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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________

FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

☒ 1934
For the fiscal year ended February 25, 2023

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

☐ OF 1934
For the transition period from ________ to ________

Commission File Number 0-20214

BED BATH & BEYOND INC.

(Exact name of registrant as specified in its charter)
New York 11-2250488
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
650 Liberty Avenue, Union, New Jersey 07083
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: 908/688-0888
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol (s) Name of each exchange on which registered
Common stock, $.01 par value BBBY The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes _ No X

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes __ No X

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No __

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes X No__

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth
company" in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ___

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No X

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. X

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received
by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

As of August 27, 2022, the aggregate market value of the common stock held by non-affiliates (which was computed by reference to the closing price on
such date of such stock on the Nasdaq Global Select Market) was $848,397,597.*

The number of shares outstanding of the registrant’s common stock (par value $0.01 per share) at May 9, 2023: 739,056,836.

* For purposes of this calculation, all outstanding shares of common stock have been considered held by non-affiliates other than the 1,073,200 shares
beneficially owned by directors and executive officers. In making such calculation, the Registrant does not determine the affiliate or non-affiliate
status of any shares for any other purpose.

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TABLE OF CONTENTS
Form 10-K
Item No. Name of Item Page

PART I
Item 1. Business 6
Item 1A. Risk Factors 12
Item 1B. Unresolved Staff Comments 17
Item 2. Properties 18
Item 3. Legal Proceedings 20
Item 4. Mine Safety Disclosures 21

PART II
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 22
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 24
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 38
Item 8. Financial Statements and Supplementary Data 39
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 85
Item 9A. Controls and Procedures 85
Item 9B. Other Information 85
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 85

PART III
Item 10. Directors, Executive Officers and Corporate Governance 87
Item 11. Executive Compensation 90
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 117
Item 13. Certain Relationships and Related Transactions, and Director Independence 118
Item 14. Principal Accounting Fees and Services 118

PART IV
Item 15. Exhibits, Financial Statement Schedules 119
Item 16. Form 10-K Summary 124
*

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INTRODUCTORY NOTE

On April 23, 2023 (the “Petition Date”), the Company and materially all of its direct and indirect subsidiaries (collectively, the “Debtors” or the “Company
Parties”) filed a voluntary petition (the “Chapter 11 Cases”) under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S.
Bankruptcy Court for the District of New Jersey (the “Bankruptcy Court”). On the Petition Date, the Company Parties filed a motion with the Bankruptcy
Court seeking to jointly administer the Chapter 11 Cases. On April 24, 2023, the Bankruptcy Court entered an order approving joint administration under
the caption “In re Bed Bath & Beyond Inc.,” Case No. 23-13359. Certain of the Company’s subsidiaries were not included in the Chapter 11 filing.

On April 25, 2023, the Bankruptcy Court entered an order approving the bidding procedures in connection with the sale of all or substantially all of the
Debtors’ assets.

1. Stalking Horse Deadline: June 11, 2023, at 5:00 p.m. (prevailing Eastern Time)

2. Bid Deadline: June 16, 2023, at 12:00 p.m. (prevailing Eastern Time)

3. Auction (if applicable): An Auction may be held on June 21, 2023, at 10:00 a.m. (prevailing Eastern Time) via live auction

4. Notice of Successful Bidder: As soon as reasonably practicable after the conclusion of the Auction (if necessary).

5. Sale Objection Deadline: June 26, 2023, at 9:00 a.m. (prevailing Eastern Time)

6. Sale Hearing: June 27, 2023, or as soon thereafter as the Court’s calendar permits

The Company Parties continue to operate their business and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Except as otherwise specifically stated
herein, the description and disclosures presented elsewhere in this Form 10-K reflect the Company’s business as of February 25, 2023, prior to the filing of
the Chapter 11 Cases. As a result of the filing of the Chapter 11 Cases, the Company no longer has any operations, other than those relating to the wind
down of its business and the completion of the Chapter 11 process.

CAUTIONARY INFORMATION REGARDING TRADING IN THE COMPANY’S SECURITIES

Holders of the Company’s equity securities will likely be entitled to no recovery on their investment following the Chapter 11 Cases, and recoveries to
other stakeholders cannot be determined at this time. The Company cautions that trading in the Company’s securities given the pendency of the Chapter 11
Cases is highly speculative and poses substantial risk. Trading prices for the Company’s securities bear little or no relationship to the actual value realized,
if any, by holders of the Company’s securities in the Chapter 11 Cases. Accordingly, the Company urges extreme caution with respect to existing and future
investment in its securities.

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PART I

Unless otherwise indicated, references to "we," "our," "us," "ourselves" and the "Company" refer collectively to Bed Bath & Beyond Inc. and its
subsidiaries as of February 25, 2023. Our fiscal year is comprised of the 52 or 53 week period ending on the Saturday nearest February 28. Accordingly,
throughout this Annual Report on Form 10-K: (i) the term "Fiscal 2022" means our fiscal year beginning February 27, 2022, and ending February 25,
2023, (ii) the term "Fiscal 2021" means our fiscal year beginning February 28, 2021, and ending February 26, 2022, and (iii) the term "Fiscal 2020"
means our fiscal year beginning March 1, 2020, and ending February 27, 2021. Unless otherwise indicated, all references herein to periods of time (e.g.,
quarters) are in relation to the fiscal years defined above.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. Many of these forward-looking statements can be identified by use of words such as “may,” “will,” “expect,” “anticipate,” “approximate,”
“estimate,” “assume,” “continue,” “model,” “project,” “plan,” “goal,” “preliminary,” and similar words and phrases, although the absence of those words
does not necessarily mean that statements are not forward-looking. Our actual results and future financial condition may differ materially from those
expressed in any such forward-looking statements as a result of many factors. Such factors include, without limitation:

• the Chapter 11 Cases and the Chapter 11 process;

• risks attendant to the bankruptcy process, including the Company’s ability to obtain court approval from the Bankruptcy Court (as defined herein)
with respect to motions or other requests made to the Bankruptcy Court throughout the course of the Chapter 11 Cases (as defined herein),
including with respect the DIP Facility (as defined herein);

• the effects of the Chapter 11 Cases, including increased legal and other professional costs necessary to execute the Company’s reorganization, on
the Company’s liquidity (including the availability of operating capital during the pendency of the Chapter 11 Cases), results of operations or
business prospects;

• the effects of the Chapter 11 Cases on the interests of various constituents and financial stakeholders;

• the length of time that the Company will operate under Chapter 11 protection and the continued availability of operating capital during the
pendency of the Chapter 11 Cases;

• objections to the Company’s Chapter 11 process, or other pleadings filed that could protract the Chapter 11 Cases;

• risks associated with third-party motions in the Chapter 11 Cases;

• the Company’s ability to comply with the restrictions imposed by the terms and conditions of the DIP Credit Agreement (as defined herein) and
other financing arrangements;

• risks relating to the delisting of the Company’s common stock from Nasdaq and future quotation of the Company’s common stock;

• the effectiveness of the Company’s internal control over financial reporting and disclosure controls and procedures, and the potential for material
weaknesses in the Company’s internal controls over financial reporting or other potential weaknesses of which the Company is not currently aware
or which have not been detected; and

• the impact of litigation and regulatory proceedings.

Except as required by law, we do not undertake any obligation to update our forward-looking statements. These statements are based on our management’s
beliefs and assumptions, which in turn are based on currently available information. These assumptions could prove inaccurate.

Any forward-looking statement we make in this Annual Report on Form 10-K or elsewhere speaks only as of the date on which we make it. The risks
identified above are not exhaustive, and you should be aware that there may be other risks that could adversely affect our business and financial
performance. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. In any event,
these and other important factors, including those set forth under the caption “Risk Factors” in this Annual Report on Form 10-K, may cause actual results
to differ materially from those

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indicated by our forward-looking statements. We have no duty, and do not intend, to update or revise the forward-looking statements we make in this
Annual Report on Form 10-K or elsewhere, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the
future events or circumstances described in any forward-looking statement we make in this Annual Report on Form 10-K or elsewhere might not occur.

ITEM 1 – BUSINESS

Overview

The description of the Company’s business contained herein reflects the Company’s operations of its business prior to the filing of the Chapter 11 Cases on
April 23, 2023. As a result of the filing of the Chapter 11 Cases, the Company no longer has operations, other than those relating to the wind down of its
business and completion of the Chapter 11 process.

The Company is an omni-channel retailer that makes it easy for our customers to feel at home. We sell a wide assortment of merchandise in the Home,
Baby, Beauty & Wellness markets and operate under the names Bed Bath & Beyond and buybuy BABY ("BABY").

Our portfolio of banners consists of:

Bed Bath & Beyond - a specialty home retailer in the U.S that sells a wide assortment of domestic merchandise and home furnishings. Bed Bath & Beyond
is a destination in the home space, particularly in key product categories including bedding, bath, kitchen food prep, home organization and indoor decor.

buybuy BABY - a specialty baby retailer in North America that sells a wide assortment of baby essentials and nursery furnishings. BABY strives to build
trust with parents by supporting them with what they need so families can celebrate every milestone – big and small – together.

We offer a broad assortment of national brands and an assortment of proprietary owned brands (the “Owned Brands”). Owned Brand merchandise in key
destination categories including bedding, bath, kitchen, food prep, home organization, indoor décor, baby and personal care.

Across our banners, we carry a wide variety of domestics, and home furnishings and baby merchandise. Domestics merchandise includes categories such as
bed linens and related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, food prep, fine
tabletop, basic housewares, home organization, general home furnishings (including furniture and wall décor), consumables, and certain juvenile products.
Our Owned Brands in domestics and home furnishings include Simply Essential™, Nestwell™, Our Table™, Squared Away™, H for Happy™ and
Everhome™. Our Owned Brands in baby include Mighty Goods™ and Ever & Ever™.

We operate an omni-channel platform consisting of various websites and applications and physical retail stores. Our e-commerce platforms include
bedbathandbeyond.com and buybuybaby.com. We operate Bed Bath & Beyond and buybuy BABY stores.

We are driving a digital-first, omni-always strategy and optimizing our digital and physical store channels to provide our customers with an omni-channel
shopping experience. Digital purchases, including web and mobile, can be shipped to a customer from our distribution facilities, directly from vendors, or
from a store. Store purchases are primarily fulfilled from that store's inventory or may also be shipped to a customer from one of our distribution facilities,
from a vendor, or from another store. Customers can also choose to pick up orders using our Buy Online Pickup In Store ("BOPIS") and contactless
Curbside Pickup services, as well as return online purchases to a store, or have an order delivered through one of our delivery partners.

We operated 872 retail stores, as of February 25, 2023, consisting of 696 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico
and Canada, 131 BABY stores in 37 states and Canada and 45 Harmon stores in 2 states. During Fiscal 2022, we opened 7 new stores and closed 88 stores.
As of February 25, 2023, our total store square footage, net of openings and closings, was approximately 25.5 million square feet. In addition to our U.S.
and Canadian operations, we are a partner in a joint venture that operates 5 stores in Mexico under the name Bed Bath & Beyond.

We account for our operations as one North American Retail reporting segment. In Fiscal 2020, we accounted for our operations as two operating
segments: North American Retail and Institutional Sales, the latter of which did not meet the quantitative thresholds under GAAP and, therefore, was not a
reportable segment, and which was divested in October 2020. Net sales outside of the U.S. were not material for Fiscal 2022, 2021, or 2020.

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Recent Developments

Chapter 11 Bankruptcy

On April 23, 2023 (the “Petition Date”), the Company and materially all of its direct and indirect subsidiaries (collectively, the “Debtors” or the “Company
Parties”) filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy
Court for the District of New Jersey (the “Bankruptcy Court”). On the Petition Date, the Company Parties filed a motion with the Bankruptcy Court
seeking to jointly administer the Chapter 11 Cases. On April 24, 2023, the Bankruptcy Court entered an order approving joint administration under the
caption “In re Bed Bath & Beyond Inc.,” Case No. 23-13359. Certain of the Company’s subsidiaries were not included in the Chapter 11 filing.

The Company Parties continue to operate their business and manage their properties as “debtors-in-possession" under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company Parties filed with the
Bankruptcy Court motions seeking a variety of “first-day” relief, including authority to pay employee wages and benefits and to pay vendors and suppliers
for goods and services provided both before and after the Petition Date. In addition, the Company filed with the Bankruptcy Court a motion seeking
approval (“Interim DIP Order”) of debtor-in-possession financing (“DIP Financing”) in the form of the DIP Credit Agreement (as defined and described
below). Following a hearing held on April 24, 2023, the Bankruptcy Court approved the Company Parties’ motions seeking a variety of “first-day” relief on
an interim basis. The Company Parties resolved numerous informal comments and many of the "first-day" motions were entered on a final basis
consensually. A hearing was scheduled on June 14, 2023 for the Bankruptcy Court to consider final approval of the relief requested in certain first day
motions, and final approval of the DIP Facility.

DIP Credit Agreement

Prior to the Petition Date, the Company Parties and Sixth Street Specialty Lending, Inc., Sixth Street Lending Partners and TAO Talents (the “DIP Parties”)
agreed to enter into a senior secured super-priority debtor-in-possession term loan credit facility in an aggregate principal amount of $240,000,000 subject
to the terms and conditions set forth therein (the “DIP Credit Agreement”). On April 25, 2023, the Bankruptcy Court entered an order approving entry into
the DIP Credit Facility on an interim basis. Pursuant to the DIP Credit Agreement, the DIP Lenders have provided a senior secured super-priority debtor in
possession term loan facility (the “DIP Facility”), consisting of (1) a new money single draw term loan facility in the amount of $40 million, and (2) a roll-
up of certain secured obligations under the existing prepetition credit agreement between the Company Parties and the Prepetition FILO Lenders in the
amount of $200 million. Borrowings under the DIP Facility are senior secured obligations of the Company and certain Company Parties, secured by a super
priority lien on the collateral under the Amended and Restated Credit Agreement, dated as of August 9, 2021 (as amended by that certain First Amendment
to Amended and Restated Credit Agreement, dated as of August 31, 2022, that certain Second Amendment to Amended and Restated Credit Agreement and
Waiver, dated as of February 7, 2023, that certain Third Amendment to Amended and Restated Credit Agreement and Waiver, dated as of March 6, 2023,
that certain Fourth Amendment to Amended and Restated Credit Agreement and Waiver, dated as of March 30, 2023, that certain Fifth Amendment to
Amended and Restated Credit Agreement and Waiver, dated as of April 6, 2023 and that certain Sixth Amendment to Amended and Restated Credit
Agreement, Consent and Waiver, dated as of April 21, 2023, the “Existing Credit Agreement”), as well as all unencumbered assets of the Company Parties
(subject to customary exceptions). The DIP Credit Agreement has various customary covenants, as well as covenants mandating compliance by the Debtors
with a 13-week budget, variance testing and reporting requirements, among others. The proceeds of all or a portion of the proposed DIP Credit Agreements
may be used for, among other things, post-petition working capital for the Company and its subsidiaries, payment of costs to administer the Chapter 11
Cases, payment of expenses and fees of the transactions contemplated by the Chapter 11 Cases, payment of court-approved adequate protection obligations
under the DIP Credit Agreements, and payment of other costs, in each case, subject to an approved budget and such other purposes permitted under the DIP
Credit Agreement and the Interim DIP Order or any other order of the Bankruptcy Court.

The Company Parties are seeking final approval of the DIP Credit Agreement at a hearing before the Bankruptcy Court, contemplated to occur on or about
June 14, 2023.

Nasdaq Delisting Proceedings

On April 24, 2023, the Company received written notice from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”)
notifying the Company that, as a result of the Chapter 11 Cases and in accordance with the Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq
had determined that the Company’s common stock will be delisted from Nasdaq Trading of the Company’s common stock was suspended at the opening of
business on May 3, 2023.

Following delisting from Nasdaq, the Company’s common stock has been quoted in the OTC Pink Open Market under the symbol “BBBYQ”. The OTC
Pink Open Market is a significantly more limited market than Nasdaq, and quotation on the OTC Pink Open Market likely results in a less liquid market for
existing and potential holders of the common stock to trade the Company’s common stock and could further depress the trading price of the common stock.
The Company can provide no assurance as to

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whether broker-dealers will continue to provide public quotes of the common stock on this market, or whether the trading volume of the common stock will
be sufficient to provide for an efficient trading market.

We expect Nasdaq to file a Form 25 with the SEC to delist our common stock from trading on Nasdaq and to remove it from registration under Section
12(b) of the Exchange Act, which will become effective 10 days after such filing. In accordance with Rule 12d2-2 of the Exchange Act, the de-registration
of our common stock under Section 12(b) of the Exchange Act will become effective 90 days, or such shorter period as the SEC may determine, from the
date of the Form 25 filing.

Appointment of Chief Restructuring Officer

Effective on April 22, 2023, the Company appointed Holly Etlin to serve as the Chief Restructuring Officer (“CRO”) of the Company for such a term and
in accordance with the terms and conditions of that certain engagement letter, dated as of April 21, 2023 by and among and the Company and AP Services,
LLC (the “AP Engagement Letter”). As further set forth in the AP Engagement Letter, Ms. Etlin’s authority as CRO includes, in coordination with the
Company’s advisors and management, (a) overseeing the Chapter 11 Cases and court-supervised liquidation and sale process, (b) overseeing cash
management and liquidity forecasting, (c) the development of, or revisions to, the Company’s business plan, and (d) engagement with creditors and other
stakeholders. Ms. Etlin shall serve at the direction of an ad hoc committee of the Board of Directors of the Company and its subsidiaries comprised of
Carol Flaton, Pamela Corrie, Jonathan Foster, and Joshua Schechter, in accordance with the terms and conditions of the AP Engagement Letter.

Divestiture of Non-Core Assets

During Fiscal 2020, we divested five non-core banners, including One Kings Lane in the first quarter, PersonalizationMall.com in the second quarter, Linen
Holdings and Christmas Tree Shops in the third quarter and Cost Plus World Market in the fourth quarter, generating approximately $534 million in net
proceeds. See "Management’s Discussion and Analysis of Financial Condition and Results of Operations" for detailed information relating to these
divestitures.

Fiscal 2022 Strategic Transformation

Beginning in the third quarter of Fiscal 2022, we underwent significant strategic and management changes to transform our business and adapt to the
dynamic retail environment and the evolving needs of our customers in order to position ourselves for long-term success. The Company began to execute a
comprehensive strategic plan led by our new President and Chief Executive Officer, Sue Gove, who was appointed in October 2022 after serving as Interim
Chief Executive Officer.

• Change in leadership and strategy: We realigned our organizational structure, which included the creation of Brand President roles for Bed Bath
& Beyond and buybuy BABY to lead merchandising, planning, brand marketing, site merchandising and stores for each banner.

• Owned Brands: We exited a third of our Owned Brands, including the discontinuation of three of our nine labels (Haven™, Wild Sage™ and
Studio 3B™). We also expect to reduce the breadth and depth of inventory across our six remaining Owned Brands (Simply Essential™,
Nestwell™, Our Table™, Squared Away™, H for Happy™ and Everhome™).

• Introduction of Welcomes Rewards: During the second quarter of fiscal 2022, we launched our cross-banner customer loyalty program, Welcome
Rewards™, which allows members to earn points for each qualifying purchase at its retail banners either online or in its stores. Points earned are
then converted to rewards upon reaching certain thresholds.

• Right-sizing cost structure and store fleets to better serve customers: We increased our focus on strategic investments in technologies, capabilities
and services, store maintenance, and the expansion of digital offerings and services. We also initiated a strategic revaluation of store remodel plans
and returns given changes in customer shopping and service.

• Supporting the growth of buybuy BABY: We began to expand as we worked to become a solution for parents from pre-natal to pre-school. During
Fiscal 2022, we launched the first two exclusive buybuy Baby brands, Mighty Goods™ and Ever & Ever™ which are available exclusively at
buybuy BABY stores and online at buybuyBABY.com.

Store Closings

In support of the Company’s transformation, the Company reduced its store footprint and closed 88 stores during Fiscal 2022. Additionally, as of the
commencement of Chapter 11 Case the Company has begun the closing of the remaining stores, and the

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Company Parties are actively seeking to market and sell real property leases in order to capture substantial value and avoid significant costs associate with
such leases.

Rebalancing our Merchandise

In conjunction with the Company’s new strategic focus areas, the Company executed plans to rebalance our merchandise assortment to align with customer
preference by leading with National Brands inventory and introducing new, emerging direct-to-consumer brands. Consequently, we announced the exiting
of a third of our Owned Brands, including the discontinuation of a third of our nine labels (Haven™, Wild Sage™ and Studio 3B™). We also expect to
reduce the breadth and depth of inventory across our six remaining Owned Brands (Simply Essential™, Nestwell™, Our Table™, Squared Away™, H for
Happy™ and Everhome™).

Exit from Harmon, Decorist and Canadian Operations

We have continued to create a more focused portfolio, including through the exit of unprofitable businesses such as our Harmon, Decorist and Canada
operations. On September 26, 2022, we announced Decorist, an e-design platform we acquired in 2017, would wind down existing projects by October 12,
2022. On January 30, 2023, we announced plans to close all of our Harmon beauty product stores. During the fourth quarter of Fiscal 2022, we begun the
exit of our Canadian operations.

On February 10, 2023 (the “Canadian Petition Date”), BBB Canada Limited made an application with the Ontario Superior Court of Justice (the “Canadian
Court”). BBB Canada Limited was granted an order, which, among other provisions, provides a stay of proceedings pursuant to the Companies’ Creditors
Arrangement Act (the “CCAA”). The CCAA is a Federal Act that allows financially troubled corporations that owe their creditors in excess of $5 million
the opportunity to restructure their affairs. Although Bed Bath & Beyond Canada L.P. (“BBB LP” and together with BBB Canada Limited, “BBB Canada”)
did not file an application with the Canadian Court, the stay of proceedings under the CCAA and other benefits were extended to BBB LP. BBB Canada
initiated a wind-down of Bed Bath & Beyond and Buy Buy Baby Stores in Canada under the CCAA. A monitor was appointed by the Canadian Court on
February 10, 2023 to oversee the orderly liquidation of its remaining inventory with assistance from a third-party professional liquidator and vacate its
leased retail stores and premises.

Financial Position Realignment

The description of the Company’s business contained herein reflects the Company’s operations of its business prior to the filing of the Chapter 11 Cases on
April 23, 2023. As a result of the filing of the Chapter 11 Cases, the Company no longer has operations, other than those relating to the wind down of its
business and completion of the Chapter 11 process.

The Company focused on its financial position with the following efforts prior to the filing of the Chapter 11 Cases:

• Right-sizing cost structure and infrastructure to reflect business operations: We initiated a strategic revaluation of our overall expense and
operational structure to align with business performance and target profitability.

• Organizational changes to drive key focus areas: We realigned our executive leadership team and streamlined our organizational structure to focus
on immediate priorities and important changes to operations. In conjunction with these changes, the Company has eliminated the Chief Operating
Officer, Chief Stores Officer, Chief Merchandising Officer, Chief Customer Officer and Chief Growth Officer roles.

• Supply chain optimization: We completed a supply chain network study to improve cost to serve and time to deliver for our customers by
streamlining fulfillment center and distribution center operations.

• Supporting our supplier and vendor partners: The Company’s teams worked closely with supplier and vendor partners to ensure customers have
access to a strong assortment of their favorite brands across both store and digital channels. The customer experience is our top priority and we
made meaningful progress to improve our business and calibrate to customer demand. In addition to leveraging our recent capital to reinvest in
high demand inventory, we also worked to develop a third-party consignment program to allow us to fortify our product assortments by expanding
merchandise availability from key supplier partners.

• Obtaining additional capital: On February 7, 2023, the Company consummated an underwritten public offering of (i) shares of Series A
Convertible Preferred Stock (“Series A”), (ii) warrants to purchase shares of the Company’s Common Stock (“Common Stock Warrants”), and (iii)
warrants to purchase shares of the Company’s Series A Convertible Preferred Stock (“Preferred Stock Warrants”). The gross proceeds received for
the Series A was $225.0 million and there was no additional consideration received for the Common Stock Warrants and Preferred Stock Warrants
issued. Between February 7, 2023 and March 27, 2023, a holder exercised 14,212 Series A Convertible Preferred Stock Warrants to

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purchase 14,212 shares of Series A Convertible Preferred Stock for aggregate proceeds to the Company of $135,014,000. After the Company
anticipated that it would not be able to meet the conditions to force the exercise of the Series A Convertible Preferred Stock Warrants in the future
and receive cash proceeds therefore, on March 30, 2023, the Company and such holder entered into an exchange agreement (the “Exchange
Agreement”). Pursuant to the Exchange Agreement, the Company exchanged the warrants to purchase Series A Convertible Preferred Stock to
purchase 70,004 shares of Series A Convertible Preferred Stock, par value $0.01 per share and stated value of $10,000 per share for 10,000,000
shares of common stock and rights to receive 5,000,000 shares of common stock upon the effectuation of a reverse stock split. The Series A
Convertible Preferred Stock Warrants were terminated pursuant to the Exchange Agreement.

• Amending the credit facility to enable strategic initiatives:

◦ On February 7, 2023, the Company entered into the Second Amendment (the “Second Amendment”) to that certain Amended and
Restated Credit Agreement, dated as of August 9, 2021 (the “Credit Agreement” and as further amended, the “Amended Credit
Agreement”), with certain of the Company’s US and Canadian subsidiaries party thereto, JPMorgan Chase Bank, N.A., as administrative
agent (the “Administrative Agent”), Sixth Street Specialty Lending, Inc., as FILO agent (the “FILO Agent”), and the lenders party
thereto. Pursuant to the Second Amendment, the lenders agreed to (i) waive any outstanding defaults or events of default under the
existing Credit Facilities consisting of an asset-based revolving credit facility (the “ABL Facility”) and a first-in-last-out term loan credit
facility (the “FILO Facility” and, together with the ABL Facility, the “Credit Facilities”) and (ii) rescind the implementation of the
acceleration of obligations under the existing Credit Facilities, the requirement to cash collateralize letters of credit obligations under the
existing Credit Facilities and the default interest on the outstanding obligations under the existing Credit Facilities.

◦ On March 6, 2023, the Company entered into a waiver and amendment (the “Third Amendment”) to the Amended Credit Agreement. The
Third Amendment waived certain defaults and events of default under the Amended Credit Agreement related to negative and affirmative
covenants, including relating to the timely approval of the Company’s budget, which impacted the receipt of equity proceeds pursuant to
the Equity Commitment Documents by the then Required Funding Date (as defined in the Amended Credit Agreement) and subsequently
triggered the required satisfaction of the springing fixed charge coverage ratio.

◦ On March 30, 2023, the Company entered into a waiver and amendment (the “Fourth Amendment”) to the Amended Credit Agreement.
The Fourth Amendment waived certain events of default under the Amended Credit Agreement related to negative and affirmative
covenants. The Fourth Amendment also revised provisions of the Amended Credit Agreement relating to the Equity Commitment (as
defined in the Amended Credit Agreement) to reflect the Company’s entry into an at-the-market sales agreement, dated March 30, 2023,
by and between the Company and B. Riley Securities, Inc. (the “ATM Agreement”) and the Purchase Agreement and the Common Stock
Purchase Agreement entered into with BRPC II on March 30, 2023 (the “Purchase Agreement”) to provide additional capital to the
Company. Simultaneously, the Company terminated its previous public equity offering and all outstanding warrants for Series A
Convertible Preferred Stock associated with that offering.

◦ On April 6, 2023, the Company entered into an amendment (the “Fifth Amendment”) to the Amended Credit Agreement. The Fifth
Amendment permitted the entry into an amendment to the Consignment Agreement, dated as of April 4, 2023 (the “Consignment
Agreement”), by and among the Company, certain of its subsidiaries and Restore Capital (BBB), LLC. The Fifth Amendment also added
an Event of Default under the Amended Credit Agreement in the event that the Consignment Agreement is not extended at least fifteen
days prior to the termination date therein.
Competition

We operate in a highly competitive business environment and compete with other national, regional, and local physical and online retailers that may carry
similar lines of merchandise, including department stores, specialty stores, off-price stores, mass merchandise stores and online only retailers.

Suppliers

Historically, we have purchased substantially all of our merchandise in the United States, with the majority from domestic sources (who may manufacture
overseas) and the balance from importers.

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In Fiscal 2022, we purchased our merchandise from approximately 3,700 suppliers with our largest supplier accounting for approximately 5% of our
merchandise purchases and the ten largest suppliers accounting for approximately 27% of such purchases. We have no long-term contracts for the
purchases of merchandise.

Distribution

A substantial portion of our merchandise is shipped to stores through a combination of third-party facilities, including cross dock locations, or through our
operated distribution facilities that are located throughout the United States. The remaining merchandise is shipped directly from vendors. Merchandise is
shipped directly to customers from one of our distribution facilities, stores or from vendors. The majority of our shipments are made by contract carriers
depending upon location.

As of February 25, 2023, we had distribution facilities totaling approximately 4.4 million square feet, including our first regional distribution center, an
approximately one million square foot facility in Frackville, Pennsylvania, which became operational during Fiscal 2021. Ryder Systems, Inc. operated this
regional distribution center under a strategic partnership, with the objective of reducing product replenishment times and improving the customer
experience. All of these capabilities allow us to better serve customers across our omni-channel network. During Fiscal 2021, we also executed a lease for
our second regional distribution center in Jurupa Valley, California, which became operational during the second half of Fiscal 2022. As part of the
optimization and transformation initiatives during the fourth quarter of Fiscal 2022, the Company decided to no longer use the Jurupa Valley, California
distribution center. As of February 25, 2023, the Company had not fully exited the distribution center or reached a final negotiation with Ryder Systems,
Inc. See "Item 2 - Properties" for additional information regarding our distribution facilities.

Marketing

We employ a digital-first, omni-channel approach to marketing that is strategically designed to deliver maximum consumer engagement. The customer-
inspired marketing mix includes a comprehensive range of touchpoints, including social, search, mobile SMS, email, digital video, display, content and
influencer marketing, online affiliate programs and public relations, as well as traditional broadcast and print media, circulars, catalogs and our well-known
"big blue" coupons.

Customer Care

Our omni-always strategy is rooted in elevating the end-to-end experience for our customers across all channels, brands and banners. Through a customer
inspired lens, we invest in capabilities necessary to continuously evolve and deliver for our customers. Our digital-first customer care made it easy for
customers to connect with us through chat, phone and our digital properties including mobile apps that offered quick access to self-serve capabilities. Our
holistic approach to customer care was designed to make it convenient for our customers to access help wherever and whenever they need it.

Tradenames, Service Marks and Domain Names

We use the service marks "Bed Bath & Beyond" and "buybuy BABY" in connection with our retail services. We have registered trademarks and service
marks (including for our Owned Brands) with the United States Patent and Trademark Office. In addition, we have registered or have applications pending
with the trademark registries of several foreign countries, including the "Bed Bath & Beyond" name and logo registered in Canada and Mexico and the
"buybuy BABY" name and logo registered in Canada. We also own a number of product trademarks. We file patent applications and seek copyright
registrations where we deem such to be advantageous to the business. We believe that our name recognition and service marks are important elements of
our merchandising strategy.

We also own a number of domain names, including bedbathandbeyond.com and buybuybaby.com.

People & Culture

At Bed Bath & Beyond Inc., we strived to create an environment where all Associates can thrive by offering resources that support their physical, mental,
social, and emotional well-being. In Fiscal 2022, we specifically focused on providing a sense of continuity and stability as we navigated a dynamic
environment. At the same time, and in light of significant senior leadership turnover initiated by the Board and our new CEO, it was essential to maintain
an environment optimizing retention and maximizing our ability to recruit new talent.

As of February 25, 2023, we had approximately 20,000 associates, including approximately 17,000 store associates and approximately 2,200 supply chain
associates.

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Government Regulations

We believe that we are in compliance with all applicable government regulations, including environmental regulations. We do not anticipate any material
effects on our capital expenditures, earnings or competitive position as a result of our efforts to comply with applicable government regulations.

Seasonality

Our business is subject to seasonal influences. Generally, our sales volumes are higher in the calendar months of August (back to school/college),
November and December (holiday), and lower in February.

Available Information

We make available as soon as reasonably practicable after filing with the Securities and Exchange Commission ("SEC"), free of charge, through our
websites, www.bedbathandbeyond.com, and http://bedbathandbeyond.gcs-web.com/financial-information/sec-filings, our annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, electronically filed or furnished pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934. We may also use our websites as a distribution channel of material information about us including through
press releases, investor presentations, and notices of upcoming events. We intend to utilize the investor relations section of our website as a channel of
distribution to reach public investors and as a means of disclosing material non-public information for complying with disclosure obligations under
Regulation FD. We also intend to use certain social media channels, including, but not limited to, Twitter, Facebook and LinkedIn, as means of
communicating with the public, our customers and investors about us, our products, and other matters. While not all the information that we post to our
website and social media channels may be deemed to be of a material nature, some information may be, and we therefore encourage investors, the media
and others interested in us to review the information we make public in these locations.

ITEM 1A – RISK FACTORS

An investment in our common stock involves a high degree of risk. You should consider carefully all of the risks described below, together with the other
information contained in this Annual Report on Form 10-K, before making a decision to invest in our common stock.

RISKS RELATED TO THE CHAPTER 11 CASES

On April 23, 2023, we voluntarily filed the Chapter 11 Cases. The Company Parties continue to operate their business and manage their properties as
“debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders
of the Bankruptcy Court.

We may not be able to obtain confirmation of a Chapter 11 plan of reorganization.

To complete our Chapter 11 bankruptcy process, we must meet certain statutory requirements with respect to adequacy of disclosure with respect to a
Chapter 11 plan of reorganization, solicit and obtain the requisite acceptances of such a plan and fulfill other statutory conditions for confirmation of such a
plan. The precise requirements and evidentiary showing for confirming a plan, notwithstanding its rejection by one or more impaired classes of claims or
equity interests, depends upon a number of factors including, without limitation, the status and seniority of the claims or equity interests in the rejecting
class.

There is no assurance that the Company will be able to successfully consummate a Chapter 11 plan, creating substantial doubt about the Company’s
ability to continue as a going concern.

The Company's ability to continue as a going concern is contingent upon, among other things, its ability to, subject to the Bankruptcy Court’s approval,
implement a Chapter 11 plan, successfully emerge from the Chapter 11 Cases and establish a sustainable capital structure upon emergence. Our ability to
consummate a Chapter 11 plan is subject to risks and uncertainties many of which are beyond our control. These factors, together with the Company’s
recurring losses from operations and accumulated deficit, create substantial doubt about the Company’s ability to continue as a going concern. There can be
no assurance that the Company will be able to successfully create and implement a Chapter 11 plan, or realize all or any of the expected benefits from such
Chapter 11 plan.

The Company has sought the protection of the Bankruptcy Court, which subjects it to the risks and uncertainties associated with bankruptcy and may
harm its business.

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The Company has sought the protection of the Bankruptcy Court and as a result our operations and ability to develop and execute its business plan, and its
ability to continue as a going concern, are subject to the risks and uncertainties associated with bankruptcy. As such, seeking Bankruptcy Court protection
could have a material adverse effect on our business, financial condition, results of operations and liquidity. Senior management has been required to spend
a significant amount of time and effort attending to the Chapter 11 Cases instead of focusing exclusively on our business operations. Bankruptcy Court
protection also might make it more difficult to retain management and other employees necessary to the success and growth of our business.

Other significant risks include the following:

• the Company’s ability to create and implement a Chapter 11 plan;

• the high costs of bankruptcy and related fees;

• the imposition of restrictions or obligations on the Company by regulators related to the bankruptcy and emergence from Chapter 11;

• the Company’s ability to obtain sufficient financing to allow us to emerge from bankruptcy and execute its business plan post-emergence;

• Bankruptcy Court rulings in the Chapter 11 Cases as well as the outcome of all other pending litigation and the outcome of the Chapter 11 Cases
in general

• the Company’s ability to maintain its relationships with our suppliers, service providers, customers, employees, and other third parties;

• the Company’s ability to maintain contracts that are critical to its operations;

• and the actions and decisions of the Company’s debtholders and other third parties who have interests in the Company’s Chapter 11 Cases that
may be inconsistent with the Company’s plans.

Delays in the Chapter 11 Cases could increase the risks of our being unable to reorganize the Company’s business and emerge from bankruptcy and
increase costs associated with the bankruptcy process.

The Debtors will be subject to the risks and uncertainties associated with the Chapter 11 Cases.

For the duration of the Chapter 11 Cases, the Debtors’ ability to operate, develop, and execute a business plan, and continue as a going concern, will be
subject to the risks and uncertainties associated with bankruptcy. These risks include the following: (a) ability to obtain Bankruptcy Court approval with
respect to motions filed in the Chapter 11 Cases from time to time; (b) ability to maintain contracts that are critical to the Debtors’ operations; (c) ability of
third parties to seek and obtain Bankruptcy Court approval to terminate contracts and other agreements with the Debtors; (d) ability of third parties to seek
and obtain Bankruptcy Court approval to terminate or shorten the exclusivity period for the Debtors to propose and confirm a Chapter 11 plan, to appoint a
Chapter 11 trustee, or to convert the Chapter 11 Cases to Chapter 7 proceedings; and (e) the actions and decisions of the Debtors’ creditors and other third
parties who have interests in the Chapter 11 Cases that may be inconsistent with the Debtors’ plans.

These risks and uncertainties could affect the Debtors’ businesses and operations in various ways. For example, the Debtors will need the prior approval of
the Bankruptcy Court for transactions outside the ordinary course of business, which may limit the Debtors’ ability to respond timely to certain events or
take advantage of certain opportunities. Because of the risks and uncertainties associated with the Chapter 11 Cases, the Debtors cannot accurately predict
or quantify the ultimate impact of events that occur during the Chapter 11 Cases that may be inconsistent with the Debtors’ plans.

The Chapter 11 Cases may be converted to cases under Chapter 7 of the Bankruptcy Code or one or more of the Chapter 11 Cases may be dismissed.

If the Bankruptcy Court finds that it would be in the best interest of creditors and/or the debtor in a Chapter 11 case, the Bankruptcy Court may convert a
Chapter 11 bankruptcy case to a case under Chapter 7 of the Bankruptcy Code. In such event, a Chapter 7 trustee would be appointed or elected to liquidate
the debtor’s assets for distribution in accordance with the priorities established by the Bankruptcy Code. The Debtors believe that liquidation under Chapter
7 would result in significantly smaller distributions being made to creditors than those provided for in a Chapter 11 plan because of (a) the likelihood that
the assets would have to be sold or otherwise disposed of in a disorderly fashion over a short period of time, rather than reorganizing or selling the business
as a going concern at a later time in a controlled manner, (b) additional administrative expenses involved in the appointment of a Chapter 7 trustee, and (c)
additional expenses and claims, some of which would be entitled to priority, that

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would be generated during the liquidation, including claims resulting from the rejection of unexpired leases and other executory contracts in connection
with cessation of operations.

Additionally, if the Bankruptcy Court finds that the Debtors have incurred substantial or continuing loss or diminution to the estate and lack of a reasonable
likelihood of rehabilitation of the Debtors or the ability to otherwise determines that cause exists, the Bankruptcy Court may dismiss one or more of the
Chapter 11 Cases.

The Debtors cannot predict the amount of time spent in bankruptcy.

While the Debtors have made efforts to minimize the length of the Chapter 11 Cases, it is impossible to predict with certainty the amount of time that the
Debtors may spend in bankruptcy. There is a risk, due to uncertainty about the Debtors’ futures that, among other things: employees could be distracted
from performance of their duties or more easily attracted to other career opportunities; and suppliers, vendors, or other business partners could terminate
their relationship with the Debtors or demand financial assurances or enhanced performance, any of which could impair the Debtors’ prospects and ability
to generate stable, recurring cash flows.

Lengthy Chapter 11 Cases also would involve additional expenses, putting strain on the Debtors’ liquidity position, and divert the attention of management
from the operation of the Debtors’ businesses.

The disruption that the bankruptcy process would have on the Debtors’ businesses could increase with the length of time it takes to complete the Chapter 11
Cases. Further, the Debtors may be forced to operate in bankruptcy for an extended period of time while they try to develop a plan of reorganization that
can be confirmed. A protracted bankruptcy case could increase both the probability and the magnitude of the adverse effects described above.

Even if a Chapter 11 plan is approved, the reorganized Debtors may not be able to achieve their projected financial results.

Even if a Chapter 11 plan is approved, the reorganized Debtors may not be able to achieve their projected financial results. If the reorganized Debtors do
not achieve their projected financial results or are unable to procure sufficient exit financing to effectuate a Chapter 11 plan, the value of the Company’s
securities may be negatively affected and the reorganized Debtors may lack sufficient liquidity to continue operating as planned after the effective date.
Moreover, the financial condition and results of operations of the reorganized Debtors from and after the effective date may not be comparable to the
financial condition or results of operations reflected in the Debtors’ historical financial statements.

The Debtors may not be able to accurately report or timely file their financial results.

We have recently experienced significant turnover in our senior management team and reductions in our workforce. Our ability to retain key employees in
the long-term is affected by Chapter 11 Cases and our financial situation. Our business may be adversely affected by the transitions in our senior
management team and reduction in workforce, and turnover at the senior management level may create instability within the Company, which could disrupt
and impede our day-to-day operations and internal controls. In addition, management transition inherently causes some loss of institutional knowledge,
which can negatively affect strategy and execution, and our results of operations and financial condition could be negatively impacted as a result.

Significant turnover in our senior management team and across our organization could result in one or more material weakness in our internal control over
financial reporting. However, internal controls over financial reporting may not prevent or detect misstatements or omissions in the Debtors’ financial
statements because of their significant turnover in senior management, inherent limitations, including the possibility of human error, and the circumvention
or overriding of controls or fraud. Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair
presentation of financial statements. If the Company fails to maintain the adequacy of their internal controls, the Debtors may be unable to provide
financial information in a timely and reliable manner within the time periods required under the terms of the agreements governing the Debtors’
indebtedness. Further, the Debtors may discover other internal control deficiencies in the future and/or fail to adequately correct previously identified
control deficiencies, which could materially adversely affect the Debtors’ businesses, results of operations, and financial condition.

The Company Parties may be adversely affected by potential litigation, including litigation arising out of the Chapter 11 Cases.

In the future, the Company Parties may become parties to litigation. In general, litigation can be expensive and time consuming to bring or defend against.
Such litigation could result in settlements or damages that could significantly affect the reorganized Debtors’ financial results. It is also possible that certain
parties will commence litigation with respect to the treatment of their claims under the Chapter 11 plan. It is not possible to predict the potential litigation
that the Company Parties may become party to nor the final resolution of such litigation. The impact of any such litigation on the reorganized Debtors’
businesses and financial stability, however, could be material.

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We may be subject to claims that are not discharged in the Chapter 11 Cases.

The Bankruptcy Code provides that the effectiveness of a Chapter 11 plan discharges a debtor from substantially all debts arising prior to petition date,
other than as provided in the applicable Chapter 11 plan. With few exceptions, all claims against us that arose prior to the filing of the Cases or before
consummation of a Chapter 11 plan (i) would be subject to compromise and/or treatment under a Chapter 11 plan and/or (ii) would be discharged in
accordance with the US Bankruptcy Code and the terms of a Chapter 11 plan. Subject to the terms of a Chapter 11 plan and orders of the Bankruptcy Court,
any claims not ultimately discharged pursuant to a Chapter 11 plan could be asserted against the reorganized entities and may have an adverse effect on our
liquidity and financial condition.

The Company’s ability to use net operating loss carryforwards (“NOLs”) may become subject to limitation, or may be reduced or eliminated, in
connection with the implementation of a Chapter 11 plan. The bankruptcy court has entered an order that is designed to protect our NOLs until a plan
of reorganization is consummated.

Generally, a company generates NOLs if the operating expenses it has incurred exceed the revenues it has earned during a single tax year. A company may
apply, or “carry forward,” NOLs to reduce future tax payments (subject to certain conditions and limitations). To date, the Company has generated a
significant amount of U.S. federal NOLs.

We expect that we may undergo an ownership change under Section 382 of the Code in connection with the consummation of a Chapter 11 plan.
Nevertheless, we believe these NOLs are a valuable asset for us, particularly in the context of the Chapter 11 Cases.

In addition, our NOLs (and other tax attributes) may be subject to use in connection with the implementation of any bankruptcy Chapter 11 plan or
reduction as a result of any cancellation of indebtedness income arising in connection with the implementation of any bankruptcy Chapter 11 plan. As such,
at this time, there can be no assurance that we will have NOLs to offset future taxable income.

We are currently out of compliance with the Nasdaq Listing Rules and are at risk of Nasdaq delisting our common stock.

On April 24, we received written notice from Nasdaq notifying us Company that, as a result of the Chapter 11 Cases and in accordance with the Nasdaq
Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq had determined that our common stock would be delisted from Nasdaq. Trading of the Company’s
common stock was suspended at the opening of business on May 3, 2023. Delisting would have an adverse effect on the liquidity of our common stock
and, as a result, the market price for our common stock might become more volatile. Delisting could also reduce the number of investors willing to hold or
acquire our common stock and negatively impact our ability to access equity markets and obtain financing.

We expect Nasdaq to file a Form 25 with the SEC to delist our common stock from trading on Nasdaq and to remove it from registration under Section
12(b) of the Exchange Act. The delisting became effective 10 days after such filing. In accordance with Rule 12d2-2 of the Exchange Act, the de-
registration of our common stock under Section 12(b) of the Exchange Act will become effective 90 days, or such shorter period as the SEC may
determine, from the date of the Form 25 filing.

Following delisting from Nasdaq, the Company’s common stock has been quoted in the OTC Pink Open Market under the symbol “BBBYQ”. The OTC
Pink Open Market is a significantly more limited market than Nasdaq, and quotation on the OTC Pink Open Market likely results in a less liquid market for
existing and potential holders of the common stock to trade the Company’s common stock and could further depress the trading price of the common stock.
The Company can provide no assurance as to whether broker-dealers will continue to provide public quotes of the common stock on this market, or
whether the trading volume of the common stock will be sufficient to provide for an efficient trading market.

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RISKS RELATED TO THE ECONOMY AND INDUSTRY

General economic factors beyond our control, including the impact of COVID-19, and changes in the economic climate have materially adversely
affected, and could continue to materially adversely affect, our business, results of operations, financial condition and liquidity.

General economic factors that are beyond our control have materially adversely affected, and could continue to materially adversely affect, our business,
results of operations, financial condition and liquidity. These factors include, but are not limited to, recent supply chain disruptions, labor shortages, wage
pressures, rising inflation and the ongoing military conflict between Russia and Ukraine, as well as housing markets, consumer credit availability, consumer
debt levels, fuel and energy costs (for example, the price of gasoline), interest rates, tax rates and policy, unemployment trends, the impact of natural
disasters such as pandemics, civil disturbances and terrorist activities, foreign currency exchange rate fluctuations, conditions affecting the retail
environment for products sold by us and other matters that influence consumer spending and preferences. Changes in the economic climate and the impact
of the COVID-19 pandemic, including on global supply chains, labor markets and economic activity, have materially adversely affected, and could
continue to materially adversely affect, our business, results of operations, financial condition and liquidity.

We operate in the highly competitive retail business where the use of emerging technologies as well as unanticipated changes in the pricing and
other practices of competitors may adversely affect our performance.

The retail business is highly competitive. We compete for customers, employees, locations, merchandise, technology, services and other important aspects
of the business with many other local, regional and national retailers. These competitors range from specialty retailers to department stores and discounters
as well as online and multichannel retailers, some of which are larger than us with significantly greater financial resources. In recent years, competition has
further intensified as a result of reduced discretionary consumer spending, increased promotional activity and deep price discounting.

Rapidly evolving technologies are also altering the manner in which we and our competitors communicate and transact with customers. Our execution of
the elements of our transformation strategy is designed to adapt to these changes, in the context of competitors’ actions, customer's adoption of new
technology and related changes in customer behavior, and presents a specific risk in the event that we are unable to successfully execute our plans or adjust
them over time as needed. Further, unanticipated changes in pricing and other practices of our competitors, including promotional activity (particularly
during back-to-school/college and/or holiday periods), reduced thresholds for free shipping and rapid price fluctuation enabled by technology, may
adversely affect our performance. If we are unable to adapt effectively and quickly to a changing competitive landscape and maintain our competitive
position, we could experience downward pressure on prices, lower demand for our merchandise, reduced sales and margins, inability to take advantage of
new business opportunities and loss of market share.

Our failure to anticipate and respond in a timely fashion to changes in consumer preferences and demographic factors may adversely affect our
business, results of operations and financial condition.

Our success depends on our ability to anticipate and respond in a timely manner to changing merchandise trends, customer demands and demographics in
order to maintain and attract customers. We must continue to monitor and react to consumer expectations, such as the increased focus on environmental,
social and governance ("ESG") matters, climate change, and sustainable products, and appropriately manage our brand to promote the right product lines
(including our Owned Brands), drive customer loyalty and protect our reputation. Our failure to anticipate, identify or react appropriately to changes in
customer tastes, preferences, shopping and spending patterns and other life interest decisions, including as a result of COVID-19, could lead to, among
other things, excess inventories, a shortage of products or reputational damage, and may adversely affect our business, results of operations and financial
condition.

In addition, we must manage our inventory effectively and commensurately with customer demand. Often, we need to order merchandise, and enter into
contracts for the purchase and manufacturing of such merchandise, multiple seasons in advance of and frequently before customer trends and preferences
are known. The extended lead times for many of our purchases may make it difficult for us to respond rapidly to new or changing trends and preferences.
These extended lead times may also increase our exposure to the effects of global supply chain disruptions, increasing the risk that merchandise is not
received when originally planned. As a result, we are vulnerable to demand and pricing shifts and to misjudgments in the selection and timing of
merchandise purchases. If we do not accurately predict our customers’ preferences and demands for our products, our inventory levels will not be
appropriate, and our business, results of operations and financial condition may be negatively impacted.

Our business is seasonal in nature, which could negatively affect our results of operations and financial performance.

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Our business is subject to seasonal influences, with a significant portion of sales and revenues historically realized during the back to school/college and
holiday seasons. We must carry a significant amount of inventory during this time, and if we are not able to sell the inventory, we may be required to take
significant inventory markdowns or write-offs, which could reduce profitability. Similarly, if we do not adequately stock or restock popular products,
particularly during the back to school and holiday seasons, and fail to meet customer demand, revenue and customer loyalty may be adversely impacted.

