Albertsons Companies, Inc. (NYSE: ACI) (the "Company") today
reported results for the third quarter of fiscal 2022, which ended
December 3, 2022.
Third Quarter of Fiscal 2022
Highlights
- Identical sales increased 7.9%
- Digital sales increased 33%
- Loyalty members increased 16% to 33 million
- Net income of $376 million, or $0.20 per share
- Adjusted net income of $505 million, or $0.87 per share
- Adjusted EBITDA of $1,158 million
"Our team continues to deliver strong performance as we execute
against our Customers for Life strategy and bring people together
around the joys of food and inspire well-being," said Vivek
Sankaran, CEO. "Our investments in digital transformation,
differentiation in Own Brands and Fresh offerings, and the
modernization of our operational capabilities contributed to these
results. I want to thank all of our teams for their commitment to
serving our customers and living our values every day."
Mr. Sankaran continued, "As we look ahead to the balance of the
year and into fiscal 2023, we believe that all of these initiatives
position us well to continue to drive top-line growth and deepen
our customer and community engagement both online and in-store. At
the same time, our ongoing productivity engine is expected to
continue to support our investments and partially offset
anticipated inflationary cost increases, declines in COVID-19
vaccination and at-home test kit revenue, and macro-consumer
headwinds."
Third Quarter of Fiscal 2022
Results
Net sales and other revenue was $18.2 billion during the 12
weeks ended December 3, 2022 ("third quarter of fiscal 2022")
compared to $16.7 billion during the 12 weeks ended December 4,
2021 ("third quarter of fiscal 2021"). The increase was driven by
the Company's 7.9% increase in identical sales and higher fuel
sales, with retail price inflation as the primary driver of the
identical sales increase.
Gross margin rate decreased to 28.2% during the third quarter of
fiscal 2022 compared to 28.9% during the third quarter of fiscal
2021. Excluding the impact of fuel and LIFO expense, gross margin
rate decreased 47 basis points compared to the third quarter of
fiscal 2021. The decrease was primarily driven by increases in
product, shrink and supply chain costs, a decline in COVID-related
revenue due to administering fewer vaccines, partially offset by
increased COVID at-home test kit revenue, and increases in picking
and delivery costs related to the growth in digital sales,
partially offset by the benefits of ongoing productivity
initiatives.
Selling and administrative expenses decreased to 25.0% of Net
sales and other revenue during the third quarter of fiscal 2022
compared to 25.4% during the third quarter of fiscal 2021.
Excluding the impact of fuel, Selling and administrative expenses
as a percentage of Net sales and other revenue decreased 29 basis
points. The decrease in Selling and administrative expenses was
primarily attributable to the benefit of ongoing productivity
initiatives and sales leverage, partially offset by market-driven
wage rate increases, investments related to the acceleration of our
digital and omnichannel capabilities and merger-related costs.
Net loss on property dispositions and impairment losses was $7.3
million during the third quarter of fiscal 2022 compared to net
gain of $13.4 million during the third quarter of fiscal 2021.
Interest expense, net was $84.3 million during the third quarter
of fiscal 2022 compared to $111.3 million during the third quarter
of fiscal 2021.
Other expense, net was $1.7 million during the third quarter of
fiscal 2022 compared to other income, net of $38.3 million during
the third quarter of fiscal 2021.
Income tax expense was $120.9 million, representing a 24.4%
effective tax rate, during the third quarter of fiscal 2022
compared to $98.4 million, representing a 18.8% effective tax rate,
during the third quarter of fiscal 2021. The favorability in the
effective income tax rate in the third quarter of fiscal 2021 was
primarily driven by incremental discrete state income tax benefits
related to expired statutes and audit settlements.
Net income was $375.5 million, or $0.20 per share, during the
third quarter of fiscal 2022 compared to $424.5 million, or $0.74
per share, during the third quarter of fiscal 2021. Net income per
share during the third quarter of fiscal 2022 includes a $0.45 per
share reduction related to the Special Dividend that is
attributable to holders of convertible preferred stock on an
as-converted basis.
Adjusted net income was $505.1 million, or $0.87 per share,
during the third quarter of fiscal 2022 compared to $457.2 million,
or $0.79 per share, during the third quarter of fiscal 2021.
Adjusted EBITDA was $1,158.0 million, or 6.4% of Net sales and
other revenue, during the third quarter of fiscal 2022 compared to
$1,051.2 million, or 6.3% of Net sales and other revenue, during
the third quarter of fiscal 2021.
