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1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 15,2024OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For
2、the transition period from _ to _Commission File Number:001-39350Albertsons Companies,Inc.(Exact name of registrant as specified in its charter)Delaware47-4376911(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)250 Parkcenter Blvd.Boise,Idaho 83706(Add
3、ress of principal executive offices and zip code)(208)395-6200(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredClass A common stock,$0.01 par valueACINew York Stock
4、 ExchangeIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 duringthe preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to s
5、uch filing requirements forthe past 90 days.Yes NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period th
6、at the registrant was required to submit suchfiles).Yes NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or anemerging growth company.See the definitions of large accelerated filer,accelerated filer,
7、smaller reporting company and emerging growth company inRule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extend
8、ed transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes NoAs of July 19,2024,the registrant had 57
9、9,133,695 shares of Class A common stock,par value$0.01 per share,outstanding.Albertsons Companies,Inc.and SubsidiariesPART I-FINANCIAL INFORMATIONPageItem 1-Condensed Consolidated Financial Statements(unaudited)Condensed Consolidated Balance Sheets3Condensed Consolidated Statements of Operations an
10、d Comprehensive Income4Condensed Consolidated Statements of Cash Flows5Condensed Consolidated Statements of Stockholders Equity6Notes to Condensed Consolidated Financial Statements7Item 2-Managements Discussion and Analysis of Financial Condition and Results of Operations18Item 3-Quantitative and Qu
11、alitative Disclosures About Market Risk29Item 4-Controls and Procedures29PART II-OTHER INFORMATIONItem 1-Legal Proceedings30Item 1A-Risk Factors30Item 2-Unregistered Sales of Equity Securities and Use of Proceeds30Item 3-Defaults Upon Senior Securities31Item 4-Mine Safety Disclosures31Item 5-Other I
12、nformation31Item 6-Exhibits31SIGNATURES32Table of ContentsPART I-FINANCIAL INFORMATIONItem 1-Condensed Consolidated Financial Statements(unaudited)Albertsons Companies,Inc.and SubsidiariesCondensed Consolidated Balance Sheets(in millions,except share data)(unaudited)June 15,2024February 24,2024ASSET
13、SCurrent assetsCash and cash equivalents$291.1$188.7 Receivables,net809.4 724.4 Inventories,net4,720.0 4,945.2 Other current assets387.4 429.2 Total current assets6,207.9 6,287.5 Property and equipment,net9,509.8 9,570.3 Operating lease right-of-use assets6,017.7 5,981.6 Intangible assets,net2,415.4
14、 2,434.5 Goodwill1,201.0 1,201.0 Other assets725.2 746.2 TOTAL ASSETS$26,077.0$26,221.1 LIABILITIESCurrent liabilitiesAccounts payable$3,898.2$4,218.2 Accrued salaries and wages1,196.4 1,302.6 Current maturities of long-term debt and finance lease obligations82.6 285.2 Current maturities of operatin
15、g lease obligations675.0 677.6 Other current liabilities1,213.8 974.1 Total current liabilities7,066.0 7,457.7 Long-term debt and finance lease obligations7,774.8 7,783.4 Long-term operating lease obligations5,610.3 5,493.2 Deferred income taxes754.8 807.6 Other long-term liabilities1,958.0 1,931.7
16、Commitments and contingenciesSTOCKHOLDERS EQUITYClass A common stock,$0.01 par value;1,000,000,000 shares authorized,597,494,242 and594,445,268 shares issued as of June 15,2024 and February 24,2024,respectively6.0 5.9 Additional paid-in capital2,126.2 2,129.6 Treasury stock,at cost,18,404,201 and 18
17、,397,745 shares held as of June 15,2024 and February 24,2024,respectively(304.2)(304.2)Accumulated other comprehensive income86.7 88.0 Retained earnings998.4 828.2 Total stockholders equity2,913.1 2,747.5 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY$26,077.0$26,221.1 The accompanying notes are an integ
18、ral part of these Condensed Consolidated Financial Statements.3Table of ContentsAlbertsons Companies,Inc.and SubsidiariesCondensed Consolidated Statements of Operations and Comprehensive Income(in millions,except per share data)(unaudited)16 weeks endedJune 15,2024June 17,2023Net sales and other rev
19、enue$24,265.4$24,050.2 Cost of sales17,526.5 17,387.5 Gross margin6,738.9 6,662.7 Selling and administrative expenses6,274.0 6,012.9 Loss on property dispositions and impairment losses,net5.3 27.6 Operating income459.6 622.2 Interest expense,net145.7 154.9 Other expense(income),net4.0(16.0)Income be
20、fore income taxes309.9 483.3 Income tax expense69.2 66.1 Net income$240.7$417.2 Other comprehensive income(loss),net of taxRecognition of pension loss(1.0)(0.6)Other(0.3)1.7 Other comprehensive(loss)income$(1.3)$1.1 Comprehensive income$239.4$418.3 Net income per Class A common shareBasic net income
21、 per Class A common share$0.42$0.73 Diluted net income per Class A common share0.41 0.72 Weighted average Class A common shares outstanding(in millions)Basic578.6 573.7 Diluted581.3 580.1 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.4Table of Conte
22、ntsAlbertsons Companies,Inc.and SubsidiariesCondensed Consolidated Statements of Cash Flows(in millions)(unaudited)16 weeks endedJune 15,2024June 17,2023Cash flows from operating activities:Net income$240.7$417.2 Adjustments to reconcile net income to net cash provided by operating activities:Loss o
23、n property dispositions and impairment losses,net5.3 27.6 Depreciation and amortization552.0 530.6 Operating lease right-of-use assets amortization207.6 203.6 LIFO expense14.6 34.0 Deferred income tax(56.3)(96.4)Contributions to pension and post-retirement benefit plans,net of expense(income)(10.9)(
24、6.4)Deferred financing costs4.9 4.8 Equity-based compensation expense36.7 31.9 Other operating activities6.0(16.3)Changes in operating assets and liabilities:Receivables,net(84.5)5.2 Inventories,net210.7(96.9)Accounts payable,accrued salaries and wages and other accrued liabilities(304.0)(222.8)Oper
25、ating lease liabilities(125.9)(123.4)Self-insurance assets and liabilities21.5 31.1 Other operating assets and liabilities242.5 114.5 Net cash provided by operating activities960.9 838.3 Cash flows from investing activities:Payments for property,equipment and intangibles,including lease buyouts(543.
26、0)(622.5)Proceeds from sale of assets3.8 169.3 Other investing activities1.2(0.7)Net cash used in investing activities(538.0)(453.9)Cash flows from financing activities:Payments on long-term borrowings,including ABL facility(200.2)(500.2)Payments of obligations under finance leases(12.5)(13.0)Divide
27、nds paid on common stock(69.5)(69.0)Dividends paid on convertible preferred stock(0.8)Employee tax withholding on vesting of restricted stock units(38.6)(33.1)Other financing activities 1.1 Net cash used in financing activities(320.8)(615.0)Net increase(decrease)in cash and cash equivalents and rest
28、ricted cash102.1(230.6)Cash and cash equivalents and restricted cash at beginning of period193.2 463.8 Cash and cash equivalents and restricted cash at end of period$295.3$233.2 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.5Table of ContentsAlberts
29、ons Companies,Inc.and SubsidiariesCondensed Consolidated Statements of Stockholders Equity(in millions,except share data)(unaudited)Class A Common StockAdditionalpaid-incapitalTreasury StockAccumulatedothercomprehensiveincomeRetainedearningsTotalstockholdersequitySharesAmountSharesAmountBalance as o
30、f February 24,2024594,445,268$5.9$2,129.6 18,397,745$(304.2)$88.0$828.2$2,747.5 Equity-based compensation 34.4 34.4 Shares issued and employee taxwithholding on vesting of restrictedstock units3,048,974 0.1(38.6)(38.5)Cash dividends declared on commonstock($0.12 per common share)(69.5)(69.5)Net inco
31、me 240.7 240.7 Other comprehensive loss,net of tax (1.3)(1.3)Other activity 0.8 6,456 (1.0)(0.2)Balance as of June 15,2024597,494,242$6.0$2,126.2 18,404,201$(304.2)$86.7$998.4$2,913.1 Class A Common StockAdditionalpaid-incapitalTreasury StockAccumulatedothercomprehensiveincomeRetainedearnings(accumu
32、lateddeficit)TotalstockholdersequitySharesAmountSharesAmountBalance as of February 25,2023590,968,600$5.9$2,072.7 21,300,945$(352.2)$69.3$(185.0)$1,610.7 Equity-based compensation 27.7 27.7 Shares issued and employee taxwithholding on vesting of restrictedstock units3,059,905 (33.1)(33.1)Convertible
33、 preferred stockconversions (2,903,200)48.0 (2.3)45.7 Cash dividends declared on commonstock($0.12 per common share)(69.0)(69.0)Dividends accrued on convertiblepreferred stock (0.3)(0.3)Net income 417.2 417.2 Other comprehensive income,net oftax 1.1 1.1 Other activity 1.0 (1.0)Balance as of June 17,
34、2023594,028,505$5.9$2,068.3 18,397,745$(304.2)$70.4$159.6$2,000.0 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.6Table of ContentsAlbertsons Companies,Inc.and SubsidiariesNotes to Condensed Consolidated Financial Statements(unaudited)NOTE 1-BASIS OF
35、 PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of PresentationThe accompanying interim Condensed Consolidated Financial Statements include the accounts of Albertsons Companies,Inc.and itssubsidiaries(the Company).All significant intercompany balances and transactions were eliminat
36、ed.The Condensed Consolidated BalanceSheet as of February 24,2024 is derived from the Companys annual audited Consolidated Financial Statements,which should be read inconjunction with these Condensed Consolidated Financial Statements and which are included in the Companys Annual Report on Form 10-K
37、forthe fiscal year ended February 24,2024,filed with the Securities and Exchange Commission(the SEC)on April 22,2024.Certain informationin footnote disclosures normally included in annual financial statements was condensed or omitted for the interim periods presented inaccordance with accounting pri
38、nciples generally accepted in the United States of America(GAAP).In the opinion of management,the interimdata includes all adjustments,consisting of normal recurring adjustments,necessary for a fair statement of the results for the interim periods.Theinterim results of operations and cash flows are
39、not necessarily indicative of those results and cash flows expected for the year.The Companysresults of operations are for the 16 weeks ended June 15,2024 and June 17,2023.Significant Accounting PoliciesRestricted cash:Restricted cash is included in Other current assets or Other assets depending on
40、the remaining term of the restriction andprimarily relates to surety bonds.The Company had$4.2 million and$4.5 million of restricted cash as of June 15,2024 and February 24,2024,respectively.Inventories,net:Substantially all of the Companys inventories consist of finished goods valued at the lower o
41、f cost or market and net of vendorallowances.The Company primarily uses the retail inventory or cost method to determine inventory cost before application of any last-in,first-out(LIFO)adjustment.Interim LIFO inventory costs are based on managements estimates of expected year-end inventory levels an
42、d inflationrates.The Company recorded LIFO expense of$14.6 million and$34.0 million for the 16 weeks ended June 15,2024 and June 17,2023,respectively.Equity method investments:The Companys equity method investments previously included an equity interest in Mexico Foods Parent LLCand La Fabrica Paren
