Safeway 2013 Annual Report Download

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Table of Contents




(Mark One)
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 28, 2013
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-00041

(Exact name of registrant as specified in its charter)
Delaware
94-3019135
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
5918 Stoneridge Mall Road
Pleasanton, California
94588-3229
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including
area code:
(925) 467-3000

Title of each class
Name of each exchange on which registered
Common Stock, $0.01 par value per share
New York Stock Exchange
7.45% Senior Debentures due 2027
New York Stock Exchange
Preferred Stock Purchase Rights
New York Stock Exchange

(Title of class)
NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  .
(Cover continued on following page)

Table of contents

  • Page 1
    ...(Mark One) X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 28, 2013 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-00041...

  • Page 2
    ... the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 15, 2013 was...

  • Page 3
    ... Executive Officers of the Registrant PTRT II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data 18 21 Item 6. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations...

  • Page 4
    ...; obligations and contributions under benefit plans; the rate of return on pension assets; amounts to be recognized as a component of net periodic benefit cost; results of shrink programs; unrecognized tax benefits; unrecognized compensation cost; and repurchases of common stock. The following are...

  • Page 5
    ... we operate; Changes in the financial performance of our equity investments; Labor costs, including benefit plan costs and severance payments, or labor disputes that may arise from time to time and work stoppages that could occur in areas where certain collective bargaining agreements have expired...

  • Page 6
    ... December 29, 2012 ("fiscal 2012" or "2012") and the 52-week period ended December 31, 2011 ("fiscal 2011" or "2011"). Safeway Inc. is one of the largest food and drug retailers in the United States, with 1,335 stores at year-end 2013. The Company's U.S. retail operations are located principally in...

  • Page 7
    ... Safeway's operating strategy is to provide value to its customers by maintaining high store standards and a wide selection of high-quality products at competitive prices. To provide one-stop shopping for today's busy shoppers, the Company emphasizes high-quality produce and meat and offers...

  • Page 8
    ... in 2011 as a value line, offering basic items across several categories, including dairy, meat, canned vegetables and paper goods. During 2012, Safeway completed the roll out of the just for Uâ„¢ personalized pricing and digital marketing program in U.S. markets. This program allows a customer to...

  • Page 9
    ... Company's long-term growth strategy is its capital expenditure program. The Company's capital expenditure program funds, among other things, new stores, remodels, retail shopping center development, manufacturing plants, distribution facilities and information technology. Safeway's management has...

  • Page 10
    ...2013, 2012 and 2011 contain 16 weeks. See Note V to the consolidated financial statements set forth in Part II, Item 8 of this report. Competition Food retailing is very competitive. The principal competitive factors that affect the Company's business are location, quality, price, service, selection...

  • Page 11
    ... of operations. Profit Margins Profit margins in the grocery retail industry are narrow. In order to increase or maintain our profit margins, we develop strategies to increase revenues, reduce costs and increase gross margins, such as new marketing programs, new advertising campaigns, productivity...

  • Page 12
    ... providers or to attract new content providers to its network, could have a material adverse effect on its business, results of operations and financial condition. Blackhawk relies on relationships with card issuing banks for services related to products for which it acts as program manager, and its...

  • Page 13
    ...-retirement plans increased from $7.1 million in 2010 to $151.2 million in 2011. In recent years, cash contributions have declined due to improved market conditions and the impact of the Pension Funding Stabilization legislation, which increased the discount rate used to determine pension funding...

  • Page 14
    ... the availability of our cash flow to fund working capital, capital expenditures, dividends on common stock, stock repurchases, acquisitions, development efforts and other general corporate purposes; (ii) our flexibility in planning for, or reacting to, changes in our business may be limited; (iii...

  • Page 15
    ..., benefit level changes and claim settlement patterns. The majority of our workers' compensation liability is from claims occurring in California. California workers' compensation has received intense scrutiny from the state's politicians, insurers, employers and providers, as well as the public in...

  • Page 16
    ... Risk." 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...

  • Page 17
    ... with the Company Robert L. Edwards (1) President and Chief Executive Officer Peter J. Bocian (2) Executive Vice President and Chief Financial Officer Diane M. Dietz Executive Vice President and Chief Marketing Officer Kelly P. Griffith (3) Executive Vice President, Retail Operations Larree M. Renda...

  • Page 18
    ... Equity Securities The Company's common stock, $0.01 par value, is listed on the New York Stock Exchange. Information on dividends declared per common share is set forth in Part II, Item 7 of this report. The following table presents quarterly high and low sales prices for the Company's common stock...

  • Page 19
    ...portion of restricted stock awards with a market value approximating the amount of the withholding taxes due from such restricted stockholders. Average purchase price excludes commissions. (2) (3) The Company's stock repurchase program was initiated in 1999. In October 2013, the Company's board of...

  • Page 20
    ... the yearly percentage change in the Company's cumulative total stockholder return on its common stock for the period from the end of its 2008 fiscal year to the end of its 2013 fiscal year to that of the Standard & Poor's ("S&P") 500 and a group of peer companies (*) in the retail grocery industry...

  • Page 21
    ... Selected Financial Data As previously reported, Safeway completed the sale of the net assets of Canada Safeway Limited ("CSL" now known as CSL IT Services ULC) to Sobeys Inc. on November 3, 2013. Additionally, in the fourth quarter of 2013, the Company exited the Chicago market where it operated...

  • Page 22
    ...) 52 Weeks 2013 52 Weeks 2012 52 Weeks 2011 52 Weeks 2010 53 Weeks 2009 (Dollars in millions, except per-share amounts) Financial Statistics Identical-store sales increases (decreases) (1) Identical-store sales increases (decreases) without fuel (1) Gross profit margin Operating & administrative...

  • Page 23
    ... fourth quarter of 2013, Safeway sold or closed all Dominick's stores. In 2013, cash proceeds on the sale of these stores were $72.2 million, with a pre-tax loss of $493.1 million . Included in the loss is a $310.8 million charge which represents the estimated multiemployer pension plan withdrawal...

