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 12, 2020June 19, 2021
OR
☐ 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
aci-20210619_g1.jpg
Albertsons Companies, Inc.
(Exact name of registrant as specified in its charter)
Delaware47-4376911
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

250 Parkcenter Blvd.
Boise, Idaho 83706
(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 classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, $0.01 par valueACINew 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 filerAccelerated filer
Non-accelerated filerSmaller 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 20, 2020,July 28, 2021, the registrant had 472,652,815466,535,671 shares of Class A common stock, par value $0.01 per share, outstanding.



Albertsons Companies, Inc. and Subsidiaries

Page




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 12,
2020
February 29,
2020
June 19,
2021
February 27,
2021
ASSETSASSETSASSETS
Current assetsCurrent assetsCurrent assets
Cash and cash equivalents$2,389.6 $470.7 Cash and cash equivalents$2,173.8 $1,717.0 
Receivables, net547.1 525.3 Receivables, net618.7 550.9 
Inventories, net4,267.1 4,352.5 Inventories, net4,271.9 4,301.3 
Other current assets374.8 382.8 Other current assets313.1 418.8 
Total current assets7,578.6 5,731.3 Total current assets7,377.5 6,988.0 
Property and equipment, netProperty and equipment, net9,110.0 9,211.9 Property and equipment, net9,295.1 9,412.7 
Operating lease right-of-use assetsOperating lease right-of-use assets5,769.2 5,867.4 Operating lease right-of-use assets5,857.3 6,015.6 
Intangible assets, netIntangible assets, net2,077.8 2,087.2 Intangible assets, net2,149.1 2,108.8 
GoodwillGoodwill1,183.3 1,183.3 Goodwill1,200.5 1,183.3 
Other assetsOther assets750.7 654.0 Other assets902.4 889.6 
TOTAL ASSETSTOTAL ASSETS$26,469.6 $24,735.1 TOTAL ASSETS$26,781.9 $26,598.0 
LIABILITIESLIABILITIESLIABILITIES
Current liabilitiesCurrent liabilitiesCurrent liabilities
Accounts payable$3,389.8 $2,891.1 Accounts payable$3,386.3 $3,487.3 
Accrued salaries and wages1,280.3 1,126.0 Accrued salaries and wages1,365.4 1,474.7 
Current maturities of long-term debt and finance lease obligations331.6 221.4 Current maturities of long-term debt and finance lease obligations214.3 212.4 
Current maturities of operating lease obligations577.8 563.1 Current maturities of operating lease obligations610.9 605.3 
Other current liabilities1,148.2 1,102.7 Other current liabilities1,127.3 1,052.5 
Total current liabilities6,727.7 5,904.3 Total current liabilities6,704.2 6,832.2 
Long-term debt and finance lease obligationsLong-term debt and finance lease obligations8,460.0 8,493.3 Long-term debt and finance lease obligations8,145.8 8,101.2 
Long-term operating lease obligationsLong-term operating lease obligations5,385.0 5,402.8 Long-term operating lease obligations5,464.5 5,548.0 
Deferred income taxesDeferred income taxes563.8 613.8 Deferred income taxes534.6 533.7 
Other long-term liabilitiesOther long-term liabilities2,232.4 2,042.8 Other long-term liabilities2,635.3 2,659.5 
Commitments and contingenciesCommitments and contingenciesCommitments and contingencies00
Series A convertible preferred stock, $0.01 par value; 1,750,000 shares authorized, 924,000 shares issued and outstanding as of September 12, 2020 and 0 shares authorized, issued and outstanding as of February 29, 2020844.3 
Series A-1 convertible preferred stock, $0.01 par value; 1,410,000 shares authorized, 826,000 shares issued and outstanding as of September 12, 2020 and 0 shares authorized, issued and outstanding as of February 29, 2020754.8 
Series A convertible preferred stock, $0.01 par value; 1,750,000 shares authorized, 924,000 shares issued and outstanding as of June 19, 2021 and February 27, 2021Series A convertible preferred stock, $0.01 par value; 1,750,000 shares authorized, 924,000 shares issued and outstanding as of June 19, 2021 and February 27, 2021844.3 844.3 
Series A-1 convertible preferred stock, $0.01 par value; 1,410,000 shares authorized, 826,000 shares issued and outstanding as of June 19, 2021 and February 27, 2021Series A-1 convertible preferred stock, $0.01 par value; 1,410,000 shares authorized, 826,000 shares issued and outstanding as of June 19, 2021 and February 27, 2021754.8 754.8 
STOCKHOLDERS' EQUITYSTOCKHOLDERS' EQUITYSTOCKHOLDERS' EQUITY
Undesignated preferred stock, $0.01 par value; 96,840,000 shares authorized, 0 shares issued as of September 12, 2020 and 30,000,000 shares authorized, 0 shares issued as of February 29, 2020Undesignated preferred stock, $0.01 par value; 96,840,000 shares authorized, 0 shares issued as of June 19, 2021 and February 27, 2021
Class A common stock, $0.01 par value; 1,000,000,000 shares authorized, 584,332,211 and 582,997,251 shares issued as of September 12, 2020 and February 29, 2020, respectively5.8 5.8 Class A common stock, $0.01 par value; 1,000,000,000 shares authorized, 586,520,608 and 585,574,666 shares issued as of June 19, 2021 and February 27, 2021, respectively5.9 5.9 
Class A-1 convertible common stock, $0.01 par value; 150,000,000 shares authorized, 0 shares issued as of September 12, 2020 and 0 shares authorized and issued as of February 29, 2020Class A-1 convertible common stock, $0.01 par value; 150,000,000 shares authorized, 0 shares issued as of June 19, 2021 and February 27, 2021
Additional paid-in capital1,875.8 1,824.3 Additional paid-in capital1,911.1 1,898.9 
Treasury stock, at cost, 105,283,357 shares held as of September 12, 2020 and 3,671,621 shares held as of February 29, 2020(1,705.8)(25.8)Treasury stock, at cost, 120,009,647 shares held as of June 19, 2021 and February 27, 2021(1,907.0)(1,907.0)
Accumulated other comprehensive loss(106.4)(118.5)Accumulated other comprehensive income63.6 63.5 
Retained earnings1,432.2 592.3 Retained earnings1,624.8 1,263.0 
Total stockholders' equity1,501.6 2,278.1 Total stockholders' equity1,698.4 1,324.3 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITYTOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$26,469.6 $24,735.1 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$26,781.9 $26,598.0 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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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 ended28 weeks ended16 weeks ended
September 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
June 19,
2021
June 20,
2020
Net sales and other revenueNet sales and other revenue$15,757.6 $14,176.7 $38,509.2 $32,915.1 Net sales and other revenue$21,269.4 $22,751.6 
Cost of salesCost of sales11,182.7 10,235.2 27,162.8 23,734.0 Cost of sales15,078.4 15,980.1 
Gross profitGross profit4,574.9 3,941.5 11,346.4 9,181.1 Gross profit6,191.0 6,771.5 
Selling and administrative expensesSelling and administrative expenses4,031.2 3,794.6 9,800.6 8,741.2 Selling and administrative expenses5,503.6 5,769.4 
(Gain) loss on property dispositions and impairment losses, net(18.3)(435.5)12.0 (464.0)
Loss on property dispositions and impairment losses, netLoss on property dispositions and impairment losses, net0.3 30.3 
Operating incomeOperating income562.0 582.4 1,533.8 903.9 Operating income687.1 971.8 
Interest expense, netInterest expense, net128.6 177.5 309.2 402.7 Interest expense, net153.3 180.6 
Loss on debt extinguishment49.1 23.1 49.1 65.8 
Other (income) expense, netOther (income) expense, net(11.4)5.1 (8.3)(6.0)Other (income) expense, net(43.5)3.1 
Income before income taxesIncome before income taxes395.7 376.7 1,183.8 441.4 Income before income taxes577.3 788.1 
Income tax expenseIncome tax expense111.2 81.9 313.1 97.6 Income tax expense132.5 201.9 
Net incomeNet income$284.5 $294.8 $870.7 $343.8 Net income$444.8 $586.2 
Other comprehensive income (loss), net of tax
Loss on interest rate swaps(11.3)(38.3)
Other comprehensive income, net of taxOther comprehensive income, net of tax
Recognition of pension gainRecognition of pension gain10.1 0.7 10.9 24.1 Recognition of pension gain0.1 0.8 
OtherOther0.3 1.3 1.2 3.0 Other0.9 
Other comprehensive income (loss)$10.4 $(9.3)$12.1 $(11.2)
Other comprehensive incomeOther comprehensive income$0.1 $1.7 
Comprehensive incomeComprehensive income$294.9 $285.5 $882.8 $332.6 Comprehensive income$444.9 $587.9 
Net income per Class A common shareNet income per Class A common shareNet income per Class A common share
Basic net income per Class A common shareBasic net income per Class A common share$0.52 $0.51 $1.57 $0.59 Basic net income per Class A common share$0.80 $1.03 
Diluted net income per Class A common shareDiluted net income per Class A common share0.49 0.51 1.49 0.59 Diluted net income per Class A common share0.78 1.00 
Weighted average Class A common shares outstandingWeighted average Class A common shares outstandingWeighted average Class A common shares outstanding
BasicBasic477.3 579.3 529.2 579.3 Basic465.1 568.0 
DilutedDiluted582.9 580.6 583.3 580.0 Diluted571.4 583.7 

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

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Table of Contents


Albertsons Companies, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)

28 weeks ended16 weeks ended
September 12,
2020
September 7,
2019
June 19,
2021
June 20,
2020
Cash flows from operating activities:Cash flows from operating activities:Cash flows from operating activities:
Net incomeNet income$870.7 $343.8 Net income$444.8 $586.2 
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 (gain) on property dispositions and impairment losses, net12.0 (464.0)
Loss on property dispositions and impairment losses, netLoss on property dispositions and impairment losses, net0.3 30.3 
Depreciation and amortizationDepreciation and amortization808.8 897.6 Depreciation and amortization504.2 460.1 
Operating lease right-of-use assets amortizationOperating lease right-of-use assets amortization309.3 288.4 Operating lease right-of-use assets amortization189.3 176.4 
LIFO expenseLIFO expense23.2 16.3 LIFO expense14.5 13.1 
Deferred income taxDeferred income tax2.8 (14.4)Deferred income tax(17.9)(51.2)
Contributions to pension and post-retirement benefit plans, net of (income) expenseContributions to pension and post-retirement benefit plans, net of (income) expense(68.9)(12.0)Contributions to pension and post-retirement benefit plans, net of (income) expense(14.5)(63.5)
Loss on interest rate swaps and commodity hedges, net25.9 0.3 
Amortization and write-off of deferred financing costs11.2 26.1 
Loss on debt extinguishment49.1 65.8 
(Gain) loss on interest rate swaps and commodity hedges, net(Gain) loss on interest rate swaps and commodity hedges, net(6.3)24.5 
Equity-based compensation expenseEquity-based compensation expense28.3 17.6 Equity-based compensation expense22.2 19.0 
OtherOther(28.7)19.6 Other(22.9)(1.8)
Changes in operating assets and liabilities:Changes in operating assets and liabilities:Changes in operating assets and liabilities:
Receivables, netReceivables, net(21.7)67.4 Receivables, net(74.7)(4.7)
Inventories, netInventories, net62.2 (23.8)Inventories, net14.8 67.8 
Accounts payable, accrued salaries and wages and other accrued liabilitiesAccounts payable, accrued salaries and wages and other accrued liabilities585.4 86.8 Accounts payable, accrued salaries and wages and other accrued liabilities(31.3)733.1 
Operating lease liabilitiesOperating lease liabilities(228.4)(267.9)Operating lease liabilities(109.5)(98.7)
Self-insurance assets and liabilitiesSelf-insurance assets and liabilities24.2 6.1 Self-insurance assets and liabilities27.5 24.1 
Other operating assets and liabilitiesOther operating assets and liabilities255.4 31.1 Other operating assets and liabilities118.5 177.2 
Net cash provided by operating activitiesNet cash provided by operating activities2,720.8 1,084.8 Net cash provided by operating activities1,059.0 2,091.9 
Cash flows from investing activities:Cash flows from investing activities:Cash flows from investing activities:
Business acquisitions, net of cash acquiredBusiness acquisitions, net of cash acquired(23.5)
Payments for property, equipment and intangibles, including payments for lease buyoutsPayments for property, equipment and intangibles, including payments for lease buyouts(702.9)(716.3)Payments for property, equipment and intangibles, including payments for lease buyouts(513.4)(402.3)
Proceeds from sale of assets20.6 1,029.5 
Other(4.8)(5.5)
Net cash (used in) provided by investing activities(687.1)307.7 
Proceeds from sale of long-lived assetsProceeds from sale of long-lived assets15.2 6.7 
Other investing activitiesOther investing activities28.7 (3.8)
Net cash used in investing activitiesNet cash used in investing activities(493.0)(399.4)
Cash flows from financing activities:Cash flows from financing activities:Cash flows from financing activities:
Proceeds from issuance of long-term debtProceeds from issuance of long-term debt3,500.0 750.0 Proceeds from issuance of long-term debt2,000.0 
Payments on long-term borrowingsPayments on long-term borrowings(3,388.5)(2,558.4)Payments on long-term borrowings(0.3)(2,001.4)
Payments of obligations under finance leasesPayments of obligations under finance leases(32.9)(56.1)Payments of obligations under finance leases(14.1)(14.1)
Payment of redemption premium on debt extinguishment(41.4)
Payments for debt financing costs(15.6)(14.9)
Dividends paid on common stockDividends paid on common stock(46.5)
Dividends paid on convertible preferred stockDividends paid on convertible preferred stock(29.5)
Proceeds from convertible preferred stockProceeds from convertible preferred stock1,680.0 Proceeds from convertible preferred stock1,680.0 
Third party issuance costs on convertible preferred stockThird party issuance costs on convertible preferred stock(80.9)Third party issuance costs on convertible preferred stock(80.9)
Treasury stock purchase, at costTreasury stock purchase, at cost(1,680.0)Treasury stock purchase, at cost(1,680.0)
Other(21.4)(16.1)
Employee tax withholding on vesting of restricted stock unitsEmployee tax withholding on vesting of restricted stock units(10.0)(6.2)
Other financing activitiesOther financing activities(8.8)(4.3)
Net cash used in financing activitiesNet cash used in financing activities(80.7)(1,895.5)Net cash used in financing activities(109.2)(106.9)
Net increase (decrease) in cash and cash equivalents and restricted cash1,953.0 (503.0)
Net increase in cash and cash equivalents and restricted cashNet increase in cash and cash equivalents and restricted cash456.8 1,585.6 
Cash and cash equivalents and restricted cash at beginning of periodCash and cash equivalents and restricted cash at beginning of period478.9 967.7 Cash and cash equivalents and restricted cash at beginning of period1,767.6 478.9 
Cash and cash equivalents and restricted cash at end of periodCash and cash equivalents and restricted cash at end of period$2,431.9 $464.7 Cash and cash equivalents and restricted cash at end of period$2,224.4 $2,064.5 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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Table of Contents
Albertsons Companies, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders' Equity
(in millions, except share data)
(unaudited)