43、t LLC(El Rancho),a Texas-based specialty grocer.During the first quarter of fiscal 2023,El Rancho exercised itscontractual option to repurchase the Companys 45%ownership interest in El Rancho and the Company received proceeds of$166.1 million.Asa result,the Company realized a gain of$10.5 million du
44、ring the first quarter of fiscal 2023,included in Other expense(income),net.Convertible Common Stock and Preferred Stock:The Companys certificate of incorporation has authorized 150,000,000 shares of Class A-1convertible common stock,par value$0.01 per share,and 100,000,000 shares of preferred stock
45、,par value$0.01 per share,of which 1,750,000shares of preferred stock are designated Series A convertible preferred stock(Series A preferred stock)and 1,410,000 shares of preferred stockare designated Series A-1 convertible preferred stock(Series A-1 preferred stock and together with the Series A pr
46、eferred stock,theConvertible Preferred Stock).As of June 15,2024 and February 24,2024,no shares of Class A-1 convertible common stock and no shares ofpreferred stock are issued or outstanding.Income taxes:Income tax expense was$69.2 million,representing a 22.3%effective tax rate,for the 16 weeks end
47、ed June 15,2024.TheCompanys effective tax rate for the 16 weeks ended June 15,2024 differs from the federal income tax statutory rate of 21%primarily due tostate income taxes,partially offset by the reduction of a reserve for an uncertain tax position due to the expiration of a state statute.Income
48、taxexpense was$66.1 million,representing a 13.7%effective tax rate,for the 16 weeks ended June 17,2023.The Companys effective tax rate forthe 16 weeks ended June 17,2023 differs from the federal income tax statutory rate of 21%primarily due to the7Table of Contentsreduction of a reserve of$49.7 mill
49、ion for an uncertain tax position due to the expiration of a foreign statute during the first quarter of fiscal2023.Segments:The Company and its subsidiaries offer grocery products,general merchandise,health and beauty care products,pharmacy,fuel andother items and services in its stores or through
50、digital channels.The Companys operating divisions are geographically based,have similareconomic characteristics and similar expected long-term financial performance.The Companys operating segments and reporting units are its 12operating divisions,which are reported in one reportable segment.Each rep
51、orting unit constitutes a business for which discrete financialinformation is available and for which management regularly reviews the operating results.Across all operating segments,the Company operatesprimarily one store format.Each division offers through its stores and digital channels the same
52、general mix of products with similar pricing tosimilar categories of customers,has similar distribution methods,operates in similar regulatory environments and purchases merchandise fromsimilar or the same vendors.Revenue recognition:Revenues from the retail sale of products are recognized at the po
53、int of sale or delivery to the customer,net of returns andsales tax.Pharmacy sales are recorded upon the customer receiving the prescription.Third-party receivables from pharmacy sales were$419.2million and$376.1 million as of June 15,2024 and February 24,2024,respectively,and are recorded in Receiv
54、ables,net.For digital relatedsales,which primarily include home delivery and Drive Up&Go curbside pickup,revenues are recognized upon either pickup in store ordelivery to the customer and may include revenue for separately charged delivery services.The Company records a contract liability whenreward
55、s are earned by customers in connection with the Companys loyalty programs.As rewards are redeemed or expire,the Company reducesthe contract liability and recognizes revenue.The contract liability balance was immaterial as of June 15,2024 and February 24,2024.The Company records a contract liability
56、 when it sells its own proprietary gift cards.The Company records a sale when the customer redeemsthe gift card.The Companys gift cards do not expire.The Company reduces the contract liability and records revenue for the unused portion ofgift cards in proportion to its customers pattern of redemptio
57、n,which the Company determined to be the historical redemption rate.TheCompanys contract liability related to gift cards was$101.5 million and$111.4 million as of June 15,2024 and February 24,2024,respectively.Disaggregated RevenuesThe following table represents Net sales and other revenue by produc
58、t type(dollars in millions):16 weeks endedJune 15,2024June 17,2023Amount(1)%of TotalAmount(1)%of TotalNon-perishables(2)$12,054.0 49.7%$12,086.8 50.3%Fresh(3)7,904.9 32.6 7,889.3 32.8 Pharmacy2,622.8 10.8 2,300.1 9.6 Fuel1,320.9 5.4 1,400.4 5.8 Other(4)362.8 1.5 373.6 1.5 Net sales and other revenue
59、$24,265.4 100.0%$24,050.2 100.0%(1)Digital related sales are included in the categories to which the revenue pertains.(2)Consists primarily of general merchandise,grocery,dairy and frozen foods.(3)Consists primarily of produce,meat,deli and prepared foods,bakery,floral and seafood.(4)Consists primar
60、ily of wholesale revenue to third parties,commissions,rental income and other miscellaneous revenue.8Table of ContentsRecently issued accounting standards:In November 2023,the Financial Accounting Standards Board(FASB)issued Accounting StandardsUpdate(ASU)2023-07,Segment Reporting Topic(280):Improve
61、ments to Reportable Segment Disclosure.The ASU improves reportablesegment disclosure requirements,primarily through enhanced disclosures about significant segment expenses.The amendments in this ASU areeffective for fiscal years beginning after December 15,2023,and interim periods within fiscal year
62、s beginning after December 15,2024 on aretrospective basis.Early adoption is permitted.The Company is currently evaluating the impact of this ASU on its Consolidated FinancialStatements and related disclosures.In December 2023,the FASB issued ASU 2023-09,Income Taxes(Topic 740):Improvements to Incom
63、e Tax Disclosures.The ASU enhancesthe transparency and decision usefulness of income tax disclosures and is effective for annual periods beginning after December 15,2024 on aprospective basis.Early adoption is permitted.The Company is currently evaluating the impact of this ASU on its Consolidated F
64、inancialStatements and related disclosures.NOTE 2-MERGER AGREEMENTOn October 13,2022,the Company,The Kroger Co.(Parent)and Kettle Merger Sub,Inc.,a wholly owned subsidiary of Parent(MergerSub),entered into an Agreement and Plan of Merger(the Merger Agreement),pursuant to which Merger Sub will be mer
65、ged with and into theCompany(the Merger),with the Company surviving the Merger as the surviving corporation and a direct,wholly owned subsidiary of Parent.Pursuant to the Merger Agreement,each share of Class A common stock issued and outstanding immediately prior to the effective time of theMerger(t
66、he Effective Time),shall be converted automatically at the Effective Time into the right to receive from Parent$34.10 per share incash,without interest.The$34.10 per share consideration to be paid by Parent would be reduced by the special cash dividend of$6.85 per shareof Class A common stock(the Sp
67、ecial Dividend),which was declared on October 13,2022 and paid on January 20,2023.At the Effective Time,each outstanding equity award denominated in shares of Class A common stock will be converted into a correspondingaward with respect to shares of Parent common stock(the Converted Awards).The Conv
68、erted Awards will remain outstanding and subject tothe same terms and conditions(including vesting and forfeiture terms)as were applied to the corresponding Company equity award immediatelyprior to the Effective Time;provided that any Company equity award with a performance-based vesting condition w
69、ill have such vestingcondition deemed satisfied at(i)the greater of target performance and actual performance(for such awards subject to an open performanceperiod at the Effective Time)and(ii)target performance(for such awards subject to a performance period that begins after the Effective Time).For
70、 purposes of the conversion described above,the number of shares of Parent common stock subject to a Converted Award will be based uponthe number of shares of Class A common stock subject to such Company equity award immediately prior to the Effective Time multiplied by anexchange ratio equal to(i)$
71、34.10 less the Special Dividend,divided by(ii)the average closing price of shares of Parent common stock for fivetrading days preceding the Closing.In connection with obtaining the requisite regulatory clearance necessary to consummate the Merger,the Company and Parent expect to makedivestitures of
72、stores owned by the Company and Parent to a third party.As described in the Merger Agreement and subject to the outcome of thedivestiture process and negotiations with applicable government authorities,the Company was prepared to establish a Company subsidiary(SpinCo)as part of this process.If utili
73、zed,the common stock or interests in SpinCo would be distributed to Company stockholders no laterthan the closing of the Merger(the Closing)and SpinCo would operate as a standalone public company,or the equity of SpinCo would becontributed to a trust for later distribution to Company stockholders.As
74、 described in more detail below,on September 8,2023,the Company andKroger announced that they entered into a comprehensive divestiture plan with C&S Wholesale Grocers,LLC(C&S).As a result of thecomprehensive divestiture plan announced with C&S,Kroger has exercised its right under the Merger Agreemen
75、t to sell what would have beenthe SpinCo business to C&S.Consequently,the creation of SpinCo and spin-off previously9Table of Contentscontemplated by the Company and Kroger is no longer a requirement under the Merger Agreement and will no longer be pursued by theCompany and Kroger.On September 8,202
76、3,the Company and Kroger announced that the parties had entered into a definitive agreement,dated September 8,2023,with C&S for the sale of select stores,banners,distribution centers,offices and private label brands to C&S.On April 22,2024,the Companyand Kroger announced they had amended the definit
77、ive agreement with C&S.The amended package modifies and builds on the initialdivestiture package(collectively,the Divestiture Assets).The Divestiture Assets will be divested by Kroger following the Closing.Thedefinitive agreement has customary representations and warranties and covenants of a transa
78、ction of its type.The divestiture to C&S is subject tofulfillment of customary closing conditions,including clearance by the United States Federal Trade Commission(FTC)and the completion ofthe proposed Merger.In accordance with the Merger Agreement,the Company has extended,and may continue to extend
79、 the original outside date of January 13,2024from time to time in 30-day increments for up to 270 days in the aggregate ending on October 9,2024(the Outside Date).The Parent will beobligated to pay a termination fee of$600 million to the Company if the Merger Agreement is terminated by either party
80、in connection with theoccurrence of the Outside Date,and,at the time of such termination,all closing conditions other than regulatory approval have been satisfied.On February 26,2024,the FTC instituted an administrative proceeding to prohibit the Merger.On the same day,the FTC(joined by nine states)
81、filed suit in the United States District Court for the District of Oregon,requesting a preliminary injunction to enjoin the Merger(the FederalAction).On January 15,2024 and February 14,2024,the attorneys general of States of Washington and Colorado,respectively,filed suit intheir respective state co