  • Page 24
    ...24, 2013 , Blackhawk, a Safeway subsidiary, completed its initial public offering of 11.5 million shares of its Class A common stock at $23.00 per share on the NASDAQ Global Select Market, which included the exercise by the underwriters for the offering of an option to purchase 1.5 million shares of...

  • Page 25
    .... Income tax expense in 2011 was reduced by $53.8 million due to a change in policy regarding the repatriation of earnings in Casa Ley. Sales and Other Revenue Identical-store sales increases for the past three fiscal years were as follows: Including fuel Excluding fuel 2013 0.2% 1.7% 2012...

  • Page 26
    ... advertising expense Changes in product mix Increased LIFO income Fuel partner discounts Investments in price Higher Blackhawk revenue (which has a lower gross margin than grocery sales) Higher shrink expense Other individually immaterial items 5 (15) (18) ( 8) (19) 2 4 The gross profit margin...

  • Page 27
    ...be flat in 2014. Safeway's long-term programs to control shrink expense include improved buying practices to prevent overstocking of inventory and increased security to reduce theft. Vendor allowances totaled $2.4 billion in 2013, $2.3 billion in 2012 and $2.2 billion in 2011. Vendor allowances can...

  • Page 28
    ...in 2012. A 100 basis-point increase in the discount rate used to measure the present value of the self-insurance liability accounted for approximately $24 million of the decline in expense. The remaining decline was due primarily to Company programs to reduce workers' compensation expense. Operating...

  • Page 29
    ... and equity in earnings of unconsolidated affiliate of $13.0 million . Income Taxes Income tax expense was $89.7 million , or 26.7% of pre-tax income in 2013. In 2013 Safeway withdrew $68.7 million from the accumulated cash surrender value of corporate-owned life insurance ("COLI") policies and...

  • Page 30
    ... value of gift cards, an increase in marketing revenue, an increase in sales from Cardpool and an increase in telecom handset sales. Income before taxes from Blackhawk was $75.0 million in 2012 compared to $60.7 million in fiscal 2011. Critical Tccounting Policies and Estimates Critical accounting...

  • Page 31
    ... the funded status as of fiscal year end. Additional disclosures are provided in Note M to the consolidated financial statements, set forth in Part II, Item 8 of this report. The determination of Safeway's obligation and expense for pension benefits is dependent, in part, on the Company's selection...

  • Page 32
    ...Expected return on assets +1 pt -1 pt Discount rate +1 pt -1 pt $ $ $ $ - - 251.7 (315.7) $ $ $ $ 14.3 (14.3) 28.9 (35.9) Cash contributions to the Company's pension and post-retirement benefit plans are expected to total approximately $13.1 million in 2014 and totaled $56.3 million in 2013...

  • Page 33
    ... to increased return on plan assets and the impact of the Pension Funding Stabilization legislation which increased the discount rate used to determine pension funding (but which had no effect on pension expense). Net cash flow used by investing activities, which consists principally of cash paid...

  • Page 34
    ... commercial paper program and credit agreement. Free Cash Flow on Continuing Operations Free cash flow is calculated as (1) net cash flow from operating activities adjusted to exclude payables related to third-party gift cards, net of receivables, less (2) net cash flow used by investing activities...

  • Page 35
    ...Continuing Operations" is a useful indicator of Safeway's ability to service debt, fund share repurchases and pay dividends that management believes will enhance stockholder value. "Adjusted EBITDA from Continuing Operations" is also a useful indicator of cash available for investing activities. The...

  • Page 36
    ... financial statements set forth in Part II, Item 8 of this report. Dividends Declared on Common Stock The following table presents information regarding dividends declared on Safeway's common stock during fiscal 2013, 2012 and 2011. (in millions, except per-share amounts) 2013 Quarter 4 Quarter...

  • Page 37
    ... information regarding dividends paid on Safeway's common stock during fiscal 2013, 2012 and 2011. Record Date Per-Share Year-to-date (in millions, except per-share amounts) 2013 Quarter 4 Quarter 3 Quarter 2 Quarter 1 2012 Quarter 4 Quarter 3 Quarter 2 Quarter 1 2011 Quarter 4 Quarter 3 Quarter...

  • Page 38
    ... only. Excludes common area maintenance, insurance or tax payments for which the Company is also obligated. In fiscal 2013, these charges totaled approximately $164.3 million. See Part II, Item 7A to this report under the caption "Commodity Price Risk." (2) (3) (4) Off-Balance Sheet Trrangements...

  • Page 39
    ... Safeway is exposed to market risk from changes in interest rates, foreign currency exchange rates and commodity prices. The Company has, from time to time, selectively used derivative financial instruments to reduce these market risks. The Company does not utilize financial instruments for trading...

  • Page 40
    ... Page Management's Annual Report on Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm Consolidated Statements of Income for fiscal 2013, 2012 and 2011 Consolidated Statements of Comprehensive Income for fiscal 2013, 2012 and 2011 Consolidated Balance...

  • Page 41
    ... of net and total assets, and comprise in aggregate less than 1% of revenues and of net income of Safeway Inc.'s consolidated financial statement amounts as of and for the fiscal year ended December 28, 2013 . Through this evaluation, management did not identify any material weakness in the Company...

  • Page 42
    ... the Company's consolidated subsidiary, Blackhawk, in November 2013. The financial statements of Retailo AG and Intelispend constitute less than 1% of net and total assets, and comprise in aggregate less than 1% of revenues and of net income of Safeway Inc.'s consolidated financial statement amounts...

  • Page 43
    ...their cash flows for each of the three years in the period ended December 28, 2013, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting...

  • Page 44
    ... 2011 35,356.7 (25,887.9) 9,468.8 (8,760.0) 708.8 (268.1) - 17.7 458.4 (91.2) 367.2 151.0 Sales and other revenue Cost of goods sold Gross profit Operating and administrative expense Operating profit Interest expense Loss on foreign currency translation Other income, net Income before income taxes...

  • Page 45
    ...) 52 Weeks 2013 3,522.2 $ 52 Weeks 2012 598.1 $ 52 Weeks 2011 518.2 Net income before allocation to noncontrolling interests Other comprehensive (loss) income: Translation adjustments, net of tax Pension and post-retirement benefits adjustment to funded status, net of tax Recognition of pension and...

