<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934
For the quarterly period ended March 25, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---- ----
Commission file number 1-41
----
SAFEWAY INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3019135
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Fourth and Jackson Streets
Oakland, California 94660
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 891-3000
Not Applicable
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES X NO .
--- ---
As of May 2, 1995, there were issued and outstanding 105,769,929
-----------
shares of the registrant's common stock.
<PAGE> 2
SAFEWAY INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION (UNAUDITED) PAGE
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of March 25, 1995 and 3
December 31, 1994
Consolidated Statements of Income for the 12 weeks ended March 25, 5
1995 and March 26, 1994
Condensed Consolidated Statements of cash flows for the 12 weeks 6
ended March 25, 1995 and March 26, 1994
Notes to the Condensed Consolidated Financial Statements 7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 10
RESULTS OF OPERATIONS
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SAFEWAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
<TABLE>
<CAPTION>
March 25, December 31,
1995 1994
--------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 50.5 $ 60.7
Receivables 144.9 147.9
Merchandise inventories 1,088.5 1,136.0
Prepaid expenses and other current assets 98.3 93.0
--------- ---------
Total current assets 1,382.2 1,437.6
--------- ---------
Property 4,421.7 4,375.3
Less accumulated depreciation
and amortization 1,924.3 1,868.9
--------- ---------
Property, net 2,497.4 2,506.4
Goodwill, net of amortization of $97.5
and $95.0, respectively 329.1 331.1
Prepaid pension costs 322.7 319.6
Investments in unconsolidated affiliates 332.1 329.3
Other assets 99.7 98.1
--------- ---------
Total assets $ 4,963.2 $ 5,022.1
========= =========
</TABLE>
(Continued)
3
<PAGE> 4
SAFEWAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(In millions, except per-share amounts)
(Unaudited)
<TABLE>
<CAPTION>
March 25, December 31,
1995 1994
--------- ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of notes
and debentures $ 165.6 $ 152.5
Current obligations under capital leases 19.3 19.3
Accounts payable 912.4 1,012.1
Accrued salaries and wages 192.0 223.6
Other accrued liabilities 428.4 416.1
-------- --------
Total current liabilities 1,717.7 1,823.6
-------- --------
Long-term debt:
Notes and debentures 1,922.3 1,849.5
Obligations under capital leases 177.6 174.8
-------- --------
Total long-term debt 2,099.9 2,024.3
Deferred income taxes 128.5 128.3
Accrued claims and other liabilities 413.7 402.1
-------- --------
Total liabilities 4,359.8 4,378.3
-------- --------
Stockholders' equity:
Common stock: par value $0.01 per share;
300 shares authorized; 105.6 and 104.8
shares outstanding, respectively 1.1 1.0
Additional paid-in capital 665.4 655.6
Unexercised warrants purchased: 4.4 shares (113.2) -
Retained earnings (accumulated deficit) 20.1 (41.9)
Cumulative translation adjustments 30.0 29.1
-------- --------
Total stockholders' equity 603.4 643.8
-------- --------
Total liabilities and stockholders' equity $4,963.2 $5,022.1
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
SAFEWAY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per-share amounts)
(Unaudited)
<TABLE>
<CAPTION>
12 Weeks Ended
---------------------------
March 25, March 26,
1995 1994
---------- ----------
<S> <C> <C>
Sales $ 3,632.3 $ 3,491.8
Cost of goods sold (2,637.1) (2,551.3)
--------- ---------
Gross profit 995.2 940.5
Operating and administrative expenses (841.2) (823.1)
--------- ---------
Operating profit 154.0 117.4
Interest expense (47.5) (55.8)
Equity in earnings of unconsolidated affiliates 2.8 10.5
Other income, net 0.5 1.4
--------- ---------
Income before income taxes 109.8 73.5
Income taxes (47.8) (31.6)
--------- ---------
Net income $ 62.0 $ 41.9
========= =========
