What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-12-06 compared with 2023-06-07 · 173 added, 252 removed, 470 unchanged (47% of the section changed)

14 unchanged sentences

Intangible assets, net 703 722

Deferred income taxes 32 32

Other long-term assets 175 162

11 unchanged sentences

Pension and other postretirement benefit obligations 16 16

Deferred income taxes 13 8

Other long-term liabilities 160 162

5 unchanged sentences

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

60.9 shares issued and 59.2 shares outstanding at April 29, 2023;

61.9 shares issued and 59.4 shares outstanding at October 28, 2023;

61.0 shares issued and 58.5 shares outstanding at July 29, 2023

13 unchanged sentences

(in millions, except for per share data)

13-Week Period Ended 39-Week Period Ended

2023 April 30,

2022 April 29,

2023 April 30,

13-Week Period Ended

2023 October 29,

Net sales $ 7,552 $ 7,532

2 unchanged sentences

Operating expenses 1,023 1,000

Restructuring, acquisition and integration related (benefits) expenses ( 4 ) 8 1 16

Loss (gain) on sale of assets 4 ( 88 ) — ( 87 )

Operating income 33 123 195 355

Restructuring, acquisition and integration related expenses 4 2

Loss (gain) on sale of assets and other asset charges 19 ( 5 )

Operating (loss) income ( 16 ) 99

Net periodic benefit income, excluding service cost ( 3 ) ( 7 )

1 unchanged sentence

Other income, net — ( 1 )

Income before income taxes 7 97 110 266

(Loss) income before income taxes ( 48 ) 72

(Benefit) provision for income taxes ( 9 ) 5

Net income including noncontrolling interests 8 68 97 213

Net (loss) income including noncontrolling interests ( 39 ) 67

Less net income attributable to noncontrolling interests — ( 1 )

Net income attributable to United Natural Foods, Inc.

Net (loss) income attributable to United Natural Foods, Inc.

$ ( 39 ) $ 66

Basic earnings per share

Basic (loss) earnings per share

$ ( 0.67 ) $ 1.12

Diluted earnings per share

Diluted (loss) earnings per share

$ ( 0.67 ) $ 1.07

5 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (unaudited)

(in millions)

13-Week Period Ended 39-Week Period Ended

2023 April 30,

2022 April 29,

2023 April 30,

Net income including noncontrolling interests $ 8 $ 68 $ 97 $ 213

13-Week Period Ended

2023 October 29,

Net (loss) income including noncontrolling interests $ ( 39 ) $ 67

Other comprehensive (loss) income:

Recognition of pension and other postretirement benefit obligations, net of tax — — 1 2

Recognition of interest rate swap cash flow hedges, net of tax (1)

( 2 ) 30 12 58

Foreign currency translation adjustments ( 3 ) ( 3 )

Recognition of other cash flow derivatives, net of tax 1 —

( 2 ) 2 ( 4 ) 4

Total other comprehensive (loss) income ( 5 ) 15

Less comprehensive income attributable to noncontrolling interests — ( 1 )

Total comprehensive income attributable to United Natural Foods, Inc.

Total comprehensive (loss) income attributable to United Natural Foods, Inc.

$ ( 44 ) $ 81

(1) Amounts are net of tax (benefit) expense of $( 1 ) million, $ 11 million, $ 4 million and $ 21 million, respectively.

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

See accompanying Notes to Condensed Consolidated Financial Statements.

UNITED NATURAL FOODS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

For the 13-week periods ended April 29, 2023 and April 30, 2022

(in millions)

Common Stock Treasury Stock Additional

Paid-in Capital Accumulated

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

Stockholders’ Equity Noncontrolling Interests Total Stockholders’ Equity

Shares Amount Shares Amount

Balances at January 28, 2023 60.9 $ 1 1.3 $ ( 53 ) $ 592 $ ( 9 ) $ 1,311 $ 1,842 $ 3 $ 1,845

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

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

Other comprehensive loss — — — — — ( 6 ) — ( 6 ) — ( 6 )

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

Net income — — — — — — 7 7 1 8

Balances at April 29, 2023 60.9 $ 1 1.7 $ ( 65 ) $ 602 $ ( 15 ) $ 1,318 $ 1,841 $ 1 $ 1,842

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

(1) Amounts are net of tax (benefit) expense of $( 1 ) million and $ 6 million for the first quarters of fiscal 2024 and 2023 , respectively.