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
and convertible preferred stock (on an as-converted basis) for
total consideration of $34.10 per share, subject to certain
reductions including the Special Dividend (as defined below).
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.
Special Dividend
Separate from the Merger Agreement, on October 13, 2022, the
Company declared a special cash dividend of $6.85 per share (the
"Special Dividend"), payable to stockholders of record, including
holders of convertible preferred stock on an as-converted basis, as
of the close of business on October 24, 2022. The Special Dividend
was to be paid on November 7, 2022. On November 1, 2022, the
Attorney General for the State of Washington ("Washington Attorney
General") filed a motion for a temporary restraining order to
prevent the payment of the Special Dividend. On November 3, 2022, a
commissioner for the Superior Court of King County (the "Superior
Court") issued a temporary restraining order against the payment of
the Special Dividend. On December 9, 2022, the Superior Court ruled
in favor of the Company and denied the Washington Attorney
General's request for a preliminary injunction, but extended the
temporary restraining order in order for the Washington Attorney
General to seek review from the Washington Supreme Court. That same
day, on December 9, 2022, the Washington Attorney General sought
review from the Washington Supreme Court, asking that Court to
review the denial of the preliminary injunction. On December 19,
2022, the commissioner of the Washington Supreme Court announced
that the Court will, sitting en banc, consider the Washington
Attorney General's application for review. The commissioner's order
also extended the temporary restraining order against the payment
of the Special Dividend. On December 28, 2022, the Court scheduled
the en banc conference to take place on January 17, 2023. The
Special Dividend of $3,921.3 million is recorded in Special
dividend payable on the Condensed Consolidated Balance Sheets.
About Albertsons
Companies
Albertsons Companies is a leading food and drug retailer in the
United States. As of December 3, 2022, the Company operated 2,270
retail food and drug stores with 1,720 pharmacies, 402 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 2021, along with the Albertsons Companies
Foundation, the Company contributed nearly $200 million in food and
financial support, including approximately $40 million through our
Nourishing Neighbors Program to ensure those living in our
communities 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, the
outcome of the Merger and the payment of the Special Dividend. 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 retail consumer behavior, including in the digital
space;
- 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, or to close the transactions
contemplated by the Merger Agreement;
- litigation related to the transactions contemplated by the
Merger Agreement;
- litigation related to the payment of the Special Dividend;
- restrictions on our ability to operate as a result of the
Merger Agreement;
- challenges in attracting, retaining and motivating our
employees until the Closing;
- availability and cost of goods used in our food products;
- challenges with our supply chain;
- cybersecurity events affecting us and related costs and impact
to the business; and
- health epidemics and pandemics including the continued impact
of the COVID-19 pandemic, about which there are still many unknowns
and the extent of their impact on our business and the communities
we serve including factors that could cause a reduction in the
current levels of revenue from administering vaccines and 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 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 Securities and Exchange
Commission ("SEC") a preliminary information statement on Schedule
14C with respect to the approval of the merger between the Company
and Kroger, which is subject to SEC comment. Once the SEC has no
further comments, the Company will mail 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
