Safeway 2013 Annual Report Download - page 33

Table of Contents
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Blackhawk receives significant cash inflow from the sale of third-party gift cards late in the fourth quarter of the year and remits the majority of
the cash, less commissions, to the card partners early in the first quarter of the following year. Changes in payables related to third-party gift
cards, net of receivables, was a use of cash of $27.6 million in 2013 compared to a source of cash of $26.4 million in 2012.
Cash contributions to pension and post-retirement plans were $56.3 million in 2013, $110.3 million in 2012 and $151.2 million in 2011.
Cash contributions are expected to decline to approximately $13.1 million in 2014 due primarily 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 for property additions, was $621.3 million in 2013, $614.3
million in 2012 and $923.2 million in 2011. Net cash flow used by investing activities increased in 2013 compared to 2012 primarily as a
result of cash used in 2013 for business acquisitions by Blackhawk, partly offset by lower capital expenditures. Net cash flow used by
investing activities declined in 2012 compared to 2011 primarily as a result of lower capital expenditures and higher proceeds from the sale of
property in 2012.
Cash paid for property additions was $767.4 million in 2013, $821.2 million in 2012 and $992.4 million in 2011. Capital expenditures by
major category of spending were as follows:
Fiscal Year
(in millions)
 2012 2011
Remodels
 $227.8 $250.7
Information technology
 96.1 126.8
New stores
 157.2 308.2
Property Development Centers
 177.2 92.3
Supply chain
 59.3 91.0
Other
 103.6 123.4
Cash paid for property additions
 $821.2 $992.4
In 2014, the Company expects to spend approximately $800 million to $900 million in cash capital expenditures.
Net cash flow used by financing activities was 1,842.4 million in 2013, $1,329.1 million in 2012 and $1,413.7 million in 2011. In 2013, net
cash payments on debt were $1,386.0 million. The Company also repurchased $663.7 million of common stock and paid $181.4 million in
dividends. In 2012, Safeway had net cash additions to debt of $117.5 million, repurchased $1,274.5 million of common stock and paid
$163.9 million in dividends. In 2011, net cash payments on debt were $270.7 million. Additionally, the Company repurchased $1,554.0
million of common stock and paid $188.0 million in dividends.
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 included the exercise by the
underwriters for the offering of an option to purchase 1.5 million shares of Class A common stock. The offering consisted solely of shares
offered by existing stockholders, including Safeway. As part of the IPO, Safeway sold 11.3 million shares of Class A common stock of
Blackhawk for proceeds of $243.6 million ($238.0 million, net of professional service fees), reducing the Company's ownership from
approximately 95% to approximately 73% of Blackhawk's total outstanding shares of common stock. In 2014, Safeway announced plans to
distribute all of its shares of Blackhawk stock to Safeway shareholders (See Note U).
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