Obbligazione Albert Inc. 6.625% ( US013093AB57 ) in USD

Albert Inc.

100 USD ▼

Stati Uniti

US013093AB57 ( in USD )

6.625% per anno ( pagato 2 volte l'anno)

15/06/2024 - Obbligazione è scaduto

Prospetto opuscolo dell'obbligazione Albertson's Inc US013093AB57 in USD 6.625%, scaduta

1 000 USD

1 249 864 000 USD

013093AB5

B1 ( Highly speculative )

Albertsons Companies, Inc. è una società americana di vendita al dettaglio di generi alimentari che opera una vasta rete di supermercati, farmacie e negozi di convenienza negli Stati Uniti.

The Obbligazione issued by Albert Inc. ( United States ) , in USD, with the ISIN code US013093AB57, pays a coupon of 6.625% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 15/06/2024

The Obbligazione issued by Albert Inc. ( United States ) , in USD, with the ISIN code US013093AB57, was rated B1 ( Highly speculative ) by Moody's credit rating agency.

The Obbligazione issued by Albert Inc. ( United States ) , in USD, with the ISIN code US013093AB57, was rated NR by Standard & Poor's ( S&P ) credit rating agency.

424B3
424B3 1 d377366d424b3.htm 424B3
Table of Contents
As file d pursua nt t o Rule 4 2 4 (b)(3 )
File N o. 3 3 3 -2 1 8 1 3 8

Prospe c t us

Albe rt sons Com pa nie s
OFFER T O EX CH AN GE
$ 1 ,2 5 0 ,0 0 0 ,0 0 0 of 6 .6 2 5 % Se nior N ot e s due 2 0 2 4 a nd t he Re la t e d Gua ra nt e e s
AN D
$ 1 ,2 5 0 ,0 0 0 ,0 0 0 of 5 .7 5 0 % Se nior N ot e s due 2 0 2 5 a nd t he Re la t e d Gua ra nt e e s
T he Offe ring:
Offered Securities: The securities offered by this prospectus are our 6.625% Senior Notes due 2024 (the "New 2024 Notes"), which are
being issued in exchange for our 6.625% Senior Notes due 2024 (the "Original 2024 Notes" and, together with the New 2024 Notes, the "2024
Notes") and sold by us in our private placement that we consummated on May 31, 2016, and our 5.750% Senior Notes due 2025 (the "New 2025
Notes" and, together with the New 2024 Notes, the "New Notes"), which are being issued in exchange for our 5.750% Senior Notes due 2025 (the
"Original 2025 Notes," together with the New 2025 Notes, the "2025 Notes" or, together with the Original 2024 Notes, the "Original Notes") and sold
by us in our private placement that we consummated on August 9, 2016. The New 2024 Notes and the New 2025 Notes and related guarantees are
substantially identical to the Original 2024 Notes and the Original 2025 Notes, respectively and are governed by the same respective indentures.
Expiration of Offering: The exchange offer expires at 5:00 pm, New York City time, on July 28, 2017, unless extended.
We will exchange all Original Notes that are validly tendered and not withdrawn prior to the expiration of the exchange offer.
We will not receive any proceeds from the exchange.
We believe that the exchange of Original Notes for New Notes will not be an exchange or otherwise a taxable event to a holder for United
States federal income tax purposes, but you should see the discussion under the caption "Certain United States Federal Income Tax
Consequences" for more information.
Each broker-dealer that receives New Notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. A broker-dealer who acquired Original Notes as a result of market making or other
trading activities may use this exchange offer prospectus, as supplemented or amended from time to time, in connection with any resales of the
New Notes.
T he N e w N ot e s:
Maturity: The New 2024 Notes will mature on June 15, 2024 and the New 2025 Notes will mature on March 15, 2025.
Interest Payment Dates: We will pay interest on the New 2024 Notes semi-annually, on June 15 and December 15 of each year,
commencing on December 15, 2017. We will pay interest on the New 2025 Notes semi-annually, on March 15 and September 15 of each year,
commencing on September 15, 2017.
We do not intend to list the New Notes on any securities exchange and, therefore, no active public market is anticipated for the New Notes.
No public market exists for the Original Notes.
Y ou should c a re fully c onside r t he risk fa c t ors be ginning on pa ge 2 7 of t his prospe c t us be fore pa rt ic ipa t ing in t he
e x c ha nge offe r.
I n m a k ing a n inve st m e nt de c ision, you m ust re ly on your ow n e x a m ina t ion of our busine ss a nd t he t e rm s of t his
e x c ha nge offe r, inc luding t he m e rit s a nd risk s involve d. N one of t he SEC, a ny st a t e se c urit ie s c om m ission or a ny
re gula t ory a ut horit y ha s a pprove d or disa pprove d t he N e w N ot e s nor ha ve a ny of t he fore going a ut horit ie s pa sse d
upon or e ndorse d t he m e rit s of t his offe ring or t he a c c ura c y of t his prospe c t us. Any re pre se nt a t ion t o t he c ont ra ry is a
c rim ina l offe nse .
The date of this prospectus is June 29, 2017.
https://www.sec.gov/Archives/edgar/data/86144/000119312517218461/d377366d424b3.htm[6/30/2017 9:49:42 AM]