40 weeks ended
December 3,
2022
December 4,
2021
December 3,
2022
December 4,
2021
Net sales and other revenue
$
18,154.9
$
16,728.4
$
59,384.6
$
54,503.5
Cost of sales
13,033.2
11,898.3
42,713.3
38,765.4
Gross margin
5,121.7
4,830.1
16,671.3
15,738.1
Selling and administrative
expenses
4,532.0
4,243.9
14,883.9
13,978.8
Loss (gain) on property dispositions
and impairment losses, net
7.3
(13.4
)
(86.1
)
(13.3
)
Operating income
582.4
599.6
1,873.5
1,772.6
Interest expense, net
84.3
111.3
313.0
373.9
Loss on debt extinguishment
—
3.7
—
3.7
Other expense (income), net
1.7
(38.3
)
(23.5
)
(100.7
)
Income before income taxes
496.4
522.9
1,584.0
1,495.7
Income tax expense
120.9
98.4
381.6
331.2
Net income
$
375.5
$
424.5
$
1,202.4
$
1,164.5
Net income per Class A common
share
Basic net income per Class A common
share
$
0.20
$
0.78
$
1.74
$
1.97
Diluted net income per Class A common
share
0.20
0.74
1.72
1.95
Weighted average Class A common shares
outstanding (in millions)
Basic
534.6
466.0
525.4
465.4
Diluted
538.6
574.2
529.8
471.2
% of net sales and other
revenue
Gross margin
28.2
%
28.9
%
28.1
%
28.9
%
Selling and administrative expenses
25.0
%
25.4
%
25.1
%
25.6
%
Store data
Number of stores at end of quarter
2,270
2,278
Albertsons Companies, Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets
(in millions)
(unaudited)
December 3,
2022
February 26,
2022
ASSETS
Current assets
Cash and cash equivalents
$
4,412.3
$
2,902.0
Receivables, net
704.8
560.6
Inventories, net
5,054.9
4,500.8
Other current assets
513.7
403.0
Total current assets
10,685.7
8,366.4
Property and equipment, net
9,092.9
9,349.6
Operating lease right-of-use assets
5,849.4
5,908.4
Intangible assets, net
2,408.8
2,285.0
Goodwill
1,201.0
1,201.0
Other assets
976.9
1,012.6
TOTAL ASSETS
$
30,214.7
$
28,123.0
LIABILITIES
Current liabilities
Accounts payable
$
3,977.7
$
4,236.8
Accrued salaries and wages
1,506.7
1,554.9
Special dividend payable
3,921.3
—
Current maturities of long-term debt and
finance lease obligations
2,025.6
828.8
Current maturities of operating lease
obligations
659.3
640.6
Other current liabilities
1,218.4
1,087.4
Total current liabilities
13,309.0
8,348.5
Long-term debt and finance lease
obligations
7,091.7
7,136.3
Long-term operating lease obligations
5,435.4
5,419.9
Deferred income taxes
896.9
799.8
Other long-term liabilities
2,083.4
2,115.4
Commitments and contingencies
Series A convertible preferred stock
579.3
681.1
Series A-1 convertible preferred stock
—
597.4
STOCKHOLDERS' EQUITY
Class A common stock
5.9
5.9
Additional paid-in capital
2,077.0
2,032.2
Treasury stock, at cost
(912.8
)
(1,647.4
)
Accumulated other comprehensive income
66.1
69.0
(Accumulated deficit) retained
earnings
(417.2
)
2,564.9
Total stockholders' equity
819.0
3,024.6
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
30,214.7
$
28,123.0
Albertsons Companies, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(in millions)
(unaudited)
40 weeks ended
December 3,
2022
December 4,
2021
Cash flows from operating
activities:
Net income
$
1,202.4
$
1,164.5
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on property dispositions and
impairment losses, net
(86.1
)
(13.3
)
Depreciation and amortization
1,380.9
1,273.2
Operating lease right-of-use assets
amortization
500.7
478.2
LIFO expense
181.4
58.6
Deferred income tax
101.3
99.4
Contributions to pension and
post-retirement benefit plans, net of (income) expense
(34.9
)
(73.6
)
Gain on interest rate swaps and energy
hedges, net
(12.9
)
(8.8
)
Deferred financing costs
13.0
16.0
Loss on debt extinguishment
—
3.7
Equity-based compensation expense
96.6
75.4
Other
1.9
(48.7
)
Changes in operating assets and
liabilities:
Receivables, net
(143.8
)
(69.6
)
Inventories, net
(735.4
)
(427.4
)
Accounts payable, accrued salaries and
wages and other accrued liabilities
33.6
627.6
Operating lease liabilities
(412.0
)
(388.2
)
Self-insurance assets and liabilities
49.6
34.7
Other operating assets and liabilities
(64.3
)
(18.9
)
Net cash provided by operating
activities
2,072.0
2,782.8
Cash flows from investing
activities:
Business acquisitions, net of cash