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

For the 39-week periods ended April 29, 2023 and April 30, 2022

For the 13-week periods ended October 28, 2023 and October 29, 2022

(in millions)

7 unchanged sentences

Share-based compensation — — — — 6 — — 6 — 6

Repurchases of common stock — — 1.1 ( 41 ) — — — ( 41 ) — ( 41 )

Other comprehensive income — — — — — 5 — 5 — 5

Other comprehensive loss — — — — — ( 5 ) — ( 5 ) — ( 5 )

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

Net income — — — — — — 92 92 5 97

Balances at April 29, 2023 60.9 $ 1 1.7 $ ( 65 ) $ 602 $ ( 15 ) $ 1,318 $ 1,841 $ 1 $ 1,842

Net loss — — — — — — ( 39 ) ( 39 ) — ( 39 )

Balances at October 28, 2023 61.9 $ 1 2.5 $ ( 86 ) $ 606 $ ( 33 ) $ 1,211 $ 1,699 $ — $ 1,699

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

1 unchanged sentence

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 )

Proceeds from issuance of common stock, net — — — — 9 — — 9 — 9

Net income — — — — — — 66 66 1 67

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

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

See accompanying Notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

13-Week Period Ended

(in millions) April 29,

2023 April 30,

(in millions) October 28,

2023 October 29,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income including noncontrolling interests $ 97 $ 213

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

Net (loss) income including noncontrolling interests $ ( 39 ) $ 67

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

Depreciation and amortization 78 74

Share-based compensation 6 12

Gain on sale of property and equipment ( 9 ) ( 87 )

Closed property and other restructuring charges — 1

Gain on sale of long-lived assets ( 7 ) ( 5 )

Long-lived asset impairment charges 21 —

Net pension and other postretirement benefit income ( 3 ) ( 7 )

1 unchanged sentence

LIFO charge 7 21

(Recoveries) provision for losses on receivables ( 2 ) 4

Non-cash interest expense and other adjustments 2 3

Changes in operating assets and liabilities ( 319 ) ( 429 )

Net cash provided by (used in) operating activities

Net cash used in operating activities

( 254 ) ( 262 )

CASH FLOWS FROM INVESTING ACTIVITIES:

2 unchanged sentences

Payments for investments ( 7 ) ( 1 )

Net cash (used in) provided by investing activities

Net cash used in investing activities

( 72 ) ( 61 )

CASH FLOWS FROM FINANCING ACTIVITIES:

3 unchanged sentences

Repurchases of common stock — ( 12 )

Proceeds from the issuance of common stock and exercise of stock options — 9

Payments of employee restricted stock tax withholdings ( 6 ) ( 37 )

Payments for debt issuance costs — ( 1 )

Distributions to noncontrolling interests ( 1 ) ( 2 )

Repayments of other loans — ( 1 )

Net cash used in financing activities

( 197 ) ( 7 )

Other ( 1 ) —

Net cash provided by financing activities

EFFECT OF EXCHANGE RATE ON CASH — ( 1 )

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 6 ) 7

NET DECREASE IN CASH AND CASH EQUIVALENTS — ( 5 )

Cash and cash equivalents, at beginning of period 37 44

4 unchanged sentences

Leased assets obtained in exchange for new operating lease liabilities $ 39 $ 57

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

Additions of property and equipment included in Accounts payable $ 18 $ 26

9 unchanged sentences

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 2023 and 2022 relate to the 13-week fiscal quarters ended April 29, 2023 and April 30, 2022, respectively.

References to fiscal 2023 and 2022 year-to-date relate to the 39-week fiscal periods ended April 29, 2023 and April 30, 2022, respectively.

Fiscal 2024 will contain 53 weeks with the fourth quarter of fiscal 2024 containing 14 weeks.

References to the first quarter of fiscal 2024 and 2023 relate to the 13-week fiscal quarters ended October 28, 2023 and October 29, 2022, respectively.

Basis of Presentation

10 unchanged sentences

Actual results could differ from those estimates.

Reclassifications

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.

