
investments.
The 401(k) Master Trust includes the SUPERVALU Wholesale Employees' 401(k)
Plan, the SUPERVALU Retail Employees' 401(k) Plan, the SUPERVALU Pre-tax
Savings and Profit Sharing Plan, and the Pittsburgh Division Profit Sharing
Plan.
The Trustee allocates interest and investment income, and net realized
gains and losses to each of the funds in the 401(k) Master Trust based on
the actual performance of each fund. Financial information related to the
401(k) Master Trust is prepared and filed in accordance with the Department
of Labor's regulations.
The Plan recordkeeper (Hewitt Associates LLC) allocates interest and
dividends, net realized (unrealized) gains and losses, and administrative
expenses to each of the plans in the 401(k) Master Trust based upon the
ratio of net assets of the Plan to the total net assets of the 401(k)
Master Trust. The Loan Fund, however, is based on the actual participant
loan activity for each plan. Separate accounts are maintained by the
recordkeeper for participants in each plan, and funds may be distributed to
or withdrawn by participants in accordance with the appropriate plan's
terms.
6 (Continued)
SUPERVALU RETAIL EMPLOYEES' 401(k) PLAN
Notes to Financial Statements
February 28, 2003 and 2002
Fair values of investments in the 401(k) Master Trust are as follows:
February 28
------------------------------
2003 2002
------------- -------------
Investments at fair value:
Collective investment funds $ 389,403,886 398,250,892
Common stock held by:
Equity funds 59,654,201 75,424,497
SUPERVALU Common Stock Fund 38,171,480 73,534,489
Cash and cash equivalents 4,598,893 8,468,711
Accrued income 456,043 465,940
Net settlements payable (142,654) (713,538)
Loans receivable from participants 15,646,739 16,299,353
------------- -------------
$ 507,788,588 571,730,344
============= =============
Investment (loss) income for the 401(k) Master Trust for the fiscal years
ended February 28, 2003 and 2002 is as follows:
2003 2002
------------- ------------
Net realized and unrealized (depreciation)
appreciation in fair value of
investments:
Collective investment funds $(36,851,749) (7,553,472)
Common stock (36,567,190) 30,619,676
------------ ------------
(73,418,939) 23,066,204
Interest 2,883,250 3,246,272
Dividends 2,609,537 2,316,756
------------ ------------
Net investment (loss) income $(67,926,152) 28,629,232
============ ============
At February 28, 2003 and 2002, the Plan held 3.6% and 3.2%, respectively,
of the 401(k) Master Trust assets.
(5) Federal Income Tax Status
The Plan has received a favorable determination letter from the Internal
Revenue Service dated May 8, 2002 indicating that the Plan meets the
requirements of Section 401(a) of the Internal Revenue Code (the Code) and
that the trust established in connection therewith is exempt from federal
income tax under Section 501(a) of the Code. The Company believes the Plan
continues to meet the requirements of Section 401(a) of the Code and that
the related trust is exempt from income tax under Section 501(a) of the
Code. Therefore, no provisions for income taxes have been made.
7 (Continued)
SUPERVALU RETAIL EMPLOYEES' 401(k) PLAN
Notes to Financial Statements
February 28, 2003 and 2002
(6) Party-in-interest Transactions
The Plan engages in transactions involving the acquisition and disposition
of investment funds with the current Trustee, Bank of New York, and the
former Trustee, Bankers Trust Company, and the 401(k) Master Trust, who are
parties-in-interest with respect to the Plan. These transactions are
covered by an exemption from the "prohibited transactions" provision of
ERISA and the Code.
(7) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to Form 5500:
February 28
----------------------------
2003 2002
------------ ------------
Net assets available for benefits per
the financial statements $ 18,315,506 18,298,894
Amounts allocated to withdrawing
participants (7,609) (9,071)
------------ ------------
Net assets available for benefits per
Form 5500 $ 18,307,897 18,289,823
============ ============
The following is a reconciliation of benefits paid to participants per the
financial statements to Form 5500 for the fiscal year ended February 28,
2003:
Benefits paid to participants per the financial statements $1,287,150
Add amounts allocated to withdrawing participants at
February 28, 2003 7,609
Less amounts allocated to withdrawing participants at
February 28, 2002 (9,071)
----------
Benefits paid to participants per Form 5500 $1,285,688
==========
Amounts allocated to withdrawing participants are recorded on Form 5500 for
benefit claims that have been processed and approved for payment prior to
February 28, 2003 and 2002, respectively, but not paid as of that date.
8