v3.26.1
INCOME TAXES
 12 Months Ended
Feb. 28, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of income tax expense consisted of the following (in millions):
Fiscal
 2025		Fiscal
 2024		Fiscal
 2023
Current
  Federal (1)$206.4 $228.9 $348.2 
  State (2)51.3 46.0 56.4 
  Foreign1.4 1.3 1.0 
Total Current259.1 276.2 405.6 
Deferred
  Federal(174.2)(11.8)(83.1)
  State(34.0)(92.9)31.7 
  Foreign(0.5)(0.4)(61.2)
Total Deferred(208.7)(105.1)(112.6)
Income tax expense$50.4 $171.1 $293.0 
(1) Federal current tax expense is net of $0.3 million, $0.3 million and $0.3 million tax benefit of net operating losses ("NOL") in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.
(2) There were no state tax benefits of NOLs in fiscal 2025 and fiscal 2023. In fiscal 2024, state current tax expense is net of $1.0 million tax benefit of NOLs.
The difference between the actual tax provision and the tax provision computed by applying the statutory federal income tax rate of 21.0% to Income before income taxes was attributable to the following (in millions):
Fiscal
 2025		Fiscal
 2024		Fiscal
 2023
AmountPercentAmountPercentAmountPercent
U.S. federal tax at statutory rate$56.2 21.0 %$237.3 21.0 %$333.7 21.0 %
State and local income taxes, net of federal income tax effect (1)10.4 3.9 51.9 4.6 66.3 4.2 
Tax credits
Research and development credit(11.9)(4.4)(12.9)(1.1)(20.6)(1.3)
Employee tax credits(8.5)(3.2)(12.3)(1.1)(20.6)(1.3)
Other credits(0.5)(0.2)(0.6)(0.1)(0.6)— 
Changes in federal valuation allowances2.2 0.8 2.7 0.2 — — 
Non-taxable or non-deductible items
Non-deductible legal settlements (2)20.4 7.6 — — — — 
Non-deductible executive compensation11.0 4.1 10.1 0.9 10.1 0.6 
Charitable donations(12.2)(4.6)(12.7)(1.1)(12.7)(0.8)
Other non-taxable or non-deductible items1.6 0.6 2.6 0.2 6.6 0.4 
Changes in unrecognized tax benefits(9.2)(3.4)(95.2)(8.4)(67.3)(4.2)
Other adjustments
Gain on purchase of transferable credits(9.4)(3.5)— — (2.5)(0.2)
Other0.3 0.1 0.2— 0.6— 
Income tax expense$50.4 18.8 %$171.1 15.1 %$293.0 18.4 %
(1) State taxes in California and Oregon made up the majority (greater than 50 percent) of the tax effect in this category.
(2) Represents the estimated future non-deductible payments related to the Opioid Settlement Framework. Refer to Note 12 for additional information.

The amounts of cash paid (refunds received) for income taxes was as follows:
Fiscal
2025		Fiscal
2024		Fiscal
2023
Federal$214.7 $209.6 $321.2 
California15.8 (87.4)20.7 
Oregon*11.2 *
Illinois*10.0 *
Other States23.7 23.7 62.5 
Foreign1.4 1.3 1.0 
Net cash paid for income taxes$255.6 $168.4 $405.4 
* The disclosure threshold of 5% was applied separately to each year. Amounts for these jurisdictions are below the threshold for the period presented.
Deferred income taxes reflect the net tax effects of temporary differences between the bases of assets and liabilities for financial reporting and income tax purposes. The Company's deferred tax assets and liabilities consisted of the following (in millions):
February 28,
2026		February 22,
2025
Deferred tax assets:
Lease obligations$1,768.2 $1,775.3 
Self-Insurance315.5 312.8 
Compensation and benefits199.9 192.2 
Pension & postretirement benefits181.3 194.5 
Legal settlements (1)176.2 — 
Net operating loss58.5 63.7 
Tax credits6.5 5.7 
Other83.1 71.3 
Gross deferred tax assets2,789.2 2,615.5 
Less: valuation allowance(61.9)(63.7)
Total deferred tax assets2,727.3 2,551.8 
Deferred tax liabilities:
Operating lease assets1,569.8 1,587.4 
Depreciation and amortization1,320.9 1,302.3 
Inventories382.7 401.7 
Other84.5 84.5 
Total deferred tax liabilities3,357.9 3,375.9 
Net deferred tax liability$(630.6)$(824.1)
Noncurrent deferred tax asset$— $— 
Noncurrent deferred tax liability(630.6)(824.1)
Total$(630.6)$(824.1)
(1) Represents the estimated future deductible payments related to the Opioid Settlement Framework. Refer to Note 12 for additional information.

The valuation allowance activity on deferred tax assets was as follows (in millions):
February 28,
2026		February 22,
2025		February 24,
2024
Beginning balance$63.7 $65.6 $102.3 
Additions charged to income tax expense2.7 5.1 6.0 
Reductions credited to income tax expense(1.4)(1.9)(2.8)
Changes to other comprehensive income or loss and other(3.1)(5.1)(39.9)
Ending balance$61.9 $63.7 $65.6 

The Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. On the basis of this evaluation, as of February 28, 2026, a valuation allowance of $61.9 million has been recorded for the portion of the deferred tax asset that is not more likely than not to be realized, consisting primarily of tax credits and carryovers in jurisdictions where the Company has minimal presence or does not expect to have future taxable income. The Company will continue to evaluate the
need to adjust the valuation allowance. The amount of the deferred tax asset considered realizable, however, could be adjusted depending on the Company's performance in certain subsidiaries or jurisdictions.

The Company currently has federal and state NOL carryforwards of $14.8 million and $1,154.5 million, respectively, which will begin to expire in 2026 and continue through fiscal 2046. As of February 28, 2026, the Company had $6.5 million of state credit carryforwards, which will begin to expire in 2026 and continue through fiscal 2038. The Company had no federal credit carryforwards as of February 28, 2026. As of February 28, 2026, the Company has federal charitable contribution carryforwards of $23.3 million, which begin to expire in 2029 and continue through fiscal 2030.

Changes in the Company's unrecognized tax benefits consisted of the following (in millions):
Fiscal
 2025		Fiscal
 2024		Fiscal
 2023
Beginning balance$57.4 $178.8 $216.0 
Increase related to tax positions taken in the current year6.1 6.4 9.6 
Decrease related to tax position taken in prior years— (111.8)(0.9)
Decrease related to settlements with taxing authorities— (2.1)(5.6)
Decrease related to lapse of statute of limitations(2.3)(13.9)(40.3)
Ending balance$61.2 $57.4 $178.8 

Included in the balance of unrecognized tax benefits as of February 28, 2026, February 22, 2025 and February 24, 2024 are tax positions of $25.2 million, $22.4 million and $118.1 million, respectively, which would reduce the Company's effective tax rate if recognized in future periods. As of February 28, 2026, the Company is no longer subject to federal income tax examinations for the fiscal years prior to 2022 and in most states, is no longer subject to state income tax examinations for fiscal years before 2013. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company recognized expense related to interest and penalties, net of settlement adjustments, of $1.7 million for fiscal 2025 and a benefit of $2.7 million and $27.2 million for fiscal 2024 and fiscal 2023, respectively.