Safeway — Investor Presentation (December 2007)
13 slides from Safeway's investor presentation, Dec 13, 2007
Slide 1: Reconciliation of GAAP Cash Flow Measure to Free Cash Flow
Reconciliation of GAAP Cash Flow Measure to Free Cash Flow $ Millions *Excludes cash flow related to Blackhawk’s gift card payables and receivables $639.0 $814.6 $1,156.1 $567.5 $427.2 $400.0- $600.0 $500.0- $700.0 Free cash flow - - - - 49.5 - - Cash used for acquisitions, net of tax benefits - - -
Slide 2: Reconciliation of Net Income to Adjusted EBITDA (Interest Coverage)
$Millions 7.4x $1,981.2 8.9 (10.5) - - - 20.9 35.2 6.9 728.0 268.5 336.1 $587.2 Add (subtract): - - - - 9.0 Dividend received from unconsolidated affiliates 1,288.0 729.1 - - - Goodwill impairment charges 700.0 - - - - Cumulative effect of accounting change 0.2 7.1 (12.6) (15.8) (21.1) Equity in (ea
Slide 3: Reconciliation of Net Cash Flow from Operating Activities to Adjusted EBITDA
Reconciliation of Net Cash Flow from Operating Activities to Adjusted EBITDA $Millions 32.0 12.1 15.1 18.1 29.2 23.5 Contribution to pension plans $1,981.2 (8.9) 144.1 19.4 0.6 (50.1) - 268.5 336.1 $1,248.0 $3,335.1 $2,537.5 $2,111.3 $2,306.9 $2,707.0 Total adjusted EBITDA (7.8) (8.2) (14.5) (14.4)
Slide 4: Reconciliation of Gross Margin
Reconciliation of Gross Margin BP Change Excluding Fuel and Unusual Items - - (26) Basis point change in gross margin, excluding fuel and unusual items - - - - Impact of Vons strike - - - - - Impact of inventory adjustment Fuel (44) (65) (11) (13) (5) Basis point change in gross margin Low High Basi
Slide 5: Reconciliation of Operating & Administrative Expense BP Change
Excluding Fuel and Unusual Items (10) - - - - - (17) Fuel (29) (22) - - - - Vons strike (9) - (7) - - Labor buyout and health and welfare contributions - - (15) - - - Stock option expense (59) (36) (5) (15) Basis point change in operating and administrative expense, excluding fuel and unusual items
Slide 6: Reconciliation of Operating Profit Margin
Reconciliation of Operating Profit Margin Basis Point Change Excluding Fuel 2008 Guidance Operating Profit Margin Excluding Fuel Fuel Impact Operating Profit Margin High Low Basis point increase over prior year:
Slide 7: EPS History As Adjusted for Unusual Items
EPS History As Adjusted for Unusual Items *Adjusted for a two-for-one stock split effected February 25, 1998 and a two-for-one stock split effected January 30, 1996. $1.94 ($0.10) ($0.12) $1.72 22.9% * EPS as reported $0.09 $0.25 $0.49 $0.67 $0.97 $1.12 $1.59 $1.88 $2.13 $2.44 ($1.77) ($0.38) $1.25
Slide 8: 2007 Investor Guidance
Non-Fuel ID Sales 3.3% 3.6% - 3.8% 3.7% Gross Margin 15 - 25 BPs 15 - 25 BPs 14 BPs Improvement (X Fuel) O&A Improvement 5 - 15 BPs 5 - 15 BPs 10 BPs (X Fuel) Free Cash Flow* $400 - $600 $400 - $600 EPS $1.90 - $2.00 $1.95 - $2.00 2007 Investor Guidance Original Revised Q3 YTD Actual *Excludes Black
Slide 9: Financial Guidance For 2008
Financial Guidance For 2008 EPS (53 wks) $2.25 - $2.35 (52 wks) $2.21 - $2.31 Non fuel ID sales 3.0% - 3.2% Operating profit margin change 15 - 35 bps Cash capital spending $1.70 - $1.75B Free cash flow $500 - $700M Excludes Fuel, see website for reconciliation Excludes BHN Gift Card payables, net o
Slide 10: Long Term Outlook
Long Term Outlook ID Sales X-Fuel 3.0% - 4.0% NC Operating profit margin X-Fuel 5.5% - 6.0% 6.0% - 6.5% Depreciation 2.5% NC Annual EPS Growth 12.0% - 15.0% NC Current Revised
Slide 11: Free Cash Flow and Capital Spending
1.5 - 1.7 1.4 - 1.6 1.2 - 1.4 0.6 - 0.7 0.5 - 0.7 0.4 - 0.6 0.4 0.6 2007G 2008G 2009E 2010E 2011E 2012E Free Cash Flow $ Billions 1.4 1.7 1.7 1.7 1.8 1.4 1.4 1.4 Capital Spending See website for reconciliation
Slide 12: Rollout of Lifestyle Stores
Rollout of Lifestyle Stores '03 '04 '05 '06 '07E '08E '09E % of Stores Completed 1,024 1,298 1,568
Slide 13: Current ID Results for Lifestyle Stores
47% 53% 89% 11% Current ID Results for Lifestyle Stores 1st Yr 2nd Yr 3rd Yr 4th Yr Non-LS Store Count ID Contribution* Lifestyle Non-Lifestyle Lifestyle Sales Change by Year * IDs are based on first 36 weeks of 2007 Indexed Adj. for competitive openings Yr 1 sales vs. Proforma Base, Yr 2 - Yr 4 Pri