Primary and fully diluted earnings per common
share and common share equivalent $ 0.51 $ 0.34
========= =========
Weighted average common shares and common
share equivalents:
Primary 121.0 124.0
Fully diluted 121.4 124.9
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
SAFEWAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
<TABLE>
<CAPTION>
12 Weeks Ended
---------------------------
March 25, March 26,
1995 1994
---------- ----------
<S> <C> <C>
CASH FLOW FROM OPERATIONS:
Net income $ 62.0 $ 41.9
Reconciliation to net cash flow from operations:
Depreciation and amortization 74.5 74.7
LIFO expense 2.3 2.3
Equity in earnings of unconsolidated affiliates (2.8) (10.5)
Other 15.1 11.2
Change in working capital items:
Receivables and prepaid expenses (2.2) (2.3)
Inventories at FIFO cost 46.4 20.8
Payables and accruals (118.3) (71.8)
-------- -------
Net cash flow from operations 77.0 66.3
-------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Cash paid for property additions (60.1) (55.9)
Proceeds from sale of property 6.2 5.3
Other (3.5) (22.9)
-------- -------
Net cash flow used by investing activities (57.4) (73.5)
-------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Additions to short-term borrowings 47.7 -
Payments on short-term borrowings (29.8) (34.0)
Additions to long-term borrowings 142.6 24.9
Payments on long-term borrowings (80.5) (69.4)
Net proceeds from exercise of warrants and stock options 3.4 4.6
Purchase of unexercised warrants (113.2) -
Other - (1.0)
-------- -------
Net cash flow used by financing activities (29.8) (74.9)
-------- -------
Decrease in cash and equivalents (10.2) (82.1)
CASH AND EQUIVALENTS:
Beginning of period 60.7 118.4
-------- -------
End of period $ 50.5 $ 36.3
======== =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE> 7
SAFEWAY INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements of Safeway Inc. and
subsidiaries ("Safeway" or the "Company") for the 12 weeks ended March 25, 1995
and March 26, 1994 are unaudited and, in the opinion of management, contain all
adjustments that are of a normal and recurring nature necessary to present
fairly the financial position and results of operations for such periods. The
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and related notes contained in the
Company's 1994 Annual Report to Stockholders. The results of operations for the
12 weeks ended March 25, 1995 are not necessarily indicative of the results
expected for the full year.
NOTE B - INVENTORY
The results of operations reflect the application of the LIFO method of valuing
certain domestic inventories, based upon estimated annual inflation ("LIFO
indices"). LIFO expense was $2.3 million in the first quarters of both 1995 and
1994. Actual LIFO indices are calculated during the fourth quarter of the year
based upon a statistical sampling of inventories.
NOTE C - INVESTMENTS IN AFFILIATES
Investments in affiliates consist of a 35% interest in The Vons Companies, Inc.
("Vons"), which operates 334 supermarkets located mostly in southern California,
and a 49% interest in Casa Ley, S.A. de C.V. ("Casa Ley") which operates 71
stores in western Mexico. Safeway records income from its equity investments on
a one-quarter delay basis.
Since the December 1994 devaluation of the peso, Mexico has experienced economic
uncertainty and very high interest rates. As a result, Safeway recorded no
income from its equity investment in Casa Ley during the first quarter of 1995,
compared to $4.2 million in the first quarter of 1994.
The Company's recorded investment in Vons at March 25, 1995 was $239.7 million,
including goodwill of $46.6 million that is being amortized over a 40 year life.
Income from Safeway's equity investment in Vons was $2.8 million for the first
quarter of 1995 compared to $6.3 million for the same period in 1994.
Based on the March 25, 1995 closing price for Vons common stock as quoted on
the New York Stock Exchange, the Company's 15.1 million shares of Vons common
stock had an aggregate market value of $291.2 million.
