{"url_path":"/sec/aci/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-04-27","source_url":"https://www.sec.gov/Archives/edgar/data/1646972/0001646972-26-000032-index.html","accession_number":"0001646972-26-000032","cik":"0001646972","ticker":"ACI","issuer_name":"Albertsons Companies, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1646972/0001646972-26-000032-index.html","primary_entity_key":"0001646972","primary_entity_name":"Albertsons Companies, Inc."},"word_count":22438,"has_tables":true,"body_markdown":"Item 8 - Financial Statements and Supplementary Data\n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\nTo the stockholders and the Board of Directors of Albertsons Companies, Inc.\n\nOpinion on the Financial Statements\n\nWe have audited the accompanying consolidated balance sheets of Albertsons Companies, Inc. and subsidiaries (the \"Company\") as of February 28, 2026 and February 22, 2025, and the related consolidated statements of operations and comprehensive income, cash flows, and stockholders' equity, for the 53 weeks ended February 28, 2026, the 52 weeks ended February 22, 2025, and the 52 weeks ended February 24, 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 28, 2026 and February 22, 2025, and the results of its operations and its cash flows for each of the three years in the period ended February 28, 2026, in conformity with accounting principles generally accepted in the United States of America.\n\nWe 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 28, 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 27, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.\n\nBasis for Opinion\n\nThese 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.\n\nWe 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.\n\nCritical Audit Matter\n\nThe 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.\n\n49\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nSelf-Insurance Liabilities—Refer to Note 1 to the financial statements\n\nCritical Audit Matter Description\n\nThe 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.\n\nWe 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 28, 2026.\n\nHow the Critical Audit Matter Was Addressed in the Audit\n\nOur audit procedures related to the Company's self‑insurance liabilities for general liability and workers' compensation included the following, among others:\n\n•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.\n\n•We evaluated the methods and assumptions used by management to estimate these self‑insurance liabilities by:\n\n–Reading the Company's insurance policies and comparing the coverage and terms to the assumptions used by management.\n\n–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.\n\n–With the assistance of our actuarial specialists, we:\n\n◦Compared our independent estimate of prior year expected loss development to actual losses incurred during the current year and assessed the consistency of management's updated estimates to identify potential bias in their determination of self-insurance liabilities.\n\n◦Developed an independent estimated range of actuarial liabilities for these self-insurance liabilities and compared our estimates to management's estimates.\n\n◦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.\n\n/s/ Deloitte & Touche LLP\n\nBoise, Idaho\n\nApril 27, 2026\n\nWe have served as the Company's auditor since 2006.\n\n50\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\nTo the stockholders and the Board of Directors of Albertsons Companies, Inc.\n\nOpinion on Internal Control over Financial Reporting\n\nWe have audited the internal control over financial reporting of Albertsons Companies, Inc. and subsidiaries (the \"Company\") as of February 28, 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 28, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.\n\nWe 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 28, 2026, of the Company and our report dated April 27, 2026, expressed an unqualified opinion on those financial statements.\n\nBasis for Opinion\n\nThe 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.\n\nWe 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.\n\nDefinition and Limitations of Internal Control over Financial Reporting\n\nA 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.\n\nBecause 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.\n\n51\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\n/s/ Deloitte & Touche LLP\n\nBoise, Idaho\n\nApril 27, 2026\n\n52\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nAlbertsons Companies, Inc. and Subsidiaries\n\nConsolidated Balance Sheets\n\n(in millions, except share data)\n\nFebruary 28,\n2026February 22,\n2025\n\nASSETS\n\nCurrent assets\n\nCash and cash equivalents$198.6 $293.6 \n\nReceivables, net932.6 834.8 \n\nInventories, net5,173.9 4,989.0 \n\nPrepaid assets368.1 338.8 \n\nOther current assets42.5 102.8 \n\n     Total current assets6,715.7 6,559.0 \n\nProperty and equipment, net9,903.7 9,811.0 \n\nOperating lease right-of-use assets6,102.4 6,153.4 \n\nIntangible assets, net2,156.1 2,318.0 \n\nGoodwill1,201.0 1,201.0 \n\nOther assets687.0 713.3 \n\nTOTAL ASSETS$26,765.9 $26,755.7 \n\nLIABILITIES\n\nCurrent liabilities\n\nAccounts payable$4,021.2 $4,092.7 \n\nAccrued salaries and wages1,348.3 1,345.2 \n\nCurrent maturities of long-term debt and finance lease obligations534.0 57.6 \n\nCurrent operating lease obligations736.7 705.5 \n\nCurrent portion of self-insurance liability385.7 374.0 \n\nTaxes other than income taxes377.8 393.9 \n\nOther current liabilities420.3 282.1 \n\n     Total current liabilities7,824.0 7,251.0 \n\nLong-term debt and finance lease obligations8,412.6 7,762.5 \n\nLong-term operating lease obligations5,613.6 5,657.2 \n\nDeferred income taxes630.6 824.1 \n\nLong-term self-insurance liability917.6 922.1 \n\nOther long-term liabilities1,531.3 952.9 \n\nCommitments and contingencies\n\nSeries 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\n— — \n\nSeries 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\n— — \n\nSTOCKHOLDERS' EQUITY\n\nUndesignated preferred stock, $0.01 par value; 96,840,000 shares authorized, no shares issued as of February 28, 2026 and February 22, 2025\n— — \n\nClass 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\n6.0 6.0 \n\nClass 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\n— — \n\nAdditional paid-in capital2,219.4 2,184.0 \n\nTreasury stock, at cost, 101,191,791 and 22,522,934 shares held as of February 28, 2026 and February 22, 2025, respectively\n(1,850.5)(386.7)\n\nAccumulated other comprehensive income83.2 94.7 \n\nRetained earnings1,378.1 1,487.9 \n\n     Total stockholders' equity1,836.2 3,385.9 \n\nTOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$26,765.9 $26,755.7 \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\n53\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nAlbertsons Companies, Inc. and Subsidiaries\n\nConsolidated Statements of Operations and Comprehensive Income\n\n(in millions, except per share data)\n\n.9\n\n53 weeks ended\nFebruary 28, 202652 weeks ended\nFebruary 22, 202552 weeks ended\nFebruary 24, 2024\n\nNet sales and other revenue$83,172.5 $80,390.9 $79,237.7 \n\nCost of sales60,565.8 58,135.3 57,192.0 \n\nGross margin22,606.7 22,255.6 22,045.7 \n\nSelling and administrative expenses21,891.3 20,613.7 19,932.9 \n\n(Gain) loss on property dispositions and impairment losses, net(12.2)95.8 43.9 \n\nOperating income727.6 1,546.1 2,068.9 \n\nInterest expense, net504.2 459.8 492.1 \n\nOther income, net(44.4)(43.4)(12.2)\n\nIncome before income taxes267.8 1,129.7 1,589.0 \n\nIncome tax expense50.4 171.1 293.0 \n\nNet income$217.4 $958.6 $1,296.0 \n\nOther comprehensive income (loss), net of tax:\n\nRecognition of pension (loss) gain(10.2)4.9 15.8 \n\nOther(1.3)1.8 2.9 \n\nOther comprehensive (loss) income$(11.5)$6.7 $18.7 \n\nComprehensive income$205.9 $965.3 $1,314.7 \n\nNet income per Class A common share:\n\nBasic net income per Class A common share$0.40 $1.65 $2.25 \n\nDiluted net income per Class A common share0.40 1.64 2.23 \n\nWeighted average Class A common shares outstanding:\n\nBasic545.2 580.1 575.4 \n\nDiluted547.2 583.8 581.1 \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\n54\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nAlbertsons Companies, Inc. and Subsidiaries\n\nConsolidated Statements of Cash Flows\n\n(in millions)\n\n53 weeks ended\nFebruary 28, 202652 weeks ended\nFebruary 22, 202552 weeks ended\nFebruary 24, 2024\n\nCash flows from operating activities:\n\n  Net income$217.4 $958.6 $1,296.0 \n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\n(Gain) loss on property dispositions and impairment losses, net(12.2)95.8 43.9 \n\nDepreciation and amortization\n1,913.7 1,817.9 1,779.0 \n\nOperating lease right-of-use assets amortization\n727.2 681.2 665.2 \n\nLIFO expense\n66.0 28.6 52.0 \n\nDeferred income tax(208.7)(105.1)(112.6)\n\nPension and post-retirement benefits (income) expense (28.4)8.7 (2.9)\n\nContributions to pension and post-retirement benefit plans\n(56.9)(91.3)(18.3)\n\nDeferred financing costs24.5 16.3 15.6 \n\nEquity-based compensation expense\n95.5 106.2 104.5 \n\nOther operating activities\n20.1 (26.0)1.4 \n\nChanges in operating assets and liabilities:\n\nReceivables, net(96.9)(113.8)(36.3)\n\nInventories, net\n(250.9)(72.4)(215.3)\n\nAccounts payable, accrued salaries and wages and other accrued liabilities\n12.8 (170.1)100.5 \n\nOperating lease liabilities\n(705.2)(673.0)(654.1)\n\nPension withdrawal liabilities(18.6)(15.5)(88.7)\n\nSelf-insurance assets and liabilities5.6 45.9 30.6 \n\nOther operating assets and liabilities\n661.7 188.6 (301.0)\n\nNet cash provided by operating activities2,366.7 2,680.6 2,659.5 \n\nCash flows from investing activities:\n\nPayments for property, equipment and intangibles, including lease buyouts(1,839.4)(1,931.2)(2,031.3)\n\nProceeds from sale of assets109.5 31.4 217.6 \n\nOther investing activities\n50.5 8.0 67.0 \n\nNet cash used in investing activities(1,679.4)(1,891.8)(1,746.7)\n\n55\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nAlbertsons Companies, Inc. and Subsidiaries\n\nConsolidated Statements of Cash Flows\n\n(in millions)\n\n53 weeks ended\nFebruary 28, 202652 weeks ended\nFebruary 22, 202552 weeks ended\nFebruary 24, 2024\n\nCash flows from financing activities:\n\nProceeds from issuance of long-term debt, including ABL facility$4,671.5 $50.0 $150.0 \n\nPayments on long-term borrowings, including ABL facility(3,510.6)(250.9)(950.8)\n\nPayments of obligations under finance leases\n(51.0)(60.6)(69.3)\n\nPayments for debt financing costs(54.7)— — \n\nDividends paid on common stock(322.7)(295.1)(276.2)\n\nTreasury stock purchase, at cost(1,478.2)(82.5)— \n\nEmployee tax withholding on vesting of restricted stock units(36.5)(45.0)(38.8)\n\nOther financing activities\n— — 1.7 \n\nNet cash used in financing activities(782.2)(684.1)(1,183.4)\n\nNet (decrease) increase in cash and cash equivalents and restricted cash(94.9)104.7 (270.6)\n\nCash and cash equivalents and restricted cash at beginning of period\n297.9 193.2 463.8 \n\nCash and cash equivalents and restricted cash at end of period\n$203.0 $297.9 $193.2 \n\nReconciliation of capital investments:\n\nPayments for property, equipment and intangibles, including payments for lease buyouts$(1,839.4)$(1,931.2)$(2,031.3)\n\nLease buyouts5.8 3.7 (5.3)\n\nTotal payments for capital investments, excluding lease buyouts\n$(1,833.6)$(1,927.5)$(2,036.6)\n\nSupplemental cash flow information:\n\nNon-cash investing and financing activities were as follows:\n\nAdditions of finance lease obligations$45.3 $42.9 $21.6 \n\nPurchases of property and equipment included in accounts payable\n269.7 324.8 246.8 \n\nInterest and income taxes paid:\n\nInterest paid, net of amount capitalized\n448.4 444.3 484.2 \n\nIncome taxes paid\n255.6 168.4 405.4 \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\n56\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nAlbertsons Companies, Inc. and Subsidiaries\n\nConsolidated Statements of Stockholders' Equity\n\n(in millions, except share data)\n\nClass A Common StockAdditional paid in capitalTreasury StockAccumulated other comprehensive income Retained earnings (accumulated deficit)Total stockholders' equity\n\nSharesAmountSharesAmount\n\nBalance as of February 25, 2023590,968,600 $5.9 $2,072.7 21,300,945 $(352.2)$69.3 $(185.0)$1,610.7 \n\nEquity-based compensation— — 91.5 — — — — 91.5 \n\nShares issued and employee tax withholding on vesting of restricted stock units3,476,668 — (38.8)— — — — (38.8)\n\nConvertible preferred stock conversions— — — (2,903,200)48.0 — (2.3)45.7 \n\nCash dividends declared on common stock ($0.48 per common share)\n— — — — — — (276.2)(276.2)\n\nNet income — — — — — — 1,296.0 1,296.0 \n\nOther comprehensive income, net of tax— — — — — 18.7 — 18.7 \n\nOther activity— — 4.2 — — — (4.3)(0.1)\n\nBalance as of February 24, 2024594,445,268 5.9 2,129.6 18,397,745 (304.2)88.0 828.2 2,747.5 \n\nEquity-based compensation— — 99.5 — — — — 99.5 \n\nShares issued and employee tax withholding on vesting of restricted stock units3,519,658 0.1 (45.0)— — — — (44.9)\n\nRepurchase of common stock— — — 4,118,733 (82.5)— — (82.5)\n\nCash dividends declared on common stock ($0.51 per common share)\n— — — — — — (295.1)(295.1)\n\nNet income— — — — — — 958.6 958.6 \n\nOther comprehensive income, net of tax— — — — — 6.7 — 6.7 \n\nOther activity— — (0.1)6,456 — — (3.8)(3.9)\n\nBalance as of February 22, 2025597,964,926 6.0 2,184.0 22,522,934 (386.7)94.7 1,487.9 3,385.9 \n\nEquity-based compensation— — 96.1 — — — — 96.1 \n\nShares issued and employee tax withholding on vesting of restricted stock units2,769,767 — (36.5)— — — — (36.5)\n\nRepurchase of common stock— — (28.7)78,668,857 (1,463.8)— — (1,492.5)\n\nCash dividends declared on common stock ($0.60 per common share)\n— — — — — — (322.7)(322.7)\n\nNet income— — — — — — 217.4 217.4 \n\nOther comprehensive loss, net of tax— — — — — (11.5)— (11.5)\n\nOther activity— — 4.5 — — — (4.5)— \n\nBalance as of February 28, 2026600,734,693 $6.0 $2,219.4 101,191,791 $(1,850.5)$83.2 $1,378.1 $1,836.2 \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\n57\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nAlbertsons Companies, Inc. and Subsidiaries\n\nNotes to Consolidated Financial Statements\n\nNOTE 1 - DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES\n\nDescription of Business\n\nAlbertsons Companies, Inc. and its subsidiaries (the \"Company\" or \"ACI\") is a food and drug retailer that, as of February 28, 2026, operated 2,244 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 22 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.