COVER PAGE
COVER PAGE - shares | 4 Months Ended | |
Jun. 18, 2022 | Jul. 22, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 18, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39350 | |
Entity Registrant Name | Albertsons Companies, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-4376911 | |
Entity Address, Address Line One | 250 Parkcenter Blvd. | |
Entity Address, City or Town | Boise | |
Entity Address, State or Province | ID | |
Entity Address, Postal Zip Code | 83706 | |
City Area Code | 208 | |
Local Phone Number | 395-6200 | |
Title of 12(b) Security | Class A common stock, $0.01 par value | |
Trading Symbol | ACI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 531,899,693 | |
Entity Central Index Key | 0001646972 | |
Current Fiscal Year End | --02-25 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 18, 2022 | Feb. 26, 2022 |
Current assets | ||
Cash and cash equivalents | $ 3,213.1 | $ 2,902 |
Receivables, net | 565.3 | 560.6 |
Inventories, net | 4,573.2 | 4,500.8 |
Other current assets | 326.6 | 403 |
Total current assets | 8,678.2 | 8,366.4 |
Property and equipment, net | 9,069.9 | 9,349.6 |
Operating lease right-of-use assets | 5,908.4 | 5,908.4 |
Intangible assets, net | 2,309.6 | 2,285 |
Goodwill | 1,201 | 1,201 |
Other assets | 1,052.9 | 1,012.6 |
TOTAL ASSETS | 28,220 | 28,123 |
Current liabilities | ||
Accounts payable | 3,970.3 | 4,236.8 |
Accrued salaries and wages | 1,349.7 | 1,554.9 |
Current maturities of long-term debt and finance lease obligations | 825.4 | 828.8 |
Current maturities of operating lease obligations | 647 | 640.6 |
Other current liabilities | 1,119.9 | 1,087.4 |
Total current liabilities | 7,912.3 | 8,348.5 |
Long-term debt and finance lease obligations | 7,121.2 | 7,136.3 |
Long-term operating lease obligations | 5,497.2 | 5,419.9 |
Deferred income taxes | 806.9 | 799.8 |
Other long-term liabilities | 2,176.4 | 2,115.4 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Additional paid-in capital | 1,998.2 | 2,032.2 |
Treasury stock, at cost, 58,776,088 and 99,640,065 shares held as of June 18, 2022 and February 26, 2022, respectively | (971.8) | (1,647.4) |
Accumulated other comprehensive income | 66.2 | 69 |
Retained earnings | 2,972.1 | 2,564.9 |
Total stockholders' equity | 4,070.6 | 3,024.6 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 28,220 | 28,123 |
Series A convertible preferred stock | ||
Current liabilities | ||
Undesignated preferred stock | 635.4 | 681.1 |
Series A-1 convertible preferred stock | ||
Current liabilities | ||
Undesignated preferred stock | 0 | 597.4 |
Undesignated preferred stock | ||
STOCKHOLDERS' EQUITY | ||
Undesignated preferred stock, $0.01 par value; 96,840,000 shares authorized, no shares issued as of June 18, 2022 and February 26, 2022 | 0 | 0 |
Class A common stock | ||
STOCKHOLDERS' EQUITY | ||
Common stock | 5.9 | 5.9 |
Class A-1 convertible common stock | ||
STOCKHOLDERS' EQUITY | ||
Common stock | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 18, 2022 | Feb. 26, 2022 |
Treasury stock, at cost (in shares) | 58,776,088 | 99,640,065 |
Series A convertible preferred stock | ||
Temporary equity, par or stated value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Temporary equity, shares authorized (in shares) | 1,750,000 | 1,750,000 |
Temporary equity, shares issued (in shares) | 695,412 | 745,410 |
Temporary equity, shares outstanding (in shares) | 695,412 | 745,410 |
Series A-1 convertible preferred stock | ||
Temporary equity, par or stated value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Temporary equity, shares authorized (in shares) | 1,410,000 | 1,410,000 |
Temporary equity, shares issued (in shares) | 0 | 653,776 |
Temporary equity, shares outstanding (in shares) | 0 | 653,776 |
Undesignated preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 96,840,000 | 96,840,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock shares issued (in shares) | 590,384,128 | 587,904,283 |
Class A-1 convertible common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock shares issued (in shares) | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 4 Months Ended | |
Jun. 18, 2022 | Jun. 19, 2021 | |
Income Statement [Abstract] | ||
Net sales and other revenue | $ 23,310.3 | $ 21,269.4 |
Cost of sales | 16,765.3 | 15,078.4 |
Gross margin | 6,545 | 6,191 |
Selling and administrative expenses | 5,864.3 | 5,503.6 |
(Gain) loss on property dispositions and impairment losses, net | (79.4) | 0.3 |
Operating income | 760.1 | 687.1 |
Interest expense, net | 138.9 | 153.3 |
Other income, net | (6.3) | (43.5) |
Income before income taxes | 627.5 | 577.3 |
Income tax expense | 143.3 | 132.5 |
Net income | 484.2 | 444.8 |
Other comprehensive income (loss), net of tax | ||
Recognition of pension gain | 0.2 | 0.1 |
Other | (3) | 0 |
Other comprehensive (loss) income | (2.8) | 0.1 |
Comprehensive income | $ 481.4 | $ 444.9 |
Net income per Class A common share | ||
Basic net income per class A common share (in dollars per share) | $ 0.86 | $ 0.80 |
Diluted net income per class A common share (in dollars per share) | $ 0.84 | $ 0.78 |
Weighted average Class A common shares outstanding (in millions) | ||
Basic (in shares) | 513.3 | 465.1 |
Diluted (in shares) | 576.3 | 571.4 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 4 Months Ended | |
Jun. 18, 2022 | Jun. 19, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 484.2 | $ 444.8 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
(Gain) loss on property dispositions and impairment losses, net | (79.4) | 0.3 |
Depreciation and amortization | 547.7 | 504.2 |
Operating lease right-of-use assets amortization | 198.8 | 189.3 |
LIFO expense | 62.1 | 14.5 |
Deferred income tax | 2.8 | (17.9) |
Contributions to pension and post-retirement benefit plans, net of (income) expense | (9.5) | (14.5) |
Gain on interest rate swaps and energy hedges, net | (18.5) | (6.3) |
Equity-based compensation expense | 35.3 | 22.2 |
Other | 25.2 | (22.9) |
Changes in operating assets and liabilities: | ||
Receivables, net | (5.4) | (74.7) |
Inventories, net | (134.4) | 14.8 |
Accounts payable, accrued salaries and wages and other accrued liabilities | (123.2) | (31.3) |
Operating lease liabilities | (118.1) | (109.5) |
Self-insurance assets and liabilities | 24.5 | 27.5 |
Other operating assets and liabilities | 99.8 | 118.5 |
Net cash provided by operating activities | 991.9 | 1,059 |
Cash flows from investing activities: | ||
Business acquisitions, net of cash acquired | 0 | (23.5) |
Payments for property, equipment and intangibles, including payments for lease buyouts | (613.8) | (513.4) |
Proceeds from sale of long-lived assets | 71.8 | 15.2 |
Other investing activities | (9.4) | 28.7 |
Net cash used in investing activities | (551.4) | (493) |
Cash flows from financing activities: | ||
Payments on long-term borrowings | (0.1) | (0.3) |
Payments of obligations under finance leases | (13.1) | (14.1) |
Dividends paid on common stock | (63) | (46.5) |
Dividends paid on convertible preferred stock | (22.8) | (29.5) |
Employee tax withholding on vesting of restricted stock units | (37.3) | (10) |
Other financing activities | 6.8 | (8.8) |
Net cash used in financing activities | (129.5) | (109.2) |
Net increase in cash and cash equivalents and restricted cash | 311 | 456.8 |
Cash and cash equivalents and restricted cash at beginning of period | 2,952.6 | 1,767.6 |
Cash and cash equivalents and restricted cash at end of period | $ 3,263.6 | $ 2,224.4 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Class A Common Stock | Additional paid in capital | Treasury Stock | Accumulated other comprehensive income | Retained earnings |
Beginning balance (in shares) at Feb. 27, 2021 | 585,574,666 | |||||
Beginning AOCI balance at Feb. 27, 2021 | $ 1,324.3 | $ 5.9 | $ 1,898.9 | $ (1,907) | $ 63.5 | $ 1,263 |
Treasury stock, beginning balance (in shares) at Feb. 27, 2021 | 120,009,647 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Equity-based compensation | 22.2 | 22.2 | ||||
Shares issued and employee tax withholding on vesting of restricted stock units (in shares) | 945,942 | |||||
Shares issued and employee tax withholding on vesting of restricted stock units | (10) | (10) | ||||
Cash dividends declared on common stock | (46.5) | (46.5) | ||||
Dividends accrued on convertible preferred stock | (36.4) | (36.4) | ||||