7
<PAGE> 8
SAFEWAY INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE C - INVESTMENTS IN AFFILIATES (CONTINUED)
Summarized financial information derived from Vons' financial reports to the
Securities and Exchange Commission is as follows (in millions):
<TABLE>
<CAPTION>
January 1, January 2,
FINANCIAL POSITION 1995 1994
---- ----
<S> <C> <C>
Current assets $ 467.8 $ 473.4
Property and equipment, net 1,203.0 1,215.6
Other assets 551.2 560.5
--------- --------
Total assets $ 2,222.0 $2,249.5
========= ========
Current liabilities $ 563.9 $ 542.7
Long-term obligations 1,105.7 1,181.9
Shareholders' equity 552.4 524.9
--------- --------
Total liabilities and shareholders' equity $ 2,222.0 $2,249.5
========= ========
</TABLE>
<TABLE>
<CAPTION>
12 Weeks Ended 12 Weeks Ended
January 1, January 2,
RESULTS OF OPERATIONS 1995 1994
---- ----
<S> <C> <C>
Sales $ 1,176.2 $ 1,170.5
Cost of sales and other expenses (1,167.1) (1,151.6)
--------- ---------
Net income $ 9.1 $ 18.9
========= =========
</TABLE>
8
<PAGE> 9
SAFEWAY INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE D - FINANCING
Notes and debentures were composed of the following at March 25, 1995 and
December 31, 1994 (in millions):
<TABLE>
<CAPTION>
March 25, 1995 December 31, 1994
-------------- -----------------
Long-term Current Long-term Current
--------- ------- --------- -------
<S> <C> <C>
Bank Credit Agreement, secured $ 187.0 $ 135.0
Working Capital Credit Agreement,
secured 223.0 196.8
9.30% Senior Secured Debentures
due 2007 70.7 70.7
10% Senior Notes due 2002,
unsecured 59.1 59.1
10% Senior Subordinated Notes due 2001,
secured 241.4 241.4
9.875% Senior Subordinated
Debentures due 2007, secured 110.0 110.0
9.65% Senior Subordinated
Debentures due 2004, secured 228.2 228.2
9.35% Senior Subordinated Notes due
1999, secured 172.5 172.5
Mortgage notes payable, secured 422.5 $ 50.4 426.7 $ 51.3
Other notes payable, unsecured 207.9 13.4 209.1 13.3
Other bank borrowings, unsecured -- 101.8 -- 87.9
-------- -------- -------- ------
$1,922.3 $ 165.6 $1,849.5 $152.5
======== ======== ======== ======
</TABLE>
Note B to the Company's consolidated financial statements on pages 25 through 27
of the 1994 Annual Report to Stockholders, and the information appearing under
the caption "Terms of Outstanding Indebtedness" in Item 1 of the Company's 1994
Form 10-K describe all of the material restrictive covenants of the Company's
subordinated indebtedness.
NOTE E - CONTINGENCIES
Note H to the Company's consolidated financial statements, under the caption
"Legal Matters" on page 32 of the 1994 Annual Report to Stockholders, provides
information on significant claims and litigation in which the Company is
involved. There have been no material developments related to those matters.
9
<PAGE> 10
SAFEWAY INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Safeway's net income for the first quarter ended March 25, 1995 was $62.0
million ($0.51 per share) compared to $41.9 million ($0.34 per share) in the
first quarter of 1994.
Sales were $3.6 billion in the first quarter of 1995 compared to $3.5 billion in
the same period of 1994. Same-store sales increased 5.0% in the first quarter of
1995, continuing a nine-quarter trend of same-store sales increases. Safeway's
sales growth, despite the continuing lack of food price inflation, is primarily
the result of reinvesting the cost savings achieved throughout the Company into
improved service and better pricing for its customers.
Gross profit was 27.4% of sales in the first quarter of 1995 compared to 26.9%
in the first quarter of 1994. The improvement in gross profit was primarily due
to decreased merchandise costs and lower advertising expense. LIFO expense was
$2.3 million for the first quarter of both 1995 and 1994, reflecting the
Company's expectation of low inflation for the year.
Operating and administrative expense was 23.16% of sales in the first quarter of
1995 compared to 23.57% of sales in the first quarter of 1994. Operating and
administrative expenses as a percentage of sales continue to decline as a result
of higher sales and efforts to reduce or control expenses.
Interest expense fell to $47.5 million in the first quarter of 1995 from $55.8
million during the same period of 1994. The decrease in 1995 is the result of a
reduction in overall debt levels and efforts begun in the second quarter of 1994
to replace higher rate long-term debt with floating rate debt.
Equity in earnings of unconsolidated affiliates, recorded on a one-quarter delay
basis, decreased to $2.8 million in the first quarter of 1995 from $10.5 million
in the first quarter of 1994. Since the December 1994 devaluation of the peso,
Mexico has experienced economic uncertainty and very high interest rates. As a
result, Safeway recorded no income from its equity investment in Casa Ley during
the first quarter of 1995, compared to $4.2 million in the first quarter of
1994. The economic issues in Mexico will continue to adversely affect Casa Ley's
financial results, but the impact is not expected to be material to the
consolidated operating results of Safeway. Safeway's income from its equity
investment in Vons fell to $2.8 million in the first quarter of 1995 from $6.3
million in 1994. Vons reported that its net income for the quarter ended January
1, 1995 reflected the impact of its strategic repositioning program which began
in late 1993. According to Vons, this program includes lower prices, increased
promotional activity, and additional store employee hours.
