Albertsons Companies Inc

Previous wording

This Form 10-Q contains "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.

Current wording

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

Previous wording

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:

Current wording

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

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

Current wording

•changes in price of goods sold in our stores and cost of goods used in our food products due to change in government regulations such as tariffs;

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

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•changes in wage rates and ability to negotiate acceptable contracts with labor unions;

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• changes in tax rates, tax laws, and regulations that directly impact our business or our customers may adversely impact our financial condition and results of operations.

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

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SECOND QUARTER OF FISCAL 2024 OVERVIEW

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THIRD QUARTER OF FISCAL 2024 OVERVIEW

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We are one of the largest food retailers in the United States, with 2,267 stores across 34 states and the District of Columbia as of September 7, 2024. We operate more than 20 well known banners including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw's, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Marketsand Balducci's Food Lovers Market, with approximately 285,000 talented and dedicated employees, as of September 7, 2024, who serve on average 36.8 million customers each week. Additionally, as of September 7, 2024, we operated 1,726 pharmacies, 1,330 in-store branded coffee shops, 405 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms.

Current wording

We are one of the largest food retailers in the United States, with 2,273 stores across 34 states and the District of Columbia as of November 30, 2024. We operate more than 20 well known banners including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw's, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Marketsand Balducci's Food Lovers Market, with approximately 285,000 talented and dedicated employees, as of November 30, 2024, who serve on average 35.9 million customers each week. Additionally, as of November 30, 2024, we operated 1,732 pharmacies, 1,337 in-store branded coffee shops, 405 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms.

Previous wording

On October 13, 2022, the Company, The Kroger Co. ("Parent") and Kettle Merger Sub, Inc., a wholly owned subsidiary of Parent ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub will be 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 Parent. For additional information about the Merger, see Note 2 - Merger Agreement in the unaudited interim Condensed Consolidated Financial Statements located elsewhere in this Form 10-Q.

Current wording

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. On December 10, 2024, subsequent to the end of the third quarter of fiscal 2024, the United States District Court for the District of Oregon issued a preliminary injunction in the case Federal Trade Commission et al. v. The Kroger Company and Albertsons Companies, Inc. (Case No.: 3:24-cv-00347-AN), whereby the court enjoined the consummation of the Merger. In light of the preliminary injunction, and in accordance with Section 8.1(e) of the Merger Agreement, the Company exercised its right to terminate the Merger Agreement and sent a notice to Kroger on December 10, 2024 terminating the Merger Agreement. Also on December 10, 2024, the King County Superior Court for the State of Washington issued a permanent injunction in the case State of Washington v. Kroger Co. et al (Case No.: 24-2-00977-9 SEA) whereby it enjoined the consummation of the Merger. For additional information about the termination of the Merger Agreement, see Note 2 - Termination of the Merger Agreement in the unaudited interim Condensed Consolidated Financial Statements located elsewhere in this Form 10-Q.

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Second quarter of fiscal 2024 highlights

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Third quarter of fiscal 2024 highlights

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In summary, our financial and operating highlights for the second quarter of fiscal 2024 include:

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In summary, our financial and operating highlights for the third quarter of fiscal 2024 include:

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•Loyalty members increased 15% to 43.0 million

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•Loyalty members increased 15% to 44.3 million

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Comparison of the Second Quarter of Fiscal 2024 and the First 28 weeks of Fiscal 2024 to the Second Quarter of Fiscal 2023 and the First 28 weeks of Fiscal 2023.

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Comparison of the Third Quarter of Fiscal 2024 and the First 40 weeks of Fiscal 2024 to the Third Quarter of Fiscal 2023 and the First 40 weeks of Fiscal 2023.

Previous wording

The following tables and related discussion set forth certain information and comparisons regarding the components of our Condensed Consolidated Statements of Operations for the 12 and 28 weeks ended September 7, 2024 ("second quarter of fiscal 2024" and "first 28 weeks of fiscal 2024") and 12 and 28 weeks ended September 9, 2023 ("second quarter of fiscal 2023" and "first 28 weeks of fiscal 2023") (dollars in millions, except per share data).

