UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended February 2228, ~~2025~~2026

☐ 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 under Section 12(b) of the Exchange 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

Securities registered under Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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 September 65, ~~2024~~2025, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the registrant's common stock held by non-affiliates was approximately $7.85 billion.

As of April 1723, ~~2025~~2026, the registrant had ~~575~~494,~~749~~534,~~857~~842 shares of Class A common stock, par value $0.01 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Items 10, 11, 12, 13 and 14 of Part III incorporate information by reference from the registrant's definitive proxy statement related to its ~~2025~~2026 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year ended February 2228, ~~2025~~2026 (the "Proxy Statement").

Albertsons Companies, Inc. and Subsidiaries

		Page
PART I		4
	Item 1 - Business	6
	Item 1A - Risk Factors	11
	Item 1B - Unresolved Staff Comments	2624
	Item 1C - Cybersecurity	2624
	Item 2 - Properties	2927
	Item 3 - Legal Proceedings	2927
	Item 4 - Mine Safety Disclosures	3028
PART II		3129
	Item 5 - Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3129
	Item 6 - [Reserved]	3331
	Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations	3432
	Item 7A - Quantitative and Qualitative Disclosures About Market Risk	4847
	Item 8 - Financial Statements and Supplementary Data	5049
	Item 9 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~100~~98
	Item 9A - Controls and Procedures	~~101~~98
	Item 9B - Other Information	~~101~~99
	Item 9C - Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	~~102~~99
PART III		~~103~~100
	Item 10 - Directors, Executive Officers and Corporate Governance	~~103~~100
	Item 11 - Executive Compensation	~~103~~100
	Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~103~~100
	Item 13 - Certain Relationships and Related Transactions, and Director Independence	~~103~~100
	Item 14 - Principal Accountant Fees and Services	~~103~~100
PART IV		~~104~~101
	Item 15 - Exhibits, Financial Statement Schedules	~~104~~101
	Item 16 - Form 10-K Summary	~~108~~105
SIGNATURES		~~109~~106

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As used in this Annual Report on Form 10-K, unless the context otherwise requires, references to "Albertsons," the "Company," "ACI," "we," "us" and "our" refer to Albertsons Companies, Inc. and, where appropriate, its consolidated subsidiaries. Our last three fiscal years consisted of the 5253 weeks ended February 2228, ~~2025~~2026 ("fiscal ~~2024~~2025"), the 52 weeks ended February 2422, ~~2024~~2025 ("fiscal ~~2023~~2024") and the 52 weeks ended February 2524, ~~2023~~2024 ("fiscal ~~2022~~2023"). Our next three fiscal years consist of the 5352 weeks ending February 2827, ~~2026~~2027 ("fiscal ~~2025~~2026"), the 52 weeks ending February 2726, ~~2027~~2028 ("fiscal ~~2026~~2027") and the 52 weeks ending February 2624, ~~2028~~2029 ("fiscal ~~2027~~2028").

PART I

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K includes "forward-looking statements" within the meaning of the federal securities laws. The "forward-looking statements" include our current expectations, assumptions, estimates and projections about our business and our industry. They include statements relating to our future operating or financial performance which the Company believes to be reasonable at this time. You can identify forward-looking statements by the use of words such as "outlook," "may," "should," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future", "intends" and similar expressions which are intended to identify forward-looking statements.

These statements are not guarantees of future performance and are subject to numerous risks and uncertainties which are beyond our control and difficult to predict and could cause actual results to differ materially from the results expressed or implied by the statements. Risks and uncertainties that could cause actual results to differ materially from such statements and may adversely impact our financial condition and results of operations include:

•changes in macroeconomic conditions such as rates of food price inflation or deflation, fuel and commodity prices and macroeconomic uncertainty, including in international trade ~~including~~and ~~recently~~current ~~announced~~ and potential future tariffs;

•changes in consumer behavior and spending ~~due~~patterns toresulting ~~the~~from ~~impact~~macroeconomic ofconditions, ~~macroeconomic~~including ~~factors~~shifts in state and federal assistance programs;

•changes in ~~price~~wage ofrates ~~goods~~and ~~sold in~~ our ~~stores~~ability ~~and~~to ~~cost~~negotiate ofacceptable ~~goods~~contracts ~~used~~with inlabor ~~our~~unions, ~~food~~including ~~products~~the ~~due~~outcome toof ~~change~~pending inunion ~~various state and federal government regulations~~negotiations;

•~~our~~changes ~~inability~~in toprice ~~execute~~of ongoods ~~our~~sold ~~standalone~~in ~~business~~our stores and ~~value-creating~~cost ~~strategies~~of ~~following~~goods ~~the~~used ~~termination~~in ofour ~~the~~food ~~Merger~~products, ~~Agreement~~as ~~with~~well ~~Kroger~~as ~~due~~limitations in our ability to ~~prolonged~~provide ~~uncertainties~~certain ~~and~~services, ~~restrictions~~due onto ~~our~~changes ~~business~~in ~~during~~various ~~the~~state ~~pendency~~and offederal ~~the~~government ~~Merger~~legislation, regulation and executive orders;

•~~litigation~~uncertainty inregarding ~~connection with~~ the ~~previously~~geopolitical pending Merger and the termination of the Merger Agreement, resulting in ongoing costs that we may be required to pay in connection with the lawsuit against Kroger, or our inability to collect the $600 million termination fee from Kroger, and negative reactions from the financial markets and our suppliers, customers, and associates as a result of the litigationenvironment;

•our ability to ~~recruit~~succeed ~~and~~in ~~retain~~a ~~qualified~~competitive ~~associates who are critical to the success of our Customers for Life strategy~~environment;

•~~failure to achieve productivity initiatives, unexpected changes in~~ our ~~objectives~~ability ~~and plans, inability~~ to ~~implement~~execute on our ~~strategies,~~business ~~plans, programs~~ and ~~initiatives,~~value-creating ~~or enter into strategic transactions, investments or partnerships in the future on terms acceptable to us, or at all~~strategies;

•~~changes~~our inability ~~wage~~to ~~rates~~attract and ~~ability~~retain qualified or specialized associates who are critical to ~~negotiate~~the ~~acceptable~~success ~~contracts~~of ~~with~~our ~~labor~~business ~~unions~~strategy;

•failure to achieve productivity initiatives, including those related to artificial intelligence, unexpected changes in our objectives and plans, inability to implement our strategies, plans, programs and initiatives, or enter into strategic transactions, investments or partnerships in the future on terms acceptable to us, or at all;

•challenges with our supply chain;

•operational and financial effects resulting from cyber incidents at the Company or at a third party, including outages in the cloud environment and the effectiveness of business continuity plans during a ransomware or other cyber incident; and

•changes in tax rates, tax laws, and regulations that directly impact our business or our customers.

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All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements and risk factors. Forward-looking statements contained in this Annual Report on Form 10-K reflect our view only as of the date of this Annual Report. We undertake no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In evaluating our financial results and forward-looking statements, you should carefully consider the risks and uncertainties more fully described in the section of this Annual Report on Form 10-K entitled "Risk Factors." Consequently, all of the forward-looking statements we make in this Annual Report on Form 10-K are qualified by the information contained in this section and the information discussed under "Part I—Item 1A. Risk Factors."

NON-GAAP FINANCIAL MEASURES

We define EBITDA as generally accepted accounting principles ("GAAP") earnings (net loss) before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as earnings (net loss) before interest, income taxes, depreciation and amortization, further adjusted to eliminate the effects of items management does not consider in assessing our ongoing core performance. We define Adjusted net income as GAAP net income adjusted to eliminate the effects of items management does not consider in assessing our ongoing core performance. We define Adjusted net income per Class A common share as Adjusted net income divided by the weighted average diluted Class A common shares outstanding, as adjusted to reflect all restricted stock units and awards outstanding at the end of the period, as well as the conversion of Convertible Preferred Stock when it is antidilutive for GAAP. See "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" for further discussion and a reconciliation of Adjusted EBITDA, Adjusted net income and Adjusted net income per Class A common share.

EBITDA, Adjusted EBITDA, Adjusted net income and Adjusted net income per Class A common share (collectively, the "Non-GAAP Measures") are performance measures that provide supplemental information we believe is useful to analysts and investors to evaluate our ongoing results of operations, when considered alongside other GAAP measures such as net income, operating income, gross margin and net income per Class A common share. These Non-GAAP Measures exclude the financial impact of items management does not consider in assessing our ongoing core operating performance, and thereby provide useful measures to analysts and investors of our operating performance on a period-to-period basis. Other companies may have different definitions of Non-GAAP Measures and provide for different adjustments, and comparability to our results of operations may be impacted by such differences. We also use Adjusted EBITDA for board of director and bank compliance reporting. Our presentation of Non-GAAP Measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

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

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Item 1 - Business

Retail Operations

Albertsons is one of the largest food and drug retailers in the United States, with both strong local presence and national scale. As of February 2228, ~~2025~~2026, we operated 2,~~270~~244 stores across 3435 states and the District of Columbia. ~~under~~We ~~more~~operate ~~than~~22 20 well known banners including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, ACME, Shaw's, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Markets and Balducci's Food Lovers Market, with approximately 280,000 talented and dedicated employees. Additionally, as of February 2228, ~~2025~~2026, we operated 1,~~728~~713 in-store pharmacies, 1,~~313~~240 in-store branded coffee shops, 405 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms. Our stores operate in premier locations and have leading market share within attractive and growing geographies. We hold a #1 or #2 position by market share in 66% of the 122 metropolitan statistical areas ("MSAs") in which we operate. Our portfolio of well-located, full-service stores provides the foundation of our omnichannel platform, and we have continued to enhance our capabilities, including automated self-checkout options, to meet customer demand for convenience and flexibility. Our Drive Up & Go curbside pickup service and our delivery services are each offered in more than 2,200 of our stores. In our delivery service, we engage customers on the platform of their choice, providing customers the ability to place delivery orders from our platform as well as delivery orders placed through our third-party partners. We continue to partner with Instacart, DoorDash and Uber, and in fiscal 2024 we launched a partnership with Grubhub. Our Customers for Life strategy is centered around driving customer growth and engagement through digital connection, enhancing the customer value proposition, modernizing capabilities through technology and driving productivity. We also manufacture and process some of the food for sale in our stores. We seek to tailor our offerings to local demographics and preferences of the markets in which we operate. Our Locally Great, Nationally Strong operating structure empowers decision making at the local level, which we believe better serves our customers and communities, while also providing the technology platforms, systems, analytics and buying power afforded by an organization with national scale.

Our stores operate in premier locations and have leading market share within attractive and growing geographies. Our portfolio of well-located, full-service stores provides the foundation of our omnichannel platform, and we have continued to enhance our capabilities, including automated self-checkout options, to meet customer demand for convenience and flexibility. We offer delivery services in more than 2,200 of our stores and our Drive Up & Go curbside pickup service is offered in more than 2,100 stores. In our delivery service, we engage customers on the platform of their choice, providing customers the ability to place delivery orders from our platform as well as delivery orders placed through our third-party partners. We continue to partner with Instacart, DoorDash and Uber. Our eCommerce capabilities are integrated with our store network, supporting store‑based fulfillment and allowing customers to engage with our banners seamlessly across digital and in‑store channels.

Through our loyalty programs and digital platforms, we collect customer transaction and engagement data that supports personalized offers, targeted marketing and enhanced customer experiences across both digital and in-store channels. These capabilities also support improved marketing efficiency and inform merchandising, pricing and promotional decisions across our operations.

Our business strategy is centered around driving customer growth and engagement through digital connection, enhancing the customer value proposition, modernizing capabilities through technology and driving productivity. We seek to tailor our offerings to local demographics and preferences of the markets in which we operate. Our Locally Great, Nationally Strong operating structure empowers decision making at the local level, which we believe better serves our customers and communities, while also providing the technology platforms, systems, analytics and buying power afforded by an organization with national scale.

Improvements in productivity, combined with data-enabled insights and automation, support reinvestment in customer value, digital capabilities and store operations across the business.

Segments

We are engaged in the operation of food and drug retail stores that offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel and other items and services in our stores or through digital channels. Our retail operating divisions are geographically based, have similar economic characteristics and similar expected long-term financial performance. Our operating segments and reporting units are made up of our 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 and makes key operating decisions on how to allocate resources. Across all operating segments, ~~the~~we ~~Company~~operate ~~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.

Products

Our stores offer grocery products, general merchandise, health and beauty care products, pharmacy, vaccines, fuel and other items and services. We are not dependent on any individual supplier; only one third-party supplier represented more than 5% of our sales for fiscal 2024.

Merchandising and Manufacturing

Our Own Brands portfolio provides high-quality products to our customers at an attractive price point, offering nearly 14,000 unique items. The Own Brands portfolio includes but is not limited to the registered trademarks Signature SELECT®, O Organics®, Open Nature®, Signature Café®, Lucerne®, Waterfront BISTRO®, Primo

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~~Taglio®, Signature Care®, Signature Reserve® and Value Corner®. Our Own Brands products resonate well with our customers, as evidenced by Own Brands sales of $16.4 billion in fiscal 2024.~~Products

AsWe ~~measured~~offer bygrocery ~~units~~products, ~~for~~general ~~fiscal 2024~~merchandise, ~~10.5%~~health ofand ~~our~~beauty ~~Own~~care ~~Brands~~ products, ~~were~~pharmacy, ~~manufactured in Company-owned facilities~~vaccines, fuel and ~~the~~other ~~remainder~~items ~~was purchased from third parties. We closely monitor make-versus-buy decisions to optimize their quality~~ and ~~profitability.~~services Inthrough ~~addition, we believe that~~ our ~~scale~~stores ~~provides~~and ~~opportunities~~digital ~~to leverage our fixed manufacturing costs in order to drive innovation across our Own Brands portfolio. As of February 22~~channels, ~~2025,~~including wedelivery ~~operated~~and 19curbside ~~food production plants~~pickup. ~~These~~We ~~plants~~are ~~consisted~~not ofdependent ~~seven~~on ~~milk~~any ~~plants,~~individual ~~three~~supplier; ~~soft~~only ~~drink~~one ~~bottling~~third-party ~~plants,~~supplier ~~three~~represented ~~bakery~~more ~~plants,~~than ~~two~~5% ~~ice~~of ~~cream~~our ~~plants,~~sales ~~two~~for ~~grocery/prepared~~fiscal ~~food plants, one ice plant and one soup plant~~2025.

Merchandising and Manufacturing

Our Own Brands portfolio provides high-quality products to our customers at an attractive price point, offering more than 14,000 unique items. The Own Brands portfolio includes but is not limited to the registered trademarks Signature SELECT®, O Organics®, Open Nature®, Signature Café®, Lucerne®, Waterfront BISTRO®, Primo Taglio®, Signature Care®, Signature Reserve® and Value Corner®. Our Own Brands products resonate well with our customers, as evidenced by Own Brands retail sales of $16.9 billion in fiscal 2025.

As measured by units for fiscal 2025, 9.9% of our Own Brands products were manufactured in Company-owned facilities, and the remainder was purchased from third parties. We closely monitor make-versus-buy decisions to optimize their quality and profitability. In addition, we believe that our scale provides opportunities to leverage our fixed manufacturing costs in order to drive innovation across our Own Brands portfolio. As of February 28, 2026, we operated 19 food production plants. These plants consisted of seven milk plants, three soft drink bottling plants, three bakery plants, two ice cream plants, two grocery/prepared food plants, one ice plant and one soup plant.

Intellectual Property

Our banners, brand image and Own Brands portfolio are significant to our business strategy. We own numerous registered trademarks and service marks and seek to obtain and preserve intellectual property protection of our marks and to ensure that any third-party uses are properly licensed.

Marketing and Advertising

Our marketing efforts involve collaboration between our national marketing and merchandising team and local divisions and stores. We augment the local division teams with corporate resources and are focused on providing expertise, sharing best practices and leveraging scale in partnership with leading consumer packaged goods vendors. Our corporate teams support divisions by providing strategic guidance in order to drive key areas of our business, including pharmacy, general merchandise and our Own Brands. Our local marketing teams set brand strategy and communicate brand messages through our integrated digital and physical marketing and advertising channels.

We devote significant resources to differentiating our banners in the local markets where we operate and invest in loyalty programs to drive traffic through our omnichannel approach. Our local merchandising teams spend considerable time working with store directors to make sure we are satisfying consumer preferences. We also strive to achieve and maintain favorable recognition of our Own Brands offerings by marketing them to consumers and enhancing value for consumers, relative to the cost of branded products.

We measure price competitiveness through systematic, selective and thoughtful price investment to drive customer traffic and basket size. We also use our loyalty program to target promotional activity and improve our customers' experience. This includes leveraging customer and transaction information with data-driven analytics to provide both personalized deals and digital coupons, as well as fuel rewards and grocery rewards, including automatic cash-off discounts. We have 4551.62 million members currently enrolled in our loyalty program. We have achieved significant success with active participants in our loyalty program, which drives higher sales and customer retention. We have deployed and are continuing to refine cloud-based enterprise solutions to quickly process proprietary customer, product and transaction data and efficiently provide our local managers with targeted marketing strategies ~~for customers in their communities. In addition, we use data analytics to optimize shelf assortment and space in our stores by continually and systematically reviewing the performance of each product.~~

In our digital strategies, we capitalize on our rich and proprietary data under our Albertsons Media Collective ("AMC"). AMC offers new and existing business partners a robust digital marketing platform that reaches our extensive customer network and leverages our strong market share, especially in the 66% of MSAs where we hold a #1 or #2 share position. We believe AMC will be a contributor to our growth and a profit driver in the future.

Raw Materials

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~~available,~~for ~~see~~customers ~~"Part~~in ~~I—Item~~their 1Acommunities. ~~Risk~~In ~~Factors"~~addition, ~~regarding~~we ~~the~~use ~~potential~~data ~~adverse~~analytics ~~impact~~to onoptimize ~~our~~shelf ~~results~~assortment ofand ~~operations~~space ~~due~~in toour ~~the~~stores ~~lack~~by ~~of,~~continually orand ~~reduced~~systematically ~~availability~~reviewing the performance of, ~~raw~~each ~~materials~~product.

We operate a retail media business through Albertsons Media Collective (the "Media Collective") that leverages customer engagement across our digital and in‑store platforms to deliver targeted marketing opportunities for vendor partners, supported by first‑party customer data and advanced analytics developed through our loyalty and digital platforms. The Media Collective is our proprietary digital marketing platform that enables new and existing partners to reach our extensive customer network while benefiting from our strong market presence, particularly in the markets we hold significant share. These capabilities complement our core retail operations and support our broader business and growth strategy.

Raw Materials

Various agricultural commodities constitute the principal raw materials used by us in the manufacture of our food products. Although historically raw materials for our products have not been in short supply and have been readily available, see "Part I—Item 1A. Risk Factors" regarding the potential adverse impact on our results of operations due to the lack of, or reduced availability of, raw materials.

Environmental

Our operations are subject to regulation under environmental laws, including those relating to waste management, air emissions and underground storage tanks. In addition, as an owner and operator of commercial real estate, we may be subject to liability under applicable environmental laws for clean-up of contamination at our facilities. Compliance with and clean-up liability under these laws has not had and is not expected to have a material adverse effect upon our business, financial condition, liquidity or operating results.

We work hard to maintain the highest standards of environmental stewardship (including procuring and offering sustainably sourced products). During fiscal ~~2024~~2025, we recycled ~~nearly~~approximately ~~800~~765 million pounds of cardboard and more than 25 million pounds of plastic bags and film from our operations and completed over ~~600~~500 energy efficiency projects. We continually look for ways to reduce our packaging and lessen our environmental impact, such as our recent Own Brands release of Bee Lightly Wines in fiscal 2024, distinguished by its unique flat bottle design crafted from 100% recycled material that is 87% lighter than traditional glass bottles resulting in reduced transportation related emissions. This innovative approach to wine packaging marks a first in the U.S. market, underscoring our commitment to recycled packaging solutions.

Human Capital

As one of the largest food and drug retailers in the U.S., serving 36.25 million customers per week, we recognize that our success and ability to delight our customers lies in the engagement of our associates. We remain committed to attracting, developing and retaining associates by fostering a culture of ~~inclusion and belonging through a variety of associate resource groups~~connection, ~~investments~~investing in talent development and supporting the personal health and well-being of associates and their families.

As of February 2228, ~~2025~~2026, we employed approximately ~~285~~280,000 associates, of which approximately 62% were part-time and approximately ~~195~~190,000 associates were covered by collective bargaining agreements. A significant number of our associates have long tenure and during fiscal ~~2024~~2025, more than 5756,000 of our associates celebrated at least 15 years of service, and more than 4243,000 associates celebrated over 20 years of service.

We are proud to offer our associates a myriad of opportunities to grow and advance in their careers. We have a talent management process that is designed to enable us to identify and assess talent across the organization and provide equal and consistent opportunities for employees to develop their skills. Several levels of associates participate in our annual performance management process that includes goal setting, feedback and development to support their personal growth and development. We engage associates across the organization to provide input through our annual Associate Experience Survey. We hold regular town hall meetings where any employee can ask questions of executives and make their voice heard.

We also offer formal and informal learning and development opportunities to all associates through synchronous, asynchronous and hybrid experiences. These offerings include eLearning and on-demand content, virtual and in-person classes, on-the-job training, virtual reality and mentoring programs. In addition to our internal learning offerings, through partnerships with third parties, we offer development programs and conferences to our top talent based on nominations.

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~~coverage,~~We wealso offer ~~paid~~formal ~~time~~and ~~off~~informal learning and development opportunities to all associates through synchronous, ~~flexible~~asynchronous ~~work~~and ~~schedules~~hybrid experiences. These offerings include eLearning and on-demand content, ~~family~~virtual ~~leave~~and in-person classes, ~~associate~~on-the-job ~~assistance~~training and mentoring programs. ~~and~~In aaddition ~~401(k)-retirement~~to ~~savings~~our internal learning offerings, through partnerships with third parties, we offer development programs and ~~investment~~conferences ~~plan~~to our top talent based on nominations.

We are continually evaluating and developing our compensation and benefits programs to offer competitive wages and job-appropriate compensation. Our benefits are designed to attract and retain our employees and vary from location, seniority and employment status. In addition to comprehensive, accessible and affordable healthcare coverage, we offer paid time off, flexible work schedules, family leave, associate assistance programs and a 401(k)-retirement savings and investment plan.

The health and safety of our associates remains at the forefront of our business, and we remain committed to the prevention of injury and illness through strong health and safety management, employee empowerment and accountability, and strict compliance with health and safety regulations. We are also focused on fostering a safe, open and accountable work environment and we provide a hotline for all associates to report workplace concerns and violations.

Seasonality

Our business is generally not seasonal in nature, but a larger share of annual revenues may be generated in November and December due to the major holidays.

Competitive Environment

See "Part I—Item 1A. Risk Factors—Risks Related to Our Industry" for information related to our competitive environment.

Other Information

We maintain a website (www.Albertsonscompanies.com) that includes additional information about the Company. We make available through our website, free of charge, our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and our interactive data files, including amendments to those reports. The information contained on or connected to our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered as part of this or any other report filed with or furnished with the Securities and Exchange Commission ("SEC"). These forms are available as soon as reasonably practicable after we have filed them with, or furnished them electronically to, the SEC. Additionally, all of our filings with the SEC can be accessed on the SEC's website at www.sec.gov.

Executive Officers of the Registrant

The following table sets forth information regarding our executive officers as of April 21, 2025:

Name

Age

Position

Vivek Sankaran

Chief Executive Officer; Director

Sharon McCollam

President, Chief Financial Officer

Susan Morris

Executive Vice President, Chief Operations Officer

Anuj Dhanda

Executive Vice President, Chief Technology & Transformation Officer

Omer Gajial

Executive Vice President, Chief Merchandising & Digital Officer

Thomas Moriarty

Executive Vice President, M&A and Corporate Affairs

Robert Backus

Executive Vice President, Retail Operations, East Region

Michelle Larson

Executive Vice President, Retail Operations, West Region

Michael Withers

Executive Vice President, Retail Operations, California Region

Evan Rainwater

Executive Vice President, Supply Chain, Manufacturing and Strategic Sourcing

Jennifer Saenz

Executive Vice President, Pharmacy & eCommerce

Michael Theilmann

Executive Vice President, Chief Human Resources Officer

Vivek Sankaran has served as our Chief Executive Officer and Director since September 2021, and our Chief Executive Officer, President and Director since April 2019. Prior to joining the Company, since 2009 Mr. Sankaran

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~~served in various leadership and executive positions at PepsiCo, Inc. ("PepsiCo"), a multinational food, snack, and beverage corporation. From January to March 2019, he served as Chief~~ Executive ~~Officer~~Officers of ~~PepsiCo~~the Foods North America, a business unit within PepsiCo, where he led PepsiCo's snack and convenient foods business. Prior to that position, Mr. Sankaran served as President and Chief Operating Officer of Frito-Lay North America, a subsidiary of PepsiCo, from April 2016 to December 2018, its Chief Operating Officer from February to April 2016 and Chief Commercial Officer, North America, of PepsiCo from 2014 to February 2016, where he led PepsiCo's cross-divisional performance across its North American customers. Prior to joining PepsiCo in 2009, Mr. Sankaran was a partner at McKinsey and Company, where he served various Fortune 100 companies, bringing a strong focus on strategy and operations. As previously announced, Mr. Sankaran will retire as Chief Executive Officer on May 1, 2025.Registrant

The following table sets forth information regarding our executive officers as of April 27, 2026:

Name

Age

Position

Susan Morris

Chief Executive Officer, Director

Sharon McCollam

President, Chief Financial Officer

Robert Backus

Executive Vice President, Retail Operations, East Region

Anuj Dhanda

Executive Vice President, Chief Technology & Transformation Officer

Michelle Larson

Executive Vice President, Chief Merchandising Officer

Thomas Moriarty

Executive Vice President, M&A and Corporate Affairs

Allison Pinkham

Executive Vice President, Chief Human Resources Officer

Evan Rainwater

Executive Vice President, Supply Chain, Manufacturing and Strategic Sourcing

Michael Withers

Executive Vice President, Retail Operations, West Region

Susan Morris has served as our Chief Executive Officer and Director since May 2025, and as our Executive Vice President and Chief Operations Officer since January 2018. Ms. Morris has served in various executive positions at the Company since 2010 including serving as our Executive Vice President, Retail Operations, West Region from April 2017 to January 2018 and Executive Vice President, Retail Operations, East Region from April 2016 to April 2017. Prior to joining the Company, Ms. Morris served as Senior Vice President of Sales and Merchandising and Vice President of Customer Satisfaction at SuperValu.

Sharon McCollam has served as our President and Chief Financial Officer since September 2021. Ms. McCollam previously served as Executive Vice President, Chief Administrative and Chief Financial Officer at Best Buy Co. Inc. ("Best Buy"), a multinational consumer electronics retailer, from 2012 to 2016. Prior to Best Buy, Ms. McCollam held several transformational leadership positions at Williams-Sonoma, Inc., a consumer retail company, from 2000 to 2012, including Chief Operating and Chief Financial Officer from 2006 to 2012.

~~Susan~~Robert ~~Morris~~Backus has served as our Executive Vice President ~~and~~of ~~Chief~~Retail Operations, ~~Officer~~East Region since ~~January~~April ~~2018~~2024. MsMr. ~~Morris~~Backus ~~has~~previously served ~~in various executive positions at the Company since 2010 including serving~~ as ~~our~~Shaw's ~~Executive~~Division ~~Vice~~ President, ~~Retail Operations, West Region~~ from ~~April~~2020 ~~2017 to January 2018~~ and ~~Executive~~as Senior Vice President, ~~Retail~~of Operations, ~~East Region~~ from ~~April~~ 2016 ~~to April 2017~~. ~~Prior to joining the Company, Ms~~Mr. ~~Morris~~Backus also served asin ~~Senior~~various ~~Vice~~roles ~~President of Sales~~ and ~~Merchandising~~positions ~~and Vice President~~ of ~~Customer~~increasing ~~Satisfaction~~responsibility at ~~SuperValu.~~Safeway Asprior ~~previously~~to ~~announced,~~its ~~Ms.~~merger ~~Morris~~with ~~will~~the ~~succeed~~Company ~~Mr.~~dating ~~Sankaran~~back asto ~~Chief~~October ~~Executive Officer on May 1, 2025~~1990.

Anuj Dhanda has served as our Executive Vice President and Chief Technology & Transformation Officer since 2023 and as our Executive Vice President and Chief Information Officer since joining the Company in December 2015. Prior to joining the Company, Mr. Dhanda served as Senior Vice President of Digital Commerce of the Giant Eagle supermarket chain from March to December 2015, and as its Chief Information Officer from September 2013. Prior to Giant Eagle, from March 2008 to August 2013, Mr. Dhanda served as Chief Information Officer of PNC Financial Services, a bank holding company and financial services corporation.

~~Omer~~Michelle ~~Gajial~~Larson has served as our ~~Executive Vice President and~~ Chief Merchandising ~~& Digital~~ Officer since ~~April~~May ~~2024,~~2025. Ms. Larson previously served as our Executive Vice President of ~~Health~~Retail ~~and~~Operations, ~~Chief~~West ~~Digital~~Region ~~Officer~~ since ~~August~~April ~~2022~~2024, as our Executive Vice President of ~~Pharmacy~~Retail ~~and~~Operations, ~~Health~~East Region since ~~February~~March ~~2022~~2023 and as our ~~Senior~~Southwest ~~Vice~~and ~~President,~~Shaw’s RxDivision ~~Health~~President ~~and Wellness~~ since ~~September 2020~~2018. ~~Prior to joining the Company, from January 2016 until August 2020, Mr~~Ms. ~~Gajial~~Larson ~~was~~also ~~the~~served ~~General~~in ~~Manager~~various ~~for~~roles ~~Amazon Marketplace business, an e-commerce platform owned~~ and operated by Amazon, across Hardlines, Softlines, and Consumables categories for the U.S., Canada, and Mexico. At Amazon Mr. Gajial led sales, business development, product, program, and fulfillment teams to launch strategic sellers into North America. Prior to Amazon, from July 2000 until December 2015, Mr. Gajial held several positions of increasing responsibility atsince ~~PepsiCo~~joining inthe ~~Dubai~~Company ~~and~~in ~~New York, before being named VP Global Strategy, Category Management & Insights for PepsiCo's Walmart Customer team~~1995.

Thomas Moriarty has served as our Executive Vice President, M&A and Corporate Affairs since March 2025 and leads the functions of M&A, Business Development, Government Relations, Corporate Communications, Sustainability and Legal. Mr. Moriarty served as our Executive Vice President, General Counsel and Chief Policy Officer since June 2023. Prior to joining the Company, Mr. Moriarty served as EVP, Chief Policy and External Affairs Officer and General Counsel at CVS Health where he spent more than ten years in roles of increasing responsibility. Before joining CVS Health, Mr. Moriarty spent twelve years at Medco Health Solutions, serving in various leadership roles in corporate strategy, legal affairs, global supply chain management, and mergers and acquisitions.

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~~Robert~~Affairs ~~Backus~~Officer ~~has served as our Executive Vice President of Retail Operations, East Region since April 2024. Mr. Backus previously served as Shaw's Division President from 2020~~ and asGeneral ~~Senior~~Counsel ~~Vice~~at ~~President~~CVS ofHealth ~~Operations~~where ~~from~~he ~~2016.~~spent ~~Mr.~~more ~~Backus~~than ~~also~~ten ~~served~~years in ~~various~~ roles ~~and positions~~ of increasing responsibility ~~at Safeway prior to its merger with the Company dating back to October 1990~~.

~~Michelle~~Allison ~~Larson~~Pinkham has served as our Executive Vice President ofand ~~Retail~~Chief ~~Operations,~~Human ~~West~~Resources ~~Region~~Officer since ~~April~~February ~~2024~~2026. Prior to joining the Company, Ms. ~~Larson~~Pinkham ~~previously~~ served as ~~our~~Chief ~~Executive~~Human ~~Vice~~Resources ~~President~~Officer ofat ~~Retail Operations~~Galderma, ~~East~~a ~~Region~~global ~~since~~dermatology ~~March~~category ~~2023~~leader ~~and~~from as2021 ~~our~~to ~~Southwest~~2026. ~~and~~Prior ~~Shaw’s~~to ~~Division~~joining ~~President~~Galderma, ~~since 2018.~~ Ms. ~~Larson~~Pinkham ~~joined~~served ~~the Company in 2016~~ as ~~Senior~~the ~~Vice~~Chief ~~President~~People ofOfficer ~~Merchandising,~~at ~~Southwest~~Heineken USA.

Michael Withers has served as our Executive Vice President of Retail Operations, California since February 2025. Mr. Withers previously served as President of our Jewel-Osco division from September 2019 and in various executive positions in the Company including as our Executive Vice President of East Operations from 2017 to 2019. Mr. Withers has served in various roles and positions of increasing responsibility since 2006.

Evan Rainwater has served as our Executive Vice President, Supply Chain, Manufacturing and Strategic Sourcing since March 2020 and our Senior Vice President, Supply Manufacturing since May 2019. Mr. Rainwater joined the Company in May 2005 as Vice President, Manufacturing.

~~Jennifer~~Michael ~~Saenz~~Withers has served as our Executive Vice President, ~~Pharmacy~~of &Retail ~~eCommerce~~Operations, ~~since~~West ~~April~~Region ~~2024 and our Chief Merchandising Officer~~ since ~~July~~May ~~2021~~2025. ~~Prior to joining the Company, since 2006, Ms~~Mr. ~~Saenz~~Withers previously served inas ~~several~~our ~~executive~~Executive ~~positions~~Vice atPresident ~~PepsiCo.~~of ~~From~~Retail ~~October~~Operations, ~~2019~~California ~~until~~since ~~July~~February ~~2021~~2025, ~~Ms.~~President ~~Saenz~~of ~~served~~our asJewel-Osco ~~Global~~division ~~Chief~~from ~~Marketing~~September ~~Officer~~2019 ~~for PepsiCo,~~ and ~~President,~~in ~~Global~~various ~~Foods,~~executive ~~responsible~~positions ~~for~~in ~~overseeing~~ the ~~marketing~~Company ~~function~~including ~~across~~as ~~foods~~our ~~and~~Executive ~~beverages~~Vice ~~and~~President ~~growing~~of ~~the~~East ~~PepsiCo~~Operations ~~Foods~~from ~~portfolio~~2017 ~~across all global markets. From January 2016~~ to ~~October~~ 2019. MsMr. ~~Saenz~~Withers has served asin ~~Senior~~various ~~Vice~~roles ~~President~~and &positions ~~Chief Marketing Officer~~ of ~~PepsiCo~~increasing ~~Foods~~responsibility ~~North~~since ~~America where she managed the business unit's snacking portfolio~~2006.

Michael Theilmann has served as our Executive Vice President and Chief Human Resources Officer since August 2019. Prior to joining the Company, Mr. Theilmann served as Global Practice Managing Partner, Human Resources Officers Practice, from February 2018 to August 2019, and as Partner, Consumer Markets Practice, from June 2017 to January 2018, of Heidrick & Struggles International Incorporated, a worldwide executive search firm.

Item 1A - Risk Factors

There are risks and uncertainties that can affect our business. The most significant risk factors are discussed below. The following information should be read together with "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Form 10-K, which includes forward-looking statements and factors that could cause us not to realize our goals or meet our expectations.

Risks Related to Our Business and Operations

General economic conditions affecting the food and drug retail industry and various operating factors may affect our business and may adversely affect our business and operating results.

Our operations and financial performance are affected by economic conditions such as macroeconomic factors, credit market conditions, tariffs and trade disruptions and the level of consumer confidence. Both inflation and deflation affect our business. Food deflation could reduce sales growth and earnings, while food inflation could reduce gross margin rates and consumer spending. We have observed increased inflation periods during the past several years with varying impacts on our business. We are unable to predict the direction of the economy or if inflation will increase materially or revert to deflation. A continued increase in energy costs, including fuel, could also have an effect on consumer spending and on our costs of producing and procuring products that we sell. If the economy weakens, energy costs continue to increase or inflationary trends continue, our business and operating results could be adversely affected. We may also experience materially adverse impacts to our business as a result of consumers' perceptions of the economy, and a decrease in their personal financial condition could hurt overall consumer confidence and reduce demand for many of our product offerings. Consumers may reduce spending on non-essential items, purchase value-oriented products or increasingly rely on food discounters in an effort to secure the food and drug products that they need, all of which could impact our sales and profit. Governmental and regulatory changes and reductions in governmental subsidies such as the Supplemental Nutrition Assistance Program ("SNAP") could also materially impact our business adversely.