Cash and Cash Equivalents

3 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 29, 2023 and July 30, 2022, the Company had net book overdrafts of $ 311 million and $ 266 million, respectively.

Reclassifications

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.

As of October 28, 2023 and July 29, 2023, the Company had net book overdrafts of $ 328 million and $ 308 million, respectively.

Inventories, Net

2 unchanged sentences

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 variances as of the end of each fiscal year.

The LIFO reserve was approximately $ 308 million and $ 225 million as of April 29, 2023 and July 30, 2022, respectively, which is recorded within Inventories, net on the Condensed Consolidated Balance Sheets.

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

Allowances for inventory shortages are recorded based on the results of these counts.

The LIFO reserve was approximately $ 351 million and $ 344 million as of October 28, 2023 and July 29, 2023, respectively, which is recorded within Inventories, net on the Condensed Consolidated Balance Sheets.

NOTE 2—RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Pronouncements

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

In June 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-03, Fair Value Measurement (Topic 820):

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

1 unchanged sentence

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.

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

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

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM.

The amendments in this update also expand the interim segment disclosure requirements.

The Company is required to adopt the amendments in this update in fiscal 2025, and the interim disclosure requirements will be effective for the Company in the first quarter of fiscal 2026.

Early adoption is permitted.

The amendments in this update are required to be applied on a retrospective basis.

The Company is currently reviewing the provisions of the amendments in this update and evaluating their impact on the Company's consolidated financial statements.

NOTE 3—REVENUE RECOGNITION

9 unchanged sentences

Net Sales for the 13-Week Period Ended

(in millions) April 29, 2023

Customer Channel Wholesale Retail Other Eliminations (1)

Chains $ 3,129 $ — $ — $ — $ 3,129

Independent retailers 1,875 — — — 1,875

Supernatural 1,647 — — — 1,647

Retail — 598 — — 598

Other 584 — 56 — 640

Eliminations — — — ( 382 ) ( 382 )

Total $ 7,235 $ 598 $ 56 $ ( 382 ) $ 7,507

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 39-Week Period Ended

(in millions) April 29, 2023

(in millions) October 28, 2023

Customer Channel Wholesale Retail Other Eliminations (1)

7 unchanged sentences

Net Sales for the 13-Week Period Ended

(in millions) April 30, 2022

(in millions) October 29, 2022

Customer Channel Wholesale Retail Other Eliminations (1)

12 unchanged sentences

Accounts and notes receivable are as follows:

(in millions) April 29, 2023 July 30, 2022

(in millions) October 28, 2023 July 29, 2023

Customer accounts receivable $ 1,004 $ 887

4 unchanged sentences

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

On October 31, 2022, the Company entered into a purchase agreement with a third-party financial institution for the sale of certain customer accounts receivable up to a maximum outstanding amount of $ 300 million, without recourse, subject to eligibility criteria established by the financial institution.

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

After these sales, the Company does not retain any interest in the receivables.

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

Accounts receivable that the Company is servicing on behalf of the financial institution, which would have otherwise been outstanding as of April 29, 2023, was approximately $ 286 million.

Net proceeds received are included within net cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows in the period of sale.

The loss on sale of receivables was $ 4 million and $ 9 million during the third quarter of fiscal 2023 and fiscal 2023 year-to-date, respectively, and is recorded within Loss (gain) on sale of assets in the Condensed Consolidated Statements of Operations.

During the prior year, the Company entered into an agreement to sell, on a revolving basis, certain customer accounts receivable to a third-party financial institution.

Accounts receivable that the Company is servicing on behalf of the financial institution, which would have otherwise been outstanding as of October 28, 2023 and July 29, 2023 , was approximately $ 326 million and $ 310 million, respectively.

Net proceeds received are included within cash from operating activities in the Condensed Consolidated Statements of Cash Flows in the period of sale.

The loss on sale of receivables was $ 5 million during the first quarter of fiscal 2024, and is recorded within Loss (gain) on sale of assets and other asset charges in the Condensed Consolidated Statements of Operations.

NOTE 4—PROPERTY AND EQUIPMENT, NET

In the first quarter of fiscal 2024, the Company determined that it was more likely than not that it would dispose of one of its corporate-owned office locations before the end of its previously estimated useful life.

