Raises Fiscal 2022 Outlook
Albertsons Companies, Inc. (NYSE: ACI) (the "Company") today
reported results for the first quarter of fiscal 2022, which ended
June 18, 2022.
First Quarter of Fiscal 2022
Highlights
- Identical sales increased 6.8%
- Digital sales increased 28%
- Net income of $484 million, or $0.84 per share
- Adjusted net income of $582 million, or $1.00 per share
- Adjusted EBITDA of $1,420 million
"In the first quarter, our teams continued to deliver strong
operating and financial performance across all key metrics, and we
continued to gain market share," said Vivek Sankaran, CEO. "As we
look forward to the balance of the year, while we are thoughtful
about the macro environment and the possible implications on
consumer behavior, our teams have consistently demonstrated their
ability to adapt to a changing back drop in real time. This puts us
in a strong position to continue to execute against our Customers
for Life strategy, including more deeply engaging our customers
both digitally and in-store and delivering against our productivity
agenda. We are so proud of the resilience, agility and passion of
our teams and their ongoing service to our customers and
communities."
First Quarter of Fiscal 2022
Results
Net sales and other revenue was $23.3 billion during the 16
weeks ended June 18, 2022 ("first quarter of fiscal 2022") compared
to $21.3 billion during the 16 weeks ended June 19, 2021 ("first
quarter of fiscal 2021"). The increase was driven by the Company's
6.8% increase in identical sales and higher fuel sales, with retail
price inflation contributing to the identical sales increase.
Gross margin rate decreased to 28.1% during the first quarter of
fiscal 2022 compared to 29.1% during the first quarter of fiscal
2021. Excluding the impact of fuel and LIFO expense, gross margin
rate decreased 27 basis points compared to the first quarter of
fiscal 2021. The decrease was driven by fewer COVID-19 vaccines in
the first quarter of fiscal 2022 compared to last year. The
COVID-19 impact was partially offset, however, by the gross margin
rate benefits from our productivity initiatives, offset by
inflationary increases in product and supply chain costs.
Selling and administrative expenses decreased to 25.2% of Net
sales and other revenue during the first quarter of fiscal 2022
compared to 25.9% during the first quarter of fiscal 2021.
Excluding the impact of fuel, Selling and administrative expenses
as a percentage of Net sales and other revenue decreased 15 basis
points. The decrease in Selling and administrative expenses was
primarily attributable to lower COVID-19 related expenses and the
execution of productivity initiatives, partially offset by expenses
related to the Company's investments in its digital and omnichannel
capabilities and other strategic priorities, increased employee
costs and higher depreciation and amortization. The increase in
employee costs was the result of market-driven wage rate increases
and higher equity-based compensation expense.
Net gain on property dispositions and impairment losses was
$79.4 million during the first quarter of fiscal 2022 compared to
net loss of $0.3 million during the first quarter of fiscal
2021.
Interest expense, net was $138.9 million during the first
quarter of fiscal 2022 compared to $153.3 million during the first
quarter of fiscal 2021.
Other income, net was $6.3 million during the first quarter of
fiscal 2022 compared to $43.5 million during the first quarter of
fiscal 2021.
Income tax expense was $143.3 million, representing a 22.8%
effective tax rate, during the first quarter of fiscal 2022
compared to $132.5 million, representing a 23.0% effective tax
rate, during the first quarter of fiscal 2021.
Net income was $484.2 million, or $0.84 per share, during the
first quarter of fiscal 2022 compared to $444.8 million, or $0.78
per share, during the first quarter of fiscal 2021.
Adjusted net income was $582.0 million, or $1.00 per share,
during the first quarter of fiscal 2022 compared to $517.5 million,
or $0.89 per share, during the first quarter of fiscal 2021.
Adjusted EBITDA was $1,420.3 million, or 6.1% of Net sales and
other revenue, during the first quarter of fiscal 2022 compared to
$1,308.1 million, or 6.2% of Net sales and other revenue, during
the first quarter of fiscal 2021.
Capital Allocation
During the first quarter of fiscal 2022, capital expenditures
were $613.8 million, which primarily included the building of our
digital and technology platforms and investments in the
modernization of our store fleet, including 27 remodels. During the
first quarter of fiscal 2022, the Company paid a quarterly dividend
of $0.12 per share of common stock on May 10, 2022 to stockholders
of record as of April 26, 2022. On July 14, 2022, the Company
announced the next quarterly dividend of $0.12 per share of Class A
common stock payable on August 10, 2022 to stockholders of record
as of July 26, 2022.