Class A Common StockAdditional paid in capitalTreasury StockAccumulated other comprehensive lossRetained earningsTotal stockholders' equityClass A Common StockAdditional paid in capitalTreasury StockAccumulated other comprehensive incomeRetained earningsTotal stockholders' equity
SharesAmountSharesAmountSharesAmountSharesAmount
Balance as of February 29, 2020582,997,251 $5.8 $1,824.3 3,671,621 $(25.8)$(118.5)$592.3 $2,278.1 
Issuance of common stock to Company's parents1,312,859 — — — — — — 
Balance as of February 27, 2021Balance as of February 27, 2021585,574,666 $5.9 $1,898.9 120,009,647 $(1,907.0)$63.5 $1,263.0 $1,324.3 
Equity-based compensationEquity-based compensation— — 19.0 — — — — 19.0 Equity-based compensation— — 22.2 — — — — 22.2 
Employee tax withholding on vesting of phantom 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, 2020584,310,110 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 stock22,101 — (0.5)— — — — (0.5)
Equity reclassification— — 30.0 — — — — 30.0 
Shares issued and employee tax withholding on vesting of restricted stock unitsShares issued and employee tax withholding on vesting of restricted stock units945,942 — (10.0)— — — — (10.0)
Cash dividends declared on common stockCash dividends declared on common stock— — — — — — (46.5)(46.5)
Dividends accrued on convertible preferred stockDividends accrued on convertible preferred stock— — — — — — (26.9)(26.9)Dividends accrued on convertible preferred stock— — — — — — (36.4)(36.4)
Net incomeNet income— — — — — — 284.5 284.5 Net income— — — — — — 444.8 444.8 
Other comprehensive income, net of taxOther comprehensive income, net of tax— — — — — 10.4 — 10.4 Other comprehensive income, net of tax— — — — — 0.1 — 0.1 
Other activityOther activity— — (0.1)— — — (0.1)Other activity— — — — — (0.1)(0.1)
Balance as of September 12, 2020584,332,211 $5.8 $1,875.8 105,283,357 $(1,705.8)$(106.4)$1,432.2 $1,501.6 
Balance as of June 19, 2021Balance as of June 19, 2021586,520,608 $5.9 $1,911.1 120,009,647 $(1,907.0)$63.6 $1,624.8 $1,698.4 


Class A Common StockAdditional paid in capitalTreasury StockAccumulated other comprehensive lossRetained earningsTotal stockholders' equity
SharesAmountSharesAmount
Balance as of February 29, 2020582,997,251 $5.8 $1,824.3 3,671,621 $(25.8)$(118.5)$592.3 $2,278.1 
Issuance of common stock to Company's parents1,312,859 — — — — — — — 
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, 2020584,310,110 $5.8 $1,837.1 105,283,357 $(1,705.8)$(116.8)$1,174.6 $1,194.9 

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

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Table of Contents
Albertsons Companies, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders' Equity
(in millions, except share data)
(unaudited)

Class A Common StockAdditional paid in capitalTreasury StockAccumulated other comprehensive incomeRetained earnings (accumulated deficit)Total stockholders' equity
SharesAmountSharesAmount
Balance as of February 23, 2019579,443,146 $5.8 $1,811.2 3,671,621 $(25.8)$91.3 $(431.8)$1,450.7 
Equity-based compensation— — 11.1 — — — — 11.1 
Employee tax withholding on vesting of phantom units— — (12.1)— — — — (12.1)
Adoption of new accounting standards, net of tax— — — — — 16.6 558.0 574.6 
Net income— — — — — — 49.0 49.0 
Other comprehensive loss, net of tax— — — — — (18.5)— (18.5)
Other activity— — (0.1)— — — (0.3)(0.4)
Balance as of June 15, 2019579,443,146 5.8 $1,810.1 3,671,621 $(25.8)$89.4 174.9 2,054.4 
Equity-based compensation— — 6.5 — — — — 6.5 
Employee tax withholding on vesting of phantom units— — (0.9)— — — — (0.9)
Net income— — — — — — 294.8 294.8 
Other comprehensive loss, net of tax— — — — — (9.3)— (9.3)
Balance as of September 7, 2019579,443,146 $5.8 $1,815.7 3,671,621 $(25.8)$80.1 $469.7 $2,345.5 

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

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Table of Contents
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 29, 202027, 2021 is derived from the Company's annual audited Consolidated Financial Statements, for the fiscal year ended February 29, 2020, which should be read in conjunction with these Condensed Consolidated Financial Statements and which are included in the Company's Prospectus dated June 25, 2020Annual Report on Form 10-K for the fiscal year ended February 27, 2021, filed with the Securities and Exchange Commission ("SEC"(the "SEC") pursuant to Rule 424(b) of the Securities Act of 1933, as amended, relating to the Company's Registration Statement on Form S-1 (File No. 333-236956).April 28, 2021. 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 2816 weeks ended September 12, 2020June 19, 2021 and September 7, 2019.June 20, 2020.

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 funds held in escrow. The Company had $42.3 million and $8.2$50.6 million of restricted cash as of September 12, 2020June 19, 2021 and February 29, 2020, respectively.27, 2021.

Inventories, net: Substantially all of the Company's inventories consist of finished goods valued at the lower of cost or market and net of vendor allowances. The Company uses either item-cost or the retail inventory method to value inventory at the lower of cost or market before application of any last-in, first-out ("LIFO") reserve. 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 $10.1$14.5 million and $5.8$13.1 million for the 1216 weeks ended September 12,June 19, 2021 and June 20, 2020, and September 7, 2019, respectively, and $23.2 million and $16.3 million for the 28 weeks ended September 12, 2020 and September 7, 2019, respectively.

Equity-based compensation: The Company maintains the Albertsons Companies, Inc. Restricted Stock Unit Plan (the "Restricted Stock Unit Plan"), which was previously namedand the "AlbertsonsAlbertsons Companies, Inc. Phantom Unit Plan" (the "Phantom Unit Plan"). Prior to being amended and restated on June 9, 2020 the Phantom Unit Plan providedOmnibus Incentive Plan. The Company recognizes equity-based compensation expense for grants of "Phantom Units" to certain employees, directors and consultants. Each Phantom Unit provided a participant with a contractual right to receive, upon vesting, 1 management incentive unit in each of the Company's parents, Albertsons Investor Holdings LLC ("Albertsons Investor") and KIM ACI, LLC ("KIM ACI"). Upon the amendment and restatement of the Phantom Unit Plan as the Restricted Stock Unit Plan, all outstanding Phantom Units were converted into 11.3 million restricted stock units ("RSUs") and restricted common stock ("RSAs") of the Company ("Restricted Stock Units" or "RSUs"), including 1.9 million performance-based RSUs that were not deemed granted for accounting purposes, underto employees and non-employee directors. Actual forfeitures are recognized as they occur. Equity-based compensation expense is based on the Restricted Stock Unit Plan, subject to substantially identical termsfair value on the grant date and conditions as applied prior tois recognized over the conversion. No changes to vesting conditions orrequisite service period of the award. The fair value of the award occurred asRSUs and RSAs with a resultservice condition or performance-based condition is generally determined using the fair market value of the conversion. Company's Class A common stock on the grant date.

Upon vesting, an award of Restricted Stock UnitsRSUs and RSAs will be settled in shares of the Company's Class A common stock. Equity-based compensation expense related to these awards recognized byRSUs generally vest over three years from the Company was $8.0 milliongrant date, based on a service period, or upon a combination of both a service period and $5.6 million for the 12 weeks ended September 12, 2020achievement of certain performance-based thresholds, and September 7, 2019, respectively. For the 28 weeks ended September 12, 2020 and September 7, 2019, equity-based compensation expense recognized by the Company related to these awards was $25.8 million and $15.5 million, respectively. The Company recorded an income tax benefit of $2.0 million and $1.5 million for the 12 weeks ended September 12, 2020 and September 7, 2019, respectively. For the 28 weeks ended September 12, 2020 and September 7, 2019, the Company recorded an
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income tax benefit of $6.6 million and $4.1 million, respectively. As of September 12, 2020, there was $98.8 million of unrecognized costs related to 9.8 million unvested RSUs deemed granted for accounting purposes. That cost is expected to be recognized over a weighted average period of 2.16 years.

On April 25, 2019, upon the commencement of employment, the Company's President and Chief Executive Officer was granted direct equity interests in each of the Company's parents, Albertsons Investor and KIM ACI. These equity interestsRSAs generally vest over five years from the grant date, with 50% based solely on a service period and 50% upon a service period and achievement of certain performance-based thresholds. On June 30, 2020, upon consummationFor performance-based RSUs and RSAs granted in fiscal 2021, the number of shares of the Company's initial public offering ("IPO"), the unvested direct equity interests in each ofClass A common stock to be received at vesting can be adjusted within a predetermined range based on the Company's parents converted into 1.7 million sharesactual performance for fiscal 2021 relative to the fiscal 2021 performance target.

7


Table of restricted common stock of the Company ("RSAs"), including 0.6 million performance-based RSAs that are not deemed granted for accounting purposes. No changes to vesting conditions or the fair value of the award occurred as a result of the conversion. For the 12 weeks ended September 12, 2020 and September 7, 2019, equity-basedContents
Equity-based compensation expense recognized byin the Condensed Consolidated Statements of Operations (in millions):
16 weeks ended
June 19,
2021
June 20,
2020
RSUs$19.7 $17.8 
RSAs2.5 1.2 
Total equity-based compensation expense$22.2 $19.0 
Total related tax benefit$5.1 $4.6 

On May 12, 2021, the Company relatedissued 3.2 million RSUs to theseits employees and directors, of which 2.2 million were deemed granted. The 2.2 million issued and granted awards consist of 1.7 million RSUs that have solely time-based vesting and 0.5 million performance-based RSUs that were deemed granted upon the establishment of the fiscal 2021 performance target and that would vest upon both the achievement of such performance target and continued service through the vesting period. Additionally, 1.2 million previously issued performance-based RSUs and 0.3 million previously issued performance-based RSAs was $1.3 millionwere deemed granted in fiscal 2021 upon the establishment of the fiscal 2021 annual performance target and $0.9 million, respectively. Forthat would vest upon both the 28 weeks ended September 12, 2020achievement of such performance target and September 7, 2019, equity-based compensation expense recognized bycontinued service through the Company related to these RSAs was $2.5 million and $2.1 million, respectively. vesting period.

As of September 12, 2020,June 19, 2021, there was $8.7$119.4 million of unrecognized costs related to 1.111.1 million RSAs deemedunvested granted for accounting purposes.RSUs. That cost is expected to be recognized over a weighted average period of 2.771.9 years.

Treasury stock: On As of June 9, 2020, the Company used $1,680.019, 2021, there was $9.2 million an amount equal to the proceeds from the sale and issuance 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"), to repurchase 101,611,736 shares of Class A common stock from the Company's parents (the "June 2020 Repurchase"). The shares are classified as treasury stock on the Condensed Consolidated Balance Sheets. The proceeds received by the Company's parents from the June 2020 Repurchase were distributed to their members, which include the Company's sponsors and current and former members of management.

On September 14, 2020, subsequent to the end of the second quarter of fiscal 2020, the Company entered into a stock repurchase agreement with a stockholder pursuant to which the Company repurchased 6,837,970 shares of its Class A common stock held by the stockholder at $12.00 per share. The stockholder was subject to a court-mandated wind-down and a court-appointed receiver was directed to liquidate the stockholder's assets. The price was agreed to between the Company and the receiver (on behalf of the stockholder). In establishing the price, the parties took into account, among many other factors that they each deemed relevant, an applicable discountunrecognized costs related to the selling restrictions that1.0 million unvested granted RSAs. That cost is expected to be recognized over a third-party buyer would have had if such third-party buyer purchased the shares, including relevant lock-up agreements.weighted average period of 1.9 years.

Income taxes: Income tax expense was $111.2$132.5 million, representing a 28.1%23.0% effective tax rate, for the 1216 weeks ended September 12, 2020.June 19, 2021. Income tax expense was $81.9$201.9 million, representing a 21.7%25.6% effective tax rate, for the 1216 weeks ended September 7, 2019. IncomeJune 20, 2020. The decrease in the effective income tax expenserate was $313.1 million, representing a 26.4%primarily driven by the recognition of certain discrete state income tax benefits during the 16 weeks ended June 19, 2021. The Company expects its annual effective tax rate for the 28 weeks ended September 12, 2020. Income tax expense was $97.6 million, representing a 22.1% effective tax rate, for the 28 weeks ended September 7, 2019. The increase in the Company's effective tax rate for the 12 and 28 weeks ended September 12, 2020 is primarily duefiscal 2021 to certain nondeductible transaction-related costs incurred during the 12 and 28 weeks ended September 12, 2020.be approximately 25%.

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 eCommercedigital 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 eCommerce
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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. Third-party receivables from pharmacy sales were $259.2$298.9 million and $218.5$262.5 million as of September 12, 2020June 19, 2021 and February 29, 2020,27, 2021, respectively, and are recorded in Receivables, net. For eCommercedigital 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. Discounts provided to customers by the Company at the time of sale are recognized as a reduction in sales as the products are sold. Discounts provided to customers by vendors, usually in the form of coupons, are not recognized as a reduction in sales, provided the coupons are redeemable at any retailer that accepts coupons. The Company recognizes revenue and records a corresponding receivable from the vendor for the difference between the sales prices and the cash received from the customer. 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 12, 2020June 19, 2021 and February 29, 2020.27, 2021.

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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 $59.9$85.0 million as of September 12, 2020June 19, 2021 and $52.2$98.1 million as of February 29, 2020.27, 2021. Breakage amounts were immaterial for the 12 and 2816 weeks ended September 12,June 19, 2021 and June 20, 2020, and September 7, 2019, respectively.

Disaggregated Revenues

The following table represents sales revenue by type of similar product (dollars in millions):
12 weeks ended28 weeks ended16 weeks ended
September 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
June 19,
2021
June 20,
2020
Amount (1)% of TotalAmount (1)% of TotalAmount (1)% of TotalAmount (1)% of TotalAmount (1)% of TotalAmount (1)% of Total
Non-perishables (2)Non-perishables (2)$7,126.6 45.2 %$6,172.0 43.5 %$17,910.4 46.5 %$14,194.2 43.1 %Non-perishables (2)$9,270.3 43.6 %$10,783.8 47.4 %
Perishables (3)Perishables (3)6,654.1 42.2 5,844.6 41.2 16,209.7 42.1 13,656.2 41.5 Perishables (3)8,912.6 41.9 9,555.6 42.0 
PharmacyPharmacy1,171.8 7.5 1,156.5 8.2 2,726.7 7.1 2,729.7 8.3 Pharmacy1,728.6 8.1 1,554.9 6.8 
FuelFuel570.8 3.6 793.2 5.6 1,160.0 3.0 1,869.7 5.7 Fuel1,049.3 4.9 589.2 2.6 
Other (4)Other (4)234.3 1.5 210.4 1.5 502.4 1.3 465.3 1.4 Other (4)308.6 1.5 268.1 1.2 
Net sales and other revenueNet sales and other revenue$15,757.6 100.0 %$14,176.7 100.0 %$38,509.2 100.0 %$32,915.1 100.0 %Net sales and other revenue$21,269.4 100.0 %$22,751.6 100.0 %
(1) eCommerceDigital related sales are included in the categories to which the revenue pertains.
(2) Consists primarily of general merchandise, grocery and frozen foods.
(3) Consists primarily of produce, dairy, meat, deli, floral and seafood.
(4) Consists primarily of wholesale revenue to third parties, commissions and other miscellaneous revenue.