In January 1995, the Company acquired 31.8% of the partnership interests in SSI
Equity Associates, L.P. for $113 million with proceeds from bank borrowings. SSI
Equity Associates, L.P., a related party, is a limited partnership whose sole
asset consists of warrants to purchase 13.9 million shares of Safeway common
stock at $2.00 per share. At the date of acquisition, Safeway estimated that
this transaction would reduce common stock equivalents by about 4.16 million
shares, which began having a favorable effect on earnings per share in the first
quarter of 1995. The favorable effect on earnings per share from reducing common
stock equivalents is being partially offset by interest expense on the bank
borrowings.
10
<PAGE> 11
SAFEWAY INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
On April 6, 1995, retail food clerks and meat department employees began a
strike which lasted nine days and affected 208 stores in Safeway's Northern
California Division. Safeway is part of a multi-employer bargaining group with
Lucky and Save Mart. During the strike, Lucky and Save Mart locked out food
clerks and meat department employees. The bargaining group has reached a
tentative settlement with the union, which is subject to a vote by the union
members. Results of this vote are expected to be announced on May 10, 1995.
Although Safeway has not determined the financial impact of the strike, sales
and operating results for the second quarter of 1995 are expected to be
adversely affected.
LIQUIDITY AND FINANCIAL RESOURCES
Operating cash flow, as presented below, provides a measure of the Company's
ability to generate cash to pay interest and fixed charges, and facilitates the
comparison of Safeway's results of operations with those of companies having
different capital structures. Safeway's computation of operating cash flow is as
follows (dollars in millions):
<TABLE>
<CAPTION>
12 Weeks Ended
--------------
March 25, March 26,
1995 1994
------ -------
<S> <C> <C>
Income before income taxes $109.8 $ 73.5
Depreciation and amortization 74.5 74.7
Interest expense 47.5 55.8
LIFO expense 2.3 2.3
Equity in earnings of unconsolidated
affiliates (2.8) (10.5)
------ ------
Operating cash flow $231.3 $195.8
====== ======
As a percent of sales 6.37% 5.61%
====== ======
As a multiple of interest expense 4.87x 3.51x
====== ======
</TABLE>
Cash flow from operations supplemented by credit available under the Bank
Agreements are the Company's primary sources of short-term liquidity. At March
25, 1995, the Company had total borrowing capacity under the Bank Agreements of
$1.15 billion, of which $612.5 million was unused. Management believes that this
amount is adequate to meet the Company's requirements.
CAPITAL EXPENDITURE PROGRAM
A key component of the Company's long-term strategy is its capital expenditure
program. During the first quarter of 1995, Safeway invested $74 million in
capital expenditures and opened four new stores. The Company plans to invest
approximately $425 million for capital expenditures in 1995 to open 25 to 30 new
stores and complete 90 to 100 remodels.
11
<PAGE> 12
SAFEWAY INC. AND SUBSIDIARIES
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Note H to the Company's consolidated financial statements, under the caption
"Legal Matters" on page 32 of the 1994 Annual Report to Stockholders, provides
information on significant claims and litigation in which the Company is
involved. There have been no material developments related to those matters.
ITEM 6(A). EXHIBITS
Exhibit 4(i).1 Form of Warrant Agreement between the Company and The
First National Bank of Boston as Warrant Agent relating
to Warrants to purchase shares of common stock of the
Company (incorporated by reference to Exhibit 4.5 to
Registration Statement No. 33-9913) and Amendment to the
Warrant Agreement between the Company and The First
National Bank of Boston as Warrant Agent relating to
Warrants to purchase shares of common stock of the
Company (incorporated by reference to Exhibit 4(i).6 to
Registrant's Form 10-K for the year ended December 30,
1989).
Exhibit 4(i).2 Specimen Warrant (incorporated by reference to Exhibit
4(i).5 to Registration Statement No. 33-33388).
Exhibit 4(i).3 Specimen Common Stock Certificate (incorporated by
reference to Exhibit 4(i).2 to Registration Statement
No. 33-33388).