Strategic Alternative
Developments
In connection with our previously-announced Board led review of
potential strategic alternatives to enhance the Company's growth
and maximize stockholder value (the "Strategic Alternatives
Review"), the Company engaged a third party to review the value of
its real estate portfolio. Based on the completed real estate
appraisal, the total value of Company-owned and ground-leased
properties has increased approximately $2.5 billion to $13.7
billion, up from $11.2 billion in 2019.
In addition, as previously disclosed in an 8-K filed June 22,
2022, we entered into an extended lock-up agreement (the "Extended
Lock-Up Agreement") with entities affiliated with five of our
largest stockholders (Cerberus Capital Management, L.P., Kimco
Realty Corporation, Klaff Realty, L.P., Lubert-Adler Partners and
Jubilee Limited Partnership), who we refer to as our Sponsors. The
Sponsors were each party to the lock-up agreement dated June 25,
2020 (the "2020 Lock-Up Agreement") which was due to expire on June
30, 2022. Under the terms of the Extended Lock-up Agreement, which
supersedes the 2020 Lock-Up Agreement, each Sponsor agreed to
restrictions, subject to certain exceptions set forth in the
Extended Lock-Up Agreement, on its ability to offer, sell,
transfer, contract to sell, pledge or otherwise dispose of shares
of our common stock that it owns through September 10, 2022, the
end of the Company's second fiscal quarter. The Sponsors
beneficially own, in the aggregate, 366,043,040 shares of common
stock as of the date of this report.
The Board has not set a timetable for the conclusion of the
Strategic Alternatives Review, nor has it made any decisions
related to any further actions or potential strategic alternatives
at this time. There can be no assurance that the Strategic
Alternatives Review will result in any transaction or other
strategic change or outcome.
Convertible Preferred
Stock
Subsequent to the end of the first quarter of fiscal 2022,
certain holders of the Company's convertible preferred stock
converted approximately 4,411 shares of convertible preferred stock
into 256,162 shares of the Company's Class A common stock. As of
July 22, 2022, the Company has issued, in the aggregate, 61,489,721
shares of common stock to holders of convertible preferred stock,
representing approximately 61% of the originally issued convertible
preferred stock. As a result, there are 40,122,279 shares of common
stock reserved for issuance upon the potential conversion of the
remaining outstanding convertible preferred stock.
Fiscal 2022 Outlook
The Company is providing an updated fiscal 2022 outlook and now
expects:
- Identical sales in fiscal 2022 of approximately 3% to 4%
(previously 2% to 3%)
- Adjusted EBITDA in the range of $4.25 billion to $4.35 billion
(previously $4.15 billion to $4.25 billion)
- Adjusted net income per share in the range of $2.80 to $2.95
per share (previously $2.70 to $2.85 per share)
- Effective tax rate in the range of 23% to 24% excluding
discrete items (unchanged)
- Capital expenditures in the range of $2.0 billion to $2.1
billion (unchanged)
The Company is unable to provide a full reconciliation of the
GAAP and Non-GAAP Measures (as defined below) used in the updated
fiscal 2022 outlook without unreasonable effort because it is not
possible to predict certain of the adjustment items with a
reasonable degree of certainty. This information is dependent upon
future events and may be outside of the Company's control and could
have a significant impact on its GAAP financial results for fiscal
2022. The expected effective tax rate does not reflect potential
rate adjustments for the resolution of tax audits or potential
changes in tax laws, which cannot be predicted with reasonable
certainty.
Conference Call
The Company will hold a conference call today at 8:30 a.m.
Eastern Time, which will be hosted by Vivek Sankaran, CEO, and
Sharon McCollam, President & CFO. The call will be webcast and
can be accessed at
https://albertsonscompanies.com/investors/events-and-presentations.
A replay of the webcast will be available for at least two weeks
following the completion of the call.
About Albertsons
Companies
Albertsons Companies is a leading food and drug retailer in the
United States. As of June 18, 2022, the Company operated 2,273
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 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.