Current wording

The following tables and related discussion set forth certain information and comparisons regarding the components of our Condensed Consolidated Statements of Operations for the 12 and 40 weeks ended November 30, 2024 ("third quarter of fiscal 2024" and "first 40 weeks of fiscal 2024") and 12 and 40 weeks ended December 2, 2023 ("third quarter of fiscal 2023" and "first 40 weeks of fiscal 2023") (dollars in millions, except per share data).

Previous wording

Net sales and other revenue increased 1.4% to $18,551.5 million for the second quarter of fiscal 2024 from $18,290.7 million for the second quarter of fiscal 2023. The increase in Net sales and other revenue was driven by our 2.5% increase in identical sales, with strong growth in pharmacy sales driving the identical sales increase. We also continued to grow our digital sales during the second quarter of fiscal 2024. The increase in Net sales and other revenue was partially offset by lower fuel sales.

Current wording

Net sales and other revenue increased 1.2% to $18,774.5 million for the third quarter of fiscal 2024 from $18,557.3 million for the third quarter of fiscal 2023. The increase in Net sales and other revenue was driven by our 2.0% increase in identical sales, with strong growth in pharmacy sales being the primary driver of the identical sales increase. We also continued to grow our digital sales during the third quarter of fiscal 2024. The increase in Net sales and other revenue was partially offset by lower fuel sales.

Previous wording

Net sales and other revenue increased 1.1% to $42,816.9 million for the first 28 weeks of fiscal 2024 from $42,340.9 million for the first 28 weeks of fiscal 2023. The increase in Net sales and other revenue was primarily driven by our 1.9% increase in identical sales, with strong growth in pharmacy sales driving the identical sales increase. We also continued to grow our digital sales during the first 28 weeks of fiscal 2024. The increase in Net Sales and other revenue was partially offset by lower fuel sales.

Current wording

Net sales and other revenue increased 1.1% to $61,591.4 million for the first 40 weeks of fiscal 2024 from $60,898.2 million for the first 40 weeks of fiscal 2023. The increase in Net sales and other revenue was primarily driven by our 1.9% increase in identical sales, with strong growth in pharmacy sales being the primary driver of the identical sales increase. We also continued to grow our digital sales during the first 40 weeks of fiscal 2024. The increase in Net sales and other revenue was partially offset by lower fuel sales.

Previous wording

Identical sales include stores operating during the same period in both the current year and the prior year, comparing sales on a daily basis. Direct to consumer digital sales are included in identical sales, and fuel sales are excluded from identical sales. Acquired stores become identical on the one-year anniversary date of the acquisition. Identical sales for the 12 and 28 weeks ended September 7, 2024 and the 12 and 28 weeks ended September 9, 2023, respectively, were:

Current wording

Identical sales include stores operating during the same period in both the current year and the prior year, comparing sales on a daily basis. Direct to consumer digital sales are included in identical sales, and fuel sales are excluded from identical sales. Acquired stores become identical on the one-year anniversary date of the acquisition. Identical sales for the 12 and 40 weeks ended November 30, 2024 and the 12 and 40 weeks ended December 2, 2023, respectively, were:

Previous wording

Gross margin rate increased to 27.7% during the first 28 weeks of fiscal 2024 compared to 27.6% during the first 28 weeks of fiscal 2023. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 31 basis points compared to the first 28 weeks of fiscal 2023. The strong growth in pharmacy sales, which carries an overall lower gross margin rate, increases in shrink during the first quarter of fiscal 2024, and increases in picking and delivery costs related to the continued growth in our digital sales were the primary drivers of the decrease, partially offset by the benefits from our procurement and sourcing productivity initiatives.

Current wording

Gross margin rate decreased to 27.9% during the third quarter of fiscal 2024 compared to 28.0% during the third quarter of fiscal 2023. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 27 basis points compared to the third quarter of fiscal 2023. The strong growth in pharmacy sales, which carries an overall lower gross margin rate, and increases in picking and delivery costs related to the continued growth in our digital sales were the primary drivers of the decrease, partially offset by the benefits from our productivity initiatives.

Previous wording

Gross margin rate was unchanged at 27.6% during both the second quarter of fiscal 2024 and the second quarter of fiscal 2023. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 44 basis points compared to the second quarter of fiscal 2023. The strong growth in pharmacy sales, which carries an overall lower gross margin rate, and increases in picking and delivery costs related to the continued growth in our digital sales were the primary drivers of the decrease, partially offset by the benefits from our procurement and sourcing productivity initiatives.