\n\nBasis of Presentation\n\nThe 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.\n\nSignificant Accounting Policies\n\nFiscal 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.\n\nUse 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.\n\nCash 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 $591.1 million and $570.8 million as of February 28, 2026 and February 22, 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.\n\nRestricted 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 $4.4 million and $4.3 million of restricted cash as of February 28, 2026 and February 22, 2025, respectively.\n\nReceivables, 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\n\n58\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\naccuracy 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.\n\nInventories, 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.\n\nAs of February 28, 2026, and February 22, 2025, approximately 87.1% and 86.2%, 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 $732.0 million and $666.0 million as of February 28, 2026 and February 22, 2025, respectively. During fiscal 2025, fiscal 2024 and fiscal 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 2025, fiscal 2024 and fiscal 2023 purchases. As a result, cost of sales decreased by $4.6 million, $0.9 million and $19.0 million in fiscal 2025, fiscal 2024 and fiscal 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.\n\nProperty 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.\n\nProperty 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.\n\nLeases: 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\n\n59\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nyears 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.\n\nThe 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.\n\nImpairment 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 (Gain) loss on property dispositions and impairment losses, net.\n\nIntangible 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.\n\nCloud 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 28, 2026 and February 22, 2025, the Company had capitalized implementation costs of $198.9 million and $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 implementation costs was $86.5 million, $80.7 million and $80.5 million for fiscal 2025, fiscal 2024 and fiscal 2023 respectively, and is included within Selling and administrative expenses. In fiscal 2025 and fiscal 2023, there was $5.0 million and $23.4 million of impairment and disposal losses, respectively, related to capitalized implementation costs, recorded as a component of (Gain) loss on property dispositions and impairment losses, net. In fiscal 2024, there were no impairment and disposal losses related to capitalized implementation costs.\n\nGoodwill: 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\n\n60\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nthe qualitative assessment and proceed directly to performing a quantitative analysis. Based on the qualitative analysis performed in fiscal 2025, the Company determined that there was no goodwill impairment.\n\nEquity 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 28, 2026 and February 22, 2025, the Company had equity method investments of $83.1 million and $82.3 million, respectively, included in Other assets. Equity in earnings from unconsolidated affiliates is included in Other income, net, including income of $0.8 million and $4.1 million in fiscal 2025 and fiscal 2024, respectively, and losses of $8.7 million in fiscal 2023.\n\nThe 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.\n\nOther 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 28, 2026, the Company had other investments of $38.7 million, included in Other assets. As of February 22, 2025 the Company had other investments of $26.0 million, included in Other current assets, and $50.8 million, included in Other assets. Net realized and unrealized losses were $6.3 million and $1.3 million for fiscal 2025 and fiscal 2023, respectively. Net realized and unrealized gains were $34.9 million for fiscal 2024.\n\nCompany-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 28, 2026 and February 22, 2025, the cash surrender values of the policies were $142.4 million and $138.1 million, and the balances of the policy loans were $85.3 million and $83.1 million, respectively. The net balance of the COLI policies is included in Other assets.\n\nDerivatives: 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.\n\nSelf-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\n\n61\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nbased on estimates, the ultimate cost of all incurred claims and related expenses may be more or less than the recorded liabilities.\n\nThe 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.\n\nChanges in self-insurance liabilities consisted of the following (in millions):\n\nFebruary 28,\n2026February 22,\n2025\n\nBeginning balance$1,296.1 $1,267.6 \n\nExpense, net of actuarial adjustments456.0 402.5 \n\nClaim payments(448.8)(374.0)\n\nEnding balance1,303.3 1,296.1 \n\nLess current portion(385.7)(374.0)\n\nLong-term portion$917.6 $922.1 \n\nBenefit 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.\n\nThe 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.\n\nMost 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.\n\nEquity-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.\n\nRevenue 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 $519.8 million and $464.1 million as of February 28, 2026 and February 22, 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\n\n62\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\ndelivery 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.\n\nThe 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.\n\nDisaggregated Revenues\n\nThe following table represents Net sales and other revenue by product type (dollars in millions):\n\nFiscal\n 2025Fiscal\n 2024Fiscal\n 2023\n\nAmount\n(1)% of TotalAmount\n(1)% of TotalAmount\n(1)% of Total\n\nNon-perishables (2)\n$40,624.8 48.8 %$40,102.8 49.9 %$39,977.3 50.5 %\n\nFresh (3)26,024.2 31.3 %25,507.3 31.7 %25,442.7 32.1 %\n\nPharmacy11,414.9 13.7 %9,597.2 11.9 %8,240.0 10.4 %\n\nFuel3,803.0 4.6 %3,980.6 5.0 %4,396.7 5.5 %\n\nOther (4)1,305.6 1.6 %1,203.0 1.5 %1,181.0 1.5 %\n\nTotal (5)$83,172.5 100.0 %$80,390.9 100.0 %$79,237.7 100.0 %\n\n(1) Digital related sales are included in the categories to which the revenue pertains.\n\n(2) Consists primarily of general merchandise, grocery, dairy and frozen foods.\n\n(3) Consists primarily of produce, meat, deli and prepared foods, bakery, floral and seafood.\n\n(4) Consists primarily of wholesale sales to third parties, commissions, rental income, media advertising revenue and other miscellaneous revenue.\n\n(5) Fiscal 2025 includes an estimated $1.4 billion of incremental Net sales and other revenue due to the additional 53rd week.\n\nCost 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.\n\nThe 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 $82.6 million and $71.7 million as of February 28, 2026 and February 22, 2025, respectively.\n\n63\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nAdvertising 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.\n\nSelling 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.\n\nIncome 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.\n\nRecently adopted accounting standards: In December 2023, the Financial Accounting Standards Board (\"FASB\") issued Accounting Standards Update (\"ASU\") 2023-09, \"Income Taxes (Topic 740): Improvements to Income Tax Disclosures.\" The ASU enhances disclosures within the income tax rate reconciliation and information disclosed related to income taxes paid. The Company adopted this ASU in fiscal 2025 on a retrospective basis for all periods presented. The adoption of this ASU resulted in additional required disclosures, which are included in Note 9 - Income Taxes.\n\nRecently issued accounting standards: In November 2024, the FASB issued ASU 2024-03, \"Income Statement - 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.\n\nIn 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.\n\n64\n\nNOTE 2 - PROPERTY AND EQUIPMENT\n\nProperty and equipment, net consisted of the following (in millions):\n\nFebruary 28,\n2026February 22,\n2025\n\nLand$2,063.6 $2,094.6 \n\nBuildings6,049.0 5,787.7 \n\nProperty under construction867.3 815.9 \n\nLeasehold improvements3,079.4 2,861.1 \n\nFixtures and equipment9,894.2 8,948.0 \n\nProperty and equipment under finance leases571.4 617.9 \n\nTotal property and equipment22,524.9 21,125.2 \n\nAccumulated depreciation and amortization(12,621.2)(11,314.2)\n\nTotal property and equipment, net$9,903.7 $9,811.0 \n\nDepreciation expense was $1,446.0 million, $1,353.7 million and $1,334.1 million for fiscal 2025, fiscal 2024 and fiscal 2023, respectively. Amortization expense related to finance lease assets was $40.6 million, $45.8 million and $51.7 million in fiscal 2025, fiscal 2024 and fiscal 2023, respectively. Fixed asset impairment losses of $22.1 million, $83.6 million and $0.9 million were recorded as a component of (Gain) loss on property dispositions and impairment losses, net in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.\n\nDuring fiscal 2025 and fiscal 2024, the Company identified certain stores with carrying values that exceeded their undiscounted cash flows, and recorded retail store impairment losses of $22.1 million and $53.9 million, respectively. During fiscal 2024, the Company also recorded impairment losses of $29.7 million primarily related to equipment from the closing of its micro-fulfillment centers.\n\nNOTE 3 - INTANGIBLE ASSETS\n\nIntangible assets, net consisted of the following (in millions):\n\nFebruary 28,\n2026February 22,\n2025\n\nEstimated useful lives (Years)Gross carrying amountAccumulated amortizationNetGross carrying amountAccumulated amortizationNet\n\nTrade names40$1,935.8 $(556.3)$1,379.5 $1,935.8 $(507.7)$1,428.1 \n\nCustomer prescription files51,446.4 (1,407.0)39.4 1,441.0 (1,400.2)40.8 \n\nInternally developed software\n3 to 5\n1,967.7 (1,316.5)651.2 1,889.2 (1,127.5)761.7 \n\nOther intangible assets (1)\n3 to 6\n45.2 (44.0)1.2 44.7 (41.6)3.1 \n\nTotal finite-lived intangible assets5,395.1 (3,323.8)2,071.3 5,310.7 (3,077.0)2,233.7 \n\nLiquor licenses and restricted covenantsIndefinite84.8 — 84.8 84.3 — 84.3 \n\nTotal intangible assets, net$5,479.9 $(3,323.8)$2,156.1 $5,395.0 $(3,077.0)$2,318.0 \n\n(1) Other intangible assets includes covenants not to compete, specialty accreditation and licenses and patents.\n\n65\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nAmortization expense for intangible assets was $340.6 million, $337.7 million and $312.7 million for fiscal 2025, fiscal 2024 and fiscal 2023, respectively. Estimated future amortization expense associated with the net carrying amount of intangibles with finite lives is as follows (in millions):\n\nFiscal YearAmortization Expected\n\n2026$349.9 \n\n2027243.7 \n\n2028130.7 \n\n202975.0 \n\n203056.8 \n\nThereafter1,215.2 \n\nTotal$2,071.3 \n\nIn 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.\n\nNOTE 4 - FAIR VALUE MEASUREMENTS\n\nThe 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:\n\nLevel 1 -    Quoted prices in active markets for identical assets or liabilities;\n\nLevel 2 -    Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and\n\nLevel 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.\n\nFair 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.