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Item 1. Financial Statements

2022-12-07 compared with 2022-06-07 · 204 added, 379 removed, 443 unchanged (57% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in millions, except for par amounts)

(in millions, except for par values)

2022 July 30,

3 unchanged sentences

Prepaid expenses and other current assets 214 184

Current assets of discontinued operations — 2

Total current assets 4,360 3,797

3 unchanged sentences

Intangible assets, net 801 819

Deferred income taxes 31 57

Other long-term assets 147 126

Long-term assets of discontinued operations — 2

Total assets $ 8,199 $ 7,628

5 unchanged sentences

Current portion of long-term debt and finance lease liabilities 27 27

Current liabilities of discontinued operations — 4

Total current liabilities 2,565 2,417

3 unchanged sentences

Pension and other postretirement benefit obligations 18 18

Deferred income taxes 17 8

Other long-term liabilities 181 194

5 unchanged sentences

Common stock, $ 0.01 par value, authorized 100.0 shares;

59.0 shares issued and 58.4 shares outstanding at April 30, 2022;

60.9 shares issued and 59.9 shares outstanding at October 29, 2022;

58.9 shares issued and 58.3 shares outstanding at July 30, 2022

1 unchanged sentence

Treasury stock at cost ( 36 ) ( 24 )

Accumulated other comprehensive income (loss) 22 ( 39 )

Accumulated other comprehensive loss ( 5 ) ( 20 )

Retained earnings 1,292 1,226

9 unchanged sentences

(in millions, except for per share data)

13-Week Period Ended 39-Week Period Ended

2021 April 30,

13-Week Period Ended

2022 October 30,

Net sales $ 7,532 $ 6,997

7 unchanged sentences

Interest expense, net 35 40

Other, net ( 1 ) ( 1 ) ( 2 ) ( 4 )

Income from continuing operations before income taxes 97 66 266 140

Provision for income taxes 29 16 53 32

Net income from continuing operations 68 50 213 108

Income from discontinued operations, net of tax — — — 3

Other (income) expense, net ( 1 ) 1

Income before income taxes 72 76

Provision (benefit) for income taxes 5 ( 1 )

Net income including noncontrolling interests 67 77

1 unchanged sentence

Net income attributable to United Natural Foods, Inc.

$ 67 $ 48 $ 209 $ 106

Basic earnings per share

Continuing operations $ 1.15 $ 0.85 $ 3.62 $ 1.84

Discontinued operations $ — $ 0.01 $ — $ 0.06

Basic earnings per share $ 1.15 $ 0.86 $ 3.62 $ 1.90

Diluted earnings per share:

Continuing operations $ 1.10 $ 0.79 $ 3.44 $ 1.73

Discontinued operations $ — $ 0.01 $ — $ 0.05

$ 1.12 $ 1.34

Diluted earnings per share

$ 1.07 $ 1.25

Weighted average shares outstanding:

6 unchanged sentences

(in millions)

13-Week Period Ended 39-Week Period Ended

2021 April 30,

13-Week Period Ended

2022 October 30,

Net income including noncontrolling interests $ 67 $ 77

7 unchanged sentences

Total comprehensive income attributable to United Natural Foods, Inc.

$ 98 $ 65 $ 270 $ 147

(1) Amounts are net of tax expense of $ 11 million, $ 5 million, $ 21 million and $ 12 million, respectively.

(2) Amounts are net of tax expense of $ 0 million , $ 0 million , $ 1 million and $ 0 million , respectively.

(1) Amounts are net of tax expense of $ 6 million and $ 4 million for the first quarters of fiscal 2023 and fiscal 2022, respectively.

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

For the 13-week periods ended April 30, 2022 and May 1, 2021

For the 13-week periods ended October 29, 2022 and October 30, 2021

(in millions)

1 unchanged sentence

Paid-in Capital Accumulated

Comprehensive Income (Loss) Retained Earnings Total United Natural Foods, Inc.

Comprehensive Loss Retained Earnings Total United Natural Foods, Inc.

Stockholders’ Equity Noncontrolling Interests Total Stockholders’ Equity

Shares Amount Shares Amount

Balances at January 29, 2022 58.8 $ 1 0.6 $ ( 24 ) $ 596 $ ( 9 ) $ 1,120 $ 1,684 $ ( 1 ) $ 1,683

Restricted stock vestings 0.2 — — — ( 7 ) — — ( 7 ) — ( 7 )

Share-based compensation — — — — 10 — — 10 — 10

Other comprehensive income — — — — — 31 — 31 — 31

Distributions to noncontrolling interests — — — — — — — — ( 1 ) ( 1 )

Net income — — — — — — 67 67 1 68

Balances at April 30, 2022 59.0 $ 1 0.6 $ ( 24 ) $ 599 $ 22 $ 1,187 $ 1,785 $ ( 1 ) $ 1,784

Balances at January 30, 2021 56.8 $ 1 0.6 $ ( 24 ) $ 581 $ ( 215 ) $ 887 $ 1,230 $ ( 1 ) $ 1,229

Balances at July 30, 2022 58.9 $ 1 0.6 $ ( 24 ) $ 608 $ ( 20 ) $ 1,226 $ 1,791 $ 1 $ 1,792

Restricted stock vestings 2.0 — — — ( 37 ) — — ( 37 ) — ( 37 )

Share-based compensation — — — — 12 — — 12 — 12

Repurchases of common stock — — 0.4 ( 12 ) — — — ( 12 ) — ( 12 )

Other comprehensive income — — — — — 15 — 15 — 15

Distributions to noncontrolling interests — — — — — — — — ( 2 ) ( 2 )

Acquisition of noncontrolling interests — — — — ( 1 ) — — ( 1 ) — ( 1 )

Net income — — — — — — 66 66 1 67

Balances at May 1, 2021 57.0 $ 1 0.6 $ ( 24 ) $ 588 $ ( 198 ) $ 935 $ 1,302 $ ( 1 ) $ 1,301

See accompanying Notes to Condensed Consolidated Financial Statements.

UNITED NATURAL FOODS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

For the 39-week periods ended April 30, 2022 and May 1, 2021

(in millions)

Common Stock Treasury Stock Additional

Paid-in Capital Accumulated

Comprehensive Income (Loss) Retained Earnings Total United Natural Foods, Inc.

Stockholders’ Equity Noncontrolling Interests Total Stockholders’ Equity

Shares Amount Shares Amount

Balances at October 29, 2022 60.9 $ 1 1.0 $ ( 36 ) $ 583 $ ( 5 ) $ 1,292 $ 1,835 $ — $ 1,835

Balances at July 31, 2021 57.0 $ 1 0.6 $ ( 24 ) $ 599 $ ( 39 ) $ 978 $ 1,515 $ ( 1 ) $ 1,514

5 unchanged sentences

Net income — — — — — — 76 76 1 77

Balances at April 30, 2022 59.0 $ 1 0.6 $ ( 24 ) $ 599 $ 22 $ 1,187 $ 1,785 $ ( 1 ) $ 1,784

Balances at August 1, 2020 55.3 $ 1 0.6 $ ( 24 ) $ 569 $ ( 239 ) $ 838 $ 1,145 $ ( 3 ) $ 1,142

Cumulative effect of change in accounting principle — — — — — — ( 9 ) ( 9 ) — ( 9 )

Restricted stock vestings 1.7 — — — ( 13 ) — — ( 13 ) — ( 13 )

Share-based compensation — — — — 33 — — 33 — 33

Other comprehensive income — — — — — 41 — 41 — 41

Distributions to noncontrolling interests — — — — — — — — ( 3 ) ( 3 )

Acquisition of noncontrolling interests — — — — ( 1 ) — — ( 1 ) — ( 1 )

Net income — — — — — — 106 106 5 111

Balances at May 1, 2021 57.0 $ 1 0.6 $ ( 24 ) $ 588 $ ( 198 ) $ 935 $ 1,302 $ ( 1 ) $ 1,301

Balances at October 30, 2021 58.7 $ 1 0.6 $ ( 24 ) $ 582 $ ( 24 ) $ 1,054 $ 1,589 $ ( 2 ) $ 1,587

See accompanying Notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

13-Week Period Ended

(in millions) April 30,

(in millions) October 29,

2022 October 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income including noncontrolling interests $ 67 $ 77

Income from discontinued operations, net of tax — 3

Net income from continuing operations 213 108

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization 74 69

3 unchanged sentences

Net pension and other postretirement benefit income ( 7 ) ( 10 )

Deferred income tax benefit — ( 2 )

Deferred income tax expense 2 —

LIFO charge 21 11

Provision (recoveries) for losses on receivables 4 ( 3 )

Provision for losses on receivables — 1

Non-cash interest expense and other adjustments 3 5

Changes in operating assets and liabilities ( 429 ) ( 246 )

Net cash (used in) provided by operating activities of continuing operations

Net cash used in operating activities of discontinued operations

Net cash (used in) provided by operating activities

Net cash used in operating activities

( 262 ) ( 81 )

CASH FLOWS FROM INVESTING ACTIVITIES:

