x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
|
47-5579477
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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|
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250 Parkcenter Blvd.
|
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Boise, Idaho
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83706
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(Address of principal
executive offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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||
Non-accelerated filer
|
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x
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging Growth Company
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o
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December 2,
2017 |
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February 25,
2017 |
||||
ASSETS
|
|
|
|
|||||
Current assets
|
|
|
|
|||||
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Cash and cash equivalents
|
$
|
473.3
|
|
|
$
|
1,219.2
|
|
|
Receivables, net
|
601.7
|
|
|
631.0
|
|
||
|
Inventories, net
|
4,724.6
|
|
|
4,464.0
|
|
||
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Other current assets
|
664.5
|
|
|
479.0
|
|
||
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Total current assets
|
6,464.1
|
|
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6,793.2
|
|
||
|
|
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|
||||
Property and equipment, net
|
10,831.8
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|
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11,511.8
|
|
|||
Intangible assets, net
|
3,212.7
|
|
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3,497.8
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Goodwill
|
1,183.3
|
|
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1,167.8
|
|
|||
Other assets
|
555.4
|
|
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784.4
|
|
|||
TOTAL ASSETS
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$
|
22,247.3
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|
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$
|
23,755.0
|
|
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||||
LIABILITIES
|
|
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|||||
Current liabilities
|
|
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|||||
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Accounts payable
|
$
|
3,149.3
|
|
|
$
|
3,034.7
|
|
|
Accrued salaries and wages
|
964.6
|
|
|
1,007.5
|
|
||
|
Current maturities of long-term debt and capitalized lease obligations
|
171.9
|
|
|
318.5
|
|
||
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Other current liabilities
|
1,356.1
|
|
|
1,380.1
|
|
||
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Total current liabilities
|
5,641.9
|
|
|
5,740.8
|
|
||
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|
|
|
|
||||
Long-term debt and capitalized lease obligations
|
11,702.4
|
|
|
12,019.4
|
|
|||
Deferred income taxes
|
846.6
|
|
|
1,479.8
|
|
|||
Other long-term liabilities
|
3,232.3
|
|
|
3,143.8
|
|
|||
|
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|
|||||
Commitments and contingencies
|
|
|
|
|
|
|||
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|||||
MEMBER EQUITY
|
|
|
|
|||||
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Member investment
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1,754.9
|
|
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1,999.3
|
|
||