In addition, our financial results during the holiday season may fluctuate significantly based on many factors, including holiday spending patterns and
weather conditions, and any such fluctuation could have a disproportionate effect on our results of operations for the entire Fiscal year. Because of the
seasonality of our business, our operating results vary considerably from quarter to quarter, and results from any quarter are not necessarily indicative of the
results that may be achieved for a full fiscal year.

RISKS RELATED TO LEGAL AND REGULATORY

Changes in statutory, regulatory, and other legal requirements at a local, state or provincial and national level, or deemed noncompliance with
such requirements, could potentially impact our operating and financial results.

We are subject to numerous statutory, regulatory and legal requirements at a local, state or provincial and national level, and this regulatory environment is
subject to constant change. Our operating results could be negatively impacted by developments in these areas due to the costs of compliance in addition to
possible government penalties and litigation, operating interruptions and reputational damage in the event of deemed noncompliance. Changes in the law or
the regulatory environment, or deemed noncompliance with such laws or regulations, in the areas of customer, employee or product safety, environmental
protection, privacy and information security, labor, wage and hour laws, and international trade policy, among others, could adversely impact our operations
and financial results.

Our product offerings to include a selection of Owned Brands which bring additional regulatory and compliance requirements, requiring new resources and
the development of new policies and procedures. Our failure to properly manage this expanded business or comply with these regulations could expose us
to fines, penalties, litigation and other costs that could harm our reputation and adversely impact our financial results.

Changes to accounting rules, regulations and tax laws, or new interpretations of existing accounting standards or tax laws could negatively impact
our operating results and financial position.

Our operating results and financial position could be negatively impacted by changes to accounting rules and regulations or new interpretations of existing
accounting standards. Our effective income tax rate could be impacted by changes in accounting standards as well as changes in tax laws or the
interpretations of these tax laws by courts and taxing authorities, which could negatively impact our financial results. Such changes would include for
example, the possible adoption by the United States of additional tariffs, or the disallowance of tax deductions, with respect to imported merchandise.

New, or developments in existing, litigation, claims or assessments could potentially impact our reputation, operating and financial results.

We are involved in litigation, claims and assessments incidental to our business, the disposition of which is not expected to have a material effect on our
reputation, financial position or results of operations. It is possible, however, that future results of operations for any particular quarterly or annual period
could be materially adversely affected by changes in our assumptions related to these matters. While outcomes of such actions vary, any such claim or
assessment against us could negatively impact our reputation, operations and financial results.

A failure of our business partners to adhere to appropriate laws, regulations or standards could negatively impact our reputation.

We engage with various third parties to meet business needs. These business partners include, among others, vendors, suppliers, and service providers. The
failure of these business partners to comply with applicable regulations, rules, laws, and industry standards could negatively impact our reputation and have
a material adverse effect on our business and results of operations.

ITEM 1B – UNRESOLVED STAFF COMMENTS

None.

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ITEM 2 – PROPERTIES
Most of our stores are located in suburban areas of medium and large-sized cities. These stores are situated in strip and power strip shopping centers, as
well as in major off-price and conventional malls, and in free standing buildings.

As of February 25, 2023, our 872 stores are located in all 50 states, the District of Columbia, Puerto Rico and Canada and range in size from approximately
4,000 to 84,000 square feet, but are predominantly between 18,000 and 50,000 square feet. Approximately 85% to 90% of store space is used for selling
areas.

The table below sets forth the locations of our stores as of February 25, 2023:
STORE LOCATIONS

Alabama 12 New York 54

Alaska 1 North Carolina 25
Arizona 18 North Dakota 2
Arkansas 6 Ohio 21
California 74 Oklahoma 9
Colorado 22 Oregon 10
Connecticut 11 Pennsylvania 23
Delaware 4 Rhode Island 2
Florida 62 South Carolina 14
Georgia 23 South Dakota 2
Hawaii 1 Tennessee 18
Idaho 6 Texas 74
Illinois 23 Utah 7
Indiana 13 Vermont 2
Iowa 6 Virginia 22
Kansas 9 Washington 15
Kentucky 7 West Virginia 1
Louisiana 11 Wisconsin 10
Maine 4 Wyoming 2
Maryland 14 District of Columbia 1
Massachusetts 18 Puerto Rico 1
Michigan 24 Alberta, Canada 17
Minnesota 8 British Columbia, Canada 11
Mississippi 4 Manitoba, Canada 2
Missouri 15 New Brunswick, Canada 2
Montana 6 Newfoundland and Labrador, Canada 1
Nebraska 5 Nova Scotia, Canada 2
Nevada 8 Ontario, Canada 27
New Hampshire 9 Prince Edward Island, Canada 1
New Jersey 63 Saskatchewan, Canada 2
New Mexico 5 Total 872

We lease substantially all of our existing stores. The leases provide for original lease terms that generally range from 10 to 15 years and most leases provide
for a series of 5 year renewal options, often at increased rents, the exercise of which is at our sole discretion. We evaluate leases on an ongoing basis which
may lead to renegotiated lease provisions, including rent and term duration, or the possible relocation or closing of stores. We have approximately 145 store
leases that are up for renewal in 2023, which provide opportunity to evaluate additional store closures and relocations. Certain leases provide for scheduled
rent increases (which, in the case of fixed increases, we account for on a straight-line basis over the committed lease term, beginning when we obtain
possession of the premises) and/or for contingent rent (based upon store sales exceeding stipulated amounts).

We have distribution facilities, which ship merchandise to stores and customers, totaling approximately 5.6 million square feet, including our first regional
distribution center, an approximately one million square foot facility in Frackville, Pennsylvania, which became operational during Fiscal 2021. We also
executed a lease for our second regional distribution center in Jurupa Valley, California, with approximately one million square feet, which became
operational in late 2022. As part of the optimization

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and transformation initiatives during the fourth quarter of Fiscal 2022, the Company decided to no longer use the Jurupa Valley, California distribution
center. As of February 25, 2023, the Company had not fully exited the distribution center or reached a final negotiation with Ryder Systems, Inc. See "Item
2 - Properties" for additional information regarding our distribution facilities.

As of February 25, 2023, we have approximately 706,000 square feet within 6 leased and owned facilities for corporate office functions.

The Company closed 88 stores during Fiscal 2022. Additionally, the Company commenced the closure of 331 additional stores as of February 25, 2023. We
may close our remaining stores as part of the Chapter 11 Cases, and the Company Parties are actively seeking to market and sell real property leases in
order to capture substantial value and avoid significant costs associate with such leases.

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ITEM 3 – LEGAL PROCEEDINGS

Chapter 11 Bankruptcy

On April 23, 2023 (the “Petition Date”), the Company and materially all of its direct and indirect subsidiaries (collectively, the “Debtors” or the “Company
Parties”) filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy
Court for the District of New Jersey (the “Bankruptcy Court”). On the Petition Date, the Company Parties filed a motion with the Bankruptcy Court
seeking to jointly administer the Chapter 11 Cases. On April 24, 2023, the Bankruptcy Court entered an order approving joint administration under the
caption “In re Bed Bath & Beyond Inc.,” Case No. 23-13359. Certain of the Company’s subsidiaries were not included in the Chapter 11 filing.

The Company Parties continue to operate their business and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company Parties filed with the
Bankruptcy Court motions seeking a variety of “first-day” relief, including authority to pay employee wages and benefits and to pay vendors and suppliers
for goods and services provided both before and after the Petition Date. In addition, the Company filed with the Bankruptcy Court a motion seeking
approval (“Interim DIP Order”) of debtor-in-possession financing (“DIP Financing”) in the form of the DIP Credit Agreement (as defined and described
below). Following a hearing held on April 24, 2023, the Bankruptcy Court approved the Company Parties’ motions seeking a variety of “first-day” relief on
an interim basis. The Company Parties resolved numerous informal comments and many of the "first-day" motions were entered on a final basis
consensually. A hearing is scheduled on June 14, 2023 for the Bankruptcy Court to consider final approval of the relief requested in certain first day
motions, and final approval of the DIP Facility.

Effect of Automatic Stay upon filing under Chapter 11 of the Bankruptcy Code

Pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed most actions against or on behalf of the Company
Parties. Subject to certain exceptions under the Bankruptcy Code, the filing of the Company Parties’ Chapter 11 Cases automatically stayed the
continuation of most legal proceedings or the filing of other actions against or on behalf of the Company Parties or their property to recover on, collect or
secure a claim arising prior to the Petition Date or to exercise control over property of the Company Parties’ bankruptcy estates, unless and until the
Bankruptcy Court modifies or lifts the automatic stay as to any such claim. Notwithstanding the general application of the automatic stay described above,
governmental authorities may determine to continue actions brought under their police and regulatory powers. See “Item 1 — Business — Recent
Developments” for further discussion of the Chapter 11 Cases and our going concern evaluation.

Legal Proceedings

On April 23, 2023, the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. As a result of such
bankruptcy filings, substantially all proceedings pending against the Debtors have been stayed by operation of Section 362(a) of the Bankruptcy Code.

A putative securities class action was filed on April 14, 2020 against our Company and three of our officers and/or directors (Mark Tritton (the Company's
former President and Chief Executive Officer), Mary Winston (the Company’s former Interim Chief Executive Officer) and Robyn D’Elia (the Company’s
former Chief Financial Officer and Treasurer)) in the United States District Court for the District of New Jersey (the "New Jersey federal court"). The case,
which is captioned Vitiello v. Bed Bath & Beyond Inc., et al., Case No. 2:20-cv-04240-MCA-MAH, asserts claims under §§ 10(b) and 20(a) of the
Securities Exchange Act of 1934 (the "Exchange Act") on behalf of a putative class of purchasers of our securities from October 2, 2019 through
February 11, 2020. The Complaint alleges that certain of our disclosures about financial performance and certain other public statements during the
putative class period were materially false or misleading. A similar putative securities class action, asserting the same claims on behalf of the same putative
class against the same defendants, was filed on April 30, 2020. That case, captioned Kirkland v. Bed Bath & Beyond Inc., et al., Case No. 1:20-cv-05339-
MCA-MAH, is also pending in the United States District Court for the District of New Jersey. On August 14, 2020, the court consolidated the two cases
and appointed Kavin Bakhda as lead plaintiff pursuant to the Private Securities Litigation Reform Act of 1995 (as consolidated, the "Securities Class
Action"). Lead plaintiff and additional named plaintiff Richard Lipka filed an Amended Class Action Complaint on October 20, 2020, on behalf of a
putative class of purchasers of the Company’s securities from September 4, 2019 through February 11, 2020. Defendants moved to dismiss the Amended
Complaint on December 21, 2020.

After a mediation held in August 2021, a settlement in principle was reached between the Company and lead plaintiff in the Securities Class Action. The
settlement has been executed and was preliminarily approved by the New Jersey Federal Court in February 2022. The court granted final approval to the
settlement and dismissed the Securities Class Action on June 2, 2022. The

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Company had previously recorded a liability for the Securities Class Action, based on the agreed settlement amount and insurance coverage available and
this amount was paid by the insurance company in the second fiscal quarter of 2022.

On July 10, 2020, the first of three related shareholder derivative actions was filed in the New Jersey federal court on behalf of our Company against
various present and former directors and officers. The case, which is captioned Salu v. Tritton, et al., Case No. 2:20-cv-08673-MCA-MAH (D.N.J.), asserts
claims under §§ 10(b) and 20(a) of the Exchange Act and for breach of fiduciary duty, unjust enrichment, and waste of corporate assets under state law
arising from the events underlying the securities class actions described above and from our repurchases of our own shares during the class period pled in
the securities cases. The two other derivative actions, which assert similar claims, are captioned Grooms v. Tritton, et al., Case No. 2:20-cv-09610-SDW-
RDW (D.N.J.) (filed July 29, 2020), and Mantia v. Fleming, et al., Case No. 2:20-cv-09763-MCA-MAH (D.N.J.) (filed July 31, 2020). On August 5, 2020,
the court signed a stipulation by the parties in the Salu case to stay that action pending disposition of a motion to dismiss in the Securities Class Action,
subject to various terms outlined in the stipulation. The parties in all three derivative cases have moved to consolidate them and to apply the Salu stay of
proceedings to all three actions. The court granted the motion on October 14, 2020, but the stay was subsequently lifted. On January 4, 2022, the
defendants filed a motion to dismiss this case.

On August 28, 2020, another related shareholder derivative action, captioned Schneider v. Tritton, et al., Index No. 516051/2020, was filed in the Supreme
Court of the State of New York, County of Kings. The claims pled in the Schneider case are similar to those pled in the three federal derivative cases,
except that the Schneider complaint does not plead claims under the Exchange Act. On September 21, 2020, the parties filed a stipulation seeking to stay
that action pending disposition of a motion to dismiss in the securities class action, subject to various terms and conditions.

On June 11, 2021, an additional related derivative action was filed on behalf of the Company against certain present and former directors and officers. This
Complaint is entitled Michael Anthony v Mark Tritton et. al., Index No. 514167/2021 and was filed in the Supreme Court of the State of New York, Kings
County. The claims are essentially the same as in the other two derivative actions. On October 26, 2021, the court consolidated the Schneider and Anthony
actions, and the plaintiffs subsequently filed a consolidated complaint. On January 10, 2022, the defendants filed a motion to dismiss this case.

The derivative cases were not included in the August 2021 settlement referred to above, but after mediation, a settlement in principle was reached in the
first quarter of Fiscal 2022. The settlement has been executed and was preliminarily approved by the New York State Court in June 2022. The court granted
final approval to the settlement on September 21, 2022 and the settlement amount has been paid by the Company’s insurer.

On August 23, 2022, a putative securities class action and shareholder derivative action was filed against the Company, Gustavo Arnal (the Company's
former Chief Financial Officer), and certain third parties in the United States District Court for the District of Columbia. The case, which is captioned Si v.
Bed Bath & Beyond Corp., et al., Case No. 2:22-cv-02541, asserts claims of breach of fiduciary duty, negligent misrepresentation, and violations of §§
10(b) and 20(a) of the Exchange Act on behalf of a putative class of purchasers of our securities from March 25, 2022 through August 18, 2022. The
Complaint alleges that certain of our disclosures about the Company's revenue and proposed divestments, as well as other disclosures made by certain of
our investors about their holdings, during the putative class period were materially false or misleading. The Complaint was amended in November 2022
and again in January 2023 and a Lead Plaintiff was appointed by the Court. The Second Amended Complaint removes Mr. Arnal as a defendant, adds Sue
Gove as a defendant, and shortens the class period and reduced the claims against the Company. The matter is now entitled In re Bed Bath & Beyond
Corporation Securities Litigation. Based on current knowledge the Company believes the claims are without merit and has filed a Motion to Dismiss the
Complaint.

While no assurance can be given as to the ultimate outcome of these matters, we do not believe that the final resolution will have a material adverse effect
on the Company’s consolidated financial position, results or liquidity. We are also a party to various legal proceedings arising in the ordinary course of
business, which we do not believe to be material to the Company’s consolidated financial position, results of operations or liquidity.

ITEM 4 – MINE SAFETY DISCLOSURES

Not Applicable.

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PART II
ITEM 5 – MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES

Nasdaq Delisting Proceedings

On April 24, 2023, the Company received written notice from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”)
notifying the Company that, as a result of the Chapter 11 Cases and in accordance with the Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq
had determined that the Company’s common stock will be delisted from Nasdaq. Trading of the Company’s common stock was suspended at the opening
of business on May 3, 2023.

Following delisting from Nasdaq, the Company’s common stock has been quoted in the OTC Pink Open Market under the symbol “BBBYQ”. The OTC
Pink Open Market is a significantly more limited market than Nasdaq, and quotation on the OTC Pink Open Market likely results in a less liquid market for
existing and potential holders of the common stock to trade the Company’s common stock and could further depress the trading price of the common stock.
The Company can provide no assurance as to whether broker-dealers will continue to provide public quotes of the common stock on this market, or
whether the trading volume of the common stock will be sufficient to provide for an efficient trading market.

We expect Nasdaq to file a Form 25 with the SEC to delist our common stock from trading on Nasdaq and to remove it from registration under Section
12(b) of the Exchange Act. The delisting became effective 10 days after such filing. In accordance with Rule 12d2-2 of the Exchange Act, the de-
registration of our common stock under Section 12(b) of the Exchange Act will become effective 90 days, or such shorter period as the SEC may
determine, from the date of the Form 25 filing. See “Item 1 — Business — Recent Developments” for further discussion of the Chapter 11 Cases.

Our common stock is traded on The Nasdaq Global Select Market under the symbol BBBY. As of April 20, 2023, there were approximately 2,700
shareholders of record of the common stock (without including individual participants in nominee security position listings). On April 20, 2023, the last
reported sale price of the common stock was $0.30.

During Fiscal 2016, our Board of Directors authorized a quarterly dividend program. In fiscal 2022, no cash dividends were paid. During Fiscal 2021, and
2020, total cash dividends of $0.7 million, and $23.1 million were paid, respectively. As a result of the COVID-19 pandemic, in Fiscal 2021 and fiscal 2022
we suspended our quarterly cash dividend payments to support plans to build long-term shareholder value and further strengthen our financial flexibility.
Any quarterly cash dividends to be paid in the future are subject to the determination by the Board of Directors, based on an evaluation of our earnings,
financial condition and requirements, business conditions and other factors.

Since 2004 through the end of Fiscal 2022, we have repurchased approximately $11.731 billion of our common stock through share repurchase programs.
Our purchases of our common stock during the fourth quarter of Fiscal 2022 were as follows:
Total Number of Approximate Dollar
Shares Purchased as Value of Shares
Part of Publicly that May Yet Be
Total Number of Average Price Announced Plans Purchased Under
Period Shares Purchased (1) Paid per Share or Programs (1) the Plans or Programs (1) (2)
November 27, 2022 - December 24, 2022 6,500 $ 3.27 6,500 $ 1,221,452,538
December 25, 2022 - January 21, 2023 7,000 $ 3.05 7,000 $ 1,221,431,212
January 22, 2023 - February 25, 2023 23,900 $ 7.38 23,900 $ 1,221,254,788
Total 37,400 $ 5.86 37,400 $ 1,221,254,788

(1)
Between December 2004 and April 2021, our Board of Directors authorized, through several share repurchase programs, the repurchase of
$12.950 billion of our shares of common stock. We have authorization to make repurchases from time to time in the open market or through other
parameters approved by the Board of Directors pursuant to existing rules and regulations. Shares purchased, as indicated in this table, include shares
withheld to cover employee related taxes on vested restricted shares, restricted stock units and performance stock unit awards, as well as shares
purchased pursuant to accelerated share repurchase agreements. Our share repurchase program could change, and any future share repurchases will be
subject to the determination of the Board of Directors, based on an evaluation of our earnings, financial condition and requirements, business and market

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conditions and other factors, including the restrictions on share repurchases under our secured asset-based revolving credit facility.
(2)
Excludes brokerage commissions paid by us, if any.

Stock Price Performance Graph

The graph shown below compares the performance of our common stock with that of the S&P 500 Index, the S&P Retail Composite Index and the S&P
500 Specialty Retail Index over the same period (assuming the investment of $100 in our common stock and each of the three Indexes on February 25,
2017, and the reinvestment of dividends, if any).

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ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

OVERVIEW

The description of the Company’s business contained herein reflects the Company’s operations of its business prior to the filing of the Chapter 11 Cases on
April 23, 2023. As a result of the filing of the Chapter 11 Cases, the Company no longer has operations, other than those relating to the wind down of its
business and completion of the Chapter 11 process.

Bed Bath & Beyond Inc. and subsidiaries (the "Company", "we", "our", "us", or ourselves") are an omni-channel retailer that makes it easy for our
customers to feel at home. We sell a wide assortment of merchandise in the Home and Baby markets and operate under the names Bed Bath & Beyond and
buybuy BABY.

We offer a broad assortment of national brands and an assortment of proprietary Owned Brand merchandise in key destination categories including
bedding, bath, kitchen food prep, home organization, indoor décor, baby and personal care.

We account for our operations as one North American Retail reporting segment. Net sales outside of the U.S. were not material for Fiscal 2022, 2021, or
2020.

We operate a omni-channel platform consisting of various websites and applications and physical retail stores. Our e-commerce platforms include
bedbathandbeyond.com and buybuybaby.com. We operate Bed Bath & Beyond and buybuy BABY stores.

Across our banners, we carry a wide variety of domestics and home furnishings merchandise. Domestics merchandise includes categories such as bed
linens and related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic
housewares, general home furnishings (including furniture and wall décor), consumables and certain juvenile products.

We are driving a digital-first, omni-always growth strategy and optimizing our digital and physical store channels to provide our customers with a omni-
channel shopping experience. Digital purchases, including web and mobile, can be shipped to a customer from our distribution facilities, directly from
vendors, or from a store. Store purchases are primarily fulfilled from that store’s inventory or may also be shipped to a customer from one of our
distribution facilities, from a vendor, or from another store. Customers can also choose to pick up orders using our Buy Online Pickup In Store ("BOPIS")
and contactless Curbside Pickup services, as well as return online purchases to a store, or have an order delivered through one of our same day delivery
partners.

Voluntary Petition for Bankruptcy and Going Concern

On April 23, 2023 (the “Petition Date”), the Company and materially all of its direct and indirect subsidiaries (collectively, the "Debtors" or the “Company
Parties”) filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy
Court for the District of New Jersey (the “Bankruptcy Court”). On the Petition Date, the Company Parties filed a motion with the Bankruptcy Court
seeking to jointly administer the Chapter 11 Cases. On April 24, 2023, the Bankruptcy Court entered an order approving joint administration under the
caption “In re: Bed Bath & Beyond Inc.,” Case No. 23-13359. Certain of the Company’s subsidiaries were not included in the Chapter 11 filing.

The Company Parties continue to operate their business and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company Parties filed with the
Bankruptcy Court motions seeking a variety of “first-day” relief, including authority to pay employee wages and benefits and to pay vendors and suppliers
for goods and services provided both before and after the Petition Date. In addition, the Company filed with the Bankruptcy Court a motion seeking
approval (“Interim DIP Order”) of debtor-in-possession financing (“DIP Financing”) in the form of the DIP Credit Agreement (as defined and described
below). Following a hearing held on April 24, 2023, the Bankruptcy Court approved the Company Parties’ motions seeking a variety of “first-day” relief on
an interim basis. The Company Parties resolved numerous informal comments and many of the "first-day" motions were entered on a final basis
consensually. A hearing was scheduled on June 14, 2023 for the Bankruptcy Court to consider final approval of the relief requested in certain first day
motions, and final approval of the DIP Facility.

On April 25, 2023, the Bankruptcy Court provided approval on an interim basis for the Company Parties and Sixth Street Specialty Lending, Inc., Sixth
Street Lending Partners and TAO Talents (the “DIP Parties”) to enter into a senior secured super-priority debtor-in-possession term loan credit facility in an
aggregate principal amount of $240.0 million subject to the terms and conditions set forth therein (the “DIP Credit Agreement”). On April 21, 2023, prior to
the Petition Date, the DIP Lenders (in their capacity as Prepetition FILO Lenders) and the Prepetition ABL Lenders approved an emergency over advance
of $54 million to

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ensure payment of critical expenses including, among other things, the Company's’ payroll and tax obligations (the “Emergency Rescue Loan”).

As a result of the Company’s assessment of going concern considerations, management has determined that the liquidity condition, our need to satisfy
certain financial and other covenants in our debtor-in-possession financing, our need to implement a Chapter 11 plan and the costs, risks and uncertainties
surrounding the Chapter 11 Cases raise substantial doubt about the Company’s ability to continue as a going concern for 12 months following the issuance
of the financial statements.

Business Transformation and Restructuring

Beginning in the third quarter of Fiscal 2022, we underwent significant strategic and management changes to transform our business and adapt to the
dynamic retail environment and the evolving needs of our customers in order to position ourselves for long-term success. Beginning in the third quarter of
Fiscal 2022, the Company began to execute a comprehensive strategic plan led by our new President and Chief Executive Officer, Sue Gove, who was
appointed in October 2022 after serving as Interim Chief Executive Officer. This plan focused on strengthening the Company’s financial position through
additional liquidity and a reduction of our cost structure, better serving our customers through merchandising, inventory and customer engagement, and
regaining our authority in the Home and Baby markets. To accelerate these strategic initiatives, the Company realigned our organizational structure, which
included the creation of Brand President roles for Bed Bath & Beyond and bubybuy BABY to lead merchandising, planning, brand marketing, site
merchandising and stores for each banner.

In conjunction with the Company’s new strategic focus areas, the Company executed plans to rebalance our merchandise assortment to align with customer
preference by leading with National Brands inventory and introducing new, emerging direct-to-consumer brands. Consequently, we announced the exiting
of a third of our Owned Brands, including the discontinuation of a third of our nine labels (Haven™, Wild Sage™ and Studio 3B™). We also expect to
reduce the breadth and depth of inventory across our six remaining Owned Brands (Simply Essential™, Nestwell™, Our Table™, Squared Away™, H for
Happy™ and Everhome™).

We exited the unprofitable businesses of Harmon and Decorist and began the exit in the fourth quarter of our Canada operations. We have also executed
key actions such as corporate restructurings and operating expense control to re-set our cost structure and to advance our ongoing efforts to reset our cost
structure and build a modern, durable model for long-term profitable growth.

In connection with the above restructuring and transformation initiatives, during Fiscal 2022, we recorded total expense of $407.7 million including
$77.7 million in cost of sales, primarily associated with $330.0 million in restructuring and transformation initiative expenses for costs associated with our
planned store closures as part of the store fleet optimization program and other transformation initiatives as well as workforce reduction and leadership
changes. We also recorded impairment charges of approximately $1.29 billion, primarily related to store assets. At this point, we are unable to estimate the
amount or range of amounts expected to be incurred in connection with future restructuring and transformation initiatives, including further store closures,
and will provide such estimates as they become available.

Executive Summary

The following represents a summary of key financial results and related business developments for the periods indicated:

• Net sales for Fiscal 2022 were $5.34 billion, a decrease of approximately 32.1% as compared with Fiscal 2021.

• Change in leadership and strategy: Beginning in the third quarter of Fiscal 2022, the Company began to execute a comprehensive strategic plan
led by our new President and Chief Executive Officer, Sue Gove, who was appointed in October 2022 after serving as Interim Chief Executive
Officer since June 2022. This plan included a significant rebalancing of the merchandise assortment, including the discontinuation of several
Owned Brands, and the implementation of cost reduction and and cash preservation actions, including the closing of underperforming stores and
reductions in force.

• Organizational changes to drive key focus areas: We realigned our executive leadership team and streamlined our organizational structure to focus
on immediate priorities and important changes to operations. This included the creation of Brand President roles for Bed Bath & Beyond and
BABY to lead merchandising, planning, brand marketing, site merchandising and stores for each banner and will report directly to the CEO. In
conjunction with these changes, the Company has eliminated the Chief Operating Officer, Chief Stores Officer, Chief Merchandising Officer,
Chief Customer Officer and Chief Growth Officer roles.

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• Reduction of Owned Brands: We exited a third of our Owned Brands, including the discontinuation of three of our nine labels (Haven™, Wild
Sage™ and Studio 3B™). We also expect to reduce the breadth and depth of inventory across our six remaining Owned Brands (Simply
Essential™, Nestwell™, Our Table™, Squared Away™, H for Happy™ and Everhome™).

• Right-sizing cost structure and infrastructure to reflect business operations: We initiated a strategic revaluation of our overall expense and
operational structure to align with business performance and target profitability. During Fiscal 2022, we:

◦ Realigned store footprint by closing 88 Bed Bath & Beyond stores and commenced the closure of 331 additional stores by the end of the
fiscal year;

◦ Closed our Harmon Face Values business;

◦ Begun the exit of all Canada operations; and

◦ Initiated cost reductions across corporate headquarters, including overhead expense and headcount.

• Supply chain optimization: We completed a supply chain network study to improve cost to serve and time to deliver for our customers by
streamlining fulfillment center and distribution center operations.

• In connection with these restructuring and transformation initiatives, during Fiscal 2022, we recorded total expense of $407.7 million including
$77.7 million in cost of sales and $330.0 million in restructuring and transformation initiative expenses in the consolidated statement of
operations, as well as $1.29 billion of impairments and $98.6 million of losses on the deconsolidation of our Canada business.

• Financial transactions to support our business strategies: we pursued several financial transactions during Fiscal 2022 with the intention of
optimizing our financial position. These included:

◦ Entered into an amendment to our Credit Agreement for more than $500.0 million of new additional financing commitments within our
expanded ABL Facility and new FILO Facility on August 31, 2022.

◦ Privately negotiated senior notes exchanges with existing holders of 2024 Notes, 2034 Notes, and 2044 Notes, respectively, under which
the Company issued shares of common stock to the existing holders in exchange for the exchange notes and cash.

◦ An at the market equity distribution program (the "ATM Program"), under which we offered and sold shares of common stock pursuant
to prospectus supplements registering (i) 12 million shares on August 31, 2022, and (ii) up to $150.0 million on October 28, 2022.

◦ An underwritten public offering of (i) shares of Series A Convertible Preferred Stock (“Series A”), (ii) warrants to purchase shares of the
Company’s Common Stock (“Common Stock Warrants”), and (iii) warrants to purchase shares of the Company’s Series A Convertible
Preferred Stock (“Preferred Stock Warrants”) for gross proceeds of $225.0 million.

Impact of the COVID-19 Pandemic

As discussed in more detail in our previous filings with the SEC, the coronavirus (COVID-19) pandemic materially disrupted our operations, most
significantly in Fiscal 2020. In compliance with relevant government directives, we closed all of our retail banner stores across the U.S. and Canada as of
March 23, 2020, except for most stand-alone BABY and Harmon stores, which were categorized as essential given the nature of their products. In May
2020, we announced a phased approach to re-open our stores in compliance with relevant government directives, and as of the end of July 2020, nearly all
of our stores reopened. During portions of Fiscal 2021, a limited number of stores in Canada either closed temporarily or continued to operate under
restrictions in compliance with local governmental orders. As of February 25, 2023, all of the Company’s stores were operating without restriction subject
to compliance with applicable mask and vaccine requirements. As of February 25, 2023, our BOPIS, contactless Curbside Pickup and Same Day Delivery
services are in place at the vast majority of our stores. We cannot predict,

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however, whether our stores will remain open, particularly if the regions in which we operate experience potential resurgences of reported new cases of
COVID-19 or increased rates of hospitalizations or become subject to additional governmental regulatory actions.

Further discussion of the risks and uncertainties posed by the COVID-19 pandemic is included in "Risk Factors" under "Part I, Item 1A" of this Form 10-K.

RESULTS OF OPERATIONS

The fiscal years discussed below were each comprised of 52 weeks.

Net Sales

Fiscal Year Ended Change from Prior Year

February 25, February 26, February 27,
(in millions) 2023 2022 2021 February 25, 2023 February 26, 2022
Net sales $ 5,344.7 $ 7,867.8 $ 9,233.0 $ (2,523.1) (32)% (1,365.3) (15)%

Sales from divested

banners — — 1,290.1 — —% (1,290.1) (100.0)%

For Fiscal 2022, net sales decreased by approximately $2.52 billion or 32% compared with Fiscal 2021 across all banners, collectively. The change in net
sales resulted from a decrease of $1.55 billion in sales through our stores and $977.7 million in sales through our e-commerce platforms - both as a result of
decreased customer demand and declines in customer traffic and inventory availability. The Company closed 88 stores during the year with net sales of
$234.1 million in Fiscal 2022 and $357.2 million of net sales during Fiscal 2021, resulting in a $123.1 million decrease. The Company commenced the
closure of an additional 331 stores as of February 25, 2023. Such stores had net sales of $1.06 billion in Fiscal 2022 and $1.35 billion in Fiscal 2021,
resulting in a $296.0 million decrease year over year. The remaining decrease of $1.13 billion in net sales, relates to stores that the Company plans to
continue to operate in Fiscal 2023 and was driven by lower customer traffic and conversion, in part due to consumer spending patterns and demand, a lack
of inventory availability and assortment in key product areas, specifically within the Company's Owned Brands and National Brands product mix, along
with additional discounting on sales resulting from the exiting of Owned Brands and closing stores.

The decrease in net sales for Fiscal 2021 was primarily due to the impact of traffic declines and supply chain disruptions. Store closures as part of our store
fleet optimization program also contributed to the decline in sales.

During Fiscal 2022, Fiscal 2021 and Fiscal 2020, net sales consummated through digital channels represented approximately 37%, 37% and 38%,
respectively, of our sales. Sales consummated on a mobile device while physically in a store location and BOPIS orders are recorded as customer facing
digital channel sales. Customer orders taken in-store by an associate through The Beyond Store, our proprietary, web-based platform, are recorded as in-
store sales. Prior to implementation of BOPIS and contactless Curbside Pickup services, customer orders reserved online and picked up in a store were
recorded as in-store sales. Sales originally consummated from customer facing digital channels and subsequently returned in-store are recorded as a
reduction of in-store sales.

Comparable Sales* for the year ended February 25, 2023 decreased by approximately 29.7%. Management attributes a portion of this decline to the impact
of lower traffic due to macro-economic factors, such as steep inflation, and fluctuations in purchasing patterns of the consumer. Also contributing to the
comparable sales decline was the lack of inventory availability and assortment in key product areas, due to vendor constraints and credit line decreases. For
the year ended February 26, 2022, Comparable Sales was not a meaningful metric as a result of the impact of the extended closure of the majority of our
stores during a portion of the comparable year ended February 27, 2021 due to the COVID-19 pandemic.

* Comparable sales normally include sales consummated through all retail channels that have been operating for twelve full months following the opening period (typically six to
eight weeks), excluding the impact of store fleet optimization program. We are an omni-channel retailer with capabilities that allow a customer to use more than one channel when
making a purchase, including in-store, online, with a mobile device or through a customer contact center, and have it fulfilled, in most cases, either through in-store customer pickup or
by direct shipment to the customer from one of our distribution facilities, stores or vendors.

Our comparable sales metric considers sales consummated through all retail channels – in-store, online, with a mobile device or through a customer contact
center. Our omni-channel environment allows our customers to use more than one channel when

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making a purchase. We believe in an integrated and seamless customer experience. A few examples are: a customer may be assisted by an in-store associate
to create a wedding or baby registry, while the guests may ultimately purchase a gift from our websites; or a customer may research a particular item, and
read other customer reviews on our websites before visiting a store to consummate the actual purchase; or a customer may buy an item online for in-store
or curbside pickup; or while in a store, a customer may make the purchase on a mobile device for in home delivery from either a distribution facility, a store
or directly from a vendor. In addition, we accept returns in-store without regard to the channel in which the purchase was consummated, therefore resulting
in reducing store sales by sales originally consummated through customer facing digital channels. As our retail operations are integrated and we cannot
reasonably track the channel in which the ultimate sale is initiated, we can however, provide directional information on where the sale was consummated.

Sales of domestics merchandise accounted for approximately 35.8%, 37.4%, and 34.7%, of net sales in Fiscal 2022, 2021 and 2020, respectively. Sales of
home furnishings accounted for approximately 64.2%, 62.6% and 65.3% of net sales, respectively, for Fiscal 2022, 2021, and 2020.

Gross Profit

Fiscal Year Ended Change from Prior Year

February 25, February 26, February 27,
(in millions) 2023 2022 2021 February 25, 2023 February 26, 2022
Gross profit $ 1,214.9 $ 2,483.5 $ 3,118.1 $ (1,268.6) (50.3)% $ (634.6) (20.4)%
Gross profit
percentage 22.7 % 31.6 % 33.8 % (8.5)% (26.9)% (2.2)% (6.5)%

Gross profit in Fiscal 2022 was $1.21 billion, or 22.7% of net sales, compared with $2.48 billion, or 31.6% of net sales in Fiscal 2021. The decrease in
gross profit percentage was primarily attributable to markdown and promotional activity associated with the general economic environment, clearance
activity related to the exiting of certain Owned Brands and Owned Brands inventory assortment, and activity associated with store closures. Gross profit for
Fiscal 2022 included the impact of charges of $91.6 million associated with the markdown of inventory being removed from our assortment in connection
with the clearance of certain Owned Brand merchandise.

The decrease in the gross profit percentage between Fiscal 2021 and Fiscal 2020 was primarily attributable to a markdown activity associated with
inventory being removed from our assortment in connection with the launches of new Owned Brands and, to a lesser extent, the redefinition of certain
existing Owned Brands, as well as markdown activity associated with store closures as part of our store fleet optimization program. Gross profit for Fiscal
2021 included the impact of charges of $137.2 million for these higher markdowns on inventory sold, as well as an adjustment to reduce the cost of
inventory on hand to be removed from the product assortment as part of these initiatives to its estimated realizable value. In addition, higher freight
expenses, both for inbound product shipments and direct-to-customer fulfillment and in part due to industry wide, global supply chain challenges,
negatively impacted gross margin in Fiscal 2021 compared with Fiscal 2020, which offset the favorable impact of a shift in product assortment toward new
Owned Brands and a more normalized mix of digital sales.

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Selling, General and Administrative Expenses

Fiscal Year Ended Change from Prior Year

February 25, February 26, February 27,
(in millions) 2023 2022 2021 February 25, 2023 February 26, 2022
Selling, general and
administrative
expenses $ 2,373.0 $ 2,692.3 $ 3,224.4 $ (319.3) (11.9)% $ (532.1) (16.5)%

As a percentage of net
sales 44.4 % 34.2 % 34.9 % 10.2 % 29.8 % (0.7)% (2.0)%

The $319.3 million decrease in SG&A expenses for Fiscal 2022 was primarily attributable to cost reduction initiatives, including the store fleet
optimization, supply chain reductions, corporate overhead reductions and reductions in marketing spend. The cost reduction initiatives and the closing of
70 and 88 stores during Fiscal 2021 and Fiscal 2022, respectively, led to a decrease in payroll and payroll-related expenses of approximately $172.0 million
(primarily salaries) and a decrease of approximately $70.1 million in rent and occupancy expenses. Additionally, there was a decrease of approximately
$38.1 million of other operating expenses related to supplies, maintenance, and other operating fees resulting from the significant decrease in stores that
operated during Fiscal 2022. The decrease was also driven by cost reductions in marketing spend of approximately $39.1 million.

For Fiscal 2021, the decrease was primarily attributable to cost reductions resulting from our transformation initiatives, including reductions in corporate
overhead, divestitures of non-core assets and lower rent and occupancy expenses as a result of our store fleet optimization program. The decrease in SG&A
expenses as a percentage of net sales for Fiscal 2021 was also largely due to the factors above, as well as the de-leveraging effect caused by sales declines
in Fiscal 2020 as a result of the COVID-19 pandemic.

Goodwill and Other Impairments

Goodwill and other impairments were $1.29 billion for Fiscal 2022, $36.5 million in Fiscal 2021 and $127.3 million in Fiscal 2020. For Fiscal 2022,
impairment charges included $1.28 billion related to certain store-level, distribution facilities and corporate assets (including leasehold improvements, other
property and equipment and operating lease assets) and tradename impairments of $2.9 million. For Fiscal 2021, impairment charges included $30.8
million related to certain store-level assets (including leasehold improvements and operating lease assets) and tradename impairments of $5.7 million. For
Fiscal 2020, impairment charges included impairments of $391.1 million related to certain store-level assets (including leasehold improvements and
operating lease assets) and tradename impairments of $35.1 million.

Restructuring and Transformation Initiative Expenses

During Fiscal 2022, we recorded charges of $407.7 million for costs associated with restructuring and other transformation initiatives, of which
approximately $77.7 million is included in cost of sales. In addition, approximately $330.0 million, was recorded in restructuring and transformation
initiative expenses in the consolidated statements of operations, which included approximately $156.9 million of accelerated depreciation related to closing
facilities and information technology systems, $101.5 million of other restructuring and transformation costs and $58.1 million of severance costs related to
workforce reduction, store closures and leadership changes. The Company also recorded approximately $13.5 million for lease related and other costs,
including in connection with store closures,

In Fiscal 2021, we recorded charges of $144.0 million, of which were primarily for costs associated with the store fleet optimization program described
above, including for the termination of facility leases, as well as technology transformation and business strategy and operating model transformation
programs across core functions, including merchandising, supply chain and finance. (see "Restructuring and Transformation Activities," Note 3 to the
accompanying consolidated financial statements).

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Loss on Sale of Businesses

During Fiscal 2022, the Company did not have any businesses classified as held for sale. During Fiscal 2021, we recognized approximately $18.2 million
in loss on sale of businesses in the consolidated statement of operations, primarily related to a $13.5 million charge associated with the Fiscal 2021
settlement of the CTS pension plan (see "Assets Held for Sale and Divestitures," Note 16 to the accompanying consolidated financial statements), as well
as certain working capital and other adjustments related to the Fiscal 2021 divestitures.

Operating Loss

Fiscal Year Ended Change from Prior Year

February 25, February 26, February 27,
(in millions) 2023 2022 2021 February 25, 2023 February 26, 2022
Operating Loss $ (2,775.6) $ (407.6) $ (336.9) $ (2,368.1) 581.0 % $ (70.7) 21.0 %
As a percentage of
net sales (51.9)% (5.2)% (3.6)% (19.7)% 378.8 % (1.6)% 44.4 %

Operating loss for Fiscal 2022 was $2.78 billion or 51.9% of net sales, compared with an operating loss of $407.6 million or 5.2% of net sales for Fiscal
2021. Operating loss for Fiscal 2022 included $407.7 million associated with restructuring and other transformation initiatives and $1.29 billion for non-
cash impairment charges (each as discussed above). The change in operating loss as a percentage of net sales between Fiscal 2022 and 2021 was primarily
due to the decline in sales and gross profit percentage, as discussed above, as well as higher restructuring and transformation expenses and higher
impairment charges in Fiscal 2022 compared to Fiscal 2021.

Operating loss for Fiscal 2021 included the impact of pre-tax charges of $137.2 million included in gross profit primarily associated with the transition of
our product assortment to Owned Brands and, to a lesser extent, our store fleet optimization program, as well as $144.0 million associated with
restructuring and other transformation initiatives, $36.5 million for non-cash impairments and $18.2 million for loss on sale of business (each as described
above). The change in operating loss as a percentage of net sales between Fiscal 2021 and 2020 was primarily due to the decline in gross profit percentage,
as discussed above, as well as higher restructuring and transformation expenses in Fiscal 2021 compared to Fiscal 2020.

Interest Expense, net

Interest expense, net was $110.5 million, $64.7 million, and $76.9 million in Fiscal 2022, 2021, and 2020, respectively. For Fiscal 2022, the increase in
interest expense, net of $45.8 million was primarily due to increased borrowings under our ABL Facility as well as entering into the $375.0 million FILO
term loan entered into in August 2022 and entering into another FILO term loan of $100.0 million in February 2023. For Fiscal 2021, the decrease in
interest expense, net of $12.2 million was primarily driven by

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decreased interest costs attributable to our revolving credit facilities and the impact of the repurchase of a portion of our senior unsecured notes in Fiscal
2020.

Loss on Preferred Stock Warrants and Derivative Liabilities

During Fiscal 2022, we recorded a $639.4 million loss on preferred stock warrants and derivative liabilities. During the fourth quarter of Fiscal 2022, the
Company issued the Series A Convertible Preferred Stock, Common Stock Warrants, and Preferred Stock Warrants when the Company was in distress, and
as a result the Company determined the offering was not an orderly transaction and the gross proceeds of $225.0 million did not represent fair value. As a
result, the Company used a model-derived valuation to estimate the fair value of the Series A derivative liability, Preferred Stock Warrants and Common
Stock Warrants in which the most significant value driver is the as-converted value utilizing the Company’s common stock price as the input. At issuance,
the fair value of the Series A embedded features derivative liability, Common Stock Warrants, and Preferred Stock Warrants was $300.5 million, $186.6
million, and $615.5 million, respectively. The Company recorded a $877.6 million loss for the fair value in excess of proceeds of $225.0 million in loss on
preferred stock warrants and derivative liabilities in its consolidated statement of operations for the year ended. The loss is partially offset by a gain of
$244.5 million related to the change in fair value associated with these derivative liabilities for the year ended February 25, 2023. Issuance costs of $6.3
million were expensed as incurred and recognized as part of the loss on preferred stock warrants and derivative liabilities.

Loss on Deconsolidation of Subsidiaries

On February 10, 2023 (the “Canadian Petition Date”), BBB Canada Limited made an application with the Ontario Superior Court of Justice (the “Canadian
Court”). BBB Canada Limited was granted an order, which, among other provisions, provides a stay of proceedings pursuant to the Companies’ Creditors
Arrangement Act (the “CCAA”). The CCAA is a Federal Act that allows financially troubled corporations that owe their creditors in excess of $5 million
the opportunity to restructure their affairs. Although Bed Bath & Beyond Canada L.P. (“BBB LP” and together with BBB Canada Limited, “BBB Canada”)
did not file an application with the Canadian Court, the stay of proceedings under the CCAA and other benefits were extended to BBB LP. BBB Canada
initiated a wind-down of Bed Bath & Beyond and Buy Buy Baby Stores in Canada under the CCAA. A monitor was appointed by the Canadian Court on
February 10, 2023 to oversee the orderly liquidation of its remaining inventory with assistance from a third-party professional liquidator and vacate its
leased retail stores and premises.

For these reasons, we concluded that BBBI had lost control of BBB Canada, and no longer had significant influence over BBB Canada during the
pendency of the bankruptcy. Therefore, the Company deconsolidated BBB Canada on the date of the bankruptcy filing. In order to deconsolidate BBB
Canada, the carrying values of the assets and certain liabilities of BBB Canada were removed from our consolidated balance sheet as of February 25, 2023,
and we recorded our investment in BBB Canada at its estimated fair value of $0. The deconsolidation resulted in the recognition of a loss of $98.6 million
during the year ended February 25, 2023.

(Loss) Gain on Extinguishment of Debt

During Fiscal 2022, we recorded a $94.4 million gain related to approximately $102.8 million recorded for the privately negotiated exchange offers
completed in November 2022, partially offset by third-party costs of approximately $8.0 million incurred with the Exchange Offers and $0.4 million of
unamortized debt financing costs written-off related to the extinguished notes. (see "Debt," Note 7 to the accompanying consolidated financial statements).

During Fiscal 2021, we recorded a $0.4 million loss on the partial repayment of senior unsecured notes.

During Fiscal 2020, we recorded a $77.0 million gain on the repurchase of $75.0 million principal amount of 4.915% senior unsecured notes due August 1,
2034 and $225.0 million principal of 5.165% senior unsecured notes due August 1, 2044.

Income Taxes

The effective tax rate was 0.9% for Fiscal 2022, (18.4)% for Fiscal 2021, and 55.2% for Fiscal 2020.

For Fiscal 2022, the effective tax rate reflects maintaining a valuation allowance against our U.S. federal and state deferred tax assets (discussed below) and
benefits from amended returns related to prior fiscal years from changes in the Company's approach to deducting charitable contributions on certain federal
returns and carrying back net operating losses in certain state jurisdictions.

For Fiscal 2021, the effective tax rate reflects the recording of a valuation allowance against our U.S federal and state deferred tax assets (discussed below),
as well as a benefit resulting from an adjustment to the estimated net operating loss incurred in Fiscal 2020 which was carried back, under the provisions of
the CARES Act, to a year in which the tax rate was 35%.

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For Fiscal 2020, the effective tax rate reflected the carry back of the net operating loss to a year in which the tax rate was 35% under the CARES Act, and
included the impact of the benefit of certain tax planning strategies the Company deployed, in addition to the losses from the divestitures of CTS, Linen
Holdings and Cost Plus, partially offset by the impact of impairment charges for tradename and certain store-level assets, the gain on the divestiture of
PMall, a benefit related to the carry back of the Fiscal 2019 net operating loss under the CARES Act, and other discrete tax items resulting in net after tax
benefits.

In assessing the recoverability of our deferred tax assets, we evaluated the available objective positive and negative evidence to estimate whether it is more
likely than not that sufficient future taxable income will be generated to permit use of existing deferred tax assets in each taxpaying jurisdiction. A
valuation allowance is a non-cash charge, and does not limit our ability to utilize our deferred tax assets, including our ability to utilize tax loss and credit
carryforward amounts, against future taxable income.

During Fiscal 2022, we concluded that, based on our evaluation of available objective positive and negative evidence, it continues to be more likely than
not that our net U.S. federal and state deferred tax assets will not be recoverable. In assessing the realizability of deferred tax assets, the key assumptions
used to determine positive and negative evidence included our cumulative book loss for the past three years and our ability to continue as a going concern.
As of February 25, 2023, the total valuation allowance relative to U.S. federal and state deferred tax assets was $851.8 million.

On March 27, 2020, the CARES Act was enacted in the United States, which provided for certain changes to tax laws which impacted our results of
operations, financial position and cash flows. We implemented certain provisions of the CARES Act, such as deferring employer payroll taxes and utilizing
the ability to carry back and deduct losses to offset prior income in previously filed tax returns. There was no benefit from the CARES Act recorded in the
provision during the year ended February 25, 2023. As of February 26, 2022 and February 27,2021, under the CARES Act, we recorded income tax
benefits of $18.7 million and $152.0 million, respectively, as a result of the Fiscal 2020 and Fiscal 2019 net operating losses were carried back to prior
years during which the federal tax rate was 35%.

Net Loss

As a result of the factors described above, the net loss for Fiscal 2022, 2021, and 2020, was $3.50 billion, $559.6 million, and $150.8 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES

We have incurred significant losses over the past few years. As of February 25, 2023, we had approximately $65.9 million in cash and cash equivalents, a
decrease of approximately $373.6 million as compared with February 26, 2022,

Credit Facilities

In the second quarter of fiscal 2021, the Company amended its asset-based credit agreement (the “Credit Agreement”) among the Company, certain of the
Company’s U.S. and Canadian subsidiaries party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (in such capacity, the
“Agent”), and the lenders party thereto. The Credit Agreement provides for an asset based revolving credit facility (the “ABL Facility”) with aggregate
revolving commitments established at closing of $1.0 billion, including a swingline sub facility and a letter of credit sub facility. The Credit Agreement has
an uncommitted expansion feature which allows the borrowers to request, at any time following the delivery of an initial field exam and appraisal, an
increase in aggregate revolving commitments under the ABL Facility or elect to enter into a first-in-last-out loan facility (“FIFO Facility”), collectively, in
an aggregate amount of up to $375.0 million, subject to certain customary conditions.

