Albertsons Companies, Inc.ACI
Albertsons Companies, Inc. Segments Disclosure
SEGMENT INFORMATION
The Company and its subsidiaries offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel and other items and services in its stores or through digital channels. The Company's retail operating divisions are geographically based, have similar economic characteristics and similar expected long-term financial performance. The Company's operating segments and reporting units are its operating divisions, which are reported in one reportable segment. Each reporting unit constitutes a business for which discrete financial information is available and for which the Chief Operating Decision Maker ("CODM"), the Company's Chief Executive Officer, regularly reviews the operating results and makes key operating decisions on how to allocate resources. Across all operating segments, the Company operates primarily one store format. Each division offers, through its stores and digital channels, the same general mix of products with similar pricing to similar categories of customers, has similar distribution methods, operates in similar regulatory environments and purchases merchandise from similar or the same vendors.
The CODM evaluates performance and allocates resources using Retail segment EBITDA, defined as earnings (net loss) before interest, income taxes, depreciation and amortization, adjusted to eliminate the effects of items management does not consider in assessing segment performance. The CODM uses Retail segment EBITDA as its principal measure of segment performance to evaluate the Company's operating results and effectiveness of its strategies and to monitor budget versus actual results.
The CODM is not provided asset information by operating segment as asset information is provided to the CODM on a consolidated basis. No customer accounts for 10% or more of the Company's revenues. Substantially all of the Company's revenues are generated in the U.S. and its long-lived assets are predominantly located within the U.S. The accounting policies of the reportable segment generally align with those described in the Company’s summary of significant accounting policies contained in Note 1, except certain classification differences that are not material for all periods presented.
The following table presents segment information for Net sales and other revenue, significant segment expenses and Retail segment EBITDA (in millions):
| Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | |||||||||||||||
| Retail segment sales | $ | 79,633.2 | $ | 78,494.4 | $ | 76,773.7 | |||||||||||
| Other revenue (1) | 757.7 | 743.3 | 876.0 | ||||||||||||||
| Net sales and other revenue | $ | 80,390.9 | $ | 79,237.7 | $ | 77,649.7 | |||||||||||
| Retail segment expenses: | |||||||||||||||||
| Merchandise costs, including advertising, distribution and freight | 56,674.1 | 55,807.2 | 54,250.1 | ||||||||||||||
| Employee costs (2) | 11,734.9 | 11,411.5 | 11,222.0 | ||||||||||||||
| Other segment expenses (3) | 6,668.5 | 6,482.8 | 6,168.9 | ||||||||||||||
| Retail segment EBITDA | $ | 4,555.7 | $ | 4,792.9 | $ | 5,132.7 | |||||||||||
| Reconciliation to Income before income taxes: | |||||||||||||||||
| Corporate adjusted EBITDA (4) | (551.0) | (475.2) | (455.7) | ||||||||||||||
| Depreciation and amortization | (1,817.9) | (1,779.0) | (1,807.1) | ||||||||||||||
| Interest expense, net | (459.8) | (492.1) | (404.6) | ||||||||||||||
| (Loss) gain on interest rate swaps and energy hedges, net | (0.9) | 3.2 | 8.4 | ||||||||||||||
| Business transformation (5) | (105.2) | (45.1) | (78.3) | ||||||||||||||
| Equity-based compensation expense | (106.2) | (104.5) | (138.3) | ||||||||||||||
| (Loss) gain on property dispositions and impairment losses, net | (95.8) | (43.9) | 147.5 | ||||||||||||||
| LIFO expense | (28.6) | (52.0) | (268.0) | ||||||||||||||
| Government-mandated incremental COVID-19 pandemic related pay (6) | — | — | (10.8) | ||||||||||||||
| Merger-related costs (7) | (254.8) | (180.6) | (56.5) | ||||||||||||||
| Certain legal and regulatory accruals and settlements, net | (6.1) | 6.7 | (100.7) | ||||||||||||||
| Combined Plan (8) | — | — | 19.0 | ||||||||||||||
| Miscellaneous adjustments (9) | 0.3 | (41.4) | (52.1) | ||||||||||||||
| Income before income taxes | $ | 1,129.7 | $ | 1,589.0 | $ | 1,935.5 | |||||||||||
(1) Primarily includes wholesale sales to third parties and other miscellaneous revenue not included in Retail segment sales.
(2) Includes wages, salaries, benefits, insurance and other employee-related costs.
(3) Other segment expenses primarily includes rent and occupancy costs, debit and credit card fees, supplies, divisional support costs and allocated corporate costs.
(4) Corporate adjusted EBITDA includes bonus compensation, unallocated corporate costs and contribution from the Company's wholesale and other sales.
(5) Includes costs associated with third-party consulting fees related to the Company's Customers for Life strategy and employee termination costs related to the Company's reduction in workforce during the fourth quarter of fiscal 2024.
(6) Represents incremental COVID-19 related pay legislatively required in certain municipalities in which the Company operates.
(7) Primarily relates to third-party legal and advisor fees and retention program expense related to the Merger and costs in connection with the Company's previously-announced Board-led review of potential strategic alternatives.
(8) Related to the Combined Plan during the second quarter of fiscal 2022. For additional information, see Note 11 - Employee benefit plans and collective bargaining agreements.
(9) Primarily includes net realized and unrealized gains and losses related to non-operating investments, lease adjustments related to non-cash rent expense and costs incurred on leased surplus properties, pension settlement loss, adjustments for unconsolidated equity investments and other costs not allocated to the segment.
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About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.