After studying the course materials located on Module 3: Lecture Materials & Resources page, answer the following:

Name and explain the levels of human sexual intercourse.
Difference between reproduction and procreation.
What are the two dimensions of intimacy?
Contraception:

What is it?
What is the intention of contraception?
Describe the three types of artificial contraception.
Risks / Side effects
Bioethical analysis and unfair dynamics of artificial contraception.

Non-Therapeutic sterilization; bioethical analysis
Principle of double effect; explain
Bioethical analysis of:

Ectopic pregnancy
Cancerous reproductive system with pregnancy

In Vitro Fertilization(IVF):

Process
Bioethical analysis of IVF

Bioethical analysis of to have a child
Read and summarize ERD paragraphs #: 40, 41, 42, 48, 52, 53.

Submission Instructions:

The work is to be clear and concise and students will lose points for improper grammar, punctuation, and misspelling.
If references are used, please cite properly according to the current APA style.

CONTRACEPTION & NON-THERAPEUTIC STERILIZATION

HUMAN SEXUAL INTERCOURSE

2 DIMENSIONS OF SEXUAL INTIMACY

CONTRACEPTION / DIRECT STERILIZATION

BIOETHICAL ANALYSIS

PRINCIPLE OF DOUBLE EFFECT

ECTOPIC PREGNANCY / CANCEROUS UTERUS

BRIEF HISTORY OF THE PILL

HUMAN SEXUAL INTERCOURSE, UNIQUE:

PHYSICAL LEVEL

PSYCHOLOGICAL LEVEL

SPIRITUAL LEVEL

Mammals: intercourse (mounting) -> naturally essential for achieving fertilization

In animals, strictly for reproduction (not face-to-face)

Unitive and Procreative Dimensions of Married Love

unitive: bonding, the blending, the intertwining that occurs between spouses
in the mutual expression of their love

The human call to love is universal

unique to marital love is the physical sexual intimacy,
which has radical implications

first implication: married couple, unlike any other familial or friendship love,
share their naked bodies

Human nature: nakedness does not belong between people who have not made
a mutual life-long commitment

Ex: when a spouse shares that nakedness with someone other than his or her spouse,
and the other spouse finds out, a deep sense of betrayal sets in

Human nature: sexual intimacy be exclusive because,
alongside with the physical intimacy there comes also a spiritual intimacy
that seals those two souls in a very unique and abiding way

Ex: sharing daily experiences,
which molds the couple into a new reality that was not there before,
and could not be there even if each individual went through the same experience alone

second implication: spiritual intimacy,
the spiritual intercourse that also happens when the physical intercourse
is honestly lived and properly understood

Unitive significance of marriage = new reality, double bonding
physical & spiritual

mutual surrender: 2 naked bodies + 2 naked hearts (Gn 2,24-25)

flows natural desire to make that bond fruitful,
with nothing less than creating a new human life = procreative significance

Mammals: intercourse -> naturally essential for achieving fertilization

However, humans dont reproduce; we procreate

Human intercourse: 2 dimensions are inseparable (complex unity) ex, coin

Regarding the procreative dimension, however,
what is inseparable from the unitive dimension is not so much
the actual begetting of a child,
but rather the desire for doing so

Whether the children actually happen or not,
thats up to the Author of life, the Creator of life

CONTRACEPTION & STERILIZATION

Definition

sexual intercourse only within valid marriage

intentional avoidance of having children without serious reason

default position in human sexual intercourse is the desire for having children

For grave reasons, it is justified to try to avoid conceiving:

finances
relocation
emotional instability
medical
many other children
etc.

mature and honest conscience is required for determining what serious reasons are

Various Methods of Artificial Contraception

3 categories: mechanical, chemical and surgical (or combo)

Mechanical:
male and female condom
cervical sponges and caps
Diaphragms
intrauterine devices (IUD)

Chemical:
synthetic estrogens and progestins (oral Pill, minipill)
injectable doses
subdermal patches

Surgical:
vasectomy (men)
tubal ligation (women)
hysterectomy (women)

In theory, some surgical sterilizations are reversible;
in practice much depends on what type of surgery was done,
how long ago, and even fiscal considerations

