UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 11, 2021~~June 18, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 001-39350

Albertsons Companies, Inc.

(Exact name of registrant as specified in its charter)


Delaware						47-4376911
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

250 Parkcenter Blvd.

Boise, Idaho 83706

(Address of principal executive offices and zip code)

(208) 395-6200

(Registrant's telephone number, including area code)

~~Not applicable~~

~~(Former name, former address and former fiscal year, if changed since last report)~~

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.01 par value	ACI	New York Stock Exchange

Indicate 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 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐☒

Accelerated filer

☐

Non-accelerated filer

☒☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised 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 ☒ No

As of ~~October 18, 2021,~~July 22, 2022, the registrant had ~~467,124,900~~531,899,693 shares of Class A common stock, par value $0.01 per share, outstanding.

Albertsons Companies, Inc. and Subsidiaries



PART I - FINANCIAL INFORMATION		Page
	Item 1 - Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Income	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Stockholders' Equity	6
	Notes to Condensed Consolidated Financial Statements	87










	Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	2018
	Item 3 - Quantitative and Qualitative Disclosures About Market Risk	3929
	Item 4 - Controls and Procedures	3929

PART II - OTHER INFORMATION
	Item 1 - Legal Proceedings	4030
	Item 1A - Risk Factors	4030
	Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	4030
	Item 3 - Defaults Upon Senior Securities	4031
	Item 4 - Mine Safety Disclosures	4031
	Item 5 - Other Information	4031
	Item 6 - Exhibits	4131

SIGNATURES		4233

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1 - Condensed Consolidated Financial Statements (unaudited)

Albertsons Companies, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in millions, except share data)

(unaudited)


			September 11, 2021		February 27, 2021				June 18, 2022		February 26, 2022
ASSETS	ASSETS						ASSETS
Current assets	Current assets						Current assets
		Cash and cash equivalents	$	2,849.8	$	1,717.0		Cash and cash equivalents	$	3,213.1	$	2,902.0
		Receivables, net	544.7		550.9			Receivables, net	565.3		560.6
		Inventories, net	4,179.1		4,301.3			Inventories, net	4,573.2		4,500.8
		Other current assets	414.7		418.8			Other current assets	326.6		403.0
		Total current assets	7,988.3		6,988.0			Total current assets	8,678.2		8,366.4

Property and equipment, net	Property and equipment, net		9,201.1		9,412.7		Property and equipment, net		9,069.9		9,349.6
Operating lease right-of-use assets	Operating lease right-of-use assets		5,861.3		6,015.6		Operating lease right-of-use assets		5,908.4		5,908.4
Intangible assets, net	Intangible assets, net		2,181.3		2,108.8		Intangible assets, net		2,309.6		2,285.0
Goodwill	Goodwill		1,200.2		1,183.3		Goodwill		1,201.0		1,201.0
Other assets	Other assets		912.1		889.6		Other assets		1,052.9		1,012.6
TOTAL ASSETS	TOTAL ASSETS		$	27,344.3	$	26,598.0	TOTAL ASSETS		$	28,220.0	$	28,123.0

LIABILITIES	LIABILITIES						LIABILITIES
Current liabilities	Current liabilities						Current liabilities
		Accounts payable	$	3,554.2	$	3,487.3		Accounts payable	$	3,970.3	$	4,236.8
		Accrued salaries and wages	1,492.3		1,474.7			Accrued salaries and wages	1,349.7		1,554.9
		Current maturities of long-term debt and finance lease obligations	211.5		212.4			Current maturities of long-term debt and finance lease obligations	825.4		828.8
		Current maturities of operating lease obligations	621.7		605.3			Current maturities of operating lease obligations	647.0		640.6
		Other current liabilities	1,190.0		1,052.5			Other current liabilities	1,119.9		1,087.4
		Total current liabilities	7,069.7		6,832.2			Total current liabilities	7,912.3		8,348.5

Long-term debt and finance lease obligations	Long-term debt and finance lease obligations		8,129.1		8,101.2		Long-term debt and finance lease obligations		7,121.2		7,136.3
Long-term operating lease obligations	Long-term operating lease obligations		5,464.1		5,548.0		Long-term operating lease obligations		5,497.2		5,419.9
Deferred income taxes	Deferred income taxes		598.3		533.7		Deferred income taxes		806.9		799.8
Other long-term liabilities	Other long-term liabilities		2,524.1		2,659.5		Other long-term liabilities		2,176.4		2,115.4

Commitments and contingencies	Commitments and contingencies		0		0		Commitments and contingencies		0		0
Series A convertible preferred stock, $0.01 par value; 1,750,000 shares authorized, 924,000 shares issued and outstanding as of September 11, 2021 and February 27, 2021			844.3		844.3
Series A-1 convertible preferred stock, $0.01 par value; 1,410,000 shares authorized, 826,000 shares issued and outstanding as of September 11, 2021 and February 27, 2021			754.8		754.8
Series A convertible preferred stock, $0.01 par value; 1,750,000 shares authorized, 695,412 and 745,410 shares issued and outstanding as of June 18, 2022 and February 26, 2022, respectively							Series A convertible preferred stock, $0.01 par value; 1,750,000 shares authorized, 695,412 and 745,410 shares issued and outstanding as of June 18, 2022 and February 26, 2022, respectively		635.4		681.1
Series A-1 convertible preferred stock, $0.01 par value; 1,410,000 shares authorized, no shares issued and outstanding as of June 18, 2022 and 653,776 shares issued and outstanding as of February 26, 2022							Series A-1 convertible preferred stock, $0.01 par value; 1,410,000 shares authorized, no shares issued and outstanding as of June 18, 2022 and 653,776 shares issued and outstanding as of February 26, 2022		—		597.4

STOCKHOLDERS' EQUITY	STOCKHOLDERS' EQUITY						STOCKHOLDERS' EQUITY
		Undesignated preferred stock, $0.01 par value; 96,840,000 shares authorized, no shares issued as of September 11, 2021 and February 27, 2021	—		—			Undesignated preferred stock, $0.01 par value; 96,840,000 shares authorized, no shares issued as of June 18, 2022 and February 26, 2022	—		—
		Class A common stock, $0.01 par value; 1,000,000,000 shares authorized, 586,668,103 and 585,574,666 shares issued as of September 11, 2021 and February 27, 2021, respectively	5.9		5.9			Class A common stock, $0.01 par value; 1,000,000,000 shares authorized, 590,384,128 and 587,904,283 shares issued as of June 18, 2022 and February 26, 2022, respectively	5.9		5.9
		Class A-1 convertible common stock, $0.01 par value; 150,000,000 shares authorized, no shares issued as of September 11, 2021 and February 27, 2021	—		—			Class A-1 convertible common stock, $0.01 par value; 150,000,000 shares authorized, no shares issued as of June 18, 2022 and February 26, 2022	—		—
		Additional paid-in capital	1,936.1		1,898.9			Additional paid-in capital	1,998.2		2,032.2
		Treasury stock, at cost, 120,009,647 shares held as of September 11, 2021 and February 27, 2021	(1,907.0)		(1,907.0)			Treasury stock, at cost, 58,776,088 and 99,640,065 shares held as of June 18, 2022 and February 26, 2022, respectively	(971.8)		(1,647.4)
		Accumulated other comprehensive income	78.7		63.5			Accumulated other comprehensive income	66.2		69.0
		Retained earnings	1,846.2		1,263.0			Retained earnings	2,972.1		2,564.9
		Total stockholders' equity	1,959.9		1,324.3			Total stockholders' equity	4,070.6		3,024.6
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	27,344.3	$	26,598.0	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	28,220.0	$	28,123.0

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

Albertsons Companies, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income

(in millions, except per share data)

(unaudited)


		12 weeks ended				28 weeks ended					16 weeks ended
		September 11, 2021		September 12, 2020		September 11, 2021		September 12, 2020			June 18, 2022		June 19, 2021
Net sales and other revenue	Net sales and other revenue	$	16,505.7	$	15,757.6	$	37,775.1	$	38,509.2	Net sales and other revenue	$	23,310.3	$	21,269.4
Cost of sales	Cost of sales	11,788.7		11,182.7		26,867.1		27,162.8		Cost of sales	16,765.3		15,078.4
Gross profit		4,717.0		4,574.9		10,908.0		11,346.4
Gross margin										Gross margin	6,545.0		6,191.0

Selling and administrative expenses	Selling and administrative expenses	4,231.3		4,031.2		9,734.9		9,800.6		Selling and administrative expenses	5,864.3		5,503.6
(Gain) loss on property dispositions and impairment losses, net	(Gain) loss on property dispositions and impairment losses, net	(0.2)		(18.3)		0.1		12.0		(Gain) loss on property dispositions and impairment losses, net	(79.4)		0.3

Operating income	Operating income	485.9		562.0		1,173.0		1,533.8		Operating income	760.1		687.1

Interest expense, net	Interest expense, net	109.3		128.6		262.6		309.2		Interest expense, net	138.9		153.3
Loss on debt extinguishment		—		49.1		—		49.1

Other income, net	Other income, net	(18.9)		(11.4)		(62.4)		(8.3)		Other income, net	(6.3)		(43.5)
Income before income taxes	Income before income taxes	395.5		395.7		972.8		1,183.8		Income before income taxes	627.5		577.3

Income tax expense	Income tax expense	100.3		111.2		232.8		313.1		Income tax expense	143.3		132.5
Net income	Net income	$	295.2	$	284.5	$	740.0	$	870.7	Net income	$	484.2	$	444.8

Other comprehensive income, net of tax
Other comprehensive income (loss), net of tax										Other comprehensive income (loss), net of tax
Recognition of pension gain	Recognition of pension gain	15.1		10.1		15.2		10.9		Recognition of pension gain	0.2		0.1

Other	Other	—		0.3		—		1.2		Other	(3.0)		—
Other comprehensive income		$	15.1	$	10.4	$	15.2	$	12.1
Other comprehensive (loss) income										Other comprehensive (loss) income	$	(2.8)	$	0.1

Comprehensive income	Comprehensive income	$	310.3	$	294.9	$	755.2	$	882.8	Comprehensive income	$	481.4	$	444.9

Net income per Class A common share	Net income per Class A common share									Net income per Class A common share
Basic net income per Class A common share	Basic net income per Class A common share	$	0.55	$	0.52	$	1.27	$	1.57	Basic net income per Class A common share	$	0.86	$	0.80
Diluted net income per Class A common share	Diluted net income per Class A common share	0.52		0.49		1.26		1.49		Diluted net income per Class A common share	0.84		0.78
Weighted average Class A common shares outstanding
Weighted average Class A common shares outstanding (in millions)										Weighted average Class A common shares outstanding (in millions)
Basic	Basic	465.3		477.3		465.2		529.2		Basic	513.3		465.1
Diluted	Diluted	573.0		582.9		470.6		583.3		Diluted	576.3		571.4

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

Albertsons Companies, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in millions)

(unaudited)


		28 weeks ended					16 weeks ended
		September 11, 2021		September 12, 2020			June 18, 2022		June 19, 2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	740.0	$	870.7	Net income	$	484.2	$	444.8
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Loss on property dispositions and impairment losses, net		0.1		12.0
(Gain) loss on property dispositions and impairment losses, net						(Gain) loss on property dispositions and impairment losses, net	(79.4)		0.3
Depreciation and amortization	Depreciation and amortization	883.2		808.8		Depreciation and amortization	547.7		504.2
Operating lease right-of-use assets amortization	Operating lease right-of-use assets amortization	333.0		309.3		Operating lease right-of-use assets amortization	198.8		189.3

LIFO expense	LIFO expense	29.1		23.2		LIFO expense	62.1		14.5
Deferred income tax	Deferred income tax	43.0		2.8		Deferred income tax	2.8		(17.9)

Contributions to pension and post-retirement benefit plans, net of (income) expense	Contributions to pension and post-retirement benefit plans, net of (income) expense	(47.5)		(68.9)		Contributions to pension and post-retirement benefit plans, net of (income) expense	(9.5)		(14.5)
(Gain) loss on interest rate swaps and commodity hedges, net		(7.5)		25.9
Amortization and write-off of deferred financing costs		11.1		11.2
Loss on debt extinguishment		—		49.1
Gain on interest rate swaps and energy hedges, net						Gain on interest rate swaps and energy hedges, net	(18.5)		(6.3)

Equity-based compensation expense	Equity-based compensation expense	49.0		28.3		Equity-based compensation expense	35.3		22.2
Other	Other	(21.2)		(28.7)		Other	25.2		(22.9)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Receivables, net	Receivables, net	(6.4)		(21.7)		Receivables, net	(5.4)		(74.7)
Inventories, net	Inventories, net	93.0		62.2		Inventories, net	(134.4)		14.8
Accounts payable, accrued salaries and wages and other accrued liabilities	Accounts payable, accrued salaries and wages and other accrued liabilities	229.2		585.4		Accounts payable, accrued salaries and wages and other accrued liabilities	(123.2)		(31.3)
Operating lease liabilities	Operating lease liabilities	(249.3)		(228.4)		Operating lease liabilities	(118.1)		(109.5)
Self-insurance assets and liabilities	Self-insurance assets and liabilities	36.3		24.2		Self-insurance assets and liabilities	24.5		27.5
Other operating assets and liabilities	Other operating assets and liabilities	22.6		255.4		Other operating assets and liabilities	99.8		118.5
Net cash provided by operating activities	Net cash provided by operating activities	2,137.7		2,720.8		Net cash provided by operating activities	991.9		1,059.0

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Business acquisitions, net of cash acquired	Business acquisitions, net of cash acquired	(23.5)		—		Business acquisitions, net of cash acquired	—		(23.5)
Payments for property, equipment and intangibles, including payments for lease buyouts	Payments for property, equipment and intangibles, including payments for lease buyouts	(822.5)		(702.9)		Payments for property, equipment and intangibles, including payments for lease buyouts	(613.8)		(513.4)
Proceeds from sale of long-lived assets	Proceeds from sale of long-lived assets	24.6		20.6		Proceeds from sale of long-lived assets	71.8		15.2
Other investing activities	Other investing activities	30.9		(4.8)		Other investing activities	(9.4)		28.7
Net cash used in investing activities	Net cash used in investing activities	(790.5)		(687.1)		Net cash used in investing activities	(551.4)		(493.0)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from issuance of long-term debt		—		3,500.0

Payments on long-term borrowings	Payments on long-term borrowings	(0.5)		(3,388.5)		Payments on long-term borrowings	(0.1)		(0.3)
Payments of obligations under finance leases	Payments of obligations under finance leases	(32.2)		(32.9)		Payments of obligations under finance leases	(13.1)		(14.1)
Payment of redemption premium on debt extinguishment		—		(41.4)
Payments for debt financing costs		—		(15.6)

Dividends paid on common stock	Dividends paid on common stock	(93.0)		—		Dividends paid on common stock	(63.0)		(46.5)
Dividends paid on convertible preferred stock	Dividends paid on convertible preferred stock	(59.1)		—		Dividends paid on convertible preferred stock	(22.8)		(29.5)
Proceeds from convertible preferred stock		—		1,680.0
Third party issuance costs on convertible preferred stock		—		(80.9)
Treasury stock purchase, at cost		—		(1,680.0)

Employee tax withholding on vesting of restricted stock units	Employee tax withholding on vesting of restricted stock units	(11.8)		(6.7)		Employee tax withholding on vesting of restricted stock units	(37.3)		(10.0)
Other financing activities	Other financing activities	(17.8)		(14.7)		Other financing activities	6.8		(8.8)
Net cash used in financing activities	Net cash used in financing activities	(214.4)		(80.7)		Net cash used in financing activities	(129.5)		(109.2)

Net increase in cash and cash equivalents and restricted cash	Net increase in cash and cash equivalents and restricted cash	1,132.8		1,953.0		Net increase in cash and cash equivalents and restricted cash	311.0		456.8
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	1,767.6		478.9		Cash and cash equivalents and restricted cash at beginning of period	2,952.6		1,767.6
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	2,900.4	$	2,431.9	Cash and cash equivalents and restricted cash at end of period	$	3,263.6	$	2,224.4

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

Albertsons Companies, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in millions, except share data)

(unaudited)


		Class A Common Stock			Additional paid in capital				Treasury Stock						Accumulated other comprehensive income			Retained earnings				Total stockholders' equity				Class A Common Stock					Additional paid in capital				Treasury Stock					Accumulated other comprehensive income			Retained earnings			Total stockholders' equity
		Shares	Amount				Shares			Amount							Shares								Amount					Shares				Amount
Balance as of February 27, 2021		585,574,666	$	5.9			$	1,898.9		120,009,647			$	(1,907.0)						$	63.5			$	1,263.0		$	1,324.3
Balance as of February 26, 2022																									Balance as of February 26, 2022	587,904,283			$	5.9		$	2,032.2			99,640,065		$	(1,647.4)		$	69.0		$	2,564.9		$	3,024.6
Equity-based compensation	Equity-based compensation	—	—		22.2				—		—				—			—				22.2			Equity-based compensation	—			—		35.3				—		—			—			—			35.3
Shares issued and employee tax withholding on vesting of restricted stock units	Shares issued and employee tax withholding on vesting of restricted stock units	945,942	—		(10.0)				—		—				—			—				(10.0)			Shares issued and employee tax withholding on vesting of restricted stock units	2,479,845			—		(37.3)				—		—			—			—			(37.3)
Convertible preferred stock conversions																									Convertible preferred stock conversions	—			—		(32.5)				(40,863,977)		675.6			—			—			643.1