Current wording

Gross margin rate was unchanged at 27.8% during both the first 40 weeks of fiscal 2024 and the first 40 weeks of fiscal 2023. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 30 basis points compared to the first 40 weeks of fiscal 2023. The strong growth in pharmacy sales, which carries an overall lower gross margin rate, and increases in picking and delivery costs related to the continued growth in our digital sales were the primary drivers of the decrease, partially offset by the benefits from our productivity initiatives.

Previous wording

Selling and administrative expenses increased to 25.8% of Net sales and other revenue during the second quarter of fiscal 2024 compared to 25.1% during the second quarter of fiscal 2023. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased 41 basis points. The increase in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to an increase in operating expenses related to the ongoing development of our digital and omnichannel capabilities, Merger-related costs, higher employee costs, increased business transformation costs and additional third-party store security services, partially offset by the benefits from our productivity initiatives.

Current wording

Selling and administrative expenses increased to 25.1% of Net sales and other revenue during the third quarter of fiscal 2024 compared to 24.8% during the third quarter of fiscal 2023. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased six basis points. The increase in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to Merger-related costs and an increase in occupancy costs including third-party store security services, partially offset by the leveraging of employee costs and benefits from our productivity initiatives.

Previous wording

Selling and administrative expenses increased to 25.8% of Net sales and other revenue during the first 28 weeks of fiscal 2024 compared to 25.1% of Net sales and other revenue for the first 28 weeks of fiscal 2023. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased 63 basis points during the first 28 weeks of fiscal 2024 compared to the first 28 weeks of fiscal 2023. The increase in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to an increase in operating expenses related to the ongoing development of our digital and omnichannel capabilities, Merger-related costs, higher employee costs, increased store occupancy costs and additional third-party store security services, partially offset by the benefits from our productivity initiatives.

Current wording

Selling and administrative expenses increased to 25.6% of Net sales and other revenue during the first 40 weeks of fiscal 2024 compared to 25.0% of Net sales and other revenue for the first 40 weeks of fiscal 2023. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased 45 basis points during the first 40 weeks of fiscal 2024 compared to the first 40 weeks of fiscal 2023. The increase in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to an increase in operating expenses related to the ongoing development of our digital and omnichannel capabilities, Merger-related costs, higher employee costs and increased store occupancy costs including additional third-party store security services, partially offset by the benefits from our productivity initiatives.

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

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Loss on Property Dispositions and Impairment Losses, Net

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For the second quarter of fiscal 2024, net loss on property dispositions and impairment losses was $43.9 million, primarily driven by $53.3 million of asset impairments including impairment losses of $39.8 million primarily related to equipment from the closing of our micro-fulfillment centers and $13.5 million of retail store impairment losses, partially offset by $9.4 million of gains from the sale of real estate assets. For the second quarter of fiscal 2023, net gain on property dispositions and impairment losses was $8.4 million, primarily driven by $8.4 million of gains from the sale of real estate assets.

Current wording

For the third quarter of fiscal 2024, net loss on property dispositions and impairment losses was $10.2 million, primarily driven by $6.0 million of retail store impairment losses and $4.2 million of net losses from the sale of real estate assets and equipment disposals. For the third quarter of fiscal 2023, net loss on property dispositions and impairment losses was $23.9 million, primarily driven by the write-off of certain technology assets, partially offset by net gains from the sale of real estate assets.

Previous wording

For the first 28 weeks of fiscal 2024, net loss on property dispositions and impairment losses was $49.2 million, primarily driven by $56.8 million of asset impairments including impairment losses of $39.8 million primarily related to equipment from the closing of our micro-fulfillment centers, $13.5 million of retail store impairment losses and $3.5 million related to certain technology assets, partially offset by $7.6 million of gains from the sale of real estate assets. For the first 28 weeks of fiscal 2023, net loss on property dispositions and impairment losses was $19.2 million, primarily driven by the write-off of certain technology assets, partially offset by net gains from the sale of real estate assets.