On August 31, 2022, the Company entered into an amendment (the “First Amendment”) to the Credit Agreement, dated as of August 9, 2021 (as amended
by the Amendment, the “First Amended Credit Agreement”), for more than $500.0 million of new additional financing commitments, including its newly
expanded $1.130 billion ABL Facility, which provides for an increase of $130.0 million in aggregate revolving commitments for the time periods set forth
in the Amendment, and a new $375.0 million FILO Facility (the “Initial FILO Loan”, together with the ABL Facility, the “Credit Facilities”), with
JPMorgan Chase Bank, N.A., as administrative agent and Sixth Street Specialty Lending, Inc., as agent and lender for the FILO Facility. The ABL Facility
and FILO Facility mature on August 9, 2026, and August 31, 2027, respectively, unless required to mature earlier pursuant to the terms of the Amendment.

On February 7, 2023, the Company entered into a second amendment (the “Second Amendment”) to the Credit Agreement. Pursuant to the Amendment,
the lenders agreed to (i) waive any outstanding defaults or events of default under the existing Credit Facilities and (ii) rescind the implementation of the
acceleration of obligations under the existing Credit Facilities, the requirement to cash collateralize letters of credit obligations under the existing Credit
Facilities and the default interest on the

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outstanding obligations under the existing Credit Facilities. The Amendment (i) decreased the total revolving commitment from $1.13 billion to $565.0
million, (ii) result in an increased outstanding principal amount as a result of the call protection make-whole amount of $53.9 million being capitalized as
principal to the Initial FILO Loan and (iii) provide for an additional $100 million of FILO loans (the “2023 FILO Loan” and together with the Initial FILO
Loan, the “FILO Facility”, and together with the ABL Facility, the “Credit Facilities”).

As a result of these events of default, the Company classified its outstanding borrowings under its asset-based revolving credit facility (the “ABL Facility)
and its FILO Facility as current in the consolidated balance sheet as of February 25, 2023. The Company’s outstanding borrowings under its ABL Facility
and FILO Facilities were $191.3 million and $528.9 million, respectively, as of February 25, 2023. In addition, the Company had $126.9 million in letters
of credit outstanding under its ABL Facility as of February 25, 2023. The Company also had $1.030 billion in senior notes (excluding deferred financing
costs) outstanding as of February 25, 2023. For information regarding the Company's borrowings, see Note 7.

The filing of the Chapter 11 Cases constituted an event of default that accelerated our obligations under the Senior Notes and the Credit Facilities.

Exchange Offers

During the third fiscal quarter of 2022, the Company commenced exchange offers (the "Exchange Offers") with eligible holders for each series of Existing
Notes as follows: (i) 2024 Notes for new 3.693% Senior Second Lien Secured Non-Convertible Notes due November 30, 2027 (the “New Second Lien
Non-Convertible Notes”) and/or new 8.821% Senior Second Lien Secured Convertible Notes due November 30, 2027 (the “New Second Lien Convertible
Notes”); (ii) 2034 Notes for new 12.000% Senior Third Lien Secured Convertible Notes due November 30, 2029 (the “New Third Lien Convertible Notes”
and, together with the New Second Lien Non-Convertible Notes and the New Second Lien Convertible Notes, the “New Notes”); and (iii) 2044 Notes for
New Third Lien Convertible Notes (see “Long-Term Debt,” Note 12 to the accompanying consolidated financial statements).

In November 2022, the Company completed privately negotiated exchange offers with existing holders of approximately $69.0 million, $15.3 million, and
$70.2 million aggregate principal amount of 2024 Notes, 2034 Notes, and 2044 Notes, respectively, under which the Company issued an aggregate of
approximately 13.6 million shares of common stock to the existing holders in exchange for the exchange notes, including accrued and unpaid interest, and
0.9 million shares in exchange for a cash payment from an existing holder of $3.5 million. The exchange notes were cancelled and no longer outstanding
upon completion of the exchange.

On January 5, 2023, upon the expiration of the Exchange Offers, the Company announced the termination of the offer and consent solicitations with respect
to its Existing Notes, as a result of the conditions applicable thereto not being satisfied. As a result of the termination of the Exchange Offers, none of the
Existing Notes that had been tendered in the Exchange Offers were accepted for purchase and no consideration will be paid or become payable to holders
of the Existing Notes who have tendered their Existing Notes in the Exchange Offers.

ATM Program

On August 31, 2022, we established an at the market equity distribution program (the "ATM Program") (see “Shareholders' (Deficit) Equity,” Note 8 to the
accompanying consolidated financial statements), under which we offered and sold 12 million shares of common stock for net proceeds of $72.2 million
pursuant to the prospectus supplement dated August 31, 2022. On October 28, 2022, we filed a prospectus supplement to register additional shares of our
common stock to offer and sell under the ATM Program at an aggregate sales price of up to $150.0 million. The net proceeds, after commissions and
offering costs, from the ATM Program were used for a number of general corporate purposes, which include immediate strategic priorities such as
rebalancing the Company's assortment and inventory. During Fiscal 2022, we sold approximately 22.2 million shares for approximately $115.4 million of
net proceeds under the Company's ATM Programs.

Series A Preferred Stock and Warrants

On February 7, 2023, the Company consummated an underwritten public offering of (i) shares of Series A Convertible Preferred Stock (“Series A”), (ii)
warrants to purchase shares of the Company’s Common Stock (“Common Stock Warrants”), and (iii) warrants to purchase shares of the Company’s Series
A Convertible Preferred Stock (“Preferred Stock Warrants”). The gross proceeds received for the Series A was $225.0 million and there was no additional
consideration received for the Common Stock Warrants and Preferred Stock Warrants issued.

During the year ended February 25, 2023, 5,000 Preferred Stock Warrants were exercised for gross proceeds of $47.5 million.

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The filing of the Chapter 11 Cases constitutes a Bankruptcy Trigger Event of the Series A, as a result of which mandatory cash redemption provisions
contained are triggered. In addition, the filing of the Chapter 11 Cases triggers a holder's ability to convert the preferred stock at the Alternate Conversion
Price, which could result in a conversion price of lesser than $0.7160.

Capital Expenditures

Capital expenditures for Fiscal 2022 were $332.9 million, which includes the entering into use of accrued capital expenditures of $63.4 million which were
recorded in fiscal 2021. As the Company executes its new strategic plans and refine capital resources to improve liquidity, capital expenditures are related
to maintenance, and investments in technology and digital offerings.

Stock Repurchases

During the first quarter of Fiscal 2022, we repurchased approximately 2.9 million shares of our common stock, at a total cost of approximately $46.1
million, which included approximately 2.3 million shares at a total cost of approximately $40.4 million repurchased under our share repurchase programs
as authorized by our Board of Directors.

Between December 2004 and April 2021, the Company’s Board of Directors authorized, through several share repurchase programs, the repurchase of up to
$12.950 billion of its shares of common stock. Since 2004 through the end of Fiscal 2022, the Company has repurchased approximately $11.731 billion of
its common stock through share repurchase programs. The Company also acquires shares of its common stock to cover employee related taxes withheld on
vested restricted stock, restricted stock units and performance stock unit awards. Since the initial authorization in December 2004, the aggregate total of
common stock repurchased is approximately 265.1 million shares for a total cost of approximately $11.731 billion. The Company had approximately
$1.221 billion remaining of authorized share repurchases as of February 25, 2023.

Debt Repurchases

There were no debt repurchases made during the year ended February 25, 2023. During Fiscal 2021, we purchased approximately $11.0 million aggregate
principal amount of our outstanding 3.749% senior unsecured notes due August 1, 2024.

Cash flow from operating activities

Net cash used in operating activities for Fiscal 2022 was $991.0 million, compared with net cash provided by operating activities of $17.9 million in Fiscal
2021. The year-over-year change in operating cash flow was primarily due to higher net loss, adjusted for non-cash expense, which included the impact of
higher impairments in fiscal 2022, as well as decreases in accounts payable and accrued expenses and other current liabilities, partially offset by decreases
in inventory. For Fiscal 2021, the decrease in cash provided by operating activities was primarily due to higher net loss, adjusted for non-cash expenses,
which included the impact of higher restructuring and transformation expenses in Fiscal 2021, as well as investments in inventory, including as a result of
changing the timing of purchasing in response to the potential impact of global supply chain disruptions on timing of inventory receipts and availability of
product in our stores and on our websites, and lower accounts payable, due primarily to timing of payments for merchandise, and accrued liabilities,
including lower incentive compensation accruals. There were partially offset by a decrease in other current assets primarily due to the receipt of income tax
refunds in Fiscal 2021.

Retail inventory, which includes inventory in our distribution facilities for direct to customer shipments, was approximately $817.6 million at February 25,
2023, a decrease of 52.6% compared with retail inventory at February 26, 2022. We continue to focus on our inventory assortment changes and other
merchandising strategies. In Fiscal 2022, the Company's in-stock levels were lower than anticipated due to supplier constraints and vendor credit line
decreases. We continue to focus on our inventory optimization strategies while also responding to the potential impact of global supply chain disruptions on
product availability. Retail inventory at February 26, 2022 increased approximately 18.0% compared to retail inventory at February 27, 2021, which was
primarily related to the focus on our inventory optimization strategies while also responding to the potential impact of global supply chain disruptions on
product availability.

Cash flow from investing activities

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Net cash used in investing activities for Fiscal 2022 was $298.7 million, compared with net cash used in investing activities of $349.2 million in Fiscal
2021. For Fiscal 2022, net cash used in investing activities included $332.9 million of capital expenditures, a $10.5 million cash outflow related to the
deconsolidation of Canadian subsidiaries, $18.9 million of cash proceeds from the sale of available-for-sale investment securities, and $25.8 million of
proceeds from a note receivable. For Fiscal 2021, net cash used in investing activities included $354.2 million of capital expenditures.

Cash flow from financing activities

Net cash provided by financing activities for Fiscal 2022 was $967.0 million, compared with net cash used in financing activities of $606.0 million in
Fiscal 2021. Net cash provided by financing activities for Fiscal 2022 was comprised of $1.6 billion of borrowings under the Credit Facilities, partially
offset by repayments of $926.2 million, $272.5 million of proceeds from the issuance and exercising of derivative liabilities, net proceeds from issuances of
common stock and ATM Program offerings of $119.0 million, repurchases of common stock of $46.1 million, of which $40.4 million is related to our share
repurchase program, payments of deferred financing costs of $24.2 million, payments of Exchange Offer costs of $8.0 million, $6,3 million of payments for
issuance costs related to derivative liabilities, repayments of finance leases of $3.2 million, and dividend payments of $0.3 million. Net cash provided by
financing activities in Fiscal 2021 was primarily comprised of repurchases of common stock of $589.4 million, of which $574.9 million was related to our
share repurchase program, repayments of long-term debt of $11.4 million and payments of deferred financing costs of $3.4 million.

Contractual Obligations

Our contractual obligations as of February 25, 2023 consist mainly of (i) principal and interest related to our debt (see "Long-Term Debt," Note 7 to the
Consolidated Financial Statements), (ii) leases for stores, offices, distribution facilities and equipment (see "Leases," Note 9 to the Consolidated Financial
Statements) and (iii) purchase obligations, primarily under purchase orders issued for merchandise and for certain capital expenditures. Total capital
expenditures for Fiscal 2022 were $332.9 million.

Approximately $215.4 million in principal amount of our senior unsecured notes are due August 1, 2024, with the remaining principal balances due
August 1, 2034 and August 1, 2044. Our lease obligations include both operating and finance leases, and have various terms extending through 2041, with
approximately $385.5 million in minimum lease payments due in Fiscal 2023, and declining amounts due each year thereafter.

These obligations are considered as part of our overall capital allocation and liquidity management processes referred to above.

SEASONALITY

Our business is subject to seasonal influences. Generally, our sales volumes are higher in the calendar months of August, November, and December, and
lower in February.

INFLATION

In Fiscal 2022, we experienced inflationary pressures in various parts of our business, including, but not limited to, product cost pressure as well as
increased freight and shipping costs across our supply chain. We continue to monitor the impact of inflation on the costs of materials, labor, and other costs
required to manage our business in order to minimize its effects through pricing strategies, productivity improvements and cost reductions. There can be no
assurance, however, that our operating results will not be affected by inflation in the future. See also Risk Factor "Rising inflation may adversely affect us
by increasing costs of materials, labor and other costs beyond what we can recover through price increases".

CRITICAL ACCOUNTING POLICIES

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires us to establish accounting
policies and to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as
of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates
on historical experience and on other assumptions that we believe to be relevant under the circumstances, the results of which form the basis for making
judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. In particular, judgment is used in areas such as
inventory valuation, impairment of long-lived assets, goodwill and other indefinite lived intangible assets, accruals for self-insurance and income and
certain other taxes. Actual results could differ from these estimates.

Inventory Valuation: Merchandise inventories are stated at the lower of cost or market. Inventory costs are primarily calculated using the weighted average
retail inventory method.

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Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the
retail values of inventories. The inputs associated with determining the cost-to-retail ratio include: merchandise purchases, net of returns to vendors,
discounts and volume and incentive rebates; inbound freight expenses; import charges, including duties, insurance and commissions.

The retail inventory method contains certain management judgments that may affect inventory valuation. At any one time, inventories include items that
have been written down to the Company’s best estimate of their realizable value. Judgment is required in estimating realizable value and factors considered
are the age of merchandise, anticipated demand based on factors such as customer preferences and fashion trends, and anticipated changes in product
assortment (including related to the launch of Owned Brands) as well as anticipated markdowns to reduce the price of merchandise from its recorded retail
price to a retail price at which it is expected to be sold in the future. These estimates are based on historical experience and current information about future
events which are inherently uncertain. Actual realizable value could differ materially from this estimate based upon future customer demand or economic
conditions.

For the fiscal years ended February 26, 2022 and February 27, 2021 the Company estimated its reserve for inventory shrinkage throughout the year based
on historical shrinkage and any current trends, if applicable. Actual shrinkage was recorded based upon the results of the Company’s physical inventory
counts for locations at which counts were conducted. For locations where physical inventory counts were not conducted in the fiscal year, an estimated
shrink reserve was recorded based on historical shrinkage and any current trends, if applicable.

For the fiscal year-ended February 25, 2023 the Company performed store physical inventory counts at or near fiscal year-end using a statistical sampling
approach based on a stratified random sample. The full population of store inventory was estimated and recorded based on an extrapolation using the direct
projection method. The Company estimated a reserve for inventory shrinkage for inventory held at other locations based on historical shrinkage and current
trends.

The Company accrues for merchandise in transit once it takes legal ownership and title to the merchandise; as such, an estimate for merchandise in transit
is included in the Company’s merchandise inventories.

Impairment of Long-Lived Assets: We review long-lived assets for impairment when events or changes in circumstances indicate the carrying value of these
assets may exceed their current fair values. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to
the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash
flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the assets. Judgment is
required in estimating the fair value of the assets including assumptions related to sales growth rates and market rental rates. These estimates are based on
historical experience and current information about future events which are inherently uncertain.

In Fiscal 2022, 2021, and 2020, we recorded $1.28 billion, $30.8 million, and $75.1 million, respectively, of non-cash pre-tax impairment charges within
goodwill and other impairments in the consolidated statement of operations for certain store-level assets, including leasehold improvements and operating
lease assets. At February 25, 2023, the required step one recoverability test resulted in estimation uncertainty regarding the ability to achieve future location
and enterprise level positive undiscounted cash flows. As such, the Company moved forward with preparing a step two impairment test for its long-lived
assets at all store, distribution facility and corporate locations. The Company used market approach models, including orderly liquidation value, to estimate
the fair value of store, distribution facility and corporate location long-lived assets, comparing the fair values to the net book values, and calculating the
impairment charge.

In the future, if events or market conditions affect the estimated fair value to the extent that a long-lived asset is impaired, the Company will adjust the
carrying value of these long-lived assets in the period in which the impairment occurs.

Self-Insurance: We utilize a combination of third-party insurance and self-insurance for a number of risks including workers’ compensation, general
liability, cyber liability, property liability, automobile liability and employee related health care benefits (a portion of which is paid by our employees).
Liabilities associated with the risks that we retain are not discounted and are estimated by considering historical claims experience, demographic factors,
severity factors and other actuarial assumptions. Although our claims experience has not displayed substantial volatility in the past, actual experience could
materially vary from our historical experience in the future. Factors that affect these estimates include but are not limited to: inflation, the number and
severity of claims and regulatory changes. In the future, if we conclude an adjustment to self-insurance accruals is required, the liability will be adjusted
accordingly.

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Beginning in the fourth quarter of Fiscal 2020, we began insuring portions of our workers' compensation and medical insurance through a wholly owned
captive insurance subsidiary (the "Captive") to enhance our risk financing strategies. The Captive is subject to regulations in Vermont, including those
relating to its levels of liquidity. The Captive was in compliance with all regulations as of February 25, 2023.

Mezzanine Equity and Derivatives: The Company also issues various financial instruments, including preferred stock and warrants. We account for
instruments containing redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events
not solely within the Company’s control are classified as redeemable or mezzanine equity. We also evaluate whether the contingent redemption provisions
are probable of becoming redeemable to determine whether the carrying value of the redeemable convertible preferred units are required to be remeasured
to their respective redemption values. All instruments that are classified as mezzanine equity are evaluated for embedded derivative features by evaluating
each feature against the nature of the host instrument (e.g. more equity-like or debt-like). Features identified as freestanding instruments or bifurcated
embedded derivatives that are material are recognized separately as a derivative asset or liability, recorded at fair value each reporting period in the
consolidated financial statements.

The Company uses a model-derived valuation in determining the fair value of the derivative liabilities. Significant assumptions used in the model include
the conversion ratio and stock price of the Company. Significant changes in these assumptions could lead to significant changes in the fair value of the
derivative liabilities.

Taxes: The Company accounts for its income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases
and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized in earnings in the period that includes the enactment date.

In assessing the recoverability of our deferred tax assets, we evaluate the available objective positive and negative evidence to estimate whether it is more
likely than not that sufficient future taxable income will be generated to permit use of existing deferred tax assets in each taxpaying jurisdiction. For any
deferred tax asset in excess of the amount for which it is more likely than not that we will realize a benefit, we establish a valuation allowance. A valuation
allowance is a non-cash charge, and does not limit our ability to utilize our deferred tax assets, including our ability to utilize tax loss and credit
carryforward amounts, against future taxable income.

During Fiscal 2022, we concluded that, based on our evaluation of available objective positive and negative evidence, we continue to be more likely than
not that our net U.S. federal and state deferred tax assets will not be recoverable. In assessing the realizability of deferred tax assets, the key assumptions
used to determine positive and negative evidence included our cumulative book loss for the past three years and our ability to continue as a going concern.
As of February 25, 2023, the total valuation allowance relative to U.S. federal and state deferred tax assets was $851.8 million.

The Company recognizes the tax benefit from an uncertain tax position only if it is at least more likely than not that the tax position will be sustained on
examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a
position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon settlement with the taxing
authorities.

The Company also accrues for certain other taxes as required by its operations.

Judgment is required in determining the provision for income and other taxes and related accruals, and deferred tax assets and liabilities. In the ordinary
course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. Additionally, the Company's various tax returns are
subject to audit by various tax authorities. Although the Company believes that its estimates are reasonable, actual results could differ from these estimates.

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FORWARD-LOOKING STATEMENTS

This Form 10-K and Management’s Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements within
the meaning of Section 21 E of the Securities Exchange Act of 1934 including, but not limited to, our progress and anticipated progress towards our long-
term objectives, as well as more generally the status of our future liquidity and financial condition and our outlook for our 2022 Fiscal year. These
statements may be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “might,” “our vision,” “plan,” “potential,” “preliminary,” “predict,” “should,” “will,” or “would” or the negative thereof or other
variations thereof or comparable terminology. These forward-looking statements are subject to a number of factors and uncertainties that could cause the
Company’s actual results to differ materially from those expressed in or contemplated by the forward-looking statements. Such factors include, but are not
limited to: risks attendant to the bankruptcy process, including the Company’s ability to obtain court approval from the Bankruptcy Court with respect to
motions or other requests made to the Bankruptcy Court throughout the course of the Chapter 11 Cases, including with respect the DIP Facility; the effects
of the Chapter 11 Cases, including increased legal and other professional costs necessary to execute the Company’s reorganization, on the Company’s
liquidity (including the availability of operating capital during the pendency of the Chapter 11 Cases), results of operations or business prospects; the
effects of the Chapter 11 Cases on the interests of various constituents and financial stakeholders; the length of time that the Company will operate under
Chapter 11 protection and the continued availability of operating capital during the pendency of the Chapter 11 Cases; objections to the Company’s
restructuring process, DIP Facilities, or other pleadings filed that could protract the Chapter 11 Cases; risks associated with third-party motions in the
Chapter 11 Cases; Bankruptcy Court rulings in the Chapter 11 Cases and the outcome of the Chapter 11 Cases in general; the Company’s ability to comply
with the restrictions imposed by the terms and conditions of the DIP Credit Agreement and other financing arrangements; employee attrition and the
Company’s ability to retain senior management and other key personnel due to the distractions and uncertainties; the Company’s ability to maintain
relationships with suppliers, customers, employees and other third parties and regulatory authorities as a result of the Chapter 11 Cases; the impact and
timing of any cost-savings measures and related local law requirements in various jurisdictions; finalization of the Company’s annual and quarterly
financial statements (including finalization of the Company’s impairment tests), completion of standard annual and quarterly-close processes; risks relating
to the delisting of the Common Stock from Nasdaq and future quotation of the Company’s common stock; the effectiveness of the Company’s internal
control over financial reporting and disclosure controls and procedures, and the potential for additional material weaknesses in the Company’s internal
controls over financial reporting or other potential weaknesses of which the Company is not currently aware or which have not been detected; the impact of
litigation and regulatory proceedings; the impact and timing of any cost-savings measures; and other factors discussed in this Annual Report on Form 10-K.
These risks and uncertainties may cause the Company’s actual results, performance, liquidity or achievements to differ materially from any future results,
performance, liquidity or achievements expressed or implied by these forward-looking statements. In addition, in light of these risks and uncertainties, the
matters referred to in the forward-looking statements contained in this report may not in fact occur. Except as required by law, we do not undertake any
obligation to update our forward-looking statements.

ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk is primarily related to variable interest rate changes associated with our investment securities and the Credit Facilities, which
includes our asset based revolving credit facility (the “ABL Facility”) and a first-in-last-out term loan facility (the “FILO Facility”). Our Credit Facilities
are based on the Secured Overnight Financing Rate (“SOFR”). During Fiscal 2022, the Company sold its long-term available-for-sale investment securities
of $20.3 million for $18.9 million resulting in a realized loss reclassified out of accumulated other comprehensive loss.

As of February 25, 2023, our investments include cash and cash equivalents of approximately $65.9 million and restricted cash of $81.5 million, at
weighted average interest rates of 3.34% and 0.34%, respectively. The book value of these investments is representative of their fair values.

As of February 25, 2023, we had a variable interest rate debt outstanding under our Credit Facilities of $720.2 million. The weighted average interest rate
on the outstanding amounts under our Credit Facilities was 11.66%. The carrying amount of the Credit Facilities approximates fair value as the interest
charged is based on the current market rate.

Our senior unsecured notes have fixed interest rates and are not subject to interest rate risk. As of February 25, 2023, the fair value of the senior unsecured
notes was $176.3 million, which is based on quoted prices in active markets for identical instruments compared to the carrying value of approximately
$1.030 billion.

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ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following are included herein:
1) Consolidated Balance Sheets as of February 25, 2023 and February 26, 2022
2) Consolidated Statements of Operations for the fiscal years ended February 25, 2023, February 26, 2022, and February 27, 2021
Consolidated Statements of Comprehensive Loss for the fiscal years ended February 25, 2023, February 26, 2022, and February
3) 27, 2021
Consolidated Statements of Shareholders’ (Deficit) Equity for the fiscal years ended February 25, 2023, February 26, 2022, and
4) February 27, 2021
5) Consolidated Statements of Cash Flows for the fiscal years ended February 25, 2023, February 26, 2022, and February 27, 2021
6) Notes to Consolidated Financial Statements
7) Reports of Independent Registered Public Accounting Firm (PCAOB ID: 185)

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BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Balance Sheets
(in thousands, except per share data)
February 25, February 26,
2023 2022
Assets
Current assets:
Cash and cash equivalents $ 65,853 $ 439,496
Restricted cash 66,242 —
Merchandise inventories 817,553 1,725,410
Prepaid expenses and other current assets 147,261 198,248
Total current assets 1,096,909 2,363,154
Long-term restricted cash 15,262 31,388
Long-term investment securities — 19,212
Property and equipment, net 50,143 1,027,387
Operating lease assets 965,882 1,562,857
Other assets 97,021 126,574
Total assets $ 2,225,217 $ 5,130,572

Liabilities, Mezzanine Equity, and Shareholders' (Deficit) Equity

Current liabilities:
Current portion of long-term debt $ 646,005 $ —
Accounts payable 457,924 872,445
Accrued expenses and other current liabilities 244,432 529,371
Merchandise credit and gift card liabilities 272,277 326,465
Current operating lease liabilities 301,194 346,506
Preferred stock warrant liabilities 404,441 —
Derivative liabilities 169,611 —
Total current liabilities 2,495,884 2,074,787
Other liabilities 131,500 102,438
Operating lease liabilities 1,278,467 1,508,002
Income taxes payable 93,241 91,424
Long-term debt 1,026,133 1,179,776
Total liabilities 5,025,225 4,956,427
Mezzanine equity
Convertible Preferred Stock, Series A, $0.001 par value, authorized - 1,000,000 shares authorized; issued 23,685
shares and outstanding 15,142 shares — —
Shareholders' (deficit) equity:
Preferred stock - $0.01 par value; authorized - 1,000 shares; no shares issued or outstanding — —
Common stock - $0.01 par value; authorized - 900,000 shares; issued 382,353 and 344,146, respectively;
outstanding 259,033 and 81,979 shares, respectively 3,823 3,441
Additional paid-in capital 2,428,439 2,235,894
Retained earnings 225,058 9,666,091
Treasury stock, at cost; 123,320 and 262,167 shares, respectively (5,457,379) (11,685,267)
Accumulated other comprehensive income (loss) 51 (46,014)
Total shareholders' (deficit) equity (2,800,008) 174,145
Total liabilities, mezzanine equity, and shareholders' (deficit) equity $ 2,225,217 $ 5,130,572

See accompanying Notes to Consolidated Financial Statements.

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BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Statements of Operations
(in thousands, except per share data)
Fiscal Year Ended
February 25, February 26, February 27,
2023 2022 2021
Net sales $ 5,344,685 $ 7,867,778 $ 9,233,028

Cost of sales 4,129,802 5,384,287 6,114,947

Gross profit 1,214,883 2,483,491 3,118,081

Selling, general and administrative expenses 2,372,969 2,692,292 3,224,363

Impairments 1,287,529 36,531 127,341

Restructuring and transformation initiative expenses 330,024 144,025 102,202

Loss on sale of businesses — 18,221 1,062

Operating loss (2,775,639) (407,578) (336,887)

Interest expense, net 110,497 64,702 76,913

Loss on preferred stock warrants and derivative liabilities 639,444 — —

Loss on deconsolidation of subsidiaries 98,633 — —

Loss (gain) on extinguishment of debt (94,343) 376 (77,038)

Loss before provision (benefit) from income taxes (3,529,870) (472,656) (336,762)

Provision (benefit) from income taxes (31,069) 86,967 (185,989)

Net loss $ (3,498,801) $ (559,623) $ (150,773)

Net loss per share - Basic $ (36.03) $ (5.64) $ (1.24)

Net loss per share - Diluted $ (36.03) $ (5.64) $ (1.24)

Weighted average shares outstanding - Basic 97,106 99,249 121,446

Weighted average shares outstanding - Diluted 97,106 99,249 121,446

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Comprehensive Loss
(in thousands)
Fiscal Year Ended
February 25, February 26, February 27,
2023 2022 2021
Net loss $ (3,498,801) $ (559,623) $ (150,773)

Other comprehensive (loss) income:

Change in temporary impairment of auction rate securities, net of tax 866 (251) (617)
Pension adjustment, net of tax — (1,562) (1,396)
Reclassification adjustment on settlement of the pension plan, net of tax — 9,938 1,522
Currency translation adjustment 45,199 1,461 9,800
Other comprehensive income 46,065 9,586 9,309

Comprehensive loss $ (3,452,736) $ (550,037) $ (141,464)

See accompanying Notes to Consolidated Financial Statements.

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BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Statements of Mezzanine Equity and Shareholders' (Deficit) Equity
(in thousands)
Accumulated
Mezzanine Equity Common Stock Additional Treasury Stock Other
Paid- Retained Comprehensive
Shares Amount Shares Amount in Capital Earnings Shares Amount Loss Total
Balance at February 29, 2020 — — 343,683 $ 3,436 $ 2,167,337 $ 10,374,826 (217,155) $ (10,715,755) $ (64,909) $ 1,764,935
Net loss — — — — — (150,773) — — — (150,773)
Other comprehensive loss, net of tax — — — — — — — — 9,309 9,309
Dividends forfeited — — — — — 1,200 — — — 1,200
Forfeiture of restricted shares, net — — (786) (8) 8 — — — — —
Payment and vesting of
performance stock units — — 344 4 (4) — — — — —
Stock-based compensation expense,
net — — — — 32,344 — — — — 32,344
Accelerated share repurchase
program — — — — (47,550) — (15,833) (327,450) — (375,000)
Repurchase of common stock,
including fees — — — — — — (632) (5,079) — (5,079)
Balance at February 27, 2021 — — 343,241 3,432 2,152,135 10,225,253 (233,620) (11,048,284) (55,600) 1,276,936
Net loss — — — (559,623) — — — (559,623)
Other comprehensive income, net of
tax — — — — — — — — 9,586 9,586
Dividends forfeited — — — — — 461 — — — 461
Issuance of restricted shares, net — — 624 6 (6) — — — — —
Payment and vesting of
performance stock units — — 274 3 (3) — — — — —
Stock-based compensation expense,
net — — — — 36,080 — — — — 36,080
Accelerated share repurchase
program — — — — 47,550 — (200) (47,550) — —
Director fees paid in stock — — 7 — 138 — — — — 138
Repurchase of common stock,
including fees — — — — — — (28,347) (589,433) — (589,433)
Balance at February 26, 2022 — — 344,146 3,441 2,235,894 9,666,091 (262,167) (11,685,267) (46,014) 174,145
Net loss — — — — — (3,498,801) — — — (3,498,801)
Other comprehensive income, net of
tax — — — — — — — — 46,065 46,065
Dividends forfeited — — — — — 235 — — — 235
Issuance of restricted shares, net — — 178 2 (2) — — — — —
Vesting of restricted stock units — — 1,163 12 (12) — — — — —
Payment and vesting of
performance stock units — — 177 2 (2) — — — — —
Stock-based compensation expense,
net — — — — 20,212 — — — — 20,212
Director fees paid in stock — — 11 — 145 — — — — 145
Issuance of common stock and At-
the-Market offering, net of offering
costs — — 36,678 366 172,204 — — — — 172,570
Repurchase of common stock,
including fees — — — — — — (2,888) (46,146) — (46,146)
Issuance of Series A convertible
preferred stock 23,685 — — — — — — — —
Conversion of Series A convertible
preferred stock (13,543) — — — — (2,980,160) 70,911 3,135,100 — 154,940
Exercise of Preferred Stock
Warrants 5,000 — — — — — — — —
Exercise of Common Stock
Warrants — — — — — (2,962,307) 70,824 3,138,934 — 176,627
Balance at February 25, 2023 15,142 — 382,353 $ 3,823 $ 2,428,439 $ 225,058 (123,320) $ (5,457,379) $ 51 $ (2,800,008)
See
accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Cash Flows
(in thousands)
Fiscal Year Ended
February 25, February 26,
2023 2022 February 27, 2021
Cash Flows from Operating Activities:
Net loss $ (3,498,801) $ (559,623) $ (150,773)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization 427,087 293,626 340,912
Impairments 1,287,529 36,531 127,341
Loss on preferred stock warrants and derivative liabilities 639,444 — —
Stock-based compensation 19,394 35,061 31,594
Realized loss on available-for-sale investment securities 1,411 — —
Deferred income taxes (37,586) 125,711 148,741
Loss on sale of businesses — 18,221 1,062
Loss on deconsolidation of subsidiaries 98,633 — —
(Gain) loss on debt extinguishment (94,343) 376 (77,038)
Other 2,827 (8,298) (396)
Decrease (increase) in assets:
Merchandise inventories 874,237 (53,339) 64,947
Other current assets 46,453 387,746 (387,172)
Other assets 11,355 607 1,519
Increase (decrease) in liabilities:
Accounts payable (365,772) (132,785) 168,556
Accrued expenses and other current liabilities (262,530) (100,356) 15,538
Merchandise credit and gift card liabilities (53,837) 13,981 (12,110)
Income taxes payable 2,300 (11,257) 54,958
Operating lease assets and liabilities, net (86,785) (14,162) (32,813)
Other liabilities (1,995) (14,186) (26,758)
Net cash (used in) provided by operating activities (990,979) 17,854 268,108
Cash Flows from Investing Activities:
Purchases of held-to-maturity investment securities — (29,997) —
Redemption of held-to-maturity investment securities — 30,000 386,500
Proceeds from sale of available-for-sale investment securities 18,864 — —
Deconsolidation of subsidiaries cash, cash equivalents and restricted cash (10,545) — —
Proceeds received from note receivable 25,832 — —
Net proceeds from sales of businesses — — 534,457
Net proceeds from sales of property — 5,000 —
Capital expenditures (332,886) (354,185) (183,077)
Net cash (used in) provided by investing activities (298,735) (349,182) 737,880
Cash Flows from Financing Activities:
Borrowings of debt 1,590,000 — 236,400
Repayments of debt (926,199) (11,360) (457,827)
Repayments of finance leases (3,206) (1,033) —
Repurchase of common stock, including fees (46,146) (589,433) (332,529)
Issuance of common stock and At-the-Market offering, net of offering costs 118,975 — —
Proceeds from issuance of Series A and preferred and common stock warrants 225,008 — —
Proceeds from exercise of preferred stock warrants 47,500 — —
Payment of dividends (329) (749) (23,108)
Payment of Exchange Offer costs (7,992) — —
Payment of issuance costs related to Series A and preferred and common stock warrants (6,334) — —
Payment of deferred financing fees (24,242) (3,443) (7,690)
Prepayment under share repurchase agreement — — (47,550)
Net cash provided by (used in) financing activities 967,035 (606,018) (632,304)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (848) 1,006 5,075
Net (decrease) increase in cash, cash equivalents and restricted cash (323,527) (936,340) 378,759
Change in cash balances classified as held-for-sale — — 4,815

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Net (decrease) increase in cash, cash equivalents and restricted cash (323,527) (936,340) 383,574
Cash, cash equivalents and restricted cash:
Beginning of period 470,884 1,407,224 1,023,650
End of period $ 147,357 $ 470,884 $ 1,407,224

See accompanying Notes to Consolidated Financial Statements.

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Notes to Consolidated Financial Statements

Bed Bath & Beyond Inc. and Subsidiaries

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS

A. Nature of Operations

Bed Bath & Beyond Inc. and subsidiaries (the "Company") is an omni-channel retailer that makes it easy for its customers to feel at home. The Company
sells a wide assortment of merchandise in the Home and Baby markets and operates under the names Bed Bath & Beyond ("BBB") and buybuy BABY
("BABY"). Customers can purchase products either in-store, online, with a mobile device or through a customer contact center. The Company generally has
the ability to have customer purchases picked up in-store, curbside or shipped direct to the customer from the Company’s distribution facilities, stores or
vendors. In addition, the Company is a partner in a joint venture which operates retail stores in Mexico under the name Bed Bath & Beyond.

We account for our operations as one North American Retail reporting segment. In Fiscal 2020, we accounted for our operations as two operating
segments: North American Retail and Institutional Sales, the latter of which did not meet the quantitative thresholds under GAAP and, therefore, was not a
reportable segment, and which was divested in October 2020. Net sales outside of the U.S. for the Company were not material for Fiscal 2022, 2021, and
2020. As the Company operates in the retail industry, its results of operations are affected by general economic conditions and consumer spending habits.

On April 23, 2023 (the “Petition Date”), Bed Bath and Beyond, Inc. (the “Company”) and materially all of its direct and indirect subsidiaries (collectively,
the "Debtors" or the “Company Parties”) filed a voluntary petition (the “Chapter 11 Cases”) under Chapter 11 of the U.S. Bankruptcy Code (the
“Bankruptcy Code”) in the U.S. Bankruptcy Court for the District of New Jersey (the “Bankruptcy Court”). On the Petition Date, the Company Parties filed
a motion with the Bankruptcy Court seeking to jointly administer the Chapter 11 Cases. On April 24, 2023, the Bankruptcy Court entered an order
approving joint administration under the caption “In re: Bed Bath & Beyond Inc.,” Case No 23-13359. Certain of the Company’s subsidiaries were not
included in the Chapter 11 filing.

The Company Parties continue to operate their business and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Following a hearing held on April 24,
2023, the Bankruptcy Court approved, on an interim basis, the Company Parties’ motions seeking a variety of “first-day” relief, including authority to pay
employee wages and benefits and to pay vendors and suppliers for goods and services provided both before and after the Petition Date. The Company
Parties resolved numerous informal comments and many of the "first-day" motions were entered on a final basis consensually. A hearing was scheduled on
June 14, 2023 for the Bankruptcy Court to consider final approval of the relief requested in certain first day motions, and final approval of the DIP Facility.

On February 10, 2023 (the “Canadian Petition Date”), BBB Canada Limited made an application with the Ontario Superior Court of Justice (the “Canadian
Court”). BBB Canada Limited was granted an order, which, among other provisions, provides a stay of proceedings pursuant to the Companies’ Creditors
Arrangement Act (the “CCAA”). The CCAA is a Federal Act that allows financially troubled corporations that owe their creditors in excess of $5 million
the opportunity to restructure their affairs. Although Bed Bath & Beyond Canada L.P. (“BBB LP” and together with BBB Canada Limited, “BBB Canada”)
did not file an application with the Canadian Court, the stay of proceedings under the CCAA and other benefits were extended to BBB LP. BBB Canada
initiated a wind-down of Bed Bath & Beyond and Buy Buy Baby Stores in Canada under the CCAA. A monitor was appointed by the Canadian Court on
February 10, 2023 to oversee the orderly liquidation of its remaining inventory with assistance from a third-party professional liquidator and vacate its
leased retail stores and premises. See “Deconsolidation – Canadian Subsidiaries,” Note 4, for additional details.

B. Fiscal Year

The Company’s Fiscal year is comprised of the 52 or 53-week period ending on the Saturday nearest February 28th. Accordingly, Fiscal 2022, Fiscal 2021,
and Fiscal 2020 represented 52 weeks and ended on February 25, 2023, February 26, 2022, and February 27, 2021, respectively.

C. Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company accounts for
its investment in the joint venture referred to above under the equity method.

All significant intercompany balances and transactions have been eliminated in consolidation.

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D. Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects
of Reference Rate Reform on Financial Reporting. The amendment provides optional guidance for a limited period of time to ease the potential burden in
accounting for (or recognizing the effects of) reference rate reform on contracts, hedging relationships and other transactions that reference LIBOR. These
updates are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on
or before December 31, 2022. The Company adopted this standard in Fiscal 2022; upon adoption, this guidance did not have a material impact on its
consolidated financial statements.

E. Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires the Company to establish
accounting policies and to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The
Company bases its estimates on historical experience and on other assumptions that it believes to be relevant under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. In particular,
judgment is used in areas such as inventory valuation, impairment of long-lived assets, impairment of auction rate securities, goodwill and other indefinite
lived intangible assets, accruals for self-insurance, litigation, store opening, expansion, relocation and closing costs, the provision for sales returns, vendor
allowances, derivatives, stock-based compensation and income and certain other taxes. Actual results could differ from these estimates.

F. Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents. Included in cash and
cash equivalents are credit and debit card receivables from banks, which typically settle within five business days, of $24.5 million and $47.9 million as of
February 25, 2023 and February 26, 2022, respectively.

Short-term restricted cash was $66.2 million as of February 25, 2023 and is included in current assets on the consolidated balance sheet. The Company had
no short-term restricted cash as of February 26, 2022. Long-term restricted cash of $15.3 million and $31.4 million as of February 25, 2023 and
February 26, 2022, respectively, is included in total assets on the consolidated balance sheet.

G. Investment Securities

Investment securities consist primarily of auction rate securities, which are securities with interest rates that reset periodically through an auction process,
and U.S. Treasury Bills, when outstanding. The U.S. Treasury Bills with original maturities of greater than three months were classified as short-term held-
to-maturity securities and stated at their amortized cost which approximated fair value. Auction rate securities are classified as available-for-sale and are
stated at fair value, which had historically been consistent with cost or par value due to interest rates which reset periodically, typically every 7, 28 or 35
days. As a result, there generally were no cumulative gross unrealized holding gains or losses relating to these auction rate securities. However, during the
global financial crisis of 2008 the auction process for the Company’s auction rate securities failed and continues to fail. These failed auctions result in a
lack of liquidity in the securities and affect their estimated fair values at February 26, 2022, but do not affect the underlying collateral of the securities.

Those investment securities which the Company had the ability and intent to hold until maturity are classified as held-to-maturity investments and are
stated at amortized cost.

Premiums are amortized and discounts are accreted over the life of the security as adjustments to interest income using the effective interest method.
Dividend and interest income are recognized when earned.

During Fiscal 2022, the Company sold its long-term available-for-sale investment securities of $20.3 million for $18.9 million resulting in a $1.4 million
realized loss, of which $1.1 million was reclassified out of accumulated other comprehensive loss.

As of February 26, 2021, the Company’s long-term available-for-sale investment securities represented approximately $20.3 million par value of auction
rate securities, less temporary valuation adjustments of approximately $1.1 million. Since these

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valuation adjustments are deemed to be temporary, they are recorded in accumulated other comprehensive loss, net of a related tax benefit, and did not
affect the Company’s net earnings.

The Company had no short-term available-for-sale investment securities as of February 25, 2023 or February 26, 2022.

H. Inventory Valuation

Merchandise inventories are stated at the lower of cost or market. Inventory costs are primarily calculated using the weighted average retail inventory
method.

Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the
retail values of inventories. The inputs associated with determining the cost-to-retail ratio include: merchandise purchases, net of returns to vendors,
discounts and volume and incentive rebates; inbound freight expenses; and import charges, including duties, insurance and commissions.
The retail inventory method contains certain management judgments that may affect inventory valuation. At any one time, inventories include items that
have been written down to the Company’s best estimate of their realizable value. Judgment is required in estimating realizable value and factors considered
are the age of merchandise, anticipated demand based on factors such as customer preferences and fashion trends, and anticipated changes in product
assortment (including related to the launch of Owned Brands) as well as anticipated markdowns to reduce the price of merchandise from its recorded retail
price to a retail price at which it is expected to be sold in the future. These estimates are based on historical experience and current information about future
events which are inherently uncertain. Actual realizable value could differ materially from this estimate based upon future customer demand or economic
conditions.

For the fiscal years ended February 26, 2022 and February 27, 2021, the Company estimated its reserve for inventory shrinkage throughout the year based
on historical shrinkage and any current trends, if applicable. Actual shrinkage was recorded based upon the results of the Company’s physical inventory
counts for locations at which counts were conducted. For locations where physical inventory counts were not conducted in the fiscal year, an estimated
shrink reserve was recorded based on historical shrinkage and any current trends, if applicable.

For the fiscal year-ended February 25, 2023 the Company performed store physical inventory counts at or near fiscal year-end using a statistical sampling
approach based on a stratified random sample. The full population of store inventory was estimated and recorded based on an extrapolation using the direct
projection method. The Company estimated a reserve for inventory shrinkage for inventory held at other locations based on historical shrinkage and current
trends.

The Company accrues for merchandise in transit once it takes legal ownership and title to the merchandise; as such, an estimate for merchandise in transit
is included in the Company’s merchandise inventories.

I. Property and Equipment

Property and equipment are stated at cost and are depreciated primarily using the straight-line method over the estimated useful lives of the assets (39 years
for buildings; 7 to 20 years for furniture, fixtures and equipment; and 3 to 10 years for computer equipment and software). Leasehold improvements are
amortized using the straight-line method over the lesser of their estimated useful life or the life of the lease. Depreciation expense is primarily included
within selling, general and administrative expenses. (see "Property and Equipment," Note 10).

The cost of maintenance and repairs is charged to earnings as incurred; significant renewals and betterments are capitalized. Maintenance and repairs
amounted to $34.7 million, $80.0 million, and $117.7 million for Fiscal 2022, 2021, and 2020, respectively.

J. Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment when events or changes in circumstances indicate the carrying value of these assets may exceed
their current fair values. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated
undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an
impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of
would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer
depreciated. In Fiscal 2022 and Fiscal 2021, the Company recorded non-cash pre-tax impairment charges of $1.28 billion and $30.8 million,

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respectively, for certain store-level, distribution facilities, corporate assets, including leasehold improvements, other property and equipment and operating
lease assets.

At February 25, 2023, the required step one recoverability test resulted in estimation uncertainty regarding the ability to achieve future location and
enterprise level positive undiscounted cash flows. As such, the Company moved forward with preparing a step two impairment test for its long-lived assets
at all store, distribution facility and corporate locations. The Company used market approach models, including orderly liquidation value, to estimate the
fair value of store, distribution facility and corporate location long-lived assets, comparing the fair values to the net book values, and calculating the
impairment charge.

In the future, if events or market conditions affect the estimated fair value to the extent that a long-lived asset is impaired, the Company will adjust the
carrying value of these long-lived assets in the period in which the impairment occurs.

K. Goodwill and Other Indefinite Lived Intangible Assets

Included within other assets in the accompanying consolidated balance sheets as of February 25, 2023 and February 26, 2022, respectively, are $13.2
million and $16.3 million for indefinite lived tradenames and trademarks.

The Company reviews its intangible assets that have indefinite lives for impairment annually as of the end of the fiscal year or when events or changes in
circumstances indicate the carrying value of these assets might exceed their current fair values. Impairment testing is based upon the best information
available including estimates of fair value which incorporate assumptions marketplace participants would use in making their estimates of fair value.
Significant assumptions and estimates are required, including, but not limited to, projecting future cash flows, determining appropriate discount rates and
terminal growth rates, and other assumptions, to estimate the fair value of goodwill and indefinite lived intangible assets. Although the Company believes
the assumptions and estimates made are reasonable and appropriate, different assumptions and estimates could materially impact its reported financial
results.

Other indefinite lived intangible assets were recorded as a result of acquisitions and primarily consist of tradenames. The Company values its tradenames
using a relief-from-royalty approach, which assumes the value of the tradename is the discounted cash flows of the amount that would be paid by a
hypothetical market participant had they not owned the tradename and instead licensed the tradename from another company. For the fiscal years ended
February 25, 2023, February 26, 2022, and February 27, 2021, the Company completed a quantitative impairment analysis for certain other indefinite lived
intangible assets, by comparing the fair value of the tradenames to their carrying value and recognized non-cash pre-tax tradename impairment charges of
$2.9 million, $5.7 million, and $35.1 million, respectively, within goodwill and other impairments in the consolidated statement of operations. As of
February 25, 2023, for the remaining other indefinite lived intangible assets, the Company assessed qualitative factors in order to determine whether any
events and circumstances existed which indicated that it was more likely than not that the fair value of these other indefinite lived assets did not exceed
their carrying values and concluded no such events or circumstances existed which would require an impairment test be performed. In the future, if events
or market conditions affect the estimated fair value to the extent that an asset is impaired, the Company will adjust the carrying value of these assets in the
period in which the impairment occurs.

As of February 25, 2023 and February 26, 2022, the Company did not have any goodwill recorded on its consolidated balance sheet.

L. Self-Insurance

The Company utilizes a combination of insurance and self-insurance for a number of risks including workers’ compensation, general liability, cyber
liability, property liability, automobile liability and employee related health care benefits (a portion of which is paid by its employees). Liabilities
associated with the risks that the Company retains are not discounted and are estimated by considering historical claims experience, demographic factors,
severity factors and other actuarial assumptions. Although the Company’s claims experience has not displayed substantial volatility in the past, actual
experience could materially vary from its historical experience in the future. Factors that affect these estimates include but are not limited to: inflation, the
number and severity of claims and regulatory changes. In the future, if the Company concludes an adjustment to self-insurance accruals is required, the
liability will be adjusted accordingly.

Beginning in the fourth quarter of Fiscal 2020, the Company began insuring portions of its workers' compensation and medical insurance through a wholly
owned captive insurance subsidiary (the "Captive") to enhance its risk financing strategies. The Captive is subject to regulations in Vermont, including
those relating to its levels of liquidity and other requirements. The Captive was in compliance with all regulations as of February 25, 2023.

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M. Shareholders' (Deficit) Equity and Mezzanine Equity

The Company has authorization to make repurchases of its common shares from time to time in the open market or through other programs approved by
the Board of Directors pursuant to existing rules and regulations. Common stock purchased for treasury is recorded at cost. At the date of subsequent
reissue, the treasury stock account is reduced by the cost of such stock, with cost determined on a weighted-average basis (see "Shareholders' (Deficit)
Equity and Mezzanine Equity", Note 8).

The Company issues various financial instruments, including preferred stock. Instruments containing redemption rights that are either within the control of
the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control are classified as redeemable or
mezzanine equity. The Company evaluates whether the contingent redemption provisions are probable of becoming redeemable to determine whether the
carrying value of the redeemable convertible preferred units are required to be remeasured to their respective redemption values. All instruments that are
classified as mezzanine equity are evaluated for embedded derivative features by evaluating each feature against the nature of the host instrument (e.g.
more equity-like or debt-like). Features identified as freestanding instruments or bifurcated embedded derivatives that are material are recognized
separately as a derivative asset or liability in the consolidated financial statements (see "Shareholders' (Deficit) Equity and Mezzanine Equity", Note 8).

N. Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, investment securities, accounts payable, long-term debt, derivatives, and certain
other liabilities. The Company’s investment securities consist primarily of U.S. Treasury securities, which are stated at amortized cost, and auction rate
securities consisting of preferred shares of closed end municipal bond funds, which are stated at their approximate fair value. The book value of the
financial instruments, excluding the Company’s long-term debt, is representative of their fair values (see "Fair Value Measurements," Note 5).