Net income | 444.8 | 444.8 | ||||
Other comprehensive income (loss), net of tax | 0.1 | 0.1 | ||||
Other activity | (0.1) | (0.1) | ||||
Ending balance (in shares) at Jun. 19, 2021 | 586,520,608 | |||||
Ending AOCI balance at Jun. 19, 2021 | 1,698.4 | $ 5.9 | 1,911.1 | $ (1,907) | 63.6 | 1,624.8 |
Treasury stock, ending balance (in shares) at Jun. 19, 2021 | 120,009,647 | |||||
Beginning balance (in shares) at Feb. 26, 2022 | 587,904,283 | |||||
Beginning AOCI balance at Feb. 26, 2022 | $ 3,024.6 | $ 5.9 | 2,032.2 | $ (1,647.4) | 69 | 2,564.9 |
Treasury stock, beginning balance (in shares) at Feb. 26, 2022 | 99,640,065 | 99,640,065 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Equity-based compensation | $ 35.3 | 35.3 | ||||
Shares issued and employee tax withholding on vesting of restricted stock units (in shares) | 2,479,845 | |||||
Shares issued and employee tax withholding on vesting of restricted stock units | (37.3) | (37.3) | ||||
Convertible preferred stock conversions (in shares) | (40,863,977) | |||||
Convertible preferred stock conversions | 643.1 | (32.5) | $ 675.6 | |||
Cash dividends declared on common stock | (63) | (63) | ||||
Dividends accrued on convertible preferred stock | (13.7) | (13.7) | ||||
Net income | 484.2 | 484.2 | ||||
Other comprehensive income (loss), net of tax | (2.8) | (2.8) | ||||
Other activity | 0.2 | 0.5 | (0.3) | |||
Ending balance (in shares) at Jun. 18, 2022 | 590,384,128 | |||||
Ending AOCI balance at Jun. 18, 2022 | $ 4,070.6 | $ 5.9 | $ 1,998.2 | $ (971.8) | $ 66.2 | $ 2,972.1 |
Treasury stock, ending balance (in shares) at Jun. 18, 2022 | 58,776,088 | 58,776,088 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 4 Months Ended | |
Jun. 18, 2022 | Jun. 19, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared (in dollars per share) | $ 0.12 | $ 0.10 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 4 Months Ended |
Jun. 18, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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 26, 2022 is derived from the Company's annual audited Consolidated Financial Statements, which should be read in conjunction with these Condensed Consolidated Financial Statements and which are included in the Company's Annual Report on Form 10-K for the fiscal year ended February 26, 2022, filed with the Securities and Exchange Commission (the "SEC") on April 26, 2022. Certain information in footnote disclosures normally included in annual financial statements was condensed or omitted for the interim periods presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of management, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The interim results of operations and cash flows are not necessarily indicative of those results and cash flows expected for the year. The Company' s results of operations are for the 16 weeks ended June 18, 2022 and June 19, 2021. Significant Accounting Policies Restricted cash: Restricted cash is included in Other current assets or Other assets depending on the remaining term of the restriction and primarily relates to surety bonds and funds held in escrow. The Company had $50.5 million and $50.6 million of restricted cash as of June 18, 2022 and February 26, 2022, respectively. Inventories, net: Substantially all of the Company's inventories consist of finished goods valued at the lower of cost or net realizable value and net of vendor allowances. The Company primarily uses the retail inventory or the item-cost method to determine inventory cost before application of any last-in, first-out ("LIFO") adjustment. Interim LIFO inventory costs are based on management's estimates of expected year-end inventory levels and inflation rates. The Company recorded LIFO expense of $62.1 million and $14.5 million for the 16 weeks ended June 18, 2022 and June 19, 2021, respectively. Convertible Preferred Stock : During the 16 weeks ended June 18, 2022, certain holders of the Company's Series A-1 convertible preferred stock ("Series A-1 preferred stock") and Series A convertible preferred stock ("Series A preferred stock" and together with the Series A-1 preferred stock, the "Convertible Preferred Stock") converted approximately 703,774 shares of Convertible Preferred Stock into 40,863,977 shares of the Company's Class A common stock, which were issued from treasury stock. Subsequent to the end of the 16 weeks ended June 18, 2022, through July 22, 2022, certain holders of the Convertible Preferred Stock converted approximately 4,411 shares of Convertible Preferred Stock into 256,162 shares of the Company's Class A common stock. As a result, the Company has issued, in the aggregate, 61,489,721 shares of Class A common stock to holders of Convertible Preferred Stock related to these non-cash conversions, representing approximately 61% of the originally issued Convertible Preferred Stock. Concurrent with the issuance and sale of the Convertible Preferred Stock during the first quarter of fiscal 2020, a consolidated real estate subsidiary of the Company entered into a real estate agreement with an affiliate of the holders ("RE Investor") of the Convertible Preferred Stock. Under the terms of the real estate agreement, the Company placed fee owned real estate properties into its real estate subsidiary and contributed $36.5 million of cash into a restricted escrow account, with a total value of $2.9 billion (165% of the liquidation preference of the Convertible Preferred Stock). The real estate agreement provides that the Company may require the release of properties and/or cash from the escrow account if the holders of Convertible Preferred Stock convert their shares into Class A Common Stock, provided that certain conversion thresholds are met. Subsequent to the end of the 16 weeks ended June 18, 2022, due to the non-cash conversions of Convertible Preferred Stock to Class A common stock discussed above, real estate properties and cash of $36.5 million, representing approximately 60% of the original $2.9 billion, have been released from the restricted escrow account, and the real estate properties are being transferred from the real estate subsidiary to operating subsidiaries. For additional information related to the Convertible Preferred Stock and the Investor Exchange Right, see "Part II—Item 8. Financial Statements and Supplementary Data—Note 9" of the Company's Annual Report on Form 10-K for the fiscal year ended February 26, 2022. Income taxes: Income tax expense was $143.3 million, representing a 22.8% effective tax rate, for the 16 weeks ended June 18, 2022. The Company's effective tax rate for the 16 weeks ended June 18, 2022 differs from the federal income tax statutory rate of 21% primarily due to state income taxes, reduced by vesting of equity-based compensation. Income tax expense was $132.5 million, representing a 23.0% effective tax rate for the 16 weeks ended June 19, 2021. The Company's effective tax rate for the 16 weeks ended June 19, 2021 differs from the federal income tax statutory rate of 21% primarily due to state income taxes. Segments: The Company and its subsidiaries offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel and other items and services in its stores or through digital channels. The Company's operating divisions are geographically based, have similar economic characteristics and similar expected long-term financial performance. The Company's operating segments and reporting units are its 12 operating divisions, which are reported in one 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 one store format. Each division offers through its stores and digital channels the same general mix of products with similar pricing to similar categories of customers, has similar distribution methods, operates in similar regulatory environments and purchases merchandise from similar or the same vendors. Revenue Recognition: Revenues from the retail sale of products are recognized at the point of sale or delivery to the customer, net of returns and sales tax. Pharmacy sales are recorded upon the customer receiving the product. Third-party receivables from pharmacy sales were $250.1 million and $247.5 million as of June 18, 2022 and February 26, 2022, respectively, and are recorded in Receivables, net. For digital related sales, which primarily include home delivery and Drive Up & Go curbside pickup, revenues