Annual Report (Form 10-K), fiscal year 1994

Item 1. Business and Item 2.




Item 3. Legal Proceedings
Information about legal proceedings appearing under the caption "Legal Matters" as reported in Note H to the consolidated financial statements on pages 32 and 33 of the Company's 1993 Annual Report to Stockholders is incorporated herein by this reference.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the stockholders during the fourth quarter of 1993.
SAFEWAY INC. AND SUBSIDIARIES
PART II
Item 5.

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Company's common stock, $0.01 par value, is listed on the New York Stock Exchange. Information as to quarterly sales prices for the Company's common stock appears in Note L to the consolidated financial statements on page 36 of the Company's 1993 Annual Report to Stockholders and is incorporated herein by this reference. There were 4,833 stockholders of record as of March 15, 1994, however, approximately 34% of the Company's outstanding stock is held in "street name" by depositories or nominees on behalf of beneficial holders. The price per share of common stock was $24.625 as of the close of business on March 15, 1994.
Holders of common stock are entitled to receive dividends if, as, and when declared by the Board of Directors out of funds legally available therefor, subject to the dividend and liquidation rights of any preferred stock that may be issued and subject to the dividend restrictions in the Bank Agreements and the indentures relating to the Notes and Debentures. The Bank Agreements provide that the Company may not declare or pay any dividend or make any distribution with respect to its common stock (other than dividends or distributions payable in its common stock). Under the indentures relating to the Notes and Debentures and the 9.30% Senior Debentures, the Company may declare or pay dividends or make distributions with respect to its common stock (other than dividends or distributions payable in its common stock) if at the time of such payment or distribution (i) no default or event of default under such indentures shall have occurred and be continuing and (ii) certain aggregate payment limitations set forth in such indentures shall have been satisfied provided that the foregoing is not violated by the payment of dividends up to 6% per annum of the net proceeds received by the Company in the initial public offering and in any subsequent public offerings of Common Stock. Net proceeds from the 1990 initial public offering and the 1991 public offering of Common Stock were approximately $120 million and $340 million, respectively. The Company has not paid dividends on common stock through 1993 and has no current plans for dividend payments.
Item 6.

Item 6. Selected Financial Data
The "Five-Year Summary Financial Information" included on page 12 of the Company's 1993 Annual Report to Stockholders is incorporated herein by this reference. The Five-Year Summary should be read in conjunction with the Company's consolidated financial statements and accompanying notes included under Item 8, Consolidated Financial Statements and Supplementary Data.
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Information appearing under the caption "Financial Review" on pages 13 through 16 and under the caption "Capital Expenditure Program" on page 11 of the Company's 1993 Annual Report to Stockholders is incorporated herein by this reference.
Item 8.


Item 8. Consolidated Financial Statements and Supplementary Data
Pages 17 through 41 of the Company's 1993 Annual Report to Stockholders, which include the consolidated financial statements, consolidated financial statement schedules, Computation of Earnings Per Common Share and Common Share Equivalent listed as Exhibit 11.1 to Item 14(a)3, and the Independent Auditors' Reports as listed in Item 14(a)1 and 14(a)2.2, are incorporated herein by this reference.
SAFEWAY INC. AND SUBSIDIARIES
Item 9.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
PART III
Item 10.



Item 10. Directors and Executive Officers of the Registrant and Compliance with Section 16(a) of the Exchange Act
Directors of the Company. Information on the nominees for election as Directors and the continuing Directors of the Company, which appears under the caption "Election of Directors" in the Company's 1994 Proxy Statement, is incorporated herein by this reference.
Executive Officers of the Company. The names and ages of the current executive officers of the Company and their positions as of March 15, 1994, are set forth below. Unless otherwise indicated, each of the executive officers served in various managerial capacities with the Company over the past five years. None of the executive officers named below is related to any other executive officer or director by blood, marriage or adoption. Officers serve at the discretion of the Board of Directors.
SAFEWAY AND SUBSIDIARIES
Item 10. Directors and Executive Officers of the Registrant and Compliance with Section 16(a) of the Exchange Act (continued)
_______________________________
(1) Previously the owner of Burd & Associates. (2) Previously self-employed as an independent consultant. (3) Previously a partner at the law firm of Latham & Watkins. (4) Previously a partner at the law firm of Latham & Watkins.
Compliance with Section 16(a) of the Exchange Act. Information appearing under the caption "Compliance with Section 16(a) of the Exchange Act" in the Company's 1994 Proxy Statement is incorporated herein by this reference.
Item 11.

Item 11. Executive Compensation
Information appearing under the captions "Executive Compensation" and "Pension Plans" in the Company's 1994 Proxy Statement is incorporated herein by this reference. Information appearing under the captions "Report of the Compensation and Stock Option Committee" and "Stock Performance Graph" in the Company's 1994 Proxy Statement is not incorporated herein by this reference.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management
Information appearing under the caption "Beneficial Ownership of Securities" in the Company's 1994 Proxy Statement is incorporated herein by this reference.
Item 13.