\n\n66\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nThe following table presents certain assets which are measured at fair value on a recurring basis as of February 28, 2026 (in millions):\n\n Fair Value Measurements\n\nTotalQuoted prices \nin active markets\nfor identical\nassets\n(Level 1)Significant\nobservable\ninputs\n(Level 2)Significant\nunobservable\ninputs\n(Level 3)\n\nAssets:\n\nShort-term investments (1)$13.7 $7.8 $5.9 $— \n\nNon-current investments (2)\n111.4 8.7 102.7 — \n\nDerivative contracts (3)3.4 — 3.4 — \n\nTotal$128.5 $16.5 $112.0 $— \n\nLiabilities:\n\nDerivative contracts (3)$0.1 $— $0.1 $— \n\nTotal$0.1 $— $0.1 $— \n\n(1) Primarily relates to Mutual Funds (Level 1) and Certificates of Deposit (Level 2). Included in Other current assets.\n\n(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.\n\n(3) Primarily relates to energy derivative contracts. Included in Other assets or Other current liabilities.\n\nThe following table presents certain assets which are measured at fair value on a recurring basis as of February 22, 2025 (in millions):\n\n Fair Value Measurements\n\nTotalQuoted prices \nin active markets\nfor identical\nassets\n(Level 1)Significant\nobservable\ninputs\n(Level 2)Significant\nunobservable\ninputs\n(Level 3)\n\nAssets:\n\nShort-term investments (1)$41.3 $6.8 $34.5 $— \n\nNon-current investments (2)\n118.8 7.2 111.6 — \n\nDerivative contracts (3)0.3 — 0.3 — \n\nTotal$160.4 $14.0 $146.4 $— \n\nLiabilities:\n\nDerivative contracts (3)$0.6 $— $0.6 $— \n\nTotal$0.6 $— $0.6 $— \n\n(1) Primarily relates to Mutual Funds (Level 1), and certain equity investments and Certificates of Deposit (Level 2). Included in Other current assets.\n\n(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.\n\n(3) Primarily relates to energy derivative contracts. Included in Other assets or Other current liabilities.\n\nThe 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.\n\n67\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nThe 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.\n\nAssets Measured at Fair Value on a Nonrecurring Basis\n\nThe 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.\n\nThe Company recorded long-lived asset impairment losses of $28.4 million, $104.2 million and $42.6 million during fiscal 2025, fiscal 2024 and fiscal 2023, respectively.\n\nNOTE 5 - LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS\n\nThe 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):\n\nFebruary 28,\n2026February 22,\n2025\n\nSenior Unsecured Notes due 2028 to 2034, interest rate range of 3.50% to 6.50%\n$7,228.9 $6,517.0 \n\nNew Albertsons L.P. Notes due 2026 to 2031, interest rate range of 6.52% to 8.70%\n489.3 484.6 \n\nSafeway Inc. Notes due 2027 to 2031, interest rate range of 7.25% to 7.45%\n376.5 375.9 \n\nABL Facility425.0 — \n\nOther financing obligations14.0 14.7 \n\nFinance lease obligations (see Note 6)\n412.9 427.9 \n\nTotal debt8,946.6 7,820.1 \n\nLess current maturities(534.0)(57.6)\n\nLong-term portion$8,412.6 $7,762.5 \n\nAs 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):\n\n2026$485.1 \n\n2027906.6 \n\n202844.0 \n\n20292,477.9 \n\n2030397.0 \n\nThereafter4,316.2 \n\nTotal$8,626.8 \n\nThe 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\n\n68\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nCompany'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 28, 2026.\n\nABL Facility\n\nOn August 27, 2025, the Company's existing ABL Facility, which provides for a $4,000.0 million senior secured revolving credit facility, was amended and restated to, among other things, extend the maturity date of the facility to August 27, 2030. The new ABL Facility has an interest rate of 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.\n\nAs 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.\n\nThe 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.\n\nSenior Unsecured Notes\n\nOn February 2, 2026, the Company and certain of its subsidiaries (the \"Subsidiary Co-Issuers\") completed the issuance of $1,200.0 million in aggregate principal amount of 5.625% senior unsecured notes due March 31, 2032 (the \"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 2032 Notes is payable semi-annually in arrears on January 15 and July 15 of each year, with the first payment commencing on July 15, 2026. Proceeds from the New Notes, together with approximately $20.7 million of cash on hand, were used to (i) redeem in full the $1,350.0 million outstanding of the Company's 4.625% senior unsecured notes due January 15, 2027 (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 New Notes.\n\n69\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nOn 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.\n\nOn 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.\n\nThe 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.\n\nThe 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.\n\nDeferred Financing Costs and Interest Expense, Net\n\nFinancing 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 $16.1 million and $9.5 million as of February 28, 2026 and February 22, 2025, respectively.\n\nInterest expense, net consisted of the following (in millions):\n\nFiscal\n 2025Fiscal\n 2024Fiscal\n 2023\n\nABL Facility, senior secured and unsecured notes, and debentures$454.6 $414.8 $446.9 \n\nFinance lease obligations34.4 38.8 45.5 \n\nAmortization of deferred financing costs (1)24.5 16.3 15.6 \n\nOther interest income, net(9.3)(10.1)(15.9)\n\nInterest expense, net$504.2 $459.8 $492.1 \n\n(1) Fiscal 2025 includes $9.3 million of deferred financing costs expensed in connection with the refinancings.\n\n70\n\nNOTE 6 - LEASES\n\nThe components of total lease cost, net consisted of the following (in millions):\n\nClassificationFiscal\n 2025Fiscal\n 2024Fiscal\n 2023\n\nOperating lease cost (1)Cost of sales and Selling and administrative expenses (3)$1,167.1 $1,111.5 $1,082.8 \n\nFinance lease cost\n\nAmortization of lease assetsCost of sales and Selling and administrative expenses (3)40.6 45.8 51.7 \n\nInterest on lease liabilitiesInterest expense, net34.4 38.8 45.5 \n\nVariable lease cost (2)Cost of sales and Selling and administrative expenses (3)483.1 465.8 456.3 \n\nSublease incomeNet sales and other revenue(72.3)(76.0)(78.6)\n\nTotal lease cost, net$1,652.9 $1,585.9 $1,557.7 \n\n(1) Includes short-term lease cost, which is immaterial.\n\n(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.\n\n(3) Supply chain-related amounts are included in Cost of sales.\n\nBalance sheet information related to leases as of February 28, 2026 and February 22, 2025 consisted of the following (in millions):\n\nClassificationFebruary 28,\n2026February 22,\n2025\n\nAssets\n\nOperatingOperating lease right-of-use assets$6,102.4 $6,153.4 \n\nFinanceProperty and equipment, net287.9 288.0 \n\nTotal lease assets$6,390.3 $6,441.4 \n\nLiabilities\n\nCurrent\n\nOperatingCurrent operating lease obligations$736.7 $705.5 \n\nFinanceCurrent maturities of long-term debt and finance lease obligations48.9 57.0 \n\nLong-term\n\nOperatingLong-term operating lease obligations5,613.6 5,657.2 \n\nFinanceLong-term debt and finance lease obligations364.0 370.9 \n\nTotal lease liabilities$6,763.2 $6,790.6 \n\n71\n\nThe following table presents cash flow information for leases (in millions):\n\nFiscal\n 2025Fiscal\n 2024Fiscal\n 2023\n\nCash paid for amounts included in the measurement of lease liabilities:\n\nOperating cash flows from operating leases$1,109.8 $1,070.1 $1,042.0 \n\nOperating cash flows from finance leases34.4 38.8 45.5 \n\nFinancing cash flows from finance leases51.0 60.6 69.3 \n\nRight-of-use assets obtained in exchange for operating lease obligations689.6 868.6 773.0 \n\nRight-of-use assets obtained in exchange for finance lease obligations41.6 41.3 22.6 \n\nImpairment of right-of-use operating lease assets6.3 7.0 1.8 \n\nThe following table presents the weighted average lease term and discount rate for leases:\n\nFebruary 28,\n2026February 22,\n2025\n\nWeighted average remaining lease term - operating leases9.9 years10.2 years\n\nWeighted average remaining lease term - finance leases10.5 years9.7 years\n\nWeighted average discount rate - operating leases6.4 %6.4 %\n\nWeighted average discount rate - finance leases8.7 %9.2 %\n\nFuture minimum lease payments for operating and finance lease obligations as of February 28, 2026 consisted of the following (in millions):\n\nLease Obligations\n\nFiscal yearOperating LeasesFinance Leases\n\n2026$1,038.5 $72.8 \n\n20271,060.8 70.9 \n\n2028980.9 62.6 \n\n2029880.1 54.3 \n\n2030783.4 49.6 \n\nThereafter4,007.7 299.9 \n\nTotal future minimum obligations 8,751.4 610.1 \n\nLess interest(2,401.1)(197.2)\n\nPresent value of net future minimum lease obligations6,350.3 412.9 \n\nLess current portion(736.7)(48.9)\n\nLong-term obligations$5,613.6 $364.0 \n\nThe 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.\n\nNOTE 7 - STOCKHOLDERS' EQUITY AND CONVERTIBLE PREFERRED STOCK\n\nCommon Stock\n\nOn 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\n\n72\n\nstock (\"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.\n\nThe 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.\n\nThe 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 $322.7 million during fiscal 2025, $295.1 million during fiscal 2024 and $276.2 million during fiscal 2023. On April 14, 2026 subsequent to the end of fiscal 2025, the Company 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, the Company 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. 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.\n\nConvertible Preferred Stock\n\nOn 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.\n\nThe 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\n\n73\n\nPreferred 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. As of February 28, 2026 and February 22, 2025, no shares of Convertible Preferred Stock were outstanding.\n\nTreasury Stock\n\nOn October 14, 2025, the Company entered into an accelerated share repurchase agreement (the \"ASR Agreement\") with JPMorgan Chase Bank, National Association (\"JPMorgan\") to repurchase $750 million 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 ASR 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. 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 Agreement 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.\n\nAs part of the share repurchase program during fiscal 2025 and fiscal 2024, the Company, through a series of open-market transactions and the ASR Agreement, repurchased 78,668,857 shares and 4,118,733 shares of its common stock for an aggregate purchase price of $1,492.5 million and $82.5 million, respectively. There were no repurchases of the Company's common stock during fiscal 2023. On April 14, 2026, subsequent to the end of fiscal 2025, 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.\n\nDuring fiscal 2023, the 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.\n\nNOTE 8 - EQUITY-BASED COMPENSATION\n\nThe Company maintains the Albertsons 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 28, 2026, 22.7 million shares of Class A common stock remained available for future awards.\n\nUnder the Equity Plans, the Company recognizes equity-based compensation expense for RSUs and RSAs granted to employees and non-employee directors. Upon vesting, RSUs and RSAs will be settled in shares of the Company's Class A common stock. RSUs generally vest over three years from the grant date, based on a service period, or upon a combination of both a service period and achievement of certain performance-based thresholds, and RSAs generally vest over five years from the grant date, with 50% based solely on a service period and 50% upon a service period and achievement of certain performance-based thresholds. For performance-based RSUs (\"PBRSUs\") granted in fiscal 2025, the number of shares of the Company's Class A common stock to be received at vesting can be adjusted within a predetermined range based on the Company's achieved performance for fiscal 2025 relative to the fiscal 2025 performance target. In fiscal 2025, fiscal 2024 and fiscal 2023, the Company also had liability classified awards that settled in cash upon vesting.\n\n74\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nEquity-based compensation expense recognized in the Consolidated Statements of Operations, net of forfeitures, was as follows (in millions):\n\nFiscal\n2025Fiscal\n2024Fiscal\n2023\n\nRSUs$96.1 $99.3 $88.3 \n\nRSAs— 0.2 3.2 \n\nLiability-classified awards(0.6)6.7 13.0 \n\nTotal equity-based compensation expense $95.5 $106.2 $104.5 \n\nTotal related tax benefit$14.4 $14.7 $19.5 \n\nDuring fiscal 2025, the Company issued 6.0 million RSUs to its employees and directors, of which 4.6 million shares were granted for accounting purposes. The 4.6 million issued and granted awards consist of 3.9 million RSUs that have solely time-based vesting and 0.7 million PBRSUs that were granted upon the establishment of the fiscal 2025 performance target and that would vest upon both the achievement of such performance target and continued service through the vesting period. Additionally, 1.6 million previously issued PBRSUs were granted in fiscal 2025 upon the establishment of the fiscal 2025 annual performance target and that would vest upon both the achievement of such performance target and continued service through the vesting period. Also, 0.4 million PBRSUs were adjusted in fiscal 2025 related to previously issued awards based on actual fiscal 2024 performance relative to the fiscal 2024 performance target. The 6.2 million RSUs granted in fiscal 2025 have an aggregate grant date value of $131.8 million. The aggregate grant date value of RSUs granted was $111.6 million and $129.5 million in fiscal 2024 and fiscal 2023, respectively.