Exhibit 4(i).4 Registration Rights Agreement dated November 25, 1986
between the Company and certain limited partnerships
(incorporated by reference to Exhibit 4(i).4 to
Registration Statement No. 33-33388).
Exhibit 4(i).5 Indenture dated as of November 20, 1991 among the Company
and The Bank of New York as Trustee relating to the
Company's Senior Subordinated Debt Securities
(incorporated by reference to Exhibit 4.1 of Registrant's
Form 8-K dated November 13, 1991).
Exhibit 4(i).6 Form of Officers' Certificate establishing the terms of
the 10% Senior Subordinated Notes due December 1, 2001,
including the form of Note (incorporated by reference to
Exhibit 4.4 of Registrant's Form 8-K dated November 13,
1991).
Exhibit 4(i).7 Form of Officers' Certificate establishing the terms of
the 9.65% Senior Subordinated Debentures due January 15,
2004, including the form of Debenture (incorporated by
reference to Exhibit 4.1 of Registrant's Form 8-K dated
January 15, 1992).
Exhibit 4(i).8 Indenture dated as of February 1, 1992 between the
Company and The First National Bank of Chicago as Trustee
relating to the Company's 9.30% Senior Secured Debentures
due 2007, including the form of Debenture and the forms
of Deed of Trust and Environmental Indemnity Agreement
attached as exhibits thereto (incorporated by reference
to Exhibit 4(i).14 to Registrant's Form 10-K for the year
ended December 28, 1991).
Exhibit 4(i).9 Indenture dated as of March 15, 1992 between the Company
and Harris Trust and Savings Bank as Trustee relating to
the Company's Senior Subordinated Debt Securities
(incorporated by reference to Exhibit 4.1 of Registrant's
Form 8-K dated March 17, 1992).
12
<PAGE> 13
SAFEWAY INC. AND SUBSIDIARIES
ITEM 6(A). EXHIBITS (CONTINUED)
Exhibit 4(i).10 Form of Officers' Certificate establishing the terms of
the 9.35% Senior Subordinated Notes due March 15, 1999,
and the 9.875% Senior Subordinated Debentures due March
15, 2007, including the form of Note and form of
Debenture (incorporated by reference to Exhibit 4.2 of
Registrant's Form 8-K dated March 17, 1992).
Exhibit 4(i).11 Indenture dated as of September 1, 1992 between the
Company and The Chase Manhattan Bank (National
Association), as Trustee relating to the Company's Debt
Securities (incorporated by reference to Exhibit 4.1 of
Registrant's Form 8-K dated September 16, 1992).
Exhibit 4(i).12 Form of Officers' Certificate relating to the Company's
Fixed Rate Medium-Term Notes and the Company's Floating
Rate Medium-Term Notes, form of Fixed Rate Note and form
of Floating Rate Note (incorporated by reference to
Exhibits 4.2, 4.3 and 4.4 of Registrant's Form 8-K dated
September 16, 1992).
Exhibit 4(i).13 Form of Officers' Certificate establishing the terms of a
separate series of Safeway Inc.'s Medium-Term Notes
entitled 10% Senior Notes due November 1, 2002, including
the form of Note (incorporated by reference to Exhibits
4.1 and 4.2 of Registrant's Form 8-K dated November 5,
1992).
Exhibit 4(i).14 Form of Officers' Certificate establishing the terms of a
separate series of Safeway Inc.'s Medium-Term Notes
entitled Medium-Term Notes due June 1, 2003 (Series
OPR-1), including the form of Note (incorporated by
reference to Exhibits 4.1 and 4.2 of Registrant's Form
8-K dated June 1, 1993).
Exhibit 4(i).15 Company Pledge Agreement dated as of November 24, 1986
between the Company and Bankers Trust Company, as
collateral agent, form of First Amendment thereto dated
as of June 12, 1990, and form of Second Amendment thereto
dated as of November 8, 1991 (incorporated by reference
to Exhibit 4.5 of Registrant's Form 8-K dated November
13, 1991) and Third Amendment dated as of January 28,
1992 to Company Pledge Agreement between the Company and
Bankers Trust Company, as collateral agent and interest
rate exchanger (incorporated by reference to Exhibit 4.3
of Registrant's Form 8-K dated March 17, 1992).
