Safeway 2013 Annual Report Download - page 6

Table of Contents
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General The Company began operations in 1926. In July 1986, Safeway was incorporated in the state of Delaware as SSI Holdings
Corporation and, thereafter, its name was changed to Safeway Stores, Incorporated. In February 1990, the Company changed its name to
Safeway Inc.
On February 19, 2014, Safeway announced it is in discussions concerning a possible transaction involving the sale of the Company.
Although the discussions are ongoing, the Company has not reached an agreement on a transaction, and there can be no assurance that
these discussions will lead to an agreement or a completed transaction.
Separately, the Company has decided to distribute the remaining 37.8 million shares it owns of Blackhawk Network Holdings, Inc.
("Blackhawk") (approximately 72.2% of the outstanding Blackhawk shares) to Safeway stockholders. Currently, the plan is to make the
distribution on a pro rata basis to all Safeway stockholders in a transaction intended to be tax-free to Safeway and its stockholders. However, if
the Company consummates a sale transaction, the distribution may be taxable.
In addition, Safeway owns 49% of Casa Ley S.A. de C.V. ("Casa Ley"), the fifth largest food and general merchandise retailer in Mexico
based on sales. Based on Casa Ley's improving performance, the Company believes it is an appropriate time to explore alternatives to
monetize its investment in Casa Ley. While the Company has discussed its desire to monetize its investment with the majority owners of
Casa Ley, there can be no assurance as to whether the Company will be able to sell its interest in Casa Ley at a price and on terms that the
Company finds acceptable.
On November 3, 2013, Safeway completed the sale of substantially all of the net assets of Canada Safeway Limited ("CSL" and now known
as CSL IT Services ULC) to Sobeys Inc., a wholly-owned subsidiary of Empire Company Limited. See Note B to the consolidated financial
statements set forth in Part II, Item 8 of this report for additional information.
During the fourth quarter of 2013, the Company exited the Chicago market, where it operated 72 Dominick's stores. See Note B to the
consolidated financial statements set forth in Part II, Item 8 of this report for additional information.
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”).
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 California, Hawaii, Oregon, Washington, Alaska, Colorado, Arizona, Texas and the Mid-Atlantic region.
In support of its U.S. retail operations, the Company has an extensive network of distribution, manufacturing and food-processing facilities.
Safeway owns and operates GroceryWorks.com Operating Company, LLC (“GroceryWorks”), an online grocery channel doing business
under the names Safeway.com and Vons.com (collectively “Safeway.com”).
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
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