Safeway 2007 Annual Report Download - page 30

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SAFEWAY INC. AND SUBSIDIARIES
Capital Expenditure Program A key component of the Company’s long-term growth strategy is its capital
expenditure program. The Company’s capital expenditure program funds, among other things, new stores, remodels,
manufacturing plants, distribution facilities and information technology. Safeway’s management has maintained a
rigorous program to select and approve new capital investments.
The table below details changes in the Company’s store base and presents the Company’s cash capital expenditures over
the last five years (dollars in millions):
2007 2006 2005 2004 2003
Total stores at beginning of year 1,761 1,775 1,802 1,817 1,808
Stores opened:
New 13 7112222
Replacement 710 10 11 18
20 17 21 33 40
Stores closed 38 31 48 48 31
Total stores at year end 1,743 1,761 1,775 1,802 1,817
Remodels completed (1)
Lifestyle remodels 253 276 293 92 19
Other remodels 15 8222356
268 284 315 115 75
Number of fuel stations at year end 361 340 314 311 270
Total retail square footage at year end
(in millions) 80.3 80.8 81.0 82.1 82.6
Cash capital expenditures $ 1,768.7 $ 1,674.2 $ 1,383.5 $ 1,212.5 $ 935.8
Cash capital expenditures as a
percentage of sales and other revenue 4.2% 4.2% 3.6% 3.4% 2.6%
(1) Defined as store remodel projects (other than maintenance) generally requiring expenditures in excess of $0.2 million.
During 2007 Safeway invested $1.77 billion in cash capital expenditures. The Company opened 20 new Lifestyle stores,
remodeled 253 stores to the Lifestyle format and closed 38 stores. The Company also completed 15 other remodels. In
2008 the Company expects to spend approximately $1.70 to $1.75 billion in cash capital expenditures and to open
approximately 20 to 25 new Lifestyle stores and to remodel approximately 250 to 255 stores into the Lifestyle format. At
year-end 2007, 59% of Safeway’s store base was in the Lifestyle format, and the Company expects to have approximately
75% in this format by the end of 2008 and approximately 90% in this format by the end of 2009.
Financial Information about Segments Note L to the consolidated financial statements set forth in Part II, Item 8 of
this report provides financial information about the Company’s segments.
Trade Names and Trademarks Safeway has invested significantly in the development and protection of “Safeway”
both as a trade name and a trademark and considers it to be an important asset. Safeway also owns more than 400 other
trademarks registered and/or pending in the United States Patent and Trademark Office and other jurisdictions, including
trademarks for its product lines such as Safeway, Safeway SELECT, Rancher’s Reserve, OORGANICS, Lucerne, Primo
Taglio, Eating Right, Basic Red and Priority, and other trademarks such as Pak’N Save Foods, Vons, Pavilions, Dominick’s,
Randall’s, Tom Thumb, Genuardi’s and Carrs Quality Centers. Each trademark registration is for an initial period of 10 or
20 years, depending on the registration date, and may be renewed so long as it is in continued use in commerce.
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