82、urts,also seeking to enjoin the Merger.In the Federal Action,the Company and Parent have stipulated to a temporaryrestraining order that prevents the Merger from closing until 11:59 PM Eastern Time on the fifth business day after the court rules on the FTCsmotion for a preliminary injunction or unti
83、l after the date set by the court,whichever is later.The FTC administrative proceeding is currentlyscheduled to begin on July 31,2024,while a preliminary injunction hearing in the Federal Action is set to begin on August 26,2024.A trial onthe State of Washingtons request for a permanent injunction i
84、s scheduled to begin on September 16,2024.In conjunction with the State ofWashingtons suit,the Company and Parent have committed that they will not close the Merger until five days after that court rules(so long asthat ruling occurs by a certain date).In the Colorado case,the court has scheduled a p
85、reliminary injunction hearing to begin on August 12,2024and a permanent injunction hearing to begin on September 30,2024.In addition to these regulatory actions,private plaintiffs have filed suit inthe United States District Court for the Northern District of California also seeking to enjoin the Me
86、rger.That case is stayed pending resolutionof the FTCs motion for a preliminary injunction.NOTE 3-FAIR VALUE MEASUREMENTSThe accounting guidance for fair value established a framework for measuring fair value and established a three-level valuation hierarchy fordisclosure of fair value measurement.T
87、he valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability atthe measurement date.The three levels are defined as follows:Level 1-Quoted prices in active markets for identical assets or liabilities;Level 2-Inputs other than quoted prices included within
88、 Level 1 that are either directly or indirectly observable;andLevel 3-Unobservable inputs in which little or no market activity exists,requiring an entity to develop its own assumptions that marketparticipants would use to value the asset or liability.10Table of ContentsFair value is defined as the
89、price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between marketparticipants at the measurement date.The following table presents certain assets which were measured at fair value on a recurring basis as of June 15,2024(in millions):Fair Value Mea
90、surementsTotalQuoted prices inactive markets for identical assets(Level 1)Significantobservableinputs(Level 2)Significantunobservableinputs(Level 3)Assets:Short-term investments(1)$22.0$5.8$16.2$Non-current investments(2)107.4 6.7 100.7 Derivative contracts(3)1.0 1.0 Total$130.4$12.5$117.9$(1)Primar
91、ily relates to Mutual Funds(Level 1)and Certificates of Deposit(Level 2).Included in Other current assets.(2)Primarily relates to investments in Exchange-Traded Funds(Level 1)and certain equity investments,U.S.Treasury Notes and Corporate Bonds(Level 2).Included in Otherassets.(3)Primarily relates t
92、o energy derivative contracts.Included in Other assets.The following table presents certain assets which were measured at fair value on a recurring basis as of February 24,2024(in millions):Fair Value MeasurementsTotalQuoted prices inactive markets for identical assets(Level 1)Significantobservablei
93、nputs(Level 2)Significantunobservableinputs(Level 3)Assets:Short-term investments(1)$23.3$5.3$18.0$Non-current investments(2)107.3 6.4 100.9 Derivative contracts(3)1.5 1.5 Total$132.1$11.7$120.4$Liabilities:Derivative contracts(3)$0.8$0.8$Total$0.8$0.8$(1)Primarily relates to Mutual Funds(Level 1)an
94、d Certificates of Deposit(Level 2).Included in Other current assets.(2)Primarily relates to investments in Exchange-Traded Funds(Level 1)and certain equity investments,U.S.Treasury Notes and Corporate Bonds(Level 2).Included in Otherassets.(3)Primarily relates to energy derivative contracts.Included
95、 in Other assets or Other current liabilities.The Company records cash and cash equivalents,restricted cash,accounts receivable and accounts payable at cost.The recorded values of thesefinancial instruments approximate fair value based on their short-term nature.The estimated fair value of the Compa
96、nys debt,including current maturities,was based on Level 2 inputs,being market quotes or values forsimilar instruments,and interest rates currently available to the Company for the issuance of debt with similar terms and remaining maturities asa discount rate for the remaining principal payments.As
97、of June 15,2024,the fair value of total debt was$7,263.9 million compared to thecarrying value of$7,484.0 million,excluding debt discounts and deferred financing costs.As of February 24,2024,the fair value of11Table of Contentstotal debt was$7,457.2 million compared to the carrying value of$7,684.2
98、million,excluding debt discounts and deferred financing costs.Assets Measured at Fair Value on a Non-Recurring BasisThe Company measures certain assets at fair value on a non-recurring basis,including long-lived assets and goodwill,which are evaluated forimpairment.Long-lived assets include store-re
99、lated assets such as property and equipment,operating lease assets and certain intangible assets.The inputs used to determine the fair value of long-lived assets and a reporting unit are considered Level 3 measurements due to their subjectivenature.NOTE 4-LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS
100、The Companys long-term debt and finance lease obligations as of June 15,2024 and February 24,2024,net of unamortized debt discounts of$31.9 million and$33.3 million,respectively,and deferred financing costs of$39.3 million and$42.7 million,respectively,consisted of thefollowing(in millions):June 15,
101、2024February 24,2024Senior Unsecured Notes due 2026 to 2030,interest rate range of 3.25%to 7.50%$6,509.7$6,506.4 New Albertsons L.P.Notes due 2026 to 2031,interest rate range of 6.52%to 8.70%481.4 480.1 Safeway Inc.Notes due 2027 to 2031,interest rate range of 7.25%to 7.45%375.5 375.4 ABL Facility 2
102、00.0 Other financing obligations29.8 29.9 Mortgage notes payable,secured16.4 16.4 Finance lease obligations444.6 460.4 Total debt7,857.4 8,068.6 Less current maturities(82.6)(285.2)Long-term portion$7,774.8$7,783.4 ABL FacilityAs of June 15,2024,there were no amounts outstanding under the ABL Facili
103、ty as the Company repaid$200.0 million during the 16 weeksended June 15,2024,and letters of credit(LOC)issued under the LOC sub-facility was$45.8 million.As of February 24,2024,there was$200.0 million outstanding under the ABL Facility and LOC issued under the LOC sub-facility was$48.3 million.12Tab
104、le of ContentsNOTE 5-EMPLOYEE BENEFIT PLANSPension and Other Post-Retirement BenefitsThe following table provides the components of net pension and post-retirement expense(income)(in millions):16 weeks endedPensionOther post-retirement benefitsJune 15,2024June 17,2023June 15,2024June 17,2023Estimate
105、d return on plan assets$(28.1)$(30.3)$Service cost5.1 5.3 Interest cost25.9 25.7 0.2 0.2 Amortization of prior service cost0.1 0.1 Amortization of net actuarial gain(1.2)(0.6)(0.2)(0.3)Expense(income),net$1.8$0.2$(0.1)The Company contributed$12.7 million and$6.5 million to its defined pension plans
106、and post-retirement benefit plans during the 16 weeksended June 15,2024 and June 17,2023,respectively.At the Companys discretion,additional funds may be contributed to the defined benefitpension plans that are determined to be beneficial to the Company.The Company currently anticipates contributing
107、an additional$72.7 millionto these plans for the remainder of fiscal 2024.NOTE 6-COMMITMENTS AND CONTINGENCIES AND OFF BALANCE SHEET ARRANGEMENTSGuaranteesLease Guarantees:The Company may have liability under certain operating leases that were assigned to third parties.If any of these thirdparties f
108、ail to perform their obligations under the leases,the Company could be responsible for the lease obligation.Because of the widedispersion among third parties and the variety of remedies available,the Company believes that if an assignee became insolvent,it would nothave a material effect on the Comp
109、anys financial condition,results of operations or cash flows.The Company also provides guarantees,indemnifications and assurances to others in the ordinary course of its business.Legal ProceedingsThe Company is subject from time to time to various claims and lawsuits,including matters involving trad
110、e,business and operational practices,personnel and employment issues,lawsuits alleging violations of state and/or federal wage and hour laws,real estate disputes,personal injury,antitrust claims,packaging or product claims,claims related to the sale of drug or pharmacy products,such as opioids,intel
111、lectual propertyclaims and other proceedings arising in or outside of the ordinary course of business.Some of these claims or suits purport or may be determinedto be class actions and/or seek substantial damages.It is the opinion of the Companys management that although the amount of liability withr
112、espect to certain of the matters described herein cannot be ascertained at this time,any resulting liability of these and other matters,includingany punitive damages,will not have a material adverse effect on the Companys business or overall financial condition.The Company continually evaluates its
113、exposure to loss contingencies arising from pending or threatened litigation and believes it has madeprovisions where the loss contingency is probable and can be reasonably estimated.Nonetheless,assessing and predicting the outcomes of thesematters involves substantial uncertainties.While13Table of
114、Contentsmanagement currently believes that the aggregate estimated liabilities currently recorded are reasonable,it remains possible that differences inactual outcomes or changes in managements evaluation or predictions could arise that could be material to the Companys results of operationsor cash
115、flows.False Claims Act:Two qui tam actions alleging violations of the False Claims Act(FCA)have been filed against the Company and itssubsidiaries.Violations of the FCA are subject to treble damages and penalties of up to a specified dollar amount per false claim.In United States ex rel.Proctor v.Sa
116、feway,filed in the United States District Court for the Central District of Illinois,the relator alleges thatSafeway overcharged federal government healthcare programs by not providing the federal government,as part of its usual and customaryprices,the benefit of discounts given to customers in phar
117、macy membership discount and price-matching programs.The relator filed hiscomplaint under seal on November 11,2011,and the complaint was unsealed on August 26,2015.The relator amended the complaint on March31,2016.On June 12,2020,the District Court granted Safeways motion for summary judgment,holdin
118、g that the relator could not prove thatSafeway acted with the intent required under the FCA,and judgment was issued on June 15,2020.On July 10,2020,the relator filed a motion toalter or amend the judgment and to supplement the record,which Safeway opposed.On November 13,2020,the District Court denie
119、d relatorsmotion,and on December 11,2020,relator filed a notice of appeal.The Seventh Circuit Court of Appeals affirmed the judgment in theCompanys favor on April 5,2022.On August 3,2022,relators filed a petition seeking review by the U.S.Supreme Court.In United States ex rel.Schutte and Yarberry v.