424B3
Table of Contents
Table of Contents
T ABLE OF CON T EN T S

Page
Prospectus Summary

1
Special Note Regarding Forward-Looking Statements

25
https://www.sec.gov/Archives/edgar/data/86144/000119312517218461/d377366d424b3.htm[6/30/2017 9:49:42 AM]

424B3
Risk Factors

27
Use of Proceeds

51
Capitalization

52
Selected Historical Financial information of ACL

53
Supplemental Selected Historical Financial Information of Safeway

54
Management's Discussion and Analysis of Financial Condition and Results of Operations of ACL

55
Business

81
Management

101
Executive Compensation

111
Security Ownership of Certain Beneficial Owners and Management

128
Certain Relationships and Related Party Transactions

129
Description of Other Indebtedness

133
The Exchange Offer

140
Description of the New 2024 Notes

147
Description of the New 2025 Notes

206
Book-Entry; Delivery and Form

265
Plan of Distribution

268
Certain United States Federal Income Tax Consequences

269
Legal Matters

270
Experts

270
Where You Can Find More Information

270
Index to Financial Statements

F-1
I N FORM AT I ON ABOU T T H E T RAN SACT I ON
We have not authorized anyone to give you any information or to make any representations about us or the transactions we
discuss in this prospectus other than those contained in this prospectus. If you are given any information or representations about
these matters that is not discussed in this prospectus, you must not rely on that information. This prospectus is not an offer to sell or a
solicitation of an offer to buy securities anywhere or to anyone where or to whom we are not permitted to offer or sell securities under
applicable law. The delivery of this prospectus does not, under any circumstances, mean that there has not been a change in our
affairs since the date of this prospectus. Subject to our obligation to amend or supplement this prospectus as required by law and the
rules and regulations of the Securities and Exchange Commission (the "SEC"), the information contained in this prospectus is correct
only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of these securities.
Until September 27, 2017 (90 days after the date of this prospectus), all dealers effecting transactions in the exchange notes,
whether or not participating in the exchange offer, may be required to deliver a prospectus. This is in addition to the obligation of
dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
Each prospective purchaser of the exchange notes must comply with all applicable laws and regulations in force in any
jurisdiction in which it purchases, offers or sells the notes or possesses or distributes this prospectus and must obtain any consent,
approval or permission required by it for the