Cash dividends declared on common stock		—	—		—				—		—				—			(46.5)				(46.5)
Cash dividends declared on common stock ($0.12 per common share)																									Cash dividends declared on common stock ($0.12 per common share)	—			—		—				—		—			—			(63.0)			(63.0)
Dividends accrued on convertible preferred stock	Dividends accrued on convertible preferred stock	—	—		—				—		—				—			(36.4)				(36.4)			Dividends accrued on convertible preferred stock	—			—		—				—		—			—			(13.7)			(13.7)
Net income	Net income	—	—		—				—		—				—			444.8				444.8			Net income	—			—		—				—		—			—			484.2			484.2
Other comprehensive income, net of tax		—	—		—				—		—				0.1			—				0.1
Other comprehensive loss, net of tax																									Other comprehensive loss, net of tax	—			—		—				—		—			(2.8)			—			(2.8)
Other activity	Other activity	—	—		—				—		—				—			(0.1)				(0.1)			Other activity	—			—		0.5				—		—			—			(0.3)			0.2
Balance as of June 19, 2021		586,520,608	$	5.9	$	1,911.1			120,009,647		$	(1,907.0)			$	63.6		$	1,624.8			$	1,698.4
Equity-based compensation		—	—		26.8				—		—				—			—				26.8
Shares issued and employee tax withholding on vesting of restricted stock units		147,495	—		(1.8)				—		—				—			—				(1.8)

Cash dividends declared on common stock		—	—		—				—		—				—			(46.5)				(46.5)
Dividends accrued on convertible preferred stock		—	—		—				—		—				—			(27.3)				(27.3)
Net income		—	—		—				—		—				—			295.2				295.2
Other comprehensive income, net of tax		—	—		—				—		—				15.1			—				15.1

Balance as of September 11, 2021		586,668,103	$	5.9	$	1,936.1			120,009,647		$	(1,907.0)			$	78.7		$	1,846.2			$	1,959.9
Balance as of June 18, 2022																									Balance as of June 18, 2022	590,384,128			$	5.9	$	1,998.2			58,776,088		$	(971.8)		$	66.2		$	2,972.1		$	4,070.6


	Class A Common Stock			Additional paid in capital		Treasury Stock			Accumulated other comprehensive income		Retained earnings		Total stockholders' equity
	Shares	Amount				Shares	Amount
Balance as of February 27, 2021	585,574,666	$	5.9	$	1,898.9	120,009,647	$	(1,907.0)	$	63.5	$	1,263.0	$	1,324.3
Equity-based compensation	—	—		22.2		—	—		—		—		22.2
Shares issued and employee tax withholding on vesting of restricted stock units	945,942	—		(10.0)		—	—		—		—		(10.0)

Cash dividends declared on common stock ($0.10 per common share)	—	—		—		—	—		—		(46.5)		(46.5)
Dividends accrued on convertible preferred stock	—	—		—		—	—		—		(36.4)		(36.4)
Net income	—	—		—		—	—		—		444.8		444.8
Other comprehensive income, net of tax	—	—		—		—	—		0.1		—		0.1
Other activity	—	—		—		—	—		—		(0.1)		(0.1)
Balance as of June 19, 2021	586,520,608	$	5.9	$	1,911.1	120,009,647	$	(1,907.0)	$	63.6	$	1,624.8	$	1,698.4

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

~~Table of Contents~~

~~Albertsons Companies, Inc. and Subsidiaries~~

~~Condensed Consolidated Statements of Stockholders' Equity~~

~~(in millions, except share data)~~

~~(unaudited)~~

Class A Common Stock Additional paid in capital Treasury Stock Accumulated other comprehensive loss Retained earnings Total stockholders' equity
Shares Amount Shares Amount
Balance as of February 29, 2020 582,997,251 $ 5.8 $ 1,824.3 3,671,621 $ (25.8) $ (118.5) $ 592.3 $ 2,278.1
Issuance of common stock to Company's parents 1,312,859 — — — — — — —
Equity-based compensation — — 19.0 — — — — 19.0
Employee tax withholding on vesting of restricted stock units — — (6.2) — — — — (6.2)
Repurchase of common stock — — — 101,611,736 (1,680.0) — — (1,680.0)
Dividends accrued on convertible preferred stock — — — — — — (3.9) (3.9)
Net income — — — — — — 586.2 586.2
Other comprehensive income, net of tax — — — — — 1.7 — 1.7
Balance as of June 20, 2020 584,310,110 $ 5.8 $ 1,837.1 105,283,357 $ (1,705.8) $ (116.8) $ 1,174.6 $ 1,194.9
Equity-based compensation — — 9.3 — — — — 9.3
Shares issued and employee tax withholding on vesting of restricted stock units 22,101 — (0.5) — — — — (0.5)
Equity reclassification — — 30.0 — — — — 30.0
Dividends accrued on convertible preferred stock — — — — — — (26.9) (26.9)
Net income — — — — — — 284.5 284.5
Other comprehensive loss, net of tax — — — — — 10.4 — 10.4
Other activity — — (0.1) — — — — (0.1)
Balance as of September 12, 2020 584,332,211 $ 5.8 $ 1,875.8 105,283,357 $ (1,705.8) $ (106.4) $ 1,432.2 $ 1,501.6

~~The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.~~

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Albertsons Companies, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying interim Condensed Consolidated Financial Statements include the accounts of Albertsons Companies, Inc. and its subsidiaries (the "Company"). All significant intercompany balances and transactions were eliminated. The Condensed Consolidated Balance Sheet as of February ~~27, 2021~~26, 2022 is derived from the Company's annual audited Consolidated Financial Statements, which should be read in conjunction with these Condensed Consolidated Financial Statements and which are included in the Company's Annual Report on Form 10-K for the fiscal year ended February ~~27, 2021,~~26, 2022, filed with the Securities and Exchange Commission (the "SEC") on April ~~28, 2021.~~26, 2022. Certain information in footnote disclosures normally included in annual financial statements was condensed or omitted for the interim periods presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of management, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The interim results of operations and cash flows are not necessarily indicative of those results and cash flows expected for the year. The Company's results of operations are for the ~~12 and 28~~16 weeks ended ~~September 11, 2021~~June 18, 2022 and ~~September 12, 2020.~~June 19, 2021.

Significant Accounting Policies

Restricted cash: Restricted cash is included in Other current assets or Other assets depending on the remaining term of the restriction and primarily relates to surety bonds and funds held in escrow. The Company had $50.5 million and $50.6 million of restricted cash as of ~~September 11, 2021~~June 18, 2022 and February ~~27, 2021.~~26, 2022, respectively.

Inventories, net: Substantially all of the Company's inventories consist of finished goods valued at the lower of cost or ~~market~~net realizable value and net of vendor allowances. The Company primarily uses ~~either item-cost or~~ the retail inventory or the item-cost method to ~~value~~determine inventory cost before application of any last-in, first-out ("LIFO") ~~reserve.~~adjustment. Interim LIFO inventory costs are based on management's estimates of expected year-end inventory levels and inflation rates. The Company recorded LIFO expense of ~~$14.6~~$62.1 million and ~~$10.1~~$14.5 million for the 1216 weeks ended ~~September 11,~~June 18, 2022 and June 19, 2021, ~~and September 12, 2020, respectively, and $29.1 million and $23.2 million for the 28 weeks ended September 11, 2021 and September 12, 2020,~~ respectively.

~~Equity-based compensation:~~ Convertible Preferred Stock~~Equity-based compensation expense recognized~~: During the 16 weeks ended June 18, 2022, certain holders of the Company's Series A-1 convertible preferred stock ("Series A-1 preferred stock") and Series A convertible preferred stock ("Series A preferred stock" and together with the Series A-1 preferred stock, the "Convertible Preferred Stock") converted approximately 703,774 shares of Convertible Preferred Stock into 40,863,977 shares of the Company's Class A common stock, which were issued from treasury stock. Subsequent to the end of the 16 weeks ended June 18, 2022, through July 22, 2022, certain holders of the Convertible Preferred Stock converted approximately 4,411 shares of Convertible Preferred Stock into 256,162 shares of the Company's Class A common stock. As a result, the Company has issued, in the ~~Condensed Consolidated Statements~~aggregate, 61,489,721 shares of ~~Operations (in millions):~~

12 weeks ended 28 weeks ended
September 11,
2021 September 12,
2020 September 11,
2021 September 12,
2020
RSUs $ 24.9 $ 8.0 $ 44.6 $ 25.8
RSAs 1.9 1.3 4.4 2.5
Total equity-based compensation expense $ 26.8 $ 9.3 $ 49.0 $ 28.3
Total related tax benefit $ 6.4 $ 2.0 $ 11.5 $ 6.6
Class A common stock to holders of Convertible Preferred Stock related to these non-cash conversions, representing approximately 61% of the originally issued Convertible Preferred Stock.

AsConcurrent with the issuance and sale of ~~September 11, 2021, there was $126.2~~the Convertible Preferred Stock during the first quarter of fiscal 2020, a consolidated real estate subsidiary of the Company entered into a real estate agreement with an affiliate of the holders ("RE Investor") of the Convertible Preferred Stock. Under the terms of the real estate agreement, the Company placed fee owned real estate properties into its real estate subsidiary and contributed $36.5 million of ~~unrecognized costs related~~cash into a restricted escrow account, with a total value of $2.9 billion (165% of the liquidation preference of the Convertible Preferred Stock). The real estate agreement provides that the Company may require the release of properties and/or cash from the escrow account if the holders of Convertible Preferred Stock convert their shares into Class A Common Stock, provided that certain conversion thresholds are met. Subsequent to ~~11.5 million unvested granted restricted stock units ("RSUs"). That cost is expected~~the end of the 16 weeks ended June 18, 2022, due to ~~be recognized over a weighted average period~~the non-cash conversions of ~~1.8 years. As of September 11, 2021, there was $7.3 million of unrecognized costs related~~Convertible Preferred Stock to ~~1.0 million unvested granted restricted~~Class A common stock ~~("RSAs"). That cost is expected to be recognized over a weighted average period~~discussed above, real estate properties and cash of ~~1.9 years.~~

~~Income taxes:~~ ~~Income tax expense was $100.3~~$36.5 million, representing ~~a 25.4% effective tax rate, for~~approximately 60% of the ~~12 weeks ended September 11, 2021. Income tax expense was $111.2 million, representing a 28.1% effective tax rate, for the~~

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~~12 weeks~~original $2.9 billion, have been released from the restricted escrow account, and the real estate properties are being transferred from the real estate subsidiary to operating subsidiaries. For additional information related to the Convertible Preferred Stock and the Investor Exchange Right, see "Part II—Item 8. Financial Statements and Supplementary Data—Note 9" of the Company's Annual Report on Form 10-K for the fiscal year ended ~~September 12, 2020. The decrease in the effective tax rate was primarily driven by nondeductible transaction-related costs incurred during the 12 weeks ended September 12, 2020.~~February 26, 2022.

Income taxes: Income tax expense was ~~$232.8~~$143.3 million, representing a ~~23.9%~~22.8% effective tax rate, for the 2816 weeks ended ~~September 11, 2021. Income tax expense was $313.1 million, representing a 26.4%~~June 18, 2022. The Company's effective tax rate for the 2816 weeks ended ~~September 12, 2020. The decrease in~~June 18, 2022 differs from the ~~effective~~federal income tax statutory rate ~~was~~of 21% primarily ~~driven by the recognition of discrete~~due to state income taxes, reduced by vesting of equity-based compensation. Income tax ~~benefits during~~expense was $132.5 million, representing a 23.0% effective tax rate for the 2816 weeks ended ~~September 11, 2021 and certain nondeductible transaction-related costs incurred during~~June 19, 2021. The Company's effective tax rate for the 2816 weeks ended ~~September 12, 2020.~~June 19, 2021 differs from the federal income tax statutory rate of 21% primarily due to state income taxes.

~~Segments~~Segments:: The Company and its subsidiaries offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel and other items and services in its stores or through digital channels. The Company's operating divisions are geographically based, have similar economic characteristics and similar expected long-term financial performance. The Company's operating segments and reporting units are its 12 operating divisions, which are reported in 1 reportable segment. Each reporting unit constitutes a business for which discrete financial information is available and for which management regularly reviews the operating results. Across all operating segments, the Company operates primarily 1 store format. Each division offers through its stores and digital channels the same general mix of products with similar pricing to similar categories of customers, has similar distribution methods, operates in similar regulatory environments and purchases merchandise from similar or the same vendors.

Revenue Recognition: Revenues from the retail sale of products are recognized at the point of sale or delivery to the customer, net of returns and sales tax. Pharmacy sales are recorded upon the customer receiving the ~~prescription.~~product. Third-party receivables from pharmacy sales were ~~$236.0~~$250.1 million and ~~$262.5~~$247.5 million as of ~~September 11, 2021~~June 18, 2022 and February ~~27, 2021,~~26, 2022, respectively, and are recorded in Receivables, net. For digital related sales, which primarily include home delivery and Drive Up & Go curbside pickup, revenues are recognized upon either pickup in store or delivery to the customer and may include revenue for separately charged delivery services. The Company records a contract liability when rewards are earned by customers in connection with the Company's loyalty programs. As rewards are redeemed or expire, the Company reduces the contract liability and recognizes revenue. The contract liability balance was immaterial as of ~~September 11, 2021~~June 18, 2022 and February ~~27, 2021.~~26, 2022.

The Company records a contract liability when it sells its own proprietary gift cards. The Company records a sale when the customer redeems the gift card. The Company's gift cards do not expire. The Company reduces the contract liability and records revenue for the unused portion of gift cards ("breakage") in proportion to its customers' pattern of redemption, which the Company determined to be the historical redemption rate. The Company's contract liability related to gift cards was ~~$76.2~~$101.9 million and $104.3 million as of ~~September 11, 2021~~June 18, 2022 and ~~$98.1 million as of~~ February ~~27, 2021. Breakage amounts were immaterial for the 12 and 28 weeks ended September 11, 2021 and September 12, 2020,~~26, 2022, respectively.

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Disaggregated Revenues

The following table represents Net sales and other revenue by product type ~~of similar product~~ (dollars in millions):


		12 weeks ended								28 weeks ended									16 weeks ended
		September 11, 2021				September 12, 2020				September 11, 2021				September 12, 2020					June 18, 2022				June 19, 2021
		Amount (1)		% of Total		Amount (1)		% of Total		Amount (1)		% of Total		Amount (1)		% of Total			Amount (1)		% of Total		Amount (1)		% of Total
Non-perishables (2)	Non-perishables (2)	$	7,268.5	44.0	%	$	7,126.6	45.2	%	$	16,538.8	43.8	%	$	17,910.4	46.5	%	Non-perishables (2)	$	11,446.0	49.1	%	$	10,742.7	50.5	%
Perishables (3)		6,823.2		41.3		6,654.1		42.2		15,735.8		41.6		16,209.7		42.1
Fresh (3)																		Fresh (3)	7,881.5		33.8		7,412.5		34.9
Pharmacy	Pharmacy	1,253.4		7.6		1,171.8		7.5		2,982.0		7.9		2,726.7		7.1		Pharmacy	1,923.5		8.3		1,728.6		8.1
Fuel	Fuel	918.5		5.6		570.8		3.6		1,967.8		5.2		1,160.0		3.0		Fuel	1,654.7		7.1		1,049.3		4.9
Other (4)	Other (4)	242.1		1.5		234.3		1.5		550.7		1.5		502.4		1.3		Other (4)	404.6		1.7		336.3		1.6
Net sales and other revenue	Net sales and other revenue	$	16,505.7	100.0	%	$	15,757.6	100.0	%	$	37,775.1	100.0	%	$	38,509.2	100.0	%	Net sales and other revenue	$	23,310.3	100.0	%	$	21,269.4	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, ~~dairy,~~ meat, deli and prepared foods, bakery, floral and seafood.

(4) Consists primarily of wholesale revenue to third parties, commissions and other miscellaneous revenue.

Recently issued accounting ~~standards:~~ standards: In June ~~2020,~~2022, the ~~FASB~~Financial Accounting Standards Board ("FASB") issued ~~ASU 2020-06, "~~Accounting Standards Update ("ASU") 2022-03, ~~Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own~~"Fair Value Measurement (Topic 820): Fair Value Measurement of Equity ~~(Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equit~~Securities Subject to Contractual Sale Restrictions"y" ("ASU ~~2020-06"~~2022-03"). ASU ~~2020-06 simplifies the accounting for certain convertible instruments, amends guidance on derivative scope exceptions for contracts in an entity's own equity and modifies~~2022-03 clarifies the guidance on ~~diluted earnings per share calculations as~~the fair value measurement of an equity security that is subject to a ~~result of these changes.~~contractual sale restriction and requires specific disclosures related to such an equity security. ASU ~~2020-06 will take effect~~2022-03 is effective for ~~public entities for annual reporting periods~~fiscal years beginning after December 15, ~~2021,~~2023, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently ~~evaluating~~does not expect the ~~effect~~adoption of this standard to have a material impact on its Consolidated Financial ~~Statements.~~Statements and related disclosures, but evaluation is continuing.