Our inability to invest in, manage costs and keep pace with technological changes, including those adopted by our competitors, may adversely impact our business initiatives and affect our financial performance. We may be limited in our ability to implement automation-related technological changes or artificial intelligence in certain of our operations if we are unable to negotiate appropriate terms in our contracts with our labor unions. Our success is also dependent in large part upon our ability to maintain and enhance the goodwill and reputation of our banners, our

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~~economy~~customers’ ~~weakens,~~connection ~~energy costs continue~~ to ~~increase~~our ~~or inflationary trends continue~~banners, ~~our business~~ and ~~operating results could be adversely affected. We may also experience materially adverse impacts to our business as~~ a ~~result~~positive ofrelationship ~~consumers'~~with ~~perceptions of~~ the ~~economy,~~communities ~~and a decrease~~ in ~~their~~which ~~personal~~we ~~financial~~serve. ~~condition~~Additionally, ~~could~~acts ~~hurt~~of ~~overall~~violence ~~consumer~~at, ~~confidence~~or ~~and~~threatened ~~reduce~~against, ~~demand for many of~~ our ~~product~~stores, ~~offerings.~~including ~~Consumers~~active ~~may~~shooter ~~reduce~~situations, ~~spending on non-essential items~~may, ~~purchase value-oriented products or increasingly rely on food discounters~~ in anaddition ~~effort~~ to ~~secure~~other ~~the~~operational ~~food and drug products that they need~~impact, ~~all~~result ofin ~~which~~damage ~~could impact our sales~~ and ~~profit.~~restricted ~~Governmental~~access ~~and~~to ~~regulatory~~our ~~changes~~stores and/or ~~reductions~~store inclosures ~~governmental~~for ~~subsidies~~short ~~such~~or asextended ~~the~~periods ~~Supplemental~~of ~~Nutrition~~time, ~~Assistance~~all ~~Program~~of ~~("SNAP")~~which could ~~also~~ materially ~~impact~~adversely affect our ~~business~~financial ~~adversely~~performance.

We compete within our industry not only for customers, but also for associates. We have faced a competitive labor market due to labor cost increases, labor shortages and turnover. Our inability to invest in, manage costs and keep pace with technological changes, including those adopted by our competitors, may adversely impact our business initiatives and affect our financial performance. We may be limited in our ability to implement automation-related technological changes in certain of our operations if we are unable to negotiate appropriate terms in our contracts with our labor unions. Our success is also dependent in large part upon our ability to maintain and enhance the goodwill and reputation of our banners, our customers’ connection to our banners, and a positive relationship with the communities in which we serve. Additionally, acts of violence at, or threatened against, our stores, including active shooter situations, may, in addition to other operational impact, result in damage and restricted access to our stores and/or store closures for short or extended periods of time, all of which could materially adversely affect our financial performance.

Our operations are dependent upon the availability of a significant amount of energy and fuel to manufacture, store, transport and sell products.

Our operations are dependent upon the availability of a significant amount of energy and fuel to manufacture, store, transport and sell products. Energy and fuel costs are influenced by domestic and international political and economic circumstances and have experienced volatility both recently and over time. While we have entered into contracts to reduce the impact of volatile energy and fuel costs for our future energy needs, volatility that exceeds offsetting contractual arrangements could adversely affect our results of operations.

Failure to realize anticipated benefits from our productivity initiatives could adversely affect our financial performance and competitive position.

While we have identified and are implementing a broad range of specific productivity initiatives to help offset cost inflation, increase growth and improve earnings, the savings from these productivity initiatives represent management's estimates and remain subject to risks and uncertainties. There can be no assurance that all of our initiatives will be successful or that we will realize the estimated benefits in the currently anticipated amounts or timeframe, if at all. Also, certain of our initiatives may involve up-front costs or significant changes to our operating processes and systems that could result in disruptions in our operations and impact our results of operations.

We may be ~~adversely~~unable ~~impacted~~to byachieve ~~environmental,~~our corporate social ~~and~~responsibility ~~governance matters, including inability to meet goals~~ and ~~commitments~~sustainability ~~that we establish in relation to such matters~~goals.

In recent years, there has been focus from investors, governmental and nongovernmental entities, associates and the public on ~~environmental,~~corporate social responsibility and ~~governance~~sustainability ~~("ESG")~~ matters, including greenhouse gas emissions, renewable energy, packaging and waste, practices related to sustainable supply chain, energy and water use, human rights, animal rights and social commitment. ~~A variety of organizations evaluate, and measure the performance of, companies on such ESG matters, and the results of these assessments can be widely publicized.~~ We have historically established and publicly announced certain goals, commitments, and targets which we may change in the future. ~~Execution~~Our ofability to set and execute on our ~~ESG~~operational strategies toand achieve these goals, commitments, and targets are subject to risks and uncertainties, many of which may be outside of our control and prove to be more costly than we anticipated. ~~These~~Any ~~risks~~failure, or perceived failure, to achieve our social responsibility and ~~uncertainties~~sustainability goals, commitments, and targets, or perceived lack of intensity of our commitment to these initiatives or to otherwise meet evolving and varied stakeholder expectations could damage our reputation and customer, investor and other stakeholder relationships. In addition, we could face increased regulatory, reputational and legal scrutiny as a result of our corporate social responsibility and sustainability related commitments and disclosures, and we could also face challenges with managing conflicting regulatory requirements and our various stakeholders' expectations. Such conditions could have an adverse effect on our business, results of operations and financial condition.

Failure to attract and retain qualified associates could materially adversely affect our financial performance and our ability to successfully execute our business strategy.

Our ability to continue to conduct and expand our operations and the acceleration of our business strategy depends on our ability to attract and retain a large and growing number of qualified associates. The food retail industry is labor intensive. Our ability to meet our labor needs, including our ability to find qualified personnel to fill positions that become vacant at our existing stores and distribution centers, while controlling our associate wage and related labor costs, is subject to numerous external factors, including the availability of qualified persons in the workforce in the local markets in which we are located, unemployment levels within those markets, prevailing wage rates, changing demographics, attitudes toward employment in the food and drug retail industry, the perception of our

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~~include~~corporate values and business strategy, ~~but~~health ~~are~~and ~~not~~other ~~limited~~insurance ~~to,~~costs ~~our~~and ~~ability~~adoption toof ~~achieve~~new ~~our~~or ~~goals~~revised employment and labor laws and regulations. Such laws related to employee hours, ~~commitments~~wages, job classification and ~~targets~~benefits ~~within~~could ~~the~~significantly ~~currently~~increase ~~projected~~our operating costs. ~~and~~In the ~~expected~~event ~~timeframes;~~of ~~governmental~~increasing ~~and~~wage ~~nongovernmental~~rates, ~~responses~~if we fail to ~~certain~~increase ~~ESG~~our ~~goals;~~wages ~~unforeseen~~competitively, ~~operational~~the ~~and~~quality ~~technological~~of ~~difficulties;~~our ~~changes~~workforce incould ~~investment~~decline, ~~assessments~~causing orour ~~increases~~customer inservice ~~projected~~to ~~investments~~suffer, ~~and~~while increasing wages for our ~~ability~~employees tocould ~~invest~~cause ~~accordingly;~~our ~~changes~~costs into ~~frameworks~~increase. If we ~~have~~are ~~agreed~~unable to; ~~actions~~locate, byto ~~our~~train, ~~competitors~~to inattract ~~setting~~ or ~~achieving~~to ~~similar~~retain ~~goals;~~qualified ~~the~~personnel ~~outcome~~capable of ~~research~~meeting ~~efforts~~our ~~and~~business ~~future~~needs ~~technology developments;~~ and expectations, the ~~success~~quality of service we provide to our ~~collaborations~~customers ~~with~~may ~~third~~decrease ~~parties.~~and ~~Any~~our ~~failure~~business, orfinancial ~~perceived~~performance and brand image may be adversely affected. Any failure, to ~~achieve~~meet our ~~ESG~~staffing ~~goals,~~needs ~~commitments,~~or ~~and~~any ~~targets,~~material orincrease ~~perceived~~in ~~lack~~turnover ofrates ~~intensity~~ of our ~~commitment~~employees tomay ~~ESG~~adversely ~~initiatives~~affect orour tobusiness, ~~otherwise~~results ~~meet~~of ~~evolving~~operations and ~~varied~~financial ~~stakeholder~~condition. ~~expectations~~We ~~could~~believe ~~damage~~that our ~~reputation~~success ~~and~~is ~~customer,~~directly ~~investor~~linked ~~and~~to ~~other~~the ~~stakeholder~~competent ~~relationships~~people in the Company, ~~and~~including ~~may~~our ~~even~~executive ~~result~~officers inand ~~regulatory~~other ~~enforcement~~key ~~action~~personnel. ~~Our~~Personnel ~~ESG~~turnover ~~commitments~~can ~~may~~be ~~also~~costly ~~encounter~~and ~~pushback~~could ~~from~~materially ~~parties~~and ~~with~~adversely ~~"anti-ESG"~~impact ~~sentiments,~~our ~~which~~operating ~~could~~results ~~subject~~and uspotentially tojeopardize ~~scrutiny~~the ~~and~~success ~~reputational~~of ~~harm~~our business strategy. ~~Such~~Our ~~conditions~~business ~~could~~and ~~have~~operating anresults ~~adverse~~may ~~effect~~be onadversely ~~our~~impacted ~~business,~~if ~~results~~we offail ~~operations~~to retain and ~~financial~~recruit ~~condition~~key personnel.

A significant majority of our employees are unionized, and our relationship with unions, including labor disputes or work stoppages, as well as related and other pensions expenses could have an adverse impact on our operations and financial results.

As of February 28, 2026, approximately 190,000 of our employees were covered by collective bargaining agreements. During fiscal 2025, collective bargaining agreements covering approximately 126,000 employees expired and were successfully renegotiated. In fiscal 2026, collective bargaining agreements covering approximately 22,000 employees are scheduled to expire. We currently contribute to 28 multiemployer pension plans for a substantial majority of employees represented by unions pursuant to collective bargaining agreements that require us to contribute to these plans. In future negotiations with labor unions, we expect that health care, pension costs and/or contributions and wage costs, among other issues, will be important topics for negotiation. If, upon the expiration of such collective bargaining agreements, we are unable to negotiate acceptable contracts with labor unions, it could result in strikes by the affected workers and significantly disrupt our operations. As part of our collective bargaining agreements, we may need to fund additional pension contributions, which would negatively impact our operating costs. In the event we were to exit certain markets or otherwise cease contributing to multiemployer plans, we could trigger a substantial withdrawal liability. Such withdrawal liability may have a material adverse impact on our financial results. We are also the sponsors of defined benefit retirement plans for certain employees. The funded status of these plans is a significant factor in determining annual pension expense and cash contributions to fund the plans. Unfavorable investment performance, increased pension expense and cash contributions may have an adverse impact on our financial results. For additional information, see "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Multiemployer Pension Plans."

Risks Related to Our Industry

Competition in our industry is intense, and our failure to compete successfully may adversely affect our profitability and operating results.

The food and drug retail industry is large and dynamic, characterized by intense competition among a collection of local, regional and national participants. In addition to new entrants to the market, we face strong competition from existing supercenters, other brick and mortar food and/or drug retailers, club stores, dollar and discount stores, grocery outlets, online retailers and distributors, specialty and niche supermarkets, "limited assortment" stores, drug stores, general merchandisers, wholesale stores, convenience stores, natural food stores, farmers' markets, local chains and stand-alone stores that cater to the individual cultural preferences of specific neighborhoods, restaurants, catering companies and home delivery and meal solution companies. Shifts in the competitive landscape, consumer preference or market share may have an adverse effect on our profitability and results of operations.

As a result of consumers' growing desire to shop online, we also face increasing competition from both our existing competitors that have incorporated the internet as a direct-to-consumer channel and online providers that sell grocery products. Although we have accelerated the expansion of our digital business to offer our customers the ability to shop online for both Drive Up & Go curbside pickup and home delivery, there is no assurance that these online initiatives will continue to be successful. In addition, these initiatives may have an adverse impact on our profitability because of lower gross margins or greater operating costs to compete.

Our ability to attract customers is dependent, in large part, upon a combination of channel preference, location, store conditions, quality, fresh, price, service, convenience and selection and our ability to leverage existing and emerging digital technologies. In each of these areas, other companies compete with us and may successfully attract our customers by matching or exceeding what we offer or by providing greater shopping convenience or better offerings. In recent years, many of our competitors have aggressively added locations and adopted a multi-channel approach to marketing and advertising. Our responses to competitive pressures, such as additional promotions, increased advertising, additional capital investment including for development of our digital offerings and retail media network, could adversely affect our profitability and cash flow. We cannot guarantee that our competitive response will succeed in increasing or maintaining our share of retail food sales.

An increasingly competitive industry and inflation and deflation in the prices of certain foods have made it difficult for food retailers to achieve positive identical sales growth on a consistent basis. We and our competitors have attempted to maintain or grow our respective share of retail food sales through capital and price investment, increased promotional activity and new and remodeled stores, creating a more difficult environment to consistently increase year-over-year sales. Some of our primary competitors are larger than us, have greater financial resources available to them or sell a diversified mix of non-food products, and, therefore, may be able to devote greater

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~~resources~~As a result of consumers' growing desire to ~~grow~~shop ~~their~~online, ~~share~~we ofalso ~~retail~~face ~~food~~increasing ~~sales~~competition orfrom ~~offset~~both ~~lower~~our ~~food~~existing ~~margins~~competitors ~~with~~that ~~higher-margin~~have ~~non~~incorporated the internet as a direct-~~food~~to-consumer channel and online providers that sell grocery products. ~~Price~~Although ~~investment~~we byhave accelerated the expansion of our ~~competitors~~digital ~~has~~business ~~also~~to ~~adversely~~offer ~~affected~~our customers the ability to shop online for both Drive Up & Go curbside pickup and home delivery, there is no assurance that these online initiatives will continue to be successful. In addition, these initiatives may have an adverse impact on our ~~operating~~profitability because of lower gross margins or greater operating costs to compete.

Our ~~continued~~ability ~~success~~ to ~~effectively~~attract ~~compete~~customers inis ~~the~~dependent, ~~food~~in ~~retail~~large ~~industry~~part, ~~is dependent~~ upon ~~our~~a ~~ability~~combination toof ~~control~~channel ~~operating~~preference, ~~expenses~~location, ~~replicate~~store ~~competitor~~conditions, ~~capabilities~~quality, ~~make~~fresh, ~~appropriate~~price, ~~investments~~service, ~~manage~~convenience ~~product~~ and ~~labor~~selection ~~costs~~and inour anability ~~increasingly~~to ~~competitive~~leverage ~~labor~~existing ~~market~~ and ~~health~~emerging ~~care~~digital ~~and pension costs stipulated by our collective bargaining agreements~~technologies. ~~Several~~In each of ~~our~~these ~~primary competitors are larger than we are~~areas, orother ~~are~~companies ~~not~~compete ~~subject~~with tous ~~collective~~and ~~bargaining~~may ~~agreements.~~successfully ~~This~~attract ~~allows~~our ~~them~~customers toby ~~more~~matching ~~effectively~~or ~~leverage~~exceeding ~~their~~what ~~fixed~~we ~~costs~~offer or ~~more~~by ~~easily~~providing ~~reduce~~greater ~~operating~~shopping ~~expenses.~~convenience ~~Changes~~or inbetter ~~our product mix also may negatively affect our profitability~~offerings. ~~Our~~In ~~inability~~recent toyears, ~~adequately~~many ~~control and prevent shrink has impacted our results~~ of ~~operations and could impact~~ our ~~results~~competitors ofhave ~~operations~~aggressively inadded ~~the~~locations ~~future.~~and ~~Failure~~adopted toa ~~accomplish~~multi-channel ~~our~~approach ~~objectives could impair our ability~~ to ~~compete~~marketing ~~successfully~~ and ~~adversely affect our profitability~~advertising. ~~Profit~~Our ~~margins~~responses ~~in the food retail industry are low. In order~~ to ~~increase~~competitive ~~or maintain our profit margins~~pressures, ~~we develop operating strategies to increase revenues, increase gross margins and reduce costs,~~ such as ~~new~~additional ~~marketing programs~~promotions, ~~new~~increased advertising ~~campaigns~~, ~~productivity~~additional ~~improvements,~~capital ~~shrink-reduction~~investment ~~initiatives,~~including ~~distribution~~for ~~center~~development ~~efficiencies,~~of ~~manufacturing~~our ~~efficiencies,~~digital ~~energy~~offerings ~~efficiencies~~ and ~~other~~retail ~~similar~~media ~~strategies.~~network, ~~Our~~could ~~failure~~adversely toaffect ~~achieve~~our ~~forecasted~~profitability ~~revenue~~and ~~growth,~~cash ~~gross~~flow. ~~margin~~We ~~improvement~~cannot orguarantee ~~cost~~that ~~reductions~~our ~~could~~competitive ~~have~~response awill ~~material~~succeed ~~adverse~~in ~~effect~~increasing onor maintaining our ~~profitability~~share ~~and~~of ~~operating~~retail ~~results.~~food sales.

WeAn ~~may~~increasingly ~~not~~competitive ~~timely~~industry ~~identify~~and orinflation ~~effectively~~and ~~respond~~deflation in the prices of certain foods have made it difficult for food retailers to ~~consumer~~achieve ~~trends,~~positive ~~which~~identical ~~could~~sales ~~negatively~~growth ~~affect~~on a consistent basis. We and our ~~relationship~~competitors ~~with~~have attempted to maintain or grow our ~~customers~~respective share of retail food sales through capital and price investment, ~~the~~increased ~~demand~~promotional ~~for~~activity and new and remodeled stores, creating a more difficult environment to consistently increase year-over-year sales. Some of our primary competitors are larger than us, have greater financial resources available to them or sell a diversified mix of non-food products, and, ~~services~~therefore, ~~and~~may ~~our~~be ~~market~~able to devote greater resources to grow their share of retail food sales or offset lower food margins with higher-margin non-food products. Price investment by our competitors has also adversely affected our operating margins.

~~Because~~We wehave ~~face~~evaluated ~~intense~~in ~~competition,~~the ~~our success depends~~past, inand ~~part,~~may onevaluate ~~effectively anticipating evolving trends~~ in ~~demographics and responding to changing consumer preferences and demands. It is difficult to predict consistently and successfully~~ the ~~products~~future, ~~and~~certain ~~services~~strategic ~~our~~transactions ~~customers~~with ~~will~~complementary ~~demand over time. Failure to timely identify or effectively respond to changing consumer tastes~~businesses, ~~preferences and spending patterns could lead us to offer our customers a mix of products~~services, ~~methods to purchase products~~ or atechnologies ~~level~~as part of ~~pricing~~our ~~that~~overall ~~they~~growth ~~do not find attractive~~strategy. ~~This~~These ~~could~~strategic ~~negatively~~transactions ~~affect~~may ~~our~~involve ~~relationship~~significant ~~with our customers~~risks, ~~leading~~including ~~them~~but tonot ~~reduce~~limited ~~their visits~~ to: ~~our~~the ~~stores,~~need ~~purchase~~for ~~less~~substantial ~~through~~financial ~~other~~investment; ~~methods and decrease~~ the ~~amount~~diversion ~~they~~of ~~spend.~~management’s ~~Further,~~attention ~~while~~and weresources ~~have~~from ~~significantly expanded~~ our ~~digital~~existing ~~capabilities~~operations; ~~and~~challenges ~~grown~~in ~~our~~integrating ~~loyalty~~acquired ~~programs~~businesses ~~over~~or ~~the~~realizing ~~last~~expected ~~several~~synergies; ~~years, as technology advances, and as~~ the ~~way~~need ~~our~~to ~~customers~~obtain ~~interact~~costly ~~with~~or ~~technology~~time-consuming ~~changes,~~regulatory weapprovals; ~~will~~potential ~~need~~negative toperception ~~continue~~by toour ~~develop and offer digital~~customers, ~~loyalty~~shareholders and ~~media~~the ~~solutions~~broader ~~that~~market; ~~are both cost effective~~ and ~~compelling~~exposure to ~~our~~contingent ~~customers. Our failure to anticipate~~ or ~~respond~~unexpected ~~to customer expectations for products~~liabilities, ~~services,~~any ~~digital~~of ~~and~~which ~~loyalty programs~~ could ~~negatively~~adversely ~~affect~~impact ~~the demand for~~ our ~~products~~business, ~~and~~results ~~services~~of ~~and~~operations, ~~our market share which may adversely impact our~~ financial condition and ~~results~~future ~~of operations~~prospects.

~~Consolidation~~Our continued success to effectively compete in the ~~healthcare~~food retail industry ~~could~~is ~~adversely~~dependent upon our ability to control operating expenses, replicate competitor capabilities, make appropriate investments, manage product and labor costs in an increasingly competitive labor market and health care and pension costs stipulated by our collective bargaining agreements. Several of our primary competitors are larger than we are, or are not subject to collective bargaining agreements. This allows them to more effectively leverage their fixed costs or more easily reduce operating expenses. Changes in our product mix also may negatively affect our ~~financial~~profitability. ~~condition~~Our inability to adequately control and prevent shrink has impacted our results of operations and could impact our results of operations in the future. Failure to accomplish our objectives could impair our ability to compete successfully and adversely affect our profitability. Profit margins in the food retail industry are low. In order to increase or maintain our profit margins, we develop operating strategies to increase revenues, increase gross margins and reduce costs, such as our business strategy, new marketing programs, new advertising campaigns, productivity improvements, shrink-reduction initiatives, distribution center efficiencies, manufacturing efficiencies, energy efficiencies and other similar strategies and value-creating initiatives. Our failure to achieve forecasted revenue growth, gross margin improvement or cost reductions could have a material adverse effect on our profitability and operating results.

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Failure to timely identify or respond to evolving consumer preferences, including changes in how customers use digital and AI-driven tools, could adversely affect our customer relationships, demand and market share.

Because we face intense competition, our success depends, in part, on effectively anticipating evolving trends in demographics and responding to changing consumer preferences and demands. It is difficult to predict consistently and successfully the products and services our customers will demand over time. Failure to timely identify or effectively respond to changing consumer tastes, preferences and spending patterns could lead us to offer our customers a mix of products, methods to purchase products or a level of pricing that they do not find attractive.

In addition, advances in technology are changing how customers interact with retailers and make purchasing decisions. The emergence of artificial intelligence‑powered agentic shopping tools, through which AI agents autonomously research, compare and purchase products on behalf of consumers, could further disrupt traditional grocery retail. If customers increasingly rely on these tools and AI agents prioritize factors such as price or speed over retailer preference or brand loyalty, we could lose our direct relationship with customers. This could reduce our visibility into customer behavior, increase margin pressure, and limit our ability to influence purchasing decisions.

These developments could negatively affect our relationship with customers, leading them to reduce their visits to our stores, shift purchases to other channels or methods, and decrease the amount they spend with us. Further, while we have significantly expanded our digital capabilities and grown our loyalty programs over the last several years, as technology continues to evolve and customer expectations change, we will need to continue to develop and offer digital, loyalty, media and other technology‑enabled solutions that are both cost effective and compelling. Failure to anticipate or respond to customer expectations for products, services, digital capabilities, loyalty programs or emerging purchasing technologies could negatively affect demand for our products and services and our market share, which may adversely impact our financial condition and results of operations.

Changes in the healthcare industry could adversely affect our financial condition and results of operations.

Many organizations in the healthcare industry have consolidated to create larger healthcare enterprises with greater market power, which has resulted in increased pricing pressures. If this consolidation trend continues, it could give the resulting enterprises even greater bargaining power, which may lead to further pressure on the prices for our pharmacy products and services. If these pressures result in reductions in our prices, we will become less profitable unless we are able to achieve corresponding reductions in costs, increase productivity or develop profitable new revenue streams. We expect that market demand, government regulation, third-party reimbursement policies, government contracting requirements, direct-to-consumer sales of prescription drugs, growth in online pharmacies, litigation and societal pressures will continue to cause the healthcare industry to evolve, potentially resulting in further business consolidations and alliances among the industry participants we engage with, which may adversely impact our financial condition and results of operations. In addition, the Inflation Reduction Act of 2022 established the Medicare Drug Negotiation Program, which authorizes the federal government to directly negotiate prices for certain prescription drugs reimbursed under Medicare Part B and Part D. The program became effective in 2026 and, while initially limited, is expected to expand over time to include up to 100 drugs by 2031. The drugs subject to future negotiation, the prices ultimately established, and the broader effects on commercial pricing, reimbursement structures, and customer purchasing behavior remain uncertain. As a result, the program could negatively impact the Company's revenues, profitability, and overall financial condition or results of operations. Any expansion of the program or adoption of similar pricing mechanisms by other government or private payers could further increase these risks.

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Certain risks are inherent in providing pharmacy products and services, and our insurance may not be adequate to cover any claims against us.

We currently operate 1,~~728~~713 in-store pharmacies. As a result, we are exposed to risks inherent in the packaging, dispensing, billing, display, distribution and disposal of pharmaceuticals and other healthcare products, including risks of liability for products such as opioids. Although we maintain insurance against such liabilities, we cannot guarantee that the coverage limits under our insurance programs will be adequate to protect us against future claims, or that we will be able to maintain this insurance on acceptable terms in the future, or at all for healthcare and pharmaceutical liabilities. Our results of operations, financial condition or cash flows may be materially adversely affected if in the future our insurance coverage proves to be inadequate or unavailable, or there is an increase in the liability for which we self-insure, or we suffer harm to our reputation because of an error or omission. Also, our business operations and operating results could be materially adversely impacted by legislative, enforcement, regulatory, judicial and public policy changes.

We are subject to numerous federal and state regulations. Each of our in-store pharmacies are enrolled in government healthcare programs and must be licensed by the respective state government. The licensing and enrollment requirements vary from state to state. An additional registration certificate must be granted by the U.S. Drug Enforcement Administration, and, in some states, a separate controlled substance license must be obtained to dispense controlled substances. In addition, pharmacies selling controlled substances are required to maintain extensive records and often report information to state and federal agencies. If we fail to comply with existing or future laws and regulations, we could suffer substantial civil or criminal penalties, including the loss of our licenses to operate pharmacies and our ability to participate in federal and state healthcare programs. Because of the severe penalties we could face, we must devote significant operational and managerial resources to complying with these laws and regulations. Application of federal and state laws and regulations could subject our current practices to allegations of impropriety or illegality, or could require us to make significant changes to our operations. In addition, we cannot predict the impact of future legislation and regulatory changes on our pharmacy operations or assure that we will be able to obtain or maintain the regulatory approvals required to operate our pharmacy business.

Risks Related to Our Supply Chain

Product and raw material supply disruptions, especially those related to fresh products, may have an adverse effect on our profitability and operating results.

Reflecting consumer preferences, we have a significant focus on fresh products. We rely on various suppliers and vendors to provide and deliver our fresh and other product inventory on a continuous basis and to supply the raw materials to manufacture certain of our Own Brands products. We could suffer significant fresh and other product inventory losses and significant lost revenue in the event of the loss or a shutdown of a major supplier or vendor, disruption of our distribution network, extended power outages, natural disasters, current and future tariffs arising from international trade disputes, foreign conflicts, acts of war or terrorism, disruptive political events or other catastrophic or unexpected occurrences such as a pandemic like COVID-19. We expect our suppliers to comply with applicable laws, including labor, safety and environmental laws. Our ability to find qualified suppliers who uphold our standards and requirements for products, including fresh, and to access such products in a timely and operationally efficient manner in volumes we may demand may become a significant challenge.

Severe weather, natural disasters and other climate changes may adversely affect our business.

Severe weather conditions such as hurricanes, earthquakes, floods, wildfires, mudslides, winter storms, tornadoes, as well as other natural disasters in areas in which we have stores or distribution centers have caused and may cause physical damage to our properties, closure of one or more of our stores, manufacturing facilities or distribution centers, lack of an adequate work force, disruption in the manufacture and supply of products, disruption and delays

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in transportation and delivery of goods, inability of our workforce to work at our facilities, reduction in customer traffic and generally a reduction in the availability of products in our stores.

In addition, adverse climate conditions, weather patterns and their respective impacts such as drought, flood, wildfires, mudslides and changing ambient temperatures adversely impact product cultivation conditions for farmers, ranchers and fishermen, including by disrupting ecosystems and severely altering the growing conditions, nutrient levels, soil moisture, and water availability necessary for the growth and cultivation of crops and raising of animals. As extreme shifts in climate conditions make it more difficult to raise and produce crops, livestock, and seafood, there may be a decrease in the product quality and the yield quantity of food products. Consequently, such a decreased food supply may adversely affect the availability or cost of certain products within the grocery supply chain, which could lead to shortages or reduced gross profit margins as such products become more expensive. At the global level, the impact of climate change on food supply is more likely to lead to food insecurity in countries which, unlike the United States, have climates insufficient to sustain diverse food production. Thus, there may be increased demand for agricultural exports from regions that experience production difficulties yet have sufficient wealth to purchase imports. This may impact the availability of products for us to purchase.

In addition, legislative and regulatory efforts to combat climate change or other environmental issues could result in new or more stringent forms of oversight and mandatory or voluntary reporting, diligence and disclosure, which could increase costs, result in additional taxes and other expenses, and further impact our business, results of operations and financial condition.

Threats or potential threats to food and drug safety, the occurrence of a widespread health epidemic and/or pandemic or regulatory concerns in our supply chain may adversely affect our business.

Acts or threats, whether perceived or real, of war or terror or other criminal activity directed at the food and drug industry or the transportation industry, whether or not directly involving our stores, could increase our operating costs or impact general consumer behavior and consumer spending. Other events that give rise to actual or potential food contamination, drug contamination or food-borne illnesses, or a widespread regional, national or global health epidemic and/or pandemic could have an adverse effect on our operating results or disrupt production and delivery of the products we sell, our ability to appropriately and safely staff our stores and cause customers to avoid public gathering places or otherwise change their shopping behaviors. We source our products from vendors and suppliers and related networks across the globe who may be subject to regulatory actions or face criticism due to actual or perceived social injustices, including human trafficking, non-sustainable practices, child labor or environmental, health and safety violations. A disruption in our supply chain due to any regulatory action or social injustice could have an adverse impact on our supply chain and ultimately our business, including potential harm to our reputation.

We could be affected if consumers lose confidence in the food supply chain or the quality and safety of our products.

We could be adversely affected if consumers lose confidence in the safety and quality of certain food products. Adverse publicity about these types of concerns, whether valid or not, may discourage consumers from buying our products or cause production and delivery disruptions. To the extent that a pathogen is food-borne, or perceived to be food-borne, future outbreaks may adversely affect the price and availability of certain food products and cause our customers to eat less of such products. In addition, recalls or withdrawals of food products, and in particular the food products we manufacture or are sold under any of our Own Brands product names, may involve costs to us, the inability to sell those products or reputational harm to us. The real or perceived sale of contaminated food products by us could result in product liability claims, a loss of consumer confidence in our products and product recalls or withdrawals, which could have a material adverse effect on our business.

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Fuel prices and availability may adversely affect our results of operations.

We currently operate 405 fuel centers that are adjacent to many of our store locations. As a result, we sell a significant amount of gasoline and diesel fuel. Increased regulation or significant increases in wholesale fuel costs and fuel taxes could result in lower gross margins on fuel sales, and demand could be negatively impacted by retail price increases as well as by concerns about the effect of emissions on the environment. We are unable to predict future regulations, environmental effects, political unrest, geopolitical tensions, hostilities or boycotts, acts of war or terrorism, the actions of major oil producing countries to regulate oil production, or the acts of countries to disrupt the distribution of oil, and other matters that may affect the cost and availability of fuel, and how our customers will react to any of the preceding matters, which could adversely affect our results of operations.

Increased commodity prices may adversely impact our profitability.

Many of our own and sourced products include ingredients such as wheat, corn, oils, milk, sugar, proteins, cocoa and other commodities. Commodity prices can be volatile and can be impacted by ~~global~~geopolitical ~~conflicts~~risks ~~such as the impact on wheat~~ and ~~corn prices by the armed conflict between Russia and Ukraine and~~ tariffs arising from international trade disputes, trade wars and inflation. For example, ~~the recently implemented~~ tariffs on products imported from certain countries may increase commodity prices for products. Any increase in commodity prices may cause an increase in our input costs or the prices our vendors seek from us. Although we typically are able to pass on modest commodity price increases or mitigate vendor efforts to increase our costs, we may be unable to continue to do so, either in whole or in part, if commodity prices increase materially or there are significant inflationary pressures. If we are forced to increase prices, our customers may reduce their purchases at our stores or trade down to less profitable products. Both may adversely impact our profitability as a result of reduced revenue or reduced margins.

Risks Relating to the Terminated Merger with Kroger

Our inability to execute on our standalone business strategies following the termination of the Merger Agreement could have a material adverse effect on our business, results of operations, and financial condition.

From October 2022 to December 2024, the uncertainties and restrictions on our business imposed by the Merger Agreement limited us from pursuing certain business opportunities and taking actions which may have been beneficial to our business and operations during this period. If we are unable to successfully optimize the acceleration of our Customers for Life strategy and other value-creating initiatives after the termination of the Merger Agreement, our business, operating results or financial condition could be materially adversely affected.

The termination of the Merger Agreement and the related legal proceedings may cause us to incur substantial costs and could otherwise adversely affect our business, financial results and operations.

As disclosed elsewhere in this Form 10-K, the Company has filed a lawsuit against Kroger in the Delaware Court of Chancery, bringing claims for willful breach of contract and breach of the covenant of good faith and fair dealing arising from Kroger's failure to exercise "best efforts" and to take "any and all actions" to secure regulatory approval, as was required of Kroger under the terms of the Merger Agreement. Kroger also delivered a termination notice to the Company, alleging that the Company's termination notice was not effective, and that Kroger had no obligation to pay the $600 million termination fee because the Company allegedly failed to perform and comply in all material respects with its covenants under the Merger Agreement. Kroger has also filed counterclaims against us for alleged breaches of the Merger Agreement. In addition to our litigation with Kroger, we may face other lawsuits related to the terminated Merger. We intend to vigorously defend against these and any other legal proceedings arising from the terminated Merger Agreement, but due to the uncertainties inherent in any legal proceedings, we cannot predict an outcome. Also, legal proceedings are expensive and could result in significant costs to us, including any costs we may be required to pay in connection with the legal proceedings with Kroger. These

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significant costs, along with our inability to collect the termination fee of $600 million from Kroger could have a material adverse effect on our business, operating results, and financial condition.

Risks Related to Our Workforce

A significant majority of our employees are unionized, and our relationship with unions, including labor disputes or work stoppages, could have an adverse impact on our operations and financial results.

As of February 22, 2025, approximately 195,000 of our employees were covered by collective bargaining agreements. During fiscal 2024, collective bargaining agreements covering approximately 17,500 employees expired and were successfully renegotiated. In fiscal 2025 collective bargaining agreements covering approximately 120,000 employees are scheduled to expire. In future negotiations with labor unions, we expect that health care, pension costs and/or contributions and wage costs, among other issues, will be important topics for negotiation. If, upon the expiration of such collective bargaining agreements, we are unable to negotiate acceptable contracts with labor unions, it could result in strikes by the affected workers and significantly disrupt our operations. As part of our collective bargaining agreements, we may need to fund additional pension contributions, which would negatively impact our operating costs.

Increased pension expenses, contributions and surcharges may have an adverse impact on our financial results.

We currently contribute to 27 multiemployer pension plans for a substantial majority of employees represented by unions pursuant to collective bargaining agreements that require us to contribute to these plans. Under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the Pension Benefit Guaranty Corporation (the "PBGC") has the authority to petition a court to terminate an underfunded pension plan in limited circumstances. In the event that our defined benefit pension plans are terminated for any reason, we could be liable for the entire amount of the underfunding, as calculated by the PBGC based on its own assumptions (which would result in a larger obligation than that based on the actuarial assumptions used to fund such plans). Under ERISA and the Internal Revenue Code, as amended (the "Code"), the liability under these defined benefit plans is joint and several with all members of our control group (participating ACI consolidated subsidiaries), such that each member of our control group is potentially liable for the defined benefit plans of each other member of the control group.