  • Page 46
    ... (In millions, except per-share amounts) Year-end 2013 Year-end 2012 Tssets Current assets: Cash and equivalents Receivables Merchandise inventories, net of LIFO reserve of $58.1 and $70.5 Prepaid expenses and other current assets Assets held for sale Total current assets Property: Land Buildings...

  • Page 47
    ... under capital leases Total long-term debt Deferred income taxes Pension and post-retirement benefit obligations Accrued claims and other liabilities Total liabilities Commitments and contingencies Stockholders' equity: Common stock: par value $0.01 per share; 1,500 shares authorized; 244.2 and...

  • Page 48
    ... taxes Other Changes in working capital items: Receivables Inventories at FIFO cost Prepaid expenses and other current assets Income taxes Payables and accruals Payables related to third-party gift cards, net of receivables Net cash flow from operating activities - continuing operations Net cash...

  • Page 49
    ...-term borrowings Payments of debt extinguishment costs Net proceeds from the sale of Blackhawk common stock Purchase of treasury stock Dividends paid Net proceeds from exercise of stock options Excess tax benefit from share-based employee compensation Other Net cash flow used by financing activities...

  • Page 50
    ... adjustment to funded status (net of tax of $87.1, $45.5 and $113.3) Recognition of pension and post-retirement benefits actuarial loss (net of tax of $38.7, $40.5 and $31.0) Sale of Canada Safeway Limited (4) Other (net of tax of $0.6, $0.5 and $0.1) Balance, end of year 50 52 Weeks 2012 52 Weeks...

  • Page 51
    ... Total Equity 5.5 6.9 14.7 28.5 55.6 5,875.1 $ 52 Weeks 2012 6.0 - 1.6 (2.1) 5.5 2,909.2 $ 52 Weeks 2011 4.4 - 1.5 0.1 6.0 3,691.1 $ Number of Shares Issued Common Stock: Balance, beginning of year Options exercised Restricted stock grants, net of forfeitures Performance share awards Retirement...

  • Page 52
    ... Financial Statements Note T: The Company and Significant Tccounting Policies The Company Safeway Inc. ("Safeway" or the "Company") is one of the largest food and drug retailers in the United States, with 1,335 stores as of year-end 2013. Safeway's U.S. retail operations are located principally...

  • Page 53
    ..., respectively. The Company, through its Blackhawk subsidiary, also sells third-party gift cards through Safeway retail operations and through other grocery and convenience store retailers. Safeway earns a commission which is recorded as other revenue when the third-party gift card is sold to the...

  • Page 54
    ...-line basis over the shorter of the remaining terms of the leases or the estimated useful lives of the assets. Company-Owned Life Insurance Policies Safeway has company-owned life insurance policies that have a cash surrender value. During 2013, Safeway borrowed against these policies. The Company...

  • Page 55
    ... present value of such claims was calculated using a discount rate of 1.75% in 2013, 0.75% in 2012 and 0.75% in 2011. A summary of changes in Safeway's self-insurance liability is as follows (in millions): Beginning balance Expense, including the effect of discount rate Claim payments Disposal of...

  • Page 56
    ... assets, is comprised primarily of notes receivable resulting from the sale of real estate. The fair value of note receivables is estimated by discounting expected future cash flows using interest rates, adjusted for credit risk, at which similar loans could be made under current market conditions...

  • Page 57
    ... B. Stock-Based Employee Compensation Safeway accounts for all share-based payments to employees, including grants of employee stock options, as compensation cost based on the fair value on the date of grant. The Company determines fair value of such awards using the Black-Scholes option pricing...

  • Page 58
    ... market, where it operated 72 Dominick's stores. During the fourth quarter of 2013, the Company sold or closed its Dominick's stores. Certain Dominick's properties were classified as held for sale at year end. Additionally, the Company had other real estate assets held for sale at December 28, 2013...

  • Page 59
    ... the historical financial operating results were not material to the Company's consolidated financial statements for all periods presented. Financial information for discontinued operations is shown below (in millions): 2013 Sales and other revenue: CSL (1) Dominick's Total 2012 2011 $ $ 5,447...

  • Page 60
    ... to Consolidated Financial Statements Note C: Blackhawk Initial Public Offering of Blackhawk On April 24, 2013, Blackhawk, a Safeway subsidiary, completed its initial public offering of 11.5 million shares of its Class A common stock at $23.00 per share on the NASDAQ Global Select Market, which...

  • Page 61
    ... the purchase price allocation which was based upon the estimated fair value of each asset and liability (in millions). Cash and cash equivalents Trading securities Accounts receivable Cardholder liabilities Customer deposits Other tangible assets, net Deferred taxes Identifiable technology and...

  • Page 62
    ... historical and forecasted amounts specific to each reporting unit and consider sales, gross profit, operating profit and cash flows and general economic and market conditions, as well as the impact of planned business and operational strategies. Safeway bases its fair value estimates on assumptions...

  • Page 63
    ... net future cash flows of Dominick's closed stores (2) Net cash flows, interest accretion, changes in estimates of net future cash flows Ending balance (1) $ 94.0 2.8 - (19.8) 77.0 Estimated net future cash flows represents future minimum lease payments and related ancillary costs from the date...

  • Page 64
    ...Consolidated Financial Statements Note F: Financing Notes and debentures were composed of the following at year end (in millions): 2013 Commercial paper Bank credit agreement, unsecured Term credit agreement, unsecured Other bank borrowings, unsecured Mortgage notes payable, secured Floating Rate...

  • Page 65
    ... under the Term Credit Agreement. Shelf Registration O n October 24, 2011, the Company filed a shelf registration statement (the "Shelf") with the SEC which enables Safeway to issue an unlimited amount of debt securities and/or common stock. The Shelf expires on October 24, 2014 . The Safeway Board...

  • Page 66
    ...-end 2013, the Company had no interest rate swaps outstanding. Note H: Fair Value Measurements The accounting guidance for fair value measurements prioritizes the inputs used in measuring fair value into the following hierarchy: Level 1 Level 2 Level 3 Quoted prices (unadjusted) in active markets...