O. Leases

The Company determines if an arrangement is a lease or contains a lease at the inception of the contract. The Company’s leases generally contain fixed and
variable components. Variable components are primarily contingent rents based upon store sales exceeding stipulated amounts. Lease agreements may also
include non-lease components, such as certain taxes, insurance and common area maintenance, which the Company combines with the lease component to
account for both as a single lease component. Lease liabilities, which represent the Company’s obligation to make lease payments arising from the lease,
and corresponding right-of-use assets, which represent the Company’s right to use an underlying asset for the lease term, are recognized at the
commencement date of the lease, which is typically the date the Company obtains possession of the leased premises, based on the present value of fixed
future payments over the lease term. The Company utilizes the lease term for which it is reasonably certain to use the underlying asset, including
consideration of options to extend or terminate the lease. Incentives received from landlords are recorded as a reduction to the lease right-of-use assets. The
Company does not recognize lease right-of-use assets and corresponding lease liabilities for leases with initial terms of 12 months or less.

The Company calculates the present value of future payments using the discount rate implicit in the lease, if available, or its incremental borrowing rate.
The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term at an amount
equal to the lease payments in a similar economic environment. The Company determined discount rates based on the rates of its unsecured borrowings,
which are then adjusted for the appropriate lease term and effects of full collateralization. In determining the Company's operating lease assets and
operating lease liabilities, the Company applied these incremental borrowing rates to the minimum lease payments within each lease agreement.

For operating leases, lease expense relating to fixed payments is recognized on a straight-line basis over the lease term and lease expense relating to
variable payments is expensed as incurred. For finance leases, the amortization of the asset is recognized over the shorter of the lease term or useful life of
the underlying asset (see "Leases," Note 9).

P. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets in the accompanying consolidated balance sheets as of February 25, 2023 and February 26, 2022, respectively,
are $147.3 million and $198.2 million, which includes income tax receivables as of February 25, 2023 and February 26, 2022 of $16.1 million and $26.5
million, respectively (see "Provision for Income Taxes," Note 12).

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Q. Revenue Recognition

Sales are recognized upon purchase by customers at the Company’s retail stores or upon delivery for products purchased from its websites. The value of
point-of-sale coupons and point-of-sale rebates that result in a reduction of the price paid by the customer are recorded as a reduction of sales. Shipping and
handling fees that are billed to a customer in a sale transaction are recorded in sales. Taxes, such as sales tax, use tax and value added tax, are not included
in sales.

Revenues from gift cards, gift certificates and merchandise credits are recognized when redeemed. Gift cards have no provisions for reduction in the value
of unused card balances over defined time periods and have no expiration dates. In Fiscal 2022 and Fiscal 2021, the Company recognized net sales for gift
card and merchandise credit redemptions of approximately $76.7 million and $72.3 million, respectively, which were included in merchandise credit and
gift card liabilities on the consolidated balance sheet as of February 26, 2022 and February 27, 2021, respectively.

During the second quarter of fiscal 2022, the Company launched its cross-banner customer loyalty program, Welcome Rewards™, which allows members
to earn points for each qualifying purchase at its retail banners either online or in its stores. Points earned are then converted to rewards upon reaching
certain thresholds. These rewards may then be redeemed on future merchandise purchases at its retail banners. The Company defers a portion of the
revenue related to the points earned at the time of the original transaction and revenue is recognized for these performance obligations upon redemption or
expiration of points or rewards earned by the customer. As of February 25, 2023, the Company recorded $4.2 million of loyalty program liabilities in
accrued expenses and other current liabilities on the consolidated balance sheet.

Sales returns are provided for in the period that the related sales are recorded based on historical experience. Although the estimate for sales returns has not
varied materially from historical provisions, actual experience could vary from historical experience in the future if the level of sales return activity changes
materially. In the future, if the Company concludes that an adjustment is required due to material changes in the returns activity, the liability for estimated
returns and the corresponding right of return asset will be adjusted accordingly. As of February 25, 2023 and February 26, 2022, the liability for estimated
returns of $6.9 million and $23.6 million is included in accrued expenses and other current liabilities and the corresponding right of return asset for
merchandise of $4.8 million and $14.6 million, respectively, is included in prepaid expenses and other current assets, respectively.

The Company sells a wide assortment of domestics merchandise and home furnishings. Domestics merchandise includes categories such as bed linens and
related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic housewares,
general home furnishings (including furniture and wall décor), consumables and certain juvenile products. Sales of domestics merchandise and home
furnishings accounted for approximately 35.8% and 64.2% of net sales, respectively, for Fiscal 2022, 37.4% and 62.6% of net sales, respectively, for Fiscal
2021 and 34.7% and 65.3% of net sales, respectively, for Fiscal 2020.

R. Cost of Sales

Cost of sales includes the cost of merchandise, buying costs and costs of the Company’s distribution network including inbound freight charges, import
charges (including duties), distribution facility costs, receiving costs, internal transfer costs and shipping and handling costs.

S. Vendor Allowances

The Company receives allowances from vendors in the normal course of business for various reasons including direct cooperative advertising, purchase
volume and reimbursement for other expenses. Annual terms for each allowance include the basis for earning the allowance and payment terms, which vary
by agreement. All vendor allowances are recorded as a reduction of inventory cost, except for direct cooperative advertising allowances which are specific,
incremental and identifiable. The Company recognizes purchase volume allowances as a reduction of the cost of inventory in the quarter in which
milestones are achieved. Advertising costs were reduced by direct cooperative allowances of $24.0 million, $35.8 million, and $28.9 million for Fiscal
2022, 2021, and 2020, respectively.

T. Store Opening, Expansion, Relocation and Closing Costs

Store opening, expansion, relocation and closing costs, including markdowns, asset residual values and projected occupancy costs, are charged to earnings
as incurred.

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U. Advertising Costs

Advertising expenses related to direct response advertising are expensed on the first day of the direct response advertising event. All other advertising
expenses associated with store advertising are charged to earnings as incurred. Net advertising costs amounted to $393.7 million, $407.1 million, and
$347.8 million for Fiscal 2022, 2021, and 2020, respectively.

V. Stock-Based Compensation

The Company measures all employee stock-based compensation awards using a fair value method and records such expense, net of estimated forfeitures, in
its consolidated financial statements. The Company’s stock-based compensation relates to restricted stock awards, stock options, restricted stock units and
performance stock units. The Company’s restricted stock awards are considered nonvested share awards (see "Stock-Based Compensation," Note 11).

W. Income Taxes

The Company files a consolidated federal income tax return. Income tax returns are also filed with each taxable jurisdiction in which the Company
conducts business.

The Company accounts for its income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases
and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized in earnings in the period that includes the enactment date.

In assessing the recoverability of its deferred tax assets, the Company evaluates the available objective positive and negative evidence to estimate whether
it is more likely than not that sufficient future taxable income will be generated to permit use of existing deferred tax assets in each taxpaying jurisdiction.
For any deferred tax asset in excess of the amount for which it is more likely than not that the Company will realize a benefit, a valuation allowance is
established. A valuation allowance is a non-cash charge, and does not limit the Company's ability to utilize its deferred tax assets, including its ability to
utilize tax loss and credit carryforward amounts against future taxable income.

The Company recognizes the tax benefit from an uncertain tax position only if it is at least more likely than not that the tax position will be sustained on
examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a
position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon settlement with the taxing
authorities.

Judgment is required in determining the provision for income and other taxes and related accruals, and deferred tax assets and liabilities. In the ordinary
course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. Additionally, the Company's various tax returns are
subject to audit by various tax authorities. Although the Company believes that its estimates are reasonable, actual results could differ from these estimates
(see "Provision for Income Taxes", Note 12).

X. Earnings per Share

The Company presents earnings per share on a basic and diluted basis. Basic earnings per share is computed by dividing net earnings by the weighted
average number of shares outstanding. Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares
outstanding, including the dilutive effect of stock-based awards as calculated under the treasury stock method. For Fiscal 2022, Fiscal 2021 and Fiscal
2020, the Company reported a net loss and therefore, the potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals
diluted net loss per share.

Stock-based awards of approximately 1.7 million, 2.9 million, and 2.4 million shares were excluded from the computation of diluted earnings per share as
the effect would be anti-dilutive for Fiscal 2022, 2021, and 2020, respectively. Additionally, Series A preferred stock and warrant liabilities of
approximately 15.7 million shares were excluded from the computation of diluted earnings per share as the effect would be anti-dilutive for Fiscal 2022.

2. LIQUIDITY AND GOING CONCERN

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Under the accounting guidance related to the presentation of financial statements, when preparing financial statements for each annual and interim
reporting period, the Company has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial
doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The accompanying
consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The financial statements do not include any adjustments that might be necessary should the Company be unable
to continue as a going concern.

We considered our current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our conditional and
unconditional obligations due over the next twelve months. Based on recurring losses from operations and negative cash flows from operations in the
amount of $991.0 million for the twelve months ended February 25, 2023, as well as current cash and liquidity projections, we have concluded that
substantial doubt exists about our ability to continue as a going concern for the next twelve months.

In view of restructuring our existing debt, we filed the Chapter 11 Cases on April 23, 2023. The filing of the Chapter 11 Cases constituted an event of
default that allowed the respective lenders to accelerate all of our debt obligations under (i) the Existing Credit Agreement and (ii) the Indenture, dated as of
July 17, 2014, as amended by the First Supplemented Indenture, dated as of July 17, 2014, relating to the 3.749% senior unsecured notes due 2024 (the
“3.749% Senior Notes”), the 4.915% senior unsecured notes due 2034 (the “4.915% Senior Notes”) and the 5.165% senior unsecured notes due 2044 (the
“5.165% Senior Notes” and, together with the 3.749% Senior Notes and the 4.915% Senior Notes, the “Notes”) between the Company and The Bank of
New York Mellon, as trustee.

Pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed most actions against or on behalf of the Company
Parties, including actions to collect indebtedness incurred prior to the Petition Date or to exercise control over the Company Parties’ property. For more
information on the automatic stay, including of any events of default, during the pendency of the Chapter 11 Cases, see “See “Item 3 — Legal Proceedings
— Effect of Automatic Stay upon filing under Chapter 11 of the Bankruptcy Code.” The consolidated financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome
of the uncertainty of us being able to continue as a going concern.

Given the risks, unknown results and inherent uncertainties associated with a bankruptcy process and the correlation between the Chapter 11 Cases and our
ability to satisfy our financial obligations and to develop and execute our business plan, our ability to continue as a going concern is contingent upon,
among other things, our ability to successfully emerge from the Chapter 11 Cases and establish a sustainable capital structure through the restructuring
process, subject to the Bankruptcy Court’s approval, the effect of the DIP Facility and the DIP Credit Agreement. The outcome of the Chapter 11 Cases is
subject to a high degree of uncertainty and is dependent upon factors that are outside of the Company’s control, including actions of the Bankruptcy Court
and the company’s creditors. There can be no assurance that the Company will be able to consummate a Chapter 11 plan with respect to the Chapter 11
Cases. As a result of risks and uncertainties related to events of default under our debt obligations, the delisting of our common stock. and the effects of
disruption from the Chapter 11 Cases making it more difficult to maintain business, financing and operational relationships, together with the Company’s
recurring losses from operations and accumulated deficit, substantial doubt exists regarding our ability to continue as a going concern for the next 12
months. See "Subsequent Events," Note 17, for additional details on the Chapter 11 Cases.

3. RESTRUCTURING AND TRANSFORMATION ACTIVITIES

Fiscal 2022 Restructuring and Transformation Initiative Expenses

During Fiscal 2022, we recorded charges of $407.7 million for costs associated with restructuring and other transformation initiatives, of which
approximately $77.7 million is included in cost of sales. In addition, approximately $330.0 million, was recorded in restructuring and transformation
initiative expenses in the consolidated statements of operations, which included approximately $156.9 million of accelerated depreciation related to closing
facilities and information technology systems, $101.5 million of other restructuring and transformation costs and $58.1 million of severance costs related to
workforce reduction, store closures and leadership changes. The Company also recorded approximately $13.5 million for lease related and other costs,
including in connection with store closures.

Fiscal 2021 Restructuring and Transformation Initiative Expenses

The Company recorded $281.2 million in its consolidated statements of operations for the fiscal year ended February 26, 2022 for costs associated with
restructuring and other transformation initiatives, of which approximately $137.2 million is included in cost of sales and approximately $144.0 million is
included in restructuring and transformation initiative expenses in the consolidated

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statements of operations. These charges were comprised of, and classified in the Company’s consolidated statement of operations, as follows:

Cost of Sales

• $125.2 million primarily related to the Company’s initiatives to introduce certain new Owned Brand merchandise and, to a lesser extent, to
redefine certain existing Owned Brands and to rationalize product assortment across the Bed Bath & Beyond banner store base. The costs incurred
in connection with these activities included higher markdowns on inventory sold in Fiscal 2021, as well as an adjustment to reduce to its estimated
realizable value inventory on hand that will be removed from the product assortment as part of these initiatives.

• $12.0 million related to store closures for which the closing process had commenced, related primarily to higher markdowns on inventory sold
during the period between final announcement of closing and the final closure of the store.

Restructuring and Transformation Initiative Expenses

• Store Closures. During Fiscal 2021, the Company closed 63 mostly Bed Bath & Beyond stores as part of its real estate and store fleet optimization
program which commenced in Fiscal 2020 and included the closure of 207 mostly Bed Bath & Beyond stores through the end of Fiscal 2021
(including the 144 stores closed in Fiscal 2021). For the fiscal year ended February 26, 2022, the Company recorded costs associated with store
closures for which the store closing process has commenced of $2.4 million of severance costs and $45.5 million of lease-related and other costs
within restructuring and transformation initiative expenses in its consolidated statements of operations. At this point, the Company is unable to
estimate the amount or range of amounts expected to be incurred in connection with future store closures.

• Other transformation initiatives. During the fiscal year ended February 26, 2022, the Company recorded costs of $96.1 million which include
costs recorded in connection with other transformation initiatives, including technology transformation and business strategy and operating model
transformation programs across core functions including merchandising, supply chain and finance.

Fiscal 2020 Restructuring Charges

The Company recorded $149.3 million within cost of sales and restructuring and transformation initiative expenses in its consolidated statement of
operations for Fiscal 2020 for costs associated with its planned store closures as part of the fleet optimization plan for which the store closure process has
commenced, workforce reduction and other transformation initiatives.

As part of the Company's ongoing business transformation, on July 6, 2020, the Board of Directors of the Company approved the planned closure of
approximately 200 mostly Bed Bath & Beyond stores by the end of Fiscal 2021 as part of the Company's store fleet optimization program, 144 of which
were closed as of February 27, 2021. In Fiscal 2020, the Company recorded costs associated with its planned store closures for which the store closing
process has commenced of $21.0 million within cost of sales, $5.3 million of severance costs and $39.2 million of lease-related and other costs within
restructuring and transformation initiative expenses in its consolidated statements of operations.

In addition, during the second quarter of Fiscal 2020, the Company announced a realignment of its organizational structure as part of its transformation
initiative, to further simplify the Company's operations, support investment in its strategic growth plans, and provide additional financial flexibility. In
connection with the organizational realignment, the Company implemented a workforce reduction of approximately 2,800 roles from across its corporate
headquarters and retail stores. During the second quarter of Fiscal 2020, the Company recorded pre-tax restructuring charges of approximately $23.1
million within restructuring and transformation initiative expenses in its consolidated statements of operations, related to severance and associated costs for
this workforce reduction, all of which have been paid during Fiscal 2020.

During Fiscal 2020, the Company also recorded costs of approximately $26.1 million within cost of sales and $34.6 million within restructuring and
transformation initiative expenses in its consolidated statements of operations related to other transformation initiatives.

As of February 25, 2023 and February 26, 2022, the remaining accrual for all severance and associated costs relating to restructuring and transformation
initiatives was $31.6 million and $12.8 million, respectively.

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4. DECONSOLIDATION — CANADIAN OPERATIONS

On February 10, 2023 (the “Canadian Petition Date”), BBB Canada Limited made an application with the Ontario Superior Court of Justice (the “Canadian
Court”). BBB Canada Limited was granted an order, which, among other provisions, provides a stay of proceedings pursuant to the Companies’ Creditors
Arrangement Act (the “CCAA”). The CCAA is a Federal Act that allows financially troubled corporations that owe their creditors in excess of $5.0 million
the opportunity to restructure their affairs. Although Bed Bath & Beyond Canada L.P. (“BBB LP” and together with BBB Canada Limited, “BBB Canada”)
did not file an application with the Canadian Court, the stay of proceedings under the CCAA and other benefits were extended to BBB LP. BBB Canada
initiated a wind-down of Bed Bath & Beyond and Buy Buy Baby Stores in Canada under the CCAA. A monitor was appointed by the Canadian Court on
February 10, 2023 to oversee the orderly liquidation of its remaining inventory with assistance from a third-party professional liquidator and vacate its
leased retail stores and premises.

BBB Canada was a consolidated operating subsidiary of the Company. The Company lost control of BBB Canada as material decisions were subject to
review by the Canadian Court. For these reasons, we concluded that the Company had lost control of BBB Canada, and no longer had significant influence
over BBB Canada during the pendency of bankruptcy. Therefore, we deconsolidated BBB Canada on the Canadian Petition Date.

In order to deconsolidate BBB Canada, the carrying values of the assets and certain liabilities of BBB Canada were removed from our consolidated balance
sheet as of February 25, 2023, and we recorded our investment in BBB Canada at its estimated fair value of $0. The deconsolidation resulted in the
recognition of a loss of $98.6 million during the year ended February 25, 2023, recognized as a non-operating loss in the consolidated statement of
operations.

5. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., "the exit price") in an orderly transaction between
market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices
and discounted cash flows. The hierarchy for inputs used in measuring fair value maximizes the use of observable inputs and minimizes the use of
unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in
pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect a company’s
judgment concerning the assumptions that market participants would use in pricing the asset or liability developed based on the best information available
under the circumstances. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an
asset or liability must be classified in its entirety based on the lowest level of input that is significant to the measurement of fair value. The fair value
hierarchy is broken down into three levels based on the reliability of inputs as follows:

• Level 1 - Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are
based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree
of judgment.
• Level 2 - Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for
identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active
markets.
• Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The Company’s financial instruments include cash and cash equivalents, investment securities, other long-term investments, accounts payable, short-term
and long-term debt, derivative liabilities, and certain other liabilities. The book value of the Company's financial instruments, excluding long-term debt,
long-term investments and derivative liabilities, are representative of their fair values.

The Company’s investment securities at February 26, 2022 consisted primarily of U.S. Treasury securities, which are carried at amortized cost and the fair
values are based on quoted prices in active markets for identical instruments (Level 1 valuation).

As of February 25, 2023 and February 26, 2022, the fair value of the Company’s senior unsecured notes was approximately $176.3 million and $956.0
million, respectively, which is based on quoted prices in active markets for identical instruments (i.e., Level 1 valuation), compared to the carrying value of
approximately $1.030 billion and $1.184 billion, respectively.

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Short-term debt is measured utilizing Level 2 inputs included the ABL Facility and FILO Facility. As of February 25, 2023, the carrying amount of the
ABL Facility and FILO Facility approximates fair value as interest charged is based on the current market rate and are secured on a first priority basis
(subject to customary exceptions) on substantially all assets of the Company and its subsidiaries that are borrowers or guarantors under the ABL Facility
and FILO Facility.

Other long-term investments utilizing Level 3 inputs included auction rate securities consisting of preferred shares of closed end municipal bond funds.

On February 7, 2023, the Company consummated an underwritten public offering of (i) shares of Series A Convertible Preferred Stock (“Series A”), (ii)
warrants to purchase shares of the Company’s Common Stock (“Common Stock Warrants”), and (iii) warrants to purchase shares of the Company’s Series
A Convertible Preferred Stock (“Preferred Stock Warrants”). The gross proceeds received for the Series A was $225.0 million and there was no additional
consideration received for the Common Stock Warrants and Preferred Stock Warrants issued. A total of $6.3 million issuance costs were incurred as part of
the underwritten public offering and are recognized in loss on preferred stock warrants and derivative liabilities in the consolidated statement of operations.

The Company determined the Common Stock Warrants and Preferred Stock Warrants are derivative liabilities initially recorded at fair value with changes
in fair value recorded in earnings (see “Derivatives”, Note 6). The Series A is contingently redeemable which results in mezzanine equity classification and
has bifurcated embedded derivative features accounted for as a derivative liability (see “Shareholders' (Deficit) Equity and Mezzanine Equity”, Note 8).

As the Series A, Common Stock Warrants, and Preferred Stock Warrants were issued when the Company was in distress, the Company determined the
offering was not an orderly transaction and the gross proceeds of $225.0 million did not represent fair value. As a result, the Company used a model-
derived valuation to estimate the fair value of the Series A embedded derivative liability, Preferred Stock Warrants and Common Stock Warrants in which
the most significant value driver is the as-converted value utilizing the Company’s common stock price as the input. At issuance, the fair value of the Series
A embedded derivative liability, Common Stock Warrants, and Preferred Stock Warrants was $300.5 million, $186.6 million, and $615.5 million,
respectively, and no fair value was allocated to the Series A exclusive of the embedded derivative liability. The Company recorded a $877.6 million loss for
the total fair value of $1,102.6 million of the financial instruments issued in excess of proceeds of $225.0 million in loss on preferred stock warrants and
derivative liabilities in its consolidated statement of operations for the year ended February 25, 2023. The loss is partially offset by a gain of $244.5 million
related to the change in fair value associated with these derivative liabilities for the quarter ended February 25, 2023. Issuance costs of $6.3 million were
expensed as incurred.

As of February 25, 2023, the fair value of the Series A embedded derivative liability, Common Stock Warrants, and Preferred Stock Warrants was $166.9
million, $2.7 million, and $404.4 million, respectively.

On March 30, 2023, the Company entered into the Exchange Agreement with the holders of the remaining Preferred Stock Warrants (see “Derivatives”,
Note 6). As a result of the exchange, the Company will recognize a gain of approximately $353.6 million during the first quarter of fiscal 2023.

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6. DERIVATIVES

Preferred Stock Warrants

On February 7, 2023, the Company issued 84,216 Preferred Stock Warrants to acquire up to 84,216 shares of Series A at a price of $9,500 per share.
Additionally, in the event the holder holds a Common Stock Warrant, upon exercise of the Preferred Stock Warrant, there is an increase to the amount of
common stock issuable upon exercise of the Common Stock Warrant. The Preferred Stock Warrants are exercisable at any time and expire one year after
issuance. The terms allow the Company to force the holders to exercise the Preferred Stock Warrants after every 20 trading day period provided there are
no equity condition failures.

During the year ended February 25, 2023, 5,000 Preferred Stock Warrants were exercised for gross proceeds of $47.5 million.

The Preferred Stock Warrants are classified as a liability in accordance with ASC 480 and initially recorded at fair value with subsequent changes in fair
value recorded in earnings. The Company recognizes the Preferred Stock Warrants in Derivative liabilities on the consolidated balance sheet and
subsequent changes in fair value in loss on preferred stock warrants and derivative liabilities in the consolidated statement of operations.

On March 7, 2023, 9,212 Preferred Stock Warrants were exercised for gross proceeds of $87.5 million. On March 13, 2023, the Company entered into an
amendment to the Preferred Stock Warrants in which the holder elected to reduce equity condition thresholds, including certain common stock price and
volume requirements such that the Preferred Stock Warrants could still be callable by the Company.

On March 30, 2023, the Company and holder entered into the Exchange Agreement, as the Company anticipated that it would not be able to meet the
conditions to force the exercise of the Preferred Stock Warrant in the future and receive cash proceeds. Pursuant to the Exchange Agreement, the Company
exchanged the remaining 70,004 Preferred Stock Warrants for 10,000,000 shares of common stock and rights to receive 5,000,000 shares of common stock
upon the receipt of shareholder approval of a proposal to effectuate a reverse stock split of the Company’s commons stock to be presented to shareholders
at a forthcoming special meeting of shareholders (as discussed in “Shareholders' (Deficit) Equity and Mezzanine Equity”, Note 8). The Company also
granted to the holder a right to participate, subject to the terms set forth in the Exchange Agreement, in certain future equity or equity-linked offerings of
the Company for a period of two years from the date of the Exchange Agreement.

Common Stock Warrants

On February 7, 2023, the Company issued 95,387,533 Common Stock Warrants to acquire up to approximately 95 million shares of common stock at a
strike price of $6.15 per share. The Common Stock Warrants are exercisable at any time and expire five years after issuance. The terms provide for an
alternate cashless exercise that allows the holder to receive 0.65 shares of common stock for each share underlying the Common Stock Warrant, for a total
of up to 62 million shares of common stock at no cost.

During the year ended February 25, 2023, 5,000 Preferred Stock Warrants were exercised resulting in an increase of 16.3 million shares of common stock
issuable upon exercise of Common Stock Warrants.

The Common Stock Warrants are classified as a liability in accordance with ASC 815-40 and initially recorded at fair value with subsequent changes in fair
value recorded in earnings. The Commons Stock Warrants are recorded at fair value in Derivative liabilities in the consolidated balance sheets and
subsequent changes in fair value are recorded in loss on preferred stock warrants and derivative liabilities in the consolidated statement of operations.

During the year ended February 25, 2023, 109.0 million Common Stock Warrants were exercised and shares were reissued out of treasury stock at a
weighted-average cost of $44.27 per share, for a total cost of $3.1 billion. The difference between the cost of the treasury stock and the fair value of
common stock issued upon exercise is recorded as a reduction to retained earnings on the consolidated balance sheet and is included within the equity roll
forward.

On March 7, 2023, 9,212 Preferred Stock Warrants were exercised resulting in an increase of 37.3 million shares of common stock issuable upon exercise
of Common Stock Warrants.

See “Fair Value Measurements,” Note 5, for fair value measurements related to the Common Stock Warrants and Preferred Stock Warrants.

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7. DEBT

Senior Unsecured Notes

On July 17, 2014, the Company issued $300.0 million aggregate principal amount of 3.749% senior unsecured notes due August 1, 2024 (the "2024
Notes"), $300.0 million aggregate principal amount of 4.915% senior unsecured notes due August 1, 2034 (the "2034 Notes"), and $900.0 million
aggregate principal amount of 5.165% senior unsecured notes due August 1, 2044 (the "2044 Notes" and, collectively with the 2024 Notes and the 2034
Notes, the "Existing Notes"). Interest on the Notes is payable semi-annually on February 1 and August 1 of each year.

The Existing Notes were issued under an indenture (the "Base Indenture"), as supplemented by a first supplemental indenture (together, with the Base
Indenture, the "Indenture"), which contains various restrictive covenants, which are subject to important limitations and exceptions that are described in the
Indenture.

On February 1, 2023, the Company missed interest payments due on the Company’s 3.749% Senior Notes due 2024, 4.915% Senior Notes due 2034 and
5.165% Senior Notes due 2044 (collectively, the "Existing Notes") and had a 30-day grace period to pay these interest payments. On February 28, 2023, the
Company paid off interest on the Existing Notes.

Exchange Offers

During the third fiscal quarter of 2022, the Company commenced exchange offers (the "Exchange Offers") with eligible holders for each series of Existing
Notes as follows: (i) 2024 Notes for new 3.693% Senior Second Lien Secured Non-Convertible Notes due November 30, 2027 (the “New Second Lien
Non-Convertible Notes”) and/or new 8.821% Senior Second Lien Secured Convertible Notes due November 30, 2027 (the “New Second Lien Convertible
Notes”); (ii) 2034 Notes for new 12.000% Senior Third Lien Secured Convertible Notes due November 30, 2029 (the “New Third Lien Convertible Notes”
and, together with the New Second Lien Non-Convertible Notes and the New Second Lien Convertible Notes, the “New Notes”); and (iii) 2044 Notes for
New Third Lien Convertible Notes.

In conjunction with the Exchange Offers, the Company solicited consents from holders of each series of Existing Notes (“Consents”) to certain proposed
amendments to the indenture governing the Existing Notes to, among other things, (i) eliminate the restrictive covenants in the Existing Notes Indenture
concerning (a) the repurchase of Existing Notes in the event of a change in control of the Company, (b) limitations on liens and (c) limitations on sale and
leaseback transactions and (ii) increase the percentage of outstanding notes necessary to accelerate payment upon an event of default (the “Proposed
Amendments”).

In November 2022, the Company completed privately negotiated exchange offers with existing holders of approximately $69.0 million, $15.3 million, and
$70.2 million aggregate principal amount of 2024 Notes, 2034 Notes, and 2044 Notes, respectively, under which the Company issued an aggregate of
approximately 13.6 million shares of common stock to the existing holders in exchange for the exchange notes, including accrued and unpaid interest, and
0.9 million shares in exchange for a cash payment from an existing holder of $3.5 million. The exchange notes were cancelled and no longer outstanding
upon completion of the exchange. In accordance with ASC subtopic 470-60, "Troubled Debt Restructuring by Debtors," the private exchange was
accounted for as a troubled debt restructuring and the Company recorded a net gain on extinguishment of debt of $94.4 million in its consolidated statement
of operations for Fiscal 2022, which included $8.0 million of third-party fees incurred and the write off of unamortized debt financing costs of $0.4 million
related to the extinguished notes exchanged for common stock.

On January 5, 2023, upon the expiration of the Exchange Offers, the Company announced the termination of the offer and consent solicitations with respect
to its Existing Notes, as a result of the conditions applicable thereto not being satisfied. As a result of the termination of the Exchange Offers, none of the
Existing Notes that had been tendered in the Exchange Offers were accepted for purchase and no consideration will be paid or become payable to holders
of the Existing Notes who have tendered their Existing Notes in the Exchange Offers.

During Fiscal 2022, the Company did not purchase any of its outstanding unsecured notes, excluding the aforementioned private exchanges completed in
November 2022.

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During Fiscal 2020, the Company purchased approximately $11.0 million aggregate principal amount of its outstanding 3.749% senior unsecured notes due
August 1, 2024. The total consideration paid for the notes accepted for purchase of $11.4 million during the fiscal year ended February 26, 2022 included
accrued and unpaid interest up to, but not including, the early settlement date. The Company recorded a loss on extinguishment of debt of $0.4 million in its
consolidated statement of operations for the fiscal year ended February 27, 2021, including the write off of unamortized debt financing costs related to the
extinguished portion of the notes accepted for purchase and reacquisition costs.

As of February 25, 2023 and February 26, 2022, unamortized deferred financing costs associated with the Company’s Existing Notes were $3.8 million and
$4.6 million, respectively, and are included in long-term debt in the Company's consolidated balance sheets.

Bed Bath and Beyond, Inc.’s filing of the Chapter 11 Cases constitutes an event of default that accelerated its obligations under the New Notes. Pursuant to
Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed most actions against the applicable debtor, including actions to
collect indebtedness incurred prior to the Petition Date or to exercise control over the applicable debtor’s property. Subject to certain exceptions under the
Bankruptcy Code, the filing of the Chapter 11 Cases also automatically stayed the continuation of most legal proceedings or the filing of other actions
against or on behalf of the applicable debtor or its property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control
over property of the applicable debtor’s bankruptcy estates, unless and until the Bankruptcy Court modifies or lifts the automatic stay as to any such claim.
Notwithstanding the general application of the automatic stay described above, governmental authorities may determine to continue actions brought under
their police and regulatory powers.

Asset-Based Credit Agreement

In the second quarter of Fiscal 2021, the Company amended its asset-based credit agreement (the "Credit Agreement") among the Company, certain of the
Company’s U.S. and Canadian subsidiaries party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (in such capacity, the
"Agent"), and the lenders party thereto. The Credit Agreement provides for an asset based revolving credit facility (the “ABL Facility”) with aggregate
revolving commitments established at closing of $1.0 billion, including a swingline sub facility and a letter of credit sub facility. The Credit Agreement has
an uncommitted expansion feature which allows the borrowers to request, at any time following the delivery of an initial field exam and appraisal, an
increase in aggregate revolving commitments under the ABL Facility or elect to enter into a first-in-last-out loan facility ("FIFO Facility"), collectively, in
an aggregate amount of up to $375.0 million, subject to certain customary conditions.

On August 31, 2022, the Company entered into an amendment (the "First Amendment") to the Credit Agreement, dated as of August 9, 2021 (as amended
by the Amendment, the “First Amended Credit Agreement”), for more than $500.0 million of new additional financing commitments, including its newly
expanded $1.130 billion ABL Facility, which provides for an increase of $130.0 million in aggregate revolving commitments for the time periods set forth
in the Amendment, and a new $375.0 million FILO Facility (the "Initial FILO Loan", together with the ABL Facility, the "Credit Facilities"), with
JPMorgan Chase Bank, N.A., as administrative agent and Sixth Street Specialty Lending, Inc., as agent and lender for the FILO Facility. The ABL Facility
and FILO Facility mature on August 9, 2026 and August 31, 2027, respectively, unless required to mature earlier pursuant to the terms of the Amendment.

On February 7, 2023, the Company entered into a second amendment (the “Second Amendment”) to the Credit Agreement. Pursuant to the Amendment,
the lenders agreed to (i) waive any outstanding defaults or events of default under the existing Credit Facilities and (ii) rescind the implementation of the
acceleration of obligations under the existing Credit Facilities, the requirement to cash collateralize letters of credit obligations under the existing Credit
Facilities and the default interest on the outstanding obligations under the existing Credit Facilities. The Amendment (i) decreased the total revolving
commitment from $1.13 billion to $565 million, (ii) result in an increased outstanding principal amount as a result of the call protection make-whole
amount of $53.9 million being capitalized as principal to the Initial FILO Loan and (iii) provide for an additional $100.0 million of FILO loans (the “2023
FILO Loan” and together with the Initial FILO Loan, the “FILO Facility”, and together with the ABL Facility, the “Credit Facilities”).

Under the Second Amendment, the Company is required to apply all net cash proceeds received from the 2023 FILO Loan and the ATM Program to repay
outstanding revolving loans under the ABL Facility. The Company will be able to continue to borrow under its ABL Facility subject to availability
thereunder.

The Credit Facilities are secured on a first priority basis (subject to customary exceptions) on substantially all assets of the Company and its subsidiaries
that are borrowers or guarantors under the Credit Facilities. Amounts available to be drawn from time to time under the ABL Facility (including, in part, in
the form of letters of credit) are equal to the lesser of (i) outstanding revolving commitments under the Amended Credit Agreement and (ii) a borrowing
base equal to the sum of (a) 90% of eligible

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credit card receivables plus (b) 90% of eligible inventory (excluding eligible foreign in-transit inventory), valued at the lower of cost or market value,
determined on a weighted average cost basis, minus (c) customary reserves, minus (d) FILO deficiency reserves. The term loans under the FILO Facility
are subject to a borrowing base equal to the sum of (a) 15% of eligible credit card receivables, plus (b)(i) 15% of eligible inventory, plus (ii) 100% of
eligible foreign in transit inventory, plus (iii) 15% of eligible domestic in-transit inventory, in each case, valued at the lower of cost or market value,
determined on a weighted average cost basis, plus (c) the lesser of (i) 68% of eligible intellectual property, which shall be reduced by 2.5% each fiscal
quarter commencing with the fiscal quarter ending on or about May 8, 2023 and (ii) $115.0 million which shall be reduced by (A) approximately $4.7
million each fiscal quarter commencing with the fiscal quarter ending on or about May 8, 2023 and (B) $75.0 million upon the consummation of certain
dispositions.

Subject to customary exceptions and restrictions, the Company may voluntarily repay outstanding amounts under the ABL Facility at any time without
premium or penalty and may voluntarily repay outstanding amounts under the FILO Facility after the ABL Facility is paid in full. Any voluntary
prepayments made will not reduce commitments under the ABL Facility. If at any time the outstanding amount under the ABL Facility exceeds the lesser of
(i) the aggregate revolving commitments and (ii) the borrowing base under the ABL Facility, the Company will be required to prepay outstanding amounts
or cash collateralize letter of credit obligations under the ABL Facility.

The term loans under the FILO Facility are callable at any time. Prepayments of the FILO Facility are subject to a prepayment premium equal to (i) the
make-whole amount if prepaid within 18 months following the funding date, (ii) 2.00% of the principal amount of such prepayment if made between 18
months and 30 months following the funding date, (iii) 1.00% of the principal amount of such prepayment if made between 30 months and 36 months
following the funding date, and (iii) 0% after such date. Further, certain dispositions of assets are subject to modified prepayment premiums and/or
mandatory paydown requirements. If at any time the outstanding amount under the FILO Facility exceeds the borrowing base under the FILO Facility, the
Company will be required to prepay term loans in an amount equal to such excess under the FILO Facility.

The First Amendment replaced the London Inter-Bank Offered (“LIBO”) Rate as the interest rate benchmark under the Credit Agreement with the forward-
looking term rate based on the Secured Overnight Financing Rate (“SOFR”). Outstanding amounts under the Amended Credit Agreement bear interest at a
rate per annum equal to, at the applicable borrower’s election: (i) in the case of loans denominated in U.S. dollars, SOFR and an alternate base rate and (ii)
in the case of loans denominated in Canadian dollars, the Canadian Prime Rate and Canadian Dollar Offered Rate ("CDOR"), in each case as set forth in
the First Amended Credit Agreement, plus (A) with respect to the ABL Facility, an interest rate margin based on average quarterly availability ranging from
(x) in the case of SOFR loans and CDOR loans, 1.25% to 1.75%; provided that if SOFR or the CDOR is less than 0.00%, such rate shall be deemed to be
0.00%, as applicable, and (y) in the case of alternate base rate loans and Canadian Prime Rate Loans, 2.25% to 2.75%; provided that if the alternate base
rate or Canadian Prime Rate is less than 1.00% such rate shall be deemed to be 1.00%, as applicable, and (B) with respect to the FILO Facility, an interest
rate margin equal to (x) in the case of SOFR loans, 7.75%; provided that if SOFR is less than 1.00%, such rate shall be deemed to be 1.00%, and (y) in the
case of alternate base rate loans, 6.75%; provided that if the alternate base rate is less than 2.00%, such rate shall be deemed to be 2.00%. The revolving
loans under the ABL Facility may be borrowed, prepaid, and reborrowed until the maturity date under the ABL Facility. The Initial FILO Term Loan
amortizes at 5.00% per annum payable in equal quarterly installments of 1.25% per annum, commencing with the fiscal quarter ending on or about
February 25, 2023. The 2023 FILO Term Loan amortizes at 5.00% per annum payable in equal quarterly installments of 1.25%, commencing with the
fiscal quarter ending on or about May 8, 2023.

The Amended Credit Agreement contains customary representations and warranties, events of default and financial, affirmative and negative covenants for
facilities of this type, including but not limited to a springing financial covenant relating to a fixed charge coverage ratio, and restrictions on indebtedness,
liens, investments and acquisitions, asset dispositions, restricted payments and prepayment of certain indebtedness. The Company was in compliance with
all covenants related to the Second Amended Credit Agreement as of February 25, 2023.

As of February 25, 2023, the Company had $191.3 million of borrowings outstanding under the ABL Facility, at a weighted average interest rate of 8.68%,
and $126.9 million of outstanding letters of credit had been issued under the ABL Facility. As of February 25, 2023, the Company had $428.9 million of
outstanding borrowings under the Initial FILO Term Loan. The original principal amount of $375 million for the Initial FILO Term Loan has an interest
rate of 12.30%, and the make-whole amount of $53.9 million has an interest rate of 12.59% that is paid-in-kind. As of February 25, 2023, the Company had
$100.0 million of outstanding borrowings under the 2023 FILO Term Loan at an interest rate of 12.59%. The Company's borrowings under the Credit
Facilities as of February 25, 2023 are included in Current portion of long-term debt in the Company’s consolidated balance sheets.

As of February 25, 2023 and February 26, 2022, deferred financing costs associated with the Company's ABL Facility were $9.8 million and $7.4 million,
respectively, and were recorded in other assets in the Company's consolidated balance sheets. As of

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February 25, 2023, deferred financing costs associated with the Company's FILO Facility were $20.9 million and are included in Current portion of long-
term debt in the Company's consolidated balance sheets.

The Company amortizes deferred financing costs for the Existing Notes and the Credit Facilities over their respective terms and such amortization is
included in interest expense, net in the consolidated statements of operations. Interest expense related to the Notes and the Credit Facilities, including the
commitment fee and the amortization of deferred financing costs, was approximately $107.5 million, $64.1 million, and $73.6 million for the fiscal years
ended February 25, 2023, February 26, 2022, and February 27, 2021, respectively.

On March 6, 2023, the Company entered into a third amendment to the Credit Agreement (the “Third Amendment). The Third Amendment waived certain
events of default under the Credit Agreement related to negative and affirmative covenants. The Third Amendment also revised provisions related to the
equity commitment required therein. In particular, the Third Amendment sets forth the requirement to receive minimum specified equity proceeds of
approximately $100 million by April 6, 2023, and every twenty-two trading days thereafter.

On March 7, 2023, the Company exercised Preferred Stock Warrants (see “Derivatives,” Note 6) and the proceeds received helped satisfy the March
Funding Requirement under the Third Amendment. The Company used proceeds received to date to repay amounts outstanding under the ABL facility.

On March 30, 2023, the Company entered into a waiver and amendment (the “Fourth Amendment”) to the Credit Agreement. The Fourth Amendment
waived certain events of default under the Credit Agreement related to negative and affirmative covenants. The Fourth Amendment also revised provisions
relating to the equity commitment required therein to reflect the Company’s entry into an ATM Agreement and the Common Stock Purchase Agreement. In
particular, the Fourth Amendment sets forth (i) the requirement to receive minimum specified equity proceeds or (ii) to demonstrate the minimum
cumulative specified equity proceeds. These testing periods are weekly for the next 8 out of 11 weeks requiring a minimum raise with an aggregate
cumulative equity raise requirement of approximately $232 million by June 27, 2023 and then $12.5 million weekly thereafter subject to exceptions. In
addition, the Fourth Amendment requires that the Company establishes reserves related to the equity proceeds received.

As of the date hereof, the conditions detailed above have been met as of the date required. The Company, however, may not be able to meet the conditions
on future dates. The failure to meet these conditions would likely cause the Company to file for bankruptcy.

On April 6, 2023, the Company entered into an amendment (the “ Fifth Amendment”) to the Credit Agreement. The Amendment permitted the entry into an
amendment to the Consignment Agreement, by and between the Company, certain of its subsidiaries and Restore Capital (BBB), LLC (the “Consignment
Agreement”). The Amendment also added an Event of Default under the Amended Credit Agreement in the event that the Consignment Agreement is not
extended at least fifteen days prior to the termination date therein. Additionally, from the date that the Consignment Agreement is terminated until the
Company pays the Buy-Out Price (as defined in the Consignment Agreement), a reserve equal to the amount of the Buy-Out Price and any outstanding fees
due and payable to the consignor under the Consignment Agreement will be implemented (see “Subsequent Events,” Note 17).

The Company's filing of the Chapter 11 Cases constitutes an event of default that accelerated its obligations under the Credit Facilities.

Pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed most actions against the applicable debtor,
including actions to collect indebtedness incurred prior to the Petition Date or to exercise control over the applicable debtor’s property. Subject to certain
exceptions under the Bankruptcy Code, the filing of the Chapter 11 Cases also automatically stayed the continuation of most legal proceedings or the filing
of other actions against or on behalf of the applicable debtor or its property to recover on, collect or secure a claim arising prior to the Petition Date or to
exercise control over property of the applicable debtor’s bankruptcy estates, unless and until the Bankruptcy Court modifies or lifts the automatic stay as to
any such claim. Notwithstanding the general application of the automatic stay described above, governmental authorities may determine to continue actions
brought under their police and regulatory powers.

8. SHAREHOLDERS' (DEFICIT) EQUITY AND MEZZANINE EQUITY

Repurchase Program

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The Company has authorization to make repurchases of shares of the Company’s common stock from time to time in the open market or through other
parameters approved by the Board of Directors pursuant to existing rules and regulations.

Between December 2004 and April 2021, the Company’s Board of Directors authorized, through several share repurchase programs, the repurchase of
$12.950 billion of its shares of common stock. The Company also acquires shares of its common stock to cover employee related taxes withheld on vested
restricted stock, restricted stock units and performance stock unit awards. Since the initial authorization in December 2004, the aggregate total of common
stock repurchased is approximately 123.3 million shares for a total cost of approximately $11.731 billion. The Company had approximately $1.221 billion
remaining of authorized share repurchases as of February 25, 2023.

Decisions regarding share repurchases are within the discretion of the Board of Directors, and are influenced by a number of factors, including the price of
the Company's common stock, general business and economic conditions, the Company's financial condition and operating results, the emergence of
alternative investment or acquisition opportunities, changes in business strategy and other factors. The Company's share repurchase program could change,
and could be influenced by several factors, including business and market conditions, such as the impact of the COVID-19 pandemic. The Company
reviews its alternatives with respect to its capital structure on an ongoing basis. Any future share repurchases will be subject to the determination of the
Board of Directors, based on an evaluation of the Company's earnings, financial condition and requirements, business conditions and other factors,
including the restrictions on share repurchases under the ABL Facility (see "Long-Term Debt," Note 7).

In connection with its share repurchase program, during the twelve months ended February 25, 2023, the Company repurchased approximately 2.3 million
shares of its common stock, at a total cost of approximately $40.4 million, including fees. The share repurchase program was completed in the first quarter
of fiscal 2022. Additionally, during the twelve months ended February 25, 2023, the Company repurchased approximately 0.5 million shares of its common
stock, at a total cost of approximately $5.7 million, to cover employee related taxes withheld on vested restricted stock, restricted stock unit awards and
performance stock unit awards.

In January 2021, the Company entered into a second accelerated share repurchase agreement to repurchase an aggregate $150.0 million of its common
stock, subject to market conditions. This resulted in the repurchase of 5.0 million shares in the fourth quarter of Fiscal 2020, and an additional 0.2 million
shares received upon final settlement in the first quarter of Fiscal 2021.

ATM Program

On August 31, 2022, the Company established an at the market equity distribution program (the "ATM Program") by entering into an Open Market Sale
Agreement with Jefferies LLC, acting as sales agent for the Company, pursuant to which the Company may issue and sell, from time to time, shares of its
common stock, par value $0.01 per share, in any method permitted by law deemed to be an "at the market offering" as defined in Rule 415(a)(4) under the
Securities Act of 1933, as amended. Pursuant to the prospectus supplement dated August 31,2022, the Company offered and sold 12.0 million shares of
common stock for net proceeds of $72.2 million. On October 28, 2022, the Company filed a prospectus supplement to register additional shares of its
common stock, par value $0.01 per share, to offer and sell under its ATM Program at an aggregate sales price of up to $150.0 million. The potential net
proceeds, after commissions and offering costs, from the ATM Program were expected to be used for a number of general corporate purposes, which
included immediate strategic priorities such as rebalancing the Company's assortment and inventory, and the repayment, refinancing, redemption or
repurchase of existing indebtedness. During both the twelve months ended February 25, 2023, the Company has sold approximately 22.2 million shares for
approximately $115.4 million of net proceeds under the ATM Program. Shares having an aggregate offering price of $105.6 million remained unsold under
the ATM program as of the end of fiscal December 2022.

During Fiscal 2016, the Company’s Board of Directors authorized a quarterly dividend program. In March 2020, the Company suspended its future
quarterly declarations of cash dividends as a result of the COVID-19 pandemic. During Fiscal 2022, 2021, and 2020, total cash dividends of $0.3 million,
$0.7 million, $23.1 million, respectively, were paid. Any future quarterly cash dividend payments on its common stock will be subject to the determination
by the Board of Directors, based on an evaluation of the Company’s earnings, financial condition and requirements, business conditions and other factors,
including the restrictions on the payment of dividends contained in the Amended Credit Agreement (see "Long-Term Debt," Note 7).

Cash dividends, if any, are accrued as a liability on the Company’s consolidated balance sheets and recorded as a decrease to retained earnings when
declared.

On March 30, 2023, the Company entered into a Sale Agreement with B. Riley Securities, Inc., as a sales agent, to offer and sell additional shares of
common stock having an aggregate sales price of up to $300 million from time to time through the Company’s “at the market offering” agreement (“ATM
Agreement ”). In connection with the Company’s entry into the ATM

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Agreement, the Company terminated the Open Market Sale Agreement and ATM Program, effective March 30, 2023. The equity commitments requirement
set forth in the Fourth Amendment to the Credit Agreement (see “Debt”, Note 7) is based on proceeds received under the ATM Agreement.

On March 30, 2023, the Company also entered into a Common Stock Purchase Agreement and a Registration Rights Agreement with B. Riley Principal
Capital II, LLC (“B. Riley Principal”). Pursuant to the Purchase Agreement, subject to the satisfaction of the conditions set forth in the Purchase
Agreement, the Company will have the right to sell to B. Riley Principal, up to the lesser of (i) $1,000,000,000 of newly issued shares of the Company’s
common stock, par value $0.01 per share, and (ii) the Exchange Cap, from time to time during the term of the Purchase Agreement.

The Company announced a special shareholders meeting for May 9, 2023 for a proposed amendment to the Company’s Amended and Restated Certificate
of Incorporation to effect, at the discretion of the Board of Directors, a reverse stock split of the Company’s common stock, par value $0.01 per share, at a
ratio in the range of 1-for-10 to 1-for-20, with such ratio to be determined at the discretion of the Board.

On April 24, 2023, in light of the filing of the Chapter 11 Cases, the Company received written notice from the Listing Qualifications Department of the
Nasdaq Stock Market LLC ("Nasdaq") notifying the Company that the Company's common stock will be delisted from Nasdaq. The Company did not
appeal this determination. Trading of the Company's common stock was suspended at the opening of business on May 3, 2023.

On April 25, 2023, the Board of Directors of the Company determined to cancel the special meeting of shareholders, previously scheduled for May 9, 2023
and to withdraw the proposals to have been submitted to shareholders at the Special Meeting.

On April 28, 2023, the Company withdrew the Registration Statement on Form S-1 as it has determined not to proceed with an offering at this time.