Based on an assessment of the most recent information available, we believe that a majority of the multiemployer plans to which we contribute are underfunded, which is the amount by which the actuarial determined plan liabilities exceed the value of the plan assets. We are only one of a number of employers contributing to these plans and the underfunding of any of these plans to which we contribute are not our liability. Though we are not obligated nor the guarantor for any of the underfunding of multiemployer plans to which we contribute, as of December 31, 2024, we attempted to estimate our allocable share of the underfunding of multiemployer plans to which we contribute, based on the ratio of our contributions to the total of all contributions to these plans in a year. Our estimate is based on the most current information available to us including actuarial evaluations and other data (that includes the estimates of others), and such information may be outdated or otherwise unreliable. Our estimate could also change based on the amount contributed to the plans, investment returns on the assets held in the plans, actions taken by trustees who manage the plans' benefit payments, interest rates, the amount of withdrawal liability payments made to the plans, if the employers currently contributing to these plans cease participation, and requirements under the Pension Protection Act of 2006, the Multiemployer Pension Reform Act of 2014 and applicable provisions of the Code.

Our estimate of the Company's allocable share of the underfunding of multiemployer plans to which we contribute was approximately $4.9 billion. The American Rescue Plan Act ("ARP Act") established a special financial assistance program for financially troubled multiemployer pension plans. Under the ARP Act, eligible multiemployer plans can apply to receive funding in the amount needed to pay pension benefits through the plan year ending 2051. We participate in 15 multiemployer plans eligible for the special financial assistance, of which

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four have received special financial assistance funds as of February 22, 2025, reducing our estimated $4.9 billion allocable share of the underfunding to approximately $3.6 billion. For additional information, see "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Multiemployer Pension Plans."

In the event we were to exit certain markets or otherwise cease contributing to multiemployer plans, we could trigger a substantial withdrawal liability. Such withdrawal liability may have a material adverse impact on our financial results. We are also the sponsors of defined benefit retirement plans for certain employees. The funded status of these plans is a significant factor in determining annual pension expense and cash contributions to fund the plans. Unfavorable investment performance, increased pension expense and cash contributions may have an adverse impact on our financial results.

Wages continue to increase and are subject to factors outside of our control. Changes to wage regulations could have an impact on our future results of operations.

A considerable number of our employees are paid at rates related to the federal minimum wage. Additionally, many of our stores are located in localities or states where the minimum wage is greater than the federal minimum wage and where a considerable number of employees receive compensation equal to the state's minimum wage which are also slated to increase over the next few years. Moreover, municipalities may set minimum wages above the applicable state standards. Increases in the federal minimum wage or the enactment of additional state or local minimum wage increases are increasing our labor costs, which may adversely affect our results of operations and financial condition.

The food retail industry is labor intensive. Our ability to meet our labor needs, while controlling wage and labor-related costs, is subject to numerous external factors, including the availability of qualified persons in the workforce in the local markets in which we are located, unemployment levels within those markets, prevailing wage rates, changing demographics, attitudes toward employment in the food and drug retail industry, the perception of our corporate values and business strategy, health and other insurance costs and changes in employment and labor laws. Such laws related to employee hours, wages, job classification and benefits could significantly increase our operating costs. In the event of increasing wage rates, if we fail to increase our wages competitively, the quality of our workforce could decline, causing our customer service to suffer, while increasing wages for our employees could cause our gross margins to decrease. If we are unable to hire and retain employees capable of meeting our business needs and expectations, our business and brand image may be impaired. Any failure to meet our staffing needs or any material increase in turnover rates of our employees may adversely affect our business, results of operations and financial condition.

Failure to attract and retain qualified associates could materially adversely affect our financial performance and our ability to successfully execute our business strategy.

Our ability to continue to conduct and expand our operations depends on our ability to attract and retain a large and growing number of qualified associates. Our ability to meet our labor needs, including our ability to find qualified personnel to fill positions that become vacant at our existing stores and distribution centers, while controlling our associate wage and related labor costs, is generally subject to numerous external factors, including the availability of a sufficient number of qualified persons in the work force of the markets in which we operate, unemployment levels within those markets, prevailing wage rates, changing demographics, attitudes toward employment in the food and drug retail industry, the perception of our corporate values and business strategy, health and other insurance costs and adoption of new or revised employment and labor laws and regulations. If we are unable to locate, to train, to attract or to retain qualified personnel, the quality of service we provide to our customers may decrease and our financial performance may be adversely affected. We believe that our success is directly linked to the competent people in the Company, including our executive officers and other key personnel. Personnel turnover can be costly and could materially and adversely impact our operating results and potentially jeopardize the success of our

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Customers for Life strategy. Our business and operating results may be adversely impacted if we fail to retain and recruit key personnel.

Legal and Regulatory Risks

Unfavorable changes in government regulation may have a material adverse effect on our business.

We operate our business within strict and complex regulatory environments, which includes laws and regulations involving antitrust and competition, privacy, data protection, environmental, healthcare, anti-bribery, anti-corruption, tax, accounting, financial reporting, health and sanitation standards, food labeling and safety, prescriptions, controlled substances, zoning, vehicle operations, fuel operations, equal employment opportunity, minimum wages and licensing for the sale of food, drugs, and alcoholic beverages, among other matters, and we could be materially adversely affected by changes to, and/or any failure to comply with, existing and new legal requirements. In addition, our industry faces significant political, societal, and media scrutiny, and we may be subject to frequent or increasing challenges which may impact our reputation and business. Additionally, shifts in enforcement practices or regulatory scrutiny generally cannot be anticipated or predicted or our predictions may not be accurate. If we fail to predict or respond adequately to regulatory changes or expanding disclosure requirements, or do not respond as effectively as our competitors, our reputation, business, operations, and financial performance may be adversely affected. Political, governmental, and regulatory regimes and practices can evolve as a result of elections or other events beyond our control. Such changes, including those which have and may occur under the new administration, are unpredictable and may have negative impacts on our business and operations. Compliance with laws, regulations, policies, and enforcement practices may become challenging requiring operational changes which may be difficult to implement, increase our operating costs, require significant capital expenditures, or result in adverse publicity and harm our reputation.

Tax matters could adversely affect our results of operations and financial conditions.

We may be affected by higher rates of federal, state, or local tax imposed as a result of political developments or economic conditions, which could adversely affect our earnings. Our future tax liability could be adversely affected by regulatory and legal changes, the results of tax audits and examinations, and changes in accounting policies and interpretations relating to tax matters, all of which could negatively impact our business. In addition, changes in tax ~~rates, tax laws, and regulations that impact our customers or the economy generally may also impact our financial condition and results of operations.~~

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rates, tax laws, and regulations that impact our customers or the economy generally may also impact our financial condition and results of operations.

Unfavorable changes in, failure to comply with, or increased costs to comply with environmental laws and regulations could adversely affect us. The storage and sale of petroleum products could expose us to potentially significant liabilities.

Our operations, including our 405 fuel centers, are subject to various laws and regulations relating to the protection of the environment, including those governing the storage, management, disposal and cleanup of hazardous materials. Some environmental laws, such as the Comprehensive Environmental Response, Compensation and Liability Act and similar state statutes, impose strict, and under certain circumstances joint and several, liability for costs to remediate a contaminated site, and also impose liability for damages to natural resources. Third-party claims in connection with releases of, or exposure to, hazardous materials relating to our current or former properties or third-party waste disposal sites can also arise. In addition, the presence of contamination at any of our properties could impair our ability to sell or lease the contaminated properties or to borrow money using any of these properties as collateral. The costs and liabilities associated with any such contamination could be substantial and could have a material adverse effect on our business. Under current environmental laws, we may be held responsible for the remediation of environmental conditions regardless of whether we lease, sublease or own the stores or other facilities and regardless of whether such environmental conditions were created by us or a prior owner or tenant. In addition, the increased focus on climate change, waste management and other environmental issues may result in new environmental laws or regulations that negatively affect us directly or indirectly through increased costs on our suppliers. There can be no assurance that environmental contamination relating to prior, existing or future sites or other environmental changes will not adversely affect us through, for example, business interruption, cost of remediation or adverse publicity.

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We are subject to, and may in the future be subject to, legal or other proceedings that could have a material adverse effect on us.

In the course of conducting our business, arising in or outside of the ordinary course, we are and may become a party to various legal proceedings, including lawsuits related to the termination of the merger agreement with Kroger, class actions in matters involving personnel and employment issues, federal and state wage and hour laws, personal injury, antitrust claims based on both federal and state law, packaging or product claims, claims related to the sale of drug or pharmacy products, such as opioids, claims invoking consumer-protection statutes, intellectual property claims and fiduciary and securities claims. We may also become subject to governmental and regulatory inquiries related to our operations. We estimate our exposure to legal proceedings and establish reserves for the estimated liabilities. We are unable to predict the outcome of any litigation, investigation or any action by governmental entities and can provide no assurance as to the scope and outcome of these matters and whether our business, financial position, results of operations or cash flows will not be materially adversely affected. In addition, legal proceedings are expensive and could result in significant costs to us, including any costs we may be required to pay in connection with the legal proceedings with Kroger. These significant costs, along with our inability to collect the termination fee of $600 million from Kroger, could have a material adverse effect on our business, operating results, and financial condition.

The inability to insure or have adequate amounts of insurance against the risks we face may have a material adverse impact on our results of operations.

We estimate the liabilities associated with the risks retained by us, in part, by considering historical claims experience, demographic and severity factors and other actuarial assumptions which, by their nature, are subject to a high degree of variability. Among the causes of this variability are unpredictable external factors affecting future inflation rates, discount rates, litigation trends, legal interpretations, benefit level changes and claim settlement patterns. The majority of our workers' compensation liability is from claims occurring in California, where workers' compensation has received intense scrutiny from the state's politicians, insurers, employers and providers, as well as the public in general. State-specific statutes and legislation may result in an increase to our workers' compensation liability, which could have a material adverse impact on our results of operations.

~~Risks Related to Information Security, Cybersecurity, Data Privacy and Evolving Technologies~~19

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compensation has received intense scrutiny from the state's politicians, insurers, employers and providers, as well as the public in general. State-specific statutes and legislation may result in an increase to our workers' compensation liability, which could have a material adverse impact on our results of operations.

Risks Related to Information Security, Cybersecurity, Data Privacy and Artificial Intelligence Technologies

We may be adversely affected by risks related to our dependence on IT systems. Any future changes to or intrusion into these IT systems, even if we are compliant with industry security standards, could materially adversely affect our financial condition and operating results.

We have complex information technology systems that are important to the success of our business operations, financial reporting and marketing initiatives. Our information systems are subject to outages, unplanned downtime, program transitions, breakdowns, ransomware attacks, denial of service attacks, malware and other cyber incidents. If we fail to timely or successfully mitigate such adverse events affecting these systems, or experience difficulties accessing the proprietary business data stored in these systems, or in maintaining, expanding or upgrading existing systems or implementing new systems, we could incur significant losses to our business and operations. These risks may be further exacerbated by the deployment and use of cloud-based enterprise solutions. In a cloud computing environment, we are subject to outages by third-party service providers and security breaches to their systems, which we may have little control over. In the case of a cloud computing outage, the reconstitution of our business services running on those computing resources will be dependent on the third-party hosting provider restoring availability.

Improper activities by third parties, exploitation of encryption technology, new data-hacking tools and discoveries and other events or developments may result in future intrusions into or compromise of our networks, payment card terminals or other payment systems.

We regularly defend against and respond to data security incidents. While we are vigilant in monitoring the security of our information technology systems, we may not be able to prevent all unauthorized access or remediate the impact of such unauthorized access. The techniques used by cyber criminals change frequently and often cannot be recognized until launched against a target; accordingly, we may not be able to anticipate these frequently changing techniques, implement adequate preventive measures for all of them or remediate any unauthorized access on a timely basis. In addition, ongoing geopolitical conflicts and the development of sophisticated artificial intelligence systems may increase the risk of cyberattacks which could impact our operations. Any unauthorized access into our customers' sensitive information, data belonging to us or our vendors or employee data, even if we are compliant with industry security standards, could put us at a competitive disadvantage, result in deterioration of our customers', vendors' and employees' confidence in us and subject us to investigations, required notifications or public disclosures, potential litigation, liability, fines and penalties and consent decrees, resulting in a possible material adverse impact on our financial condition and results of operations.

21As a merchant that accepts debit and credit cards for payment, we are subject to the Payment Card Industry ("PCI") Data Security Standard ("PCI DSS"), issued by the PCI Council. PCI DSS contains compliance guidelines and standards with regard to security surrounding the physical administrative and technical storage, processing and transmission of individual cardholder data. By accepting debit cards for payment, we are also subject to compliance with American National Standards Institute ("ANSI") data encryption standards and payment network security operating guidelines. Failure to be PCI compliant or to meet other payment card standards may result in the imposition of financial penalties or the allocation by the card brands of the costs of fraudulent charges to us. Additionally, the Fair and Accurate Credit Transactions Act ("FACTA") requires systems that print payment card receipts to employ personal account number truncation so that the consumer's full account number is not viewable on the slip. Despite our efforts to comply with these or other payment card standards and other information security measures, we cannot be certain that all of our IT systems will be able to prevent, contain or detect all cyber-attacks or intrusions. To the extent that any disruption results in the loss, damage or misappropriation of information, we

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~~impact~~may ofbe ~~such~~adversely ~~unauthorized~~affected ~~access. The techniques used~~ by ~~cyber~~claims ~~criminals~~from ~~change~~customers, ~~frequently~~financial ~~and often cannot be recognized until launched against a target; accordingly~~institutions, weregulatory ~~may not be able to anticipate these frequently changing techniques~~authorities, ~~implement~~payment ~~adequate~~card ~~preventive~~associations ~~measures~~and ~~for all of them or remediate any unauthorized access on a timely basis~~others. In addition, ~~ongoing~~privacy ~~geopolitical conflicts~~ and ~~the~~information ~~development~~security oflaws ~~sophisticated~~and ~~artificial~~standards ~~intelligence~~continue ~~systems~~to ~~may~~evolve ~~increase~~and ~~the risk of cyberattacks which~~ could ~~impact~~expose ~~our~~us ~~operations. Any unauthorized access into our customers' sensitive information, data belonging~~ to usfurther orregulatory ~~our~~burdens. ~~vendors~~The orcost ~~employee~~of ~~data,~~complying ~~even if we are compliant~~ with ~~industry~~stricter ~~security~~laws and standards, ~~could~~including ~~put~~PCI ~~us at a competitive disadvantage~~DSS, ~~result~~ANSI ~~in deterioration of our customers', vendors'~~ and ~~employees'~~FACTA ~~confidence~~data inencryption usstandards and ~~subject~~state usconsumer todata ~~investigations~~privacy, ~~required~~data ~~notifications~~protection ~~or public disclosures, potential litigation, liability, fines~~ and ~~penalties~~related ~~and consent decrees~~laws, ~~resulting~~could inbe ~~a possible material adverse impact on our financial condition and results of operations~~significant.

As a merchant that accepts debit and credit cards for payment, we are subject to the Payment Card Industry ("PCI") Data Security Standard ("PCI DSS"), issued by the PCI Council. PCI DSS contains compliance guidelines and standards with regard to security surrounding the physical administrative and technical storage, processing and transmission of individual cardholder data. By accepting debit cards for payment, we are also subject to compliance with American National Standards Institute ("ANSI") data encryption standards and payment network security operating guidelines. Failure to be PCI compliant or to meet other payment card standards may result in the imposition of financial penalties or the allocation by the card brands of the costs of fraudulent charges to us. Additionally, the Fair and Accurate Credit Transactions Act ("FACTA") requires systems that print payment card receipts to employ personal account number truncation so that the consumer's full account number is not viewable on the slip. Despite our efforts to comply with these or other payment card standards and other information security measures, we cannot be certain that all of our IT systems will be able to prevent, contain or detect all cyber-attacks or intrusions. To the extent that any disruption results in the loss, damage or misappropriation of information, we may be adversely affected by claims from customers, financial institutions, regulatory authorities, payment card associations and others. In addition, privacy and information security laws and standards continue to evolve and could expose us to further regulatory burdens. The cost of complying with stricter laws and standards, including PCI DSS, ANSI and FACTA data encryption standards and state consumer data privacy, data protection and related laws, could be significant.

The loss of confidence from a data security incident involving our customers, employees or vendors could materially adversely affect our financial condition and operating results.

We receive, store and transmit personal information in connection with our business, including information from processing credit card data, digital marketing, and human resources records. The legal landscape surrounding privacy and cybersecurity is constantly changing, leading to stricter requirements for the processing of personal information. Meeting these obligations poses challenges, as any missteps could result in fines, government scrutiny, and lawsuits from individuals and regulators. Violations, or even perceived violations, of privacy, can adversely affect the trust that customers, employees, and vendors place in us regarding their personal information. The protection of our customer, employee and vendor data is critically important to us. Despite our considerable efforts to secure, upgrade and maintain our computer networks, our information security could be compromised, and customer, employee and vendor confidential information could be misappropriated whether as a result of cyberattacks on our information systems, the information systems hosted by third party providers or otherwise. If we experience a data security incident, we could be exposed to government enforcement actions, ransomware claims, loss of business information, negative publicity and possible claims from customers, associates, financial institutions and payment card associations. In addition, our customers could lose confidence in our ability to protect their personal information, which could cause them to stop shopping at our stores altogether and materially adversely affect our financial condition and operating results.

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We and our third parties may use artificial intelligence in our business, which could result in competitive and reputational harm, and legal liability, and adversely affect our results of operations.

We and our third parties are increasingly incorporating artificial intelligence ("AI") solutions into our operations, systems, and services. Developing and incorporating AI solutions into our business is uncertain and may result in increased costs and business disruptions without a corresponding benefit. Our competitors may incorporate AI into their products and services more quickly or more successfully than us, which could impair our ability to compete effectively in the market. Additionally, if the content, analyses, or recommendations that AI applications assist in producing are or are alleged to be deficient, inaccurate, biased, or infringe on existing intellectual property, our business, financial condition, and results of operations may be adversely affected. AI presents emerging ethical issues and could pose potential harms to our customers and associates and if our use of AI becomes controversial, we may experience competitive harm, brand or reputational harm, or legal liability. AI also presents a new attack surface that cybercriminals will attempt to exploit as well as providing means to scale and automate targeted attacks. The rapid evolution of AI, including expected government regulation of AI and automated decision making, requires resources, formalized AI governance, a commitment to the ethical and responsible use of data, and processes to best meet these challenges. If we fail to adopt AI in a thoughtful and strategic manner, the risks above may be exacerbated.

Risks Related to Our Indebtedness

Our indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our indebtedness.

As of February 2228, ~~2025~~2026, we had approximately $78.56 billion of debt outstanding (other than finance lease obligations), and, subject to our borrowing base, we would have been able to borrow an additional $43.06 billion ~~under our asset-based loan ("ABL") facility (the "ABL Facility"). As of February 22, 2025, we and our subsidiaries had approximately $0.4 billion of finance lease obligations.~~

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under our asset-based loan ("ABL") facility (the "ABL Facility"). As of February 28, 2026, we and our subsidiaries had approximately $0.4 billion of finance lease obligations.

Our indebtedness could have important consequences. For example, it could: increase our vulnerability to general adverse economic and industry conditions; require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes, including acquisitions; limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; place us at a competitive disadvantage compared to our competitors that have less debt; and limit our ability to borrow additional funds. In addition, there can be no assurance that we will be able to refinance any of our debt or that we will be able to refinance on commercially reasonable terms. If we were unable to make payments or refinance our debt or obtain new financing under these circumstances, we would have to consider other options, such as sales of assets, sales of equity or restructure of the applicable debt.

We may incur substantially more debt in the future.

We and our subsidiaries may incur substantial additional indebtedness in the future. The terms of the credit agreement that governs the ABL Facility and the indentures that govern our indebtedness, as disclosed in "Part II—Item 8. Financial Statements and Supplementary Data—Note 65", permit us to incur significant additional debt, subject to certain limitations. If new indebtedness is added to our and our subsidiaries' current debt levels, the related risks that we and they now face would increase.

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To service our indebtedness, we require a significant amount of cash, and our ability to generate cash depends on many factors beyond our control.

Our ability to make cash payments on and to refinance the indebtedness and to fund planned capital expenditures will depend on our ability to generate significant operating cash flow in the future, as described in the section entitled "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Annual Report on Form 10-K. This ability is, to a significant extent, subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Our business may not generate sufficient cash flow from operations to enable us to pay our indebtedness or to fund our other liquidity needs. In any such circumstance, we may need to refinance all or a portion of our indebtedness, on or before maturity. We may not be able to refinance any indebtedness on commercially reasonable terms, or at all. If we cannot service our indebtedness, we may have to take actions such as selling assets, seeking additional equity or reducing or delaying capital expenditures, strategic acquisitions and investments. Any such action, if necessary, may not be effected on commercially reasonable terms, or at all. The instruments governing our indebtedness may restrict our ability to sell assets and our use of the proceeds from such sales.

If we are unable to generate sufficient cash flow or are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants in the instruments governing our indebtedness, we could be in default under the terms of the agreements governing such indebtedness. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under our credit agreement, or any replacement revolving credit facility in respect thereof, could elect to terminate their revolving commitments thereunder, cease making further loans and institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation.

Our debt instruments limit our flexibility in operating our business.

Our debt instruments contain various covenants that limit our and our restricted subsidiaries' ability to engage in specified types of transactions. A breach of any of these covenants could result in a default under our debt instruments. Any debt agreements we enter into in the future may further limit our ability to enter into certain types of transactions. In addition, certain of the covenants governing the ABL Facility and our existing notes restrict, among other things, our and our restricted subsidiaries' ability to: incur additional indebtedness or provide guarantees in respect of obligations of other persons; pay dividends on, repurchase stock from or make distributions to our stockholders, or make other restricted payments or make certain investments; prepay, redeem or repurchase debt; make loans, investments and capital expenditures; sell or otherwise dispose of certain assets; incur liens; engage in sale leaseback transactions; restrict dividends, loans or asset transfers from our subsidiaries; consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; enter into a new or different line of business; and enter into certain transactions with our affiliates.

In addition, the restrictive covenants in our ABL Facility require us, in certain circumstances, to maintain a specific fixed charge coverage ratio. Our ability to meet that financial ratio can be affected by events beyond our control, and there can be no assurance that we will meet it. A breach of this covenant could result in a default under such facilities. Moreover, the occurrence of a default under our ABL Facility could result in an event of default under our other indebtedness. Upon the occurrence of an event of default under our ABL Facility, the lenders could elect to declare all amounts outstanding under the ABL Facility to be immediately due and payable and terminate all commitments to extend further credit. Even if we can obtain new financing, it may not be on commercially reasonable terms, or terms that are acceptable to us. 22

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instruments. Any debt agreements we enter into in the future may further limit our ability to enter into certain types of transactions. In addition, certain of the covenants governing the ABL Facility and our existing notes restrict, among other things, our and our restricted subsidiaries' ability to: incur additional indebtedness or provide guarantees in respect of obligations of other persons; pay dividends on, repurchase stock from or make distributions to our stockholders, or make other restricted payments or make certain investments; prepay, redeem or repurchase debt; make loans, investments and capital expenditures; sell or otherwise dispose of certain assets; incur liens; engage in sale leaseback transactions; restrict dividends, loans or asset transfers from our subsidiaries; consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; enter into a new or different line of business; and enter into certain transactions with our affiliates.

Increases in interest rates, a downgrade of our credit ratings and/or instability in the credit market could negatively affect our financing costs and our ability to access capital.

We have exposure to future interest rates based on the variable rate debt under our ABL Facility and to the extent we raise additional debt in the capital markets to meet maturing debt obligations, to fund our capital expenditures, working capital needs and to finance future acquisitions. Daily working capital requirements are typically financed with operational cash flow and use of our ABL Facility. The interest rate on these borrowing arrangements is generally determined from a borrowing rate at the borrowing date plus a pre-set margin. Significant and sustained increases in market interest rates could materially increase our financing costs and negatively impact our reported results. We rely on access to bank and capital markets as sources of liquidity for cash requirements not satisfied by cash flows from operations. A downgrade in our credit ratings from the internationally recognized credit rating agencies could negatively affect our ability to access the bank and capital markets, especially in a time of uncertainty in either of those markets. A rating downgrade could also impact our ability to grow our business by substantially increasing the cost of, or limiting access to, capital.

Risks Related to Owning Our Common Stock

The price of our common stock may be volatile or may decline regardless of our operating performance, and you may suffer a decline in value.

The market price of our common stock is volatile and may be influenced by many factors, some of which are beyond our control, including: stock market volatility in response to macroeconomic and global events; if a substantial number of shares of our common stock becomes available for sale and are sold in a short period of time, the market price of our common stock could decline; the failure of securities analysts to cover our common stock, or changes in financial estimates by analysts; if one or more securities analysts downgrade our shares or if those analysts issue a sell recommendation or other unfavorable commentary or cease publishing reports about us or our business; changes in, or investors' perception of, the food and drug retail industry; the activities of competitors; future issuances and sales of our common stock, including in connection with acquisitions; the impact of our stock repurchase program; future sales of our common stock by our largest stockholder; our quarterly or annual earnings or those of other companies in our industry; the public's reaction to our press releases, our other public announcements and our filings with the SEC; and litigation involving us, our industry, or both.

~~Our largest stockholder is Cerberus, which may have conflicts of interest with other stockholders in the future.~~23

Cerberus beneficially owns in the aggregate approximately 26% of our common stock and Cerberus has certain governance rights pursuant to a Stockholders' Agreement. As a result, Cerberus may be able to influence (i) the election of our directors, (ii) our corporate and management policies and (iii) other matters submitted to our stockholders for approval. The interests of Cerberus may not coincide with the interests of other holders of our common stock. Additionally, Cerberus is in the business of making investments in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us. Cerberus may also pursue, for its own account, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as Cerberus continues to own a significant amount of the outstanding shares of our common stock, Cerberus will continue to be able to strongly influence our decisions.

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Our largest stockholder is Cerberus, which may have conflicts of interest with other stockholders in the future.

Cerberus beneficially owns in the aggregate approximately 30% of our common stock and Cerberus has certain governance rights pursuant to a Stockholders' Agreement. As a result, Cerberus may be able to influence (i) the election of our directors, (ii) our corporate and management policies and (iii) other matters submitted to our stockholders for approval. The interests of Cerberus may not coincide with the interests of other holders of our common stock. Additionally, Cerberus is in the business of making investments in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us. Cerberus may also pursue, for its own account, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as Cerberus continues to own a significant amount of the outstanding shares of our common stock, Cerberus will continue to be able to strongly influence our decisions.

Provisions in our charter documents and Delaware law may prevent attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders.

Provisions in our amended and restated certificate of incorporation, as amended ("certificate of incorporation"), and our amended and restated bylaws ("bylaws") may restrict the ability of stockholders to make changes in our governance that they may consider advantageous or desirable. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace members of our Board of Directors (the "Board"). Because our Board is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace members of our management team. Our certificate of incorporation authorizes our Board to issue up to 100,000,000 shares of preferred stock. The preferred stock may be issued in one or more series, the terms of which may be determined by our Board at the time of issuance or fixed by resolution without further action by the stockholders. These terms may include voting rights, preferences as to dividends and liquidation, conversion rights, redemption rights, and sinking fund provisions. The issuance of preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of our common stock. In addition, specific rights granted to holders of preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of our Board to issue preferred stock could delay, discourage, prevent, or make it more difficult or costly to acquire or effect a change in control, thereby preserving the current stockholders' control.

Our ability to pay dividends to our stockholders is restricted by applicable laws and regulations and requirements under certain of our securities and debt agreements, including the ABL Facility, and our existing notes.

Holders of our common stock are only entitled to receive such cash dividends as our Board, in its sole discretion, may declare out of funds legally available for such payments, including minimum capital requirements and limited by contractual obligations or covenants in any financing arrangements that we are currently a party to, including the ABL Facility and our existing notes, or any that we may enter into in the future. As a consequence of these various limitations and restrictions, we may not be able to make, or may have to reduce or eliminate at any time, the payment of dividends on our common stock.

Item 1B - Unresolved Staff Comments

None.

Item 1C - Cybersecurity

Risk Management and Strategy 

Our cybersecurity risk management processes for assessing and managing risks from cybersecurity threats include proactively identifying and detecting internal and external threats and vulnerabilities and mitigating, containing or eradicating attacks, as necessary. To ensure the highest levels of availability and integrity of critical business systems and services, we have designed a comprehensive risk reduction strategy. Our cybersecurity related risk management processes include assessing risk based on business criticality, data classification, disaster recovery rating, and security monitoring our operations (e.g., network, systems, retail stores, manufacturing plants and distribution centers) to determine where and how critical business operations could be impacted by a cyber incident. We maintain a risk repository and partner with technology and business teams to identify and remediate risk. Our cybersecurity team conducts regular risk assessments to analyze the likelihood of compromise and magnitude of harm which could potentially result from unauthorized access, use, disclosure, disruption, modification, or destruction of the Company's systems and data. We also perform risk assessments on our third-party suppliers. We make reasonable efforts to require third-party technology service providers to manage vulnerabilities in their environments to prevent the risk of impact to our business operations and enterprise network. We also undertake periodic National Institute of Standards and Technology ("NIST") Cybersecurity Framework assessments,

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eradicating attacks, as necessary. To ensure the highest levels of availability and integrity of critical business systems and services, we have designed a comprehensive risk reduction strategy. Our cybersecurity related risk management processes include assessing risk based on business criticality, data classification, disaster recovery rating, and security monitoring our operations (e.g., network, systems, retail stores, manufacturing plants and distribution centers) to determine where and how critical business operations could be impacted by a cyber incident. We maintain a risk repository and partner with technology and business teams to identify and remediate risk. Our cybersecurity team conducts regular risk assessments to analyze the likelihood of compromise and magnitude of harm which could potentially result from unauthorized access, use, disclosure, disruption, modification, or destruction of the Company's systems and data. We also perform risk assessments on our third-party suppliers. We make reasonable efforts to require third-party technology service providers to manage vulnerabilities in their environments to prevent the risk of impact to our business operations and enterprise network. We also undertake periodic National Institute of Standards and Technology ("NIST") Cybersecurity Framework assessments, conducted by a third party, to ensure our cybersecurity program is maturing in-line with industry and includes the key functions and capabilities to address key risk areas.

Collectively with our technology partners, we continuously (24/7) monitor our systems and assets to quickly respond to cybersecurity threats against our business. We conduct vulnerability scanning of our infrastructure and applications to identify risk and work with relevant stakeholders to proactively remediate risk where necessary. Additionally, we partner with multiple third-party managed security service providers ("MSSP") for enhanced monitoring of our information technology and data security environment and to perform proactive detection and investigation of suspicious or malicious activity within our network. We have defined processes with our third-party MSSPs for handling and escalating identified potential malicious activity within the Company’s information technology environment. MSSPs and internal stakeholders perform response actions when a security event is identified. Additionally, we meet regularly with our MSSPs to enhance processes and to ensure service level requirements are being met.

Information security risk events are managed by following our cyber incident response plan and executed by our cybersecurity team in coordination with stakeholders (including legal counsel) who review and assess materiality based on qualitative and quantitative factors. In the case of a risk event that has a broad organizational impact, the event will be escalated to the Company’s Corporate Crisis Management Team comprised of senior leadership who will execute a tailored response plan, activate notification procedures where applicable, and guided by legal counsel, coordinate communications with appropriate business partners, and manage the incidents through closure. We conduct annual tabletop exercises to test our response processes and incident management procedures. The outcomes from these exercises are used to drive continuous improvement in how we handle cybersecurity incidents.

Governance

Our Board is engaged in risk management and the oversight of Company-wide risks. To supplement its risk oversight function, our Board has delegated certain risk management responsibilities to the Audit and Risk Committee (the "Audit Committee") and the Technology Committee of the Board (the "Technology Committee").

As part of its responsibility related to enterprise-wide risk management, the Audit Committee reviews and discusses with management cybersecurity risks, how they are being addressed and the effectiveness of risk management policies and practices to help safeguard the Company's operations, financial systems, and data in an ever-evolving threat landscape. The internal audit team, in its quarterly compliance and risk assessment update to the Audit Committee, reports on its reviews of the Company's cybersecurity risk exposures, controls and management actions, as applicable. In addition to this regular reporting, significant cybersecurity incidents, risks or threats may also be escalated on an as-needed basis to the Audit Committee.

The Technology Committee is responsible for oversight of the Company's technology risk management, including but not limited to the Company's technology related policies, technology architecture, significant emerging technology issues and trends that may affect the Company, and practices and safeguards for information technology, cybersecurity, and data security. Our Chief Information Security Officer ("CISO") presents cybersecurity related topics quarterly to the Technology Committee, including reviews of key information security risk metrics and program maturity progress, and annually updates the Board on external assessments.

At the management level, our cybersecurity organization is led by the Company's CISO, who reports to the Company's Chief Technology and Transformation Officer. The CISO is responsible for all aspects of our cybersecurity program across the Company, which includes cybersecurity engineering and architecture, cybersecurity operations, incident response, threat intelligence, identity and access management, cybersecurity risk and compliance, and vulnerability management. Our CISO has served in leadership roles across the retail, financial services, and national security sectors. Before joining the Company, he was Deputy CISO at Capital One Financial Corp. and Deputy Assistant Secretary of Defense for Cyber Policy. He earned a BS in Mechanical Engineering from 25

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~~the~~technology ~~University~~issues ofand ~~Virginia,~~trends MSthat inmay ~~Telecommunications~~affect the Company, and ~~Computers~~practices ~~from~~and ~~George~~safeguards ~~Washington~~for ~~University~~information technology, cybersecurity, and ~~MBA~~data ~~from~~security. ~~the~~Our ~~Stanford~~Chief ~~Graduate~~Information ~~School~~Security ofOfficer ~~Business.~~("CISO") Hepresents ~~continues~~cybersecurity related topics quarterly to ~~serve~~the asTechnology aCommittee, ~~Colonel~~including inreviews ~~the~~of ~~United~~key ~~States~~information ~~Air~~security ~~Force~~risk ~~Reserve~~metrics asand aprogram ~~Senior~~maturity ~~Advisor~~progress, toand annually updates the ~~Commander~~Board ofon ~~USCYBERCOM~~external assessments.

At the management level, our cybersecurity organization is led by the Company's CISO, who reports to the Company's Chief Technology and Transformation Officer. The CISO is responsible for all aspects of our cybersecurity program across the Company, which includes cybersecurity engineering and architecture, cybersecurity operations, incident response, threat intelligence, identity and access management, cybersecurity risk and compliance, and vulnerability management. Our CISO has served in leadership roles across the banking and financial services sectors. Before joining the Company, he was the Head of Strategy and Governance for the Global Technology Chief Technology Office at JPMorgan. He earned a BS in Computer Science from Saint Anselm College and MBA in Finance from NYU's Stern School of Business. Effective April 26, 2026, the Company hired a new CISO to lead our cybersecurity organization.

Risks from Material Cybersecurity Threats

As of the date of this report, we have not identified any cybersecurity threats that have materially affected or are reasonably anticipated to have a material effect on the Company. Although we have not experienced cybersecurity incidents that are individually, or in the aggregate, material, we have experienced cyberattacks in the past, which have been mitigated by preventive, detective, and responsive measures put in place by the Company.

For a detailed discussion of the Company’s cybersecurity related risks, see "Item 1A. Risk Factors—Risks Related to Information Security, Cybersecurity, Data Privacy and ~~Evolving~~Artificial Intelligence Technologies."

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Item 2 - Properties

As of February 2228, ~~2025~~2026, we operated 2,~~270~~244 stores located in 3435 states and the District of Columbia as shown in the following table:

Location

Number of stores

Location

Number of stores

Location

Number of stores

Alaska

2524

Iowa

North Dakota

Arizona

~~136~~137

Louisiana

1615

~~Oregon~~Oklahoma

~~120~~1

Arkansas

Maine

~~Pennsylvania~~Oregon

50118

California

~~585~~584

Maryland

6766

~~Rhode Island~~Pennsylvania

850

Colorado

~~105~~94

Massachusetts

7675

~~South~~Rhode ~~Dakota~~Island

Connecticut

Montana

4039

~~Texas~~South Dakota

~~213~~3

Delaware

Nebraska

~~Utah~~Texas

6210

District of Columbia

Nevada

~~Vermont~~Utah

196

Hawaii

New Hampshire

2625

~~Virginia~~Vermont

3919

Idaho

New Jersey

8584

~~Washington~~Virginia

~~215~~39

Illinois

184

New Mexico

~~Wyoming~~Washington

15214

Indiana

New York

Wyoming

The following table summarizes our stores by size as of February 2228, ~~2025~~2026:

Square Footage	Number of stores	Percent of total
Less than 30,000	~~214~~206	9.42	%
30,000 to 50,000	~~777~~763	34.20	%
More than 50,000	1,~~279~~275	56.48	%
Total stores	2,~~270~~244	100.0	%

We own or ground-lease approximately 39% of our operating stores and 5251% of our industrial properties (distribution centers, warehouses and manufacturing plants).