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Accumulated other comprehensive income (loss)
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26.5
|
|
|
(12.8
|
)
|
||
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Accumulated deficit
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(957.3
|
)
|
|
(615.3
|
)
|
||
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Total member equity
|
824.1
|
|
|
1,371.2
|
|
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TOTAL LIABILITIES AND MEMBER EQUITY
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$
|
22,247.3
|
|
|
$
|
23,755.0
|
|
|
12 weeks ended
|
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40 weeks ended
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||||||||||||
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December 2,
2017 |
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December 3,
2016 |
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December 2,
2017 |
|
December 3,
2016 |
||||||||
Net sales and other revenue
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$
|
13,599.2
|
|
|
$
|
13,613.8
|
|
|
$
|
45,890.9
|
|
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$
|
45,861.6
|
|
Cost of sales
|
9,974.6
|
|
|
9,794.0
|
|
|
33,478.1
|
|
|
33,154.9
|
|
||||
Gross profit
|
3,624.6
|
|
|
3,819.8
|
|
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12,412.8
|
|
|
12,706.7
|
|
||||
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|
|
|
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|
||||||||
Selling and administrative expenses
|
3,719.6
|
|
|
3,665.9
|
|
|
12,488.7
|
|
|
12,252.2
|
|
||||
Goodwill impairment
|
—
|
|
|
—
|
|
|
142.3
|
|
|
—
|
|
||||
Operating (loss) income
|
(95.0
|
)
|
|
153.9
|
|
|
(218.2
|
)
|
|
454.5
|
|
||||
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|
|
|
|
|
|
|
||||||||
Interest expense, net
|
193.9
|
|
|
212.4
|
|
|
679.2
|
|
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784.0
|
|
||||
(Gain) loss on debt extinguishment
|
(5.0
|
)
|
|
—
|
|
|
(5.0
|
)
|
|
111.7
|
|
||||
Other expense (income)
|
21.5
|
|
|
(26.4
|
)
|
|
40.4
|
|
|
(22.9
|
)
|
||||
Loss before income taxes
|
(305.4
|
)
|
|
(32.1
|
)
|
|
(932.8
|
)
|
|
(418.3
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax (benefit) expense
|
(523.5
|
)
|
|
4.1
|
|
|
(590.8
|
)
|
|
(10.4
|
)
|
||||
Net income (loss)
|
$
|
218.1
|
|
|
$
|
(36.2
|
)
|
|
$
|
(342.0
|
)
|
|
$
|
(407.9
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Gain on interest rate swaps, net of tax
|
22.2
|
|
|
31.0
|
|
|
22.6
|
|
|
31.8
|
|
||||
Recognition of pension gain (loss), net of tax
|
2.4
|
|
|
0.9
|
|
|
6.0
|
|
|
(12.1
|
)
|
||||
Foreign currency translation adjustment, net of tax
|
(11.6
|
)
|
|
(17.8
|
)
|
|
14.3
|
|
|
(25.7
|
)
|
||||
Other, net of tax
|
(7.8
|
)
|
|
(3.5
|
)
|
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(3.6
|
)
|
|
(3.6
|
)
|
||||
Comprehensive income (loss)
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$
|
223.3
|
|
|
$
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(25.6
|
)
|
|
$
|
(302.7
|
)
|
|
$
|
(417.5
|
)
|
|
40 weeks ended
|
||||||
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December 2,
2017 |
|
December 3,
2016 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(342.0
|
)
|
|
$
|
(407.9
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Net loss (gain) on property dispositions, asset impairment and lease exit costs
|
66.8
|
|
|
(38.8
|
)
|
||
Goodwill impairment
|
142.3
|
|
|
—
|
|
||
Depreciation and amortization
|
1,462.0
|
|
|
1,374.0
|
|
||
LIFO expense
|
24.0
|
|
|
8.5
|
|
||
Deferred income tax
|
(629.7
|