Mezzanine Equity

On February 7, 2023, pursuant to an underwritten public offering, the Company issued 23,685 shares of Series A Convertible Preferred Stock with an
original issuance price of $10,000 per share. The Company classifies the Series A as mezzanine equity as the instrument is contingently redeemable outside
of the control of the Company. The Series A embedded derivative features were evaluated against the debt-like host and bifurcated embedded derivatives
are recognized separately as a derivative liability in Derivative liabilities in the consolidated balance sheets. The derivative liability was initially recorded at
fair value with subsequent changes in fair value recorded in loss on preferred stock warrants and derivative liabilities in the consolidated statement of
operations. Given the material embedded derivative features, there is no value recognized for the host instrument. There is no remeasurement of the Series
A in mezzanine equity as the derivative liability represents the redemption value.

During the year ended February 25, 2023, 13,543 Series A were converted and shares were reissued out of treasury stock at a weighted-average cost of
$44.27 per share, for a total cost of $3.1 billion. The difference between the cost of the treasury stock and the consideration received is recorded as a
reduction to retained earnings on the consolidated balance sheets.

See Fair Value Measurements, Note 5, for fair value measurements related to the Series A derivative liability.

The terms and preferences of the Series A are summarized as follows:

Conversion Rights

The Series A are convertible, at any time, at the option of the holder, into a number of shares of common stock based on the conversion rate. The
conversion rate is equal to the original issuance price plus all declared and unpaid dividends divided by the applicable conversion price. The conversion
price is the lower of (1) $6.15, and (2) the greater of (a) $0.7160 and (b) 92% of the lowest volume weighted average price (“VWAP”) of common stock
during the trailing ten consecutive trading days.

Dividend Rights

The Series A are entitled to receive dividends when and as declared by the Company’s board. To the extent a dividend is declared on common stock,
holders of the Series A would participate on an as-converted basis.

Voting Rights

The holders of the Series A shall have no voting power and no right to vote on any matter at any time, either as a separate series or class or together with
any other series or class of share of capital stock, except as otherwise required by the certain laws or for votes that would amend the terms of Series A.

Liquidation Rights

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Upon liquidation of the Company, holders of the Series A have a liquidation preference over holders of our common stock and will be entitled to receive,
prior to any distribution to holders of our common stock, an amount equal to the greater of (i) the stated value plus accrued and unpaid dividends multiplied
by 125% or (ii) the if-converted value of the common stock that would have been received if the Series A had been converted into common stock
immediately prior to the liquidation event at the then effective conversion price. In the event liquidation funds are insufficient, the holders of the Series A
will receive an amount equivalent to the percentage of their liquidation preference.

Redemption Rights

The holders of the Series A shall have the right to redeem in cash all or part of such holder’s shares of Series A upon bankruptcy ("Bankruptcy Triggering
Event") or a change of control. Redemption upon bankruptcy results in a cash payment equal to the greater of (i) the original issuance price plus all
declared and unpaid dividends multiplied by 115% and (ii) the if-converted value of common stock multiplied by 115%. The redemption upon change of
control results in a payout in either cash or other form of consideration at the Company’s election, equal to the greater of (i) the stated value plus accrued
and unpaid dividends multiplied by 115% and (ii) the if-converted value of common stock in the event of an equity conditions failure.

The filing of the Chapter 11 Cases on April 23, 2023 constitutes a Bankruptcy Triggering Event of the preferred stock, as a result of which mandatory cash
redemption provisions are triggered. In addition, the filing of the Chapter 11 Cases triggers a holder’s ability to convert the preferred stock at an alternate
conversion price, which could result in a conversion price of lesser than $0.7160.

9. LEASES

The Company leases retail stores, as well as distribution facilities, offices and equipment, under agreements expiring at various dates through 2041. The
leases provide for original lease terms that generally range from 10 to 15 years and most leases provide for a series of five year renewal options, often at
increased rents, the exercise of which is at the Company's sole discretion. Certain leases provide for contingent rents (which are based upon store sales
exceeding stipulated amounts and are immaterial in Fiscal 2022, 2021, and 2020), scheduled rent increases and renewal options. The Company is obligated
under a majority of the leases to pay for taxes, insurance and common area maintenance charges.

The Company subleases certain real estate to unrelated third parties, all of which have been classified as operating leases. The Company recognizes
sublease income on a straight-line basis over the sublease term, which generally ranges from 5 to 10 years. Most sublease arrangements provide for a series
of five year renewal options, the exercise of which are at the Company's sole discretion.

The Company regularly negotiates lease terms with landlords, including in connection with its transformation initiatives. Beginning in the first quarter of
Fiscal 2021, in order to maintain liquidity given temporary store closures as a result of the COVID-19 pandemic, the Company withheld portions of and/or
delayed or deferred payments to certain landlords, including in connection with renegotiations of lease terms. In some instances, the renegotiations led to
agreements with landlords for rent abatements or rental deferrals. In Fiscal 2022, the Company has continued to withhold payments to certain landlords in
connection with certain negotiations of payment terms. Total payments withheld and/or delayed or deferred as of February 25, 2023 and February 26, 2022
were approximately $0.2 million and $1.9 million, respectively, and are included in current liabilities.

In accordance with the FASB’s Staff Q&A regarding rent concessions related to the effects of the COVID-19 pandemic, the Company has elected to
account for the concessions agreed to by landlords that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee as
though enforceable rights and obligations for those concessions existed in the original lease agreements and the Company has elected to not remeasure the
related lease liabilities and right-of-use assets. For qualifying rent abatement concessions, the Company has recorded negative lease expense for the amount
of the concession during the period of relief, and for qualifying deferrals of rental payments, the Company has recognized a non-interest bearing payable in
lieu of recognizing a decrease in cash for the lease payment that would have been made based on the original terms of the lease agreement, which will be
reduced when the deferred payment is made in the future. During the fiscal year ended February 26, 2022, the Company recognized reduced rent expense
of $2.7 million related to rent abatement concessions.

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The components of total lease cost for the fiscal year ended February 25, 2023 and February 26, 2022 were as follows:

(in thousands) Statement of Operations Location February 25, 2023 February 26, 2022
Operating lease cost Cost of sales and SG&A $ 386,319 $ 449,394
Finance lease cost:
Depreciation of property SG&A 1,611 184
Interest on lease liabilities Interest expense, net 4,966 1,886
Variable lease cost Cost of sales and SG&A 138,219 152,259
Sublease income SG&A (55,407) (43,922)
Total lease cost $ 475,708 $ 559,801

As of February 25, 2023 and February 26, 2022, assets and liabilities related to the Company's operating and finance leases were as follows:
(in thousands) Consolidated Balance Sheet Location February 25, 2023 February 26, 2022
Assets
Operating leases Operating lease assets $ 965,882 $ 1,562,857
Finance leases Property and equipment, net — 38,790
Total Lease assets $ 965,882 $ 1,601,647

Liabilities
Current:
Operating leases Current operating lease liabilities $ 301,194 $ 346,506
Finance leases Accrued expenses and other current liabilities 7,048 2,494
Noncurrent:
Operating leases Operating lease liabilities 1,278,467 1,508,002
Finance leases Other liabilities 64,052 35,447
Total lease liabilities $ 1,650,761 $ 1,892,449

As of February 25, 2023, the Company's lease liabilities mature as follows:

(in thousands) Operating Leases Finance Leases
Fiscal Year:
2023 $ 373,985 $ 11,525
2024 355,359 11,525
2025 295,382 11,525
2026 229,674 11,525
2027 183,157 11,525
Thereafter 560,964 48,841
Total lease payments $ 1,998,521 $ 106,466
Less imputed interest (418,860) (35,366)
Present value of lease liabilities $ 1,579,661 $ 71,100

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The Company's lease terms and discount rates were as follows:

February 25, 2023 February 26, 2022
Weighted-average remaining lease term (in years)
Operating leases 6.7 years 7.0 years
Finance leases 9.5 years 10.0 years
Weighted-average discount rate
Operating leases 8.3 % 6.0 %
Finance leases 8.3 % 8.4 %

Other information with respect to the Company's leases is as follows:

(in thousands) February 25, 2023 February 26, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases $ 419,553 $ 450,082
Operating cash flows from finance leases 4,448 1,886
Financing cash flows from finance leases 3,206 1,033
Operating lease assets obtained in exchange for new operating lease liabilities 96,669 359,933
Financing lease assets obtained in exchange for new financing lease liabilities 35,030 38,974

In Fiscal 2019, the Company completed a sale-leaseback transaction on approximately 2.1 million square feet of owned real estate, which generated
approximately $267.3 million in proceeds. As a result of the transaction, the Company recorded a loss, including transaction costs of approximately
$5.7 million, of approximately $33.1 million which is included in selling, general and administrative expenses in the consolidated statement of operations
for the fiscal year ended February 27, 2021. All leases entered into as a result of the sale-leaseback transaction were classified as operating leases. For
certain assets included in the transaction, the Company determined that the fair value of the assets was less than the consideration received. As a result, the
Company recognized a financing obligation in the amount of $14.5 million, for the additional financing obtained from the buyer. As of February 25, 2023
and February 26, 2022, the financing obligation amounted to approximately $19.00 million and $13.0 million, respectively, of which approximately
$7.6 million and $0.7 million, respectively, is included in accrued expenses and other current liabilities, and approximately 11.4 million and 12.3 million,
respectively, is included in other liabilities, in the consolidated balance sheets.

10. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

February 25, February 26,
(in thousands) 2023 2022
Land and buildings $ 4,750 $ 21,597
Furniture, fixtures and equipment (1) 33,985 594,443
Leasehold improvements — 746,365
Computer equipment and software 11,408 1,494,457
Total 50,143 2,856,862
Less: Accumulated depreciation (1) — (1,829,475)
Property and equipment, net $ 50,143 $ 1,027,387

________________________
(1)
$63.6 million of furniture, fixtures and equipment, in assets held under finance leases, were fully impaired in Fiscal 2022. Furniture, fixtures and
equipment includes $39.0 million in assets held under finance leases as of February 26, 2022. Accumulated depreciation includes $0.2 million in
accumulated depreciation for assets held under finance leases as of February 26, 2022.
Depreciation expense was $298.5 million, $292.3 million, $338.7 million in Fiscal 2022, 2021, and 2020, respectively.

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11. STOCK-BASED COMPENSATION

The Company measures all stock-based compensation awards for employees and non-employee directors using a fair value method and records such
expense, net of estimated forfeitures, in its consolidated financial statements. Currently, the Company’s stock-based compensation relates to restricted stock
awards, restricted stock units, performance stock units, and stock options. The Company’s restricted stock awards are considered nonvested share awards.

Stock-based compensation expense and capitalized stock-based compensation cost for the fiscal year ended February 25, 2023, February 26, 2022, and
February 27, 2021 were as follows:

(in thousands) February 25, 2023 February 26, 2022 February 27, 2021
Stock-based compensation expense:
Equity-classified share-settled awards $ 19,394 $ 35,064 $ 31,600
Liability-classified cash-settled awards $ 1,002 $ — $ —
Total stock-based compensation expense $ 20,396 $ 35,064 $ 31,600

Capitalized stock-based compensation cost:

Equity-classified share-settled awards $ 817 $ 1,020 $ 800
Liability-classified cash-settled awards $ 41 $ — $ —
Total capitalized stock-based compensation cost $ 858 $ 1,020 $ 800
Incentive Compensation Plans

The Company may grant awards under the Bed Bath & Beyond 2018 Incentive Compensation Plan (the "2018 Plan") and the Bed Bath & Beyond 2012
Incentive Compensation Plan (the "2012 Plan"). The 2018 Plan includes an aggregate of 4.6 million common shares authorized for issuance of awards
permitted under the 2018 Plan, including stock options, stock appreciation rights, restricted stock awards, performance awards and other stock based
awards. The 2018 Plan supplements the 2012 Plan, which amended and restated the Bed Bath & Beyond 2004 Incentive Compensation Plan (the "2004
Plan"). The 2012 Plan includes an aggregate of 43.2 million common shares authorized for issuance of awards permitted under the 2012 Plan (similar to the
2018 Plan). Outstanding awards that were covered by the 2004 Plan continue to be in effect under the 2012 Plan.

The terms of the 2012 Plan and the 2018 Plan are substantially similar and enable the Company to offer incentive compensation through stock options
(whether nonqualified stock options or incentive stock options), restricted stock awards, stock appreciation rights, performance awards and other stock
based awards, and cash-based awards. Grants are determined by the Compensation Committee of the Board of Directors of the Company for those awards
granted to executive officers, and by the Board of Directors of the Company for awards granted to non-employee directors. Stock option grants generally
become exercisable in either three or five equal annual installments beginning one year from the date of grant. Restricted stock awards generally become
vested in five to seven equal annual installments beginning one to three years from the date of grant. Restricted stock units generally become vested in one
to three equal annual installments beginning one year from the date of grant. Performance stock units generally vest at the end of the performance period
dependent on the Company's achievement of performance-based tests. Vesting of each of these types of awards is subject, in general, to the recipient
remaining in the Company's service on specified vesting dates.

The Company generally issues new shares for stock option exercises, restricted stock awards and vesting of restricted stock units and performance stock
units. The 2018 Plan expires in May 2028. The 2012 Plan expires in May 2022.

As described in further detail below, in Fiscal 2020 and 2019, the Company granted stock-based awards to certain of the Company’s new executive officers
as inducements material to their commencement of employment and entry into an employment agreement with the Company. The inducement awards were
made in accordance with Nasdaq Listing Rule 5635(c)(4) and were not made under the 2012 Plan or the 2018 Plan.

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Restricted Stock Awards

Restricted stock awards are issued and measured at fair market value on the date of grant and generally become vested in five to seven equal annual
installments beginning one to three years from the date of grant, subject, in general, to the recipient remaining in the Company’s service on specified
vesting dates. Vesting of restricted stock is based solely on time vesting. As of February 25, 2023, unrecognized compensation expense related to the
unvested portion of the Company’s restricted stock awards was $2.8 million, which is expected to be recognized over a weighted average period of 1.4
years.

Changes in the Company’s restricted stock awards for the fiscal year ended February 25, 2023 were as follows:
Weighted Average
Number of Grant-Date Fair
(Shares in thousands) Restricted Shares Value
Unvested restricted stock awards, beginning of period 472 $ 32.38
Granted 392 4.90
Vested (168) 38.44
Forfeited (214) 22.63
Unvested restricted stock awards, end of period 482 $ 12.25

Restricted Stock Units ("RSUs")

RSUs are issued and measured at fair market value on the date of grant and generally become vested in one to three equal annual installments beginning
one year from the date of grant, subject, in general, to the recipient remaining in the Company’s service on specified vesting dates. RSUs are converted into
shares of common stock upon vesting. As of February 25, 2023, unrecognized compensation expense related to the unvested portion of the Company’s
RSUs, that will be settled in equity, was $5.5 million, which is expected to be recognized over a weighted average period of 1.4 years.

Changes in the Company’s RSUs for the fiscal year ended February 25, 2023 were as follows:

Weighted Average
Number of Restricted Grant-Date Fair
(Shares in thousands) Stock Units Value
Unvested restricted stock units, beginning of period 2,600 $ 17.07
Granted 262 6.78
Vested (1,414) 15.29
Forfeited (890) 18.04
Unvested restricted stock units, end of period 558 $ 15.20

In May of 2022, the Company determined that the RSU awards issued under its incentive compensation plans in May of 2022 would be settled in cash,
rather than in equity. As a result, the awards issued in May of 2022 will be accounted for as a liability and measured at their fair value through their
respective vesting periods. As of February 25, 2023, unrecognized compensation

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expense related to the unvested portion of the Company’s RSUs, that will be settled in cash, was $1.3 million, which is expected to be recognized over a
weighted average period of 2.1 years.

Changes in the Company’s RSUs that will be settled in cash for the fiscal year ended February 25, 2023 were as follows:

Weighted Average
Number of Restricted Grant-Date Fair
(Shares in thousands) Stock Units Value
Unvested restricted stock units, beginning of period 57 $ 23.44
Granted 2,356 8.71
Vested (144) 9.89
Forfeited (989) 10.10
Unvested restricted stock units, end of period 1,280 $ 8.17

The liability for the cash-settled RSUs was approximately $0.5 million as of February 25, 2023, and is included in accrued expenses and other current
liabilities on the consolidated balance sheet. During Fiscal 2022, the Company paid $0.7 million for cash-settled RSUs.

Performance Stock Units ("PSUs")

PSUs are issued and measured at fair market value on the date of grant using the following performance periods and performance metrics. The performance
metrics generally include one or more of Earnings Before Interest and Taxes ("EBIT"), Total Shareholder Return relative to a peer group ("TSR"), Return
on Invested Capital ("ROIC") or Gross Margin Percentage ("GM") compared with the Company's peer groups as determined by the Compensation
Committee of the Company's Board of Directors.

Fiscal Year Performance Period Performance Metrics Target Achievement Range (%)
2020 3 years TSR 0% - 150%
2021 3 years TSR and GM 0% - 150%
2022 3 years TSR and GM 0% - 200%

For the PSUs granted in Fiscal 2019, the three year performance-based tests based on a combination of EBIT margin and ROIC were not met in the first
quarter of Fiscal 2022 and therefore, there was no payment of these awards following vesting.

Vesting of PSUs awarded to certain of the Company’s executives is dependent on the Company’s achievement of a performance-based test from the date of
grant, during the performance period and, assuming achievement of the performance-based test, vest at the end of the performance period noted above,
subject, in general, to the executive remaining in the Company’s service on specified vesting dates. PSUs are converted into shares of common stock upon
payment following vesting. Upon grant of the PSUs, the Company recognizes compensation expense related to these awards based on the Company’s
estimate of the percentage of the award that will be achieved. The Company evaluates the estimate on these awards on a quarterly basis and adjusts
compensation expense related to these awards, as appropriate. As of February 25, 2023, there was $5.2 million of unrecognized compensation expense
associated with these awards, which is expected to be recognized over a weighted average period of 2.0 years.

The fair value of the PSUs granted in Fiscal 2022 for which performance during the three-year period will be based on a relative three-year Total
Shareholder Return ("TSR") goal relative to a peer group was estimated on the date of the grant using a Monte Carlo simulation that uses the assumptions
noted in the following table.

Fiscal Year Ended

Monte Carlo Simulation Assumptions February 25, 2023 February 26, 2022 February 27, 2021
Risk Free Interest Rate 3.55 % 0.29 % 0.25 %
Expected Dividend Yield —% —% —%
Expected Volatility 55.00 % 52.21 % 51.47 %
Expected Term (in years) 3 years 3 years 3 years

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Changes in the Company’s PSUs for the fiscal year ended February 25, 2023 were as follows:
Number of Weighted Average
Performance Stock Grant-Date Fair
(Shares in thousands) Units Value
Unvested performance stock units, beginning of period 1,298 $ 19.55
Granted 2,143 6.79
Vested (666) 15.81
Forfeited (1,292) 15.49
Unvested performance stock units, end of period 1,483 $ 6.33

Stock Options

Stock option grants were issued at fair market value on the date of grant and generally became exercisable in either three or five equal annual installments
beginning one year from the date of grant, subject, in general, to the recipient remaining in the Company’s service on specified vesting dates. Option grants
expired eight years after the date of grant. All option grants were nonqualified. During the fiscal year ended February 27, 2021, the remaining 822,633
options outstanding were forfeited and there were no options outstanding as of February 27, 2021.

For the fiscal years ended February 25, 2023 and February 26, 2022, no stock options were granted. For stock options granted in Fiscal 2019, the fair value
of these stock options granted were estimated on the date of grant using a Black-Scholes option-pricing model that used the assumptions noted in the table
below. The weighted average fair value for the stock options granted in Fiscal 2019 was $4.18.

Fiscal Year Ended

Black-Scholes Valuation Assumptions (1) February 29, 2020
Weighted Average Expected Life (in years) (2) 7.6 years
Weighted Average Expected Volatility (3) 39.41 %
Weighted Average Risk Free Interest Rates (4) 2.39 %
Expected Dividend Yield (5) 4.34 %
________________________
(1)
Forfeitures were estimated based on historical experience.
(2)
The expected life of stock options was estimated based on historical experience.
(3)
Expected volatility was based on the average of historical and implied volatility. The historical volatility was determined by observing actual prices of
the Company’s stock over a period commensurate with the expected life of the awards. The implied volatility represented the implied volatility of the
Company’s call options, which were actively traded on multiple exchanges, had remaining maturities in excess of twelve months, had market prices close
to the exercise prices of the employee stock options and were measured on the stock option grant date.
(4)
Based on the U.S. Treasury constant maturity interest rate whose term was consistent with the expected life of the stock options.
(5)
Expected dividend yield was estimated based on anticipated dividend payouts.

No stock options were exercised during Fiscal 2022 and 2021.

Inducement Awards

In Fiscal 2020 and 2019, the Company granted stock-based awards to certain of the Company’s new executive officers as inducements material to their
commencement of employment and entry into an employment agreement with the Company. These inducement awards were approved by the
Compensation Committee of the Board of Directors of the Company and did not require shareholder approval in accordance with Nasdaq Listing Rule
5635(c)(4).

RSUs granted as inducement awards are issued and measured at fair market value on the date of grant and generally become vested in one to three equal
annual installments beginning one year from the date of grant, subject, in general, to the recipient remaining in the Company’s service on specified vesting
dates. There were 437 unvested RSUs, with a weighted average grant-

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date fair value of $6.10. Changes in the RSUs granted as inducement awards for the fiscal year ended February 25, 2023 included the vesting of 437 RSUs
with a weighted average grant-date fair value of $6.09.

On November 4, 2019, in connection with the appointment of the Company’s former President and Chief Executive Officer, the Company also granted
inducement awards consisting of 273,735 PSU awards. The PSUs vested over two years, based on performance goals requiring the President and CEO to
prepare and deliver to the Board of Directors key objectives and goals for the Company and the strategies and initiatives for the achievement of such
objectives and goals, and the President and CEO's provision of updates to the Board of Directors regarding achievement of such goals and objectives.
Vesting of the PSUs was also subject, in general, to the President and CEO remaining in the Company’s service through the vesting date of November 4,
2021. On November 2, 2021, the Compensation Committee of the Board of Directors determined that the performance goals established for the awards had
been met, and the awards vested in full.

Other than with respect to the vesting terms described above for the inducement awards to the Company's President and Chief Executive Officer,
inducement awards are generally subject to substantially the same terms and conditions as awards that are made under the 2018 Plan.

During Fiscal 2020, the Company granted 816,158 RSUs to executive officers of the Company, pursuant to inducement award agreements. During Fiscal
2021, an executive officer's employment with the Company was terminated and, as a result, 160,255 awards vested in accordance with the terms of the
awards.

As of February 26, 2022, unrecognized compensation expense related to the unvested portion of the Company's inducement awards was $1.6 million and is
expected to be recognized over a weighted average period of 1.2 years. Each inducement award recipient must hold at least fifty percent (50%) of the after-
tax shares of common stock received pursuant to the inducement awards until they have satisfied the terms of the Company’s stock ownership guidelines.

12. PROVISION FOR INCOME TAXES

The components of the (benefit) provision for income taxes are as follows:

Fiscal Year Ended

February 25, February 26, February 27,
(in thousands) 2023 2022 2021
Current:
Federal $ (19,584) $ (43,740) $ (336,506)
State and local (11,485) 3,397 1,211
(31,069) (40,343) (335,295)

Deferred:
Federal — 73,006 150,861
State and local — 54,304 (1,555)
— 127,310 149,306
$ (31,069) $ 86,967 $ (185,989)

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At February 25, 2023, the Company did not have a net deferred income tax asset due to the Company recording a valuation allowance as discussed below
and at February 26, 2022, included in other assets are net deferred income tax assets of $(0.1) million. These amounts represent the net tax effects of
temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
The significant components of the Company’s deferred tax assets and liabilities consist of the following:

February 25, February 26,

(in thousands) 2023 2022
Deferred tax assets:
Inventories $ (1,688) $ 4,077
Operating lease liabilities 396,416 473,397
Insurance 14,077 6,416
Stock-based compensation (1,005) 1,592
Merchandise credits and gift card liabilities 62,300 56,690
Accrued expenses 24,835 23,412
Intangibles 1,585 1,685
Goodwill (351) 90
Carryforwards, NOLs and other tax credits 793,163 189,746
Other (4,920) 34,991

Valuation allowance: $ (908,614) $ (249,529)

Deferred tax liabilities:

Depreciation (126,324) (146,970)
Prepaid expenses (5,292) (1,155)
Operating lease assets (222,121) (376,079)
Other (22,061) (18,499)
$ — $ (136)

At February 25, 2023, the Company has federal net operating loss carryforwards of $599.7 million (tax effected), of which $4.6 million will expire between
2025 and 2039, state net operating loss carryforwards of $171.6 million (tax effected), which will expire between 2022 and 2042, California state enterprise
zone credit carryforwards of $2.1 million (tax effected), which will expire in 2023, but require taxable income in the enterprise zone to be realizable.

In assessing the recoverability of its deferred tax assets, the Company evaluates the available objective positive and negative evidence to estimate whether
it is more likely than not that sufficient future taxable income will be generated to permit use of existing deferred tax assets in each taxpaying jurisdiction.
For any deferred tax asset in excess of the amount for which it is more likely than not that the Company will realize a benefit, the Company establishes a
valuation allowance. A valuation allowance is a non-cash charge, and does not limit the Company's ability to utilize its deferred tax assets, including its
ability to utilize tax loss and credit carryforward amounts, against future taxable income.

The Company assessed all available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of
existing deferred tax assets in each taxpaying jurisdiction. On the basis of this evaluation, as of February 25, 2023, a valuation allowance of $851.8 million
was recorded against the Company's net federal and state deferred tax assets as it is not more likely than not that these assets would be realized.

As of February 25, 2023 and February 26, 2022, the Company had also recorded a valuation allowance of $56.8 million and $25.2 million, respectively,
relative to the Company's Canadian net deferred tax asset, as the Company did not believe the deferred tax assets in that jurisdiction were more likely than
not to be realized.

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The following table summarizes the activity related to the gross unrecognized tax benefits from uncertain tax positions:

February 25, February 26,

(in thousands) 2023 2022
Balance at beginning of year $ 95,518 $ 105,749

Increase/(Decrease) related to current year positions (212) 1,125

Decrease related to prior year positions 485 (1,902)
Settlements (2,340) (2,340)
Lapse of statute of limitations (1,113) (7,114)

Balance at end of year $ 92,338 $ 95,518

Gross unrecognized tax benefits are classified in non-current income taxes payable (or a contra deferred tax asset) on the consolidated balance sheet for
uncertain tax positions taken (or expected to be taken) on a tax return. As of February 25, 2023 and February 26, 2022, approximately $92.3 million and
$95.5 million, respectively, of gross unrecognized tax benefits would impact the Company’s effective tax rate. As of February 25, 2023 and February 26,
2022, the liability for gross unrecognized tax benefits included approximately $8.8 million and $8.6 million, respectively, of accrued interest. The Company
recognizes interest and penalties for unrecognized tax benefits, as applicable, in income tax expense. The Company recorded an increase to accrued interest
of approximately $0.3 million for the fiscal year ended February 25, 2023 and a decrease of approximately $0.5 million for the fiscal year ended
February 26, 2022 for gross unrecognized tax benefits in the consolidated statement of earnings.

The Company anticipates that any adjustments to gross unrecognized tax benefits which will impact income tax expense, due to the expiration of statutes of
limitations, could be approximately $5.8 million in the next twelve months. However, actual results could differ from those currently anticipated.

As of February 25, 2023, the Company operated in all 50 states, the District of Columbia, Puerto Rico, and Canada, and files income tax returns in the
United States and various state, local and international jurisdictions. The Company is currently under examination by the Internal Revenue Service for the
tax years 2018 - 2021. The Company is open to examination for state, foreign and local jurisdictions with varying statutes of limitations, generally ranging
from 3 to 5 years.

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The following table summarizes the reconciliation between the effective income tax rate and the federal statutory rate:

Fiscal Year Ended

February 25, 2023 February 26, 2022 February 27, 2021

Federal statutory rate 21.00 % 21.00 % 21.00 %

State income tax rate, net of federal impact 2.66 % 3.87 % 3.94 %
Uncertain tax positions —% 2.16 % 1.63 %
Goodwill non-deductible impairment charges —% —% —%
Tax deficiencies related to stock-based compensation (0.07)% (0.81)% (3.18)%
Tax credits 0.03 % 0.38 % 0.41 %
CARES Act —% 0.94 % 35.98 %
Valuation Allowance (18.94)% (48.01)% (7.74)%
Canadian Branch Earnings —% 1.60 % 0.78 %
Loss on Warrant Issuance (3.80)% —% —%
Other —% 0.47 % 2.35 %
0.88 % (18.40)% 55.17 %

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was enacted in the United States. The CARES Act is an
emergency economic aid package to help mitigate the impact of the COVID-19 pandemic. Among other things, the CARES Act provides certain changes to
tax laws, As of February 27, 2021, the Company had deferred $3.1 million of employer payroll taxes, which were deposited by December 2021. In
addition, during Fiscal 2021 and 2020, the Company recorded credits of approximately $7.8 million and $33.3 million, respectively, as an offset to selling,
general and administrative expenses as a result of the employee retention credits and rent and property expense support made available under the CARES
Act for U.S. employees and under the Canada Emergency Wage Subsidy for Canadian employees and the Canada Emergency Rent Subsidy.

During the fiscal years ended February 26, 2022 and February 27, 2021 under the CARES Act, the Company recorded income tax benefits of $18.7 million
and $152.0 million, respectively, as a result of the Fiscal 2020 and Fiscal 2019 net operating losses that were carried back to prior years during which the
federal tax rate was 35%.

13. EMPLOYEE BENEFIT PLANS

Defined Contribution Plans

The Company has three defined contribution savings plans covering all eligible employees of the Company (the "Plans"). Participants of the Plans may
defer annual pre-tax compensation subject to statutory and Plan limitations. In addition, a certain percentage of an employee’s contributions are matched by
the Company and vest over a specified period of time, subject to certain statutory and Plan limitations. The Company did not match employee contributions
for Fiscal 2022. The Company’s match was approximately $6.2 million, and $10.6 million for Fiscal 2021 and 2020, respectively, which was expensed as
incurred.

Defined Benefit Plan

During Fiscal 2020, upon the divestiture of CTS, the Company retained liability for a non-contributory defined benefit pension plan for CTS employees
hired on or before July 31, 2003, who met specified age and length-of-service requirements.

During Fiscal 2021, the Company received final approval to terminate the plan, upon which the Company contributed $5.1 million to the plan. Using plan
assets, the Company purchased a non-participating group annuity contract for certain participants and made lump sum distributions to all remaining
participants. Net periodic pension cost included in the consolidated statement of operations includes the pre-tax release of $13.5 million from other
comprehensive income in connection with the settlement of the plan, which is recorded within loss on sale of businesses. As of February 25, 2023, the
Company had no liability remaining related to the plan.

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During Fiscal 2020, the Company released $2.1 million from other comprehensive income in connection with the partial settlement of the plan, recorded
within loss on sale of businesses, including impairment of assets held for sale, in the consolidated statements of operations. In addition, as of February 26,
2022, the Company recognized a loss of $8.4 million, net of tax of $3.0 million, within accumulated other comprehensive loss. As of February 26, 2022,
the Company had liabilities of $3.6 million, which is included in other liabilities in the Company's consolidated balance sheets.

The remaining net periodic pension cost recorded during Fiscal 2022, 2021, and 2020 was not material to the Company’s results of operations.

14. SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid income taxes of $5.4 million, $5.2 million, and $4.8 million in Fiscal 2022, 2021, and 2020, respectively. In addition, the Company had
interest payments of approximately $61.3 million, $66.0 million, and $75.5 million in Fiscal 2022, 2021, and 2020, respectively.

In Fiscal 2022 and Fiscal 2021, the Company acquired property, plant and equipment of approximately $35.0 million and $39.0 million under finance lease
arrangements, respectively.

The Company recorded an accrual for capital expenditures of $63.4 million, and $44.6 million as of February 26, 2022, and February 27, 2021,
respectively. There was no accrual for capital expenditures as of February 25, 2023.

In addition, the Company recorded an accrual for dividends payable of $0.3 million, $0.9 million, $2.1 million as of February 25, 2023, February 26, 2022,
and February 27, 2021, respectively.

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15. COMMITMENTS AND CONTINGENCIES

On April 23, 2023, the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. As a result of such
bankruptcy filings, substantially all proceedings pending against the Debtors have been stayed by operation of Section 362(a) of the Bankruptcy Code.

A putative securities class action was filed on April 14, 2020 against the Company and three of its officers and/or directors (Mark Tritton (the Company's
former President and Chief Executive Officer), Mary Winston (the Company’s former Interim Chief Executive Officer) and Robyn D’Elia (the Company’s
former Chief Financial Officer and Treasurer)) in the United States District Court for the District of New Jersey (the "New Jersey federal court"). The case,
which is captioned Vitiello v. Bed Bath & Beyond Inc., et al., Case No. 2:20-cv-04240-MCA-MAH, asserts claims under §§ 10(b) and 20(a) of the
Securities Exchange Act of 1934 (the "Exchange Act") on behalf of a putative class of purchasers of the Company’s securities from October 2, 2019
through February 11, 2020. The Complaint alleges that certain of the Company’s disclosures about financial performance and certain other public
statements during the putative class period were materially false or misleading. A similar putative securities class action, asserting the same claims on
behalf of the same putative class against the same defendants, was filed on April 30, 2020. That case, captioned Kirkland v. Bed Bath & Beyond Inc., et al.,
Case No. 1:20-cv-05339-MCA-MAH, is also pending in the United States District Court for the District of New Jersey. On August 14, 2020, the court
consolidated the two cases and appointed Kavin Bakhda as lead plaintiff pursuant to the Private Securities Litigation Reform Act of 1995 (as consolidated,
the "Securities Class Action"). Lead plaintiff and additional named plaintiff Richard Lipka filed an Amended Class Action Complaint on October 20, 2020,
on behalf of a putative class of purchasers of the Company’s securities from September 4, 2019 through February 11, 2020. Defendants moved to dismiss
the Amended Complaint on December 21, 2020.

After a mediation held in August 2021, a settlement in principle was reached between the Company and lead plaintiff in the Securities Class Action. The
settlement has been executed and was preliminarily approved by the New Jersey Federal Court in February 2022. The court granted final approval to the
settlement and dismissed the Securities Class Action on June 2, 2022. The Company had previously recorded a liability for the Securities Class Action,
based on the agreed settlement amount and insurance coverage available and this amount was paid by the insurance company in the second fiscal quarter of
2022.

On July 10, 2020, the first of three related shareholder derivative actions was filed in the New Jersey federal court on behalf of the Company against
various present and former directors and officers. The case, which is captioned Salu v. Tritton, et al., Case No. 2:20-cv-08673-MCA-MAH (D.N.J.), asserts
claims under §§ 10(b) and 20(a) of the Exchange Act and for breach of fiduciary duty, unjust enrichment, and waste of corporate assets under state law
arising from the events underlying the securities class actions described above and from the Company’s repurchases of its own shares during the class
period pled in the securities cases. The two other derivative actions, which assert similar claims, are captioned Grooms v. Tritton, et al., Case No. 2:20-cv-
09610-SDW-RDW (D.N.J.) (filed July 29, 2020), and Mantia v. Fleming, et al., Case No. 2:20-cv-09763-MCA-MAH (D.N.J.) (filed July 31, 2020). On
August 5, 2020, the court signed a stipulation by the parties in the Salu case to stay that action pending disposition of a motion to dismiss in the Securities
Class Action, subject to various terms outlined in the stipulation. The parties in all three derivative cases have moved to consolidate them and to apply the
Salu stay of proceedings to all three actions. The court granted the motion on October 14, 2020, but the stay was subsequently lifted. On January 4, 2022,
the defendants filed a motion to dismiss this case.

On August 28, 2020, another related shareholder derivative action, captioned Schneider v. Tritton, et al., Index No 516051/2020, was filed in the Supreme
Court of the State of New York, County of Kings. The claims pled in the Schneider case are similar to those pled in the three federal derivative cases,
except that the Schneider complaint does not plead claims under the Exchange Act. On September 21, 2020, the parties filed a stipulation seeking to stay
that action pending disposition of a motion to dismiss in the securities class action, subject to various terms and conditions.

On June 11, 2021, an additional related derivative action was filed on behalf of the Company against certain present and former directors and officers. This
Complaint is entitled Michael Anthony v Mark Tritton et. al., Index No. 514167/2021 and was filed in the Supreme Court of the State of New York, Kings
County. The claims are essentially the same as in the other two derivative actions. On October 26, 2021, the court consolidated the Schneider and Anthony
actions, and the plaintiffs subsequently filed a consolidated complaint. On January 10, 2022, the defendants filed a motion to dismiss this case.

The derivative cases were not included in the August 2021 settlement referred to above, but after mediation, a settlement in principle was reached in the
first quarter of Fiscal 2022. The settlement has been executed and was preliminarily approved by the New York State Court in June 2022. The court granted
final approval to the settlement on September 21, 2022 and the settlement amount has been paid by the Company’s insurer.

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In connection with the sale of PMall (see "Assets Held for Sale and Divestitures", Note 16), the Company agreed to indemnify 1-800-FLOWERS.COM for
certain litigation matters then existing at the time of the close of the transaction, including certain matters for which the Company is entitled to
indemnification from the former owner of PMall in connection with the Company's purchase of PMall in Fiscal 2016. During Fiscal 2021, the Company
recorded a liability for one such matter and a corresponding asset based on the Company's assessment of the ability to recover the expected loss under the
indemnification provided at the time of its purchase of PMall.

On August 23, 2022, a putative securities class action and shareholder derivative action was filed against the Company, Gustavo Arnal (the Company's
former Chief Financial Officer), and certain third parties in the United States District Court for the District of Columbia. The case, which is captioned Si v.
Bed Bath & Beyond Corp., et al., Case No. 2:22-cv-02541, asserts claims of breach of fiduciary duty, negligent misrepresentation, and violations of §§
10(b) and 20(a) of the Exchange Act on behalf of a putative class of purchasers of our securities from March 25, 2022 through August 18, 2022. The
Complaint alleges that certain of our disclosures about the Company's revenue and proposed divestments, as well as other disclosures made by certain of
our investors about their holdings, during the putative class period were materially false or misleading. The Complaint was amended in November 2022
and again in January 2023 and a Lead Plaintiff was appointed by the Court. The Second Amended Complaint removes Mr. Arnal as a defendant, adds Sue
Gove as a defendant, and shortens the class period and reduced the claims against the Company. The matter is now entitled In re Bed Bath & Beyond
Corporation Securities Litigation. Based on current knowledge the Company believes the claims are without merit and has filed a Motion to Dismiss the
Complaint.

The Company records an estimated liability related to its various claims and legal actions arising in the ordinary course of business when and to the extent
that it concludes a liability is probable and the amount of the loss can be reasonably estimated. Such estimated loss is based on available information and
advice from outside counsel, where appropriate. As additional information becomes available, the Company reassesses the potential liability related to
claims and legal actions and revises its estimated liabilities, as appropriate. The Company expects the ultimate disposition of these matters will not have a
material adverse effect on the Company’s consolidated financial position, results of operations or liquidity. The Company also cannot predict the nature and
validity of claims which could be asserted in the future, and future claims could have a material impact on its earnings.

16. ASSETS HELD FOR SALE AND DIVESTITURES

Assets Held for Sale

The Company has included businesses classified as held for sale within its continuing operations as their dispositions do not represent a strategic shift that
will have a major effect on the Company’s operations and financial results. As of February 25, 2023 and February 26, 2022, the Company did not have any
businesses classified as held for sale.

Prior to the end of Fiscal 2020, certain assets and liabilities of Cost Plus World Market, Personalization Mall.com ("PMall") and One Kings Lane ("OKL")
were classified as held for sale on the Company's consolidated balance sheet. CPWM, PMall, and OKL were sold during Fiscal 2020, as further described
below.

Divestitures

Cost Plus World Market. On December 14, 2020, the Company announced that it entered into a definitive agreement to sell Cost Plus World Market to
Kingswood Capital Management. On January 15, 2021, the Company completed the sale of Cost Plus World Market. Proceeds from the sale were
approximately $63.7 million, subject to certain working capital and other adjustments. The Company recognized a loss on sale of approximately $72.0
million in loss on sale of businesses including impairment of assets held for sale in its consolidated statements of operations for the fiscal year ended
February 27, 2021. The $72.0 million loss on sale includes an impairment of $54.0 million recorded in the third quarter of Fiscal 2020 to remeasure the
disposal group that was classified as held for sale to the lower of carrying value or fair value less costs to sell, recorded in impairments, including on assets
held for sale.

Christmas Tree Shops. On October 11, 2020, the Company entered into definitive agreements to sell Christmas Tree Shops ("CTS") to Handil Holdings
LLC and to sell one of the CTS distribution facilities to an institutional buyer, with a leaseback term of nine months, to provide business continuity to the
Company for some of its operations currently using the facility. These transactions were completed during the third quarter of Fiscal 2021, generating
approximately $233.3 million in proceeds, subject to certain working capital and other adjustments, and the Company recognized a loss on sale of
approximately $53.8 million,

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which was recorded in loss on sale of businesses including impairment of assets held for sale in its consolidated statements of operations for the fiscal year
ended February 27, 2021. In Fiscal 2021, the Company recorded an additional loss of sale of CTS of $13.5 million related to the settlement of the CTS
Pension Plan.

Linen Holdings. On October 11, 2020, the Company entered into a definitive agreement to sell Linen Holdings to The Linen Group, LLC, an affiliate of
Lion Equity Partners. On October 24, 2020, the Company completed the sale of Linen Holdings for approximately $10.1 million, subject to certain working
capital and other adjustments, and recognized a loss on the sale of $64.6 million, which was recorded in loss on sale of businesses including impairment of
assets held for sale in its consolidated statements of operations for the fiscal year ended February 27, 2021.
PersonalizationMall.com. On February 14, 2020, the Company entered into a definitive agreement to sell PersonalizationMall.com ("PMall") to 1-800-
FLOWERS.COM, Inc. for $252.0 million, subject to certain working capital and other adjustments. The buyer was required to close the transaction on
March 30, 2020, but failed to do so. Accordingly, the Company had filed an action to require the buyer to close the transaction. On July 20, 2020, the
Company entered into a settlement agreement with respect to the litigation. Under this agreement, 1-800-FLOWERS.COM agreed to move forward with its
purchase of PMall from the Company for $245.0 million, subject to certain working capital and other adjustments. The transaction closed on August 3,
2020. Net proceeds from the sale of PMall were $244.6 million, subject to certain working capital and other adjustments, and the Company recognized a
gain on the sale of approximately $189.3 million, which was recorded in loss on sale of businesses including impairment of assets held for sale in its
consolidated statement of operations for the fiscal year ended February 27, 2021. Upon the close of the transaction, Bed Bath & Beyond withdrew the
litigation against 1-800-FLOWERS.COM and 800-FLOWERS, INC.

In connection with the sale of PMall, the Company agreed to indemnify 1-800-FLOWERS.COM for certain litigation matters then existing at the time of
the close of the transaction, including certain matters for which the Company is entitled to indemnification from the former owner of PMall in connection
with the Company's purchase of PMall in Fiscal 2016 (see "Commitments and Contingencies" Note 15 for additional information.)

One Kings Lane. On April 13, 2020, the Company completed the sale of One Kings Lane ("OKL"). Proceeds from the sale were not material.

During the fiscal year ended February 26, 2022, the Company recognized approximately $18.2 million of loss on the sale of these businesses primarily
associated with the Fiscal 2021 settlement of the CTS pension plan (see "Employee Benefit Plans" Note 13) and certain working capital and other
adjustments related to the above divestitures.

17. SUBSEQUENT EVENTS

Chapter 11 Cases

On April 23, 2023, (the “Petition Date”), the Company and certain of its direct and indirect subsidiaries (collectively, the “Debtors” or the “Company
Parties”) filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy
Court for the District of New Jersey (the “Bankruptcy Court”). On the Petition Date, the Company Parties filed a motion with the Bankruptcy Court
seeking to jointly administer the Chapter 11 Cases. On April 24, 2023, the Bankruptcy Court entered an order approving joint administration under the
caption “In re Bed Bath & Beyond Inc.,” Case No. 23-13359. Certain of the Company’s subsidiaries were not included in the Chapter 11 filing.

The Company Parties continue to operate their business and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company Parties filed with the
Bankruptcy Court motions seeking a variety of “first-day” relief, including authority to pay employee wages and benefits and to pay vendors and suppliers
for goods and services provided both before and after the Petition Date. In addition, the Company filed with the Bankruptcy Court a motion seeking
approval (“Interim DIP Order”) of debtor-in-possession financing (“DIP Financing”) in the form of the DIP Credit Agreement (as defined and described
below). Following a hearing held on April 24, 2023, the Bankruptcy Court approved the Company Parties’ motions seeking a variety of “first-day” relief on
an interim basis for. The Company Parties resolved numerous informal comments and many of the "first-day" motions were entered on a final basis
consensually. A hearing is scheduled on June 14, 2023 for the Bankruptcy Court to consider final approval of the relief requested in certain first day
motions, and final approval of the DIP Facility.

DIP Credit Agreement

Prior to the Petition Date, the Company Parties and Sixth Street Specialty Lending, Inc., Sixth Street Lending Partners and TAO Talents (the “DIP Parties”)
agreed to enter into a senior secured super-priority debtor-in-possession term loan credit facility in an aggregate principal amount of $240.0 million subject
to the terms and conditions set forth therein (the “DIP Credit Agreement”).

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On April 24, 2023, the Bankruptcy Court entered an order approving entry into the DIP Credit Facility on an interim basis. Pursuant to the DIP Credit
Agreement, the DIP Lenders have provided a senior secured super-priority debtor in possession term loan facility (the “DIP Facility”), consisting of (1) a
new money single draw term loan facility in the amount of $40.0 million, and (2) a roll-up of certain secured obligations under the existing prepetition
credit agreement between the Company Parties and the Prepetition FILO Lenders in the amount of $200.0 million. Borrowings under the DIP Facility are
senior secured obligations of the Company and certain Company Parties, secured by a super priority lien on the collateral under the Amended and Restated
Credit Agreement, dated as of August 9, 2021 (as amended by that certain First Amendment to Amended and Restated Credit Agreement, dated as of
August 31, 2022, that certain Second Amendment to Amended and Restated Credit Agreement and Waiver, dated as of February 7, 2023, that certain Third
Amendment to Amended and Restated Credit Agreement and Waiver, dated as of March 6, 2023, that certain Fourth Amendment to Amended and Restated
Credit Agreement and Waiver, dated as of March 30, 2023, that certain Fifth Amendment to Amended and Restated Credit Agreement and Waiver, dated as
of April 6, 2023 and that certain Sixth Amendment to Amended and Restated Credit Agreement, Consent and Waiver, dated as of April 21, 2023, the
“Existing Credit Agreement”), as well as all unencumbered assets of the Company Parties (subject to customary exceptions). The DIP Credit Agreement
has various customary covenants, as well as covenants mandating compliance by the Debtors with a 13-week budget, variance testing and reporting
requirements, among others. The proceeds of all or a portion of the proposed DIP Credit Agreements may be used for, among other things, post-petition
working capital for the Company and its subsidiaries, payment of costs to administer the Chapter 11 Cases, payment of expenses and fees of the
transactions contemplated by the Chapter 11 Cases, payment of court-approved adequate protection obligations under the DIP Credit Agreements, and
payment of other costs, in each case, subject to an approved budget and such other purposes permitted under the DIP Credit Agreement and the Interim DIP
Order or any other order of the Bankruptcy Court.

The Interim DIP Order provides certain milestones for the Chapter 11 Cases. Failure of the Debtors to satisfy these milestones without a waiver or
consensual amendment would provide the Required DIP Lenders a termination right under the Interim DIP Order. These milestones include (i) the entry of
an order approving the sale(s) of all or substantially all of the Debtors’ assets, (ii) the filing of a Chapter 11 plan and disclosure statement, in form and
substance acceptable to the Required DIP Lenders (iii) the entry of an order confirming the Chapter 11 plan within 120 days after the Petition Date The
Debtors have satisfied the first milestone as of the filing of these financial statements.

Adequate Protection

Pursuant to the Interim DIP Order, we are obligated to make certain adequate protection payments during our bankruptcy proceedings on each of our
Prepetition Secured Obligations. The Prepetition Secured Obligations are each entitled to receive adequate protection as set forth to the extent of
Diminution in Value of their respective interests in the Prepetition Collateral.

Nasdaq Delisting Proceedings

On April 24, the Company received written notice from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the
Company that, as a result of the Chapter 11 Cases and in accordance with the Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq had determined
that the Company’s common stock will be delisted from Nasdaq. Trading of the Company’s common stock was suspended at the opening of business on
May 3, 2023.

Following delisting from Nasdaq, the Company’s common stock has been quoted in the OTC Pink Open Market under the symbol “BBBYQ”. The OTC
Pink Open Market is a significantly more limited market than Nasdaq, and quotation on the OTC Pink Open Market likely results in a less liquid market for
existing and potential holders of the common stock to trade the Company’s common stock and could further depress the trading price of the common stock.
The Company can provide no assurance as to whether broker-dealers will continue to provide public quotes of the common stock on this market, or
whether the trading volume of the common stock will be sufficient to provide for an efficient trading market.

We expect Nasdaq to file a Form 25 with the SEC to delist our common stock from trading on Nasdaq and to remove it from registration under Section
12(b) of the Exchange Act. The delisting became effective 10 days after such filing. In accordance with Rule 12d2-2 of the Exchange Act, the de-
registration of our common stock under Section 12(b) of the Exchange Act will become effective 90 days, or such shorter period as the SEC may
determine, from the date of the Form 25 filing.

Potential Claims

The Debtors have filed with the Bankruptcy Court schedules and statements setting forth, among other things, the assets and liabilities of each of the
Debtors , subject to the assumptions filed in connection therewith. These schedules and statements may be subject to further amendment or modification
after filing. Certain holders of pre-petition claims that are not governmental units are required to file proofs of claim by the deadline for general claims,
which is currently expected to be June 30, 2023 (the “Bar Date”).

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The Debtors' have received approximately 2,413 proofs of claim, primarily representing general unsecured claims, for an amount of approximately
$181.7 million. These claims will be reconciled to amounts recorded in the Company's accounting records. Differences in amounts recorded and claims
filed by creditors will be investigated and resolved, including through the filing of objections with the Bankruptcy Court, where appropriate. The Company
may ask the Bankruptcy Court to disallow claims that the Company believes are duplicative, have been later amended or superseded, are without merit, are
overstated or should be disallowed for other reasons. In addition, as a result of this process, the Company may identify additional liabilities that will need to
be recorded or reclassified to Liabilities subject to compromise. In light of the substantial number of claims filed, and expected to be filed, the claims
resolution process may take considerable time to complete and likely will continue after the Debtors emerge from bankruptcy.

