Albertsons Companies Inc

As used in this Annual Report on Form 10-K, unless the context otherwise requires, references to "Albertsons," the "Company," "ACI," "we," "us" and "our" refer to Albertsons Companies, Inc. and, where appropriate, its consolidated subsidiaries. Our last three fiscal years consisted of the 52 weeks ended February 24, 2024 ("fiscal 2023"), the 52 weeks ended February 25, 2023 ("fiscal 2022") and the 52 weeks ended February 26, 2022 ("fiscal 2021"). Our next three fiscal years consist of the 52 weeks ending February 22, 2025 ("fiscal 2024"), the 53 weeks ending February 28, 2026 ("fiscal 2025"), and the 52 weeks ending February 27, 2027 ("fiscal 2026").

PART I

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K includes "forward-looking statements" within the meaning of the federal securities laws. The "forward-looking statements" include our current expectations, assumptions, estimates and projections about our business, 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", "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:

•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 and the transactions contemplated by the Merger Agreement;

•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 consumer behavior and spending due to the impact of macroeconomic factors, including the expiration of student loan payment deferments;

• challenges in attracting, retaining and motivating our employees until the closing of the Merger;

• 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;

• changes in wage rates, ability to attract and retain qualified associates and negotiate acceptable contracts with labor unions;

• litigation related to the transactions contemplated by the Merger Agreement;

• restrictions on our ability to operate as a result of the Merger Agreement;

• availability and cost of goods used in our food products;

• challenges with our supply chain;

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

• continued reduction in governmental assistance programs such as SNAP.

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

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

SUMMARY RISK FACTORS

The following is a summary of the principal factors that create risk in investing in our securities:

Risks Related to Our Business and Operations

•general economic conditions affecting the food and drug retail industry and various operating factors;

•availability of a significant amount of energy to manufacture, store, transport and sell products;

•failure to realize anticipated benefits from our productivity initiatives; and

•impact of environmental, social and governance matters, including inability to meet goals and commitments established in relation to such matters.

Risks Related to the Merger

•the Merger Agreement and the pendency of the Merger;

•restrictions on our business activities while the Merger Agreement is in effect;

•litigation related to the Merger;

•the ability to complete the Merger and the transactions contemplated by the Merger; and

•significant delay or the failure to complete the Merger.

Risks Related to Our Industry

•intensity of the competition in our industry;

•our ability to timely identify or effectively respond to consumer trends;

•consolidation in the healthcare industry; and

•providing pharmacy products and services and the adequacy of our insurance to cover any claims.

Risks Related to Our Supply Chain

•product and raw material supply disruptions, especially of fresh products, including from severe weather, natural disasters and climate change;

•threats or potential threats to security of food and drug safety, including the occurrence of a widespread health epidemic and/or pandemic, and loss of consumer confidence in the supply chain; and

•availability and increased prices of fuel or commodities.

Risks Related to Our Workforce

•our relationship with unions, including labor disputes or work stoppages, and increased pension expenses, contributions and surcharges;

•increases to the minimum wage and changes to wage regulations; and

•the failure to attract and retain qualified associates.

Legal and Regulatory Risks

•unfavorable changes in government regulation and environmental laws;

•unfavorable changes in the tax code;

•legal or other proceedings; and

•our use of insurance and self-insurance to address potential liabilities.

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

•our dependence on IT systems;

•improper activities by third parties and the loss of confidence from a data security incident involving our customers, employees or vendors; and

•the use of artificial intelligence in our business.

Risks Related to Our Indebtedness

•our level of indebtedness and our ability to generate cash;

•our debt instruments limiting our flexibility in operating our business; and

•increases in interest rates, a downgrade of our credit ratings and/or instability in credit markets.

Risks Related to Owning Our Common Stock

•the volatility of the price of our common stock and the possibility of a decline regardless of our operating performance;

•our largest stockholder may have conflicts of interest with other stockholders in the future;

•provisions in our charter documents and Delaware law and certain other agreements that could delay or prevent a change of control; and

•our ability to pay dividends to our stockholders.

See "Part I—Item 1A. Risk Factors" for a more complete discussion of the material risks facing our business.

NON-GAAP FINANCIAL MEASURES

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

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

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