2 unchanged sentences

Payments for investments ( 1 ) ( 26 )

Net cash provided by (used in) investing activities of continuing operations

Net cash provided by investing activities of discontinued operations

Net cash provided by (used in) investing activities

Net cash used in investing activities

( 61 ) ( 81 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from borrowings of long-term debt — 500

Proceeds from borrowings under revolving credit line 1,206 1,238

1 unchanged sentence

Repayments of long-term debt and finance leases ( 6 ) ( 13 )

Repurchases of common stock ( 12 ) —

Proceeds from the issuance of common stock and exercise of stock options — 5

Payment of employee restricted stock tax withholdings ( 42 ) ( 13 )

Payments for debt issuance costs ( 1 ) ( 12 )

Payments of employee restricted stock tax withholdings ( 37 ) ( 33 )

Distributions to noncontrolling interests ( 2 ) ( 2 )

Net cash used in financing activities

( 7 ) ( 232 )

Repayments of other loans ( 1 ) —

Net cash provided by financing activities

EFFECT OF EXCHANGE RATE ON CASH ( 1 ) —

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 7 ( 7 )

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 5 ) 5

Cash and cash equivalents, at beginning of period 44 41

2 unchanged sentences

Cash paid for interest $ 40 $ 46

Cash payments (receipts) for federal, state, and foreign income taxes, net $ — $ ( 22 )

Cash (refunds) for federal, state, and foreign income taxes, net $ ( 1 ) $ ( 1 )

Leased assets obtained in exchange for new operating lease liabilities $ 57 $ 71

Leased assets obtained in exchange for new finance lease liabilities $ 1 $ —

Additions of property and equipment included in Accounts payable $ 26 $ 17

6 unchanged sentences

United Natural Foods, Inc.

and its subsidiaries (the “Company”, “we”, “us”, “UNFI”, or “our”) is a leading distributor of natural, organic, specialty, produce and conventional grocery and non-food products, and provider of support services to retailers.

and its subsidiaries (the “Company” or “UNFI”) is a leading distributor of natural, organic, specialty, produce and conventional grocery and non-food products, and provider of support services to retailers.

The Company sells its products primarily throughout the United States and Canada.

The Company’s fiscal years end on the Saturday closest to July 31 and contain either 52 or 53 weeks.

References to the third quarter of fiscal 2022 and 2021 relate to the 13-week fiscal quarters ended April 30, 2022 and May 1, 2021, respectively.

References to fiscal 2022 and 2021 year-to-date relate to the 39-week fiscal periods ended April 30, 2022 and May 1, 2021, respectively.

References to the first quarter of fiscal 2023 and 2022 relate to the 13-week fiscal quarters ended October 29, 2022 and October 30, 2021, respectively.

Basis of Presentation

1 unchanged sentence

All significant intercompany transactions and balances have been eliminated in consolidation.

Unless otherwise indicated in these Condensed Consolidated Financial Statements, references to the Condensed Consolidated Statements of Operations, the Condensed Consolidated Balance Sheets and the Notes to the Condensed Consolidated Financial Statements exclude all amounts related to discontinued operations.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.

4 unchanged sentences

There were no material changes in significant accounting policies from those described in the Annual Report.

Discontinued Operations

In the fourth quarter of fiscal 2021, the Company determined it no longer met the held for sale criterion for a probable sale to be completed within 12 months for two of the four stores that were previously included within discontinued operations.

As a result, the Company revised its Condensed Consolidated Financial Statements to reclassify two Shoppers stores from discontinued operations to continuing operations.

Prior periods presented in the Condensed Consolidated Financial Statements have been conformed to the current period presentation.

The remaining two stores included in discontinued operations were sold in the second quarter of fiscal 2022.

Use of Estimates

6 unchanged sentences

Checks outstanding in excess of bank balances create book overdrafts, which are recorded in Accounts payable in the Condensed Consolidated Balance Sheets and are reflected as an operating activity in the Condensed Consolidated Statements of Cash Flows.

As of April 30, 2022 and July 31, 2021, the Company had net book overdrafts of $ 271 million and $ 268 million, respectively.

As of October 29, 2022 and July 30, 2022, the Company had net book overdrafts of $ 305 million and $ 266 million, respectively.

Reclassifications

Within the Condensed Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current year presentation.

Within the Condensed Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current period presentation.

These reclassifications had no impact on reported net income, cash flows, or total assets and liabilities.

2 unchanged sentences

To value discrete inventory items at lower of cost or net realizable value before application of any last-in, first-out (“LIFO”) reserve, the Company utilizes the weighted average cost method, perpetual cost method, the retail inventory method and the replacement cost method.

Allowances for vendor funds received from suppliers are recorded as a reduction to Inventories, net and subsequently within Cost of sales upon the sale of the related products.

Inventory quantities are evaluated throughout each fiscal year based on actual physical counts in our distribution facilities and stores.

Allowances for vendor funds and cash discounts received from suppliers are recorded as a reduction to Inventories, net and subsequently within Cost of sales upon the sale of the related products.

Inventory quantities are evaluated throughout each fiscal year based on actual physical counts in the Company’s distribution facilities and stores.

Allowances for inventory shortages are recorded based on the results of these counts to provide for estimated shortages as of the end of each fiscal year.

If the first-in, first-out method had been used, Inventories, net would have been higher by approximately $ 169 million and $ 67 million at April 30, 2022 and July 31, 2021, respectively.

The LIFO reserve was approximately $ 246 million and $ 225 million as of October 29, 2022 and July 30, 2022, respectively, which is recorded within Inventories, net on the Condensed Consolidated Balance Sheets.

NOTE 2—RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes .

ASU 2019-12 eliminates certain exceptions to Topic 740’s general principles.

The amendments also improve consistency in and simplify its application.

The Company adopted this standard in the first quarter of fiscal 2022.

The adoption of this standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

The temporary guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued.

ASU 2020-04 is effective from March 12, 2020 and may be applied prospectively through December 31, 2022.

In fiscal 2020, the Company elected the initial expedient to assert probability of its hedged interest rate transactions.

The Company expects to adopt the remaining applicable practical expedients of the standard in the fourth quarter of fiscal 2022 when it converts its LIBOR based contracts to Secured Overnight Financing Rate (“SOFR”) and does not expect a material impact on the Company’s Condensed Consolidated Financial Statements.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.

ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The amendments in this update also require additional disclosures for equity securities subject to contractual sale restrictions.

The Company is required to adopt this guidance in the first quarter of fiscal 2025.

The Company is in the process of reviewing the provisions of the new standard but does not expect the adoption to have a material impact on the Company’s consolidated financial statements.

NOTE 3—REVENUE RECOGNITION

3 unchanged sentences

• Independent retailers , which includes smaller size accounts, including single store and multiple store locations, and group purchasing entities that are not classified within Chains above or Other discussed below;

• Supernatural , which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of Whole Foods Market;

• Retail , which reflects our Retail segment, including Cub Foods and Shoppers stores, excluding Shoppers stores that were held for sale within discontinued operations;

• Supernatural , which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of one customer;

• Retail , which reflects the Company’s Retail segment, including Cub Foods and Shoppers stores, and

• Other , which includes international customers outside of Canada, foodservice, eCommerce, conventional military business and other sales.

2 unchanged sentences

Net Sales for the 13-Week Period Ended

(in millions) April 30, 2022

Customer Channel Wholesale Retail Other Eliminations (1)

Chains $ 3,111 $ — $ — $ — $ 3,111

Independent retailers 1,833 — — — 1,833

Supernatural 1,468 — — — 1,468

Retail — 602 — — 602

Other 565 — 60 — 625

Eliminations — — — ( 397 ) ( 397 )

Total $ 6,977 $ 602 $ 60 $ ( 397 ) $ 7,242

Net Sales for the 13-Week Period Ended

(in millions) May 1, 2021

Customer Channel Wholesale Retail Other Eliminations (1)

Chains $ 2,957 $ — $ — $ — $ 2,957

Independent retailers 1,599 — — — 1,599

Supernatural 1,287 — — — 1,287

Retail — 590 — — 590

Other 524 — 55 — 579

Eliminations — — — ( 381 ) ( 381 )

Total $ 6,367 $ 590 $ 55 $ ( 381 ) $ 6,631

Net Sales for the 39-Week Period Ended

(in millions) April 30, 2022

(in millions) October 29, 2022

Customer Channel Wholesale Retail Other Eliminations (1)

7 unchanged sentences

Net Sales for the 13-Week Period Ended

(in millions) May 1, 2021

(in millions) October 30, 2021

Customer Channel Wholesale Retail Other Eliminations (1)

6 unchanged sentences

Total $ 6,734 $ 602 $ 56 $ ( 395 ) $ 6,997

(1) Eliminations primarily includes the net sales elimination of Wholesale’s sales to Retail and the elimination of net sales included within Other to Wholesale.

(1) Eliminations primarily includes the net sales elimination of Wholesale to Retail sales and the elimination of sales from segments included within Other to Wholesale.

The Company serves customers in the United States and Canada, as well as customers located in other countries.