)
|
|
(198.2
|
)
|
||
Pension and post-retirement benefits expense
|
18.9
|
|
|
91.3
|
|
||
Contributions to pension and post-retirement benefit plans
|
(19.8
|
)
|
|
(9.5
|
)
|
||
Gain on interest rate swaps and commodity hedges, net
|
(5.6
|
)
|
|
(11.2
|
)
|
||
Amortization and write-off of deferred financing costs
|
48.5
|
|
|
62.0
|
|
||
(Gain) loss on debt extinguishment
|
(5.0
|
)
|
|
111.7
|
|
||
Equity-based compensation expense
|
24.6
|
|
|
34.2
|
|
||
Other
|
98.6
|
|
|
39.9
|
|
||
Changes in operating assets and liabilities, net of effects of acquisition of businesses:
|
|
|
|
||||
Receivables, net
|
29.7
|
|
|
35.5
|
|
||
Inventories, net
|
(278.9
|
)
|
|
(216.2
|
)
|
||
Accounts payable, accrued salaries and wages and other accrued liabilities
|
159.6
|
|
|
145.5
|
|
||
Other operating assets and liabilities
|
(83.4
|
)
|
|
88.5
|
|
||
Net cash provided by operating activities
|
710.6
|
|
|
1,109.3
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Business acquisitions, net of cash acquired
|
(148.8
|
)
|
|
(188.6
|
)
|
||
Payments for property, equipment and intangibles, including payments for lease buyouts
|
(1,062.7
|
)
|
|
(1,052.3
|
)
|
||
Proceeds from sale of assets
|
652.6
|
|
|
435.9
|
|
||
Other
|
(56.9
|
)
|
|
64.8
|
|
||
Net cash used in investing activities
|
(615.8
|
)
|
|
(740.2
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
290.0
|
|
|
2,977.9
|
|
||
Payments on long-term borrowings
|
(830.6
|
)
|
|
(2,831.8
|
)
|
||
Payment of make-whole premium on debt extinguishment
|
—
|
|
|
(87.7
|
)
|
||
Payments of obligations under capital leases
|
(82.8
|
)
|
|
(95.2
|
)
|
||
Payments for debt financing costs
|
(1.5
|
)
|
|
(31.1
|
)
|
||
Member distribution
|
(250.0
|
)
|
|
—
|
|
||
Proceeds from financing leases
|
99.9
|
|
|
—
|
|
||
Other
|
(65.7
|
)
|
|
(74.8
|
)
|
||
Net cash used in financing activities
|
(840.7
|
)
|
|
(142.7
|
)
|
||
|
|
|
|
||||
Net (decrease) increase in cash and cash equivalents
|
(745.9
|
)
|
|
226.4
|
|
||
Cash and cash equivalents at beginning of period
|
1,219.2
|
|
|
579.7
|
|
||
Cash and cash equivalents at end of period
|
$
|
473.3
|
|
|
$
|
806.1
|
|
|
December 2,
2017 |
|
February 25,
2017 |
||||
Balance at beginning of period
|
$
|
1,167.8
|
|
|
$
|
1,131.1
|
|
Acquisitions
|
157.8
|
|
|
36.7
|
|
||
Impairment
|
(142.3
|
)
|
|
—
|
|
||
Balance at end of period
|
$
|
1,183.3
|
|
|
$
|
1,167.8
|
|
|
12 weeks ended
|
|
40 weeks ended
|
||||||||||||||||||||||||
|
December 2,
2017 |
|
December 3,
2016 |
|
December 2,
2017 |
|
December 3,
2016 |
||||||||||||||||||||
|
Amount
|
|
% of Total
|
|
Amount
|
|
% of Total
|
|
Amount
|
|
% of Total
|
|
Amount
|
|
% of Total
|
||||||||||||
Non-perishables (1)
|
$
|
5,868.1
|
|
|
43.2
|
%
|
|
$
|
6,210.5
|
|
|
45.6
|
%
|
|
$
|
20,278.6
|
|
|
44.3
|
%
|
|
$
|
20,823.7
|
|
|
45.5
|
%
|
Perishables (2)
|
5,624.9
|
|
|
41.4
|
%
|
|
5,391.3
|
|
|
39.6
|
%
|
|
18,783.6
|
|
|
40.9
|
%
|
|
18,400.4
|
|
|
40.1
|
%
|
||||
Pharmacy
|
1,187.1
|
|
|
8.7
|
%
|
|
1,219.1
|
|
|
9.0
|
%
|
|
3,858.2
|
|
|
8.4
|
%
|
|
3,959.0
|
|
|
8.6
|
%
|
||||
Fuel
|
739.6
|
|
|
5.4
|
%
|
|
622.0
|
|
|
4.6
|
%
|
|
2,399.3
|
|
|
5.2
|
%
|
|
2,076.9
|
|
|
4.5
|
%
|
||||
Other (3)
|
179.5
|
|
|
1.3
|
%
|
|
170.9
|
|
|
1.2
|
%
|
|
571.2
|
|
|
1.2
|
%
|
|
601.6
|
|
|
1.3
|
%
|
||||
Net sales and other revenue
|
$
|
13,599.2
|
|
|
100.0
|
%
|
|
$
|
13,613.8
|
|
|
100.0
|
%
|
|
$
|
45,890.9
|
|
|
100.0
|
%
|
|
$
|
45,861.6
|
|
|
100.0
|
%
|
Level 1 -
|
Quoted prices in active markets for identical assets or liabilities;
|
Level 2 -
|
Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;