Exhibit 4(i).16 Trademark Security Agreement and Conditional Assignment
dated as of November 24, 1986 between the Company and
Bankers Trust Company, as collateral agent, form of First
Amendment thereto dated as of June 12, 1990, and form of
Second Amendment thereto dated as of November 8, 1991
(incorporated by reference to Exhibit 4.6 of Registrant's
Form 8-K dated November 13, 1991) and Third Amendment
dated as of January 28, 1992 to Safeway Pledge Agreement
between the Company and Bankers Trust Company, as
collateral agent and interest rate exchanger
(incorporated by reference to Exhibit 4.4 of Registrant's
Form 8-K dated March 17, 1992).
Exhibit 4(i).17 Pledge and Security Agreement dated as of November 26,
1986 between the Company and Bankers Trust Company, as
collateral agent, form of First Amendment thereto dated
as of June 12, 1990, and form of Second Amendment thereto
dated as of November 8, 1991 (incorporated by reference
to Exhibit 4.7 of Registrant's Form 8-K dated November
13, 1991) and Third Amendment dated as of January 28,
1992 to Company Pledge and Security Agreement (Inventory)
between the Company and Bankers Trust Company, as
collateral agent and interest rate exchanger
(incorporated by reference to Exhibit 4.5 of Registrant's
Form 8-K dated March 17, 1992).
13
<PAGE> 14
SAFEWAY INC. AND SUBSIDIARIES
ITEM 6(A). EXHIBITS (CONTINUED)
Exhibit 4(i).18 Intercreditor Agreement (Company Pledge) dated as of
November 24, 1986 among the Company, Bankers Trust
Company, as agent and collateral agent, Harris Trust and
Savings Bank and Norwest Bank Minneapolis, N.A., and form
of First Amendment thereto dated as of November 8, 1991
(incorporated by reference to Exhibit 4.8 of Registrant's
Form 8-K dated November 13, 1991) and Second Amendment
dated as of January 28, 1992 to Intercreditor Agreement
(Company Pledge) among the Company, Bankers Trust
Company, as agent, collateral agent and interest rate
exchanger, Harris Trust and Savings Bank, Norwest Bank
Minneapolis, N.A., and The Bank of New York (incorporated
by reference to Exhibit 4.6 of Registrant's Form 8-K
dated March 17, 1992).
Exhibit 4(i).19 Intercreditor Agreement (Substitute Collateral) dated as
of November 24, 1986 among the Company, Bankers Trust
Company, as agent and collateral agent, Harris Trust and
Savings Bank, and Norwest Bank Minneapolis, N.A., and
form of First Amendment thereto dated as of November 8,
1991 (incorporated by reference to Exhibit 4.9 of
Registrant's Form 8-K dated November 13, 1991) and Second
Amendment dated as of January 28, 1992 to Intercreditor
Agreement (Substitute Collateral) among the Company,
Bankers Trust Company, as agent, collateral agent and
interest rate exchanger, Harris Trust and Savings Bank,
Norwest Bank Minneapolis, N.A., and The Bank of New York
(incorporated by reference to Exhibit 4.7 of Registrant's
Form 8-K dated March 17, 1992).
Exhibit 4(i).20 Form of Second Amended and Restated Credit Agreement
dated as of June 12, 1990 incorporating changes through
the Third Amendment dated as of August 7, 1991, the
Fourth Amendment dated November 8, 1991, and the Fifth
Amendment dated January 28, 1992 among the Company, the
banks listed therein, and Bankers Trust Company as Lead
Manager and Agent (incorporated by reference to Exhibit
4(i).19 to Registrant's Form 10-K for the year ended
January 2, 1993), the Extension Agreement and Sixth
Amendment dated March 31, 1994 (incorporated by reference
to Exhibit 4(i).20 of the Registrant's Form 10-Q for the
quarterly period ended March 26, 1994), the Seventh
Amendment dated August 19, 1994 (incorporated by
reference to Exhibit 4(i).20 of the Registrant's Form
10-Q for the quarterly period ended September 10, 1994),
and the Eighth Amendment and Limited Waiver dated January
13, 1995 (incorporated by reference to Exhibit 4(i).20 of
the Registrant's Form 10-K for the year ended December
31, 1994).