120、SuperValu,New Albertsons,Inc.,et al.,also filed in the Central District of Illinois,the relatorsallege that defendants(including various subsidiaries of the Company)overcharged federal government healthcare programs by not providingthe federal government,as a part of usual and customary prices,the b
121、enefit of discounts given to customers who requested that defendants matchcompetitor prices.The complaint was originally filed under seal and amended on November 30,2015.On August 5,2019,the District Courtgranted relators motion for partial summary judgment,holding that price-matched prices are the
122、usual and customary prices for those drugs.OnJuly 1,2020,the District Court granted the defendants motions for summary judgment and dismissed the case,holding that the relator could notprove that defendants acted with the intent required under the FCA.Judgment was issued on July 2,2020.On July 9,202
123、0,the relators filed anotice of appeal.On August 12,2021,the Court of Appeals for the Seventh Circuit affirmed the grant of summary judgment in the Companysfavor.On September 23,2021,the relators filed a petition for rehearing en banc with the Seventh Circuit.On December 3,2021,the SeventhCircuit de
124、nied relators petition.On April 1,2022,relators filed a petition seeking review by the U.S.Supreme Court.The U.S.Supreme Court decided to hear the appeals filed by the relators in Proctor and Schutte.The Supreme Court consolidated the two casesfor the purpose of hearing the appeal.The Supreme Court
125、heard oral arguments on April 18,2023.On June 1,2023,the Supreme Court issued anopinion adverse to the Company that reversed the lower courts rulings.On July 3,2023,the Supreme Court issued the order remanding bothcases back to the Court of Appeals for the Seventh Circuit for further review.On July
126、27,2023,the Court of Appeals remanded both cases backto the U.S.District Court for the Central District of Illinois.On August 22,2023,the District Court-as to Schutte-set a pretrial conference forMarch 4,2024,and a trial date of April 29,2024.At the same July 27 hearing,the District Court also gave
127、the defendants leave to file motionsfor summary judgment on a schedule to be agreed upon.On October 11,2023,the Company and co-defendant filed a motion for summaryjudgment.On the same day,the relators filed motions for partial summary judgment.Both sides motions are pending.On February 16,2024,theCo
128、mpany and co-defendant filed a motion to reconsider a prior grant of partial summary judgment against the defendants,and also a motion tocontinue the trial.On February 27,2024,the District Court granted the motion to continue and vacated the April 29,2024 trial date.At a pretrialconference on March
129、4,2024,the District Court reset the trial for September 30,2024.On May 20,2024,the District Court heard oral argumenton the pending motions.On May 22,2024,the Company and co-defendant filed a motion to continue the trial to January 2025,but14Table of Contentsin any event no earlier than November 202
130、4.The District Court has not set any trial date for Proctor as of yet,and no motions are pending in thatcase.In both of the above cases,the federal government previously investigated the relators allegations and declined to intervene.The relators electedto pursue their respective cases on their own
131、and in each case have alleged FCA damages in excess of$100 million before trebling and excludingpenalties.The Company is vigorously defending each of these matters.The Company has recorded an estimated liability for these matters.Pharmacy Benefit Manager(PBM)Litigation:The Company(including its subs
132、idiary,Safeway Inc.)is a defendant in a lawsuit filed onJanuary 21,2021,in Minnesota state court,captioned Health Care Service Corp.et al.v.Albertsons Companies,LLC,et al.The actionchallenges certain prescription-drug prices reported by the Company to a pharmacy benefit manager,Prime Therapeutics LL
133、C(Prime),whichin turn contracted with the health-insurer plaintiffs to adjudicate and process prescription-drug reimbursement claims.On December 7,2021,the Company filed a motion to dismiss the complaint.On January 14,2022,the court denied the Companys motion todismiss as to all but one count,plaint
134、iffs claim of negligent misrepresentation.On January 21,2022,the Company and co-defendantSUPERVALU,Inc.(SUPERVALU)filed a third-party complaint against Prime,asserting various claims,including:indemnification,fraud andunjust enrichment.On February 17,2022,the Company filed in the Minnesota Court of
135、Appeals an interlocutory appeal of the denial of theirmotion to dismiss on personal jurisdiction grounds(the Jurisdictional Appeal).On February 24,2022,the Company and SUPERVALU filed inthe trial court an unopposed motion to stay proceedings,pending the resolution of the Jurisdictional Appeal.The pa
136、rties agreed on March 6,2022,to an interim stay in the trial court pending a ruling on the unopposed motion to stay proceedings.On September 6,2022,the MinnesotaCourt of Appeals denied the Jurisdictional Appeal and affirmed the trial courts denial of the Companys motion to dismiss.On October 6,2022,
137、the Company and SUPERVALU filed a petition seeking review by the Minnesota Supreme Court.On November 23,2022,the MinnesotaSupreme Court denied that petition.The Company and co-defendant SUPERVALU filed an answer to the complaint on January 23,2023.OnMarch 9,2023,Prime moved to dismiss the third-part
138、y complaint filed by the Company and SUPERVALU.The court heard oral arguments onthe motion on May 11,2023.On August 9,2023,the court denied Primes motion as to 16 of the 17 counts in the third-party complaint,anddismissed one count without prejudice.On September 18,2023,the Company and SUPERVALU fil
139、ed an amended third-party complaint,whichrepleaded the one count that had been dismissed(in addition to the other claims asserted in the initial third-party complaint).On October 2,2023,Prime filed an answer to the amended third-party complaint.The parties are presently engaged in discovery.The case
140、 is currentlyscheduled to be ready for trial on or after September 29,2025.The Company is vigorously defending the claims filed against it,and the Company also intends to prosecute its claims against Prime with equalvigor.The Company has recorded an estimated liability for this matter.Opioid Litigat
141、ion:The Company is one of dozens of companies that have been named as defendants in lawsuits filed by various plaintiffs,including states,counties,cities,Native American tribes,and hospitals,alleging that defendants contributed to the national opioid epidemic.Atpresent,the Company is named in approx
142、imately 85 suits pending in various state courts as well as in the United States District Court for theNorthern District of Ohio,where over 2,000 cases against various defendants have been consolidated as Multi-District Litigation pursuant to 28U.S.C.1407.Most of the cases naming the Company have be
143、en stayed pending multiple bellwether trials,including three involving theCompany in Tarrant County(Texas),Town of Hull(Massachusetts)and Monterey County(California).All three bellwether matters are currentlyin discovery.The relief sought by the various plaintiffs in these matters includes compensat
144、ory damages,abatement and punitive damages aswell as injunctive relief.Prior to the start of a state-court trial that was scheduled for September 6,2022,the Company reached an agreement to settle with the State ofNew Mexico.The New Mexico counties and municipal entities that filed 14 additional15Tab
145、le of Contentslawsuits,including Santa Fe County,agreed to the terms of the settlement.Thus,all 15 cases filed by New Mexico entities have been dismissedas a result of the settlement.The Company executed an agreement to settle three matters pending in Nevada state court.The Company recorded aliabili
146、ty of$21.5 million for the settlements of the cases in New Mexico and Nevada which was paid by our insurers in the fourth quarter offiscal 2022.With respect to the remaining pending state court claims,which may not be covered by insurance,three claims are currentlyproceeding through discovery,with t
147、rial dates scheduled in 2025.Those matters are pending in Dallas County(Texas),the State of Washingtonand the City of Philadelphia(Pennsylvania).The Company believes that it has substantial factual and legal defenses to these claims,and isvigorously defending these matters.At this stage in the proce
148、edings,the Company is unable to determine the probability of the outcome of theseremaining matters or the range of reasonably possible loss.The Company has also received,subpoenas,Civil Investigative Demands and other requests for documents and information from the U.S.Department of Justice(DOJ)and
149、certain state Attorneys General,and has had preliminary discussions with the DOJ with respect to purportedviolations of the federal Controlled Substances Act and the FCA in dispensing prescriptions.The Company has been cooperating with thegovernment with respect to these requests for information.Oth
150、er CommitmentsIn the ordinary course of business,the Company enters into various supply contracts to purchase products for resale and purchase and servicecontracts for fixed asset and information technology commitments.These contracts typically include volume commitments or fixed expirationdates,ter
151、mination provisions and other standard contractual considerations.NOTE 7-OTHER COMPREHENSIVE INCOME OR LOSSTotal comprehensive earnings are defined as all changes in stockholders equity during a period,other than those from investments by ordistributions to the stockholders.Generally,for the Company
152、,total comprehensive income equals net income plus or minus adjustments forpension and other post-retirement liabilities.Total comprehensive earnings represent the activity for a period,net of tax.While total comprehensive earnings are the activity in a period and are largely driven by net earnings
153、in that period,accumulated othercomprehensive income or loss(AOCI)represents the cumulative balance of other comprehensive income,net of tax,as of the balance sheetdate.Changes in the AOCI balance by component are shown below(in millions):16 weeks ended June 15,2024TotalPension and Post-retirement b
154、enefitplansOtherBeginning AOCI balance$88.0$87.5$0.5 Other comprehensive income before reclassifications(0.1)(0.1)Amounts reclassified from accumulated other comprehensive income(1)(1.3)(1.3)Tax benefit(expense)0.1 0.3(0.2)Current-period other comprehensive loss,net of tax(1.3)(1.0)(0.3)Ending AOCI
155、balance$86.7$86.5$0.2 16Table of Contents16 weeks ended June 17,2023TotalPension and Post-retirement benefitplansOtherBeginning AOCI balance$69.3$71.7$(2.4)Other comprehensive loss before reclassifications2.3 2.3 Amounts reclassified from accumulated other comprehensive income(1)(0.8)(0.8)Tax(expens