are recognized upon either pickup in store or delivery to the customer and may include revenue for separately charged delivery services. The Company records a contract liability when rewards are earned by customers in connection with the Company's loyalty programs. As rewards are redeemed or expire, the Company reduces the contract liability and recognizes revenue. The contract liability balance was immaterial as of June 18, 2022 and February 26, 2022. The Company records a contract liability when it sells its own proprietary gift cards. The Company records a sale when the customer redeems the gift card. The Company's gift cards do not expire. The Company reduces the contract liability and records revenue for the unused portion of gift cards ("breakage") in proportion to its customers' pattern of redemption, which the Company determined to be the historical redemption rate. The Company's contract liability related to gift cards was $101.9 million and $104.3 million as of June 18, 2022 and February 26, 2022, respectively. Disaggregated Revenues The following table represents Net sales and other revenue by product type (dollars in millions): 16 weeks ended June 18, June 19, Amount (1) % of Total Amount (1) % of Total Non-perishables (2) $ 11,446.0 49.1 % $ 10,742.7 50.5 % Fresh (3) 7,881.5 33.8 7,412.5 34.9 Pharmacy 1,923.5 8.3 1,728.6 8.1 Fuel 1,654.7 7.1 1,049.3 4.9 Other (4) 404.6 1.7 336.3 1.6 Net sales and other revenue $ 23,310.3 100.0 % $ 21,269.4 100.0 % (1) Digital related sales are included in the categories to which the revenue pertains. (2) Consists primarily of general merchandise, grocery, dairy and frozen foods. (3) Consists primarily of produce, meat, deli and prepared foods, bakery, floral and seafood. (4) Consists primarily of wholesale revenue to third parties, commissions and other miscellaneous revenue. Recently issued accounting standards : In June 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-03, "Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions" ("ASU 2022-03"). ASU 2022-03 clarifies the guidance on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The Company currently does not expect the adoption of this standard to have a material impact on its Consolidated Financial Statements and related disclosures, but evaluation is continuing. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 4 Months Ended |
Jun. 18, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The accounting guidance for fair value established a framework for measuring fair value and established a three-level valuation hierarchy for disclosure of fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability at the measurement date. The three levels are defined as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities; Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 - Unobservable inputs in which little or no market activity exists, requiring an entity to develop its own assumptions that market participants would use to value the asset or liability. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following table presents certain assets which were measured at fair value on a recurring basis as of June 18, 2022 (in millions): Fair Value Measurements Total Quoted prices in active markets Significant Significant Assets: Short-term investments (1) $ 17.2 $ 4.7 $ 12.5 $ — Non-current investments (2) 94.7 — 94.7 — Derivative contracts (3) 24.5 — 24.5 — Total $ 136.4 $ 4.7 $ 131.7 $ — (1) Primarily relates to Mutual Funds (Level 1) and Certificates of Deposit (Level 2). Included in Other current assets. (2) Primarily relates to investments in publicly traded stock (Level 1) and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets. (3) Primarily relates to energy derivative contracts and interest rate swaps. Included in Other assets. The following table presents certain assets and liabilities which were measured at fair value on a recurring basis as of February 26, 2022 (in millions): Fair Value Measurements Total Quoted prices in active markets Significant Significant Assets: Short-term investments (1) $ 14.4 $ 4.9 $ 9.5 $ — Non-current investments (2) 114.7 10.9 103.8 — Derivative contracts (3) 18.6 — 18.6 — Total $ 147.7 $ 15.8 $ 131.9 $ — Liabilities: Derivative contracts (4) $ 10.4 $ — $ 10.4 $ — Total $ 10.4 $ — $ 10.4 $ — (1) Primarily relates to Mutual Funds (Level 1) and Certificates of Deposit (Level 2). Included in Other current assets. (2) Primarily relates to investments in publicly traded stock (Level 1) and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets. (3) Primarily relates to energy derivative contracts. Included in Other assets. (4) Primarily relates to interest rate swaps. Included in Other current liabilities. The Company records cash and cash equivalents, restricted cash, accounts receivable and accounts payable at cost. The recorded values of these financial instruments approximate fair value based on their short-term nature. The estimated fair value of the Company's debt, including current maturities, was based on Level 2 inputs, being market quotes or values for similar instruments, and interest rates currently available to the Company for the issuance of debt with similar terms and remaining maturities as a discount rate for the remaining principal payments. As of June 18, 2022, the fair value of total debt was $6,774.0 million compared to the carrying value of $7,484.3 million, excluding debt discounts and deferred financing costs. As of February 26, 2022, the fair value of total debt was $7,531.5 million compared to the carrying value of $7,484.6 million, excluding debt discounts and deferred financing costs. |
LONG-TERM DEBT AND FINANCE LEAS
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS | 4 Months Ended |
Jun. 18, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS | LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS The Company's long-term debt and finance lease obligations as of June 18, 2022 and February 26, 2022, net of unamortized debt discounts of $40.2 million and $41.4 million, respectively, and deferred financing costs of $53.8 million and $57.5 million, respectively, consisted of the following (in millions): June 18, February 26, Senior Unsecured Notes due 2023 to 2030, interest rate range of 3.25% to 7.50% $ 6,496.0 $ 6,492.5 Safeway Inc. Notes due 2027 to 2031, interest rate range of 7.25% to 7.45% 374.5 374.4 New Albertsons L.P. Notes due 2026 to 2031, interest rate range of 6.52% to 8.70% 473.7 472.6 Other financing obligations 29.0 29.1 Mortgage notes payable, secured 17.1 17.1 Finance lease obligations 556.3 579.4 Total debt 7,946.6 7,965.1 Less current maturities (825.4) (828.8) Long-term portion $ 7,121.2 $ 7,136.3 ABL Facility As of June 18, 2022 and February 26, 2022, there were no amounts outstanding under the Company's asset-based loan facility ("ABL Facility"), and letters of credit ("LOC") issued under the LOC sub-facility were $249.6 million and $249.4 million, respectively. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 4 Months Ended |
Jun. 18, 2022 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Pension and Other Post-Retirement Benefits The following table provides the components of net pension and post-retirement (income) expense (in millions): 16 weeks ended Pension Other post-retirement benefits June 18, June 19, June 18, June 19, Estimated return on plan assets $ (28.6) $ (32.7) $ — $ — Service cost 6.2 6.9 — — Interest cost 15.8 13.0 0.1 0.1 Amortization of prior service cost 0.1 0.1 — — Amortization of net actuarial loss (gain) 0.2 0.3 (0.1) (0.2) (Income) expense, net $ (6.3) $ (12.4) $ — $ (0.1) The Company contributed $3.2 million and $2.0 million to its defined pension plans and post-retirement benefit plans during the 16 weeks ended June 18, 2022 and June 19, 2021, respectively. At the Company's discretion, additional funds may be contributed to the defined benefit pension plans that are determined to be beneficial to the Company. The Company currently anticipates contributing an additional $17.9 million to these plans for the remainder of fiscal 2022. Multiemployer Pension Plans ARP Act: The American Rescue Plan Act ("ARP Act"), which was signed into law on March 11, 2021, established a special financial assistance program for financially troubled multiemployer pension plans. Under the ARP Act, eligible multiemployer plans can apply to receive a one-time cash payment in an amount projected by the Pension Benefit Guaranty Corporation ("PBGC") to pay pension benefits through the plan year ending 2051. In the fourth quarter of fiscal 2021, the Combined Plan submitted its application to receive one-time special financial assistance. During the 16 weeks ended June 18, 2022, the Combined Plan received approval and payment from the PBGC for $1.2 billion in special financial assistance. For additional information, including a description and definition of the Combined Plan, as well as the impact on the Excess Plan, as defined therein, see "Part II—Item 8. Financial Statements and Supplementary Data—Note 12" of the Company's Annual Report on Form 10-K for the fiscal year ended February 26, 2022. |