Item 13. Certain Relationships and Related Transactions
Note J to the consolidated financial statements, included on page 35 of the Company's 1993 Annual Report to Stockholders, and the captions "Certain Relationships and Transactions" and "Compensation Committee Interlocks and Insider Participation" in the Company's 1994 Proxy Statement contain information about certain relationships and related transactions and are incorporated herein by this reference.
SAFEWAY INC. AND SUBSIDIARIES
PART IV
Item 14.

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The following documents are filed as a part of this report:
1. Consolidated Financial Statements of the Company are incorporated by reference in PART II, Item 8: Consolidated Statements of Income for fiscal 1993, 1992, and 1991. Consolidated Balance Sheets as of the end of fiscal 1993 and 1992. Consolidated Statements of Cash Flows for fiscal 1993, 1992, and 1991. Consolidated Statements of Stockholders' Equity for fiscal 1993, 1992, and 1991. Notes to Consolidated Financial Statements. Independent Auditors' Report.
2.1 Consolidated Financial Statement Schedules of the Company for fiscal 1993, 1992, and 1991 are incorporated by reference in PART II, Item 8:
Schedule V Property, Plant and Equipment
Schedule VI Accumulated Depreciation and Amortization of Property, Plant and Equipment
Schedule IX Short-term Borrowings
2.2 Schedule II - Amounts Receivable from Related Parties and Underwriters, Promoters, and Employees Other Than Related Parties, and Independent Auditors' Report thereon are included on pages 16 and 17 of this report.
3. The following exhibits are filed as part of this report:
Exhibit 3.1 Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to Registration Statement No. 33-33388).
Exhibit 3.2 Form of By-laws of each of the SSI Companies except the Company (incorporated by reference to Exhibit 3.2 to Registration Statement No. 33-9047), Form of By-laws of the Company as amended (incorporated by reference to Exhibit 3.2 to Registration Statement No. 33-33388), and Amendment to the Company's By-laws effective March 8, 1993.
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).
SAFEWAY INC. AND SUBSIDIARIES
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (continued)
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 2001, 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 4.14 of 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).
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).
SAFEWAY INC. AND SUBSIDIARIES
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (continued)
SAFEWAY INC. AND SUBSIDIARIES
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (continued)
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 the 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(1).19 of Registrant's Form 10-K for the year ended January 2, 1993).
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(1).20 of Registrant's Form 10-K dated January 2, 1993).
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).
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). ________________________ * Management contract, or compensatory plan or arrangement
SAFEWAY INC. AND SUBSIDIARIES
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (continued)
(b) Reports on Form 8-K:
On November 1, 1993, the Company filed a Form 8-K listing under item 7 (Exhibits) its Computation of Ratio of Earnings to Fixed Charges for the third quarter of 1993. _________________________ * Management contract, or compensatory plan or arrangement.
SAFEWAY INC. AND SUBSIDIARIES
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
By: /s/ STEVEN A. BURD Date: March 25, SAFEWAY INC. Steven A. Burd President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
/s/ JULIAN C. DAY /s/ F. J. DALE Julian C. Day F. J. Dale Executive Vice President and Group Vice Chief Financial Officer President, Date: March 25, 1994 Finance Date: March 25,
Consolidated Supplemental Financial Schedules Schedule II
SAFEWAY INC. AND SUBSIDIARIES Amounts Receivable from Related Parties and Underwriters, Promoters, and Employees Other Than Related Parties (in thousands)
(1) Loan made to purchase common stock of the Company. Loan was secured by common stock owned by Mr. Kinnie. (2) Loan made to purchase personal residence and was secured by Deed of Trust on the property. (3) Loan made to purchase personal residence and was secured by common stock of the Company owned by Mr. Kinnie. (4) Loan made to pay income tax obligations related to Mr. Kinnie's change of residence from Canada to the U.S., and was secured by common stock of the Company owned by Mr. Kinnie. (5) In June 1993 Mr. Kinnie resigned from his positions as Executive Vice President and Chief Operations Officer and became an employee of Canada Safeway Limited. In connection therewith, all outstanding principal and interest was repaid, with the exception of $517,229 which was forgiven. (6) Loan made for expenses incurred with relocation of residence to Oakland, Ca. The loan bears no interest and is due on the date of sale of his prior residence.
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULE
The Board of Directors and Stockholders of Safeway Inc.:
We have audited the consolidated balance sheets of Safeway Inc. and subsidiaries as of January 1, 1994, and January 2, 1993, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three fiscal years in the period ended January 1, 1994, and have issued our report thereon dated February 21, 1994; such financial statements and report are included in your 1993 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the Consolidated Financial Statement Schedule II listed in Item 14(a)2.2 of this Form 10-K. Such consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on such consolidated financial statement schedule. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information shown therein.
DELOITTE & TOUCHE Oakland, California February 21, 1994