156、e)benefit(0.4)0.2(0.6)Current-period other comprehensive income(loss),net of tax1.1(0.6)1.7 Ending AOCI balance$70.4$71.1$(0.7)(1)These amounts are included in the computation of net pension and post-retirement expense(income).For additional information,see Note 5-Employee Benefit Plans.NOTE 8-NET I
157、NCOME PER CLASS A COMMON SHAREThe Company calculates basic and diluted net income per Class A common share using the two-class method.The two-class method is anallocation formula that determines net income per Class A common share for each share of Class A common stock and Convertible PreferredStock
158、,a participating security,according to dividends declared and participation rights in undistributed earnings.Under this method,all earnings(distributed and undistributed)are allocated to Class A common shares and Convertible Preferred Stock based on their respective rights toreceive dividends.The ho
159、lders of Convertible Preferred Stock participate in cash dividends that the Company pays on its common stock to theextent that such cash dividends exceed$206.25 million per fiscal year and shares of Convertible Preferred Stock remain outstanding as of theapplicable record date to participate in such
160、 dividends.As of June 17,2023,100%of the originally issued Convertible Preferred Stock had beenconverted into Class A common stock and no shares of Convertible Preferred Stock are outstanding.In applying the two-class method to interimperiods,the Company allocates income to its quarterly periods ind
161、ependently and discretely from its year-to-date and annual periods.Basic netincome per Class A common share is computed by dividing net income allocated to Class A common stockholders by the weighted averagenumber of Class A common shares outstanding for the period,including Class A common shares to
162、 be issued with no prior remainingcontingencies prior to issuance.Diluted net income per Class A common share is computed based on the weighted average number of shares ofClass A common stock outstanding during each period,plus potential Class A common shares considered outstanding during the period
163、,as longas the inclusion of such awards is not antidilutive.Potential Class A common shares consist of unvested restricted stock units(RSUs),restricted common stock(RSAs)and Convertible Preferred Stock,using the more dilutive of either the two-class method or as-converted stockmethod.Performance-bas
164、ed RSUs are considered dilutive when the related performance criterion has been met.17Table of ContentsThe components of basic and diluted net income per Class A common share were as follows(in millions,except per share data):16 weeks endedJune 15,2024June 17,2023Basic net income per Class A common
165、shareNet income$240.7$417.2 Accrued dividends on Convertible Preferred Stock(0.3)Earnings allocated to Convertible Preferred Stock(0.4)Net income allocated to Class A common stockholders-Basic$240.7$416.5 Weighted average Class A common shares outstanding-Basic(1)578.6 573.7 Basic net income per Cla
166、ss A common share$0.42$0.73 Diluted net income per Class A common shareNet income allocated to Class A common stockholders-Basic$240.7$416.5 Accrued dividends on Convertible Preferred Stock 0.3 Earnings allocated to Convertible Preferred Stock 0.4 Net income allocated to Class A common stockholders-
167、Diluted$240.7$417.2 Weighted average Class A common shares outstanding-Basic(1)578.6 573.7 Dilutive effect of:Restricted stock units and awards2.7 5.3 Convertible Preferred Stock(2)1.1 Weighted average Class A common shares outstanding-Diluted(3)581.3 580.1 Diluted net income per Class A common shar
168、e$0.41$0.72(1)The number of Class A common shares remaining to be issued for the 16 weeks ended June 15,2024 and June 17,2023 were not material.(2)Reflects the number of shares of Convertible Preferred Stock issued,if converted into common stock for the period outstanding.(3)The number of potential
169、Class A common shares outstanding related to RSUs and RSAs that were antidilutive for the 16 weeks ended June 15,2024 and June 17,2023 werenot material.Item 2-Managements Discussion and Analysis of Financial Condition and Results of OperationsFORWARD-LOOKING STATEMENTS AND FACTORS THAT IMPACT OUR OP
170、ERATING RESULTS AND TRENDSThis Form 10-Q contains forward-looking statements within the meaning of the federal securities laws.The forward-looking statementsinclude our current expectations,assumptions,estimates and projections about our business,our industry and the outcome of the Merger.Theyinclud
171、e statements relating to our future operating or financial performance which the Company believes to be reasonable at this time.You canidentify forward-looking statements by the use of words such as outlook,may,should,could,estimates,predicts,potential,continue,anticipates,believes,plans,expects,fut
172、ure and intends and similar expressions which are intended to identify forward-looking statements.These statements are not guarantees of future performance and are subject to numerous risks and uncertainties which are beyond our control anddifficult to predict and could cause actual results to diffe
173、r materially from the results expressed or implied by the statements.Risks anduncertainties that could cause actual results to differ materially from such statements include:18Table of Contents uncertainties related to the Merger,including our ability to close the transactions contemplated by the Me
174、rger Agreement,and the impactof the costs related to the Merger;erosion of consumer confidence in our business as a result of the Merger;restrictions on our ability to operate as a result of the Merger Agreement;challenges in retaining and motivating our associates until the closing of the Merger,pa
175、rticularly following the public announcement ofthe locations to be divested,with difficulties in attracting new employees during the pendency of the Merger;litigation related to the transactions contemplated by the Merger Agreement;changes in macroeconomic conditions such as rates of food price infl
176、ation or deflation,fuel and commodity prices and expiration ofstudent loan payment deferments;changes in consumer behavior and spending due to the impact of macroeconomic factors;failure to achieve productivity initiatives,unexpected changes in our objectives and plans,inability to implement our str
177、ategies,plans,programs and initiatives,or enter into strategic transactions,investments or partnerships in the future on terms acceptable to us,or at all;changes in wage rates,ability to attract and retain qualified associates and negotiate acceptable contracts with labor unions;availability and cos
178、t of goods used in our food products;challenges with our supply chain;operational and financial effects resulting from cyber incidents at the Company or at a third party,including outages in the cloudenvironment and the effectiveness of business continuity plans during a ransomware or other cyber in
179、cident;and changes in tax rates,tax laws,and regulations that directly impact our business or our customers may adversely impact our financialcondition and results of operations.All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entiret
180、y by these cautionarystatements and risk factors.Forward-looking statements contained in this Form 10-Q reflect our view only as of the date of this Form 10-Q.Weundertake no obligation,other than as required by law,to update or revise any forward-looking statements,whether as a result of newinformat
181、ion,future events or otherwise.In evaluating our financial results and forward-looking statements,you should carefully consider the risks and uncertainties more fully describedin the Risk Factors section or other sections in our reports filed with the SEC including the most recent annual report on F
182、orm 10-K and anysubsequent periodic reports on Form 10-Q and current reports on Form 8-K.As used in this Form 10-Q,unless the context otherwise requires,references to Albertsons,the Company,we,us and our refer toAlbertsons Companies,Inc.and,where appropriate,its subsidiaries.NON-GAAP FINANCIAL MEASU
183、RESWe define EBITDA as GAAP earnings(net loss)before interest,income taxes,depreciation and amortization.We define Adjusted EBITDA asearnings(net loss)before interest,income taxes,depreciation and amortization,further adjusted to eliminate the effects of items managementdoes not consider in assessin
184、g our ongoing core performance.We define Adjusted net income as GAAP Net income adjusted to eliminate theeffects of items management does not consider in assessing our ongoing core performance.We define Adjusted net income per Class A commonshare as Adjusted net income divided by the weighted averag
185、e diluted Class A common shares outstanding,as adjusted to reflect all RSUs andRSAs outstanding at the end of the period,as well as the conversion of Convertible Preferred19Table of ContentsStock when it is antidilutive for GAAP.See Results of Operations for further discussion and a reconciliation o
186、f Adjusted EBITDA,Adjustednet income and Adjusted net income per Class A common share.EBITDA,Adjusted EBITDA,Adjusted net income and Adjusted net income per Class A common share(collectively,the Non-GAAPMeasures)are performance measures that provide supplemental information we believe is useful to a
187、nalysts and investors to evaluate ourongoing results of operations,when considered alongside other GAAP measures such as net income,operating income,gross margin and netincome per Class A common share.These Non-GAAP Measures exclude the financial impact of items management does not consider inassess
188、ing our ongoing core operating performance,and thereby provide useful measures to analysts and investors of our operating performanceon a period-to-period basis.Other companies may have different definitions of Non-GAAP Measures and provide for different adjustments,andcomparability to our results o
189、f operations may be impacted by such differences.We also use Adjusted EBITDA for board of director and bankcompliance reporting.Our presentation of Non-GAAP Measures should not be construed as an inference that our future results will be unaffectedby unusual or non-recurring items.Non-GAAP Measures
190、should not be considered as measures of discretionary cash available to us to invest in the growth of our business.Wecompensate for these limitations by relying primarily on our GAAP results and using Non-GAAP Measures only for supplemental purposes.20Table of ContentsFIRST QUARTER OF FISCAL 2024 OV
191、ERVIEWWe are one of the largest food retailers in the United States,with 2,269 stores across 34 states and the District of Columbia as of June 15,2024.We operate more than 20 well known banners including Albertsons,Safeway,Vons,Pavilions,Randalls,Tom Thumb,Carrs,Jewel-Osco,Acme,Shaws,Star Market,Uni