COMMITMENTS AND CONTINGENCIES A
COMMITMENTS AND CONTINGENCIES AND OFF BALANCE SHEET ARRANGEMENTS | 4 Months Ended |
Jun. 18, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES AND OFF BALANCE SHEET ARRANGEMENTS | COMMITMENTS AND CONTINGENCIES AND OFF BALANCE SHEET ARRANGEMENTS Guarantees California Department of Industrial Relations: On January 21, 2014, the Company entered into a Collateral Substitution Agreement with the California Self-Insurers' Security Fund to provide collateral related to certain California self-insured workers' compensation obligations pursuant to applicable regulations. The collateral not covered by the California Self-Insurers' Security Fund is covered by surety bonds for the benefit of the State of California Office of Self-Insurance Plans. A portion of the surety bonds is covered by irrevocable LOCs. The collateral requirements are adjusted annually based on semi-annual filings of an actuarial study reflecting liabilities as of December 31 of each year reduced by claim closures and settlements. The related LOC was $1.7 million as of June 18, 2022 and $9.2 million as of February 26, 2022. Lease Guarantees: The Company may have liability under certain operating leases that were assigned to third parties. If any of these third parties fail to perform their obligations under the leases, the Company could be responsible for the lease obligation. 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, including matters involving trade practices, personnel and employment issues, lawsuits alleging violations of state and/or federal wage and hour laws, real estate disputes, personal injury, antitrust claims, packaging or product claims, claims related to the sale of drug or pharmacy products, such as opioids, intellectual property claims and other proceedings arising in or outside of the ordinary course of business. Some of these claims or suits purport or may be determined to be class actions and/or seek substantial damages. It is the opinion of the Company's management that although the amount of liability with respect to certain of the matters described herein cannot be ascertained at this time, any resulting liability of these and other matters, including any punitive damages, will not have a material adverse effect on the Company's business or overall financial condition. The Company continually evaluates its exposure to loss contingencies arising from pending or threatened litigation and believes it has made provisions where the loss contingency is probable and can be reasonably estimated. Nonetheless, assessing and predicting the outcomes of these matters involves substantial uncertainties. While management currently believes that the aggregate estimated liabilities currently recorded are reasonable, it remains possible that differences in actual outcomes or changes in management's evaluation or predictions could arise that could be material to the Company's results of operations or cash flows. False Claims Act : Two qui tam actions alleging violations of the False Claims Act ("FCA") have also been filed against the Company and its subsidiaries. Violations of the FCA are subject to treble damages and penalties of up to a specified dollar amount per false claim. In United States ex rel. Proctor v. Safeway , filed in the United States District Court for the Central District of Illinois, the relator alleges that Safeway overcharged federal government healthcare programs by not providing the federal government, as part of its usual and customary prices, the benefit of discounts given to customers in pharmacy membership discount and price-matching programs. The relator filed his complaint under seal on November 11, 2011, and the complaint was unsealed on August 26, 2015. The relator amended the complaint on March 31, 2016. On June 12, 2020, the Court granted Safeway's motion for summary judgment, holding that the relator could not prove that Safeway acted with the intent required under the FCA, and judgment was issued on June 15, 2020. On July 10, 2020, the relator filed a motion to alter or amend the judgment and to supplement the record, which Safeway opposed. On November 13, 2020, the Court denied relator's motion, and on December 11, 2020, relator filed a notice of appeal. Oral arguments took place September 9, 2021 and the Seventh Circuit Court of Appeals affirmed the judgement in the Company's favor on April 5, 2022. Relators have until August 4, 2022 to file a petition seeking review by the U.S. Supreme Court. In United States ex rel. Schutte and Yarberry v. SuperValu, New Albertson's, Inc., et al. , also filed in the Central District of Illinois, the relators allege that defendants (including various subsidiaries of the Company) overcharged federal government healthcare programs by not providing the federal government, as a part of usual and customary prices, the benefit of discounts given to customers who requested that defendants match competitor prices. The complaint was originally filed under seal and amended on November 30, 2015. On August 5, 2019, the Court granted relators' motion for partial summary judgment, holding that price-matched prices are the usual and customary prices for those drugs. On July 1, 2020, the Court granted the defendants' motions for summary judgment and dismissed the case, holding that the relator could not prove that defendants acted with the intent required under the FCA. Judgment was issued on July 2, 2020. On July 9, 2020, the relators filed a notice of appeal. Oral argument was held on January 19, 2021. On August 12, 2021, the Court of Appeals for the Seventh Circuit affirmed the grant of summary judgment in the Company's favor. On September 23, 2021, the relators filed a petition for rehearing en banc with the Seventh Circuit. On December 3, 2021, the Seventh Circuit denied relators' petition. On April 1, 2022, relators filed a petition to seek review by the U.S. Supreme Court. In both of the above cases, the federal government previously investigated the relators' allegations and declined to intervene. The relators elected to pursue their respective cases on their own and in each case have alleged FCA damages in excess of $100 million before trebling and excluding penalties. The Company is vigorously defending each of these matters and believes each of these cases is without merit. The Company has recorded an estimated liability for these matters. Pharmacy Benefit Manager (PBM) Litigation: The Company (including its subsidiary, Safeway Inc.) is a defendant in a lawsuit filed on January 21, 2021, in Minnesota state court, captioned Health Care Service Corp. et al. v. Albertsons Companies, LLC, et al. The action challenges certain prescription-drug prices reported by the Company to a pharmacy benefit manager, Prime Therapeutics LLC ("Prime"), which in turn contracted with the health-insurer plaintiffs to adjudicate and process prescription-drug reimbursement claims. On December 7, 2021, the Company filed a motion to dismiss the complaint. On January 14, 2022, the court denied the Company's motion to dismiss as to all but one count, plaintiffs' claim of negligent misrepresentation. On January 21, 2022, the Company and co-defendant SUPERVALU, Inc. ("SUPERVALU") filed a third-party complaint against Prime, asserting various claims, including: indemnification, fraud and unjust enrichment. On February 17, 2022, the Company filed in the Minnesota Court of Appeals an interlocutory appeal of the denial of their motion to dismiss on personal jurisdiction grounds (the "Jurisdictional Appeal"). On February 24, 2022, the Company