The Company And Significant Accounting Policies

9 Months Ended

Sep. 10, 2011

The Company And Significant Accounting Policies

The Company And Significant Accounting Policies

NOTE A–THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements of Safeway Inc. and subsidiaries ("Safeway" or the "Company") for the 12 and 36 weeks ended September 10, 2011 and September 11, 2010 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. These condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared on an accrual basis in accordance with generally accepted accounting principles in the United States ("US GAAP") have been condensed or omitted, pursuant to SEC regulations. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company's 2010 Annual Report on Form 10-K, as amended. The results of operations for the 12 and 36 weeks ended September 10, 2011 are not necessarily indicative of the results expected for the full year.

Inventory

Net income reflects the LIFO method of valuing certain domestic inventories based upon estimated annual inflation. The LIFO method of inventory valuation can only be determined annually, when inflation rates and inventory levels are known; therefore, LIFO inventory costs for interim financial statements are estimated. Actual LIFO inflation indices for the year are calculated during the fourth quarter based upon a statistical sampling of inventories. Safeway recorded $21.4 million of LIFO expense during the first 36 weeks of 2011 and no LIFO expense during the first 36 weeks of 2010.

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets include $54.1 million of Canadian assets classified as held for sale as of September 10, 2011.

Comprehensive Income

Comprehensive income consists of the following (in millions):

	12 Weeks Ended						36 Weeks Ended
	Sept. 10, 2011			Sept. 11, 2010			Sept. 10, 2011			Sept. 11, 2010
Net income before allocation to noncontrolling interests	$	130.3		$	122.7		$	301.4		$	359.8
Foreign currency translation adjustments, net of tax		(15.9	)		(2.9	)		24.9			24.0
Recognition of pension actuarial loss, net of tax		11.1			11.3			33.8			33.9
Other, net of tax		(0.6	)		0.7			1.4			1.9
Comprehensive income including noncontrolling interests	$	124.9		$	131.8		$	361.5		$	419.6
Comprehensive income attributable to noncontrolling interests		(0.1	)		0.1			(0.3	)		0.3
Comprehensive income attributable to Safeway Inc.	$	124.8		$	131.9		$	361.2		$	419.9