Some contraceptives are also abortifacient,
such as the IUD and possibly the Pill

POSSIBLE ABORTIFACIENTS:

MORNING AFTER PILL (PLAN B)

CONTRACEPTIVE PILLS

IUD

Effectiveness, Risks and Side Effects

Most claim success rates 97% ~ 99%

assumes perfect and consistent use, which seldom is the case with humans

risks:
blood clots
Cancer
high blood pressure
Depression
etc

side effects:
Nausea
Vomiting
Dizziness
Headaches
vaginal infections
abdominal pain
irregular bleeding or spotting

The Catholic bioethical analysis of contraception is not based on its risks or side effects

diminished desire for sexual activity
weight gain
increase or decrease in acne
appetite changes
tender breasts
increase or decrease in body hair
vaginal discharge
bone density loss
ectopic pregnancy

Moral Evaluation: Means and Ends

2 dimensions to marriage: unitive and procreative

The unitive dimension involves the generous mutual love expression
of the spouses

The procreative dimension involves their openness to having children
in each act of sexual intercourse

If either one of these two dimensions is truncated,
the marital act is not truly and fully human

Intrinsic Evil

Contraception: introduces a radical separation unitive <-> procreative

Unitive love w/o procreative love

even unitive: truncated, defective, pseudo-unit

act of selfishness and/or of fear (conscious or subconscious)

betrays a lack of trust in Gods Providence for that couple

Todays lifestyles = much control over our daily decisions;
the more control we have, the further control we want to have

engendering a new human being = God is in control

The role of the couple is to cooperate with God in creating that new life

The couple is given the gift and privilege of being co-creators with God

God decides

God intends: intimate sexual act of husband and wife

love-giving
simultaneously

life-giving

Contraception frustrates all this

UNFAIR DYNAMICS OF ARTIFICIAL CONTRACEPTION:

LIBIDO DIFFERENTIAL

TURNS SEXUAL INTERCOURSE INTO ENTERTAINMENT

BURDEN ON THE WOMAN

PROMOTES CONTRACEPTIVE MENTALITY IN SOCIETY

SEXUALLY TRANSMITTED DISEASE (STD) EXPOSURE

2,334,382 TOTAL CASES IN 2017 ALONE

TOTAL US POPULATION 2017 = 325,700,000

~ 1 IN EVERY 14 AMERICANS HAS AN STD

US STD EPIDEMIC:

STDs in U.S. 2017 Reach Record Highs (CDC website)

Chlamydia = 1,708,569
Gonorrhea = 555,608
HIV = 38,643
Syphilis = 31,562

Bad Medical Practice

contraception and sterilization seek to render a healthy organ inoperative

Thus contraception, honestly speaking, goes against sound medical practice: mutilation

contraception = act of arrogance against Gods created plan

Alternative: develop a deep trust in Gods Plan and Providence

The Church calls Gods Plan and Providence for a married couple a VOCATION

Therapeutic sterilization justified for serious medical reasons

PRINCIPLE OF DOUBLE EFFECT

good
act -> 2 simult effects

bad

conditions:

1. the act to be done must be good in itself or at least morally indifferent
(independently of its consequences)

2. the good effect must not be obtained by means of the evil effect
(evil an incidental by-product, not an actual factor in the accomplishment of the good)

3. the evil effect must not be intended for itself but only permitted
(evil desire not permitted)

4. there must be a proportionately grave reason for permitting the evil effect

5. Last resort (no other action w/o evil effect available)

All five conditions must be fulfilled. If any one of them is not satisfied, the act is morally wrong.

