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 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.

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, but are not limited to, statements relating to our future operating or financial performance, turnaround strategy, customer strategy, cost structure, operating model, portfolio of banners, markets, assets and businesses, and capital allocation priorities, the development of a multi-year financial outlook, and management's expectations regarding our long-term growth and value creation opportunities 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 and may adversely impact our financial condition and results of operations include:

Current wording

These statements are not guarantees of future performance and are subject to significant 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:

Previous wording

•our ability to execute on our business and value-creating strategies, including our operating structure realignment;

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•our ability to execute on our business and value-creating strategies, including our turnaround strategy and operating structure realignment, to realize anticipated benefits from those efforts, and the timing of any anticipated improvements;

Previous wording

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

Current wording

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

Previous wording

FIRST QUARTER OF FISCAL 2026 OVERVIEW

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SECOND QUARTER OF FISCAL 2026 OVERVIEW

Previous wording

We are one of the largest food retailers in the United States, with 2,240 stores across 35 states and the District of Columbia as of June 20, 2026. We operate 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 Marketsand Balducci's Food Lovers Market, with approximately 275,000 talented and dedicated employees, as of June 20, 2026, who serve on average 36.5 million customers each week. Additionally, as of June 20, 2026, we operated 1,708 pharmacies, 1,238 in-store branded coffee shops, 408 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 2,240 stores across 35 states and the District of Columbia as of September 12, 2026. We operate 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 Marketsand Balducci's Food Lovers Market, with approximately 270,000 talented and dedicated employees, as of September 12, 2026, who serve on average 36.3 million customers each week. Additionally, as of September 12, 2026, we operated 1,709 pharmacies, 1,225 in-store branded coffee shops, 408 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms.

Previous wording

On July 23, 2026, we announced ACI Edge, an operating structure realignment intended to simplify operations, increase accountability, and more effectively leverage enterprise scale. As part of the realignment, we consolidated our 11 divisions into four regions and centralized center-store merchandising under a single enterprise team. The new structure aligns category management, supplier management, and merchandising functions across the enterprise and is intended to improve consistency and execution across banners and regions.

Current wording

On July 23, 2026, we announced ACI Edge, an operating structure realignment designed to accelerate execution, increase accountability and more effectively leverage our scale. As part of the realignment, we combined our 11 divisions into four regions and fully centralized center-store merchandising under a single enterprise team. We view ACI Edge as the first step in a broader turnaround aimed at improving operating performance, strengthening competitiveness and creating greater long-term shareholder value. Building on those actions, on October 13, 2026, we announced a comprehensive review of our customer strategy, cost structure, operating model, portfolio of banners, markets, assets and businesses, and capital allocation priorities.

Previous wording

Our capital allocation strategy balances investing for the future, strengthening our balance sheet and returns to shareholders through a combination of dividends and opportunistic share repurchases. Capital expenditures were approximately $522 million for the first quarter of fiscal 2026, primarily including the completion of 15 remodels, the opening of four new stores and continued investment in our digital and technology platforms. On April 14, 2026, we increased the quarterly cash dividend from $0.15 per common share to $0.17 per common share. Also on April 14, 2026, we increased the remaining share repurchase authorization to $2.0 billion in total. Capital returns to shareholders during the first quarter of fiscal 2026 included $84.0 million of common stock dividends ($0.17 per common share) and the repurchase of 13.4 million shares of common stock for a total of $226.5 million.

Current wording

Our business continues to generate meaningful cash flow and maintain a strong financial foundation. Our capital allocation strategy allocates capital where it can create the greatest long-term value for shareholders. Capital expenditures were approximately $900 million for the first 28 weeks of fiscal 2026, primarily including the completion of 38 remodels, the opening of seven new stores and continued investment in our digital and technology platforms. Capital returns to shareholders during the first 28 weeks of fiscal 2026 included $166.6 million of common stock dividends ($0.34 per common share) and the repurchase of 26.0 million shares of common stock for a total of $387.6 million.

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First quarter of fiscal 2026 highlights

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Second quarter of fiscal 2026 highlights

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In summary, our financial and operating highlights for the first quarter of fiscal 2026 include:

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In summary, our financial and operating highlights for the second quarter of fiscal 2026 include:

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

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

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Comparison of the First Quarter of Fiscal 2026 to the First Quarter of Fiscal 2025.

