Albertsons Companies, Inc.ACI
Albertsons Companies, Inc. Fair Value Disclosure
FAIR VALUE MEASUREMENTS
The accounting guidance for fair value established a framework for measuring fair value and established a three-level valuation hierarchy for disclosure of fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability at the measurement date. The three levels are defined as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities;
Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
Level 3 - Unobservable inputs in which little or no market activity exists, requiring an entity to develop its own assumptions that market participants would use to value the asset or liability.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following table presents certain assets which are measured at fair value on a recurring basis as of February 28, 2026 (in millions):
| Fair Value Measurements | ||||||||||||||||||||||||||
| Total | Quoted prices in active markets for identical assets (Level 1) | Significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | |||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Short-term investments (1) | $ | 13.7 | $ | 7.8 | $ | 5.9 | $ | — | ||||||||||||||||||
Non-current investments (2) | 111.4 | 8.7 | 102.7 | — | ||||||||||||||||||||||
| Derivative contracts (3) | 3.4 | — | 3.4 | — | ||||||||||||||||||||||
| Total | $ | 128.5 | $ | 16.5 | $ | 112.0 | $ | — | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| $ | 0.1 | $ | — | $ | 0.1 | $ | — | |||||||||||||||||||
| Total | $ | 0.1 | $ | — | $ | 0.1 | $ | — | ||||||||||||||||||
(1) Primarily relates to Mutual Funds (Level 1) and Certificates of Deposit (Level 2). Included in Other current assets.
(2) Primarily relates to investments in Exchange-Traded Funds (Level 1), and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets.
(3) Primarily relates to energy derivative contracts. Included in Other assets or Other current liabilities.
The following table presents certain assets which are measured at fair value on a recurring basis as of February 22, 2025 (in millions):
| Fair Value Measurements | ||||||||||||||||||||||||||
| Total | Quoted prices in active markets for identical assets (Level 1) | Significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | |||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Short-term investments (1) | $ | 41.3 | $ | 6.8 | $ | 34.5 | $ | — | ||||||||||||||||||
Non-current investments (2) | 118.8 | 7.2 | 111.6 | — | ||||||||||||||||||||||
| 0.3 | — | 0.3 | — | |||||||||||||||||||||||
| Total | $ | 160.4 | $ | 14.0 | $ | 146.4 | $ | — | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| $ | 0.6 | $ | — | $ | 0.6 | $ | — | |||||||||||||||||||
| Total | $ | 0.6 | $ | — | $ | 0.6 | $ | — | ||||||||||||||||||
(1) Primarily relates to Mutual Funds (Level 1), and certain equity investments and Certificates of Deposit (Level 2). Included in Other current assets.
(2) Primarily relates to investments in Exchange-Traded Funds (Level 1), and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets.
(3) Primarily relates to energy derivative contracts. Included in Other assets or Other current liabilities.
The Company records cash and cash equivalents, restricted cash, accounts receivable and accounts payable at cost. The recorded values of these financial instruments approximate fair value based on their short-term nature.
The estimated fair value of the Company's debt, including current maturities, was based on Level 2 inputs, being market quotes or values for similar instruments, and interest rates currently available to the Company for the issuance of debt with similar terms and remaining maturities as a discount rate for the remaining principal payments. As of February 28, 2026, the fair value of total debt was $8,649.9 million compared to a carrying value of $8,626.8 million, excluding debt discounts and deferred financing costs. As of February 22, 2025, the fair value of total debt was $7,312.1 million compared to the carrying value of $7,452.4 million, excluding debt discounts and deferred financing costs.
Assets Measured at Fair Value on a Nonrecurring Basis
The Company measures certain assets at fair value on a non-recurring basis, including long-lived assets and goodwill, which are evaluated for impairment. Long-lived assets include store-related assets such as property and equipment, operating lease assets and certain intangible assets. The inputs used to determine the fair value of long-lived assets and a reporting unit are considered Level 3 measurements due to their subjective nature.
The Company recorded long-lived asset impairment losses of $28.4 million, $104.2 million and $42.6 million during fiscal 2025, fiscal 2024 and fiscal 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Apr 27, 2026 | Showing above |
| 2025 | Apr 21, 2025 | |
| 2024 | Apr 22, 2024 | |
| 2023 | Apr 25, 2023 | |
| 2022 | Apr 26, 2022 | |
| 2021 | Apr 28, 2021 | |
| 2020 | May 13, 2020 | |
| 2019 | Apr 24, 2019 | |
| 2018 | May 11, 2018 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.