Safeway 2008 Annual Report Download - page 34

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SAFEWAY INC. AND SUBSIDIARIES
regards to the Company’s security surrounding the physical and electronic storage, processing and transmission of
individual cardholder data.
Despite the Company’s considerable efforts and technology to secure our computer network and payment cardholder
data, security could be compromised, confidential information could be misappropriated or system disruptions could
occur. This could lead to loss of sales or profits or cause the Company to incur significant costs to reimburse third parties
for damages.
Changes in Accounting Standards Financial statements are prepared in accordance with accounting principles
generally accepted in the United States. They are subject to interpretation by various governing bodies, including the
Financial Accounting Standards Board (“FASB”) and the SEC, which create and interpret accounting standards. For many
aspects of our business, such as workers’ compensation, store closures, employee benefit plans, stock-based employee
compensation, goodwill and income tax contingencies, these standards and their interpretations require management’s
most difficult, subjective or complex judgments. Additionally, the SEC has issued for comment a proposed roadmap
regarding the potential use of International Financial Reporting Standards (“IFRS”) for the preparation of financial
statements by U.S. registrants. Under the proposed roadmap, Safeway would be required to prepare financial statements
in accordance with IFRS in fiscal 2014, including comparative information also prepared under IFRS for fiscal 2013 and
2012. A change from current accounting standards could have a significant effect on the Company’s results of
operations.
Energy and Fuel Safeway’s operations are dependent upon the availability of a significant amount of energy and fuel
to manufacture, store and transport products. Energy and fuel costs have experienced volatility over time. To reduce the
impact of volatile energy costs, the Company has entered into contracts to purchase electricity and natural gas at fixed
prices to satisfy a portion of its energy needs. This is discussed further in Part II, Item 7 of this report under the caption
“Energy Contracts.”
Safeway also sells fuel. Significant increases in wholesale fuel costs could result in retail price increases and in lower gross
profit on fuel sales. Additionally, consumer demand for fuel may decline if retail prices increase. Such volatility and the
impact to our operations and financial results are difficult to predict.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The information required by this item is set forth in Part I, Item 1 of this report.
Item 3. Legal Proceedings
Information about legal proceedings appears under the caption “Legal Matters” in Note K to the consolidated financial
statements set forth in Part II, Item 8 of this report.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the stockholders during the fourth quarter of fiscal 2008.
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