|
Level 3 -
|
Unobservable inputs in which little or no market activity exists, requiring an entity to develop its own assumptions that market participants would use to value the asset or liability.
|
|
|
Fair Value Measurements
|
||||||||||||||
|
|
Total
|
|
Quoted prices in active markets
for identical assets
(Level 1)
|
|
Significant
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market
|
|
$
|
50.0
|
|
|
$
|
50.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments (1)
|
|
23.7
|
|
|
21.2
|
|
|
2.5
|
|
|
—
|
|
||||
Non-current investments (2)
|
|
87.4
|
|
|
35.2
|
|
|
52.2
|
|
|
—
|
|
||||
Total
|
|
$
|
161.1
|
|
|
$
|
106.4
|
|
|
$
|
54.7
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivative contracts (3)
|
|
$
|
49.2
|
|
|
$
|
—
|
|
|
$
|
49.2
|
|
|
$
|
—
|
|
Contingent consideration (4)
|
|
281.9
|
|
|
—
|
|
|
—
|
|
|
281.9
|
|
||||
Total
|
|
$
|
331.1
|
|
|
$
|
—
|
|
|
$
|
49.2
|
|
|
$
|
281.9
|
|
|
|
Fair Value Measurements
|
||||||||||||||
|
|
Total
|
|
Quoted prices in active markets
for identical assets
(Level 1)
|
|
Significant
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market
|
|
$
|
596.0
|
|
|
$
|
596.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments (1)
|
|
21.6
|
|
|
19.4
|
|
|
2.2
|
|
|
—
|
|
||||
Non-current investments (2)
|
|
97.5
|
|
|
45.6
|
|
|
51.9
|
|
|
—
|
|
||||
Total
|
|
$
|
715.1
|
|
|
$
|
661.0
|
|
|
$
|
54.1
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivative contracts (3)
|
|
$
|
103.7
|
|
|
$
|
—
|
|
|
$
|
103.7
|
|
|
$
|
—
|
|
Contingent consideration (4)
|
|
281.0
|
|
|
—
|
|
|
—
|
|
|
281.0
|
|
||||
Total
|
|
$
|
384.7
|
|
|
$
|
—
|
|
|
$
|
103.7
|
|
|
$
|
281.0
|
|
|
Contingent consideration
|
||
Beginning balance
|
$
|
281.0
|
|
Plated acquisition
|
60.1
|
|
|
Change in fair value
|
(54.1
|
)
|
|
Payments
|
(5.1
|
)
|
|
Ending balance
|
$
|
281.9
|
|
|
|
Amount of income recognized from derivatives
|
|
|
||||||
Derivatives designated as hedging instruments
|
|
12 weeks ended December 2, 2017
|
|
12 weeks ended December 3, 2016
|
|
Location of income recognized from derivatives
|
||||
Designated interest rate swaps
|
|
$
|
22.2
|
|
|
$
|
31.0
|
|
|
Other comprehensive income (loss), net of tax
|
|
|
Amount of income recognized from derivatives
|
|
|
||||||
Derivatives designated as hedging instruments
|
|
40 weeks ended December 2, 2017
|
|
40 weeks ended December 3, 2016
|
|
Location of income recognized from derivatives
|
||||
Designated interest rate swaps
|
|
$
|
22.6
|
|
|
$
|
31.8
|
|
|
Other comprehensive income (loss), net of tax
|
|
|
Amount of income recognized from derivatives
|
|
|
||||||
Derivatives not designated as hedging instruments
|
|
12 weeks ended December 2, 2017
|
|
12 weeks ended December 3, 2016
|
|
Location of income recognized from derivatives
|
||||
Undesignated and ineffective portion of interest rate swaps
|
|
$
|
1.0
|
|
|
$
|
0.8
|
|
|
Other expense (income)
|
|
|
Amount of income recognized from derivatives
|
|
|
||||||
Derivatives not designated as hedging instruments
|
|
40 weeks ended December 2, 2017
|
|
40 weeks ended December 3, 2016
|
|
Location of income recognized from derivatives
|
||||
Undesignated and ineffective portion of interest rate swaps
|
|
$
|
0.2
|
|
|
$
|
0.8
|
|
|
Other expense (income)
|
|
December 2,
2017 |
|
February 25,
2017 |
||||
Albertsons Term Loans due 2021 to 2023, interest rate range of 4.10% to 4.46%
|
$
|
5,619.1
|
|
|
$
|
5,853.0
|
|
Albertsons Senior Unsecured Notes due 2024 and 2025, interest rate of 6.625% and 5.750%, respectively
|
2,475.3
|
|
|
2,473.0
|
|
||