These statements are not guarantees of future performance and
are subject to risks, uncertainties and other factors, some of
which are beyond our control and difficult to predict, including,
among others:
- changes in macroeconomic conditions and uncertainty regarding
the geopolitical environment;
- retail consumer behavior and environment and the Company's
industry;
- ability to attract and retain qualified associates and
negotiate acceptable contracts with labor unions;
- failure to achieve productivity initiatives;
- increased rates of food price inflation, as well as fuel and
commodity prices;
- availability of agricultural commodities and raw materials used
in our food products;
- ability to enter into strategic transactions, investments or
partnerships in the future on terms acceptable to us, or at all;
and
- factors related to the continued impact of the COVID-19
pandemic, about which there are still many unknowns, including its
duration, recurrence, new variants, status and effectiveness of
vaccinations, duration and scope of related government orders,
financial assistance programs, mandates and regulations and the
extent of the overall impact to our business and the communities we
serve.
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.
While certain aspects of our financial results have been
favorably impacted by increased demand during the COVID-19
pandemic, in addition to favorable consumer conditions including
incremental financial assistance provided by various government
agencies, our business continues to experience challenges to meet
customer demand. We have experienced increased labor shortages due
to COVID-19 variants resulting in operational disruptions. Together
with labor shortages and higher demand for talent, the current
economic environment is driving higher wages. Labor shortages could
also impact our ability to negotiate acceptable contracts with
labor unions which could result in strikes by affected workers and
thereby significantly disrupt our operations. Our ability to meet
labor needs, control wage and labor-related costs and minimize
labor disruptions will be key to our success of operating our
business and executing our business strategies. Furthermore, our
business is experiencing an inflationary environment and food price
inflation, which has benefited our sales and gross margin growth
but has negatively impacted our gross margin rates. We are unable
to predict how long the current inflationary environment, including
increased energy costs, will continue. We expect the economic
environment to remain uncertain as we navigate the current
geopolitical environment, the COVID-19 pandemic, labor challenges,
supply chain constraints and the current inflationary environment,
including increasing energy and commodity prices.
Such risks and uncertainties could cause actual results to
differ materially from those expressed or forecasted by us. 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.
Non-GAAP Measures and Identical
Sales
Non-GAAP Measures. EBITDA, Adjusted EBITDA, Adjusted net income
and Adjusted net income per Class A common share (collectively, the
"Non-GAAP Measures") are performance measures that provide
supplemental information 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 operating performance, and thereby provide useful measures
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 implication 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)
16 weeks ended
June 18, 2022
June 19, 2021
Net sales and other revenue
$
23,310.3
$
21,269.4
Cost of sales
16,765.3
15,078.4
Gross margin
6,545.0
6,191.0
Selling and administrative
expenses
5,864.3
5,503.6
(Gain) loss on property dispositions
and impairment losses, net
(79.4
)
0.3
Operating income
760.1
687.1
Interest expense, net
138.9
153.3
Other income, net
(6.3
)
(43.5
)
Income before income taxes
627.5
577.3
Income tax expense
143.3
132.5
Net income
$
484.2
$
444.8
Net income per Class A common
share
Basic net income per Class A common
share
$
0.86
$
0.80
Diluted net income per Class A common
share
0.84
0.78
Weighted average Class A common shares
outstanding (in millions)
Basic
513.3
465.1
Diluted
576.3
571.4
% of net sales and other
revenue
Gross margin
28.1
%
29.1
%
Selling and administrative expenses
25.2
%
25.9
%
Store data
Number of stores at end of quarter
2,273
2,278
Albertsons Companies, Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets
(in millions)
(unaudited)
June 18, 2022
February 26,
2022
ASSETS
Current assets
Cash and cash equivalents
$
3,213.1
$
2,902.0
Receivables, net
565.3
560.6
Inventories, net
4,573.2
4,500.8
Other current assets
326.6
403.0
Total current assets
8,678.2
8,366.4
Property and equipment, net
9,069.9
9,349.6
Operating lease right-of-use assets
5,908.4
5,908.4
Intangible assets, net
2,309.6
2,285.0
Goodwill
1,201.0
1,201.0
Other assets