NOTE 2 - FAIR VALUE MEASUREMENTS

The accounting guidance for fair value established a framework for measuring fair value and established a three-level valuation hierarchy for disclosure of fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability at the 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 Level 1 that are either directly or indirectly observable; and

Level 3 - Unobservable inputs in which little or no market activity exists, requiring an entity to develop its own assumptions that market participants would use to value the asset or liability.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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Table of Contents

The following table presents certain assets ~~and liabilities~~ which were measured at fair value on a recurring basis as of ~~September 11, 2021~~June 18, 2022 (in millions):


		Fair Value Measurements									Fair Value Measurements
		Total		Quoted prices in active markets for identical assets (Level 1)		Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)			Total		Quoted prices in active markets for identical assets (Level 1)		Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:	Assets:									Assets:

Short-term investments (1)	Short-term investments (1)	$	14.7	$	5.0	$	9.7	$	—	Short-term investments (1)	$	17.2	$	4.7	$	12.5	$	—
Non-current investments (2)	Non-current investments (2)	92.6		19.5		73.1		—		Non-current investments (2)	94.7		—		94.7		—
Derivative contracts (3)	Derivative contracts (3)	10.0		—		10.0		—		Derivative contracts (3)	24.5		—		24.5		—
Total	Total	$	117.3	$	24.5	$	92.8	$	—	Total	$	136.4	$	4.7	$	131.7	$	—

Liabilities:
Derivative contracts (4)		$	26.3	$	—	$	26.3	$	—

Total		$	26.3	$	—	$	26.3	$	—

(1) Primarily relates to Mutual Funds (Level 1) and Certificates of Deposit (Level 2). Included in Other current assets.

(2) Primarily relates to investments in publicly traded stock (Level 1) and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets.

(3) Primarily relates to energy derivative ~~contracts. Included in Other assets.~~

~~(4) Primarily relates to~~contracts and interest rate swaps. Included in Other ~~current liabilities.~~assets.

The following table presents certain assets and liabilities which were measured at fair value on a recurring basis as of February ~~27, 2021~~26, 2022 (in millions):


		Fair Value Measurements									Fair Value Measurements
		Total		Quoted prices in active markets for identical assets (Level 1)		Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)			Total		Quoted prices in active markets for identical assets (Level 1)		Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:	Assets:									Assets:

Short-term investments (1)	Short-term investments (1)	$	11.9	$	4.4	$	7.5	$	—	Short-term investments (1)	$	14.4	$	4.9	$	9.5	$	—
Non-current investments (2)	Non-current investments (2)	110.2		40.3		69.9		—		Non-current investments (2)	114.7		10.9		103.8		—
Derivative contracts (3)										Derivative contracts (3)	18.6		—		18.6		—
Total	Total	$	122.1	$	44.7	$	77.4	$	—	Total	$	147.7	$	15.8	$	131.9	$	—

Liabilities:	Liabilities:									Liabilities:
Derivative contracts (3)		$	40.0	$	—	$	40.0	$	—

Derivative contracts (4)										Derivative contracts (4)	$	10.4	$	—	$	10.4	$	—
Total	Total	$	40.0	$	—	$	40.0	$	—	Total	$	10.4	$	—	$	10.4	$	—

(1) Primarily relates to Mutual Funds (Level 1) and Certificates of Deposit (Level 2). Included in Other current assets.

(2) Primarily relates to investments in publicly traded stock (Level 1) and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets.

(3) Primarily relates to energy derivative contracts. Included in Other assets.

(4) Primarily relates to interest rate swaps. Included in Other current liabilities.

The Company records cash and cash equivalents, restricted cash, accounts receivable and accounts payable at cost. The recorded values of these financial instruments approximate fair value based on their short-term nature.

The estimated fair value of the Company's debt, including current maturities, was based on Level 2 inputs, being market quotes or values for similar instruments, and interest rates currently available to the Company for the issuance of debt with similar terms and remaining maturities as a discount rate for the remaining principal payments. As of ~~September 11, 2021,~~June 18, 2022, the fair value of total debt was ~~$8,325.6~~$6,774.0 million compared to the carrying value of ~~$7,815.0~~$7,484.3 million, excluding debt discounts and deferred financing costs. As of February ~~27, 2021,~~26, 2022, the fair value of total debt was ~~$8,150.7~~$7,531.5 million compared to the carrying value of ~~$7,815.5~~$7,484.6 million, excluding debt discounts and deferred financing costs.

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Assets Measured at Fair Value on a Non-Recurring Basis

The Company measures certain assets at fair value on a non-recurring basis, including long-lived assets and goodwill, which are evaluated for impairment. Long-lived assets include store-related 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 subjective nature.

~~NOTE 3~~ - ~~DERIVATIVE FINANCIAL INSTRUMENTS~~

The aggregate notional amount of the Company's interest rate swaps as of September 11, 2021 and February 27, 2021, were $1,553.0 million and $1,653.0 million, respectively, of which none were designated as cash flow hedges as defined by GAAP.

~~Activity related to interest rate swaps consisted of the following (in millions):~~

~~12 weeks ended~~

September 11,
2021

September 12,
2020

~~Location of loss recognized from derivatives~~

~~Loss on undesignated portion of interest rate swaps~~

—

~~(0.4)~~

~~Other income, net~~

28 weeks ended
September 11,
2021 September 12,
2020 Location of loss recognized from derivatives
Loss on undesignated portion of interest rate swaps $ (0.3) $ (19.4) Other income, net

NOTE 43 - LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS

The Company's long-term debt and finance lease obligations as of ~~September 11, 2021~~June 18, 2022 and February ~~27, 2021,~~26, 2022, net of unamortized debt discounts of ~~$43.0~~$40.2 million and ~~$44.8~~$41.4 million, respectively, and deferred financing costs of ~~$63.6~~$53.8 million and ~~$69.8~~$57.5 million, respectively, consisted of the following (in millions):

September 11,
2021 February 27,
2021
Senior Unsecured Notes due 2023 to 2030, interest rate range of 3.25% to 7.50% $ 6,686.5 $ 6,680.5
Safeway Inc. Notes due 2021 to 2031, interest rate range of 4.75% to 7.45% 504.4 504.3
New Albertsons L.P. Notes due 2026 to 2031, interest rate range of 6.52% to 8.70% 470.9 469.1
Other financing obligations 29.2 29.4
Mortgage notes payable, secured 17.4 17.6
Finance lease obligations 632.2 612.7
Total debt 8,340.6 8,313.6
Less current maturities (211.5) (212.4)
Long-term portion $ 8,129.1 $ 8,101.2

~~Senior Unsecured Notes~~

On October 1, 2021, subsequent to the end of the 12 weeks ended September 11, 2021, the Company provided notice to the holders and trustee, of its election to redeem all of the $200.0 million aggregate principal amount currently outstanding of the Company's 5.750% Senior Unsecured Notes due 2025 (the "2025 Notes"). The 2025 Notes will be redeemed on November 1, 2021 (the "Redemption Date"), using cash on hand, at a redemption price of 101.438% of the principal amount thereof plus accrued and unpaid interest on the 2025 Notes to, but excluding, the Redemption Date.

~~Table of Contents~~


	June 18, 2022		February 26, 2022

Senior Unsecured Notes due 2023 to 2030, interest rate range of 3.25% to 7.50%	$	6,496.0	$	6,492.5
Safeway Inc. Notes due 2027 to 2031, interest rate range of 7.25% to 7.45%	374.5		374.4
New Albertsons L.P. Notes due 2026 to 2031, interest rate range of 6.52% to 8.70%	473.7		472.6

Other financing obligations	29.0		29.1
Mortgage notes payable, secured	17.1		17.1
Finance lease obligations	556.3		579.4
Total debt	7,946.6		7,965.1
Less current maturities	(825.4)		(828.8)
Long-term portion	$	7,121.2	$	7,136.3

ABL Facility

As of ~~September 11, 2021~~June 18, 2022 and February ~~27, 2021,~~26, 2022, there were no amounts outstanding under the Company's asset-based loan facility ("ABL Facility"), and letters of credit ("LOC") issued under the LOC sub-facility were ~~$323.8~~$249.6 million and ~~$354.6~~$249.4 million, respectively.

NOTE 54 - EMPLOYEE BENEFIT PLANS

Pension and Other Post-Retirement Benefits

The following ~~tables provide~~table provides the components of net pension and post-retirement (income) expense (in millions):

12 weeks ended
Pension Other post-retirement benefits
September 11,
2021 September 12,
2020 September 11,
2021 September 12,
2020
Estimated return on plan assets $ (24.5) $ (23.7) $ — $ —
Service cost 5.1 3.5 — —
Interest cost 9.7 12.6 0.1 0.1
Amortization of prior service cost — — — 0.4
Amortization of net actuarial loss (gain) 0.2 0.5 (0.1) (0.1)
Settlement (gain) loss (14.3) 3.0 — —
(Income) expense, net $ (23.8) $ (4.1) $ — $ 0.4


		28 weeks ended									16 weeks ended
		Pension				Other post-retirement benefits					Pension				Other post-retirement benefits
		September 11, 2021		September 12, 2020		September 11, 2021		September 12, 2020			June 18, 2022		June 19, 2021		June 18, 2022		June 19, 2021
Estimated return on plan assets	Estimated return on plan assets	$	(57.2)	$	(55.2)	$	—	$	—	Estimated return on plan assets	$	(28.6)	$	(32.7)	$	—	$	—
Service cost	Service cost	12.0		8.3		—		—		Service cost	6.2		6.9		—		—
Interest cost	Interest cost	22.7		29.2		0.2		0.2		Interest cost	15.8		13.0		0.1		0.1
Amortization of prior service cost	Amortization of prior service cost	0.1		0.1		—		1.0		Amortization of prior service cost	0.1		0.1		—		—
Amortization of net actuarial loss (gain)	Amortization of net actuarial loss (gain)	0.5		1.1		(0.3)		(0.3)		Amortization of net actuarial loss (gain)	0.2		0.3		(0.1)		(0.2)
Settlement (gain) loss		(14.3)		3.0		—		—

(Income) expense, net	(Income) expense, net	$	(36.2)	$	(13.5)	$	(0.1)	$	0.9	(Income) expense, net	$	(6.3)	$	(12.4)	$	—	$	(0.1)

The Company contributed ~~$9.2~~$3.2 million and ~~$11.2~~$2.0 million to its defined pension plans and post-retirement benefit plans during the ~~12 and 28~~16 weeks ended ~~September 11,~~June 18, 2022 and June 19, 2021, ~~respectively. For the 12 and 28 weeks ended September 12, 2020, the Company contributed $1.7 million and $56.3 million,~~ respectively. At the Company's discretion, additional funds may be contributed to the defined benefit pension plans that are determined to be beneficial to the ~~Company. The Company currently anticipates contributing an additional $26.1 million to these plans for the remainder of fiscal 2021.~~

During the 12 and 28 weeks ended September 11, 2021, the Company purchased a group annuity policy and transferred $203.5 million of pension plan assets to an insurance company, thereby reducing the Company's defined benefit pension obligations by $205.4 million. As a result of the annuity purchase, the Company recorded a settlement gain of $11.1 million during the 12 and 28 weeks ended September 11, 2021.

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~~Defined Contribution Plans and Supplemental Retirement Plans~~

~~Total contributions expensed for defined contribution~~Company. The Company currently anticipates contributing an additional $17.9 million to these plans ~~(401(k) plans) were $26.4 million and $16.3 million~~ for the 12 weeks ended September 11, 2021 and September 12, 2020, respectively. For the 28 weeks ended September 11, 2021 and September 12, 2020, total contributions expensed were $42.6 million and $38.1 million, respectively.remainder of fiscal 2022.

Multiemployer Pension Plans

ARP Act:The American Rescue Plan Act ("ARP Act"), which was signed into law on March 11, ~~2021. The ARP Act establishes~~2021, established a special financial assistance program for financially troubled multiemployer pension plans. Under the ARP Act, eligible multiemployer plans can apply to receive a one-time cash payment in ~~the~~an amount projected by the Pension Benefit Guaranty Corporation ("PBGC") to pay pension benefits through the plan year ending 2051. ~~On July 9,~~In the fourth quarter of fiscal 2021, the ~~PBGC issued~~Combined Plan submitted its ~~interim final rule with respect~~application to ~~the~~receive one-time special financial ~~assistance program. The~~assistance. During the 16 weeks ended June 18, 2022, the Combined Plan received approval and payment from the PBGC ~~interim final rule provides direction on the application requirements, identifies which plans will have priority, eligibility requirements, the determination~~for $1.2 billion in special financial assistance. For additional information, including a description and definition of the ~~amount of financial assistance to be provided and establishes conditions and restrictions that apply to plans that receive~~Combined Plan, as well as the ~~assistance. The Company is evaluating~~impact on the ~~interim final rule and has submitted comments during the 30-day comment period. The Company's evaluation includes any potential impact to the Company's~~ Excess Plan, as defined ~~in and further described in~~therein, see "Part II—Item 8. Financial Statements and ~~Supplemental~~Supplementary Data—Note 12" of the Company's Annual Report on Form 10-K for the fiscal year ended February ~~27, 2021.~~26, 2022.

NOTE 65 - COMMITMENTS AND CONTINGENCIES AND OFF BALANCE SHEET ARRANGEMENTS

Guarantees

California Department of Industrial Relations: On January 21, 2014, the Company entered into a Collateral Substitution Agreement with the California Self-Insurers' Security Fund to provide collateral related to certain California self-insured workers' compensation obligations pursuant to applicable regulations. The collateral not covered by the California Self-Insurers' Security Fund is covered by surety bonds for the benefit of the State of California Office of Self-Insurance Plans. A portion of the surety bonds is covered by irrevocable LOCs. The collateral requirements are adjusted annually based on semi-annual filings of an actuarial study reflecting liabilities as of December 31 of each year reduced by claim closures and settlements. The related LOC was ~~$22.6~~$1.7 million as of ~~September 11, 2021~~June 18, 2022 and ~~$40.1~~$9.2 million as of February ~~27, 2021, respectively.~~26, 2022.

Lease Guarantees: The Company may have liability under certain operating leases that were assigned to third parties. If any of these third parties fail to perform their obligations under the leases, the Company could be responsible for the lease ~~obligation, including as a result of the economic dislocation caused by the response to the COVID-19 pandemic.~~obligation. Because of the wide dispersion among third parties and the variety of remedies available, the Company believes that if an assignee became insolvent, it would not have a material effect on the Company's financial condition, results of operations or cash flows.

The Company also provides guarantees, indemnifications and assurances ~~pursuant~~ to ~~contractual obligations~~others in the ordinary course of its business.

Legal Proceedings

The Company is subject from time to time to various claims and lawsuits, ~~arising in the ordinary course of business,~~ including ~~lawsuits~~matters involving trade practices, personnel and employment issues, lawsuits alleging violations of state and/or federal wage and hour laws, ~~(including alleged violations of meal and rest period laws and alleged misclassification issues),~~ real estate disputes, personal injury, antitrust claims, packaging or product claims, claims related to the sale of drug or pharmacy products, such as ~~well as~~opioids, intellectual property claims and other ~~matters.~~proceedings arising in or outside of the ordinary course of business. Some of these claims or suits purport or may be determined to be class actions and/or seek substantial damages. It is the opinion of the Company's management that although the amount of liability with

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respect to certain of the matters described herein cannot be ascertained at this time, any resulting liability of these and other matters, including any punitive damages, will not have a material adverse effect on the Company's business or overall financial condition.

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The Company continually evaluates its exposure to loss contingencies arising from pending or threatened litigation and believes it has made provisions where the loss contingency is probable and can be reasonably estimated. Nonetheless, assessing and predicting the outcomes of these matters involves substantial uncertainties. ~~Management~~While management currently believes that the aggregate ~~range of reasonably possible loss for the Company's exposure in excess of the amount accrued is expected to be immaterial to the Company. It~~estimated liabilities currently recorded are reasonable, it remains possible that ~~despite management's current belief, material~~ differences in actual outcomes or changes in management's evaluation or predictions could arise that could ~~have a~~be material ~~effect on~~to the Company's ~~financial condition,~~ results of operations or cash flows.

~~ERISA Litigation:~~ NaN lawsuits were brought against Safeway Inc. ("Safeway") and the Safeway Benefits Plan Committee (the "Benefit Plans Committee," and together with Safeway, the "Safeway Benefits Plans Defendants") and other third parties alleging breaches of fiduciary duty under the Employee Retirement Income Security Act of 1974, as amended ("ERISA") with respect to Safeway's 401(k) Plan (the "Safeway 401(k) Plan"). On July 14, 2016, a complaint was filed in the United States District Court for the Northern District of California by a participant in the Safeway 401(k) Plan individually and on behalf of the Safeway 401(k) Plan. An amended complaint was filed on November 18, 2016. On August 25, 2016, a second complaint was filed in the United States District Court for the Northern District of California by another participant in the Safeway 401(k) Plan individually and on behalf of all others similarly situated against the Safeway Benefits Plans Defendants and against the Safeway 401(k) Plan's former record-keepers. An amended complaint was filed on September 16, 2016, and a second amended complaint was filed on November 21, 2016. In general, both lawsuits alleged that the Safeway Benefits Plans Defendants breached their fiduciary duties under ERISA regarding the selection of investments offered under the Safeway 401(k) Plan and the fees and expenses related to those investments. All parties filed summary judgment motions which were heard and taken under submission on August 16, 2018. Plaintiffs' motions were denied, and defendants' motions were granted in part and denied in part. Bench trials for both matters were set for May 6, 2019. A settlement in principle was reached before trial. On September 13, 2019, settlement papers were filed with the Court along with a motion for preliminary approval of the settlement. A hearing for preliminary approval was set for November 20, 2019, but the Court vacated the hearing. The Court issued an order on March 30, 2020 requesting some minor changes to the notice procedures, and plaintiffs submitted an amended motion for preliminary approval.On September 8, 2020, the Court granted plaintiffs' amended motion, and a final approval hearing was held on April 26, 2021, at which time the Court took the matter under submission. On July 19, 2021, the Court issued a final order approving the settlement. In August 2021, a settlement fund was established with funds from insurers. A settlement administrator is now managing the calculation and payment of settlement provisions to class members.