Current wording

For the first 40 weeks of fiscal 2024, net loss on property dispositions and impairment losses was $59.4 million, primarily driven by $62.7 million of asset impairments including impairment losses of $39.8 million primarily related to equipment from the closing of our micro-fulfillment centers, $19.5 million of retail store impairment losses and $3.5 million related to certain technology assets, partially offset by $3.3 million of net gains from the sale of real estate assets. For the first 40 weeks of fiscal 2023, net loss on property dispositions and impairment losses was $43.1 million, primarily driven by the write-off of certain technology assets, partially offset by net gains from the sale of real estate assets.

Previous wording

Interest expense, net was $103.6 million during the second quarter of fiscal 2024 compared to $111.9 million during the second quarter of fiscal 2023. The decrease in interest expense, net was primarily attributable to lower average outstanding borrowings. The weighted average interest rate during the second quarter of fiscal 2024 was 5.5%, excluding amortization and write-off of deferred financing costs and original issue discount, compared to 5.6% during the second quarter of fiscal 2023.

Current wording

Interest expense, net was $109.0 million during the third quarter of fiscal 2024 compared to $116.3 million during the third quarter of fiscal 2023. The decrease in interest expense, net was primarily attributable to lower average outstanding borrowings. The weighted average interest rate during both the third quarter of fiscal 2024 and third quarter of fiscal 2023 was 5.6%, excluding amortization and write-off of deferred financing costs and original issue discount.

Previous wording

Interest expense, net was $249.3 million during the first 28 weeks of fiscal 2024 compared to $266.8 million during the first 28 weeks of fiscal 2023. The decrease in interest expense, net was primarily attributable to lower average outstanding borrowings. The weighted average interest rate during first 28 weeks of fiscal 2024 was 5.5%, excluding amortization and write-off of deferred financing costs and original issue discount, compared to 5.6% during the first 28 weeks of fiscal 2023.

Current wording

Interest expense, net was $358.3 million during the first 40 weeks of fiscal 2024 compared to $383.1 million during the first 40 weeks of fiscal 2023. The decrease in interest expense, net was primarily attributable to lower average outstanding borrowings. The weighted average interest rate during both the first 40 weeks of fiscal 2024 and first 40 weeks of fiscal 2023 was 5.6%, excluding amortization and write-off of deferred financing costs and original issue discount.

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For the second quarter of fiscal 2024, Other expense, net was $1.9 million compared to $8.1 million for the second quarter of fiscal 2023. Other expense, net during the second quarter of fiscal 2024 was primarily driven by non-service cost components of net pension and post-retirement expense, partially offset by unrealized gains from non-operating investments. Other expense, net during the second quarter of fiscal 2023 was primarily driven by realized and unrealized losses from non-operating investments, partially offset by non-service cost components of net pension and post-retirement income.

Current wording

For the third quarter of fiscal 2024, other income, net was $5.6 million compared to other income, net of $6.7 million for the third quarter of fiscal 2023. Other income, net during the third quarter of fiscal 2024 was primarily driven by unrealized gains from non-operating investments and non-service cost components of net pension and post-retirement expense. Other income, net during the third quarter of fiscal 2023 was primarily driven by realized and unrealized gains from non-operating investments and non-service cost components of net pension and post-retirement income, partially offset by unrealized losses from non-operating investments.

Previous wording

For the first 28 weeks of fiscal 2024, Other expense, net was $5.9 million compared to other income, net of $7.9 million for the first 28 weeks of fiscal 2023. Other expense, net during the first 28 weeks of fiscal 2024 was primarily driven by unrealized losses from non-operating investments, partially offset by non-service cost components of net pension and post-retirement income. Other income, net during the first 28 weeks of fiscal 2023 was primarily driven by non-service cost components of net pension and post-retirement income and income related to our equity interest and gain on sale of El Rancho in the first quarter of fiscal 2023, partially offset by realized and unrealized losses from non-operating investments.

Current wording

For the first 40 weeks of fiscal 2024, other expense, net was $0.3 million compared to other income, net of $14.6 million for the first 40 weeks of fiscal 2023. Other expense, net during the first 40 weeks of fiscal 2024 was primarily driven by non-service cost components of net pension and post-retirement expense and unrealized gains and losses from non-operating investments. Other income, net during the first 40 weeks of fiscal 2023 was primarily driven by non-service cost components of net pension and post-retirement income, realized and unrealized gains from non-operating investments and income related to our equity interest and gain on sale of El Rancho in the first quarter of fiscal 2023, partially offset by realized and unrealized losses from non-operating investments.

