SUPERVALU (SVU) Enters Transition Services Agreements with NAI and Albertson’s

In connection with the sale of its wholly owned subsidiary, New Albertson’s, Inc. (“NAI”), on March 21, 2013, SUPERVALU (NYSE: SVU) entered into Transition Services Agreements (collectively, the “TSA”) with each of NAI and Albertson’s LLC to support the divested NAI banners and the continuing operations of Albertson’s LLC. Each TSA had an initial term expiring on September 21, 2015, subject to annual renewal by notice given at least 12 months prior to expiration of the then current term. In September 2014, each of the Company, NAI and Albertson’s LLC extended the terms of the TSA for an additional year. The current terms of the TSA now end on September 21, 2016, unless renewed again by notice given by NAI and/or Albertson’s LLC (or the Company with respect to the services it receives) no later than September 21, 2015.

On April 16, 2015, the Company entered into a letter agreement regarding the TSA with NAI and Albertson’s LLC (the “TSA Letter Agreement”) pursuant to which the Company will provide services to NAI and Albertson’s LLC as needed to transition and wind down the TSA and the services the Company provides under the TSA. In exchange for these transition and wind down services, the Company will receive eight payments of $6.25 million every six months for aggregate fees of $50 million. These payments are separate from and incremental to the fixed and variable fees the Company receives under the TSA. The parties agreed that these transition and wind down services would be provided by the Company in an orderly manner and timeline as reasonably determined by NAI, Albertson’s LLC and the Company. The parties also agreed to negotiate in good faith if either the costs associated with the transition and wind down services are materially higher (i.e., 5% or more) than anticipated by the Company, or the Company is not performing in all material respects the transition and wind down services as needed to support NAI’s and Albertson’s LLC’s transition and wind down activities.

Item 7.01 Regulation FD Disclosure.

The Company expects the fees due under the TSA Letter Agreement described above to cover the Company’s costs of providing the transition and wind down services and may help to offset the decline in TSA fees resulting from stores and distribution centers being removed from the TSA as part of the transition and wind down.

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