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Comparison of the Second Quarter of Fiscal 2026 and the First 28 weeks of Fiscal 2026 to the Second Quarter of Fiscal 2025 and the First 28 weeks of Fiscal 2025.

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 16 weeks ended June 20, 2026 ("first quarter of fiscal 2026") and 16 weeks ended June 14, 2025 ("first quarter of fiscal 2025") (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 28 weeks ended September 12, 2026 ("second quarter of fiscal 2026" and "first 28 weeks of fiscal 2026") and 12 and 28 weeks ended September 6, 2025 ("second quarter of fiscal 2025" and "first 28 weeks of fiscal 2025") (dollars in millions, except per share data).

Previous wording

Net sales and other revenue increased 0.2% to $24,941.6 million for the first quarter of fiscal 2026 from $24,880.8 million for the first quarter of fiscal 2025. The increase in Net sales and other revenue was primarily driven by higher fuel sales, while identical sales declined 0.8%. Pharmacy and digital remained areas of strength, with pharmacy sales continuing to grow despite ongoing Inflation Reduction Act ("IRA") headwinds and digital sales increasing 13% during the first quarter of fiscal 2026.

Current wording

Net sales and other revenue increased 0.1% to $43,836.3 million for the first 28 weeks of fiscal 2026 from $43,796.6 million for the first 28 weeks of fiscal 2025. This increase in Net sales and other revenue was primarily driven by higher fuel sales, while identical sales declined 0.8%. Pharmacy and digital remained areas of strength, with pharmacy sales continuing to grow despite ongoing IRA headwinds and digital sales increasing 12% during the first 28 weeks of fiscal 2026.

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 16 weeks ended June 20, 2026 and the 16 weeks ended June 14, 2025, 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 28 weeks ended September 12, 2026 and the 12 and 28 weeks ended September 6, 2025, respectively, were:

Previous wording

Gross margin rate decreased to 26.6% during the first quarter of fiscal 2026 compared to 27.1% during the first quarter of fiscal 2025. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 23 basis points compared to the first quarter of fiscal 2025. This decrease was primarily driven by increases in delivery and handling costs related to the continued growth in digital sales, as well as higher fuel costs. These impacts were partially offset by improvements in pharmacy margins, primarily related to the impact of the IRA. The Company also continued to make incremental investments in its customer value proposition, funded by productivity initiatives.

Current wording

Gross margin rate decreased to 26.8% during the second quarter of fiscal 2026 compared to 27.0% during the second quarter of fiscal 2025. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 17 basis points compared to the second quarter of fiscal 2025. This decrease was primarily driven by increases in delivery and handling costs related to the continued growth in digital sales, as well as higher shrink. These impacts were partially offset by improvements in pharmacy margins, primarily related to the impact of the IRA. The Company also continued to make incremental investments in its customer value proposition, funded by productivity initiatives.

Previous wording

Selling and administrative expenses increased to 25.6% of Net sales and other revenue during the first quarter of fiscal 2026 compared to 25.4% of Net sales and other revenue for the first quarter of fiscal 2025. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased 42 basis points during the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. This increase in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to increases in rent and occupancy costs, merger-related litigation costs, business transformation costs and depreciation and amortization, partially offset by a decrease in employee costs. Despite disciplined productivity and cost management initiatives, the rate was negatively impacted by lower identical sales, including the effect of the IRA on pharmacy sales growth.

Current wording

Selling and administrative expenses increased to 25.6% of Net sales and other revenue during the first 28 weeks of fiscal 2026 compared to 25.4% of Net sales and other revenue for the first 28 weeks of fiscal 2025. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased 40 basis points during the first 28 weeks of fiscal 2026 compared to the first 28 weeks of fiscal 2025. This increase in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to sales deleveraging resulting from lower identical sales. Selling and administrative expenses were relatively flat year over year as the Company continued to realize benefits from disciplined productivity and cost management initiatives which offset inflationary pressures on operating expenses and increases in merger-related litigation costs and business transformation costs.