3 unchanged sentences

Accounts and notes receivable are as follows:

(in millions) April 30, 2022 July 31, 2021

(in millions) October 29, 2022 July 30, 2022

Customer accounts receivable $ 1,340 $ 1,213

4 unchanged sentences

Long-term notes receivable, net, included within Other long-term assets

NOTE 4—RESTRUCTURING, ACQUISITION AND INTEGRATION RELATED EXPENSES

Restructuring, acquisition and integration related expenses were as follows:

13-Week Period Ended 39-Week Period Ended

(in millions) April 30, 2022 May 1, 2021 April 30, 2022 May 1, 2021

Restructuring and integration costs $ 8 $ 12 $ 15 $ 41

Closed property charges and costs, net — ( 2 ) 1 3

Total $ 8 $ 10 $ 16 $ 44

Subsequent to the end of the first quarter of fiscal 2023, the Company entered into a purchase agreement with a third-party financial institution for the sale of certain accounts receivable up to $ 300 million, subject to eligibility criteria established by the financial institution.

The Company initially sold $ 253 million of accounts receivable under this agreement without recourse, in exchange for cash less a discount, as specified in the agreement.

After the initial sale, the Company does not retain any interest in the receivables.

The Company’s continuing involvement in transferred receivables is limited to servicing the receivables.

Pursuant to the terms of the agreement, certain receivables are sold to the third-party financial institution on a revolving basis, subject to certain limitations.

NOTE 4—GOODWILL AND INTANGIBLE ASSETS, NET

3 unchanged sentences

Change in foreign exchange rates — — —

Goodwill as of April 30, 2022

(1) Wholesale amounts are net of accumulated goodwill impairment charges of $ 717 million as of July 31, 2021 and April 30, 2022.

(2) Other amounts are net of accumulated goodwill impairment charges of $ 10 million as of July 31, 2021 and April 30, 2022.

Goodwill as of October 29, 2022

(1) Wholesale amounts are net of accumulated goodwill impairment charges of $ 717 million as of July 30, 2022 and October 29, 2022.

(2) Other amounts are net of accumulated goodwill impairment charges of $ 10 million as of July 30, 2022 and October 29, 2022.

Identifiable intangible assets, net consisted of the following:

April 30, 2022 July 31, 2021

October 29, 2022 July 30, 2022

(in millions) Gross Carrying

12 unchanged sentences

Intangibles assets, net $ 1,186 $ 385 $ 801 $ 1,186 $ 367 $ 819

Amortization expense was $ 18 million and $ 18 million for the third quarters of fiscal 2022 and 2021, respectively, and $ 54 million and $ 60 million for fiscal 2022 and 2021 year-to-date, respectively.

The estimated future amortization expense for each of the next five fiscal years and thereafter on definite lived intangible assets existing as of April 30, 2022 is as follows:

Amortization expense was $ 18 million and $ 18 million for the first quarters of fiscal 2023 and 2022, respectively.

The estimated future amortization expense for each of the next five fiscal years and thereafter on amortizing intangible assets existing as of October 29, 2022 is as shown below:

(in millions)

4 unchanged sentences

The following tables provide the fair value hierarchy for financial assets and liabilities measured on a recurring basis:

Condensed Consolidated Balance Sheets Location Fair Value at April 30, 2022

Condensed Consolidated Balance Sheets Location Fair Value at October 29, 2022

(in millions) Level 1 Level 2 Level 3

Fuel derivatives designated as hedging instruments Prepaid expenses and other current assets $ — $ 2 $ —

Foreign currency derivatives designated as hedging instruments Prepaid expenses and other current assets

Foreign currency derivatices designated as hedging instruments Prepaid expenses and other current assets $ — $ 2 $ —

Interest rate swaps designated as hedging instruments Prepaid expenses and other current assets $ — $ 16 $ —

Interest rate swaps designated as hedging instruments Other long-term assets $ — $ 11 $ —

Mutual funds Other long-term assets

Interest rate swaps designated as hedging instruments Accrued expenses and other current liabilities

Fuel derivatives designated as hedging instruments Accrued expenses and other current liabilities $ — $ 1 $ —

Condensed Consolidated Balance Sheets Location Fair Value at July 30, 2022

1 unchanged sentence

Fuel derivatives designated as hedging instruments Prepaid expenses and other current assets $ — $ 3 $ —

Mutual funds Other long-term assets

Foreign currency derivatives designated as hedging instruments Accrued expenses and other current liabilities

Interest rate swaps designated as hedging instruments Accrued expenses and other current liabilities $ — $ 33 $ —

Interest rate swaps designated as hedging instruments Prepaid expenses and other current assets $ — $ 3 $ —

Interest rate swaps designated as hedging instruments Other long-term assets $ — $ 1 $ —

Interest rate swaps designated as hedging instruments Other long-term liabilities $ — $ 2 $ —

1 unchanged sentence

The fair values of interest rate swap contracts are measured using Level 2 inputs.

The interest rate swap contracts are valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, LIBOR swap rates and credit default swap rates.

As of April 30, 2022, a 100 basis point increase in forward LIBOR interest rates would increase the fair value of the interest rate swaps by approximately $ 20 million;

a 100 basis point decrease in forward LIBOR interest rates would decrease the fair value of the interest rate swaps by approximately $ 21 million.

The interest rate swap contracts are valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, SOFR swap rates and credit default swap rates.

As of October 29, 2022, a 100-basis point increase in forward SOFR interest rates would increase the fair value of the interest rate swaps by approximately $ 14 million;

a 100-basis point decrease in forward SOFR interest rates would decrease the fair value of the interest rate swaps by approximately $ 14 million.

Refer to Note 6—Derivatives for further information on interest rate swap contracts.

4 unchanged sentences

In the table below, the carrying value of the Company’s long-term debt is net of original issue discounts and debt issuance costs.

April 30, 2022 July 31, 2021

October 29, 2022 July 30, 2022

(in millions) Carrying Value Fair Value Carrying Value Fair Value

5 unchanged sentences

Interest rate swap contracts are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures.

The Company’s interest rate swap contracts are designated as cash flow hedges as of April 30, 2022.

The Company’s interest rate swap contracts are designated as cash flow hedges as of October 29, 2022.

Interest rate swap contracts are reflected at their fair values in the Condensed Consolidated Balance Sheets.

Refer to Note 5—Fair Value Measurements of Financial Instruments for further information on the fair value of interest rate swap contracts.

Details of active swap contracts as of April 30, 2022, which are all pay fixed and receive floating, are as follows:

Effective Date Swap Maturity Notional Value (in millions) Pay Fixed Rate Receive Floating Rate (2)

Floating Rate Reset Terms

August 3, 2015 (1)

August 15, 2022 $ 30 1.7950 % One-Month LIBOR Monthly

October 26, 2018 October 31, 2022 100 2.8915 % One-Month LIBOR Monthly

January 11, 2019 October 31, 2022 50 2.4678 % One-Month LIBOR Monthly

January 23, 2019 October 31, 2022 50 2.5255 % One-Month LIBOR Monthly

November 16, 2018 March 31, 2023 150 2.8950 % One-Month LIBOR Monthly

January 23, 2019 March 31, 2023 50 2.5292 % One-Month LIBOR Monthly

November 30, 2018 September 30, 2023 50 2.8315 % One-Month LIBOR Monthly

October 26, 2018 October 31, 2023 100 2.9210 % One-Month LIBOR Monthly

January 11, 2019 March 28, 2024 100 2.4770 % One-Month LIBOR Monthly

January 23, 2019 March 28, 2024 100 2.5420 % One-Month LIBOR Monthly

November 30, 2018 October 31, 2024 100 2.8480 % One-Month LIBOR Monthly

January 11, 2019 October 31, 2024 100 2.5010 % One-Month LIBOR Monthly

January 24, 2019 October 31, 2024 50 2.5210 % One-Month LIBOR Monthly

October 26, 2018 October 22, 2025 50 2.9550 % One-Month LIBOR Monthly

November 16, 2018 October 22, 2025 50 2.9590 % One-Month LIBOR Monthly

November 16, 2018 October 22, 2025 50 2.9580 % One-Month LIBOR Monthly

January 24, 2019 October 22, 2025 50 2.5558 % One-Month LIBOR Monthly

(1) The swap contract has an amortizing notional principal amount which is reduced by $ 1 million on a quarterly basis.

(2) Subsequent to the third quarter of fiscal 2022, the Company amended the reference rate in all of its outstanding interest rate swap contracts to replace One-Month LIBOR with One-Month Term SOFR and certain credit spread adjustments.

The Company does not expect to record any gains or losses upon the conversion of the reference rates in these interest rate swap contracts, and the Company believes these amendments will not have a material impact on its Condensed Consolidated Financial Statements.

In the third quarter of fiscal 2021, in order to reduce its exposure to pay fixed and receive floating interest rate swap contracts due to lower levels of debt balances with floating interest rates, the Company paid $ 6 million to terminate certain outstanding interest rate swaps with a notional amount of $ 250 million.