i
Table of Contents
purchase, offer or sale by it of the exchange notes under the laws and regulations in force in any jurisdiction to which it is subject or in
which it makes such purchases, offers or sales, and we shall not have any responsibility therefore.
CERT AI N T ERM S U SED I N T H I S PROSPECT U S
As used in this prospectus, unless the context otherwise requires, references to (i) the terms "company," "Company," "ACL,"
"we," "us" and "our" refer to Albertsons Companies, LLC, (ii) the term "AB Acquisition" refers to AB Acquisition LLC, ACL's direct and
sole parent, (iii) the term "Albertsons" refers to Albertson's LLC, and, where appropriate, its subsidiaries, (iv) the term "NAI" refers to
New Albertson's, Inc., and, where appropriate, its subsidiaries, (v) the term "United" refers to United Supermarkets, LLC, (vi) the term
"Safeway" refers to Safeway Inc. and, where appropriate, its subsidiaries, (vii) the term "Co-Issuers" refers to Albertsons (and not any
of its subsidiaries), NAI (and not any of its subsidiaries) and Safeway (and not any of its subsidiaries), (viii) the term "Additional Issuers
has the meaning set forth in the "Description of the New 2024 Notes" and the "Description of the New 2025 Notes," as applicable,
(ix) the term "Lead Issuers" refers to ACL and the Co-Issuers and (x) references to our "Sponsors" or the "Cerberus-led Consortium"
refer to, collectively, Cerberus Capital Management, L.P. ("Cerberus"), Kimco Realty Corporation ("Kimco Realty"), Klaff Realty, LP
https://www.sec.gov/Archives/edgar/data/86144/000119312517218461/d377366d424b3.htm[6/30/2017 9:49:42 AM]

424B3
("Klaff Realty"), Lubert-Adler Partners, L.P. ("Lubert-Adler"), Schottenstein Stores Corporation ("Schottenstein Stores") and their
respective controlled affiliates and investment funds.
All of the references to "notes" or "Notes" in this prospectus refer to the Original Notes and New Notes, collectively.
BASI S OF PRESEN T AT I ON
The consolidated financial statements and consolidated financial data included in this prospectus are those of ACL and its
consolidated subsidiaries.
We use a 52 or 53 week fiscal year ending on the last Saturday in February each year. Prior to fiscal year 2014, we used a 52
or 53 week fiscal year ending on the closest Thursday before the last Saturday in February each year. For ease of reference, unless
the context otherwise indicates, we identify our fiscal years in this prospectus by reference to the calendar year of the first day of such
fiscal year. For example, "fiscal 2014" refers to our fiscal year ended February 28, 2015, "fiscal 2015" refers to our fiscal year ended
February 27, 2016, and "fiscal 2016" refers to our fiscal year ended February 25, 2017. Our first quarter consists of 16 weeks, and our
second, third and fourth quarters generally consist of 12 weeks. For the fiscal year ended February 28, 2015, the fourth quarter
included 13 weeks, and the fiscal year included 53 weeks. The fiscal years ended February 25, 2017, February 27, 2016,
February 20, 2014 and February 21, 2013 included 52 weeks. We acquired Safeway on January 30, 2015. Accordingly, this
prospectus includes the audited balance sheets of Safeway as of January 3, 2015 and December 28, 2013 and audited consolidated
statements of income, comprehensive income (loss), stockholders' equity and cash flows of Safeway for the 53 weeks ended January
3, 2015 and the 52 weeks ended December 28, 2013 and December 29, 2012. Safeway's last three fiscal years prior to the Safeway
acquisition consisted of the 53-week period ended January 3, 2015, the 52-week period ended December 28, 2013 and the 52-week
period ended December 29, 2012.
I DEN T I CAL ST ORE SALES
As used in this prospectus, the term "identical store sales" is defined as stores operating during the same period in both the
current year and the prior year, comparing sales on a daily basis. Fuel sales are excluded from identical store sales, and internet sales
are included in identical store sales of the store from which the products are sourced. Fiscal 2016 is compared with the 52-week
period