False Claims Act: The Company has received a civil investigative demand dated February 28, 2020 from the United States Attorney for the Southern District of New York in connection with a False Claims Act ("FCA") investigation relating to the Company's dispensing practices regarding insulin pen products. The investigation seeks documents regarding the Company's policies, practices and procedures, as well as dispensing data, among other things. The Company has cooperated with the U.S. Attorney in the investigation. The Company is currently unable to determine the probability of the outcome of this matter or the range of possible loss, if any.

NaN qui tam actions alleging violations of the ~~FCA~~False Claims Act ("FCA") have also been filed against the Company and its subsidiaries. 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. Safeway, filed in the United States District Court for the Central District of Illinois, the relator alleges that Safeway overcharged federal government healthcare programs by not providing the federal government, as part of its usual and customary prices, the benefit of discounts given to customers in pharmacy membership discount and price-matching programs. The relator filed his complaint under seal on November 11, 2011, and the complaint was unsealed on August 26, 2015. The relator amended the complaint on

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March 31, 2016. On June 12, 2020, the Court granted Safeway's motion for summary judgment, holding that the relator could not prove that Safeway 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 to alter or amend the judgment and to supplement the record, which Safeway opposed. On November 13, 2020, the Court denied relator's motion, and on December 11, 2020, relator filed a notice of appeal. ~~The appeal is now pending in~~Oral arguments took place September 9, 2021 and the Seventh Circuit Court of ~~Appeals. Oral argument took place September 9, 2021.~~Appeals affirmed the judgement in the Company's favor on April 5, 2022. Relators have until August 4, 2022 to file a petition seeking review by the U.S. Supreme Court.

In United States ex rel. Schutte and Yarberry v. SuperValu, New Albertson's, Inc., et al., also filed in the Central District of Illinois, the relators allege that defendants (including various subsidiaries of the Company) overcharged federal government healthcare programs by not providing the federal government, as a part of usual and customary prices, the benefit of discounts given to customers who requested that defendants match competitor prices. The complaint was originally filed under seal and amended on November 30, 2015. On August 5, 2019, the Court granted relators' motion for partial summary judgment, holding that price-matched prices are the usual and customary prices for those drugs. On July 1, 2020, the Court granted the defendants' motions for summary judgment and dismissed the case, holding that the relator could not prove that defendants acted with the intent required under the FCA. Judgment was issued on July 2, 2020. On July 9, 2020, the relators filed a notice of appeal. Oral argument was held on January 19, 2021. On August 12, 2021, the Court of Appeals for the Seventh Circuit affirmed the grant of summary judgment in the Company's favor. On September 23, 2021, the relators filed a petition for rehearing en banc with the Seventh Circuit. ~~The Company's response~~On December 3, 2021, the Seventh Circuit denied relators' petition. On April 1, 2022, relators filed a petition to seek review by the ~~petition for rehearing is due by November 9, 2021.~~U.S. Supreme Court.

In both of the above cases, the federal government previously investigated the relators' allegations and declined to intervene. The relators elected to pursue their respective cases on their own and in each case have alleged FCA damages in excess of $100 million before trebling and excluding penalties. The Company is vigorously defending each of these matters and believes each of these cases is without merit. The Company has recorded an estimated liability for these matters.

Pharmacy Benefit Manager (PBM) Litigation: The Company (including its subsidiary, Safeway Inc.) is a defendant in a lawsuit filed on January 21, 2021, in Minnesota state court, captioned Health Care Service Corp. et al. v. Albertsons Companies, LLC, et al. The action challenges certain prescription-drug prices reported by the Company to a pharmacy benefit manager, Prime Therapeutics LLC ("Prime"), which in turn contracted with the health-insurer plaintiffs to adjudicate and process prescription-drug reimbursement claims.

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On December 7, 2021, the Company filed a motion to dismiss the complaint. On January 14, 2022, the court denied the Company's motion to dismiss as to all but one count, plaintiffs' claim of negligent misrepresentation. On January 21, 2022, the Company and co-defendant SUPERVALU, Inc. ("SUPERVALU") filed a third-party complaint against Prime, asserting various claims, including: indemnification, fraud and unjust enrichment. On February 17, 2022, the Company filed in the Minnesota Court of Appeals an interlocutory appeal of the denial of their motion to dismiss on personal jurisdiction grounds (the "Jurisdictional Appeal"). On February 24, 2022, the Company and SUPERVALU filed in the trial court an unopposed motion to stay proceedings, pending the resolution of the Jurisdictional Appeal. The parties agreed on March 6, 2022, to an interim stay in the trial court pending a ruling on the unopposed motion to stay proceedings. The Jurisdictional Appeal is currently pending.

The Company is vigorously defending the claims filed against it, and believes the claims are without merit. The Company also intends to prosecute its claims against Prime with equal vigor. The Company has recorded an estimated liability for these matters.

Opioid Litigation: The Company is one of dozens of companies that have been named in various lawsuits alleging that defendants contributed to the national opioid epidemic. At present, the Company is named in over 8090 suits pending in various state courts as well as in the United States District Court for the Northern District of Ohio, where over 2,000 cases have been consolidated as Multi-District Litigation ~~("MDL")~~ pursuant to 28 U.S.C. §1407. Most of these cases have been stayed pending bellwether trials. At present, the most active case is a matter in New Mexico state court where we have been in active discovery and where a September 2022 trial date has been set. ~~The MDL Court and a~~A trial has also been scheduled in Nevada state court ~~in Utah~~for April 2023. Cases filed by Tarrant County (Texas), Santa Fe County (New Mexico), Washington County (Utah) and the State of Nevada are currently considering position statements from the parties in connection with scheduling bellwether trials and it is likely that the Company may be included in one or more of those anticipated bellwether trials.proceeding through discovery. The Company is vigorously defending these matters and believes that these cases are without merit. At this stage in the proceedings, the Company is unable to determine the probability of the outcome of these matters or the range of reasonably possible loss, if any.

~~California Air Resources Board:~~Oregon Class Action: ~~Upon~~A putative class action complaint entitled Schearon Stewart and Jason Stewart v. Safeway Inc. is pending in Circuit Court, County of Multnomah, State of Oregon, alleging that Safeway engaged in unfair trade practices, in violation of Oregon's Unlawful Trade Practices Act (ORS 646.608), regarding the ~~inspection by~~sale of certain meat products in 2015 and 2016 with its "Buy One, Get One Free" and similar promotions. Safeway denies plaintiffs' claim and is vigorously defending itself in the California Air Resources Board ("CARB") of several of the Company's stores in California, it was determined that the Company failed certain paperwork and other administrative requirements. As a result of the inspections, the Company proactively undertook a broad evaluation of the record keeping and administrative practices at all of its stores in California. In connection with this evaluation, the Company retained a third party to conduct an audit and correct deficiencies identified across its California store base.matter. The Company is working with CARB to resolve these compliance issues and comply with governing regulations, and that work is ongoing. CARB has made an opening demand regarding potential fines and penalties. On July 7, 2021, the parties entered into a settlement agreement for which the Company has recorded an estimated ~~liability.~~liability for this matter.

FACTA: On May 31, 2019, a putative class action complaint entitled Martin v. Safeway was filed in the California Superior Court for the County of Alameda, alleging the Company failed to comply with the Fair and Accurate Credit Transactions Act ("FACTA") by printing receipts that failed to adequately mask payment card numbers as

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required by FACTA. The plaintiff claims the violation was "willful" and exposes the Company to statutory damages provided for in FACTA. ~~The Company has answered the complaint and is vigorously defending the matter.~~ On January 8, 2020, the Company commenced mediation discussions with plaintiff's counsel and reached a settlement in principle on February 24, 2020. ~~The parties~~On May 5, 2022, the court approved the negotiated settlement. Pursuant to the settlement, funds have been paid to a claims administrator, who will ~~seek court approval~~oversee the processing of claims.

Plated Litigation: On September 1, 2020, a complaint entitled Shareholder Representative Services LLC v. Albertsons Companies Inc. was filed in Delaware Chancery Court where Shareholder Representative Services LLC sued on behalf of former shareholders and rightsholders of DineInFresh, Inc. d/b/a Plated ("Plated"). Plaintiff alleged that, following the Company's acquisition of Plated, pursuant to a September 19, 2017 Agreement and Plan of Merger, the Company intentionally engaged in conduct to prevent Plated from reaching certain milestones that would have resulted in post-acquisition consideration paid to Plated shareholders and rightsholders. Plaintiff alleged breach of contract, breach of the ~~settlement.~~implied covenant of good faith and fair dealing, and fraudulent inducement. On October 21, 2020, the Company filed a motion to dismiss the complaint. On June 7, 2021, the Court granted the motion in part, dismissing all claims except for the breach-of-contract claim. The Company ~~has recorded an estimated liability for~~is vigorously defending

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itself in the lawsuit and believes that the case is without merit. At this ~~matter.~~stage in the proceedings, the Company is unable to determine the probability of the outcome of the matter or the range of reasonably possible loss, if any.

Other Commitments

In the ordinary course of business, the Company enters into various supply contracts to purchase products for resale and purchase and service contracts for fixed asset and information technology commitments. These contracts typically include volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations.

NOTE 76 - OTHER COMPREHENSIVE INCOME OR LOSS

Total comprehensive earnings are defined as all changes in stockholders' equity during a period, other than those from investments by or distributions to the stockholders. Generally, for the Company, total comprehensive income ~~or loss~~ equals net income plus or minus adjustments for pension 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 in that period, accumulated other comprehensive income or loss ("AOCI") represents the cumulative balance of other comprehensive income, net of tax, as of the balance sheet date. Changes in the AOCI balance by component are shown below (in millions):

28 weeks ended September 11, 2021
Total Pension and Post-retirement benefit plans Other
Beginning balance $ 63.5 $ 61.3 $ 2.2
Other comprehensive income before reclassifications 34.3 34.3 —
Amounts reclassified from accumulated other comprehensive income (14.0) (14.0) —
Tax expense (5.1) (5.1) —
Current-period other comprehensive income, net of tax 15.2 15.2 —
Ending balance $ 78.7 $ 76.5 $ 2.2


	16 weeks ended June 18, 2022
	Total		Pension and Post-retirement benefit plans		Other
Beginning AOCI balance	$	69.0	$	67.1	$	1.9

Other comprehensive loss before reclassifications	(4.0)		—		(4.0)
Amounts reclassified from accumulated other comprehensive income (1)	0.2		0.2		—
Tax benefit	1.0		—		1.0
Current-period other comprehensive (loss) income, net of tax	(2.8)		0.2		(3.0)
Ending AOCI balance	$	66.2	$	67.3	$	(1.1)


		28 weeks ended September 12, 2020				16 weeks ended June 19, 2021
		Total		Pension and Post-retirement benefit plans			Other			Total		Pension and Post-retirement benefit plans		Other
Beginning balance		$	(118.5)	$	(121.7)		$	3.2
Other comprehensive income before reclassifications		11.1		9.6			1.5
Beginning AOCI balance									Beginning AOCI balance	$	63.5	$	61.3	$	2.2

Amounts reclassified from accumulated other comprehensive income(1)	Amounts reclassified from accumulated other comprehensive income(1)	4.9		4.9			—		Amounts reclassified from accumulated other comprehensive income(1)	0.2		0.2		—
Tax expense	Tax expense	(3.9)		(3.6)			(0.3)		Tax expense	(0.1)		(0.1)		—
Current-period other comprehensive income, net of tax	Current-period other comprehensive income, net of tax	12.1		10.9			1.2		Current-period other comprehensive income, net of tax	0.1		0.1		—
Ending balance		$	(106.4)	$	(110.8)		$	4.4
Ending AOCI balance									Ending AOCI balance	$	63.6	$	61.4	$	2.2

(1) These amounts are included in the computation of net pension and post-retirement (income) expense. For additional information, see Note 4 - Employee Benefit Plans.

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NOTE 87 - NET INCOME PER CLASS A COMMON SHARE

The Company calculates basic and diluted net income per Class A common share using the two-class method. The two-class method is an allocation formula that determines net income per Class A common share for each share of Class A common stock and the Company's Series A-1 convertible preferred stock ("Series A-1 preferred stock") and Series A convertible preferred stock ("Series A preferred stock" and together with the Series A-1 preferred stock, the "ConvertibleConvertible Preferred ~~Stock"),~~Stock, 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 to receive dividends. The holders of Convertible Preferred Stock participate in cash dividends that the Company pays on its common stock to the extent that such cash dividends exceed $206.25 million per fiscal year. In applying the two-class method to interim periods, the Company allocates income to its quarterly periods independently and discretely from its year-to-date and annual periods. Basic net income per Class A common share is computed by dividing net income allocated to Class A common stockholders by the weighted average number of Class A common shares outstanding for the period, including Class A common shares to be issued with no prior remaining contingencies prior to issuance. Diluted net income per Class A common share is computed based on the weighted average number of shares of Class A common stock outstanding during each period, plus potential Class A common shares considered outstanding during the period, as long as the inclusion of such awards is not antidilutive. Potential Class A common shares consist of unvested ~~RSUs and RSAs~~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 stock method. Performance-based RSUs are considered dilutive when the related performance criterion has been met.

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The components of basic and diluted net income per Class A common share were as follows (in millions, except per share data):


		12 weeks ended				28 weeks ended					16 weeks ended
		September 11, 2021		September 12, 2020		September 11, 2021		September 12, 2020			June 18, 2022		June 19, 2021
Basic net income per Class A common share	Basic net income per Class A common share									Basic net income per Class A common share
Net income	Net income	$	295.2	$	284.5	$	740.0	$	870.7	Net income	$	484.2	$	444.8
Accrued dividends on Convertible Preferred Stock	Accrued dividends on Convertible Preferred Stock	(27.3)		(26.9)		(63.7)		(30.8)		Accrued dividends on Convertible Preferred Stock	(13.7)		(36.4)
Earnings allocated to Convertible Preferred Stock	Earnings allocated to Convertible Preferred Stock	(11.0)		(9.0)		(84.2)		(9.0)		Earnings allocated to Convertible Preferred Stock	(26.9)		(36.2)
Net income allocated to Class A common stockholders - Basic	Net income allocated to Class A common stockholders - Basic	$	256.9	$	248.6	$	592.1	$	830.9	Net income allocated to Class A common stockholders - Basic	$	443.6	$	372.2

Weighted average Class A common shares outstanding - Basic (1)	Weighted average Class A common shares outstanding - Basic (1)	465.3		477.3		465.2		529.2		Weighted average Class A common shares outstanding - Basic (1)	513.3		465.1

Basic net income per Class A common share	Basic net income per Class A common share	$	0.55	$	0.52	$	1.27	$	1.57	Basic net income per Class A common share	$	0.86	$	0.80

Diluted net income per Class A common share	Diluted net income per Class A common share									Diluted net income per Class A common share
Net income allocated to Class A common stockholders - Basic	Net income allocated to Class A common stockholders - Basic	$	256.9	$	248.6	$	592.1	$	830.9	Net income allocated to Class A common stockholders - Basic	$	443.6	$	372.2
Accrued dividends on Convertible Preferred Stock	Accrued dividends on Convertible Preferred Stock	27.3		26.9		—		30.8		Accrued dividends on Convertible Preferred Stock	13.7		36.4
Earnings allocated to Convertible Preferred Stock	Earnings allocated to Convertible Preferred Stock	11.0		9.0		—		9.0		Earnings allocated to Convertible Preferred Stock	26.9		36.2
Net income allocated to Class A common stockholders - Diluted	Net income allocated to Class A common stockholders - Diluted	$	295.2	$	284.5	$	592.1	$	870.7	Net income allocated to Class A common stockholders - Diluted	$	484.2	$	444.8

Weighted average Class A common shares outstanding - Basic (1)	Weighted average Class A common shares outstanding - Basic (1)	465.3		477.3		465.2		529.2		Weighted average Class A common shares outstanding - Basic (1)	513.3		465.1
Dilutive effect of:	Dilutive effect of:									Dilutive effect of:
Restricted stock units and awards	Restricted stock units and awards	6.1		4.0		5.4		4.3		Restricted stock units and awards	4.8		4.7
Convertible Preferred Stock (2)	Convertible Preferred Stock (2)	101.6		101.6		—		49.8		Convertible Preferred Stock (2)	58.2		101.6
Weighted average Class A common shares outstanding - Diluted (3)	Weighted average Class A common shares outstanding - Diluted (3)	573.0		582.9		470.6		583.3		Weighted average Class A common shares outstanding - Diluted (3)	576.3		571.4

Diluted net income per Class A common share	Diluted net income per Class A common share	$	0.52	$	0.49	$	1.26	$	1.49	Diluted net income per Class A common share	$	0.84	$	0.78

(1) ~~There were 0.3 million~~The number of Class A common shares remaining to be issued for the ~~12 and 28~~16 weeks ended ~~September 11,~~June 18, 2022 and June 19, 2021 ~~compared to 0.4 million Class A common shares remaining to be issued for the 12 and 28 weeks ended September 12, 2020.~~were not material.

(2) Reflects the number of shares of Convertible Preferred Stock issued, if converted into common stock for the period outstanding. ~~For the 28 weeks ended September 11, 2021, 101.6 million potential common shares outstanding related to Convertible Preferred Stock were antidilutive.~~

(3) ~~There were no~~The number of potential Class A common shares outstanding related to RSUs and RSAs that were antidilutive for the ~~12 and 28~~16 weeks ended ~~September 11, 2021. There~~June 18, 2022 and June 19, 2021 were ~~no potential Class A common shares outstanding related to RSUs and RSAs that were antidilutive for the 12 and 28 weeks ended September 12, 2020.~~

not material.

