Stock Based Awards

4 Months Ended

Jun. 16, 2012

Stock-Based Awards [Abstract]

STOCK-BASED AWARDS

NOTE 7 — STOCK-BASED AWARDS

The Company recognized pre-tax stock-based compensation expense (included primarily in Selling and administrative expenses in the Condensed Consolidated Statements of Earnings) related to stock-based awards of $5 for the first quarter ended June 16, 2012 and June 18, 2011.

In May 2012 the Company granted 5 performance award units to certain employees under the SUPERVALU INC. 2007 Stock Plan as part of the Company’s long-term incentive program (“2013 LTIP”). Payout of the award will be based on the increase in share price over the three-year service period ending May 1, 2015, and will be settled in the Company’s stock.

The grant date fair value used to determine compensation expense associated with the performance grant is calculated utilizing a Monte Carlo simulation. The assumptions related to the valuation of the Company’s 2013 LTIP consisted of the following:

	June 16, 2012
Dividend yield		4.1%
Volatility rate		45.8%
Risk-free interest rate		0.4%
Expected life		3.0 years

The grant date fair value of the 2013 LTIP award during the first quarter ended June 16, 2012 was $1.38 per award unit. At the end of the three-year service period, the award units will be converted to shares based on the aggregate award value as determined by multiplying the award units by the increase in the Company share price over the service period above the $5.77 grant date share price. The aggregate award will be divided by the closing market price as of May 1, 2015 to determine the number of shares awarded.

The fair value used to determine compensation expense associated with the 2012 LTIP performance grant is calculated utilizing a Monte Carlo simulation. The assumptions related to the valuation of the Company’s 2012 LTIP consisted of the following:

	June 16, 2012		June 18, 2011
Dividend yield		4.6%		4.2%
Volatility rate		47.0%		47.4 — 49.5%
Risk-free interest rate		0.3%		0.7 — 1.2%
Expected life		2.2 years		2.9 — 3.1 years

The grant date fair value of the award during the first quarter ended June 18, 2011 was $2.40 per share. The fair value of the cash portion of the award is classified as a liability and is remeasured at fair value each reporting period. As of June 16, 2012 and June 18, 2011 the fair value of the cash portion of the award was $0.57 and $1.46 per share, respectively. The minimum payout value of cash and stock is $0 and the aggregate maximum amount the Company could be required to payout is $177.

The Company did not grant any shares under stock options during the first quarter ended June 16, 2012 and June 18, 2011. In April 2012 the Company granted 1 share of restricted stock awards (“RSAs”) to certain employees under the Company’s fiscal 2012 bonus plan at a fair value of $6.15 per share. The RSAs will vest over a three year period from the date of grant.

Refer to Note 11 — Subsequent Events for information relating to stock option issuances on July 17, 2012.