Our corporate headquarters is located in Boise, Idaho. We own our headquarters. The premises is approximately 250,000 square feet in size. In addition to our corporate headquarters, we have corporate offices in Pleasanton, California, Phoenix, Arizona and Plano, Texas. We also operate global business capability centers in India and the Philippines. We believe our properties are well maintained, in good operating condition and suitable for operating our business.

Item 3 - 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 and other matters. Some of these claims or suits purport or may be determined to be class actions and/or seek substantial damages. It is the opinion of the Company's management that although the amount of liability with respect to certain of the matters described 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. See also the matters under the caption Legal Proceedings in "Part II—Item 8. Financial Statements and Supplementary Data—Note 13."~~

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business or overall financial condition. See also the matters under the caption Legal Proceedings in "Part II—Item 8. Financial Statements and Supplementary Data—Note 12."

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.

Environmental Matters

Our operations are subject to regulation under environmental laws, including those relating to waste management, air emissions and underground storage tanks. In addition, as an owner and operator of commercial real estate, we may be subject to liability under applicable environmental laws for clean-up of contamination at our facilities. SEC regulations require us to disclose certain environmental matters arising under federal, state, or local environmental provisions if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to SEC regulations, we use a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required.

Item 4 - Mine Safety Disclosures

Not applicable.

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PART II

Item 5 - Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information for Common Stock

The Company's Class A common stock began trading on the NYSE on June 26, 2020 under the symbol "ACI." Prior to that date, there was no public market for the Company's Class A common stock. As of April 1723, ~~2025~~2026, there were 6968 holders of record of our Class A common stock.

Performance Graph

The following graph shows a comparison of the total cumulative stockholder return on our Class A common stock with the total return for (i) the S&P 500 Index and (ii) the S&P 500 Retail Composite Index for the period from ~~June~~February 2627, ~~2020~~2021 ~~(the date our Class A common stock commenced trading on the NYSE)~~ through February 2228, ~~2025~~2026. The graph assumes an investment of $100 in our Class A common stock at market close on ~~June~~February 2627, ~~2020~~2021 and the reinvestment of dividends. The comparisons in the table are not intended to forecast or be indicative of possible future performance of our Class A common stock.

6/26/2020

2/27/2021

2/26/2022

2/25/2023

2/24/2024

2/22/2025

2/27/2021

2/26/2022

2/25/2023

2/24/2024

2/22/2025

2/28/2026

ACI

100.00

~~105~~187.9321

~~198~~175.3476

~~186~~187.2759

~~198~~184.8155

~~195~~165.5976

S&P 500

100.00

~~126~~116.66

~~145~~107.7241

~~137~~139.5590

~~179~~167.1555

~~214~~194.5615

S&P 500 Retail Composite

100.00

~~118~~110.9714

~~131~~90.0302

~~107~~130.0901

~~154~~157.6799

~~187~~166.9620

3129

Issuer Purchases of Equity Securities

OnShare ~~December 11, 2024, the Company announced that the Board has authorized a share~~ repurchase ~~program~~activity ofduring ~~up to $2.0 billion of~~ the ~~Company's~~fourth ~~common~~quarter stock. The share repurchase program could include open market repurchases, accelerated share repurchase programs, tender offers, block trades, potential privately negotiated transactions, or trading plans in compliance with the federal securities laws. During fiscal 2024, the Company repurchased 4.1 million shares of ~~common stock for a total of $82.5 million. The Company did not repurchase any shares of our Class A common stock during~~ fiscal ~~2023~~2025 ~~and~~was ~~fiscal~~as ~~2022.~~ follows:

Share repurchase activity during the fourth quarter of fiscal 2024 was as follows:


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3)	Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in millions) (2)(3)
November 30, 2025 through December 27, 2025	—	$	—	—	$	1,317.8
December 28, 2025 through January 24, 2026	7,294,291	16.63		7,294,291	1,317.8
January 25, 2026 through February 28, 2026	7,285,800	17.64		7,285,800	1,189.3
Total	14,580,091	$	17.13	14,580,091	$	1,189.3

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in millions)
December 1, 2024 through December 28, 2024	—	$	—	—	$	—
December 29, 2024 through January 25, 2025	2,221,000	19.95		2,221,000	1,955.7
January 26, 2025 through February 22, 2025	1,897,733	20.15		1,897,733	1,917.5
Total	4,118,733	$	20.04	4,118,733	$	1,917.5

(1) On October 14, 2025, the Company entered into an accelerated share repurchase agreement (the "ASR Agreement") with JPMorgan to repurchase $750 million of shares of the Company's common stock. Pursuant to the ASR Agreement, on October 15, 2025, the Company paid JPMorgan $750.0 million in cash and received an initial delivery of 35.4 million shares of common stock with a value equal to $600.0 million as of the date the ASR Agreement was executed, representing an estimated 80% of the total shares initially underlying the ASR Agreement. Final settlement of the ASR occurred during the fourth quarter of fiscal 2025, and the Company received a final delivery of 7.3 million shares on January 8, 2026. The Company repurchased a total of 42.7 million shares under the ASR Agreement at an average price of $17.57 per share, based on the average of the volume-weighted average share price of the Company's common stock on specified dates during the term of the ASR Agreement, less a discount.

~~Unregistered~~(2) ~~Sales~~Excludes excise tax on share repurchases in excess of ~~Equity~~issuances, ~~Securities~~which is included as part of the cost basis of the shares acquired.

~~During~~(3) ~~fiscal~~On ~~2023~~December ~~and~~11, ~~fiscal 2022~~2024, ~~certain~~the ~~holders~~Board ofauthorized ~~Convertible~~a ~~Preferred~~multi-year ~~Stock~~share ~~converted~~repurchase ~~approximately~~program ~~50,000~~of ~~and~~up ~~1,349,186~~to ~~shares~~$2.0 billion of ~~Convertible~~the ~~Preferred~~Company's ~~Stock,~~common ~~respectively,~~stock. ~~into~~The ~~approximately~~share ~~2,903,200~~repurchase ~~and~~program ~~78,339,120~~could ~~shares~~include ofopen ~~Class~~market ~~A common stock~~repurchases, ~~respectively.~~accelerated Asshare ofrepurchase ~~June~~programs, 17tender offers, ~~2023~~block trades, ~~100%~~potential ofprivately ~~the~~negotiated ~~originally~~transactions, ~~issued~~or ~~Convertible~~trading ~~Preferred~~plans ~~Stock~~in ~~had~~compliance ~~been~~with ~~converted~~the ~~into~~federal ~~Class~~securities Alaws. ~~common~~On ~~stock~~October ~~and~~14, no2025, ~~shares~~the ofCompany ~~Convertible~~announced ~~Preferred~~that ~~Stock~~the ~~are~~Board ~~outstanding.~~authorized ~~Each~~an ~~share~~increase ofto ~~Convertible~~the ~~Preferred~~share ~~Stock~~repurchase ~~was~~program ~~convertible~~from at$2.0 abillion ~~rate~~to of$2.75 58billion.~~064~~ ~~shares~~The of$750 ~~Class~~million AASR ~~common~~Agreement ~~stock~~paid ~~(with~~in cash ~~delivered~~on inOctober ~~lieu~~15, of2025 ~~any~~was ~~fractional~~reflected ~~shares~~in ofthe ~~Class~~dollar Avalue ~~common~~of ~~stock)~~shares ~~and~~that ~~were~~may ~~issued~~yet ~~from~~be purchased under the ~~Company's~~share ~~treasury~~repurchase ~~stock~~program ~~account.~~in ~~The~~the ~~shares~~third quarter of ~~Class~~fiscal A2025. ~~common~~On ~~stock~~April ~~were~~14, ~~issued~~2026, insubsequent ~~exchange~~to ~~for~~the ~~Convertible~~end ~~Preferred~~of ~~Stock~~fiscal in2025, ~~reliance~~the onBoard authorized an ~~exemption~~increase ~~from~~to the ~~registration~~remaining ~~requirements~~share repurchase authorization of ~~the~~$900 ~~Securities~~million, ~~Act~~resulting ofin ~~1933,~~a astotal ~~amended~~remaining ~~(the~~authorization ~~"Act"),~~of ~~under~~$2.0 ~~Section~~billion ~~3(a)(9)~~as of ~~the~~April ~~Act~~14, 2026.

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Item 6 - [Reserved]

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Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and related notes found in "Part II—Item 8. Financial Statements and Supplementary Data" in this Form 10-K, as well as "Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the fiscal year ended February 2422, ~~2024~~2025 filed with the SEC on April 2221, ~~2024~~2025, which provides comparisons of fiscal ~~2023~~2024 and fiscal ~~2022~~2023. This discussion contains forward-looking statements based upon current expectations that involve numerous risks and uncertainties. Our actual results may differ materially from those contained in any forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in the section entitled "Special Note Regarding Forward-Looking Statements" set forth in Part I and in Item 1A. "Risk Factors."

Our last three fiscal years consisted of the 5253 weeks ended February 2228, ~~2025~~2026 ("fiscal ~~2024~~2025"), the 52 weeks ended February 2422, ~~2024~~2025 ("fiscal ~~2023~~2024") and the 52 weeks ended February 2524, ~~2023~~2024 ("fiscal ~~2022~~2023"). In this Management's Discussion and Analysis of Financial Condition and Results of Operations of Albertsons Companies, Inc., the words "Albertsons," the "Company," "we," "us," "our" and "ours" refer to Albertsons Companies, Inc., together with its subsidiaries.

EXECUTIVE SUMMARY - FISCAL ~~2024~~2025 OVERVIEW

We are one of the largest food retailers in the United States, with 2,~~270~~244 stores across 3435 states and the District of Columbia as of February 2228, ~~2025~~2026. We operate ~~more~~22 ~~than 20~~ well known banners including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, ACME, Shaw's, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Markets and Balducci's Food Lovers Market, with approximately ~~285~~280,000 talented and dedicated employees, as of February 2228, ~~2025~~2026, who serve on average 36.25 million customers each week. Additionally, as of February 2228, ~~2025~~2026, we operated 1,~~728~~713 in-store pharmacies, 1,~~313~~240 in-store branded coffee shops, 405 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms.

During fiscal ~~2024~~2025, we continued to execute on our ~~Customers~~business ~~for Life~~ strategy, which is centered around driving customer growth and engagement through digital connection and loyalty, expanding our Media Collective, enhancing the customer value proposition, modernizing capabilities through technology and AI, and driving transformational productivity. We continue to invest in growth through our four digital platforms of eCommerce, Loyalty, Pharmacy & Health and the use of our mobile app in our stores. ~~Collectively,~~This ~~these~~integrated ~~digital~~ecosystem ~~platforms~~is ~~generate~~intended ~~deeper~~to ~~customer~~enhance ~~engagement, increase digital inventory and enrich~~ our ~~data~~ability to ~~accelerate~~innovate, ~~growth~~improve inmarketing ~~the~~efficiency, ~~Albertsons~~and ~~Media~~support ~~Collective~~revenue ~~("AMC").~~growth Weover ~~continue to invest significantly in AMC~~time, ~~building~~while ~~industry-leading~~strengthening ~~technologies~~customer toengagement ~~expand the reach of our brand~~ and ~~fuel one of the largest opportunities for reinvestment into our core business~~loyalty.

Identical sales, excluding fuel, increased 2.0% during fiscal ~~2024~~2025. WeOur ~~continued~~digital toinvestments ~~invest~~are incontinuing ~~new~~to ~~merchandising~~drive ~~initiatives and our loyalty offerings~~engagement, ~~and~~customer weacquisition ~~also deepened digital connection~~ and ~~engagement with our customers~~retention. During fiscal ~~2024~~2025, digital sales, which include Drive Up & Go curbside pickup and home delivery, increased 2421% compared to fiscal ~~2023,~~2024 as ~~the~~we ~~expansion~~continue ofto elevate our ~~services~~customer ~~and~~experience. ~~continued~~In ~~innovation~~loyalty, membership grew 12% to 51.2 million in ~~digital~~fiscal ~~offerings~~2025 ~~resonated~~compared ~~with~~to ~~customers.~~fiscal ~~Loyalty~~2024, ~~members~~while ~~increased~~program ~~15%~~enhancements and simplification continue to 45fuel deeper engagement through more frequent transactions and easier reward redemption.6 ~~million~~During fiscal 2025, in-store ~~fiscal~~pharmacy ~~2024~~sales ~~compared~~were toinfluenced ~~fiscal~~by ~~2023.~~evolving regulatory and reimbursement dynamics, while management actions remained focused on improving underlying profitability, operational efficiency and customer engagement

~~Customer~~Our ~~needs~~customer ~~for~~ value ~~have~~proposition ~~evolved~~focuses ~~due~~on tomaking ~~inflationary~~shopping ~~pressure~~more affordable, intuitive and sopersonalized ~~have~~across our ~~strategies~~markets. toBy ~~address~~combining ~~those~~data-driven ~~needs~~personalization ~~as we work~~ with ~~our~~disciplined ~~vendor~~price ~~partners to strategically invest in our customer value proposition in certain categories and markets. In Own Brands~~investments, we ~~continue~~aim to ~~focus~~deliver onclearer, ~~providing~~more ~~our~~consistent ~~customers~~value. ~~with~~Through ~~products~~targeted ~~they~~pricing ~~trust~~actions, ~~through~~improved ~~innovation~~loyalty-driven promotions and ~~offering~~continued ~~products~~Own atBrands ~~an attractive price point. During fiscal 2024~~innovation, we ~~launched~~are ~~279~~reinforcing ~~new~~trust ~~items,~~with ~~including~~customers ~~new~~who ~~items~~increasingly inexpect ~~our~~transparency ~~Open Nature cauliflower pizza line~~ and consistency in ~~our Signature Select ice cream assortment.~~

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Wetheir ~~endeavor~~weekly to use technology in everything we do and over the last few years we have invested strategically to build a best-in-class technology platform, with our core infrastructure in the Cloud and a modernized scalable networkshop. ~~This~~These ~~advanced~~efforts ~~technology~~are ~~platform,~~designed ~~on which we will continue~~ to ~~innovate,~~support ~~powers~~both ~~our~~value ~~eCommerce,~~perception ~~store, pharmacy, supply chain, merchandising~~ and ~~AMC~~longer-term ~~operations,~~margin ~~and will allow us to leverage emerging technologies to accelerate our operational transformation going forward~~sustainability.

~~Our~~Technology ~~capital~~and ~~allocation~~AI ~~strategy~~are ~~balances~~an ~~investing~~important ~~for~~component of our transformation and long-term growth strategy. In the ~~future,~~digital ~~strengthening~~customer ~~our~~experience, ~~balance~~AI-driven ~~sheet~~capabilities ~~and~~are ~~returns~~helping to ~~shareholders~~modernize ~~through~~the away ~~combination~~customers ofshop, ~~dividends~~delivering ~~and~~increased ~~opportunistic~~personalization ~~share~~intended ~~repurchases.~~to ~~Capital~~drive ~~expenditures~~engagement, ~~were~~basket ~~approximately~~size ~~$1,927~~and loyalty.~~5 million~~ ~~during~~Our ~~fiscal~~AI-enabled ~~2024,~~shopping ~~primarily~~assistant ~~including~~continues ~~the~~to ~~completion~~evolve ofas ~~127~~customer ~~remodels,~~adoption ~~the~~increases. ~~opening~~As part of 11our ~~new~~investments ~~stores~~in ~~and~~an ~~continued~~AI-enabled ~~investment~~supply inchain, ~~our~~we ~~digital~~have ~~and~~launched ~~technology~~a ~~platforms.~~proprietary ~~Capital~~forecasting ~~returns~~capability towe ~~shareholders~~call ~~during~~Gateway ~~fiscal~~to ~~2024~~enhance ~~included~~replenishment ~~$295.1~~performance ~~million~~and ofimprove ~~common~~efficiency ~~stock~~across ~~dividends~~promotional ~~($0~~center store SKUs.51 ~~per~~Execution ~~common~~of ~~share)~~these ~~and~~initiatives ~~the~~occurs ~~repurchase~~within ofa ~~4.1~~dynamic ~~million~~macroeconomic ~~shares~~and ofcompetitive ~~common~~environment ~~stock~~and ~~for~~requires acontinued ~~total~~investment, ofdiscipline ~~$82.5~~and ~~million~~adaptability.

~~Termination~~Our capital allocation strategy balances investing for the future, strengthening our balance sheet and returning capital to shareholders through a combination of dividends and opportunistic share repurchases. Capital expenditures were approximately $1,833.6 million during fiscal 2025, primarily including the ~~Merger~~completion of 94 remodels, the opening of nine new stores and continued investment in our digital and technology platforms. Capital returns to shareholders during fiscal 2025 included $322.7 million of common stock dividends ($0.60 per common share) and the investment of $1,492.5 million for the repurchase of common stock, inclusive of the $750 million ASR Agreement. On April 14, 2026, we increased the quarterly cash dividend from $0.15 per common share to $0.17 per common share. Also on April 14, 2026, we increased the remaining share repurchase authorization to $2.0 billion in total.

AsFiscal ~~previously~~2025 disclosed, on October 13, 2022, the Company, The Kroger Co. ("Kroger") and Kettle Merger Sub, Inc., a wholly owned subsidiary of Kroger ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub would have been merged with and into the Company (the "Merger"), with the Company surviving the Merger as the surviving corporation and a direct, wholly owned subsidiary of Kroger. On December 10, 2024, the United States District Court for the District of Oregon issued a preliminary injunction in the case Federal Trade Commission et al. v. The Kroger Company and Albertsons Companies, Inc. (Case No.: 3:24-cv-00347-AN), whereby the court enjoined the consummation of the Merger. In light of the preliminary injunction, and in accordance with Section 8.1(e) of the Merger Agreement, the Company exercised its right to terminate the Merger Agreement and sent a notice to Kroger on December 10, 2024 terminating the Merger Agreement. For additional information about the termination of the Merger Agreement and the Merger, see Part II—Item 8. Financial Statements and Supplementary Data—Note 2.highlights

~~Fiscal~~In ~~2024~~summary, our financial and operating highlights for fiscal 2025 include:

In summary, our financial and operating highlights for fiscal 2024 include:

•Identical sales increased 2.0%

•Digital sales increased 2421%

•Loyalty members increased 1512% to 4551.62 million

•Net income of $~~959~~217 million, or $0.40 per Class A common share, inclusive of the $600 million charge, net of tax, or $(1.6410) per Class A common share, related to the Opioid Settlement Framework (as defined herein)

•Adjusted net income of $1,~~382~~209 million, or $2.3418 per Class A common share

•Adjusted EBITDA of $43,~~005~~902 million

•Operating cash flows of $2,~~681~~367 million

•Continued modernization of our store fleet, including completing ~~127~~94 remodels and opening 11nine new stores

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Stores

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

Fiscal 2024

Fiscal 2023

Fiscal 2022

Fiscal 2025

Fiscal 2024

Fiscal 2023

Stores, beginning of period

2,~~269~~270

2,~~271~~269

2,~~276~~271

Opened

119

611

Closed

(1035)

(810)

(108)

Stores, end of period

2,~~270~~244

2,~~269~~270

2,~~271~~269

The following table summarizes our stores by size:

	Number of Stores		Percent of Total				Retail Square Feet (1)
Square Footage	February 2228,~~2025~~2026	February 2422,~~2024~~2025	February 2228,~~2025~~2026		February 2422,~~2024~~2025		February 2228,~~2025~~2026	February 2422,~~2024~~2025
Less than 30,000	~~214~~206	~~217~~214	9.42	%	9.64	%	4.97	4.9
30,000 to 50,000	~~777~~763	~~778~~777	34.20	%	34.32	%	32.60	32.6
More than 50,000	1,~~279~~275	1,~~274~~279	56.48	%	56.14	%	75.53	75.35
Total Stores	2,~~270~~244	2,~~269~~270	100.0	%	100.0	%	~~113~~112.0	~~112~~113.80

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

NON-GAAP FINANCIAL MEASURES

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RESULTS OF OPERATIONS

The following information summarizes the components of our Consolidated Statements of Operations for fiscal ~~2024~~2025 compared to fiscal ~~2023~~2024.

Summary of Consolidated Statements of Operations (dollars in millions, except per share data):

	Fiscal 2024				Fiscal 2023				Fiscal 2022
	Fiscal 2025				Fiscal 2024				Fiscal 2023
Net sales and other revenue	$	8083,~~390~~172.95	100.0	%	$	7980,~~237~~390.79	100.0	%	$	7779,~~649~~237.7	100.0	%
Cost of sales	5860,~~135~~565.38		72.38		5758,~~192~~135.03		72.23		5557,~~894~~192.10		72.02
Gross margin	22,~~255~~606.67		27.72		22,~~045~~255.76		27.87		2122,~~755~~045.67		2827.08
Selling and administrative expenses	2021,~~613~~891.73		2526.63		1920,~~932~~613.97		25.26		19,~~596~~932.09		25.2
Loss (gain) on property dispositions and impairment losses, net	95.8		0.1		43.9		—		(147.5)		(0.2)
(Gain) loss on property dispositions and impairment losses, net	(12.2)		—		95.8		0.1		43.9		—
Operating income	~~1,546~~727.16		2.0.9		21,~~068~~546.91		2.60		2,~~307~~068.19		32.06
Interest expense, net	~~459~~504.82		0.6		~~492~~459.18		0.6		~~404~~492.61		0.56
Other income, net	(4344.4)		—		(1243.24)		—		(3312.02)		—
Income before income taxes	~~1,129~~267.78		10.43		1,~~589~~129.07		21.04		1,~~935~~589.50		2.50
Income tax expense	~~171~~50.14		~~0.2~~—		~~293~~171.01		0.42		~~422~~293.0		0.54
Net income	$	~~958~~217.64	10.23	%	$	~~1,296~~958.06	1.62	%	$	1,~~513~~296.50	21.06	%
Basic net income per Class A common share	$	10.6540			$	21.2565			$	2.2925
Diluted net income per Class A common share	10.6440				21.2364				2.2723

Net Sales and Other Revenue

Net sales and other revenue increased $12,~~153~~781.26 million, or 13.5%, to $8083,~~390~~172.95 million in fiscal ~~2024~~2025 from $7980,~~237~~390.79 million in fiscal ~~2023~~2024. The increase in Net sales and other revenue in fiscal ~~2024~~2025 as compared to fiscal ~~2023~~2024 was driven by our 2.0% increase in identical sales, with growth in pharmacy sales being the primary driver of the identical sales increase, ~~while~~as well as the impact of the additional 53rd week. We also continued to grow our digital sales ~~also~~with ~~increased~~a 2421% increase during fiscal ~~2024~~2025. ~~The~~These ~~increase~~increases in Net sales and other revenue ~~was~~were partially offset by a net reduction in sales driven by store closures since the fourth quarter of fiscal 2024 and lower fuel sales. The components of the change in Net sales and other revenue for fiscal ~~2024~~2025 were as follows (in millions):

	Fiscal 2024
	Fiscal 2025
Net sales and other revenue for fiscal 2023	$	79,237.7
Identical sales increase of 2.0%	1,479.7
Decrease in fuel sales	(416.1)
Increase in sales due to new store openings, net of store closures	60.0
Other, net	29.6
Net sales and other revenue for fiscal 2024	$	80,390.9
Identical sales increase of 2.0%	1,569.0
Estimated impact of 53rd week	1,360.0
Decrease in fuel sales	(177.6)
Decrease in sales due to store closures, net of new store openings	(63.4)
Other, net	93.6
Net sales and other revenue for fiscal 2025	$	83,172.5

Identical Sales, Excluding Fuel

Identical sales include stores operating during the same period in both the current year and the prior year, comparing sales on a daily basis. Direct to consumer digital sales are included in identical sales, and fuel sales are excluded

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from identical sales. Acquired stores become identical on the one-year anniversary date of the acquisition. Identical sales results, on an actual basis, for the past three fiscal years were as follows:

Fiscal 2024

Fiscal 2023

Fiscal 2022

Fiscal 2025

Fiscal 2024

Fiscal 2023

Identical sales, excluding fuel

2.0%

32.0%

63.90%

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

	Fiscal 2024				Fiscal 2023
	Fiscal 2025				Fiscal 2024
	Amount(1)		% of Total		Amount(1)		% of Total
Non-perishables (2)	$	40,~~102~~624.8	4948.98	%	$	3940,~~977~~102.38	5049.59	%
Fresh (3)	2526,~~507~~024.32		31.73	%	25,~~442~~507.73		3231.17	%
Pharmacy	911,~~597~~414.29		1113.97	%	89,~~240~~597.02		1011.49	%
Fuel	3,~~980~~803.60		54.06	%	43,~~396~~980.76		5.50	%
Other (4)	1,~~203~~305.06		1.56	%	1,~~181~~203.0		1.5	%
Total	$	80,390.9	100.0	%	$	79,237.7	100.0	%
Total (5)	$	83,172.5	100.0	%	$	80,390.9	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 sales to third parties, commissions, rental income, media advertising revenue, ~~rental income~~ and other miscellaneous revenue.

(5) Fiscal 2025 includes an estimated $1.4 billion of incremental Net sales and other revenue due to the additional 53rd week.

Gross Margin

Gross margin rate decreased to 27.72% in fiscal ~~2024~~2025 compared to 27.87% in fiscal ~~2023~~2024. Excluding the impacts of fuel and LIFO, gross margin rate decreased 3459 basis points. ~~The~~This decrease in gross margin rate was primarily driven by strong growth in pharmacy sales, which carries an overall lower gross margin rate, and increases in delivery and handling costs related to the ~~24%~~continued growth in our digital sales. ~~and~~We ~~investment~~also continue to make incremental investments in our customer value proposition which were ~~the~~largely ~~primary~~funded ~~drivers of the decrease, partially offset~~ by the benefits from our productivity initiatives.

Selling and Administrative Expenses

Selling and administrative expenses increased to 2526.63% of Net sales and other revenue in fiscal ~~2024~~2025 compared to 25.26% in fiscal ~~2023~~2024. Excluding the ~~impact~~impacts of fuel and the Opioid Settlement Framework, Selling and administrative expenses as a percentage of Net sales and other revenue ~~increased~~decreased 3438 basis points during fiscal ~~2024~~2025 compared to fiscal ~~2023~~2024. The ~~increase~~decrease in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to ~~an increase in operating expenses related to~~ the ~~ongoing~~sales ~~development~~leveraging of ~~our~~employee ~~digital~~costs and ~~omnichannel~~lower ~~capabilities,~~ Merger-related costs, ~~increased~~partially ~~business~~offset ~~transformation~~by ~~costs,~~an ~~higher~~increase ~~employee~~in ~~costs~~business ~~and~~transformation ~~increased~~costs. ~~store~~The ~~occupancy~~benefits ~~costs~~from ~~including~~our ~~additional~~productivity ~~third-party~~initiatives ~~store~~continue ~~security~~to ~~services,~~ partially offset byincreasing ~~the~~wage ~~benefits~~rates ~~from~~and other inflationary pressures on our ~~productivity~~operating ~~initiatives~~expenses.

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

For fiscal ~~2024~~2025, net ~~loss~~gain on property dispositions and impairment losses was $9512.82 million, ~~primarily~~ driven by $~~104~~59.28 million of ~~asset~~net ~~impairments~~gains ~~including impairment losses of $60.9 million of retail store impairment losses, $39.8 million~~ primarily ~~related to equipment~~ from the ~~closing~~sale of ~~our~~real ~~micro-fulfillment~~estate ~~centers and $3.5 million related to certain technology~~ assets, partially offset by $828.4 million of ~~net~~retail ~~gains~~store impairment losses and $19.2 million from the ~~sale~~impairment and disposal of ~~real~~certain ~~estate~~technology assets. For fiscal ~~2023~~2024, net loss on property dispositions and impairment losses was $4395.98 million, primarily driven by ~~the~~$104.2 ~~impairment~~million ~~and disposal~~ of ~~certain~~asset ~~technology assets, partially offset by net gains from the sale of assets.~~

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impairments including impairment losses of $60.9 million of retail store impairment losses, $39.8 million primarily related to equipment from the closing of our micro-fulfillment centers and $3.5 million related to certain technology assets, partially offset by $8.4 million of net gains from the sale of real estate assets.

Interest Expense, Net

Interest expense, net was $~~459~~504.82 million in fiscal ~~2024~~2025 compared to $~~492~~459.18 million in fiscal ~~2023~~2024. The ~~decrease~~increase in Interest expense, net was primarily attributable to ~~lower~~higher average outstanding borrowings. ~~The weighted average interest rate was 5.6% during both fiscal 2024 and fiscal 2023, excluding amortization of debt discounts and deferred financing costs.~~

Other Income, Net

For fiscal ~~2024~~2025, Other income, net was $4344.4 million primarily driven by ~~unrealized gains from~~ non-~~operating investments and non-~~service cost components of net pension and post-retirement income~~. For fiscal 2023~~, ~~Other~~including ~~income, net was~~ $1229.24 million ~~primarily driven by non-service cost components~~ of ~~net~~ pension ~~and~~settlement ~~post-retirement~~ income, and realized gains from non-operating investments, ~~and~~partially ~~income~~offset ~~related~~by tounrealized ~~our~~losses ~~equity~~from ~~interest~~non-operating ~~and~~investments. ~~gain~~For onfiscal ~~sale~~2024, ofOther Elincome, ~~Rancho~~net ~~during~~was ~~fiscal~~$43.4 ~~2023,~~million ~~partially~~primarily ~~offset~~driven by ~~realized and~~ unrealized ~~losses~~gains from non-operating investments and non-service cost components of net pension and post-retirement income.

Income Taxes

Income tax expense was $~~171~~50.14 million in fiscal 2025, representing aan 1518.18% effective tax rate,. inIncome ~~fiscal~~tax ~~2024,~~expense ~~and~~was $~~293~~171.01 million in fiscal 2024, representing ana 1815.41% effective tax rate~~, in fiscal 2023~~. The ~~decrease~~increase in the effective income tax rate during fiscal ~~2024~~2025 compared to fiscal ~~2023~~2024 was primarily driven by the recognition of $81.0 million of discrete state income tax benefits related to ~~audit~~the ~~settlements,~~settlement ~~compared~~of toaudits aduring ~~reduction~~the ofthird aquarter ~~reserve~~ of ~~$49~~fiscal 2024.7 ~~million~~Refer ~~for~~to an"Part ~~uncertain~~II—Item ~~tax~~8. ~~position~~Financial ~~due~~Statements toand ~~the~~Supplementary ~~expiration~~Data—Note of9 a- ~~foreign~~Income ~~statute~~Taxes" ~~during~~for ~~the~~additional ~~first~~information ~~quarter~~on ofour ~~fiscal~~effective ~~2023.~~tax rate.

Net Income and Adjusted Net Income

Net income was $~~958~~217.64 million or $10.6440 per diluted share during fiscal ~~2024~~2025 compared to $~~1,296~~958.06 million or $21.2364 per diluted share during fiscal ~~2023~~2024. Fiscal ~~2024~~2025 included the $81599.08 million charge, net of tax, or $0(1.1410) per share ~~benefit~~loss related to ~~certain discrete state income tax benefits related to~~ the ~~settlement~~Opioid ofSettlement ~~audits,~~Framework. ~~and~~Fiscal ~~fiscal~~2024 ~~2023~~ included the $4981.70 million or $0.0914 per share benefit related to ~~the~~certain ~~reduction~~discrete instate ~~the~~income ~~reserve~~tax ~~for~~benefits anrelated ~~uncertain~~to ~~tax~~the ~~position~~settlement of audits. Adjusted net income was $1,~~382~~209.43 million, or $2.3418 per share, during fiscal ~~2024~~2025 compared to $1,~~693~~382.74 million, or $2.8834 per share, ~~(which~~during fiscal 2024. Adjusted net income per share during fiscal 2025 includes ~~the~~an estimated incremental $490.703 ~~million~~per ~~tax~~share ~~benefit~~related ~~discussed~~to ~~above),~~the ~~during~~extra week in fiscal ~~2023~~2025.

Adjusted EBITDA

Adjusted EBITDA was $43,~~004~~901.75 million, or 54.07% of Net sales and other revenue, during fiscal ~~2024~~2025 compared to $4,~~317~~004.7 million, or 5.40% of Net sales and other revenue, during fiscal ~~2023~~2024. The increase in Adjusted EBITDA reflects an estimated incremental $68 million related to the extra week in fiscal 2025.

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Reconciliation of Non-GAAP Measures

The following table reconciles Net income to Adjusted net income and adjusted EBITDA (in millions):

	Fiscal 2024		Fiscal 2023		Fiscal 2022
	Fiscal 2025		Fiscal 2024		Fiscal 2023
Net income	$	~~958~~217.64	$	~~1,296~~958.06	$	1,~~513~~296.50
Adjustments:
Loss (gain) on interest rate swaps and energy hedges, net (d)	0.9		(3.2)		(8.4)
Business transformation (1)(b)	153.7		105.2		45.1
Business transformation (1)(b)	105.2		45.1		78.3
Equity-based compensation expense (b)	95.5		106.2		104.5
Equity-based compensation expense (b)	106.2		104.5		138.3
(Gain) loss on property dispositions and impairment losses, net	(12.2)		95.8		43.9
Loss (gain) on property dispositions and impairment losses, net	95.8		43.9		(147.5)
LIFO expense (a)	66.0		28.6		52.0
LIFO expense (a)	28.6		52.0		268.0
Merger-related costs (2)(b)	84.1		254.8		180.6
Government-mandated incremental COVID-19 pandemic related pay (2)(b)	—		—		10.8
Certain legal and regulatory accruals and settlements, net (3)(b)	802.9		6.1		(6.7)
Merger-related costs (3)(b)	254.8		180.6		56.5
Amortization of debt discount and deferred financing costs (c)	23.5		16.1		15.5
Certain legal and regulatory accruals and settlements, net (b)	6.1		(6.7)		100.7
Amortization of intangible assets resulting from acquisitions (b)	48.2		47.9		48.6
Amortization of debt discount and deferred financing costs (c)	16.1		15.5		16.8
Miscellaneous adjustments (4)(e)	25.8		0.6		38.2
Amortization of intangible assets resulting from acquisitions (b)	47.9		48.6		50.9
State income tax benefits related to the settlement of audits	—		(81.0)		—
Combined Plan (4)(b)	—		—		(19.0)
Tax impact of adjustments to Adjusted net income	(295.6)		(156.5)		(124.0)
Miscellaneous adjustments (5)(f)	(0.3)		41.4		52.1
Adjusted net income	$	1,209.3	$	1,382.4	$	1,693.7
State income tax benefits related to the settlement of audits	(81.0)		—		—
Tax impact of adjustments to Adjusted net income	295.6		156.5		124.0
Tax impact of adjustments to Adjusted net income	(156.5)		(124.0)		(145.9)
State income tax benefits related to the settlement of audits	—		81.0		—
Adjusted net income	$	1,382.4	$	1,693.7	$	1,965.1
Income tax expense	50.4		171.1		293.0
Tax impact of adjustments to Adjusted net income	156.5		124.0		145.9
Amortization of debt discount and deferred financing costs (c)	(23.5)		(16.1)		(15.5)
State income tax benefits related to the settlement of audits	81.0		—		—
Interest expense, net	504.2		459.8		492.1
Income tax expense	171.1		293.0		422.0
Amortization of intangible assets resulting from acquisitions (b)	(48.2)		(47.9)		(48.6)
Amortization of debt discount and deferred financing costs (c)	(16.1)		(15.5)		(16.8)
Depreciation and amortization (d)	1,913.7		1,817.9		1,779.0
Interest expense, net	459.8		492.1		404.6
Adjusted EBITDA (5)	$	3,901.5	$	4,004.7	$	4,317.7
Amortization of intangible assets resulting from acquisitions (b)	(47.9)		(48.6)		(50.9)
Depreciation and amortization (e)	1,817.9		1,779.0		1,807.1
Adjusted EBITDA	$	4,004.7	$	4,317.7	$	4,677.0

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

	Fiscal 2024		Fiscal 2023		Fiscal 2022
	Fiscal 2025		Fiscal 2024		Fiscal 2023
Numerator:
Adjusted net income (6)	$	1,~~382~~209.43	$	1,~~693~~382.74	$	1,~~965~~693.17
Denominator:
Weighted average Class A common shares outstanding - diluted	~~583~~547.82		~~581~~583.18		~~534~~581.01
Adjustments:
Convertible preferred stock (7)	—		~~0.3~~—		420.73
Restricted stock units and awards (8)	68.52		6.45		56.94
Adjusted weighted average Class A common shares outstanding - diluted	~~590~~555.34		~~587~~590.83		~~582~~587.68
Adjusted net income per Class A common share - diluted	$	2.34	$	2.88	$	3.37
Adjusted net income per Class A common share - diluted (9)	$	2.18	$	2.34	$	2.88

	Fiscal 2024		Fiscal 2023		Fiscal 2022
	Fiscal 2025		Fiscal 2024		Fiscal 2023
Net income per Class A common share - diluted	$	10.6440	$	21.2364	$	2.2723
Convertible Preferred Stock (7)	—		—		0.36
Non-GAAP adjustments (10)	1.81		0.73		0.68
Non-GAAP adjustments (9)	0.73		0.68		0.78
Restricted stock units and awards (8)	(0.03)		(0.03)		(0.03)
Restricted stock units and awards (8)	(0.03)		(0.03)		(0.04)
Adjusted net income per Class A common share - diluted (9)	$	2.18	$	2.34	$	2.88
Adjusted net income per Class A common share - diluted	$	2.34	$	2.88	$	3.37

(1) ~~Includes~~Primarily includes costs associated with third-party consulting fees related to our ~~Customers~~business ~~for~~transformation ~~Life~~ strategy and ~~employee termination~~ costs related to ~~our~~employee ~~reduction in workforce during the fourth quarter of fiscal 2024~~terminations, as follows (see table below):

	Fiscal 2024		Fiscal 2023		Fiscal 2022
	Fiscal 2025		Fiscal 2024		Fiscal 2023
Third-party consulting fees	$	71107.71	$	4571.17	$	7845.31
Employee termination costs	33.5		—		—
Employee termination and other related costs	46.6		33.5		—
Total Business transformation	$	~~105~~153.27	$	45105.12	$	7845.31

(2) ~~Represents~~Fiscal ~~incremental~~2025 ~~COVID-19~~primarily ~~related~~relates ~~pay~~to ~~legislatively~~litigation ~~required~~costs inand ~~certain~~retention ~~municipalities~~program inexpense ~~which~~related weto ~~operate~~the terminated merger. Fiscal 2024 and fiscal 2023 primarily include third-party legal and advisor fees and retention program expense related to the merger.

