Albertsons Companies, Inc. (NYSE: ACI) (the "Company") today
reported results for the second quarter of fiscal 2023, which ended
September 9, 2023.
Second Quarter of Fiscal 2023
Highlights
- Identical sales increased 2.9%
- Digital sales increased 19%
- Loyalty members increased 17% to 37.4 million
- Net income of $267 million, or $0.46 per share
- Adjusted net income of $368 million, or $0.63 per share
- Adjusted EBITDA of $977 million
Vivek Sankaran, CEO commented, "During the second quarter, we
continued to execute against our Customers for Life transformation
strategy and drive solid operating results, despite increasing
macro-economic headwinds. We want to thank all our teams for their
commitment to our customers and communities."
Mr. Sankaran continued, "As we look ahead to the balance of the
year, our focus remains the same – advancing operational excellence
in our stores, driving growth in our digital and pharmacy
operations, and deepening our relationships with our
customers."
Mr. Sankaran concluded, "We are also mindful of a more
challenging economic backdrop, including declining federal and
state government assistance and higher interest rates, and their
effects on consumer spending and our business. We also expect
slowing food inflation, ongoing labor investment, broad
inflationary cost increases and significant declines in COVID-19
vaccination and test kit revenue. We continue to partially offset
these headwinds with the benefits of our productivity
initiatives."
Second Quarter of Fiscal 2023
Results
Net sales and other revenue was $18.3 billion during the 12
weeks ended September 9, 2023 ("second quarter of fiscal 2023")
compared to $17.9 billion during the 12 weeks ended September 10,
2022 ("second quarter of fiscal 2022"). The increase was driven by
the Company's 2.9% increase in identical sales, with strong growth
in pharmacy sales, a 19% increase in digital sales, and retail
price inflation across most categories being the primary
contributors to the identical sales increase. The increase in Net
sales and other revenue was partially offset by lower fuel
sales.
Gross margin rate decreased to 27.6% during the second quarter
of fiscal 2023 compared to 27.9% during the second quarter of
fiscal 2022. Excluding the impact of fuel and LIFO expense, gross
margin rate decreased 37 basis points compared to the second
quarter of fiscal 2022. The strong growth in pharmacy operations,
which carries an overall lower gross margin rate, and increases in
shrink were the primary drivers of the decrease, partially offset
by our procurement and sourcing productivity initiatives. The rate
decrease related to pharmacy operations was primarily due to growth
in pharmacy sales and fewer COVID-19 vaccines in the second quarter
of fiscal 2023. In addition, the benefits from our productivity
initiatives allowed us to continue to provide incremental price
investments to our customers during the second quarter of fiscal
2023.
Selling and administrative expenses increased to 25.1% of Net
sales and other revenue during the second quarter of fiscal 2023
compared to 25.0% during the second quarter of fiscal 2022.
Excluding the impact of fuel, Selling and administrative expenses
as a percentage of Net sales and other revenue decreased eight
basis points. The decrease in Selling and administrative expenses
as a percentage of Net sales and other revenue was primarily
attributable to lower employee costs, which includes the benefit of
ongoing productivity initiatives, partially offset by
Merger-related costs, an increase in operating expenses related to
the expansion of our digital and omnichannel capabilities,
increased store occupancy costs and additional third-party store
security services.
Net gain on property dispositions and impairment losses was $8.4
million during the second quarter of fiscal 2023 compared to $14.0
million during the second quarter of fiscal 2022.
Interest expense, net was $111.9 million during the second
quarter of fiscal 2023 compared to $89.8 million during the second
quarter of fiscal 2022. The increase in interest expense, net was
primarily attributable to higher average outstanding borrowings and
higher average interest rates, as well as lower interest
income.
Other expense, net was $8.1 million during the second quarter of
fiscal 2023 compared to other income, net of $18.9 million during
the second quarter of fiscal 2022.