NAI Notes due 2018 to 2031, interest rate range of 6.47% to 8.70%
|
1,412.2
|
|
|
1,552.2
|
|
||
Safeway Notes due 2019 to 2031, interest rate range of 3.95% to 7.45%
|
1,266.9
|
|
|
1,368.4
|
|
||
Other Notes Payable, unsecured
|
206.4
|
|
|
114.9
|
|
||
Mortgage Notes Payable, secured
|
21.0
|
|
|
22.4
|
|
||
Total debt
|
11,000.9
|
|
|
11,383.9
|
|
||
Less current maturities
|
(72.6
|
)
|
|
(203.8
|
)
|
||
Long-term portion
|
$
|
10,928.3
|
|
|
$
|
11,180.1
|
|
|
12 weeks ended
|
||||||||||||||
|
Pension
|
|
Other post-retirement benefits
|
||||||||||||
|
December 2,
2017 |
|
December 3,
2016 |
|
December 2,
2017 |
|
December 3,
2016 |
||||||||
Estimated return on plan assets
|
$
|
(27.6
|
)
|
|
$
|
(28.7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Service cost
|
11.5
|
|
|
11.8
|
|
|
0.3
|
|
|
0.1
|
|
||||
Interest cost
|
20.4
|
|
|
20.0
|
|
|
0.2
|
|
|
0.2
|
|
||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
0.8
|
|
|
0.9
|
|
||||
Amortization of unrecognized loss
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net expense
|
$
|
4.4
|
|
|
$
|
3.1
|
|
|
$
|
1.3
|
|
|
$
|
1.2
|
|
|
40 weeks ended
|
||||||||||||||
|
Pension
|
|
Other post-retirement benefits
|
||||||||||||
|
December 2,
2017 |
|
December 3,
2016 |
|
December 2,
2017 |
|
December 3,
2016 |
||||||||
Estimated return on plan assets
|
$
|
(92.0
|
)
|
|
$
|
(92.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Service cost
|
38.3
|
|
|
37.7
|
|
|
0.8
|
|
|
0.2
|
|
||||
Interest cost
|
67.9
|
|
|
64.3
|
|
|
0.7
|
|
|
0.6
|
|
||||
Amortization of prior service cost
|
0.1
|
|
|
—
|
|
|
2.8
|
|
|
1.7
|
|
||||
Amortization of unrecognized loss
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Collington acquisition
|
—
|
|
|
78.9
|
|
|
—
|
|
|
—
|
|
||||
Net expense
|
$
|
14.6
|
|
|
$
|
88.8
|
|
|
$
|
4.3
|
|
|
$
|
2.5
|
|
|
12 weeks ended
|
|
40 weeks ended
|
||||||||||||
|
December 2,
2017 |
|
December 3,
2016 |
|
December 2,
2017 |
|
December 3,
2016 |
||||||||
Supply agreements included in Cost of sales
|
$
|
379.0
|
|
|
$
|
374.0
|
|
|
$
|
1,287.9
|
|
|
$
|
1,353.9
|
|
Selling and administrative expenses
|
23.9
|
|
|
27.4
|
|
|
96.5
|
|
|
123.9
|
|
||||
Total
|
$
|
402.9
|
|
|
$
|
401.4
|
|
|
$
|
1,384.4
|
|
|
$
|
1,477.8
|
|
|
40 weeks ended December 2, 2017
|
||||||||||||||||||
|
Total
|
|
Pension and Post-retirement benefit plans
|
|
Interest rate swaps
|
|
Foreign currency translation adjustments
|
|
Other
|
||||||||||
Beginning AOCI balance
|
$
|
(12.8
|
)
|
|
$
|
79.7
|
|
|
$
|
(28.1
|
)
|
|
$
|
(66.1
|
)
|
|
$
|
1.7
|
|
Other comprehensive income before reclassifications
|
32.4
|
|
|
2.2
|
|
|
4.8
|
|
|
23.7
|
|
|
1.7
|
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
25.7
|
|
|
2.8
|
|
|
27.9
|
|
|
—
|
|
|
(5.0
|
)
|
|||||
Tax (expense) benefit
|
(18.8
|
)
|
|
1.0
|
|
|
(10.1
|
)
|
|
(9.4
|
)
|
|
(0.3
|
)
|
|||||
Current-period other comprehensive income (loss), net
|
39.3
|
|
|
6.0
|
|
|
22.6
|
|
|
14.3
|
|
|
(3.6
|
)
|
|||||
Ending AOCI balance
|
$
|
26.5
|
|
|
$
|
85.7
|
|
|
$
|
(5.5
|
)
|
|
$
|
(51.8
|
)
|
|
$
|
(1.9
|
)
|
|
40 weeks ended December 3, 2016
|
||||||||||||||||||
|
Total
|
|
Pension and Post-retirement benefit plans
|
|
Interest rate swaps
|
|
Foreign currency translation adjustments
|
|
Other
|
||||||||||
Beginning AOCI balance
|
$
|
(112.7
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
(67.5
|
)
|
|
$
|
(45.6
|
)
|
|
$
|
2.7
|
|
Other comprehensive (loss) income before reclassifications
|
(59.3
|
)
|
|
(15.5
|
)
|
|
2.8
|
|
|
(42.6
|
)
|
|
(4.0
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
41.5
|
|
|
1.7
|
|
|
39.8
|
|
|
—
|
|
|
—
|
|
|||||