192、ted Supermarkets,Market Street,Haggen,Kings Food Markets and Balduccis Food Lovers Market,withapproximately 285,000 talented and dedicated employees,as of June 15,2024,who serve on average 36.3 million customers each week.Additionally,as of June 15,2024,we operated 1,725 pharmacies,1,346 in-store br
193、anded coffee shops,403 associated fuel centers,22 dedicateddistribution centers,19 manufacturing facilities and various digital platforms.Merger AgreementOn October 13,2022,the Company,The Kroger Co.(Parent)and Kettle Merger Sub,Inc.,a wholly owned subsidiary of Parent(MergerSub),entered into an Agr
194、eement and Plan of Merger(the Merger Agreement),pursuant to which Merger Sub will be merged with and into theCompany(the Merger),with the Company surviving the Merger as the surviving corporation and a direct,wholly owned subsidiary of Parent.For additional information about the Merger,see Note 2-Me
195、rger Agreement in the unaudited interim Condensed Consolidated FinancialStatements located elsewhere in this Form 10-Q.The Company has filed with the SEC a definitive information statement on Schedule 14C with respect to the approval of the Merger and hasmailed the definitive information statement t
196、o the Companys stockholders.You may obtain copies of all documents filed by the Company withthe SEC regarding this transaction,free of charge,at the SECs website,www.sec.gov or from the Companys website athttps:/ quarter of fiscal 2024 highlightsIn summary,our financial and operating highlights for
197、the first quarter of fiscal 2024 include:Identical sales increased 1.4%Digital sales increased 23%Loyalty members increased 15%to 41.4 millionNet income of$241 million,or$0.41 per Class A common shareAdjusted net income of$392 million,or$0.66 per Class A common shareAdjusted EBITDA of$1,184 million2
198、1Table of ContentsStoresThe following table shows stores operating,opened and closed during the periods presented:16 weeks endedJune 15,2024June 17,2023Stores,beginning of period2,269 2,271 Opened1 2 Closed(1)(1)Stores,end of period2,269 2,272 The following table summarizes our stores by size:Number
199、 of storesPercent of TotalRetail Square Feet(1)Square FootageJune 15,2024June 17,2023June 15,2024June 17,2023June 15,2024June 17,2023Less than 30,000217 218 9.6%9.6%4.9 4.9 30,000 to 50,000777 780 34.2%34.3%32.6 32.7 More than 50,0001,275 1,274 56.2%56.1%75.3 75.3 Total Stores2,269 2,272 100.0%100.0
200、%112.8 112.9(1)In millions,reflects total square footage of retail stores operating at the end of the period.RESULTS OF OPERATIONSComparison of the First Quarter of Fiscal 2024 to the First Quarter of Fiscal 2023.The following tables and related discussion set forth certain information and compariso
201、ns regarding the components of our CondensedConsolidated Statements of Operations for the 16 weeks ended June 15,2024(first quarter of fiscal 2024 and first 16 weeks of fiscal 2024)and 16 weeks ended June 17,2023(first quarter of fiscal 2023 and first 16 weeks of fiscal 2023)(dollars in millions,exc
202、ept per share data).16 weeks endedJune 15,2024%of SalesJune 17,2023%of SalesNet sales and other revenue$24,265.4 100.0%$24,050.2 100.0%Cost of sales17,526.5 72.2 17,387.5 72.3 Gross margin6,738.9 27.8 6,662.7 27.7 Selling and administrative expenses6,274.0 25.9 6,012.9 25.0 Loss on property disposit
203、ions and impairment losses,net5.3 27.6 0.1 Operating income459.6 1.9 622.2 2.6 Interest expense,net145.7 0.6 154.9 0.6 Other expense(income),net4.0 (16.0)(0.1)Income before income taxes309.9 1.3 483.3 2.1 Income tax expense69.2 0.3 66.1 0.3 Net income$240.7 1.0%$417.2 1.8%Basic net income per Class
204、A common share$0.42$0.73 Diluted net income per Class A common share0.41 0.72 22Table of ContentsNet Sales and Other RevenueNet sales and other revenue increased 0.9%to$24,265.4 million for the first quarter of fiscal 2024 from$24,050.2 million for the first quarter offiscal 2023.The increase in Net
205、 sales and other revenue was driven by our 1.4%increase in identical sales,with strong growth in pharmacy salesdriving the identical sales increase.We also continued to grow our digital sales during the first quarter of fiscal 2024.The increase in Net salesand other revenue was partially offset by l
206、ower fuel sales.Identical Sales,Excluding FuelIdentical sales include stores operating during the same period in both the current year and the prior year,comparing sales on a daily basis.Direct to consumer digital sales are included in identical sales,and fuel sales are excluded from identical sales
207、.Acquired stores become identicalon the one-year anniversary date of the acquisition.Identical sales for the 16 weeks ended June 15,2024 and the 16 weeks ended June 17,2023,respectively,were:16 weeks endedJune 15,2024June 17,2023Identical sales,excluding fuel1.4%4.9%The following table represents Ne
208、t sales and other revenue by product type(dollars in millions):16 weeks endedJune 15,2024June 17,2023Amount(1)%of TotalAmount(1)%of TotalNon-perishables(2)$12,054.0 49.7%$12,086.8 50.3%Fresh(3)7,904.9 32.6 7,889.3 32.8 Pharmacy2,622.8 10.8 2,300.1 9.6 Fuel1,320.9 5.4 1,400.4 5.8 Other(4)362.8 1.5 37
209、3.6 1.5 Net sales and other revenue$24,265.4 100.0%$24,050.2 100.0%(1)Digital related sales are included in the categories to which the revenue pertains.(2)Consists primarily of general merchandise,grocery,dairy and frozen foods.(3)Consists primarily of produce,meat,deli and prepared foods,bakery,fl
210、oral and seafood.(4)Consists primarily of wholesale revenue to third parties,commissions,rental income and other miscellaneous revenue.Gross MarginGross margin represents the portion of Net sales and other revenue remaining after deducting Cost of sales during the period,including purchaseand distri
211、bution costs.These costs include,among other things,purchasing and sourcing costs,inbound freight costs,product quality testingcosts,warehouse and distribution costs,Own Brands program costs and digital-related delivery and handling costs.Advertising,promotionalexpenses and vendor allowances are als
212、o components of Cost of sales.Gross margin rate increased to 27.8%during the first quarter of fiscal 2024 compared to 27.7%during the first quarter of fiscal 2023.Excludingthe impact of fuel and LIFO expense,gross margin rate decreased 22 basis points compared to the first quarter of fiscal 2023.The
213、 strong growthin pharmacy sales,which carries an overall lower gross margin rate,increases in shrink,and increases in picking and delivery costs related to thecontinued growth in23Table of Contentsour digital sales were the primary drivers of the decrease,partially offset by our procurement and sour
214、cing productivity initiatives.Selling and Administrative ExpensesSelling and administrative expenses consist primarily of store level costs,including wages,employee benefits,rent,depreciation and utilities,inaddition to certain back-office expenses related to our corporate and division offices.Selli
215、ng and administrative expenses increased to 25.9%of Net sales and other revenue during the first quarter of fiscal 2024 compared to 25.0%during the first quarter of fiscal 2023.Excluding the impact of fuel,Selling and administrative expenses as a percentage of Net sales and otherrevenue increased 79
216、 basis points.The increase in Selling and administrative expenses as a percentage of Net sales and other revenue wasprimarily attributable to an increase in operating expenses related to the ongoing development of our digital and omnichannel capabilities,Merger-related costs,higher employee costs,in
217、creased store occupancy costs and additional third-party store security services,partially offset bythe benefit of productivity initiatives.Loss on Property Dispositions and Impairment Losses,NetFor the first quarter of fiscal 2024,net loss on property dispositions and impairment losses was$5.3 mill
218、ion,primarily driven by the impairmentof certain technology assets.For the first quarter of fiscal 2023,net loss on property dispositions and impairment losses was$27.6 million,primarily driven by the impairment and disposal of certain technology assets.Interest Expense,NetInterest expense,net was$1
219、45.7 million during the first quarter of fiscal 2024 compared to$154.9 million during the first quarter of fiscal 2023.The decrease in interest expense,net was primarily attributable to lower average outstanding borrowings.The weighted average interest rateduring both the first quarter of fiscal 202
220、4 and the first quarter of fiscal 2023 was 5.6%,excluding deferred financing costs and original issuediscount.Other Expense(Income),NetFor the first quarter of fiscal 2024,other expense,net was$4.0 million compared to other income,net of$16.0 million for the first quarter offiscal 2023.Other expense
221、,net during the first quarter of fiscal 2024 was primarily driven by unrealized losses from non-operating investments,partially offset by non-service cost components of net pension and post-retirement income.Other income,net during the first quarter of fiscal2023 was primarily driven by income relat
222、ed to our equity interest and gain on sale of El Rancho,as well as non-service cost components of netpension and post-retirement income,partially offset by realized losses from non-operating investments.Income TaxesIncome tax expense was$69.2 million,representing a 22.3%effective tax rate,for the fi
223、rst quarter of fiscal 2024.Income tax expense was$66.1million,representing a 13.7%effective tax rate,for the first quarter of fiscal 2023.The increase in the effective income tax rate in the firstquarter of fiscal 2024 was primarily driven by the reduction of a reserve of$49.7 million for an uncerta
224、in tax position due to the expiration of aforeign statute during the first quarter of fiscal 2023.Net Income and Adjusted Net IncomeNet income was$240.7 million,or$0.41 per Class A common share,during the first quarter of fiscal 2024 compared to$417.2 million,or$0.72per Class A common share,during t
225、he first quarter of fiscal 2023.The first24Table of Contentsquarter of fiscal 2023 included the$49.7 million or$0.09 per share benefit related to the reduction in the reserve for an uncertain tax position.Adjusted net income was$391.6 million,or$0.66 per Class A common share,during the first quarter
226、 of fiscal 2024 compared to$545.7 million,or$0.93 per Class A common share(which includes the tax benefit discussed above),during the first quarter of fiscal 2023.Adjusted EBITDAFor the first quarter of fiscal 2024,Adjusted EBITDA was$1,183.9 million,or 4.9%of Net sales and other revenue,compared to
227、$1,318.5million,or 5.5%of Net sales and other revenue,for the first quarter of fiscal 2023.Reconciliation of Non-GAAP MeasuresThe following tables reconcile Net income to Adjusted net income,and Net income per Class A common share to Adjusted net income per ClassA common share(in millions,except per