\n\nThe following summarizes the activity of RSUs during fiscal 2025:\n\nTime-BasedPerformance-Based\n\nNumber of shares (in millions)Weighted average grant date fair valueNumber of shares (in millions)Weighted average grant date fair value\n\nUnvested, February 22, 20253.3 $20.18 4.2 $20.45 \n\nGranted3.9 21.04 2.3 21.62 \n\nPerformance adjustment (1)— — (0.4)19.98 \n\nVested(2.8)20.75 (1.7)21.33 \n\nForfeited or cancelled(0.5)20.49 (0.6)20.55 \n\nUnvested, February 28, 20263.9 $20.66 3.8 $20.70 \n\n(1) Represents the adjustment of PBRSUs based on actual fiscal 2024 performance relative to the fiscal 2024 performance target. Does not include the adjustment to PBRSUs based on actual fiscal 2025 performance relative to the fiscal 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 2025.\n\nDuring fiscal 2025, fiscal 2024 and fiscal 2023, the aggregate fair value of RSUs and RSAs that vested was $86.5 million, $121.7 million and $119.2 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.\n\nAs of February 28, 2026, the Company had $62.3 million of unrecognized compensation cost related to 7.7 million unvested granted RSUs. That cost is expected to be recognized over a weighted average period of 1.6 years. As of February 28, 2026, there was no unrecognized compensation costs related to RSAs or liability-classified awards.\n\n75\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nUpon the establishment of the annual performance target for fiscal 2026 and fiscal 2027, the remaining 1.9 million issued PBRSUs will be granted for accounting purposes. As of February 28, 2026, there are no performance-based RSAs that have not been granted for accounting purposes.\n\nNOTE 9 - INCOME TAXES\n\nThe components of income tax expense consisted of the following (in millions):\n\nFiscal\n 2025Fiscal\n 2024Fiscal\n 2023\n\nCurrent\n\n  Federal (1)$206.4 $228.9 $348.2 \n\n  State (2)51.3 46.0 56.4 \n\n  Foreign1.4 1.3 1.0 \n\nTotal Current259.1 276.2 405.6 \n\nDeferred\n\n  Federal(174.2)(11.8)(83.1)\n\n  State(34.0)(92.9)31.7 \n\n  Foreign(0.5)(0.4)(61.2)\n\nTotal Deferred(208.7)(105.1)(112.6)\n\nIncome tax expense$50.4 $171.1 $293.0 \n\n(1) Federal current tax expense is net of $0.3 million, $0.3 million and $0.3 million tax benefit of net operating losses (\"NOL\") in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.\n\n(2) There were no state tax benefits of NOLs in fiscal 2025 and fiscal 2023. In fiscal 2024, state current tax expense is net of $1.0 million tax benefit of NOLs.\n\n76\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nThe 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):\n\nFiscal\n 2025Fiscal\n 2024Fiscal\n 2023\n\nAmountPercentAmountPercentAmountPercent\n\nU.S. federal tax at statutory rate$56.2 21.0 %$237.3 21.0 %$333.7 21.0 %\n\nState and local income taxes, net of federal income tax effect (1)10.4 3.9 51.9 4.6 66.3 4.2 \n\nTax credits\n\nResearch and development credit(11.9)(4.4)(12.9)(1.1)(20.6)(1.3)\n\nEmployee tax credits(8.5)(3.2)(12.3)(1.1)(20.6)(1.3)\n\nOther credits(0.5)(0.2)(0.6)(0.1)(0.6)— \n\nChanges in federal valuation allowances2.2 0.8 2.7 0.2 — — \n\nNon-taxable or non-deductible items\n\nNon-deductible legal settlements (2)20.4 7.6 — — — — \n\nNon-deductible executive compensation11.0 4.1 10.1 0.9 10.1 0.6 \n\nCharitable donations(12.2)(4.6)(12.7)(1.1)(12.7)(0.8)\n\nOther non-taxable or non-deductible items1.6 0.6 2.6 0.2 6.6 0.4 \n\nChanges in unrecognized tax benefits(9.2)(3.4)(95.2)(8.4)(67.3)(4.2)\n\nOther adjustments\n\nGain on purchase of transferable credits(9.4)(3.5)— — (2.5)(0.2)\n\nOther0.3 0.1 0.2— 0.6— \n\nIncome tax expense$50.4 18.8 %$171.1 15.1 %$293.0 18.4 %\n\n(1) State taxes in California and Oregon made up the majority (greater than 50 percent) of the tax effect in this category.\n\n(2) Represents the estimated future non-deductible payments related to the Opioid Settlement Framework. Refer to Note 12 for additional information.\n\nThe amounts of cash paid (refunds received) for income taxes was as follows:\n\nFiscal\n2025Fiscal\n2024Fiscal\n2023\n\nFederal$214.7 $209.6 $321.2 \n\nCalifornia15.8 (87.4)20.7 \n\nOregon*11.2 *\n\nIllinois*10.0 *\n\nOther States23.7 23.7 62.5 \n\nForeign1.4 1.3 1.0 \n\nNet cash paid for income taxes$255.6 $168.4 $405.4 \n\n* The disclosure threshold of 5% was applied separately to each year. Amounts for these jurisdictions are below the threshold for the period presented.\n\n77\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nDeferred income taxes reflect the net tax effects of temporary differences between the bases of assets and liabilities for financial reporting and income tax purposes. The Company's deferred tax assets and liabilities consisted of the following (in millions):\n\nFebruary 28,\n2026February 22,\n2025\n\nDeferred tax assets:\n\nLease obligations$1,768.2 $1,775.3 \n\nSelf-Insurance315.5 312.8 \n\nCompensation and benefits199.9 192.2 \n\nPension & postretirement benefits181.3 194.5 \n\nLegal settlements (1)176.2 — \n\nNet operating loss58.5 63.7 \n\nTax credits6.5 5.7 \n\nOther83.1 71.3 \n\nGross deferred tax assets2,789.2 2,615.5 \n\nLess: valuation allowance(61.9)(63.7)\n\nTotal deferred tax assets2,727.3 2,551.8 \n\nDeferred tax liabilities:\n\nOperating lease assets1,569.8 1,587.4 \n\nDepreciation and amortization1,320.9 1,302.3 \n\nInventories382.7 401.7 \n\nOther84.5 84.5 \n\nTotal deferred tax liabilities3,357.9 3,375.9 \n\nNet deferred tax liability$(630.6)$(824.1)\n\nNoncurrent deferred tax asset$— $— \n\nNoncurrent deferred tax liability(630.6)(824.1)\n\nTotal$(630.6)$(824.1)\n\n(1) Represents the estimated future deductible payments related to the Opioid Settlement Framework. Refer to Note 12 for additional information.\n\nThe valuation allowance activity on deferred tax assets was as follows (in millions):\n\nFebruary 28,\n2026February 22,\n2025February 24,\n2024\n\nBeginning balance$63.7 $65.6 $102.3 \n\nAdditions charged to income tax expense2.7 5.1 6.0 \n\nReductions credited to income tax expense(1.4)(1.9)(2.8)\n\nChanges to other comprehensive income or loss and other(3.1)(5.1)(39.9)\n\nEnding balance$61.9 $63.7 $65.6 \n\nThe Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. On the basis of this evaluation, as of February 28, 2026, a valuation allowance of $61.9 million has been recorded for the portion of the deferred tax asset that is not more likely than not to be realized, consisting primarily of tax credits and carryovers in jurisdictions where the Company has minimal presence or does not expect to have future taxable income. The Company will continue to evaluate the\n\n78\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nneed to adjust the valuation allowance. The amount of the deferred tax asset considered realizable, however, could be adjusted depending on the Company's performance in certain subsidiaries or jurisdictions.\n\nThe Company currently has federal and state NOL carryforwards of $14.8 million and $1,154.5 million, respectively, which will begin to expire in 2026 and continue through fiscal 2046. As of February 28, 2026, the Company had $6.5 million of state credit carryforwards, which will begin to expire in 2026 and continue through fiscal 2038. The Company had no federal credit carryforwards as of February 28, 2026. As of February 28, 2026, the Company has federal charitable contribution carryforwards of $23.3 million, which begin to expire in 2029 and continue through fiscal 2030.\n\nChanges in the Company's unrecognized tax benefits consisted of the following (in millions):\n\nFiscal\n 2025Fiscal\n 2024Fiscal\n 2023\n\nBeginning balance$57.4 $178.8 $216.0 \n\nIncrease related to tax positions taken in the current year6.1 6.4 9.6 \n\nDecrease related to tax position taken in prior years— (111.8)(0.9)\n\nDecrease related to settlements with taxing authorities— (2.1)(5.6)\n\nDecrease related to lapse of statute of limitations(2.3)(13.9)(40.3)\n\nEnding balance$61.2 $57.4 $178.8 \n\nIncluded in the balance of unrecognized tax benefits as of February 28, 2026, February 22, 2025 and February 24, 2024 are tax positions of $25.2 million, $22.4 million and $118.1 million, respectively, which would reduce the Company's effective tax rate if recognized in future periods. As of February 28, 2026, the Company is no longer subject to federal income tax examinations for the fiscal years prior to 2022 and in most states, is no longer subject to state income tax examinations for fiscal years before 2013. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company recognized expense related to interest and penalties, net of settlement adjustments, of $1.7 million for fiscal 2025 and a benefit of $2.7 million and $27.2 million for fiscal 2024 and fiscal 2023, respectively.\n\nNOTE 10 - EMPLOYEE BENEFIT PLANS AND COLLECTIVE BARGAINING AGREEMENTS\n\nEmployer Sponsored Pension Plans\n\nThe Company sponsors a defined benefit pension plan (the \"Safeway Plan\") for certain employees not participating in multiemployer pension plans. The Safeway Plan is frozen to non-union employees but continues to remain fully open to union employees, and past service benefits, including future interest credits, for non-union employees continue to be accrued under the Safeway Plan. The Company also sponsors a defined benefit pension plan (the \"Shaw's Plan\") covering union employees under the Shaw's banner. Under the United banner, the Company sponsors a frozen plan (the \"United Plan\") covering certain United employees and an unfunded Retirement Restoration Plan that provides death benefits and supplemental income payments for certain executives after retirement. On December 21, 2023, the Company initiated the process of terminating the United Plan which is expected to be finalized during fiscal 2026. The Company also contributes to the Safeway Variable Annuity Pension Plan (the \"Safeway VAPP\") that provides benefits to participants for future services.\n\nOther Post-Retirement Benefits\n\nIn addition to the Company's pension plans, the Company provides post-retirement medical and life insurance benefits to certain employees. Retirees share a portion of the cost of the post-retirement medical plans. The Company pays all the cost of the life insurance plans. These plans are unfunded.\n\n79\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nThe following table provides a reconciliation of the changes in the retirement plans' benefit obligation and fair value of assets over the two-year period ended February 28, 2026 and a statement of funded status as of February 28, 2026 and February 22, 2025 (in millions):\n\nPensionOther Post-Retirement Benefits\n\nFebruary 28,\n2026February 22,\n2025February 28,\n2026February 22,\n2025\n\nChange in projected benefit obligation:\n\nBeginning balance$1,641.4 $1,691.5 $12.1 $12.0 \n\nService cost15.9 16.7 — — \n\nInterest cost70.8 83.4 0.5 0.5 \n\nActuarial loss (gain)25.7 16.4 (1.2)1.1 \n\nBenefit payments (including settlements)(423.9)(166.7)(1.3)(1.5)\n\nPlan amendments— 0.1 — — \n\nEnding balance$1,329.9 $1,641.4 $10.1 $12.1 \n\nChange in fair value of plan assets:\n\nBeginning balance$1,483.2 $1,443.7 $— $— \n\nActual return on plan assets126.3 116.4 — — \n\nEmployer contributions55.6 89.8 1.3 1.5 \n\nBenefit payments (including settlements)(423.9)(166.7)(1.3)(1.5)\n\nEnding balance$1,241.2 $1,483.2 $— $— \n\nComponents of net amount recognized in financial position:\n\nOther current liabilities $(5.5)$(4.4)$(1.8)$(2.3)\n\nOther long-term liabilities(83.2)(153.8)(8.3)(9.8)\n\nFunded status$(88.7)$(158.2)$(10.1)$(12.1)\n\nThe actuarial loss in fiscal 2025 related to the projected benefit obligation was primarily driven by discount rate and mortality assumptions, partially offset by cash balance interest crediting rates. The actuarial loss in fiscal 2024 related to the projected benefit obligation was primarily driven by cash balance interest crediting rates.\n\nAmounts recognized in Accumulated other comprehensive income (loss) consisted of the following (in millions):\n\nPensionOther Post-Retirement\nBenefits\n\nFebruary 28,\n2026February 22,\n2025February 28,\n2026February 22,\n2025\n\nNet actuarial gain$(101.5)$(116.2)$(10.0)$(9.7)\n\nPrior service cost0.8 1.2 — — \n\n$(100.7)$(115.0)$(10.0)$(9.7)\n\n80\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nInformation for the Company's pension plans, all of which have an accumulated benefit obligation in excess of plan assets as of February 28, 2026 and February 22, 2025, is shown below (in millions):\n\nFebruary 28,\n2026February 22,\n2025\n\nProjected benefit obligation$1,329.9 $1,641.4 \n\nAccumulated benefit obligation1,329.7 1,637.8 \n\nFair value of plan assets1,241.2 1,483.2 \n\nThe following table provides the components of net pension and post-retirement (income) expense for the retirement plans and other changes in plan assets and benefit obligations recognized in Other comprehensive income (loss) (in millions):\n\nPensionOther Post-Retirement\nBenefits\n\nFiscal\n 2025Fiscal\n 2024Fiscal\n 2023Fiscal\n 2025Fiscal\n 2024Fiscal\n 2023\n\nComponents of net (income) expense:\n\nEstimated return on plan assets$(83.1)$(91.1)$(98.5)$— $— $— \n\nService cost15.9 16.7 17.3 — — — \n\nInterest cost70.8 83.4 83.6 0.5 0.5 0.6 \n\nAmortization of prior service cost0.4 0.3 0.4 — — — \n\nAmortization of net actuarial (gain) loss(2.7)(3.9)(5.5)(0.8)(0.7)(1.1)\n\n(Income) loss due to settlement accounting(29.4)3.5 0.3 — — — \n\n(Income) expense, net(28.1)8.9 (2.4)(0.3)(0.2)(0.5)\n\nChanges in plan assets and benefit obligations recognized in Other comprehensive income (loss):   \n\nNet actuarial (gain) loss(17.4)(8.6)(28.0)(1.2)1.1 0.8 \n\nAmortization of net actuarial gain (loss)2.7 3.9 5.5 0.8 0.7 1.1 \n\nPrior service cost— 0.1 (0.2)— — — \n\nAmortization of prior service cost(0.4)(0.3)(0.4)— — — \n\nIncome (loss) due to settlement accounting29.4 (3.5)(0.3)— — — \n\nTotal recognized in Other comprehensive income (loss)14.3 (8.4)(23.4)(0.4)1.8 1.9 \n\nTotal net expense and changes in plan assets and benefit obligations recognized in Other comprehensive income (loss) $(13.8)$0.5 $(25.8)$(0.7)$1.6 $1.4 \n\nDuring fiscal 2025, the Company purchased a group annuity policy and transferred $290.0 million of pension plan assets to an insurance company (the \"Annuity Purchase\"), thereby reducing the Company's defined benefit pension obligations by $295.0 million. As a result of the Annuity Purchase, the Company recorded a settlement gain of $26.8 million during fiscal 2025.