and SUPERVALU filed in the trial court an unopposed motion to stay proceedings, pending the resolution of the Jurisdictional Appeal. The parties agreed on March 6, 2022, to an interim stay in the trial court pending a ruling on the unopposed motion to stay proceedings. The Jurisdictional Appeal is currently pending. The Company is vigorously defending the claims filed against it, and believes the claims are without merit. The Company also intends to prosecute its claims against Prime with equal vigor. The Company has recorded an estimated liability for these matters. Opioid Litigation: The Company is one of dozens of companies that have been named in various lawsuits alleging that defendants contributed to the national opioid epidemic. At present, the Company is named in over 90 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 pursuant to 28 U.S.C. §1407. Most of these cases have been stayed pending bellwether trials. At present, the most active case is a matter in New Mexico state court where we have been in active discovery and where a September 2022 trial date has been set. A trial has also been scheduled in Nevada state court for April 2023. Cases filed by Tarrant County (Texas), Santa Fe County (New Mexico), Washington County (Utah) and the State of Nevada are proceeding through discovery. The Company is vigorously defending these matters and believes that these cases are without merit. At this stage in the proceedings, the Company is unable to determine the probability of the outcome of these matters or the range of reasonably possible loss, if any. Oregon Class Action: A putative class action complaint entitled Schearon Stewart and Jason Stewart v. Safeway Inc. is pending in Circuit Court, County of Multnomah, State of Oregon, alleging that Safeway engaged in unfair trade practices, in violation of Oregon's Unlawful Trade Practices Act (ORS 646.608), regarding the sale of certain meat products in 2015 and 2016 with its "Buy One, Get One Free" and similar promotions. Safeway denies plaintiffs' claim and is vigorously defending itself in the matter. The Company has recorded an estimated liability for this matter. FACTA: On May 31, 2019, a putative class action complaint entitled Martin v. Safeway was filed in the California Superior Court for the County of Alameda, alleging the Company failed to comply with the Fair and Accurate Credit Transactions Act ("FACTA") by printing receipts that failed to adequately mask payment card numbers as required by FACTA. The plaintiff claims the violation was "willful" and exposes the Company to statutory damages provided for in FACTA. On January 8, 2020, the Company commenced mediation discussions with plaintiff's counsel and reached a settlement in principle on February 24, 2020. On May 5, 2022, the court approved the negotiated settlement. Pursuant to the settlement, funds have been paid to a claims administrator, who will oversee the processing of claims. Plated Litigation: On September 1, 2020, a complaint entitled Shareholder Representative Services LLC v. Albertsons Companies Inc. was filed in Delaware Chancery Court where Shareholder Representative Services LLC sued on behalf of former shareholders and rightsholders of DineInFresh, Inc. d/b/a Plated ("Plated"). Plaintiff alleged that, following the Company's acquisition of Plated, pursuant to a September 19, 2017 Agreement and Plan of Merger, the Company intentionally engaged in conduct to prevent Plated from reaching certain milestones that would have resulted in post-acquisition consideration paid to Plated shareholders and rightsholders. Plaintiff alleged breach of contract, breach of the implied covenant of good faith and fair dealing, and fraudulent inducement. On October 21, 2020, the Company filed a motion to dismiss the complaint. On June 7, 2021, the Court granted the motion in part, dismissing all claims except for the breach-of-contract claim. The Company is vigorously defending itself in the lawsuit and believes that the case is without merit. At this stage in the proceedings, the Company is unable to determine the probability of the outcome of the matter or the range of reasonably possible loss, if any. Other Commitments |
OTHER COMPREHENSIVE INCOME OR L
OTHER COMPREHENSIVE INCOME OR LOSS | 4 Months Ended |
Jun. 18, 2022 | |
Equity [Abstract] | |
OTHER COMPREHENSIVE INCOME OR LOSS | 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 equals net income plus or minus adjustments for pension and other post-retirement liabilities. Total comprehensive earnings represent the activity for a period net of tax. While total comprehensive earnings are the activity in a period and are largely driven by net earnings in that period, accumulated other comprehensive income or loss ("AOCI") represents the cumulative balance of other comprehensive income, net of tax, as of the balance sheet date. Changes in the AOCI balance by component are shown below (in millions): 16 weeks ended June 18, 2022 Total Pension and Post-retirement benefit plans Other Beginning AOCI balance $ 69.0 $ 67.1 $ 1.9 Other comprehensive loss before reclassifications (4.0) — (4.0) Amounts reclassified from accumulated other comprehensive income (1) 0.2 0.2 — Tax benefit 1.0 — 1.0 Current-period other comprehensive (loss) income, net of tax (2.8) 0.2 (3.0) Ending AOCI balance $ 66.2 $ 67.3 $ (1.1) 16 weeks ended June 19, 2021 Total Pension and Post-retirement benefit plans Other Beginning AOCI balance $ 63.5 $ 61.3 $ 2.2 Amounts reclassified from accumulated other comprehensive income (1) 0.2 0.2 — Tax expense (0.1) (0.1) — Current-period other comprehensive income, net of tax 0.1 0.1 — Ending AOCI balance $ 63.6 $ 61.4 $ 2.2 |
NET INCOME PER CLASS A COMMON S
NET INCOME PER CLASS A COMMON SHARE | 4 Months Ended |
Jun. 18, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME PER CLASS A COMMON SHARE | 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 Convertible Preferred Stock, a participating security, according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to Class A common shares and Convertible Preferred Stock based on their respective rights to receive dividends. The holders of Convertible Preferred Stock participate in cash dividends that the Company pays on its common stock to the extent that such cash dividends exceed $206.25 million per fiscal year. In applying the two-class method to interim periods, the Company allocates income to its quarterly periods independently and discretely from its year-to-date and annual periods. Basic net income per Class A common share is computed by dividing net income allocated to Class A common stockholders by the weighted average number of Class A common shares outstanding for the period, including Class A common shares to be issued with no prior remaining contingencies prior to issuance. Diluted net income per Class A common share is computed based on the weighted average number of shares of Class A common stock outstanding during each period, plus potential Class A common shares considered outstanding during the period, as long as the inclusion of such awards is not antidilutive. Potential Class A common shares consist of unvested restricted stock units ("RSUs"), restricted common stock ("RSAs") and Convertible Preferred Stock, using the more dilutive of either the two-class method or as-converted stock method. Performance-based RSUs are considered dilutive when the related performance criterion has been met. The components of basic and diluted net income per Class A common share were as follows (in millions, except per share data): 16 weeks ended June 18, June 19, Basic net income per Class A common share Net income $ 484.2 $ 444.8 Accrued dividends on Convertible Preferred Stock (13.7) (36.4) Earnings allocated to Convertible Preferred Stock (26.9) (36.2) Net income allocated to Class A common stockholders - Basic $ 443.6 $ 372.2 Weighted average Class A common shares outstanding - Basic (1) 513.3 465.1 Basic net income per Class A common share $ 0.86 $ 0.80 Diluted net income per Class A common share Net income allocated to Class A common stockholders - Basic $ 443.6 $ 372.2 Accrued dividends on Convertible Preferred Stock 13.7 36.4 Earnings allocated to Convertible Preferred Stock 26.9 36.2 Net income allocated to Class A common stockholders - Diluted $ 484.2 $ 444.8 Weighted average Class A common shares outstanding - Basic (1) 513.3 465.1 Dilutive effect of: Restricted stock units and awards 4.8 4.7 Convertible Preferred Stock (2) 58.2 101.6 Weighted average Class A common shares outstanding - Diluted (3) 576.3 571.4 Diluted net income per Class A common share $ 0.84 $ 0.78 (1) The number of Class A common shares remaining to be issued for the 16 weeks ended June 18, 2022 and June 19, 2021 were not material. (2) Reflects the number of shares of Convertible Preferred Stock issued, if converted into common stock for the period outstanding. (3) The number of potential Class A common shares outstanding related to RSUs and RSAs that were antidilutive for the 16 weeks ended June 18, 2022 and June 19, 2021 were not material. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 4 Months Ended |
