Safeway 1999 Annual Report Download - page 43

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SAFEWAY INC. AND SUBSIDIARIES
MANAGEM ENT’S REPORT
Financial Statements Safeway Inc. is responsible for the
preparation, integrity and fair presentation of its published finan-
cial statements. The accompanying consolidated financial state-
ments have been prepared in accordance with generally accepted
accounting principles and necessarily include amounts that are
based on judgments and estimates made by management. Safeway
also prepared the other information included in the annual report
and is responsible for its accuracy and consistency with the
financial statements.
The financial statements have been audited by Deloitte &
Touche LLP, independent auditors, which was given unrestricted
access to all financial records and related data, including min-
utes of all meetings of stockholders, the Board of Directors, and
committees of the Board. Safeway believes that all representa-
tions made to the independent auditors during their audit were
valid and appropriate. The report of Deloitte & Touche LLP is
presented below.
Internal Control System Safeway maintains a system of inter-
nal control over financial reporting, which is designed to provide
reasonable assurance to management and the Board of Directors
regarding the preparation of reliable published financial state-
ments. The system includes a documented organizational struc-
ture and division of responsibility; established policies and
procedures including a code of conduct to foster a strong ethical
climate, which are communicated throughout Safeway; and the
careful selection, training and development of employees.
Internal auditors monitor the operation of the internal control
system and report findings and recommendations to management
and the Board, and corrective actions are taken to address con-
trol deficiencies and other opportunities for improving the sys-
tem as they are identified. The Board, operating through its
Audit Committee, which is composed entirely of outside direc-
tors, provides oversight to the financial reporting process.
There are inherent limitations in the effectiveness of any sys-
tem of internal control, including the possibility of circumven-
tion or overriding of controls. Accordingly, even an effective
internal control system can provide only reasonable assurance
with respect to financial statement preparation. Furthermore, the
effectiveness of an internal control system can change with cir-
cumstances. As of January 1, 2000, Safeway believes its system
of internal controls over financial reporting was effective for pro-
viding reliable financial statements.
Steven A. Burd David G. Weed
Chairman, President and Executive Vice President
Chief Executive Officer and Chief Financial Officer
INDEPENDENT AUDITORS’ REPORT
The Board of Directors and
Stockholders of Safeway Inc:
We have audited the accompanying consolidated balance sheets
of Safeway Inc. and subsidiaries as of January 1, 2000 and
January 2, 1999, and the related consolidated statements of
income, stockholders’ equity and cash flows for each of the three
fiscal years in the period ended January 1, 2000. These financial
statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accept-
ed auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and sig-
nificant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements pres-
ent fairly, in all material respects, the financial position of
Safeway Inc. and subsidiaries as of January 1, 2000 and
January 2, 1999, and the results of their operations and their
cash flows for each of the three fiscal years in the period ended
January 1, 2000 in conformity with generally accepted
accounting principles.
San Francisco, California
February 25, 2000