Tax benefit (expense)
|
8.2
|
|
|
1.7
|
|
|
(10.8
|
)
|
|
16.9
|
|
|
0.4
|
|
|||||
Current-period other comprehensive (loss) income, net
|
(9.6
|
)
|
|
(12.1
|
)
|
|
31.8
|
|
|
(25.7
|
)
|
|
(3.6
|
)
|
|||||
Ending AOCI balance
|
$
|
(122.3
|
)
|
|
$
|
(14.4
|
)
|
|
$
|
(35.7
|
)
|
|
$
|
(71.3
|
)
|
|
$
|
(0.9
|
)
|
•
|
Announced alliance with Instacart for same-day deliveries in as little as an hour
|
•
|
Initiated roll-out of Plated meal-kits in-store
|
•
|
Accelerated growth of eCommerce business, including expansion of 'Drive-Up and Go' options
|
•
|
Increased penetration in Own Brands by 62 basis points
|
•
|
Exceeded $1 billion in last twelve months "O Organics" sales for the first time
|
•
|
Acquired an equity interest in El Rancho, a Texas-based Hispanic specialty grocer
|
•
|
Increased registered households in Company loyalty programs by 23% since fiscal 2016
|
•
|
Record number of store reset activities focused on adding new and expanded product offerings
|
|
12 weeks ended
|
|
40 weeks ended
|
||||||||
|
December 2,
2017 |
|
December 3,
2016 |
|
December 2,
2017 |
|
December 3,
2016 |
||||
Stores, beginning of period
|
2,328
|
|
|
2,320
|
|
|
2,324
|
|
|
2,271
|
|
Acquired
|
—
|
|
|
6
|
|
|
5
|
|
|
74
|
|
Opened
|
1
|
|
|
6
|
|
|
13
|
|
|
9
|
|
Closed
|
(6
|
)
|
|
(5
|
)
|
|
(19
|
)
|
|
(27
|
)
|
Stores, end of period
|
2,323
|
|
|
2,327
|
|
|
2,323
|
|
|
2,327
|
|
|
|
Number of stores
|
|
Percent of Total
|
|
Retail Square Feet (1)
|
||||||||||||
Square Footage
|
|
December 2,
2017 |
|
December 3,
2016 |
|
December 2,
2017 |
|
December 3,
2016 |
|
December 2,
2017 |
|
December 3,
2016 |
||||||
Less than 30,000
|
|
213
|
|
|
208
|
|
|
9.2
|
%
|
|
8.9
|
%
|
|
4.9
|
|
|
4.8
|
|
30,000 to 50,000
|
|
813
|
|
|
820
|
|
|
35.0
|
%
|
|
35.3
|
%
|
|
34.1
|
|
|
34.4
|
|
More than 50,000
|
|
1,297
|
|
|
1,299
|
|
|
55.8
|
%
|
|
55.8
|
%
|
|
76.5
|
|
|
76.7
|
|
Total Stores
|
|
2,323
|
|
|
2,327
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
115.5
|
|
|
115.9
|
|
|
12 weeks ended
|
||||||||||||
|
December 2,
2017 |
|
% of Sales
|
|
December 3,
2016 |
|
% of Sales
|
||||||
Net sales and other revenue
|
$
|
13,599.2
|
|
|
100.0
|
%
|
|
$
|
13,613.8
|
|
|
100.0
|
%
|
Cost of sales
|
9,974.6
|
|
|
73.3
|
%
|
|
9,794.0
|
|
|
71.9
|
%
|
||
Gross profit
|
3,624.6
|
|
|
26.7
|
%
|
|
3,819.8
|
|
|
28.1
|
%
|
||
Selling and administrative expenses
|
3,719.6
|
|
|
27.4
|
%
|
|
3,665.9
|
|
|
27.0
|
%
|
||
Operating (loss) income
|
(95.0
|
)
|
|
(0.7
|
)%
|
|
153.9
|
|
|
1.1
|
%
|
||
Interest expense, net
|
193.9
|
|
|
1.4
|
%
|
|
212.4
|
|
|
1.6
|
%
|
||
Gain on debt extinguishment
|
(5.0
|
)
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Other expense (income)
|
21.5
|
|
|
0.2
|
%
|
|
(26.4
|
)
|
|
(0.2
|
)%
|
||
Loss before income taxes
|
(305.4
|
)
|
|
(2.3
|
)%
|
|
(32.1
|
)
|
|
(0.3
|
)%
|
||
Income tax (benefit) expense
|
(523.5
|
)
|
|
(3.8
|
)%
|
|
4.1
|
|
|
—
|
%
|
||
Net income (loss)
|
$
|
218.1
|
|
|
1.5
|
%
|
|
$
|
(36.2
|
)
|
|
(0.3
|
)%
|
|
|
|
|
|
|
|
|
||||||
|
40 weeks ended
|
||||||||||||
|
December 2,
2017 |
|
% of Sales
|
|
December 3,
2016 |
|
% of Sales
|
||||||
Net sales and other revenue
|
$
|
45,890.9
|
|
|
100.0
|
%
|
|
$
|
45,861.6
|
|
|
100.0
|
%
|
Cost of sales
|
33,478.1
|
|
|
73.0
|
%
|
|
33,154.9
|
|
|
72.3
|
%
|
||
Gross profit
|
12,412.8
|
|
|
27.0
|
%
|
|
12,706.7
|
|
|
27.7
|
%
|
||
Selling and administrative expenses
|
12,488.7
|
|
|
27.2
|
%
|
|
12,252.2
|
|
|
26.7
|
%
|
||
Goodwill impairment
|
142.3
|
|
|
0.3
|
%
|
|
—
|
|
|
—
|
%
|
||
Operating (loss) income
|
(218.2
|
)
|
|
(0.5
|
)%
|
|
454.5
|
|
|
1.0