ECTOPIC PREGNANCY:

REMOVAL OF TUBE W LIVE UNBORN OK (SALPINGECTOMY)

REMOVAL ONLY OF LIVE UNBORN NOT OK (SALPINGOSTOMY)

CANCEROUS REPRODUCTIVE SYSTEM w PREGNANCY:

THERAPY AND/OR HYSTERECTOMY OK (DOUBLE EFFECT)

BRIEF HISTORY OF THE CONTRACEPTIVE PILL:

MARGARET SANGER (1879-1966):
6th of 11 siblings (18 pgs), nurse @ 20, suffragist, eugenicist, absol control over repr, utilitarian

GREGORY PINCUS (1903-1967): Biologist, Harvard, Hormones; progestins

JOHN ROCK (1890-1984): OB/GYN, Harvard, Catholic, Clinical Trials

CLINICAL TRIALS: Enovid; Puerto Rico, Haiti, Mexico, Los Angeles

FDA APPROVAL: 1957 menstrual regulator, 1960 contraception

PAPAL COMMISSION:
Pope John XXIII 1963 (6 members), Pope Paul VI (72 members) report 1966

HUMANAE VITAE (POPE PAUL VI, 1968): 2 dimensions, intrinsic evil, serious reasons, NFP

http://w2.vatican.va/content/paul-vi/en/encyclicals/documents/hf_p-vi_enc_25071968_humanae-vitae.html

http://w2.vatican.va/content/paul-vi/en/encyclicals/documents/hf_p-vi_enc_25071968_humanae-vitae.html

IVF, Assisted Reproductive Technologies and Human Embryos

The short answer is: no.

Expensive and burdensome:

physically
psychologically
socially
spiritually

To what purpose? To have a child

To have a child

@ 2 levels:

superficial

deeper

No child may be had, possessed; an object, a thing

Rather, a gift from God

Catholic teaching: having a child is only ethical
within the context of a valid marriage.

Automatically excludes all other possibilities:

non-married couples
married woman becoming pregnant by sperm from a donor
single woman becoming pregnant by sperm of a donor
woman carrying a pregnancy for another woman

Within a valid marriage:

2 central issues: 1. unitive / procreative dimensions together

2. responsible parenthood

Unitive / procreative: like 2 sides of a same coin

Does not mean that each time a couple has intercourse

for grave motives (Humanae vitae 10)

In a sense, IVF is the converse of contraception:

contraception is unitive without procreative

IVF is procreative without unitive

In other words, in IVF, the unitive is
radically separated from the procreative
such that procreation occurs in the lab (manufacture).

Now, 2 aspects of human procreation:

a natural act

a vital act

We just dont have a right to change natural, vital acts
that involve the species as a whole (natural selection).

Specifically, in order for human procreation to be ethical,
the sperm must fertilize the egg in the proper place,
that is, in the ampulla of the Fallopian tube (in vivo).

Ampulla

Endometrium

DAY 1

DAY 7

In other words, we have no right to take out a human egg,
collect sperm, and mix them in a lab (in vitro).

We can do it (technologically)

We may not do it (ethically)

Aside from this consideration of principle,
which makes IVF intrinsically evil,
there are a number of considerations of practice.

Considerations of practice:

Risk to women due to ovarian hyperstimulation and egg extraction

Typical sperm collection by masturbation

Abortions due to failed implantations

Abortions due to freezing and thawing of embryos

Creating and feeding the problem of ~ 1 million frozen human embryos

What to do with frozen embryos when parents divorce

Denying the child and the species natural selection

Selective reduction

Spontaneous abortions and miscarriages:

25-50% of all human pregnancies

Most within the first couple of weeks of pregnancy

Most due to genetic defects

We just do not have a right to negate natural selection to a child
at such an early stage that it is not even painful
either to himself or his mother

Double right to natural selection:

at the individual & family level

at the social level

Bottom line: human procreation is extremely complex:

Physically: as banal as tight shorts
as complicated as one or both spouses having Down syndrome

Psychologically: low % of pregnancy resulting from rape vs general rate
infertile couple getting pregnant shortly after having first child

Socially: blanket acceptance of IVF
one million spare embryos

Spiritually: having a child for the right reasons: gift from God

No one has a right to a child;

yes, a right to desire children,
but not at all costs ($ 20 ~ 30 thousand)

So, for infertile couples: perhaps assist, but ultimately:

Reflect on the apparent silence of God
in this aspect of their marriage
at this particular time.

God can speak volumes in His silence

Therefore, pray, with an open heart, with humility, accepting Divine Will

In view of the Incarnation, all human life is an act of Divine Will:

Therefore, surrendering to Divine Will, in the married couple,

is especially redemptive and sanctifying, for all society.