1,052.9
1,012.6
TOTAL ASSETS
$
28,220.0
$
28,123.0
LIABILITIES
Current liabilities
Accounts payable
$
3,970.3
$
4,236.8
Accrued salaries and wages
1,349.7
1,554.9
Current maturities of long-term debt and
finance lease obligations
825.4
828.8
Current maturities of operating lease
obligations
647.0
640.6
Other current liabilities
1,119.9
1,087.4
Total current liabilities
7,912.3
8,348.5
Long-term debt and finance lease
obligations
7,121.2
7,136.3
Long-term operating lease obligations
5,497.2
5,419.9
Deferred income taxes
806.9
799.8
Other long-term liabilities
2,176.4
2,115.4
Commitments and contingencies
Series A convertible preferred stock
635.4
681.1
Series A-1 convertible preferred stock
—
597.4
STOCKHOLDERS' EQUITY
Class A common stock
5.9
5.9
Additional paid-in capital
1,998.2
2,032.2
Treasury stock, at cost
(971.8
)
(1,647.4
)
Accumulated other comprehensive income
66.2
69.0
Retained earnings
2,972.1
2,564.9
Total stockholders' equity
4,070.6
3,024.6
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
28,220.0
$
28,123.0
Albertsons Companies, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(in millions)
(unaudited)
16 weeks ended
June 18, 2022
June 19, 2021
Cash flows from operating
activities:
Net income
$
484.2
$
444.8
Adjustments to reconcile net income to net
cash provided by operating activities:
(Gain) loss on property dispositions and
impairment losses, net
(79.4
)
0.3
Depreciation and amortization
547.7
504.2
Operating lease right-of-use assets
amortization
198.8
189.3
LIFO expense
62.1
14.5
Deferred income tax
2.8
(17.9
)
Contributions to pension and
post-retirement benefit plans, net of (income) expense
(9.5
)
(14.5
)
Gain on interest rate swaps and energy
hedges, net
(18.5
)
(6.3
)
Equity-based compensation expense
35.3
22.2
Other
25.2
(22.9
)
Changes in operating assets and
liabilities:
Receivables, net
(5.4
)
(74.7
)
Inventories, net
(134.4
)
14.8
Accounts payable, accrued salaries and
wages and other accrued liabilities
(123.2
)
(31.3
)
Operating lease liabilities
(118.1
)
(109.5
)
Self-insurance assets and liabilities
24.5
27.5
Other operating assets and liabilities
99.8
118.5
Net cash provided by operating
activities
991.9
1,059.0
Cash flows from investing
activities:
Business acquisitions, net of cash
acquired
—
(23.5
)
Payments for property, equipment and
intangibles, including payments for lease buyouts
(613.8
)
(513.4
)
Proceeds from sale of long-lived
assets
71.8
15.2
Other investing activities
(9.4
)
28.7
Net cash used in investing
activities
(551.4
)
(493.0
)
Cash flows from financing
activities:
Payments on long-term borrowings
(0.1
)
(0.3
)
Payments of obligations under finance
leases
(13.1
)
(14.1
)
Dividends paid on common stock
(63.0
)
(46.5
)
Dividends paid on convertible preferred
stock
(22.8
)
(29.5
)
Employee tax withholding on vesting of
restricted stock units
(37.3
)
(10.0
)
Other financing activities
6.8
(8.8
)
Net cash used in financing
activities
(129.5
)
(109.2
)
Net increase in cash and cash
equivalents and restricted cash
311.0
456.8
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
$
3,263.6
$
2,224.4
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 for the 16 weeks ended June 18,
2022 and June 19, 2021:
16 weeks ended
June 18, 2022
June 19, 2021
Numerator:
Net income
$
484.2
$
444.8
Adjustments:
Gain on interest rate swaps and energy
hedges, net (d)
(18.5
)
(6.3
)
Business transformation (1)(b)
33.8
20.8
Equity-based compensation expense (b)
35.3
22.2
(Gain) loss on property dispositions and
impairment losses, net
(79.4
)
0.3
LIFO expense (a)
62.1
14.5
Government-mandated incremental COVID-19
pandemic related pay (2)(b)
5.9
29.1
Amortization of debt discount and deferred
financing costs (c)
5.1
6.4
Amortization of intangible assets
resulting from acquisitions (b)
15.4
16.1
Miscellaneous adjustments (3)(f)
67.0
(7.3
)
Tax impact of adjustments to Adjusted net
income
(28.9
)
(23.1
)
Adjusted net income
$
582.0
$
517.5
Denominator:
Weighted average Class A common shares
outstanding - diluted
576.3
571.4
Adjustments:
Restricted stock units and awards (4)
6.9
9.4
Adjusted weighted average Class A common
shares outstanding - diluted
583.2
580.8
Adjusted net income per Class A common
share - diluted
$
1.00
$
0.89
16 weeks ended
June 18, 2022
June 19, 2021
Net income per Class A common share -
diluted
$
0.84
$
0.78
Non-GAAP adjustments (5)
0.17
0.13
Restricted stock units and awards (4)
(0.01
)
(0.02
)
Adjusted net income per Class A common
share - diluted
$
1.00
$
0.89
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
(1)
Includes costs associated with third-party
consulting fees related to our strategic 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 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, adjustments for unconsolidated equity
investments and costs associated with integrating acquired
businesses.