|
%
|
||
Interest expense, net
|
679.2
|
|
|
1.5
|
%
|
|
784.0
|
|
|
1.7
|
%
|
||
(Gain) loss on debt extinguishment
|
(5.0
|
)
|
|
—
|
%
|
|
111.7
|
|
|
0.2
|
%
|
||
Other expense (income)
|
40.4
|
|
|
0.1
|
%
|
|
(22.9
|
)
|
|
—
|
%
|
||
Loss before income taxes
|
(932.8
|
)
|
|
(2.1
|
)%
|
|
(418.3
|
)
|
|
(0.9
|
)%
|
||
Income tax benefit
|
(590.8
|
)
|
|
(1.3
|
)%
|
|
(10.4
|
)
|
|
—
|
%
|
||
Net loss
|
$
|
(342.0
|
)
|
|
(0.8
|
)%
|
|
$
|
(407.9
|
)
|
|
(0.9
|
)%
|
|
12 weeks ended
|
|
40 weeks ended
|
||||
|
December 2,
2017 |
|
December 3,
2016 |
|
December 2,
2017 |
|
December 3,
2016 |
Identical store sales, excluding fuel
|
(1.8)%
|
|
(2.1)%
|
|
(1.9)%
|
|
0.5%
|
|
12 weeks ended
|
|
40 weeks ended
|
||||||||||||
|
December 2,
2017 |
|
December 3,
2016 |
|
December 2,
2017 |
|
December 3,
2016 |
||||||||
Net income (loss)
|
$
|
218.1
|
|
|
$
|
(36.2
|
)
|
|
$
|
(342.0
|
)
|
|
$
|
(407.9
|
)
|
Depreciation and amortization
|
444.4
|
|
|
425.0
|
|
|
1,462.0
|
|
|
1,374.0
|
|
||||
Interest expense, net
|
193.9
|
|
|
212.4
|
|
|
679.2
|
|
|
784.0
|
|
||||
Income tax (benefit) expense
|
(523.5
|
)
|
|
4.1
|
|
|
(590.8
|
)
|
|
(10.4
|
)
|
||||
EBITDA
|
332.9
|
|
|
605.3
|
|
|
1,208.4
|
|
|
1,739.7
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gain on interest rate and commodity hedges, net
|
(2.3
|
)
|
|
(3.8
|
)
|
|
(5.6
|
)
|
|
(11.2
|
)
|
||||
Acquisition and integration costs (1)
|
61.4
|
|
|
48.5
|
|
|
161.5
|
|
|
165.7
|
|
||||
Equity-based compensation expense
|
6.5
|
|
|
18.9
|
|
|
24.6
|
|
|
34.2
|
|
||||
(Gain) loss on debt extinguishment
|
(5.0
|
)
|
|
—
|
|
|
(5.0
|
)
|
|
111.7
|
|
||||
Net loss (gain) on property dispositions, asset impairment and lease exit costs
|
15.5
|
|
|
12.0
|
|
|
66.8
|
|
|
(38.8
|
)
|
||||
Goodwill impairment
|
—
|
|
|
—
|
|
|
142.3
|
|
|
—
|
|
||||
LIFO expense (benefit)
|
0.4
|
|
|
(11.2
|
)
|
|
24.0
|
|
|
8.5
|
|
||||
Collington acquisition (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
78.9
|
|
||||
Facility closures and related transition costs (3)
|
1.5
|
|
|
3.3
|
|
|
11.0
|
|
|
20.3
|
|
||||
Other (4)
|
18.1
|
|
|
1.8
|
|
|
57.9
|
|
|
21.0
|
|
||||
Adjusted EBITDA
|
$
|
429.0
|
|
|
$
|
674.8
|
|
|
$
|
1,685.9
|
|
|
$
|
2,130.0
|
|
|
|
40 weeks ended
|
||||||
|
|
December 2,
2017 |
|
December 3,
2016 |
||||
Net cash provided by operating activities
|
|
$
|
710.6
|
|
|
$
|
1,109.3
|
|
Income tax benefit
|
|
(590.8
|
)
|
|
(10.4
|
)
|
||
Deferred income taxes
|
|
629.7
|
|
|
198.2
|
|
||
Interest expense, net
|
|
679.2
|
|
|
784.0
|
|
||
Changes in operating assets and liabilities
|
|
173.0
|
|
|
(53.3
|
)
|
||
Amortization and write-off of deferred financing costs
|
|
(48.5
|
)
|
|
(62.0
|
)
|
||
Acquisition and integration costs
|
|
161.5
|
|
|
165.7
|
|
||
Other adjustments
|
|
(28.8
|
)
|
|
(1.5
|
)
|
||
Adjusted EBITDA
|
|
1,685.9
|
|
|
2,130.0
|
|
||
Less: capital expenditures
|
|
(1,062.7
|
)
|
|
(1,052.3
|
)
|
||
Free Cash Flow
|
|
$
|
623.2
|
|
|
$
|
1,077.7
|
|
|
40 weeks ended
|
||||||
|
December 2,
2017 |
|
December 3,
2016 |
||||
Cash and cash equivalents at end of period
|
$
|
473.3
|
|
|
$
|
806.1
|
|
Cash flows from operating activities
|
710.6
|
|
|
1,109.3
|
|
||
Cash flows from investing activities
|
(615.8
|
)
|
|
(740.2
|
)
|
||
Cash flows from financing activities
|
(840.7
|
)
|
|
(142.7
|
)
|
|
Albertsons Companies, LLC
(Registrant)
|
|
|
|
|
Date: January 16, 2018
|
By:
|
/s/ Robert G. Miller
|
|
|
Robert G. Miller
|
|
|
Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
|
|
|
Albertsons Companies, LLC
(Registrant) |
|
|
|
|
Date: January 16, 2018
|
By:
|