As a result, the Company conducted an impairment review and recorded a $ 21 million non-cash asset impairment charge in the first quarter of fiscal 2024.

The fair value utilized in the Company’s impairment review was determined based on the market approach.

The impairment charge is recorded within Loss (gain) on sale of assets and other asset charges in the Condensed Consolidated Statements of Operations.

There were no asset impairment charges recorded in the first quarter of fiscal 2023.

NOTE 5—GOODWILL AND INTANGIBLE ASSETS, NET

3 unchanged sentences

Change in foreign exchange rates ( 1 ) — ( 1 )

Goodwill as of April 29, 2023

(1) Wholesale amounts are net of accumulated goodwill impairment charges of $ 717 million as of July 30, 2022 and April 29, 2023.

(2) Other amounts are net of accumulated goodwill impairment charges of $ 10 million as of July 30, 2022 and April 29, 2023.

Goodwill as of October 28, 2023

(1) Wholesale amounts are net of accumulated goodwill impairment charges of $ 717 million as of July 29, 2023 and October 28, 2023.

(2) Other amounts are net of accumulated goodwill impairment charges of $ 10 million as of July 29, 2023 and October 28, 2023.

Identifiable intangible assets, net consisted of the following:

April 29, 2023 July 30, 2022

October 28, 2023 July 29, 2023

(in millions) Gross Carrying

12 unchanged sentences

Intangibles assets, net $ 1,159 $ 456 $ 703 $ 1,160 $ 438 $ 722

Amortization expense was $ 18 million and $ 18 million for the third quarters of fiscal 2023 and 2022, respectively, and $ 54 million and $ 54 million for fiscal 2023 and 2022 year-to-date, respectively.

The estimated future amortization expense for each of the next five fiscal years and thereafter on amortizing intangible assets existing as of April 29, 2023 is as shown below:

Amortization expense was $ 18 million for the first quarters of fiscal 2024 and 2023.

The estimated future amortization expense for each of the next five fiscal years and thereafter on amortizing intangible assets existing as of October 28, 2023 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 29, 2023

Condensed Consolidated Balance Sheets Location Fair Value at October 28, 2023

(in millions) Level 1 Level 2 Level 3

Fuel derivatives designated as hedging instruments Prepaid expenses and other current assets $ — $ 1 $ —

Foreign currency derivatives designated as hedging instruments Prepaid expenses and other current assets $ — $ 1 $ —

1 unchanged sentence

Interest rate swaps designated as hedging instruments Other long-term assets $ — $ 4 $ —

Fuel derivatives designated as hedging instruments Accrued expenses and other current liabilities $ — $ 2 $ —

Condensed Consolidated Balance Sheets Location Fair Value at July 29, 2023

(in millions) Level 1 Level 2 Level 3

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

Interest rate swaps designated as hedging instruments Prepaid expenses and other current assets $ — $ 17 $ —

Interest rate swaps designated as hedging instruments Other long-term assets $ — $ 5 $ —

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

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

Interest Rate Swap Contracts

1 unchanged sentence

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 April 29, 2023, a 100-basis point increase in forward SOFR interest rates would increase the fair value of the interest rate swaps by approximately $ 10 million;

As of October 28, 2023, a 100-basis point increase in forward SOFR interest rates would increase the fair value of the interest rate swaps by approximately $ 6 million;

a 100-basis point decrease in forward SOFR interest rates would decrease the fair value of the interest rate swaps by approximately $ 6 million.

5 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 29, 2023 July 30, 2022

October 28, 2023 July 29, 2023

(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 29, 2023.

The Company’s interest rate swap contracts are designated as cash flow hedges as of October 28, 2023.

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

Refer to Note 6—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 29, 2023, which are all pay fixed and receive floating, are as follows:

Details of active swap contracts as of October 28, 2023, 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

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

12 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 (Loss) 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 29, 2023 April 30, 2022 April 29, 2023 April 30, 2022

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

13-Week Period Ended

October 28, 2023 October 29, 2022

(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

$ 35 $ 37 $ 109 $ 121

Gain (loss) on cash flow hedging relationships:

Gain (loss) reclassified from comprehensive income into earnings $ 3 $ ( 9 ) $ 7 $ ( 30 )

Gain on cash flow hedging relationships:

Gain reclassified from comprehensive income into earnings $ 5 $ —

NOTE 8—LONG-TERM DEBT

1 unchanged sentence

(in millions) Average Interest Rate at

April 29, 2023

Fiscal Maturity Year April 29,

October 28, 2023

Fiscal Maturity Year October 28,

2023 July 29,

9 unchanged sentences

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 April 29, 2023 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).