ii
Table of Contents
ending February 27, 2016. Fiscal 2015 is compared with the 52-week period ending February 28, 2015. Fiscal 2014 is compared with
the 53-week period ending February 27, 2014. On an actual basis, acquired stores become identical on the one-year anniversary date
of their acquisition. Stores that are open during remodeling are included in identical store sales. The stores divested in order to secure
Federal Trade Commission ("FTC") clearance of the Safeway acquisition are excluded from the identical store sales calculation
beginning on December 19, 2014, the announcement date of the divestitures. Also included in this prospectus, where noted, are
supplemental identical store sales measures for ACL, which includes acquired Safeway, NAI and United stores, irrespective of their
acquisition dates.
T RADEM ARK S AN D T RADE N AM ES
This prospectus includes our trademarks and service marks, including ALBERTSONS®, SAFEWAY®, ACME®, AMIGOS®,
CARRS®, HAGGEN®, JEWEL-OSCO®, MARKET STREET®, PAVILIONS®, RANDALLS®, SAV-ON®, SHAW'S®, STAR MARKET®,
TOM THUMB®, UNITED EXPRESS®, UNITED SUPERMARKETS®, VONS®, EATING RIGHT®, LUCERNE®, O ORGANICS®, OPEN
NATURE®, MyMixx® and just for U®, which are protected under applicable intellectual property laws and are the property of our
company and its subsidiaries. This prospectus also contains trademarks, service marks, trade names and copyrights of other
companies, which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this
prospectus may appear without the ® or TM symbols. We do not intend our use or display of other parties' trademarks, trade names or
service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship
of us by, these other parties.
M ARK ET , I N DU ST RY AN D OT H ER DAT A AN D APPRAI SALS
This prospectus includes market and industry data and outlook, which are based on publicly available information, reports from
https://www.sec.gov/Archives/edgar/data/86144/000119312517218461/d377366d424b3.htm[6/30/2017 9:49:42 AM]

424B3
government agencies, reports by market research firms and/or our own estimates based on our management's knowledge of and
experience in the markets and businesses in which we operate. We believe this information to be reasonable based on the information
available to us as of the date of this prospectus. However, we have not independently verified market and industry data from third-
party sources. Historical information regarding supermarket and grocery industry revenues, including online grocery revenues, was
obtained from IBISWorld. Forecasts regarding Food-at-Home inflation were obtained from the U.S. Department of Agriculture ("USDA").
Information with respect to our market share was obtained from Nielsen ACView All Outlets Combined (Food, Mass and Dollar but
excluding Drug) for fiscal 2016. This information may prove to be inaccurate because of the method by which we obtained some of the
data for our estimates or because this information cannot always be verified with complete certainty due to limits on the availability and
reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in a survey of
market size. In addition, market conditions, customer preferences and the competitive landscape can and do change significantly. As a
result, you should be aware that the market and industry data included in this prospectus and our estimates and beliefs based on such
data may not be reliable. We do not make any representations as to the accuracy of such industry and market data.
In addition, the market value reported in the appraisals of the properties described herein are an estimate of value, as of the
date stated in each appraisal. The appraisals were subject to the following assumption: The estimate of market value as is, is based
on the assumption that the existing occupant/user remains in occupancy in the foreseeable future, commensurate with the typical
tenure of a user of this type, and is paying market rent as of the effective date of appraisal. Changes since the appraisal