\n\nPrior service costs are amortized on a straight-line basis over the average remaining service period of active participants. When the accumulation of actuarial gains and losses exceeds 10% of the greater of the projected benefit obligation and the fair value of plan assets, the excess is amortized over either the average remaining\n\n81\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nlifetime of all participants or the average remaining service period of active participants. No significant prior service costs or estimated net actuarial gain or loss is expected to be amortized from Other comprehensive income (loss) into periodic benefit cost during fiscal 2026.\n\nAssumptions\n\nThe weighted average actuarial assumptions used to determine year-end projected benefit obligations for pension plans were as follows:\n\nFebruary 28,\n2026February 22,\n2025\n\nDiscount rate5.29 %5.34 %\n\nRate of compensation increase3.21 %3.20 %\n\nCash balance plan interest crediting rate4.64 %4.85 %\n\nThe weighted average actuarial assumptions used to determine net periodic benefit costs for pension plans were as follows: \n\nFebruary 28,\n2026February 22,\n2025February 24,\n2024\n\nDiscount rate5.45 %5.32 %5.17 %\n\nExpected return on plan assets6.50 %6.67 %7.40 %\n\nCash balance plan interest crediting rate4.85 %4.25 %3.65 %\n\nDiscount Rate Assumption. The discount rate reflects the current rate at which the pension obligations could be settled at each measurement date. In all years presented, the discount rates were determined by matching the expected plan benefit payments against a spot rate yield curve constructed to replicate above median yields of AA-graded corporate bonds.\n\nAsset Return Assumption. Expected return on pension plan assets is based on historical experience of the Company's portfolios and the review of projected returns by asset class on return-seeking assets and liability-hedging assets, as well as target asset allocation.\n\nRetirement and Mortality Rates. The mortality assumptions reflect the applicable current mortality tables and adjusted mortality improvement projection scales as issued by the Society of Actuaries.\n\nInvestment Policies and Strategies. During the fourth quarter of fiscal 2023, the Company revised the investment policy for the Safeway Plan and the Shaw's Plan, and these changes to the structure of plan assets were implemented during fiscal 2024. The investment policy for the Safeway VAPP remained unchanged. The defined benefit plan investment policy incorporates a strategic long-term asset allocation mix designed to meet the Company's long-term pension requirements. This asset allocation policy is reviewed annually and, on a regular basis, actual allocations are rebalanced to the prevailing targets. The investment policy for the Safeway Plan and the Shaw's Plan allows for a varying asset allocation dependent on each plan's funded status. The investment policy also emphasizes the following key objectives: (1) maintaining a diversified portfolio among asset classes and investment styles; (2) maintaining an acceptable level of risk in pursuit of long-term economic benefit; (3) maximizing the opportunity for value-added returns from active investment management while establishing investment guidelines and monitoring procedures for the investment manager to ensure the characteristics of the portfolio are consistent with the original investment mandate; and (4) maintaining adequate controls over administrative costs.\n\n82\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nThe following table summarizes actual allocations for the Safeway Plan which had $1,006.8 million in plan assets as of February 28, 2026: \n\nPlan Assets\n\nAsset categoryTarget (1)February 28,\n2026February 22,\n2025\n\nReturn-seeking56%59.1 %63.4 %\n\nLiability-hedging44%40.9 %36.6 %\n\nTotal\n100%100.0 %100.0 %\n\n(1) In accordance with the Safeway Plan investment policy, the target asset allocation was adjusted in fiscal 2025 based on the funded ratio of the Safeway Plan.\n\nThe following table summarizes the actual allocations for the Shaw's Plan which had $187.0 million in plan assets as of February 28, 2026:\n\nPlan Assets\n\nAsset categoryTarget (1)February 28,\n2026February 22,\n2025\n\nReturn-seeking50%51.1 %58.9 %\n\nLiability-hedging50%48.9 %41.1 %\n\nTotal\n100%100.0 %100.0 %\n\n(1) In accordance with the Shaw's Plan investment policy, the target asset allocation was adjusted in fiscal 2025 based on the funded ratio of the Shaw's Plan.\n\nThe following table summarizes the actual allocations for the Safeway VAPP which had $41.7 million in plan assets as of February 28, 2026:\n\nPlan Assets\n\nAsset categoryTargetFebruary 28,\n2026February 22,\n2025\n\nEquity15%16.3 %18.1 %\n\nFixed income60%57.7 %60.9 %\n\nOther (1)25%19.0 %18.5 %\n\nCash—%7.0 %2.5 %\n\nTotal100%100.0 %100.0 %\n\n(1) Includes real estate, global tactical asset allocation, private equity investments and money market funds.\n\nAdditionally, the Company sponsors other defined benefit pension plans which had $5.7 million in plan assets as of February 28, 2026.\n\n83\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nPension Plan Assets\n\nThe fair value of the Company's pension plan assets as of February 28, 2026 by asset category are as follows (in millions): \n\n Fair Value Measurements\n\nAsset categoryTotalQuoted Prices in Active Markets for Identical Assets\n(Level 1)Significant Observable Inputs\n(Level 2)(1)Significant Unobservable Inputs\n(Level 3)Assets Measured at NAV (1)\n\nCash and cash equivalents (2)$3.2 $3.2 $— $— $— \n\nShort-term investment collective trust (3)23.1 — — — 23.1 \n\nPublic equity funds (5)365.5 — 365.5 — — \n\nReturn-seeking fixed income funds (6)134.7 — 16.9 — 117.8 \n\nDebt funds (7)504.6 — 504.6 — — \n\nHedge funds (8)64.2 — — — 64.2 \n\nReal estate funds (9)132.5 — 37.8 — 94.7 \n\nOther securities (10)13.4 — 13.4 — — \n\nTotal$1,241.2 $3.2 $938.2 $— $299.8 \n\nThe fair value of the Company's pension plan assets as of February 22, 2025 by asset category are as follows (in millions): \n\n Fair Value Measurements\n\nAsset categoryTotalQuoted Prices in Active Markets for Identical Assets\n(Level 1)Significant Observable Inputs\n(Level 2)(1)Significant Unobservable Inputs\n(Level 3)Assets Measured at NAV (1)\n\nCash and cash equivalents (2)$1.9 $1.9 $— $— $— \n\nShort-term investment collective trust (3)53.2 — — — 53.2 \n\nMutual funds (4)6.7 6.7 — — — \n\nPublic equity funds (5)490.2 — 490.2 — — \n\nReturn-seeking fixed income funds (6)172.2 — 15.5 — 156.7 \n\nDebt funds (7)499.1 — 499.1 — — \n\nHedge funds (8)82.4 — — — 82.4 \n\nReal estate funds (9)168.9 — 46.9 — 122.0 \n\nOther securities (10)8.6 — 8.6 — — \n\nTotal$1,483.2 $8.6 $1,060.3 $— $414.3 \n\n(1) Certain of the Company's pension assets are invested in common collective trusts managed and valued by the fund administrator. The fair value of the funds is based on the Net Asset Value (\"NAV\") of the underlying investments owned by the fund minus its liabilities. Certain of these funds are classified outside of the fair value hierarchy because fair value for those funds is measured using the NAV practical expedient. These specific funds have been determined not to have a readily determinable fair value and the NAV is not the basis for current transactions, as the NAV is only published monthly or quarterly for these funds, and the Company can only redeem these investments monthly or quarterly. The remaining common collective trusts have a daily published NAV, and the Company can redeem those investments daily, therefore these funds are classified within the fair value hierarchy as the Company has determined the funds have a readily determinable fair value that is the basis for current transactions.\n\n(2) The carrying value of these items approximates fair value.\n\n(3) Invested in a fund comprised of high-grade, short term money market instruments. There are no unfunded commitments or redemption restrictions for these funds.\n\n84\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\n(4) Invested in mutual funds that are registered with the SEC which are valued using the NAV. The NAV of the mutual funds is a published price in an active market. There are no unfunded commitments, or redemption restrictions for these funds, and the funds are required to transact at the published price.\n\n(5) Invested in funds comprised of U.S. and international equity.\n\n(6) Invested in funds comprised of high yield, emerging market debt, leveraged loans and real estate debt.\n\n(7) Invested in funds comprised of intermediate and long duration corporate and private bonds and U.S. government securities.\n\n(8) Invested in hedge funds comprised of a combination of equity, fixed income, private assets and derivatives.\n\n(9) Invested in funds comprised of underlying real estate properties and infrastructure as well as a fund comprised of underlying real estate investment trusts.\n\n(10) These investments primarily consist of foreign government bonds valued based on yields currently available on comparable securities of issuers with similar credit ratings.\n\nContributions\n\nIn fiscal 2025, fiscal 2024 and fiscal 2023, the Company contributed $56.9 million, $91.3 million and $18.3 million, respectively, to its pension and post-retirement plans. The Company's funding policy for the defined benefit pension plan is to contribute the minimum contribution required under the Employee Retirement Income Security Act of 1974, as amended, and other applicable laws as determined by the Company's external actuarial consultant. At the Company's discretion, additional funds may be contributed to the defined benefit pension plans. The Company expects to contribute approximately $50 million to its pension and post-retirement plans in fiscal 2026. The Company will recognize contributions in accordance with applicable regulations, with consideration given to recognition for the earliest plan year permitted.\n\nEstimated Future Benefit Payments\n\nThe following benefit payments, which reflect expected future service as appropriate, are expected to be paid to plan participants (in millions):\n\nPension BenefitsOther Benefits\n\n2026$115.1 $1.9 \n\n2027116.1 1.6 \n\n2028113.2 1.4 \n\n2029112.5 1.2 \n\n2030112.0 1.1 \n\n2031 – 2035528.2 3.4 \n\nMultiemployer Pension Plans\n\nThe Company currently contributes to 28 multiemployer pension plans. These multiemployer plans generally provide retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Plan trustees typically are responsible for determining the level of benefits to be provided to participants, the investment of the assets and plan administration. Expense is recognized in connection with these plans as contributions are funded.\n\nThe risks of participating in these multiemployer plans are different from the risks associated with single-employer plans in the following respects:\n\n•Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.\n\n•Though the unfunded obligations of a multiemployer plan are not a liability of the Company, if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.\n\n85\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\n•With respect to some multiemployer plans, if the Company chooses to stop participating, or makes market exits or store closures or otherwise has participation in the plan fall below certain levels, the Company may be required to pay the plan an amount based on the underfunded status of the plan, referred to as withdrawal liability.\n\nThe Company's participation in these plans is outlined in the table below. The EIN-Pension Plan Number column provides the Employer Identification Number (\"EIN\") and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act of 2006 (\"PPA\") zone status available for fiscal 2025 and fiscal 2024 is for the plan's year ended December 31, 2024 and December 31, 2023, respectively. The zone status is based on information received from the plans and is certified by each plan's actuary. The FIP/RP Status Pending/Implemented column indicates plans for which a funding improvement plan (\"FIP\") or a rehabilitation plan (\"RP\") is either pending or has been implemented by the plan trustees.