(3) ~~Primarily~~Includes ~~relates~~the to$773.8 ~~third-party~~million ~~legal~~charge ~~and~~in ~~advisor~~the ~~fees~~fourth ~~and~~quarter ~~retention~~of ~~program~~fiscal ~~expense~~2025 related to the ~~Merger~~Opioid ~~and~~Settlement ~~costs~~Framework. inRefer ~~connection~~to ~~with~~"Part ~~our~~II—Item ~~previously-announced~~8. ~~Board-led~~Financial ~~review~~Statements ofand ~~potential~~Supplementary ~~strategic~~Data—Note ~~alternatives~~12" for additional information.

(4) ~~Related~~Miscellaneous toadjustments ~~the~~include ~~Combined Plan during~~ the ~~second~~following ~~quarter~~(see oftable ~~fiscal 2022. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 11" for more information.~~ below):


	Fiscal 2025		Fiscal 2024		Fiscal 2023
Closed stores and surplus properties	$	45.1	$	15.9	$	19.4
Pension settlement (income) loss	(26.8)		4.7		—
Net realized and unrealized (gain) loss on non-operating investments	(0.2)		(40.1)		8.6

Non-cash lease-related adjustments	7.6		4.5		4.2
Other (i)	0.1		15.6		6.0
Total Miscellaneous adjustments	$	25.8	$	0.6	$	38.2

(i) Primarily includes adjustments for unconsolidated equity investments and other costs not considered in our core performance.

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(5) ~~Miscellaneous~~Fiscal ~~adjustments~~2025 ~~include~~includes an estimated $68 million of incremental Adjusted EBITDA due to the ~~following~~impact ~~(see~~of ~~table~~the ~~below):~~additional 53rd week.

	Fiscal 2024		Fiscal 2023		Fiscal 2022
Non-cash lease-related adjustments	$	4.5	$	4.2	$	5.6
Lease and lease-related costs for surplus and closed stores	15.9		19.4		22.7
Net realized and unrealized (gain) loss on non-operating investments	(40.1)		8.6		25.2
Other (i)	19.4		9.2		(1.4)
Total Miscellaneous adjustments	$	(0.3)	$	41.4	$	52.1

(i) Primarily includes adjustments for pension settlement loss, unconsolidated equity investments and other costs not considered in our core performance.

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

(7) Represents the conversion of Convertible Preferred Stock to the fully outstanding as-converted Class A common shares as of the end of each respective period, for periods in which the Convertible Preferred Stock is antidilutive under GAAP. ~~Fiscal 2022 reflects the impact of the Special Dividend (as defined below) that is attributable to the holders of Convertible Preferred Stock on an as-converted basis.~~

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

(9) ~~Reflects~~Adjusted ~~the~~net income per share ~~impact~~for offiscal ~~Non-GAAP~~2025 ~~adjustments~~includes ~~for~~an ~~each~~estimated ~~period~~incremental $0.03 ~~See~~per ~~the~~share ~~reconciliation~~due ~~of Net income~~ to ~~Adjusted~~the ~~net~~impact ~~income~~of ~~above~~the ~~for~~additional ~~further~~53rd ~~details~~week.

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

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

(a) Cost of sales

(b) Selling and administrative expenses

(d) ~~Loss~~Depreciation ~~(gain) on interest rate swaps~~ and ~~energy hedges, net~~amortization:

	Fiscal 2024		Fiscal 2023		Fiscal 2022
	Fiscal 2025		Fiscal 2024		Fiscal 2023
Cost of sales	$	1202.09	$	(2181.2)4	$	(4169.8)0
Selling and administrative expenses	~~(0.~~1),710.8		(1,636.0)5		41,610.80
Other income, net	—		—		(8.4)
Total Depreciation and amortization	$	1,913.7	$	1,817.9	$	1,779.0
Total Loss (gain) on interest rate swaps and energy hedges, net	$	0.9	$	(3.2)	$	(8.4)

(e) ~~Depreciation~~Miscellaneous ~~and amortization~~adjustments:

	Fiscal 2024		Fiscal 2023		Fiscal 2022
	Fiscal 2025		Fiscal 2024		Fiscal 2023
Cost of sales	$	181.4	$	169.0	$	162.7
Cost of Sales	$	(3.3)	$	1.0	$	(2.2)
Selling and administrative expenses	~~1,636~~56.50		~~1,610~~35.09		~~1,644~~33.47
Total Depreciation and amortization	$	1,817.9	$	1,779.0	$	1,807.1
Other income, net	(26.9)		(36.3)		6.7
Total Miscellaneous adjustments	$	25.8	$	0.6	$	38.2

(f) Miscellaneous adjustments:

	Fiscal 2024		Fiscal 2023		Fiscal 2022
Selling and administrative expenses	$	36.0	$	34.7	$	28.9
Other income, net	(36.3)		6.7		23.2
Total Miscellaneous adjustments	$	(0.3)	$	41.4	$	52.1

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LIQUIDITY AND FINANCIAL RESOURCES

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

February 22,2025

February 24,2024

February 25,2023

February 28,2026

February 22,2025

February 24,2024

Cash and cash equivalents and restricted cash at end of period

~~297~~203.90

~~193~~297.29

~~463~~193.82

Cash flows provided by operating activities

2,~~680~~366.67

2,~~659~~680.56

2,~~853~~659.95

Cash flows used in investing activities

(1,~~891~~679.84)

(1,~~746~~891.78)

(1,~~977~~746.37)

Cash flows used in financing activities

(~~684~~782.12)

(~~1,183~~684.41)

(31,~~365~~183.4)

Net Cash Provided By Operating Activities

Net cash provided by operating activities was $2,~~680~~366.67 million during fiscal ~~2024~~2025 compared to $2,~~659~~680.56 million during fiscal ~~2023~~2024. The ~~increase~~decrease in cash flow from operating activities during fiscal ~~2024~~2025 compared to fiscal ~~2023~~2024 was ~~due~~primarily todriven ~~less~~by ~~cash~~a ~~paid~~decrease ~~for~~in ~~taxes,~~Adjusted ~~legal~~EBITDA ~~settlements,~~and ~~multiemployer~~increases ~~pension~~in ~~plan~~cash ~~withdrawal~~paid ~~liabilities~~for income and ~~interest~~indirect taxes, ~~partially~~insurance ~~offset~~claims, byoperating aleases ~~decrease~~and inbusiness ~~Adjusted~~transformation ~~EBITDA~~costs, ~~higher~~as ~~Merger-related~~well ~~costs,~~as changes in working capital ~~and~~related ~~an increase in contributions to our defined benefit pension plans during fiscal 2024.~~

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to inventory, accounts payable and other prepaids. These decreases in cash flow from operating activities were partially offset by lower Merger-related costs and contributions to our defined benefit pension plans.

Net Cash Used In Investing Activities

Net cash used in investing activities during fiscal ~~2024~~2025 was $1,~~891~~679.84 million primarily due to payments for property, equipment and intangibles of $1,~~927~~833.56 million, partially offset by proceeds from the sale of assets of $31109.45 million, primarily related to real estate. Payments for property, equipment and intangibles included the completion of ~~127~~94 remodels, the opening of 11nine new stores and continued investment in our digital and technology platforms.

Net cash used in investing activities during fiscal ~~2023~~2024 was $1,~~746~~891.78 million primarily due to payments for property, equipment and intangibles of $21,~~036~~927.65 million, partially offset by proceeds from the sale of assets of $~~217~~31.64 million, ~~which~~primarily ~~includes $166.1 million~~ related to ~~the~~real ~~sale of our equity interest in El Rancho during fiscal 2023~~estate. Payments for property, equipment and intangibles included the completion of ~~150~~127 remodels, the opening of ~~six~~11 new stores and continued investments in our digital and technology platforms.

In fiscal ~~2025~~2026, we expect capital expenditures to be in the range of $12.70 billion to $12.92 billion.

Net Cash Used In Financing Activities

Net cash used in financing activities was $~~684~~782.12 million in fiscal ~~2024~~2025 primarily consisting of the ~~$250.0 million~~repurchase ~~repayment~~ of ~~the~~common ~~asset-based loan facility (as amended~~stock, ~~the "ABL Facility"),~~ dividends paid on our Class A common stock, ~~the~~payments ~~repurchase~~for ofdebt ~~common~~financing ~~stock~~costs, payments of obligations under finance leases and tax withholding payments on vesting of RSUs, partially offset by $504,200.0 million of issuances and subsequent $3,450.0 million of redemptions of senior unsecured notes (as further discussed below under the caption Debt Management). Net proceeds from the issuance of long-term debt ~~under~~also includes $425.0 million from the asset-based loan facility (as amended, the "ABL Facility."), including the $750 million of borrowings related to the ASR Agreement and subsequent repayment using proceeds from the issuance of senior unsecured notes in fiscal 2025.

Net cash used in financing activities was $~~1,183~~684.41 million in fiscal ~~2023~~2024 primarily consisting of the $~~950~~250.0 million ~~partial~~ repayment of the ABL Facility, dividends paid on our Class A common stock, the repurchase of common stock, payments of obligations under finance leases and tax withholding payments on vesting of RSUs, partially offset by $50.0 million of proceeds from the issuance of debt under the ABL Facility.

43See "Part II—Item 8. Financial Statements and Supplementary Data—Note 5 and Note 7" for additional information.

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finance leases and tax withholding payments on vesting of RSUs, partially offset by $150.0 million of proceeds from the issuance of debt under the ABL Facility.

See "Part II—Item 8. Financial Statements and Supplementary Data—Note 6 and Note 8" for additional information.

Debt Management

Total debt, including both the current and long-term portions of finance lease obligations, net of debt discounts and deferred financing costs, ~~decreased~~increased $~~248~~1,126.5 million to $78,~~820~~946.16 million as of the end of fiscal ~~2024~~2025 compared to $87,~~068~~820.61 million as of the end of fiscal ~~2023~~2024.

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Outstanding debt, including current maturities, net of debt discounts and deferred financing costs, principally consisted of (in millions):

	February 22,2025
	February 28,2026
Senior Unsecured Notes, New Albertson's L.P. Notes and Safeway Inc. Notes	$	78,~~377~~094.57
Finance lease obligations	427.9
ABL Facility	425.0
Other financing obligations	14.7
Finance lease obligations	412.9
Total debt, including finance leases	$	7,820.1
Other financing obligations	14.0
Total debt, including finance leases	$	8,946.6

~~During~~As ~~fiscal~~of ~~2024~~February 28, we2026, ~~repaid~~there was $~~200~~425.0 million, ~~net,~~outstanding ofunder the ABL Facility. Asand total availability of ~~February 22~~$3,562.3 million ~~2025,~~(net weof ~~had~~letter noof ~~borrowings~~credit ~~outstanding~~usage). ~~under~~On August 27, 2025, the existing ABL Facility was amended and ~~total~~restated ~~availability~~to, among other things, extend the maturity date of $3the facility to August 27,~~972~~ 2030.~~6 million~~ ~~(net~~The new ABL Facility has an interest rate of ~~letter~~term SOFR plus a margin ranging from 1.25% to 1.50% and also provides for a letters of credit ~~usage)~~sub-facility of $1,500.0 million.

On ~~March~~February 112, ~~2025~~2026, ~~subsequent~~the toCompany ~~the~~and ~~end~~certain of ~~fiscal~~its ~~2024,~~subsidiaries we(the "Subsidiary Co-Issuers") completed the issuance of $~~600~~1,200.0 million in aggregate principal amount of 65.~~250~~625% senior unsecured notes due March 1531, ~~2033~~2032 (the "~~2033~~2032 Notes") and $900.0 million in aggregate principal amount of additional 5.750% 2034 Notes, as defined below (the "Additional 2034 Notes" and together with the 2032 Notes, the "New Notes"). The Additional 2034 Notes were issued as "additional securities" under the indenture governing the outstanding 2034 Notes. The Additional 2034 Notes are treated as a single class with the outstanding 2034 Notes for all purposes and have the same terms as those of the outstanding 2034 Notes. The New Notes are guaranteed on a senior unsecured basis by all of our existing and future direct and indirect domestic subsidiaries (other than the Subsidiary Co-Issuers) that are obligors under the ABL Facility. Interest on the ~~2033~~2032 Notes is payable semi-annually in arrears on ~~March~~January 15 and ~~September~~July 15 of each year, with the first payment commencing on ~~September~~July 15, ~~2025~~2026. OnProceeds ~~March 17, 2025, subsequent to the end of fiscal 2024, proceeds~~ from the ~~2033~~New Notes, together with approximately $520.67 million of cash on hand, were used to (i) redeem in full the $~~600~~1,350.0 million outstanding of our 74.~~500~~625% senior unsecured notes due ~~March~~January 15, ~~2026~~2027 ~~and~~(the "2027 Notes Refinancing"), (ii) redeem in full the $750.0 million outstanding of our 5.875% senior unsecured notes due February 15, 2028 (the "2028 Notes Refinancing" and together with the 2027 Notes Refinancing, the “Refinancing”); and (iii) pay fees and expenses related to the Refinancing and the issuance of the ~~2033~~New Notes.

~~During~~On ~~fiscal~~November ~~2024~~10, 2025, the Company and the Subsidiary Co-Issuers completed the issuance of $700.0 million in aggregate principal amount of 5.500% senior unsecured notes due March 31, 2031 (the "2031 Notes") and $800.0 million in aggregate principal amount of 5.750% senior unsecured notes due March 31, 2034 (the "2034 Notes" and together with the 2031 Notes, the "Notes"). The Notes are guaranteed on a senior unsecured basis by all of our existing and future direct and indirect domestic subsidiaries (other than the Subsidiary Co-Issuers) that are obligors under the ABL Facility. Interest on the Notes is payable semi-annually in arrears on May 15 and November 15 of each year, with the first payment commencing on May 15, 2026. During fiscal ~~2023~~2025, ~~there~~the proceeds from the Notes were noused ~~financial~~to ~~maintenance~~(i) ~~covenants~~redeem in ~~effect~~full the $750.0 million outstanding of our 3.250% senior unsecured notes due March 15, 2026 (the "November Refinancing"); (ii) repay a portion of the borrowings under the ABL Facility; ~~because~~and (iii) pay fees and expenses related to the ~~conditions~~November ~~had~~Refinancing ~~not~~and ~~been~~the ~~met.~~issuance of the Notes.

~~See~~On ~~"Part~~March ~~II—Item~~11, 8.2025, ~~Financial~~the ~~Statements~~Company and ~~Supplementary~~the ~~Data—Note~~Subsidiary Co-Issuers completed the issuance of $600.0 million in aggregate principal amount of 6.250% senior unsecured notes due March 15, 2033 (the "2033 ~~for~~Notes"). ~~additional~~The ~~information~~2033 Notes are guaranteed on a senior unsecured basis by all of our existing and future direct and indirect domestic subsidiaries (other than the Subsidiary Co-Issuers) that are obligors under the ABL Facility. Interest on the 2033 Notes is payable semi-annually in arrears on March 15 and September 15 of each year, and the first payment commenced on September 15, 2025. Proceeds from the 2033 Notes, together with approximately $5.7 million of cash on hand, were used to (i) redeem in full the $600.0 million outstanding of our 7.500% senior unsecured notes

~~Dividends~~42

We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock. Cash dividends paid on our Class A common stock were $295.1 million ($0.51 per common share), $276.2 million ($0.48 per common share) and $255.1 million ($0.48 per common share) during fiscal 2024, fiscal 2023 and fiscal 2022, respectively. On December 11, 2024, the Board increased the quarterly cash dividend 25% from $0.12 per common share to $0.15 per common share. On April 15, 2025, we announced the next quarterly dividend payment of $0.15 per share of Class A common stock to be paid on May 9, 2025 to stockholders of record as of the close of business on April 25, 2025.

During the first quarter of fiscal 2023, the conversion of the remaining Convertible Preferred Stock was completed. The holders of Convertible Preferred Stock were 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 addition, the holders of Convertible Preferred

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~~Stock~~due ~~participated~~March in15, ~~cash~~2026 ~~dividends~~(the ~~that~~"March weRefinancing") and (ii) pay onfees ~~our~~and ~~common~~expenses ~~stock~~related to the ~~extent~~March ~~that~~Refinancing ~~such cash dividends exceed $206.25 million per fiscal year~~ and ~~shares of Convertible Preferred Stock remain outstanding as of~~ the ~~applicable~~issuance ~~record date to participate in such dividends. Cash dividends paid to holders~~ of the ~~Convertible~~2033 ~~Preferred Stock were $0~~Notes.~~8 million and $65.3 million during fiscal 2023 and fiscal 2022, respectively.~~

OnDuring ~~October~~fiscal ~~13,~~2025 ~~2022,~~and wefiscal ~~declared the Special Dividend~~2024, ~~payable~~there towere ~~stockholders~~no offinancial ~~record,~~maintenance ~~including~~covenants ~~holders~~in ofeffect ~~Series~~under ~~A preferred stock on an as-converted basis, as of~~ the ~~close~~ABL ofFacility ~~business~~because ~~on October 24, 2022. On January 20, 2023,~~ the ~~Special~~conditions ~~Dividend~~had ofnot ~~$3,916.9 million~~been ~~was paid~~met.

See "Part II—Item 8. Financial Statements and Supplementary Data—Note 5" for additional information.

Dividends

We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock. Cash dividends paid on our Class A common stock were $322.7 million ($0.60 per common share), $295.1 million ($0.51 per common share) and $276.2 million ($0.48 per common share) during fiscal 2025, fiscal 2024 and fiscal 2023, respectively. On April 14, 2026 subsequent to the end of fiscal 2025, we announced that the Board of Directors (the "Board") increased the quarterly cash dividend 13% from $0.15 per common share to $0.17 per common share. Also on April 14, 2026, we announced the next quarterly dividend payment of $0.17 per share of Class A common stock to be paid on May 8, 2026 to stockholders of record as of the close of business on April 24, 2026.

Common Stock Repurchase Program

On ~~December~~October 1114, ~~2024~~2025, the Board authorized aan increase to the share repurchase program offrom up$2.0 billion to $2.075 billion of our common stock. The share repurchase program could include open market repurchases, accelerated share repurchase programs, tender offers, block trades, potential privately negotiated transactions, or trading plans in compliance with the federal securities laws. ~~Subsequent~~Also on October 14, 2025, we entered into an accelerated share repurchase agreement (the "ASR Agreement") with JPMorgan Chase Bank, National Association ("JPMorgan") to repurchase $750 million of shares of our common stock. The ASR Agreement was funded with $750.0 million of borrowings under the ~~Board~~ABL ~~authorization~~Facility. Pursuant to the ASR Agreement, on October 15, 2025, we paid JPMorgan $750.0 million in cash and received an initial delivery of 35.4 million shares of common stock with a value equal to $600.0 million as of the date the ASR Agreement was executed, representing an estimated 80% of the total shares initially underlying the ASR Agreement. Final settlement of the ASR Agreement occurred during the fourth quarter of fiscal ~~2024~~2025, weand ~~repurchased~~the anCompany ~~aggregate~~received a final delivery of 47.1 3 million shares ofon ~~our~~January ~~common~~8, ~~stock~~2026. ~~for~~The Company repurchased a total of ~~$82~~42.5 7 million ~~pursuant~~shares tounder ~~such~~the ~~share~~ASR ~~repurchase~~Agreement ~~authorization~~at an average price of $17.57 Weper ~~did~~share, ~~not~~based ~~repurchase~~on ~~any~~the ~~shares~~average of ~~our~~the volume-weighted average share price of the Company's common stock on specified dates during ~~fiscal~~the ~~2023~~term ~~and~~of ~~fiscal~~the ~~2022.~~ASR Agreement, less a discount.

During fiscal 2025 and fiscal 2024, we repurchased an aggregate of 78.7 million shares and 4.1 million shares of our common stock for a total of $1,492.5 million and $82.5 million, respectively. We did not repurchase any shares of our common stock during fiscal 2023. On April 14, 2026, the Board authorized an increase to the remaining share repurchase authorization of $900 million, resulting in a total remaining authorization of $2.0 billion as of April 14, 2026.

Liquidity and Factors Affecting Liquidity

Based on current operating trends, we believe that we have significant sources of cash to meet our liquidity needs for the next 12 months and for the foreseeable future, including cash on hand, cash flows from operating activities and other sources of liquidity, including the ABL Facility. We estimate our liquidity needs over the next 12 months to be ~~approximately~~in the range of $56.50 billion, ~~which~~to ~~includes~~$6.5 ~~anticipated~~billion. ~~requirements~~This ~~for~~includes ~~incremental~~$425.0 ~~working~~million ~~capital,~~related ~~capital~~to ~~expenditures,~~the ~~pension~~outstanding ~~obligations,~~borrowings ~~interest~~under ~~payments,~~our ~~quarterly~~ABL ~~dividends~~Facility onfor ~~Class~~which Awe ~~common stock~~may, ~~common~~at ~~stock~~our ~~repurchases~~discretion, ~~operating~~elect ~~leases~~to ~~and~~pay ~~finance~~all ~~leases.~~or Ina ~~addition,~~portion weof ~~may~~the ~~enter~~outstanding ~~into~~balance ~~refinancing~~within ~~and~~the ~~sale~~next ~~leaseback~~12 ~~transactions~~months, ~~from~~and ~~time~~anticipated torequirements ~~time.~~for Weworking ~~believe~~capital, wecapital ~~have~~expenditures, ~~adequate~~pension ~~cash~~obligations, ~~flow~~interest topayments ~~continue~~and toscheduled ~~maintain~~principal ~~our~~payments ~~current~~of debt, ~~ratings~~operating ~~and~~leases, tofinance ~~respond~~leases, ~~effectively~~legal ~~to competitive conditions.~~

~~The table below presents our material cash requirements as of February 22, 2025 (in millions):~~43

	Payments Due Per Fiscal Year (1)
	Total		2025		2026-2027		2028-2029		Thereafter
Long-term debt (2)	$	7,452.4	$	0.6	$	4,416.7	$	2,521.9	$	513.2
Estimated interest on long-term debt (3)	1,297.5		389.1		604.3		264.0		40.1
Operating leases (4)	8,878.5		1,010.6		2,011.4		1,661.7		4,194.8
Finance leases (4)	623.1		81.3		145.7		109.4		286.7
Other obligations (5)	1,780.3		397.3		503.0		234.5		645.5
Purchase obligations (6)	481.9		254.0		148.4		37.4		42.1
Total contractual obligations	$	20,513.7	$	2,132.9	$	7,829.5	$	4,828.9	$	5,722.4

(1) The cash requirements table excludes funding of pension and other postretirement benefit obligations, which totaled $91.3 million in fiscal 2024 and is expected to total approximately $57 million in fiscal 2025. This table also excludes recurring contributions under various multiemployer pension plans, which totaled $547.7 million in fiscal 2024 and is expected to total approximately $560 million in fiscal 2025.

(2) Long-term debt amounts exclude any debt discounts and deferred financing costs. See "Part II—Item 8. Financial Statements and Supplementary Data—Note 6" for additional information.

(3) Amounts include contractual interest payments using the stated fixed interest rate or the variable interest rate in effect as of February 22, 2025. See "Part II—Item 8. Financial Statements and Supplementary Data—Note 6" for additional information.

(4) Represents the minimum rents payable under operating and finance leases, excluding common area maintenance, insurance or tax payments, for which we are obligated.

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~~(5) Consists of self-insurance liabilities~~settlements, ~~which~~quarterly ~~have~~dividends ~~not~~on ~~been~~Class ~~reduced~~A bycommon ~~insurance-related~~stock ~~receivables, as well as payment obligations related to the Combined Plan. The table excludes the unfunded pension~~ and ~~postretirement~~common ~~benefit~~stock ~~obligation of $170~~repurchases.3 ~~million.~~In ~~The~~addition, ~~potential~~we ~~settlement~~may ~~payments~~enter ~~related~~into torefinancing ~~unrecognized~~and ~~tax~~sale ~~benefits~~leaseback ~~have~~transactions ~~been excluded~~ from ~~the~~time ~~contractual~~to ~~obligations~~time. ~~table~~We ~~because~~believe awe ~~reasonably~~have ~~reliable~~adequate ~~estimate~~cash offlow ~~the~~to ~~timing~~continue ofto ~~future~~maintain ~~tax~~our ~~settlements~~current ~~cannot~~debt beratings ~~determined. Also excludes deferred tax liabilities~~ and ~~certain~~to ~~other~~respond ~~deferred~~effectively ~~liabilities~~to ~~that~~competitive ~~will not be settled in cash~~conditions.

~~(6)~~The ~~Purchase~~table ~~obligations~~below ~~include~~presents ~~various~~our ~~obligations~~material ~~that~~cash ~~have~~requirements ~~specified~~as ~~purchase commitments. As~~ of February 2228, ~~2025,~~2026 ~~future purchase obligations primarily relate to energy, fixed asset, information technology and marketing commitments, including fixed price contracts. In addition, not included~~ (in the contractual obligations table are supply contracts to purchase product for resale to consumers which are typically of a short-term nature with limited or no purchase commitments. We also enter into supply contracts which typically include either volume commitments or fixed expiration dates, termination provisions and other customary contractual considerations. The supply contracts that are cancelable have not been included above. millions):


	Payments Due Per Fiscal Year (1)
	Total		2026		2027-2028		2029-2030		Thereafter
Long-term debt (2)	$	8,626.8	$	485.1	$	950.6	$	2,874.9	$	4,316.2
Estimated interest on long-term debt (3)	2,505.9		473.0		836.8		633.7		562.4
Operating leases (4)	8,751.4		1,038.5		2,041.7		1,663.5		4,007.7
Finance leases (4)	610.1		72.8		133.5		103.9		299.9
Other obligations (5)	2,538.0		545.5		727.9		381.2		883.4
Purchase obligations (6)	566.2		181.5		151.0		57.1		176.6
Total contractual obligations	$	23,598.4	$	2,796.4	$	4,841.5	$	5,714.3	$	10,246.2

(1) The cash requirements table excludes funding of pension and other postretirement benefit obligations, which totaled $56.9 million in fiscal 2025 and is expected to total approximately $50 million in fiscal 2026. This table also excludes recurring contributions under various multiemployer pension plans, which totaled $583.3 million in fiscal 2025 and is expected to total approximately $610 million in fiscal 2026.

(2) Long-term debt amounts exclude any debt discounts and deferred financing costs. See "Part II—Item 8. Financial Statements and Supplementary Data—Note 5" for additional information.

(3) Amounts include contractual interest payments using the stated fixed interest rate or the variable interest rate in effect as of February 28, 2026. See "Part II—Item 8. Financial Statements and Supplementary Data—Note 5" for additional information.

(4) Represents the minimum rents payable under operating and finance leases, excluding common area maintenance, insurance or tax payments, for which we are obligated.

(5) Consists of self-insurance liabilities, which have not been reduced by insurance-related receivables, as well as payment obligations related to withdrawal liabilities. The table also includes expected cash outflows related to the Opioid Settlement Framework estimated liability. The table excludes the unfunded pension and postretirement benefit obligation of $98.8 million. The potential settlement payments related to unrecognized tax benefits have been excluded from the contractual obligations table because a reasonably reliable estimate of the timing of future tax settlements cannot be determined. Also excludes deferred tax liabilities and certain other deferred liabilities that will not be settled in cash.

(6) Purchase obligations include various obligations that have specified purchase commitments. As of February 28, 2026, future purchase obligations primarily relate to energy, fixed asset, information technology and marketing commitments, including fixed price contracts. In addition, not included in the contractual obligations table are supply contracts to purchase product for resale to consumers which are typically of a short-term nature with limited or no purchase commitments. We also enter into supply contracts which typically include either volume commitments or fixed expiration dates, termination provisions and other customary contractual considerations. The supply contracts that are cancelable have not been included above.

Multiemployer Pension Plans

We currently contribute to 2728 multiemployer pension plans ~~which~~for ~~provide~~a ~~retirement~~substantial ~~benefits~~majority of employees represented by unions pursuant to ~~participants~~collective ~~based~~bargaining onagreements ~~their~~that ~~service~~require us to ~~contributing~~contribute ~~employers~~to these plans. The benefits are paid from assets held in trust for that purpose and the respective plan trustees are responsible for determining the level of benefits to be provided to participants, the management of the plan assets and plan administration. We continue to monitor any potential exposure to underfunded multiemployer plans for our associates who are beneficiaries of these plans.

~~The~~Based ~~American~~on ~~Rescue~~an ~~Plan~~assessment ~~Act~~of ~~("ARP~~the ~~Act")~~most ~~establishes~~recent ainformation ~~special~~available, ~~financial~~we ~~assistance~~believe ~~program~~that ~~for~~a ~~financially~~majority ~~troubled~~of ~~multiemployer pension plans. Under~~ the ~~ARP Act, eligible~~ multiemployer plans ~~can apply~~ to ~~receive~~which awe ~~one-time~~contribute ~~cash~~are ~~payment~~underfunded, inwhich is the amount ~~projected~~ by which the ~~PBGC~~actuarial todetermined ~~pay~~plan ~~pension~~liabilities ~~benefits~~exceed ~~through~~ the ~~plan~~value ~~year~~of ~~ending 2051. The payment received by~~ the ~~multiemployer~~ plan ~~under~~assets. ~~this~~We ~~special~~are ~~financial~~only ~~assistance~~one ~~program~~of ~~would~~many ~~not~~employers bethat ~~considered~~contribute ato ~~loan~~these plans, and ~~would~~we ~~not~~are ~~need~~neither obligated to befund ~~paid~~nor ~~back.~~act ~~Any~~as ~~financial~~a ~~assistance~~guarantor ~~received~~of byany ~~the multiemployer~~ plan's ~~would~~underfunded ~~need~~status. toAccordingly, ~~be segregated from~~ the ~~other~~underfunding ~~assets~~ of ~~the~~these ~~multiemployer~~ plans ~~and~~does ~~invested~~not inrepresent ~~investment~~a ~~grade~~liability ~~bonds~~of ~~or other investments permitted by~~ the ~~PBGC~~Company.

The underfunding of any of these plans to which we contribute are not our liability and though we are not obligated nor the guarantor for any of the underfunding, we have estimated, based on the ratio of our contributions to the total of all contributions to these plans, our allocable share of the underfunding (the amount by which the actuarial determined plan liabilities exceed the value of the plan assets) of these multiemployer plans to which we contribute to be approximately $4.9 billion. Of the 27 multiemployer plans to which we contribute, 15 plans are classified as "Critical" or "Critical and Declining" and eligible for relief under the special financial assistance program through the ARP Act. As of February 22, 2025, four of these 15 plans have received special financial assistance funds, reducing our estimated $4.9 billion allocable share of underfunding to approximately $3.6 billion. The remaining 11 plans have applied for special financial assistance and though the amounts each plan could receive will vary, we currently estimate that these 11 plans represent over 85% of our remaining $3.6 billion allocable share of underfunding. We expect the special financial assistance program under these regulations to provide the funding for these plans to remain solvent for at least the next 25 to 30 years and continue to provide benefits to our associates who are beneficiaries of these multiemployer plans. 44

Guarantees

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~~these~~The ~~agreements,~~American weRescue ~~may~~Plan ~~provide~~Act ~~certain~~("ARP ~~routine~~Act") ~~indemnifications~~establishes ~~relating~~a tospecial ~~representations~~financial ~~and~~assistance ~~warranties~~program (for ~~example,~~financially ~~ownership~~troubled ofmultiemployer ~~assets~~pension plans. Under the ARP Act, ~~environmental~~eligible ormultiemployer ~~tax~~plans ~~indemnifications~~can apply to receive a one-time cash payment in the amount projected by the Pension Benefit Guaranty Corporation ("PBGC") orto ~~personal~~pay ~~injury~~pension ~~matters~~benefits through the plan year ending 2051. The ~~terms~~payment ofreceived ~~these~~by ~~indemnifications~~the ~~range~~multiemployer inplan ~~duration~~under this special financial assistance program would not be considered a loan and ~~may~~would not need to be ~~explicitly~~paid ~~defined~~back. WeAny ~~believe~~financial ~~that~~assistance ifreceived weby ~~were~~the multiemployer plan would need to ~~incur~~be asegregated ~~loss~~from inthe ~~any~~other assets of ~~these~~the ~~matters,~~multiemployer ~~the~~plans ~~loss~~and ~~would~~invested ~~not~~in ~~have~~investment agrade ~~material~~bonds ~~effect~~or onother ~~our~~investments ~~financial~~permitted ~~statements~~by the PBGC.

Of the 28 multiemployer plans to which we contribute, 16 plans are classified as "Critical" or "Critical and Declining" and eligible for relief under the special financial assistance program through the ARP Act. A substantial majority of the eligible multiemployer plans have either received, or have been approved to receive, special financial assistance funds, which have already resulted in, or are expected to result in, a significant reduction in the underfunding of these plans. Based on current expectations and the plans' funding status, we expect the special financial assistance provided under these regulations will allow these plans to remain solvent for at least the next 30 years and continue to provide benefits to our associates who are beneficiaries of these multiemployer plans.

The amount of underfunding is an estimate and may change based on factors including investment returns on plan assets, benefit payments, plan amendments, collective bargaining, trustee actions, or legislative changes. The Company's share of the underfunding could increase or decrease depending on changes in asset values, employer participation, or other actions affecting the plans. The Company continues to monitor its potential exposure to underfunded multiemployer pension plans.