In the first quarter of fiscal 2021, in conjunction with the $ 500 million fixed rate senior unsecured notes offering described below in Note 8—Long-Term Debt, the Company paid $ 11 million to terminate or novate certain outstanding interest rate swaps with a notional amount of $ 504 million and certain forward starting interest rate swaps with a notional amount of $ 450 million.

The payments equaled the fair value of the interest rate swaps at the time of their termination or novation.

No gain or loss was recorded as a result of the swap terminations and novations.

Since the hedged interest payments remain probable of occurring, the unrecognized gains and losses that existed as of the early termination or novation of these interest rate swap agreements will be amortized out of Accumulated other comprehensive loss and into Interest expense, net over the remaining period of the original terminated or novated interest rate swap agreements.

If any of the hedged interest payments were not probable of occurring, then a charge representing an accelerated amortization of the unrecognized gains and losses would be recorded.

Cash payments resulting from the termination or novation of interest rate swaps are classified as operating activities in the Company’s Condensed Consolidated Statements of Cash Flows.

Details of active swap contracts as of October 29, 2022, which are all pay fixed and receive floating, are as follows:

Effective Date Swap Maturity Notional Value (in millions) Pay Fixed Rate Receive Floating Rate Floating Rate Reset Terms

October 26, 2018 October 31, 2022 100 2.8170 % One-Month Term SOFR Monthly

January 11, 2019 October 31, 2022 50 2.3770 % One-Month Term SOFR Monthly

January 23, 2019 October 31, 2022 50 2.2740 % One-Month Term SOFR Monthly

November 16, 2018 March 31, 2023 150 2.7770 % One-Month Term SOFR Monthly

January 23, 2019 March 31, 2023 50 2.4245 % One-Month Term SOFR Monthly

November 30, 2018 September 30, 2023 50 2.6980 % One-Month Term SOFR Monthly

October 26, 2018 October 31, 2023 100 2.7880 % One-Month Term SOFR Monthly

January 11, 2019 March 28, 2024 100 2.3600 % One-Month Term SOFR Monthly

January 23, 2019 March 28, 2024 100 2.4250 % One-Month Term SOFR Monthly

November 30, 2018 October 31, 2024 100 2.7385 % One-Month Term SOFR Monthly

January 11, 2019 October 31, 2024 100 2.4025 % One-Month Term SOFR Monthly

January 24, 2019 October 31, 2024 50 2.4090 % One-Month Term SOFR Monthly

October 26, 2018 October 22, 2025 50 2.8725 % One-Month Term SOFR Monthly

November 16, 2018 October 22, 2025 50 2.8750 % One-Month Term SOFR Monthly

November 16, 2018 October 22, 2025 50 2.8380 % One-Month Term SOFR Monthly

January 24, 2019 October 22, 2025 50 2.4750 % One-Month Term SOFR Monthly

The Company performs an initial quantitative assessment of hedge effectiveness using the “Hypothetical Derivative Method” in the period in which the hedging transaction is entered.

2 unchanged sentences

The Company also monitors the risk of counterparty default on an ongoing basis and noted that the counterparties are reputable financial institutions.

The entire change in the fair value of the derivative is initially reported in Other comprehensive income (outside of earnings) in the Condensed Consolidated Statements of Comprehensive Income and subsequently reclassified to earnings in Interest expense, net in the Condensed Consolidated Statements of Operations when the hedged transactions affect earnings.

The entire change in the fair

value of the derivative is initially reported in Other comprehensive income (outside of earnings) in the Condensed Consolidated Statements of Comprehensive Income and subsequently reclassified to earnings in Interest expense, net in the Condensed Consolidated Statements of Operations when the hedged transactions affect earnings.

The location and amount of gains or losses recognized in the Condensed Consolidated Statements of Operations for interest rate swap contracts for each of the periods, presented on a pre-tax basis, are as follows:

13-Week Period Ended 39-Week Period Ended

April 30, 2022 May 1, 2021 April 30, 2022 May 1, 2021

(in millions) Interest expense, net Interest expense, net

13-Week Period Ended

October 29, 2022 October 30, 2021

(in millions) Interest expense, net

Total amounts of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded

$ 37 $ 44 $ 121 $ 164

Loss on cash flow hedging relationships:

3 unchanged sentences

(in millions) Average Interest Rate at

April 30, 2022

Fiscal Maturity Year April 30,

October 29, 2022

Fiscal Maturity Year October 29,

2022 July 30,

8 unchanged sentences

Long-term debt $ 2,485 $ 2,109

Refinancing Activities

Subsequent to the end of the third quarter of fiscal 2022, on June 3, 2022, the Company entered into a new loan agreement (the “2022 ABL Loan Agreement”), by and among the Company (the “2022 U.S.

Borrower”) and UNFI Canada, Inc.

(the “2022 Canadian Borrower” and, together with the 2022 U.S.

On October 22, 2020, the Company issued $ 500 million of unsecured 6.750 % senior notes due October 15, 2028 (the “Senior Notes”).

The Senior Notes, which are presented net of debt issuance costs of $ 7 million as of October 29, 2022 and July 30, 2022 in the Condensed Consolidated Balance Sheets, are guaranteed by each of the Company’s subsidiaries that are borrowers under or that guarantee the ABL Credit Facility or the Term Loan Facility (defined below).

ABL Credit Facility

The revolving credit agreement dated as of June 3, 2022 (the “ABL Loan Agreement”), by and among the Company (the “U.S.

Borrower”), UNFI Canada (the “Canadian Borrower” and, together with the U.S.

Borrower, the “Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “ABL Lenders”), Wells Fargo Bank, N.A.

as administrative agent for the 2022 ABL Lenders, and the other parties thereto, which provides for a secured asset-based revolving credit facility (the “2022 ABL Credit Facility”), of which up to $ 2,600 million is available to the 2022 Borrowers, including a U.S.

as administrative agent for the ABL Lenders, and the other parties thereto, provides for a secured asset-based revolving credit facility (the “ABL Credit Facility”), of which up to $ 2,600 million is available to the Borrowers, including a U.S.

Dollar equivalent of $ 100 million sublimit for borrowings in Canadian dollars.

The 2022 ABL Credit Facility replaced the Company’s existing $ 2,100 million ABL Credit Facility (defined below).

Under the ABL Loan Agreement, the Borrowers may, at their option, increase the aggregate amount of the ABL Credit Facility in an amount of up to $ 750 million without the consent of any ABL Lenders not participating in such increase, subject to certain customary conditions and applicable lenders committing to provide the increase in funding.

There is no assurance that additional funding would be available.

Effective June 3, 2022, the Company used borrowings under the 2022 ABL Loan Agreement to repay all amounts outstanding under the ABL Loan Agreement and terminated the ABL Credit Facility.

The 2022 ABL Loan Agreement utilizes Term SOFR and Prime rates as the benchmark interest rates.

Borrowings under the 2022 ABL Credit Facility bear interest at rates that, at the 2022 Borrowers’ option, can be either:

(i) a base rate plus a 0.00 % - 0.25 % margin or (ii) a Term SOFR rate plus a 1.00 % - 1.25 % margin.

Unutilized commitments under the 2022 ABL Credit Facility are subject to a per annum fee of 0.20 %.

The 2022 ABL Credit Facility will expire at the earlier of (i) June 3, 2027, and (ii) the date that is ninety days prior to the maturity date of the Term Loan Facility (defined below) if on such date more than $ 100 million of borrowings under the Term Loan Facility remain outstanding and matures prior to June 3, 2027.

The 2022 ABL Loan Agreement subjects the Company to a fixed charge coverage ratio of at least 1.0 to 1.0 calculated at the end of each of the Company’s fiscal quarters on a rolling four quarter basis, if the adjusted aggregate availability is ever less than the greater of (i) $ 210 million and (ii) 10 % of the aggregate borrowing base.

The 2022 ABL Loan Agreement contains certain operational and informational covenants customary for this type of secured revolving credit facility, which limit the Company’s restricted subsidiaries’ ability to, among other things, incur debt, declare or pay dividends or make other distributions to its stockholders, transfer or sell assets, create liens on our assets, engage in transactions with affiliates and merge, consolidate or sell all or substantially all of the Company’s and its subsidiaries’ assets on a consolidated basis.

If the Company fails to comply with any of these covenants, it may be in default under the applicable debt agreement, and all amounts due thereunder may become immediately due and payable.

The Borrowers’ obligations under the ABL Credit Facility are guaranteed by most of the Company’s wholly owned subsidiaries (collectively, the “Guarantors”), subject to customary exceptions and limitations.

The Borrowers’ obligations under the ABL Credit Facility and the Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on all of the Borrowers’ and Guarantors’ accounts receivable, inventory and certain other assets arising therefrom or related thereto (including substantially all of their deposit accounts, collectively, the “ABL Assets”) and (ii) a second-priority lien on all of the Borrowers’ and Guarantors’ assets that do not constitute ABL Assets, in each case, subject to customary exceptions and limitations.