  • Page 67
    ...at December 28, 2013 (in millions): Fair Value Measurements Quoted prices in active markets for identical assets (Level 1) Assets: Cash equivalents: Term deposits Money market Bankers' acceptances Commercial paper Short-term investments (1) Non-current investments (2) Total Liabilities: Contingent...

  • Page 68
    ... estate taxes) and discounting them using a risk-adjusted rate of interest. Safeway estimates future cash flows based on its experience and knowledge of the market in which the store is located and, when necessary, uses real estate brokers. During fiscal 2013, long-lived assets with a carrying value...

  • Page 69
    ...with increased rental rates during the option period. Certain of these leases contain options to purchase the property at amounts that approximate fair market value. As of year-end 2013, future minimum rental payments applicable to non-cancelable capital and operating leases with remaining terms in...

  • Page 70
    ... to Consolidated Financial Statements Note J: Interest Expense Interest expense consisted of the following (in millions): 2013 Commercial paper Bank credit agreement Term credit agreement Mortgage notes payable 6.50% Senior Notes due 2011 5.80% Senior Notes due 2012 Floating Rate Senior Notes...

  • Page 71
    ...right's then-current exercise price, a number of shares of the acquiring company's common stock having a market value at that time of twice the right's exercise price. Stock Option Plans Under Safeway's stock option plans, the Company may grant incentive and non-qualified options to purchase common...

  • Page 72
    ... weighted-average period of 2.6 years. Additional Stock Plan Information Safeway accounts for stock-based employee compensation in accordance with generally accepted accounting principles for stock compensation. The Company determines fair value of such awards using the Black-Scholes option pricing...

  • Page 73
    ...million in 2011. At December 28, 2013 , there was $36.2 million of total unrecognized compensation cost related to non-vested restricted stock awards. The cost is expected to be recognized over a weighted average period of 2.7 years. Total share-based compensation expenses for continuing operations...

  • Page 74
    ... rate Income tax expense using federal statutory rate State taxes on income net of federal benefit Charitable donations of inventory U.S. repatriation tax Federal tax credits Reversal of deferred tax liability on life insurance Investment in Blackhawk Equity earnings of foreign affiliate 2012...

  • Page 75
    ... Financial Statements Significant components of the Company's net deferred tax liability at year end are as follows (in millions): 2013 Deferred tax assets: 2012 Pension liability Workers' compensation and other claims Employee benefits Accrued claims and other liabilities Reserves not currently...

  • Page 76
    ... by Canada and certain of its provinces for fiscal years before 2006. The Company does not anticipate that total unrecognized tax benefits will change significantly in the next 12 months. Note M: Employee Benefit Plans Pension Plans The Company maintains defined benefit, non-contributory retirement...

  • Page 77
    ... Financial Statements Other Post-Retirement Benefits In addition to the Company's pension plans, the Company sponsors plans that provide postretirement medical and life insurance benefits to certain employees. Retirees share a portion of the cost of the postretirement medical plans. Safeway pays...

  • Page 78
    ...-Retirement Benefits 2013 2012 10.6 $ 25.4 (1.1) (3.2) 9.5 $ 22.2 Safeway expects approximately $43.0 million of the net actuarial pension loss and $9.6 million of the prior service cost to be recognized as a component of net periodic benefit cost in 2014. Information for Safeway's pension plans...

  • Page 79
    ... income (in millions): Pension Components of net expense: Other Post-Retirement Benefits 2011 2013 $ (107.9) $ 42.0 85.4 - - 12.8 77.8 110.1 $ 2012 2013 $ - $ 0.7 3.2 - - (0.1) 0.9 4.7 $ 2012 2011 Estimated return on plan assets Service cost Interest cost Settlement loss Curtailment loss...

  • Page 80
    ... used to determine net periodic benefit costs for pension plans were as follows: Discount rate Expected return on plan assets: Rate of compensation increase 2013 4.20% 7.50% 3.00% 2012 4.94% 7.75% 3.00% 2011 5.69% 8.50% 3.00% The Company has adopted and implemented an investment policy...

  • Page 81
    ...projected returns by asset class on broad, publicly traded equity and fixed-income indices, as well as target asset allocation. Safeway's target asset allocation mix is designed to meet the Company's long-term pension requirements. The fair value of Safeway's pension plan assets at December 28, 2013...

  • Page 82
    ... agency securities are valued based on yields currently available on comparable securities of issuers with similar credit ratings. (8) Also included in Other Securities are exchange-traded derivatives that are valued based on quoted prices in an active market for identical derivatives assets...

  • Page 83
    ... balances for Level 3 assets for the year ended December 29, 2012 follows (in millions): Fair Value Measured Using Significant Unobservable Inputs (Level 3) Corporate bonds Mortgage- and other assetbacked securities Total U.S. government securities 0.1 Balance, beginning of year Purchases, sales...

  • Page 84
    ... sold or closed all stores in the Dominick's division. Safeway participated in four multiemployer pension plans on which withdrawal liability is expected to be incurred due to the Dominick's closure. The Company recorded expense of $310.8 million to discontinued operations in the fourth quarter 2013...

  • Page 85
    ... and 2011, respectively, unless otherwise stated. The "EIN-PN" column provides the Employer Identification Number ("EIN") and the Plan Number ("PN"), if applicable. Unless otherwise noted, the most recent Pension Protection Act ("PPA") zone status available in 2013 and 2012 is for the plan's year...

  • Page 86
    ...001 Red 6/30/2014 Red 6/30/2013 Yes 6/30/2012 6/30/2011 Yes Alaska United Food and Commercial Workers Pension 916123694 - 001 Trust (3) Safeway Multiple Employer Retirement Plan 943019135 - 005 Retail Food Employers and UFCW Local 711 Pension 516031512 - 001 Trust Fund Central Pension Fund of the...

  • Page 87
    ... Plan Desert States Employers & UFCW Unions Pension Plan Denver Area Meat Cutters and Employers Pension Plan Mid-Atlantic UFCW and Participating Employers Pension Fund (4) Oregon Retail Employees Pension Trust 2013 $ 2012 72.9 $ 43.9 $ 2011 69.3 Surcharge imposed (1) No No Expiration date...