CARES Act: TheCoronavirus Aid, Relief and Economic Security Act ("CARES Act") was signed into law on March 27, 2020. The Company analyzed the various income tax and non-income tax provisions of the CARES Act based on currently available technical guidance and determined that aside from an impact to the timing of cash
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flows, there is no material impact to the Company's Consolidated Financial Statements. Specifically, as it relates to the Company, the CARES Act allows for deferred payment of the employer-paid portion of social security taxes through the end of 2020, with 50% due on December 31, 2021 and the remainder due on December 31, 2022. For the 28 weeks ended September 12, 2020, the Company deferred approximately $270 million of the employer-paid portion of social security taxes, which is included in Other long-term liabilities. The CARES Act also includes a technical correction to permit 100% bonus depreciation of eligible qualified improvement property. The Company will continue to assess the effect of the CARES Act and ongoing other government legislation related to the COVID-19 pandemic that may be issued.

Recently issued accounting standards: In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, "Simplifying the Accounting for Income Taxes" ("ASU 2019-12"). ASU 2019-12 eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating taxes during the quarters and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also simplifies aspects of the accounting for franchise taxes, enacts changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 will take effect for public entities for annual reporting periods beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect of this standard on its Consolidated Financial Statements.

In June 2020, the FASB issued ASU 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU 2020-06"). 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 the guidance on diluted earnings per share calculations as a result of these changes. ASU 2020-06 will take effect for public entities for annual reporting periods beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect of this standard on its Consolidated Financial Statements.

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.

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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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The following table presents assets and liabilities which were measured at fair value on a recurring basis as of September 12, 2020June 19, 2021 (in millions):
Fair Value MeasurementsFair Value Measurements
TotalQuoted prices in active markets
for identical assets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
TotalQuoted 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)$11.7 $3.9 $7.8 $Short-term investments (1)$11.7 $4.8 $6.9 $
Non-current investments (2)Non-current investments (2)85.7 22.1 63.6 Non-current investments (2)104.9 32.3 72.6 
Derivative contracts (3)Derivative contracts (3)9.9 9.9 
TotalTotal$97.4 $26.0 $71.4 $Total$126.5 $37.1 $89.4 $
Liabilities:Liabilities:Liabilities:
Derivative contracts (3)(4)Derivative contracts (3)(4)$68.9 $$68.9 $Derivative contracts (3)(4)$34.0 $$34.0 $
TotalTotal$68.9 $$68.9 $Total$34.0 $$34.0 $
(1) Primarily relates to Mutual Funds (Level 1) and Corporate BondsCertificates of Deposit (Level 2). Included in Other current assets.
(2) Primarily relates to investments in publicly traded stock (Level 1) and U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets.
(3) Primarily relates to energy hedges. Included in Other assets.
(4) Primarily relates to interest rate swaps. Included in Other current liabilities.
The following table presents assets and liabilities which were measured at fair value on a recurring basis as of February 29, 202027, 2021 (in millions):
Fair Value Measurements Fair Value Measurements
TotalQuoted prices in active markets
for identical assets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
TotalQuoted prices in active markets
 for identical assets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Assets:Assets:Assets:
Cash equivalents:
Money market$2.0 $2.0 $$
Short-term investments (1)Short-term investments (1)13.5 5.0 8.5 Short-term investments (1)$11.9 $4.4 $7.5 $
Non-current investments (2)Non-current investments (2)85.9 26.8 59.1 Non-current investments (2)110.2 40.3 69.9 
TotalTotal$101.4 $33.8 $67.6 $Total$122.1 $44.7 $77.4 $
Liabilities:Liabilities:Liabilities:
Derivative contracts (3)Derivative contracts (3)$66.4 $$66.4 $Derivative contracts (3)$40.0 $$40.0 $
TotalTotal$66.4 $$66.4 $Total$40.0 $$40.0 $
(1) Primarily relates to Mutual Funds (Level 1) and Corporate BondsCertificates of Deposit (Level 2). Included in Other current assets.
(2) Primarily relates to investments in publicly traded stock (Level 1) and U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets.
(3) Primarily relates to interest rate swaps. Included in Other current liabilities.

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 12, 2020,June 19, 2021, the fair value of total debt was $8,662.3$8,178.2 million compared to the carrying value of $8,273.8 million, excluding debt discounts and deferred financing costs. As of February 29, 2020, the fair value of total debt was $8,486.2 million compared to the carrying value of $8,162.2 million, excluding debt discounts and deferred financing costs.
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$7,815.2 million, excluding debt discounts and deferred financing costs. As of February 27, 2021, the fair value of total debt was $8,150.7 million compared to the carrying value of $7,815.5 million, excluding debt discounts and deferred financing costs.
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 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 Swaps as of September 12, 2020June 19, 2021 and February 29, 202027, 2021 were $2,023.0$1,653.0 million, 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 12,
2020
September 7,
2019
Location of loss recognized from derivatives
Loss on undesignated portion of interest rate swaps$(0.4)$Other (income) expense, net
Loss on designated portion of interest rate swaps$$(11.3)Other comprehensive income (loss), net of tax

28 weeks ended
September 12,
2020
September 7,
2019
Location of loss recognized from derivatives
Loss on undesignated portion of interest rate swaps$(19.4)$Other (income) expense, net
Loss on designated portion of interest rate swaps$$(38.3)Other comprehensive income (loss), net of tax
16 weeks ended
June 19,
2021
June 20,
2020
Location of loss recognized from derivatives
Loss on undesignated portion of interest rate swaps$(0.3)$(19.0)Other (income) expense, net

NOTE 4 - LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS

The Company's long-term debt and finance lease obligations as of September 12, 2020June 19, 2021 and February 29, 2020,27, 2021, net of unamortized debt discounts of $40.0$43.8 million and $41.3$44.8 million, respectively, and deferred financing costs of $74.8$66.2 million and $72.9$69.8 million, respectively, consisted of the following (in millions):
September 12,
2020
February 29,
2020
Senior Unsecured Notes due 2023 to 2030, interest rate range of 3.25% to 7.50%$7,132.1 $6,884.5 
Safeway Inc. Notes due 2021 to 2031, interest rate range of 4.75% to 7.45%504.2 642.1 
New Albertsons L.P. Notes due 2026 to 2031, interest rate range of 6.52% to 8.70%467.7 466.0 
Other financing obligations37.1 37.2 
Mortgage notes payable, secured17.9 18.2 
Finance lease obligations632.6 666.7 
Total debt8,791.6 8,714.7 
Less current maturities(331.6)(221.4)
Long-term portion$8,460.0 $8,493.3 
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Senior Unsecured Notes

On August 31, 2020, the Company and substantially all of its subsidiaries completed the issuance of $750.0 million in aggregate principal amount of 3.250% Senior Unsecured Notes which will mature on March 15, 2026 (the "2026 Notes") and $750.0 million in aggregate principal amount of 3.500% Senior Unsecured Notes which will mature on March 15, 2029 (the "2029 Notes" and together with the 2026 Notes, the "New Notes"). Interest on the New Notes is payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2021. The New Notes have not been and will not be registered with the SEC. The New Notes are also fully and unconditionally guaranteed, jointly and severally, by substantially all of the Company's subsidiaries that are not issuers under the indenture governing such New Notes. On September 11, 2020, proceeds from the New Notes, together with approximately $60 million cash on hand, were used to fully redeem the $1,250.0 million in aggregate principal amount outstanding of the Company's 6.625% Senior Unsecured Notes due 2024 (the "2024 Redemption"). In connection with the 2024 Redemption, the Company paid an associated redemption premium of $41.4 million. The Company recorded a $49.1 million loss on debt extinguishment related to the 2024 Redemption, comprised of the $41.4 million redemption premium and $7.7 million write-off of deferred financings costs.

On September 16, 2020, subsequent to the end of the second quarter of fiscal 2020, the remaining proceeds were used to fund the partial redemption of $250.0 million of the $1,250.0 million in aggregate principal amount outstanding of the Company's 5.75% Senior Unsecured Notes due 2025.

Safeway Notes

The Company repaid the remaining $136.8 million in aggregate principal amount of Safeway Inc.'s ("Safeway") 3.95% Notes due 2020 on their maturity date, August 15, 2020.
June 19,
2021
February 27,
2021
Senior Unsecured Notes due 2023 to 2030, interest rate range of 3.25% to 7.50%$6,683.9 $6,680.5 
Safeway Inc. Notes due 2021 to 2031, interest rate range of 4.75% to 7.45%504.2 504.3 
New Albertsons L.P. Notes due 2026 to 2031, interest rate range of 6.52% to 8.70%470.3 469.1 
Other financing obligations29.4 29.4 
Mortgage notes payable, secured17.4 17.6 
Finance lease obligations654.9 612.7 
Total debt8,360.1 8,313.6 
Less current maturities(214.3)(212.4)
Long-term portion$8,145.8 $8,101.2 

ABL Facility

As of September 12, 2020June 19, 2021 and February 29, 2020,27, 2021, there were 0 amounts outstanding under the Company's amended and restated senior secured asset-based loan facility (as amended, the "ABL("ABL Facility"), and letters of credit ("LOC") issued under the LOC sub-facility were $367.3$349.1 million and $454.5$354.6 million, respectively.
NOTE 5 - STOCKHOLDERS' EQUITY AND CONVERTIBLE PREFERRED STOCK
Common Stock

On June 8, 2020, the Company amended and restated its certificate of incorporation to authorize 1,150,000,000 shares of common stock, par value $0.01 per share, of which 1,000,000,000 shares were classified as Class A common stock ("Class A common stock") and 150,000,000 shares were classified as Class A-1 common stock ("Class A-1 common stock" and together with the Class A common stock, the "Common Stock"). As of September 12, 2020, there were 584,332,211 shares of Class A common stock and 479,048,854 shares of Class A common stock issued and outstanding, respectively, and 0 shares of Class A-1 common stock issued or outstanding. As of February 29, 2020, there were 582,997,251 shares of Class A common stock and 579,325,630 shares of Class A common stock issued and outstanding, respectively. For all prior periods presented, use of Class A common stock refers to the Company's common stock pre-reclassification.

The terms of the Class A common stock are substantially identical to the terms of the Class A-1 common stock, except that the Class A-1 common stock does not have voting rights. Each holder of Class A common stock is entitled to one vote for each share owned of record on all matters voted upon by stockholders. A majority vote is required for all action to be taken by stockholders, except as otherwise provided for in the Company's amended and restated certificate of incorporation and amended and restated bylaws or as required by law. Subject to preferences that may be applicable to any then outstanding preferred stock, holders of the Company's Common Stock are
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entitled to receive ratably those dividends, if any, as may be declared from time to time by the board of directors out of legally available funds. In the event of the Company's liquidation, dissolution or winding-up, the holders of Common Stock are entitled to share equally and ratably in the Company's assets, if any, remaining after the payment of all of debts and liabilities and the liquidation preference of any outstanding preferred stock. Shares of Class A-1 common stock would be issued upon the conversion of the Company's outstanding Series A-1 preferred stock. When permitted under the relevant antitrust restrictions, any issued shares of Class A-1 common stock would automatically convert on a 1-for-one basis to voting shares of Class A common stock.

In connection with the IPO, the Company established a dividend policy pursuant to which the Company intends to pay a quarterly dividend on its Common Stock in an annual amount equal to $0.400 per common share. On October 14, 2020, the Company announced the first quarterly dividend payment of $0.100 per common share to be paid on November 10, 2020 to stockholders of record as of the close of business on October 26, 2020.

Stock Split

On June 18, 2020, the Company effected a 2.072-for-1 stock split of its Common Stock, without any change in the total shares authorized or the par value per share. All information related to the Company's Common Stock and per Class A common share amounts for all periods presented in the accompanying Condensed Consolidated Financial Statements have been retroactively adjusted to give effect to the 2.072-for-1 stock split.
Initial Public Offering

The Company's Class A common stock began trading on the New York Stock Exchange on June 26, 2020 under the symbol "ACI" and on June 30, 2020, certain selling stockholders completed the sale of a total of 50,000,000 shares of Class A common stock at an initial price to the public of $16.00 per share. The Company did not receive any proceeds from the sale of shares of Class A common stock by the selling stockholders in the IPO.
Convertible Preferred Stock and Investor Exchange Right

On June 8, 2020, the Company amended and restated its certificate of incorporation to authorize 100,000,000 shares of preferred stock, par value $0.01 per share, of which 1,750,000 shares were designated Series A preferred stock and 1,410,000 shares were designated Series A-1 preferred stock. On June 9, 2020 (the "Preferred Closing Date"), the Company sold and issued (i) an aggregate of 1,410,000 shares of Series A-1 preferred stock and (ii) an aggregate of 340,000 shares of Series A preferred stock. The Company received aggregate proceeds of $1.68 billion from the sale and issuance of the Convertible Preferred Stock which has an aggregate liquidation preference of $1.75 billion.

The terms of the Series A preferred stock are substantially identical to the terms of the Series A-1 preferred stock, except that the Series A preferred stock will vote together with Class A common stock on an as-converted basis, but the Series A-1 preferred stock cannot vote with Class A common stock on an as converted basis. When permitted under the relevant antitrust restrictions, shares of the Company's Series A-1 preferred stock will convert on a 1-for-one basis to shares of voting Series A preferred stock. On June 29, 2020, holders of 584,000 shares of Series A-1 preferred stock were relieved from the relevant antitrust restrictions resulting in the automatic conversion into 584,000 shares of voting Series A preferred stock. The Convertible Preferred Stock, with respect to dividend rights and/or distribution rights upon the liquidation, winding-up or dissolution, as applicable, ranks senior to each class of Common Stock and junior to existing and future indebtedness and other liabilities.

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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. In the event that the Company does not declare and pay any dividends in cash, the Company may instead, only for two quarters, pay such dividends by increasing the liquidation preference of the Convertible Preferred Stock at a rate equal to the applicable cash dividend rate plus 2.25% on such dividend payment date. In addition, the holders of Convertible Preferred Stock will 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. On September 15, 2020, the Company declared a quarterly cash dividend of $36.4 million to holders of the Convertible Preferred Stock, which was paid on September 30, 2020.