Divine Will in the married couple: an extension of their wedding vows:

to be true to you in good times and in bad,
in sickness and in health;
to love and honor you
all the days of my life.

Nowhere does it say there: we have to have a child at any cost.

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Accounting – Safeway

Below is my assignment to show the tieout and sources for each transaction. I have attached the screenshot of example on how it should look like.
Summary:
You will submit an Excel file that provides the tieout and sources for the selected/marked items in the attached file, which includes financial statements and MD&A.
Details:
(1) Create a column with the marked item within your Excel. There are 27 total questions (one post-it has 2 questions within so there is 1 less post it than total questions).
(2) Create a column (or two/more if needed) to provide the source of the disclosure. This could be, for a few examples: (A) directly from the income statement, balance sheet, or statement of cash flow (B) a calculation year over year to show an increase or decrease (C) an amount derived from using two financial statement amounts, such as cash flows less capital expenditures.
(3) You can use review notes or an additional column for text explanation. Review notes are handy and useful for highlighting an item. However to format the text, copy it and reuse it, or see it while using the spreadsheet, a separate column is likely more effective when explanatory comments are warranted
(4) If you desire, downloading the financials from Mergent into Excel on a separate tab may make the process much more efficient as you can then simply calculate within the spreadsheet. I must be able to review the formulas for grading, so if this is not utilized explanatory comments should be given for your calculations. Use tools such as trace dependents and precedents, absolute referencing, and others to make the tieout easier for you. These financials were obtained from Mergent. If you prefer better formatted financials to read than Mergent, you can find the 10K publicly available online.

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 28, 2013
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 1-00041
SAFEWAY INC.
(Exact name of registrant as specified in its charter)

Delaware 94-3019135
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)

5918 Stoneridge Mall Road
Pleasanton, California 94588-3229
(Address of principal executive offices) (Zip Code)

Registrants telephone number, including
area code: (925) 467-3000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered
Common Stock, $0.01 par value per share New York Stock Exchange
7.45% Senior Debentures due 2027 New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
(Title of class)
NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes X No .
(Cover continued on following page)

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(Cover continued from previous page)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes No X.
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 .
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files) Yes X No .
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405) is not contained herein, and
will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K X.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):

Large accelerated filer X Accelerated filer Non-accelerated filer
Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes No X.
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the
registrants most recently completed second fiscal quarter. The aggregate market value of the voting stock held by non-affiliates of the
registrant as of June 15, 2013 was approximately $5.8 billion.
As of February 20, 2014, there were outstanding approximately 230.3 million shares of the registrants common stock.
DOCUMENTS INCORPORATED BY REFERENCE
The following document is incorporated by reference to the extent specified herein:

Document Description 10-K Part
Portions of the definitive proxy statement for use in connection with the Annual Meeting of Stockholders (to be held
May 14, 2014) to be filed within 120 days after the end of the fiscal year ended December 28, 2013 III

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SAFEWAY INC. AND SUBSIDIARIES
Table of Contents

Page
FORWARD-LOOKING STATEMENTS 4

PART I

Item 1. Business 6

Item 1A. Risk Factors 11

Item 1B. Unresolved Staff Comments 16

Item 2. Properties 16

Item 3. Legal Proceedings 16

Item 4. Mine Safety Disclosures 16

Executive Officers of the Registrant 17

PART II

Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities 18

Item 6. Selected Financial Data 21

Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations 23

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 39

Item 8. Financial Statements and Supplementary Data 40

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure 95

Item 9A. Controls and Procedures 95

Item 9B. Other Information 95

PART III

Item 10. Directors, Executive Officers and Corporate Governance 96

Item 11. Executive Compensation 96

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters 96

Item 13. Certain Relationships and Related Transactions, and Director Independence 96