We will continue to make our contributions based on collective bargaining agreements for each of the multiemployer plans to which we contribute. Our contributions to multiemployer plans were $583.3 million, $547.7 million and $545.5 million during fiscal 2025, fiscal 2024 and fiscal 2023, respectively, and we expect to contribute approximately $610 million in fiscal 2026. In the event we were to exit certain markets or otherwise cease contributing to certain multiemployer plans, such actions could result in a substantial withdrawal liability. Any resulting withdrawal liability is recognized when it is probable that a liability has been incurred and the amount can be reasonably estimated. Refer to "Part II—Item 8. Financial Statements and Supplementary Data—Note 10" for additional information.

Guarantees

We are party to a variety of contractual agreements pursuant to which we may be obligated to indemnify the other party for certain matters. These contracts primarily relate to our commercial contracts, operating leases and other real estate contracts, trademarks, intellectual property, financial agreements and various other agreements. Under these agreements, we may provide certain routine indemnifications relating to representations and warranties (for example, ownership of assets, environmental or tax indemnifications) or personal injury matters. The terms of these indemnifications range in duration and may not be explicitly defined. We believe that if we were to incur a loss in any of these matters, the loss would not have a material effect on our financial statements.

We are liable for certain operating leases that were assigned to third parties. If any of these third parties fail to perform their obligations under the leases, we could be responsible for the lease obligation. Because of the wide dispersion among third parties and the variety of remedies available, we believe that if an assignee became insolvent it would not have a material effect on our financial condition, results of operations or cash flows.

In the ordinary course of business, we enter into various supply contracts to purchase products for resale and purchase and service contracts for fixed asset and information technology commitments. We have also entered into fixed price contracts to purchase electricity and natural gas for a portion of our energy needs. These contracts ~~typically include volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations.~~

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typically include volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations.

Letters of Credit

We had letters of credit of $2712.47 million outstanding as of February 2228, ~~2025~~2026. The letters of credit are maintained primarily to support our performance, payment, deposit or surety obligations. We typically pay bank fees of 1.25% plus a fronting fee of 0.125% on the face amount of the letters of credit.

NEW ACCOUNTING POLICIES

See "Part II—Item 8. Financial Statements and Supplementary Data—Note 1" for new accounting pronouncements.

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 "Part II—Item 8. Financial Statements and Supplementary Data—Note 1" for a discussion of our significant accounting policies.

Management believes the following critical accounting policies reflect its more subjective or complex judgments and estimates used in the preparation of our consolidated financial statements.

Self-Insurance Liabilities

We are primarily self-insured for workers' compensation, property, automobile and general liability. The self-insurance liability is undiscounted and determined actuarially, based on claims filed and an estimate of claims incurred but not yet reported. We have established stop-loss amounts that limit our further exposure after a claim reaches the designated stop-loss threshold. In determining our self-insurance liabilities, we perform a continuing review of our overall position and reserving techniques. Since recorded amounts are based on estimates, the ultimate cost of all incurred claims and related expenses may be more or less than the recorded liabilities.

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Any actuarial projection of self-insured losses is subject to a high degree of variability. Litigation trends, legal interpretations, benefit level changes, claim settlement patterns and similar factors influenced historical development trends that were used to determine the current year expense and, therefore, contributed to the variability in the annual expense. However, these factors are not direct inputs into the actuarial projection, and thus their individual impact cannot be quantified.

Contingencies

We are involved in a number of legal proceedings and certain regulatory matters. We record a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. We also perform an assessment of the materiality of loss contingencies where a loss is either reasonably possible or it is reasonably possible that an estimated liability could materially change. If a loss or change in the estimated liability has at least a reasonable possibility of occurring and the impact on the financial statements would be material, we provide disclosure of the nature of the uncertainty and estimate of possible loss or range of loss to the extent such estimate can be made. We review all contingencies at least quarterly to determine whether the likelihood of loss has changed and whether a reasonable estimate of the loss can be made. The assessment of the outcome of litigation can be very difficult to predict as it is subject to legal processes that are highly complex, subject to many factors, including those that are not within our control, and highly dependent on individual facts and circumstances. While management currently believes that the 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 our financial condition, results of operations or cash flows. In addition, although we are not able to predict the outcome or reasonably estimate a range of possible losses in certain matters described in Part II—Item 8. Financial Statements and Supplementary Data—Note 13" and have not recorded an associated accrual related to these matters, an adverse judgment or negotiated settlement in these matters could be material to our financial condition, results of operations or cash flows.

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review all contingencies at least quarterly to determine whether the likelihood of loss has changed and whether a reasonable estimate of the loss can be made. The assessment of the outcome of litigation can be very difficult to predict as it is subject to legal processes that are highly complex, subject to many factors, including those that are not within our control, and highly dependent on individual facts and circumstances. While management currently believes that the 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 our financial condition, results of operations or cash flows. In addition, although we are not able to predict the outcome or reasonably estimate a range of possible losses in certain matters described in "Part II—Item 8. Financial Statements and Supplementary Data—Note 12" and have not recorded an associated estimated liability related to these matters, an adverse judgment or negotiated settlement in these matters could be material to our financial condition, results of operations or cash flows.

Item 7A - Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from a variety of sources, including changes in interest rates and energy prices. We have from time to time selectively used derivative financial instruments to reduce these market risks. Our market risk exposures related to interest rates and energy prices are discussed below.

Interest Rate Risk and Long-Term Debt

We are exposed to market risk from fluctuations in interest rates. From time to time, we manage our exposure to interest rate fluctuations through the use of interest rate swaps. At the time of entering into interest rate swap contracts, our risk management objective and strategy is to utilize them to protect us against adverse fluctuations in interest rates by reducing our exposure to variability in cash flows relating to interest payments on a portion of our outstanding debt. All of our interest rate swaps expired in March 2023. Our exposure to changes in Term SOFR primarily relates to our ABL Facility which had noa ~~amounts~~$425.0 million outstanding balance as of February 2228, ~~2025~~2026. Therefore, we ~~believe~~estimate that a 100 basis point increase on our variable interest rates would ~~not~~increase ~~have~~our ainterest ~~material~~expense ~~impact~~by onapproximately ~~our~~$4 ~~interest~~million ~~expense~~per year.

The table below provides information about debt instruments that are sensitive to changes in interest rates, and presents principal amounts due and related weighted average interest rates by expected maturity dates (dollars in millions):


	Fiscal 2026		Fiscal 2027		Fiscal 2028		Fiscal 2029		Fiscal 2030		Thereafter		Total		Fair Value
Long-Term Debt
Fixed Rate - Principal payments	$	60.1	$	906.6	$	44.0	$	2,477.9	$	397.0	$	4,316.2	$	8,201.8	$	8,224.9
Weighted average interest rate (1)	7.76%		6.64%		6.60%		4.26%		7.74%		5.80%		5.54%
Variable Rate - Principal payments	$	425.0	$	—	$	—	$	—	$	—	$	—	$	425.0	$	425.0
Weighted average interest rate (1)	4.92%		0%		0%		0%		0%		0%		4.92%

Table of Contents

	Fiscal 2025		Fiscal 2026		Fiscal 2027		Fiscal 2028		Fiscal 2029		Thereafter		Total		Fair Value
Long-Term Debt
Fixed Rate - Principal payments	$	0.6	$	2,760.1	$	1,656.6	$	44.0	$	2,477.9	$	513.2	$	7,452.4	$	7,312.1
Weighted average interest rate (1)	7.25%		4.94%		6.29%		6.60%		4.26%		7.79%		5.22%

(1) Excludes debt discounts and deferred financing costs.

Energy Price Risk

We have entered into fixed price contracts to purchase electricity and natural gas for a portion of our energy needs. We expect to take delivery of these commitments in the normal course of business, and, as a result, these commitments qualify as normal purchases. We also manage our exposure to changes in diesel prices utilized in our distribution process through the use of short-term heating oil derivative contracts. These contracts are economic hedges of price risk and are not designated or accounted for as hedging instruments for accounting purposes. Changes in the fair value of these instruments are recognized in earnings. We do not believe that these energy swaps would cause a material change to our financial position.

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hedges of price risk and are not designated or accounted for as hedging instruments for accounting purposes. Changes in the fair value of these instruments are recognized in earnings. We do not believe that these energy swaps would cause a material change to our financial position.

Table of Contents

Item 8 - Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Albertsons Companies, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Albertsons Companies, Inc. and subsidiaries (the "Company") as of February 2228, ~~2025~~2026 and February 2422, ~~2024~~2025, and the related consolidated statements of operations and comprehensive income, cash flows, and stockholders' equity, for ~~each~~the of53 weeks ended February 28, 2026, the 52 weeks ended February 22, 2025, ~~February~~and ~~24,~~the ~~2024,~~52 ~~and~~weeks ended February 2524, ~~2023,~~2024 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 2228, ~~2025~~2026 and February 2422, ~~2024~~2025, and the results of its operations and its cash flows for each of the three years in the period ended February 2228, ~~2025~~2026, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of February 2228, ~~2025~~2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 2127, ~~2025~~2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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Self-Insurance Liabilities—Refer to Note 1 to the financial statements

Critical Audit Matter Description

The Company is primarily self-‑insured for workers' compensation, property, automobile, and general liability. The self‑insurance liability is undiscounted and determined actuarially, based on claims filed and an estimate of claims incurred but not yet reported. The Company has established stop-‑loss amounts that limit the Company's further exposure after a claim reaches the designated stop-loss threshold. The projected settlement values are estimated based on the Company's historical claim experience, supplemented with industry experience, as necessary and are established using actuarial methods followed in the insurance industry.

We identified the Company's self‑insurance liabilities for general liability and workers' compensation as a critical audit matter because estimating projected settlement value of reported and unreported claims involves significant estimation by management, and changes in actuarial assumptions could have a significant impact on management's estimate. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists, when performing audit procedures to evaluate whether self‑insurance liabilities were appropriately recorded as of February 2228, ~~2025~~2026.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company's self‑insurance liabilities for general liability and workers' compensation included the following, among others:

•We tested the effectiveness of controls related to these self‑insurance liabilities, including management's controls over the projection of settlement value of reported and unreported claims,; management's controls over the review of the actuarial report; and evaluation of the external actuarial expert's qualifications, competency, and objectivity and evaluation of the underlying data sent to the external actuary.

•We evaluated the methods and assumptions used by management to estimate these self‑insurance liabilities by:

–Reading the Company's insurance policies and comparing the coverage and terms to the assumptions used by management.

–Testing the underlying data that served as the basis for the actuarial analysis, including historical claims, to test that the inputs to the actuarial estimate were accurate and complete.

–With the assistance of our actuarial specialists, we:

◦Compared ~~management's~~our ~~prior‑year~~independent ~~assumptions~~estimate of ~~expected~~prior ~~development~~year ~~and~~expected ~~ultimate~~ loss development to ~~actuals~~actual losses incurred during the current year and assessed the consistency of management's updated estimates to identify potential bias in ~~the~~their determination of ~~these~~ self‑-insurance liabilities.

◦Developed an independent estimated range of actuarial liabilities for these self-insurance liabilities and compared our estimates to management's estimates.

◦Evaluated the qualifications of the Company'’s external actuary by assessing their certifications and determining whether they met the Qualification Standards of the American Academy of Actuaries to render the statements of actuarial opinion implicit in their analyses.

/s/ Deloitte & Touche LLP

Boise, Idaho

April 2127, ~~2025~~2026

We have served as the Company's auditor since 2006.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the ~~Stockholders~~stockholders and the Board of Directors of Albertsons Companies, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Albertsons Companies, Inc. and subsidiaries (the "Company") as of February 2228, ~~2025~~2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 2228, ~~2025~~2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended February 2228, ~~2025~~2026, of the Company and our report dated April 2127, ~~2025~~2026, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’'s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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/s/ Deloitte & Touche LLP

Boise, Idaho

April 2127, ~~2025~~2026

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Albertsons Companies, Inc. and Subsidiaries

Consolidated Balance Sheets

(in millions, except share data)

February 22,2025

February 24,2024

February 28,2026

February 22,2025

ASSETS

Current assets

Cash and cash equivalents

~~293~~198.6

~~188~~293.76

Receivables, net

~~834~~932.86

~~724~~834.48

Inventories, net

45,~~989~~173.09

4,~~945~~989.20

Prepaid assets

~~338~~368.81

~~370~~338.38

Other current assets

~~102~~42.85

58102.98

Total current assets

6,~~559~~715.07

6,~~287~~559.50

Property and equipment, net

9,~~811~~903.07

9,~~570~~811.30

Operating lease right-of-use assets

6,~~153~~102.4

56,~~981~~153.64

Intangible assets, net

2,~~318~~156.01

2,~~434~~318.50

Goodwill

1,201.0

Other assets

~~713~~687.30

~~746~~713.23

TOTAL ASSETS

26,~~755~~765.79

26,~~221~~755.17

LIABILITIES

Current liabilities

Accounts payable

4,~~092~~021.72

4,~~218~~092.27

Accrued salaries and wages

1,~~345~~348.23

1,~~302~~345.62

Current maturities of long-term debt and finance lease obligations

57534.60

~~285~~57.26

Current operating lease obligations

~~705~~736.57

~~677~~705.65

Current portion of self-insurance liability

~~374~~385.07

~~367~~374.70

Taxes other than income taxes

~~393~~377.98

~~325~~393.49

Other current liabilities

~~282~~420.13

~~281~~282.01

Total current liabilities

7,~~251~~824.0

7,~~457~~251.70

Long-term debt and finance lease obligations

78,~~762~~412.56

7,~~783~~762.45

Long-term operating lease obligations

5,~~657~~613.26

5,~~493~~657.2

Deferred income taxes

~~824~~630.16

~~807~~824.61

Long-term self-insurance liability

~~922~~917.16

~~899~~922.91

Other long-term liabilities

~~952~~1,531.93

~~1,031~~952.89

Commitments and contingencies

Series A convertible preferred stock, $0.01 par value; 1,750,000 shares authorized, no shares issued and outstanding as of February 22, 2025 and February 24, 2024

—

Series A convertible preferred stock, $0.01 par value; 1,750,000 shares authorized, no shares issued and outstanding as of February 28, 2026 and February 22, 2025

—

Series A-1 convertible preferred stock, $0.01 par value; 1,410,000 shares authorized, no shares issued and outstanding as of February 22, 2025 and February 24, 2024

—

Series A-1 convertible preferred stock, $0.01 par value; 1,410,000 shares authorized, no shares issued and outstanding as of February 28, 2026 and February 22, 2025

—

STOCKHOLDERS' EQUITY

Undesignated preferred stock, $0.01 par value; 96,840,000 shares authorized, no shares issued as of February 22, 2025 and February 24, 2024

—

Undesignated preferred stock, $0.01 par value; 96,840,000 shares authorized, no shares issued as of February 28, 2026 and February 22, 2025

—

Class A common stock, $0.01 par value; 1,000,000,000 shares authorized, 597,964,926 and 594,445,268 shares issued as of February 22, 2025 and February 24, 2024, respectively

6.0

5.9

Class A common stock, $0.01 par value; 1,000,000,000 shares authorized, 600,734,693 and 597,964,926 shares issued as of February 28, 2026 and February 22, 2025, respectively

6.0

Class A-1 convertible common stock, $0.01 par value; 150,000,000 shares authorized, no shares issued as of February 22, 2025 and February 24, 2024

—

Class A-1 convertible common stock, $0.01 par value; 150,000,000 shares authorized, no shares issued as of February 28, 2026 and February 22, 2025

—

Additional paid-in capital

2,~~184~~219.04

2,~~129~~184.60

Treasury stock, at cost, 22,522,934 and 18,397,745 shares held as of February 22, 2025 and February 24, 2024, respectively

(386.7)

(304.2)

Treasury stock, at cost, 101,191,791 and 22,522,934 shares held as of February 28, 2026 and February 22, 2025, respectively

(1,850.5)

(386.7)

Accumulated other comprehensive income

9483.72

8894.07

Retained earnings

1,~~487~~378.91

~~828~~1,487.29

Total stockholders' equity

31,~~385~~836.92

23,~~747~~385.59

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

26,~~755~~765.79

26,~~221~~755.17

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

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Albertsons Companies, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income

(in millions, except per share data)

	52 weeks endedFebruary 22, 2025		52 weeks endedFebruary 24, 2024		52 weeks endedFebruary 25, 2023
	53 weeks endedFebruary 28, 2026		52 weeks endedFebruary 22, 2025		52 weeks endedFebruary 24, 2024
Net sales and other revenue	$	8083,~~390~~172.95	$	7980,~~237~~390.79	$	7779,~~649~~237.7
Cost of sales	5860,~~135~~565.38		5758,~~192~~135.03		5557,~~894~~192.10
Gross margin	22,~~255~~606.67		22,~~045~~255.76		2122,~~755~~045.67
Selling and administrative expenses	2021,~~613~~891.73		1920,~~932~~613.97		19,~~596~~932.09
Loss (gain) on property dispositions and impairment losses, net	95.8		43.9		(147.5)
(Gain) loss on property dispositions and impairment losses, net	(12.2)		95.8		43.9
Operating income	~~1,546~~727.16		21,~~068~~546.91		2,~~307~~068.19
Interest expense, net	~~459~~504.82		~~492~~459.18		~~404~~492.61
Other income, net	(4344.4)		(1243.24)		(3312.02)
Income before income taxes	~~1,129~~267.78		1,~~589~~129.07		1,~~935~~589.50
Income tax expense	~~171~~50.14		~~293~~171.01		~~422~~293.0
Net income	$	~~958~~217.64	$	~~1,296~~958.06	$	1,~~513~~296.50
Other comprehensive income (loss), net of tax:
Recognition of pension gain	4.9		15.8		4.6
Recognition of pension (loss) gain	(10.2)		4.9		15.8
Other	(1.83)		21.98		(42.3)9
Other comprehensive income	$	6.7	$	18.7	$	0.3
Other comprehensive (loss) income	$	(11.5)	$	6.7	$	18.7
Comprehensive income	$	~~965~~205.39	$	~~1,314~~965.73	$	1,~~513~~314.87
Net income per Class A common share:
Basic net income per Class A common share	$	10.6540	$	21.2565	$	2.2925
Diluted net income per Class A common share	10.6440		21.2364		2.2723
Weighted average Class A common shares outstanding:
Basic	~~580~~545.12		~~575~~580.41		~~529~~575.04
Diluted	~~583~~547.82		~~581~~583.18		~~534~~581.01

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

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Albertsons Companies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in millions)

52 weeks endedFebruary 22, 2025

52 weeks endedFebruary 24, 2024

52 weeks endedFebruary 25, 2023

53 weeks endedFebruary 28, 2026

52 weeks endedFebruary 22, 2025

52 weeks endedFebruary 24, 2024

Cash flows from operating activities:

Net income

~~958~~217.64

~~1,296~~958.06

1,~~513~~296.50

Adjustments to reconcile net income to net cash provided by operating activities:

Loss (gain) on property dispositions and impairment losses, net

95.8

43.9

(147.5)

(Gain) loss on property dispositions and impairment losses, net

(12.2)

95.8

43.9

Depreciation and amortization

1,~~817~~913.97

1,~~779~~817.09

1,~~807~~779.10

Operating lease right-of-use assets amortization

~~681~~727.2

~~665~~681.2

~~652~~665.72

LIFO expense

2866.60

5228.06

~~268~~52.0

Deferred income tax

(~~105~~208.17)

(~~112~~105.61)

12(112.96)

Pension and post-retirement benefits expense (income)

8.7

(2.9)

(21.7)

Pension and post-retirement benefits (income) expense

(28.4)

8.7

(2.9)

Contributions to pension and post-retirement benefit plans

(9156.39)

(1891.3)

(2718.3)

Deferred financing costs

1624.35

1516.63

1615.96

Equity-based compensation expense

~~106~~95.25

~~104~~106.52

~~138~~104.35

Other operating activities

~~(26~~20.0)1

1(26.40)

(61.6)4

Changes in operating assets and liabilities:

Receivables, net

(~~113~~96.89)

(36113.38)

(~~127~~36.13)

Inventories, net

(72250.49)

(~~215~~72.34)

(~~549~~215.13)

Accounts payable, accrued salaries and wages and other accrued liabilities

~~(170~~12.1)8

~~100~~(170.51)

~~(164~~100.2)5

Operating lease liabilities

(~~673~~705.02)

(~~654~~673.10)

(~~637~~654.71)

Pension withdrawal liabilities

(1518.56)

(8815.75)

(~~103~~88.47)

Self-insurance assets and liabilities

455.96

3045.69

5630.26

Other operating assets and liabilities

~~188~~661.67

~~(301~~188.0)6

~~172~~(301.90)

Net cash provided by operating activities

2,~~680~~366.67

2,~~659~~680.56

2,~~853~~659.95

Cash flows from investing activities:

Payments for property, equipment and intangibles, including lease buyouts

(1,~~931~~839.24)

(21,~~031~~931.32)

(2,~~153~~031.93)

Proceeds from sale of assets

31109.45

~~217~~31.64

~~195~~217.26

Other investing activities

850.05

678.0

~~(18~~67.6)0

Net cash used in investing activities

(1,~~891~~679.84)

(1,~~746~~891.78)

(1,~~977~~746.37)

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Albertsons Companies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in millions)

	52 weeks endedFebruary 22, 2025		52 weeks endedFebruary 24, 2024		52 weeks endedFebruary 25, 2023
	53 weeks endedFebruary 28, 2026		52 weeks endedFebruary 22, 2025		52 weeks endedFebruary 24, 2024
Cash flows from financing activities:
Proceeds from issuance of long-term debt, including ABL facility	$	504,671.05	$	~~150~~50.0	$	2,150.0
Payments on long-term borrowings, including ABL facility	(~~250~~3,510.96)		(~~950~~250.89)		(~~1,150~~950.8)
Payments of obligations under finance leases	(6051.60)		(6960.36)		(7169.63)
Special dividend paid	—		—		(3,916.9)
Payments for debt financing costs	(54.7)		—		—
Dividends paid on common stock	(~~295~~322.17)		(~~276~~295.21)		(~~255~~276.12)
Dividends paid on convertible preferred stock	—		(0.8)		(65.3)
Treasury stock purchase, at cost	(1,478.2)		(82.5)		—
Treasury stock purchase, at cost	(82.5)		—		—
Employee tax withholding on vesting of restricted stock units	(36.5)		(45.0)		(38.8)
Employee tax withholding on vesting of restricted stock units	(45.0)		(38.8)		(44.0)
Other financing activities	—		—		1.7
Other financing activities	—		2.5		(11.7)
Net cash used in financing activities	(782.2)		(684.1)		(1,183.4)
Net cash used in financing activities	(684.1)		(1,183.4)		(3,365.4)
Net (decrease) increase in cash and cash equivalents and restricted cash	(94.9)		104.7		(270.6)
Net increase (decrease) in cash and cash equivalents and restricted cash	104.7		(270.6)		(2,488.8)
Cash and cash equivalents and restricted cash at beginning of period	297.9		193.2		463.8
Cash and cash equivalents and restricted cash at beginning of period	193.2		463.8		2,952.6
Cash and cash equivalents and restricted cash at end of period	$	203.0	$	297.9	$	193.2
Cash and cash equivalents and restricted cash at end of period	$	297.9	$	193.2	$	463.8
Reconciliation of capital investments:
Payments for property, equipment and intangibles, including payments for lease buyouts	$	(1,~~931~~839.24)	$	(21,~~031~~931.32)	$	(2,~~153~~031.93)
Lease buyouts	35.78		~~(5.~~3).7		(25.83)
Total payments for capital investments, excluding lease buyouts	$	(1,~~927~~833.56)	$	(21,~~036~~927.65)	$	(2,~~156~~036.76)
Supplemental cash flow information:
Non-cash investing and financing activities were as follows:
Additions of finance lease obligations, excluding business acquisitions	$	42.9	$	21.6	$	23.3
Additions of finance lease obligations	$	45.3	$	42.9	$	21.6
Purchases of property and equipment included in accounts payable	~~324~~269.87		~~246~~324.8		~~333~~246.58
Interest and income taxes paid:
Interest paid, net of amount capitalized	~~444~~448.34		~~484~~444.23		~~395~~484.32
Income taxes paid	~~168~~255.46		~~405~~168.4		~~220~~405.94

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

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Albertsons Companies, Inc. and Subsidiaries

Consolidated Statements of Stockholders' Equity

(in millions, except share data)

	Class A Common Stock			Additional paid in capital		Treasury Stock			Accumulated other comprehensive income		Retained earnings (accumulated deficit)		Total stockholders' equity
	Shares	Amount				Shares	Amount
Balance as of February 26, 2022	587,904,283	$	5.9	$	2,032.2	99,640,065	$	(1,647.4)	$	69.0	$	2,564.9	$	3,024.6
Balance as of February 25, 2023	590,968,600	$	5.9	$	2,072.7	21,300,945	$	(352.2)	$	69.3	$	(185.0)	$	1,610.7
Equity-based compensation	—	—		112.4		—	—		—		—		112.4
Shares issued and employee tax withholding on vesting of restricted stock units	3,064,317	—		(44.0)		—	—		—		—		(44.0)
Convertible preferred stock conversions	—	—		(61.0)		(78,339,120)	1,295.2		—		(1.4)		1,232.8
Special dividend declared ($6.85 per share)	—	—		31.3		—	—		—		(3,952.6)		(3,921.3)
Cash dividends declared on common stock ($0.48 per common share)	—	—		—		—	—		—		(255.1)		(255.1)
Dividends accrued on convertible preferred stock	—	—		—		—	—		—		(51.0)		(51.0)
Net income	—	—		—		—	—		—		1,513.5		1,513.5
Other comprehensive income, net of tax	—	—		—		—	—		0.3		—		0.3
Other activity	—	—		1.8		—	—		—		(3.3)		(1.5)
Balance as of February 25, 2023	590,968,600	5.9		2,072.7		21,300,945	(352.2)		69.3		(185.0)		1,610.7
Equity-based compensation	—	—		91.5		—	—		—		—		91.5
Shares issued and employee tax withholding on vesting of restricted stock units	3,476,668	—		(38.8)		—	—		—		—		(38.8)
Convertible preferred stock conversions	—	—		—		(2,903,200)	48.0		—		(2.3)		45.7
Cash dividends declared on common stock ($0.48 per common share)	—	—		—		—	—		—		(276.2)		(276.2)
Dividends accrued on convertible preferred stock	—	—		—		—	—		—		(0.3)		(0.3)
Net income	—	—		—		—	—		—		1,296.0		1,296.0
Other comprehensive income, net of tax	—	—		—		—	—		18.7		—		18.7
Other activity	—	—		4.2		—	—		—		(4.03)		(0.21)
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	—	—		99.5		—	—		—		—		99.5
Shares issued and employee tax withholding on vesting of restricted stock units	3,519,658	0.1		(45.0)		—	—		—		—		(44.9)
Repurchase of common stock	—	—		—		4,118,733	(82.5)		—		—		(82.5)
Cash dividends declared on common stock ($0.51 per common share)	—	—		—		—	—		—		(295.1)		(295.1)
Net income	—	—		—		—	—		—		958.6		958.6
Other comprehensive income, net of tax	—	—		—		—	—		6.7		—		6.7
Other activity	—	—		(0.1)		6,456	—		—		(3.8)		(3.9)
Balance as of February 22, 2025	597,964,926	$6.0	~~6.0~~	$2,184.0	~~2,184.0~~	22,522,934	$(386.7)	~~(386.7)~~	$94.7	~~94.7~~	$1,487.9	~~1,487.9~~	$3,385.9	~~3,385.9~~
Equity-based compensation	—	—		96.1		—	—		—		—		96.1
Shares issued and employee tax withholding on vesting of restricted stock units	2,769,767	—		(36.5)		—	—		—		—		(36.5)
Repurchase of common stock	—	—		(28.7)		78,668,857	(1,463.8)		—		—		(1,492.5)
Cash dividends declared on common stock ($0.60 per common share)	—	—		—		—	—		—		(322.7)		(322.7)
Net income	—	—		—		—	—		—		217.4		217.4
Other comprehensive loss, net of tax	—	—		—		—	—		(11.5)		—		(11.5)
Other activity	—	—		4.5		—	—		—		(4.5)		—
Balance as of February 28, 2026	600,734,693	$	6.0	$	2,219.4	101,191,791	$	(1,850.5)	$	83.2	$	1,378.1	$	1,836.2

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

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Albertsons Companies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 1 - DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Albertsons Companies, Inc. and its subsidiaries (the "Company" or "ACI") is a food and drug retailer that, as of February 2228, ~~2025~~2026, operated 2,~~270~~244 retail stores together with 405 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms. The Company's retail food businesses and in-store pharmacies operate throughout the United States (U.S.) under ~~more~~22 ~~than 20~~ well known banners including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, ACME, Shaw's, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Markets and Balducci's Food Lovers Market. The Company has no separate assets or liabilities other than its investments in its subsidiaries, and all of its business operations are conducted through its operating subsidiaries.

Basis of Presentation

The Company's Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Intercompany transactions and accounts have been eliminated in consolidation for all periods presented.

Significant Accounting Policies

Fiscal year: The Company's fiscal year ends on the last Saturday in February. Unless the context otherwise indicates, reference to a fiscal year of the Company refers to the calendar year in which such fiscal year commences. The Company's first quarter consists of 16 weeks, the second, third and fourth quarters generally each consist of 12 weeks, and the fiscal year generally consists of 52 weeks. For the fiscal year ended February 28, 2026, the fourth quarter consisted of 13 weeks, and the fiscal year consisted of 53 weeks. For each of the prior years presented, the fiscal year consisted of 52 weeks.

Use of estimates: The preparation of the Company's Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting periods presented. Certain estimates require difficult, subjective or complex judgments about matters that are inherently uncertain. Actual results could differ from those estimates.

Cash and cash equivalents: Cash equivalents include all highly liquid investments with original maturities of three months or less at the time of purchase and outstanding deposits related to credit and debit card sales transactions that settle within a few days. Cash and cash equivalents related to credit and debit card transactions were $~~570~~591.81 million and $~~558~~570.98 million as of February 2228, ~~2025~~2026 and February 2422, ~~2024~~2025, respectively. The Company has cash and cash equivalents that are in excess of federally insured limits. Though the Company has not experienced any losses on its cash and cash equivalents to date and it does not anticipate incurring any losses, the Company cannot be assured that it will not experience losses on its cash and cash equivalents.

Restricted cash: Restricted cash is included in Other current assets and Other assets depending on the remaining term of the restriction and primarily relates to surety bonds. The Company had $4.34 million and $4.53 million of restricted cash as of February 2228, ~~2025~~2026 and February 2422, ~~2024~~2025, respectively.

Receivables, net: Receivables consist primarily of trade accounts receivable, pharmacy accounts receivable, tenant receivables and vendor receivables. Management makes estimates of the uncollectibility of its accounts receivable. In determining the adequacy of the allowances for doubtful accounts, management analyzes the value of collateral, historical collection experience, aging of receivables and other economic and industry factors. It is possible that the ~~accuracy of the estimation process could be materially impacted by different judgments, estimations and~~

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accuracy of the estimation process could be materially impacted by different judgments, estimations and assumptions based on the information considered and could result in a further adjustment of receivables. The allowance for doubtful accounts and bad debt expense were not material for any of the periods presented.

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.

As of February 2228, ~~2025~~2026, and February 2422, ~~2024~~2025, approximately 8687.21% and 8586.52%, respectively, of the Company's inventories were valued under the last-in, first-out ("LIFO") method. The Company primarily uses the retail inventory or cost method to determine inventory cost before application of any LIFO adjustment. Under the retail inventory method, inventory cost is determined, before the application of any LIFO adjustment, by applying a cost-to-retail ratio to various categories of similar items to the retail value of those items. Under the cost method, the most recent purchase cost is used to determine the cost of inventory before the application of any LIFO adjustment. Replacement or current cost was higher than the carrying amount of inventories valued using LIFO by $~~666~~732.0 million and $~~637~~666.40 million as of February 2228, ~~2025~~2026 and February 2422, ~~2024~~2025, respectively. During fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023, inventory quantities in certain LIFO layers were reduced. These reductions resulted in a liquidation of LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the cost of fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023 purchases. As a result, cost of sales decreased by $04.96 million, $~~19.~~0.9 million and $019.50 million in fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023, respectively. Cost for the remaining inventories, which consists primarily of certain perishable and fuel inventories, was determined using the most recent purchase cost, which approximates the first-in, first-out ("FIFO") method. Perishables are counted every four weeks and are carried at the last purchased cost which approximates FIFO cost. Fuel inventories are carried at the last purchased cost, which approximates FIFO cost. The Company records inventory shortages based on actual physical counts at its facilities and also provides allowances for inventory shortages for the period between the last physical count and the balance sheet date.

Property and equipment, net: Property and equipment is recorded at cost or fair value for assets acquired as part of a business combination, and depreciation is calculated on the straight-line method over the estimated useful lives of the assets. Estimated useful lives are generally as follows: buildings - seven to 40 years; leasehold improvements - the shorter of the remaining lease term or ten to 20 years; and fixtures and equipment - three to 20 years.

Property and equipment under finance leases are recorded at the lower of the present value of the future minimum lease payments or the fair value of the asset and are amortized on the straight-line method over the lesser of the lease term or the estimated useful life. Interest capitalized on property under construction was immaterial for all periods presented.

Leases: The Company leases certain retail stores, distribution centers, office facilities and equipment from third parties. The Company determines whether a contract is or contains a lease at contract inception. Operating and finance lease assets and liabilities are recognized at the lease commencement date. Operating leases are included in operating lease right-of-use ("ROU") assets, current operating lease obligations and long-term operating lease obligations on the Consolidated Balance Sheets. Finance leases are included in Property and equipment, net, current maturities of long-term debt and finance lease obligations and long-term debt and finance lease obligations on the Consolidated Balance Sheets. Operating lease assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Lease liabilities are based on the present value of remaining lease payments over the lease term. As the rate implicit in the Company's leases is not readily determinable, the Company's applicable incremental borrowing rate, which is estimated to approximate the interest rate on a collateralized basis with similar terms, is used in calculating the present value of the sum of the lease payments. Operating lease assets are based on the lease liability, adjusted for any prepayments, lease incentives and initial direct costs incurred. The typical real estate lease period is 15 to 20 ~~years with renewal options for varying terms and, to a limited extent, options to purchase. The Company includes renewal options that are reasonably certain to be exercised as part of the lease term.~~

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years with renewal options for varying terms and, to a limited extent, options to purchase. The Company includes renewal options that are reasonably certain to be exercised as part of the lease term.

The Company has lease agreements with non-lease components that relate to the lease components. Certain leases contain percent rent based on sales, escalation clauses or payment of executory costs such as property taxes, utilities, insurance and maintenance. Non-lease components primarily relate to common area maintenance. Non-lease components and the lease components to which they relate are accounted for together as a single lease component for all asset classes. The Company recognizes lease payments for short-term leases as expense either straight-line over the lease term or as incurred depending on whether lease payments are fixed or variable.

Impairment of long-lived assets: The Company regularly reviews the operating performance of its individual stores and other long-lived assets, together with current market conditions, for indicators of impairment. When events or changes in circumstances indicate that the carrying value of the individual store's assets or other long-lived assets may not be recoverable, their future undiscounted cash flows are compared to the carrying value. If the carrying value of the asset is greater than the estimated undiscounted future cash flows, the carrying value of the asset is compared to the asset's estimated fair value and an impairment loss is recognized when the asset's carrying value exceeds its estimated fair value. For assets held for sale, the Company recognizes impairment charges for the excess of the carrying value plus estimated costs of disposal over the fair value. Fair values are determined using an income or market approach based on estimated cash flow expected. The Company uses multiple inputs, including projected future cash flows and discount rates, to determine the estimated fair value, for which actual results could differ due to inherent uncertainty involved in estimating fair value. Long-lived asset impairments are recorded as a component of ~~Loss~~ (~~gain~~Gain) loss on property dispositions and impairment losses, net.

Intangible assets, net: Intangible assets with finite lives consist primarily of trade names, customer prescription files and internally developed software. Intangible assets with finite lives are amortized on a straight-line basis over an estimated economic life ranging from three to 40 years. The Company reviews finite-lived intangible assets for impairment in accordance with its policy for long-lived assets. Intangible assets with indefinite useful lives, which are not amortized, consist of restricted covenants and liquor licenses. The Company reviews intangible assets with indefinite useful lives and tests for impairment annually on the first day of the fourth quarter and also if events or changes in circumstances indicate the occurrence of a triggering event. The review consists of comparing the estimated fair value of the cash flows generated by the asset to the carrying value of the asset.