The Series A-1 preferred stock is convertible at the option of the holders thereof at any time into shares of Class A-1 common stock (which are identical to the Class A common stock, except that the Class A-1 common stock does not include voting rights) and the Series A preferred stock is convertible at the option of the holders thereof at any time into shares of Class A common stock, each at an initial conversion price of $17.22 per share and an initial conversion rate of 58.064 shares of Common Stock per share of Convertible Preferred Stock, subject to certain anti-dilution adjustments. At any time after June 30, 2023, if the last reported sale price of the Class A common stock has equaled or exceeded $20.50 per share (or 119% of the initial conversion price), as may be adjusted, for at least 20 trading days in any period of 30 consecutive trading days, the Company will have the right to cause all, or any portion, of the outstanding Series A-1 preferred stock or Series A preferred stock to convert into the relevant number of shares of Class A-1 common stock or Class A common stock, as applicable; provided that the Company will not be permitted to effect a mandatory conversion with respect to more than one-third of the aggregate outstanding shares, as of the date of the first notice date, of Series A-1 preferred stock and Series A preferred stock in any 12-month period unless the last reported sale price of the Class A common stock has equaled or exceeded $23.42 (or 136% of the initial conversion price), as may be adjusted, for at least 20 trading days in any period of 30 consecutive trading days.

At any time following June 9, 2026, the Company may redeem all, but not less than all, of the Convertible Preferred Stock then outstanding at a redemption price equal to the product of the liquidation preference of the Convertible Preferred Stock then outstanding and 105%, plus accrued and unpaid dividends. In the event that the Company receives a notice of an intention to exchange the shares of Convertible Preferred Stock for equity interests in certain of the Company's subsidiaries pursuant to the real estate agreement (as discussed below), the Company will have the right to redeem all, but not less than all, of its Convertible Preferred Stock then outstanding at a redemption price equal to the product of the aggregate liquidation preference of the Convertible Preferred Stock of such holder then outstanding and 110%, plus accrued and unpaid dividends. The Convertible Preferred Stock is also convertible, at the option of the holder, upon the occurrence of certain fundamental change events, including a change in control or delisting of the Company at the applicable conversion rate plus an additional number of shares determined by reference to the price paid for the Company's Common Stock upon such change in control, plus in certain conditions accrued and unpaid dividends through June 30, 2023 or June 30, 2024, as applicable.

Concurrent with the issuance and sale of the Convertible Preferred Stock, a newly formed 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, prior to the closing of the Convertible Preferred Stock, the Company was to place into its real estate subsidiary fee owned real estate properties with an appraised value of 165% of the liquidation preference of the Convertible Preferred Stock or a combination of real estate properties and cash. This resulted in the Company contributing approximately $36.5 million of cash into a restricted escrow account to make up for the shortfall on the appraised value of owned properties placed into the real estate subsidiary. The real estate agreement provides the RE Investor with the unilateral right, upon the occurrence of specified trigger events, to exercise an investor exchange right to exchange all of the outstanding Convertible Preferred Stock for certain real estate assets or the real estate subsidiary's equity interests in its subsidiary special purpose entities holding such real estate assets, subject to certain provisions as further defined in the real estate agreement (the "Investor Exchange Right"). The Investor Exchange Right may be exercised if any of the following were to occur: (i) the Convertible Preferred Stock remains outstanding as of June 9, 2027, (ii) if a
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fundamental change occurs after June 30, 2024 and the related fundamental change stock price is less than the conversion price, (iii) a downgrade by one or more gradations or withdrawal of the Company's credit rating by certain rating agencies, as a result of which the Company's credit rating is B- (or its equivalent) or lower, (iv) the failure by the Company to pay a dividend on the Convertible Preferred Stock, which failure continues for 30 days after such dividend's due date, or (v) a bankruptcy filing. The target amount of real estate assets (net of taxes and fees) to be received in exchange for the Convertible Preferred Stock will be the product of the liquidation preference and 110%, plus an amount equal to any accrued and unpaid dividends. The Investor Exchange Right may be exercised unless the Company redeems all of the outstanding Convertible Preferred Stock at a redemption price, if such redemption occurs after the Company receives a notice of intent to exercise the Investor Exchange Right, equal to the product of the aggregate liquidation preference of the Convertible Preferred Stock then outstanding and 110%, plus accrued and unpaid dividends. Upon completion of the Investor Exchange Right, subsidiaries of the Company, as the applicable tenant, will enter into a master lease agreement with the RE Investor or designated affiliate as the landlord, solely with respect to the real estate properties that have been transferred directly or indirectly to the RE Investor, substantially the same as the current master lease agreements between the Company's consolidated real estate subsidiaries and the Company's consolidated operating subsidiaries.
NOTE 65 - EMPLOYEE BENEFIT PLANS

Pension and Other Post-Retirement Benefits

The following tables provide the components of net pension and post-retirement (income) expense (in millions):
12 weeks ended
PensionOther post-retirement benefits
September 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
Estimated return on plan assets$(23.7)$(25.3)$$
Service cost3.5 3.4 0.1 
Interest cost12.6 18.6 0.1 0.2 
Amortization of prior service cost0.1 0.4 0.9 
Amortization of net actuarial loss (gain)0.5 0.1 (0.1)(0.2)
Settlement charge3.0 
(Income) expense, net$(4.1)$(3.1)$0.4 $1.0 

28 weeks ended16 weeks ended
PensionOther post-retirement benefitsPensionOther post-retirement benefits
September 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
June 19,
2021
June 20,
2020
June 19,
2021
June 20,
2020
Estimated return on plan assetsEstimated return on plan assets$(55.2)$(59.2)$$Estimated return on plan assets$(32.7)$(31.5)$$
Service costService cost8.3 7.9 0.3 Service cost6.9 4.8 
Interest costInterest cost29.2 43.4 0.2 0.4 Interest cost13.0 16.6 0.1 0.1 
Amortization of prior service costAmortization of prior service cost0.1 0.2 1.0 2.0 Amortization of prior service cost0.1 0.1 0.6 
Amortization of net actuarial loss (gain)Amortization of net actuarial loss (gain)1.1 0.3 (0.3)(0.3)Amortization of net actuarial loss (gain)0.3 0.6 (0.2)(0.2)
Settlement charge3.0 
(Income) expense, net(Income) expense, net$(13.5)$(7.4)$0.9 $2.4 (Income) expense, net$(12.4)$(9.4)$(0.1)$0.5 

The Company contributed $1.7$2.0 million and $56.3$54.6 million to its defined pension plans and post-retirement benefit plans during the 12 and 2816 weeks ended September 12,June 19, 2021 and June 20, 2020, respectively. For the 12 and 28 weeks ended September 7, 2019, the Company contributed $1.8 million and $7.0 million, respectively. At the Company's discretion, additional funds may be contributed to the defined benefit pension plans. The Company currently anticipates contributing an additional $6.1$46.8 million to meet the minimum funding requirements for these plans for the remainder of fiscal 2020.
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2021 but may make additional discretionary contributions that are determined to be beneficial to the Company.
Defined Contribution Plans and Supplemental Retirement Plans

Total contributions expensed for defined contribution plans (401(k) plans) were $16.3$16.2 million and $14.0$21.8 million for the 1216 weeks ended September 12,June 19, 2021 and June 20, 2020, and September 7, 2019, respectively. For the 28 weeks ended September 12, 2020 and September 7, 2019, total contributions expensed were $38.1 million and $32.6 million, respectively.

Multiemployer Pension Plans

ARP Act: The Company isAmerican Rescue Plan Act ("ARP Act") was signed into law on March 11, 2021. The ARP Act establishes a special financial assistance program for financially troubled multiemployer pension plans. Under the second largest contributing employerARP Act, eligible multiemployer plans can apply to receive a one-time cash payment in the Food Employers Labor Relations Association and United Food and Commercial Workers Pension Fund ("FELRA") which is currentlyamount projected by FELRA to become insolvent in the first quarter of 2021, and to the Mid-Atlantic UFCW and Participating Pension Fund ("MAP"). The Company continues to fund all of its required contributions to FELRA and MAP.

On March 5, 2020, the Company agreed with the two applicable local unions to new collective bargaining agreements pursuant to which the Company contributes to FELRA and MAP. In connection with these agreements, to address the pending insolvency of FELRA, the Company and the two local unions, along with the largest contributing employer, agreed to combine MAP into FELRA ("Combined Plan"). Immediately after the formation, the Combined Plan will terminate and the Company will be required to annually pay $23.2 million to the Combined Plan for the next 25 years. Immediately after the combination, the Company will receive a release of all withdrawal liability and mass withdrawal liability from FELRA, MAP, the Combined Plan and the Pension Benefit Guaranty Corporation ("PBGC"). This payment will replace to pay pension benefits through the Company's current annual contribution to both MAP and FELRA, which was a combined $26.2 million in fiscal 2019. In addition to the $23.2 million annual payment, the Company will begin to contribute to a new multiemployer pension plan. This new multiemployer plan will be limited to providing benefits to participants in MAP and FELRA in excess of the benefitsyear ending 2051. On July 9, 2021, the PBGC insures under law.

Furthermore, upon formation of the Combined Plan, the Company will establish and contribute to a new variable defined benefit plan that will provide benefits to participants for future services. These agreements are subject to approval by the PBGC, and the Company is in discussions with the local unions, the largest contributing employer and the PBGCissued its interim final rule with respect to these otherthe special financial assistance program. The PBGC interim final rule provides direction on the application requirements, identifies which plans andwill have priority, eligibility requirements, the Combined Plan. It is possible some provisionsdetermination of the Company's agreements withamount of financial assistance to be provided and establishes conditions and restrictions that apply to plans that receive the local unions may change as a result of negotiations with the PBGC. The Company expects to reach final agreements on formation of the Combined Plan by no later than December 31, 2020. Under the terms of the new collective bargaining agreements, the Company will continue to contribute to FELRA and MAP under the same terms of the previous collective bargaining agreements until approval by the PBGC and formation of the Combined Plan.assistance. The Company is currently evaluating the effect of these new agreements on its Consolidatedinterim final rule, which is subject to a 30-day comment period, including any potential impact to the Company's Excess Plan as defined in and further described in "Part II—Item 8. Financial Statements and preliminarily expects to record a material increase to its pension-related liabilities with a corresponding non-cash charge to pension expense upon approval bySupplemental Data—Note 12" of the PBGC.Company's Annual Report on Form 10-K for the fiscal year ended February 27, 2021.

On July 21, 2020, the Company announced that it had entered into a tentative agreement with the trustees of the United Food and Commercial Workers International Union ("UFCW") Union-Industry Pension Fund ("National Fund"), providing that the Company will permanently cease to have any obligation to contribute to the National Fund, a multiemployer pension plan, and will completely withdraw from the National Fund, effective as of June 30, 2020. The Company and 9 UFCW local unions have entered into a Memorandum of Understanding ("MOU") that will permit the withdrawal and establish a single employer Variable Annuity Pension Plan (the "VAPP"), effective as of July 1, 2020, providing for future security and service benefits for the Company's associates. These agreements will become effective only if the MOU is ratified by the membership of each of these 9 local unions and the related agreements with the local unions whose members participate in the National Fund and are employed by the two largest contributors to the National Fund also are ratified. After ratification, the Company will pay an aggregate of approximately $286 million to the National Fund, which will be in full satisfaction of the Company's withdrawal liability amount or mass withdrawal liability amount, by June 30, 2023. The Company will pay this
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amount in 3 or 4 installments over the next three years, any portion of which may be prepaid, in whole or in part. Within 30 days of the establishment of the VAPP, the Company will pre-fund a transition reserve to support certain grandfathered participants by making a payment of approximately $8 to $9 million. The Company expects to incur a pre-tax charge of approximately $286 million (or $213 million on an after-tax basis) to record the withdrawal liability for these benefits earned for prior service. This charge is expected to be recorded upon ratification of the agreement, which the Company expects to be in the third quarter of fiscal 2020.
NOTE 76 - COMMITMENTS AND CONTINGENCIES AND OFF BALANCE SHEET ARRANGEMENTS

Guarantees

California Department of Industrial Relations: On October 24, 2012, the Office of Self-Insurance Plans, a program within the director's office of the California Department of Industrial Relations (the "DIR"), notified SUPERVALU INC. ("SuperValu"), which was then the owner of New Albertsons L.P., a wholly-owned subsidiary of the Company, that additional collateral was required to be posted in connection with the Company's, and certain other subsidiaries', California self-insured workers' compensation obligations pursuant to applicable regulations. The notice from the DIR stated that the additional collateral was required as a result of an increase in estimated future liabilities, as determined by the DIR pursuant to a review of the self-insured California workers' compensation claims with respect to the applicable businesses. On January 21, 2014, the Company entered into a Collateral Substitution Agreement with the California Self-Insurers' Security Fund to provide collateral.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 an irrevocable LOCsurety bonds for the benefit of the State of
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California Office of Self-Insurance Plans. The amountA portion of the LOCsurety 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 million as of June 19, 2021 and $40.1 million as of September 12, 2020 and $90.3 million as of February 29, 2020,27, 2021, respectively.

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. 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 to 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 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 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 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 financial condition.

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 and an adverse outcome is probable.estimated. Nonetheless, assessing and predicting the outcomes of these matters involves substantial uncertainties. Management currently believes that the aggregate range of reasonably possible loss for the Company's
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exposure in excess of the amount accrued is expected to be immaterial to the Company. 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 material effect on the Company's financial condition, results of operations or cash flows.

Office of Inspector General: In January 2016, the Company received a subpoena from the Office of the Inspector General of the Department of Health and Human Services (the "OIG") pertaining to the pricing of drugs offered under the Company's MyRxCare discount program and the impact on reimbursements to Medicare, Medicaid and TRICARE (the "Government Health Programs"). In particular, the OIG requested information on the relationship between the prices charged for drugs under the MyRxCare program and the "usual and customary" prices reported by the Company in claims for reimbursements to the Government Health Programs or other third-party payors. The Company cooperated with the OIG in the investigation. The Company is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any.

Civil Investigative Demands: On December 16, 2016, the Company received a civil investigative demand from the United States Attorney for the District of Rhode Island in connection with a False Claims Act ("FCA") investigation relating to the Company's influenza vaccination programs. The investigation concerns whether the Company's provision of store coupons to its customers who received influenza vaccinations in its store pharmacies constituted an improper benefit to those customers under the federal Medicare and Medicaid programs. The Company believes that its provision of the store coupons to its customers is an allowable incentive to encourage vaccinations. The Company 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.

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 an 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 will cooperate 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.

Terraza/Lorenz: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 ("Terraza") 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 ("Lorenz") 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
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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,
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and the matter has been set for a final approval hearing was held on April 26, 2021.2021, at which time the Court took the matter under submission. The Company has recorded an estimated liability for these matters.

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 intends to cooperate 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 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 U.S.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 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. ThatOn November 13, 2020, the Court denied relator's motion, and on December 11, 2020, relator filed a notice of appeal. The appeal is fully briefed and awaiting a decision.now pending in the Seventh Circuit Court of Appeals. Oral argument is scheduled for September 9, 2021.
 
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. The appeal is now pending in the Seventh Circuit and the relators will file their opening appellate briefCourt of Appeals. Oral argument was held on September 30, 2020.January 19, 2021.
 