Previous wording

Gain on Property Dispositions and Impairment Losses, Net

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

Previous wording

For the first quarter of fiscal 2026, net gain on property dispositions and impairment losses was $4.7 million, primarily driven by net gains from the sale of real estate assets. For the first quarter of fiscal 2025, net gain on property dispositions and impairment losses was $31.9 million, primarily driven by $45.5 million of net gains from the sale of real estate assets, partially offset by $11.4 million from the impairment and disposal of certain technology assets and $2.2 million of retail store impairment losses.

Current wording

For the first 28 weeks of fiscal 2026, net loss on property dispositions and impairment losses was $37.7 million, primarily driven by $28.0 million of retail store impairment losses and $21.0 million of losses on disposals of equipment and certain technology assets, partially offset by $11.2 million of net gains from the sale of assets, primarily related to real estate. For the first 28 weeks of fiscal 2025, net gain on property dispositions and impairment losses was $27.5 million, primarily driven by $47.5 million of net gains primarily from the sale of real estate assets, partially offset by $11.6 million from the impairment and disposal of certain technology assets and $8.4 million of retail store impairment losses.

Previous wording

Interest expense, net was $166.7 million during the first quarter of fiscal 2026 compared to $141.8 million during the first quarter of fiscal 2025. The increase in interest expense, net was primarily attributable to higher average outstanding borrowings.

Current wording

Interest expense, net was $125.0 million during the second quarter of fiscal 2026 compared to $105.3 million during the second quarter of fiscal 2025. The increase in interest expense, net was primarily attributable to higher average outstanding borrowings.

Previous wording

For the first quarter of fiscal 2026, other income, net was $16.8 million compared to other income, net of $3.9 million for the first quarter of fiscal 2025. Other income, net during the first quarter of fiscal 2026 was primarily driven by realized 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. Other income, net during the first quarter of fiscal 2025 was primarily driven by non-service cost components of net pension and post-retirement income, partially offset by unrealized losses from non-operating investments.

Current wording

For the second quarter of fiscal 2026, Other income, net was $13.2 million compared to $29.7 million for the second quarter of fiscal 2025. Other income, net during the second quarter of fiscal 2026 was primarily driven by realized 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. Other income, net during the second quarter of fiscal 2025 was primarily driven by non-service cost components of net pension and post-retirement income, including $26.8 million of pension settlement income, partially offset by unrealized losses from non-operating investments.

Previous wording

Income tax expense was $29.0 million during the first quarter of fiscal 2026, representing a 25.5% effective tax rate. Income tax expense was $75.0 million during the first quarter of fiscal 2025, representing a 24.1% effective tax rate. The increase in the effective income tax rate was primarily driven by the legislative expiration of federal employment tax credits.

Current wording

Income tax expense was $40.2 million, representing a 22.8% effective tax rate, for the first 28 weeks of fiscal 2026. Income tax expense was $126.2 million, representing a 23.8% effective tax rate, for the first 28 weeks of fiscal 2025. The decrease in the effective income tax rate was primarily driven by a decrease in Income before income taxes, partially offset by the expiration of certain federal tax credits.

Previous wording

For the first quarter of fiscal 2026, Adjusted EBITDA was $1,013.2 million, or 4.1% of Net sales and other revenue, compared to $1,111.0 million, or 4.5% of Net sales and other revenue, for the first quarter of fiscal 2025.

Current wording

For the second quarter of fiscal 2026, Adjusted EBITDA was $784.0 million, or 4.1% of Net sales and other revenue, compared to $848.4 million, or 4.5% of Net sales and other revenue, for the second quarter of fiscal 2025. For the first 28 weeks of fiscal 2026, Adjusted EBITDA was $1,797.2 million, or 4.1% of Net sales and other revenue, compared to $1,959.4 million, or 4.5% of Net sales and other revenue for the first 28 weeks of fiscal 2025.

Previous wording

(2) Primarily includes litigation costs related to the terminated merger. The first quarter of fiscal 2025 also includes retention program expense related to the terminated merger.

Current wording

(2) Primarily includes litigation costs related to the terminated merger. The 12 and 28 weeks ended September 6, 2025 also includes retention program expense related to the terminated merger.