Item 14. Principal Accountant Fees and Services 97

PART IV

Item 15. Exhibits and Financial Statement Schedules 98

SIGNATURES 103

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FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K for Safeway Inc. (Safeway, the Company, we or our) contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We also provide
forward-looking statements in other materials which are released to the public, as well as oral forward-looking statements.
Forward-looking statements contain information about our future operating or financial performance. Forward-looking statements are
based on our current expectations and involve risks and uncertainties, which may be beyond our control, as well as assumptions. If
assumptions prove to be incorrect or if known or unknown risks and uncertainties materialize into actual events or circumstances, actual
results could differ materially from those included in or contemplated or implied by these statements. Forward-looking statements do not
strictly relate to historic or current facts. Forward-looking statements are indicated by words or phrases such as continuing, ongoing,
expects, estimates, anticipates, believes, guidance and similar words or phrases and the negative of such words or phrases.
This Annual Report on Form 10-K includes forward-looking statements relating to, among other things: a potential transaction involving
the sale of the Company; the distribution of the our shares of Blackhawk Network Holdings, Inc. (“Blackhawk”) to our stockholders; the
potential monetization of our ownership interest in Casa Ley S.A. de C.V. (“Casa Ley”); changes to the total closed store reserve; uses of
cash; ability to borrow under commercial paper program and/or bank credit facilities; sufficiency of liquidity; repayment of borrowings and
debt reduction; interest expense; indemnification obligations; dividend payments on common stock; cash capital expenditures; outcomes
of legal proceedings; the effect of new accounting standards; compliance with laws and regulations; amount of indebtedness; realization
of deferred tax liability; expansion of proprietary private-label brands; sale of Dominick’s locations; multiemployer pension plan withdrawal
liability; pension plan expense and contributions; obligations and contributions under benefit plans; the rate of return on pension assets;
amounts to be recognized as a component of net periodic benefit cost; results of shrink programs; unrecognized tax benefits;
unrecognized compensation cost; and repurchases of common stock. The following are among the principal factors that could cause
actual results to differ materially from those included in or contemplated or implied by the forward-looking statements:
The Company’s ability to consummate a transaction involving the sale of the Company;
The Company’s ability to execute plans to distribute its Blackhawk stock to Safeway stockholders;
The Company’s ability to monetize its investment in Casa Ley;

General business and economic conditions in our operating regions, including the rate of inflation or deflation, consumer spending
levels, currency valuations, population, employment and job growth and/or losses in our markets;

Sales volume levels and price per item trends;

Pricing pressures and competitive factors, which could include pricing strategies, store openings, remodels or acquisitions by our
competitors;

Results of our programs to control or reduce costs, improve buying practices and control shrink;
Results of our programs to increase sales;
Results of our continuing efforts to expand corporate brands;
Results of our programs to improve our perishables and center of store departments;
The impact of generic drugs on pharmacy sales and identical-store sales;
Results of our promotional programs;
Results of our capital program;

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Results of our efforts to improve working capital;
Results of any ongoing litigation in which we are involved or any litigation in which we may become involved;
The resolution of uncertain tax positions;

The outcome of the agreement to sell substantially all the net assets of Canada Safeway Limited to Sobeys Inc. including the ability to
use proceeds as described in this Form 10-K and the ability to project the impact of the transaction on our ongoing operations;

The outcome of exiting the Chicago market;
The ability to achieve satisfactory operating results in all geographic areas where we operate;
Changes in the financial performance of our equity investments;

Labor costs, including benefit plan costs and severance payments, or labor disputes that may arise from time to time and work
stoppages that could occur in areas where certain collective bargaining agreements have expired or are on indefinite extensions or are
scheduled to expire in the near future;

Potential costs and risks associated with actual or potential cyber attacks;
Data security or other information technology issues that may arise;

Failure to fully realize or delay in realizing growth prospects for existing or new business ventures, including our Blackhawk and Property
Development Centers subsidiaries;

Legislative, regulatory, tax, accounting or judicial developments, including with respect to Blackhawk;
The cost and stability of fuel, energy and other power sources;
The impact of the cost of fuel on gross margin and identical-store sales;
Discount rates used in actuarial calculations for pension obligations and self-insurance reserves;
The rate of return on our pension assets;
The availability and terms of financing, including interest rates;
Adverse developments with regard to food and drug safety and quality issues or concerns that may arise;
Loss of key members of senior management;
Unanticipated events or changes in real estate matters, including acquisitions, dispositions and impairments;
Adverse weather conditions and effects from natural disasters;
Performance in new business ventures or other opportunities that we pursue; and
The capital investment in and financial results from our retail stores.
We undertake no obligation to update forward-looking statements to reflect new information, events or developments after the date
hereof. For additional information regarding these risks and uncertainties, see Item 1A. Risk Factors. These are not intended to be a
discussion of all potential risks or uncertainties, as it is not possible to predict or identify all risk factors.