228、 share data):16 weeks endedJune 15,2024June 17,2023Numerator:Net income$240.7$417.2 Adjustments:Gain on energy hedges,net(d)(0.8)(0.6)Business transformation(1)(b)17.3 12.1 Equity-based compensation expense(b)36.7 31.9 Loss on property dispositions and impairment losses,net5.3 27.6 LIFO expense(a)14
229、.6 34.0 Merger-related costs(2)(b)92.3 47.1 Certain legal and regulatory accruals and settlements,net(b)(8.9)Amortization of debt discount and deferred financing costs(c)4.9 4.7 Amortization of intangible assets resulting from acquisitions(b)14.7 15.4 Miscellaneous adjustments(3)(f)19.8(2.4)Tax impa
230、ct of adjustments to Adjusted net income(45.0)(41.3)Adjusted net income$391.6$545.7 Denominator:Weighted average Class A common shares outstanding-diluted581.3 580.1 Adjustments:Restricted stock units and awards(4)9.3 6.7 Adjusted weighted average Class A common shares outstanding-diluted590.6 586.8
231、 Adjusted net income per Class A common share-diluted$0.66$0.93 25Table of Contents16 weeks endedJune 15,2024June 17,2023Net income per Class A common share-diluted$0.41$0.72 Non-GAAP adjustments(5)0.26 0.22 Restricted stock units and awards(4)(0.01)(0.01)Adjusted net income per Class A common share
232、-diluted$0.66$0.93 The following table is a reconciliation of Adjusted net income to Adjusted EBITDA:16 weeks endedJune 15,2024June 17,2023Adjusted net income(6)$391.6$545.7 Tax impact of adjustments to Adjusted net income45.0 41.3 Income tax expense69.2 66.1 Amortization of debt discount and deferr
233、ed financing costs(c)(4.9)(4.7)Interest expense,net145.7 154.9 Amortization of intangible assets resulting from acquisitions(b)(14.7)(15.4)Depreciation and amortization(e)552.0 530.6 Adjusted EBITDA$1,183.9$1,318.5(1)Includes costs associated with third-party consulting fees related to our operation
234、al priorities and associated business transformation.(2)Primarily relates to third-party legal and advisor fees and retention program expense related to the proposed Merger.(3)Miscellaneous adjustments include the following(see table below):16 weeks endedJune 15,2024June 17,2023Non-cash lease-relate
235、d adjustments$1.0$Lease and lease-related costs for surplus and closed stores5.4 6.6 Net realized and unrealized loss(gain)on non-operating investments3.2(4.6)Other(i)10.2(4.4)Total miscellaneous adjustments$19.8$(2.4)(i)Primarily includes adjustments for unconsolidated equity investments and other
236、costs not considered in our core performance.(4)Represents incremental unvested RSUs and unvested RSAs to adjust the diluted weighted average Class A common shares outstanding during each respective period to thefully outstanding RSUs and RSAs as of the end of each respective period.(5)Reflects the
237、per share impact of Non-GAAP adjustments for each period.See the reconciliation of Net income to Adjusted net income above for further details.(6)See the reconciliation of Net income to Adjusted net income above for further details.Non-GAAP adjustment classifications within the Condensed Consolidate
238、d Statements of Operations:(a)Cost of sales(b)Selling and administrative expenses(c)Interest expense,net26Table of Contents(d)Gain on energy hedges,net:16 weeks endedJune 15,2024June 17,2023Cost of sales$0.1$1.3 Selling and administrative expenses(0.9)(1.9)Total Gain on energy hedges,net$(0.8)$(0.6)
239、(e)Depreciation and amortization:16 weeks endedJune 15,2024June 17,2023Cost of sales$53.6$46.7 Selling and administrative expenses498.4 483.9 Total Depreciation and amortization$552.0$530.6(f)Miscellaneous adjustments:16 weeks endedJune 15,2024June 17,2023Selling and administrative expenses$12.4$10.
240、0 Other expense(income),net7.4(12.4)Total Miscellaneous adjustments$19.8$(2.4)LIQUIDITY AND CAPITAL RESOURCESThe following table sets forth the major sources and uses of cash and cash equivalents and restricted cash for each period(in millions):16 weeks endedJune 15,2024June 17,2023Cash and cash equ
241、ivalents and restricted cash at end of period$295.3$233.2 Cash flows provided by operating activities960.9 838.3 Cash flows used in investing activities(538.0)(453.9)Cash flows used in financing activities(320.8)(615.0)Net Cash Provided by Operating ActivitiesNet cash provided by operating activitie
242、s was$960.9 million for the first 16 weeks of fiscal 2024 compared to$838.3 million for the first 16weeks of fiscal 2023.The increase in cash flow from operations compared to the first 16 weeks of fiscal 2023 was due to changes in workingcapital,primarily related to lower inventory,and less cash pai
243、d for taxes and interest,partially offset by a decrease in Adjusted EBITDA andhigher Merger-related costs during the first 16 weeks of fiscal 2024.Net Cash Used in Investing ActivitiesNet cash used in investing activities was$538.0 million for the first 16 weeks of fiscal 2024 compared to$453.9 mill
244、ion for the first 16 weeks offiscal 2023.For the first 16 weeks of fiscal 2024,cash used in investing activities consisted primarily of payments for property,equipment and intangibles of$543.0 million,partially offset by proceeds from the sale of assets of$3.8 million,27Table of Contentsprimarily re
245、lated to real estate.Payments for property,equipment and intangibles in the first 16 weeks of fiscal 2024 included the completion of17 remodels,the opening of one new store and continued investment in our digital and technology platforms.For the first 16 weeks of fiscal2023,cash used in investing ac
246、tivities consisted primarily of payments for property,equipment and intangibles of$622.5 million,partially offsetby proceeds from the sale of assets of$169.3 million,primarily related to the sale of our equity interest in El Rancho.Payments for property,equipment and intangibles in the first 16 week
247、s of fiscal 2023 included the completion of 43 remodels,the opening of two new stores andcontinued investment in our digital and technology platforms.Net Cash Used in Financing ActivitiesNet cash used in financing activities was$320.8 million during the first 16 weeks of fiscal 2024 compared to net
248、cash used in financing activitiesof$615.0 million during the first 16 weeks of fiscal 2023.Net cash used in financing activities during the first 16 weeks of fiscal 2024 consisted primarily of the$200.0 million repayment of the ABLFacility,dividends paid on our Class A common stock and tax withholdi
249、ng payments on vesting of restricted stock units.Net cash used infinancing activities during the first 16 weeks of fiscal 2023 consisted primarily of the$500.0 million partial repayment of the ABL Facility,dividends paid on our Class A common stock and tax withholding payments on vesting of restrict
250、ed stock units.DividendsWe have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock.Cash dividendspaid on our Class A common stock were$69.5 million($0.12 per common share)and$69.0 million($0.12 per common share)during the first 16weeks o
251、f fiscal 2024 and first 16 weeks of fiscal 2023,respectively.On July 11,2024,we announced the next quarterly dividend payment of$0.12 per share of Class A common stock to be paid on August 9,2024 to stockholders of record as of the close of business on July 26,2024.LiquidityBased on current operatin
252、g trends,we believe that we have significant sources of cash to meet our liquidity needs for the next 12 months and forthe foreseeable future,including cash on hand,cash flows from operating activities and other sources of liquidity,including the ABL Facility.Weestimate our liquidity needs over the
253、next 12 months to be approximately$5.1 billion,which includes anticipated requirements for workingcapital,Merger costs,capital expenditures,pension obligations,interest payments,quarterly dividends on Class A common stock,operatingleases and finance leases.In addition,we may enter into refinancing a
254、nd sale leaseback transactions from time to time.We believe we haveadequate cash flow to continue to maintain our current debt ratings and to respond effectively to competitive conditions.As of June 15,2024,we had no borrowings outstanding under our ABL Facility and total availability of$3,954.2 mil
255、lion(net of letter of creditusage).CRITICAL ACCOUNTING POLICIESThe preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilit
256、ies as of the date of the Consolidated FinancialStatements and the reported amounts of revenues and expenses during the reporting period.Actual results could differ from those estimates.Wehave chosen accounting policies that we believe are appropriate to report accurately and fairly our operating re
257、sults and financial position,andwe apply those accounting policies in a fair and consistent manner.See the Critical Accounting28Table of ContentsPolicies section included in our Annual Report on Form 10-K for the fiscal year ended February 24,2024,filed with the SEC on April 22,2024,for a discussion
258、 of our significant accounting policies.RECENTLY ISSUED AND RECENTLY ADOPTED ACCOUNTING STANDARDSSee Note 1-Basis of Presentation and Summary of Significant Accounting Policies of our unaudited interim Condensed Consolidated FinancialStatements located elsewhere in this Form 10-Q.Item 3-Quantitative
259、 and Qualitative Disclosures About Market RiskThere have been no material changes in our exposure to market risk from the information provided in our Annual Report on Form 10-K for thefiscal year ended February 24,2024,filed with the SEC on April 22,2024.Item 4-Controls and ProceduresBased on their
260、evaluation of our disclosure controls and procedures(as defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of1934(the Exchange Act)as of the end of the period covered by this Form 10-Q,our Principal Executive Officer and Principal FinancialOfficer concluded our disclosure controls
261、and procedures are effective to ensure that information required to be disclosed by us in the reports thatwe file or submit under the Exchange Act is recorded,processed,summarized and reported within the time periods specified in the SECs rulesand forms and is accumulated and communicated to managem
262、ent,including our Principal Executive Officer and Principal Financial Officer,asappropriate,to allow timely decisions regarding required disclosure.Changes in Internal Control over Financial ReportingThere were no changes in our internal control over financial reporting during the first quarter of f
263、iscal 2024 that have materially affected,or arereasonably likely to materially affect,our internal control over financial reporting.29Table of ContentsPART II-OTHER INFORMATIONItem 1-Legal ProceedingsThe Company is subject from time to time to various claims and lawsuits arising in the ordinary cour
264、se of business,including lawsuits involvingtrade practices,lawsuits alleging violations of state and/or federal wage and hour laws(including alleged violations of meal and rest period lawsand alleged misclassification issues),real estate disputes and other matters.Some of these claims or suits purpo