Previous wording

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

Current wording

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

Previous wording

Net cash provided by operating activities was $728.9 million for the first quarter of fiscal 2026 compared to $754.4 million for the first quarter of fiscal 2025. The decrease in cash flow from operations compared to the first quarter of fiscal 2025 was primarily driven by a decrease in Adjusted EBITDA and increases in cash paid for interest, as well as higher merger-related and business transformation costs, partially offset by changes in working capital and lower cash paid for indirect taxes during the first quarter of fiscal 2026.

Current wording

Net cash provided by operating activities was $1,210.3 million for the first 28 weeks of fiscal 2026 compared to $1,282.0 million for the first 28 weeks of fiscal 2025. The decrease in cash flow from operations was primarily driven by a decrease in Adjusted EBITDA and increases in cash paid for interest and operating leases, as well as higher merger-related and business transformation costs, partially offset by changes in working capital and lower cash paid for taxes during the first 28 weeks of fiscal 2026.

Previous wording

Net cash used in investing activities was $507.7 million for thefirst quarter of fiscal 2026 compared to $474.1 million for the first quarter of fiscal 2025.

Current wording

Net cash used in investing activities was $858.0 million for thefirst 28 weeks of fiscal 2026 compared to $837.9 million for the first 28 weeks of fiscal 2025.

Previous wording

For the first quarter of fiscal 2026, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $522.1 million and the Hames acquisition of $28.0 million, partially offset by proceeds from the sale of assets of $25.8 million, primarily related to real estate. Payments for property, equipment and intangibles in the first quarter of fiscal 2026 included the completion of 15 remodels, the opening of four new stores and continued investment in our digital and technology platforms.

Current wording

For the first 28 weeks of fiscal 2026, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $899.6 million and the Hames acquisition of $28.0 million, partially offset by proceeds from the sale of assets of $36.2 million, primarily related to real estate. Payments for property, equipment and intangibles in the first 28 weeks of fiscal 2026 included the completion of 38 remodels, the opening of seven new stores and continued investment in our digital and technology platforms.

Previous wording

For the first quarter of fiscal 2025, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $584.6 million, partially offset by proceeds from the sale of assets of $78.2 million, primarily related to real estate. Payments for property, equipment and intangibles in the first quarter of fiscal 2025 included the completion of 36 remodels, the opening of three new stores and continued investment in our digital and technology platforms.

Current wording

For the first 28 weeks of fiscal 2025, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $950.5 million, partially offset by proceeds from the sale of assets of $82.6 million, primarily related to real estate. Payments for property, equipment and intangibles in the first 28 weeks of fiscal 2025 included the completion of 51 remodels, the opening of three new stores and continued investment in our digital and technology platforms.

Previous wording

Net cash used in financing activities was $129.2 million during the first quarter of fiscal 2026 compared to net cash used in financing activities of $422.9 million during the first quarter of fiscal 2025.

Current wording

Net cash used in financing activities was $271.7 million during the first 28 weeks of fiscal 2026 compared to net cash used in financing activities of $467.0 million during the first 28 weeks of fiscal 2025.

Previous wording

Net cash used in financing activities during the first quarter of fiscal 2026 consisted primarily of the repurchase of common stock, dividends paid on our Class A common stock, payments on long-term borrowings and tax withholding payments on vesting of RSUs, partially offset by $275.0 million of proceeds from the issuance of long-term debt under the ABL Facility.

Current wording

Net cash used in financing activities during the first 28 weeks of fiscal 2026 consisted primarily of the repurchase of common stock, dividends paid on our Class A common stock, payments on long-term borrowings and tax withholding payments on vesting of RSUs, partially offset by $400.0 million of proceeds from the issuance of long-term debt under the ABL Facility.

Previous wording

Net cash used in financing activities during the first quarter of fiscal 2025 consisted primarily of the repurchase of common stock, dividends paid on our Class A common stock and tax withholding payments on vesting of RSUs, partially offset by $25.0 million of proceeds from the ABL Facility. Proceeds from the issuance of long-term debt and payments on long-term borrowings also included a $600 million issuance and subsequent $600 million redemption of senior unsecured notes.

Current wording

Net cash used in financing activities during the first 28 weeks of fiscal 2025 consisted primarily of the repurchase of common stock, dividends paid on our Class A common stock and tax withholding payments on vesting of RSUs, partially offset by $325.0 million of proceeds from the ABL Facility. We also had a $600.0 million issuance and subsequent $600.0 million redemption of senior unsecured notes.