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PART I

Item 1. Business
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 Companys 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 Companys 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. Blackhawks 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. Blackhawks product offerings include gift
cards, prepaid telecom products and prepaid financial services products, including general purpose

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reloadable (“GPR”) cards and Blackhawks 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.
Stores Safeways average store size is approximately 47,500 square feet. The Company determines the size of a new store based on a
number of considerations, including the needs of the community the store serves, the location and site plan and the estimated return on
capital invested. Safeways Lifestyle store showcases the Companys commitment to quality with an expanded perishables offering. It
features an earth-toned dcor package that is warm and inviting with special lighting to highlight products and departments, custom
flooring and unique display features. The Company believes this warm ambiance significantly enhances the shopping experience.
Safeways stores provide a full array of grocery items with a portion tailored to local preferences. Most stores offer a wide selection of
food and general merchandise and feature a variety of specialty departments such as bakery, delicatessen, floral, seafood and pharmacy.
In addition, the majority of stores offer Starbucks coffee shops, and some offer adjacent fuel centers.
Safeway continues to operate a number of smaller stores that also offer an extensive selection of food and general merchandise and that
generally include one or more specialty departments. These stores remain an important part of the Companys store network in smaller
communities and certain other locations where larger stores may not be feasible because of space limitations and/or community needs or
restrictions.
The following table summarizes Safeways stores by size at year-end 2013:

Square footage Number
of stores

Percent
of total

Less than 30,000 145 10.9 %
30,000 to 50,000 541 40.5
More than 50,000 649 48.6
Total stores 1,335 100.0 %
Store Ownership At year-end 2013, Safeway owned 46% of its stores and leased its remaining stores.

Private Label/Merchandise Safeway’s operating strategy is to provide value to its customers by maintaining high store standards and a
wide selection of high-quality products at competitive prices. To provide one-stop shopping for today’s busy shoppers, the Company
emphasizes high-quality produce and meat and offers many unique items through its various specialty departments.

Safeway is focused on differentiating its offering with high-quality perishables. The Company believes it has developed a reputation for
having the best produce in the market, through high-quality specifications and precise handling procedures, and the most tender and
flavorful meat and poultry, through both the Company’s Rancher’s Reserve Tender Beef offering and Open Nature all natural beef,
chicken and sausages. Safeway’s deli/food service department has developed a variety of solutions for today’s busy shoppers, including
Signature Caf sandwiches, soups and salads as well as Primo Taglio deli meats and cheeses. Many Safeway bakeries offer freshly
made bread, and the floral department is recognized by its signature gazebo.

Safeway has continued to develop its portfolio of Consumer Brands private label products. The Company has focused its brands into
three areas: Health & Wellness, Premium and Core. The prices in each category are generally lower than those of comparable products
from national brands.

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The Health & Wellness portfolio includes the O Organics, Eating Right, Open Nature and Bright Green brands. These offerings address
consumers’ specific health needs or preferences. O Organics is an exclusively organic brand. Eating Right offers products created for
specific eating needs such as high protein, gluten free, low calorie and general health maintenance. Open Nature is a line of products that
are 100% natural. Bright Green is an environmentally friendly household product line.

The Premium portfolio includes the Safeway SELECT, Signature Caf, Rancher’s Reserve, Primo Taglio, waterfront BISTRO and Debi
Lilly offerings. Safeway SELECT is a line of quality products that the Company believes are unique to the category. Waterfront BISTRO is
a seafood brand designed to make preparing a restaurant-quality meal at home easy. Debi Lilly is a line of unique bouquets, candles,
vases and gifts.

