Safeway 2013 Annual Report Download - page 52

Table of Contents
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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 in California, Hawaii, Oregon, Washington, Alaska,
Colorado, Arizona, Texas, and the Mid-Atlantic region. In support of its retail operations, the Company has an extensive network of
distribution, manufacturing and food processing facilities. The Company also owns and operates GroceryWorks.com Operating Company,
LLC, an online grocery channel, doing business under the names Safeway.com and Vons.com (collectively “Safeway.com”).
On November 3, 2013, Safeway completed the sale of substantially all of the net assets of Canada Safeway Limited ("CSL" now known as
CSL IT Services ULC) to Sobeys Inc. ("Sobeys"), a wholly-owned subsidiary of Empire Company Limited. As a result, the operating results
of CSL are reported as discontinued operations in the consolidated statements of income for all periods presented. See Note B to the
consolidated financial statements for additional information.
During the fourth quarter of 2013, the Company exited the Chicago market, where it operated 72 Dominick's stores. The operating results of
Dominick's are reported as discontinued operations in the consolidated statements of income for all periods presented. In addition, certain
assets and liabilities associated with Dominick's are reported as assets and liabilities held for sale in the December 28, 2013 consolidated
balance sheet. See Note B to the consolidated financial statements for additional information.
Unless otherwise indicated, the notes accompanying the consolidated financial statements reflect the Company's continuing operations.
Blackhawk Network Holdings, Inc. (“Blackhawk”), a majority-owned subsidiary of Safeway, is a leading prepaid payment network utilizing
proprietary technology to offer a broad range of gift cards, other prepaid products and payment services. Blackhawk’s payment network
supports its three primary constituents: consumers who purchase the products and services Blackhawk offers, content providers who offer
branded products that are redeemable for goods and services, and distribution partners who sell those products. Blackhawk’s product
offerings include gift cards, prepaid telecom products and prepaid financial services products, including general purpose reloadable ("GPR")
cards and Blackhawk’s reload network. In the fourth quarter of 2013, Blackhawk acquired InteliSpend Prepaid Solutions TM, a leader in the
corporate incentives and consumer promotions marketplace, and Retailo AG, a leading third-party gift card distribution network in Germany,
Austria and Switzerland. See Note C to the consolidated financial statements set forth in Part II, Item 8 of this report for additional
information.
The Company also has a 49% ownership interest in Casa Ley, S.A. de C.V. (“Casa Ley”), which operates 200 food and general
merchandise stores in Western Mexico.
Basis of Presentation The consolidated financial statements include Safeway Inc., a Delaware corporation, and all majority-owned
subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America.
Intercompany transactions and balances have been eliminated in consolidation. The Company’s investment in Casa Ley is reported using
the equity method. Safeway's equity in earnings of Casa Ley is based on financial information prepared in accordance with accounting
principles generally accepted in the United States and is recorded on a one-month delay basis because financial information for the latest
month is not available from Casa Ley in time to be included in Safeway’s consolidated results until the following reporting period.
Fiscal Year The Company’s fiscal year ends on the Saturday nearest December 31. The last three fiscal years consist of the 52-week
period ended December 28, 2013 (“fiscal 2013” or “2013”), the 52-week period ended December 29, 2012 (“fiscal 2012” or “2012”) and the
52-week period ended December 31, 2011 (“fiscal 2011” or “2011”).
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