Rejected Executory Contracts and Leases

Subject to certain exceptions, under the Bankruptcy Code, the Company Parties may assume, assign, or reject certain executory contracts and unexpired
leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is
treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Company Parties from
performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general
unsecured claim for damages caused by such deemed breach. Generally, the assumption of an executory contract or unexpired lease requires the Company
Parties to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance.
Accordingly, any description of an executory contract or unexpired lease with the Company Parties discussed herein, including a quantification of the
Company Parties’ obligations under any such executory contract or unexpired lease, is qualified by any overriding rejection rights the Company Parties
have under the Bankruptcy Code.

Delisting of Our Common Stock form Nasdaq

In connection with the Chapter 11 Cases, on April 24, 2023, the Company received written notice (the “Delisting Notice”) from the Listing Qualifications
Department of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, as a result of the Chapter 11 Cases and in accordance with Nasdaq
Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq had determined that the Company’s common stock will be delisted from Nasdaq. The Company did
not intend to appeal this determination.
Trading of the Company’s common stock was suspended at the opening of business on May 3, 2023.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors Bed Bath & Beyond Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Bed Bath & Beyond Inc. and subsidiaries (the Company) as of February 25, 2023 and
February 26, 2022, the related consolidated statements of operations, comprehensive loss, mezzanine equity and shareholders’ (deficit) equity, and cash
flows for each of the years in the three-year period ended February 25, 2023, and the related notes and financial statement schedule (collectively, the
consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company as of February 25, 2023 and February 26, 2022, and the results of its operations and its cash flows for each of the years in the three-year period
ended February 25, 2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s
internal control over financial reporting as of February 25, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated June 13, 2023 expressed an unqualified opinion on the
effectiveness of the Company’s internal control over financial reporting.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in
Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations and negative cash flows from operations that
raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The
consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included
performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was
communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated
financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairments of Long-Lived Assets

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As discussed in Note 2 to the consolidated financial statements, the Company tests long-lived assets, which include store-level, distribution
facilities, corporate assets, including leasehold improvements, other property and equipment and operating lease assets (right of use assets), for
impairment using the two-step impairment model when events or changes in circumstances indicate that the carrying values of these assets may
exceed their current fair values. As of February 25, 2023, the Company performed a Step 1 recoverability test and determined that Step 2 was
necessary which required a comparison of carrying value to fair value for each asset/asset group. An impairment charge was recognized for the
excess of the carrying amount over the fair value. The Company used market approach models, including orderly liquidation value, to estimate the
fair value of store, distribution facilities and corporate location long-lived assets. During the year ended February 25, 2023, the Company
recognized pre-tax impairment charges for long lived assets of $1,284.6 million which included write-offs associated with store-level, distribution
facilities, corporate assets, including leasehold improvements, other property and equipment and right of use assets.

We identified the evaluation of the fair value of certain store, distribution facilities and corporate long-lived assets which were written down to
their orderly liquidation value, as a critical audit matter. There were complex auditor judgements involved in assessing the valuation techniques
and certain assumptions involved in determining the orderly liquidation value of the right of use assets as they involve a high degree of
subjectivity. Specifically, there are no market prices for right of use assets and the evaluation required the involvement of individuals with
specialized knowledge to assess the valuation techniques and the market price assumptions.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating
effectiveness of certain internal controls over the Company’s long-lived asset impairment assessment process, including controls related to the
Company’s selection of the valuation techniques and the market price assumptions. We involved valuation professionals with specialized skills
and knowledge, who assisted in:

• evaluating whether the valuation techniques used were reasonable and consistent with (i) valuation practice given the nature of the assets
and (ii) the plans included in the Company’s going concern assessment
• assessing market price assumptions by developing an independent estimate of market prices using third party data and comparing the
amounts to the Company’s estimates.

/s/ KPMG LLP

We have served as the Company’s auditor since 1992.

New York, New York

June 13, 2023

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Shareholders and Board of Directors Bed Bath & Beyond Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Bed Bath & Beyond Inc. and subsidiaries' (the Company) internal control over financial reporting as of February 25, 2023, based on
criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 25, 2023, based on
criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated
balance sheets of the Company as of February 25, 2023 and February 26, 2022, the related consolidated statements of operations, comprehensive loss,
mezzanine equity and shareholders’ (deficit) equity, and cash flows for each of the years in the three-year period ended February 25, 2023, and the related
notes and financial statement schedule (collectively, the consolidated financial statements), and our report dated June 13, 2023 expressed an unqualified
opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our
responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over
financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

New York, New York

June 13, 2023

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ITEM 9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE
None.

ITEM 9A – CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures

Based on their evaluation as of February 25, 2023, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective to ensure that
the information required to be disclosed by our management in the reports that we file or submit under the Securities Exchange Act of 1934 is (i) recorded,
processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our
management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.

Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and procedures or
our internal controls will prevent all error and all fraud. Further, the design of a control system must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their costs. A control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system are met. Our disclosure controls and procedures are designed to provide such
reasonable assurance of achieving their objectives, and our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure
controls and procedures are effective at that reasonable assurance level.

(b) Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the
Securities Exchange Act of 1934, as amended). Our management assessed the effectiveness of our internal control over financial reporting as of
February 25, 2023. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO"), released in 2013, Internal Control-Integrated Framework.

Our management has concluded that, as of February 25, 2023, our internal control over financial reporting is effective based on these criteria.

(c) Attestation Report of the Independent Registered Public Accounting Firm

KPMG LLP issued an audit report on the effectiveness of our internal control over financial reporting, which is included herein.

(d) Changes in Internal Control over Financial Reporting

In the ordinary course of business, management reviews its system of internal control over financial reporting and makes changes to its systems and
processes to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include
activities such as implementing new, more efficient systems and automating manual processes.

During the first quarter of fiscal 2022, we implemented new general ledger, sales audit, accounts payable, and consolidation and reporting systems as part
of our multi-year effort to upgrade and/or replace certain of our information systems. The implementation resulted in certain changes to the Registrant's
processes and procedures related to general accounting, sales audit, and accounts payable, and financial reporting that have required the Registrant to effect
certain modifications to its internal control over financial reporting. These changes to the Registrant's processes and procedures have been and will continue
to be subject to the Registrant's processes for evaluating the design and operating effectiveness of internal control over financial reporting. Other than the
system implementation noted above, the Registrant's principal executive officer and principal financial officer have determined that there have been no
other changes in the Registrant's internal control over financial reporting during the most recently completed fiscal quarter covered by this report identified
in connection with the evaluation described above that have materially affected, or are reasonably likely to materially affect, the Registrant's internal
control over financial reporting.

ITEM 9B – OTHER INFORMATION

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On April 20, 2022, as part of the Company’s annual review process that began in 2021, the People, Culture and Compensation Committee of the
Company’s Board of Directors approved the adoption of an Executive Change in Control Severance Plan (the “Change in Control Plan”). This plan, similar
to those of benchmarked peers, provides for enhanced cash severance to be paid to members of the Company’s executive leadership team and specific other
employees as a result of certain events that would trigger a change in control of the Company, as defined in the Change in Control Plan. A copy of the
Change in Control Plan, including the form of participation agreement is filed as an exhibit hereto.

ITEM 9C – DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

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PART III
ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

(a) Directors of the Company

The following table discloses our directors as of February 25, 2023.

Name Age Position Term of office

Non-Employee Directors
Harriet Edelman 67 Director 1 year
Jeffrey Kirwan 56 Director 1 year
Shelly Lombard 63 Director 1 year
Joshua E. Schechter 50 Director 1 year
Minesh Shah 49 Director 1 year
Andrea M. Weiss 68 Director 1 year
Ann Yerger 61 Director 1 year
Carol Flaton 58 Director 1 year

Harriet Edelman. Ms. Edelman is an accomplished senior executive and Independent Director with over 30 years of global operating experience in
consumer goods and financial services. Since 2010, she has served as the Vice Chair of Emigrant Bank, a private financial institution, after serving as
Special Advisor to the Chairman from June 2008 to October 2010. Prior to that, she spent more than 25 years with Avon Products, Inc. holding various
senior global leadership positions in sales, marketing, supply chain, information technology and product development. She has served on large public
company boards for nearly 20 years in the U.S. and Europe and in multiple Board leadership positions. The consumer goods business has been central to
Ms. Edelman’s career, and she has a strong passion for our Company and brand. She brings strong leadership to our Board to help deliver on our business
transformation. Ms. Edelman received her Bachelor’s degree from Bucknell University and her MBA from Fordham Gabelli School of Business.

Jeffrey Kirwan. Mr. Kirwan currently serves as the Chairman of Maurices Incorporated, a specialty retailer focused on women’s value apparel. Previously,
he served as the Global President of the Gap Division of The Gap, Inc., a worldwide clothing and accessories retailer, from December 2014 to February
2018. He also led the Gap’s operations in China from 2011 to 2014. During his tenure with The Gap, Inc., he contributed to significant operational
progress, including strong marketing and customer engagement, increased traffic and improved sales and digital business. Mr. Kirwan’s executive
experience in large, multinational retailers, his knowledge of our customer base as well as his strong consumer marketing and sales experience is an
important asset for our Board. Mr. Kirwan received his Bachelor’s degree in Business Communications from Rhode Island College and his MBA in
Business and Human Resources Management from the University of Maryland Global Campus.

Shelly Lombard. Ms. Lombard currently serves as an independent consultant, focusing on investment analysis and financial training. She has over 30
years of experience analyzing, valuing, and investing in companies. Prior to becoming a consultant, she served as Director of High Yield and Special
Situation Research for Britton Hill Capital, a broker dealer specializing in high yield and special situation bank debt and bonds and value equities, from
2011 to 2014. Prior to that, she was a high yield and special situation bond analyst and was also involved in analyzing, managing, and restructuring
proprietary investments for various financial institutions. She was named by NACD as one of its 100 Directorship Honorees for 2021. Ms. Lombard brings
strong financial analysis, investment, capital markets, and public company director experience to our Board. Ms. Lombard received her Bachelor’s degree
in Communications and Political Science from Simmons College and her MBA from Columbia Business School.

Joshua E Schechter. Mr. Schechter is a private investor and public company director. He has strong public company board leadership expertise, previously
serving as Chairman of the Board of SunWorks, Inc., a premier provider of high-performance solar power solutions. He spent 13 years in investment
services for Steel Partners and its affiliates, including Managing Director of Steel Partners Ltd. and Co-President, Steel Partners Japan Asset Management,
LP. His significant experience with complex business and strategic transactions, M&A, corporate governance matters and capital markets, together with his
public company board leadership experience provides valuable insight to our Board. Mr. Schechter received his BBA and MPA in Professional Accounting
from the University of Texas at Austin.

Minesh Shah. Mr. Shah has served as Chief Operations Officer at Stitch Fix, a leading online shopping experience, since October 2020 and is responsible
for the company’s operations and client experiences. He also served as Vice President, Operations at

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Stitch Fix from September 2018 to October 2020. Previously, Mr. Shah served as Senior Director of Delivery Operations at Tesla Motors, Inc. from
February 2017 to June 2018. He has spent most of his career in high growth, consumer-driven companies – focused on operations, customer experience,
omnichannel programs, marketing and digital retail, including as Vice President of Global eCommerce for Uniqlo Co. Ltd. Mr. Shah’s extensive consumer,
supply chain, marketing, technology and operational experience, as well as his deep knowledge and expertise in retail offer valuable perspective and
oversight to our ongoing transformation. Mr. Shah received his BS in Chemical Engineering and his MBA in Marketing, Management and Strategy from
Northwestern University.

Andrea M. Weiss. Ms. Weiss was an early innovator in multi-channel commerce and brings nearly 30 years of entrepreneurial leadership experience in the
retail industry, currently serving as Founding Partner of The O Alliance, LLC since 2014 and Chief Executive Officer and Founder of Retail Consulting
Inc. since 2002. She is recognized as a pioneer in creating a seamless customer experience and has been a key player in transforming retail into the digital
space. She also has extensive experience developing high-level business strategy and tactical execution plans, including implementing turnaround
initiatives for leading brands in the U.S. and Europe. Ms. Weiss was named by NACD as one of the Top 100 Best Public Directors in 2016. Our Board
benefits from Ms. Weiss’ extensive retail and transformation experience, as well as her experience serving on public company boards. She received her
BFA from Virginia Commonwealth University and her Masters of Administrative Science from Johns Hopkins University.

Ann Yerger. Ms. Yerger has dedicated her career to the advancement of corporate governance and investor protection initiatives. She has held various
governance advisory roles, including her current position as Advisor with Spencer Stuart North America Board Practice, a leading board consulting firm,
which she has held since 2017. She has also served as a Member of the Grant Thornton Audit Quality Advisory Council since 2019. Previously, Ms. Yerger
served as Executive Director, Center for Board Matters at Ernst & Young LLP from 2015 to 2017. In addition, she has served as a member of several
advisory boards and committees, including the Investor Advisory Committee of the SEC and the Nasdaq Listing and Hearing Review Council. She has
been recognized by the International Corporate Governance Network and NACD for her contributions to investor collaboration and the improvement of
corporate governance. Ms. Yerger’s deep corporate governance and shareholder-oriented work provide our Board with important insight and guidance with
respect to our corporate governance practices and engagement with key stakeholder. She received her MBA from Tulane University.

Carol Flaton. Ms. Flaton has served on the Talen Energy Supply Board of Directors since November 2021. Ms. Flaton has over 30 years of experience in
banking and finance, transformation and restructuring, and governance and risk management. Since 2019 she has provided financial advisory services and
served as an independent director for both public and private companies. Recent mandates include Speedcast International Ltd (ASX: SDA), EP Energy
Corp. (NYSE: EPE) and Jupiter Resources, Inc. She also was nominated in 2020 by the Xerox Corporation (NYSE: XRX) as an Independent Director
candidate for HP, Inc. (NYSE: HPQ) in a Material Shareholder Proposal. From 2014 to 2019 Ms. Flaton was a managing director at AlixPartners (formerly
known as Zolfo Cooper, LLC) specializing in restructuring and turnarounds. Prior to joining AlixPartners, she was a managing director in the restructuring
practice of Lazard Freres (“Lazard”) from 2008-2013. Prior to Lazard, Ms. Flaton was a managing director at both Credit Suisse First Boston and Citi
(1995- 2008) as well as being a senior member of the risk management teams. She has held NASD Series 7 (registered rep) and Series 24 (managing
principal) licenses. Ms. Flaton has a BSBA from the University of Delaware and an MBA from the International Institute of Management Development,
Lausanne, Switzerland.

(b) Executive Officers of the Company

The following table discloses our executive officers as of February 25, 2023.

Name Age Position

Executive Officers
Sue Gove 64 Director, President and Chief Executive Officer
Laura Crossen 53 Senior Vice President of Finance and Chief Accounting Officer
Patricia Wu 50 Executive Vice President, Brand President—buybuy BABY
David Kastin 55 Executive Vice President, Chief Legal Officer and Corporate Secretary
Bart Sichel 58 Executive Vice President, Chief Marketing & Customer Officer
Lynda Markoe 56 Executive Vice President, Chief People & Culture Officer
Scott Lindblom 60 Executive Vice President, Chief Technology and Digital Officer

Sue Gove. Ms. Gove has been President and Chief Executive Officer of Bed Bath & Beyond Inc. since October 2022, after being named Interim CEO in
June 2022. In this role, Sue initiated a turnaround plan to position the Company for success in the Home,

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Baby, and Wellness categories. She continues to serve as a Director of the Company, a position she has held since May 2019. During her tenure on the
Board, Sue served as a member of the Audit Committee, Nominating and Corporate Governance Committee, and was Chair of the Board’s Strategy
Committee. She has spent more than 30 years within the retail industry serving a variety of senior financial, operating, and strategic roles that included
President and Chief Executive Officer of Golfsmith International Holdings and Chief Operating Officer of Zale Corporation. Sue has also served as a
Senior Advisor for Alvarez & Marsal, a global professional services firm, where she primarily focused on advisory and turnaround for retail companies.
She was the President of Excelsior Advisors, LLC, a retail consulting and advisory firm founded in August 2014. Ms. Gove received her BBA in
Accounting from the University of Texas Austin.

Laura Crossen. Ms. Crossen joined the Company in 2001 and has served as Chief Accounting Officer since June 2022. Ms. Crossen recently served as
interim Chief Financial Officer from September 2022 to February 2023 while maintaining her role as Chief Accounting Officer. Prior to her service as
Chief Accounting Officer, Ms. Crossen served as the Company’s Senior Vice President, Tax, Treasury and Transformation since May 2021. Previously, Ms.
Crossen served as Vice President, Financial Management of the Company since 2001. Ms. Crossen received her BS in Public Accounting from Providence
College.

Patricia Wu. Ms. Wu joined the Company in January 2021 as Senior Vice President and General Manager of buybuy BABY. In September 2022, Ms. Wu
became Executive Vice President and President of buybuy BABY. Prior to joining the Company Ms. Wu served as Chief Commercial Officer of
Beautycounter, a direct-retail brand dedicated to getting safe beauty products into the hands of everyone. Before Beautycounter, Ms. Wu served three years
at Mattel as Group Vice President of Emerging Markets & New Business Models, Vice President and General Manager of Mattel’s China Growth Team,
Vice President of Global Commercial Strategy, and Vice President of International Strategy. Ms. Wu also spent nearly two years in China, managing
merchandising and strategy for Walmart, and before that, nearly nine years at The Clorox Company. Ms. Wu received her BS and BA in Business and
German from Washington University in St. Louis as well as an MBA from Harvard Business School.

David Kastin. Mr. Kastin has served as Executive Vice President, Chief Legal Officer and Corporate Secretary since December 2022. Prior to joining the
Company, from August 2020 through December 2022, Mr. Kastin served as General Counsel and Corporate Secretary of Clever Leaves Holdings Inc.;
from August 2015 through January 20202, Mr. Kastin served as Senior Vice President, General Counsel and Corporate Secretary at the Vitamin Shoppe,
Inc.; and from August 2007 through July 2015, he served as as Senior Vice President, General Counsel and Corporate Secretary at Town Sports
International. Since August 2013, Mr. Kastin has served on the Board of Directors of Greenbacker Renewable Energy, a publicly-registered, non-traded
company that invests and funds solar, wind and other alternative energy projects. Mr. Kastin received his BBA in Finance from George Washington
University and his JD from Benjamin N. Cardozo School of Law.

Bart Sichel. Mr. Sichel joined the company in November 2022 as Chief Marketing & Customer Officer. Mr. Sichel is a Board Member of kidpik, a
company that offers clothing subscription boxes for children. Prior to joining the Company Mr. Sichel was a Senior Advisor at Impact Analytics, a
company that uses artificial intelligence to drive analytic performance and measurable business impact. Mr. Sichel was also an Advisory Board Member of
Forman Mills, a privately owned regional retailer operating in the off-price and discount space. Mr. Sichel spent eight years as Executive Vice President
and Chief Marketing Officer of Burlington Stores and prior to that role, thirteen years as a Partner in McKinsey’s Marketing and Retail practices. For over
25 years Bart Sichel has successfully led teams to measurable success by combining a keen focus on strategic insights with a hands-on operator’s bias
toward action. Bart’s industry experience spans both B-to-B and B-to-C businesses encompassing retail, e-commerce, and a range of other consumer
sectors including packaged goods, technology, hospitality, and more. His deep knowledge of customer insights, advanced analytics, media and advertising,
brand portfolio management, strategic planning, and marketing has benefited his companies, his clients, and their customers. Mr. Sichel received his BA in
Political Science from Vassar College and his MBA with a focus in marketing from Columbia Business School.

Lynda Markoe. Ms. Markoe joined the Company as Executive Vice President, Chief People & Culture Officer in September 2020. Prior to joining the
Company, Ms. Markoe held various leadership roles at J.Crew Group, Inc. since 2003, including serving as its Chief Administrative Officer and Global
Head of Human Resources. Prior to that, Ms. Markoe was a human resources leader at Gap Inc. Ms. Markoe received her Bachelor’s degree from
Binghamton University.

Scott Lindblom. Mr. Lindblom joined the company in September 2020 as the Company’s Chief Technology Officer. Mr. Lindblom previously held
Executive Vice President and Chief Information Officer roles at The Michaels Companies where he transformed IT from an anchor on the organization to
one of value creation for this $5B retailer with 1250 stores in the US and Canada. At Michaels, Mr. Lindblom introduced omnichannel capabilities enabling
speed to market and world-class customer shopping experiences. Mr. Lindblom also has nearly ten years of experience at ROSS Stores, where he served as
Group President of IT and Vice President of Software Applications. Prior to Mr. Lindblom’s experience at ROSS Stores, he served five years at Best Buy,
as Senior Director of Demand Creation and Fulfillment Systems, Director – Program Manager, and Director of Infrastructure Services. Mr. Lindblom
received his BS in Accounting from Minnesota State University and Mankato and his MBA in Finance from University of St. Thomas Opus College of
Business.

(c) Compliance with Section 16(a)

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Section 16(a) of the Securities Exchange Act of 1934 requires our directors, officers and beneficial owners of 10% or more of our common shares to file
reports with the SEC relating to their common share ownership and changes in such ownership, and to confirm that all required Section 16(a) forms were
filed with the SEC. Based on a review of our records and certain written representations received from our executive officers and directors, we believe that
all reports, except eleven, that were required to be filed under Section 16(a) during Fiscal 2022, were timely filed. There were eleven late filings: the Form
3 filed with the SEC on March 10, 2022 for Minesh Shah; the Form 3 filed with the SEC on April 1, 2022 for Benjamin Rosenzweig; the Form 3 filed with
the SEC on April 1, 2022 for Shelly Lombard; the Form 3 filed with the SEC on April 1, 2022 for Marjorie Bowen; the Form 3 filed with the SEC on July
7, 2022 for Laura Crossen; the Form 3 filed with the SEC on July 7, 2022 for Mara Sirhal; the Form 4 filed with the SEC on July 15, 2022 for John
Hartmann; the Form 4 filed with the SEC on July 15, 2022 for Gregg Melnick; the Form 4 filed with the SEC on July 15, 2022 for Anuradha Gupta; the
Form 4 filed with the SEC on July 15, 2022 for John Barresi; the Form 4 filed with the SEC on July 15, 2022 for Gustavo Arnal; the Form 4 filed with the
SEC on July 15, 2022 for Joseph Hartsig; the Form 4 filed with the SEC on July 15, 2022 for Mark Tritton; the Form 4 filed with the SEC on July 15, 2022
for Masood Rafeh; the Form 4 filed with the SEC on July 15, 2022 for Arlene Hong; the Form 4 filed with the SEC on July 15, 2022 for Lynda Maroke; the
Form 3 filed with the SEC on August 15, 2022 for Ryan Cohen and RC Ventures LLC; the Form 4 filed with the SEC on November 15, 2022 for Anuradha
Gupta; the Form 4 filed with the SEC on November 15, 2022 for Rafeh Masood; the Form 3 filed with the SEC on November 23, 2022 for Hobart Sichel;
the Form 3 filed with the SEC on November 29, 2022 for Scott Lindblom; the Form 3 filed with the SEC on December 19, 2022 for David Kastin; the
Form 3 filed with the SEC on February 7, 2023 Carol Flaton.

(d) Audit Committee

The audit committee.is comprised of: Joshua E. Schechter, Chair* | Shelly Lombard* | Minesh Shah | Andrea M. Weiss.* All of the members of the audit
committee are considered independent.

*Audit Committee Financial Experts The Audit Committee assists the Board by: overseeing the Company’s accounting and financial reporting processes
and the integrity of the Company’s quarterly and annual financial statements; reviewing the Company’s earnings announcements, as well as financial
information and earnings guidance provided to analysts and ratings agencies; reviewing audits of the Company’s financial statements; overseeing the
Company’s internal control system and the quality of internal control by management; overseeing management’s practices to ensure adequate risk
management; overseeing the Company’s corporate compliance program, including compliance with legal and regulatory requirements and the Company’s
ethical conduct policy; reviewing and overseeing the independent auditor’s qualifications, independence and performance; overseeing the performance of
the Company’s internal audit function; overseeing cybersecurity, data privacy, information technology and information protection programs; and overseeing
procedures for receipt and treatment of complaints received by the Company from its customers, vendors or associates relating to accounting, internal
accounting controls or auditing matters.

The Audit Committee has the authority to engage independent counsel and other advisors.

(e) Code of Ethics

The Company has adopted a code of ethics entitled "“Policy of Ethical Standards For Business Conduct"” that applies to all of its employees, including
Executive Officers and the Board of Directors, the complete text of which is available through the Investor Relations section of the Company’s website,
www.bedbathandbeyond.com. Amendments to, and waivers granted under, the Policy of Ethical Standards for Business Conduct, if any, will be posted to
the Company’s website.

ITEM 11 – EXECUTIVE COMPENSATION

Compensation Discussion & Analysis (CD&A)

This Compensation Discussion and Analysis provides an overview of our executive compensation program and the compensation awarded to, earned by, or
paid to our Chief Executive Officer (“CEO”), our former Chief Executive Officer (“former CEO”), our Principal Financial Officer (“PFO”), our former
Chief Financial Officer (“former CFO”), our three most highly compensated officers (other than the CEO, former CEO, PFO, and former CFO), and the
two most highly compensated former officers, who otherwise would have been named executive officers, if not for their departure from the Company
(these individuals, who along with the CEO, former CEO, PFO, former CFO and three most highly compensated employees for 2022, we refer to as our
Named Executive Officers (“NEOs”)). For fiscal year 2022, our NEOs are:

Name Principal Position

Executive Officers

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Sue Gove(1).............................. Chief Executive Officer and President

Laura Crossen(2)......................... Principal Financial Officer
Mara Sirhal(3)............................. Former Executive Vice President and Brand President of Bed Bath & Beyond
Lynda Markoe(4)........................ Executive Vice President, Chief People and Culture Officer
Patricia Wu(5)............................. Executive Vice President and Brand President of buybuy BABY
Mark Tritton(6)......................... Former Chief Executive Officer
Gustavo Arnal(7)......................... Former Chief Financial Officer
John Hartmann(8)....................... Former Executive Vice President, Chief Operating Officer, and President, buybuy BABY, Inc.
Joseph Hartsig(9)........................ Executive Vice President, Chief Merchandising Officer and President of Harmon Stores, Inc.

(1) Ms. Gove was appointed Interim CEO, effective June 23, 2022, and was made the Company’s permanent CEO and President on October 24, 2022.
Previously, Ms. Gove served solely as an Independent Director on the Board.

(2) Ms. Crossen was appointed Interim Chief Financial Officer and PFO, effective September 5, 2022. Previously, Ms. Crossen served as Chief Accounting
Officer of the Company and was appointed Interim Chief Financial Officer on September 5, 2022. On February 2, 2023, she was re-appointed
the Company’s Chief Accounting Officer, and continues to serve as the PFO of the Company.

(3) Ms. Sirhal was appointed Executive Vice President and Brand President of Bed Bath & Beyond on August 31, 2022. Ms. Sirhal joined the Company in
January 2021 and previously served as Senior Vice President and General Manager for Harmon, as well as Executive Vice President and Chief
Merchandising Officer of Bed Bath & Beyond. Ms. Sirhal resigned from the Company effective as of April 9, 2023.

(4) Ms. Markoe joined the Company as Executive Vice President, Chief People and Culture Officer on September 28,2020.

(5) Ms. Wu was appointed Executive Vice President and Brand President of buybuy BABY on August 31, 2022. Ms. Wu joined the Company in January
2021 and served as Senior Vice President and General Manager of buybuy BABY.

(6) Mr. Tritton ceased serving as Chief Executive Officer, effective June 23, 2022.

(7) Mr. Arnal passed away on September 2, 2022.

(8) Mr. Hartmann ceased serving as Executive Vice President, Chief Operating Officer, and President of buybuy BABY, Inc., effective August 31, 2022.

(9) Mr. Hartsig ceased serving as Executive Vice President, Chief Merchandising Officer and President of Harmon Stores, Inc., effective June 28, 2022.

Fiscal 2022 Overall Summary

Repositioning Our Business for Long-Term Success

Fiscal 2022 has undoubtedly been the most difficult in Bed Bath & Beyond’s history and was a year of significant change as we initiated a turnaround
strategy to refocus our efforts on better serving our customers and strengthening our financial position. Our entire enterprise is being transformed –
financially, operationally, and organizationally – to fulfill our unique opportunity to be the shopping destination of choice in the Home and Baby markets.

Led by our new President and Chief Executive Officer, Sue Gove, we commenced executing a comprehensive strategic plan intended to focus on
stabilizing our financial foundation by securing additional liquidity, significantly reducing our cost structure and allocating resources to better serve our
customers through merchandising, inventory and customer engagement. Specifically:

• We addressed long-standing changes in consumer shopping patterns which pre-dated the COVID pandemic and were further accelerated by
consumer changes and supply chain impact that emerged from peak COVID in 2020 and 2021. These actions included additional store closures to
align with changing demand as customers continue to adjust the frequency of their shopping trips across brick-and-mortar and online channels;
and major changes to the Company’s distribution network.

• We took steps to rebalance our merchandise allocations by bringing back popular national brands and introducing new, emerging direct-to-
consumer brands. Consequently, we announced the exiting of a third of our Owned Brands.

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• In addition to reconnecting with customers through better assortments, we launched a new cross-banner loyalty program. Welcome Rewards™
brings valuable savings, more benefits, and special perks to customers who shop online and in stores nationwide at both Bed Bath & Beyond and
buybuy BABY. Since launching in June, our program has grown to more than 20 million members.

Although we moved quickly and effectively to change the assortment and other merchandising and marketing strategies, inventory and in-stock levels have
been lower than anticipated. Accordingly, our financial results have been negatively impacted and our targets for fiscal 2022 were not met.

Fiscal 2022 Compensation Program Design & Pay for Performance Philosophy

The People, Culture and Compensation Committee (the “Committee”) designs and develops our compensation programs. The 2022 executive
compensation program was developed in close consultation with our independent compensation consultant Meridian and structured to drive performance
and recognize achievement of key strategic objectives for the year. Our compensation program emphasizes at-risk pay, which underscores our pay-for-
performance compensation philosophy and our program’s goals of supporting our turnaround strategy and improving our financial performance, while
reflecting market-leading practices.

At the outset of fiscal 2022, our primary goal for the fiscal 2022 compensation program was to incentivize and reward balanced, sustainable growth with
key financial metrics directly aligned with our strategic plan and driving long-term shareholder value. To drive this alignment, and to motivate and retain
our employees, including our NEOs, we granted both short-term and long-term incentive awards. Following the first half of fiscal 2022, due to Company
performance and turnover of senior leadership, our goals and strategies for the fiscal year substantially shifted, as communicated by our then-interim CEO
to all stakeholders in early September 2022. These shifts in our goals and strategies under our comprehensive turnaround strategy led to certain changes to
the design of our short-term incentive plan, as described below.

• At the beginning of the fiscal year, the Committee approved an annual performance-based, cash short-term incentive plan (STIP) for fiscal 2022
incorporating aggressive adjusted EBITDA and comparable sales growth goals, with adjusted EBITDA (70% weighting) as the primary driver of
performance. Our secondary metric continued to focus on growth in comparable sales (30% weighting) to reflect our strategic emphasis on
accelerating omni-channel, top-line growth. We also added a metric to establish store traffic goals – a leading performance indicator for sales – as
an additional multiplier. The goals for the STIP were consistent with our annual operating plan and were designed to be challenging with targets
established based on our annual financial plan.

• Our goals and strategies for the Company significantly shifted in the second half of fiscal 2022 under our comprehensive turnaround strategy. As a
result, the Committee discussed in depth and approved revising the structure of the STIP from an annual program to a half-year program. The
revised program retained the adjusted EBITDA and comparable sales growth metrics applied to the annual program but eliminated the store traffic
goals multiplier and limited payouts to 70% of the payouts that would have been payable under the annual program.

For fiscal 2022 long-term incentives (LTI), the Committee approved a highly performance-weighted mix of PSUs (60% weighting) and time-vested RSUs
(40% weighting). The goals approved by the Committee for the fiscal 2022 PSUs incorporated our continued emphasis on gross margin (50% weighting)
and also continued to measure relative total stock return (TSR) (50% weighting). The PSUs vest at the end of a three-year performance period (2022-2024),
subject to continued employment and achievement of the performance goals. To be prudent stewards given the share availability under our equity
compensation plan, the Committee, in consultation with our independent compensation consultant, structured the RSU portion of equity awards granted at
the start of fiscal 2022 (40% weighting) as cash-settled RSUs rather than stock-settled RSUs.

We are committed to correlating pay with performance and, based on current projections, we expect that there will be no STIP payouts for fiscal 2022.
Further, as of fiscal year-end, the value of the fiscal 2022 LTI awards had significantly decreased for our NEOs due to the impact of stock price decline and
current projections of our performance awards. Consistent with our program design, we believe these incentive plan outcomes are appropriate in light of
our performance and continue to demonstrate our pay-for-performance compensation philosophy.

People & Culture

Oversight of People & Culture

The Committee oversees the Company’s broad-based people and culture programs. As part of its focus on emphasizing the importance of our associates to
our talent-focused strategy, the Committee receives regular people and culture updates, and considers and implements updates to our key programs.

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People & Culture in Fiscal 2022

At Bed Bath & Beyond Inc., we strive to create an environment where all Associates can thrive by offering resources that support their physical, mental,
social, and emotional well-being. In fiscal 2022, we specifically focused on providing a sense of continuity and stability as we navigated a dynamic
environment. At the same time, and in light of significant senior leadership turnover initiated by the Board and our new CEO, it was essential to maintain
an environment that optimizes retention and maximizes our ability to recruit new talent.

In addition to significant senior leadership change to execute our turnaround, we realigned our organizational structure, including the creation of Brand
President roles for Bed Bath & Beyond and buybuy BABY to lead merchandising, planning, brand marketing, site merchandising and stores for each
banner. Aligned with these new roles, we removed layers to create greater efficiency in decision-making and better align to the size of our business, while
also leveraging and elevating internal talent combined with external talent across our leadership team. These changes have enabled more direct engagement
with Associates, customers and supplier partners, promoted accountability, and supported more efficient and productive change.

Our goal is to build trust and accountability for every Associate throughout our organization. In 2022, we engaged Associates more frequently, and farther
across our enterprise, by holding our first global town hall meetings. At the extended leadership team level, we increased the frequency of connection,
including scheduled and impromptu meetings, panel discussions and guest speakers in addition to materials to support their growth and promote a culture
of transparency as we underwent organizational and financial events under public and media scrutiny. Additionally, we continue to build community
through our Associate Resource Groups (ARGs): Asian American Pacific Islander, Beyond Black Associate Coalition, Hispanic/ LatinX, LGBTQ+,
Wellness and Women’s, and for the first time in our history, our Board is led by a female Chair and we are led by a female President and Chief Executive
Officer. We monitor the representation of women and racially or ethnically diverse associates at all levels of our organization and our progress toward our
2030 goals of 50% female and 25% racial and ethnic diversity at each level.

The health and wellbeing of our Associates and customers is one of our top priorities. We implemented health, safety, and security programs in all our
workplaces, including safety and security standards and policies, emergency response and crisis management protocol, and Associate training related to the
risks and exposures in their areas of responsibility. We provide all Associates and their family members with benefits and resources to navigate change and
support overall wellbeing. In 2022, we saw active utilization of our Beyond Wellness program (EAP) for work-life, financial and emotional support, and
resources, as well as continued engagement of our mindfulness app– Headspace.

Compensation Governance Practices

We continue to evaluate and enhance our executive compensation program to reflect our pay-for-performance philosophy and consider governance
practices that benefit all shareholders.

What We Do

• Align pay with our strategy, performance and creation of value for shareholders

• Use an appropriate mix of fixed and variable, and short- and long-term, compensation elements

• Pay a substantial portion of executive compensation in the form of at-risk equity-based awards (in the form of RSUs and PSUs)

• Vary incentive payouts commensurate with results, including capping PSU award payouts based on TSR if the Company’s TSR is negative

• Require double-trigger change in control vesting provisions

• Maintain a Compensation Recoupment Policy

• Maintain rigorous stock ownership guidelines for all executive officers and directors

What We Don’t Do

• No performance goals for incentive awards that encourage excessive risk taking

• No hedging and restricted pledging of Company stock

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• No repricing or backdating of stock options

• No payment of dividends or dividend equivalents on unearned PSU and RSU awards

• No excessive perquisites or other supplemental benefits

• No excise tax gross-ups on severance payments

How We Design Our Executive Compensation Program

In fiscal 2022, we have continued to focus our design of the executive compensation program on the following principles:

Customer Inspired Omni-Always Talent-Focused Performance-Driven

We unlock the value delivered to our To accelerate the evolution of our We invest in attracting and retaining We align a majority of the
leaders and our shareholders when we business with an integrated approach the talent required to deliver on our compensation of our leaders to
deliver on our promise to inspire our of both brick & mortar and digital, we customer and shareholder promise to quantifiable performance goals,
customers to home, happier - they are take a multi-faceted and holistic re-establish our authority as the emphasizing long-term value
the center of all we do. approach to making compensation preferred omni-channel home allowing us to unlock balanced
decisions. We consider numerous destination. durable growth and strong sustainable
factors, including market practice and total shareholder growth.
benchmarking but also role and
specific talent markets, individual
performance and potential and
internal equity.

FISCAL 2022 ENGAGEMENT

Say-On-Pay and How We Consider Feedback

At the 2022 Annual Meeting, our executive compensation program received advisory approval of approximately 92% of the shares voted. We believe the
consistent improvement in say-on-pay results over the last several years reflects the development by the Committee of a pay-for-performance philosophy
and a framework that became the basis of our compensation design pillars. The Committee considers the results of the say-on-pay vote as part of its
decision-making process and is committed to remaining responsive to shareholder priorities, with the goal of earning consistent high levels of shareholder
support.

At the outset of fiscal 2022, we reached out to our top shareholders, representing the majority of our total shares outstanding, including index funds, hedge
funds, public pension funds and actively-managed funds. The Chair of the Board, members of the Board and management participated in virtual and
telephone meetings with the majority of our largest shareholders.

Going forward, our intention is to continue our shareholder, financial stakeholder, and vendor outreach and maintain a regular cadence of two-way
communication opportunities, as we continue to understand priorities from all perspectives. In connection with these efforts, we intend to maintain a
regular, ongoing governance outreach program overseen by our Board, which will include engagement on executive compensation matters and other
relevant topics.

EXECUTIVE COMPENSATION PROGRAM ELEMENTS IN FISCAL 2022

Our fiscal 2022 performance-driven compensation program for the NEOs and certain other key executives included the following elements:

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Total Direct Compensation

Base Salary STIP Long-Term Incentive Retirement & Other Benefits
Fixed Delivered in cash Variable Delivered in cash Rewards Variable Aligns the interest of Health plan Limited perquisites
achievement against objective, pre- associates and shareholders
established performance metrics Incentivizes retention during critical
aligned with short-term strategic transformation period PSUs reward
priorities Incentivizes retention during achievement against objective, pre-
critical transformation period established performance metrics
aligned with strategic imperatives

The Committee focuses primarily on the elements of total direct compensation, including base salary, short- and long-term incentives, when structuring and
assessing compensation for the leadership team. We aim to set target total direct compensation and related elements generally at a reasonable range around
the median of our peer group, but we also consider role and specific talent markets, internal equity, and individual performance and potential. For more
information on our peer group and benchmarking, see ”our compensation decision-making process.”

Base Salary

Base salaries represent fixed cash compensation tied to the size, scope and complexity of each executive’s position and the depth of each executive’s
experience. The Committee considered these factors in setting base salaries that would attract and retain executives leading the Company’s transformation.

The Committee reviews base salaries for executives on an annual basis to determine whether salaries remain appropriate. This annual review considers
each executive’s performance, as well as the results of peer group benchmarking. Any approved adjustments generally become effective in the first quarter
of the applicable fiscal year.

Base salaries for NEOs during fiscal 2022 are as set forth below:
Named Executive Officer Base Salary(1) Base Salary at 2022 Fiscal Year End
Sue Gove.............................................. $ 1,400,000(2) $ 1,400,000
Laura Crossen...................................... $ 712,500(3) $ 712,500
Mara Sirhal.......................................... $ 550,000(4) $ 600,000(5)
Lynda Markoe..................................... $ 600,000 $ 600,000
Patricia Wu.......................................... $ 550,000(6) $ 550,000
Mark Tritton........................................ $ 1,230,000 --
Gustavo Arnal..................................... $ 775,000 --
John Hartmann.................................... $ 1,000,000 --
Joseph Hartsig..................................... $ 770,000 --

(1) Reflects the Base Salary of each NEO at the time they commenced their principle position, except as otherwise noted.

(2) Reflects Ms. Gove’s base salary during the time she served as Interim CEO.

(3) Reflects Ms. Crossen’s base salary as of the time she served as Interim CFO.

(4) Reflects Ms. Sirhal’s base salary effective with her promotion to Executive Vice President, Chief Merchandising Officer and General Manager of
Harmon Face Values.

(5) Reflects a salary increase following Ms. Sirhal’s promotion to Executive Vice President, Brand President, Bed Bath & Beyond.

(6) Reflects base salary effective with Ms. Wu’s promotion to Executive Vice President, Brand President of buybuy BABY.

Short-Term Incentive Compensation

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For fiscal 2022, the Committee continued the use of its performance-based cash STIP to provide short-term variable pay tied to an appropriate mix of
challenging, quantitative objectives. Changes in our leadership team during fiscal 2022 and the implementation of a comprehensive strategic plan described
above in Repositioning Our Business for Long-Term Success resulted in the Committee adopting a change to the overall structure of our performance-based
cash STIP from an annual program to a half-year program. While the overall structure of the STIP changed for fiscal 2022, the program’s performance
measures continued to be based on two metrics: Adjusted EBITDA (weighted at 70%) and comparable sales growth (weighted at 30%).

ADJUSTED EBITDA* EBITDA is a common metric used to assess operating performance, particularly for our peer retail companies. We
selected adjusted EBITDA (70%) because we believe it directly measures achievement against our collective
strategic goals, including sales growth, margin expansion and cost control.
COMPARABLE SALES GROWTH Comparable sales growth (30%) aligns with our strategy and takes into account our revenue base and rightsizing of
our store fleet.

* Adjusted EBITDA is a non-GAAP financial measure. For more information, see “Reconciliation of GAAP to non-GAAP measures for Fiscal 2022.”

The target adjusted EBITDA goal required improved performance over fiscal 2021 results. Comparable sales growth, by nature of the measure, required
year-over-year improvement. Achievement of maximum-level payouts for both goals required significantly exceeding the operating plans in place at the
time the goals were approved.

Evolution of Our Short-Term Incentive Program into a Half-Year Program

Our STIP for fiscal 2022 (the “Annual STIP”) commenced as an annual program tied to the achievement of Adjusted EBITDA (weighted at 70%) and
comparable sales growth (weighted at 30%), with a 10% kicker based on achievement of store traffic goals, a leading indicator for sales. At the time that
the Committee considered and approved the design of the Annual STIP in early fiscal 2022, the annual structure was determined to be appropriate in light
of our strategic goals and business plan for the year.
As discussed above in Repositioning Our Business for Long-Term Success, the Company underwent significant changes during fiscal 2022 as a result of
shifts in leadership, the Company’s financial position, and the refocusing of our strategy. In light of these major changes, the Committee determined in
August 2022, after significant discussion and with the guidance of our independent consultant, that the structure of the Annual STIP should be changed
from an annual program to a half-year program (the “H2 STIP”), to better align the efforts of our leadership team with our comprehensive turnaround
strategy.

In connection with STIP re-design from the Annual STIP to the H2 STIP, the Committee worked closely with its independent compensation consultant to
approve challenging goals that would require significant progress toward our strategic transformation milestones Performance goals for H2 STIP remained
tied to achievement of Adjusted EBITDA and comparable sales growth, with achievement measured for the second half of the year. Under the H2 STIP,
achievement at target performance would entitle participants to 70% of the target payout that would have been payable under the Annual STIP. Following
the shift to the H2 STIP, participants were no longer entitled to payments under the Annual STIP.

Annual STIP H2 STIP

Threshold Target (100%) Maximum Threshold N/A Target (100%) Maximum
(25%) (200%) (200%)
Adjusted EBITDA $350M $425M $500M N/A $54M $114M
(70%).......................................
Comparable Sales Growth -2% 1% 5% N/A -16% -10%
(30%)............
Store traffic goals...... Up to 10% kicker Eliminated

As outlined above, Adjusted EBITDA and comparable sales growth (and their relative weighting) remained as the performance metrics under the H2 STIP,
but the store traffic goal was eliminated and threshold eligibility for payout was removed. Additionally, under the H2 STIP, failure to achieve the Adjusted
EBITDA target would result in zero payout, even if the comparable sales growth target was met or exceeded.

Our NEOs were eligible to earn payments under the STIP, with target bonus amounts based on a percentage of base salary as set forth in the table below:

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Named Executive Officer Target Bonus(1) Target Bonus at 2022 Fiscal Year
End(1)
Sue Gove.............................................................. --(2) 150% (3)

Laura Crossen(8).................................................. 70% 70%

Mara Sirhal(8)....................................................... 70%(4) 75%(5)
Lynda Markoe..................................................... 60% 70%(6)
Patricia Wu(8)....................................................... 75%(7) 75%
Mark Tritton......................................................... 175% --
Gustavo Arnal...................................................... 85% --
John Hartmann................................................... 125% --
Joseph Hartsig..................................................... 80% --

(1) Reflects the target bonus opportunity for each NEO expressed as a percentage of their Base Salary. Percentages reflected in the “Target Bonus” column
reflect the target bonus percentage in effect at the time they commenced their principal position, except as otherwise noted.

(2) Ms. Gove was not eligible for a bonus during the time she served as the Interim Chief Executive Officer.

(3) Ms. Gove became eligible to participate in the H2 STIP in connection with her appointment to the role of Chief Executive Officer and President.

(4) Reflects Ms. Sirhal’s target bonus opportunity following her promotion to Executive Vice President, Chief Merchandising Officer and General
Manager, Harmon Face Values.

(5) Ms. Sirhal’s target bonus opportunity increased in connection with her promotion to Executive Vice President, Brand President, Bed Bath & Beyond.

(6) Reflects a merit-based adjustment to Ms. Markoe’s target bonus opportunity.

(7) Reflects Ms. Wu’s target bonus opportunity following her promotion to Executive Vice President, Brand President of buybuy BABY.

(8) At the start of fiscal 2022, Ms. Crossen, Ms. Sirhal and Ms. Wu were eligible to participate in the Non-LT STIP which is further described below in
footnote 5 to the Grant of Plan Based Awards for Fiscal 2022 table.

Based on current projections, we do not expect that our NEOs will receive any payments under the H2 STIP.

We have modified our annual bonus program for fiscal 2023 to more closely align our NEOs’ financial interests with short-term company performance. Our
NEOs will have the opportunity to earn 25% of their target bonus opportunity based on company performance in each fiscal quarter during fiscal 2023,
with a “catch up” feature that measures full year performance.

Long-Term Incentive Compensation

Our long-term incentive program is designed to focus our executives on increasing shareholder value, to reward their contributions to our sustainable, long-
term growth and performance, and to attract and retain key talent. For 2022, the Committee approved long-term incentive grants for our NEOs, consisting
of a mix of PSUs and time-vested RSUs.

Considerations for Fiscal 2022 LTI Mix PSUs (60%) RSUs (40%)
In determining the split between PSUs and RSUs, the Fiscal 2022 PSUs are earned based on the Time-vested cash-settled RSUs vest ratably on
Committee considered: results of a three-year adjusted gross margin the first, second and third anniversary of the
• the emphasis on performance-based, at-risk pay; and (50%) and three-year relative TSR (50%). date of grant, generally subject to the
• the goal of aligning executive and shareholder interests. Payouts for PSUs based on relative TSR are executive’s continued employment through
also subject to a TSR “regulator” that caps such date.
award payouts at 100% of target if our TSR
over the performance period is negative.

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The Committee approved target long-term incentive award values for each NEO as detailed below. These values are determined in connection with the
benchmarking and setting of target total direct compensation and related compensation elements for each NEO, as contemplated in applicable employment
agreements. For more information, see ”executive compensation program elements.”

Named Executive Officer Fiscal 2022 Target LTI Value

Sue Gove......................................................................................................... $ 5,300,000*
Laura Crossen................................................................................................ $ 712,500
Mara Sirhal..................................................................................................... $ 1,050,000
Lynda Markoe............................................................................................... $ 960,000
Patricia Wu..................................................................................................... $ 880,000
Mark Tritton................................................................................................... $ 7,700,000
Gustavo Arnal................................................................................................ $ 1,937,500
John Hartmann.............................................................................................. $ 3,500,000
Joseph Hartsig................................................................................................ $ 1,750,000

* Includes the target value of the equity awards granted to Ms. Gove of (i) $2,600,000 (in connection with her appointment as Interim CEO) and (ii)
$2,700,000 (in connection with her appointment as CEO and President). The award made in connection her appointment as Interim CEO consisted
solely of cash-settled time-vesting RSUs.

2022 PSUs – Grants

The Committee selected adjusted gross margin and relative TSR as the performance metrics, with equal weighting, for the 2022 PSUs and established: (i)
for adjusted gross margin, aggressive threshold, target and maximum performance goals and related payout percentages based on achievement (the “AGM
PSUs”) and (2) for relative TSR, payout percentages based on achievement versus other peer retailers (the “TSR PSUs”). As noted in our compensation
design pillars, the peer group for performance comparisons is the same as the peer group used for benchmarking. To further enhance shareholder alignment,
the Committee continued its past practice of capping payouts of 2022 PSUs based on relative TSR at target (regardless of relative performance) if our
absolute TSR over the performance period is negative.

ADJUSTED GROSS MARGIN* Adjusted gross margin is a key component of our transformation strategy and reflects achievement across all
our critical drivers, including digital growth, assortment balance, cost and sourcing savings and fulfillment
cost optimization. We believe that gross margin is critical to long-term value creation.
RELATIVE TSR Relative TSR rewards shareholder returns and long-term performance relative to our peer group, and we
believe also provides the right balance with our annual incentive metrics focusing on near-term strategic
priorities. The risk of any excessive payouts in the event we are not delivering value to our shareholders is
controlled by the cap on payouts at target in the event absolute TSR over the performance period is negative.