In the fourth quarter of 2013, Safeway announced a partnership with celebrity chef Marcella Valladolid, creating a proprietary brand for
Safeway bearing her name. Initially launched with marinated meats, authentic tortillas and snacks, this line will continue to expand as
Safeway looks to offer more products that appeal to Hispanics and all Hispanic food lovers.

In the Core portfolio are the Safeway brands Lucerne, Refreshe, the Snack Artist and Pantry Essentials. The Safeway brand is a family of
four brands: Safeway Farms, Safeway Kitchens, Safeway Home and Safeway Care. The Lucerne brand has been producing quality dairy
products for over 100 years. The Snack Artist offers high-quality and great value snacks in a variety of categories such as chips, snacking
nuts and frozen categories in whimsical, resealable packaging, a unique feature in the category. Pantry Essentials was launched in 2011
as a value line, offering basic items across several categories, including dairy, meat, canned vegetables and paper goods.

During 2012, Safeway completed the roll out of the just for U personalized pricing and digital marketing program in U.S. markets. This
program allows a customer to download personalized pricing and digital coupons to the Safeway Club Card.

Manufacturing and Wholesale The principal function of manufacturing operations is to manufacture and process private-label
merchandise sold in stores operated by Safeway. As measured by sales dollars, 13% of Safeways private-label merchandise is
manufactured in Company-owned plants, and the remainder is purchased from third parties.
Safeway operated the following manufacturing and processing facilities in the United States at year-end 2013:
Milk plants 6
Bakery plants 6
Ice cream plants 2
Soft drink bottling plants 4
Fruit and vegetable processing plants 1
Cake commissary 1
Total 20
In addition, the Company operates laboratory facilities for quality assurance and research and development in certain plants and at its
corporate offices.
Distribution Safeway has 13 distribution/warehousing centers in the United States, which collectively provide the majority of all products
to Safeways retail operating areas. The distribution center in Maryland is operated by a third party.

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Capital Expenditure Program A key component of the Companys long-term growth strategy is its capital expenditure program. The
Companys capital expenditure program funds, among other things, new stores, remodels, retail shopping center development,
manufacturing plants, distribution facilities and information technology. Safeways management has maintained a rigorous program to
select and approve new capital investments.
As previously reported, Safeway completed the sale of the net assets of CSL to Sobeys Inc. on November 3, 2013. Additionally, in the
fourth quarter of 2013, the Company exited the Chicago market where it operated 72 Dominick’s stores. CSL and Dominick’s are reported
as discontinued operations. All information in the table below excludes discontinued operations. It details changes in the Companys store
base and presents the Companys cash capital expenditures over the last five years (dollars in millions):

2013 2012 2011 2010 2009
Total stores at beginning of year 1,346 1,377 1,392 1,422 1,436
Stores opened:
New 3 3 4 3 2
Replacement 4 5 18 9 4

7 8 22 12 6
Stores closed or sold 18 39 37 42 20
Total stores at year end 1,335 1,346 1,377 1,392 1,422
Number of fuel stations at year end 349 340 334 326 322
Total retail square footage at year end (in millions) 63.4 63.8 65.1 65.1 66.0
Cash paid for property additions 767.4 821.2 992.4 689.6 721.7
Cash paid for property additions as a percentage of sales
and other revenue 2.1 %2.3 %2.8 %2.1 %2.2 %

In 2014, the Company expects to spend approximately $800 million to $900 million for capital expenditures.
The decline in the store count over the last five years is due to a focus on completing Lifestyle remodels rather than opening new stores
while, at the same time, selling or closing underperforming stores. In 2012, the Company disposed of 25 of its Genuardi’s stores. See
Note B to the consolidated financial statements set forth in Part II, Item 8 of this report.
Financial Information about Segments, Geographic Areas and Sales Revenue by Type of Similar Product Note Q to the consolidated
financial statements set forth in Part II, Item 8 of this report provides financial information about the Companys segments, geographic
areas and sales revenue by type of similar product.
Trade Names and Trademarks Safeway has invested significantly in the development and protection of Safeway both as a trade name
and a trademark and considers it to be an important business asset. Safeway also owns more than 300 other trademarks registered
and/or pending in the United States Patent and Trademark Office and other jurisdictions, including trademarks for its product and services
such as Safeway, Safeway SELECT, Ranchers Reserve, O Organics, Lucerne, Primo Taglio, Eating Right, mom to mom, waterfront
BISTRO, Bright Green, Pantry Essentials, Open Nature, Refreshe, Snack Artist, Signature Caf, Priority, just for U, My Simple
Nutrition, Ingredients for Life, and other trademarks such as PakN Save Foods, Vons, Pavilions, Randalls, Tom Thumb, and Carrs
Quality Centers. Each trademark registration is for an initial period of 10 or 20 years, depending on the registration date, and may be
renewed so long as it is in continued use in commerce.