acquired
—
(25.4
)
Payments for property, equipment and
intangibles, including payments for lease buyouts
(1,566.9
)
(1,216.4
)
Proceeds from sale of long-lived
assets
99.4
37.8
Other investing activities
(11.2
)
26.9
Net cash used in investing
activities
(1,478.7
)
(1,177.1
)
Cash flows from financing
activities:
Proceeds from issuance of long-term debt,
including ABL facility
1,400.0
—
Payments on long-term borrowings,
including ABL facility
(200.5
)
(330.6
)
Payments of obligations under finance
leases
(46.4
)
(50.6
)
Payment of redemption premium on debt
extinguishment
—
(2.9
)
Dividends paid on common stock
(190.9
)
(149.0
)
Dividends paid on convertible preferred
stock
(50.2
)
(88.6
)
Employee tax withholding on vesting of
restricted stock units
(42.9
)
(28.7
)
Other financing activities
5.3
(11.3
)
Net cash provided by (used in)
financing activities
874.4
(661.7
)
Net increase in cash and cash
equivalents and restricted cash
1,467.7
944.0
Cash and cash equivalents and
restricted cash at beginning of period
2,952.6
1,767.6
Cash and cash equivalents and
restricted cash at end of period
$
4,420.3
$
2,711.6
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 (in millions, except
per share data):
12 weeks ended
40 weeks ended
December 3,
2022
December 4,
2021
December 3,
2022
December 4,
2021
Numerator:
Net income
$
375.5
$
424.5
$
1,202.4
$
1,164.5
Adjustments:
Loss (gain) on interest rate swaps and
energy hedges, net (d)
2.0
(1.3
)
(12.9
)
(8.8
)
Business transformation (1)(b)
17.2
10.2
64.5
45.8
Equity-based compensation expense (b)
33.4
26.4
96.6
75.4
Loss (gain) on property dispositions and
impairment losses, net
7.3
(13.4
)
(86.1
)
(13.3
)
LIFO expense (a)
64.5
29.5
181.4
58.6
Government-mandated incremental COVID-19
pandemic related pay (2)(b)
1.0
5.6
10.8
53.0
Merger-related costs (3)(b)
14.4
—
23.8
—
Amortization of debt discount and deferred
financing costs (c)
3.9
4.8
12.9
15.9
Loss on debt extinguishment
—
3.7
—
3.7
Amortization of intangible assets
resulting from acquisitions (b)
11.7
9.5
39.1
37.1
Combined Plan (4)(b)
—
—
(19.0
)
—
Miscellaneous adjustments (5)(f)
16.4
(33.7
)
89.8
(32.5
)
Tax impact of adjustments to Adjusted net
income
(42.2
)
(8.6
)
(97.9
)
(55.2
)
Adjusted net income
$
505.1
$
457.2
$
1,505.4
$
1,344.2
Denominator:
Weighted average Class A common shares
outstanding - diluted
538.6
574.2
529.8
471.2
Adjustments:
Convertible preferred stock (6)
37.6
—
45.2
101.6
Restricted stock units and awards (7)
6.6
6.5
6.1
7.3
Adjusted weighted average Class A common
shares outstanding - diluted
582.8
580.7
581.1
580.1
Adjusted net income per Class A common
share - diluted
$
0.87
$
0.79
$
2.59
$
2.32
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
12 weeks ended
40 weeks ended
December 3,
2022
December 4,
2021
December 3,
2022
December 4,
2021
Net income per Class A common share -
diluted
$
0.20
$
0.74
$
1.72
$
1.95
Convertible preferred stock (6)
0.45
—
0.37
0.09
Non-GAAP adjustments (8)
0.23
0.06
0.53
0.31
Restricted stock units and awards (7)
(0.01
)
(0.01
)
(0.03
)
(0.03
)
Adjusted net income per Class A common
share - diluted
$
0.87
$
0.79
$
2.59
$
2.32
The following table is a reconciliation of
Adjusted net income to Adjusted EBITDA:
12 weeks ended
40 weeks ended
December 3,
2022
December 4,
2021
December 3,
2022
December 4,
2021
Adjusted net income (9)
$
505.1
$
457.2
$
1,505.4
$
1,344.2
Tax impact of adjustments to Adjusted net
income
42.2
8.6
97.9
55.2
Income tax expense
120.9
98.4
381.6
331.2
Amortization of debt discount and deferred
financing costs (c)
(3.9
)
(4.8
)
(12.9
)
(15.9
)
Interest expense, net
84.3
111.3
313.0
373.9
Amortization of intangible assets
resulting from acquisitions (b)
(11.7
)
(9.5
)
(39.1
)
(37.1
)
Depreciation and amortization (e)
421.1
390.0
1,380.9
1,273.2
Adjusted EBITDA
$
1,158.0
$
1,051.2
$
3,626.8
$
3,324.7
(1)
Includes costs associated with third-party
consulting fees related to our operational priorities and
associated business transformation, as well as closures of
operating facilities.
(2)
Represents incremental pay that is
legislatively required in certain municipalities in which we
operate.