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.
 
The Company was also subject to another FCA qui tam action entitled United States ex rel. Zelickowski v. Albertson's LLC. In that case, the relators alleged that Albertson's LLC ("Albertson's") overcharged federal healthcare programs by not providing the federal government, as a part of its usual and customary prices to the federal government, the benefit of discounts given to customers who enrolled in the Albertson's discount-club program. The complaint was originally filed under seal and amended on June 20, 2017. On December 17, 2018, the case was dismissed, without prejudice.

Alaska Attorney General's Investigation: On May 22, 2018, the Company received a subpoena from the Office of the Attorney General for the State of Alaska (the "Alaska Attorney General") stating that the Alaska Attorney General has reason to believe the Company has engaged in unfair or deceptive trade practices under Alaska's Unfair Trade Practices and Consumer Act and seeking documents regarding the Company's policies, procedures, controls, training, dispensing practices and other matters in connection with the sale and marketing of opioid pain medications. The Company responded to the subpoena on July 30, 2018 and has not received any further communication from the Alaska Attorney General. The Company does not currently have a basis to believe it has violated Alaska's Unfair Trade Practices and Consumer Act; however, at this time, the Company is unable to determine the probability of the outcome of this matter or estimate a range of reasonably possible loss, if any.

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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 7080 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. In two matters--MDL No. 2804 filed by The Blackfeet TribeMost of the Blackfeet Indian Reservation and State of New Mexico v. Purdue Pharma L.P., et al.--the Company filed motions to dismiss, which were denied, and the Company has now answered the complaints. The MDLthese cases arehave been stayed pending bellwether trials, andtrials. At present, the onlymost active case is a matter is thein New Mexico actionstate court where we have been in active discovery and where a September 20212022 trial date has been set. The MDL Court and a state court in Utah 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. The Company is vigorously defending these matters and believes that these cases are without merit. At this early 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: Upon the inspection by 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. 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.The On July 7, 2021, the parties are in negotiations to reachentered into a settlement. Thesettlement agreement for which the Company has recorded an estimated liability for this matter.liability.

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 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 will seek court approval of the settlement. The Company has recorded an estimated liability for this matter.

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 87 - 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 and interest rate swaps.liabilities. Total comprehensive earnings represent the activity for a period net of tax.

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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 12, 202016 weeks ended June 19, 2021
TotalInterest rate swapsPension and Post-retirement benefit plansOtherTotalPension and Post-retirement benefit plansOther
Beginning balanceBeginning balance$(118.5)$$(121.7)$3.2 Beginning balance$63.5 $61.3 $2.2 
Other comprehensive income before reclassifications11.1 9.6 1.5 
Amounts reclassified from accumulated other comprehensive incomeAmounts reclassified from accumulated other comprehensive income4.9 4.9 Amounts reclassified from accumulated other comprehensive income0.2 0.2 
Tax expenseTax expense(3.9)(3.6)(0.3)Tax expense(0.1)(0.1)
Current-period other comprehensive income, net of taxCurrent-period other comprehensive income, net of tax12.1 10.9 1.2 Current-period other comprehensive income, net of tax0.1 0.1 
Ending balanceEnding balance$(106.4)$$(110.8)$4.4 Ending balance$63.6 $61.4 $2.2 

28 weeks ended September 7, 2019
TotalInterest rate swapsPension and Post-retirement benefit plansOther
Beginning balance$91.3 $3.4 $88.8 $(0.9)
Cumulative effect of accounting change (1)16.6 1.2 14.9 0.5 
Other comprehensive (loss) income before reclassifications(36.7)(50.3)10.2 3.4 
Amounts reclassified from accumulated other comprehensive income(1.0)(3.2)2.2 
Tax benefit (expense)9.9 14.0 (3.2)(0.9)
Current-period other comprehensive (loss) income, net of tax(11.2)(38.3)24.1 3.0 
Ending balance$80.1 $(34.9)$112.9 $2.1 
16 weeks ended June 20, 2020
TotalPension and Post-retirement benefit plansOther
Beginning balance$(118.5)$(121.7)$3.2 
Other comprehensive income before reclassifications1.2 1.2 
Amounts reclassified from accumulated other comprehensive income1.1 1.1 
Tax expense(0.6)(0.3)(0.3)
Current-period other comprehensive income, net of tax1.7 0.8 0.9 
Ending balance$(116.8)$(120.9)$4.1 
(1) Related to the fiscal 2019 adoption of 
ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income".
NOTE 98 - 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 Convertiblethe 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,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 Stockcommon 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 restricted stock unitsRSUs and
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awards 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 ended28 weeks ended16 weeks ended
September 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
June 19,
2021
June 20,
2020
Basic net income per Class A common shareBasic net income per Class A common shareBasic net income per Class A common share
Net incomeNet income$284.5 $294.8 $870.7 $343.8 Net income$444.8 $586.2 
Accrued dividends on Convertible Preferred StockAccrued dividends on Convertible Preferred Stock(26.9)(30.8)Accrued dividends on Convertible Preferred Stock(36.4)(3.9)
Earnings allocated to Convertible Preferred StockEarnings allocated to Convertible Preferred Stock(9.0)(9.0)Earnings allocated to Convertible Preferred Stock(36.2)
Net income allocated to Class A common stockholders - BasicNet income allocated to Class A common stockholders - Basic$248.6 $294.8 $830.9 $343.8 Net income allocated to Class A common stockholders - Basic$372.2 $582.3 
Weighted average Class A common shares outstanding - Basic (1)Weighted average Class A common shares outstanding - Basic (1)477.3 579.3 529.2 579.3 Weighted average Class A common shares outstanding - Basic (1)465.1 568.0 
Basic net income per Class A common shareBasic net income per Class A common share$0.52 $0.51 $1.57 $0.59 Basic net income per Class A common share$0.80 $1.03 
Diluted net income per Class A common shareDiluted net income per Class A common shareDiluted net income per Class A common share
Net income allocated to Class A common stockholders - BasicNet income allocated to Class A common stockholders - Basic$248.6 $294.8 $830.9 $343.8 Net income allocated to Class A common stockholders - Basic$372.2 $582.3 
Accrued dividends on Convertible Preferred StockAccrued dividends on Convertible Preferred Stock26.9 30.8 Accrued dividends on Convertible Preferred Stock36.4 3.9 
Earnings allocated to Convertible Preferred StockEarnings allocated to Convertible Preferred Stock9.0 9.0 Earnings allocated to Convertible Preferred Stock36.2 
Net income allocated to Class A common stockholders - DilutedNet income allocated to Class A common stockholders - Diluted$284.5 $294.8 $870.7 $343.8 Net income allocated to Class A common stockholders - Diluted$444.8 $586.2 
Weighted average Class A common shares outstanding - Basic (1)Weighted average Class A common shares outstanding - Basic (1)477.3 579.3 529.2 579.3 Weighted average Class A common shares outstanding - Basic (1)465.1 568.0 
Dilutive effect of:Dilutive effect of:Dilutive effect of:
Restricted stock units and awards Restricted stock units and awards4.0 1.3 4.3 0.7  Restricted stock units and awards4.7 4.8 
Convertible preferred stock (2) Convertible preferred stock (2)101.6 49.8  Convertible preferred stock (2)101.6 10.9 
Weighted average Class A common shares outstanding - Diluted (3)Weighted average Class A common shares outstanding - Diluted (3)582.9 580.6 583.3 580.0 Weighted average Class A common shares outstanding - Diluted (3)571.4 583.7 
Diluted net income per Class A common shareDiluted net income per Class A common share$0.49 $0.51 $1.49 $0.59 Diluted net income per Class A common share$0.78 $1.00 
(1) There were 0.4 million20,048 Class A common shares remaining to be issued for the 12 and 2816 weeks ended September 12, 2020,June 19, 2021 compared to 3.6 million0 Class A common shares remaining to be issued for the 12 and 2816 weeks ended September 7, 2019, respectively.June 20, 2020.
(2) Reflects the number of shares of Convertible Preferred Stock issued, if converted into Common Stockcommon stock for the period outstanding.
(3) There were 0 potential Class A common shares outstanding that were antidilutive for the 12 and 2816 weeks ended September 12,June 19, 2021 and June 20, 2020, and September 7, 2019.respectively.

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

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future operating results and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. In many cases, you can identify forward-looking statements by terms such as "may," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these terms or other similar expressions. Forward-looking statements are based on our current expectations and assumptions about market conditions and our future operating performance which the Company believes to be reasonable at this time. The Company's results may vary significantly from quarter to quarter, and these expectations and assumptions involve risks and uncertainties, including changes in macroeconomic conditions and the Company's industry, failure to achieve anticipated synergies and cost-savings, increased rates of food price inflation or deflation and other factors, that could cause actual results or events to be materially different from those anticipated. These risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements include those related to the COVID-19 pandemic, about which there are still many unknowns, including the duration of the pandemic and the extent of its impact. The Company undertakes no obligation to update or revise any such statements as a result of new information, future events or otherwise. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

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 Incomenet income as GAAP netNet income adjusted to eliminate the effects of items management does not consider in assessing our ongoing core performance. We define Adjusted Net Income Pernet income per Class A Common Sharecommon share as Adjusted Net Incomenet income divided by the weighted average diluted Class A common shares outstanding, as adjusted to reflect all restricted stock units ("RSUs") and awardsrestricted common stock ("RSAs") outstanding at the end of the period. We define Adjusted Free Cash FlowNet 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 Ratio as the ratio of Net Debt to Adjusted EBITDA less capital expenditures.for the rolling 52 or 53 week period. See "Results of Operations" for further discussion and a reconciliation of Adjusted EBITDA, Adjusted Net Income,net income and Adjusted Net Income Pernet income per Class A Common Share and Adjusted Free Cash Flow.common share.

EBITDA, Adjusted EBITDA, Adjusted Net Income,net income and Adjusted Net Income Pernet income per Class A Common Share and Adjusted Free Cash Flowcommon share (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 netNet income, operating income and gross profit. These Non-GAAP Measures exclude the financial impact of items management does not consider in assessing our ongoing core operating performance, and thereby facilitate reviewprovide useful measures to analysts and investors of our operating performance on a period-to-period basis. Other companies may have different capital structures ordefinitions of Non-GAAP Measures and provide for different lease terms, and comparability to our results of operations may be impacted by the effects of acquisition accounting on our depreciation and amortization. As a result of the effects of these factors and factors specific to other companies, we believe EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income Per Class A Common Share and Adjusted Free Cash Flow provide helpful information to analysts and investors to facilitate a comparison of our operating performance to that of other companies. We also use Adjusted EBITDA, as further adjusted for additional items defined in our debt instruments, for board of director and bank compliance reporting. Our presentation of
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adjustments, and comparability to our results of operations may be impacted by such differences. We also use Adjusted EBITDA and Net 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.

COVID-19FIRST QUARTER OF FISCAL 2021 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 16 weeks ended June 19, 2021 ("first quarter of fiscal 2021") to the 16 weeks ended June 15, 2019 ("first quarter of fiscal 2019") for certain financial measures to demonstrate the two-year growth in our business in addition to comparisons to the 16 weeks ended June 20, 2020 ("first quarter of fiscal 2020").

As of June 19, 2021, we operated 2,278 retail food and drug stores with 1,725 pharmacies, 399 associated fuel centers, 22 dedicated distribution centers and 20 manufacturing facilities. We continue to experiencemake significant increasesprogress against all of our strategic priorities, including in-store excellence, accelerating our digital and omni-channel capabilities, driving productivity and strengthening our talent and culture. Identical sales decreased 10.0%, excluding fuel, during the first quarter of fiscal 2021, resulting in demandtwo-year stacked identical sales growth of 16.5%. Underscoring our strong omni-channel capabilities that allow customers to complete their shopping with us in storesany way they want, our digital initiatives continue to resonate with our customers, as people have adjustedevidenced by our sustained sales levels in the first quarter of fiscal 2021 with digital sales flat compared to the new circumstances resulting fromfirst quarter of fiscal 2020 and a two-year stacked growth of 276%. During the COVID-19 pandemic. There also continues to be a substantial increase in customer demand and engagement with our eCommerce offerings as a resultfirst quarter of the pandemic, including both home delivery andfiscal 2021, we expanded our Drive Up & Go curbside pickup.pickup service to 1,740 locations and offer delivery services across more than 2,000 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 have responded to this increased demand for our eCommerce offerings by hiring additional pickers and drivers, retaining additional third-party service providers and expanding our Drive Up & Go offerings.also recently launched a similar partnership with Uber, where customers can order a full assortment of groceries on the Uber platform.

Responding to the pandemic has also significantly increased our expenses. We continue to cleanachieve significant success with members in our just for U loyalty program, which drives higher sales and disinfect all departments, restrooms,customer retention, with participation growing 18% compared to the first quarter of fiscal 2020, reaching 26.7 million members. Our Own Brands products resonate well with our customers as evidenced by increased sales penetration of Own Brands by 100 basis points to 25.2% compared to the first quarter of fiscal 2020. Own Brands continues to deliver on innovation with more than 300 new items launched in the first quarter of fiscal 2021. During the first quarter of fiscal 2021, we made significant progress on productivity initiatives, including labor efficiency, shrink, promotional effectiveness and other high-touch points of our stores often, including check standspurchasing and service counters, and hourly disinfecting of high-touch areas. This is in addition to our rigorous food safety and sanitation programs that were already in place. From March 2020 to June 2020, we instituted associate appreciation awards in recognition of their significant efforts. We also have contributed $53 million to hunger relief to help feed families in need during the COVID-19 pandemic and ensure that they get the food they need.procurement.

MostOur capital allocation strategy balances investing for the future, strengthening our balance sheet and returns to shareholders through a combination of dividends and opportunistic share repurchases. Capital expenditures were approximately $513 million during the first quarter of fiscal 2021 as we opened five new stores and completed 33 upgrades and remodels. Our balance sheet remains strong with a Net Debt Ratio of 1.5x as of the states in which we operate have anti-price gouging statutes, which place limits on our ability to increase prices after an officially declared emergency. Certain state governors declared an emergency near the outsetend of the COVID-19 pandemic, thus triggeringfirst quarter of fiscal 2021. Capital returns to shareholders in the applicationfirst quarter of anti-price gouging statutes. As the COVID-19 pandemic began, we implemented procedures to assure compliance with anti-price gouging laws, including instruction and guidance tofiscal 2021 included our retail operators on the price restrictions to which we needed to adhere, all of which remain in place. Despite these efforts, we have been named as a defendant (along with other retailers and suppliers) in three complaints alleging price gouging and one other pre-complaint claim letter. We believe these actions are without merit, at least as they relate to our Company.$0.10 per share quarterly dividend.

We believe that someIn addition, during the first quarter of the changes that have been implemented, infiscal 2021, our stores and the country as a whole, will be permanent. However, the ultimate significance of the pandemic onNourishing Neighbors fundraising drive raised approximately $9 million from our financial condition, results of operations, or cash flows will be dictatedcustomers at our check stands, which was matched by the length of time that such circumstances continue, which will depend onAlbertsons Companies Foundation, resulting in approximately $18 million in funds to feed children and families. We have also been partnering with the currently unknowable extent and duration of the COVID-19 pandemic and the nature and effectiveness of governmental and public actions taken in response.

