aci-20240907

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 7, 2024

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

For the transition period from _____ to _____

Commission File Number: 001-39350

Albertsons Companies, Inc.

(Exact name of registrant as specified in its charter)


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

250 Parkcenter Blvd.

Boise, Idaho 83706

(Address of principal executive offices and zip code)

(208) 395-6200

(Registrant's telephone number, including area code)

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


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

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

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of October 11, 2024, the registrant had 579,348,079 shares of Class A common stock, par value $0.01 per share, outstanding.

Albertsons Companies, Inc. and Subsidiaries



PART I - FINANCIAL INFORMATION		Page
	Item 1 - Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Income	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Stockholders' Equity	6
	Notes to Condensed Consolidated Financial Statements	8










	Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3 - Quantitative and Qualitative Disclosures About Market Risk	34
	Item 4 - Controls and Procedures	34

PART II - OTHER INFORMATION
	Item 1 - Legal Proceedings	35
	Item 1A - Risk Factors	35
	Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	35
	Item 3 - Defaults Upon Senior Securities	36
	Item 4 - Mine Safety Disclosures	36
	Item 5 - Other Information	36
	Item 6 - Exhibits	36

SIGNATURES		37

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 7, 2024		February 24, 2024
ASSETS
Current assets
	Cash and cash equivalents	$	280.0	$	188.7
	Receivables, net	897.6		724.4
	Inventories, net	5,042.7		4,945.2
	Other current assets	426.3		429.2
	Total current assets	6,646.6		6,287.5

Property and equipment, net		9,551.4		9,570.3
Operating lease right-of-use assets		6,022.6		5,981.6
Intangible assets, net		2,377.9		2,434.5
Goodwill		1,201.0		1,201.0
Other assets		728.9		746.2
TOTAL ASSETS		$	26,528.4	$	26,221.1

LIABILITIES
Current liabilities
	Accounts payable	$	4,221.9	$	4,218.2
	Accrued salaries and wages	1,352.2		1,302.6

	Current maturities of long-term debt and finance lease obligations	129.1		285.2
	Current maturities of operating lease obligations	679.3		677.6
	Other current liabilities	1,039.9		974.1
	Total current liabilities	7,422.4		7,457.7

Long-term debt and finance lease obligations		7,779.3		7,783.4
Long-term operating lease obligations		5,615.1		5,493.2
Deferred income taxes		727.5		807.6
Other long-term liabilities		1,963.8		1,931.7

Commitments and contingencies



STOCKHOLDERS' EQUITY

	Class A common stock, $0.01 par value; 1,000,000,000 shares authorized, 597,711,686 and 594,445,268 shares issued as of September 7, 2024 and February 24, 2024, respectively	6.0		5.9

	Additional paid-in capital	2,152.3		2,129.6
	Treasury stock, at cost, 18,404,201 and 18,397,745 shares held as of September 7, 2024 and February 24, 2024, respectively	(304.2)		(304.2)
	Accumulated other comprehensive income	92.6		88.0
	Retained earnings	1,073.6		828.2
	Total stockholders' equity	3,020.3		2,747.5
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	26,528.4	$	26,221.1

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

Table of Contents

Albertsons Companies, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income

(in millions, except per share data)

(unaudited)


	12 weeks ended				28 weeks ended
	September 7, 2024		September 9, 2023		September 7, 2024		September 9, 2023
Net sales and other revenue	$	18,551.5	$	18,290.7	$	42,816.9	$	42,340.9
Cost of sales	13,430.2		13,249.2		30,956.7		30,636.7
Gross margin	5,121.3		5,041.5		11,860.2		11,704.2

Selling and administrative expenses	4,785.4		4,595.5		11,059.4		10,608.4
Loss (gain) on property dispositions and impairment losses, net	43.9		(8.4)		49.2		19.2