(3)
Primarily relates to third-party advisor
fees 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 certain legal and
regulatory accruals and settlements, 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 and costs associated with
integrating acquired businesses.
(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. The third quarter of fiscal 2022 and first 40 weeks of fiscal
2022 reflect the impact of the Special Dividend that is
attributable to the holders of convertible preferred stock on an
as-converted basis.
(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) Loss (gain) on interest rate swaps and
energy hedges, net:
12 weeks ended
40 weeks ended
December 3,
2022
December 4,
2021
December 3,
2022
December 4,
2021
Cost of sales
$
2.8
$
(0.3
)
$
(2.7
)
$
(6.6
)
Selling and administrative expenses
0.5
(0.3
)
(1.6
)
(1.8
)
Other expense (income), net
(1.3
)
(0.7
)
(8.6
)
(0.4
)
Total Loss (gain) on interest rate swaps
and energy hedges, net
$
2.0
$
(1.3
)
$
(12.9
)
$
(8.8
)
(e) Depreciation and amortization:
12 weeks ended
40 weeks ended
December 3,
2022
December 4,
2021
December 3,
2022
December 4,
2021
Cost of sales
$
39.5
$
38.8
$
129.2
$
125.6
Selling and administrative expenses
381.6
351.2
1,251.7
1,147.6
Total Depreciation and amortization
$
421.1
$
390.0
$
1,380.9
$
1,273.2
(f) Miscellaneous adjustments:
12 weeks ended
40 weeks ended
December 3,
2022
December 4,
2021
December 3,
2022
December 4,
2021
Selling and administrative expenses
$
6.5
$
(14.0
)
$
64.6
$
3.1
Other expense (income), net
9.9
(19.7
)
25.2
(35.6
)
Total Miscellaneous adjustments
$
16.4
$
(33.7
)
$
89.8
$
(32.5
)
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:
December 3,
2022
December 4,
2021
Total debt (including finance leases)
$
9,117.3
$
7,997.7
Cash and cash equivalents
4,412.3
2,661.0
Special dividend payable
(3,921.3
)
—
Cash and cash equivalents, net of Special
dividend payable
491.0
2,661.0
Total debt net of cash and cash
equivalents, net
8,626.3
5,336.7
Rolling four quarters Adjusted EBITDA
$
4,700.5
$
4,241.6
Total Net Debt Ratio
1.84
1.26
The following table is a reconciliation of
Net income to Adjusted EBITDA on a rolling four quarter basis:
Rolling four quarters
ended
December 3,
2022
December 4,
2021
Net income
$
1,657.5
$
1,020.3
Depreciation and amortization
1,789.0
1,638.4
Interest expense, net
421.0
487.0
Income tax expense
530.3
267.1
EBITDA
4,397.8
3,412.8
Gain on interest rate swaps and energy
hedges, net
(26.9
)
(15.9
)
Business transformation (1)
75.3
69.3
Equity-based compensation expense
122.4
91.0
Loss on debt extinguishment
—
31.3
Gain on property dispositions and
impairment losses, net
(87.8
)
(5.1
)
LIFO expense
238.0
79.8
Government-mandated incremental COVID-19
pandemic related pay (2)
15.7
53.0
Merger-related costs (3)
23.8
—
Combined Plan (4)
(125.3
)
607.2
Miscellaneous adjustments (5)
67.5
(81.8
)
Adjusted EBITDA
$
4,700.5
$
4,241.6
(1)
Includes costs related to third-party
consulting fees related to our operational priorities and
associated business transformation, as well as closures of
operating facilities.
(2)
Represents incremental pay that is
legislatively required in certain municipalities in which we
operate.
(3)
Primarily relates to third-party advisor
fees 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 of $19.0 million and $106.3
million during the second quarter of fiscal 2022 and fourth quarter
of fiscal 2021, respectively, and the $607.2 million charge in the
fourth quarter of fiscal 2020 related to the withdrawal from the
Combined Plan.
(5)
Primarily includes certain legal and
regulatory accruals and settlements, lease adjustments related to
non-cash rent expense and costs incurred on leased surplus
properties, net realized and unrealized gains and losses related to
non-operating investments, pension settlement gain, adjustments for
unconsolidated equity investments and costs associated with
integrating acquired businesses.
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version on businesswire.com: https://www.businesswire.com/news/home/20230110005182/en/
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