Albertsons 2014 Annual Report Download - page 110

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August 20, 2013, the parties agreed in principle to resolve the matters on a nationwide basis in a settlement that
will cap the Company’s aggregate obligation, including with respect to settlement funds, plaintiffs’ attorneys fees
and costs and settlement administration costs. The settlement is subject to the applicable courts’ preliminary and
final approval. The court granted preliminary approval of the settlement on March 13, 2014. Final approval is
subject to the court’s approval, which the parties expect to seek in July 2014. The Company recorded a litigation
settlement charge of $5 before tax ($3 after tax) in the second quarter of fiscal 2014 in connection with the
expected settlement of this matter. The Company funded $5 into a qualified settlement fund on February 28,
2014.
Predicting the outcomes of claims and litigation and estimating related costs and exposures involves substantial
uncertainties that could cause actual outcomes, costs and exposures to vary materially from current expectations.
The Company regularly monitors its exposure to the loss contingencies associated with these matters and may
from time to time change its predictions with respect to outcomes and its estimates with respect to related costs
and exposures.
With respect to the IOS and C&S matters discussed above, the Company believes the chance of a negative
outcome is remote. It is possible, although management believes it is remote, that material differences in actual
outcomes, costs and exposures relative to current predictions and estimates, or material changes in such
predictions or estimates, could have a material adverse effect on the Company’s financial condition, results of
operations or cash flows.
NOTE 13—SEGMENT INFORMATION
Refer to the Consolidated Segment Financial Information for financial information concerning the Company’s
operations and financial position by reportable segment.
The Company’s operating segments reflect the manner in which the business is managed and how the Company
allocates resources and assesses performance internally. The Company’s chief operating decision maker is the
Chief Executive Officer.
The Company offers a wide variety of grocery products, general merchandise and health and beauty care,
pharmacy, fuel and other items and services. The Company’s business is classified by management into three
reportable segments: Independent Business, Save-A-Lot and Retail Food. These reportable segments are three
distinct businesses, each with a different customer base, marketing strategy and management structure. The
Company reviews its reportable segments on an annual basis, or more frequently if events or circumstances
indicate a change in reportable segments has occurred.
The Independent Business reportable segment derives revenues from wholesale distribution to independently
owned retail food stores and other customers (collectively referred to as “independent retail customers”). The
Save-A-Lot reportable segment derives revenues from the sale of groceries at retail locations operated and
licensed by the Company (both the Company’s own stores and stores licensed by the Company to which the
Company distributes wholesale products). The Retail Food reportable segment derives revenues from the sale of
groceries and other products at retail locations operated by the Company. Substantially all of the Company’s
operations are domestic.
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