  • Page 88
    ... Trust Fund Central Pension Fund of the International Union of Operating Engineers and Participating Employers Alaska Teamster-Employer Pension Plan $ 2013 2012 3.0 $ 2011 2.7 1.9 - 1.5 Surcharge imposed (1) No Yes Expiration date of collective bargaining agreements 3/15/2014 to 5/7/2016 Total...

  • Page 89
    ... funding of postretirement benefit plans other than pensions is likely much lower as this amount continues to include contributions which benefit active employees. Note O: Investment in Unconsolidated Tffiliates At year-end 2013, 2012 and 2011, Safeway's investment in unconsolidated affiliates...

  • Page 90
    ... gift card distribution network in Germany, Austria and Switzerland. The following tables present information about the Company by segment (in millions): Safeway Blackhawk Total 2013 Sales and other revenue Operating profit Income before income taxes 2012 Sales and other revenue Operating profit...

  • Page 91
    ... bakery, deli, floral and seafood. Consists primarily of wholesale sales, commissions on gift cards and other revenue. Note R: Income Per Share The Company computes earnings per share under the two-class method, which is a method of computing earnings per share when an entity has both common stock...

  • Page 92
    ... (In millions, except per-share amounts) Income from discontinued operations, net of tax Distributed and undistributed earnings allocated to participating securities Income from discontinued operations available to common stockholders 2012 Diluted 294.6 $ (1.6) 2011 Basic 294.6 (1.6) $ Diluted...

  • Page 93
    ... income, net of tax, as of the balance sheet date. For Safeway, AOCI is primarily the cumulative balance related to pension and other post-retirement benefit adjustments and foreign currency translation adjustments. Changes in the AOCI balance by component are shown below (in millions): 2013 Total...

  • Page 94
    ... INC. TND SUBSIDITRIES Notes to Consolidated Financial Statements 2012 Pension and PostRetirement Benefit Plan Items Total Comprehensive (Loss) Income Including Noncontrolling Interests Foreign Currency Items Other Beginning balance Other comprehensive (loss) income before reclassifications...

  • Page 95
    ... 12 Weeks 2013 Sales and other revenue Gross profit Operating profit $ Income before income taxes Income from continuing operations, net of tax Income (loss) from discontinued operations, net of tax (1) Net income attributable to Safeway Inc. Basic earnings per common share: Continuing operations...

  • Page 96
    ...12 Weeks Second 12 Weeks First 12 Weeks 2012 Sales and other revenue $ Gross profit Operating profit Income before income taxes Income from continuing operations, net of tax Income from discontinued operations, net of tax (1) Net income attributable to Safeway Inc. Basic earnings per common share...

  • Page 97
    ... operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b). Based upon the foregoing, as of the end of the period covered by this Annual Report on Form 10-K, the Company's Chief Executive Officer along with the Company's Chief Financial Officer concluded...

  • Page 98
    ... from the Company's definitive proxy statement for the 2014 Annual Meeting of Stockholders to be filed pursuant to Regulation 14A under the Exchange Act no later than 120 days after the end of the Company's 2013 fiscal year. Executive Officers of the Registrant This information has been included...

  • Page 99
    ... Services The information called for by Item 14 is incorporated by reference from the Company's definitive proxy statement for the 2014 Annual Meeting of Stockholders to be filed pursuant to Regulation 14A under the Exchange Act no later than 120 days after the end of the Company's 2013 fiscal year...

  • Page 100
    ... Financial Statement Schedules: None required. 3. The following exhibits are filed as part of this report: Exhibit 2.1 Asset Purchase Agreement, dated June 12, 2013, among Safeway Inc., Canada Safeway Limited, Canada Safeway Liquor Stores ULC, Safeway New Canada, Inc., Sobeys Inc. and Empire Company...

  • Page 101
    ... 10-K for the year ended January 1, 1994). Form of stock option agreement for former directors of The Vons Companies, Inc. (incorporated by reference to Exhibit 10(iii).12 of the registrant's Form 10-K for the year ended December 28, 1996). Safeway Executive Deferred Compensation Plan and Deferral...

  • Page 102
    ...). Updated Form of Performance Share Award Grant Notice and Performance Share Award Agreement under the Safeway Inc. 2011 Equity and Incentive Award Plan (incorporated by reference to Exhibit 10(iii).1 to the registrant's Current Report on Form 8-K dated March 12, 2012). Safeway Inc. 2007 Equity and...

  • Page 103
    ... Award Agreement under the Safeway Inc. 2007 Equity and Incentive Award Plan (incorporated by reference to Exhibit 10(iii).31 to the registrant's Current Report on Form 8-K dated May 16, 2007). Amended and Restated Capital Performance Bonus Plan for Executive Officers and Key Employees of Safeway...

  • Page 104
    ... Award Plan. Updated Form of Stock Option Grant Notice and Stock Option Agreement under the Safeway Inc. 2011 Equity and Incentive Award Plan. Safeway Inc. Executive Severance Plan (incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K dated February 19, 2014...

  • Page 105
    ... authorized. SAFEWAY INC. /s/ Robert L. Edwards Date: February 25, 2014 Robert L. Edwards President and Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf...

  • Page 106
    Table of Contents STFEWTY INC. TND SUBSIDITRIES Signatures /s/ Arun Sarin Arun Sarin, Director /s/ William Y. Tauscher William Y. Tauscher, Director Date: February 25, 2014 Date: February 25, 2014 104

  • Page 107
    .... 2011 Equity and Incentive Award Plan. Updated Form of Performance Share Award Grant Notice and Performance Share Award Agreement under the Safeway Inc. 2007 Equity and Incentive Award Plan. Updated Form of Performance Share Award Grant Notice and Performance Share Award Agreement under the Safeway...

  • Page 108
    ...corporation, (the " Company"), pursuant to its 2007 Equity and Incentive Award Plan, as amended from time to time (the "Plan"), hereby grants to the individual listed below (" Holder"), an award of restricted stock units (the " RSUs"). This award of RSUs is subject to all of the terms and conditions...