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Safeway considers its trademarks to be of material importance to its business and actively defends and enforces its rights.
Working Capital At year-end 2013, working capital consisted of $8.5 billion in current assets and $5.9 billion in current liabilities. Normal
operating fluctuations in these substantial balances can result in changes to cash flow from operations presented in the consolidated
statements of cash flows that are not necessarily indicative of long-term operating trends. There are no unusual industry practices or
requirements relating to working capital items.
Seasonality Blackhawk receives a significant portion of the cash inflow from the sale of third-party prepaid cards late in the fourth quarter
of the year and generally remits the cash, less commissions, to the card partners early in the first quarter of the following year.
Safeway’s first three fiscal quarters contain 12 weeks. The fourth quarters of 2013, 2012 and 2011 contain 16 weeks. See Note V to the
consolidated financial statements set forth in Part II, Item 8 of this report.
Competition Food retailing is very competitive. The principal competitive factors that affect the Companys business are location, quality,
price, service, selection and condition of assets.
We face intense competition from traditional grocery retailers, non-traditional competitors such as supercenters and club stores, as well
as from specialty and niche supermarkets, drug stores, dollar stores, convenience stores and restaurants. Safeway and its competitors
engage in price competition which, from time to time, has adversely affected operating margins in the Companys markets.
Raw Materials Various agricultural commodities constitute the principal raw materials used by the Company in the manufacture of its
food products. Management believes that raw materials for its products are not in short supply, and all are readily available from a wide
variety of independent suppliers.
Compliance with Environmental Laws The Companys compliance with federal, state, local and foreign laws and regulations that have
been enacted or adopted regulating the discharge of materials into the environment or otherwise related to the protection of the
environment has not had and is not expected to have a material adverse effect upon the Companys financial position or results of
operations.
Employees At year-end 2013, Safeway had more than 138,000 full- and part-time employees. Just over 75% of Safeway’s employees
are covered by collective bargaining agreements negotiated with union locals affiliated with one of seven different international unions.
There are almost 400 such agreements, typically having three- to five-year terms. Accordingly, Safeway renegotiates a significant
number of these agreements every year.

During 2013, contracts covering approximately 28,000 employees were ratified, excluding Canadian operations and Dominick’s. In
particular, United Food and Commercial Workers International Union (UFCW) collective bargaining agreements which covered
approximately 25,000 employees, primarily in stores in the Company’s Northwest and Eastern divisions, were ratified.
Available Information Safeways investor Web site is located at www.safeway.com/investor_relations. You may access our Securities
and Exchange Commission (SEC) filings free of charge at our corporate Web site promptly after such material is electronically filed with,
or furnished to, the SEC. We also maintain certain corporate governance documents on our Web site, including the Companys Corporate
Governance Guidelines, our Director Independence Standards, the Code of Business Conduct and Ethics for the Companys corporate
directors, officers and employees, and the charters for our Audit, Nominating and Corporate Governance, and Executive Compensation
committees. We will provide a copy of any such documents to any stockholder who requests it. We do not intend for information found on
the Companys Web site to be part of this document.

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Item 1A. Risk Factors
We wish to caution you that there are risks and uncertainties that could affect our business. These risks and uncertainties include, but are
not limited to, the risks described below and elsewhere in this report, particularly in Forward-Looking Statements. The following is not
intended to be a complete discussion of all potential risks or uncertainties, as it is not possible to predict or identify all risk factors.
Competitive Industry Conditions We face strong competition from traditional grocery retailers, non-traditional competitors such as
superc