The Senior Notes, which are presented net of debt issuance costs of $ 6 million as of October 28, 2023 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.

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

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

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.

3 unchanged sentences

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 certain accounts receivable, certain inventory and certain other assets arising therefrom or related thereto of the Borrowers and Guarantors (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 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:

Assets securing the ABL Credit Facility (in millions):

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 certain accounts receivable, inventory and certain other assets arising therefrom or related thereto of the Borrowers and Guarantors (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 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 availability related to pharmacy prescription files, 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 were as follows:

(in millions) October 28,

2023 July 29,

3 unchanged sentences

Total $ 2,806 $ 2,443

As of April 29, 2023, the Borrowers’ Borrowing Base, net of $ 100 million of reserves, was $ 2,640 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 April 29, 2023, the Borrowers had $ 879 million of loans outstanding under the ABL Credit Facility, which are presented net of debt issuance costs of $ 8 million and are included in Long-term debt in the Condensed Consolidated Balance Sheets.

As of April 29, 2023, the U.S.

Borrowers had $ 144 million in letters of credit outstanding under the ABL Credit Facility.

The Company’s resulting remaining availability under the ABL Credit Facility was $ 1,577 million as of April 29, 2023.

Availability under the ABL Credit Facility (in millions):

April 29, 2023

As of October 28, 2023, the Borrowers’ Borrowing Base was $ 2,550 million, reflecting the advance rates described above and $ 101 million of reserves, which is below the $ 2,600 million limit of availability.

This resulted in total availability of $ 2,550 million for loans and letters of credit under the ABL Credit Facility.

The Company’s unused credit under the ABL Credit Facility was as follows:

(in millions) October 28, 2023

Total availability for ABL loans and letters of credit $ 2,550

ABL loans $ 879

Letters of credit $ 144

ABL loans outstanding ( 1,152 )

Letters of credit outstanding ( 150 )

Unused credit $ 1,248

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 29, 2023

Range of Facility Rates and Fees (per annum) October 28, 2023

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

6 unchanged sentences

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.

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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 29, 2023 and July 30, 2022, there was $ 615 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.

As of October 28, 2023 and July 29, 2023, there was $ 612 million and $ 617 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.

As of April 29, 2023, there is no Excess Cash Flow payment expected to be required in fiscal 2024.

As of April 29, 2023, the Company had borrowings of $ 670 million outstanding under the Term Loan Facility, which are presented in the Condensed Consolidated Balance Sheets net of debt issuance costs of $ 8 million and an original issue discount on debt of $ 7 million.

As of April 29, 2023, no amount of the Term Loan Facility was classified as current.

On November 7, 2022, 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) INCOME

Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2023 year-to-date were as follows:

The potential amount of prepayment from Excess Cash Flow in fiscal 2024 that may be required in fiscal 2025 is not reasonably estimable as

of October 28, 2023.

As of October 28, 2023, the Company had borrowings of $ 670 million outstanding under the Term Loan Facility, which are presented in the Condensed Consolidated Balance Sheets net of debt issuance costs of $ 7 million and an original issue discount on debt of $ 6 million.

As of October 28, 2023, no amount of the Term Loan Facility was classified as current.

As of October 28, 2023, 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 SOFR rate plus a margin of 3.25 %, provided that the SOFR rate shall never be less than 0.0 %.