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Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations

~~SPECIAL NOTE REGARDING~~ FORWARD-LOOKING STATEMENTS AND FACTORS THAT IMPACT OUR OPERATING RESULTS AND TRENDS

This Form 10-Q contains "forward-looking statements" within the meaning of the federal securities laws. The "forward-looking statements" include our current expectations, assumptions, estimates and projections about our business and our industry. They include statements relating to our future operating or financial performance which the Company believes to be reasonable at this time. You can identify forward-looking statements by the use of words such as "outlook," "may," "should," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future" 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 risks, uncertainties and other factors, some of which are beyond our control and difficult to predict, including, among ~~others,~~ others:

•changes in macroeconomic conditions and uncertainty regarding the geopolitical environment;

•retail consumer behavior and environment and the Company's ~~industry,~~ industry;

•ability to attract and retain qualified associates and negotiate acceptable contracts with labor unions;

•failure to achieve productivity ~~initiatives,~~ initiatives;

•increased rates of food price inflation, as well as fuel and commodity prices;

•availability of agricultural commodities and raw materials used in our food products;

•ability to enter into strategic transactions, investments or partnerships in the future on terms acceptable to us, or at all; and

•factors related to the continued impact of the COVID-19 pandemic, about which there are still many unknowns, including its duration, recurrence, new ~~virus strains,~~variants, status and effectiveness of vaccinations, duration and scope of related government orders, financial assistance programs, mandates and regulations and the extent of the overall impact to our business and the communities we serve. Such risks and uncertainties could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. In evaluating forward-looking statements, you should carefully consider the risks and uncertainties more fully described in the "Risk Factors" section or other sections in our reports filed with the SEC including the most recent annual report on Form 10-K and any subsequent periodic reports on Form 10-Q and current reports on Form 8-K.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements 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. We undertake no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

While certain aspects of our financial results have been favorably impacted by increased demand during the COVID-19 pandemic, in addition to favorable consumer conditions including incremental financial assistance provided by various government agencies, our business continues to experience challenges to meet customer demand. We have experienced increased labor shortages due to COVID-19 variants resulting in operational disruptions. Together with labor shortages and higher demand for talent, the current economic environment is driving higher wages. Labor shortages could also impact our ability to negotiate acceptable contracts with labor unions which could result in strikes by affected workers and thereby significantly disrupt our operations. Our ability to meet labor needs, control wage and labor-related costs and minimize labor disruptions will be key to our success of operating our business and executing our business strategies. Furthermore, our business is experiencing an inflationary environment and food price inflation, which has benefited our sales and gross margin growth but has negatively impacted our gross margin rates. We are unable to predict how long the current inflationary environment, including increased energy costs, will continue. We expect the economic environment to remain uncertain as we

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navigate the current geopolitical environment, the COVID-19 pandemic, labor challenges, supply chain constraints and the current inflationary environment, including increasing energy and commodity prices.

Such risks and uncertainties could cause actual results to differ materially from those expressed or forecasted by us. In evaluating our financial results and forward-looking statements, you should carefully consider the risks and uncertainties more fully described in the "Risk Factors" section or other sections in our reports filed with the SEC including the most recent annual report on Form 10-K and any subsequent 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 to Albertsons Companies, Inc. and, where appropriate, its subsidiaries.

NON-GAAP FINANCIAL MEASURES

We define EBITDA as generally accepted accounting principles ("GAAP") earnings (net loss) before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as earnings (net loss) before interest, income taxes, depreciation and amortization, further adjusted to eliminate the effects of items management does not consider in assessing our ongoing core performance. We define Adjusted net income as GAAP Net income adjusted to eliminate the effects of items management does not consider in assessing our ongoing core performance. We define Adjusted net income per Class A common share as Adjusted net income divided by the weighted average diluted Class A common shares outstanding, as adjusted to reflect all restricted stock units ("RSUs") and restricted common stock ("RSAs") outstanding at the end of the ~~period.~~period, as well as the conversion of Convertible Preferred Stock when it is antidilutive for GAAP. We define Net ~~Debt~~debt as total debt (which includes finance lease obligations and is net of deferred financing costs and original issue discount) minus unrestricted cash and cash equivalents and we define Net ~~Debt~~debt Ratio as the ratio of Net ~~Debt~~debt to Adjusted EBITDA for the rolling 52 or 53 week period. See "Results of Operations" for further discussion and a reconciliation of Adjusted EBITDA, Adjusted net 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 and Net debt ratio (collectively, the "Non-GAAP Measures") are performance measures that provide supplemental information we believe is useful to analysts and investors to evaluate our ongoing results of operations, when considered alongside other GAAP measures such as ~~Net~~net income, operating income, gross margin and ~~gross profit.~~net income per Class A common share. These Non-GAAP Measures exclude

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the financial impact of items management does not consider in assessing our ongoing core operating performance, and thereby provide useful measures to analysts and investors of our operating performance on a period-to-period basis. Other companies may have different definitions of Non-GAAP Measures and provide for different adjustments, and comparability to our results of operations may be impacted by such differences. We also use Adjusted EBITDA and Net ~~Debt Ratio~~debt ratio for board of director and bank compliance reporting. Our presentation of Non-GAAP Measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Non-GAAP Measures should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Non-GAAP Measures only for supplemental purposes.

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~~SECOND~~FIRST QUARTER OF FISCAL ~~2021~~2022 OVERVIEW

Given the significant variations that occurred in our business during fiscal 2020 due to the COVID-19 pandemic, we provide a supplemental comparison of the 12 and 28 weeks ended September 11, 2021 ("second quarter of fiscal 2021" and "first 28 weeks of fiscal 2021") to the 12 and 28 weeks ended September 7, 2019 ("second quarter of fiscal 2019" and "first 28 weeks of fiscal 2019") for certain financial measures to demonstrate the two-year growth in our business in addition to comparisons to the 12 and 28 weeks ended September 12, 2020 ("second quarter of fiscal 2020" and "first 28 weeks of fiscal 2020").

As of ~~September 11, 2021,~~June 18, 2022, we operated ~~2,278~~2,273 retail food and drug stores with ~~1,725~~1,720 pharmacies, ~~401~~402 associated fuel centers, 22 dedicated distribution centers and 2019 manufacturing facilities. ~~With a strong consumer environment,~~During the first quarter of fiscal 2022, we ~~continue~~executed on our Customer for Life strategy as we continued to ~~make significant progress against all of~~invest in our strategic priorities, including ~~in-store excellence, accelerating~~deepening our digital connection and ~~omni-channel capabilities, increasing productivity~~engagement with our customers, differentiating our store experience, enhancing what we offer and ~~strengthening~~modernizing our ~~talent and culture.~~capabilities. Identical sales increased ~~1.5%~~6.8%, excluding fuel, during the ~~second~~first quarter of fiscal ~~2021, resulting in two-year stacked identical sales growth of 15.3%. We continue~~2022 and we continued to gain market share in food market and in Multi Outlet ("MULO") ~~we are up on a two-year basis and down marginally on a one-year basis.~~. Food market generally includes traditional supermarkets while MULO includes most food market, drug, mass merchants, club, dollar and military stores that sell food.

~~Underscoring~~Our digital initiatives continue to resonate with our ~~strong omni-channel~~customers, underscoring our omnichannel capabilities that allow customers to complete their shopping with us in any way they ~~want, our digital initiatives continue to resonate with our customers, as evidenced by our sustained sales levels in~~want. During the ~~second~~first quarter of fiscal ~~2021,~~2022, digital sales, ~~increasing 5% compared to the second quarter of fiscal 2020~~which include home delivery and ~~a two-year stacked growth of 248%. During the second quarter of fiscal 2021, we expanded our~~ Drive Up & Go curbside pickup, ~~service~~increased 28% compared to ~~approximately 1,900 locations and offer delivery services across more than 2,000~~the first quarter of our stores. In our delivery service, we have expanded first party locations, and continue to work with third party services to engage with customers on the platform of their choice. In addition to our continuing partnership with Instacart, we have expanded our partnership with DoorDash to offer on-demand grocery delivery service where customers can receive a broad assortment in under one hour. We also recently launched a similar partnership with Uber, where customers can order a full assortment of groceries on the Uber platform.

~~With ongoing benefit enhancements, we continue to achieve significant success with our~~fiscal 2021. ~~just~~Just for U loyalty ~~program, which drives higher sales and customer retention, with membership growing 17%~~members increased 16% to 31 million in the ~~second~~first quarter of fiscal ~~2021~~2022 compared to the ~~second~~first quarter of fiscal ~~2020, reaching 27.5 million members.~~2021. Within the program, ~~the number~~our retention rate of actively engaged members, those that redeemed fuel or grocery rewards during the ~~second~~first quarter of fiscal ~~2021, increased by almost 9% compared to the second quarter of fiscal 2020, and our retention rate of actively engaged members was 93% in the second quarter of fiscal 2021.~~2022, remained at over 90%.

~~During~~In deepening our digital connection and engagement with our customers, during the ~~second~~first quarter of fiscal ~~2021~~2022, we launched new merchandising features in our Unified Mobile App, providing a personalized and curated digital experience. We also saw increased digital engagement driven by our Meal Planning tool, launched in the fourth quarter of fiscal 2021. The Meal Planning capability inspires our customers to engage in our app more frequently as they plan, shop and prepare the recipes we offer, which can by filtered by dietary preferences, such as carb conscious, vegetarian and pescatarian. We also continued to ~~roll~~invest in the Albertsons Media Collective using industry-leading technologies to build a platform that is easy to use, transparent, modern and measurable.

We are differentiating our store experience by deepening engagement through the use of technology to automate task management, thus creating more time for our team members to assist our customers. We are also simplifying the end-to-end shopping journey by improving localized assortments and adjacencies of complimentary products, installing more self-checkouts, and adding grab and go sections to ensure a convenient and easy experience. In support of our omnichannel growth, we are evolving store operations, including building out staging areas for Drive Up & Go, adding warerooms for easier picking and installing additional micro fulfillment centers.

We are enhancing what we offer by expanding our Own Brands ~~across all our banners, launching 85 new~~ products and ~~generating strong growth as~~elevating our distinctiveness in Fresh. In Own Brands, our sales penetration ~~increased by 60 basis points to 25.2% compared to~~was at its highest at 25.8% during the ~~second~~first quarter of fiscal ~~2020.~~2022. We ~~also continue~~launched 59 new items during the first quarter of fiscal 2022 and we expect to ~~make significant progress on productivity initiatives, including promotional effectiveness, purchasing~~launch a total of approximately 425 new products in fiscal 2022. In Fresh, our in-store processing capabilities allow us to tailor the selection, the cuts and ~~procurement, labor efficiency~~package sizes to fit local demographics and ~~shrink.~~economic circumstances. In addition, we now have rolled out our ReadyMeals, our ready to eat, ready to heat and ready to cook meals to approximately 600 stores and expect to be in more than 1,100 stores by the end of fiscal 2022.

~~Our capital allocation strategy balances investing for~~Lastly, we continue to modernize our capabilities in part through an improved supply chain, enhanced data and data analytics, ongoing productivity and automation, all built on the ~~future, strengthening our balance sheet~~foundation of being Locally Great and ~~returns to shareholders through a combination of dividends and opportunistic share repurchases.~~ Nationally Strong.

Capital Allocation

Capital expenditures were approximately ~~$823~~$614 million during the first ~~28 weeks~~quarter of fiscal ~~2021 as we opened seven new stores~~2022, primarily including the building of our digital and ~~completed 76 upgrades~~technology platforms and investments in the modernization of our store fleet, including 27 remodels. ~~Our~~We continue to make progress in strengthening the balance sheet, ~~remains strong with a~~reducing our Net ~~Debt Ratio of 1.3x~~debt ratio to 1.0x as of the end of the ~~second~~first quarter of fiscal ~~2021. Capital returns~~2022 compared to ~~shareholders during the first 28 weeks~~1.5x as of ~~fiscal 2021 included our $0.10 per share quarterly dividend. On October 18, 2021, subsequent to~~ the end of the ~~second~~end of first quarter of fiscal ~~2021, we announced a 20% increase to our quarterly dividend, which is now $0.12 per share of Class A common stock.~~

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~~In addition, we have continued~~2021. Capital returns to ~~partner with~~shareholders during the ~~Department~~first quarter of ~~Health and Human Services and local health authorities to administer COVID-19 vaccines to our local communities and, as~~fiscal 2022 included $63.0 million of ~~October 12, 2021, have administered approximately 7.5 million doses.~~common stock dividends ($0.12 per common share).

~~Second~~First quarter of fiscal ~~2021~~2022 highlights

In summary, our financial and operating highlights for the ~~second~~first quarter of fiscal ~~2021~~2022 include:

•Identical sales ~~increase of 1.5%; two-year identical sales stacked growth was 15.3%~~increased 6.8%

•Digital sales increased ~~5%;~~ ~~on a two-year stacked basis digital sales growth was 248%~~28%

•Net income of ~~$295~~$484 million, or ~~$0.52~~$0.84 per Class A common share

•Adjusted net income of ~~$370~~$582 million, or ~~$0.64~~$1.00 per Class A common share

•Adjusted EBITDA of ~~$965~~$1,420 million

•~~Opened one new~~Continued modernization of our store ~~and completed 43 remodel projects~~

•~~Launched 153 new Drive Up & Go locations~~fleet, including completing 27 remodels

Stores

The following table shows stores operating, acquired, opened and closed during the periods presented:

12 weeks ended 28 weeks ended
September 11,
2021 September 12,
2020 September 11,
2021 September 12,
2020
Stores, beginning of period 2,278 2,252 2,277 2,252
Acquired (1) — — 1 —
Opened 1 2 6 2
Closed (1) (2) (6) (2)
Stores, end of period 2,278 2,252 2,278 2,252

~~(1) The 28 weeks ended September 11, 2021 includes one store acquired from Kings and Balducci's that transferred to us subsequent to the end of the fourth quarter of fiscal 2020.~~


	16 weeks ended
		June 18, 2022	June 19, 2021
Stores, beginning of period		2,276	2,277
Acquired		—	1
Opened		—	5
Closed		(3)	(5)
Stores, end of period		2,273	2,278

The following table summarizes our stores by size:


		Number of stores		Percent of Total				Retail Square Feet (1)			Number of stores		Percent of Total				Retail Square Feet (1)
Square Footage	Square Footage	September 11, 2021	September 12, 2020	September 11, 2021		September 12, 2020		September 11, 2021	September 12, 2020	Square Footage	June 18, 2022	June 19, 2021	June 18, 2022		June 19, 2021		June 18, 2022	June 19, 2021
Less than 30,000	Less than 30,000	223	204	9.8	%	9.1	%	5.1	4.7	Less than 30,000	220	223	9.7	%	9.8	%	5.0	5.1
30,000 to 50,000	30,000 to 50,000	786	781	34.5	%	34.6	%	32.9	32.8	30,000 to 50,000	781	786	34.4	%	34.5	%	32.7	32.9
More than 50,000	More than 50,000	1,269	1,267	55.7	%	56.3	%	75.0	74.8	More than 50,000	1,272	1,269	55.9	%	55.7	%	75.2	75.0
Total Stores	Total Stores	2,278	2,252	100.0	%	100.0	%	113.0	112.3	Total Stores	2,273	2,278	100.0	%	100.0	%	112.9	113.0

(1) In millions, reflects total square footage of retail stores operating at the end of the period.

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RESULTS OF OPERATIONS

Comparison of ~~Second Quarter of Fiscal 2021 and First 28 Weeks of Fiscal 2021~~the 16 weeks ended June 18, 2022 to ~~Second Quarter of Fiscal 2020 and First 28 Weeks of Fiscal 2020:~~the 16 weeks ended June 19, 2021:

The following tables and related discussion set forth certain information and comparisons regarding the components of our Condensed Consolidated Statements of Operations for the ~~second~~16 weeks ended June 18, 2022 ("first quarter of fiscal 2022") and 16 weeks ended June 19, 2021 ~~and~~ ("first ~~28 weeks of fiscal 2021 to the second~~ quarter of fiscal ~~2020 and first 28 weeks of fiscal 2020~~2021") (in millions, except per share data).