Previous wording

As of June 20, 2026, there was $700.0 million outstanding under our ABL Facility and total availability of $3,287.4 million (net of letter of credit usage).

Current wording

As of September 12, 2026, there was $825.0 million outstanding under our ABL Facility and total availability of $3,162.4 million (net of letter of credit usage).

Previous wording

We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock. On April 14, 2026, the Board of Directors (the "Board") increased the quarterly cash dividend 13% from $0.15 per common share to $0.17 per common share. Cash dividends paid on our Class A common stock were $84.0 million ($0.17 per common share) and $85.7 million ($0.15 per common share) during the first quarter of fiscal 2026 and first quarter of fiscal 2025, respectively. On July 14, 2026, we announced the next quarterly dividend payment of $0.17 per share of Class A common stock to be paid on August 7, 2026 to stockholders of record as of the close of business on July 24, 2026.

Current wording

We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock. On April 14, 2026, the Board of Directors (the "Board") increased the quarterly cash dividend 13% from $0.15 per common share to $0.17 per common share. Cash dividends paid on our Class A common stock were $166.6 million ($0.34 per common share) and $169.6 million ($0.30 per common share) during the first 28 weeks of fiscal 2026 and first 28 weeks of fiscal 2025, respectively. On October 13, 2026, we announced the next quarterly dividend payment of $0.17 per share of Class A common stock to be paid on November 6, 2026, to stockholders of record as of the close of business on October 23, 2026.

Previous wording

On April 14, 2026, the Board increased the remaining share repurchase authorization to $2.0 billion in total. The share repurchase program could include open market repurchases, accelerated share repurchase programs, tender offers, block trades, potential privately negotiated transactions, or trading plans in compliance with the federal securities laws. During the first quarter of fiscal 2026, we repurchased 13.4 million shares of common stock for a total of $226.5 million pursuant to the existing multi-year repurchase authorization.

Current wording

On April 14, 2026, the Board increased the remaining share repurchase authorization to $2.0 billion in total. The share repurchase program could include open market repurchases, accelerated share repurchase programs, tender offers, block trades, potential privately negotiated transactions, or trading plans in compliance with the federal securities laws. During the first 28 weeks of fiscal 2026 and first 28 weeks of fiscal 2025, we repurchased 26.0 million and 25.7 million shares of common stock for a total of $387.6 million and $550.1 million, respectively, pursuant to the existing multi-year repurchase authorization.

Previous wording

Based on current operating trends, we believe that we have significant sources of cash to meet our liquidity needs for the next 12 months and for the foreseeable future, including cash on hand, cash flows from operating activities and other sources of liquidity, including the ABL Facility. We estimate our liquidity needs over the next 12 months to be in the range of $6.0 billion to $6.7 billion. This includes $700.0 million related to the outstanding borrowings under our ABL Facility for which we may, at our discretion, elect to pay all or a portion of the outstanding balance within the next 12 months, and anticipated requirements for working capital, capital expenditures, pension obligations, interest payments and scheduled principal payments of debt, operating leases, finance leases, legal settlements, quarterly dividends on Class A common stock and common stock repurchases. In addition, we may enter into refinancing and sale leaseback transactions from time to time. We believe we have adequate cash flow to continue to maintain our current debt ratings and to respond effectively to competitive conditions.

Current wording

Based on current operating trends, we believe that we have significant sources of cash to meet our liquidity needs for the next 12 months and for the foreseeable future, including cash on hand, cash flows from operating activities and other sources of liquidity, including the ABL Facility. We estimate our liquidity needs over the next 12 months to be in the range of $5.8 billion to $6.7 billion. This includes $825.0 million related to the outstanding borrowings under our ABL Facility for which we may, at our discretion, elect to pay all or a portion of the outstanding balance within the next 12 months, and anticipated requirements for working capital, capital expenditures, pension obligations, interest payments and scheduled principal payments of debt, operating leases, finance leases, legal settlements, quarterly dividends on Class A common stock and common stock repurchases. In addition, we may enter into refinancing and sale leaseback transactions from time to time. We believe we have adequate cash flow to continue to maintain our current debt ratings and to respond effectively to competitive conditions.