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

Changes in Accumulated other comprehensive loss by component, net of tax, for the first quarter of fiscal 2024 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 (loss) income before reclassifications ( 6 ) — ( 4 ) 17 7

Amortization of amounts included in net periodic benefit income — 1 — — 1

Accumulated other comprehensive (loss) income at July 29, 2023 $ — $ ( 21 ) $ ( 21 ) $ 14 $ ( 28 )

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

Amortization of cash flow hedges — — — ( 4 ) ( 4 )

Net current period Other comprehensive (loss) income ( 4 ) 1 ( 4 ) 12 5

Accumulated other comprehensive (loss) income at April 29, 2023 $ ( 2 ) $ ( 2 ) $ ( 23 ) $ 12 $ ( 15 )

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

Net current period Other comprehensive income (loss) 1 — ( 3 ) ( 3 ) ( 5 )

Accumulated other comprehensive income (loss) at October 28, 2023 $ 1 $ ( 21 ) $ ( 24 ) $ 11 $ ( 33 )

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

Items reclassified out of Accumulated other comprehensive (loss) income 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 29,

2023 April 30,

2022 April 29,

2023 April 30,

Pension and postretirement benefit plan net assets:

Amortization of amounts included in net periodic benefit income (1)

$ — $ — $ 1 $ 2 Net periodic benefit income, excluding service cost

Income tax benefit — — — — (Benefit) provision for income taxes

Total reclassifications, net of tax $ — $ — $ 1 $ 2

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

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

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 28,

2023 October 29,

Swap agreements:

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

Income tax benefit — — ( 1 ) ( 1 ) (Benefit) provision for income taxes

Income tax expense (benefit) — — (Benefit) provision 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 29, 2023, the Company expects to reclassify $ 13 million related to unrealized derivative gains out of Accumulated other comprehensive loss and primarily into Interest expense, net during the following twelve-month period.

As of October 28, 2023, the Company expects to reclassify $ 15 million related to unrealized derivative gains out of Accumulated other comprehensive loss and primarily into Interest expense, net during the following twelve-month period.

NOTE 10—SHARE-BASED AWARDS

In fiscal 2023 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 1.6 million shares.

As of April 29, 2023, there were 1.6 million shares available for issuance under the Amended and Restated 2020 Equity Incentive Plan.

As of October 28, 2023, there were 2.2 million shares available for issuance under the Second Amended and Restated 2020 Equity Incentive Plan.

NOTE 11—BENEFIT PLANS

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

Net periodic benefit (income) cost 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 29, 2023 April 30, 2022 April 29, 2023 April 30, 2022

Net Periodic Benefit (Income) Cost

(in millions) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Interest cost $ 19 $ 17 $ — $ —

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Contributions to benefit plans $ — $ — $ — $ —

39-Week Period Ended

Pension Benefits Other Postretirement Benefits

(in millions) April 29, 2023 April 30, 2022 April 29, 2023 April 30, 2022

Net Periodic Benefit (Income) Cost

Interest cost $ 48 $ 29 $ — $ —

Expected return on plan assets ( 71 ) ( 61 ) — —

Amortization of prior service cost — — 1 2

Net periodic benefit (income) cost $ ( 23 ) $ ( 32 ) $ 1 $ 2

Contributions to benefit plans $ ( 1 ) $ ( 1 ) $ — $ ( 2 )

Contributions

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

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

Retirement Plan under the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) in fiscal 2024.

1 unchanged sentence

Multiemployer Pension Plans

The Company contributed $ 13 million and $ 12 million in the third quarters of fiscal 2023 and 2022, respectively, and $ 36 million and $ 34 million in fiscal 2023 and 2022 year-to-date, respectively, to multiemployer pension plans, which contributions are included within Operating expenses.

The Company contributed $ 13 million and $ 11 million in the first quarters of fiscal 2024 and 2023, respectively, to multiemployer pension plans, which contributions are included within Operating expenses.

NOTE 12—INCOME TAXES

The effective tax rate for the third quarter of fiscal 2023 was a benefit rate of 14.3 % compared to an expense rate of 29.9 % for the third quarter of fiscal 2022.

The change was primarily driven by the impact of a partnership investment entered into in the third quarter of fiscal 2023, and the reduction in pre-tax income during the third quarter of fiscal 2023.

The effective tax rate for fiscal 2023 year-to-date was 11.8 % compared to 19.9 % for fiscal 2022 year-to-date.

The change was driven primarily by the impact of a partnership investment entered into in the third quarter of fiscal 2023, and the reduction in pre-tax income in fiscal 2023 year-to-date as compared to fiscal 2022 year-to-date.

This was partially offset by the lower discrete tax benefits in fiscal 2023 year-to-date related to the vesting of employee stock awards as compared to fiscal 2022 year-to-date.

