Safeway 2013 Annual Report Download - page 16

Table of Contents
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not reach a definitive agreement related to the potential transaction involving the Company, it intends to pay down additional debt, buy back
additional stock and invest in growth opportunities with the remainder of these proceeds. Stock market conditions, the market value of our
common stock and other factors may affect our ability to continue to effect repurchases of our common stock, including the amount and
timing of any such stock repurchases. Failure to find growth opportunities to use the proceeds from this sale of the net assets could
adversely affect our financial results.
Additionally, this transaction increases our concentration of retail stores to certain geographic areas in the United States, which heightens our
exposure to general economic conditions in these areas.
Dominick’s During the fourth quarter of 2013, we closed a number of Dominick’s store locations in the Chicago market. At December 28,
2013, certain of these closed locations were classified as Assets and Liabilities Held for Sale in our statement of financial position (see Note B
to the consolidated financial statements). While the Company currently expects to sell these locations, the sale of these properties is
dependent on local real estate market conditions, local and global economic factors, and the existence of prospective buyers. There can be no
assurance that the Company will realize its expected proceeds from the sale of these locations, or that sales can be completed within a
reasonable time, if at all.
Impairment of Long-Lived Assets Our long-lived assets, primarily stores, are subject to periodic testing for impairment. Failure to achieve
sufficient levels of cash flow at reporting units could result in impairment charges on long-lived assets. We have incurred significant
impairment charges to earnings in the past, including in fiscal 2013, 2012 and 2011.
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 7A of this report under the caption “Commodity Price 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 results are difficult to predict with certainty.
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None.
 
The information required by this item is set forth in Part I, Item 1 of this report.
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Information about legal proceedings appears under the caption “Legal Matters” in Note P to the consolidated financial statements set forth in
Part II, Item 8 of this report.
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Not applicable.
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