Cloud computing arrangements that are service contracts: The Company enters into hosted cloud computing arrangements that are considered to be service contracts and capitalizes certain development costs related to implementing the cloud computing arrangement. As of February 2228, ~~2025~~2026 and February 2422, ~~2024~~2025, the Company had capitalized implementation costs of $~~246~~198.9 million and $~~275~~246.9 million, respectively, included in Other assets. The Company amortizes the costs over the related service contract period of the hosting arrangement. Amortization expense for ~~the~~ implementation costs was $8086.75 million, $80.57 million and $6480.95 million for fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023 respectively, and is included within Selling and administrative expenses. In fiscal ~~2024~~2025 and fiscal ~~2022~~2023, there ~~were~~was no$5.0 ~~impairment~~million and ~~disposal losses related to capitalized implementation costs. In fiscal 2023, there was~~ $23.4 million of impairment and disposal losses, respectively, related to capitalized implementation costs, recorded as a component of ~~Loss~~ (~~gain~~Gain) loss on property dispositions and impairment losses, net. In fiscal 2024, there were no impairment and disposal losses related to capitalized implementation costs.

Goodwill: Goodwill represents the difference between the purchase price and the fair value of assets and liabilities acquired in a business combination. Goodwill is not amortized as the Company reviews goodwill for impairment annually on the first day of its fourth quarter and also if events or changes in circumstances indicate the occurrence of a triggering event. The Company reviews goodwill for impairment by initially considering qualitative factors to determine whether it is necessary to perform a quantitative analysis. If it is determined that it is more likely than not that the fair value of reporting unit is less than its carrying amount, a quantitative analysis is performed to identify goodwill impairment. If it is determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, it is unnecessary to perform a quantitative analysis. The Company may elect to bypass the qualitative assessment and proceed directly to performing a quantitative analysis. Based on the qualitative analysis performed in fiscal 2024, the Company determined that there was no goodwill impairment.

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~~Business combination measurements: In accordance with applicable accounting standards,~~ the ~~Company~~qualitative ~~estimates~~assessment ~~the fair value of acquired assets~~ and ~~assumed~~proceed ~~liabilities~~directly asto ofperforming ~~the~~a ~~acquisition~~quantitative ~~date of business combinations~~analysis. ~~These~~Based ~~fair~~on ~~value adjustments are input into~~ the ~~calculation~~qualitative ofanalysis ~~goodwill~~performed ~~related~~in tofiscal ~~the~~2025, ~~excess of~~ the ~~purchase~~Company ~~price~~determined ~~over~~that ~~the~~there ~~fair~~was ~~value~~no ofgoodwill ~~the tangible and identifiable intangible assets acquired and liabilities assumed in the acquisition~~impairment.

~~The~~Equity ~~fair~~method ~~value~~investments: ofInvestments ~~assets~~in ~~acquired~~certain ~~and~~companies ~~liabilities~~over ~~assumed~~which ~~are determined using market, income and cost approaches from~~ the ~~perspective~~Company ofexerts ~~a market participant. The fair value measurements can be based on~~ significant ~~inputs~~influence, ~~that~~but ~~are~~does not ~~readily~~control ~~observable in~~ the ~~market.~~financial ~~The~~and ~~market~~operating ~~approach~~decisions, ~~indicates~~are ~~value~~accounted for aas ~~subject~~equity ~~asset~~method ~~based on available market pricing for comparable assets~~investments. ~~The~~For ~~market~~equity ~~approach~~method ~~used includes prices and other relevant information generated by market transactions involving comparable assets~~investments, asthe ~~well~~Company asregularly ~~pricing~~reviews ~~guides~~its ~~and~~investments ~~other~~to ~~sources.~~determine ~~The~~whether ~~income~~there ~~approach~~is ~~indicates value for~~ a ~~subject~~decline ~~asset~~in ~~based~~fair ~~on the present~~ value ofbelow ~~cash~~carrying ~~flows projected to be generated by the asset~~value. ~~Projected~~If ~~cash~~there ~~flows~~is ~~are discounted at~~ a ~~required~~decline ~~market rate of return~~ that ~~reflects~~is ~~the~~other-than-temporary, ~~relative risk of achieving~~ the ~~cash~~investment ~~flows~~is ~~and~~written ~~the~~down ~~time~~to ~~value~~fair ~~of money~~value. ~~The~~As ~~cost~~of ~~approach~~February 28, ~~which~~2026 ~~estimates~~and ~~value~~February 22, by2025, ~~determining~~ the ~~current~~Company ~~cost~~had ofequity ~~replacing~~method aninvestments ~~asset with another~~ of ~~equivalent~~$83.1 million ~~economic~~and ~~utility~~$82.3 million, isrespectively, ~~used~~included ~~for~~in ~~certain~~Other assets. ~~for~~Equity ~~which~~in ~~the~~earnings ~~market~~from ~~and~~unconsolidated ~~income~~affiliates ~~approaches~~is ~~could~~included ~~not~~in beOther ~~applied~~income, ~~due~~net, toincluding ~~the~~income ~~nature~~ of ~~the asset~~$0.8 million ~~The~~and ~~cost~~$4.1 million toin ~~replace~~fiscal a2025 ~~given~~and ~~asset~~fiscal ~~reflects~~2024, ~~the estimated reproduction or replacement cost for the asset~~respectively, ~~adjusted~~and ~~for~~losses ~~obsolescence,~~of ~~whether~~$8.7 million ~~physical,~~in ~~functional~~fiscal ~~or economic~~2023.

Equity method investments: Investments in certain companies over which the Company exerts significant influence, but does not control the financial and operating decisions, are accounted for as equity method investments. For equity method investments, the Company regularly reviews its investments to determine whether there is a decline in fair value below carrying value. If there is a decline that is other-than-temporary, the investment is written down to fair value. As of February 22, 2025 and February 24, 2024, the Company has equity method investments of $82.3 million and $78.2 million, respectively, included in Other assets. Equity in earnings from unconsolidated affiliates is included in Other income, net, including income of $4.1 million in fiscal 2024, losses of $8.7 million in fiscal 2023 and income of $11.8 million in fiscal 2022.

The Company's equity method investments previously included an equity interest in Mexico Foods Parent LLC and La Fabrica Parent LLC ("El Rancho"), a Texas-based specialty grocer. During fiscal 2023, El Rancho exercised its contractual option to repurchase the Company's 45% ownership interest in El Rancho and the Company received proceeds of $166.1 million. As a result, the Company realized a gain of $10.5 million during fiscal 2023, included in Other income, net.

Other investments: Investments in equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at fair value with realized and unrealized gains and losses included in Other income, net. For equity securities without a readily determinable fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with realized and unrealized gains and losses included in Other income, net. As of February 2228, ~~2025~~2026, the Company ~~has~~had other investments of $2638.07 million, included in Other ~~current~~ assets~~, and $50~~.~~8 million,~~ ~~included in Other assets.~~ As of February 2422, ~~2024~~2025 the Company ~~has~~had other investments of $3926.40 million, included in Other current assets., ~~Net realized~~ and ~~unrealized gains were~~ $3450.98 million, ~~for~~included ~~fiscal~~in ~~2024~~Other assets. Net realized and unrealized losses were $16.3 million and $111.53 million for fiscal ~~2023~~2025 and fiscal ~~2022~~2023, respectively. Net realized and unrealized gains were $34.9 million for fiscal 2024.

Company-Owned life insurance policies ("COLI"): The Company has COLI policies that have a cash surrender value. The Company has loans against these policies. The Company has no intention of repaying the loans prior to maturity or cancellation of the policies. Therefore, the Company offsets the cash surrender value by the related loans. As of February 2228, ~~2025~~2026 and February 2422, ~~2024~~2025, the cash surrender values of the policies were $~~138~~142.14 million and $~~136~~138.21 million, and the balances of the policy loans were $8385.13 million and $8283.31 million, respectively. The net balance of the COLI policies is included in Other assets.

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Derivatives: The Company has entered into contracts to purchase electricity and natural gas at fixed prices for a portion of its energy needs. The Company expects to take delivery of the electricity and natural gas in the normal course of business. Contracts that qualify for the normal purchase exception under derivatives and hedging accounting guidance are not recorded at fair value. Energy purchased under these contracts is expensed as delivered. The Company also manages its exposure to changes in diesel prices utilized in the Company's distribution process through the use of short-term heating oil derivative contracts. These contracts are economic hedges of price risk and are not designated or accounted for as hedging instruments for accounting purposes. Changes in the fair value of these instruments are recognized in current period earnings.

Self-Insurance liabilities: The Company is primarily self-insured for workers' compensation, property, automobile and general liability. The self-insurance liability is undiscounted and determined actuarially, based on claims filed and an estimate of claims incurred but not yet reported. The Company has established stop-loss amounts that limit the Company's further exposure after a claim reaches the designated stop-loss threshold. Stop-loss amounts for claims incurred for the years presented range from $0.25 million to $10.0 million per claim, depending upon the type of insurance coverage and the year the claim was incurred. In determining its self-insurance liabilities, the Company performs a continuing review of its overall position and reserving techniques. Since recorded amounts are ~~based on estimates, the ultimate cost of all incurred claims and related expenses may be more or less than the recorded liabilities.~~

The Company has reinsurance receivables of $19.1 million and $21.2 million recorded within Receivables, net and $38.2 million and $53.5 million recorded within Other assets as of February 22, 2025 and February 24, 2024, respectively. The self-insurance liabilities and related reinsurance receivables are recorded gross.61

Changes in self-insurance liabilities consisted of the following (in millions):

	February 22,2025		February 24,2024
Beginning balance	$	1,267.6	$	1,234.1
Expense, net of actuarial adjustments	402.5		373.0
Claim payments	(374.0)		(339.5)
Ending balance	1,296.1		1,267.6
Less current portion	(374.0)		(367.7)
Long-term portion	$	922.1	$	899.9

Benefit plans and Multiemployer plans: Substantially all of the Company's employees are covered by various contributory and non-contributory pension, profit sharing or 401(k) plans, in addition to sponsored defined benefit plans. Certain employees participate in a long-term retention incentive bonus plan. The Company also provides certain health and welfare benefits, including short-term and long-term disability benefits to inactive disabled employees prior to retirement.

The Company recognizes a liability for the underfunded status of the defined benefit plans as a component of Other long-term liabilities. Actuarial gains or losses and prior service costs or credits are recorded within Other comprehensive income (loss). The determination of the Company's obligation and related expense for its sponsored pensions and other post-retirement benefits is dependent, in part, on management's selection of certain actuarial assumptions in calculating these amounts. These assumptions include, among other things, the discount rate and expected long-term rate of return on plan assets.

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based on estimates, the ultimate cost of all incurred claims and related expenses may be more or less than the recorded liabilities.

The Company had reinsurance receivables of $19.4 million and $19.1 million recorded within Receivables, net and $39.5 million and $38.2 million recorded within Other assets as of February 28, 2026 and February 22, 2025, respectively. The self-insurance liabilities and related reinsurance receivables are recorded gross.

Changes in self-insurance liabilities consisted of the following (in millions):


	February 28, 2026		February 22, 2025
Beginning balance	$	1,296.1	$	1,267.6
Expense, net of actuarial adjustments	456.0		402.5
Claim payments	(448.8)		(374.0)
Ending balance	1,303.3		1,296.1
Less current portion	(385.7)		(374.0)
Long-term portion	$	917.6	$	922.1

Benefit plans and Multiemployer plans: Substantially all of the Company's employees are covered by various contributory and non-contributory pension, multiemployer retirement, profit sharing or 401(k) plans, in addition to sponsored defined benefit plans. Certain employees participate in a long-term retention incentive bonus plan. The Company also provides certain health and welfare benefits, including short-term and long-term disability benefits to inactive disabled employees prior to retirement.

The Company recognizes a liability for the underfunded status of the sponsored defined benefit plans as a component of Other long-term liabilities. Actuarial gains or losses and prior service costs or credits are recorded within Other comprehensive income (loss). The determination of the Company's obligation and related expense for its sponsored pensions and other post-retirement benefits is dependent, in part, on management's selection of certain actuarial assumptions in calculating these amounts. These assumptions include, among other things, the discount rate and expected long-term rate of return on plan assets.

Most union employees participate in multiemployer retirement plans pursuant to collective bargaining agreements, unless the collective bargaining agreement provides for participation in plans sponsored by the Company. Pension expense for the multiemployer plans is recognized as contributions are made. In the event we were to exit certain markets or otherwise cease contributing to certain multiemployer plans, such actions could result in a withdrawal liability. Any resulting withdrawal liability is recognized when it is probable that a liability has been incurred and the amount can be reasonably estimated.

Equity-based compensation: The Company recognizes equity-based compensation expense for restricted stock units ("Restricted Stock Units" or "RSUs") and restricted common stock of the Company ("RSAs") granted to employees and non-employee directors. Actual forfeitures are recognized as they occur. Equity-based compensation expense is based on the fair value on the grant date and is recognized over the requisite service period of the award, generally between one and three years from the date of the award. The fair value of the RSUs and RSAs with a service condition or performance-based condition is generally determined using the fair market value of the Company's Class A common stock on the grant date.

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 $~~464~~519.18 million and $~~376~~464.1 million as of February 2228, ~~2025~~2026 and February 2422, ~~2024~~2025, 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. 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 in fiscal 2024 and fiscal 2023. Media advertising services are classified as either Net sales and other revenue or a reduction in Cost of sales depending on the nature of the media advertising arrangement.

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 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 $119.9 million and $111.4 million as of February 22, 2025 and February 24, 2024, respectively. 62

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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 in fiscal 2025 and fiscal 2024. Media advertising services are classified as either Net sales and other revenue or a reduction in Cost of sales depending on the nature of the media advertising arrangement.

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 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 $126.2 million and $119.9 million as of February 28, 2026 and February 22, 2025, respectively.

Disaggregated Revenues

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

	Fiscal 2024				Fiscal 2023				Fiscal 2022
	Fiscal 2025				Fiscal 2024				Fiscal 2023
	Amount(1)		% of Total		Amount(1)		% of Total		Amount(1)		% of Total
Non-perishables (2)	$	40,~~102~~624.8	4948.98	%	$	3940,~~977~~102.38	5049.59	%	$	39,~~142~~977.43	50.45	%
Fresh (3)	2526,~~507~~024.32		31.73	%	25,~~442~~507.73		3231.17	%	25,~~585~~442.47		32.91	%
Pharmacy	911,~~597~~414.29		1113.97	%	89,~~240~~597.02		1011.49	%	68,~~769~~240.30		810.74	%
Fuel	3,~~980~~803.60		54.06	%	43,~~396~~980.76		5.50	%	4,~~857~~396.67		65.35	%
Other (4)	1,~~203~~305.06		1.56	%	1,~~181~~203.0		1.5	%	1,~~295~~181.0		1.75	%
Total	$	80,390.9	100.0	%	$	79,237.7	100.0	%	$	77,649.7	100.0	%
Total (5)	$	83,172.5	100.0	%	$	80,390.9	100.0	%	$	79,237.7	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 sales to third parties, commissions, rental income, media advertising revenue, ~~rental income~~ and other miscellaneous revenue.

64(5) Fiscal 2025 includes an estimated $1.4 billion of incremental Net sales and other revenue due to the additional 53rd week.

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Cost of sales and vendor allowances: Cost of sales includes, among other things, purchasing and sourcing costs, inbound freight costs, product quality testing costs, warehousing and distribution costs, Own Brands program costs and digital-related delivery and handling costs.

The Company receives vendor allowances or rebates ("Vendor Allowances") for a variety of merchandising initiatives and buying activities. The terms of the Company's Vendor Allowances arrangements vary in length but are primarily expected to be completed within a quarter. The Company records Vendor Allowances as a reduction of Cost of sales when the associated products are sold. Vendor Allowances that have been earned as a result of completing the required performance under terms of the underlying agreements but for which the product has not yet been sold are recognized as reductions of inventory. The reduction of inventory for these Vendor Allowances was $7182.76 million and $6671.67 million as of February 2228, ~~2025~~2026 and February 2422, ~~2024~~2025, respectively.

Advertising costs are included in Cost of sales and are expensed in the period the advertising occurs. Cooperative advertising funds are recorded as a reduction of Cost of sales when the advertising occurs. Advertising costs were $530.0 million, $535.7 million and $498.2 million, net of cooperative advertising allowances of $62.3 million, $67.0 million and $63~~.9 million for fiscal 2024, fiscal 2023 and fiscal 2022, respectively.~~

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Advertising costs are included in Cost of sales and are expensed in the period the advertising occurs. Cooperative advertising funds are recorded as a reduction of Cost of sales when the advertising occurs. Advertising costs were $524.7 million, $530.0 million and $535.7 million, net of cooperative advertising allowances of $72.2 million, $62.3 million and $67.0 million for fiscal 2025, fiscal 2024 and fiscal 2023, respectively.

Selling and administrative expenses: Selling and administrative expenses consist primarily of store and corporate employee-related costs such as salaries and wages, equity-based compensation, health and welfare benefits, workers' compensation and pension benefits, as well as rent, occupancy, debit and credit card fees, depreciation, utilities, amortization of intangibles and other operating and administrative costs.

Income taxes: The Company's income before taxes is primarily from domestic operations. Deferred taxes are provided for the net tax effects of temporary differences between the financial reporting and income tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Valuation allowances are established where management determines that it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company reviews tax positions taken or expected to be taken on tax returns to determine whether and to what extent a tax benefit can be recognized. The Company evaluates its positions taken and establishes liabilities in accordance with the applicable accounting guidance for uncertain tax positions. The Company reviews these liabilities as facts and circumstances change and adjusts accordingly. The Company recognizes any interest and penalties associated with uncertain tax positions as a component of Income tax expense. U.S. shareholders of a controlled foreign corporation are required to provide U.S. taxes on its share of global intangible low-taxed income ("GILTI"). The current and deferred tax impact of GILTI is not material to the Company. Accordingly, the Company will report the tax impact of GILTI as a period cost and not provide deferred taxes for the basis difference that would be expected to reverse as GILTI.

Recently adopted accounting standards: In ~~November~~December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-0709, "~~Segment~~Income ~~Reporting~~Taxes (Topic ~~(280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax ~~Disclosure~~Disclosures." The ASU ~~updated~~enhances ~~reportable~~disclosures ~~segment~~within ~~disclosure~~the ~~requirements,~~income ~~primarily~~tax ~~through~~rate ~~enhanced~~reconciliation ~~disclosures about significant segment expenses~~ and information ~~used~~disclosed related to ~~assess~~income ~~segment~~taxes ~~performance~~paid. The Company adopted this ASU ~~beginning~~ in ~~the fourth quarter of~~ fiscal ~~2024~~2025 on a retrospective basis for all periods presented,. ~~requiring~~The ~~additional~~adoption ~~disclosures~~of inthis ~~its~~ASU ~~consolidated~~resulted ~~financial~~in ~~statements. For~~ additional ~~information~~required ~~about~~disclosures, ~~the~~which ~~Company's~~are ~~segment~~included ~~reporting,~~in ~~see~~ Note 159 - ~~Segment~~Income ~~Information~~Taxes.

Recently issued accounting standards: In ~~December~~November ~~2023~~2024, the FASB issued ASU ~~2023~~2024-0903, "Income ~~Taxes~~Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (~~Topic~~Subtopic ~~740~~220-40): ~~Improvements~~Disaggregation toof Income ~~Tax~~Statement ~~Disclosures~~Expenses." The ASU ~~enhances~~requires ~~the~~disclosures ~~transparency~~about ~~and~~specific ~~decision~~types ~~usefulness~~of expenses, including purchases of ~~income~~inventory, ~~tax~~employee ~~disclosures~~compensation, depreciation and isamortization. The amendments in this ASU are effective for ~~annual~~fiscal ~~periods~~years beginning after December 15, ~~2024~~2026, onand afor ~~prospective~~interim ~~basis~~periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements and related disclosures.

65In September 2025, the FASB issued ASU 2025-06, "Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software." The ASU removes all references to prescriptive and sequential software development stages. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements and related disclosures.

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InNOTE ~~November~~2 ~~2024, the FASB issued ASU 2024~~-~~03,~~ ~~"Income~~PROPERTY ~~Statement~~AND -EQUIPMENT Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." The ASU requires disclosures about specific types of expenses, including purchases of inventory, employee compensation, depreciation and amortization. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements and related disclosures.

NOTE 2 - TERMINATION OF THE MERGER AGREEMENT

As previously disclosed, on October 13, 2022, the Company, The Kroger Co. ("Kroger") and Kettle Merger Sub, Inc., a wholly owned subsidiary of Kroger ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub would have been merged with and into the Company (the "Merger"), with the Company surviving the Merger as the surviving corporation and a direct, wholly owned subsidiary of Kroger.

Pursuant to the Merger Agreement, each share of Class A common stock issued and outstanding immediately prior to the effective time of the Merger (the "Effective Time"), would have converted automatically at the Effective Time into the right to receive from Kroger $34.10 per share in cash, without interest, reduced by the special cash dividend of $6.85 per share of Class A common stock which was paid on January 20, 2023. The adjusted per share cash purchase price was expected to be $27.25 per share of Class A common stock. All outstanding Company equity awards would have converted to Kroger equity awards as described in the Merger Agreement.

In connection with obtaining the requisite regulatory approval to consummate the Merger, on September 8, 2023, the Company and Kroger announced that the parties had entered into a definitive agreement with C&S Wholesale Grocers, LLC ("C&S") for the sale of select stores, banners, distribution centers, offices and private label brands. On April 22, 2024, the Company and Kroger announced they had amended the definitive agreement with C&S. The divestiture to C&S was subject to fulfillment of customary closing conditions, including clearance by the United States Federal Trade Commission ("FTC") and the completion of the proposed Merger.

On February 26, 2024, the FTC instituted an administrative proceeding to prohibit the Merger. On the same day, the FTC (joined by nine states) filed suit in the United States District Court for the District of Oregon, requesting a preliminary injunction to enjoin the consummation of the Merger. On January 15, 2024 and February 14, 2024, the attorneys general of the States of Washington and Colorado, respectively, filed suit in their respective state courts, also seeking to enjoin the consummation of the Merger.

On December 10, 2024, the United States District Court for the District of Oregon issued a preliminary injunction in the case Federal Trade Commission et al. v. The Kroger Company and Albertsons Companies, Inc. (Case No.: 3:24-cv-00347-AN), whereby the court enjoined the consummation of the Merger. In light of the preliminary injunction, and in accordance with Section 8.1(e) of the Merger Agreement, the Company exercised its right to terminate the Merger Agreement and sent a notice to Kroger on December 10, 2024 terminating the Merger Agreement.

Following the Company's termination of the Merger Agreement, on December 10, 2024, the Company filed a lawsuit against Kroger in the Court of Chancery in the State of Delaware, bringing claims for willful breach of the Merger Agreement and breach of the covenant of good faith and fair dealing arising from Kroger's failure to exercise "best efforts" and to take "any and all actions" to secure regulatory approval, as was required of Kroger under the terms of the Merger Agreement. The Company is seeking damages in an amount to be determined at trial, in addition to the $600 million termination fee which Kroger is already obligated to pay to the Company under the Merger Agreement.

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On December 11, 2024, Kroger delivered a termination notice to the Company, alleging that the Company's December 10, 2024 termination notice was not effective and that Kroger had no obligation to pay the $600 million termination fee because the Company allegedly failed to perform and comply in all material respects with its covenants under the Merger Agreement. On March 25, 2025, Kroger answered the Company's lawsuit and brought counterclaims against the Company in connection with the Company's alleged failure to perform under the Merger Agreement.

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment, net consisted of the following (in millions):

	February 22,2025		February 24,2024
	February 28,2026		February 22,2025
Land	$	2,~~094~~063.6	$	2,~~118~~094.96
Buildings	56,~~787~~049.70		5,~~537~~787.7
Property under construction	~~815~~867.93		~~692~~815.49
Leasehold improvements	23,~~861~~079.14		2,~~699~~861.01
Fixtures and equipment	89,~~948~~894.02		8,~~792~~948.10
Property and equipment under finance leases	~~617~~571.94		~~679~~617.39
Total property and equipment	2122,~~125~~524.29		2021,~~519~~125.42
Accumulated depreciation and amortization	(1112,~~314~~621.2)		(1011,~~949~~314.12)
Total property and equipment, net	$	9,~~811~~903.07	$	9,~~570~~811.30

Depreciation expense was $1,~~353~~446.70 million, $1,~~334~~353.17 million and $1,~~433~~334.1 million for fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023, respectively. Amortization expense related to finance lease assets was $4540.86 million, $5145.78 million and $5551.57 million in fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023, respectively. Fixed asset impairment losses of $8322.61 million, $083.96 million and $50.19 million were recorded as a component of ~~Loss~~ (~~gain~~Gain) loss on property dispositions and impairment losses, net in fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023, respectively.

During ~~the~~fiscal ~~fourth~~2025 ~~quarter~~and of fiscal 2024, the Company ~~performed an overall review of its retail store portfolio in consideration of its post-Merger business strategy. As a result, the Company~~ identified certain stores with carrying values that exceeded their undiscounted cash flows, and recorded retail store impairment losses of $3422.41 million inand ~~the fourth quarter of fiscal 2024, for a total of~~ $53.9 million, ~~during~~respectively. During fiscal 2024., ~~The~~the Company also recorded impairment losses of $29.7 million primarily related to equipment from the closing of ~~our~~its micro-fulfillment centers ~~in fiscal 2024~~.

67NOTE 3 - INTANGIBLE ASSETS

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NOTE 4 - INTANGIBLE ASSETS

Intangible assets, net consisted of the following (in millions):

February 22,2025

February 24,2024

February 28,2026

February 22,2025

Estimated useful lives (Years)

Gross carrying amount

Accumulated amortization

Net

Gross carrying amount

Accumulated amortization

Net

Trade names

1,935.8

(~~507~~556.73)

1,~~428~~379.15

1,935.8

(~~459~~507.17)

1,~~476~~428.71

Customer prescription files

1,~~441~~446.04

(1,~~400~~407.20)

4039.84

1,~~430~~441.90

(1,~~389~~400.12)

4140.8

Internally developed software

3 to 5

1,~~889~~967.27

(1,~~127~~316.5)

~~761~~651.72

1,~~769~~889.52

(~~944~~1,127.35)

~~825~~761.27

Other intangible assets (1)

3 to 6

4445.72

(4144.60)

3.1.2

6644.17

(6141.56)

43.61

Total finite-lived intangible assets

5,~~310~~395.71

(3,~~077~~323.08)

2,~~233~~071.73

5,~~202~~310.37

(23,~~854~~077.0)

2,~~348~~233.37

Liquor licenses and restricted covenants

Indefinite

84.38

—

84.38

8684.23

—

8684.23

Total intangible assets, net

5,~~395~~479.09

(3,~~077~~323.08)

2,~~318~~156.01

5,~~288~~395.50

(23,~~854~~077.0)

2,~~434~~318.50

(1) Other intangible assets includes covenants not to compete, specialty accreditation and licenses and patents.

Amortization expense for intangible assets was $337.7 million, $312.7 million and $253.6 million for fiscal 2024, fiscal 2023 and fiscal 2022, respectively. Estimated future amortization expense associated with the net carrying amount of intangibles with finite lives is as follows (in millions):65

Fiscal Year	Amortization Expected
2025	$	348.6
2026	283.2
2027	174.5
2028	89.4
2029	57.4
Thereafter	1,280.6
Total	$	2,233.7

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InAmortization ~~fiscal~~expense ~~2024~~for ~~and~~intangible ~~fiscal~~assets ~~2023,~~was ~~there~~$340.6 ~~were~~million, $13337.67 million and $39312.97 million, ~~respectively,~~for offiscal ~~intangible~~2025, ~~asset~~fiscal ~~impairment~~2024 and ~~disposal~~fiscal ~~losses~~2023, ~~related~~respectively. toEstimated ~~internally~~future ~~developed~~amortization ~~software~~expense ~~recorded~~associated aswith athe ~~component of Loss (gain) on property dispositions and impairment losses,~~ net. ~~There~~carrying ~~were~~amount noof ~~intangible~~intangibles ~~asset~~with ~~impairment~~finite ~~and~~lives ~~disposal~~is ~~losses~~as follows (in ~~fiscal 2022.~~millions):

NOTE 5 - FAIR VALUE MEASUREMENTS


Fiscal Year	Amortization Expected
2026	$	349.9
2027	243.7
2028	130.7
2029	75.0
2030	56.8
Thereafter	1,215.2
Total	$	2,071.3

In fiscal 2025, fiscal 2024 and fiscal 2023, there were $14.2 million, $13.6 million and $39.9 million, respectively, of intangible asset impairment and disposal losses related to internally developed software recorded as a component of (Gain) loss on property dispositions and impairment losses, net.

NOTE 4 - 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;

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Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and

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

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

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The following table presents certain assets which are measured at fair value on a recurring basis as of February 28, 2026 (in millions):


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


Short-term investments (1)	$	13.7	$	7.8	$	5.9	$	—
Non-current investments (2)	111.4		8.7		102.7		—
Derivative contracts (3)	3.4		—		3.4		—
Total	$	128.5	$	16.5	$	112.0	$	—

Liabilities:
Derivative contracts (3)	$	0.1	$	—	$	0.1	$	—

Total	$	0.1	$	—	$	0.1	$	—

(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 Exchange-Traded Funds (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 or Other current liabilities.

The following table presents certain assets which are measured at fair value on a recurring basis as of February 22, 2025 (in millions):


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


Short-term investments (1)	$	41.3	$	6.8	$	34.5	$	—
Non-current investments (2)	118.8		7.2		111.6		—
Derivative contracts (3)	0.3		—		0.3		—
Total	$	160.4	$	14.0	$	146.4	$	—

Liabilities:
Derivative contracts (3)	$	0.6	$	—	$	0.6	$	—

Total	$	0.6	$	—	$	0.6	$	—

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

(2) Primarily relates to investments in Exchange-Traded Funds (Level 1), and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets.

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

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The following table presents certain assets which are measured at fair value on a recurring basis as of February 24, 2024 (in millions):

	Fair Value Measurements
	Total		Quoted prices in active marketsfor identicalassets(Level 1)		Significantobservableinputs(Level 2)		Significantunobservableinputs(Level 3)
Assets:
Short-term investments (1)	$	23.3	$	5.3	$	18.0	$	—
Non-current investments (2)	107.3		6.4		100.9		—
Derivative contracts (3)	1.5		—		1.5		—
Total	$	132.1	$	11.7	$	120.4	$	—
Liabilities:
Derivative contracts (3)	$	0.8	$	—	$	0.8	$	—
Total	$	0.8	$	—	$	0.8	$	—

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

(2) Primarily relates to investments in Exchange-Traded Funds (Level 1), and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets.

(3) Primarily relates to energy derivative contracts. Included in Other assets and 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 February 22, 2025, the fair value of total debt was $7,312.1 million compared to a carrying value of $7,452.4 million, excluding debt discounts and deferred financing costs. As of February 24, 2024, the fair value of total debt was $7,457.2 million compared to the carrying value of $7,684.2 million, excluding debt discounts and deferred financing costs. 67

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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 February 28, 2026, the fair value of total debt was $8,649.9 million compared to a carrying value of $8,626.8 million, excluding debt discounts and deferred financing costs. As of February 22, 2025, the fair value of total debt was $7,312.1 million compared to the carrying value of $7,452.4 million, excluding debt discounts and deferred financing costs.

Assets Measured at Fair Value on a Nonrecurring Basis

The Company measures certain assets at fair value on a non-recurring basis, including long-lived assets and goodwill, which are evaluated for impairment. Long-lived assets include store-related assets such as property and equipment, operating lease assets and certain intangible assets. The inputs used to determine the fair value of long-lived assets and a reporting unit are considered Level 3 measurements due to their subjective nature.

The Company recorded long-lived asset impairment ~~and disposal~~ losses of $~~104~~28.24 million, $42104.62 million and $542.16 million during fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023, respectively.

70NOTE 5 - LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS

The Company's long-term debt and finance lease obligations as of February 28, 2026 and February 22, 2025, net of unamortized debt discounts of $37.9 million and $28.6 million, respectively, and deferred financing costs of $55.2 million and $31.6 million, respectively, consisted of the following (in millions):


	February 28, 2026		February 22, 2025
Senior Unsecured Notes due 2028 to 2034, interest rate range of 3.50% to 6.50%	$	7,228.9	$	6,517.0
New Albertsons L.P. Notes due 2026 to 2031, interest rate range of 6.52% to 8.70%	489.3		484.6
Safeway Inc. Notes due 2027 to 2031, interest rate range of 7.25% to 7.45%	376.5		375.9
ABL Facility	425.0		—
Other financing obligations	14.0		14.7

Finance lease obligations (see Note 6)	412.9		427.9
Total debt	8,946.6		7,820.1
Less current maturities	(534.0)		(57.6)
Long-term portion	$	8,412.6	$	7,762.5

As of February 28, 2026, the future maturities of long-term debt, excluding finance lease obligations, debt discounts and deferred financing costs, consisted of the following (in millions):


2026	$	485.1
2027	906.6
2028	44.0
2029	2,477.9
2030	397.0
Thereafter	4,316.2
Total	$	8,626.8

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~~NOTE~~Company's 6ability -to ~~LONG-TERM~~receive ~~DEBT~~distributions ~~AND~~from ~~FINANCE~~its ~~LEASE~~subsidiaries ~~OBLIGATIONS~~to fund interest and principal payments due under the ABL Facility and the Company's senior unsecured notes (the "Senior Unsecured Notes"). Each of the ABL Facility and the Senior Unsecured Notes restrict the ability of the Company to pay dividends and distribute property to the Company's stockholders. As a result, all of the Company's consolidated net assets are effectively restricted with respect to their ability to be transferred to the Company's stockholders. Notwithstanding the foregoing, the ABL Facility and the Senior Unsecured Notes each contain customary exceptions for certain dividends and distributions, if certain conditions are satisfied under the documentation governing the ABL Facility and the Senior Unsecured Notes. The Company was in compliance with all such covenants and provisions as of and for the fiscal year ended February 28, 2026.

The Company's long-term debt and finance lease obligations as of February 22, 2025 and February 24, 2024, net of unamortized debt discounts of $28.6 million and $33.3 million, respectively, and deferred financing costs of $31.6 million and $42.7 million, respectively, consisted of the following (in millions):

	February 22,2025		February 24,2024
Senior Unsecured Notes due 2026 to 2030, interest rate range of 3.25% to 7.50%	$	6,517.0	$	6,506.4
New Albertsons L.P. Notes due 2026 to 2031, interest rate range of 6.52% to 8.70%	484.6		480.1
Safeway Inc. Notes due 2027 to 2031, interest rate range of 7.25% to 7.45%	375.9		375.4
ABL Facility	—		200.0
Other financing obligations	14.7		46.3
Finance lease obligations (see Note 7)	427.9		460.4
Total debt	7,820.1		8,068.6
Less current maturities	(57.6)		(285.2)
Long-term portion	$	7,762.5	$	7,783.4

As of February 22, 2025, the future maturities of long-term debt, excluding finance lease obligations, debt discounts and deferred financing costs, consisted of the following (in millions):

2025	$	0.6
2026	2,760.1
2027	1,656.6
2028	44.0
2029	2,477.9
Thereafter	513.2
Total	$	7,452.4

The Company's amended and restated senior secured asset-based loan facility (as amended, the "ABL Facility") and certain of the outstanding notes and debentures have restrictive covenants, subject to the right to cure in certain circumstances, calling for the acceleration of payments due in the event of a breach of a covenant or a default in the payment of a specified amount of indebtedness due under certain debt arrangements. There are no restrictions on the Company's ability to receive distributions from its subsidiaries to fund interest and principal payments due under the ABL Facility and the Company's senior unsecured notes (the "Senior Unsecured Notes"). Each of the ABL Facility and the Senior Unsecured Notes restrict the ability of the Company to pay dividends and distribute property to the Company's stockholders. As a result, all of the Company's consolidated net assets are effectively restricted with respect to their ability to be transferred to the Company's stockholders. Notwithstanding the foregoing, the ABL Facility and the Senior Unsecured Notes each contain customary exceptions for certain dividends and distributions, if certain conditions are satisfied under the documentation governing the ABL Facility and the Senior Unsecured Notes. The Company was in compliance with all such covenants and provisions as of and for the fiscal year ended February 22, 2025.

