Kroger 2007 Annual Report Download - page 46

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Please find page 46 of the 2007 Kroger annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

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We believe that long-term shareholder value is determined, in part, by the
return on invested capital and therefore we use a disciplined approach to
evaluate every capital investment:
Capital investments are assessed versus our after-tax hurdle rate with
consideration given to the risk of that specific investment.
The projected incremental sales and EBITDA from each capital
expenditure are added to divisional and corporate bonus bases in order
to motivate the entire organization to achieve returns above our hurdle
rate.
A quarterly re-analysis of each major project is conducted to ensure we
understand the return from major capital projects.
Kroger continues to aggressively close underperforming stores. In fiscal
2007, we closed 52 stores – 43 of these were operational closures. The
term “operational closure” describes a store location that has been
closed without opening another store in the same vicinity to replace it.
The chart on the following page provides Kroger’s real estate activity by
quarter for fiscal 2005, 2006, and 2007.
The Kroger Co. Page 46
Capital Investments
2007
2006
2005
Supermarkets Real Estate
Technology & Logistics Mfg, C-stores, Jewelry
Other