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OVERVIEWDepartment of Health and Human Services and local health authorities to administer COVID-19 vaccines to our local communities and, as of July 28, 2021, have administered approximately 6 million doses.

As
First quarter of September 12, 2020, we operated 2,252 retail foodfiscal 2021 highlights

In summary, our financial and drugoperating highlights for the first quarter of fiscal 2021 include:
Identical sales decrease of 10.0%; two-year identical sales stacked growth of 16.5%
Sustained digital sales levels; on a two-year stacked basis digital sales growth was 276%
Net income of $445 million, or $0.78 per Class A common share
Adjusted net income of $518 million, or $0.89 per Class A common share
Adjusted EBITDA of $1,308 million
Opened five new stores with 1,725 pharmacies, 398 associated fuel centers, 22 dedicated distribution centers and 20 manufacturing facilities. In addition to our retail footprint, we strive to differentiate through our best in class Own Brands and rapidly expanding eCommerce options, which primarily include home delivery sales andcompleted 33 remodel projects
Launched 320 new Drive Up & Go curbside pickup. locations and one micro-fulfillment center

Stores

The following table shows stores operating, acquired, opened and closed during the periods presented:
12 weeks ended28 weeks ended16 weeks ended
September 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
June 19,
2021
June 20,
2020
Stores, beginning of periodStores, beginning of period2,252 2,268 2,252 2,269 Stores, beginning of period2,277 2,252 
Acquired (1)Acquired (1)— 
OpenedOpenedOpened— 
ClosedClosed(2)(7)(2)(14)Closed(5)— 
Stores, end of periodStores, end of period2,252 2,262 2,252 2,262 Stores, end of period2,278 2,252 
(1) The 16 weeks ended June 19, 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.
The following table summarizes our stores by size:
Number of storesPercent of TotalRetail Square Feet (1)Number of storesPercent of TotalRetail Square Feet (1)
Square FootageSquare FootageSeptember 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
Square FootageJune 19,
2021
June 20,
2020
June 19,
2021
June 20,
2020
June 19,
2021
June 20,
2020
Less than 30,000Less than 30,000204 205 9.1 %9.1 %4.7 4.8 Less than 30,000223 204 9.8 %9.1 %5.1 4.7 
30,000 to 50,00030,000 to 50,000781 790 34.6 %34.9 %32.8 33.1 30,000 to 50,000786 783 34.5 %34.7 %32.9 32.9 
More than 50,000More than 50,0001,267 1,267 56.3 %56.0 %74.8 74.9 More than 50,0001,269 1,265 55.7 %56.2 %75.0 74.7 
Total StoresTotal Stores2,252 2,262 100.0 %100.0 %112.3 112.8 Total Stores2,278 2,252 100.0 %100.0 %113.0 112.3 
(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 12 and 28 weeks ended September 12, 2020First Quarter of Fiscal 2021 to 12 and 28 weeks ended September 7, 2019:First Quarter of Fiscal 2020:

The following table and related discussion set forth certain information and comparisons regarding the components of our Condensed Consolidated Statements of Operations for the 12 and 28 weeks ended September 12, 2020 ("secondfirst quarter of fiscal 2020"2021 and "first 28 weeks of fiscal 2020") and 12 and 28 weeks ended September 7, 2019 ("secondthe first quarter of fiscal 2019" and "first 28 weeks of fiscal 2019")2020 (in millions, except per share data).
12 weeks ended16 weeks ended
September 12,
2020
% of SalesSeptember 7,
2019
% of SalesJune 19,
2021
% of SalesJune 20,
2020
% of Sales
Net sales and other revenueNet sales and other revenue$15,757.6 100.0 %$14,176.7 100.0 %Net sales and other revenue$21,269.4 100.0 %$22,751.6 100.0 %
Cost of salesCost of sales11,182.7 71.0 10,235.2 72.2 Cost of sales15,078.4 70.9 15,980.1 70.2 
Gross profitGross profit4,574.9 29.0 3,941.5 27.8 Gross profit6,191.0 29.1 6,771.5 29.8 
Selling and administrative expensesSelling and administrative expenses4,031.2 25.6 3,794.6 26.8 Selling and administrative expenses5,503.6 25.9 5,769.4 25.4 
Gain on property dispositions and impairment losses, net(18.3)(0.1)(435.5)(3.1)
Loss on property dispositions and impairment losses, netLoss on property dispositions and impairment losses, net0.3 — 30.3 0.1 
Operating incomeOperating income562.0 3.5 582.4 4.1 Operating income687.1 3.2 971.8 4.3 
Interest expense, netInterest expense, net128.6 0.8 177.5 1.3 Interest expense, net153.3 0.7 180.6 0.8 
Loss on debt extinguishment49.1 0.3 23.1 0.2 
Other (income) expense, netOther (income) expense, net(11.4)(0.1)5.1 — Other (income) expense, net(43.5)(0.2)3.1 — 
Income before income taxesIncome before income taxes395.7 2.5 376.7 2.6 Income before income taxes577.3 2.7 788.1 3.5 
Income tax expenseIncome tax expense111.2 0.7 81.9 0.6 Income tax expense132.5 0.6 201.9 0.9 
Net incomeNet income$284.5 1.8 %$294.8 2.0 %Net income$444.8 2.1 %$586.2 2.6 %
Basic net income per Class A common shareBasic net income per Class A common share$0.80 $1.03 
Diluted net income per Class A common shareDiluted net income per Class A common share0.78 1.00 
28 weeks ended
September 12,
2020
% of SalesSeptember 7,
2019
% of Sales
Net sales and other revenue$38,509.2 100.0 %$32,915.1 100.0 %
Cost of sales27,162.8 70.5 23,734.0 72.1 
Gross profit11,346.4 29.5 9,181.1 27.9 
Selling and administrative expenses9,800.6 25.5 8,741.2 26.6 
Loss (gain) on property dispositions and impairment losses, net12.0 — (464.0)(1.4)
Operating income1,533.8 4.0 903.9 2.7 
Interest expense, net309.2 0.8 402.7 1.2 
Loss on debt extinguishment49.1 0.1 65.8 0.2 
Other income, net(8.3)— (6.0)— 
Income before income taxes1,183.8 3.1 441.4 1.3 
Income tax expense313.1 0.8 97.6 0.3 
Net income$870.7 2.3 %$343.8 1.0 %

Net Sales and Other Revenue
Net sales and other revenue increased 11.2%decreased 6.5% to $15,757.6$21,269.4 million for the secondfirst quarter of fiscal 20202021 from $14,176.7$22,751.6 million for the secondfirst quarter of fiscal 2019.2020. The increasedecrease in Net sales and other revenue was primarily driven by our 13.8% increase10.0% decrease in identical sales, driven by significantly elevated demand at the onset of the COVID-19 pandemic in the first quarter of fiscal 2020 and partially offset by a reductionan increase in pharmacy sales, related to the stores closed since the second quarter of fiscal 2019 and $222.4 million in lower fuel sales.
Net sales and other revenue increased 17.0% to $38,509.2 million for the first 28 weeks of fiscal 2020primarily from $32,915.1 million for the first 28 weeks of fiscal 2019.administering COVID-19 vaccines. The increasedecrease in Net sales and other revenue was primarily
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driven by our 21.0% increase in identical sales, partially offset by a reduction in sales related to the stores closed since the second quarter of fiscal 2019 and $709.7 million in lower 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 internetdigital 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 2816 weeks ended September 12, 2020June 19, 2021 and the 12 and 2816 weeks ended September 7, 2019,June 20, 2020, respectively, were:
12 weeks ended28 weeks ended
September 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
Identical sales, excluding fuel13.8%2.4%21.0%1.9%
16 weeks ended
June 19,
2021
June 20,
2020
Identical sales, excluding fuel(10.0)%26.5%

The increasedecrease in identical sales for the secondfirst quarter of fiscal 2020 and first 28 weeks of fiscal 20202021 was a direct result of significant demand due toat the onset of the COVID-19 pandemic including 243% growth in our digital sales during the secondfirst quarter of fiscal 2020 as more customers shifted2020. Though our identical sales decreased in the first quarter of fiscal 2021, we retained market share gains compared to online home delivery and Drive Up & Go.pre-pandemic levels.

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Gross Profit

Gross profit 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 charges, purchasing and receivingcosts, product quality testing costs, warehouse inspectionand distribution costs, warehousingOwn Brands program costs and other costs associated with our distribution network.digital-related delivery and handling costs. Advertising, promotional expenses and vendor allowances are also components of Cost of sales.

Gross profit margin increaseddecreased to 29.0%29.1% during the secondfirst quarter of fiscal 20202021 compared to 27.8%29.8% during the secondfirst quarter of fiscal 2019.2020. Excluding the impact of fuel, gross profit margin increased 8510 basis points compared to the secondfirst quarter of fiscal 2019.2020. The increase in gross profit margin was primarily driven by improvementsimproved pharmacy margins related to administering COVID-19 vaccines, productivity initiatives related to optimization of promotions, growth in shrink expenseOwn Brands penetration and leveraging of our distribution, warehousing and supplies costs. Gross profit margin was also favorably impacted from leveraging of advertisinglower COVID-19 related costs, and shifts in sales mix. The increase was partially offset by approximately $22 million of costs related to the COVID-19 pandemic, including expanded sick pay, incremental labor for enhanced cleaning and health screening to support and protect our employees and other warehousing and inventory costs.
Second quarter of fiscal 2020 vs. Second quarter of fiscal 2019Basis point increase
(decrease)
Shrink44
Advertising and sales mix44
Distribution, warehousing and supplies11
Depreciation and rent expense3
COVID-19 pandemic related costs(14)
Other(3)
Total85

Gross profit margin increased to 29.5% during the first 28 weeks of fiscal 2020 compared to 27.9% during the first 28 weeks of fiscal 2019. Excluding the impact of fuel, gross profit margin increased 80 basis points compared to the first 28 weeks of fiscal 2019. The increase in gross profit margin was driven by improvements in shrink expense and leveraging of our distribution, warehousing and supplies costs. Gross profit margin was also favorably impacted from leveraging of advertising costs and shifts in sales mix. The increase was partially offset by approximately $78
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million of costs related to the COVID-19 pandemic, including employee appreciation pay, expanded sick pay, incremental labor for enhanced cleaning and health screening to support and protect our employees and other warehousing and inventory costs.
First 28 weeks of fiscal 2020 vs. First 28 weeks of fiscal 2019Basis point increase
(decrease)
Shrink71
Advertising and sales mix19
Distribution, warehousing and supplies7
Depreciation and rent expense4
COVID-19 pandemic related costs(21)
Total80
deleverage.

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 decreasedincreased to 25.6%25.9% of Net sales and other revenue during the secondfirst quarter of fiscal 20202021 compared to 26.8%25.4% of Net sales and other revenue for the secondfirst quarter of fiscal 2019.2020. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue decreased 175increased 115 basis points during the secondfirst quarter of fiscal 20202021 compared to the secondfirst quarter of fiscal 2019.2020. The decreaseincrease in Selling and administrative expenses as a percentage of Net sales and other revenue was driven byprimarily attributable to the sales deleverage, including employee wage and benefit costs, depreciation and amortization and rent and occupancy costs, attributable to sales leverage drivencosts. The increase was partially offset by significantly higher identical sales. The decrease was also attributable to lower third-party fees and services, partially driven by cost reduction initiatives. Employee wage and benefit costs included approximately $83 million of COVID-19 pandemic related incremental labor for enhanced cleaning and health screening and expanded sick pay to front-line associates. In addition, we also incurred approximately $15 million in additional COVID-19 pandemic costsbenefits related to suppliesthe execution of our productivity initiatives and outside services, which included personal protective equipment for our stores and employees.
Second quarter of fiscal 2020 vs. Second quarter of fiscal 2019Basis point increase
(decrease)
Employee wage and benefit costs(53)
Depreciation and amortization(53)
Rent and occupancy costs(48)
Third-party fees and services(29)
COVID-19 pandemic related costs, excluding incremental employee wages and benefits10
Other(2)
Total(175)
lower COVID-19 related costs.

Selling and administrative expenses decreased to 25.5% of Net sales and other revenue during the first 28 weeks of fiscal 2020 compared to 26.6% of Net sales and other revenue for the first 28 weeks of fiscal 2019. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue decreased 185 basis points during the first 28 weeks of fiscal 2020 compared to the first 28 weeks of fiscal 2019. The decrease in Selling and administrative expenses as a percentage of Net sales and other revenue was driven by employee wage and benefit costs, depreciation and amortization and rent and occupancy costs, attributable to sales leverage driven by significantly higher identical sales. The decrease was also attributable to lower third-party fees and services, partially driven by cost reduction initiatives. Employee wage and benefit costs included approximately $222 million of incremental labor for enhanced cleaning and health screening and also included $290 million of COVID-19 pandemic related employee appreciation pay, which includes expanded sick pay, to front-line associates. In
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addition, we also incurred approximately $90 million in additional COVID-19 pandemic costs related to supplies and outside services, which included personal protective equipment for our stores and employees. We also contributed $53 million to hunger relief in our communities during the first 28 weeks of fiscal 2020.
First 28 weeks of fiscal 2020 vs. First 28 weeks of fiscal 2019Basis point increase
(decrease)
Employee wage and benefit costs(79)
Depreciation and amortization(68)
Rent and occupancy costs(64)
Third-party fees and services(9)
COVID-19 pandemic related costs, excluding incremental employee wages and benefits38
Other(3)
Total(185)

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

For the secondfirst quarter of fiscal 2020,2021, net gainloss on property dispositions and impairment losses was $18.3$0.3 million, primarily driven by $20.0$9.9 million of asset impairments, primarily related to right-of-use assets, partially offset by $9.6 million of gains from the sale of assets, partially offset by $1.7 million of asset impairments. For the second quarter of fiscal 2019, net gain on property dispositions and impairment losses was $435.5 million, primarily driven by $463.6 million of gains related to sale leaseback transactions, partially offset by asset impairments including an impairment loss of $38.6 million related to certain assets of our meal kit operations.

real estate assets. For the first 28 weeksquarter of fiscal 2020, net loss on property dispositions and impairment losses was $12.0$30.3 million, primarily driven by $22.8$21.1 million of asset impairments, primarily related to right-of-use assets, partially offset by $10.8and $9.2 million of gainslosses from the sale of real estate assets. For the first 28 weeks of fiscal 2019, net gain on property dispositions and impairment losses was $464.0 million, primarily driven by $463.6 million of gains related to sale leaseback transactions during the second quarter of fiscal 2019, partially offset by asset impairments including an impairment loss of $38.6 million related to certain assets of our meal kit operations.