Availability under the 2022 ABL Credit Facility is subject to a borrowing base (the “2022 Borrowing Base”), which is based on 90 % of eligible accounts receivable, plus 90 % of eligible credit card receivables, plus 90.0 % - 92.5 % of the net orderly liquidation value of eligible inventory, plus 90 % of eligible pharmacy receivables, plus certain pharmacy prescription files availability of the 2022 Borrowers, after adjusting for customary reserves, but at no time shall exceed the lesser of the aggregate commitments under the 2022 ABL Credit Facility (currently $ 2,600 million) or the 2022 Borrowing Base.

On October 22, 2020, the Company issued $ 500 million of unsecured 6.750 % Senior Notes due October 15, 2028 (the “Senior Notes”).

The Senior Notes are guaranteed by each of the Company’s subsidiaries that are borrowers under or that guarantee the 2022 ABL Credit Facility or the Term Loan Facility (defined below).

ABL Credit Facility

The ABL Loan Agreement by and among the Company and United Natural Foods West, Inc.

(together with the Company, the “U.S.

Borrowers”) and UNFI Canada, Inc.

(the “Canadian Borrower” and, together with the U.S.

Borrowers, the “Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “ABL Lenders”), Bank of America, N.A.

as administrative agent for the ABL Lenders, Bank of America, N.A.

(acting through its Canada branch), as Canadian agent for the ABL Lenders, and the other parties thereto, provides for a secured asset-based revolving credit facility (the “ABL Credit Facility” and the loans thereunder, the “ABL Loans”), of which up to (i) $ 2,050 million is available to the U.S.

Borrowers and (ii) $ 50 million is available to the Canadian Borrower.

The ABL Loan Agreement also provides for (i) a $ 300 million sublimit of availability for letters of credit of which there is a further $ 25 million sublimit for the Canadian Borrower.

Under the ABL Loan Agreement, the Borrowers may, at their option, increase the aggregate amount of the ABL Credit Facility in an amount of up to $ 600 million without the consent of any ABL Lenders not participating in such increase, subject to certain customary conditions and applicable lenders committing to provide the increase in funding.

There is no assurance that additional funding would be available.

The Borrowers’ obligations under the ABL Credit Facility are guaranteed by the Guarantors, subject to customary exceptions and limitations.

The Borrowers’ obligations under the ABL Credit Facility and the Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on all of the Borrowers’ and Guarantors’ accounts receivable, inventory and ABL Assets and (ii) a second-priority lien on all of the Borrowers’ and Guarantors’ assets that do not constitute ABL Assets, in each case, subject to customary exceptions and limitations.

Availability under the ABL Credit Facility is subject to a borrowing base (the “Borrowing Base”), which is based on 90 % of eligible accounts receivable, plus 90 % of eligible credit card receivables, plus 90 % of the net orderly liquidation value of eligible inventory, plus 90 % of eligible pharmacy receivables, plus certain pharmacy prescription files availability of the Borrowers, after adjusting for customary reserves, but at no time shall exceed the lesser of the aggregate commitments under the ABL Credit Facility ($ 2,100 million at April 30, 2022) or the Borrowing Base.

Availability under the ABL Credit Facility is subject to a borrowing base (the “Borrowing Base”), which is based on 90 % of eligible accounts receivable, plus 90 % of eligible credit card receivables, plus 90 % to 92.5 % of the net orderly liquidation value of eligible inventory, plus 90 % of eligible pharmacy receivables, plus certain pharmacy prescription files availability to the Borrowers, after adjusting for customary reserves, but at no time shall exceed the lesser of the aggregate commitments under the ABL Credit Facility (currently $ 2,600 million) or the Borrowing Base.

The assets included in the Condensed Consolidated Balance Sheets securing the outstanding obligations under the ABL Credit Facility on a first-priority basis, and the unused credit and fees under the ABL Credit Facility, were as follows:

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2022 July 30,

Certain inventory assets included in Inventories, net and Current assets of discontinued operations $ 2,696 $ 2,297

Certain receivables included in Accounts receivable, net and Current assets of discontinued operations $ 1,134 $ 1,041

(1) The ABL Credit Facility is also secured by all of the Company’s pharmacy prescription files, which are included in Intangibles, net in the Condensed Consolidated Balance Sheets.

Refer to Note 5—Goodwill and Intangible Assets, Net for additional information.

As of April 30, 2022, the U.S.

Borrowers’ Borrowing Base, net of $ 135 million of reserves, was $ 2,649 million, which is above the $ 2,050 million limit of availability to the U.S.

Borrowers under the ABL Credit Facility.

As of April 30, 2022, the Canadian Borrower’s Borrowing Base, net of $ 6 million of reserves, was $ 46 million, which is below the $ 50 million limit of availability to the Canadian Borrower under the ABL Credit facility, resulting in total availability of $ 2,096 million for ABL Loans and letters of credit under the ABL Credit Facility.

As of April 30, 2022, the U.S.

Borrowers had $ 1,101 million of ABL Loans and the Canadian Borrower had no ABL Loans outstanding under the ABL Credit Facility, which are presented net of debt issuance costs of $ 5 million and are included in Long-term debt on the Condensed Consolidated Balance Sheets.

As of April 30, 2022, the U.S.

Borrowers had $ 134 million in letters of credit and the Canadian Borrower had no letters of credit outstanding under the ABL Credit Facility.

The Company’s resulting remaining availability under the ABL Credit Facility was $ 861 million as of April 30, 2022.

ABL availability (in millions):

April 30, 2022

Certain inventory assets included in Inventories, net $ 2,153 $ 1,789

Certain receivables included in Accounts receivable, net 783 878

Pharmacy prescription files included in Intangible assets, net 14 15

Total $ 2,950 $ 2,682

As of October 29, 2022, the Borrowers’ Borrowing Base, net of $ 110 million of reserves, was $ 2,898 million, which is above the $ 2,600 million limit of availability, resulting in total availability of $ 2,600 million for loans and letters of credit under the ABL Credit Facility.

As of October 29, 2022, the Borrowers had $ 1,217 million of loans outstanding under the ABL Credit Facility, which are presented net of debt issuance costs of $ 10 million and are included in Long-term debt in the Condensed Consolidated Balance Sheets.

As of October 29, 2022, the U.S.

Borrowers had $ 133 million in letters of credit outstanding under the ABL Credit Facility.

The Company’s resulting remaining availability under the ABL Credit Facility was $ 1,250 million as of October 29, 2022.

Availability under the ABL Credit Facility (in millions):

October 29, 2022

Total availability for ABL loans and letters of credit $ 2,600

2 unchanged sentences

Unused credit $ 1,250

The applicable interest rates, letter of credit fees and unutilized commitment fees under the ABL Credit Facility are variable and are dependent upon the prior fiscal quarter’s daily Average Availability (as defined in the ABL Loan Agreement), and were as follows:

The applicable interest rates, unutilized commitment fees and letter of credit fees under the ABL Credit Facility are variable and are dependent upon the prior fiscal quarter’s daily Average Availability (as defined in the ABL Loan Agreement), and were as follows:

Interest rates and fees under the ABL Credit Facility:

Range of Facility Rates and Fees (per annum) April 30, 2022

and Canadian Borrowers’ applicable margin for base rate loans — % - 0.50 %

and Canadian Borrowers’ applicable margin for LIBOR and BA loans (1)

Range of Facility Rates and Fees (per annum) October 29, 2022

Borrowers’ applicable margin for base rate loans 0.00 % - 0.25 %

Borrowers’ applicable margin for SOFR and BA loans (1)

1.00 % - 1.25 %

1 unchanged sentence

Letter of credit fees 1.125 % - 1.375 %

Borrowers utilize LIBOR-based loans and the Canadian Borrower utilizes bankers’ acceptance rate-based loans.

Borrower utilizes SOFR-based loans and the Canadian Borrower utilizes bankers’ acceptance rate-based loans.

Term Loan Facility

The term loan agreement (“Term Loan Agreement”), by and among the Company and SUPERVALU INC.

(“Supervalu” and collectively with the Company, the “Term Borrowers”), the financial institutions that are parties thereto as lenders, Credit Suisse, as administrative agent for the Lenders, and the other parties thereto, provides for senior secured first lien term loans in an initial aggregate principal amount of $ 1,800 million in a seven-year tranche (the “Term Loan Facility”).

The loans under the Term Loan Facility will be payable in full on October 22, 2025.

Under the Term Loan Agreement, the Company may, at its option, increase the amount of the Term Loan Facility, add one or more additional tranches of term loans or add one or more additional tranches of revolving credit commitments, without the consent of any Term Lenders not participating in such additional borrowings, up to an aggregate amount of $ 656 million plus additional amounts based on satisfaction of certain leverage ratio tests, subject to certain customary conditions and applicable lenders committing to provide the additional funding.

There can be no assurance that additional funding would be available.

The term loan agreement dated as of October 22, 2018 (as amended, the “Term Loan Agreement”), by and among the Company and SUPERVALU INC.

(“Supervalu” and, collectively with the Company, the “Term Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “Term Lenders”), Credit Suisse, as administrative agent for the Term Lenders, and the other parties thereto, provides for senior secured first lien term loans in an initial aggregate principal amount of $ 1,950 million, consisting of a $ 1,800 million seven-year tranche and a $ 150 million 364 -day tranche that was repaid in fiscal 2020 (the “Term Loan Facility”).