ABL Facility

~~The~~On August 27, 2025, the Company's existing ABL Facility, which provides for a $4,000.0 million senior secured revolving credit facility, ~~maturing~~was onamended ~~December 20~~and restated to, ~~2026~~among other things, extend the maturity date of the facility to August 27, 2030. The new ABL Facility has an interest rate of ~~Term~~term SOFR plus a margin ranging from 1.25% to 1.50% and also provides for a letters of credit ("LOC") sub-facility of $1,500.0 million. The unused commitment fee is 0.25% per annum. As part of the amendment, the Company capitalized $12.6 million of deferred financing costs, recorded within Other assets, and wrote-off $1.4 million of unamortized deferred financing costs to Interest expense, net.

71As of February 28, 2026, there was $425.0 million outstanding under the ABL Facility, and LOC issued under the LOC sub-facility were $12.7 million. As of February 22, 2025, there were no amounts outstanding under the ABL Facility, and LOC issued under the LOC sub-facility were $27.4 million.

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1.50% and also provides for a letters of credit ("LOC") sub-facility of $1,500.0 million. The unused commitment fee is 0.25% per annum.

As of February 22, 2025, there were no amounts outstanding under the ABL Facility as the Company repaid $250.0 million and borrowed $50.0 million during fiscal 2024, and LOC issued under the LOC sub-facility were $27.4 million. As of February 24, 2024, there was $200.0 million outstanding under the ABL Facility as the Company repaid $950.0 million and borrowed $150.0 million during fiscal 2023, and LOC issued under the LOC sub-facility were $48.3 million. On November 2, 2022, the Company provided notice to the lenders to borrow $1,400.0 million under the ABL Facility, which together with cash on hand was used to fund the payment of the Special Dividend (as defined below in Note 8 - Stockholders' Equity and Convertible Preferred Stock). Subsequently, during fiscal 2022, the Company repaid $400.0 million of the ABL Facility. During the fiscal years ended February 22, 2025 and February 24, 2024, the average interest rate on the ABL Facility was 7.1% and 6.5%, respectively.

The ABL Facility is guaranteed by the Company's existing and future direct and indirect wholly owned domestic subsidiaries that are not borrowers, subject to certain exceptions. The ABL Facility is secured by, subject to certain exceptions, (i) a first-priority lien on substantially all of the ABL Facility priority collateral and (ii) a first-priority lien on substantially all other assets (other than real property). The ABL Facility contains no financial covenant unless and until (a) excess availability is less than (i) 10.0% of the lesser of the aggregate commitments and the then-current borrowing base at any time or is (ii) $250.0 million at any time or (b) an event of default is continuing. If any of such events occur, the Company must maintain a fixed charge coverage ratio of 1.0 to 1.0 from the date such triggering event occurs until such event of default is cured or waived and/or the 30th day that all such triggers under clause (a) no longer exist.

Senior Unsecured Notes

On ~~March~~February 112, ~~2025~~2026, ~~subsequent to~~ the ~~end of fiscal 2024, the~~ Company and ~~substantially~~certain ~~all~~ of its subsidiaries (the "Subsidiary Co-Issuers") completed the issuance of $~~600~~1,200.0 million in aggregate principal amount of 65.~~250~~625% senior unsecured notes due March 1531, ~~2033~~2032 (the "~~2033~~2032 Notes") and $900.0 million in aggregate principal amount of additional 5.750% 2034 Notes, as defined below (the "Additional 2034 Notes" and together with the 2032 Notes, the "New Notes"). The Additional 2034 Notes were issued as "additional securities" under the indenture governing the outstanding 2034 Notes. The Additional 2034 Notes are treated as a single class with the outstanding 2034 Notes for all purposes and have the same terms as those of the outstanding 2034 Notes. The New Notes are guaranteed on a senior unsecured basis by all of the Company's existing and future direct and indirect domestic subsidiaries (other than the Subsidiary Co-Issuers) that are obligors under the ABL Facility. Interest on the ~~2033~~2032 Notes is payable semi-annually in arrears on ~~March~~January 15 and ~~September~~July 15 of each year, with the first payment commencing on ~~September~~July 15, ~~2025~~2026. OnProceeds ~~March 17, 2025, subsequent to the end of fiscal 2024, proceeds~~ from the ~~2033~~New Notes, together with approximately $520.67 million of cash on hand, were used to (i) redeem in full the $~~600~~1,350.0 million outstanding of the Company's 74.~~500~~625% senior unsecured notes due ~~March~~January 15, ~~2026~~2027 ~~and~~(the "2027 Notes Refinancing"), (ii) redeem in full the $750.0 million outstanding of the Company's 5.875% senior unsecured notes due February 15, 2028 (the "2028 Notes Refinancing" and together with the 2027 Notes Refinancing, the “Refinancing”); and (iii) pay fees and expenses related to the Refinancing and the issuance of the ~~2033~~New Notes.

On February 13, 2023, the Company and substantially all of its subsidiaries completed the issuance of $750.0 million in aggregate principal amount of 6.500% senior unsecured notes due February 15, 2028 (the "New 2028 Notes"). Interest on the New 2028 Notes is payable semi-annually in arrears on February 15 and August 15 of each year, and the first payment commenced on August 15, 2023. On February 15, 2023, proceeds from the New 2028 Notes, together with approximately $7.1 million of cash on hand, were used to (i) repay in full the $750.0 million outstanding of the Company's 3.50% senior unsecured notes due February 15, 2023 and (ii) pay fees and expenses related to the issuance of the New 2028 Notes. 69

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On November 10, 2025, the Company and the Subsidiary Co-Issuers completed the issuance of $700.0 million in aggregate principal amount of 5.500% senior unsecured notes due March 31, 2031 (the "2031 Notes") and $800.0 million in aggregate principal amount of 5.750% senior unsecured notes due March 31, 2034 (the "2034 Notes" and together with the 2031 Notes, the "Notes"). The Notes are guaranteed on a senior unsecured basis by all of the Company's existing and future direct and indirect domestic subsidiaries (other than the Subsidiary Co-Issuers) that are obligors under the ABL Facility. Interest on the Notes is payable semi-annually in arrears on May 15 and November 15 of each year, with the first payment commencing on May 15, 2026. Proceeds from the Notes were used to (i) redeem in full the $750.0 million outstanding of the Company's 3.250% senior unsecured notes due March 15, 2026 (the "November Refinancing"); (ii) repay a portion of the borrowings under the ABL Facility; and (iii) pay fees and expenses related to the November Refinancing and the issuance of the Notes.

On March 11, 2025, the Company and the Subsidiary Co-Issuers completed the issuance of $600.0 million in aggregate principal amount of 6.250% senior unsecured notes due March 15, 2033 (the "2033 Notes"). The 2033 Notes are guaranteed on a senior unsecured basis by all of the Company's existing and future direct and indirect domestic subsidiaries (other than the Subsidiary Co-Issuers) that are obligors under the ABL Facility. Interest on the 2033 Notes is payable semi-annually in arrears on March 15 and September 15 of each year, and the first payment commenced on September 15, 2025. Proceeds from the 2033 Notes, together with approximately $5.7 million of cash on hand, were used to (i) redeem in full the $600.0 million outstanding of the Company's 7.500% senior unsecured notes due March 15, 2026 (the "March Refinancing") and (ii) pay fees and expenses related to the March Refinancing and the issuance of the 2033 Notes.

The Senior Unsecured Notes have not been and will not be registered with the SEC. Each of these 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 notes.

The Company, an issuer and direct or indirect parent of each of the other issuers of the Senior Unsecured Notes, has no independent assets or operations. All of the direct or indirect subsidiaries of the Company, other than subsidiaries that are issuers, or guarantors, as applicable, of the Senior Unsecured Notes are minor, individually and in the aggregate.

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Deferred Financing Costs and Interest Expense, Net

Financing costs incurred to obtain all financing, except for ABL Facility financing, are recognized as a direct reduction from the carrying amount of the debt liability and are amortized over the term of the related debt using the effective interest method. Financing costs incurred to obtain ABL Facility financing are capitalized and amortized over the ABL Facility term using the straight-line method. Deferred financing costs associated with ABL Facility financing are included in Other assets and were $916.51 million and $149.75 million as of February 2228, ~~2025~~2026 and February 2422, ~~2024~~2025, respectively.

Interest expense, net consisted of the following (in millions):

	Fiscal 2024		Fiscal 2023		Fiscal 2022
	Fiscal 2025		Fiscal 2024		Fiscal 2023
ABL Facility, senior secured and unsecured notes, and debentures	$	~~414~~454.86	$	~~446~~414.98	$	~~404~~446.9
Finance lease obligations	3834.84		4538.58		5145.45
Amortization of deferred financing costs	16.3		15.6		16.9
Amortization of deferred financing costs (1)	24.5		16.3		15.6
Other interest income, net	(109.13)		(1510.91)		(6815.69)
Interest expense, net	$	~~459~~504.82	$	~~492~~459.18	$	~~404~~492.61

~~NOTE~~(1) 7Fiscal -2025 ~~LEASES~~includes $9.3 million of deferred financing costs expensed in connection with the refinancings.

NOTE 6 - LEASES

The components of total lease cost, net consisted of the following (in millions):

Classification

Fiscal ~~2024~~2025

Fiscal ~~2023~~2024

Fiscal ~~2022~~2023

Operating lease cost (1)

Cost of sales and Selling and administrative expenses (3)

1,~~111~~167.51

1,~~082~~111.85

1,~~062~~082.8

Finance lease cost

Amortization of lease assets

Cost of sales and Selling and administrative expenses (3)

4540.86

5145.78

5551.57

Interest on lease liabilities

Interest expense, net

3834.84

4538.58

5145.45

Variable lease cost (2)

Cost of sales and Selling and administrative expenses (3)

~~465~~483.81

~~456~~465.38

~~441~~456.93

Sublease income

Net sales and other revenue

(7672.03)

(7876.60)

(8378.36)

Total lease cost, net

1,~~585~~652.9

1,~~557~~585.79

1,~~528~~557.37

(1) Includes short-term lease cost, which is immaterial.

(2) Represents variable lease costs for both operating and finance leases. Includes contingent rent expense and other non-fixed lease-related costs, including property taxes, common area maintenance and property insurance.

(3) Supply chain-related amounts are included in Cost of sales.

73Balance sheet information related to leases as of February 28, 2026 and February 22, 2025 consisted of the following (in millions):

Balance sheet information related to leases as of February 22, 2025 and February 24, 2024 consisted of the following (in millions):


	Classification	February 28, 2026		February 22, 2025
Assets
Operating	Operating lease right-of-use assets	$	6,102.4	$	6,153.4
Finance	Property and equipment, net	287.9		288.0
Total lease assets		$	6,390.3	$	6,441.4

Liabilities
Current
Operating	Current operating lease obligations	$	736.7	$	705.5
Finance	Current maturities of long-term debt and finance lease obligations	48.9		57.0
Long-term
Operating	Long-term operating lease obligations	5,613.6		5,657.2
Finance	Long-term debt and finance lease obligations	364.0		370.9
Total lease liabilities		$	6,763.2	$	6,790.6

	Classification	February 22,2025		February 24,2024
Assets
Operating	Operating lease right-of-use assets	$	6,153.4	$	5,981.6
Finance	Property and equipment, net	288.0		300.2
Total lease assets		$	6,441.4	$	6,281.8
Liabilities
Current
Operating	Current operating lease obligations	$	705.5	$	677.6
Finance	Current maturities of long-term debt and finance lease obligations	57.0		68.3
Long-term
Operating	Long-term operating lease obligations	5,657.2		5,493.2
Finance	Long-term debt and finance lease obligations	370.9		392.1
Total lease liabilities		$	6,790.6	$	6,631.2

The following table presents cash flow information for leases (in millions):

	Fiscal 2024		Fiscal 2023		Fiscal 2022
	Fiscal 2025		Fiscal 2024		Fiscal 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,~~070~~109.18	$	1,~~042~~070.01	$	1,~~020~~042.20
Operating cash flows from finance leases	3834.84		4538.58		5145.45
Financing cash flows from finance leases	6051.60		6960.36		7169.63
Right-of-use assets obtained in exchange for operating lease obligations	~~868~~689.6		~~773~~868.06		~~629~~773.50
Right-of-use assets obtained in exchange for finance lease obligations	41.36		2241.63		22.86
Impairment of right-of-use operating lease assets	76.03		17.80		—1.8

The following table presents the weighted average lease term and discount rate for leases:

	February 22,2025		February 24,2024
	February 28,2026		February 22,2025
Weighted average remaining lease term - operating leases	109.29 years		10.52 years
Weighted average remaining lease term - finance leases	910.75 years		89.7 years
Weighted average discount rate - operating leases	6.4	%	6.4	%
Weighted average discount rate - finance leases	98.27	%	109.12	%

74Future minimum lease payments for operating and finance lease obligations as of February 28, 2026 consisted of the following (in millions):

Future minimum lease payments for operating and finance lease obligations as of February 22, 2025 consisted of the following (in millions):


	Lease Obligations
Fiscal year	Operating Leases		Finance Leases
2026	$	1,038.5	$	72.8
2027	1,060.8		70.9
2028	980.9		62.6
2029	880.1		54.3
2030	783.4		49.6
Thereafter	4,007.7		299.9
Total future minimum obligations	8,751.4		610.1
Less interest	(2,401.1)		(197.2)
Present value of net future minimum lease obligations	6,350.3		412.9
Less current portion	(736.7)		(48.9)
Long-term obligations	$	5,613.6	$	364.0

	Lease Obligations
Fiscal year	Operating Leases		Finance Leases
2025	$	1,010.6	$	81.3
2026	1,047.1		78.5
2027	964.3		67.2
2028	881.9		58.9
2029	779.8		50.5
Thereafter	4,194.8		286.7
Total future minimum obligations	8,878.5		623.1
Less interest	(2,515.8)		(195.2)
Present value of net future minimum lease obligations	6,362.7		427.9
Less current portion	(705.5)		(57.0)
Long-term obligations	$	5,657.2	$	370.9

The Company subleases certain property to third parties. Future minimum tenant operating lease payments remaining under these non-cancelable operating leases as of February 28, 2026 was $260.7 million.

~~The~~NOTE ~~Company~~7 ~~subleases certain property to third parties. Future minimum tenant operating lease payments remaining under these non~~-~~cancelable~~ ~~operating~~STOCKHOLDERS' ~~leases~~EQUITY asAND ofCONVERTIBLE ~~February 22,~~PREFERRED ~~2025~~STOCK ~~was $278.0 million.~~

NOTE 8 - 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 convertible common stock ("Class A-1 common stock"). As of February 22, 2025, there were 597,964,926 and 575,441,992 shares of Class A common stock issued and outstanding, respectively, and no shares of Class A-1 common stock issued or outstanding. As of February 24, 2024, there were 594,445,268 and 576,047,523 shares of Class A common stock issued and outstanding, respectively, and no shares of Class A-1 common stock issued or outstanding.

stock ("Class A-1 common stock"). As of February 28, 2026, there were 600,734,693 and 499,542,902 shares of Class A common stock issued and outstanding, respectively, and no shares of Class A-1 common stock issued or outstanding. As of February 22, 2025, there were 597,964,926 and 575,441,992 shares of Class A common stock issued and outstanding, respectively, and no shares of Class A-1 common stock issued or outstanding.

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 Class A common stock and Class A-1 common stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the Board of Directors (the "Board") out of legally available funds. In the event of the Company's liquidation, dissolution or winding-up, the holders of Class A common stock and Class A-1 common stock are entitled to share equally and ratably in the Company's assets, if any, remaining after the payment of all debts and liabilities and the liquidation preference of any outstanding preferred stock. When permitted under the relevant antitrust restrictions, any issued shares of Class A-1 common stock would automatically convert on a one-for-one basis to voting shares of Class A common stock.

The Company has established a dividend policy pursuant to which the Company intends to pay a quarterly dividend on its Class A common stock. The Company paid cash dividends on its Class A common stock of $~~295~~322.17 million during fiscal ~~2024~~2025, $~~276~~295.21 million during fiscal ~~2023~~2024 and $~~255~~276.12 million during fiscal ~~2022~~2023. On April 14, ~~excluding~~2026 subsequent to the ~~Special~~end ~~Dividend~~of ~~(as~~fiscal ~~defined~~2025, ~~below~~the Company announced that the Board of Directors (the "Board") increased the quarterly cash dividend 13% from $0.15 Onper ~~December~~common 11share to $0.17 per common share. Also on April 14, ~~2024~~2026, the Company announced ~~that~~the next quarterly dividend payment of $0.17 per share of Class A common stock to be paid on May 8, 2026 to stockholders of record as of the close of business on April 24, 2026. Future dividends will be made at the discretion of the Board ~~increased~~and will depend on, among other things, general and economic conditions, industry standards, the Company's financial condition and operating results, the Company's available cash and current and anticipated cash needs, restrictions under the documentation governing certain of the Company's indebtedness, including the ABL Facility and Senior Unsecured Notes, capital requirements, regulations and contractual, legal, tax and regulatory restrictions, and such other factors as the Board may deem relevant.

quarterly cash dividend 25% from $0.12 per common share to $0.15 per common share. On April 15, 2025, the Company announced the next quarterly dividend payment of $0.15 per share of Class A common stock to be paid on May 9, 2025 to stockholders of record as of the close of business on April 25, 2025. Future dividends will be made at the discretion of the Board and will depend on, among other things, general and economic conditions, industry standards, the Company's financial condition and operating results, the Company's available cash and current and anticipated cash needs, restrictions under the documentation governing certain of the Company's indebtedness, including the ABL Facility and Senior Unsecured Notes, capital requirements, regulations and contractual, legal, tax and regulatory restrictions, and such other factors as the Board may deem relevant.

Special Dividend

In connection with the Company's previously-announced Board-led review of potential strategic alternatives to enhance the Company's growth and maximize stockholder value, on October 13, 2022, the Company declared a special cash dividend of $6.85 per share of Class A common stock (the "Special Dividend"). The Special Dividend was payable to stockholders of record, including holders of Series A preferred stock on an as-converted basis, as of the close of business on October 24, 2022. On January 20, 2023, the Special Dividend of $3,916.9 million was paid.

Convertible Preferred Stock

On June 8, 2020, the Company amended and restated its certificate of incorporation to authorize 100,000,000 shares of convertible preferred stock, par value $0.01 per share, of which 1,750,000 shares were designated Series A preferred stock ("Series A preferred stock") and 1,410,000 shares were designated Series A-1 convertible preferred stock ("Series A-1 preferred stock" and together with the Series A preferred stock, the "Convertible 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 $1,680.0 million from the sale and issuance of the Convertible Preferred Stock which had an aggregate liquidation preference of $1,750.0 million. The Convertible Preferred Stock was presented outside of permanent equity at its original issuance price less costs incurred, due to it being contingently redeemable. The Series A preferred stock was 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.

The terms of the Series A preferred stock were substantially identical to the terms of the Series A-1 preferred stock, except that the Series A preferred stock voted together with Class A common stock on an as-converted basis, but the Series A-1 preferred stock could not vote with Class A common stock on an as converted basis. The Convertible Preferred Stock, with respect to dividend rights and/or distribution rights upon the liquidation, winding-up or dissolution, as applicable, ranked senior to each class of common stock and junior to existing and future indebtedness and other liabilities.

During fiscal 2023 and fiscal 2022, certain holders of the Company's Convertible Preferred Stock converted 50,000 and 1,349,186 shares of Convertible Preferred Stock, respectively, into 2,903,200 and 78,339,120 shares of the Company's Class A common stock, respectively, which were issued from treasury stock. As a result, the Company has issued, in the aggregate, 101,611,902 shares of Class A common stock to holders of Convertible Preferred Stock. These non-cash conversions represent 100% of the originally issued Convertible Preferred Stock. As of February 22, 2025 and February 24, 2024, no shares of Convertible Preferred Stock are outstanding.73

~~The holders of Convertible~~ Preferred Stock, ~~were~~with ~~entitled~~respect to ~~a quarterly~~ dividend ~~at a~~rights ~~rate~~and/or ~~per~~distribution ~~annum~~rights ofupon ~~6.75% of~~ the liquidation, winding-up or ~~preference~~dissolution, ~~per~~as ~~share~~applicable, ofranked senior ~~the~~to ~~Convertible~~each ~~Preferred~~class ~~Stock. In addition, the holders~~ of ~~Convertible Preferred Stock participated in cash dividends that the Company pays on its~~ common stock toand ~~the~~junior ~~extent~~to ~~that~~existing ~~such~~and ~~cash~~future ~~dividends~~indebtedness ~~exceeded~~and ~~$206~~other liabilities.25 ~~million~~As ~~per~~of ~~fiscal~~February 28, ~~year.~~2026 ~~The~~and ~~Company~~February 22, ~~paid~~2025, ~~cash~~no ~~dividends~~shares toof ~~holders~~Convertible ofPreferred ~~the~~Stock ~~Convertible~~were outstanding.

Preferred Stock of $0.8 million during fiscal 2023 and $65.3 million during fiscal 2022, excluding the Special Dividend.

Treasury Stock

On ~~December~~October 1114, ~~2024~~2025, the Company ~~announced~~entered ~~that~~into an accelerated share repurchase agreement (the ~~Board~~"ASR ~~has~~Agreement") ~~authorized~~with aJPMorgan ~~share~~Chase ~~repurchase~~Bank, ~~program~~National ofAssociation up("JPMorgan") to repurchase $~~2.0~~750 million ~~billion~~of shares of the Company's common stock. The ASR Agreement was funded with $750.0 million of borrowings under the ABL Facility. Also on October 14, 2025, the Company announced that the Board authorized an increase to the share repurchase program from $2.0 billion to $2.75 billion, inclusive of the ~~existing~~ASR ~~authorization~~Agreement. The $2.75 billion share repurchase program could include open market repurchases, accelerated share repurchase programs, tender offers, block trades, potential privately negotiated transactions, or trading plans in compliance with the federal securities laws. AsPursuant ~~part~~to the ASR Agreement, on October 15, 2025, the Company paid JPMorgan $750.0 million in cash and received an initial delivery of 35.4 million shares of common stock with a value equal to $600.0 million as of the ~~share~~date ~~repurchase~~the ~~program~~ASR Agreement was executed, representing an estimated 80% of the total shares initially underlying the ASR Agreement. Final settlement of the ASR Agreement occurred during the fourth quarter of fiscal ~~2024~~2025, and the Company, ~~through~~received a ~~series~~final delivery of ~~open-market~~7.3 million ~~transactions~~shares on January 8, 2026. The Company repurchased ~~4,118,733~~a ~~shares~~total of ~~its~~42.7 million ~~common~~shares ~~stock~~under ~~for~~the anASR ~~aggregate~~Agreement ~~purchase~~at an average price of $8217.557 ~~million.~~per ~~There~~share, ~~were~~based noon ~~repurchases~~the average of the volume-weighted average share price of the Company's common stock on specified dates during ~~fiscal~~the ~~2023~~term ~~and~~of ~~fiscal~~the ~~2022~~ASR Agreement, less a discount.

~~During~~As part of the share repurchase program during fiscal ~~2023~~2025 and fiscal ~~2022~~2024, the Company, ~~reissued~~through 2a series of open-market transactions and the ASR Agreement,~~903~~ repurchased 78,~~200~~668,857 shares and 784,~~339~~118,~~120~~733 shares of ~~treasury~~its common stock for an aggregate purchase price of $1,492.5 atmillion ~~cost~~and $82.5 million, respectively,. ~~upon~~There ~~conversion~~were no repurchases of ~~approximately~~the ~~50,000~~Company's ~~and~~common 1stock during fiscal 2023. On April 14,~~349~~ 2026,~~186~~ ~~shares~~subsequent ofto ~~Convertible~~the ~~Preferred~~end ~~Stock~~of fiscal 2025, ~~respectively~~the ~~into~~Board ~~Class~~authorized Aan ~~common~~increase ~~stock.~~to ~~Shares~~the remaining share repurchase authorization of ~~treasury~~$900 ~~stock~~million, ~~are~~resulting ~~reissued~~in ~~based~~a ontotal ~~specific~~remaining ~~identification~~authorization of $2.0 billion as of April 14, 2026.

~~NOTE~~During 9fiscal -2023, ~~EQUITY-BASED~~the ~~COMPENSATION~~Company reissued 2,903,200 shares of treasury stock, at cost, upon conversion of approximately 50,000 shares of Convertible Preferred Stock into Class A common stock. Shares of treasury stock are reissued based on specific identification.

~~The~~NOTE ~~Company~~8 ~~maintains~~- ~~the~~EQUITY-BASED ~~Albertsons~~COMPENSATION Companies, Inc. 2020 Omnibus Incentive Plan and the Albertsons Companies, Inc. Restricted Stock Unit Plan (the "Equity Plans"). Under the Equity Plans, subsequent to the IPO, 43.6 million shares of Class A common stock have been authorized for issuance as equity awards. As of February 22, 2025, 25.3 million shares of Class A common stock remained available for future awards.

~~Under~~The ~~the~~Company ~~Equity~~maintains ~~Plans,~~ the ~~Company~~Albertsons ~~recognizes~~Companies, ~~equity-based~~Inc. ~~compensation~~2020 ~~expense~~Omnibus ~~for~~Incentive ~~RSUs~~Plan and ~~RSAs~~the ~~granted~~Albertsons toCompanies, ~~employees and non-employee directors~~Inc. ~~Upon~~Restricted ~~vesting,~~Stock ~~RSUs~~Unit ~~and~~Plan ~~RSAs will be settled in shares of~~ (the ~~Company's~~"Equity ~~Class A common stock~~Plans"). ~~RSUs~~Under ~~generally~~the ~~vest~~Equity ~~over~~Plans, ~~three~~subsequent ~~years~~to ~~from~~ the ~~grant date~~IPO, ~~based~~43.6 million onshares aof ~~service~~Class ~~period,~~A orcommon ~~upon~~stock ahave ~~combination~~been ofauthorized ~~both~~for aissuance ~~service~~as ~~period~~equity ~~and~~awards. ~~achievement~~As of ~~certain performance-based thresholds~~February 28, ~~and RSAs generally vest over five years from the grant date~~2026, ~~with 50% based solely on a service period and 50% upon a service period and achievement of certain performance-based thresholds~~22.7 ~~For~~million ~~performance-based RSUs ("PBRSUs") granted in fiscal 2024, the number of~~ shares of ~~the Company's~~ Class A common stock toremained beavailable ~~received at vesting can be adjusted within a predetermined range based on the Company's achieved performance~~ for ~~fiscal~~future ~~2024 relative to the fiscal 2024 performance target~~awards.

InUnder ~~fiscal~~the ~~2022~~Equity Plans, ~~all~~the ~~unvested~~Company recognizes equity-based ~~awards~~compensation ~~outstanding~~expense ~~participated~~for inRSUs ~~the~~and ~~Special~~RSAs ~~Dividend,~~granted ~~according~~ to ~~the~~employees ~~same~~and non-employee directors. Upon vesting, ~~terms~~RSUs and ~~conditions~~RSAs aswill be settled in shares of the ~~underlying~~Company's ~~equity~~Class ~~award.~~A ~~Unvested~~common ~~equity~~stock. ~~awards~~RSUs ~~with~~generally ~~dividend~~vest ~~equivalent~~over ~~rights~~three ~~("DERs")~~years ~~received~~from the ~~Special~~grant ~~Dividend~~date, ~~through~~based ~~the~~on ~~issuance~~a service period, or upon a combination of ~~additional~~both ~~RSUs.~~a ~~Unvested~~service ~~equity~~period ~~awards~~and ~~without~~achievement ~~DERs~~of ~~received~~certain ~~the~~performance-based ~~Special~~thresholds, ~~Dividend~~and inRSAs ~~cash~~generally ~~subject~~vest toover ~~anti-dilution~~five ~~provisions.~~years ~~For~~from the ~~Special~~grant ~~Dividend~~date, ~~that~~with ~~settles~~50% inbased ~~cash~~solely on a service period and 50% upon ~~vesting,~~a ~~modification~~service ~~accounting~~period ~~was~~and ~~applied~~achievement ~~during~~of certain performance-based thresholds. For performance-based RSUs ("PBRSUs") granted in fiscal ~~2022~~2025, tothe ~~reflect~~number ~~liability~~of ~~classification.~~shares ~~The~~of ~~modification~~the ~~did~~Company's ~~not~~Class ~~result~~A incommon stock to be received at vesting can be adjusted within a ~~material~~predetermined ~~impact~~range tobased on the Company's ~~financial~~achieved ~~position~~performance orfor ~~results~~fiscal of2025 ~~operations~~relative to the fiscal 2025 performance target. ~~For~~In ~~further~~fiscal ~~description~~2025, offiscal ~~the~~2024 ~~Special~~and ~~Dividend~~fiscal 2023, ~~see~~the ~~Note~~Company 8also -had ~~Stockholders'~~liability ~~Equity~~classified ~~and~~awards ~~Convertible~~that ~~Preferred~~settled ~~Stock~~in cash upon vesting.

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Equity-based compensation expense recognized in the Consolidated Statements of Operations, net of forfeitures, was as follows (in millions):

	Fiscal 2024		Fiscal 2023		Fiscal 2022
	Fiscal 2025		Fiscal 2024		Fiscal 2023
RSUs	$	9996.31	$	8899.3	$	~~104~~88.03
RSAs	~~0.2~~—		30.2		83.42
Liability-classified awards	6(0.76)		136.07		2513.90
Total equity-based compensation expense	$	~~106~~95.25	$	~~104~~106.52	$	~~138~~104.35
Total related tax benefit	$	14.74	$	1914.57	$	2619.95

During fiscal ~~2024~~2025, the Company issued 56.80 million RSUs to its employees and directors, of which 4.16 million shares were granted for accounting purposes. The 4.16 million issued and granted awards consist of 3.39 million RSUs that have solely time-based vesting and 0.87 million PBRSUs that were granted upon the establishment of the fiscal ~~2024~~2025 performance target and that would vest upon both the achievement of such performance target and continued service through the vesting period. Additionally, 1.36 million previously issued PBRSUs were granted in fiscal ~~2024~~2025 upon the establishment of the fiscal ~~2024~~2025 annual performance target and that would vest upon both the achievement of such performance target and continued service through the vesting period. Also, ~~and an additional~~ 0.24 million PBRSUs were ~~granted~~adjusted in fiscal ~~2024~~2025 related to previously issued awards based on ~~achieved~~actual ~~performance for~~ fiscal ~~2023~~2024 performance relative to the fiscal ~~2023~~2024 performance target. The 5.6.2 million RSUs granted in fiscal ~~2024~~2025 have an aggregate grant date value of $~~111~~131.68 million. The aggregate grant date value of RSUs granted was $~~129~~111.56 million and $~~120~~129.15 million in fiscal ~~2023~~2024 and fiscal ~~2022~~2023, respectively.

The following summarizes the activity of RSUs ~~and RSAs~~ during fiscal ~~2024~~2025:

	Time-Based			Performance-Based
	Number of shares (in millions)	Weighted average grant date fair value		Number of shares (in millions)	Weighted average grant date fair value
Unvested, February 24, 2024	3.6	$	22.61	4.9	$	20.98
Granted	3.3	19.83		2.1	20.05
Performance adjustment (1)	—	—		0.2	20.04
Vested	(3.2)	22.93		(2.7)	21.07
Forfeited or cancelled	(0.4)	21.24		(0.3)	20.14
Unvested, February 22, 2025	3.3	$	20.18	4.2	$	20.45
Granted	3.9	21.04		2.3	21.62
Performance adjustment (1)	—	—		(0.4)	19.98
Vested	(2.8)	20.75		(1.7)	21.33
Forfeited or cancelled	(0.5)	20.49		(0.6)	20.55
Unvested, February 28, 2026	3.9	$	20.66	3.8	$	20.70

(1) Represents ~~additional~~the adjustment of PBRSUs based on ~~achieved~~actual ~~performance for~~ fiscal ~~2023~~2024 performance relative to the fiscal ~~2023~~2024 performance target. ~~The~~Does ~~performance adjustment does~~ not include athe ~~reduction~~adjustment ofto ~~0.3 million~~ PBRSUs based on ~~achieved~~actual ~~performance for~~ fiscal ~~2024~~2025 performance relative to the fiscal ~~2024~~2025 performance target, although these shares have been estimated and included in the determination of equity-based compensation expense and the calculation of diluted net income per common share for fiscal ~~2024~~2025.

During fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023, the aggregate fair value of RSUs and RSAs that vested was $~~121~~86.75 million, $~~119~~121.27 million and $~~137~~119.92 million, respectively. The number of RSUs and RSAs vested includes shares of common stock that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements.

As of February 2228, ~~2025~~2026, the Company had $5562.73 million of unrecognized compensation cost related to 7.57 million unvested granted RSUs. That cost is expected to be recognized over a weighted average period of 1.76 years. As of February 2228, ~~2025~~2026, there was no unrecognized compensation costs related to RSAs or liability-classified awards.

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Upon the establishment of the annual performance target for fiscal ~~2025~~2026 and fiscal ~~2026~~2027, the remaining 21.29 million issued PBRSUs will be granted for accounting purposes. As of February 2228, ~~2025~~2026, there are no performance-based RSAs that have not been granted for accounting purposes.

NOTE 109 - INCOME TAXES

The components of income tax expense consisted of the following (in millions):

	Fiscal 2024		Fiscal 2023		Fiscal 2022
	Fiscal 2025		Fiscal 2024		Fiscal 2023
Current
Federal (1)	$	~~228~~206.94	$	~~348~~228.29	$	~~320~~348.52
State (2)	4651.03		5646.40		8856.14
Foreign	1.34		1.03		01.50
Total Current	~~276~~259.21		~~405~~276.62		~~409~~405.16
Deferred
Federal	(11174.82)		(8311.18)		(783.61)
State	(9234.90)		31(92.79)		1131.17
Foreign	(0.45)		(610.24)		9(61.42)
Total Deferred	(~~105~~208.17)		(~~112~~105.61)		12(112.96)
Income tax expense	$	~~171~~50.14	$	~~293~~171.01	$	~~422~~293.0

(1) Federal current tax expense is net of $0.3 million, $0.3 million and $0.53 million tax benefit of net operating losses ("NOL") in fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023, respectively.

(2) ~~State~~There ~~current~~were ~~tax~~no ~~expense~~state ~~is net of $1.0 million~~ tax ~~benefit~~benefits of NOLs in fiscal ~~2024~~2025 and fiscal 2023. ~~There~~In ~~was~~fiscal no2024, state current tax ~~benefit~~expense ofis ~~NOLs~~net inof ~~fiscal~~$1.0 million ~~2023~~tax ~~and~~benefit ~~fiscal~~of ~~2022~~NOLs.

The difference between the actual tax provision and the tax provision computed by applying the statutory federal income tax rate of 21% to Income before income taxes was attributable to the following (in millions):76

	Fiscal 2024		Fiscal 2023		Fiscal 2022
Income tax expense at federal statutory rate	$	237.3	$	333.7	$	406.4
State income taxes, net of federal benefit	50.6		58.5		85.9
Change in valuation allowance	3.2		3.2		0.1
Unrecognized tax benefits	(95.2)		(67.3)		(41.8)
Tax credits	(23.0)		(37.1)		(26.2)
Other	(1.8)		2.0		(2.4)
Income tax expense	$	171.1	$	293.0	$	422.0

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The difference between the actual tax provision and the tax provision computed by applying the statutory federal income tax rate of 21.0% to Income before income taxes was attributable to the following (in millions):


	Fiscal 2025				Fiscal 2024				Fiscal 2023
	Amount		Percent		Amount		Percent		Amount		Percent
U.S. federal tax at statutory rate	$	56.2	21.0	%	$	237.3	21.0	%	$	333.7	21.0	%
State and local income taxes, net of federal income tax effect (1)	10.4		3.9		51.9		4.6		66.3		4.2
Tax credits
Research and development credit	(11.9)		(4.4)		(12.9)		(1.1)		(20.6)		(1.3)
Employee tax credits	(8.5)		(3.2)		(12.3)		(1.1)		(20.6)		(1.3)
Other credits	(0.5)		(0.2)		(0.6)		(0.1)		(0.6)		—
Changes in federal valuation allowances	2.2		0.8		2.7		0.2		—		—
Non-taxable or non-deductible items
Non-deductible legal settlements (2)	20.4		7.6		—		—		—		—
Non-deductible executive compensation	11.0		4.1		10.1		0.9		10.1		0.6
Charitable donations	(12.2)		(4.6)		(12.7)

Filing Compare · Albertsons Companies, Inc.