Safeway 2004 Annual Report Download - page 30

28 SAFEWAY INC. 2004 ANNUAL REPORT
SAFEWAY INC. AND SUBSIDIARIES
The Company will be required to choose between the
modified-prospective and modified-retrospective transition
alternatives in adopting SFAS No. 123R. Under the
modified-prospective-transition method, compensation cost
will be recognized in financial statements issued
subsequent to the date of adoption for all shared-based
payments granted, modified or settled after the date of
adoption, as well as for any unvested awards that were
granted prior to the date of adoption. Under the modified-
retrospective-transition method, prior period financial
statements will be restated by recognizing compensation
cost as previously reported in the pro forma disclosures
under SFAS No. 123. The restatement provisions can be
applied to either a) all periods presented or b) to the
beginning of the fiscal year in which SFAS No. 123R is
adopted. As the Company previously adopted only the pro
forma disclosure provisions of SFAS No. 123, Safeway will
recognize compensation cost relating to the unvested
portion of awards granted prior to the date of adoption
using the same estimate of the grant-date fair value and the
same attribution method used to determine the pro forma
disclosures under SFAS No. 123.
SFAS No. 123R is effective at the beginning of the first
interim or annual period beginning after June 15, 2005, and
early adoption is encouraged. Safeway has elected to early
adopt this pronouncement beginning in the first quarter of
2005. The Company is in the process of evaluating the use
of certain option-pricing models as well as the assumptions
to be used in such models. When that evaluation is complete,
Safeway will select a transition method.
Forward-Looking Statements
This Annual Report contains certain forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements relate to, among
other things, capital expenditures, acquisitions, the
valuation of Safeway’s investments, operating
improvements and costs, tax rate and gross profit
improvement, and are indicated by words or phrases such
as “continuing,” “ongoing,” “expects” and similar words or
phrases. The following are among the principal factors that
could cause actual results to differ materially from the
forward-looking statements: general business and economic
conditions in our operating regions, including the rate of
inflation, consumer spending levels, population,
employment and job growth in our markets; pricing
pressures and competitive factors, which could include
pricing strategies, store openings and remodels by our
competitors; results of our programs to control or reduce
costs, improve buying practices and control shrink; results
of our programs to increase sales, including private-label
sales, improvement in our perishables departments and our
promotional programs; results of our programs to improve
capital management; the ability to integrate any companies
we acquire and achieve operating improvements at those
companies; changes in financial performance of our equity
investments; increases in labor costs and relations with
union bargaining units representing our employees or
employees of third-party operators of our distribution
centers; changes in state or federal legislation or regulation;
the cost and stability of power sources; opportunities,
acquisitions or dispositions that we pursue; performance
in new business ventures; the rate of return on our pension
assets; and the availability and terms of financing.
Consequently, actual events and results may vary signifi-
cantly from those included in or contemplated or implied by
such statements. The Company undertakes no obligation to
update forward-looking statements to reflect developments
or information obtained after the date hereof and disclaims
any obligation to do so.