Exhibit 4(i).21 Form of Second Amended and Restated Working Capital
Credit Agreement dated as of June 14, 1990 incorporating
changes through the Third Amendment dated as of August 7,
1991, the Fourth Amendment dated November 8, 1991, and
the Fifth Amendment dated January 28, 1992 among the
Company, the Banks listed therein, and Bankers Trust
Company as Lead Manager and Agent (incorporated by
reference to Exhibit 4(i).20 to Registrant's Form 10-K
for the year ended January 2, 1993), the Extension
Agreement and Sixth Amendment dated March 31, 1994
(incorporated by reference to Exhibit 4(i).21 of the
Registrant's Form 10-Q for the quarterly period ended
March 26, 1994), the Seventh Amendment dated August 19,
1994 (incorporated by reference to Exhibit 4(i).21 of the
Registrant's Form 10-Q for the quarterly period ended
September 10, 1994), and the Eighth Amendment and Limited
Waiver dated January 13, 1995 (incorporated by reference
to Exhibit 4(i).21 of the Registrant's Form 10-K for the
year ended December 31, 1994).
14
<PAGE> 15
SAFEWAY INC. AND SUBSIDIARIES
ITEM 6(A). EXHIBITS (CONTINUED)
Exhibit 4(i).22 Form of Common Stock Purchase Warrants dated November 25,
1986 to purchase 13,928,000 shares of Safeway Common
Stock (incorporated by reference to Exhibit 4.7 to
Registration Statement No. 33-9254).
Exhibit 4(iii) Registrant agrees to provide the Securities and Exchange
Commission, upon request, copies of instruments defining
the rights of holders of long-term debt of Registrant and
all of its subsidiaries for which consolidated financial
statements are required to be filed with the Securities
and Exchange Commission.
Exhibit 10(iii).1 Safeway Inc. Outside Director Equity Purchase Plan
(incorporated by reference to Exhibit 4.1 to Registration
Statement No. 33-36753) and First Amendment to the
Safeway Inc. Outside Director Equity Purchase Plan dated
as of July 5, 1994 (incorporated by reference to Exhibit
10(iii).1 to Registrant's Form 10-Q for the quarterly
period ended September 10, 1994).
Exhibit 10(iii).2 Share Appreciation Rights Plan of Canada Safeway Limited
(incorporated by reference to Exhibit 10(iii).17 to
Registrant's Form 10-K for the year ended December 29,
1990) and Amendment No. 1 thereto dated December 13, 1991
(incorporated by reference to Exhibit 10(iii).17 to
Registrant's Form 10-K for the year ended December 28,
1991).
Exhibit 10(iii).3 Share Appreciation Rights Plan of Lucerne Foods Ltd.
(incorporated by reference to Exhibit 10(iii).18 to
Registrant's Form 10-K for the year ended December 29,
1990) and Amendment No. 1 thereto dated December 13, 1991
(incorporated by reference to Exhibit 10(iii).18 to
Registrant's Form 10-K for the year ended December 28,
1991).
Exhibit 10(iii).4 Letter Agreement dated March 24, 1993, between the
Company and Peter A. Magowan (incorporated by reference
to Exhibit 10(iii).6 to Registrant's Form 10-Q for the
quarterly period ending June 19, 1993).
Exhibit 10(iii).5 Stock Option Plan for Consultants of Safeway Inc.
(incorporated by reference to Exhibit 10(iii).7 to
Registrant's Form 10-Q for the quarterly period ending
June 19, 1993).
Exhibit 10(iii).6 First Amendment to the Stock Option Plan for Consultants
of Safeway Inc. (incorporated by reference to Exhibit
10(iii).7 to Registrant's Form 10-K for the year ended
January 1, 1994).
Exhibit 10(iii).7 1994 Amended and Restated Stock Option and Incentive Plan
for Key Employees of Safeway Inc. (incorporated by
reference to Exhibit 10(iii).8 to Registrant's Form 10-K
for the year ended January 1, 1994) and First Amendment
thereto dated March 1, 1995 (incorporated by reference to
Exhibit 10(iii).7 of Registrants Form 10-K/A for the year
ended December 31, 1994).
Exhibit 10(iii).8 Operating Performance Bonus Plan for Executive Officers
of Safeway Inc. (incorporated by reference to Exhibit
10(iii).9 to Registrant's Form 10-K for the year ended
January 1, 1994).
15
<PAGE> 16
SAFEWAY INC. AND SUBSIDIARIES
ITEM 6(A). EXHIBITS (CONTINUED)
Exhibit 10(iii).9 Capital Performance Bonus Plan (incorporated by reference
to Exhibit 10(iii).10 to Registrant's Form 10-K for the
year ended January 1, 1994).
