Safeway 2013 Annual Report Download - page 25

Table of Contents
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Reduction of Debt
During 2013, the Company reduced debt by $1.4 billion with a combination of net proceeds from the sale of its Canadian operations, free
cash flow and net proceeds from the IPO of Blackhawk .
The Company repaid its $250.0 million Floating Rate Senior Note on the December 12, 2013 maturity date and redeemed $500.0 million of
6.25% Senior Notes due March 15, 2014. Additionally, in the fourth quarter of 2013, the Company deposited CAD304.5 million in an
account with the Trustee under the indenture governing the CAD300.0 million, 3.00% Second Series Notes due March 31, 2014. Safeway
met the conditions for satisfaction and discharge of the Company's obligations under the indenture and as a result, extinguished the $287.9
million notes and $292.2 million cash from the consolidated balance sheet. In addition, the Company reduced borrowings under its term
credit agreement by $300 million.
Repurchase of the Company's Common Stock
During 2013, the Company repurchased 19.5 million shares of common stock at an average cost of $33.93 per share and a total cost of
$663.7 million (including commissions), with a portion of proceeds from the sale of Safeway's Canadian operations.
Economic Conditions
The Company’s results of operations can be affected by economic conditions such as macroeconomic conditions, credit market conditions
and the level of consumer confidence. The Company believes that recently consumer confidence has improved modestly, but remains
cautious. The Company is responding to this challenging environment with new marketing programs, such as , a continuing
focus on cost control and new business initiatives.
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Income from Continuing Operations Income from continuing operations was $246.3 million ($0.95 per diluted share) in 2013, $294.6
million ($1.18 per diluted share) in 2012 and $367.2 million ($1.06 per diluted share) in 2011. Fiscal 2013 included a $57.4 million loss on
foreign currency translation, a $30.0 million loss from the impairment of notes receivable and a $9.7 million gain from the reduction of
contingent consideration related to Blackhawk's acquisition of Cardpool. Fiscal 2012 included a $46.5 million gain from legal settlements.
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:
 2012 2011
Including fuel 1.6%4.9%
Excluding fuel 0.8%1.1%
Sales increased 0.2% to $36,139.1 million in 2013 from $36,068.3 million in 2012. Identical-store sales, excluding fuel, increased 1.7%, or
$506 million, due to inflation and better merchandising. Other revenue, primarily from gift and prepaid card sales increased $186 million.
Warehouse and supply sales increased $35 million. Fuel sales decreased $426 million in 2013, as a result of the average retail price per
gallon of fuel decreasing 4.1% and gallons sold decreasing 5.4%. Sales declined $233 million due to the disposition of Genuardi's stores in
2012. Store closures, net of new stores, decreased sales $39 million. Average transaction size and transaction counts increased during fiscal
2013.
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