* Adjusted gross margin is a non-GAAP financial measure. For more information, see “Reconciliation of GAAP to non-GAAP measures for Fiscal 2022.”

How We Set Our PSU Performance Goals

We set challenging threshold, target and maximum adjusted gross margin goals. The payout scale for AGM PSUs based on adjusted gross margin ranges
from 50% (threshold) to 200% (maximum).

We require TSR performance above the 50th percentile of our peer group for target payout (55th percentile). This performance hurdle is higher than typical
market practice and reflects robust goal-setting. For the TSR-based PSUs, the Committee used a 25% (threshold) to 200% (maximum) payout scale for
fiscal 2022 (based on performance relative to our peer group as set forth in the chart below) to continue to align with market practice and our pay-for-
performance culture. The Committee also focused on carefully and thoughtfully identifying our peer group, including retailers with business characteristics
similar to ours and companies of appropriate sizes in terms of revenue and market capitalization.

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Threshold Target Maximum

Achievement Percentile (Peer Group)...................... 30th Percentile 55th Percentile ≥ 80th Percentile
Payout %.......................................................................... 25% 100% 200%*

* If absolute TSR is negative, payout percentage is capped at 100%, regardless of relative peer group achievement percentile

2019 and 2022 PSUs Payouts

In May 2022, the Committee verified the results for the Company’s 2019 PSUs and verified that the achievement of EBITDA and performance goals for
these PSUs were not met, and they were paid out at 9%.

Based on current projections, the 2022 PSUs are not expected to vest.

Retention and Recognition Awards

In late fiscal 2022, the Company’s challenges accelerated amidst ongoing and significant organizational and financial events that created unprecedented
uncertainty for our organization and to address this, the Committee engaged in robust discussions with an independent compensation consultant, Willis
Towers Watson, about retention strategies for key employees during this critical time. To stabilize the leadership of our organization and ensure the
continuity of work needed to drive the business during this time, in February 2023, the Committee awarded special one-time retention awards to Messrs.
Gove, Crossen, Sirhal, Markoe and Wu equal to $1,018,000; $360,000, $314,000; $305,000; and $287,000, respectively. The terms of each one-time
retention bonus provide that each NEO is required to pay the full amount if the NEO’s employment is terminated other than by the Company without Cause
or due to the NEO’s death or Disability (each, as defined in the applicable bonus agreement) prior to the vesting date specified in the applicable agreement.

Additionally, in May of 2022, in recognition of their commitment and leadership in accelerating improvement in driving our customer centered turnaround
strategy and delivering key results aligned with the business plan, the Committee awarded special one-time recognition awards to Messrs. Crossen, Sirhal
and Wu equal to $128,125; $106,250; and $112,500, respectively. The terms of each one-time recognition award provide for pay the full repayment of
amount if the NEO voluntarily resigns or is terminated by the Company for any reason other than for Cause (as defined in the applicable bonus agreement)
prior to one year from the date of payment, subject to proration based on days of service through the termination date.

Ms. Sirhal additionally received a a cash sign-on bonus of $220,000 in connection with her promotion to Executive Vice President of Bed, Bath & Beyond
in June 2022.

Retirement and Other Benefits

The NEOs generally are entitled to the same retirement and other benefits offered to all Bed Bath & Beyond associates. The cost of these benefits
constitutes a small percentage of each NEO’s total compensation. Key benefits include paid vacation, premiums paid for short- and long-term disability
insurance, and payment of a portion of the NEO’s premiums for healthcare and basic life insurance. We do not provide any pension or retirement benefits,
other than the 401(k) plan, or any nonqualified deferred compensation plans.

We generally have provided our leadership team with certain perquisites, including an automobile allowance and an annual financial planning benefit, and,
only for Ms. Gove, reimbursement of commuting expenses on a tax-neutral basis, as further described below. The Committee believes such limited
perquisites are reasonable and consistent with our overall objective of attracting and retaining talented NEOs.

See the ”all other compensation” column in the Summary Compensation Table for further information regarding these benefits and perquisites, and the
”potential payments upon termination or change in control” table for information regarding termination and change in control payments and benefits.

Elements of Compensation for Ms. Gove following Appointment as Interim CEO and Permanent President and CEO

In connection with Ms. Gove’s appointment as the Company’s Interim CEO effective June 23, 2022, after research and review of compensation
arrangements provided to other interim retail company CEO roles filled by an existing member of the applicable company’s board of directors and
discussions with its independent consultant, the Committee approved the terms of Ms. Gove’s Interim CEO offer. The terms of her offer entitled her to
receive an annual base salary of $1,400,000 and a grant of cash-settled RSUs with a target grant date value of $2,600,000 that will vest on the first
anniversary of the grant date, subject to Ms. Gove’s

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continued employment through the vesting date (subject to forfeiture provision upon certain terminations of employment, as described in “Potential
Payments Upon Termination or Change in Control — Executive Change in Control Severance Plan.”)

In connection with Ms. Gove’s appointment as the Company’s permanent President and CEO, the Committee reviewed pay arrangements for similarly
situated CEO roles from companies in the revised compensation benchmarking peer group (as noted below), as provided by the independent consultant.
After thorough discussions, the Company entered into an employment agreement with Ms. Gove effective October 24, 2022, which replaced the terms of
the original offer letter, under which Ms. Gove was entitled to continue receiving a base salary of $1,400,000 and was eligible to earn an H2 STIP (as
defined below) and was awarded PSUs with a target value of $2,700,000.

Additionally, with the termination of Mr. Tritton, the Board of Directors unanimously appointed Ms. Gove Interim CEO with the understanding that,
effective immediately, Ms. Gove would spend the substantial portion of each week at headquarters in New Jersey and regularly commute from her home in
Texas to facilitate optimal execution of a new, comprehensive strategic plan and expeditiously revamp and solidify the new leadership team. Therefore,
commuting expense reimbursements for Ms. Gove were provided on a tax-neutral basis. This arrangement was further ratified as part of Ms. Gove
assuming the role of permanent President and CEO.

Our Compensation Decision-Making Process

Role of the People, Culture and Compensation Committee

The Committee, which is comprised entirely of independent directors, reviews and establishes our management compensation and benefits philosophy,
policies, plans and programs. In this role, the Committee is responsible for considering and determining all matters relating to the compensation of the CEO
and other executive officers, including the NEOs, as well as administering and functioning as the committee authorized to make grants and awards of
equity compensation to our NEOs. Pursuant to its charter, the Committee may form subcommittees and delegate its authority to any such subcommittee or
to any designated officer of the Company as it deems appropriate, to the extent permitted by law or by applicable policies and rules of the Company. The
Chair of the Board attends committee meetings.

Role of Management

Meetings of the Committee have been regularly attended by our Chief People & Culture Officer and other members of our People & Culture management
team. Our CEO also provides input as requested and, together with our CFO, contributes to the discussion of our internal operating budget and related
calculation of goals for our incentive plans.
Role of Independent Compensation Consultants

In fiscal 2022, the Committee engaged the services of an independent compensation consultant, Meridian Compensation Partners, LLC (Meridian).
Meridian reports directly to the Committee and attended meetings during the year, as requested by the Committee Chair. Meridian assisted with the
development of competitive market data and benchmarking, helped the Committee design and implement our revised incentive compensation programs and
provided information on trends and emerging best practices. Meridian has not served the Company in any other capacity except as consultant to the
Committee. Additionally, in late fiscal 2022, the Committee engaged the services of Willis Towers Watson (WTW) to advise on implementation of
retention strategies to retain key employees of the business.

The Committee has concluded that no conflict of interest exists (or existed) that prevents (or prevented) either Meridian or WTW from being an
independent advisor to the Committee.
Benchmarking Peer Group

In October 2021, the Committee reassessed our peer group for fiscal 2022, based on a review by Meridian, and removed five companies due to size
misalignment and/or non-standard pay practices.

The peer group shown below, which was used to assess competitiveness of pay levels in early fiscal 2022, consists primarily of retailers with business
characteristics similar to the Company. The Committee also considered various size parameters, including revenue and market capitalization.

Based on the parameters reviewed, the following 17 companies (our Peer Group) were identified as competitors for business, talent or both. We aim to set
target total direct compensation and related elements generally at the median range for our peer group, but also consider role and specific talent markets,
internal equity, and individual performance and potential.

Fiscal 2022 Peer Group

Advance Auto Parts, Inc. Foot Locker, Inc. The Gap, Inc.

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AutoZone, Inc. Kohl’s Corporation The ODP Corporation

Bath & Body Works, Inc. Macy’s, Inc.* Tractor Supply Company
Big Lots, Inc. Nordstrom, Inc. Ulta Beauty, Inc.
Burlington Stores, Inc. O’Reilly Automotive, Inc. Williams-Sonoma, Inc.
Dick’s Sporting Goods, Inc.. Ross Stores, Inc.

* For fiscal 2023 peer group, Macy’s, Inc. was removed and Five Below, Inc. and Academy were added.

The Committee continues to annually assess the peer group to ensure it remains consistent with the Company’s size and business characteristics. The
Committee reviews market data from compensation surveys to benchmark pay for executive officer positions when relevant Peer Group data are not
available.

In October 2022, the Committee conducted its annual review of the peer group, at which time it approved the following changes in an effort to position
BBBY more closely to the median of the group in terms of revenues:

• Removed Macy’s and added Five Below, Inc. and Academy Sports and Outdoors, Inc.

This revised Peer Group was used to assess competitiveness of compensation for roles (including Ms. Gove) that were hired or promoted in the later part of
the fiscal year.

ADDITIONAL COMPENSATION INFORMATION

Employment Agreements and Severance Policy

We have entered into employment agreements with our NEOs that set forth generally the elements of compensation discussed above and provide for
termination payments in qualifying termination scenarios. We believe that it is in the best interests of the Company and its shareholders to enter into these
employment arrangements as they provide a level of certainty to the Company and our executives on their fixed compensation and termination
entitlements. Our NEOs are also entitled to severance under the Executive Change in Control Severance Plan that, similar to those of benchmarked peers,
provides for enhanced cash severance to be paid to members of the Company’s executive leadership team (other than Ms. Gove) and specific other
employees as a result of certain events that would trigger a change in control of the Company, as defined therein, and based on a tier system, subject to
limitations thereunder, which provide that maximum payouts shall be limited to such amounts as would not require shareholder approval. For more
information, see “Potential Payments Upon Termination or Change in Control — Executive Change in Control Severance Plan.”

Impact of Accounting and Tax Considerations

The Committee considers various accounting and tax implications of cash, equity-based and other compensation.

When determining the amounts of equity-based awards to be granted, the Committee examines the accounting cost associated with the grants. Under ASC
718, grants of stock options, PSUs and other equity-based awards result in an accounting charge for the Company equal to the fair value of the awards
being granted.

Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), generally disallows a federal income tax deduction for compensation in
excess of $1 million in any taxable year paid to certain covered executive officers. There is limited transitional relief for “qualified performance-based
compensation” and certain other items of compensation that were in place before November 2, 2017. While the Committee generally considers this limit
when determining executive compensation, the Committee reserves the discretion to decide that it is appropriate to exceed the limitation on deductibility so
we have the flexibility to attract and retain talented executives and to ensure those executives are compensated in a manner that is consistent with the best
interests of the Company and our shareholders. Interpretations of and changes in the tax laws and other factors beyond the Committee’s control also may
affect the deductibility of compensation.
Policy on the Recovery of Incentive Compensation

We have a stand-alone Compensation Recoupment Policy regarding the recovery of incentive compensation applicable to current and former senior
officers. The Compensation Recoupment Policy is a stand-alone policy to underscore the importance of these principles and generally provides that we will
seek to recoup incentive-based cash and equity compensation paid or awarded to current and former senior officers, where (i) there has been a restatement
of the Company’s financial results or there was an error in the calculation of the achievement of applicable performance goals, which should have resulted
in no performance-based award or a lower payment relating to such performance or (ii) the Board determines in good faith that the executive engaged in
conduct detrimental to the Company (including fraud causing financial or reputational harm, commission of a felony, or material breach of

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restrictive covenants). The full policy is available in the Governance Documents section of our Investor Relations website available at
www.bedbathandbeyond.com. We are reviewing the final rule issued by the Securities and Exchange Commission implementing the provisions of the
Dodd-Frank Wall Street Reform and Consumer Protection Act relating to recovery of certain incentive compensation and will amend our Compensation
Recoupment Policy when the NASDAQ adopts final listing standards in accordance with the final rules.

Policies Prohibiting Hedging and Pledging

We do not permit executive officers to hedge the Company’s securities, and we also restrict their ability to pledge the Company’s securities. Additional
detail regarding the Company’s anti-hedging and pledging policies can be found above under the heading “Anti-Hedging and Anti-Pledging Policies.”

Compensation Risk Assessment

The Committee annually conducted a risk assessment of our compensation programs, which includes an analysis of the risk associated with our executive
compensation program conducted by the Committee’s independent compensation consultant. In its review, the Committee considers the balance between
pay components, measures of performance, magnitude of pay, pay caps, plan time horizons and overlapping performance cycles, program design and
administration and other features that are designed to mitigate risk (such as stock ownership guidelines and a Compensation Recoupment Policy).
Following its review, the Committee, with confirmation by the independent compensation consultant, makes a determination as to whether our
compensation practices and policies create risks that are reasonably likely to have a material adverse effect on the Company. The last such analysis was
conducted in April 2021, at which time the Committee concluded that no such risks were present. The Committee will be conducting its assessment at its
next meeting in April 2023 as per its annual committee calendar.

Minimum Executive Stock Ownership Guidelines at Beginning of Fiscal 2022

We encourage our executives to own our common stock so that they share the same long-term investment risk as our shareholders. Our stock ownership
guidelines require all executive officers, including our NEOs, to maintain an ongoing and substantial investment in our common stock. The guidelines are
based on multiples of base salary, varying by role, as follows:

6x BASE SALARY 3x BASE SALARY 2x BASE SALARY

Chief Executive Officer Chief Financial Officer Chief Stores Officer Chief Legal Officer
Chief Operating Officer Chief Customer Officer Chief People and Culture Officer
Chief Merchandising Officer Chief Growth Officer

• All covered individuals must hold 50% of the net after-tax shares they receive in connection with the Company’s compensation programs or
pursuant to such individuals’ employment agreements until their ownership requirement is met;

• Once the covered individual satisfies the ownership requirement, he or she is considered in compliance as long as such covered individual’s
eligible holdings do not decline below the number of shares held when he or she first met the applicable ownership guideline; and

• The price used to determine compliance with the guidelines will be the 20-day trading average at each fiscal year-end.

The Committee evaluates compliance with this policy on an annual basis. Once an executive satisfies the ownership guideline as of a measurement date,
they will be considered in compliance regardless of share price fluctuations or an increase in base salary, as long as their holdings remain at or above the
number of shares held at the time they first met the ownership guideline.

Reconciliation of GAAP to non-GAAP measures for Fiscal 2022

The Company reports its financial results in accordance with GAAP. The Company also reports certain non-GAAP financial measures that it believes
provide management, analysts, investors and other users of the Company’s financial information with meaningful supplemental information regarding the
performance of the Company’s business. These non-GAAP financial measures include, but are not limited to, adjusted earnings before interest, income
taxes, depreciation and amortization (“EBITDA”). The Company also uses certain non-GAAP financial measures in its short term annual incentive
compensation program. These non-GAAP financial measures should not be considered superior to, but rather in addition to other financial measures
prepared by the Company in accordance with GAAP. The Company’s method of determining these non-GAAP financial measures may be different from
other companies’ methods and, therefore, may not be comparable to those used by other companies and the Company does not recommend the sole use of
these non-GAAP measures to assess its financial and earnings performance.

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NON-GAAP RECONCILIATION
RECONCILIATION OF NET (LOSS) INCOME TO EBITDA AND ADJUSTED EBITDA
(IN THOUSANDS)
(UNAUDITED)

Twelve Months Ended February 25, 2023

Excluding
Reported (Gain) loss on (Gain) loss on Restructuring and Impairment Gain on Total income Total impact Adjusted
deconsolidation of preferred stock transformation Charges extinguishment of tax impact
businesses warrants and expenses debt
derivative liabilities
Net (loss)
income...................... $ (3,498,801) $ 98,633 $ 639,444 $ 407,909 $ 1,287,529 $ (94,343) $ — $ 2,339,172 $ (1,159,629)
Depreciation and
amortization... 427,087 — — (156,900) — — — (156,900) 270,187
Interest expense 110,497 — — (160) — — — (160) 110,337
(Benefit) provision for
income
taxes...................... (31,069) — — — — — — — (31,069)
EBITDA.......... $ (2,992,286) $ 98,633 $ 639,444 $ 250,849 $ 1,287,529 $ (94,343) $ — $ 2,182,112 $ (810,174)

Executive Compensation

Compensation Tables

Summary Compensation Table for Fiscal 2022, Fiscal 2021 and Fiscal 2020

The following table sets forth information concerning the compensation of the Company’s NEOs for the last three completed
fiscal years.

Name and Principal Position Year Salary(1) ($) Bonus ($) Stock Non-Equity Incentive All Other Total ($)
Awards(2)(3) Plan Compensation(4) Compensation(5) ($)
($) ($)
Sue Gove(6) President and Chief 2022 899,231 1,018,000(14)(19) 2,637,797 — 226,499 4,781,527
Executive Officer............................
Mark J. Tritton(7) Former President and 2022 444,692 — 3,714,867 — 6,765,000 10,935,521
Chief Executive Officer............. 2021 1,225,385 0 8,351,225 0 199,012 9,775,622
2020 1,144,615 710,000 6,931,834 2,700,000 1,440,503 12,926,952
Laura Crossen(8) Principal Financial 2022 601,731 488,125(15)(19) 334,958 — 4,200 1,429,014
Officer and Executive Vice President,
Chief Accounting Officer..
Gustavo Arnal(9) Former Executive 2022 432,212 — 934,742 — 34,577 1,401,530
Vice President, Chief Financial
Officer............................ 2021 775,000 0 2,101,371 0 37,094 2,913,465
2020 611,058 — 2,740,375 988,125 310,841 4,650,399
John Hartmann Chief Operating 2022 550,000 1,688,572 — 3,386,951 5,625,523
Officer and President, buybuy BABY.. 2021 1,000,000 0 3,796,011 0 545,649 5,341,660
2020 750,000 687,500 6,635,377 1,473,214 103,553 9,649,644
Joseph Hartsig(10) Executive Vice 2022 261,154 — 844,291 — 1,271,357 2,376,802
President, Chief Merchandising
Officer, and President, Harmon Stores
Inc.................................. 2021 700,000 70,000 1,897,993 0 208,798 2,876,790
2020 635,385 260,000 2,556,051 420,000 61,974 3,933,410
Mara Sirhal(11) Executive Vice 2022 526,923 640,250(16)(19) 512,202 — 15,589 1,694,964
President and Brand President of Bed
Bath & Beyond...........................

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Lynda Markoe(12) Executive Vice 2022 600,000 305,000(17)(19) 463,156 — 28,756 1,369,912
President, Chief People and Culture
Officer............................
Patricia Wu(13) Executive Vice 2022 496,154 399,500(18)(19) 431,889 — 62,500 1,390,042
President and Brand President of
buybuy BABY.............................

(1) Except as otherwise described in this Summary Compensation Table, salaries to NEOs were paid in cash in fiscal 2022, fiscal 2021, and fiscal 2020. See
“Compensation Discussion and Analysis — Fiscal 2022 Base Salary Values” for details about increases to salary during fiscal 2022.

(2) The value of stock awards represents their respective total fair value on the date of grant calculated in accordance with ASC 718, without regard to the
estimated forfeiture related to service-based vesting conditions, and in the case of PSUs, is based on the performance conditions applicable to such
PSUs being achieved at the target payout level, which was determined to be the probable outcome as of the grant date. For liability-classified
awards, such as cash-settled RSUs, fair values are determined based on the closing price of our common stock on the grant date and are
remeasured based on the closing price of our common stock at the end of each reporting period through the date of settlement. All assumptions
made in the valuations are contained and described in Note 15 to the Company’s consolidated financial statements in the Company’s Form 10-K
for fiscal 2021 and to be contained the Company’s forthcoming financial statements for fiscal 2022 once completed. Stock awards are rounded up
to the nearest whole share when converted from dollars to shares. The amounts shown in the table reflect the total fair value on the date of grant
and do not necessarily reflect the actual value, if any, that may be realized by the NEOs.

(3) The value of stock awards consists of (i) PSU and RSU awards granted in fiscal 2022 to Messrs. Gove, Tritton, Crossen, Arnal, Hartmann, Hartsig,
Sirhal, Markoe and Wu (ii) PSU and RSU awards granted in fiscal 2021 to Messrs. Tritton, Arnal, Hartmann and Hartsig and (iii) PSU and RSU
awards granted in fiscal 2021 to Messrs. Tritton, Arnal, Hartmann and Hartsig in fiscal 2020.

The fair value of the PSU awards that have not yet been certified is reported at 100% of target, which is the estimated outcome of performance
conditions associated with the PSU awards on the grant date. If the Company achieves the highest level of performance for the PSU awards
granted in fiscal 2022, then the fair value of such PSU awards would be $4,080,594, $6,833,124, $379,004, $1,719,363, $3,105,956, $1,552,989,
$706,580, $851,931 and $6,04,842 for Gove, Tritton, Crossen, Arnal, Hartmann, Hartsig, Sirhal, Markoe and Wu, respectively. If the Company
achieves the highest level of performance for the PSU awards granted in fiscal 2021, then the fair value of such PSU awards would be
$10,528,298, $2,649,156, $4,785,599, and $2,392,774 for Messrs. Tritton, Arnal, Hartmann, and Hartsig respectively. If the Company achieves the
highest level of performance for the PSU awards granted in fiscal 2020, then the fair value of such PSU awards would be $3,051,466, $844,608,
$1,525,738 and $762,874 for Messrs. Tritton, Arnal, Hartmann and Hartsig, respectively

(4) For fiscal 2022 the People, Culture and Compensation Committee set performance objectives under the company’s short term incentive program of
adjusted EBITDA and comparable sales growth under the STIP. Based on the People, Culture and Compensation Committee’s certification of
performance results, no amounts were paid under the STIP for fiscal 2022.

(5) All Other Compensation for fiscal 2022 includes the following:

Inter alia, dividends or dividend equivalents on equity-based awards based on the amounts paid to all shareholders as of the record date for each
dividend declared.

Ms. Gove: (i) $96,546 in commuting expenses and $93,401 in a tax gross-up with respect to such amount and (ii) $36,552 in fees earned for
service as a director prior to her appointment as Interim Chief Executive Officer.

Mr. Tritton: (i) severance of $6,765,000 (for details, see “Potential Payments upon Termination or Change in Control”) and (ii) car allowance of
$10,962. Ms. Crossen: (i) a payment for cell phone and (ii) total dividend income of $3,600.

Mr. Arnal: (i) car allowance of $15,702, (ii) $2,500 payment for financial planning benefits (iii) $16,000 payment for relocation assistance benefits
and (iv) a $375 payment for cell phone benefits.

Mr. Hartmann: (i) severance of $3,375,000, (ii) car allowance of $11,601 and (iii) a $350 payment for cell phone benefits.

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Mr. Hartsig: (i) severance of $1,260,000, (ii) car allowance of $7,478 (iii) $3,699 payment for financial planning benefits and (iv) a $200 payment
for cell phone benefits.

Ms. Sirhal: a car allowance of $15,589.

Ms. Markoe: (i) a car allowance of $28,156 and (ii) a $600 payment for cell phone benefits.

Ms. Wu: payment for her relocation assistance benefits of $62,500.

(6) Ms. Gove commenced employment as President and Chief Executive Officer of the Company, effective as of June 23, 2022.

(7) Mr. Tritton’s employment with the Company terminated effective June 23, 2022.

(8) Ms. Crossen commenced employment as the Chief Financial Officer, effective as of September 5, 2022 and served until February 2, 2023.

(9) Mr. Arnal commenced employment as Executive Vice President, Chief Financial Officer of the Company, effective as of May 4, 2020 and served until
his passing on September 2, 2022.

(10) Mr. Hartsig’s employment was terminated by the Company on June 29, 2022.

(11) Ms. Sirhal was appointed Executive Vice President and Brand President of Bed Bath & Beyond on August 31, 2022.

(12) Ms. Markoe joined the Company as Executive Vice President, Chief People and Culture Officer on September 28, 2020.

(13) Ms. Wu was appointed Executive Vice President and Brand President of buybuy BABY on August 31, 2022.

(14) Amount represents retention bonus.

(15) Amount represents a one-time retention bonus of $360,000 and a one-time recognition award of $128,125.

(16) Amount represents a sign-on bonus of $220,000, a one-time retention bonus of $314,000 and a one-time recognition award of $106,250.

(17) Amount represents a one-time retention bonus.

(18) Amount represents a one-time retention bonus of $287,000 and one-time recognition award of $112,500.

(19) The terms of each one-time retention bonus provide that each NEO is required to pay the full amount if the NEO’s employment is terminated by the
Company without Cause or due to the NEO’s death or Disability (each, as defined in the applicable bonus agreement) prior to June 8, 2023. The
terms of each one-time recognition award provide for pay the full repayment of amount if the NEO voluntarily resigns or is terminated by the
Company for any reason other than for Cause (as defined in the applicable bonus agreement) prior to one year from the date of payment, subject to
proration based on days of service through the termination date.

Grants of Plan Based Awards for Fiscal 2022

Grants of Non-Equity Incentive Plan Awards, Restricted Stock Awards, Restricted Stock Units and Performance Stock Units for Fiscal 2022

The following table sets forth information with respect to non-equity incentive plan awards and restricted stock (RSAs), RSUs and PSUs awarded
during fiscal 2022 to each of the NEOs under the 2018 Plan and 2012 Plan.
All Other Stock Awards:
Estimated Potential Payouts Under Estimated Future Payouts Under Number of Grant Date
Shares of Fair Value
Stock
Non-Equity Incentive Plan Awards Equity Incentive Plan Awards or of Stock
Name Grant Date Threshold ($) Target ($) Maximum ($) Threshold(1) Target(1) (#) Maximum(1) Units (#) Awards(2) ($)
(#) (#)
Sue Gove............ 10/24/2022(5) — 1,470,000 2,940,000 — — — — —
12/22/2022(6) — — — 197,369 394,737 789,474 — 1,211,349

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12/12/2022(7) — — — 98,684 394,737 789,474 — 828,948

7/14/2022(8) — — — — — — 9,592 46,953
6/29/2022(9) — — — — — — 355,192 550,548
Mark J. Tritton......... 3/25/2022(3) 538,125 2,152,500 4,305,000 — — — — —
5/10/2022(11) — — — 72,171 144,342 288,684 — 1,521,365
5/10/2022(12) — — — 36,085 144,341 288,682 — 1,895,197
5/10/2022(10) — — — — — — 192,455 298,305
Laura Crossen........ 3/25/2022(4) 25,625 102,500 205,000 — — — — —
8/24/2022(5) — 244,388 488,775 — — — — —
5/10/2022(11) — — — 4,003 8,006 16,012 — 84,382
5/10/2022(12) — — — 2,002 8,006 16,012 — 105,119
5/10/2022(10) — — — — — — 16,012 24,819
7/11/2022(13) — — — — — — 24,470 120,637
Gustavo Arnal........... 3/25/2022(3) 164,688 658,750 1,317,500 — — — — —
8/24/2022(5) — 461,125 922,250 — — — — —
5/10/2022(11) — — — 18,160 36,320 72,640 — 382,813
5/10/2022(12) — — — 9,080 36,319 72,638 — 476,868
5/10/2022(10) — — — — — — 48,426 75,060
John Hartmann..... 3/25/2022(3) 312,500 1,250,000 2,500,000 — — — — —
5/10/2022(11) — — — 32,805 65,609 131,218 — 691,519
5/10/2022(12) — — — 16,403 65,610 131,220 — 861,459
5/10/2022(10) — — — — — — 87,480 135,594
Joseph Hartsig......... 3/25/2022(3) 140,000 560,000 1,120,000 — — — — —
5/10/2022(11) — — — 16,403 32,805 65,610 — 345,765
5/10/2022(12) — — — 8,201 32,805 65,610 — 430,730
5/10/2022(10) — — — — — — 43,740 67,797
Mara Sirhal........... 3/25/2022(4) 21,250 85,000 170,000 — — — — —
8/24/2022(5) — 220,500 441,000 — — — — —
5/10/2022(11) — — — 3,320 6,640 13,280 — 69,986
5/10/2022(12) — — — 1,660 6,639 13,278 — 87,170
7/11/2022(6) — — — 10,522 21,044 42,088 — 103,747
7/11/2022(7) — — — 5,261 21,045 42,090 — 92,388
5/10/2022(10) — — — — — — 13,278 20,581
7/11/2022(13) — — — — — — 28,059 138,331
Lynda Markoe........ 3/25/2022(3) 90,000 360,000 720,000 — — — — —
8/24/2022(5) — 205,800 411,600 — — — — —
5/10/2022(11) — — — 8,998 17,996 35,992 — 189,678
5/10/2022(12) — — — 4,499 17,996 35,992 — 236,287
5/10/2022(10) — — — — — — 23,994 37,191
Patricia Wu............... 3/25/2022(4) 22,500 90,000 180,000 — — — — —
8/24/2022(5) — 202,125 404,250 — — — — —
5/10/2022(11) — — — 3,515 7,030 14,060 — 74,096
5/10/2022(12) — — — 1,758 7,030 14,060 — 92,304
12/12/2022(6) — — — 13,158 26,316 52,632 — 80,757
12/12/2022(7) — — — 6,579 26,316 52,632 — 55,264

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5/10/2022(10) — — — — — — 14,059 21,791

12/12/2022(13) — — — — — — 35,088 107,676

(1) Number of shares when converted from dollars to shares, which number is rounded up to the nearest whole share. Amounts represent the threshold,
target and maximum amounts for equity incentive plan awards with performance conditions for each NEO.

(2) Pursuant to the SEC rules, RSA, PSU and RSU awards are valued in accordance with ASC 718. See footnote (2) to the Summary Compensation Table
in this Proxy Statement. The fair value of PSU awards is reported at 100% of target, which is the estimated outcome of performance conditions
associated with the PSU awards on the grant date.

(3) Represents the target and maximum amount of the H2 STIP opportunity granted to Messrs. Gove, Crossen, Sirhal, Markoe, and Wu in August 2022 in
connection with the shift to the half year program. Linear interpolation applies for performance above the target level of achievement, and no
payout is earned if performance is below the target level of achievement. Under the H2 STIP, achievement at target performance would entitle
participants thereunder to 70% of the overall target payout that would have been payable under the Annual STIP. Therefore, the amounts reported
represent the target and maximum weighted at 70% of the overall target payout that would have been available under the Annual STIP. For
Messrs. Crossen, Markoe, Sirhal and Wu, the amounts reported also reflect increases to base salary and/or target as a percentage of base salary
between the grant of the Annual STIP in March 2022 and the grant of the H2 STIP in August 2022 in connection with mid-year promotions and/or
change in responsibilities. See footnote (4) to the Summary Compensation Table in this Proxy Statement and “Compensation Discussion and
Analysis — Short-Term Incentive Compensation.”

(4) Represents the threshold, target and maximum amount of the Annual STIP opportunity granted to Mr. Tritton, Mr. Hartsig, Mr. Anal and Mr. Hartmann
in March 2022. In August 2022, the Annual STIP structure was changed from an annual program to a half-year program, so that the Annual STIP
applied to performance during only the first half of fiscal 2022. Following the shift to the H2 STIP, participants would no longer be entitled to
payments under the Annual STIP. See footnote (4) to the Summary Compensation Table in this Proxy Statement and “Compensation Discussion
and Analysis — Short-Term Incentive Compensation.”

(5) Represents the threshold, target and maximum amount of the STIP opportunity for the first half of fiscal 2022 for Ms. Crossen, Ms. Sirhal and Ms. Wu.
The level of these NEOs’ positions at the beginning of fiscal 2022 (prior to their mid-year promotions) made them eligible to participate in the
STIP available to the broader leadership population outside of the leadership team (the “Non-LT STIP”). The Non-LT STIP for the first half of
fiscal 2022 used the same performance measures as the Annual STIP (Comparable Sales Growth and Adjusted EBITDA), but performance was
based on only the first half of the year and was weighted at 40% of of the overall target payout available under the Non-LT STIP for fiscal 2022.
The goals for the Non-LT STIP for the second half of fiscal 2022, which represented 60% of the overall target payout available, were not finalized
or communicated until September 2022, by which time Ms. Crossen, Ms. Sirhal and Ms. Wu were eligible to participate in the H2 STIP instead of
the Non-LT STIP for the second half of fiscal 2022 due to their mid-year promotions, so the Non-LT STIP opportunities for the second half of
fiscal 2022 are not reported in this table.

(6) Represents an award of PSUs granted to the NEOs on July 11, 2022, and December 12, 2022 under the Company’s 2018 Plan. Vesting of these PSUs
granted to the NEOs depends on (i) the achievement of the Company’s Gross Margin Percentage, and, if the Gross Margin Percentage is achieved,
(ii) the NEO’s continuous employment by the Company from the grant date until the third anniversary of the grant date. The awards are capped at
200% of target achievement, with a floor of zero. PSUs are converted into shares of common stock upon payment following vesting.

(7) Represents an award of PSUs granted to the NEOs on July 11, 2022, and December 12, 2022 under the Company’s 2018 Plan. Vesting of these PSUs
granted to the NEOs depends on (i) the Company’s achievement of a three-year performance goal based on the Company’s Total Shareholder
Return compared with the Company’s peer group as determined by the People, Culture and Compensation Committee of the Company’s Board of
Directors, and, if the Total Shareholder Return goal is achieved, (ii) the NEOs’ continuous employment by the Company from the grant date until
the third anniversary of the grant date. The awards are capped at 200% of target achievement, with a floor of zero. PSUs are converted into shares
of common stock upon payment following vesting.

(8) Represents an award of RSAs granted to Ms. Gove on July 14, 2022, under the Company’s 2018 Plan, in respect of Ms. Gove’s service as a director
prior to her appointment as Interim Chief Executive Officer. The RSAs will vest one year from the date of grant.

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(9) Represents an award of RSUs granted to Ms. Gove on June 29, 2022 that will vest one year from the date of grant, provided that the NEO remains
continuously employed by the Company from the grant date until the vesting date. The RSUs granted will be settled in cash, rather than in equity.

(10) Represents an award of RSUs granted to the NEOs on May 10, 2022 under the Company’s 2012 Plan with respect to Mr. Arnal and the 2018 Plan for
each other NEO. The RSUs granted will be settled in cash, rather than in equity. The RSUs will vest in three equal annual installments beginning
one year from the date of grant, provided that the NEO remains continuously employed by the Company from the grant date until the vesting date.
(11) Represents an award of PSUs granted to the NEOs on May 10, 2022, under the Company’s 2012 Plan. Vesting of these PSUs granted to the NEOs
depends on (i) the achievement of the Company’s Gross Margin Percentage, and, if the Gross Margin Percentage is achieved, (ii) the NEO’s
continuous employment by the Company from the grant date until the third anniversary of the grant date. The awards are capped at 200% of target
achievement, with a floor of zero. PSUs are converted into shares of common stock upon payment following vesting.

(12) Represents an award of PSUs granted to the NEOs on May 10, 2022, under the Company’s 2012 Plan. Vesting of these PSUs granted to the NEOs
depends on (i) the Company’s achievement of a three-year performance goal based on the Company’s Total Shareholder Return compared with the
Company’s peer group as determined by the People, Culture and Compensation Committee of the Company’s Board of Directors, and, if the Total
Shareholder Return goal is achieved, (ii) the NEOs’ continuous employment by the Company from the grant date until the third anniversary of the
grant date. The awards are capped at 200% of target achievement, with a floor of zero. PSUs are converted into shares of common stock upon
payment following vesting.

(13) Represents an award of RSUs granted to the NEOs on July 11, 2022, and December 12, 2022, under the Company’s 2018 Plan. The RSUs will vest in
three equal annual installments beginning one year from the date of grant, provided that the NEO remains continuously employed by the Company
from the grant date until the vesting date.

During fiscal 2022, the Company was party to the following employment agreements with our NEOs, which each set forth the NEO’s base salary, annual
bonus, participation in the Company’s long-term incentive program, participation in the Company’s benefit plans, and certain fringe benefits (each, as
described in Compensation Discussion & Analysis — Executive Compensation Elements in Fiscal 2022), as well as benefits upon certain terminations of
employment and restrictive covenants (as described below in Potential Payments upon Termination and Change in Control):

Ms. Gove: In connection with Ms. Gove’s appointment as Interim Chief Executive Officer on June 29, 2022, the Company entered into an offer letter with
Ms. Gove (the “Gove Offer Letter”). On November 11. 2022, in connection with her appointment as permanent President and Chief Executive Officer of
the Company, the Company entered into an employment agreement with Ms. Gove effective October 24, 2022 (which wholly superseded the Gove Offer
Letter).

Mr. Tritton: In connection with his appointment as President and Chief Executive Officer, the Company entered into an employment agreement with Mr.
Tritton on October 6, 2019.

Ms. Crossen: Prior to Ms. Crossen’s appointment as Interim Chief Financial Officer on September 5, 2022, Ms. Crossen’s employment as Chief Accounting
Officer was governed by her Offer Letter, dated July 12, 2022 (the “Crossen Offer Letter”). In connection with her appointment as Interim Chief Financial
Officer, the Company entered into an employment agreement with Ms. Crossen on September 5, 2022 for the term of her employment as the Interim Chief
Financial Officer (which ended on February 2, 2023). Following Ms. Crossen’s term as the Interim Chief Financial Officer, her employment has continued
to be governed by the Crossen Offer Letter.

Mr. Arnal: In connection with his appointment as Executive Vice President and Chief Financial Officer, the Company entered into an employment
agreement with Mr. Arnal on April 24, 2020.

Mr. Hartmann: In connection with his appointment as Chief Operating Officer of the Company and President, buybuy BABY, the Company entered into an
employment agreement with Mr. Hartmann on April 1, 2020.

Mr. Hartsig: In connection with his appointment as Executive Vice President, Chief Merchandising Officer of the Company and President, Harmon Stores
Inc., the Company entered into an employment agreement with Mr. Hartsig on February 26, 2020.

Ms. Sirhal: Prior to June 29, 2022 Ms. Sirhal’s employment as Executive Vice President, Brand President, Bed Bath & Beyond was governed by the
Company’s Offer Letter with Ms. Sirhal, dated December 14, 2020 (the “Sirhal Offer Letter”). The Board appointed Mara Sirhal as the Executive Vice
President, Chief Merchandising Officer and General Manager, Harmon on June 29, 2022, and in connection therewith, the Company entered into an
employment agreement with Ms. Sirhal (the “Sirhal Employment Agreement”) effective June 28, 2022, as amended August 31, 2022, (which wholly
superseded the Sirhal Offer Letter).

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Ms. Markoe: In connection with her appointment as Chief People and Culture Officer on July 14, 2020, the Company entered into an employment
agreement with Ms. Markoe (the “Markoe Employment Agreement”) on the same date.

Ms. Wu: In connection with her appointment as Executive Vice President, Brand President, buybuyBaby on August 31, 2022, the Company entered into an
employment agreement with Ms. Wu on the same date.

Outstanding Equity Awards at Fiscal 2022 Year-End

The following table sets forth information for each of the NEOs with respect to the value of all unvested RSUs, unvested RSAs and unvested PSUs as of
February 25, 2023, the last day of fiscal 2022.

Name Number of Shares or Units Market Value of Shares or Equity Incentive Plan Equity Incentive Plan
of Stock That Have Not Units of Stock That Have Awards: Number of Awards: Market or Payout
Vested (#) Not Vested ($)(1) Unearned Shares, Units or Value of Unearned Shares,
Other Rights That Have Not Units or Other Rights That
Vested (#) Have Not Vested(1) ($)
Sue Gove......................... 364,784(2) $ 558,120 789,474(3) $ 1,207,895
Mark J. Tritton................. 383,203(4) $ 586,301 252,573(5) $ 386,437
Laura Crossen................. 53,488(6) $ 81,837 26,059(7) $ 39,870
Gustavo Arnal................. — — — —
John Hartmann................ 190,415(8) $ 291,335 121,760(9) $ 186,293
Joseph Hartsig................. 84,385(9) $ 129,109 52,007(10) $ 79,571
Mara Sirhal...................... 49,763(11) $ 76,137 62,230(12) $ 95,212
Lynda Markoe................. 69,319(13) $ 106,058 71,414(14) $ 109,263
Patricia Wu...................... 58,977(15) $ 90,235 75,514(16) $ 115,536

(1) Market value is based on the closing price of the Company’s common stock of $1.53 per share on February 24, 2023. See footnote (4) to the Grants of
Plan Based Awards table in this Proxy Statement. PSU awards are valued at target achievement.

(2) The amounts reflected for Ms. Gove include (i) 355,192 RSUs that will be settled in cash and vest on June 23, 2023 and (ii) 9,592 RSAs that will vest
on July 14, 2023, in each case, subject to the terms, conditions and restrictions of the award agreement governing the grant;

(3) The amounts reflected for Ms. Gove include 789,474 PSUs that will vest on May 10, 2025 subject to the terms, conditions and restrictions of the award
agreement governing the grant.

(4) The amounts reflected for Mr. Tritton include (i) 16,037 RSUs that will be settled in cash and vest as follows: (a) 5,345 RSUs vested on May 10, 2023,
(b) 5,345 RSUs that will vest on May 10, 2024 and (c) 5,347 RSUs that will vest on May 10, 2025; and (ii) 367,166 RSUs that will vest as
follows: (a) 5,031 RSUs vested on May 10, 2023, (b) 357,103 RSUs that will vest on June 8, 2023 and (c) 5,032 RSUs that will vest on May 10,
2024, in the case of (b) and (c) for (i) and (ii), subject to the terms, conditions and restrictions of the separation agreement governing the grant;

(5) The amounts reflected for Mr. Tritton include and 252,573 PSUs that will vest as follows: (a) 153,044 PSUs that will vest on June 8, 2023, (b) 75,472
PSUs that will vest on May 10, 2024, and (c) 24,057 PSUs that will vest on May 10, 2024, in the case of (b) and (c), subject to the terms,
conditions and restrictions of the separation agreement governing the grant.

(6) The amounts reflected for Ms. Crossen include (i) 3,514 RSAs that will vest as follows: (a) 899 RSAs will vest on June 10, 2023, (b) 214 RSAs will
vest on June 11, 2023, (c) 468 RSAs will vest on June 12, 2023, (d) 345 RSAs will vest on June 10, 2024, (e) 215 RSAs will vest on June 11,
2024, (f) 469 RSAs will vest on June 12, 2024, (g) 344 RSAs will vest on June 10, 2025, (h) 215 RSAs will vest on June 12, 2024, (i) 345 RSAs
will vest on June 10, 2026, in each case, subject to the terms, conditions and restrictions of the award agreement governing the grant; and (ii)
16,012 RSUs that will be settled in cash and vest as follows: (a) 5,337 RSUs will vest on May 10, 2023, (b) 5,338 RSUs that will vest on May 10,
2024 and (c) 5,337 RSUs that will vest on May 10, 2025, in each case, subject to the terms, conditions and restrictions of the award agreement
governing the grant; (iii) 33,962 RSUs that will vest as follows: (a) 3,349 RSUs will vest on May 10, 2023, (b) 8,156 RSUs that will vest on July
11, 2023, (c) 2,794 RSUs that will vest on October 14, 2023, (d) 3,349 RSUs that will vest on May 10, 2024, (e) 8,157 RSUs that will vest on July
11, 2024, (f) 8,157 RSUs that will

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vest on July 11, 2025, in each case, subject to the terms, conditions and restrictions of the award agreement governing the grant;

(7) The amounts reflected for Ms. Crossen include: 26,059 PSUs that will vest as follows: (i) 10,047 PSUs that will vest on May 10, 2024, and (ii) 16,012
PSUs that will vest on May 10, 2025, in each case, subject to the terms, conditions and restrictions of the separation agreement governing the
grant.

(8) The amounts reflected for Mr. Hartmann include (i) 7,920 RSUs that will be settled in cash and vest as follows: (a) 2,430 RSUs will vest on May 10,
2023, (b) 2,430 RSUs that will vest on May 10, 2024 and (c) 2,430 RSUs that will vest on May 10, 2025, in each case, subject to the terms,
conditions and restrictions of the separation agreement governing the grant; (ii) 183,125 RSUs that will vest as follows: (a) 2,287 RSUs will vest
on May 10, 2023, (b) 178,551 RSUs that will vest on June 8, 2023 and (c) 2,287 RSUs that will vest on May 10, 2024, in each case, subject to the
terms, conditions and restrictions of the separation agreement governing the grant;

(9) The amounts reflected for Mr. Hartmann include 121,760 PSUs that will vest as follows: (a) 76,522 PSUs that will vest on June 8, 2023, (b) 34,304
PSUs that will vest on May 10, 2024, and (c) 10,934 PSUs that will vest on May 10, 2025, in each case, subject to the terms, conditions and
restrictions of the separation agreement governing the grant.

(10) The amounts reflected for Mr. Hartsig include (i) 1,215 RSUs that will be settled in cash and vest as follows: (a) 405 RSUs will vest on May 10, 2023,
(b) 405 RSUs that will vest on May 10, 2024 and (c) 405 RSUs that will vest on May 10, 2025, in each case, subject to the terms, conditions and
restrictions of the separation agreement governing the grant; (ii) 83,170 RSUs that will vest as follows: (a) 381 RSUs will vest on May 10, 2023,
(b) 82,408 RSUs that will vest on June 8, 2023 and (c) 381 RSUs that will vest on May 10, 2024, in each case subject to the terms, conditions and
restrictions of the separation agreement governing the grant;

(11 The amounts reflected for Mr. Hartsig include 52,007 PSUs that will vest as follows: (a) 35,318 PSUs that will vest on June 8, 2023, (b) 14,866 PSUs
that will vest on May 10, 2024 and (c) 1,823 PSUs that will vest on May 10, 2025, in each case, subject to the terms, conditions and restrictions of
the separation agreement governing the grant.

(12) The amounts reflected for Ms. Sirhal include (i) 13,278 RSUs that will be settled in cash and vest as follows: (a) 4,426 RSUs will vest on May 10,
2023, (b) 4,426 RSUs that will vest on May 10, 2024 and (c) 4,426 RSUs that will vest on May 10, 2025, in each case, subject to the terms,
conditions and restrictions of the award agreement governing the grant; (ii) 36,485 RSUs that will vest as follows: (a) 2,287 RSUs will vest on
May 10, 2023, (b) 9,352 RSUs that will vest on June 11, 2023, (c) 956 RSUs that will vest on September 16, 2023, (d) 1,940 RSUs that will vest
on February 10, 2024, (e) 2,287 RSUs that will vest on May 10, 2024, (f) 9,353 RSUs that will vest on July 11, 2024, (g) 956 RSUs that will vest
on September 16, 2024 and (h) 9,354 RSUs that will vest on July 11, 2025, in each case, subject to the terms, conditions and restrictions of the
award agreement governing the grant.

(13) The amounts reflected for Ms. Sirhal include 62,230 PSUs that will vest as follows: (a) 6,862 PSUs that will vest on May 10, 2024, (b) 13,279 PSUs
that will vest on May 10, 2025, and (c) 42,089 PSUs that will vest on July 11, 2025, in each case, subject to the terms, conditions and restrictions
of the award agreement governing the grant.

(14) The amounts reflected for Ms. Markoe include (i) 23,994 RSUs that will be settled in cash and vest as follows: (a) 7,998 RSUs will vest on May 10,
2023, (b) 7,998 RSUs that will vest on May 10, 2024 and (c) 7,998 RSUs that will vest on May 10, 2025, in each case, subject to the terms,
conditions and restrictions of the award agreement governing the grant; (ii) 45,325 RSUs that will vest as follows: (a) 4,391 RSUs will vest on
May 10, 2023, (b) 36,543 RSUs that will vest on September 28, 2023, and (c) 4,391 RSUs that will vest on May 10, 2024, in each case, subject to
the terms, conditions and restrictions of the award and agreement governing the grant.

(15) The amounts reflected for Ms. Markoe 71,414 PSUs that will vest as follows: (a) 15,662 PSUs that will vest on September 28, 2023, (b) 19,760 PSUs
that will vest on May 10, 2024, and (c) 35,992 PSUs that will vest on May 10, 2025, in each case, subject to the terms, conditions and restrictions
of the award agreement governing the grant .

(16) The amounts reflected for Ms. Wu include (i) 14,059 RSUs that will be settled in cash and vest as follows: (a) 4,686 RSUs will vest on May 10, 2023,
(b) 4,687 RSUs that will vest on May 10, 2024 and (c) 4,686 RSUs that will vest on May 10, 2025, in each case, subject to the terms, conditions
and restrictions of the award agreement governing the grant; (ii) 44,918 RSUs that will vest as follows: (a) 2,940 RSUs will vest on May 10, 2023,
(b) 11,695 RSUs that will vest on December 12, 2023, (c) 3,949 RSUs that will vest on February 10, 2024, (d) 2,941 RSUs that will vest on May
10, 2024, (e) 11,696 RSUs that will vest on December 12, 2024 and (f) 11,697 RSUs that will vest on December 12, 2025, in each case, subject to
the terms, conditions and restrictions of the award and agreement governing the grant.

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(17) The amounts reflected for Ms. Wu 75,514 PSUs that will vest as follows: (a) 8,822 PSUs that will vest on May 10, 2024, (b) 14,060 PSUs that will
vest on May 10, 2025, and (c) 52,632 PSUs that will vest on December 12, 2025, in each case, subject to the terms, conditions and restrictions of
the separation agreement governing the grant.

Option Exercises and Stock Vested for Fiscal 2022

Stock Awards Vested for Fiscal 2022

The following table includes certain information with respect to the vesting of stock awards by NEOs during fiscal 2022.