Exhibit 10.(iii).10 Retirement Restoration Plan of Safeway Inc. (incorporated
by reference to Exhibit 10(iii).11 to Registrant's Form
10-K for the year ended January 1, 1994).
Exhibit 10(iii).11 Deferred Compensation Plan for Safeway Directors
(incorporated by reference to Registrant's Form 10-K for
the year ended December 31, 1994).
Exhibit 11.1 Computation of Earnings Per Common Share and Common
Share Equivalent.
Exhibit 27 Financial Data Schedule (electronic filing only).
ITEM 6(B). REPORTS ON FORM 8-K.
None.
16
<PAGE> 17
SAFEWAY INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: May 4, 1995 \s\ Steven A. Burd
----------- ------------------
Steven A. Burd
President and Chief Executive Officer
Date: May 4, 1995 \s\ Julian C. Day
----------- -----------------
Julian C. Day
Executive Vice President and
Chief Financial Officer
17
<PAGE> 18
SAFEWAY INC. AND SUBSIDIARIES
Exhibit Index
SAFEWAY INC. AND SUBSIDIARIES
LIST OF EXHIBITS FILED WITH FORM 10-Q FOR THE PERIOD
ENDED MARCH 25, 1995
Exhibit 11.1 Computation of Earnings Per Common Share and Common Share
Equivalent
Exhibit 27 Financial Data Schedule (electronic filing only)
18
<PAGE> 1
EXHIBIT 11.1
SAFEWAY INC. AND SUBSIDIARIES
Computation of Earnings Per Common Share
and Common Share Equivalent
(In millions, except per share amounts)
<TABLE>
<CAPTION>
12 Weeks Ended
----------------------------------------------------
March 25, 1995 March 26, 1994
----------------------- -----------------------
Fully Fully
Diluted Primary Diluted Primary
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Net income $ 62.0 $ 62.0 $ 41.9 $ 41.9
====== ====== ====== ======
Weighted average common shares outstanding 105.6 105.2 102.3 101.7
Common share equivalents 15.8 15.8 22.6 22.3
------ ------ ------ ------
Weighted average common shares and common
share equivalents 121.4 121.0 124.9 124.0
====== ====== ====== ======
Earnings per common share and common
share equivalent $ 0.51 $ 0.51 $ 0.34 $ 0.34
====== ====== ====== ======
Calculation of common share equivalents:
Options and warrants to purchase common shares 23.8 24.2 28.6 29.3
Common shares assumed purchased with potential
proceeds (8.0) (8.4) (6.0) (7.0)
------ ------ ------ ------
Common share equivalents 15.8 15.8 22.6 22.3
====== ====== ====== ======
Calculation of common shares assumed purchased with
potential proceeds:
Potential proceeds from exercise of options and
warrants to purchase common shares $285.6 $283.0 $155.1 $158.3
Common stock price used under the treasury
stock method $ 35.50 $ 33.72 $ 25.75 $ 22.64
Common shares assumed purchased with
potential proceeds 8.0 8.4 6.0 7.0
</TABLE>
19
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEETS AND THE CONSOLIDATED STATEMENTS OF
INCOME ON PAGES 3 THROUGH 5 OF THE COMPANY'S FORM 10-Q FOR THE QUARTERLY
PERIOD ENDED MARCH 25, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> MAR-25-1995
<CASH> 50,500
<SECURITIES> 0
<RECEIVABLES> 144,900
<ALLOWANCES> 0
<INVENTORY> 1,088,500
<CURRENT-ASSETS> 1,382,200
<PP&E> 4,421,700
<DEPRECIATION> 1,924,300
<TOTAL-ASSETS> 4,963,200
<CURRENT-LIABILITIES> 1,717,700
<BONDS> 2,099,900
<COMMON> 1,100
0
0
<OTHER-SE> 602,300
<TOTAL-LIABILITY-AND-EQUITY> 4,963,200
<SALES> 3,632,300
<TOTAL-REVENUES> 3,632,300
<CGS> 2,637,100
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 47,500
<INCOME-PRETAX> 109,800
<INCOME-TAX> 47,800
<INCOME-CONTINUING> 62,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 62,000
<EPS-PRIMARY> 0.51
<EPS-DILUTED> 0.51
</TABLE>