The effective tax rate for the first quarter of fiscal 2024 was a benefit rate of 18.8 % on pre-tax loss compared to an expense rate of 6.9 % on pre-tax income for the first quarter of fiscal 2023.

The change from the first quarter of fiscal 2023 is primarily driven by the reduction of discrete tax benefits related to employee stock award vestings in the first quarter of fiscal 2024.

In addition, the first quarter of fiscal 2023 included a tax benefit from the release of reserves for unrecognized tax positions that did not recur in the first quarter of fiscal 2024.

The primary driver for the variation between the Company’s statutory tax rate and its effective tax rate for the first quarters of fiscal 2024 and fiscal 2023 were discrete tax detriments and benefits, respectively, resulting from share award vestings.

NOTE 13—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 29,

2023 April 30,

2022 April 29,

2023 April 30,

13-Week Period Ended

(in millions, except per share data) October 28,

2023 October 29,

Basic weighted average shares outstanding 58.7 58.8

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

1.0 2.5 1.7 3.1

Diluted weighted average shares outstanding 58.7 61.6

Basic earnings per share (1)

Basic (loss) earnings per share (1)

$ ( 0.67 ) $ 1.12

Diluted earnings per share (1)

Diluted (loss) earnings per share (1)

$ ( 0.67 ) $ 1.07

Anti-dilutive share-based awards excluded from the calculation of diluted earnings per share 0.9 0.5 0.8 0.5

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

Anti-dilutive share-based awards excluded from the calculation of diluted (loss) earnings per share 2.3 0.9

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

NOTE 14—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 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.

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

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

Wholesale business.

1 unchanged sentence

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 2023, the Company reversed previously accrued incentive compensation expense due to changes in expected financial performance in the third quarter of fiscal 2023 and recorded this adjustment within its business segments.

This had the effect of removing previously allocated incentive compensation expense from fiscal 2023 year-to-date reportable segment Adjusted EBITDA.

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

13-Week Period Ended 39-Week Period Ended

(in millions) April 29, 2023 April 30, 2022 April 29, 2023 April 30, 2022

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

13-Week Period Ended

(in millions) October 28, 2023 October 29, 2022

Wholesale (1)

1 unchanged sentence

Retail 606 613

Other 56 60 172 166

Eliminations ( 395 ) ( 400 )

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Retail ( 1 ) 20

Other ( 1 ) 11 33 27

Eliminations ( 2 ) ( 3 )

6 unchanged sentences

LIFO charge ( 7 ) ( 21 )

Restructuring, acquisition and integration related benefits (expenses) 4 ( 8 ) ( 1 ) ( 16 )

(Loss) gain on sale of assets ( 4 ) 88 — 87

Multiemployer pension plan withdrawal benefit — — — 8

Other retail benefit — — — 1

Restructuring, acquisition and integration related expenses ( 4 ) ( 2 )

(Loss) gain on sale of assets and other asset charges ( 19 ) 5

Business transformation costs

Other adjustments ( 4 ) —

(Loss) income before income taxes

$ ( 48 ) $ 72

Income before income taxes $ 7 $ 97 $ 110 $ 266

Depreciation and amortization:

Wholesale $ 67 $ 64

Retail 9 7 27 22

Other 2 1 5 2

Total depreciation and amortization $ 78 $ 74

1 unchanged sentence

Wholesale $ 71 $ 57

Retail 3 5 23 13

Total capital expenditures $ 74 $ 67

(1) As presented in Note 3—Revenue Recognition, the Company recorded $ 319 million and $ 337 million for the third quarters of fiscal 2023 and 2022, respectively, and $ 1,006 million and $ 1,032 million in fiscal 2023 and 2022 year-to-date, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale to Retail sales that have been eliminated upon consolidation.

(1) As presented in Note 3—Revenue Recognition, the Company recorded $ 321 million and $ 334 million for the first quarters of fiscal 2024 and 2023, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale to Retail sales that have been eliminated upon consolidation.

Total assets by reportable segment were as follows:

(in millions) April 29, 2023 July 30, 2022

(in millions) October 28, 2023 July 29, 2023

Wholesale $ 6,858 $ 6,405

5 unchanged sentences

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 29, 2023.

