Risk Factors Update Summary
- We estimate our exposure to legal liability, including personal injury and antitrust claims, to be $5.9 billion as of December 31, 2022. This change might result in potential financial losses and reputational harm.
- The company failed to enter into strategic transactions, investments acceptable to us, or at all. This change might result in missed growth opportunities.
- The Merger Agreement with Kroger could have a material adverse effect on our business, results of operations, and financial condition. The pending Merger may impact our business relationships, financial condition, and operating results.
- Our information systems are subject to cyber incidents, including ransomware attacks and unauthorized access to sensitive data. This change might result in data breaches, financial losses, and damage to our reputation.
- Labor and transportation issues, stemming from COVID-19, continue to be felt along our supply chain, resulting in shipping and stocking delays. This change might result in increased costs and potential disruptions to our operations.
- The company warns that daily changes in benchmark rates and SOFR may not correlate with historical data, potentially increasing loan rates and borrowing costs.
- The company contributes to the communities it serves, donating over $200 million in food and financial support, including $40 million through the Nourishing Neighbors program. This change highlights the company's commitment to social responsibility and community impact.
- We had approximately $8.5 billion of debt outstanding and $0.5 billion of finance lease obligations as of February 25, 2023. This change might result in increased financial obligations and potential bankruptcy or liquidation risks.
- The company failed to realize anticipated benefits from productivity initiatives and environmental, social, and governance goals. This change might result in decreased efficiency and reputation.
- The company continually evaluates and develops its compensation and benefits programs, offering competitive wages, comprehensive healthcare coverage, paid time off, and retirement savings plans. This change aims to attract and retain employees.
- The company has integrated diversity, equity, and inclusion (DE&I) goals into the performance plans of top leaders, training over 15,000 leaders. This change might result in improved DE&I outcomes and a more inclusive work environment.
- We face strong competition from existing supercenters, club stores, dollar and discount stores, online retailers, and specialty stores. The industry's competitiveness may require increased advertising and capital investment.
- We currently operate 401 fuel centers that are adjacent to many of our stores. This change might result in increased profitability and improved customer convenience.
- The largest stockholder, Cerberus, controls approximately 75% of the company's common stock and has the power to influence corporate decisions.
- The company actively negotiates collective bargaining agreements to provide fair wages, retirement packages, and other benefits to unionized employees. This change demonstrates a commitment to employee well-being and satisfaction.
- The company is a signatory to the CEO Action for Diversity & Inclusion, committing to open dialogue and participating in Chief Diversity Officer roundtable forums. This change demonstrates a commitment to fostering diversity and inclusion within the company.
- Our digital business expansion and online initiatives have accelerated due to increased customer demand. However, there is no assurance of continued success, and additional capital investment may be required.
- The company increased its quarterly dividend on common stock from $0.10 to $0.12 per share in October 2021.
- We entered into a LIBOR Transition Amendment, replacing LIBOR with a term SOFR for our ABL Facility. This change might result in interest rate fluctuations and potential impacts on borrowing costs.
- Commodity prices such as wheat and corn have recently been impacted by the armed conflict between Russia and Ukraine. This change might result in significant inflationary pressures and increased costs for raw materials.
- The company faces legal and regulatory risks, including unfavorable changes in the tax code and legal proceedings. This change might result in financial penalties or reputational damage.
- The company had approximately 409,031,717 shares of Class A common stock and 150,242,903 shares of common stock as of February 25, 2023.
- Consolidation in the industry and larger competitors with greater financial resources pose risks to our financial performance, margins, and operating income.
- The company offers formal and informal learning and development opportunities, including eLearning, on-the-job training, mentoring programs, and VR experiences. This change may enhance employee skills and prepare them for future opportunities.
- The company's indebtedness poses risks, including increases in interest rates and liability under operating leases. This change might result in higher costs and financial strain.
- The company's ability to pay dividends to stockholders may be limited by contractual obligations or covenants in financing arrangements.
- Our pharmacy operations are exposed to risks related to product liability, regulatory changes, and licensing requirements.
- The company's largest stockholder is controlled by sponsors who may have conflicts of interest. This change might result in governance challenges and potential conflicts.
- The company provides various recognition programs for outstanding team members, including spot award cards, quarterly awards, and milestone anniversaries. This change acknowledges and rewards exceptional performance.
- Provisions in the company's charter documents and stockholders agreement could make it more difficult for stockholders to make changes in control or replace directors.
- Legislative, enforcement, regulatory, judicial, and public policy changes could materially and adversely impact our business operations and financial condition.
- The company's stock price may be affected by the future issuance of additional common stock. This change might result in dilution for existing shareholders.
- The company's workforce risks
- Catastrophic or unexpected occurrences, such as foreign conflicts, could disrupt our workplaces and supply chains.
- The interests of the largest stockholder, Cerberus, may not align with other stockholders and they may pursue competing investment opportunities.
Full Text Changes in Most Recent 10-K
Intended use: review the highlighted statements. These are additions to the risk factors disclosure in the most recent 10-K filing compared to the previous 10-K filing. Deleted and moved text is less important and is shown for context.
To view the full company filings, click on the following link to be taken to the SEC EDGAR database landing page for the company: https://www.sec.gov/edgar/browse/?CIK=1646972&owner=exclude
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