Safeway
SWY
#2339
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$8.08 B
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Safeway is a major American supermarket chain that operates grocery stores across the United States. In 2015, Safeway was delisted from the stock market after being acquired by private equity firm Cerberus Capital Management, which merged Safeway with its existing grocery company Albertsons.

Safeway - 10-Q quarterly report FY


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934


For the quarterly period ended March 25, 2000


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 1-41


SAFEWAY INC.

(Exact name of registrant as specified in its charter)


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

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

Registrant's telephone number, including area code (925) 467-3000


Not Applicable
--------------
(Former name, former address and former fiscal year, if changed
since last report.)

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 . As of April 28, 2000, there were
issued and outstanding 496.4 million shares of the registrant's common stock.
2


SAFEWAY INC. AND SUBSIDIARIES

INDEX



<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION (UNAUDITED) Page
- ------ --------------------------------- ----
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of March 25, 2000 3
and January 1, 2000

Condensed Consolidated Statements of Income for the 12 5
weeks ended March 25, 2000 and March 27, 1999

Condensed Consolidated Statements of Cash Flows for the 12 6
weeks ended March 25, 2000 and March 27, 1999

Notes to the Condensed Consolidated Financial Statements 7

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 10
CONDITION AND RESULTS OF OPERATIONS

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 12

PART II OTHER INFORMATION
- ------- -----------------

ITEM 1. LEGAL PROCEEDINGS 13

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
</TABLE>


2
3

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


SAFEWAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
(UNAUDITED)

<TABLE>
<CAPTION>
March 25, January 1,
2000 2000
--------- ----------
<S> <C> <C>
ASSETS

Current assets:
Cash and equivalents $ 71.0 $ 106.2
Receivables 305.5 292.9
Merchandise inventories 2,318.1 2,444.9
Prepaid expenses and other current assets 198.7 208.1
--------- ---------
Total current assets 2,893.3 3,052.1
--------- ---------

Property 9,838.8 9,726.6
Less accumulated depreciation and amortization (3,406.3) (3,281.9)
--------- ---------
Property, net 6,432.5 6,444.7

Goodwill, net of accumulated amortization
of $343.1 and $314.4 4,760.4 4,786.6
Prepaid pension costs 422.3 405.6
Investment in unconsolidated affiliate 138.7 131.6
Other assets 84.0 79.7
--------- ---------
Total assets $14,731.2 $14,900.3
========= =========
</TABLE>

(Continued)


3
4


SAFEWAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(IN MILLIONS, EXCEPT PER-SHARE AMOUNTS)
(UNAUDITED)

<TABLE>
<CAPTION>
March 25, January 1,
2000 2000
--------- ----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Current maturities of notes
and debentures $ 487.5 $ 557.1
Current obligations under capital leases 41.2 41.8
Accounts payable 1,487.8 1,878.4
Accrued salaries and wages 331.2 387.7
Other accrued liabilities 845.8 717.6
--------- ---------
Total current liabilities 3,193.5 3,582.6
--------- ---------
Long-term debt:
Notes and debentures 5,923.3 5,922.0
Obligations under capital leases 426.9 435.4
--------- ---------
Total long-term debt 6,350.2 6,357.4

Deferred income taxes 368.6 379.1
Accrued claims and other liabilities 476.9 495.4
--------- ---------
Total liabilities 10,389.2 10,814.5
--------- ---------
Commitments and contingencies

Stockholders' equity:
Common stock: par value $0.01 per share;
1,500 shares authorized; 494.8 and 493.6 shares
issued, after deducting 65.2 and 65.4 treasury shares 5.6 5.6
Additional paid-in capital 1,339.6 1,321.8
Retained earnings 3,011.8 2,769.9
Accumulated other comprehensive loss (15.0) (11.5)
--------- ---------
Total stockholders' equity 4,342.0 4,085.8
--------- ---------
Total liabilities and stockholders' equity $14,731.2 $14,900.3
========= =========
</TABLE>


See accompanying notes to condensed consolidated financial statements.


4
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SAFEWAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER-SHARE AMOUNTS)
(UNAUDITED)

<TABLE>
<CAPTION>
12 Weeks Ended
-------------------------
March 25, March 27,
2000 1999
--------- ---------
<S> <C> <C>
Sales $ 7,086.3 $ 6,113.2
Cost of goods sold (4,976.6) (4,291.6)
--------- ---------
Gross profit 2,109.7 1,821.6

Operating and administrative expense (1,565.7) (1,376.4)
Goodwill amortization (29.1) (20.0)
--------- ---------
Operating profit 514.9 425.2

Interest expense (109.8) (73.3)
Equity in earnings of unconsolidated affiliate 7.1 8.0
Other income, net 1.3 1.2
--------- ---------
Income before income taxes 413.5 361.1

Income taxes (171.6) (155.3)
--------- ---------
Net income $ 241.9 $ 205.8
========= =========

Basic earnings per share $ 0.49 $ 0.42
========= =========
Diluted earnings per share $ 0.48 $ 0.40
========= =========

Weighted average shares outstanding - basic 494.2 492.6
========= =========
Weighted average shares outstanding - diluted 507.9 512.8
========= =========
</TABLE>


See accompanying notes to condensed consolidated financial statements.


5
6

SAFEWAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)

<TABLE>
<CAPTION>
12 Weeks Ended
----------------------
March 25, March 27,
2000 1999
--------- ---------
<S> <C> <C>
CASH FLOW FROM OPERATIONS
Net income $241.9 $205.8
Reconciliation to net cash flow from operations:
Depreciation and amortization 189.7 144.0
LIFO expense -- 2.3
Equity in undistributed earnings of unconsolidated affiliate (7.1) (8.0)
Net pension income (20.4) (4.2)
Other (40.8) (20.0)
Change in working capital items:
Receivables and prepaid expenses (4.6) 18.3
Inventories at FIFO cost 123.4 (6.3)
Payables and accruals (313.6) (162.3)
------ ------
Net cash flow from operations 168.5 169.6
------ ------

CASH FLOW FROM INVESTING ACTIVITIES
Cash paid for property additions (154.5) (130.1)
Proceeds from sale of property 35.9 8.2
Other (7.9) (4.9)
------ ------
Net cash flow used by investing activities (126.5) (126.8)
------ ------

CASH FLOW FROM FINANCING ACTIVITIES
Additions to short-term borrowings -- 9.5
Payments on short-term borrowings (70.0) (86.5)
Additions to long-term borrowings 125.1 236.5
Payments on long-term borrowings (141.4) (212.7)
Net proceeds from exercise of stock options and warrants 9.1 11.6
Other -- (2.0)
------ ------
Net cash flow used by financing activities (77.2) (43.6)
------ ------

Decrease in cash and equivalents (35.2) (0.8)

CASH AND EQUIVALENTS
Beginning of period 106.2 45.7
------ ------
End of period $ 71.0 $ 44.9
====== ======
</TABLE>

See accompanying notes to condensed consolidated financial statements.


6
7

SAFEWAY INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE A - THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of Safeway Inc. and
subsidiaries ("Safeway" or the "Company") for the 12 weeks ended March 25, 2000
and March 27, 1999 are unaudited and, in the opinion of management, contain all
adjustments that are of a normal and recurring nature necessary to present
fairly the financial position and results of operations for such periods. The
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and related notes contained in the
Company's 1999 Annual Report to Stockholders. The results of operations for the
12 weeks ended March 25, 2000 are not necessarily indicative of the results
expected for the full year.

ACQUISITION OF CARR-GOTTSTEIN FOODS CO. ("CARRS")

In April 1999, Safeway completed its acquisition of Carrs by purchasing all of
the outstanding shares of Carrs for approximately $106 million in cash (the
"Carrs Acquisition"). The Carrs Acquisition was accounted for as a purchase and
Carrs operating results have been consolidated with Safeway's since the
beginning of the second quarter of 1999. See Note D.

ACQUISITION OF RANDALL'S FOOD MARKETS, INC. ("RANDALL'S")

In September 1999, Safeway acquired Randall's by purchasing all of the
outstanding shares of Randall's for $1.3 billion consisting of $754 million in
cash and 12.7 million shares of Safeway stock (the "Randall's Acquisition"). The
Randall's Acquisition was accounted for as a purchase and Randall's operating
results have been consolidated with Safeway's since the beginning of the fourth
quarter of 1999. See Note D.