Jun. 18, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 26, 2022 is derived from the Company's annual audited Consolidated Financial Statements, which should be read in conjunction with these Condensed Consolidated Financial Statements and which are included in the Company's Annual Report on Form 10-K for the fiscal year ended February 26, 2022, filed with the Securities and Exchange Commission (the "SEC") on April 26, 2022. Certain information in footnote disclosures normally included in annual financial statements was condensed or omitted for the interim periods presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of management, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The interim results of operations and cash flows are not necessarily indicative of those results and cash flows expected for the year. The Company' |
Restricted cash | Restricted cash: Restricted cash is included in Other current assets or Other assets depending on the remaining term of the restriction and primarily relates to surety bonds and funds held in escrow. |
Inventories, net | Inventories, net: Substantially all of the Company's inventories consist of finished goods valued at the lower of cost or net realizable value and net of vendor allowances. The Company primarily uses the retail inventory or the item-cost method to determine inventory cost before application of any last-in, first-out ("LIFO") adjustment. Interim LIFO inventory costs are based on management's estimates of expected year-end inventory levels and inflation rates. |
Segments | Segments: The Company and its subsidiaries offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel and other items and services in its stores or through digital channels. The Company's operating divisions are geographically based, have similar economic characteristics and similar expected long-term financial performance. The Company's operating segments and reporting units are its 12 operating divisions, which are reported in one 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 one store format. Each division offers through its stores and digital channels the same general mix of products with similar pricing to similar categories of customers, has similar distribution methods, operates in similar regulatory environments and purchases merchandise from similar or the same vendors. |
Revenue Recognition | 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 product.For digital related sales, which primarily include home delivery and Drive Up & Go curbside pickup, revenues are recognized upon either pickup in store or delivery to the customer and may include revenue for separately charged delivery services. The Company records a contract liability when rewards are earned by customers in connection with the Company's loyalty programs. As rewards are redeemed or expire, the Company reduces the contract liability and recognizes revenue. The contract liability balance was immaterial as of June 18, 2022 and February 26, 2022.The Company records a contract liability when it sells its own proprietary gift cards. The Company records a sale when the customer redeems the gift card. The Company's gift cards do not expire. The Company reduces the contract liability and records revenue for the unused portion of gift cards ("breakage") in proportion to its customers' pattern of redemption, which the Company determined to be the historical redemption rate. |
Recently issued accounting standards | Recently issued accounting standards : In June 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-03, "Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions" ("ASU 2022-03"). ASU 2022-03 clarifies the guidance on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The Company currently does not expect the adoption of this standard to have a material impact on its Consolidated Financial Statements and related disclosures, but evaluation is continuing. |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The accounting guidance for fair value established a framework for measuring fair value and established a three-level valuation hierarchy for disclosure of fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability at the measurement date. The three levels are defined as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities; Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 - Unobservable inputs in which little or no market activity exists, requiring an entity to develop its own assumptions that market participants would use to value the asset or liability. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 4 Months Ended |
Jun. 18, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Sales Revenue by Type of Similar Products | The following table represents Net sales and other revenue by product type (dollars in millions): 16 weeks ended June 18, June 19, Amount (1) % of Total Amount (1) % of Total Non-perishables (2) $ 11,446.0 49.1 % $ 10,742.7 50.5 % Fresh (3) 7,881.5 33.8 7,412.5 34.9 Pharmacy 1,923.5 8.3 1,728.6 8.1 Fuel 1,654.7 7.1 1,049.3 4.9 Other (4) 404.6 1.7 336.3 1.6 Net sales and other revenue $ 23,310.3 100.0 % $ 21,269.4 100.0 % (1) Digital related sales are included in the categories to which the revenue pertains. (2) Consists primarily of general merchandise, grocery, dairy and frozen foods. (3) Consists primarily of produce, meat, deli and prepared foods, bakery, floral and seafood. (4) Consists primarily of wholesale revenue to third parties, commissions and other miscellaneous revenue. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 4 Months Ended |
Jun. 18, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents certain assets which were measured at fair value on a recurring basis as of June 18, 2022 (in millions): Fair Value Measurements Total Quoted prices in active markets Significant Significant Assets: Short-term investments (1) $ 17.2 $ 4.7 $ 12.5 $ — Non-current investments (2) 94.7 — 94.7 — Derivative contracts (3) 24.5 — 24.5 — Total $ 136.4 $ 4.7 $ 131.7 $ — (1) Primarily relates to Mutual Funds (Level 1) and Certificates of Deposit (Level 2). Included in Other current assets. (2) Primarily relates to investments in publicly traded stock (Level 1) and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets. (3) Primarily relates to energy derivative contracts and interest rate swaps. Included in Other assets. The following table presents certain assets and liabilities which were measured at fair value on a recurring basis as of February 26, 2022 (in millions): Fair Value Measurements Total Quoted prices in active markets Significant Significant Assets: Short-term investments (1) $ 14.4 $ 4.9 $ 9.5 $ — Non-current investments (2) 114.7 10.9 103.8 — Derivative contracts (3) 18.6 — 18.6 — Total $ 147.7 $ 15.8 $ 131.9 $ — Liabilities: Derivative contracts (4) $ 10.4 $ — $ 10.4 $ — Total $ 10.4 $ — $ 10.4 $ — (1) Primarily relates to Mutual Funds (Level 1) and Certificates of Deposit (Level 2). Included in Other current assets. (2) Primarily relates to investments in publicly traded stock (Level 1) and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets. (3) Primarily relates to energy derivative contracts. Included in Other assets. (4) Primarily relates to interest rate swaps. Included in Other current liabilities. |
LONG-TERM DEBT AND FINANCE LE_2
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS (Tables) | 4 Months Ended |