iii
Table of Contents
date in external and market factors or in the property itself can significantly affect the conclusions. As an opinion, the reported values
are not necessarily a measure of current market value and may not reflect the amount which would be received if the property were
sold today. While we are not aware of any misstatements regarding any appraisals, market, industry or similar data presented herein,
such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the
sections entitled "Special Note Regarding Forward-Looking Statements" and "Risk Factors" in this prospectus.
SPECI AL N OT E REGARDI N G N ON -GAAP FI N AN CI AL M EASU RES
We define EBITDA as generally accepted accounting principles ("GAAP") earnings (net income (loss)) before interest, income
taxes, depreciation, and amortization. We define Adjusted EBITDA as earnings (net income (loss)) before interest, income taxes,
depreciation, and amortization, further adjusted to eliminate the effects of items management does not consider in assessing our
ongoing performance. We define Adjusted Net Income as GAAP net income (loss) adjusted to eliminate the effects of items
management does not consider in assessing ongoing performance. See "Prospectus Summary--Summary Consolidated Historical
Financial and Other Data" for further discussion and a reconciliation of Adjusted EBITDA and Adjusted Net Income.
EBITDA, Adjusted EBITDA and Adjusted Net Income (collectively, the "Non-GAAP Measures") are performance measures that
provide supplemental information we believe is useful to analysts and investors to evaluate our ongoing results of operations, when
considered alongside other GAAP measures such as net income, operating income and gross profit. These Non-GAAP Measures
exclude the financial impact of items management does not consider in assessing our ongoing operating performance, and thereby
facilitate review of our operating performance on a period-to-period basis. Other companies may have different capital structures or
different lease terms, and comparability to our results of operations may be impacted by the effects of acquisition accounting on our
depreciation and amortization. As a result of the effects of these factors and factors specific to other companies, we believe EBITDA,
Adjusted EBITDA and Adjusted Net Income provide helpful information to analysts and investors to facilitate a comparison of our
operating performance to that of other companies. We also use Adjusted EBITDA, as further adjusted for additional items defined in
our debt instruments, for board of manager and bank compliance reporting. Our presentation of Non-GAAP Measures should not be
construed as an inference that our future results will be unaffected by unusual or non-recurring items.
N on -GAAP M e a sure s ha ve lim it a t ions a s a na lyt ic a l t ools, a nd you should not c onside r t he m in isola t ion
or a s subst it ut e s for a na lysis of our ope ra t ing re sult s or c a sh flow s a s re port e d unde r GAAP. Som e of t he se
lim it a t ions a re :

· Non-GAAP Measures do not reflect the anticipated synergies associated with the Safeway acquisition;

· Non-GAAP Measures do not reflect certain one-time or non-recurring cash costs to achieve the anticipated synergies

associated with the Safeway acquisition;

· Non-GAAP Measures do not reflect changes in, or cash requirements for, our working capital needs;

· EBITDA and Adjusted EBITDA do not reflect the significant interest expense or the cash requirements necessary to service

interest or principal payments on our debt;

https://www.sec.gov/Archives/edgar/data/86144/000119312517218461/d377366d424b3.htm[6/30/2017 9:49:42 AM]

424B3
· Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized may have to be

replaced in the future, and EBITDA and Adjusted EBITDA and, with

iv
Table of Contents

respect to acquired intangible assets, Adjusted Net Income, do not reflect any cash requirements for such replacements;

· Non-GAAP Measures are adjusted for certain non-recurring and non-cash income or expense items that are reflected in our

statements of operations

· Non-GAAP Measures do not reflect our cash expenditures or future requirements for capital expenditures or contractual

commitments; and

· Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as

comparative measures.
Because of these limitations, Non-GAAP Measures should not be considered as measures of discretionary cash available to us
to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Non-
GAAP Measures only for supplemental purposes. Please see our consolidated financial statements contained in this prospectus.