  • Page 109
    ... "Agreement ") is attached, Safeway Inc., a Delaware corporation (the " Company"), has granted to Holder the number of RSUs specified in the Grant Notice upon the terms and conditions set forth in the Safeway Inc. 2007 Equity and Incentive Award Plan, as such plan may be amended from time to time...

  • Page 110
    ... conditions: (a) The admission of such Shares to listing on all stock exchanges on which the Stock is then listed; (b) The completion of any registration or other qualification of such Shares under any federal, state or foreign law or under regulations or rules promulgated by the Securities...

  • Page 111
    ...of full payment for all amounts which, under federal, state, local or foreign tax law, the Company (or other employer corporation) is required to withhold upon issuance of such Shares; and (e) The lapse of such reasonable period of time following the satisfaction of all other conditions to issuance...

  • Page 112
    ... affects the Company's operations, financial performance, or relationship with its customers; (b) misappropriation of funds or other property of the Company or its affiliates; (c) refusal to perform the lawful and reasonable directives of Holder's supervisor, the Company's Chief Executive Officer or...

  • Page 113
    ... the Plan, this Agreement or the Shares. In its discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan, except with respect to matters which under Rule 16b â€'3 or Section 162(m) of the Code, or any regulations or rules...

  • Page 114
    ... the Dividend Equivalent rights shall be limited to the number of shares which have a Fair Market Value on the date of withholding equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state and local income tax and payroll tax purposes that...

  • Page 115
    ... Limitations Applicable to Section 16 Persons . Notwithstanding any other provision of the Plan or this Agreement, if Holder is subject to Section 16 of the Exchange Act, the Plan, the RSUs, and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule...

  • Page 116
    EXHIBIT B TO RESTRICTED STOCK UNIT AWARD GRANT NOTICE CONSENT OF SPOUSE [See separate form in Grant Packet]

  • Page 117
    EXHIBIT C TO RESTRICTED STOCK AWARD GRANT NOTICE SAFEWAY INC. 2007 EQUITY AND INCENTIVE AWARD PLAN

  • Page 118
    EXHIBIT D TO RESTRICTED STOCK AWARD GRANT NOTICE SAFEWAY INC. 2007 EQUITY AND INCENTIVE AWARD PLAN PROSPECTUS

  • Page 119
    ...corporation, (the " Company"), pursuant to its 2011 Equity and Incentive Award Plan, as amended from time to time (the "Plan"), hereby grants to the individual listed below (" Holder"), an award of restricted stock units (the " RSUs"). This award of RSUs is subject to all of the terms and conditions...

  • Page 120
    ... "Agreement ") is attached, Safeway Inc., a Delaware corporation (the " Company"), has granted to Holder the number of RSUs specified in the Grant Notice upon the terms and conditions set forth in the Safeway Inc. 2011 Equity and Incentive Award Plan, as such plan may be amended from time to time...

  • Page 121
    ... conditions: (a) The admission of such Shares to listing on all stock exchanges on which the Stock is then listed; (b) The completion of any registration or other qualification of such Shares under any federal, state or foreign law or under regulations or rules promulgated by the Securities...

  • Page 122
    ...of full payment for all amounts which, under federal, state, local or foreign tax law, the Company (or other employer corporation) is required to withhold upon issuance of such Shares; and (e) The lapse of such reasonable period of time following the satisfaction of all other conditions to issuance...

  • Page 123
    ... affects the Company's operations, financial performance, or relationship with its customers; (b) misappropriation of funds or other property of the Company or its affiliates; (c) refusal to perform the lawful and reasonable directives of Holder's supervisor, the Company's Chief Executive Officer or...

  • Page 124
    ... the Plan, this Agreement or the Shares. In its discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan, except with respect to matters which under Rule 16b â€'3 or Section 162(m) of the Code, or any regulations or rules...

  • Page 125
    ... the Dividend Equivalent rights shall be limited to the number of shares which have a Fair Market Value on the date of withholding equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state and local income tax and payroll tax purposes that...

  • Page 126
    ... Limitations Applicable to Section 16 Persons . Notwithstanding any other provision of the Plan or this Agreement, if Holder is subject to Section 16 of the Exchange Act, the Plan, the RSUs, and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule...

  • Page 127
    EXHIBIT B TO RESTRICTED STOCK UNIT AWARD GRANT NOTICE CONSENT OF SPOUSE [See separate form in Grant Packet]

  • Page 128
    EXHIBIT C TO RESTRICTED STOCK AWARD GRANT NOTICE SAFEWAY INC. 2011 EQUITY AND INCENTIVE AWARD PLAN

  • Page 129
    EXHIBIT D TO RESTRICTED STOCK AWARD GRANT NOTICE SAFEWAY INC. 2011 EQUITY AND INCENTIVE AWARD PLAN PROSPECTUS

  • Page 130
    ...to its 2007 Equity and Incentive Award Plan, as amended from time to time (the " Plan"), hereby grants to the holder listed below (" Participant ") an award of performance shares (" Performance Shares "). Each Performance Share represents the right to receive one share of common stock of Safeway Inc...

  • Page 131
    ...corporation (the " Company"), has granted to Participant an award of performance shares ( "Performance Shares "), specified in the Grant Notice, upon the terms and conditions set forth in the Safeway Inc. 2007 Equity and Incentive Award Plan, as such plan may be amended from time to time (the " Plan...

  • Page 132
    ... in the Grant Notice (the " Grant Date "), the Company grants to Participant an award of Performance Shares as set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this Agreement. 2.2 Performance-Based Right to Payment. (a) The number of Shares that shall be issued...

  • Page 133
    ... the number of Performance Shares that would have been earned based on actual achievement of the Company's Performance Goals through the most recently completed fiscal year prior to such Change in Control (calculated as if the most recently completed fiscal year prior to such Change in Control had...

  • Page 134
    ...otherwise payable pursuant to the Performance Shares) which have a then-current Fair Market Value on the date of delivery not greater than the amount necessary to satisfy the Company's withholding obligation based on the minimum statutory withholding rates for federal, state and local income tax and...