Previous wording

Income tax expense was $41.0 million, representing a 22.0% effective tax rate, for the second quarter of fiscal 2024. Income tax expense was $67.5 million, representing a 20.2% effective tax rate, for the second quarter of fiscal 2023. The increase in the effective income tax rate in the second quarter of fiscal 2024 was primarily driven by the recognition of discrete state income tax benefits related to audit settlements and favorable legislation during the second quarter of fiscal 2023.

Current wording

Income tax expense was $14.5 million, representing a 3.5% effective tax rate, for the third quarter of fiscal 2024. Income tax expense was $95.1 million, representing a 20.8% effective tax rate, for the third quarter of fiscal 2023. The decrease in the effective income tax rate in the third quarter of fiscal 2024 was primarily driven by the recognition of $81.0 million of discrete state income tax benefits related to the settlement of audits.

Previous wording

Income tax expense was $110.2 million, representing a 22.2% effective tax rate, for the first 28 weeks of fiscal 2024. Income tax expense was $133.6 million, representing a 16.3% effective tax rate, for the first 28 weeks of fiscal 2023. The increase in the effective income tax rate was primarily driven by the reduction of a reserve of $49.7 million for an uncertain tax position due to the expiration of a foreign statute during the first quarter of fiscal 2023.

Current wording

Income tax expense was $124.7 million, representing a 13.7% effective tax rate, for the first 40 weeks of fiscal 2024. Income tax expense was $228.7 million, representing a 17.9% effective tax rate, for the first 40 weeks of fiscal 2023. The decrease in the effective income tax rate was primarily driven by the recognition of $81.0 million of discrete state income tax benefits related to audit settlements, compared to a reduction of a reserve of $49.7 million for an uncertain tax position due to the expiration of a foreign statute during the first quarter of fiscal 2023.

Previous wording

Net income was $386.2 million, or $0.66 per Class A common share, during the first 28 weeks of fiscal 2024 compared to $684.1, or $1.18 per Class A common share, during the first 28 weeks of fiscal 2023. The first 28 weeks of fiscal 2023 included the $49.7 million or $0.09 per share benefit related to the reduction in the reserve for an uncertain tax position. Adjusted net income was $692.6 million, or $1.17 per Class A common share, during the first 28 weeks of fiscal 2024 compared to $913.4 million, or $1.56 per Class A common share (which includes the tax benefit discussed above), during the first 28 weeks of fiscal 2023.

Current wording

Net income was $786.8 million, or $1.35 per Class A common share, during the first 40 weeks of fiscal 2024 compared to $1,045.5, or $1.80 per Class A common share, during the first 40 weeks of fiscal 2023. The first 40 weeks of fiscal 2024 included the $81.0 million or $0.14 per share benefit related to certain discrete state income tax benefits related to the settlement of audits, and the first 40 weeks of fiscal 2023 included the $49.7 million or $0.09 per share benefit related to the reduction in the reserve for an uncertain tax position. Adjusted net income was $1,112.9 million, or $1.88 per Class A common share, during the first 40 weeks of fiscal 2024 compared to $1,375.7 million, or $2.34 per Class A common share (which includes the $49.7 million tax benefit discussed above), during the first 40 weeks of fiscal 2023.

Previous wording

For the second quarter of fiscal 2024, Adjusted EBITDA was $900.6 million, or 4.9% of Net sales and other revenue, compared to $976.9 million, or 5.3% of Net sales and other revenue, for the second quarter of fiscal 2023. For the first 28 weeks of fiscal 2024, Adjusted EBITDA was $2,084.5 million, or 4.9% of Net sales and other revenue, compared to $2,295.4 million, or 5.4% of Net sales and other revenue for the first 28 weeks of fiscal 2023.