(4)
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.
(5)
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.
The following table is a reconciliation of
Adjusted net income to Adjusted EBITDA:
16 weeks ended
June 18, 2022
June 19, 2021
Adjusted net income (1)
$
582.0
$
517.5
Tax impact of adjustments to Adjusted net
income
28.9
23.1
Income tax expense
143.3
132.5
Amortization of debt discount and deferred
financing costs (c)
(5.1
)
(6.4
)
Interest expense, net
138.9
153.3
Amortization of intangible assets
resulting from acquisitions (b)
(15.4
)
(16.1
)
Depreciation and amortization (e)
547.7
504.2
Adjusted EBITDA
$
1,420.3
$
1,308.1
(1) See the reconciliation of Net income
to Adjusted net income above for further details.
Non-GAAP adjustment classifications within
the Consolidated Statement of Operations:
(a) Cost of sales
(b) Selling and administrative
expenses
(c) Interest expense, net
(d) Gain on interest rate swaps and energy
hedges, net:
16 weeks ended
June 18, 2022
June 19, 2021
Cost of sales
$
(8.9
)
$
(5.2
)
Selling and administrative expenses
(2.9
)
(1.4
)
Other income, net
(6.7
)
0.3
Total Gain on interest rate swaps and
energy hedges, net
$
(18.5
)
$
(6.3
)
Albertsons Companies, Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(in millions, except per share
data)
(e) Depreciation and amortization:
16 weeks ended
June 18, 2022
June 19, 2021
Cost of sales
$
51.5
$
50.8
Selling and administrative expenses
496.2
453.4
Total Depreciation and amortization
$
547.7
$
504.2
(f) Miscellaneous adjustments:
16 weeks ended
June 18, 2022
June 19, 2021
Selling and administrative expenses
$
47.8
$
10.3
Other income, net
19.2
(17.6
)
Total Miscellaneous adjustments
$
67.0
$
(7.3
)
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:
June 18, 2022
June 19, 2021
Total debt (including finance leases)
$
7,946.6
$
8,360.1
Cash and cash equivalents
3,213.1
2,173.8
Total debt net of cash and cash
equivalents
4,733.5
6,186.3
Rolling four quarters Adjusted EBITDA
$
4,510.6
$
4,141.1
Total Net Debt Ratio
1.05
1.49
The following table is a reconciliation of
Net income to Adjusted EBITDA on a rolling four quarter basis:
Rolling four quarters
ended
June 18, 2022
June 19, 2021
Net income
$
1,659.0
$
708.8
Depreciation and amortization
1,724.8
1,581.0
Interest expense, net
467.5
510.9
Income tax expense
490.7
209.1
EBITDA
4,342.0
3,009.8
Gain on interest rate swaps and energy
hedges, net
(35.0
)
(13.9
)
Business transformation (1)
69.6
69.0
Equity-based compensation expense
114.3
62.2
Loss on debt extinguishment
3.7
85.3
Gain on property dispositions and
impairment losses, net
(94.7
)
(68.8
)
LIFO expense
162.8
60.1
Discretionary COVID-19 pandemic related
costs (2)
—
44.7
Government-mandated incremental COVID-19
pandemic related pay (3)
34.7
29.1
Combined Plan and UFCW National Fund
withdrawal (4)
(106.3
)
892.9
Miscellaneous adjustments (5)
19.5
(29.3
)
Adjusted EBITDA
$
4,510.6
$
4,141.1
(1)
Includes costs related to third-party
consulting fees related to our strategic priorities and associated
business transformation, as well as closures of operating
facilities.
(2)
Includes $44.7 million in bonus payments
related to front-line associates during the third quarter of fiscal
2020.
(3)
Represents incremental pay that is
legislatively required in certain municipalities in which we
operate.
(4)
Includes the $106.3 million gain during
the fourth quarter of fiscal 2021 and $607.2 million charge in the
fourth quarter of fiscal 2020 related to the withdrawal 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") and the $285.7 million charge in the third quarter
of fiscal 2020 related to the withdrawal from the United Food and
Commercial Workers International Union ("UFCW") Union-Industry
Pension Fund ("National Fund").
(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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