Operating income	292.0		454.4		751.6		1,076.6

Interest expense, net	103.6		111.9		249.3		266.8

Other expense (income), net	1.9		8.1		5.9		(7.9)
Income before income taxes	186.5		334.4		496.4		817.7

Income tax expense	41.0		67.5		110.2		133.6
Net income	$	145.5	$	266.9	$	386.2	$	684.1

Other comprehensive income (loss), net of tax
Recognition of pension gain (loss)	2.9		(1.9)		1.9		(2.5)

Other	3.0		0.4		2.7		2.1
Other comprehensive income (loss)	$	5.9	$	(1.5)	$	4.6	$	(0.4)

Comprehensive income	$	151.4	$	265.4	$	390.8	$	683.7

Net income per Class A common share
Basic net income per Class A common share	$	0.25	$	0.46	$	0.67	$	1.19
Diluted net income per Class A common share	0.25		0.46		0.66		1.18

Weighted average Class A common shares outstanding (in millions)
Basic	580.1		576.0		579.5		574.7
Diluted	583.2		581.9		582.4		580.3

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

Table of Contents

Albertsons Companies, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in millions)

(unaudited)


	28 weeks ended
	September 7, 2024		September 9, 2023
Cash flows from operating activities:
Net income	$	386.2	$	684.1
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on property dispositions and impairment losses, net	49.2		19.2
Depreciation and amortization	973.9		945.2
Operating lease right-of-use assets amortization	364.3		357.0

LIFO expense	19.4		60.2
Deferred income tax	(86.7)		(85.8)

Contributions to pension and post-retirement benefit plans, net of expense (income)	(29.3)		(12.1)

Deferred financing costs	8.6		8.4

Equity-based compensation expense	66.2		57.2
Other operating activities	17.0		(12.3)
Changes in operating assets and liabilities:
Receivables, net	(174.0)		(21.3)
Inventories, net	(116.9)		(326.6)
Accounts payable, accrued salaries and wages and other accrued liabilities	88.5		35.1
Operating lease liabilities	(280.6)		(274.7)
Self-insurance assets and liabilities	21.2		40.3
Other operating assets and liabilities	67.1		(126.0)
Net cash provided by operating activities	1,374.1		1,347.9

Cash flows from investing activities:
Payments for property, equipment and intangibles, including lease buyouts	(952.3)		(1,084.3)
Proceeds from sale of assets	19.8		195.1

Other investing activities	7.2		(0.9)
Net cash used in investing activities	(925.3)		(890.1)

Cash flows from financing activities:
Proceeds from issuance of long-term debt, including ABL facility	50.0		50.0
Payments on long-term borrowings, including ABL facility	(200.4)		(500.5)
Payments of obligations under finance leases	(26.9)		(29.1)


Dividends paid on common stock	(139.0)		(138.0)
Dividends paid on convertible preferred stock	—		(0.8)



Employee tax withholding on vesting of restricted stock units	(41.5)		(35.1)
Other financing activities	—		2.4
Net cash used in financing activities	(357.8)		(651.1)

Net increase (decrease) in cash and cash equivalents and restricted cash	91.0		(193.3)
Cash and cash equivalents and restricted cash at beginning of period	193.2		463.8
Cash and cash equivalents and restricted cash at end of period	$	284.2	$	270.5

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

Table of Contents

Albertsons Companies, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in millions, except share data)

(unaudited)


	Class A Common Stock			Additional paid-in capital		Treasury Stock			Accumulated other comprehensive income		Retained earnings		Total stockholders' equity
	Shares	Amount				Shares	Amount
Balance as of February 24, 2024	594,445,268	$	5.9	$	2,129.6	18,397,745	$	(304.2)	$	88.0	$	828.2	$	2,747.5
Equity-based compensation	—	—		34.4		—	—		—		—		34.4
Shares issued and employee tax withholding on vesting of restricted stock units

SEC Form 10-Q filed by Albertsons Companies Inc.