Jun. 18, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The Company's long-term debt and finance lease obligations as of June 18, 2022 and February 26, 2022, net of unamortized debt discounts of $40.2 million and $41.4 million, respectively, and deferred financing costs of $53.8 million and $57.5 million, respectively, consisted of the following (in millions): June 18, February 26, Senior Unsecured Notes due 2023 to 2030, interest rate range of 3.25% to 7.50% $ 6,496.0 $ 6,492.5 Safeway Inc. Notes due 2027 to 2031, interest rate range of 7.25% to 7.45% 374.5 374.4 New Albertsons L.P. Notes due 2026 to 2031, interest rate range of 6.52% to 8.70% 473.7 472.6 Other financing obligations 29.0 29.1 Mortgage notes payable, secured 17.1 17.1 Finance lease obligations 556.3 579.4 Total debt 7,946.6 7,965.1 Less current maturities (825.4) (828.8) Long-term portion $ 7,121.2 $ 7,136.3 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 4 Months Ended |
Jun. 18, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Pension and Post-retirement Expense | The following table provides the components of net pension and post-retirement (income) expense (in millions): 16 weeks ended Pension Other post-retirement benefits June 18, June 19, June 18, June 19, Estimated return on plan assets $ (28.6) $ (32.7) $ — $ — Service cost 6.2 6.9 — — Interest cost 15.8 13.0 0.1 0.1 Amortization of prior service cost 0.1 0.1 — — Amortization of net actuarial loss (gain) 0.2 0.3 (0.1) (0.2) (Income) expense, net $ (6.3) $ (12.4) $ — $ (0.1) |
OTHER COMPREHENSIVE INCOME OR_2
OTHER COMPREHENSIVE INCOME OR LOSS (Tables) | 4 Months Ended |
Jun. 18, 2022 | |
Equity [Abstract] | |
Schedule of Changes In the Accumulated Other Comprehensive Income or Loss | Changes in the AOCI balance by component are shown below (in millions): 16 weeks ended June 18, 2022 Total Pension and Post-retirement benefit plans Other Beginning AOCI balance $ 69.0 $ 67.1 $ 1.9 Other comprehensive loss before reclassifications (4.0) — (4.0) Amounts reclassified from accumulated other comprehensive income (1) 0.2 0.2 — Tax benefit 1.0 — 1.0 Current-period other comprehensive (loss) income, net of tax (2.8) 0.2 (3.0) Ending AOCI balance $ 66.2 $ 67.3 $ (1.1) 16 weeks ended June 19, 2021 Total Pension and Post-retirement benefit plans Other Beginning AOCI balance $ 63.5 $ 61.3 $ 2.2 Amounts reclassified from accumulated other comprehensive income (1) 0.2 0.2 — Tax expense (0.1) (0.1) — Current-period other comprehensive income, net of tax 0.1 0.1 — Ending AOCI balance $ 63.6 $ 61.4 $ 2.2 |
NET INCOME PER CLASS A COMMON_2
NET INCOME PER CLASS A COMMON SHARE (Tables) | 4 Months Ended |
Jun. 18, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The components of basic and diluted net income per Class A common share were as follows (in millions, except per share data): 16 weeks ended June 18, June 19, Basic net income per Class A common share Net income $ 484.2 $ 444.8 Accrued dividends on Convertible Preferred Stock (13.7) (36.4) Earnings allocated to Convertible Preferred Stock (26.9) (36.2) Net income allocated to Class A common stockholders - Basic $ 443.6 $ 372.2 Weighted average Class A common shares outstanding - Basic (1) 513.3 465.1 Basic net income per Class A common share $ 0.86 $ 0.80 Diluted net income per Class A common share Net income allocated to Class A common stockholders - Basic $ 443.6 $ 372.2 Accrued dividends on Convertible Preferred Stock 13.7 36.4 Earnings allocated to Convertible Preferred Stock 26.9 36.2 Net income allocated to Class A common stockholders - Diluted $ 484.2 $ 444.8 Weighted average Class A common shares outstanding - Basic (1) 513.3 465.1 Dilutive effect of: Restricted stock units and awards 4.8 4.7 Convertible Preferred Stock (2) 58.2 101.6 Weighted average Class A common shares outstanding - Diluted (3) 576.3 571.4 Diluted net income per Class A common share $ 0.84 $ 0.78 (1) The number of Class A common shares remaining to be issued for the 16 weeks ended June 18, 2022 and June 19, 2021 were not material. (2) Reflects the number of shares of Convertible Preferred Stock issued, if converted into common stock for the period outstanding. (3) The number of potential Class A common shares outstanding related to RSUs and RSAs that were antidilutive for the 16 weeks ended June 18, 2022 and June 19, 2021 were not material. |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Millions | 1 Months Ended | 4 Months Ended | |||
Jul. 22, 2022 shares | Jun. 18, 2022 USD ($) format segment division shares | Jun. 19, 2021 USD ($) | Jun. 20, 2020 USD ($) | Feb. 26, 2022 USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Restricted cash | $ 50.5 | $ 50.6 | |||
LIFO expense | $ 62.1 | $ 14.5 | |||
Preferred stock convertible, shares (in shares) | shares | 703,774 | ||||
Income tax expense | $ 143.3 | $ 132.5 | |||
Effective tax rate | 22.80% | 23% | |||
Number of divisions | division | 12 | ||||
Number of reportable segments | segment | 1 | ||||
Number of store format | format | 1 | ||||
Receivables, net | $ 565.3 | 560.6 | |||
Contract liability related to gift cards | $ 101.9 | 104.3 | |||
Subsequent Event | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Preferred stock convertible, shares (in shares) | shares | 4,411 | ||||
Convertible preferred stock, outstanding, percentage | 61% | ||||
Class A Common Stock | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Convertible preferred stock conversions (in shares) | shares | 40,863,977 | ||||
Class A Common Stock | Subsequent Event | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Convertible preferred stock conversions (in shares) | shares | 61,489,721 | ||||
Conversion of stock, shares converted (in shares) | shares | 256,162 | ||||
Convertible Preferred Stock | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Escrow deposit | $ 36.5 | ||||
Restricted Cash and Investments | $ 2,900 | ||||
Preferred stock, agreement appraisal value of the stock liquidation preference, percent | 165% | ||||
Percentage of cash withdrawal from restricted escrow account | 60% | ||||
Pharmacy | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Receivables, net | $ 250.1 | $ 247.5 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Sales Revenue by Similar Products (Details) - USD ($) $ in Millions | 4 Months Ended | |
Jun. 18, 2022 | Jun. 19, 2021 | |
Concentration Risk [Line Items] | ||
Net sales and other revenue | $ 23,310.3 | $ 21,269.4 |
Product Line | Product Concentration Risk | ||
Concentration Risk [Line Items] | ||
Net sales and other revenue | $ 23,310.3 | $ 21,269.4 |
Percentage of total net sales and other revenue | 100% | 100% |
Non-perishables | Product Line | Product Concentration Risk | ||
Concentration Risk [Line Items] | ||
Net sales and other revenue | $ 11,446 | $ 10,742.7 |
Percentage of total net sales and other revenue | 49.10% | 50.50% |
Fresh | Product Line | Product Concentration Risk | ||
Concentration Risk [Line Items] | ||
Net sales and other revenue | $ 7,881.5 | $ 7,412.5 |
Percentage of total net sales and other revenue | 33.80% | 34.90% |
Pharmacy | Product Line | Product Concentration Risk | ||
Concentration Risk [Line Items] | ||
Net sales and other revenue | $ 1,923.5 | $ 1,728.6 |
Percentage of total net sales and other revenue | 8.30% | 8.10% |
Fuel | Product Line | Product Concentration Risk | ||
Concentration Risk [Line Items] | ||
Net sales and other revenue | $ 1,654.7 | $ 1,049.3 |
Percentage of total net sales and other revenue | 7.10% | 4.90% |
Other | Product Line | Product Concentration Risk | ||
Concentration Risk [Line Items] | ||
Net sales and other revenue | $ 404.6 | $ 336.3 |
Percentage of total net sales and other revenue | 1.70% | 1.60% |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Assets and Liabilities Measured at Fair Value (Details) - Recurring - USD ($) $ in Millions | Jun. 18, 2022 | Feb. 26, 2022 |
Assets: | ||
Short-term investments | $ 17.2 | $ 14.4 |
Non-current investments | 94.7 | 114.7 |
Derivative contracts | 24.5 | 18.6 |
Total | 136.4 | 147.7 |
Liabilities: | ||
Derivative contracts | 10.4 | |
Total | 10.4 | |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets: | ||
Short-term investments | 4.7 | 4.9 |
Non-current investments | 0 | 10.9 |
Derivative contracts | 0 | 0 |
Total | 4.7 | 15.8 |
Liabilities: | ||
Derivative contracts | 0 | |
Total | 0 | |
Significant observable inputs (Level 2) | ||
Assets: | ||
Short-term investments | 12.5 | 9.5 |
Non-current investments | 94.7 | 103.8 |
Derivative contracts | 24.5 | 18.6 |