Stock Awards
Name Number of Shares Acquired on Value Realized on Vesting ($)
Vesting (#)
Sue Gove............................................................................................... — $—
Mark J. Tritton(1)................................................................................. 40,252 $ 424,256
Laura Crossen(2).................................................................................. 8,072 $ 63,466
Gustavo Arnal(3).................................................................................. 488,478 $ 4,411,671
John Hartmann(4)................................................................................ 359,623 $ 3,328,782
Joseph Hartsig(5).................................................................................. 64,785 $ 739,231
Mara Sirhal(6)....................................................................................... 5,184 $ 36,846
Lynda Markoe(7)................................................................................. 12,211 $ 95,664
Patricia Wu(8)....................................................................................... 6,890 $ 40,614

(1) Mr. Tritton acquired 40,252 shares in total on May 10, 2022, upon the vesting of previously granted RSUs.

(2) Ms. Crossen acquired 8,072 shares in total on May 10, 2022, June 10, 2022, June 11, 2022, June 12, 2022, and October 14, 2022, upon the vesting of
previously granted RSUs and RSAs.

(3) Mr. Arnal acquired 488,478 shares in total on May 4, 2022, May 10, 2022, and September 2, 2022, upon the vesting of previously granted PSUs and
RSUs. Pursuant terms of the applicable award agreements, unvested PSUs immediately vested at target upon Mr. Arnal’s passing.

(4) Mr. Hartmann acquired 359,623 shares in total on May 10, 2022, May 18, 2022, and August 31, 2022, upon the vesting of previously granted RSUs.

(5) Mr. Hartsig acquired 64,785 shares in total on March 4, 2022, May 10, 2022, and June 28, 2022, upon the vesting of previously granted RSUs.

(6) Ms. Sirhal acquired 5,184 shares in total on May 10, 2022, September 16, 2022, and February 10, 2023, upon the vesting of previously granted RSUs.

(7) Ms. Markoe acquired 12,211 shares in total on May 10, 2022, and September 28, 2022, upon the vesting of previously granted RSUs.

(8) Ms. Wu acquired 6,890 shares in total on May 10, 2022, and February 10, 2023, upon the vesting of previously granted RSUs.

Potential Payments upon Termination or Change in Control

NEO Terminations of Employment during Fiscal 2022

During fiscal 2022, three of our NEOs terminated employment with the Company. Each NEO’s separation benefits, pursuant to the terms of each NEO’s
employment agreement, are described below.

Separation Agreement with Mr. Tritton

Pursuant to the terms set forth in Mr. Tritton’s employment agreement, in connection with Mr. Tritton’s termination of employment with the Company on
June 23, 2022, the Company entered into a Separation and Release Agreement with Mr. Tritton on June 27, 2022 (the “Tritton Separation Agreement”),
pursuant to which, subject to a timely release of claims and

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continued compliance with the restricted covenants set forth in his employment agreement dated October 6, 2019 (the “Tritton Employment Agreement”),
Mr. Triton is entitled to receive (i) cash payments equal to an aggregate of $6,765,000, payable generally in ratable installments over a 24 month period
following the separation date, (ii) COBRA benefits at active employee rates for 24 months following the separation date or, if earlier, the date on which Mr.
Tritton receives comparable coverage from a subsequent employer or Mr. Tritton is no longer eligible to receive COBRA coverage, and (iii) a lump sum
cash payment of $202,192. Mr. Tritton’s outstanding RSUs and PSUs remain subject to the terms and conditions of the applicable award agreements (see
below). Pursuant to his employment agreement, Mr. Tritton is subject to non-competition and non-solicitation restrictions for two years following the
separation date, as well as perpetual non-disparagement and confidentiality provisions.

Separation Agreement with Mr. Hartmann

Pursuant to the terms set forth in Mr. Hartmann’s employment agreement, in connection with Mr. Hartmann’s termination of employment with the
Company on August 31, 2022, the Company entered into a Separation and Release Agreement with Mr. Hartmann, pursuant to which, subject to a timely
release of claims and continued compliance with the restricted covenants set forth in his employment agreement dated April 1, 2020 (the “Hartmann
Employment Agreement”), Mr. Hartmann is entitled to receive (i) cash payments equal to an aggregate of $3,275,000, payable generally in ratable
installments over an 18 month period following the separation date; the Company will pay Mr. Hartmann (or his estate) any Accrued Obligations; (ii)
immediate vesting in full of the unvested portion (170,664 shares) of the Hartmann Make-Whole RSU Award; (iii) up to 78 weeks of COBRA benefits at
active employee rates; and (iv) six months of outplacement services. Mr. Hartmann’s outstanding RSUs and PSUs (other than the Hartmann Make-Whole
RSU Award) remain subject to the terms and conditions of the applicable award agreements (see below). Pursuant to his employment agreement, Mr.
Hartmann is subject to non-competition and non-solicitation restrictions for 18 months following the separation date, as well as perpetual non-
disparagement and confidentiality provisions.

Mr. Arnal’s Separation Benefit

Pursuant to the terms set forth in his employment agreement and in accordance with the applicable equity award agreements, in connection with Mr.
Arnal’s passing on September 2, 2022, Mr. Arnal’s estate, subject to Mr. Arnal’s estate or legal representative’s timely execution of a release of claims, all
unvested RSUs and PSUs held by Mr. Arnal at the time of his passing were immediately vested (with PSUs vesting at target).
Executive Change in Control Severance Plan

Each actively employed NEO is entitled to participate in the Executive Change in Control Severance Plan (the Change in Control Plan). Pursuant to the
Change in Control Plan, upon the occurrence of a termination of an NEO by the Company without Cause or by the NEO for Good Reason at any time three
(3) months prior to a Change in Control or two (2) years following a Change in Control, such NEO would be entitled to the following:

• a cash severance payment equal to 1.5 times (or in the case of the Chief Executive Officer, 2.0 times) the sum of annual base salary and target
bonus, both as in effect immediately prior to the Change in Control;

• a prorated portion of the NEO’s annual bonus for the period in which the termination date occurs, at target level of performance and paid at such
time as other executives receive their bonuses; continuation of an NEO’s (and eligible dependents’) health benefit coverage for up to 18 months
(or in the case of the Chief Executive Officer, 24 months) at active employee rates; and 12 months of outplacement services (at the sole discretion
of the Committee).

The Change in Control Plan adopts the definitions of “Cause” and “Good Reason” set forth in each NEO’s employment agreement (as described below).

Pursuant to the Change in Control Plan, in the sole discretion of the Committee, such payments are subject to reduction to the extent necessary to comply
with the Company’s applicable policies as in effect from time to time, such that no shareholder ratification of such payments and benefits shall be required.
As of May 4, 2017, the Company’s applicable policy limits certain severance benefits to no more than 2.99 times the sum of the executive’s base salary
plus non-equity incentive plan payment or other annual non-equity bonus or award, without seeking shareholder ratification of the agreement

Employment Agreements

The Company has entered into employment agreements with each of Messrs. Gove, Crossen, Sirhal, Markoe and Wu (collectively, the “NEO Employment
Agreements”) which contain severance benefits and post-employment restrictive covenants, as described below. For Ms. Crossen, the description below
sets forth the terms of the agreement governing her role as Interim CFO from September 5, 2022 until February 2, 2023.

Pursuant to each NEO Employment Agreement, if the Company does not renew the NEO’s employment term or terminates the NEO’s employment without
“Cause” (other than due to death or disability) or in the event the NEO terminates with “Good

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Reason,” in each case, not in subject to timely execution of a release of claims and continued compliance with the restrictive covenant obligations set forth
in the respective employment agreement, the NEO is entitled to: (i) a cash payment equal to one-times (or for Ms. Gove, two-times) the sum of base salary
and target annual bonus for the performance year in which the termination date occurs, payable over the 12 months (or for Ms. Gove, 24 months) following
the separation date, (ii) any earned but unpaid annual bonus for the performance year prior to the year of termination, to be paid when the bonus would
otherwise be paid, (iii) up to one year (or for Ms. Gove, two years) of COBRA benefits at active employee rates.

Each NEO Employment Agreement defines “Cause” as the NEO’s: (i) indictment for or plea of nolo contendere to a felony or commission of an act
involving moral turpitude; (ii) commission of fraud, theft, embezzlement, self-dealing, misappropriation or other malfeasance against the business of the
Company Group; (iii) indictment for or plea of nolo contendere to any serious offense that results in or would reasonably be expected to result in material
financial harm, materially negative publicity or other material harm to any member of the Company Group; (iv) failure to perform any material aspect of
her lawful duties or responsibilities for the Company or the Company Group (other than by reason of disability), and if curable, failure to cure in 30 days;
(v) failure to comply with any lawful written policy of the Company or reasonable directive of the Board (and for all NEOs other than Ms. Gove, the CEO),
and in either case, if curable, failure to cure in a timely manner; (vi) commission of acts or omissions constituting gross negligence or gross misconduct in
the performance of any aspect of her lawful duties or responsibilities; (vii) breach of any fiduciary duty owed to the Company Group; (viii) violation or
breach of any restrictive covenant or any material term of the applicable NEO Employment Agreement, and, if curable, failure to cure in a timely manner;
or (ix) commission of any act or omission that damages or is reasonably likely to damage the financial condition or business of the Company or materially
damages or is reasonably likely to materially damage the reputation, public image, goodwill, assets or prospects of the Company.

“Good Reason” is defined in each agreement as any of the following occurring without the NEO’s written consent that the Company fails to cure within 30
days of receipt of notice: (i) a material reduction of base salary, other than a reduction of less than ten percent in connection with a comparable decrease
applicable to all senior executives of the Company; (ii) a requirement by the Company that the NEO relocate her primary place of employment more than
35 miles, (iii) for Messrs. Gove, Shirhal, Markoe and Wu only, a material diminution in duties, authority or responsibilities of employment, or (iv) for Ms.
Gove only, a change in Ms. Gove’s reporting line (such that she no longer reports directly to the Board) or title (other than the removal of Ms. Gove’s title
as President and the subsequent appointment of a President who would report to Ms. Gove).

The NEO Employment Agreements also provide for non-competition and non-solicitation restrictions during the term of employment and for 12 months (or
for Ms. Gove, 24 months) thereafter, as well as perpetual non-disparagement and confidentiality provisions.

PSU and RSU Award Agreements

The award agreements applicable to the PSUs and RSUs held by our NEOs provide for accelerated vesting upon certain termination events, including
enhanced benefits in connection with a change in control (as defined in the 2012 Plan or 2018 Plan, as applicable).

Generally, upon (i) termination due to death, unvested RSUs and PSUs will immediately vest in full (with PSUs vesting at target); (ii) termination due to
disability (as defined in an applicable employment agreement or, if not there defined, the 2012 Plan), unvested RSUs will immediately vest in full and
unvested PSUs will remain outstanding and eligible to vest in full based on actual performance on the original vesting date and (iii) termination by the
Company without Cause, by the NEO for Good Reason (each, as defined in NEO’s employment agreement), in each case, subject to the NEO’s timely
execution of a release of claims, a pro-rated portion of the unvested RSUs and PSUs (based on days employed during the vesting period) will remain
eligible to vest on the original vesting date (with PSUs vesting based on actual performance); provided that, if such termination occurs within 90 days prior
to or two years following a change in control, the RSUs will immediately vest in full (with PSUs vesting based on actual performance during the portion of
the performance period ending on the date of such termination).

In connection with her appointment as Interim Chief Executive Officer, on June 29, 2022 the Board granted Ms. Gove a one-time award of 355,192 cash-
settled RSUs under the 2018 Plan (the “Gove 2022 Special RSUs) that will vest on the first anniversary of the grant date, subject to Ms. Gove’s continued
employment through the vesting date. Pursuant to the award agreement, upon a termination by the Company without Cause (as defined below), by Ms.
Gove with Good Reason (as defined in the Gove Employment Agreement), due to Ms. Gove’s death or Disability (as defined under Section 409A of the
Internal Revenue Code, as amended), or in the event Ms. Gove’s employment as Interim Chief Executive Officer is terminated following the hiring by the
Company of a replacement Chief Executive Officer, in each case, subject to Ms. Gove’s timely executive of a release of claims and her continued
compliance with the restrictive covenants set forth in the Gove Employment Agreement, the Gove 2022 Special RSUs will immediately vest in full;
provided, that if such termination of employment occurs within 6 months of grant date, 80% of the Gove 2022 Special RSUs will immediately vest in full
and 20% will be forfeited without consideration; provided, further, that in no case will the value of the RSUs that accelerate in the accordance with the
foregoing be less than $2,080,000. For purposes of the Gove 2022 Special RSUs, “Cause” means any instance in which Ms. Gove has (i) acted in bad faith
or with

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dishonesty; (ii) willfully failed to follow the directions of the Board; (iii) performed duties with gross negligence; or (iv) is convicted of felony.

The table below lists the estimated amount of compensation payable to each of our NEOs who was employed as of the last day of fiscal 2022 in each
termination situation using an assumed termination date and an assumed change in control date of February 26, 2023, the last day of fiscal 2022 and a price
per share of common stock of $1.55, the closing per share price as of February 25, 2023, the last trading day of fiscal 2022.
Cash Severance(1) Pro Rata Bonus(2) PSU and RSU COBRA Total
Acceleration Continuation(3)
Sue Gove
Termination due to death or $— $— $ 1,789,100 $— $ 1,789,100
Disability(4).......................
Termination without Cause or with Good $ 7,000,000 $— $ 550,548 $ 35,029 $ 7,238,046
Reason(5).........
Change in Control + Termination without Cause $ 7,000,000 $ 2,100,000 $ 1,789,100 $ 35,029 $ 10,924,129
or with Good Reason(6).........
Laura Crossen
Termination due to death or $— $— $ 113,520 $— $ 113,520
Disability(4).......................
Termination without Cause or with Good $ 1,211,250 $— $ 36,467 $ 12,228 $ 1,259,945
Reason(5).........
Change in Control + Termination(6)................... $ 1,816,875 $ 498,750 $ 113,520 $ 18,342 $ 2,447,487
Mara Sirhal
Termination due to death or $— $— $ 170,582 $— $ 170,582
Disability(4).......................
Termination without Cause or with Good $ 1,050,000 $— $ 45,424 $ 29,498 $ 1,124,922
Reason(5).........
Change in Control + Termination(6)................... $ 1,575,000 $ 450,000 $ 170,582 $ 44,247 $ 2,239,829
Lynda Markoe
Termination due to death or $— $— $ 137,218 $— $ 137,218
Disability(4).......................
Termination without Cause or with Good $ 1,020,000 $— $ 50,958 $0 $ 1,070,958
Reason(5).........
Change in Control + Termination(6)................... $ 1,530,000 $ 420,000 $ 137,218 $0 $ 2,087,218
Patricia Wu
Termination due to death or $— $— $ 202,340 $— $ 202,340
Disability(4).......................
Termination without Cause or with Good $ 962,500 $— $ 34,302 $ 19,358 $ 1,016,159
Reason(5).........
Change in Control + Termination(6)................... $ 1,443,750 $ 412,500 $ 202,340 $ 29,037 $ 2,087,627

(1) Pursuant to the CIC Severance Plan, if an NEO is terminated during the three (3) months preceding a Change in Control or two (2) years following, the
severance would be paid out in a lump sum within 60 days of the termination date. If the termination is not in connection with a Change in
Control, severance payments will be made in installments in accordance with the regular payroll payment schedule; provided that if severance
payments are subject to Section 409A of the Code (“Section 409A”), certain payments may be delayed until six months following separation from
the Company.

(2) Pursuant to the CIC Severance Plan if an NEO is terminated during the three (3) months preceding a Change in Control or two (2) years following, the
pro rata share of the NEO’s bonus, at target level, would be paid at such time as other executives receive their bonuses.

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(3) Represents the employer portion of COBRA continuation coverage at active employee rates. Upon a termination without Cause or for Good Reason,
Ms. Gove would be entitled to 24 months of benefit continuation, and Messrs. Crossen, Sirhal, Markoe and Wu would be entitled to 12 months.
Upon a termination without Cause or for Good Reason during the three (3) months preceding a Change in Control of two (2) years following, Ms.
Gove would be entitled to 24 months of benefits continuation, and Messrs. Crossen, Sirhal, Markoe and Wu would be entitled to 18 months.

(4) Represents accelerated vesting of all unvested RSU and PSU awards. In the event of termination due to death, PSUs vest in full based on target. In the
event of termination due to disability, PSUs vest in full based on actual performance. For purposes of this analysis, the values above assume target
performance.

(5) Represents (i) (x) for Ms. Gove, two times the sum of base salary and target fiscal 2022 annual bonus and (y) for Messrs. Crossen, Sirhal, Markoe and
Wu, one time the sum of base salary and target fiscal 2022 annual bonus; (ii) a pro-rata portion of the unvested RSUs (other than the Gove 2022
Special RSU Award, which is entitled to full accelerated vesting upon termination without Cause or resignation with Good Reason) and PSUs
(with PSUs vesting based on actual performance) prorated based on the days employs employed during the vesting period or performance period,
as applicable, at the time that such awards would have otherwise vested had the NEO remained employed up to the vesting date. With respect to
Ms. Gove’s 2022 Special RSU Award, represents full accelerated vesting.

(6) Pursuant to the Change in Control Plan, upon a termination without Cause or for Good Reason during 90 days preceding a Change in Control of two (2)
years following, the NEOs would become entitled to a lump sum cash payment equal to (i) 1.5 times (or 2.0 times times for Ms. Gove) the sum of
base salary and target annual bonus, (ii) a pro rata share of annual bonus, at target level, for the performance period in which the termination
occurs. With respect to equity compensation, unvested RSUs will immediately vest in full, and any unvested PSUs will vest, based on actual
performance through the date of termination. For purposes of this analysis, the values above assume target performance.

CEO Pay Ratio

The Company has prepared the following information required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and
Item 402(u) of Regulation S-K, regarding the ratio of the compensation of our CEO to that of the Company’s median associate, using certain permitted
methodologies.

The median associate at the Company, not counting the CEO, was determined by: using our total associate population (whether employed on a full-time,
part-time, seasonal or temporary basis), which as of February 26, 2023, the Company’s fiscal year end, includes approximately 20,000 associates (of which
more than 63% were part-time and more than 91% were hourly), comprised of approximately 18,800 US associates and approximately 1,400 non-US
associates; and using payroll records as of February 26, 2023, the Company’s fiscal year end.

The median associate was identified using total cash compensation, which, for this purpose, included base salary, bonus and commissions, per payroll
records for the twelve months ended February 26, 2023 and pay for any permanent full-time and part-time associates (whether salaried or hourly) who were
not employed for the full fiscal year was annualized.

The individual identified as the median associate is a part-time hourly associate working in a Bed Bath & Beyond store receiving a total annual
compensation for fiscal 2022 of $17,333. The identification of the median associate was influenced by the Company having a workforce significantly
composed of part-time, hourly store associates.

The compensation of the Company’s CEO for fiscal 2022 as reported in the Summary Compensation Table was $4,781,527. The ratio of the annual total
compensation of the Company’s CEO to that of the median associate is estimated to be 276:1. This estimate was calculated in a manner consistent with the
applicable SEC rules and guidance, based upon the payroll and employment records of the Company. The rules and guidance applicable to this disclosure
permit a variety of methods and a range of reasonable estimates and assumptions to reflect compensation practices. Therefore, the pay ratio reported by
other companies in similar industries may well not be comparable to the pay ratio reported above.

In connection with the preparation of the foregoing disclosure, management has provided the People, Culture and Compensation Committee with the
analysis of the CEO to median associate pay ratio and accompanying contextual narrative, for its information when setting executive pay decisions.
Director Compensation
1. How We Are Paid

The Director Compensation Table provides compensation information for each member of our Board during fiscal 2022, other than Mr. Tritton, our
President and CEO, whose compensation is reflected in the Summary Compensation Table. Mr. Tritton did not receive any director fees for fiscal 2022,
since he received compensation in his capacity as an executive of the Company. Ms.

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Gove received compensation in her capacity as a director for fiscal 2022 until June 23, 2022, when she commenced employment as President and Chief
Executive Officer of the Company.

Annual director fees for fiscal 2022 were $90,000. In addition to annual fees, directors serving on standing committees of the Board were paid as follows:
an additional $10,000 for Audit Committee members (or $25,000 for the Chair of the Audit Committee); an additional $7,500 for People, Culture and
Compensation Committee members (or $25,000 for the Chair of the People, Culture and Compensation Committee); an additional $5,000 for Nominating
and Corporate Governance Committee members (or $16,500 for the Chair of the Nominating and Corporate Governance Committee); and an additional
$6,000 for the Strategy Committee members (or $12,000 for the Chair of the Strategy Committee). The independent Chair of the Board also receives an
annual retainer in the amount of $200,000 (in addition to the standard annual director fees received by the independent Chair of the Board), with 75%
payable in cash and 25% payable in restricted stock on the date of the Annual Meeting of Shareholders (calculated based on the average of the high and low
trading prices on such date).

The Company does not pay per meeting fees. Director fees are paid on a quarterly basis. Directors may elect to receive all or 50% of their fees in stock.

In addition to the fees above, each non-executive director serving on the Board as of the Company’s 2022 Annual Meeting of Shareholders received a grant
of restricted stock under the Company’s 2012 Incentive Compensation Plan (the “2012 Plan”). In 2022, the Company transitioned to a new director pay
cycle so that all non-executive directors will be granted an annual restricted stock award on the date of the Annual Meeting of Shareholders, instead of at
fiscal year-end as was done in prior years. In recognition of service for the period from the 2021 Annual Meeting of Shareholders in July 2021 to the 2022
Annual Meeting of Shareholders in July 2022, non-executive directors were eligible to receive a restricted stock award with a grant date value equal to
$150,000. However, the actual amount of restricted stock awarded to directors who began serving on the Board prior to July 2021 was increased pro-rata to
compensate for the time served between fiscal year-end 2021 (or, if later, the date of appointment to the Board) and the 2022 Annual Meeting of
Shareholders in July 2022; provided, that any such directors who were not up for re-election at the 2022 Annual Meeting of Shareholders received the pro-
rata increase in cash. The number of shares were calculated using the average of the high and low trading prices of the Company’s common stock on the
date of the 2022 Annual Meeting of Shareholders.

In an effort to further align the interests of our Board and the Company, the non-employee members of our Board are required to maintain ownership of
Bed Bath & Beyond stock (inclusive of restricted stock) of not less than six times a director’s base annual cash retainer (measured at the close of the fiscal
year and subject to later fluctuations in share price). In addition, until a non-employee director has achieved the minimum share ownership, the director is
required to hold one hundred percent (100%) of the shares acquired through the vesting of restricted stock received from the Company. As of the end of
fiscal 2022, all the Company’s directors owned shares in excess of the applicable guideline or were in compliance with the retention requirement described
above.

As described above and more fully below, the following table summarizes the annual compensation for the directors, other than Mr. Tritton and Ms. Gove,
during fiscal 2022.
Fees Earned or Paid in Stock Awards ($)(1)(2) Total ($)
Cash ($)
Marjorie Bowen(4)(5)...................................................... 94,427 196,000 290,427
Harriet Edelman............................................................ 240,000 256,000 496,000
John E. Fleming ..........................................................
(5) 99,282 — 99,282
Jeffrey A. Kirwan.......................................................... 100,618(3) 206,000 306,618
Shelly Lombard(5)......................................................... 90,906 196,000 286,906
Benjamin Rosenzweig(4)(5)........................................... 61,121 196,000 265,1210
Virginia P. Ruesterholz(5)............................................. 99,847 — 99,847
Joshua E. Schechter....................................................... 121,000 206,000 327,000
Minesh Shah(4)............................................................... 100,913 206,000 306,913
Andrea M. Weiss............................................................ 127,590 206,000 333,590
Mary A. Winston(5)....................................................... 91,755 — 91,755
Ann Yerger...................................................................... 109,671 206,000 315,671

(1) The value of stock awards represents their respective total fair value on the date of grant calculated in accordance with Accounting Standards
Codification (“ASC”) Topic No. 718, “Compensation—Stock Compensation” (“ASC 718”), without regard to the estimated forfeiture related to
service-based vesting conditions. All assumptions made in the valuations are contained and described in Note 15 to the Company’s financial
statements in the Company’s Annual

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Report on Form 10-K for fiscal 2022. Stock awards are rounded up to the nearest whole share when converted from dollars to shares. The amounts
shown in the table reflect the total fair value on the date of grant and do not necessarily reflect the actual value, if any, that may be realized by the
directors.

(2) For all non-executive directors serving on the Board as of the Company’s 2022 Annual Meeting of Shareholders, includes the value of 392,042
restricted shares of common stock of the Company granted under the Company’s 2018 Plan on the date of the Company’s 2022 Annual Meeting of
Shareholders and valued under ASC 718 at fair market value on such date ($4.90 per share, the average of the high and low trading prices on July
14, 2022). Such restricted stock vested on the last day of the fiscal year of grant, subject to the applicable director remaining in office until the last
day of the fiscal year.
(3) 50% of Mr. Kirwan’s fees for the first, second and third quarters of fiscal 2022 were paid in unrestricted shares of common stock of the Company
pursuant to the Bed Bath & Beyond Plan to Pay Directors Fees in Stock, and the number of shares was determined (in accordance with the terms
of such plan) based on the fair market value per share on the second business day following the announcement of the Company’s financial results
for its fiscal third quarter, which was $4.76 per share, the average of the high and low trading prices on January 12, 2023.

(4) Mr. Shah was appointed to the Board on March 1, 2022. Mmes. Bowen and Lombard and Mr. Rosenzweig were appointed to the Board on March 24,
2022.

(5) Mr. Fleming, Ms. Ruesterholz, and Ms. Winston are no longer serving as directors as of July 14, 2022. Mr. Rozenweig is no longer serving as a Director
of December 20, 2022. Ms. Bowen is no longer serving as a director as of February 11, 2023.

ITEM 12 – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND

RELATED SHAREHOLDER MATTERS

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding the beneficial ownership of shares of common stock as of April 7, 2023 by (i) each person or
group of affiliated persons known by us to beneficially own more than 5% of common stock; (ii) our named executive officers; (iii) each of our directors;
and (iv) all of our directors and executive officers as a group. Ownership data with respect to our institutional shareholders is based upon information
publicly available as described in the footnotes below.

The following table gives effect to the shares of common stock issuable within 60 days of April 7, 2023 upon the exercise of all awards and other rights
beneficially owned by the indicated shareholders on that date. Beneficial ownership is determined in accordance with Rule 13d-3 promulgated under
Section 13 of the Exchange Act, and includes voting and investment power with respect to shares. Percentage of beneficial ownership is based on
542,432,598 shares of common stock outstanding at April 7, 2023. Except as otherwise noted below, each person or entity named in the following table has
sole voting and investment power with respect to all shares of common stock that he, she or it beneficially owns.

Unless otherwise indicated, the address of each beneficial owner listed below is c/o Bed Bath & Beyond Inc., 650 Liberty Avenue, Union, New Jersey
07083.

Name Position Number of Shares of

Common Stock Beneficially
Owned and Percent of Class
Sue E. Gove.................................. President & Chief Executive Officer and Director 115,179(1) *
(2)
Laura Crossen............................... Senior Vice President of Finance & Chief Accounting Officer 18,371 *
Mara Sirhal.................................... Former Executive Vice President and Brand President of Bed 6,770(3) *
Bath & Beyond
Lynda Markoe.............................. Executive Vice President, Chief People and Culture Officer 16,630(4) *
Patricia Wu.................................... Executive Vice President and Brand President of buybuy 9,759(5) *
BABY
Mark Tritton.................................. Former Chief Executive Officer 192,455(6) *
John Hartmann............................ Former Executive Vice President, Chief Operating Officer, and 87,480(7) *
President, buybuy BABY, Inc.

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Joseph Hartsig.............................. Executive Vice President, Chief Merchandising Officer and 43,740(8) *
President of Harmon Stores, Inc.
Harriet Edelman........................... Director 73,789 *
Jeffrey A. Kirwan......................... Director 85,496 *
Shelly Lombard........................... Director 40,000 *
Joshua E. Schechter..................... Director 77,128 *
Minesh Shah................................. Director 42,041 *
Andrea M. Weiss.......................... Director 69,137 *
Ann Yerger.................................... Director 79,465 *
Carol Flaton.................................. Director — *
All Directors and Executive Officers as a 652,194 *
Group..................................

* Less than 1% of our outstanding common stock.

(1) The shares reported as being owned by Ms. Gove are owned by her individually.

(2) The shares reported as being owned by Ms. Crossen are owned by her individually.

(3) The shares reported as being owned by Ms. Sirhal are owned by her individually. Ms. Sirhal was appointed Executive Vice President and Brand
President of Bed Bath & Beyond on August 31, 2022. Ms. Sirhal joined the Company in January 2021 and previously served as Senior Vice
President and General Manager for Harmon, as well as Executive Vice President and Chief Merchandising Officer of Bed Bath & Beyond. Ms.
Sirhal resigned from the Company effective as of April 9, 2023. The information provided in the table above is based on the Form 4 filed with the
SEC on February 13, 2023.

(4) The shares reported as being owned by Ms. Markoe are owned by her individually.

(5) The shares reported as being owned by Ms. Wu are owned by her individually.

(6) The shares reported as being owned by Mr. Tritton are owned by him individually. Mr. Tritton ceased serving as Chief Executive Officer, effective June
23, 2022. The information provided in the table above is based on the Form 4 filed with the SEC on July 15, 2022.

(7) The shares reported as being owned by Mr. Hartmann are owned by him individually. Mr. Hartmann ceased serving as Executive Vice President, Chief
Operating Officer, and President of buybuy BABY, Inc., effective August 31, 2022. The information provided in the table above is based on the
Form 4 filed with the SEC on July 15, 2022.

(8) The shares reported as being owned by Mr. Hartsig are owned by him individually. Mr. Hartsig ceased serving as Executive Vice President, Chief
Merchandising Officer and President of Harmon Stores, Inc., effective June 28, 2022. The information provided in the table above is based on the
Form 4 filed with the SEC on July 15, 2022.

ITEM 13 – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE
The information required by this item is set forth under the sections captioned "Director Independence" and "Certain Relationships and Related
Transactions" in the Proxy Statement and is incorporated herein by reference.

ITEM 14 – PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item is set forth under the sections captioned "Fees Paid to KPMG LLP for Services and Products" and "Pre-Approval
Policies and Procedures" in the Proxy Statement and is incorporated herein by reference.

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PART IV
ITEM 15 – EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) (1) Consolidated Financial Statements of Bed Bath & Beyond Inc. and subsidiaries are incorporated under Item 8 of this Form 10-K.

(a) (2) Financial Statement Schedules

For the Fiscal Years Ended February 25, 2023, February 26, 2022 and February 27, 2021.

Schedule II – Valuation and Qualifying Accounts

(a) (3) Exhibits

Unless otherwise indicated, exhibits are incorporated by reference to the correspondingly numbered exhibits to the Company’s Registration Statement on
Form S-1 (Commission File No. 33-47250).
Exhibit
No. Exhibit
Company's Amended and Restated Certificate of Incorporation as amended through June 30, 2009 (incorporated by reference to the
3.1 Company's Form 10-K for the year ended February 27, 2021 filed on April 22, 2021)

Amended and Restated By-Laws of Bed Bath & Beyond Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed
3.2 with the Commission on February 10, 2023)
Amended and Restated By-Laws of Bed Bath & Beyond Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed
3.3 with the Commission on June 19, 2019).
Indenture, dated as of July 17, 2014, relating to the 3.749% senior unsecured notes due 2024, the 4.915% senior unsecured notes due 2034
and the 5.165% senior unsecured notes due 2044, between the Company and The Bank of New York Mellon, as trustee (incorporated by
4.1 reference to Exhibit 4.1 to the Company’s Form 8-K filed with the Commission on July 17, 2014)

First Supplemental Indenture, dated as of July 17, 2014, relating to the 3.749% senior unsecured notes due 2024, the 4.915% senior
unsecured notes due 2034 and the 5.165% senior unsecured notes due 2044, between the Company and The Bank of New York Mellon, as
4.2 trustee (incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed with the Commission on July 17, 2014)

Form of 3.749% senior unsecured notes due 2024 (incorporated by reference to Exhibit 4.3 to the Company’s Form 8-K filed with the
4.3 Commission on July 17, 2014)

Form of 4.915% senior unsecured notes due 2034 (incorporated by reference to Exhibit 4.4 to the Company’s Form 8-K filed with the
4.4 Commission on July 17, 2014)

Form of 5.165% senior unsecured notes due 2044 (incorporated by reference to Exhibit 4.5 to the Company’s Form 8-K filed with the
4.5 Commission on July 17, 2014)

Form of Warrant to Purchase Common Stock of Bed Bath & Beyond Inc. (incorporated by reference to Exhibit 4.1 to the Company’s
4.6 Form 8-K filed on February 10, 2023).
Credit Agreement, dated as of June 19, 2020, among Bed Bath & Beyond Inc., certain of the Company’s U.S. and Canadian subsidiaries
party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the lenders party thereto (incorporated by
10.1 reference to Exhibit 10.1 to the Company’s Form 8-K filed on June 22, 2020)
Amended and Restated Credit Agreement, dated as of August 9, 2021, among the Company, certain of the Company’s US and Canadian
subsidiaries party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the lenders party thereto
10.2 (incorporated by reference to Exhibit 10.1 to the Company's 8-K filed August 10, 2021)
Amendment, dated August 31, 2022 to Amended and Restated Credit Agreement, dated as of August 9, 2021, among the Company, certain
of the Company’s US and Canadian subsidiaries party thereto, JPMorgan Chase Bank, N.A., as administrative agent and Sixth Street
Specialty Lending, Inc., as FILO agent and the lenders party thereto (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K
10.3 filed on October 18, 2022)
Second Amendment (including Amended Credit Facility) dated February 8, 2023 to the Amended and Restated Credit Agreement, dated as
of August 9, 2021, among Bed Bath & Beyond Inc., certain of Bed Bath & Beyond Inc.’s US and Canadian subsidiaries party thereto,
JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to
10.4 Exhibit 10.1 to the Company’s Form 8-K filed on February 10, 2023)

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Third Amendment, dated as of March 6, 2023, to the Amended and Restated Credit Agreement, dated as of August 9, 2021, among Bed
Bath & Beyond Inc., certain of Bed Bath & Beyond Inc.’s US and Canadian subsidiaries party thereto, JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent, Sixth Street Specialty Lending, Inc., as FILO agent, and the lenders party thereto (incorporated
10.5 by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 8, 2023)
Fourth Amendment, dated as of March 30, 2023, to the Amended and Restated Credit Agreement, dated as of August 9, 2021, among Bed
Bath & Beyond Inc., certain of Bed Bath & Beyond Inc.’s US and Canadian subsidiaries party thereto, JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent, Sixth Street Specialty Lending, Inc., as FILO agent, and the lenders party thereto (incorporated
10.6 by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 30, 2023)
Fifth Amendment, dated as of April 6, 2023, to the Amended and Restated Credit Agreement, dated as of August 9, 2021, among Bed Bath
& Beyond Inc., certain of Bed Bath & Beyond Inc.’s US and Canadian subsidiaries party thereto, JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent, Sixth Street Specialty Lending, Inc., as FILO agent, and the lenders party thereto (incorporated
10.7 by reference to Exhibit 10.1 to the Company’s Form 8-K filed on April 11, 2023)
Common Stock Purchase Agreement, dated March 30, 2023, by and between Bed Bath & Beyond Inc. and B. Riley Principal Capital II,
10.8 LLC (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on March 30, 2023)
Registration Rights Agreement, dated March 30, 2023, by and between Bed Bath & Beyond Inc. and B. Riley Principal Capital II, LLC
10.9 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by Bed Bath & Beyond Inc. on March 30, 2023)
Sales Agreement, dated March 30, 2023, by and between Bed Bath & Beyond Inc. and B. Riley Securities, Inc. (incorporated by reference
10.1 to Exhibit 10.4 to the Current Report on Form 8-K filed by Bed Bath & Beyond Inc. on March 30, 2023)
Exchange Agreement, dated March 30, 2023, by and between Bed Bath & Beyond Inc. and HBC Investments LLC (incorporated by
10.11 reference to Exhibit 10.5 to the Current Report on Form 8-K filed by Bed Bath & Beyond Inc. on March 30, 2023)
Employment Agreement between the Company and Laura Crossen (dated as of September 5, 2022) (incorporated by reference to Exhibit
10.12* 10.1 to the Company’s Form 10-Q filed on January 26, 2023)

Employment Agreement between the Company and Sue Gove (dated as of November 11, 2022) (incorporated by reference to Exhibit 10.2
10.13* to the Company’s Form 10-Q filed on January 26, 2023)

Restricted Stock Unit Agreement between the Company and Sue Gove (dated June 29, 2022) (incorporated by reference to Exhibit 10.2 to
10.14* the Company’s Form 10-Q filed on September 30, 2022)

Separation Agreement and General Release between the Company and Mark J. Tritton (dated as of June 27, 2022) (incorporated by
10.15* reference to Exhibit 10.3 to the Company’s Form 10-Q filed on September 30, 2022)

Separation Agreement and General Release between the Company and John Hartmann (dated as of August 31, 2022) (incorporated by
10.16* reference to Exhibit 10.4 to the Company’s Form 10-Q filed on September 30, 2022)

Separation Agreement and General Release between the Company and Joseph G. Hartsig (dated as of August 31, 2022) (incorporated by
10.17* reference to Exhibit 10.5 to the Company’s Form 10-Q filed on September 30, 2022)
Company’s 2004 Incentive Compensation Plan (incorporated by reference to Exhibit B to the Registrant’s Proxy Statement dated May 28,
10.18* 2004
Amended and Restated Employment Agreement between the Company and Warren Eisenberg, dated as of December 31, 2008
10.19* (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended November 29, 2008)
Amended and Restated Employment Agreement between the Company and Leonard Feinstein, dated as of December 31, 2008
10.20* (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended November 29, 2008)
Bed Bath & Beyond Inc. Policy on Recovery of Incentive Compensation (incorporated by reference to Exhibit 10.1 to the Company’s
10.21* Form 10-Q for the quarter ended May 30, 2009)

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Amendment dated as of August 13, 2010 to Amended and Restated Employment Agreement between the Company and Warren Eisenberg,
dated as of December 31, 2008 (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended August 28,
10.22* 2010)
Amendment dated as of August 13, 2010 to Amended and Restated Employment Agreement between the Company and Leonard Feinstein,
dated as of December 31, 2008 (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended August 28,
10.23* 2010)

Bed Bath & Beyond Inc. 2012 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed
10.24* with the Commission on June 26, 2012)

Performance-Based Form of Restricted Stock Agreement under 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.39 to
10.25* the Company’s Form 10-K for the year ended March 1, 2013)

Notice of Amendment to Restricted Stock Agreements, dated on or before June 11, 2012 (incorporated by reference to Exhibit 10.41 to the
10.26* Company’s Form 10-K for the year ended March 1, 2013)

Amendment dated as of February 26, 2014 to Amended and Restated Employment Agreement between the Company and Warren
Eisenberg, dated as of December 31, 2008, as previously amended as of June 29, 2010 and August 13, 2010 (incorporated by reference to
10.27* Exhibit 10.1 to the Company’s Form 8-K filed with the Commission on February 28, 2014)

Amendment dated as of February 26, 2014 to Amended and Restated Employment Agreement between the Company and Leonard
Feinstein, dated as of December 31, 2008, as previously amended as of June 29, 2010 and August 13, 2010 (incorporated by reference to
10.28* Exhibit 10.2 to the Company’s Form 8-K filed with the Commission on February 28, 2014)

Form of Standard Performance Unit Agreement under 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the
10.29* Company’s Form 8-K filed with the Commission on May 9, 2014)

Form of Performance Stock Unit Agreement under 2012 Incentive Compensation Plan (effective 2016) (incorporated by reference to
10.30* Exhibit 10.3 to the Company’s Form 10-Q filed with the Commission on July 6, 2016)

Letter agreement dated February 7, 2017 between the Company and Warren Eisenberg (incorporated by reference to Exhibit 10.1 to the
10.31* Company’s Form 8-K filed with the Commission on February 9, 2017)

Letter agreement dated February 7, 2017 between the Company and Leonard Feinstein (incorporated by reference to Exhibit 10.2 to the
10.32* Company’s Form 8-K filed with the Commission on February 9, 2017)

Form of Standard Performance Stock Unit Agreement under 2012 Incentive Compensation Plan (effective 2017) (incorporated by
10.33* reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the Commission on June 30, 2017)

Employment Agreement between the Company and Robyn M. D'Elia (dated as of June 4, 2018) (incorporated by reference to Exhibit 10.1
10.34* to the Company's Form 8-K filed with the Commission on June 5, 2018)

Bed Bath & Beyond Inc. 2018 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed
10.35* with the Commission on June 29, 2018)
Form of Standard Performance Stock Unit Agreement under 2018 or 2012 Incentive Compensation Plan (incorporated by reference to
10.36* Exhibit 10.1 to the Company’s Form 8-K filed with the Commission on June 19, 2019)
Employment Agreement between the Company and Mark J. Tritton (dated as of October 6, 2019) (incorporated by reference to Exhibit
10.37* 10.1 to the Company’s Form 8-K filed with the Commission on October 10, 2019)
Sign-On Restricted Stock Unit Agreement between the Company and Mark J. Tritton (dated as of November 4, 2019) (incorporated by
10.38* reference to Exhibit 10.2 to the Company’s Form 10-Q filed with the Commission on January 9, 2020))
Make-Whole Restricted Stock Unit Agreement between the Company and Mark J. Tritton (dated as of November 4, 2019) (incorporated
10.39* by reference to Exhibit 10.3 filed with the Commission on January 9, 2020)
Make-Whole Performance Stock Unit Agreement between the Company and Mark J. Tritton (dated as of November 4, 2019) (incorporate
10.40* by reference to Exhibit 10.4 to the Company’s Form 10-Q filed with the Commission on January 9, 2020)
Cooperation and Support Agreement (dated as of May 28, 2019) (incorporated by reference to Exhibit 99.2 to the Company's Form 8-K
10.41* filed with the Commission on June 3, 2019)
Employment Agreement between the Company and John Hartmann (dated April 1, 2020) (incorporated by reference to Exhibit 10.1 to the
10.42* Company’s Form 8-K filed with the Commission on April 21, 2020)

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Employment Agreement between the Company and Gustavo Arnal (dated April 24, 2020) (incorporated by reference to Exhibit 10.1 to the
10.43* Company’s Form 8-K filed with the Commission on April 30, 2020)
Employment Agreement between the Company and Cindy Davis (dated April 30, 2020) (incorporated by reference to Exhibit 99.1 to the
10.44* Company’s Form S-8 filed with the Commission on May 26, 2020)
Make-Whole Restricted Stock Unit Agreement between the Company and John Hartmann (incorporated by reference to Exhibit 10.3 to
10.45* the Company's Form 10-Q filed with the SEC on July 8, 2020)
Sign-On Restricted Stock Unit Agreement between the Company and Gustavo Arnal (incorporated by reference to Exhibit 10.4 to the
10.46* Company's Form 10-Q filed with the SEC on July 8, 2020)
Master Confirmation between JPMorgan Chase Bank, National Association and Bed Bath & Beyond Inc., dated October 28, 2020
10.47* (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed with the SEC on October 28, 2020)
Employment Agreement between the Company and Joe Hartsig, dated February 26, 2020 (incorporated by reference to Exhibit 10.41 to
10.48* the Company's Form 10-K filed with the SEC on April 22, 2021)
Make-Whole Restricted Stock Unit Agreement between the Company and Joe Hartsig, dated March 4, 2020 (incorporated by reference to
10.49* Exhibit 10.42 to the Company's Form 10-K filed with the SEC on April 22, 2021)
Bed Bath & Beyond Inc. Compensation Recoupment Policy, dated as of January 2021 (incorporated by reference to Exhibit 10.43 to the
10.50* Company's Form 10-K filed with the SEC on April 22, 2021)
Sign-On Restricted Stock Unit Agreement between the Company and Cindy Davis, dated May 26, 2020 (incorporated by reference to
10.51* Exhibit 10.44 to the Company's Form 10-K filed with the SEC on April 22, 2021)
10.52* Form of Performance Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Company's 8-K filed on May 14, 2021)
10.53* Form of Restricted Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Company's 8-K filed on May 14, 2021)
Separation and General Release Agreement Between the Company and Cindy Davis (Dated as of August 30, 2021) (incorporated by
10.54* reference to Exhibit 10.2 to the Company's Form 10-Q filed September 30, 2021)
Bed Bath & Beyond Inc. Executive Change in Control Severance Plan, dated as of April 20, 2022 (incorporated by reference to Exhibit
10.55* 10.49 to the Company’s Form 10-K filed on April 21, 2022)
Employment Agreement between the Company and Rafeh Masood, dated April 22, 2020 (incorporated by reference to Exhibit 10.50 to
10.56* the Company’s Form 10-K filed on April 21, 2022)
Amended Employment Agreement between the Company and Rafeh Masood, dated November 2, 2021 (incorporated by reference to
10.57* Exhibit 10.51 to the Company’s Form 10-K filed on April 21, 2022)
Cooperation Agreement, by and among Bed Bath & Beyond Inc., RC Ventures LLC and Ryan Cohen, dated as of March 24, 2022
10.58* (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed with the SEC on March 25, 2022)
Bed Bath & Beyond Amended and Restated Short-Term Incentive Plan, dated April 13, 2022 (incorporated by reference to Exhibit 10.53
10.59* to the Company’s Form 10-K filed on April 21, 2022)
DIP Credit Agreement, by and among Bed Bath & Beyond and certain of its subsidiaries, the lenders party thereto and Sixth Specialty
Lending, Inc., dated as of April 24, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s 8-K filed with the SEC on April 24,
10.6 2023
21** Subsidiaries of the Company

23** Consent of Independent Registered Public Accounting Firm

31.1** Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002

31.2** Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002

Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
32** Section 906 of the Sarbanes - Oxley Act of 2002

101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded
within the Inline XBRL document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

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101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

104 The cover page of Bed Bath & Beyond Inc.’s Annual Report on Form 10-K for the year ended February 26, 2022, formatted in Inline
XBRL (included within Exhibit 101 attachments)

______________________________
* This is a management contract or compensatory plan or arrangement.
** Filed herewith.

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ITEM 16 – FORM 10-K SUMMARY

None.

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

BED BATH & BEYOND INC.

By: /s/ Sue E. Gove

Sue E. Gove
Chief Executive Officer
June 13, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.

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Signature Capacity Date

/s/ Sue E. Gove President and Chief Executive Officer June 13, 2023
Sue E. Gove and Director

Senior Vice President of Finance & Chief

/s/Laura Crossen Accounting Officer June 13, 2023
Laura Crossen (Principal Financial Officer)

/s/ Harriet Edelman Director June 13, 2023

Harriet Edelman

/s/ Carol Flaton Director June 2, 2023

Carol Flaton

/s/ Jeffrey A. Kirwan Director June 13, 2023

Jeffrey A. Kirwan

/s/ Shelly Lombard Director June 13, 2023

Shelly Lombard

/s/ Joshua E. Schechter Director June 13, 2023

Joshua E. Schechter

/s/ Minesh Shah Director June 13, 2023

Minesh Shah

/s/ Andrea Weiss Director June 13, 2023

Andrea Weiss

/s/ Ann Yerger Director June 13, 2023

Ann Yerger

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Bed Bath & Beyond Inc. and Subsidiaries

Schedule II - Valuation and Qualifying Accounts

Fiscal Years Ended February 25, 2023, February 26, 2022, and February 27, 2021
(amounts in millions)
Column A Column B Column C Column D Column E
Balance at Additions Charged
Beginning of to Adjustments Balance at End of
Description Period Income and/or Deductions Period
Sales Returns and Allowance

Year Ended:
February 25, 2023 $ 22.2 $ 101.0 $ (116.2) $ 7.0
February 26, 2022 36.2 227.1 (241.1) 22.2
February 27, 2021 71.6 259.8 (295.2) 36.2

127
 Exhibit 21

SUBSIDIARIES OF BED BATH & BEYOND INC.

The following are all of the subsidiaries of Bed Bath & Beyond Inc. other than: (i) 100% owned subsidiaries of Bed 'n Bath Stores Inc. holding no assets
other than a single store lease and, in some cases, fully depreciated fixed assets; (ii) 100% owned subsidiaries of Harmon Stores, Inc. holding no assets
other than a single store lease and, in some cases, fully depreciated fixed assets; (iii) 100% owned subsidiaries of buybuy BABY, Inc. holding no assets
other than a single store lease and, in some cases, fully depreciated fixed assets; and (iv) omitted subsidiaries which in the aggregated would not constitute
a significant subsidiary.

Name Jurisdiction

Bed Bath & Beyond of California Limited Liability Company Delaware

Bed Bath & Beyond Canada L.P. Ontario
buybuy BABY, Inc. Delaware
Harmon Stores, Inc. Delaware
Liberty Procurement Co. Inc. New York
 Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the registration statements (Nos. 33-63902, 33-87602, 333-18011, 333-75883, 333-64494, 333-126169,
333-182528, 333-227939, 333-234457, 333-238697, and 333-237972) on Form S-8 of our reports dated June 13, 2023, with respect to the consolidated
financial statements of Bed Bath & Beyond Inc. and the effectiveness of internal control over financial reporting.

/s/ KPMG LLP

New York, New York

June 13, 2023
 Exhibit 31.1

CERTIFICATION

I, Sue E. Gove, certify that:

1. I have reviewed this annual report on Form 10-K of Bed Bath & Beyond Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
Date: June 13, 2023 /s/ Sue E. Gove
Sue E. Gove
President and Chief Executive Officer
 Exhibit 31.2

CERTIFICATION

I, Laura Crossen, certify that:

1. I have reviewed this annual report on Form 10-K of Bed Bath & Beyond Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
Date: June 13, 2023 /s/ Laura Crossen
Laura Crossen
Chief Accounting Officer
(Principal Financial Officer)
 Exhibit 32

CERTIFICATION

The undersigned, the Principal Executive Officer and Principal Financial Officer of Bed Bath & Beyond Inc. (the “Company”), hereby certify, to the best of
their knowledge and belief, that the Form 10-K of the Company for the annual period ended February 26, 2022, (the “Periodic Report”) accompanying this
certification fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and that the
information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. The
foregoing certification is provided solely for purposes of complying with the provisions of Section 906 of the Sarbanes – Oxley Act and is not intended to
be used for any other purposes.
Date: June 13, 2023 /s/ Sue E. Gove
Sue E. Gove
President and Chief Executive Officer
/s/ Laura Crossen
Laura Crossen
Chief Accounting Officer
(Principal Financial Officer)