Income tax expense was $67.5 million, representing a 20.2%
effective tax rate, during the second quarter of fiscal 2023
compared to $117.4 million, representing a 25.5% effective tax
rate, during the second quarter of fiscal 2022. The favorability in
the effective income tax rate in the second quarter of fiscal 2023
was driven by the recognition of discrete state income tax benefits
related to audit settlements and favorable legislation during the
second quarter of fiscal 2023.
Net income was $266.9 million, or $0.46 per share, during the
second quarter of fiscal 2023. Net income was $342.7 million, or
$0.59 per share, during the second quarter of fiscal 2022.
Adjusted net income was $367.7 million, or $0.63 per share,
during the second quarter of fiscal 2023 compared to $418.3
million, or $0.72 per share, during the second quarter of fiscal
2022.
Adjusted EBITDA was $976.9 million, or 5.3% of Net sales and
other revenue, during the second quarter of fiscal 2023 compared to
$1,048.5 million, or 5.9% of Net sales and other revenue, during
the second quarter of fiscal 2022. The decrease in Adjusted EBITDA
in the second quarter of fiscal 2023 was primarily due to a
decrease in gross margin contribution from our fuel business and
fewer COVID-19 vaccinations. We expect a continued decline in
demand for COVID-19 vaccinations and at-home test kits, resulting
in an approximate $75 million headwind to Adjusted EBITDA for the
remaining two quarters of fiscal 2023.
Capital Expenditures
During the first 28 weeks of fiscal 2023, capital expenditures
were $1,084.3 million, which primarily included the completion of
80 remodels, the opening of three new stores and continued
investment in our digital and technology platforms.
Merger Agreement
On October 13, 2022, the Company entered into an Agreement and
Plan of Merger (the "Merger Agreement") with The Kroger Company
("Kroger") and Kettle Merger Sub, Inc. Under the terms of the
Merger Agreement, Kroger (through Kettle Merger Sub, Inc.) will
acquire all of the outstanding shares of the Company's common stock
for total consideration of $34.10 per share, reduced by the special
cash dividend of $6.85 per share paid on January 20, 2023 (the
"Merger"). Details regarding the Merger Agreement and the
transactions contemplated by the Merger Agreement can be found in
the Form 8-K filed on October 14, 2022 and the joint press release
issued by the Company and Kroger on October 14, 2022.
In connection with the Merger, on September 8, 2023, the Company
and Kroger announced that the parties had entered into a definitive
agreement, dated September 8, 2023, with C&S Wholesale Grocers,
LLC ("C&S") for the sale of select stores, banners,
distribution centers, offices and private label brands. Also on
September 8, 2023, Kroger notified the Company that, in accordance
with the Merger Agreement, Kroger intends to sell the SpinCo
Business (as defined in the Merger Agreement) to C&S. As a
result, the spin-off previously contemplated by the Company and
Kroger is no longer a requirement under the Merger Agreement and
will no longer be pursued by the Company and Kroger. Details
regarding the definitive agreement with C&S can be found in the
Form 8-K filed on September 8, 2023 and the joint press release
issued by the Company and Kroger on September 8, 2023.
About Albertsons
Companies
Albertsons Companies is a leading food and drug retailer in the
United States. As of September 9, 2023, the Company operated 2,272
retail food and drug stores with 1,726 pharmacies, 401 associated
fuel centers, 22 dedicated distribution centers and 19
manufacturing facilities. The Company operates stores across 34
states and the District of Columbia with 24 banners including
Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb,
Randalls, United Supermarkets, Pavilions, Star Market, Haggen,
Carrs, Kings Food Markets and Balducci's Food Lovers Market. The
Company is committed to helping people across the country live
better lives by making a meaningful difference, neighborhood by
neighborhood. In 2022, along with the Albertsons Companies
Foundation, the Company contributed more than $200 million in food
and financial support, including more than $40 million through our
Nourishing Neighbors Program to ensure those living in our
communities and those impacted by disasters have enough to eat.