\n\nThe following tables contain information about the Company's multiemployer plans. Certain plans have been aggregated in the Other funds line in the following table, as the contributions to each of these plans are not individually material.\n\nEIN - PNPension Protection Act zone status (1)Company's 5% of total plan contributionsFIP/RP status pending/implemented\n\nPension fund2025202420242023\n\nUFCW-Northern California Employers Joint Pension Trust Fund946313554 - 001RedRedYesYesImplemented\n\nWestern Conference of Teamsters Pension Plan916145047 - 001GreenGreenNoNoNo\n\nSouthern California United Food & Commercial Workers Unions and Food Employers Joint Pension Plan (4)951939092 - 001RedRedYesYesImplemented\n\nSound Retirement Trust (6)916069306 - 001GreenGreenYesYesNo\n\nBakery and Confectionery Union and Industry International Pension Fund526118572 - 001RedRedYesYesImplemented\n\nUFCW Union and Participating Food Industry Employers Tri-State Pension Fund236396097 - 001RedRedYesYesImplemented\n\nRocky Mountain UFCW Unions & Employers Pension Plan846045986 - 001GreenGreenYesYesNo\n\nUFCW Local 152 Retail Meat Pension Fund (5)236209656 - 001RedRedYesYesImplemented\n\nDesert States Employers & UFCW Unions Pension Plan846277982 - 001GreenGreenYesYesNo\n\nUFCW Int'l Union- Albertsons Variable Annuity Pension Fund (5)853326342 - 001GreenGreenYesYesNo\n\nRetail Food Employers and UFCW Local 711 Pension Trust Fund516031512 - 001RedRedYesYesImplemented\n\nOregon Retail Employees Pension Trust936074377 - 001GreenRedYesYesNo\n\nIntermountain Retail Store Employees Pension Trust (7)916187192 - 001RedRedYesYesImplemented\n\nUFCW Local 1245 Labor Management Pension Plan516090661 - 001RedRedYesYesImplemented\n\n86\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nContributions of Company (in millions)\nSurcharge imposed (2)\nExpiration date of collective bargaining agreementsTotal collective bargaining agreementsMost significant collective bargaining agreement(s)(3)\n\nPension fund202520242023CountExpiration\n\nUFCW-Northern California Employers Joint Pension Trust Fund$127.0 $130.8 $132.1 No4/15/202884804/15/2028\n\nWestern Conference of Teamsters Pension Plan82.3 78.2 75.9 No5/16/2026 to 9/30/20305699/21/2030\n\nSouthern California United Food & Commercial Workers Unions and Food Employers Joint Pension Plan (4)132.7 136.6 138.5 No3/6/2026 to 3/5/202840393/5/2028\n\nSound Retirement Trust (6)74.7 73.7 70.1 No3.21.2026 to 8/3/2029149405/1/2027\n\nBakery and Confectionery Union and Industry International Pension Fund18.2 18.6 18.7 No6/27/2026 to 6/10/2028122334/17/2027\n\nUFCW Union and Participating Food Industry Employers Tri-State Pension Fund10.5 10.7 10.7 No2/1/2028 to 1/31/2030623/29/2029\n\nRocky Mountain UFCW Unions & Employers Pension Plan16.3 16.5 16.9 No8/29/2026 to 6/9/202984262/19/2028\n\nUFCW Local 152 Retail Meat Pension Fund (5)10.9 11.1 11.2 No5/2/2028445/2/2028\n\nDesert States Employers & UFCW Unions Pension Plan11.8 11.2 11.0 No3/7/2026 to 11/10/202920183/7/2026\n\nUFCW Int'l Union- Albertsons Variable Annuity Pension Fund (5)9.5 9.6 9.6 No4/3/2027 to 11/10/20292476/9/2029\n\nRetail Food Employers and UFCW Local 711 Pension Trust Fund8.7 8.5 8.6 No4/18/2026 to 5/27/2028743/4/2028\n\nOregon Retail Employees Pension Trust14.9 13.0 12.8 No8/14/2027 to 11/18/2028125368/14/2027\n\nIntermountain Retail Store Employees Pension Trust (7)8.2 7.8 7.9 No5/1/2027 to 6/24/202854245/1/2027\n\nUFCW Local 1245 Labor Management Pension Plan6.0 6.1 6.0 No11/28/2026 to 4/8/20284311/28/2026\n\nOther funds (8)51.6 15.3 15.5 \n\nTotal Company contributions to U.S. multiemployer pension plans$583.3 $547.7 $545.5 \n\n(1) PPA established three categories (or \"zones\") of plans: (1) \"Green Zone\" for healthy; (2) \"Yellow Zone\" for endangered; and (3) \"Red Zone\" for critical. These categories are based upon multiple factors, including the funding ratio of the plan assets to plan liabilities.\n\n(2) Under the PPA, a surcharge may be imposed when employers make contributions under a collective bargaining agreement that is not in compliance with a rehabilitation plan. As of February 28, 2026, the collective bargaining agreements under which the Company was making contributions were in compliance with rehabilitation plans adopted by the applicable pension fund.\n\n(3) These columns represent the number of most significant collective bargaining agreements aggregated by common expiration dates for each of the pension funds listed above.\n\n(4) The information for this fund was obtained from the Form 5500 filed for the plan's year-end at March 31, 2025 and March 31, 2024.\n\n(5) The information for this fund was obtained from the Form 5500 filed for the plan's year-end at June 30, 2024 and June 30, 2023.\n\n(6) The information for this fund was obtained from the Form 5500 filed for the plan's year-end at September 30, 2024 and September 30, 2023.\n\n(7) The information for this fund was obtained from the Form 5500 filed for the plan's year-end at August 31, 2024 and August 31, 2023.\n\n(8) Fiscal 2025 includes $36.4 million of contributions related to the UFCW Northern California Employers Lifetime Income Security Accrual Fund, which was created during fiscal 2025. As this was a new plan in fiscal 2025, there were no contributions in fiscal 2024 or fiscal 2023.\n\nCollective Bargaining Agreements\n\nAs of February 28, 2026, the Company had approximately 280,000 employees, of which approximately 190,000 were covered by collective bargaining agreements. During fiscal 2025, collective bargaining agreements covering\n\n87\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\napproximately 126,000 employees were successfully renegotiated. As of February 28, 2026, collective bargaining agreements covering approximately 22,000 employees have expired or are scheduled to expire in fiscal 2026.\n\nMultiemployer Health and Welfare Plans\n\nThe Company makes contributions to multiemployer health and welfare plans in amounts specified in the applicable collective bargaining agreements. These plans provide medical, dental, pharmacy, vision, and other ancillary benefits to active employees and retirees as determined by the trustees of each plan. The majority of the Company's contributions cover active employees and as such, may not constitute contributions to a postretirement benefit plan. However, the Company is unable to separate contribution amounts to postretirement benefit plans from contribution amounts paid to active employee plans. Total contributions to multiemployer health and welfare plans were $1.3 billion for each of fiscal 2025, fiscal 2024 and fiscal 2023.\n\nDefined Contribution Plans and Supplemental Retirement Plans\n\nMany of the Company's employees are eligible to contribute a percentage of their compensation to defined contribution plans (\"401(k) Plans\"). Participants in the 401(k) Plans may become eligible to receive a profit-sharing allocation in the form of a discretionary Company contribution based on employee compensation. In addition, the Company may also provide matching contributions based on the amount of eligible compensation contributed by the employee. All Company contributions to the 401(k) Plans are made at the discretion of the Board. The Company provides supplemental retirement benefits through a Company sponsored deferred executive compensation plan, which provides certain key employees with retirement benefits that supplement those provided by the 401(k) Plans. Total contributions accrued for these plans were $82.8 million, $83.5 million and $83.0 million for fiscal 2025, fiscal 2024 and fiscal 2023, respectively.\n\nMerger-Related Retention Benefits\n\nThe Merger Agreement provided for the Company to establish a retention program to promote retention and to incentivize efforts to close the Merger and to ensure a successful and efficient integration process. On December 18, 2022, the retention program was approved, with an aggregate amount of up to $100 million, as amended, covering certain executive officers and employees of the Company. With the termination of the Merger Agreement, 50% of the award was paid on December 12, 2024 and 50% was paid on October 16, 2025. Retention bonus expense was $15.5 million for fiscal 2025, $33.6 million for fiscal 2024, and $35.0 million for fiscal 2023, and is included within Selling and administrative expenses.\n\nNOTE 11 - RELATED PARTIES\n\nThe Company paid Cerberus Technology Solutions, an affiliate of Cerberus Capital Management, L.P. (\"Cerberus\"), fees totaling approximately $2.7 million, $4.0 million and $5.5 million for fiscal 2025, fiscal 2024 and fiscal 2023, respectively, for information technology advisory and implementation services in connection with modernizing the Company's information systems.\n\nThe Company's payments to Cerberus Operations and Advisory Company, LLC, an affiliate of Cerberus, were immaterial for fiscal 2025, fiscal 2024 and fiscal 2023, for consulting services provided in connection with improving the Company's operations.\n\n88\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nNOTE 12 - COMMITMENTS AND CONTINGENCIES AND OFF BALANCE SHEET ARRANGEMENTS\n\nGuarantees\n\nLease Guarantees: The Company may have liability under certain operating leases that were assigned to third parties. If any of these third parties fail to perform their obligations under the leases, the Company could be responsible for the lease obligation. Because of the wide dispersion among third parties and the variety of remedies available, the Company believes that if an assignee became insolvent, it would not have a material effect on the Company's financial condition, results of operations or cash flows.\n\nThe Company also provides guarantees, indemnifications and assurances to others in the ordinary course of its business.\n\nLegal Proceedings\n\nThe Company is subject from time to time to various claims and lawsuits, including matters involving trade, business and operational practices, personnel and employment issues, lawsuits alleging violations of state and/or federal wage and hour laws, real estate disputes, personal injury, antitrust claims, packaging or product claims, claims related to the sale of drug or pharmacy products, such as opioids, intellectual property claims and other proceedings arising in or outside of the ordinary course of business. The Company is also subject, from time to time, to government investigations, subpoenas, audits, reviews, claims enforcement actions and litigation. These can include routine, regular and special investigations, audits, civil or criminal subpoenas, civil investigative demands (\"CIDs\") and reviews by various governmental authorities. 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.\n\nThe 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 is reasonably 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.\n\nFalse Claims Act: two qui tam actions alleging violations of the False Claims Act (\"FCA\") have been filed against the Company and its subsidiaries. Violations of the FCA are subject to treble damages and penalties of up to a specified dollar amount per false claim.\n\nIn United States ex rel. Proctor v. Safeway, filed in the United States District Court for the Central District of Illinois, the relator alleges that Safeway overcharged federal government healthcare programs by not providing the federal government, as part of its usual and customary prices, the benefit of discounts given to customers in pharmacy membership discount and price-matching programs. The relator filed his complaint under seal on November 11, 2011, and the complaint was unsealed on August 26, 2015. The relator amended the complaint on March 31, 2016. On June 12, 2020, the District Court granted Safeway's motion for summary judgment, holding that the relator could not prove that Safeway acted with the intent required under the FCA, and judgment was issued on June 15, 2020. On July 10, 2020, the relator filed a motion to alter or amend the judgment and to supplement the record, which Safeway opposed. On November 13, 2020, the District Court denied relator's motion, and on December 11, 2020, relator filed a notice of appeal. The Seventh Circuit Court of Appeals affirmed the judgment in the Company's favor on April 5, 2022. On August 3, 2022, relators filed a petition seeking review by the U.S. Supreme Court.\n\n89\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nIn United States ex rel. Schutte and Yarberry v. SuperValu, New Albertson's, Inc., et al., also filed in the Central District of Illinois, the relators allege that defendants (including various subsidiaries of the Company) overcharged federal government healthcare programs by not providing the federal government, as a part of usual and customary prices, the benefit of discounts given to customers who requested that defendants match competitor prices. The complaint was originally filed under seal and amended on November 30, 2015. On August 5, 2019, the District Court granted relators' motion for partial summary judgment, holding that price-matched prices are the usual and customary prices for those drugs. On July 1, 2020, the District Court granted the defendants' motions for summary judgment and dismissed the case, holding that the relator could not prove that defendants acted with the intent required under the FCA. Judgment was issued on July 2, 2020. On July 9, 2020, the relators filed a notice of appeal. On August 12, 2021, the Court of Appeals for the Seventh Circuit affirmed the grant of summary judgment in the Company's favor. On September 23, 2021, the relators filed a petition for rehearing en banc with the Seventh Circuit. On December 3, 2021, the Seventh Circuit denied relators' petition. On April 1, 2022, relators filed a petition seeking review by the U.S. Supreme Court.