  • Page 135
    ... conditions: (a) The admission of such Shares to listing on all stock exchanges on which the Common Stock is then listed; (b) The completion of any registration or other qualification of such Shares under any federal, state or foreign law or under regulations or rules promulgated by the Securities...

  • Page 136
    ... or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred. 3.4 Shares To Be Reserved. The Company shall at all times prior to the Payment Date reserve and keep available such number of Shares as will be sufficient to...

  • Page 137
    ... Section 11.3 of the Plan (including, without limitation, an extraordinary cash dividend on such Shares), the Administrator shall make such adjustments the Administrator deems appropriate in the number of Performance Shares then outstanding and the number and kind of securities that may be issued in...

  • Page 138
    ... program, in and of itself, has any assets. Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Performance Shares, and rights no greater than the right to receive the Shares...

  • Page 139
    ... have any rights in said Agreement or any shares of the common stock of Safeway Inc. issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement. Dated: _____...

  • Page 140
    EXHIBIT C TO PERFORMANCE SHARE AWARD GRANT NOTICE SAFEWAY INC. 2007 EQUITY AND INCENTIVE AWARD PLAN The Safeway Inc. 2007 Equity and Inventive Award Plan can be viewed at http://home.safeway.com/hr/benefits/stockoption/plan.html C-1

  • Page 141
    EXHIBIT D TO PERFORMANCE SHARE AWARD GRANT NOTICE SAFEWAY INC. 2007 EQUITY AND INCENTIVE AWARD PLAN PROSPECTUS The Prospectus can be viewed at http://home.safeway.com/hr/benefits/stockoption/plan.html D-1

  • Page 142
    ...to its 2011 Equity and Incentive Award Plan, as amended from time to time (the " Plan"), hereby grants to the holder listed below (" Participant ") an award of performance shares (" Performance Shares "). Each Performance Share represents the right to receive one share of common stock of Safeway Inc...

  • Page 143
    ...corporation (the " Company"), has granted to Participant an award of performance shares ( "Performance Shares "), specified in the Grant Notice, upon the terms and conditions set forth in the Safeway Inc. 2011 Equity and Incentive Award Plan, as such plan may be amended from time to time (the " Plan...

  • Page 144
    ...in the Grant Notice (the " Grant Date "), the Company grants to Participant an award of Performance Shares as set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this Agreement. 2.2 Performance-Based Right to Payment . (a) The number of Shares that shall be issued...

  • Page 145
    ... the number of Performance Shares that would have been earned based on actual achievement of the Company's Performance Goals through the most recently completed fiscal year prior to such Change in Control (calculated as if the most recently completed fiscal year prior to such Change in Control had...

  • Page 146
    ... by cash or check made payable to the Company; (ii) by the deduction of such amount from other compensation payable to Participant; (iii) by tendering Shares (including, without limitation, Shares otherwise payable pursuant to the Performance Shares) which have a then-current Fair Market Value on...

  • Page 147
    ... conditions: (a) The admission of such Shares to listing on all stock exchanges on which the Common Stock is then listed; (b) The completion of any registration or other qualification of such Shares under any federal, state or foreign law or under regulations or rules promulgated by the Securities...

  • Page 148
    ... Agreement or the Performance Shares. In its discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan, except with respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations or rules issued...

  • Page 149
    ... Shares To Be Reserved. The Company shall at all times prior to the Payment Date reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of this Agreement. 3.5 Binding Agreement . Subject to the limitation on the transferability of the Performance Shares...

  • Page 150
    ... program, in and of itself, has any assets. Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Performance Shares, and rights no greater than the right to receive the Shares...

  • Page 151
    ... have any rights in said Agreement or any shares of the common stock of Safeway Inc. issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement. Dated: _____...

  • Page 152
    EXHIBIT C TO PERFORMANCE SHARE AWARD GRANT NOTICE SAFEWAY INC. 2011 EQUITY AND INCENTIVE AWARD PLAN The Safeway Inc. 2011 Equity and Inventive Award Plan can be viewed at http://home.safeway.com/hr/benefits/stockoption/plan.html C-1

  • Page 153
    EXHIBIT D TO PERFORMANCE SHARE AWARD GRANT NOTICE SAFEWAY INC. 2011 EQUITY AND INCENTIVE AWARD PLAN PROSPECTUS The Prospectus can be viewed at http://home.safeway.com/hr/benefits/stockoption/plan.html D-1

  • Page 154
    ... STOCK OPTION GRANT NOTICE Safeway Inc., a Delaware corporation, (the " Company"), pursuant to its 2007 Equity and Incentive Award Plan, as amended from time to time (the " Plan"), hereby grants to the holder listed below (" Participant "), an option to purchase the number of shares of Common Stock...

  • Page 155
    ... corporation (the " Company"), has granted to Participant an option to purchase the number of shares of the Company's common stock, par value $0.01 per share (" Stock"), specified in the Grant Notice, upon the terms and conditions set forth in the Safeway Inc. 2007 Equity and Incentive Award Plan...

  • Page 156
    ... price per share of Stock subject to the Option shall not be less than 110% of the Fair Market Value of a share of Stock on the Grant Date (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code). 2.3 Consideration to the Company; No Employment Rights...

  • Page 157
    ...% of the total combined voting power of all classes of stock of the Company or any Subsidiary Corporation or any "parent corporation" of the Company (as defined in Section 424(e) of the Code), the expiration of five years from the Grant Date; (c) The expiration of three months following the date of...

  • Page 158
    ..., or new rights that substantially preserve the terms of the Option substituted therefor, by Participant's employer (or the parent of such employer) immediately following the Change in Control, the Option shall become fully vested and exercisable with respect to all shares of Stock covered thereby...

  • Page 159
    ...the Remaining Option, if any. 3.5 Special Tax Consequences. Participant acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of Stock with respect to which Incentive Stock Options, including the Option, are exercisable...

  • Page 160
    ... conditions: (a) The admission of such shares to listing on all stock exchanges on which such Stock is then listed; (b) The completion of any registration or other qualification of such shares under any federal, state or foreign law or under rulings or regulations promulgated by the Securities...