The net proceeds from the Term Loan Facility were used to finance the Supervalu acquisition and related transaction costs.

Any amounts then outstanding will be payable in full on October 22, 2025.

The obligations under the Term Loan Facility are guaranteed by the Guarantors, subject to customary exceptions and limitations.

The Term Borrowers’ obligations under the Term Loan Facility and the Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ assets other than the ABL Assets and (ii) a second-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ ABL Assets, in each case, subject to customary exceptions and limitations, including an exception for owned real property with net book values of less than $ 10 million.

As of April 30, 2022 and July 31, 2021, there was $ 627 million and $ 676 million, respectively, of owned real property pledged as collateral that was included in Property and equipment, net in the Condensed Consolidated Balance Sheets.

As of October 29, 2022 and July 30, 2022, there was $ 623 million and $ 629 million, respectively, of owned real property pledged as collateral that was included in Property and equipment, net in the Condensed Consolidated Balance Sheets.

The Company must prepay loans outstanding under the Term Loan Facility no later than 130 days after the fiscal year end in an aggregate principal amount equal to a specified percentage (which percentage ranges from 0 to 75 percent depending on the Consolidated First Lien Net Leverage Ratio as of the last day of such fiscal year) of Excess Cash Flow (as defined in the Term Loan Agreement), minus certain types of voluntary prepayments of indebtedness made during such fiscal year.

Based on the Company’s Consolidated First Lien Net Leverage Ratio at the end of fiscal 2021, no prepayment from Excess Cash Flow in fiscal 2021 is required to be made in fiscal 2022.

The potential amount of prepayment from Excess Cash Flow in fiscal 2022 that may be required in fiscal 2023 is not reasonably estimable as of April 30, 2022.

As of April 30, 2022, the Company had borrowings of $ 800 million outstanding under the Term Loan Facility, which are presented in the Condensed Consolidated Balance Sheets net of debt issuance costs of $ 13 million and an original issue discount on debt of $ 11 million.

As of April 30, 2022, no amount of the Term Loan Facility was classified as current.

As of April 30, 2022, the borrowings under the Term Loan Facility bear interest at rates that, at the Term Borrowers’ option, can be either:

(i) a base rate plus a margin of 2.25 % or (ii) a LIBOR rate plus a margin of 3.25 %;

provided that the LIBOR rate shall never be less than 0.0 %.

The Term Loan Agreement contains provisions for the establishment of an alternative rate of interest in the event that LIBOR is no longer available.

On November 10, 2021, the Company entered into an amendment (the “Second Term Loan Amendment”) amending the Term Loan Agreement.

The amendment provides for (i) the reduction of the applicable margin for LIBOR loans from 3.50 % to 3.25 % and the applicable margin for base rate loans from 2.50 % to 2.25 %, and (ii) other administrative changes.

The amendment did not change the aggregate amount or maturity date of the Term Loan Facility.

In conjunction with the Second Term Loan Amendment, the Company made a voluntary prepayment of $ 150 million on the Term Loan Facility funded with incremental borrowings under the ABL Credit Facility that reduced its interest costs.

In connection with this prepayment, the Company incurred a loss on debt extinguishment of $ 5 million related to unamortized debt issuance costs and a loss on unamortized original issue discount, which was recorded within Interest expense, net in the second quarter of fiscal 2022.

On March 1, 2022, the Company made a $ 44 million voluntary prepayment on the Term Loan Facility from the majority of the after-tax net proceeds from the sale-leaseback of an acquired distribution center that was previously leased.

These voluntary prepayments will count towards any requirement to prepay the Term Loan Facility from Excess Cash Flow (as defined in the Term Loan Agreement) generated during fiscal 2022, which would be due in fiscal 2023.

Subsequent to the end of the third quarter of fiscal 2022, on June 3, 2022, the Company entered into an amendment (the “Third Term Loan Amendment”) to the Term Loan Agreement to amend the reference rate thereunder from LIBOR to Term SOFR.

There were no other changes to the Term Loan Agreement as a result of the Third Loan Amendment.

The Company does not expect to record any gains or losses on the conversion of these interest rate swap contracts from LIBOR to SOFR.

NOTE 9—COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in Accumulated other comprehensive income (loss) by component, net of tax, for fiscal 2022 year-to-date are as follows:

The potential amount of prepayment from Excess Cash Flow in fiscal 2023 that may be required in fiscal 2024 is not reasonably estimable as of October 29, 2022.

As of October 29, 2022, the Company had borrowings of $ 800 million outstanding under the Term Loan Facility, which are presented in the Condensed Consolidated Balance Sheets net of debt issuance costs of $ 11 million and an original issue discount on debt of $ 10 million.

As of October 29, 2022, no amount of the Term Loan Facility was classified as current.

Subsequent to the end of the first quarter of fiscal 2023, the Company made a $ 125 million voluntary prepayment on the Term Loan Facility with a portion of the proceeds received from monetizing certain receivables within Accounts receivable, net associated with the Company’s purchase agreement with a third-party financial institution as previously discussed within Note 3—Revenue Recognition.

This voluntary prepayment will count towards any requirement to prepay the Term Loan Facility from Excess Cash Flow (as defined in the Term Loan Agreement) generated during fiscal 2023, which would be due in fiscal 2024.

NOTE 8—COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in Accumulated other comprehensive loss by component, net of tax, for the first quarter of fiscal 2023 were as follows:

(in millions) Other Cash Flow Derivatives Benefit Plans Foreign Currency Translation Swap Agreements Total

Accumulated other comprehensive income (loss) at July 30, 2022 $ 2 $ ( 3 ) $ ( 19 ) $ — $ ( 20 )

Other comprehensive income (loss) before reclassifications 1 — ( 3 ) 36 34

Amortization of amounts included in net periodic benefit income — 2 — — 2

Other comprehensive (loss) income before reclassifications ( 1 ) — ( 3 ) 18 14

Amortization of cash flow hedges 1 — — — 1

Net current period Other comprehensive income (loss) 4 2 ( 3 ) 58 61

Accumulated other comprehensive income (loss) at April 30, 2022 $ 4 $ 39 $ ( 19 ) $ ( 2 ) $ 22

Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2021 year-to-date are as follows:

(in millions) Benefit Plans Foreign Currency Translation Swap Agreements Total

Accumulated other comprehensive loss at August 1, 2020 $ ( 116 ) $ ( 21 ) $ ( 102 ) $ ( 239 )

Net current period Other comprehensive (loss) income — — ( 3 ) 18 15

Accumulated other comprehensive income (loss) at October 29, 2022 $ 2 $ ( 3 ) $ ( 22 ) $ 18 $ ( 5 )

Changes in Accumulated other comprehensive loss by component, net of tax, for the first quarter of fiscal 2022 were as follows:

(in millions) Other Cash Flow Derivatives Benefit Plans Foreign Currency Translation Swap Agreements Total

Accumulated other comprehensive income (loss) at July 31, 2021 $ — $ 37 $ ( 16 ) $ ( 60 ) $ ( 39 )

Other comprehensive income before reclassifications 1 — — 5 6

1 unchanged sentence

Amortization of cash flow hedges — — — 8 8

Net current period Other comprehensive (loss) income ( 1 ) 6 36 41

Accumulated other comprehensive loss at May 1, 2021 $ ( 117 ) $ ( 15 ) $ ( 66 ) $ ( 198 )

Items reclassified out of Accumulated other comprehensive income (loss) had the following impact on the Condensed Consolidated Statements of Operations:

13-Week Period Ended 39-Week Period Ended Affected Line Item on the Condensed Consolidated Statements of Operations

(in millions) April 30,

2021 April 30,

Net current period Other comprehensive income 1 1 — 13 15

Accumulated other comprehensive income (loss) at October 30, 2021 $ 1 $ 38 $ ( 16 ) $ ( 47 ) $ ( 24 )

Items reclassified out of Accumulated other comprehensive loss had the following impact on the Condensed Consolidated Statements of Operations:

13-Week Period Ended Affected Line Item on the Condensed Consolidated Statements of Operations

(in millions) October 29,

2022 October 30,

Pension and postretirement benefit plan net assets:

1 unchanged sentence

$ — $ 1 Net periodic benefit income, excluding service cost

Income tax expense (benefit) — — — — Provision for income taxes

Income tax benefit — — Benefit for income taxes

Total reclassifications, net of tax $ — $ 1

1 unchanged sentence

Reclassification of cash flow hedges $ — $ 11 Interest expense, net

Income tax benefit ( 2 ) ( 2 ) ( 8 ) ( 9 ) Provision for income taxes

Income tax benefit — ( 3 ) Benefit for income taxes

Total reclassifications, net of tax $ — $ 8

1 unchanged sentence

Reclassification of cash flow hedge $ 1 $ — Cost of sales

Income tax benefit — — ( 1 ) — Provision for income taxes

Total reclassification, net of tax $ 2 $ — $ 3 $ —

Income tax benefit — — Benefit for income taxes

Total reclassifications, net of tax $ 1 $ —

(1) Reclassification of amounts included in net periodic benefit income include reclassification of prior service cost and reclassification of net actuarial loss as reflected in Note 10—Benefit Plans.