Current wording

For the third quarter of fiscal 2024, Adjusted EBITDA was $1,065.1 million, or 5.7% of Net sales and other revenue, compared to $1,106.5 million, or 6.0% of Net sales and other revenue, for the third quarter of fiscal 2023. For the first 40 weeks of fiscal 2024, Adjusted EBITDA was $3,149.6 million, or 5.1% of Net sales and other revenue, compared to $3,401.9 million, or 5.6% of Net sales and other revenue for the first 40 weeks of fiscal 2023.

Previous wording

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 (in millions, except per share data):

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

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(1) Includes costs associated with third-party consulting fees related to our operational priorities and associated business transformation.

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(1) Includes costs associated with third-party consulting fees related to our Customers for Life strategy and associated business transformation initiatives.

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(2) Primarily relates to third-party legal and advisor fees and retention program expense related to the proposed Merger.

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(2) Primarily relates to third-party legal and advisor fees and retention program expense related to the Merger.

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

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

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(d) Loss (gain) on energy hedges, net:

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(d) (Gain) loss on energy hedges, net:

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Net cash provided by operating activities was $1,374.1 million for the first 28 weeks of fiscal 2024 compared to $1,347.9 million for the first 28 weeks of fiscal 2023. The change in cash flow from operations compared to the first 28 weeks of fiscal 2023 was due to changes in working capital, primarily related to lower inventory, a decrease in multiemployer pension withdrawal liability payments and less cash paid for taxes and interest, partially offset by a decrease in Adjusted EBITDA, higher Merger-related costs and an increase in contributions to our defined benefit pension plans during the first 28 weeks of fiscal 2024.

Current wording

Net cash provided by operating activities was $1,922.1 million for the first 40 weeks of fiscal 2024 compared to $1,730.8 million for the first 40 weeks of fiscal 2023. The increase in cash flow from operations compared to the first 40 weeks of fiscal 2023 was due to changes in working capital, primarily related to lower inventory, as well as less cash paid for taxes, legal settlements, multiemployer pension withdrawal liabilities and interest, partially offset by a decrease in Adjusted EBITDA, higher Merger-related costs and an increase in contributions to our defined benefit pension plans during the first 40 weeks of fiscal 2024.

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Net cash used in investing activities was $925.3 million for thefirst 28 weeks of fiscal 2024 compared to $890.1 million for the first 28 weeks of fiscal 2023.

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Net cash used in investing activities was $1,416.5 million for thefirst 40 weeks of fiscal 2024 compared to $1,328.8 million for the first 40 weeks of fiscal 2023.

Previous wording

For the first 28 weeks of fiscal 2024, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $952.3 million, partially offset by proceeds from the sale of assets of $19.8 million, primarily related to real estate. Payments for property, equipment and intangibles in the first 28 weeks of fiscal 2024 included the completion of 44 remodels, the opening of two new stores and continued investment in our digital and technology platforms. For the first 28 weeks of fiscal 2023, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $1,084.3 million, partially offset by proceeds from the sale of assets of $195.1 million, primarily related to the sale of our equity interest in El Rancho during the first quarter of fiscal 2023. Payments for property, equipment and intangibles in the first 28 weeks of fiscal 2023 included the completion of 80 remodels, the opening of three new stores and continued investment in our digital and technology platforms.

Current wording

For the first 40 weeks of fiscal 2024, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $1,446.7 million, partially offset by proceeds from the sale of assets of $24.1 million, primarily related to real estate. Payments for property, equipment and intangibles in the first 40 weeks of fiscal 2024 included the completion of 84 remodels, the opening of nine new stores and continued investment in our digital and technology platforms. For the first 40 weeks of fiscal 2023, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $1,535.0 million, partially offset by proceeds from the sale of assets of $201.3 million, primarily related to the sale of our equity interest in El Rancho during the first quarter of fiscal 2023. Payments for property, equipment and intangibles in the first 40 weeks of fiscal 2023 included the completion of 115 remodels, the opening of five new stores and continued investment in our digital and technology platforms.

Previous wording

Net cash used in financing activities was $357.8 million during the first 28 weeks of fiscal 2024 compared to net cash used in financing activities of $651.1 million during the first 28 weeks of fiscal 2023.

Current wording

Net cash used in financing activities was $492.3 million during the first 40 weeks of fiscal 2024 compared to net cash used in financing activities of $638.6 million during the first 40 weeks of fiscal 2023.