265、rt or may be determined to beclass actions and/or seek substantial damages.It is the opinion of the Companys management that although the amount of liability with respectto certain of the matters described in this Form 10-Q cannot be ascertained at this time,any resulting liability of these and othe
266、r matters,including any punitive damages,will not have a material adverse effect on the Companys business or overall financial condition.See the mattersunder the caption Legal Proceedings in Note 6-Commitments and Contingencies and Off Balance Sheet Arrangements in the unaudited interimCondensed Con
267、solidated Financial Statements located elsewhere in this Form 10-Q.The Company continually evaluates its exposure to loss contingencies arising from pending or threatened litigation and believes it has madeprovisions where the loss contingency is probable and can be reasonably estimated.Nonetheless,
268、assessing and predicting the outcomes of thesematters involves substantial uncertainties.While management currently believes that the aggregate estimated liabilities currently recorded arereasonable,it remains possible that differences in actual outcomes or changes in managements evaluation or predi
269、ctions could arise that could bematerial to the Companys results of operations or cash flows.Environmental MattersOur operations are subject to regulation under environmental laws,including those relating to waste management,air emissions and undergroundstorage tanks.In addition,as an owner and oper
270、ator of commercial real estate,we may be subject to liability under applicable environmentallaws for clean-up of contamination at our facilities.SEC regulations require us to disclose certain environmental matters arising under federal,state or local environmental provisions if we reasonably believe
271、 that such proceedings may result in monetary sanctions above a stated threshold.Pursuant to SEC regulations,we use a threshold of$1 million for purposes of determining whether disclosure of any such proceedings isrequired.Item 1A-Risk FactorsThere have been no material changes to the risk factors p
272、reviously included in our Annual Report on Form 10-K for the fiscal year endedFebruary 24,2024,filed with the SEC on April 22,2024,under the heading Risk Factors.Item 2-Unregistered Sales of Equity Securities and Use of Proceeds(a)Unregistered Sales of Equity SecuritiesNone.(b)Use of ProceedsNone.(c
273、)Purchases of Equity SecuritiesNone.30Table of ContentsItem 3-Defaults Upon Senior SecuritiesNone.Item 4-Mine Safety DisclosuresNot Applicable.Item 5-Other InformationIn the first quarter of fiscal 2024,none of the Companys directors or officers adopted or terminated a Rule 10b5-1 trading arrangemen
274、t or a non-Rule 10b5-1 trading arrangement,as defined in Item 408(a)of Regulation S-K.Item 6-Exhibits31.1 Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2 Certification of the Principal Financial Officer pursuant to Section 302 of the Sar
275、banes-Oxley Act of 200232.1 Certification of the Principal Executive Officer and of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of2002EXHIBIT 101.INS-Inline XBRL Instance DocumentEXHIBIT 101.SCH-Inline XBRL Taxonomy Extension Schema DocumentEXHIBIT 101.CAL-Inlin
276、e XBRL Taxonomy Extension Calculation Linkbase DocumentEXHIBIT 101.DEF-Inline XBRL Taxonomy Extension Definition Linkbase DocumentEXHIBIT 101.LAB-Inline XBRL Taxonomy Extension Label Linkbase DocumentEXHIBIT 101.PRE-Inline XBRL Taxonomy Extension Presentation Linkbase DocumentEXHIBIT 104-Cover Page
277、Interactive Data File(embedded within the Inline XBRL document)31Table of ContentsSIGNATURESPursuant to the requirements of the Securities Exchange Act of 1934,the registrant has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized.Albertsons Companies,Inc.(
278、Registrant)Date:July 23,2024By:/s/Vivek SankaranVivek SankaranChief Executive Officer and Director(Principal Executive Officer)Date:July 23,2024By:/s/Sharon McCollamSharon McCollamPresident and Chief Financial Officer(Principal Financial Officer)32Exhibit 31.1Certification of the Principal Executive
279、 Officer pursuantto Section 302 of the Sarbanes-Oxley Act of 2002I,Vivek Sankaran,certify that:1.I have reviewed this Quarterly Report on Form 10-Q of Albertsons Companies,Inc.;2.Based on my knowledge,this report does not contain any untrue statement of a material fact or omit to state a material fa
280、ct necessary tomake the statements made,in light of the circumstances under which such statements were made,not misleading with respect to theperiod covered by this report;3.Based on my knowledge,the financial statements,and other financial information included in this report,fairly present in all m
281、aterialrespects the financial condition,results of operations and cash flows of the registrant as of,and for,the periods presented in this report;4.The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures(asdefined in Exchange
282、 Act Rules 13a-15(e)and 15d-15(e)and internal control over financial reporting(as defined in Exchange Act Rules13a-15(f)and 15d-15(f)for the registrant and have:a)Designed such disclosure controls and procedures,or caused such disclosure controls and procedures to be designed under oursupervision,to
283、 ensure that material information relating to the registrant,including its consolidated subsidiaries,is made knownto us by others within those entities,particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting,or caused such inter
284、nal control over financial reporting to be designedunder our supervision,to provide reasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effec
285、tiveness of the registrants disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures,as of the end of the period covered by this report based on suchevaluation;andd)Disclosed in this report any change in the regi
286、strants internal control over financial reporting that occurred during the registrantsmost recent fiscal quarter(the registrants fourth fiscal quarter in the case of an annual report)that has materially affected,or isreasonably likely to materially affect,the registrants internal control over financ
287、ial reporting;and5.The registrants other certifying officer and I have disclosed,based on our most recent evaluation of internal control over financialreporting,to the registrants auditors and the audit committee of the registrants board of directors(or persons performing the equivalentfunctions):a)
288、All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting,whichare reasonably likely to adversely affect the registrants ability to record,process,summarize and report financial information;andb)Any fraud,whether or not material,that
289、 involves management or other employees who have a significant role in the registrantsinternal control over financial reporting.Date:July 23,2024/s/Vivek SankaranVivek SankaranChief Executive Officer and Director(Principal Executive Officer)Exhibit 31.2Certification of the Principal Financial Office
290、r pursuantto Section 302 of the Sarbanes-Oxley Act of 2002I,Sharon McCollam,certify that:1.I have reviewed this Quarterly Report on Form 10-Q of Albertsons Companies,Inc.;2.Based on my knowledge,this report does not contain any untrue statement of a material fact or omit to state a material fact nec
291、essary tomake the statements made,in light of the circumstances under which such statements were made,not misleading with respect to theperiod covered by this report;3.Based on my knowledge,the financial statements,and other financial information included in this report,fairly present in all materia
292、lrespects the financial condition,results of operations and cash flows of the registrant as of,and for,the periods presented in this report;4.The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures(asdefined in Exchange Act R
293、ules 13a-15(e)and 15d-15(e)and internal control over financial reporting(as defined in Exchange Act Rules13a-15(f)and 15d-15(f)for the registrant and have:a)Designed such disclosure controls and procedures,or caused such disclosure controls and procedures to be designed under oursupervision,to ensur
294、e that material information relating to the registrant,including its consolidated subsidiaries,is made knownto us by others within those entities,particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting,or caused such internal co
295、ntrol over financial reporting to be designedunder our supervision,to provide reasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectivene
296、ss of the registrants disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures,as of the end of the period covered by this report based on suchevaluation;andd)Disclosed in this report any change in the registrant
297、s internal control over financial reporting that occurred during the registrantsmost recent fiscal quarter(the registrants fourth fiscal quarter in the case of an annual report)that has materially affected,or isreasonably likely to materially affect,the registrants internal control over financial re
298、porting;and5.The registrants other certifying officer and I have disclosed,based on our most recent evaluation of internal control over financialreporting,to the registrants auditors and the audit committee of the registrants board of directors(or persons performing the equivalentfunctions):a)All si
299、gnificant deficiencies and material weaknesses in the design or operation of internal control over financial reporting,whichare reasonably likely to adversely affect the registrants ability to record,process,summarize and report financial information;andb)Any fraud,whether or not material,that invol
300、ves management or other employees who have a significant role in the registrantsinternal control over financial reporting.Date:July 23,2024/s/Sharon McCollamSharon McCollamPresident and Chief Financial Officer(Principal Financial Officer)Exhibit 32.1Certification Pursuant to 18 U.S.C.Section 1350,as
301、 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002In connection with the Quarterly Report of Albertsons Companies,Inc.(the“Company”)on Form 10-Q for the period ended June 15,2024as filed with the Securities and Exchange Commission on the date hereof(the“Report”),each of the undersign
302、ed certifies,pursuant to 18 U.S.C.1350,as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002,that:1.The Report fully complies with the requirements of section 13(a)or 15(d)of the Securities Exchange Act of 1934;and2.The information contained in the Report fairly presents,in all material respects,the financial condition and results ofoperations of the Company.Date:July 23,2024/s/Vivek SankaranVivek SankaranChief Executive Officer and Director(Principal ExecutiveOfficer)/s/Sharon McCollamSharon McCollamPresident and Chief Financial Officer(Principal FinancialOfficer)
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