Interest Expense, Net

Interest expense, net was $128.6$153.3 million during the secondfirst quarter of fiscal 20202021 compared to $177.5$180.6 million during the secondfirst quarter of fiscal 2019.2020. The decrease in interest expense was primarily attributable to lower average outstanding borrowings and lower average interest rates. The weighted average interest rate during the secondfirst quarter of fiscal 20202021 was 6.0%5.6%, excluding amortization and write-off of deferred financing costs and original issue discount, compared to 6.4%6.0% during the secondfirst quarter of fiscal 2019.

Interest expense, net was $309.2 million during the first 28 weeks of fiscal 2020 compared to $402.7 million during the first 28 weeks of fiscal 2019. 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 2020 was 6.0%, excluding amortization and write-off of deferred financing costs and original issue discount, compared to 6.4% during the first 28 weeks of fiscal 2019.

Loss on Debt Extinguishment

Loss on debt extinguishment was $49.1 million during both the second quarter of fiscal 2020 and first 28 weeks of fiscal 2020, compared to loss on debt extinguishment of $23.1 million during the second quarter of fiscal 2019 and $65.8 million during the first 28 weeks of fiscal 2019 . 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 2024 Redemption. The loss on debt extinguishment during the second quarter and first
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28 weeks of fiscal 2019 primarily consisted of the write-off of debt discounts associated with the tender offer and various repurchases of notes.2020.

Other (Income) Expense, Net

For the secondfirst quarter of fiscal 2020,2021, other income, net was $11.4$43.5 million compared to other expense, net of $5.1 million for the second quarter of fiscal 2019. For the first 28 weeks of fiscal 2020, other income, net was $8.3 million compared to $6.0$3.1 million for the first 28 weeksquarter of fiscal 2019.2020. Other income, net during both the secondfirst quarter of fiscal 2020 and the first 28 weeks of fiscal 20202021 was primarily driven by realized gains from non-operating investments, 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. Other expense, (income), net during the secondfirst quarter of fiscal 2019 and the first 28 weeks of fiscal 20192020 was primarily driven by non-service cost components of net pension and post-retirement expense, unrealized gains and losses from non-operating investments and income related to our equity investment.

Income Taxes

Income tax expense was $111.2 million, representing a 28.1% effective tax rate, for the second quarter of fiscal 2020. Income tax expense was $81.9 million, representing a 21.7% effective tax rate, for the second quarter of fiscal 2019. For the first 28 weeks of fiscal 2020, Income tax expense was $313.1 million, representing a 26.4% effective tax rate. Income tax expense was $97.6 million, representing a 22.1% effective tax rate, for the first 28 weeks of fiscal 2019. The increase in our effective tax rate for the second quarter of fiscal 2020 and first 28 weeks of fiscal 2020 is primarily due to certain nondeductible transaction-related costs incurred during the first 28 weeks of fiscal 2020.

Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income Per Class A Common Share

For the second quarter of fiscal 2020, Adjusted EBITDA was $948.4 million, or 6.0% of Net sales and other revenue, compared to $567.6 million, or 4.0% of Net sales and other revenue, for the second quarter of fiscal 2019. For the first 28 weeks of fiscal 2020, Adjusted EBITDA was $2,639.4 million, or 6.9% of Net sales and other revenue, compared to $1,444.4 million, or 4.4% of Net sales and other revenue for the first 28 weeks of fiscal 2019. The increase in Adjusted EBITDA for the second quarter of fiscal 2020 and first 28 weeks of fiscal 2020 primarily relates to the 13.8% and 21.0% increase in identical sales, respectively, and the improved sales leverage experienced in gross margin and selling and administrative expenses as a percent of sales.recognized
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losses on interest rate swaps and unrealized losses from non-operating investments, partially offset by income from non-service cost components of net pension and post-retirement expense.

Income Taxes

Income tax expense was $132.5 million, representing a 23.0% effective tax rate, for the first quarter of fiscal 2021. Income tax expense was $201.9 million, representing a 25.6% effective tax rate, for the first quarter of fiscal 2020. The decrease in the effective income tax rate was primarily driven by the recognition of certain discrete state income tax benefits during the first quarter of fiscal 2021. We expect our annual effective tax rate for fiscal 2021 to be approximately 25%.

Net Income and Adjusted Net Income

Net income was $444.8 million, or $0.78 per Class A common share, during the first quarter of fiscal 2021 compared to $586.2 million, or $1.00 per Class A common share, during the first quarter of fiscal 2020. Adjusted net income was $517.5 million, or $0.89 per Class A common share, during the first quarter of fiscal 2021 compared to $801.2 million, or $1.35 per Class A common share, during the first quarter of fiscal 2020.

Adjusted EBITDA

For the first quarter of fiscal 2021, Adjusted EBITDA was $1,308.1 million, or 6.2% of Net sales and other revenue, compared to $1,691.0 million, or 7.4% of Net sales and other revenue, for the first quarter of fiscal 2020.

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

The following reconcilestable provides a comparison of the first quarter of fiscal 2021 to the first 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.
First Quarter of Fiscal 2021
Supplemental Two-Year Results
Identical sales two-year stacked (1)16.5 %
Net income per Class A common share two-year CAGR212.2 %
Adjusted net income per Class A common share two-year CAGR72.2 %
Net income two-year CAGR201.3 %
Adjusted EBITDA two-year CAGR22.1 %
Margins:
Gross profit (1)Increased 90 basis points
Selling and administrative expenses (1)Decreased 75 basis points
(1) Excluding fuel

Net sales and other revenue was $21.3 billion during the first quarter of fiscal 2021 compared to $18.7 billion during the first quarter of fiscal 2019. The increase in sales compared to the first quarter of 2019 is primarily due to the 16.5% increase in two-year stacked identical sales. Identical sales were driven in part by the 276% two-year stacked increase in digital sales.
Gross profit margin was 29.1% during the first quarter of fiscal 2021 compared to 28.0% during the first quarter of fiscal 2019. Excluding the impact of fuel, gross profit margin increased by approximately 90 basis points compared
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to the first quarter of fiscal 2019, primarily driven by improvements in shrink expense, productivity initiatives, sales leverage and improved pharmacy margins related to administering COVID-19 vaccines, partially offset by our growth in digital sales and incremental COVID-19 expenses.
Selling and administrative expenses were 25.9% of sales during the first quarter of fiscal 2021 compared to 26.4% of sales for the first quarter of fiscal 2019. Excluding the impact of fuel, selling and administrative expenses as a percentage of sales decreased 75 basis points primarily due to sales leverage and the execution of our productivity initiatives, partially offset by incremental COVID-19 expenses.

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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 ended28 weeks ended16 weeks ended
September 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
June 19,
2021
June 20,
2020
June 15, 2019
Supplemental
Numerator:Numerator:Numerator:
Net incomeNet income$284.5 $294.8 $870.7 $343.8 Net income$444.8 $586.2 $49.0 
Adjustments:Adjustments:Adjustments:
Loss on interest rate and commodity hedges, net1.4 — 25.9 0.3 
Facility closure and related transition costs6.1 — 15.9 — 
(Gain) loss on interest rate and commodity hedges, net (d)(Gain) loss on interest rate and commodity hedges, net (d)(6.3)24.5 0.3 
Facility closures and transformation (1)(b)Facility closures and transformation (1)(b)20.8 9.8 — 
Acquisition and integration costs (1)(b)Acquisition and integration costs (1)(b)2.2 7.5 8.5 33.6 Acquisition and integration costs (1)(b)3.5 6.3 26.1 
Equity-based compensation expense(b)Equity-based compensation expense(b)9.3 6.5 28.3 17.6 Equity-based compensation expense(b)22.2 19.0 11.1 
(Gain) loss on property dispositions and impairment losses, net(18.3)(435.5)12.0 (464.0)
Loss (gain) on property dispositions and impairment losses, netLoss (gain) on property dispositions and impairment losses, net0.3 30.3 (28.5)
LIFO expense(a)LIFO expense(a)10.1 5.8 23.2 16.3 LIFO expense(a)14.5 13.1 10.5 
Discretionary COVID-19 pandemic related costs (2)(b)Discretionary COVID-19 pandemic related costs (2)(b)— — 89.9 — Discretionary COVID-19 pandemic related costs (2)(b)— 89.9 — 
Civil disruption related costs (3)(1.9)— 13.0 — 
Transaction and reorganization costs related to convertible preferred stock issuance and initial public offering4.1 — 24.4 — 
Amortization of debt discount and deferred financing costs4.7 35.4 11.2 43.8 
Government-mandated incremental COVID-19 pandemic related pay (4)(b)Government-mandated incremental COVID-19 pandemic related pay (4)(b)29.1 — — 
Civil disruption related costs (5)(b)Civil disruption related costs (5)(b)— 14.9 — 
Transaction and reorganization costs related to convertible preferred stock issuance and initial public offering (b)Transaction and reorganization costs related to convertible preferred stock issuance and initial public offering (b)— 20.3 — 
Amortization of debt discount and deferred financing costs (c)Amortization of debt discount and deferred financing costs (c)6.4 6.5 8.4 
Loss on debt extinguishmentLoss on debt extinguishment49.1 23.1 49.1 65.8 Loss on debt extinguishment— — 42.7 
Amortization of intangible assets resulting from acquisitions13.1 68.9 30.6 161.7 
Miscellaneous adjustments (4)13.3 24.3 47.4 33.1 
Amortization of intangible assets resulting from acquisitions (b)Amortization of intangible assets resulting from acquisitions (b)16.1 17.5 92.8 
Miscellaneous adjustments (6)(f)Miscellaneous adjustments (6)(f)(10.8)34.1 8.8 
Tax impact of adjustments to Adjusted net incomeTax impact of adjustments to Adjusted net income(21.3)68.4 (92.5)23.7 Tax impact of adjustments to Adjusted net income(23.1)(71.2)(44.6)
Adjusted net incomeAdjusted net income$356.4 $99.2 $1,157.6 $275.7 Adjusted net income$517.5 $801.2 $176.6 
Denominator:Denominator:Denominator:
Weighted average Class A common shares outstanding - dilutedWeighted average Class A common shares outstanding - diluted582.9 580.6 583.3 580.0 Weighted average Class A common shares outstanding - diluted571.4 583.7 579.4 
Adjustments:Adjustments:Adjustments:
Restricted stock units and awards (5)9.6 7.6 9.2 8.2 
Restricted stock units and awards (7)Restricted stock units and awards (7)9.4 8.2 9.5 
Adjusted weighted average Class A common shares outstanding - dilutedAdjusted weighted average Class A common shares outstanding - diluted$592.5 $588.2 $592.5 $588.2 Adjusted weighted average Class A common shares outstanding - diluted580.8 591.9 588.9 
Adjusted net income per Class A common share - dilutedAdjusted net income per Class A common share - diluted$0.60 $0.17 $1.95 $0.47 Adjusted net income per Class A common share - diluted$0.89 $1.35 $0.30 
Supplemental Two-Year CAGR:Supplemental Two-Year CAGR:
Net income two-year CAGRNet income two-year CAGR201.3 %

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12 weeks ended28 weeks ended16 weeks ended
September 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
June 19,
2021
June 20,
2020
June 15, 2019
Supplemental
Net income per Class A common share - dilutedNet income per Class A common share - diluted$0.49 $0.51 $1.49 $0.59 Net income per Class A common share - diluted$0.78 $1.00 $0.08 
Non-GAAP adjustments (6)0.12 (0.33)0.49 (0.11)
Dilutive effect of incremental restricted stock units and awards(0.01)(0.01)(0.03)(0.01)
Non-GAAP adjustments (8)Non-GAAP adjustments (8)0.13 0.37 0.22 
Restricted stock units and awards (7)Restricted stock units and awards (7)(0.02)(0.02)— 
Adjusted net income per Class A common share - dilutedAdjusted net income per Class A common share - diluted$0.60 $0.17 $1.95 $0.47 Adjusted net income per Class A common share - diluted$0.89 $1.35 $0.30 
Supplemental Two-Year CAGR:Supplemental Two-Year CAGR:
Net income per Class A common share two-year CAGRNet income per Class A common share two-year CAGR212.2 %
Adjusted net income per Class A common share two-year CAGRAdjusted net income per Class A common share two-year CAGR72.2 %

The following table is a reconciliation of Adjusted net income to Adjusted EBITDA:
12 weeks ended28 weeks ended16 weeks ended
September 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
June 19,
2021
June 20,
2020
June 15, 2019
Supplemental
Adjusted net income (7)(9)Adjusted net income (7)(9)$356.4 $99.2 $1,157.6 $275.7 Adjusted net income (7)(9)$517.5 $801.2 $176.6 
Tax impact of adjustments to Adjusted net incomeTax impact of adjustments to Adjusted net income21.3 (68.4)92.5 (23.7)Tax impact of adjustments to Adjusted net income23.1 71.2 44.6 
Income tax expenseIncome tax expense111.2 81.9 313.1 97.6 Income tax expense132.5 201.9 15.7 
Amortization of debt discount and deferred financing costs(c)Amortization of debt discount and deferred financing costs(c)(4.7)(35.4)(11.2)(43.8)Amortization of debt discount and deferred financing costs(c)(6.4)(6.5)(8.4)
Interest expense net128.6 177.5 309.2 402.7 
Interest expense, netInterest expense, net153.3 180.6 225.2 
Amortization of intangible assets resulting from acquisitions(b)Amortization of intangible assets resulting from acquisitions(b)(13.1)(68.9)(30.6)(161.7)Amortization of intangible assets resulting from acquisitions(b)(16.1)(17.5)(92.8)
Depreciation and amortization(e)Depreciation and amortization(e)348.7 381.7 808.8 897.6 Depreciation and amortization(e)504.2 460.1 515.9 
Adjusted EBITDAAdjusted EBITDA$948.4 $567.6 $2,639.4 $1,444.4 Adjusted EBITDA$1,308.1 $1,691.0 $876.8 
Supplemental Two-Year CAGR:Supplemental Two-Year CAGR:
Adjusted EBITDA two-year CAGRAdjusted EBITDA two-year CAGR22.1 %
(1) Includes costs related to closures of operating facilities and third-party consulting fees related to our strategic priorities and associated business transformation.
(2) Related to conversion activities and related costs associated with integrating acquired businesses, primarily the Safeway acquisition.businesses. Also includes expenses related to acquisitions and expenses related to management fees in prior periods paid in connection with acquisition and financing activities.
(2)(3) 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.
(3)(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.
(4)(6) Miscellaneous adjustments include the following (see table below):