Total | 131.7 | 131.9 |
Liabilities: | ||
Derivative contracts | 10.4 | |
Total | 10.4 | |
Significant unobservable inputs (Level 3) | ||
Assets: | ||
Short-term investments | 0 | 0 |
Non-current investments | 0 | 0 |
Derivative contracts | 0 | 0 |
Total | $ 0 | 0 |
Liabilities: | ||
Derivative contracts | 0 | |
Total | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions | Jun. 18, 2022 | Feb. 26, 2022 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt amount | $ 6,774 | $ 7,531.5 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt amount | $ 7,484.3 | $ 7,484.6 |
LONG-TERM DEBT AND FINANCE LE_3
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS - Narrative (Details) - USD ($) | Jun. 18, 2022 | Feb. 26, 2022 |
Debt Instrument [Line Items] | ||
Unamortized debt discounts | $ 40,200,000 | $ 41,400,000 |
Deferred financing costs | 53,800,000 | 57,500,000 |
Asset-Based Loan Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Outstanding balance on line of credit | 0 | 0 |
LOC Sub-facility | ||
Debt Instrument [Line Items] | ||
Outstanding balance on letters of credit | $ 249,600,000 | $ 249,400,000 |
LONG-TERM DEBT AND FINANCE LE_4
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Jun. 18, 2022 | Feb. 26, 2022 |
Debt Instrument [Line Items] | ||
Finance lease obligations | $ 556.3 | $ 579.4 |
Total debt | 7,946.6 | 7,965.1 |
Less current maturities | (825.4) | (828.8) |
Long-term portion | 7,121.2 | 7,136.3 |
Other financing obligations | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 29 | 29.1 |
Senior Notes | Senior Unsecured Notes due 2023 to 2030, interest rate range of 3.25% to 7.50% | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 6,496 | 6,492.5 |
Senior Notes | Senior Unsecured Notes due 2023 to 2030, interest rate range of 3.25% to 7.50% | Minimum | ||
Debt Instrument [Line Items] | ||
Stated interest rate percentage | 3.25% | |
Senior Notes | Senior Unsecured Notes due 2023 to 2030, interest rate range of 3.25% to 7.50% | Maximum | ||
Debt Instrument [Line Items] | ||
Stated interest rate percentage | 7.50% | |
Notes Payable | Safeway Inc. Notes due 2027 to 2031, interest rate range of 7.25% to 7.45% | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 374.5 | 374.4 |
Notes Payable | Safeway Inc. Notes due 2027 to 2031, interest rate range of 7.25% to 7.45% | Minimum | ||
Debt Instrument [Line Items] | ||
Stated interest rate percentage | 7.25% | |
Notes Payable | Safeway Inc. Notes due 2027 to 2031, interest rate range of 7.25% to 7.45% | Maximum | ||
Debt Instrument [Line Items] | ||
Stated interest rate percentage | 7.45% | |
Notes Payable | New Albertsons L.P. Notes due 2026 to 2031, interest rate range of 6.52% to 8.70% | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 473.7 | 472.6 |
Notes Payable | New Albertsons L.P. Notes due 2026 to 2031, interest rate range of 6.52% to 8.70% | Minimum | ||
Debt Instrument [Line Items] | ||
Stated interest rate percentage | 6.52% | |
Notes Payable | New Albertsons L.P. Notes due 2026 to 2031, interest rate range of 6.52% to 8.70% | Maximum | ||
Debt Instrument [Line Items] | ||
Stated interest rate percentage | 8.70% | |
Mortgage Notes Payable | Mortgage notes payable, secured | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 17.1 | $ 17.1 |
EMPLOYEE BENEFIT PLANS - Schedu
EMPLOYEE BENEFIT PLANS - Schedule of Components of Net Pension and Post-Retirement Expense (Details) - USD ($) $ in Millions | 4 Months Ended | |
Jun. 18, 2022 | Jun. 19, 2021 | |
Pension | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Estimated return on plan assets | $ (28.6) | $ (32.7) |
Service cost | 6.2 | 6.9 |
Interest cost | 15.8 | 13 |
Amortization of prior service cost | 0.1 | 0.1 |
Amortization of net actuarial loss (gain) | 0.2 | 0.3 |
(Income) expense, net | (6.3) | (12.4) |
Other post-retirement benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Estimated return on plan assets | 0 | 0 |
Service cost | 0 | 0 |
Interest cost | 0.1 | 0.1 |
Amortization of prior service cost | 0 | 0 |
Amortization of net actuarial loss (gain) | (0.1) | (0.2) |
(Income) expense, net | $ 0 | $ (0.1) |
EMPLOYEE BENEFIT PLANS - Narrat
EMPLOYEE BENEFIT PLANS - Narrative (Details) - USD ($) $ in Millions | 4 Months Ended | |
Jun. 18, 2022 | Jun. 19, 2021 | |
Retirement Benefits [Abstract] | ||
Contribution made to defined benefit plan | $ 3.2 | $ 2 |
Expected future employer contributions for remainder of the fiscal year | 17.9 | |
PBGC's financial assistance | $ 1,200 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES AND OFF BALANCE SHEET ARRANGEMENTS - Guarantees (Details) - USD ($) $ in Millions | Jun. 18, 2022 | Feb. 26, 2022 |
Letter of Credit | ||
Loss Contingencies [Line Items] | ||
Outstanding balance on letters of credit | $ 1.7 | $ 9.2 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES AND OFF BALANCE SHEET ARRANGEMENTS - Legal Contingencies (Details) $ in Millions | 4 Months Ended |
Jun. 18, 2022 USD ($) case lawsuit | |
Qui Tam Lawsuits | Pending litigation | |
Loss Contingencies [Line Items] | |
Number of lawsuits filed against the company | lawsuit | 2 |
Loss contingency, amount of damages sought (in excess of) | $ | $ 100 |
Various State Courts | Threatened litigation | |
Loss Contingencies [Line Items] | |
Number of lawsuits filed against the company | 90 |
Consolidated Cases for Multidistrict Litigation | |
Loss Contingencies [Line Items] | |
Number of lawsuits filed against the company | 2,000 |
OTHER COMPREHENSIVE INCOME OR_3
OTHER COMPREHENSIVE INCOME OR LOSS - Changes in the AOCI Balance (Details) - USD ($) $ in Millions | 4 Months Ended | |
Jun. 18, 2022 | Jun. 19, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning AOCI balance | $ 3,024.6 | $ 1,324.3 |
Other comprehensive loss before reclassifications | (4) | |
Amounts reclassified from accumulated other comprehensive income | 0.2 | 0.2 |
Tax (expense) benefit | 1 | (0.1) |
Other comprehensive (loss) income | (2.8) | 0.1 |
Ending AOCI balance | 4,070.6 | 1,698.4 |
Accumulated other comprehensive income | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning AOCI balance | 69 | 63.5 |
Ending AOCI balance | 66.2 | 63.6 |
Pension and Post-retirement benefit plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning AOCI balance | 67.1 | 61.3 |
Other comprehensive loss before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive income | 0.2 | 0.2 |
Tax (expense) benefit | 0 | (0.1) |
Other comprehensive (loss) income | 0.2 | 0.1 |
Ending AOCI balance | 67.3 | 61.4 |
Other | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning AOCI balance | 1.9 | 2.2 |
Other comprehensive loss before reclassifications | (4) | |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Tax (expense) benefit | 1 | 0 |
Other comprehensive (loss) income | (3) | 0 |
Ending AOCI balance | $ (1.1) | $ 2.2 |
NET INCOME PER CLASS A COMMON_3
NET INCOME PER CLASS A COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 4 Months Ended | |
Jun. 18, 2022 | Jun. 19, 2021 | |
Basic net income per Class A common share | ||
Net income | $ 484,200 | $ 444,800 |
Accrued dividends on Convertible Preferred Stock | (13,700) | (36,400) |
Earnings allocated to Convertible Preferred Stock | (26,900) | (36,200) |
Net income allocated to Class A common stockholders - Basic | $ 443,600 | $ 372,200 |
Weighted average class A common shares outstanding - Basic (in shares) | 513.3 | 465.1 |
Basic net income per class A common share (in dollars per share) | $ 0.86 | $ 0.80 |
Diluted net income per Class A common share | ||
Net income allocated to Class A common stockholders - Basic | $ 443,600 | $ 372,200 |
Accrued dividends on Convertible Preferred Stock | 13,700 | 36,400 |
Earnings allocated to Convertible Preferred Stock | 26,900 | 36,200 |
Net income allocated to Class A common stockholders - Diluted | $ 484,200 | $ 444,800 |
Dilutive effect of: | ||
Convertible preferred stock (in shares) | 58.2 | 101.6 |
Weighted average Class A common shares outstanding - Diluted | 576.3 | 571.4 |
Diluted net income per class A common share (in dollars per share) | $ 0.84 | $ 0.78 |
Restricted stock units and awards | ||
Dilutive effect of: | ||
Restricted stock units and awards (in shares) | 4.8 | 4.7 |
Series A-1 convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Preferred stock participation in cash dividends over dividends to common stock | $ 206,250 |