v
Table of Contents
PROSPECT U S SU M M ARY
This summary highlights the information contained elsewhere in this prospectus. This summary may not contain all of the
information that may be important to you or that you should consider before participating in the exchange offer. You should read
this entire prospectus carefully. The following summary is qualified in its entirety by, and should be read in conjunction with, the
more detailed information appearing elsewhere in this prospectus. In particular, you should read the sections entitled "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations of ACL" and our
consolidated financial statements and the related notes included elsewhere in this prospectus.
OU R COM PAN Y
We are one of the largest food and drug retailers in the United States, with both strong local presence and national scale.
As of February 25, 2017, we operated 2,324 stores across 35 states and the District of Columbia under 20 well-known banners,
including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star
Market, Carrs and Haggen. We operate in 122 Metropolitan Statistical Areas in the United States ("MSAs") and are ranked #1 or
#2 by market share in 66% of them. We provide our customers with a service-oriented shopping experience, including convenient
and value-added services through 1,786 pharmacies, 1,227 in-store branded coffee shops and 385 adjacent fuel centers. We
have approximately 273,000 talented and dedicated employees serving on average 34 million customers each week.
Our operating philosophy is simple: we run great stores with a relentless focus on driving sales. We believe that our
management team, with decades of collective experience in the food and drug retail industry, has developed a proven and
successful operating playbook that differentiates us from our competitors.
We implement our playbook through a decentralized management structure. We believe this approach allows our division
and district-level leadership teams to create a superior customer experience and deliver outstanding operating performance. These
leadership teams are empowered and incentivized to make decisions on product assortment, placement, pricing, promotional plans
and capital spending in the local communities and neighborhoods they serve. Our store directors are responsible for implementing
our operating playbook on a daily basis and ensuring that our employees remain focused on delivering outstanding service to our
customers.
We believe that the execution of our operating playbook, among other factors, including improved economic conditions and
consumer confidence, has enabled us to grow sales, profitability and free cash flow across our business. During fiscal 2014 and
fiscal 2015, on a supplemental basis including acquired Safeway, NAI and United stores, our identical store sales grew at 4.6%
and 4.8%, respectively, and decreased 0.4% during fiscal 2016. Given the deflationary trends in certain commodities, such as
https://www.sec.gov/Archives/edgar/data/86144/000119312517218461/d377366d424b3.htm[6/30/2017 9:49:42 AM]

424B3
meat, eggs and dairy, identical store sales for the third and fourth quarters of fiscal 2016 decreased. However, despite such
deflationary trends, we have been able to maintain or increase our overall share in the food retail channel during fiscal 2016.
While we anticipate deflationary trends in certain commodities will continue in fiscal 2017, though at lower rates than in fiscal
2016, we believe we are well-positioned to take advantage of projected food price inflation in the second half of 2017 and we plan
to maintain our price competitiveness in order to drive customer traffic. We believe that our fiscal 2015 identical store sales and
customer traffic benefited from the poor performance or closure of A&P and Haggen stores under prior ownership. We also believe
that during fiscal 2016 our identical store sales and customer traffic comparisons to fiscal 2015 were negatively impacted in

1
Table of Contents
certain markets from our acquisition or re-opening of A&P and Haggen stores. The rates of identical store sales growth for our
stores, on a supplemental basis including acquired Safeway, NAI and United stores, for fiscal 2014 and fiscal 2015 have been
adjusted for the positive sales impact in one of our divisions during the second quarter of fiscal 2014 resulting from a labor dispute
at a competitor that caused a temporary closure of its stores. Without adjusting for this impact, identical store sales growth for our
stores, on a supplemental basis including acquired Safeway, NAI and United stores, during fiscal 2014 and fiscal 2015 would have
been 4.7% and 4.6%, respectively.
We are currently executing on an annual synergy plan of approximately $800 million related to the acquisition of Safeway,
which we expect to achieve by the end of fiscal 2018. We expect to deliver annual run-rate synergies related to the acquisition of
Safeway of approximately $750 million by the end of fiscal 2017.
For fiscal 2015, we generated net sales of $58.7 billion, Adjusted EBITDA of $2.7 billion and free cash flow, which we
define as Adjusted EBITDA less capital expenditures, of $1.7 billion. For fiscal 2016, we generated net sales of $59.7 billion,
Adjusted EBITDA of $2.8 billion and free cash flow of $1.4 billion. In addition to realizing increased sales, profitability and free
cash flow through the implementation of our operating playbook, we expect synergies from the Safeway acquisition to enhance our
profitability and free cash flow over the next few years.
OU R I N T EGRAT I ON H I ST ORY
Over the past ten years, we have completed a series of acquisitions, beginning with our purchase of Albertson's LLC in
2006 (the "Legacy Albertsons Stores"). This was followed in March 2013 by our acquisition of NAI from SUPERVALU INC.
("SuperValu"), which included the Albertsons stores that we did not already own and stores operating under the Acme,
Jewel-Osco, Shaw's and Star Market banners. In December 2013, we acquired United, a regional grocery chain in North and
West Texas. In January 2015, we acquired Safeway in a transaction that significantly increased our scale and geographic reach.
We also completed the acquisition of 73 stores from The Great Atlantic & Pacific Tea Company, Inc. ("A&P") for our Acme banner
and 35 stores from Haggen during fiscal 2015, and we acquired an additional 29 stores from Haggen during fiscal 2016, 15 of
which operate under the Haggen banner. We continually review acquisition opportunities that we believe are synergistic with our
existing store network and we intend to continue to participate in the ongoing consolidation of the food retail industry. Any future
acquisitions may be material.
OU R OPERAT I N G PLAY BOOK
Our management team has developed and implemented a proven and successful operating playbook to drive sales growth,
profitability and free cash flow. Our playbook covers every major facet of store-level operations and is executed by local leadership
under the supervision of our executive management team. Our playbook is based on the following key concepts:

· Operate Our Stores to the Highest Standards. We ensure that our stores are always "full, fresh, friendly and clean." Our

efforts are driven through our rigorous G.O.L.D. (Grand Opening Look Daily) program that is focused on delivering fresh
offerings, well-stocked shelves, and clean and brightly lit departments.

· Deliver Superior Customer Service. We focus on providing superior customer service. We consistently invest in store

labor and training, and our simple and well-understood sales- and EBITDA-based bonus structure ensures that our
employees are properly incentivized. We

https://www.sec.gov/Archives/edgar/data/86144/000119312517218461/d377366d424b3.htm[6/30/2017 9:49:42 AM]

424B3

2
Table of Contents
measure customer satisfaction scores weekly and hold management accountable for continuous improvement. Our focus

on customer service is reflected in our improving customer satisfaction scores and identical store sales growth.

· Provide a Compelling Product Offering. We focus on providing the highest quality fresh, natural and organic
assortments to meet the demands of our customers, including through our private label brands, which we refer to as our
own brands, such as Open Nature and O Organics. Our own brands products achieved over $10.5 billion in sales in
fiscal 2016, and our company's portfolio of USDA-certified organic products is one of the largest and fastest growing in

the industry. In addition, we offer high-volume, high-quality and differentiated signature products, including fresh fruit and
vegetables cut in-store, cookies and fried chicken prepared using our proprietary recipes, in-store roasted turkey and
freshly-baked bread. Our decentralized operating structure enables our divisions to offer products that are responsive to
local tastes and preferences.

· Offer an Attractive Value Proposition to Our Customers. We maintain price competitiveness through systematic,
selective and thoughtful price investment to drive customer traffic and basket size. We also use our loyalty programs,

including just for U, MyMixx and our fuel-based rewards programs, as well as our strong own brand assortment, to
improve customer perception of our value proposition.

· Drive Innovation Across our Network of Stores. We focus on innovation to enhance our customers' in-store experience,
generate customer loyalty and drive traffic and sales growth. We ensure that our stores benefit from modern décor,
fixtures and store layout. We systematically monitor emerging trends in food and source new and innovative products to

offer in our stores. In addition, we are focused on continuing to deliver personalized and promotional offers to further
develop our relationship with our customers. We are currently testing our "click-and-collect" program, in which items
selected online by our customers are gathered from our store shelves by our associates and picked up by our customers
from our stores.

· Make Disciplined Capital Investments. We believe that our store base is modern and in excellent condition. We apply a
disciplined approach to our capital investments, undertaking a rigorous cost-benefit analysis and targeting an attractive

return on investment. Our capital budgets are subject to approval at the corporate level, but we empower our division
leadership to prudently allocate capital to projects that will generate the highest return.