Forward-Looking Statements and Factors
That Impact Our Operating Results and Trends
This press release includes "forward-looking statements" within
the meaning of the federal securities laws. The "forward-looking
statements" include our current expectations, assumptions,
estimates and projections about our business, our industry and the
outcome of the Merger. They include statements relating to our
future operating or financial performance which the Company
believes to be reasonable at this time. You can identify
forward-looking statements by the use of words such as "outlook,"
"may," "should," "could," "estimates," "predicts," "potential,"
"continue," "anticipates," "believes," "plans," "expects," "future"
and "intends" and similar expressions which are intended to
identify forward-looking statements.
These statements are not guarantees of future performance and
are subject to numerous risks and uncertainties which are beyond
our control and difficult to predict and could cause actual results
to differ materially from the results expressed or implied by the
statements. Risks and uncertainties that could cause actual results
to differ materially from such statements include:
- changes in macroeconomic conditions and uncertainty regarding
the geopolitical environment;
- rates of food price inflation or deflation, as well as fuel and
commodity prices;
- changes in market interest rates and wage rates;
- changes in consumer behavior and spending due to the impact of
macroeconomic factors and discontinuation of government relief
related to COVID-19, including the expiration of student loan
payment deferments;
- ability to attract and retain qualified associates and
negotiate acceptable contracts with labor unions;
- failure to achieve productivity initiatives, unexpected changes
in our objectives and plans, inability to implement our strategies,
plans, programs and initiatives, or enter into strategic
transactions, investments or partnerships in the future on terms
acceptable to us, or at all;
- uncertainties related to the Merger, including our ability to
close the transactions contemplated by the Merger Agreement, and
the impact of the costs related to the Merger;
- erosion of consumer confidence as a result of the Merger
Agreement and the transactions contemplated by the Merger
Agreement;
- litigation related to the transactions contemplated by the
Merger Agreement;
- restrictions on our ability to operate as a result of the
Merger Agreement;
- challenges in attracting, retaining and motivating our
employees until the closing of the Merger;
- availability and cost of goods used in our food products;
- challenges with our supply chain;
- operational and financial effects resulting from cyber
incidents, including outages in the cloud environment and the
effectiveness of business continuity plans during a ransomware or
other cyber incident; and
- continued reduction in revenue from administering vaccines and
a reduction in current levels of revenue from providing test
kits.
All forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by
these cautionary statements and risk factors. Forward-looking
statements contained in this press release reflect our view only as
of the date of this press release. We undertake no obligation,
other than as required by law, to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
In evaluating our financial results and forward-looking
statements, you should carefully consider the risks and
uncertainties more fully described in the "Risk Factors" section or
other sections in our reports filed with the Securities and
Exchange Commission ("SEC") including the most recent annual report
on Form 10-K and any subsequent periodic reports on Form 10-Q and
current reports on Form 8-K.
Additional Information and Where to
Find It
The Company has filed with the SEC a definitive information
statement on Schedule 14C with respect to the approval of the
Merger and has mailed the definitive information statement to the
Company's stockholders. You may obtain copies of all documents
filed by the Company with the SEC regarding this transaction, free
of charge, at the SEC's website, www.sec.gov or from the Company's
website at
https://www.albertsonscompanies.com/investors/overview/.
Non-GAAP Measures and Identical
Sales
Non-GAAP Measures. EBITDA, Adjusted EBITDA, Adjusted net income,
Adjusted net income per Class A common share and Net debt ratio
(collectively, the "Non-GAAP Measures") are performance measures
that provide supplemental information the Company believes is
useful to analysts and investors to evaluate its ongoing results of
operations, when considered alongside other GAAP measures such as
net income, operating income, gross margin, and net income per
Class A common share. These Non-GAAP Measures exclude the financial
impact of items management does not consider in assessing the
Company's ongoing core operating performance, and thereby provide
useful measures to analysts and investors of its operating
performance on a period-to-period basis. Other companies may have
different definitions of Non-GAAP Measures and provide for
different adjustments, and comparability to the Company's results
of operations may be impacted by such differences. The Company also
uses Adjusted EBITDA and Net debt ratio for board of director and
bank compliance reporting. The Company's presentation of Non-GAAP
Measures should not be construed as an inference that its future
results will be unaffected by unusual or non-recurring items.