		12 weeks ended									16 weeks ended
		September 11, 2021		% of Sales		September 12, 2020		% of Sales			June 18, 2022		% of Sales		June 19, 2021		% of Sales
Net sales and other revenue	Net sales and other revenue	$	16,505.7	100.0	%	$	15,757.6	100.0	%	Net sales and other revenue	$	23,310.3	100.0	%	$	21,269.4	100.0	%
Cost of sales	Cost of sales	11,788.7		71.4		11,182.7		71.0		Cost of sales	16,765.3		71.9		15,078.4		70.9
Gross profit		4,717.0		28.6		4,574.9		29.0
Gross margin										Gross margin	6,545.0		28.1		6,191.0		29.1
Selling and administrative expenses	Selling and administrative expenses	4,231.3		25.6		4,031.2		25.6		Selling and administrative expenses	5,864.3		25.2		5,503.6		25.9
Gain on property dispositions and impairment losses, net		(0.2)		—		(18.3)		(0.1)
(Gain) loss on property dispositions and impairment losses, net										(Gain) loss on property dispositions and impairment losses, net	(79.4)		(0.3)		0.3		—

Operating income	Operating income	485.9		3.0		562.0		3.5		Operating income	760.1		3.2		687.1		3.2
Interest expense, net	Interest expense, net	109.3		0.7		128.6		0.8		Interest expense, net	138.9		0.6		153.3		0.7
Loss on debt extinguishment		—		—		49.1		0.3

Other income, net	Other income, net	(18.9)		(0.1)		(11.4)		(0.1)		Other income, net	(6.3)		—		(43.5)		(0.2)
Income before income taxes	Income before income taxes	395.5		2.4		395.7		2.5		Income before income taxes	627.5		2.6		577.3		2.7
Income tax expense	Income tax expense	100.3		0.6		111.2		0.7		Income tax expense	143.3		0.6		132.5		0.6
Net income	Net income	$	295.2	1.8	%	$	284.5	1.8	%	Net income	$	484.2	2.0	%	$	444.8	2.1	%

Basic net income per Class A common share	Basic net income per Class A common share	$	0.55			$	0.52			Basic net income per Class A common share	$	0.86			$	0.80
Diluted net income per Class A common share	Diluted net income per Class A common share	0.52				0.49				Diluted net income per Class A common share	0.84				0.78

		28 weeks ended
		September 11, 2021		% of Sales		September 12, 2020		% of Sales
Net sales and other revenue		$	37,775.1	100.0	%	$	38,509.2	100.0	%
Cost of sales		26,867.1		71.1		27,162.8		70.5
Gross profit		10,908.0		28.9		11,346.4		29.5
Selling and administrative expenses		9,734.9		25.8		9,800.6		25.5
Loss on property dispositions and impairment losses, net		0.1		—		12.0		—

Operating income		1,173.0		3.1		1,533.8		4.0
Interest expense, net		262.6		0.7		309.2		0.8
Loss on debt extinguishment		—		—		49.1		0.1
Other income, net		(62.4)		(0.2)		(8.3)		—
Income before income taxes		972.8		2.6		1,183.8		3.1
Income tax expense		232.8		0.6		313.1		0.8
Net income		$	740.0	2.0	%	$	870.7	2.3	%

Basic net income per Class A common share		$	1.27			$	1.57
Diluted net income per Class A common share		1.26				1.49

Net Sales and Other Revenue

Net sales and other revenue increased ~~4.7%~~9.6% to ~~$16,505.7~~$23,310.3 million for the ~~second~~first quarter of fiscal ~~2021~~2022 from ~~$15,757.6~~$21,269.4 million for the ~~second~~first quarter of fiscal ~~2020.~~2021. The increase in Net sales and other revenue was ~~primarily~~ driven by our ~~1.5%~~6.8% increase in identical sales ~~which includes an increase in pharmacy~~and higher fuel sales, ~~partially from~~with retail price inflation contributing to the identical sales increase.

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~~administering COVID-19 vaccines, an increase in sales related to the stores acquired and opened since the second quarter of fiscal 2020 and higher fuel sales.~~

Net sales and other revenue decreased 1.9% to $37,775.1 million for the first 28 weeks of fiscal 2021 from $38,509.2 million for the first 28 weeks of fiscal 2020. The decrease in Net sales and other revenue was primarily driven by our 5.3% decrease in identical sales, which was partially offset by an increase in pharmacy sales, primarily from administering COVID-19 vaccines, and an increase in sales related to the stores opened since the first 28 weeks of fiscal 2020 and higher fuel sales.

Identical Sales, Excluding Fuel

Identical 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. Acquired stores become identical on the one-year anniversary date of the acquisition. Identical sales for the ~~12 and 28~~16 weeks ended ~~September 11, 2021~~June 18, 2022 and the ~~12 and 28~~16 weeks ended ~~September 12, 2020,~~June 19, 2021, respectively, were:

12 weeks ended 28 weeks ended
September 11,
2021 September 12,
2020 September 11,
2021 September 12,
2020
Identical sales, excluding fuel 1.5% 13.8% (5.3)% 21.0%

16 weeks ended

June 18,
2022

June 19,
2021

Identical sales, excluding fuel

6.8%

(10.0)%

The following table represents Net sales and other revenue by product type (dollars in millions):


	16 weeks ended
	June 18, 2022				June 19, 2021
	Amount (1)		% of Total		Amount (1)		% of Total
Non-perishables (2)	$	11,446.0	49.1	%	$	10,742.7	50.5	%
Fresh (3)	7,881.5		33.8		7,412.5		34.9
Pharmacy	1,923.5		8.3		1,728.6		8.1
Fuel	1,654.7		7.1		1,049.3		4.9
Other (4)	404.6		1.7		336.3		1.6
Net sales and other revenue	$	23,310.3	100.0	%	$	21,269.4	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 primarily of wholesale revenue to third parties, commissions and other miscellaneous revenue.

Gross ~~Profit~~Margin

Gross ~~profit~~margin represents the portion of Net sales and other revenue remaining after deducting Cost of sales during the period, including purchase and distribution costs. These costs include, among other things, purchasing and sourcing costs, inbound freight costs, product quality testing costs, warehouse and distribution costs, Own Brands program costs and digital-related delivery and handling costs. Advertising, promotional expenses and vendor allowances are also components of Cost of sales.

Gross ~~profit~~ margin rate decreased to ~~28.6%~~28.1% during the ~~second~~first quarter of fiscal ~~2021~~2022 compared to ~~29.0%~~29.1% during the ~~second~~first quarter of fiscal ~~2020.~~2021. Excluding the impact of fuel and LIFO expense, gross ~~profit~~ margin was flat compared to the second quarter of fiscal 2020, primarily due to higher product, supply chain and advertising costs, offset by benefits related to productivity initiatives, favorable product mix and improved pharmacy margins related to administering COVID-19 vaccines.

~~Gross profit margin~~rate decreased ~~to 28.9% during the first 28 weeks of fiscal 2021 compared to 29.5% during the first 28 weeks of fiscal 2020. Excluding the impact of fuel, gross profit margin increased five~~27 basis points compared to the first ~~28 weeks~~quarter of fiscal ~~2020.~~2021. The ~~increase in gross profit margin~~decrease was ~~primarily~~ driven by fewer COVID-19 vaccines in the first quarter of fiscal 2022 compared to 2021 as the gross margin rate benefits from our productivity initiatives ~~favorable product mix and improved pharmacy margins related to administering COVID-19 vaccines, partially~~ offset ~~by sales deleverage and higher~~inflationary increases in product and supply chain costs.

Selling and Administrative Expenses

Selling and administrative expenses consist primarily of store level costs, including wages, employee benefits, rent, depreciation and utilities, in addition to certain back-office expenses related to our corporate and division offices.

Selling and administrative expenses ~~were 25.6%~~decreased to 25.2% of Net sales and other revenue during the ~~second~~first quarter of fiscal ~~2021 and~~2022 compared to 25.9% during the ~~second~~first quarter of fiscal ~~2020.~~2021. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased 55 basis points during the second quarter of fiscal 2021 compared to the second quarter of fiscal 2020. The increase in Selling and administrative expenses as a percentage

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of Net sales and other revenue was primarily attributable to employee costs, depreciation and other expenses related to our investments in our digital and omni-channel capabilities and strategic priorities. The increase in employee costs was the result of additional labor related to reopening fresh departments, market-driven retail wage rate increases and higher equity-based compensation expense. These increases were partially offset by lower COVID-19 related costs and execution of productivity initiatives.

Selling and administrative expenses increased to 25.8% of Net sales and other revenue during the first 28 weeks of fiscal 2021 compared to 25.5% of Net sales and other revenue for the first 28 weeks of fiscal 2020. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue ~~increased 90~~decreased 15 basis ~~points during the first 28 weeks of fiscal 2021 compared to the first 28 weeks of fiscal 2020.~~points. The ~~increase~~decrease in Selling and administrative expenses ~~as a percentage of Net sales and other revenue~~ was primarily attributable to ~~sales deleverage, together with higher employee costs, depreciation~~lower COVID-19 related expenses and ~~other~~the execution of productivity initiatives, partially offset by expenses related to ~~our~~the Company's investments in ~~our~~its digital and ~~omni-channel~~omnichannel capabilities and other strategic ~~priorities.~~priorities, increased employee costs and higher depreciation and amortization. The increase in employee costs was the result of ~~additional labor related to reopening of fresh departments,~~ market-driven ~~retail~~ wage rate increases and higher equity-based compensation expense. ~~These increases were partially offset by lower COVID-19 related costs and execution of productivity initiatives.~~

(Gain) Loss on Property Dispositions and Impairment Losses, Net

For the ~~second~~first quarter of fiscal ~~2021,~~2022, net gain on property dispositions and impairment losses was ~~$0.2~~$79.4 million, primarily driven by ~~$6.2~~$80.0 million of gains from the sale of real estate assets, partially offset by $6.0 million of intangible asset impairment. For the second quarter of fiscal 2020, net gain on property dispositions and impairment losses was $18.3 million, primarily driven by $20.0 million of gains from the sale of assets, partially offset by $1.7$0.6 million of asset impairments.

For the first ~~28 weeks~~quarter of fiscal 2021, net loss on property dispositions and impairment losses was ~~$0.1~~$0.3 million, primarily driven by $15.9 million of asset impairments, primarily related to right-of-use assets and intangible assets, partially offset by $15.8 million of gains from the sale of assets. For the first 28 weeks of fiscal 2020, net loss on property dispositions and impairment losses was $12.0 million, primarily driven by $22.8$9.9 million of asset impairments, primarily related to right-of-use assets, partially offset by ~~$10.8~~$9.6 million of gains from the sale of real estate assets.

Interest Expense, Net

Interest expense, net was ~~$109.3~~$138.9 million during the ~~second~~first quarter of fiscal ~~2021~~2022 compared to ~~$128.6~~$153.3 million during the ~~second~~first quarter of fiscal ~~2020.~~2021. The decrease in interest expense was primarily attributable to lower average outstanding borrowings and lower average interest rates. The weighted average interest rate during the ~~second~~first quarter of fiscal ~~2021~~2022 was 5.4%, excluding deferred financing costs and original issue discount, compared to ~~6.0%~~5.6% during the ~~second~~first quarter of fiscal ~~2020.~~

Interest expense, net was $262.6 million during the first 28 weeks of fiscal 2021 compared to $309.2 million during the first 28 weeks of fiscal 2020. The decrease in interest expense was primarily attributable to lower average outstanding borrowings and lower average interest rates. The weighted average interest rate during first 28 weeks of fiscal 2021 was 5.5%, excluding deferred financing costs and original issue discount, compared to 6.0% during the first 28 weeks of fiscal 2020.

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~~Loss of Debt Extinguishment~~

There was no loss on debt extinguishment during both the second quarter of fiscal 2021 and first 28 weeks of fiscal 2021, compared to loss on debt extinguishment of $49.1 million during both the second quarter of fiscal 2020 and first 28 weeks of fiscal 2020. The loss on debt extinguishment during the second quarter and first 28 weeks of fiscal 2020 primarily consisted of a redemption premium payment and write-off of debt discounts associated with the redemption of the Company's 6.625% Senior Unsecured Notes due 2024 (the "2024 Notes").2021.

Other Income, Net

For the ~~second~~first quarter of fiscal ~~2021,~~2022, Other income, net was ~~$18.9~~$6.3 million compared to ~~$11.4~~$43.5 million for the ~~second~~first quarter of fiscal ~~2020.~~2021. Other income, net during the ~~second~~first quarter of fiscal ~~2021~~2022 was primarily driven by non-service cost components of net pension and post-retirement expense and income related to our equity investment, partially offset by unrealized losses from non-operating investments. Other income, net during the ~~second~~first quarter ~~of fiscal 2020 was primarily driven by non-service cost components of net pension and post-retirement expense and income related to our equity investment.~~

~~For the first 28 weeks of fiscal 2021, Other income, net was $62.4 million compared to $8.3 million for the first 28 weeks of fiscal 2020. Other income, net during the first 28 weeks~~ of fiscal 2021 was primarily driven by ~~non-service cost components of net pension and post-retirement expense,~~ realized gains from non-operating investments, ~~and income related to our equity investment, partially offset by unrealized losses from non-operating investments. Other income, net during the first 28 weeks of fiscal 2020 was primarily driven by~~ non-service cost components of net pension and post-retirement expense and income related to our equity investment, partially offset by ~~recognized losses on interest rate swaps and~~ unrealized losses from non-operating investments.

Income Taxes

Income tax expense was ~~$100.3~~$143.3 million, representing a 25.4% effective tax rate, for the second quarter of fiscal 2021. Income tax expense was $111.2 million, representing a 28.1% effective tax rate, for the second quarter of fiscal 2020. The decrease in the effective tax rate was primarily driven by nondeductible transaction-related costs incurred during the second quarter of fiscal 2020.

~~Income tax expense was $232.8 million, representing a 23.9%~~22.8% effective tax rate, for the first ~~28 weeks~~quarter of fiscal ~~2021.~~2022. Income tax expense was ~~$313.1~~$132.5 million, representing a ~~26.4%~~23.0% effective tax rate, for the first ~~28 weeks~~quarter of fiscal 2020. The decrease in the effective income tax rate was primarily driven by the recognition of discrete state income tax benefits during the first 28 weeks of fiscal 2021 and certain nondeductible transaction-related costs incurred during the first 28 weeks of fiscal 2020.2021.

We currently expect our annual effective tax rate for fiscal ~~2021~~2022 to be in the range of approximately 23% to 24%.

Net Income and Adjusted Net Income

Net income was ~~$295.2~~$484.2 million, or $0.52 per Class A common share, during the second quarter of fiscal 2021 compared to $284.5 million, or $0.49 per Class A common share, during the second quarter of fiscal 2020. Adjusted net income was $369.5 million, or $0.64 per Class A common share, during the second quarter of fiscal 2021 compared to $356.4 million, or $0.60 per Class A common share, during the second quarter of fiscal 2020.

~~Net income was $740.0 million, or $1.26~~$0.84 per Class A common share, during the first ~~28 weeks~~quarter of fiscal ~~2021~~2022 compared to ~~$870.7,~~$444.8 million, or ~~$1.49~~$0.78 per Class A common share, during the first ~~28 weeks~~quarter of fiscal ~~2020.~~2021. Adjusted net income was ~~$887.0~~$582.0 million, or ~~$1.53~~$1.00 per Class A common share, during the first ~~28 weeks~~quarter of fiscal ~~2021~~2022 compared to ~~$1,157.6~~$517.5 million, or ~~$1.95~~$0.89 per Class A common share, during the first ~~28 weeks~~quarter of fiscal ~~2020.~~2021.

Adjusted EBITDA

For the first quarter of fiscal 2022, Adjusted EBITDA was $1,420.3 million, or 6.1% of Net sales and other revenue, compared to $1,308.1 million, or 6.2% of Net sales and other revenue, for the first quarter of fiscal 2021.

2724

Table of Contents

~~Adjusted EBITDA~~

For the second quarter of fiscal 2021, Adjusted EBITDA was $965.4 million, or 5.8% of Net sales and other revenue, compared to $948.4 million, or 6.0% of Net sales and other revenue, for the second quarter of fiscal 2020. The increase in Adjusted EBITDA was primarily the result of an increase in Net sales and other revenue, partially offset by an increase in Selling and administrative expenses. For the first 28 weeks of fiscal 2021, Adjusted EBITDA was $2,273.5 million, or 6.0% of Net sales and other revenue, compared to $2,639.4 million, or 6.9% of Net sales and other revenue for the first 28 weeks of fiscal 2020. The decrease in Adjusted EBITDA was primarily the result of a decrease in Net sales and other revenue.

~~Supplemental Two-Year Results - Comparison of Second Quarter of Fiscal 2021 to Second Quarter of Fiscal 2019~~

The following table provides a comparison of the second quarter of fiscal 2021 to the second quarter of fiscal 2019 for certain financial measures, including a compounded annual growth rate ("CAGR"), to demonstrate the two-year growth in our business. We believe these supplemental comparisons provide meaningful and useful information to investors about the trends in our business relative to pre-COVID-19 pandemic periods. These comparisons should not be reviewed in isolation or considered substitutes for our financial results included elsewhere in this Form 10-Q.


	Second Quarter of Fiscal 2021 Supplemental Two-Year Results
~~Identical sales two-year stacked (1)~~	~~15.3~~	%

~~Net income per Class A common share two-year CAGR (2)~~	~~1.0~~	%
~~Adjusted net income per Class A common share two-year CAGR~~	~~94.0~~	%
~~Net income two-year CAGR (2)~~	~~0.1~~	%
~~Adjusted net income two-year CAGR~~	~~93.0~~	%
~~Adjusted EBITDA two-year CAGR~~	~~30.4~~	%
~~Margins:~~
~~Gross profit (1)~~	~~Increased 85 basis points~~
~~Selling and administrative expenses (1)~~	~~Decreased 120 basis points~~

~~(1) Excluding fuel.~~

~~(2) The net income per Class A common share two-year CAGR and net income two-year CAGR are impacted by gains related to sale leaseback transactions in the second quarter of fiscal 2019.~~

Net sales and other revenue was $16.5 billion during the second quarter of fiscal 2021 compared to $14.2 billion during the second quarter of fiscal 2019. The increase in sales compared to the second quarter of fiscal 2019 was primarily due to the 15.3% increase in two-year stacked identical sales. Identical sales were driven in part by the 248% two-year stacked increase in digital sales.

Gross profit margin was 28.6% during the second quarter of fiscal 2021 compared to 27.8% during the second quarter of fiscal 2019. Excluding the impact of fuel, gross profit margin increased by approximately 85 basis points compared to the second quarter of fiscal 2019, primarily driven by sales leverage, improvements in shrink expense, productivity initiatives and improved pharmacy margins related to administering COVID-19 vaccines, partially offset by growth in digital sales and an increase in supply chain costs and COVID-19 expenses.

~~Table of Contents~~

Selling and administrative expenses were 25.6% of sales during the second quarter of fiscal 2021 compared to 26.8% of sales for the second quarter of fiscal 2019. Excluding the impact of fuel, selling and administrative expenses as a percentage of sales decreased approximately 120 basis points primarily due to sales leverage and the execution of productivity initiatives, partially offset by increases in employee costs and other expenses related to our investments in our digital and omni-channel capabilities and strategic priorities and increased market driven retail wage rates, higher equity-based compensation expense as well as incremental COVID-19 expenses.