As of April 30, 2022, the Company expects to reclassify $ 2 million related to unrealized derivative gains out of Accumulated other comprehensive income (loss) and primarily into Interest expense, net during the following twelve-month period.

As of October 29, 2022, the Company expects to reclassify $ 19 million related to unrealized derivative gains on interest rate swap hedges out of Accumulated other comprehensive loss and primarily into Interest expense, net during the following twelve-month period.

NOTE 9—SHARE-BASED AWARDS

In fiscal 2022 year-to-date, the Company granted restricted stock units and performance share units to its directors, executive officers and certain employees representing a right to receive an aggregate of 1.2 million shares.

As of April 30, 2022, there were 2.9 million shares available for issuance under the Amended and Restated 2020 Equity Incentive Plan.

In the first quarter of fiscal 2023, the Company granted restricted stock units and performance share units to its directors, executive officers and certain employees representing a right to receive an aggregate of 1.5 million shares.

As of October 29, 2022, there were 1.6 million shares available for issuance under the Amended and Restated 2020 Equity Incentive Plan.

NOTE 10—BENEFIT PLANS

Net periodic benefit income and contributions to defined benefit pension and other post-retirement benefit plans consisted of the following:

13-Week Period Ended

Pension Benefits Other Postretirement Benefits

(in millions) April 30, 2022 May 1, 2021 April 30, 2022 May 1, 2021

Net Periodic Benefit (Income) Cost

Interest cost $ 10 $ 10 $ — $ ( 1 )

Expected return on plan assets ( 20 ) ( 26 ) — —

Amortization of net actuarial gain — — — —

Net periodic benefit income $ ( 10 ) $ ( 16 ) $ — $ ( 1 )

Contributions to benefit plans $ ( 1 ) $ — $ — $ ( 1 )

Net periodic benefit income and contributions to defined benefit pension and other postretirement benefit plans consisted of the following:

13-Week Period Ended

Pension Benefits Other Postretirement Benefits

(in millions) April 30, 2022 May 1, 2021 April 30, 2022 May 1, 2021

(in millions) October 29, 2022 October 30, 2021 October 29, 2022 October 30, 2021

Net Periodic Benefit (Income) Cost

1 unchanged sentence

Expected return on plan assets ( 24 ) ( 21 ) — —

Amortization of prior service cost (credit) — — 2 ( 1 )

Amortization of net actuarial loss (gain) — 1 — ( 1 )

Amortization of prior service cost — — — 1

Net periodic benefit (income) cost $ ( 7 ) $ ( 11 ) $ — $ 1

Contributions to benefit plans $ — $ — $ — $ ( 1 )

Defined Benefit Plan Merger

In the second quarter of fiscal 2022, the Company merged the Unified Grocers, Inc.

Cash Balance Plan into the SUPERVALU INC.

Retirement Plan.

The merger did not impact the amount of plan assets and accumulated benefit plan obligations;

however, as a result of the merger, former Unified Grocers, Inc.

Cash Balance Plan participants will receive all benefits from the SUPERVALU INC.

Retirement Plan.

As such, the funded status of the remaining plan in the Condensed Consolidated Balance Sheets has been presented within a single asset balance within Other long-term assets.

Pension Contributions

Contributions

No minimum pension contributions are required to be made under the SUPERVALU INC.

Retirement Plan under the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) in fiscal 2023.

The Company expects to contribute approximately $ 2 million and $ 3 million, respectively, to its other non-qualified pension plans and postretirement benefit plans in fiscal 2022.

The Company expects to contribute approximately $ 1 million to its other defined benefit pension plans and $ 1 million to its postretirement benefit plans in fiscal 2023.

Multiemployer Pension Plans

The Company contributed $ 12 million and $ 12 million in the third quarters of fiscal 2022 and 2021, respectively, and $ 34 million and $ 36 million in fiscal 2022 and 2021 year-to-date, respectively, to multiemployer pension plans, which are included within Operating expenses.

The Company contributed $ 11 million and $ 11 million in the first quarters of fiscal 2023 and 2022, respectively, to multiemployer pension plans, which are included within Operating expenses.

NOTE 11—INCOME TAXES

The effective tax rate for the third quarter of fiscal 2022 was 29.9 % compared to 24.2 % for the third quarter of fiscal 2021.

The change in the effective tax rate was primarily driven by limitations on the deductibility of certain share-based compensation expenses in the third quarter of fiscal 2022 and a discrete benefit for the vesting of employee stock awards in the third quarter of fiscal 2021 that was not material to the effective tax rate in the third quarter of fiscal 2022.

The effective tax rate for fiscal 2022 year-to-date was 19.9 % compared to 22.9 % for fiscal 2021 year-to-date.

The change in the effective tax rate was primarily driven by discrete tax benefits from employee stock award vestings that occurred in fiscal 2022 year-to-date.

The impacts from the release of unrecognized tax positions in fiscal 2022 year-to-date were comparable to fiscal 2021 year-to-date.

The effective tax rate for the first quarter of fiscal 2023 was an expense rate of 6.9 % compared to a benefit rate of 1.3 % for the first quarter of fiscal 2022.

The effective tax rate for both periods was reduced by the impact of discrete tax benefits related to the vesting of employee stock awards.

The change from the first quarter of fiscal 2022 was primarily driven by the reduction of these discrete tax benefits during the first quarter of fiscal 2023.

NOTE 12—EARNINGS PER SHARE

The following is a reconciliation of the basic and diluted number of shares used in computing earnings per share:

13-Week Period Ended 39-Week Period Ended

(in millions, except per share data) April 30,

2021 April 30,

13-Week Period Ended

(in millions, except per share data) October 29,

2022 October 30,

Basic weighted average shares outstanding 58.8 57.0

Net effect of dilutive stock awards based upon the treasury stock method

2.5 4.0 3.1 3.7

Diluted weighted average shares outstanding 61.6 61.1

Basic earnings per share (1)

Continuing operations $ 1.15 $ 0.85 $ 3.62 $ 1.84

Discontinued operations $ — $ 0.01 $ — $ 0.06

Basic earnings per share $ 1.15 $ 0.86 $ 3.62 $ 1.90

Diluted earnings per share:

Continuing operations $ 1.10 $ 0.79 $ 3.44 $ 1.73

Discontinued operations $ — $ 0.01 $ — $ 0.05

$ 1.12 $ 1.34

Diluted earnings per share (1)

$ 1.07 $ 1.25

Anti-dilutive share-based awards excluded from the calculation of diluted earnings per share 0.9 0.9

(1) Earnings per share amounts are calculated using actual unrounded figures.

NOTE 13—BUSINESS SEGMENTS

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These reportable segments are two distinct businesses, each with a different customer base, marketing strategy and management structure.

The Wholesale reportable segment is the aggregation of two operating segments:

Wholesale and Canada Wholesale.

Wholesale and Canada Wholesale operating segments have similar products and services, customer channels, distribution methods and economic characteristics.

The Company organizes and operates the Wholesale reportable segment through four U.S geographic regions:

and Canada Wholesale, which is operated separately from the U.S.

Wholesale business.

Wholesale and Canada Wholesale operating segments have similar products and services, customer channels, distribution methods and economic characteristics, and therefore have been aggregated into a single reportable segment.

Reportable segments are reviewed on an annual basis, or more frequently if events or circumstances indicate a change in reportable segments has occurred.

In the third quarter of fiscal 2022, the Company changed its measure of segment profit to exclude the non-cash LIFO charge or benefit from Adjusted EBITDA.

Prior period Adjusted EBITDA amounts and the reconciliation to Income from continuing operations before income taxes have been recast to reflect this change in the measure of segment profit.

The following table provides continuing operations information by reportable segment, including Net sales, Adjusted EBITDA with a reconciliation to Income from continuing operations before income taxes, depreciation and amortization, and payments for capital expenditures:

13-Week Period Ended 39-Week Period Ended

(in millions) April 30, 2022 May 1, 2021 April 30, 2022 May 1, 2021

In fiscal 2022, the Company changed its measure of segment profit to exclude the impact of the non-cash LIFO charge or benefit from Adjusted EBITDA.

Prior-period Adjusted EBITDA amounts and the reconciliation to Income before income taxes have been recast to reflect this change in the measure of segment profit.