\n\nThe U.S. Supreme Court decided to hear the appeals filed by the relators in Proctor and Schutte. The Supreme Court consolidated the two cases for the purpose of hearing the appeal. The Supreme Court heard oral arguments on April 18, 2023. On June 1, 2023, the Supreme Court issued an opinion adverse to the Company, reversing the lower court's rulings. On July 3, 2023, the Supreme Court issued the order remanding both cases back to the Court of Appeals for the Seventh Circuit for further review. On July 27, 2023, the Court of Appeals remanded both cases back to the U.S. District Court for the Central District of Illinois.\n\nOn August 22, 2023, the District Court - as to Schutte - set a pretrial conference for March 4, 2024, and a trial date of April 29, 2024. At the same July 27 hearing, the District Court also gave the defendants leave to file motions for summary judgment on a schedule to be agreed upon. On October 11, 2023, the Company and co-defendant filed a motion for summary judgment. On the same day, the relators filed motions for partial summary judgment. On February 16, 2024, the Company and co-defendant filed a motion to reconsider a prior grant of partial summary judgment against the defendants, and also a motion to continue the trial. On February 27, 2024, the District Court granted the motion to continue and vacated the April 29, 2024 trial date. On April 26, 2024, the District Court denied the motion for reconsideration of partial summary judgment. On May 20, 2024, the District Court heard oral argument on the pending motions for summary judgment. On September 30, 2024, the District Court denied both parties' motions for summary judgment on scienter and granted relators' motion for summary judgment on materiality. On November 18, 2024, the District Court denied a motion by the Company to reconsider the materiality ruling or certify that ruling for an interlocutory appeal. The Schutte trial began on February 10, 2025. On March 4, 2025, the Company prevailed at trial and the District Court entered judgment in favor of the Company on March 12, 2025. On April 1, 2025, the relators filed a motion to amend the judgment and grant a new trial on damages. On October 31, 2025, the Court denied this motion, and the relators have appealed the denial of the motion.\n\nThe Company requested a stay in Proctor while Schutte is on appeal. In response, the Court vacated all dates in Proctor and ordered the parties to attend a settlement conference. The case has not settled and the Court is considering whether to set a trial date or stay the case until the Schutte appeal is decided.\n\nIn both of the above cases, the federal government previously investigated the relators' allegations and declined to intervene. The relators elected to pursue their respective cases on their own and in each case have alleged FCA damages in excess of $100.0 million before trebling and excluding penalties. The Company is vigorously defending each of these matters. The Company has recorded an estimated liability for these matters.\n\nPharmacy Benefit Manager (PBM) Litigation: The Company (including its subsidiary, Safeway Inc.) is a defendant in a lawsuit filed on January 21, 2021, in Minnesota state court, captioned Health Care Service Corp. et al. v. Albertsons Companies, LLC, et al. The action challenges certain prescription-drug prices reported by the\n\n90\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nCompany to a pharmacy benefit manager, Prime Therapeutics LLC (\"Prime\"), which in turn contracted with the health-insurer plaintiffs to adjudicate and process prescription-drug reimbursement claims.\n\nOn December 7, 2021, the Company filed a motion to dismiss the complaint. On January 14, 2022, the court denied the Company's motion to dismiss as to all but one count, plaintiffs' claim of negligent misrepresentation. On January 21, 2022, the Company and co-defendant SUPERVALU, Inc. (\"SUPERVALU\") filed a third-party complaint against Prime, asserting various claims, including: indemnification, fraud and unjust enrichment. On February 17, 2022, the Company filed in the Minnesota Court of Appeals an interlocutory appeal of the denial of their motion to dismiss on personal jurisdiction grounds (the \"Jurisdictional Appeal\"). On February 24, 2022, the Company and SUPERVALU filed in the trial court an unopposed motion to stay proceedings, pending the resolution of the Jurisdictional Appeal. The parties agreed on March 6, 2022, to an interim stay in the trial court pending a ruling on the unopposed motion to stay proceedings. On September 6, 2022, the Minnesota Court of Appeals denied the Jurisdictional Appeal and affirmed the trial court’s denial of the Company’s motion to dismiss. On October 6, 2022, the Company and SUPERVALU filed a petition seeking review by the Minnesota Supreme Court. On November 23, 2022, the Minnesota Supreme Court denied that petition. The Company and co-defendant SUPERVALU filed an answer to the complaint on January 23, 2023. On March 9, 2023, Prime moved to dismiss the third-party complaint filed by the Company and SUPERVALU. The court heard oral arguments on the motion on May 11, 2023. On August 9, 2023, the court denied Prime's motion as to 16 of the 17 counts in the third-party complaint, and dismissed one count without prejudice. On September 18, 2023, the Company and SUPERVALU filed an amended third-party complaint, which repleaded the one count that had been dismissed (in addition to the other claims asserted in the initial third-party complaint). On October 2, 2023, Prime filed an answer to the amended third-party complaint. The proceedings were stayed through September 29, 2025 to facilitate settlement discussions. The case is currently scheduled to be ready for trial on or after April 19, 2027. On October 9, 2025, the Company, SUPERVALU, and Prime filed a stipulated motion requesting the dismissal of Prime from the litigation, which was approved by the Court on October 10, 2025, thus dismissing Prime.\n\nThe Company is vigorously defending the claims filed against it. The Company has recorded an estimated liability for this matter.\n\nOpioid Litigation: The Company is one of dozens of companies that have been named as defendants in lawsuits filed by various plaintiffs, including states, counties, cities, Native American tribes, and hospitals, alleging that defendants contributed to the national opioid epidemic. At present, the Company is a named defendant in approximately 81 suits pending in various state and federal courts including the United States District Court for the Northern District of Ohio, where over 2,000 cases against various defendants have been consolidated as Multi-District Litigation (\"MDL\") pursuant to 28 U.S.C. §1407. All of the MDL cases naming the Company have been stayed except for two so called \"bellwether\" actions in Tarrant County (Texas) and Monterey County (California). Discovery has been completed on Tarrant County's liability claim and the matter has been remanded to the Northern District of Texas for trial. On July 25, 2025, the Company filed a motion with the Court seeking to certify for interlocutory appeal an order denying its Motion for Summary Judgment, which is fully briefed and pending before the Court. Discovery in Monterey County (California) is ongoing. The County of Monterey matter is stayed until July 17, 2026. The relief sought by the various plaintiffs in these matters includes compensatory damages, abatement and punitive damages as well as injunctive relief. On July 30, 2024, multiple plaintiffs filed an Omnibus Motion for Leave to Amend complaints, seeking leave from the MDL court to add the Company to over 150 additional lawsuits. The Company filed its response to the Omnibus Motion on January 16, 2025. In the reply filed by the plaintiffs on July 2, 2025, the number of additional lawsuits was reduced to approximately 108 suits. The Motion remains pending before the Court.\n\nPrior to the start of a state-court trial that was scheduled for September 6, 2022, the Company reached an agreement to settle with the State of New Mexico. The New Mexico counties and municipal entities that filed 14 additional lawsuits, including Santa Fe County, agreed to the terms of the settlement. Thus, all 15 cases filed by New Mexico entities have been dismissed as a result of the settlement. The Company executed an agreement to settle three\n\n91\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nmatters that were filed in Nevada. The Company recorded a liability of $21.5 million for the settlements of the cases in New Mexico and Nevada which was paid by its insurers in the fourth quarter of fiscal 2022. With respect to the three active state court claims, those matters are in Dallas County (Texas), the State of Washington and the City of Philadelphia (Pennsylvania). The State of Washington matter is scheduled for trial on July 13, 2026. The Company requested an interlocutory appeal with the City of Philadelphia matter, which was granted on November 26, 2024. The City of Philadelphia appeal was heard on July 15, 2025, and the Company awaits the Court's ruling. The Dallas County matter has a trial-ready date of September 8, 2026. Following the denial of its preliminary objections, the Company sought interlocutory review with the Superior Court. The Superior Court affirmed the denial of the Company's preliminary objections. The Company has filed an application for re-argument. The Company believes that it has substantial factual and legal defenses to these claims, and is vigorously defending these matters.\n\nOn April 14, 2026, the Company announced that it reached a settlement framework to resolve substantially all of the opioid-related claims that have been or may be asserted against the Company by participating states, political subdivisions, and Native American tribes (the \"Opioid Settlement Framework\"). Subject to the completion of certain non‑monetary terms that are currently under negotiation, the Company has agreed to make remediation payments of up to $655.1 million to participating states and political subdivisions and $21.7 million to participating Native American tribes for abatement‑related initiatives, and approximately $97.0 million for attorneys’ fees and costs. Participating states, political subdivisions, and Native American tribes will have an opportunity to opt into the Opioid Settlement Framework. The Company retains discretion to determine whether participation levels are sufficient for the settlement framework to become effective. The Opioid Settlement Framework, subject to the completion of all required terms and conditions, would provide for the resolution of all claims asserted by participating states, political subdivisions, and Native American tribes and is being entered into without any admission of liability or wrongdoing by the Company.\n\nAs a result of the Opioid Settlement Framework, the Company concluded that a loss related to the settlement of opioid‑related claims was probable and for which the related loss was reasonably estimable. Accordingly, in the fourth quarter of fiscal 2025, the Company recorded a loss of $773.8 million ($599.8 million, net of tax) related to the Opioid Settlement Framework, included as a component of Selling and administrative expenses in the Consolidated Statements of Operations. These related payments are expected to be made over a period of nine years, with slightly more than one-third of the total amount payable within the first two years and the remainder payable over the following seven years. The first payment of $136.6 million is expected to be made on April 30, 2026 into escrow until final settlement. As of February 28, 2026, the Company recorded $136.6 million and $637.2 million of the estimated liability in Other current liabilities and Other long-term liabilities, respectively, in the Consolidated Balance Sheets.\n\nLoss contingencies are inherently uncertain and require significant judgment, and unfavorable developments may occur. The Opioid Settlement Framework remains in its early stages, and there is no assurance that the required parties will reach a definitive agreement or satisfy any related conditions. Accordingly, actual losses may differ materially from the Company’s estimated liability.\n\nThe Opioid Settlement Framework does not include the State of Washington. The Company continues to vigorously defend this matter and believes that it has substantial factual and legal defenses. At this stage in the proceedings, the Company is unable to determine the probability of the outcome of this matter or the range of reasonably possible loss.\n\nThe Company has also received subpoenas, Civil Investigative Demands and other requests for documents and information from the U.S. Department of Justice (\"DOJ\") and certain state Attorneys General, and has had preliminary discussions with the DOJ with respect to purported violations of the federal Controlled Substances Act and the FCA in dispensing prescriptions. The Company has been cooperating with the government with respect to these requests for information.\n\n92\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nTermination 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.\n\nAs previously disclosed, 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. A permanent injunction was issued, also on December 10, 2024, by a state court judge in a lawsuit brought against Kroger and the Company by the State of Washington, in the case State of Washington v. The Kroger Company and Albertsons Companies, Inc., King County Superior Court, Washington (Case No. 24-2-00977-9 SEA). In light of the injunctions, 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.\n\nFollowing 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.\n\nOn 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. The Company filed its answers to Kroger's counterclaims on May 17, 2025 and the parties are presently engaged in discovery. Trial is scheduled to begin on October 19, 2026.\n\nOn August 19, 2025, the Court in the State of Washington's case against Kroger and the Company awarded the State $28.4 million in attorneys' fees and costs as the prevailing party, with post-judgment interest accruing at 12%. The judgment was entered jointly and severally against Kroger and the Company. Kroger and the Company disagree with the Court's decision in awarding the State of Washington its attorneys' fees and costs, and the decision is being appealed. Kroger has filed a supersedeas bond with respect to the judgment for purposes of the appeal. The Company believes, based on the terms of the Merger Agreement, that Kroger is solely responsible for the full payment of the judgment and, accordingly, the Company has not recorded an estimated liability.\n\nOther Commitments\n\nIn the ordinary course of business, the Company enters into various supply contracts for goods and contracts for fixed assets and information technology. These contracts typically include volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations.\n\nNOTE 13 - OTHER COMPREHENSIVE INCOME OR LOSS\n\nTotal comprehensive earnings are defined as all changes in stockholders' equity during a period, other than those from investments by or distributions to stockholders. Generally, for the Company, total comprehensive income\n\n93\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nequals net income plus or minus adjustments for pension and other post-retirement liabilities. Total comprehensive earnings represent the activity for a period net of tax.\n\nWhile total comprehensive earnings are the activity in a period and are largely driven by net earnings in that period, accumulated other comprehensive income or loss (\"AOCI\") represents the cumulative balance of other comprehensive income, net of tax, as of the balance sheet date. Changes in the AOCI balance by component are shown below (in millions):\n\nFiscal 2025\n\nTotalPension and Post-retirement benefit plan itemsOther\n\nBeginning AOCI balance$94.7 $92.4 $2.3 \n\nOther comprehensive income (loss) before reclassifications17.3 18.6 (1.3)\n\nAmounts reclassified from Accumulated other comprehensive income (1)(32.5)(32.5)— \n\nTax benefit3.7 3.7 — \n\nCurrent-period other comprehensive loss, net(11.5)(10.2)(1.3)\n\nEnding AOCI balance$83.2 $82.2 $1.0 \n\nFiscal 2024\n\nTotalPension and Post-retirement benefit plan itemsOther\n\nBeginning AOCI balance$88.0 $87.5 $0.5 \n\nOther comprehensive income before reclassifications9.8 7.4 2.4 \n\nAmounts reclassified from Accumulated other comprehensive income (1)(0.8)(0.8)— \n\nTax expense(2.3)(1.7)(0.6)\n\nCurrent-period other comprehensive income, net6.7 4.9 1.8 \n\nEnding AOCI balance$94.7 $92.4 $2.3 \n\n(1) These amounts are included in the computation of net pension and post-retirement (income) expense. For additional information, see Note 10 - Employee benefit plans and collective bargaining agreements.\n\n94\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nNOTE 14 - SEGMENT INFORMATION\n\nThe Company and its subsidiaries offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel and other items and services in its stores or through digital channels. The Company's retail operating divisions are geographically based, have similar economic characteristics and similar expected long-term financial performance. The Company's operating segments and reporting units are its 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 the Chief Operating Decision Maker (\"CODM\"), the Company's Chief Executive Officer, regularly reviews the operating results and makes key operating decisions on how to allocate resources. Across all operating segments, the Company operates primarily one store format. Each division offers, through its stores and digital channels, the same general mix of products with similar pricing to similar categories of customers, has similar distribution methods, operates in similar regulatory environments and purchases merchandise from similar or the same vendors.\n\nThe CODM evaluates performance and allocates resources using Retail segment EBITDA, defined as earnings (net loss) before interest, income taxes, depreciation and amortization, adjusted to eliminate the effects of items management does not consider in assessing segment performance. The CODM uses Retail segment EBITDA as its principal measure of segment performance to evaluate the Company's operating results and effectiveness of its strategies and to monitor budget versus actual results.\n\nThe CODM is not provided asset information by operating segment as asset information is provided to the CODM on a consolidated basis. No customer accounts for 10% or more of the Company's revenues. Substantially all of the Company's revenues are generated in the U.S. and its long-lived assets are predominantly located within the U.S. The accounting policies of the reportable segment generally align with those described in the Company’s summary of significant accounting policies contained in Note 1, except certain classification differences that are not material for all periods presented.\n\n95\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\nThe following table presents segment information for Net sales and other revenue, significant segment expenses and Retail segment EBITDA (in millions):\n\nFiscal\n 2025Fiscal\n 2024Fiscal\n 2023\n\nRetail segment sales$82,359.4 $79,633.2 $78,494.4 \n\nOther revenue (1)813.1 757.7 743.3 \n\nNet sales and other revenue$83,172.5 $80,390.9 $79,237.7 \n\nRetail segment expenses:\n\nMerchandise costs, including advertising, distribution and freight58,789.1 56,674.1 55,807.2 \n\nEmployee costs (2)12,218.8 11,734.9 11,411.5 \n\nOther segment expenses (3)6,950.5 6,668.5 6,482.8 \n\nRetail segment EBITDA$4,401.0 $4,555.7 $4,792.9 \n\nReconciliation to Income before income taxes:\n\nCorporate adjustments (4)(499.5)(551.0)(475.2)\n\nDepreciation and amortization(1,913.7)(1,817.9)(1,779.0)\n\nInterest expense, net(504.2)(459.8)(492.1)\n\nBusiness transformation (5)(153.7)(105.2)(45.1)\n\nEquity-based compensation expense(95.5)(106.2)(104.5)\n\nGain (loss) on property dispositions and impairment losses, net12.2 (95.8)(43.9)\n\nLIFO expense(66.0)(28.6)(52.0)\n\nMerger-related costs (6)(84.1)(254.8)(180.6)\n\nCertain legal and regulatory accruals and settlements, net (7)(802.9)(6.1)6.7 \n\nMiscellaneous adjustments (8)(25.8)(0.6)(38.2)\n\nIncome before income taxes$267.8 $1,129.7 $1,589.0 \n\n(1) Primarily includes wholesale sales to third parties and other miscellaneous revenue not included in Retail segment sales.\n\n(2) Includes wages, salaries, benefits, insurance and other employee-related costs.\n\n(3) Primarily includes rent and occupancy costs, debit and credit card fees, supplies, divisional support costs and allocated corporate costs.\n\n(4) Primarily includes bonus compensation, unallocated corporate costs and contribution from the Company's wholesale and other sales.\n\n(5) Primarily includes costs associated with third-party consulting fees related to the Company's business transformation strategy and costs related to employee terminations.\n\n(6) Fiscal 2025 primarily relates to litigation costs and retention program expense related to the terminated merger. Fiscal 2024 and fiscal 2023 primarily include third-party legal and advisor fees and retention program expense related to the merger.\n\n(7) Includes the $773.8 million charge in the fourth quarter of fiscal 2025 related to the Opioid Settlement Framework. Refer to Note 12 for additional information.\n\n(8) Primarily includes pension settlement gains and losses, adjustments for closed stores and surplus properties, net realized and unrealized gains and losses related to non-operating investments, non-cash rent expense, gains and losses on energy hedges and other items not allocated to the segment.\n\nNOTE 15 - NET INCOME PER COMMON SHARE\n\nThe Company calculates basic and diluted net income per Class A common share using the two-class method. The two-class method is an allocation formula that determines net income per Class A common share for each share of Class A common stock and Convertible Preferred Stock, a participating security, according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to Class A common shares and Convertible Preferred Stock based on their respective rights to receive\n\n96\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\ndividends. The holders of Convertible Preferred Stock participated in cash dividends that the Company paid on its common stock to the extent that such cash dividends exceeded $206.25 million per fiscal year and shares of Convertible Preferred Stock remained outstanding as of the applicable record date to participate in such dividends. As of June 17, 2023, 100% of the originally issued Convertible Preferred Stock had been converted into Class A common stock and no shares of Convertible Preferred Stock are outstanding. In applying the two-class method to interim periods, the Company allocates income to its quarterly periods independently and discretely from its year-to-date and annual periods. Basic net income per Class A common share is computed by dividing net income allocated to Class A common stockholders by the weighted average number of Class A common shares outstanding for the period, including Class A common shares to be issued with no prior remaining contingencies prior to issuance. Diluted net income per Class A common share is computed based on the weighted average number of shares of Class A common stock outstanding during each period, plus potential Class A common shares considered outstanding during the period, as long as the inclusion of such awards is not antidilutive. Potential Class A common shares consist of unvested RSUs and RSAs and Convertible Preferred Stock, using the more dilutive of either the two-class method or as-converted stock method. PBRSUs and performance-based RSAs are considered dilutive when the related performance criterion has been met.\n\nThe components of basic and diluted net income per Class A common share were as follows (in millions, except per share data):\n\nFiscal\n 2025Fiscal\n 2024Fiscal\n 2023\n\nBasic net income per Class A common share\n\nNet income$217.4 $958.6 $1,296.0 \n\nAccrued dividends on Convertible Preferred Stock— — (0.3)\n\nEarnings allocated to Convertible Preferred Stock— — (0.7)\n\nNet income allocated to Class A common stockholders - Basic$217.4 $958.6 $1,295.0 \n\nWeighted average Class A common shares outstanding - Basic (1)545.2 580.1 575.4 \n\nBasic net income per Class A common share$0.40 $1.65 $2.25 \n\n \n\nDiluted net income per Class A common share\n\nNet income allocated to Class A common stockholders - Basic$217.4 $958.6 $1,295.0 \n\nAccrued dividends on Convertible Preferred Stock— — — \n\nEarnings allocated to Convertible Preferred Stock— — — \n\nNet income allocated to Class A common stockholders - Diluted$217.4 $958.6 $1,295.0 \n\nWeighted average Class A common shares outstanding - Basic (1)545.2 580.1 575.4 \n\nDilutive effect of:\n\nRestricted stock units and awards2.0 3.7 5.7 \n\nConvertible Preferred Stock (2)— — — \n\nWeighted average Class A common shares outstanding - Diluted (3)547.2 583.8 581.1 \n\nDiluted net income per Class A common share$0.40 $1.64 $2.23 \n\n97\n\n[Table of Contents](#i04215854cf2748c6bf450001f66c5329_7)\n\n(1) Fiscal 2025, fiscal 2024 and fiscal 2023 include 2.3 million, 2.3 million and 3.0 million Class A common shares remaining to be issued, respectively.\n\n(2) Reflects the number of shares of Convertible Preferred Stock issued, if converted into common stock for the period outstanding. For fiscal 2023, 0.3 million potential common shares outstanding related to Convertible Preferred Stock were antidilutive.\n\n(3) The number of potential Class A common shares outstanding related to RSUs and RSAs that were antidilutive for fiscal 2025, fiscal 2024 and fiscal 2023 were not material."}