~~Table of Contents~~

Reconciliation of Non-GAAP Measures

The following tables reconcile Net income to Adjusted net income, and Net income per Class A common share to Adjusted net income per Class A common share (in millions, except per share data):


		12 weeks ended							16 weeks ended
		September 11, 2021			September 12, 2020		September 7, 2019 Supplemental				June 18, 2022		June 19, 2021
Numerator:	Numerator:									Numerator:

Net income	Net income	$	295.2		$	284.5	$	294.8		Net income	$	484.2	$	444.8
Adjustments:	Adjustments:									Adjustments:
(Gain) loss on interest rate and commodity hedges, net (d)		(1.2)			1.4		—
Facility closures and transformation (1)(b)		14.8			6.1		—
Acquisition and integration costs (2)(b)		3.4			2.2		7.5
Gain on interest rate swaps and energy hedges, net (d)										Gain on interest rate swaps and energy hedges, net (d)	(18.5)		(6.3)
Business transformation (1)(b)										Business transformation (1)(b)	33.8		20.8

Equity-based compensation expense (b)	Equity-based compensation expense (b)	26.8			9.3		6.5			Equity-based compensation expense (b)	35.3		22.2
(Gain) loss on property dispositions and impairment losses, net ~~(3)~~	(Gain) loss on property dispositions and impairment losses, net ~~(3)~~	(0.2)			(18.3)		(435.5)			(Gain) loss on property dispositions and impairment losses, net ~~(3)~~	(79.4)		0.3
LIFO expense (a)	LIFO expense (a)	14.6			10.1		5.8			LIFO expense (a)	62.1		14.5

Government-mandated incremental COVID-19 pandemic related pay (4)(b)		18.3			—		—
Civil disruption related costs (5)(b)		—			(1.9)		—
Transaction and reorganization costs related to Convertible Preferred Stock issuance and initial public offering (b)		—			4.1		—
Government-mandated incremental COVID-19 pandemic related pay (2)(b)										Government-mandated incremental COVID-19 pandemic related pay (2)(b)	5.9		29.1

Amortization of debt discount and deferred financing costs (c)	Amortization of debt discount and deferred financing costs (c)	4.7			4.7		35.4			Amortization of debt discount and deferred financing costs (c)	5.1		6.4
Loss on debt extinguishment		—			49.1		23.1

Amortization of intangible assets resulting from acquisitions (b)	Amortization of intangible assets resulting from acquisitions (b)	11.5			13.1		68.9			Amortization of intangible assets resulting from acquisitions (b)	15.4		16.1

Miscellaneous adjustments (6)(f)		5.1			13.3		24.3
Miscellaneous adjustments (3)(f)										Miscellaneous adjustments (3)(f)	67.0		(7.3)
Tax impact of adjustments to Adjusted net income	Tax impact of adjustments to Adjusted net income	(23.5)			(21.3)		68.4			Tax impact of adjustments to Adjusted net income	(28.9)		(23.1)
Adjusted net income	Adjusted net income	$	369.5		$	356.4	$	99.2		Adjusted net income	$	582.0	$	517.5

Denominator:	Denominator:									Denominator:

Weighted average Class A common shares outstanding - diluted	Weighted average Class A common shares outstanding - diluted	573.0			582.9		580.6			Weighted average Class A common shares outstanding - diluted	576.3		571.4
Adjustments:	Adjustments:									Adjustments:

Restricted stock units and awards ~~(7)~~(4)	Restricted stock units and awards ~~(7)~~(4)	8.1			9.6		7.6			Restricted stock units and awards ~~(7)~~(4)	6.9		9.4
Adjusted weighted average Class A common shares outstanding - diluted	Adjusted weighted average Class A common shares outstanding - diluted	581.1			592.5		588.2			Adjusted weighted average Class A common shares outstanding - diluted	583.2		580.8

Adjusted net income per Class A common share - diluted	Adjusted net income per Class A common share - diluted	$	0.64		$	0.60	$	0.17		Adjusted net income per Class A common share - diluted	$	1.00	$	0.89

Supplemental Two-Year CAGR:
Net income two-year CAGR		0.1		%
Adjusted net income two-year CAGR		93.0		%


	16 weeks ended
	June 18, 2022		June 19, 2021
Net income per Class A common share - diluted	$	0.84	$	0.78

Non-GAAP adjustments (5)	0.17		0.13
Restricted stock units and awards (4)	(0.01)		(0.02)
Adjusted net income per Class A common share - diluted	$	1.00	$	0.89

Table of Contents

12 weeks ended
September 11,
2021 September 12,
2020 September 7, 2019
Supplemental
Net income per Class A common share - diluted $ 0.52 $ 0.49 $ 0.51
Non-GAAP adjustments (8) 0.13 0.12 (0.33)
Restricted stock units and awards (7) (0.01) (0.01) (0.01)
Adjusted net income per Class A common share - diluted $ 0.64 $ 0.60 $ 0.17
Supplemental Two-Year CAGR:
Net income per Class A common share two-year CAGR 1.0 %
Adjusted net income per Class A common share two-year CAGR 94.0 %

The following table is a reconciliation of Adjusted net income to Adjusted EBITDA:


		12 weeks ended							16 weeks ended
		September 11, 2021			September 12, 2020		September 7, 2019 Supplemental				June 18, 2022		June 19, 2021
Adjusted net income ~~(9)~~(6)	Adjusted net income ~~(9)~~(6)	$	369.5		$	356.4	$	99.2		Adjusted net income ~~(9)~~(6)	$	582.0	$	517.5
Tax impact of adjustments to Adjusted net income	Tax impact of adjustments to Adjusted net income	23.5			21.3		(68.4)			Tax impact of adjustments to Adjusted net income	28.9		23.1
Income tax expense	Income tax expense	100.3			111.2		81.9			Income tax expense	143.3		132.5
Amortization of debt discount and deferred financing costs (c)	Amortization of debt discount and deferred financing costs (c)	(4.7)			(4.7)		(35.4)			Amortization of debt discount and deferred financing costs (c)	(5.1)		(6.4)
Interest expense, net	Interest expense, net	109.3			128.6		177.5			Interest expense, net	138.9		153.3
Amortization of intangible assets resulting from acquisitions (b)	Amortization of intangible assets resulting from acquisitions (b)	(11.5)			(13.1)		(68.9)			Amortization of intangible assets resulting from acquisitions (b)	(15.4)		(16.1)
Depreciation and amortization (e)	Depreciation and amortization (e)	379.0			348.7		381.7			Depreciation and amortization (e)	547.7		504.2
Adjusted EBITDA	Adjusted EBITDA	$	965.4		$	948.4	$	567.6		Adjusted EBITDA	$	1,420.3	$	1,308.1

Supplemental Two-Year CAGR:
Adjusted EBITDA two-year CAGR		30.4		%

(1) Includes costs ~~related to closures of operating facilities and~~associated with third-party consulting fees related to our strategic priorities and associated business ~~transformation.~~transformation, as well as closures of operating facilities.

(2) Related to conversion activities and related costs associated with integrating acquired businesses. Also includes expenses related to management fees in prior periods paid in connection with acquisition and financing activities.

~~(3) Primarily due to gains related to sale leaseback transactions in the second quarter of fiscal 2019.~~

~~(4)~~ Represents incremental pay that is legislatively required in certain municipalities in which we operate.

~~(5) Primarily includes costs related to store damage, inventory losses and community support as a result of the civil disruption during late May 2020 and early June 2020 in certain markets.~~

~~Table of Contents~~

~~(6)~~(3) Miscellaneous adjustments include the following (see table below):


		12 weeks ended							16 weeks ended
		September 11, 2021		September 12, 2020		September 7, 2019 Supplemental			June 18, 2022		June 19, 2021
Non-cash lease-related adjustments	Non-cash lease-related adjustments	$	1.0	$	(0.1)	$	4.4	Non-cash lease-related adjustments	$	1.2	$	2.1
Lease and lease-related costs for surplus and closed stores	Lease and lease-related costs for surplus and closed stores	6.5		10.8		5.2		Lease and lease-related costs for surplus and closed stores	7.3		10.2

Net realized and unrealized (gain) loss on non-operating investments		12.8		0.2		10.8

Net realized and unrealized loss (gain) on non-operating investments								Net realized and unrealized loss (gain) on non-operating investments	14.0		(22.5)
Certain legal and regulatory accruals and settlements, net								Certain legal and regulatory accruals and settlements, net	32.8		—
Acquisition and integration costs								Acquisition and integration costs	0.5		3.5
Other (i)	Other (i)	(15.2)		2.4		3.9		Other (i)	11.2		(0.6)
Total miscellaneous adjustments	Total miscellaneous adjustments	$	5.1	$	13.3	$	24.3	Total miscellaneous adjustments	$	67.0	$	(7.3)

(i) Primarily includes adjustments for ~~pension settlement gain, certain legal and regulatory accruals,~~ unconsolidated equity investments and ~~certain contract termination costs.~~other costs not considered in our core performance.

~~(7)~~(4) Represents incremental unvested RSUs and unvested RSAs to adjust the diluted weighted average Class A common shares outstanding during each respective period to the fully outstanding RSUs and RSAs as of the end of each respective period.

~~(8)~~(5) Reflects the per share impact of Non-GAAP adjustments for each period. See the reconciliation of Net income to Adjusted net income above for further details.

~~(9)~~(6) See the reconciliation of Net income to Adjusted net income above for further details.

Non-GAAP adjustment classifications within the Consolidated Statement of Operations:

(a) Cost of sales

(b) Selling and administrative expenses

~~(d) (Gain) loss on interest rate and commodity hedges, net:~~

12 weeks ended
September 11,
2021 September 12,
2020 September 7, 2019
Supplemental
Cost of sales $ (1.2) $ 1.0 $ —
Other income, net — 0.4 —
Total (Gain) loss on interest rate and commodity hedges, net $ (1.2) $ 1.4 $ —

~~(e) Depreciation and amortization:~~

12 weeks ended
September 11,
2021 September 12,
2020 September 7, 2019
Supplemental
Cost of sales $ 36.0 $ 40.1 $ 38.0
Selling and administrative expenses 343.0 308.6 343.7
Total Depreciation and amortization $ 379.0 $ 348.7 $ 381.7

~~(f) Miscellaneous adjustments:~~

12 weeks ended
September 11,
2021 September 12,
2020 September 7, 2019
Supplemental
Selling and administrative expenses $ 3.4 $ 9.9 $ 9.6
Other income, net 1.7 3.4 14.7
Total Miscellaneous adjustments $ 5.1 $ 13.3 $ 24.3

~~Table of Contents~~

28 weeks ended
September 11,
2021 September 12,
2020 September 7, 2019
Supplemental
Numerator:
Net income $ 740.0 $ 870.7 $ 343.8
Adjustments:
(Gain) loss on interest rate and commodity hedges, net (d) (7.5) 25.9 0.3
Facility closures and transformation (1)(b) 35.6 15.9 —
Acquisition and integration costs (2)(b) 6.9 8.5 33.6
Equity-based compensation expense (b) 49.0 28.3 17.6
Loss (gain) on property dispositions and impairment losses, net (3) 0.1 12.0 (464.0)
LIFO expense (a) 29.1 23.2 16.3
Discretionary COVID-19 pandemic related costs (4)(b) — 89.9 —
Government-mandated incremental COVID-19 pandemic related pay (5)(b) 47.4 — —
Civil disruption related costs (6)(b) — 13.0 —
Transaction and reorganization costs related to Convertible Preferred Stock issuance and initial public offering (b) — 24.4 —
Amortization of debt discount and deferred financing costs (c) 11.1 11.2 43.8
Loss on debt extinguishment — 49.1 65.8
Amortization of intangible assets resulting from acquisitions (b) 27.6 30.6 161.7
Miscellaneous adjustments (7)(f) (5.7) 47.4 33.1
Tax impact of adjustments to Adjusted net income (46.6) (92.5) 23.7
Adjusted net income $ 887.0 $ 1,157.6 $ 275.7
Denominator:
Weighted average Class A common shares outstanding - diluted 470.6 583.3 580.0
Adjustments:
Convertible Preferred Stock (8) 101.6 — —
Restricted stock units and awards (9) 8.8 9.2 8.2
Adjusted weighted average Class A common shares outstanding - diluted 581.0 592.5 588.2
Adjusted net income per Class A common share - diluted $ 1.53 $ 1.95 $ 0.47
Supplemental Two-Year CAGR:
Net income two-year CAGR 46.7 %
Adjusted net income two-year CAGR 79.4 %

~~Table of Contents~~

28 weeks ended
September 11,
2021 September 12,
2020 September 7, 2019
Supplemental
Net income per Class A common share - diluted $ 1.26 $ 1.49 $ 0.59
Convertible Preferred Stock (8) 0.03 — —
Non-GAAP adjustments (10) 0.26 0.49 (0.11)
Restricted stock units and awards (9) (0.02) (0.03) (0.01)
Adjusted net income per Class A common share - diluted $ 1.53 $ 1.95 $ 0.47
Supplemental Two-Year CAGR:
Net income per Class A common share two-year CAGR 46.1 %
Adjusted net income per Class A common share two-year CAGR 80.4 %

~~The following table is a reconciliation of Adjusted net income to Adjusted EBITDA:~~

28 weeks ended
September 11,
2021 September 12,
2020 September 7, 2019
Supplemental
Adjusted net income (11) $ 887.0 $ 1,157.6 $ 275.7
Tax impact of adjustments to Adjusted net income 46.6 92.5 (23.7)
Income tax expense 232.8 313.1 97.6
Amortization of debt discount and deferred financing costs (c) (11.1) (11.2) (43.8)
Interest expense, net 262.6 309.2 402.7
Amortization of intangible assets resulting from acquisitions (b) (27.6) (30.6) (161.7)
Depreciation and amortization (e) 883.2 808.8 897.6
Adjusted EBITDA $ 2,273.5 $ 2,639.4 $ 1,444.4
Supplemental Two-Year CAGR:
Adjusted EBITDA two-year CAGR 25.5 %

~~(1) Includes costs related to closures of operating facilities and third-party consulting fees related to our strategic priorities and associated business transformation.~~

~~(3) Primarily due to gains related to sale leaseback transactions in the second quarter of fiscal 2019.~~

(4) Includes $53 million of charitable contributions to our communities for hunger relief and $36.9 million in final reward payments to front-line associates at the end of the first quarter of fiscal 2020.

~~(5) Represents incremental pay that is legislatively required in certain municipalities in which we operate.~~

~~(6) Primarily includes costs related to store damage, inventory losses and community support as a result of the civil disruption during late May 2020 and early June 2020 in certain markets.~~

~~Table of Contents~~

~~(7) Miscellaneous adjustments include the following (see table below):~~

28 weeks ended
September 11,
2021 September 12,
2020 September 7, 2019
Supplemental
Non-cash lease-related adjustments $ 3.1 $ 1.9 $ 6.3
Lease and lease-related costs for surplus and closed stores 16.7 29.5 12.0
Net realized and unrealized (gain) loss on non-operating investments (9.7) 4.7 7.5
Other (i) (15.8) 11.3 7.3
Total miscellaneous adjustments $ (5.7) $ 47.4 $ 33.1

~~(i) Primarily includes adjustments for pension settlement gain, certain legal and regulatory accruals, unconsolidated equity investments and certain contract termination costs.~~

(8) Represents the conversion of Convertible Preferred Stock to the fully outstanding as-converted Class A common shares as of the end of each respective period, for periods in which the Convertible Preferred Stock is antidilutive under GAAP.

(9) Represents incremental unvested RSUs and unvested RSAs to adjust the diluted weighted average Class A common shares outstanding during each respective period to the fully outstanding RSUs and RSAs as of the end of each respective period.