  • Page 161
    ... the Company of full payment for such shares, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4; (e) Unless a Registration Statement under the Securities Act is in effect with respect to the shares of Stock to...

  • Page 162
    ...shares of Stock or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred. 5.4 Shares to Be Reserved . The Company shall at all times during the term of the Option reserve and keep available such number of shares of Stock...

  • Page 163
    ... to Section 16 Persons . Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Option and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16...

  • Page 164
    EXHIBIT B TO STOCK OPTION GRANT NOTICE FORM OF EXERCISE NOTICE (See Stock Administration for Form)

  • Page 165
    EXHIBIT C TO STOCK OPTION GRANT NOTICE SAFEWAY INC. 2007 EQUITY AND INCENTIVE AWARD PLAN

  • Page 166
    EXHIBIT D TO STOCK OPTION GRANT NOTICE SAFEWAY INC. 2007 EQUITY AND INCENTIVE AWARD PLAN PROSPECTUS

  • Page 167
    ... STOCK OPTION GRANT NOTICE Safeway Inc., a Delaware corporation, (the " Company"), pursuant to its 2011 Equity and Incentive Award Plan, as amended from time to time (the " Plan"), hereby grants to the holder listed below (" Participant "), an option to purchase the number of shares of Common Stock...

  • Page 168
    ... option (the " Option") to purchase the number of shares of the Company's Common Stock, par value $0.01 per share (" Stock"), specified in the Grant Notice, upon the terms and conditions set forth in the Safeway Inc. 2011 Equity and Incentive Award Plan, as such plan may be amended from time to time...

  • Page 169
    ... price per share of Stock subject to the Option shall not be less than 110% of the Fair Market Value of a share of Stock on the Grant Date (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code). 2.3 Consideration to the Company; No Employment Rights...

  • Page 170
    ...% of the total combined voting power of all classes of stock of the Company or any Subsidiary Corporation or any "parent corporation" of the Company (as defined in Section 424(e) of the Code), the expiration of five years from the Grant Date; (c) The expiration of three months following the date of...

  • Page 171
    ..., or new rights that substantially preserve the terms of the Option substituted therefor, by Participant's employer (or the parent of such employer) immediately following the Change in Control, the Option shall become fully vested and exercisable with respect to all shares of Stock covered thereby...

  • Page 172
    ...the Remaining Option, if any. 3.5 Special Tax Consequences. Participant acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of Stock with respect to which Incentive Stock Options, including the Option, are exercisable...

  • Page 173
    ... conditions: (a) The admission of such shares to listing on all stock exchanges on which such Stock is then listed; (b) The completion of any registration or other qualification of such shares under any federal, state or foreign law or under rulings or regulations promulgated by the Securities...

  • Page 174
    ... the Company of full payment for such shares, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4; (e) Unless a Registration Statement under the Securities Act is in effect with respect to the shares of Stock to...

  • Page 175
    ...shares of Stock or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred. 5.4 Shares to Be Reserved . The Company shall at all times during the term of the Option reserve and keep available such number of shares of Stock...

  • Page 176
    ... to Section 16 Persons . Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Option and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16...

  • Page 177
    ...Company with respect to amounts credited and benefits payable, if any, with respect to the Option, and rights no greater than the right to receive the Stock as a general unsecured creditor with respect to options, as and when exercised pursuant to the terms hereof. 5.16 Claw-Back Policy . The Option...

  • Page 178
    EXHIBIT B TO STOCK OPTION GRANT NOTICE SAFEWAY INC. 2011 EQUITY AND INCENTIVE AWARD PLAN

  • Page 179
    EXHIBIT C TO STOCK OPTION GRANT NOTICE SAFEWAY INC. 2011 EQUITY AND INCENTIVE AWARD PLAN PROSPECTUS

  • Page 180
    ...52 Weeks 2013 Income (loss) before income taxes Add interest expense Add interest on rental expense (a) Less equity in earnings of unconsolidated affiliate, net Noncontrolling interests 52 Weeks 2012 $ 336.0 $ 273.0 200.4 Earnings (loss) $ (17.6) (14.7) 777.1 $ 52 Weeks 52 Weeks 53 Weeks 2011...

  • Page 181
    ... Land Management LLC and its subsidiary: (WA) Eureka Development LLC (WA) GFM Holdings I, Inc. and its subsidiary: (DE) GFM Holdings LLC, general partner of: (DE) Genuardi's Family Markets LP (DE) Lehua Insurance Company, Inc. (HI) Lucerne Foods, Inc. and its subsidiaries: (DE) Eating Right LLC (DE...

  • Page 182
    ...) Pak 'N Save, Inc. (CA) PDC I, Inc. (DE) Point Fosdick Square LLC (WA) Property Development Centers LLC and its subsidiaries: (DE) PDC Lahaina, LLC (DE) PDC-Rancho Del Mar LLC (DE) Randall's Holdings, Inc. and its subsidiaries: (DE) Randall's Finance Company, Inc. (DE) Randall's Food Markets, Inc...

  • Page 183
    ... Safeway Stores 49, Inc. (DE) Safeway Stores 50, Inc. (DE) Safeway Gift Cards, LLC (AZ) Safeway Global Sourcing Holdings Ltd. and its subsidiaries: (BVI) Safeway Global Sourcing Limited (Hong Kong) Safeway Global Sourcing (Macao Commercial Offshore) Limited (Macau) Safeway Holdings I, LLC and...

  • Page 184
    ... Foods, Inc. 401(k) Retirement Plan for Union Employees, as amended, and the Randall's Food Markets, Inc. ESOP/401(k) Savings Plan, No. 333-30820 on Form S-8 regarding the Safeway Executive Deferred Compensation Plan and Canada Safeway Limited Executive Deferred Compensation Plan, No. 333-45920 on...

  • Page 185
    ... information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. February 25, 2014 /s/ Robert L. Edwards Robert L. Edwards President and Chief Executive Officer Date...

  • Page 186
    ... the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act...

  • Page 187
    ...of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: February 25, 2014 /s/ Robert L. Edwards Robert L. Edwards Chief Executive Officer...

  • Page 188