The following table provides Net sales and Adjusted EBITDA by reportable segment and reconciles that information to consolidated Net sales and Income before income taxes, respectively:

13-Week Period Ended

(in millions) October 29, 2022 October 30, 2021

Wholesale (1)

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Retail 613 602

Other 60 55 166 166

Eliminations ( 400 ) ( 395 )

Total Net sales $ 7,532 $ 6,997

Continuing Operations Adjusted EBITDA:

Adjusted EBITDA:

Wholesale (2)

$ 171 $ 166 $ 522 $ 490

Other 11 — 27 ( 4 )

Eliminations ( 3 ) ( 1 )

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Interest expense, net ( 35 ) ( 40 )

Other, net 1 1 2 4

Other (income) expense, net 1 ( 1 )

Depreciation and amortization ( 74 ) ( 69 )

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Gain on sale of assets 5 —

Multi-employer pension plan withdrawal benefit — — 8 —

Other retail expense — ( 2 ) 1 ( 5 )

Income from continuing operations before income taxes $ 97 $ 66 $ 266 $ 140

Income before income taxes $ 72 $ 76

Depreciation and amortization:

Wholesale $ 64 $ 61

Retail 7 7 22 21

Other 1 1 2 4

Total depreciation and amortization $ 74 $ 69

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Wholesale $ 57 $ 52

Retail 5 7 13 15

Total capital expenditures $ 67 $ 56

(1) As presented in Note 3—Revenue Recognition, for the third quarters of fiscal 2022 and 2021, the Company recorded $ 337 million and $ 331 million, respectively, and $ 1,032 million and $ 1,050 million in fiscal 2022 and 2021 year-to-date, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale sales to its Retail segment that have been eliminated upon consolidation.

(2) As a result of the segment profit measurement revision discussed above, previously reported Adjusted EBITDA disclosures by segment and the reconciliation to Income from continuing operations before income taxes has been recast to exclude the impact of the non-cash LIFO charge or benefit.

Total assets of continuing operations by reportable segment were as follows:

(in millions) April 30,

(1) As presented in Note 3—Revenue Recognition, for the first quarters of fiscal 2023 and 2022, the Company recorded $ 334 million and $ 339 million, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale to Retail sales that have been eliminated upon consolidation.

(2) As a result of the segment profit measurement revision discussed above, previously reported Adjusted EBITDA disclosures by segment and the reconciliation to Income before income taxes has been recast to exclude the impact of the non-cash LIFO charge.

(3) Includes costs for certain technology-related initiatives.

Total assets by reportable segment were as follows:

(in millions) October 29,

2022 July 30,

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Eliminations ( 45 ) ( 39 )

Total assets of continuing operations $ 7,878 $ 7,521

Total assets $ 8,199 $ 7,628

NOTE 14—COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

Guarantees and Contingent Liabilities

The Company has outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various retailers as of April 30, 2022.

The Company has outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various retailers as of October 29, 2022.

These guarantees were generally made to support the business growth of wholesale customers.

The guarantees are generally for the entire terms of the leases, fixture financing loans or other debt obligations with remaining terms that range from less than one year to eight years , with a weighted average remaining term of approximately five years .

For each guarantee issued, if the wholesale customer or other third-party defaults on a payment, the Company would be required to make payments under its guarantee.

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The Company reviews performance risk related to its guarantee obligations based on internal measures of credit performance.

As of April 30, 2022, the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was $ 23 million ($ 20 million on a discounted basis).

Based on the indemnification agreements, personal guarantees and results of the reviews of performance risk, as of April 30, 2022, a total estimated loss of $ 1 million is recorded in the Condensed Consolidated Balance Sheets.

As of October 29, 2022, the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was $ 17 million ($ 15 million on a discounted basis).

Based on the indemnification agreements, personal guarantees and results of the reviews of performance risk, as of October 29, 2022, a total estimated loss of $ 1 million is recorded in the Condensed Consolidated Balance Sheets.

The Company is a party to a variety of contractual agreements under which it may be obligated to indemnify the other party for certain matters in the ordinary course of business, which indemnities may be secured by operation of law or otherwise.

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Accordingly, no amount has been recorded in the Condensed Consolidated Balance Sheets for these guarantees, as the fair value has been determined to be de minimis.

Sale-Leaseback Arrangement

During the third quarter of fiscal 2022, the Company acquired the real property of a previously leased distribution center for approximately $ 153 million.

Immediately following this acquisition, the Company monetized this property through a sale-leaseback transaction, pursuant to which the Company received $ 225 million in aggregate proceeds for the sale of the property, which reflected the fair value of the property.

Under the terms of the sale-leaseback agreement, the Company entered into a lease for the distribution center for a term of 15 years.

The Company recorded a pre-tax gain on sale of approximately $ 87 million in the third quarter of fiscal 2022 as a result of the transactions, which primarily represented the pre-tax net proceeds.

Agreements with Save-A-Lot and Onex

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Similarly, Supervalu entered into a Separation Agreement (the “Separation Agreement”) with Moran Foods, LLC d/b/a Save-A-Lot (“Moran Foods”), which contains indemnification obligations and covenants related to the separation of the assets and liabilities of the Save-A-Lot business from the Company.

The Company also entered into a Services Agreement with Moran Foods (the “Services Agreement”), pursuant to which the Company is providing Save-A-Lot with various technical, human resources, finance and other operational services for a term of five years , subject to termination provisions that can be exercised by each party.

The initial annual base charge under the Services Agreement is $ 30 million, subject to adjustments.

The Company expects that services provided under the Services Agreement will wind down in 2022.

The Company also entered into a Services Agreement with Moran Foods (the “Services Agreement”), pursuant to which the Company provided Save-A-Lot with various technical, human resources, finance and other operational services.

The Company primarily ceased providing services under the Services Agreement in fiscal 2022.

The Services Agreement generally requires each party to indemnify the other party against third-party claims arising out of the performance of or the provision or receipt of services under the Services Agreement.

While the Company’s aggregate indemnification obligations to Save-A-Lot and Onex, the purchaser of Save-A-Lot, could result in a material liability, the Company is not aware of any matters that are expected to result in a material liability.

The Company has recorded the fair value of the guarantee in the Condensed Consolidated Balance Sheets within Other long-term liabilities.

The Company has recorded the de minimis fair value of the guarantee in the Condensed Consolidated Balance Sheets within Other long-term liabilities.

Other Contractual Commitments

1 unchanged sentence

These contracts typically include either volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations.

As of April 30, 2022, the Company had approximately $ 300 million of non-cancelable future purchase obligations, most of which will be paid and utilized in the ordinary course within one year.

As of October 29, 2022, the Company had approximately $ 582 million of non-cancelable future purchase obligations, most of which will be paid and utilized in the ordinary course within one year.

Legal Proceedings

The Company is one of dozens of companies that have been named in various lawsuits alleging that drug manufacturers, retailers and distributors contributed to the national opioid epidemic.

Currently, UNFI, primarily through its subsidiary, Advantage Logistics, is named in approximately 43 suits pending in the United States District Court for the Northern District of Ohio where over 1,800 cases have been consolidated as Multi-District Litigation (“MDL”).

Currently, UNFI, primarily through its subsidiary, Advantage Logistics, is named in approximately 43 suits pending in the United States District Court for the Northern District of Ohio where thousands of cases have been consolidated as Multi-District Litigation (“MDL”).

In accordance with the Stock Purchase Agreement dated January 10, 2013, between New Albertson’s Inc.

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To date, no discovery has been conducted against UNFI in any of the actions.

On October 7, 2022, the MDL Court issued an order directing the Company and numerous other “non-litigating” defendants to submit by November 1, 2022, a list of opioid cases where the Company is named and opioid dispensing and distribution data.

The Company substantially complied with the order and is working to provide the remaining data.

UNFI is vigorously defending these matters, which it believes are without merit.

35 unchanged sentences

On April 1, 2022, the Relators filed a petition for a writ of certiorari with the United States Supreme Court.

The Company’s response is due June 20, 2022.

The Company filed its response on June 20, 2022.

On August 22, 2022, the Supreme Court issued an order inviting the Solicitor General to file a brief setting forth the views of the government on the petition for a writ of certiorari.

On December 6, 2022, the Solicitor General submitted its brief recommending that the Supreme Court grant the petition for certiorari.

From time to time, the Company receives notice of claims or potential claims or becomes involved in litigation, alternative dispute resolution, such as arbitration, or other legal and regulatory proceedings that arise in the ordinary course of its business, including investigations and claims regarding employment law, including wage and hour (including class actions);

8 unchanged sentences

Management regularly monitors the Company’s exposure to the loss contingencies associated with these matters and may from time to time change its predictions with respect to outcomes and estimates with respect to related costs and exposures.

As of April 30, 2022, no material accrued obligations, individually or in the aggregate, have been recorded for these legal proceedings.

As of October 29, 2022, no material accrued obligations, individually or in the aggregate, have been recorded for these legal proceedings.

Although management believes it has made appropriate assessments of potential and contingent loss in each of these cases based on current facts and circumstances, and application of prevailing legal principles, there can be no assurance that material differences in actual outcomes from management’s current assessments, costs and exposures relative to current predictions and estimates, or material changes in such predictions or estimates will not occur.

The occurrence of any of the foregoing, could have a material adverse effect on our financial condition, results of operations or cash flows.

NOTE 16—SUBSEQUENT EVENTS

Refer to Note 8—Long-Term Debt for disclosure of the ABL Credit Facility’s refinancing and Term Loan Facility’s amendment.

Refer to Note 7—Derivatives for disclosure of the outstanding interest rate swap contract amendments from LIBOR to SOFR.

The occurrence of any of the foregoing, could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements