Safeway 2010 Annual Report Download - page 94

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SAFEWAY INC. 2010 ANNUAL REPORT
Reconciliations
SAFEWAY INC. AND SUBSIDIARIES
TABLE 1: RECONCILIATION OF GAAP CASH FLOW MEASURE TO FREE CASH FLOW (1,2)
(in millions)
Fiscal Year
2010
Net cash flow from operating activities $1,849.7
Decrease in payables related to third-party gift cards, net of receivables 6.9
Net cash flow from operating activities, as adjusted 1,856.6
Net cash flow used by investing activities (798.8)
Free cash flow $1,057.8
(1) See pages 26 and 27 of the Annual Report on Form 10-K for a definition of free cash flow and why management feels free cash
flow is a useful financial measure.
(2) 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 partners. Because this cash flow is
temporary, it is not available for other uses and therefore is excluded from the company’s calculation of free cash flow.
TABLE 2: RECONCILIATION OF 2009 GAAP NET LOSS ATTRIBUTABLE TO SAFEWAY INC. TO NET INCOME,
EXCLUDING GOODWILL IMPAIRMENT CHARGE (1)
(in millions, except per share amounts)
Fiscal Year
2009
Net loss attributable to Safeway Inc., as reported $(1,097.5)
Add goodwill impairment charge 1,974.2
Less tax benefit from goodwill impairment charge (2) (156.0)
Net income, excluding goodwill impairment charge $ 720.7
Diluted loss per share attributable to Safeway Inc., as reported $ (2.66)
Less goodwill impairment charge per diluted share, net of tax 4.40
Diluted earnings per share, excluding goodwill impairment charge $ 1.74
Weighted shares outstanding used for diluted loss per share, as reported 412.9
Add common share equivalents 1.2
Weighted average shares outstanding used for diluted earnings per share,
excluding goodwill impairment charge 414.1
(1) The exclusion included in “net income, excluding goodwill impairment charge” and “diluted earnings per share, excluding
goodwill impairment charge” relates to the effects of the non-cash goodwill impairment charge that we incurred in the fourth
quarter of fiscal 2009. Management believes that excluding this item provides a useful financial measure that will facilitate
comparisons of our operating results before, during and after such charge was incurred, as well as facilitating comparisons of
our performance with that of other companies that might not have the goodwill impairment charge that we have experienced.
Management also believes that investors, analysts and other interested parties view our “net income, excluding goodwill
impairment charge” and “diluted earnings per share, excluding goodwill impairment charge” as indicators of our ongoing
operating performance.
(2) Represents the tax deduction from the impairment of goodwill that arose from taxable asset acquisitions, tax-affected at
Safeway’s incremental rate of 38.6%.