Albertsons 2008 Annual Report Download - page 18

Download and view the complete annual report

Please find page 18 of the 2008 Albertsons 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.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

The Company’s policy is to discount its self-insurance liabilities at a risk-free interest rate, which is appropriate
based on the Company’s ability to reliably estimate the amount and timing of cash payments. If, in the future, the
Company were to experience significant volatility in the amount and timing of cash payments compared to the
Company’s earlier estimates, the Company would assess whether it is appropriate to continue to discount these
liabilities.
Litigation may adversely affect the Company’s businesses, financial condition and results of operations.
The Company’s businesses are subject to the risk of litigation by employees, consumers, suppliers, stockholders
or others through private actions, class actions, administrative proceedings, regulatory actions or other litigation.
The outcome of litigation, particularly class action lawsuits and regulatory actions, is difficult to assess or
quantify. Plaintiffs in these types of lawsuits may seek recovery of very large or indeterminate amounts, and the
magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time.
The cost to defend future litigation may be significant. There may also be adverse publicity associated with
litigation that could decrease consumer confidence in the Company’s businesses, regardless of whether the
allegations are valid or whether the Company is ultimately found liable. As a result, litigation may adversely
affect the Company’s businesses, financial condition and results of operations.
Difficulties with the Company’s information technology systems could adversely affect the Company’s
results of operations.
The Company has complex information technology systems that are important to the operation of its businesses.
The Company could encounter difficulties in developing new systems or maintaining and upgrading existing
systems. Such difficulties could lead to significant expenses or losses due to disruption in business operations
and, as a result, could adversely affect the Company’s results of operations.
Threats or potential threats to security or the occurrence of a widespread health epidemic may adversely
affect the Company’s financial condition and results of operations.
The Company’s businesses could be severely impacted by wartime activities, threats or acts of terror or a
widespread regional, national or global health epidemic, such as pandemic flu. Such activities, threats or
epidemics may adversely impact the Company’s businesses by disrupting production and delivery of products to
its stores or to its distribution customers, by affecting the Company’s ability to appropriately staff its stores and
by causing customers to avoid public gathering places or otherwise change their shopping behaviors.
Additionally, data theft, information espionage or other criminal activity directed at the grocery or drug store
industry, the transportation industry, or computer or communications systems may adversely affect the
Company’s businesses by causing the Company to implement costly security measures in recognition of actual or
potential threats, by requiring the Company to expend significant time and expense developing, maintaining or
upgrading its information technology systems and by causing the Company to incur significant costs to
reimburse third parties for damages. Such activities may also adversely affect the Company’s financial condition
and results of operations by reducing consumer confidence in the marketplace and by modifying consumer
spending habits.
Severe weather, natural disasters and adverse climate changes could adversely affect the Company’s
financial condition and results of operations.
Severe weather conditions such as hurricanes, earthquakes or tornadoes, as well as other natural disasters, in
areas in which the Company has stores or distribution facilities or from which the Company obtains products
could adversely affect the Company’s results of operations. Such conditions could cause physical damage to the
Company’s properties, closure of one or more of the Company’s stores or distribution facilities, lack of an
adequate work force in a market, temporary disruption in the supply of products, disruption in the transport of
12