12 weeks ended28 weeks ended16 weeks ended
September 12,
2020
September 7,
2019
September 12,
2020
September 7,
2019
June 19,
2021
June 20,
2020
June 15, 2019
Supplemental
Non-cash lease-related adjustmentsNon-cash lease-related adjustments$(0.1)$4.4 $1.9 $6.3 Non-cash lease-related adjustments$2.1 $2.0 $1.9 
Lease and lease-related costs for surplus and closed storesLease and lease-related costs for surplus and closed stores10.8 5.2 29.5 12.0 Lease and lease-related costs for surplus and closed stores10.2 18.7 6.8 
Net realized and unrealized loss (gain) on non-operating investments0.2 10.8 4.7 7.5 
Certain legal and regulatory accruals and settlements, net— 0.3 — (1.9)
Net realized and unrealized (gain) loss on non-operating investmentsNet realized and unrealized (gain) loss on non-operating investments(22.5)4.5 (3.3)
Other (a)(i)Other (a)(i)2.4 3.6 11.3 9.2 Other (a)(i)(0.6)8.9 3.4 
Total miscellaneous adjustmentsTotal miscellaneous adjustments$13.3 $24.3 $47.4 $33.1 Total miscellaneous adjustments$(10.8)$34.1 $8.8 
(a)(i) Primarily includes adjustments for unconsolidated equity investments and certain contract termination costs.
(5)(7) Represents incremental unvested restricted stock unitsRSUs and restricted stock awardsunvested RSAs to adjust the diluted weighted average Class A common shares outstanding during each respective period to the number of dilutive sharesfully outstanding RSUs and RSAs as of the end of each respective period.
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(6)(8) Reflects the per share impact of Non-GAAP adjustments for each period. See the reconciliation of Net income to Adjusted Net Incomenet income above for further details.
(7)(9) Reflects the impact of Non-GAAP adjustments for each period presented. See the reconciliation of Net income to Adjusted net income above for further details.
Non-GAAP adjustment classifications within the Consolidated Statement of Operations:
Adjusted Free Cash Flow(a) Cost of sales
(b) Selling and administrative expenses
(c) Interest expense, net
(d) (Gain) loss on interest rate and commodity hedges, net:
16 weeks ended
June 19,
2021
June 20,
2020
June 15, 2019
Supplemental
Cost of sales$(6.6)$5.5 $0.3 
Other (income) expense, net0.3 19.0 — 
Total (Gain) loss on interest rate and commodity hedges, net$(6.3)$24.5 $0.3 

The following is a reconciliation of Net cash provided by operating activities to Adjusted Free Cash Flow (in millions):(e) Depreciation and amortization:
28 weeks ended
September 12,
2020
September 7,
2019
Net cash provided by operating activities$2,720.8 $1,084.8 
Income tax expense313.1 97.6 
Deferred income taxes(2.8)14.4 
Interest expense, net309.2 402.7 
Operating lease right-of-use assets amortization(309.3)(288.4)
Changes in operating assets and liabilities(677.1)100.3 
Amortization and write-off of deferred financing costs(11.2)(26.1)
Contributions to pension and post-retirement benefit plans, net of (income) expense68.9 12.0 
Facility closures and related transition costs15.9 — 
Acquisition and integration costs8.5 33.6 
Discretionary COVID-19 pandemic related costs89.9 — 
Civil disruption related costs13.0 — 
Transaction and reorganization costs related to convertible preferred stock issuance and initial public offering24.4 — 
Other adjustments76.1 13.5 
Adjusted EBITDA2,639.4 1,444.4 
Less: capital expenditures(702.9)(716.3)
Adjusted Free Cash Flow$1,936.5 $728.1 
16 weeks ended
June 19,
2021
June 20,
2020
June 15, 2019
Supplemental
Cost of sales$50.8 $54.0 $52.0 
Selling and administrative expenses453.4 406.1 463.9 
Total Depreciation and amortization$504.2 $460.1 $515.9 

(f) Miscellaneous adjustments:
16 weeks ended
June 19,
2021
June 20,
2020
June 15, 2019
Supplemental
Selling and administrative expenses$6.8 $24.8 $7.1 
Other (income) expense, net(17.6)9.3 1.7 
Total Miscellaneous adjustments$(10.8)$34.1 $8.8 

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 ended16 weeks ended
September 12,
2020
September 7,
2019
June 19,
2021
June 20,
2020
Cash and cash equivalents and restricted cash at end of periodCash and cash equivalents and restricted cash at end of period$2,431.9 $464.7 Cash and cash equivalents and restricted cash at end of period$2,224.4 $2,064.5 
Cash flows provided by operating activitiesCash flows provided by operating activities2,720.8 1,084.8 Cash flows provided by operating activities1,059.0 2,091.9 
Cash flows (used in) provided by investing activities(687.1)307.7 
Cash flows used in investing activitiesCash flows used in investing activities(493.0)(399.4)
Cash flows used in financing activitiesCash flows used in financing activities(80.7)(1,895.5)Cash flows used in financing activities(109.2)(106.9)

Net Cash Provided by Operating Activities

Net cash provided by operating activities was $2,720.8$1,059.0 million for the first 28 weeksquarter of fiscal 20202021 compared to $1,084.8$2,091.9 million for the first 28 weeksquarter of fiscal 2019.2020. The increasedecrease in cash flow from operations compared to the first 28 weeksquarter of fiscal 20192020 was due to improvements in operating performance and changes in working capital primarily related to inventory and accounts payable as our business adjusted for the significant increase in sales volume during the first 28 weeks of fiscal 2020. Also contributing to the increase in cash flow from operations was
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experienced significantly elevated demand during the first quarter of fiscal 2020, a deferral of approximately $140 million of the employer-paid portion of social security taxes provided underin the CARES Actfirst quarter of fiscal 2020 and a decrease in cash paid for interest. These increases were partially offset by an increase of approximately $78 million in cash paid for income taxes, the $75.0taxes. These decreases were partially offset by a decrease of approximately $43 million in cash paid for interest, $75 million payment for the UFCW & Employers Midwest Pension Fund pension settlement in the first quarter of fiscal 2020 and additional$52.6 million in reduced contributions to our defined benefit pension plans and post-retirement benefit plans.

Net Cash (Used in) ProvidedUsed by Investing Activities

Net cash used in investing activities was $687.1$493.0 million for the first 28 weeksquarter of fiscal 20202021 compared to net cash provided by investing activities of $307.7$399.4 million for the first 28 weeksquarter of fiscal 2019.2020.

For the first 28 weeksquarter of fiscal 2021, cash used in investing activities consisted primarily of payments for property and equipment, 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 $15.2 million. Payments for property and equipment in the first quarter of fiscal 2021 included the opening of five new stores, completion of 33 remodels and continued investment in our digital technology. For the full fiscal year of 2021, we expect capital expenditures to be in the range of $1.9 billion to $2.0 billion. For the first quarter of fiscal 2020, cash used in investing activities consisted primarily of payments for property and equipment, including lease buyouts, of $702.9$402.3 million. Payments for property and equipment in the first quarter of fiscal 2020 included the completion of 13246 remodels and continued investment in our digital and eCommerce technology. In fiscal 2020, we expect capital expenditures to be approximately $1.9 billion. For the first 28 weeks of fiscal 2019, cash provided by investing activities consisted primarily of proceeds from the sale of assets of $1,029.5 million, partially offset by payments for property and equipment, including lease buyouts, of $716.3 million. Proceeds from the sale of assets primarily includes the sale and leaseback of 53 store properties and one distribution center for $931.3 million, net of closing costs, during the second quarter of fiscal 2019. Payments for property and equipment included the opening of seven new stores, completion of 99 remodels and continued investment in our digital and eCommerce technology.

Net Cash Used in Financing Activities

Net cash used in financing activities was $80.7109.2 million during the secondfirst quarter of fiscal 20202021 compared to $1,895.5$106.9 million during the secondfirst quarter of fiscal 20192020.

Net cash used in financing activities during the first 28 weeksquarter of fiscal 20202021 consisted primarily of the $1.5 billion issuance and $1.25 billion redemption of Senior Unsecured Notes (as further discussed below), the $2.0 billion borrowing and subsequent repayment of the ABL Facility, the issuance of the Convertible Preferred Stock and the repurchase of outstandingdividends paid on our Class A common stock.
Debt Managementstock and Convertible Preferred Stock.

On August 31, 2020, we completed the issuance of $750.0 million in aggregate principal amount of 3.250% Senior Unsecured Notes which will mature on March 15, 2026 (the "2026 Notes") and $750.0 million in aggregate principal amount of 3.500% Senior Unsecured Notes which will mature on March 15, 2029 (the "2029 Notes" and together with the 2026 Notes, the "New Notes"). Proceeds from the New Notes, together with approximately $60 million cash on hand, were used to fully redeem the $1,250.0 million in aggregate principal amount outstanding of our 6.625% Senior Unsecured Notes due 2024 (the "2024 Redemption"). In connection with the 2024 Redemption we paid an associated redemption premium of $41.4 million and recorded a $49.1 million loss on debt extinguishment, comprised of the $41.4 million redemption premium and $7.7 million write-off of deferred financings costs.

On September 16, 2020, subsequent to the end of the second quarter of fiscal 2020, the remaining proceeds were used to fund the partial redemption of $250.0 million of the $1,250.0 million in aggregate principal amount outstanding of our 5.75% Senior Unsecured Notes due 2025.

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Liquidity Needs

We estimate our liquidity needs over the next 12 months to be in the range of $4.75 billion to $5.25 billion, which includes anticipated requirements for working capital, capital expenditures, pension obligations, interest payments and scheduled principal payments of debt, dividends on Common StockClass 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 respond effectively to competitive conditions. In 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 and June 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 and June 30, 2021, respectively. In addition, the holders of Convertible Preferred Stock will participate in cash dividends that we pay on our Common Stockcommon stock to the extent that such cash dividends exceed $206.25 million per fiscal year. On September 15, 2020, we declared a quarterly cash dividend of $36.4 million to holders of the Convertible Preferred Stock, which was paid on September 30, 2020.

In connection with the IPO, we
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We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Common StockClass A common stock in an annual amount equal to $0.400$0.40 per common share. On October 14, 2020,April 13, 2021, we announced the firsta quarterly dividend payment of $0.100$0.10 per share of Class A common share to bestock which was paid on NovemberMay 10, 20202021 to stockholders of record as of the close of business on OctoberApril 26, 2020.2021. On July 13, 2021, subsequent to the end of the first quarter of fiscal 2021, we announced the next quarterly dividend payment of $0.10 per share of Class A common stock to be paid on August 10, 2021 to stockholders of record as of the close of business on July 26, 2021.

Common Stock Repurchase ProgramMultiemployer Pension Plans

On October 14, 2020, our BoardThe American Rescue Plan ("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 Directors authorized a new share repurchase program that allows usthe multiemployer plans and invested in investment grade bonds or other investments permitted by the PBGC.

Of the 27 multiemployer plans to repurchase up to $300 million of our Common Stock. Purchaseswhich we contribute, 16 plans are classified as "Critical" or "Critical and Declining" and are potentially eligible for special financial assistance under the Common Stock repurchase program are anticipatedARP 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 made opportunistically at management's discretion.provided and establishes conditions and restrictions that apply to plans that receive assistance. We are currently evaluating the interim final rule, which is subject to a 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 Prospectus dated June 25, 2020Annual Report on Form 10-K for the fiscal year ended February 27, 2021, filed with the SEC pursuant to Rule 424(b) of the Securities Act of 1933, as amended, relating to our Registration Statement on Form S-1 (File No. 333-236956)April 28, 2021, for a discussion of our significant accounting policies.
RECENTLY ISSUED AND RECENTLY ADOPTED ACCOUNTING STANDARDS

See Note 1 - Basis of presentation and summary of significant accounting policies of our unaudited interim Condensed Consolidated Financial Statements located elsewhere in this Form 10-Q.
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 29, 2020.27, 2021, filed with the SEC on April 28, 2021.
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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 Quarterly Report on 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 secondfirst quarter ended September 12, 2020of fiscal 2021 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 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 financial condition. See the matters under the caption Legal Proceedings in Note 76 - Commitments and contingencies and off balance sheet arrangements in the unaudited interim Condensed Consolidated Financial Statements located elsewhere in this Form 10-Q.

The Company continually evaluates its exposure to loss contingencies arising from pending or threatened litigation and believes it has made provisions where the loss contingency can be reasonably estimated and an adverse outcome is probable. Nonetheless, assessing and predicting the outcomes of these matters involves substantial uncertainties. 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 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 material effect on the Company's financial condition, results of operations or cash flows.
Item 1A - Risk Factors

The risk factors contained in Part II, "Item 1A. Risk Factors" of our Quarterly Report on Form 10-Q for the quarter ended June 20, 2020, filed with the SEC on August 4, 2020, amended and supplementedThere have been no material changes to the risk factors previously disclosedincluded in Part I, "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended February 29, 2020,27, 2021, filed with the SEC on May 13, 2020, and are incorporated by reference herein.April 28, 2021, under the heading "Risk Factors."
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Sales of Equity Securities

None.

(b) Use of Proceeds

None.

(c) Purchases of Equity Securities

None.
Item 3 - Defaults Upon Senior Securities

None.

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Item 4 - Mine Safety Disclosures

Not Applicable.
Item 5 - Other Information

None.
Item 6 - Exhibits

3.1 Certificate of Amendment to Certificate of Designations of 6.75% Series A Convertible Preferred Stock of Albertsons Companies, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on10.1 Employment Agreement, dated June 30, 2020)

3.2 Certificate of Amendment to Certificate of Designations of 6.75% Series A-1 Convertible Preferred Stock of Albertsons Companies, Inc. (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the SEC on June 30, 2020)

3.3 Amended and Restated Bylaws of Albertsons Companies, Inc. (incorporated by reference to Exhibit 3.3 to the Company's Current Report on Form 8-K filed with the SEC on June 30, 2020)

4.1 Stockholders' Agreement by and among15, 2020, between Albertsons Companies, Inc. and holders of stock of Albertsons Companies, Inc. signatory thereto (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on June 30, 2020)

4.2 Indenture, dated as of August 31, 2020, by and among Albertsons Companies, Inc., Safeway Inc., New Albertsons L.P., Albertson's LLC, the guarantors party thereto from time to time, and Wilmington Trust, National Association, as Trustee, with respect to the 3.250% Senior Notes due 2026 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on August 31, 2020)

4.3 Indenture, dated as of August 31, 2020, by and among Albertsons Companies, Inc., Safeway Inc., New Albertsons L.P., Albertson's LLC, the guarantors party thereto from time to time, and Wilmington Trust, National Association, as Trustee, with respect to the 3.500% Senior Notes due 2029 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the SEC on August 31, 2020)

10.1 Amendment No.1, dated as of June 25, 2020, to the Amended and Restated Investment Agreement, dated as of June 9, 2020, by and among Albertsons Companies, Inc. and each of the investors named therein (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on June 30, 2020)Juliette Pryor

10.2 Share Repurchase Agreement, dated asForm of September 14, 2020, by and between Albertsons Companies, Inc. and Gabriel Assets, LLC (incorporated by reference to Exhibit 10.1 to the Company's Current Report ontime-based restricted stock unit agreement (fiscal 2021 award cycle)
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10.3 Form 8-K filed with the SEC on September 15, 2020)of performance-based restricted stock unit agreement (fiscal 2021 award cycle)

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

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EXHIBIT 101.INS - Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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 21, 2020July 29, 2021By:/s/ Vivek Sankaran
Vivek Sankaran
President, Chief Executive Officer and Director
(Principal Executive Officer)

Date:October 21, 2020July 29, 2021By:/s/ Robert B. Dimond
Robert B. Dimond
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)


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