Harris Teeter 2007 Annual Report Download - page 11

7
The Company may Incur Increased Pension Expenses
The Company maintains certain retirement benefit plans for substantially all domestic full-time employees
and a supplemental retirement benefit plan for certain selected officers of the Company and its subsidiaries,
including a qualified pension plan which is a non-contributory, funded defined benefit plan and a non-qualified
supplemental pension plan for executives which is an unfunded, defined benefit plan. The Company has frozen
participation and benefit accruals under the Company-sponsored defined benefit plan effective September
30, 2005 for all participants, with certain transition benefits provided to those participants that have achieved
specified age and service levels on December 31, 2005; however, at September 30, 2007, the Company’s pension
plans had accumulated benefit obligations in excess of the fair value of plan assets. The amount of any increase
or decrease in our required contributions to our pension plans will depend on government regulation, returns on
plan assets and actuarial assumptions regarding our future funding obligations. For more information, refer to
the Note entitled “Employee Benefit Plans” of the Notes to Consolidated Financial Statements in Item 8 hereof.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The executive office of the Company is located in a leased space of a downtown office tower at 301
S. Tryon Street, Suite 1800, Charlotte, North Carolina, 28202.
Harris Teeter owns its principal offices near Charlotte, North Carolina, a 517,000 square foot distribution
facility east of Charlotte, a 913,000 square foot distribution facility in Greensboro, North Carolina, and a 90,500
square foot dairy processing plant in High Point, North Carolina. Both distribution facilities contain dry grocery
warehousing space and refrigerated storage for perishable goods. In addition, the Greensboro facility has frozen
goods storage and a single pick facility for health and beauty care products and other general merchandise.
Harris Teeter operates its retail stores primarily from leased properties. As of September 30, 2007, Harris Teeter
held title to the land and buildings of approximately 4% of its supermarkets. The remaining supermarkets are
either leased in their entirety or the building is owned and situated on leased land. In addition, Harris Teeter
holds interest in properties that are under development for store sites. In future years the proportion of store
development and store ownership may increase. Harris Teeter’s supermarkets range in size from approximately
16,000 square feet to 73,000 square feet, with an average size of approximately 46,000 square feet. The following
table sets forth selected statistics with respect to Harris Teeter stores for each of the last three fiscal years:
2007 2006 2005
Stores Open at Period End . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 152 145
Average Weekly Net Sales Per Store* . . . . . . . . . . . . . . . . . . . . . . . $ 402,982 $ 380,812 $ 358,699
Average Square Footage Per Store at Period End . . . . . . . . . . . . . . 46,197 44,535 43,060
Average Square Footage Per New Store Opened
During Period ....................................... 51,737 51,607 50,742
Total Square Footage at Period End . . . . . . . . . . . . . . . . . . . . . . . . . 7,576,302 6,769,245 6,243,635
* Computed on the basis of aggregate sales of stores open for a full year.
A&E’s principal offices, seven domestic manufacturing plants and one distribution center are all owned
by A&E and are all located in North Carolina. Domestic manufacturing and related warehouse facilities
have an aggregate of 1,778,027 square feet of floor space. A&E has a domestic dyeing production capacity
of approximately 27,000,000 pounds per year. Capacities are based on 168 hours of operations per week. In
addition, A&E leases six distribution centers scattered throughout its domestic markets with an aggregate of
184,935 square feet of floor space.