Safeway — Investor Day (March 2010)
17 slides from Safeway's investor day presentation, Mar 3, 2010
Slide 1: Reconciliations and Financial Slides from the Safeway Investor Conference
Reconciliations and Financial Slides from the Safeway Investor Conference March 3, 2010 Exhibit 99.2
Slide 2: Safe Harbor Language
This presentation may contain forward-looking statements. Such statements may relate to topics such as sales, margins, earnings growth, earnings estimates, guidance, free cash flow, operating profit, operating improvements, capital spending, Lifestyle stores and other related subjects. These stateme
Slide 3: Reconciliation of Net (Loss) Income to Adjusted EBITDA (Interest Coverage)
$ Millions Net (loss) income ($1,097.5) $965.3 $888.4 $870.6 $561.1 $560.2 ($169.8) Add (subtract): Income taxes 144.2 539.3 515.2 369.4 287.9 233.7 310.9 Interest expense 331.7 358.7 388.9 396.1 402.6 411.2 442.4 Depreciation 1,171.2 1,141.1 1,071.2 991.4 932.7 894.6 863.6 LIFO (income) expense (35
Slide 4: Reconciliation of Net Cash Flow from Operating Activities to Adjusted EBITDA
Reconciliation of Net Cash Flow from Operating Activities to Adjusted EBITDA $ Millions Net cash flow from operating activities $2,549.7 $2,250.9 $2,190.5 $2,175.0 $1,881.0 $2,226.4 $1,609.6 Add (subtract): Income taxes 144.2 539.3 515.2 369.4 287.9 233.7 310.9 Interest expense 331.7 358.7 388.9 396
Slide 5: Reconciliation of Gross Margin BP Change Excluding Fuel
Reconciliation of Gross Margin BP Change Excluding Fuel Basis point (decrease) increase over prior year: Basis point change in gross margin (36) (8) (11) Fuel (59) Basis point change in gross margin, excluding fuel (35) (26)
Slide 6: Reconciliation of Gross Margin BP Change Excluding Fuel
Reconciliation of Gross Margin BP Change Excluding Fuel Basis point (decrease) increase over prior quarter: Q1 Q2 Q3 Q4 Basis point change in gross margin (7) (14) Fuel (79) (99) (84) (2) Basis point change in gross margin, excluding fuel (86) (43) (6) (16) Q1 Q2 Q3 Q4 Basis point change in gross ma
Slide 7: Reconciliation of Operating & Administrative Expense BP Change
Excluding Fuel and Unusual Items Basis point change in operating and administrative expense (38) (29) (93) (53) (7) Unusual items: Texas store closures - - - (29) - Impairment charges (incl. Dominick’s) - - - - Vons strike - - - - - (22) Labor buyout and health and welfare contributions - - - (7) -
Slide 8: Reconciliation of GAAP Cash Flow Measure to Free Cash Flow
$ Millions Reconciliation of GAAP Cash Flow Measure to Free Cash Flow Low High Low High Low High Low High Low High Low High Net cash flow from operating activities 2,450 $ 2,550 $ 2,350 $ 2,450 $ 2,150 $ 2,250 $ 2,050 $ 2,150 $ 1,950 $ 2,050 $ 2,200 $ 2,350 $ Original Guidance 2014F 2010G 2011F 2012
Slide 9: Reconciliation of GAAP Cash Flow Measure to Free Cash Flow
$ Millions Reconciliation of GAAP Cash Flow Measure to Free Cash Flow* *Excludes cash flow from payables related to third-party gift cards, net of receivables. Cash from the sale of third-party gift cards is held for a short period of time and then remitted, less Safeway’s commission, to card partne
Slide 10: Reconciliation of Operating Profit Margin Basis Point Change Excluding Fuel & Unusual Items
2010G 2009G Basis point (decrease) increase over prior year Low High Low High Basis point change in operating profit margin (5) (5) (574) (11) Unusual items: Texas store closures - - - - - - - (29) - Goodwill impairment charges - - - - - - - - (204) Impairment charges (including Dominick’s) - - - -
Slide 11: 2009 Guidance: Original, Revised, Actual
X-Fuel ID Sales 2.0% - 3.0% (1.0)% - (1.7)% (2.5)% Operating Profit Margin 5 - 20 bps NG (95) Improvement (X-Fuel) Cash Capital ~ $1.2B ~ $1.0B $0.9B Expenditures Free Cash Flow $1.0 - $1.2B $1.1 - $1.3B $1.5B Earnings Per Share $2.34 - $2.44 $1.70 - $1.90 $1.74 2009 Guidance Original Revised Actual
Slide 12: 2010 Guidance
2010 Guidance Earnings per Share $1.65 – $1.85 ID Sales 0.0% – 1.0% Operating Profit Margin Chg (10) – 5 bps Cash Capital Expenditures $0.9 – $1.0B Free Cash Flow $0.9 – $1.1B X-Fuel See website for reconciliation
Slide 13: 2010 EPS Growth Over Adjusted 2009
2010 EPS Growth Over Adjusted 2009 2009 reported earnings $(2.66) Add goodwill impairment charge 4.40 Adjusted 2009 earnings $1.74 Remove tax benefit (0.18) $1.56 Earnings guidance increase $1.65 - $1.85 +6 - 19% $0.09 - $0.29
Slide 14: Approaching Completion of Lifestyle Rollout
19 92 293 82 80 32 21 276 232 253 20 8 20 20 17 Approaching Completion of Lifestyle Rollout New Remodels Store Base 1% 8% 26% 43% 59% 73% 79% 85% 85% Complete at YE 2010
Slide 15: Capital spending levels will remain below 3% of sales for six years
Capital spending levels will remain below 3% of sales for six years % Sales 3.4% 3.6% 4.2% 4.2% 3.6% 2.1% 2.4% 2.3% 2.3% 2.4% 2.4% 2.3% '04 '05 '06 '07 '08 '09 '10F '11F '12F '13F '14F '09- '14 $1.2 $1.4 $1.7 $1.8 $1.6 $0.9 $1.0 $1.0 $1.0 $1.1 $1.1 $ Million 11 year average = 3.0%
Slide 16: Free Cash Flow and Capital Spending, 2010F-2014F
0.5 0.4 0.4 0.7 1.5 0.9 - 1.1 1.3 - 1.5 1.2 - 1.4 1.1 - 1.3 1.0 - 1.2 2010F 2011F 2012F 2013F 2014F Free Cash Flow $ Billions 1.4 1.7 1.7 1.6 0.9 1.0 1.0 1.0 1.1 1.1 Capital Spending See website for reconciliation Excludes Blackhawk gift card payables, net of receivables
Slide 17: Safeway
SAFEWAY (9.