The Company has outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various retailers as of October 28, 2023.

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

3 unchanged sentences

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

As of April 29, 2023, the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was $ 16 million ($ 14 million on a discounted basis).

Based on the indemnification agreements, personal guarantees and results of the reviews of performance risk, as of April 29, 2023, a total estimated loss of $ 1 million is recorded in the Condensed Consolidated Balance Sheets.

As of October 28, 2023, the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was $ 14 million ($ 11 million on a discounted basis).

Based on the indemnification agreements, personal guarantees and results of the reviews of performance risk, as of October 28, 2023, 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.

19 unchanged sentences

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

As of April 29, 2023, the Company had approximately $ 524 million of non-cancelable future purchase obligations, most of which will be paid and utilized in the ordinary course within one year.

As of April 29, 2023, the Company had commitments of $ 772 million for future undiscounted minimum lease payments on leases signed but not yet commenced with terms of up to 20 years from commencement date.

As of October 28, 2023, the Company had approximately $ 606 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 28, 2023, the Company had commitments of $ 778 million for future undiscounted minimum lease payments on leases signed but not yet commenced with terms of up to 21 years from commencement date.

Legal Proceedings

9 unchanged sentences

On March 8, 2023, the Company received a subpoena from the Consumer Protection Division of the Maryland Attorney General’s Office seeking records related to the distribution and dispensing of opioids.

The Company is in the process of gathering responsive documents and responding to the subpoena.

The Company believes these claims are without merit and is vigorously defending this matter.

On May 19, 2023, the Company provided an initial production in response to the subpoena and is in the process of gathering additional responsive documents.

The Company believes these claims are without merit and intends to vigorously defend this matter.

On January 21, 2021, various health plans filed a complaint in Minnesota state court against the Company, Albertson’s Companies, LLC (“Albertson’s”) and Safeway, Inc.

9 unchanged sentences

The hearing on the remand motion and motions to dismiss occurred on May 20, 2021.

On September 21, 2021, the Federal District Court remanded the

case to Minnesota state court and did not rule on the motion to dismiss, which was refiled in state court.

On September 21, 2021, the Federal District Court remanded the case to Minnesota state court and did not rule on the motion to dismiss, which was refiled in state court.

On February 1, 2022, the state court denied the motion to dismiss.

On November 27, 2023, the court held a scheduling conference and will enter a scheduling order setting various discovery and expert deadlines.

The Company anticipates the trial date will be set for July 21, 2025.

The Company believes these claims are without merit and is vigorously defending this matter.

7 unchanged sentences

Violations of the FCA are subject to treble damages and penalties of up to a specified dollar amount per false claim.

Relators elected to pursue the case on their own and have alleged FCA damages against Supervalu and New Albertson’s in excess of $ 100 million, not including trebling and statutory penalties.

The relators elected to pursue the case on their own and have alleged FCA damages against Supervalu and New Albertson’s in excess of $ 100 million, not including trebling and statutory penalties.

For the majority of the relevant period Supervalu and New Albertson’s operated as a combined company.

In March 2013, Supervalu divested New Albertson’s (and related assets) pursuant to the Stock Purchase Agreement.

Based on the claims that are currently pending and the Stock Purchase Agreement, Supervalu’s share of a potential award (at the currently claimed value by relators) would be approximately $ 24 million, not including trebling and statutory penalties.

Based on the claims that are currently pending and the Stock Purchase Agreement, Supervalu’s share of a potential award (at the currently claimed value by the relators) would be approximately $ 24 million, not including trebling and statutory penalties.

Both sides moved for summary judgment.

8 unchanged sentences

On June 1, 2023, the Supreme Court reversed and vacated the lower court’s judgment and remanded the case to the Seventh Circuit for further proceedings.

On July 27, 2023, the Seventh Circuit vacated the summary judgment order and remanded the case to the District Court.

On August 22, 2023, the District Court set the trial date for April 29, 2024.

On October 11, 2023, each of the Company and the relators filed a motion for summary judgment.

Responses to the motions were filed on October 21, 2023, and replies are due December 15, 2023.

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 29, 2023, no material accrued obligations, individually or in the aggregate, have been recorded for these legal proceedings.

As of October 28, 2023, 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.

1 unchanged sentence

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