Identical Sales. As used in this earnings release, the term
"identical sales" includes stores operating during the same period
in both the current fiscal year and the prior fiscal year,
comparing sales on a daily basis. Direct to consumer digital sales
are included in identical sales, and fuel sales are excluded from
identical sales.
Albertsons Companies, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Operations
(dollars in millions, except
per share data)
(unaudited)
12 weeks ended
28 weeks ended
September 9,
2023
September 10,
2022
September 9,
2023
September 10,
2022
Net sales and other revenue
$
18,290.7
$
17,919.4
$
42,340.9
$
41,229.7
Cost of sales
13,249.2
12,914.8
30,636.7
29,680.1
Gross margin
5,041.5
5,004.6
11,704.2
11,549.6
Selling and administrative
expenses
4,595.5
4,487.6
10,608.4
10,351.9
(Gain) loss on property dispositions
and impairment losses, net
(8.4
)
(14.0
)
19.2
(93.4
)
Operating income
454.4
531.0
1,076.6
1,291.1
Interest expense, net
111.9
89.8
266.8
228.7
Other expense (income), net
8.1
(18.9
)
(7.9
)
(25.2
)
Income before income taxes
334.4
460.1
817.7
1,087.6
Income tax expense
67.5
117.4
133.6
260.7
Net income
$
266.9
$
342.7
$
684.1
$
826.9
Net income per Class A common
share
Basic net income per Class A common
share
$
0.46
$
0.61
$
1.19
$
1.44
Diluted net income per Class A common
share
0.46
0.59
1.18
1.43
Weighted average Class A common shares
outstanding (in millions)
Basic
576.0
531.9
574.7
521.3
Diluted
581.9
576.3
580.3
525.9
% of net sales and other
revenue
Gross margin
27.6
%
27.9
%
27.6
%
28.0
%
Selling and administrative expenses
25.1
%
25.0
%
25.1
%
25.1
%
Store data
Number of stores at end of quarter
2,272
2,272
Albertsons Companies, Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets
(in millions)
(unaudited)
September 9,
2023
February 25,
2023
ASSETS
Current assets
Cash and cash equivalents
$
266.1
$
455.8
Receivables, net
710.1
687.6
Inventories, net
5,048.3
4,782.0
Other current assets
397.1
345.0
Total current assets
6,421.6
6,270.4
Property and equipment, net
9,431.1
9,358.7
Operating lease right-of-use assets
5,955.9
5,879.1
Intangible assets, net
2,460.7
2,465.4
Goodwill
1,201.0
1,201.0
Other assets
852.2
993.6
TOTAL ASSETS
$
26,322.5
$
26,168.2
LIABILITIES
Current liabilities
Accounts payable
$
4,149.7
$
4,173.1
Accrued salaries and wages
1,293.7
1,317.4
Current maturities of long-term debt and
finance lease obligations
638.8
1,075.7
Current maturities of operating lease
obligations
668.8
664.8
Other current liabilities
1,172.5
1,197.8
Total current liabilities
7,923.5
8,428.8
Long-term debt and finance lease
obligations
7,810.8
7,834.4
Long-term operating lease obligations
5,543.0
5,386.2
Deferred income taxes
831.6
854.0
Other long-term liabilities
1,997.0
2,008.4
Commitments and contingencies
Series A convertible preferred stock
—
45.7
STOCKHOLDERS' EQUITY
Class A common stock
5.9
5.9
Additional paid-in capital
2,089.6
2,072.7
Treasury stock, at cost
(304.2
)
(352.2
)
Accumulated other comprehensive income
68.9
69.3
Retained earnings (accumulated
deficit)
356.4
(185.0
)
Total stockholders' equity
2,216.6
1,610.7
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
26,322.5
$
26,168.2
Albertsons Companies, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(in millions)
(unaudited)
28 weeks ended
September 9,
2023
September 10,
2022
Cash flows from operating
activities:
Net income
$
684.1
$
826.9
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss (gain) on property dispositions and
impairment losses, net
19.2
(93.4
)
Depreciation and amortization
945.2
959.8
Operating lease right-of-use assets
amortization
357.0
349.4
LIFO expense
60.2
116.9
Deferred income tax
(85.8
)
58.3
Contributions to pension and
post-retirement benefit plans, net of (income) expense
(12.1
)
(16.1
)
Gain on interest rate swaps and energy
hedges, net
(5.4
)
(14.9
)
Deferred financing costs
8.4
9.1
Equity-based compensation expense
57.2
63.2
Other operating activities
(6.9
)
(10.8
)
Changes in operating assets and
liabilities:
Receivables, net
(21.3
)
(92.5
)
Inventories, net
(326.6
)
(362.5
)
Accounts payable, accrued salaries and
wages and other accrued liabilities
35.1
43.5
Operating lease liabilities
(274.7
)
(265.4
)
Self-insurance assets and liabilities
40.3
35.1
Other operating assets and liabilities
(126.0
)
45.5
Net cash provided by operating
activities
1,347.9
1,652.1
Cash flows from investing
activities:
Payments for property, equipment and
intangibles, including lease buyouts
(1,084.3
)
(1,060.7
)
Proceeds from sale of assets
195.1
94.2
Other investing activities
(0.9
)
(11.2
)
Net cash used in investing
activities
(890.1
)
(977.7
)
Cash flows from financing
activities:
Proceeds from issuance of long-term debt,
including ABL facility
50.0
—
Payments on long-term borrowings,
including ABL facility
(500.5
)
(0.2
)
Payments of obligations under finance
leases
(29.1
)
(29.9
)
Dividends paid on common stock
(138.0
)
(126.7
)
Dividends paid on convertible preferred
stock
(0.8
)
(34.5
)
Employee tax withholding on vesting of
restricted stock units
(35.1
)
(40.3
)
Other financing activities
2.4
5.0
Net cash used in financing
activities
(651.1
)
(226.6
)
Net (decrease) increase in cash and
cash equivalents and restricted cash
(193.3
)
447.8
Cash and cash equivalents and
restricted cash at beginning of period
463.8
2,952.6
Cash and cash equivalents and
restricted cash at end of period
$
270.5
$
3,400.4
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
The following tables reconcile Net income
to Adjusted net income, and Net income per Class A common share to
Adjusted net income per Class A common share:
12 weeks ended
28 weeks ended
September 9,
2023
September 10,
2022
September 9,
2023
September 10,
2022
Numerator:
Net income
$
266.9
$
342.7
$
684.1
$
826.9
Adjustments:
(Gain) loss on interest rate swaps and
energy hedges, net (d)
(4.8
)
3.6
(5.4
)
(14.9
)
Business transformation (1)(b)
13.5
13.5
25.6
47.3
Equity-based compensation expense (b)
25.3
27.9
57.2
63.2
(Gain) loss on property dispositions and
impairment losses, net
(8.4
)
(14.0
)
19.2
(93.4
)
LIFO expense (a)
26.2
54.8
60.2
116.9
Government-mandated incremental COVID-19
pandemic related pay (2)(b)
—
3.9
—
9.8
Merger-related costs (3)(b)
41.2
3.3
88.3
9.4
Certain legal and regulatory accruals and
settlements, net (b)
—
10.9
—
43.7
Amortization of debt discount and deferred
financing costs (c)
3.6
3.9
8.3
9.0
Amortization of intangible assets
resulting from acquisitions (b)
11.1
12.0
26.5
27.4
Combined Plan (4)(b)
—
(19.0
)
—
(19.0
)
Miscellaneous adjustments (5)(f)
23.0
1.6
20.6
29.7
Tax impact of adjustments to Adjusted net
income
(29.9
)
(26.8
)
(71.2
)
(55.7
)
Adjusted net income
$
367.7
$
418.3
$
913.4
$
1,000.3
Denominator:
Weighted average Class A common shares
outstanding - diluted
581.9
576.3
580.3
525.9
Adjustments:
Convertible preferred stock (6)
—
—
0.6
49.1
Restricted stock units and awards (7)
5.1
6.5
5.4
6.3
Adjusted weighted average Class A common
shares outstanding - diluted
587.0
582.8
586.3
581.3
Adjusted net income per Class A common
share - diluted
$
0.63
$
0.72
$
1.56
$
1.72
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
12 weeks ended
28 weeks ended
September 9,
2023
September 10,
2022
September 9,
2023
September 10,
2022
Net income per Class A common share -
diluted
$
0.46
$
0.59
$
1.18
$
1.43
Convertible preferred stock (6)
—
—
—
0.01
Non-GAAP adjustments (8)
0.17
0.14
0.39
0.30
Restricted stock units and awards (7)
—
(0.01
)
(0.01
)
(0.02
)
Adjusted net income per Class A common
share - diluted
$
0.63
$
0.72
$
1.56
$
1.72
The following table is a reconciliation of
Adjusted net income to Adjusted EBITDA:
12 weeks ended
28 weeks ended
September 9,
2023
September 10,
2022
September 9,
2023
September 10,
2022
Adjusted net income (9)
$
367.7
$
418.3
$
913.4
$
1,000.3
Tax impact of adjustments to Adjusted net
income
29.9
26.8
71.2
55.7
Income tax expense
67.5
117.4
133.6
260.7
Amortization of debt discount and deferred
financing costs (c)
(3.6
)
(3.9
)
(8.3
)
(9.0
)
Interest expense, net
111.9
89.8
266.8
228.7
Amortization of intangible assets
resulting from acquisitions (b)
(11.1
)
(12.0
)
(26.5
)
(27.4
)
Depreciation and amortization (e)
414.6
412.1
945.2
959.8
Adjusted EBITDA
$
976.9
$
1,048.5
$
2,295.4
$
2,468.8
(1)
Includes costs associated with third-party
consulting fees related to our operational priorities and
associated business transformation.
(2)
Represents incremental COVID-19 related
pay legislatively required in certain municipalities in which we
operate.
(3)
Primarily relates to third-party legal and
advisor fees and retention program expense related to the proposed
Merger with Kroger and costs in connection with our
previously-announced Board-led review of potential strategic
alternatives.
(4)
Includes the $19.0 million gain during the
second quarter of fiscal 2022 related to the withdrawal in fiscal
2020 from the Food Employers Labor Relations Association and United
Food and Commercial Workers Pension Fund ("FELRA") and the
Mid-Atlantic UFCW and Participating Pension Fund ("MAP" and
together with "FELRA", the "Combined Plan").
(5)
Primarily includes net realized and
unrealized gains and losses related to non-operating investments,
lease adjustments related to non-cash rent expense and costs
incurred on leased surplus properties, adjustments for
unconsolidated equity investments and other costs not considered in
our core performance.
(6)
Represents the conversion of convertible
preferred stock to the fully outstanding as-converted Class A
common shares as of the end of each respective period, for periods
in which the convertible preferred stock is antidilutive under
GAAP.
(7)
Represents incremental unvested restricted
stock units ("RSUs") and unvested restricted stock awards ("RSAs")
to adjust the diluted weighted average Class A common shares
outstanding during each respective period to the fully outstanding
RSUs and RSAs as of the end of each respective period.
(8)
Reflects the per share impact of Non-GAAP
adjustments for each period. See the reconciliation of Net income
to Adjusted net income above for further details.
(9)
See the reconciliation of Net income to
Adjusted net income above for further details.
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
Non-GAAP adjustment classifications within
the Condensed Consolidated Statements of Operations:
(a)
Cost of sales
(b)
Selling and administrative expenses
(c)
Interest expense, net
(d)
(Gain) loss on interest rate swaps and
energy hedges, net:
12 weeks ended
28 weeks ended
September 9,
2023
September 10,
2022
September 9,
2023
September 10,
2022
Cost of sales
$
(5.1
)
$
3.4
$
(3.8
)
$
(5.5
)
Selling and administrative expenses
0.3
0.8
(1.6
)
(2.1
)
Other expense (income), net
—
(0.6
)
—
(7.3
)
Total (Gain) loss on interest rate swaps
and energy hedges, net
$
(4.8
)
$
3.6
$
(5.4
)
$
(14.9
)
(e)
Depreciation and amortization:
12 weeks ended
28 weeks ended
September 9,
2023
September 10,
2022
September 9,
2023
September 10,
2022
Cost of sales
$
38.3
$
38.2
$
85.0
$
89.7
Selling and administrative expenses
376.3
373.9
860.2
870.1
Total Depreciation and amortization
$
414.6
$
412.1
$
945.2
$
959.8
(f)
Miscellaneous adjustments:
12 weeks ended
28 weeks ended
September 9,
2023
September 10,
2022
September 9,
2023
September 10,
2022
Selling and administrative expenses
$
11.9
$
5.5
$
21.9
$
14.4
Other expense (income), net
11.1
(3.9
)
(1.3
)
15.3
Total Miscellaneous adjustments
$
23.0
$
1.6
$
20.6
$
29.7
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions)
The following table is a reconciliation of
Net Debt Ratio on a rolling four quarter basis:
September 9,
2023
September 10,
2022
Total debt (including finance leases)
$
8,449.6
$
7,932.8
Cash and cash equivalents
266.1
3,392.4
Total debt net of cash and cash
equivalents
8,183.5
4,540.4
Rolling four quarters Adjusted EBITDA
$
4,503.6
$
4,593.7
Total Net Debt Ratio
1.82
0.99
The following table is a reconciliation of
Net income to Adjusted EBITDA on a rolling four quarter basis:
Rolling four quarters
ended
September 9,
2023
September 10,
2022
Net income
$
1,370.7
$
1,706.5
Depreciation and amortization
1,792.5
1,757.9
Interest expense, net
442.7
448.0
Income tax expense
294.9
507.8
EBITDA
3,900.8
4,420.2
Loss (gain) on interest rate swaps and
energy hedges, net
1.1
(30.2
)
Business transformation (1)
56.6
68.3
Equity-based compensation expense
132.3
115.4
Gain on property dispositions and
impairment losses, net
(34.9
)
(108.5
)
LIFO expense
211.3
203.0
Government-mandated incremental COVID-19
pandemic related pay (2)
1.0
20.3
Merger-related costs (3)
135.4
9.4
Certain legal and regulatory accruals and
settlements, net
57.0
16.8
Loss on debt extinguishment
—
3.7
Combined Plan (4)
—
(125.3
)
Miscellaneous adjustments (5)
43.0
0.6
Adjusted EBITDA
$
4,503.6
$
4,593.7
(1)
Includes costs associated with third-party
consulting fees related to our operational priorities and
associated business transformation.
(2)
Represents incremental COVID-19 related
pay legislatively required in certain municipalities in which we
operate.
(3)
Primarily relates to third-party legal and
advisor fees and retention program expense related to the proposed
Merger with Kroger and costs in connection with our
previously-announced Board-led review of potential strategic
alternatives.
(4)
Includes gains related to the withdrawal
from the Combined Plan.
(5)
Primarily includes net realized and
unrealized gains and losses related to non-operating investments,
lease adjustments related to non-cash rent expense and costs
incurred on leased surplus properties, pension settlement gain,
adjustments for unconsolidated equity investments, certain contract
terminations and other costs not considered in our core
performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231017303193/en/
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investor-relations@albertsons.com
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