3
Table of Contents
I DEN T I CAL ST ORE SALES
We believe that the execution of our operating playbook has been an important factor in the identical store sales growth
across our company. The charts below illustrate historical identical store sales growth across ACL (on a supplemental basis
including the acquired Safeway, NAI and United stores) and separately for the Safeway stores:

https://www.sec.gov/Archives/edgar/data/86144/000119312517218461/d377366d424b3.htm[6/30/2017 9:49:42 AM]

424B3

(1) Calculated irrespective of date of acquisition.
(2) After adjusting for the positive sales impact in one of our divisions during the second quarter of fiscal 2014 resulting from a labor dispute at a competitor
that caused a temporary closure of its stores.
(3) We believe that our fiscal 2015 identical store sales and customer traffic benefited from the poor performance or closure of A&P and Haggen stores
under prior ownership. We also believe that during fiscal 2016 our identical store sales and customer traffic comparisons to fiscal 2015 were negatively
impacted in certain markets from our acquisition or re-opening of A&P and Haggen stores.

4
Table of Contents
The following illustrative map represents our regional banners and combined store network as of February 25, 2017. We
also operate 28 strategically located distribution centers and 18 manufacturing facilities. Approximately 46% of our operating stores
are owned or ground-leased. Together, our owned and ground-leased properties have a value of approximately $12.1 billion.

https://www.sec.gov/Archives/edgar/data/86144/000119312517218461/d377366d424b3.htm[6/30/2017 9:49:42 AM]

424B3
OU R COM PET I T I V E ST REN GT H S
We believe the following strengths differentiate us from our competitors and contribute to our ongoing success:
Powerful Combination of Strong Local Presence and National Scale. We operate a portfolio of well-known banners with
both strong local presence and national scale. We have leading positions in many of the largest and fastest-growing MSAs in the
United States. Given the long operating history of our banners, many of our stores form an important part of the local communities
and neighborhoods in which they operate and occupy "First-and-Main" locations. We believe that our combination of local
presence and national scale provides us with competitive advantages in brand recognition, customer loyalty and purchasing,
marketing and advertising and distribution efficiencies.
Best-in-Class Management Team with a Proven Track Record. We have assembled a best-in-class management team
with decades of operating experience in the food and drug retail industry. Our Chairman and Chief Executive Officer, Bob Miller,
has over 50 years of food and drug retail experience, including serving as Chairman and CEO of Fred Meyer and Rite Aid and
Vice Chairman of Kroger. Wayne Denningham, President & Chief Operating Officer, and Shane Sampson, Executive Vice
President & Chief Marketing and Merchandising Officer, both bring significant leadership and operational experience to our
management team with long tenures at our company and within the industry. Our Executive and Senior Vice Presidents and our
division, district and store-level leadership teams are also critical to the success of our business. Our eight Executive Vice
Presidents, 18 Senior Vice Presidents and 13 division Presidents have an average of over 20, 22 and 32 years of service,
respectively, with our company.

5
Table of Contents
Proven Operating Playbook. We believe that the execution of our operating playbook has been an important factor in
enabling us to achieve sales growth and increase our market share. During fiscal 2014 and fiscal 2015, on a supplemental basis
including acquired Safeway, NAI and United stores, our identical store sales grew at 4.6% and 4.8%, respectively, and decreased
0.4% during fiscal 2016. Given the deflationary trends in certain commodities, such as meat, eggs and dairy, identical store sales
for the third and fourth quarters of fiscal 2016 decreased. However, despite such deflationary trends, we have been able to
maintain or increase our overall share in the food retail channel during fiscal 2016. While we anticipate deflationary trends in
certain commodities will continue in fiscal 2017, though at lower rates than in fiscal 2016, we believe we are well-positioned to
take advantage of projected food price inflation in the second half of 2017 and we plan to maintain our price competitiveness in
order to drive customer traffic. We believe that our fiscal 2015 identical store sales and customer traffic benefited from the poor
performance or closure of A&P and Haggen stores under prior ownership. We also believe that during fiscal 2016 our identical
store sales and customer traffic comparisons to fiscal 2015 were negatively impacted in certain markets from our acquisition or re-
opening of A&P and Haggen stores. The rates of identical store sales growth for our stores, on a supplemental basis including
https://www.sec.gov/Archives/edgar/data/86144/000119312517218461/d377366d424b3.htm[6/30/2017 9:49:42 AM]

Document Outline

#1">
- #1">