~~(10) Reflects the per share impact of Non-GAAP adjustments for each period. See the reconciliation of Net income to Adjusted net income above for further details.~~

~~(11) See the reconciliation of Net income to Adjusted net income above for further details.~~

~~Non-GAAP adjustment classifications within the Consolidated Statement of Operations:~~

~~(a) Cost of sales~~

~~(b) Selling and administrative expenses~~

~~(c) Interest expense, net~~

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Table of Contents

(d) ~~(Gain) loss~~Gain on interest rate swaps and ~~commodity~~energy hedges, net:


		28 weeks ended						16 weeks ended
		September 11, 2021		September 12, 2020		September 7, 2019 Supplemental				June 18, 2022		June 19, 2021
Cost of sales	Cost of sales	$	(7.8)	$	6.5	$	0.3		Cost of sales	$	(8.9)	$	(5.2)
Selling and administrative expenses									Selling and administrative expenses	(2.9)		(1.4)
Other income, net	Other income, net	0.3		19.4		—			Other income, net	(6.7)		0.3
Total (Gain) loss on interest rate and commodity hedges, net		$	(7.5)	$	25.9	$	0.3
Total Gain on interest rate swaps and energy hedges, net									Total Gain on interest rate swaps and energy hedges, net	$	(18.5)	$	(6.3)

(e) Depreciation and amortization:


		28 weeks ended						16 weeks ended
		September 11, 2021		September 12, 2020		September 7, 2019 Supplemental				June 18, 2022		June 19, 2021
Cost of sales	Cost of sales	$	86.8	$	94.1	$	90.0		Cost of sales	$	51.5	$	50.8
Selling and administrative expenses	Selling and administrative expenses	796.4		714.7		807.6			Selling and administrative expenses	496.2		453.4
Total Depreciation and amortization	Total Depreciation and amortization	$	883.2	$	808.8	$	897.6		Total Depreciation and amortization	$	547.7	$	504.2

(f) Miscellaneous adjustments:


		28 weeks ended						16 weeks ended
		September 11, 2021		September 12, 2020		September 7, 2019 Supplemental				June 18, 2022		June 19, 2021
Selling and administrative expenses	Selling and administrative expenses	$	10.2	$	34.7	$	16.7		Selling and administrative expenses	$	47.8	$	10.3
Other income, net	Other income, net	(15.9)		12.7		16.4			Other income, net	19.2		(17.6)
Total Miscellaneous adjustments	Total Miscellaneous adjustments	$	(5.7)	$	47.4	$	33.1		Total Miscellaneous adjustments	$	67.0	$	(7.3)

LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth the major sources and uses of cash and cash equivalents and restricted cash for each period (in millions):


		28 weeks ended					16 weeks ended
		September 11, 2021		September 12, 2020			June 18, 2022		June 19, 2021
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	2,900.4	$	2,431.9	Cash and cash equivalents and restricted cash at end of period	$	3,263.6	$	2,224.4
Cash flows provided by operating activities	Cash flows provided by operating activities	2,137.7		2,720.8		Cash flows provided by operating activities	991.9		1,059.0
Cash flows used in investing activities	Cash flows used in investing activities	(790.5)		(687.1)		Cash flows used in investing activities	(551.4)		(493.0)
Cash flows used in financing activities	Cash flows used in financing activities	(214.4)		(80.7)		Cash flows used in financing activities	(129.5)		(109.2)

Net Cash Provided by Operating Activities

Net cash provided by operating activities was ~~$2,137.7~~$991.9 million for the first ~~28 weeks~~quarter of fiscal ~~2021~~2022 compared to ~~$2,720.8~~$1,059.0 million for the first ~~28 weeks~~quarter of fiscal ~~2020.~~2021. The decrease in cash flow from operations compared to the first ~~28 weeks~~quarter of fiscal ~~2020~~2021 was due to changes in working capital primarily related to inventory and accounts payable ~~as our business experienced significantly elevated demand during the first 28 weeks of fiscal 2020~~ and ~~a deferral of approximately $270 million of the employer-paid portion of social security taxes in the first 28 weeks of fiscal 2020 together with lower EBITDA during the first 28 weeks of fiscal 2021.~~accrued salaries and wages. These decreases were partially offset by an increase in Adjusted EBITDA and less cash paid for interest and income taxes ~~of $94 million and $72 million, respectively, $75 million payment for the UFCW & Employers Midwest Pension Fund settlement in~~during the first ~~28 weeks~~quarter of fiscal ~~2020 and a decrease of $45.1 million in contributions to our defined benefit pension plans and post-retirement benefit plans.~~2022.

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Net Cash Used byin Investing Activities

Net cash used in investing activities was ~~$790.5~~$551.4 million for the first quarter of fiscal 2022 compared to $493.0 million for the first ~~28 weeks~~quarter of fiscal 2021 ~~compared to $687.1 million for the first 28 weeks of fiscal 2020.~~.

For the first ~~28 weeks~~quarter of fiscal ~~2021,~~2022, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $613.8 million partially offset by proceeds from the sale of long-lived assets of $71.8 million. Payments for property, equipment and intangibles in the first quarter of ~~$822.5~~fiscal 2022 included continued investment in our digital and technology platforms and the completion of 27 remodels. For the first quarter of fiscal 2021, cash used in investing activities consisted primarily of payments for property, equipment and intangibles, including lease buyouts, of $513.4 million and payments for business acquisitions of $23.5 million, partially offset by proceeds from the sale of long-lived assets of ~~$24.6~~$15.2 million. Payments for property, equipment and ~~equipment~~intangibles in the first ~~28 weeks~~quarter of fiscal 2021 included the opening of six new stores, completion of 76 remodels and increased investment in our digital technology. For the first 28 weeks of fiscal 2020, cash used in investing activities consisted primarily of payments for property and equipment of $702.9 million. Payments for property and equipment in the first 28 weeks of fiscal 2020 included the completion of 132 remodels and continued investment in our digital ~~technology.~~ and technology platforms, the opening of five new stores and the completion of 33 remodels.

For the full fiscal year of ~~2021,~~2022, we expect capital expenditures to be in the range of ~~$1.9~~$2.0 billion to ~~$2.0~~$2.1 billion.

Net Cash Used in Financing Activities

Net cash used in financing activities was ~~$214.4~~$129.5 million during the first ~~28 weeks~~quarter of fiscal ~~2021~~2022 compared to ~~$80.7~~$109.2 million during the first ~~28 weeks~~quarter of fiscal ~~2020~~2021.

Net cash used in financing activities during the first ~~28 weeks~~quarter of fiscal 2022 and the first quarter of fiscal 2021 consisted primarily of dividends paid on our Class A common stock and Convertible Preferred ~~Stock. Net cash used in financing activities during the first 28 weeks~~Stock, as well as tax withholding payments on vesting of ~~fiscal 2020 consisted primarily~~restricted stock units.

Dividends

The holders of Convertible Preferred Stock are entitled to a quarterly dividend at a rate per annum of 6.75% of the ~~$1.5 billion issuance of new Senior Unsecured Notes and $1.25 billion aggregate redemption of 2024 Notes and 2025 Notes, the $2.0 billion borrowing and subsequent repayment~~liquidation preference per share of the ~~ABL Facility,~~Convertible Preferred Stock. In addition, the ~~issuance~~holders of Convertible Preferred Stock will participate in cash dividends that we pay on our common stock to the extent that such cash dividends exceed $206.25 million per fiscal year. Cash dividends paid to holders of the Convertible Preferred Stock were $22.8 million and $29.5 million during the ~~repurchase~~first quarter of ~~outstanding~~fiscal 2022 and first quarter of fiscal 2021, respectively. On June 15, 2022, we declared a quarterly cash dividend of $11.7 million to holders of Convertible Preferred Stock, which was paid on June 30, 2022.

We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock. Cash dividends paid on our Class A common stock were $63.0 million ($0.12 per common share) and $46.5 million ($0.10 per common share) during the first quarter of fiscal 2022 and first quarter of fiscal 2021, respectively. On July 14, 2022, we announced the next quarterly dividend payment of $0.12 per share of Class A common stock to be paid on August 10, 2022 to stockholders of record as of the close of business on July 26, 2022.

~~Liquidity and Factors Affecting~~ Liquidity

We estimate our liquidity needs over the next 12 months to be ~~in the range of $4.75 billion to $5.25 billion,~~approximately $6,000 million, which includes anticipated requirements for incremental working capital, capital expenditures, pension obligations, interest payments and scheduled principal payments of debt, dividends on Class A common stock and Convertible Preferred Stock, operating leases and finance leases. Based on current operating trends, we believe that cash flows from operating activities and other sources of liquidity, including borrowings under our ABL Facility, will be adequate to meet our liquidity needs for the next 12 months and for the foreseeable future. We believe we have adequate cash flow to continue to maintain our current debt ratings and to respond effectively to competitive conditions. In

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addition, we may enter into refinancing and sale leaseback transactions from time to time. There can be no assurance, however, that our business will continue to generate cash flow at or above current levels or that we will maintain our ability to borrow under our ABL Facility.

The holders of Convertible Preferred Stock are entitled to a quarterly dividend at a rate per annum of 6.75% of the liquidation preference per share of the Convertible Preferred Stock. On March 15, 2021, June 15, 2021 and September 15, 2021, we declared quarterly cash dividends of $29.5 million, respectively, to holders of the Convertible Preferred Stock, which was paid on March 31, 2021, June 30, 2021 and September 30, 2021, respectively. In addition, the holders of Convertible Preferred Stock will participate in cash dividends that we pay on our common stock to the extent that such cash dividends exceed $206.25 million per fiscal year.

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We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock. During the first 28 weeks of fiscal 2021, we paid quarterly cash dividends of $0.10 per share of Class A common stock on May 10, 2021 and August 10, 2021, to stockholders of record as of the close of business on April 26, 2021 and July 26, 2021, respectively. On October 18, 2021, subsequent to the end of the second quarter of fiscal 2021, we announced a 20% increase to our quarterly dividend, which is now $0.12 per share of Class A common stock, payable on November 12, 2021 to stockholders of record as of the close of business on October 29, 2021.

As of ~~September 11, 2021,~~June 18, 2022, we had no borrowings outstanding under out ABL Facility and total availability of ~~$3,483.1~~$3,750.4 million (net of letter of credit usage).

~~Multiemployer Pension Plans~~

The American Rescue Plan Act ("ARP Act") establishes a special financial assistance program for financially troubled multiemployer pension plans. Under the ARP Act, eligible multiemployer plans can apply to receive a one-time cash payment in the amount projected by the Pension Benefit Guaranty Corporation ("PBGC") to pay pension benefits through the plan year ending 2051. The payment received by the multiemployer plan under this special financial assistance program would not be considered a loan and would not need to be paid back. Any financial assistance received by the multiemployer plan would need to be segregated from the other assets of the multiemployer plans and invested in investment grade bonds or other investments permitted by the PBGC.

Of the 27 multiemployer plans to which we contribute, 16 plans are classified as "Critical" or "Critical and Declining" and are potentially eligible for special financial assistance under the ARP Act. Though the amount of financial assistance that each of these 16 plans could receive will vary by plan, we currently estimate that these 16 plans represent over 90% of the $4.7 billion we estimated as our share of the underfunding of the 27 plans. On July 9, 2021, the PBGC issued its interim final rule with respect to the special financial assistance program. The PBGC interim final rule provides direction on the application requirements, identifies which plans will have priority, eligibility requirements, the determination of the amount of financial assistance to be provided and establishes conditions and restrictions that apply to plans that receive assistance. We are evaluating the interim final rule and have submitted comments during the 30-day comment period, and we expect the special financial assistance program to provide funding for the multiemployer plans to which we contribute to remain solvent through the next 25 to 30 years.

CRITICAL ACCOUNTING POLICIES

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. We have chosen accounting policies that we believe are appropriate to report accurately and fairly our operating results and financial position, and we apply those accounting policies in a fair and consistent manner. See the Critical Accounting Policies section included in our Annual Report on Form 10-K for the fiscal year ended February ~~27, 2021,~~26, 2022, filed with the SEC on April ~~28, 2021,~~26, 2022, for a discussion of our significant accounting policies.

RECENTLY ISSUED AND RECENTLY ADOPTED ACCOUNTING STANDARDS

See Note 1 - Basis of ~~presentation~~Presentation and ~~summary~~Summary of ~~significant accounting policies~~Significant Accounting Policies of our unaudited interim Condensed Consolidated Financial Statements located elsewhere in this Form 10-Q.

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Item 3 - Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our exposure to market risk from the information provided in our Annual Report on Form 10-K for the fiscal year ended February ~~27, 2021,~~26, 2022, filed with the SEC on April ~~28, 2021.~~26, 2022.

Item 4 - Controls and Procedures

Based on their evaluation of our disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the period covered by this Form 10-Q, our Principal Executive Officer and Principal Financial Officer concluded our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the ~~second~~first quarter of fiscal ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

The Company is subject from time to time to various claims and lawsuits arising in the ordinary course of business, including lawsuits involving trade practices, lawsuits alleging violations of state and/or federal wage and hour laws (including alleged violations of meal and rest period laws and alleged misclassification issues), real estate disputes ~~as well as~~and other matters. Some of these claims or suits purport or may be determined to be class actions and/or seek substantial damages. It is the opinion of the Company's management that although the amount of liability with respect to certain of the matters described in this Form 10-Q cannot be ascertained at this time, any resulting liability of these and other matters, including any punitive damages, will not have a material adverse effect on the Company's business or overall financial condition. See the matters under the caption Legal Proceedings in Note 65 - Commitments and ~~contingencies~~Contingencies and ~~off balance sheet arrangements~~Off Balance Sheet Arrangements in the unaudited interim Condensed Consolidated Financial Statements located elsewhere in this Form 10-Q.

Environmental Matters

As previously disclosed, we have been in negotiations to resolve an investigation being conducted by the Office of the Attorney General of the State of California, as well as the District Attorneys' offices of the counties of Contra Costa, Placer, Sacramento, San Joaquin, and Solano. The investigation has focused on whether or not we violated California regulations that govern the maintenance and operation of underground storage tanks located at our fueling stations within the state. In lieu of litigating the matter, we have agreed to implement certain enhancements to improve our compliance with the applicable regulations. We have reached an agreement in principle under which the Company will pay $6.9 million to settle the matter.

Item 1A - Risk Factors

There have been no material changes to the risk factors previously included in our Annual Report on Form 10-K for the fiscal year ended February ~~27, 2021,~~26, 2022, filed with the SEC on April ~~28, 2021,~~26, 2022, under the heading "Risk Factors."

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Sales of Equity Securities

~~None.~~On July 6, 2022, the Company received notices from certain holders of Convertible Preferred Stock to convert approximately 4,411 shares of Convertible Preferred Stock into shares of common stock. Each share of Convertible Preferred Stock is convertible at a rate of 58.064 shares of common stock (with cash delivered in lieu of any fractional shares of common stock). The Company issued 256,162 shares of common stock to such holders of Convertible Preferred Stock. As of the filing date of this Quarterly Report, including the shares of common stock as reported herein, the Company has issued, in the aggregate, approximately 61,489,721 shares of common stock to holders of Convertible Preferred Stock. The shares of common stock were issued in reliance on an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Act"), under Section 3(a)(9) of the Act.

(b) Use of Proceeds

None.

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Item 3 - Defaults Upon Senior Securities

None.

Item 4 - Mine Safety Disclosures

Not Applicable.

Item 5 - Other Information

~~None.~~

~~Table~~The Compensation Committee of ~~Contents~~the Board of Directors approved a form employment agreement for senior Company executives, as applicable, except for the Chief Executive Officer and Chief Financial Officer. Accordingly, effective July 20, 2022 (the "Effective Date"), the Company entered into respective employment agreements with Susan Morris, Executive Vice President and Chief Operations Officer, and Anuj Dhanda, Executive Vice President and Chief Technology Officer (each, a "New Employment Agreement" and collectively, the "New Employment Agreements"). The New Employment Agreements amend and restate the respective employment agreements of Ms. Morris and Mr. Dhanda dated May 1, 2019 (collectively, the "Original Employment Agreements") which were due to expire January 30, 2023.

The New Employment Agreements amend the Original Employment Agreements to, among others, make the following changes:

Term: The term of the New Employment Agreements shall continue until termination of the executive’s employment.

Termination provisions and benefits: The executive can terminate employment, subject to certain notice and cure provisions, on the basis of Good Reason (as defined in the New Employment Agreement) in the event of (i) a material reduction in the executive’s base salary or target bonus opportunity, unless such decrease is part of a temporary, uniform reduction in salary for all executive officers of the Company that is undertaken in the reasonable business judgment of the Board of Directors, based on the Company's financial performance or a reasonably anticipated economic downturn; (ii) relocation of the executive’s principal location of work to any location that is in excess of thirty (30) miles from the executive’s principal work location on the Effective Date; or (iii) a material diminution in the executive’s authority, responsibilities or duties. The executive shall also be entitled to receive the bonus (on a pro-rata basis) upon termination for Good Reason or without Cause (as defined in the New Employment Agreement).

In the event the executive's employment terminates due to death or Disability (as defined in the New Employment Agreement), the executive or the executive's estate (in the case of the executive’s death), shall be entitled to receive a lump sum payment equal to the earned but unpaid portion of any bonus earned in respect of any performance period that is completed prior to the executive’s death or Disability.

The New Employment Agreements contain various covenants, including covenants related to confidentiality, non-competition and non-solicitation.

Item 6 - Exhibits

~~3.1 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Albertsons Companies, Inc.~~

10.1 ~~Employment~~Lock-Up Agreement ~~dated as of August 4, 2021,~~ by and ~~between~~among Albertsons Companies, Inc. and ~~Sharon McCollam~~the other parties thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on ~~August 11, 2021)~~June 22, 2022)

10.2 Employment Agreement, dated July 20, 2022, between Albertsons Companies, Inc. and Anuj Dhanda

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10.3 Employment Agreement, dated July 20, 2022, between Albertsons Companies, Inc. and Susan Morris

31.1 Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of the Principal Executive Officer and of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EXHIBIT 101.INS - Inline XBRL Instance Document

EXHIBIT 101.SCH - Inline XBRL Taxonomy Extension Schema Document

EXHIBIT 101.CAL - Inline XBRL Taxonomy Extension Calculation Linkbase Document

EXHIBIT 101.DEF - Inline XBRL Taxonomy Extension Definition Linkbase Document

EXHIBIT 101.LAB - Inline XBRL Taxonomy Extension Label Linkbase Document

EXHIBIT 101.PRE - Inline XBRL Taxonomy Extension Presentation Linkbase Document

EXHIBIT 104 - Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Albertsons Companies, Inc. (Registrant)

Date:	~~October 20, 2021~~July 26, 2022	By:	/s/ Vivek Sankaran
			Vivek Sankaran
			Chief Executive Officer and Director (Principal Executive Officer)


Date:	~~October 20, 2021~~July 26, 2022	By:	/s/ Sharon McCollam
			Sharon McCollam
			President and Chief Financial Officer (Principal Financial Officer)

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	28 weeks ended September 11, 2021
	Total		Pension and Post-retirement benefit plans		Other
Beginning balance	$	63.5	$	61.3	$	2.2

Other comprehensive income before reclassifications	34.3		34.3		—
Amounts reclassified from accumulated other comprehensive income	(14.0)		(14.0)		—
Tax expense	(5.1)		(5.1)		—
Current-period other comprehensive income, net of tax	15.2		15.2		—
Ending balance	$	78.7	$	76.5	$	2.2