/s/ Robert B. Dimond
|
|
|
Robert B. Dimond
|
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
40 weeks ended
December 2, 2017 |
|
Fiscal 2016
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
|
Fiscal 2012
|
||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pre-tax (loss) income
|
$
|
(932.8
|
)
|
|
$
|
(463.6
|
)
|
|
$
|
(541.8
|
)
|
|
$
|
(1,378.6
|
)
|
|
$
|
1,140.5
|
|
|
$
|
31.5
|
|
Income from unconsolidated affiliate (1)
|
12.2
|
|
|
17.5
|
|
|
14.4
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
||||||
(Loss) income before tax and unconsolidated affiliate
|
(945.0
|
)
|
|
(481.1
|
)
|
|
(556.2
|
)
|
|
(1,379.7
|
)
|
|
1,140.5
|
|
|
31.5
|
|
||||||
Plus: fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest expense, net (2)
|
193.9
|
|
|
1,003.8
|
|
|
950.5
|
|
|
633.2
|
|
|
390.1
|
|
|
7.2
|
|
||||||
Capitalized interest
|
4.5
|
|
|
7.8
|
|
|
2.1
|
|
|
0.5
|
|
|
0.1
|
|
|
—
|
|
||||||
Portion of rent expense deemed to be interest
|
213.8
|
|
|
268.5
|
|
|
260.4
|
|
|
125.3
|
|
|
101.4
|
|
|
18.0
|
|
||||||
Interest income
|
4.3
|
|
|
3.9
|
|
|
7.4
|
|
|
1.4
|
|
|
1.6
|
|
|
0.2
|
|
||||||
Charges related to guarantee obligations
|
—
|
|
|
1.6
|
|
|
30.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total fixed charges
|
416.5
|
|
|
1,285.6
|
|
|
1,251.0
|
|
|
760.4
|
|
|
493.2
|
|
|
25.4
|
|
||||||
Less: capitalized interest
|
(4.5
|
)
|
|
(7.8
|
)
|
|
(2.1
|
)
|
|
(0.5
|
)
|
|
(0.1
|
)
|
|
—
|
|
||||||
Earnings:
|
$
|
(533.0
|
)
|
|
$
|
796.7
|
|
|
$
|
692.7
|
|
|
$
|
(619.8
|
)
|
|
$
|
1,633.6
|
|
|
$
|
56.9
|
|
Fixed Charges:
|
$
|
416.5
|
|
|
$
|
1,285.6
|
|
|
$
|
1,251.0
|
|
|
$
|
760.4
|
|
|
$
|
493.2
|
|
|
$
|
25.4
|
|
Ratio of earnings to fixed charges (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
|
2.2
|
|
(1)
|
Represents earnings related to the Company’s equity method investment in Casa Ley, S.A. de C.V.
|
(2)
|
Interest expense, net does not include interest relating to liabilities for uncertain tax positions, which the Company records as a component of income tax expense.
|
(3)
|
Due to the Company’s losses during the
40 weeks ended December 2, 2017
, fiscal 2016, fiscal 2015 and fiscal 2014, the ratio coverage was less than 1:1 in each of those periods. The Company would have needed to generate additional earnings of
$949.5 million
,
$488.9 million
,
$558.3 million
and
$1,380.2 million
during the
40 weeks ended December 2, 2017
, fiscal 2016, fiscal 2015 and fiscal 2014, respectively, in order to achieve a coverage ratio of 1:1 during those periods.
|
1.
|
I, Robert G. Miller, certify that:
I have reviewed this Quarterly Report on Form 10-Q of Albertsons Companies, LLC;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Albertsons Companies, LLC
(Registrant)
|
|
|
|
|
Date: January 16, 2018
|
By:
|
/s/ Robert G. Miller
|
|
|
Robert G. Miller
|
|
|
Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)
|
1.
|
I, Robert B. Dimond, certify that:
I have reviewed this Quarterly Report on Form 10-Q of Albertsons Companies, LLC;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Albertsons Companies, LLC
(Registrant)
|
|
|
|
|
Date: January 16, 2018
|
By:
|
/s/ Robert B. Dimond
|
|
|
Robert B. Dimond
|
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Albertsons Companies, LLC
(Registrant)
|
|
|
|
|
Date: January 16, 2018
|
By:
|
/s/ Robert G. Miller
|
|
|
Robert G. Miller
|
|
|
Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
|
|
|
Albertsons Companies, LLC
(Registrant)
|
|
|
|
|
|
By:
|
/s/ Robert B. Dimond
|
|
|
Robert B. Dimond
|
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
|
|