INVENTORY

Net income reflects the application of the LIFO method of valuing certain
domestic inventories, based upon estimated annual inflation ("LIFO Indices").
Safeway did not record LIFO expense in the first quarter of 2000 reflecting
management's expectation of little or no inflation for the full year. LIFO
expense was $2.3 million in the first quarter of 1999. Actual LIFO Indices are
calculated during the fourth quarter of the year based upon a statistical
sampling of inventories.

COMPREHENSIVE INCOME

Comprehensive income includes net income and foreign currency translation
adjustments. Total comprehensive income approximates net income.


NOTE B - NEW ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which defines derivatives, requires that
derivatives be carried at fair value, and provides for hedge accounting when
certain conditions are met. Safeway will adopt SFAS No. 133 as required by SFAS
137, "Deferral of the Effective Date of the FASB Statement No. 133," beginning
in the first quarter of 2001. Although the Company has not fully assessed the
implications of this new statement, the Company does not believe adoption of
this statement will have a material impact on its financial statements.


7
8

SAFEWAY INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE C - FINANCING

Notes and debentures were composed of the following at March 25, 2000 and
January 1, 2000 (in millions):

<TABLE>
<CAPTION>
March 25, 2000 January 1, 2000
---------------------- ---------------------
Long-term Current Long-term Current
--------- ------- --------- -------
<S> <C> <C> <C> <C>
Commercial paper $2,361.3 $2,358.1
Bank credit agreement, unsecured 75.1 75.7
9.30% Senior Secured Debentures due 2007 24.3 24.3
6.85% Senior Notes due 2004, unsecured 200.0 200.0
7.00% Senior Notes due 2007, unsecured 250.0 250.0
7.45% Senior Debentures due 2027, unsecured 150.0 150.0
5.75% Senior Notes due 2000, unsecured -- $400.0 -- $400.0
5.875% Senior Notes due 2001, unsecured 400.0 400.0
6.05% Senior Notes due 2003, unsecured 350.0 350.0
6.50% Senior Notes due 2008, unsecured 250.0 250.0
7.00% Senior Notes due 2002, unsecured 600.0 600.0
7.25% Senior Notes due 2004, unsecured 400.0 400.0
7.50% Senior Notes due 2009, unsecured 500.0 500.0
10% Senior Subordinated Notes due 2001, 79.9 79.9
unsecured
9.65% Senior Subordinated Debentures due
2004, unsecured 81.2 81.2
9.875% Senior Subordinated Debentures due
2007, unsecured 24.2 24.2
10% Senior Notes due 2002, unsecured 6.1 6.1
Mortgage notes payable, secured 68.8 15.1 63.5 12.1
Other notes payable, unsecured 85.9 3.7 92.5 6.3
Medium-term notes, unsecured 16.5 9.0 16.5 9.0
Short-term bank borrowings, unsecured 59.7 129.7
-------- ------ -------- ------
$5,923.3 $487.5 $5,922.0 $557.1
======== ====== ======== ======
</TABLE>


8
9

SAFEWAY INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE D - PRO FORMA SUMMARY FINANCIAL INFORMATION

The following unaudited pro forma combined summary financial information is
based on the historical consolidated results of the operations of Safeway,
Randall's and Carrs, as if the Randall's and Carrs Acquisitions had occurred as
of the beginning of the 12-week period ended March 27, 1999. This pro forma
financial information is presented for informational purposes only and may not
be indicative of what the actual consolidated results of operations would have
been if the acquisition had been effective as of the period being presented.

Under purchase accounting, the purchase price is allocated to acquired assets
and liabilities based on their estimated fair values at the date of acquisition,
and any excess is allocated to goodwill. For Randall's and Carrs, such
allocations are subject to adjustment when additional analysis concerning asset
and liability balances is finalized. Management does not expect the final
allocations to differ materially from the amounts presented herein.


<TABLE>
<CAPTION>
12 Weeks Ended
--------------------------------
(Actual) (Pro Forma)
(in millions, except per-share amounts) March 25, 2000 March 27, 1999
-------------- --------------
<S> <C> <C>
Sales $7,086.3 $6,859.2

Net income $241.9 $201.1
Diluted earnings per share $0.48 $0.38
</TABLE>

NOTE E - CONTINGENCIES

LEGAL MATTERS

Note K to the Company's consolidated financial statements, under the caption
"Legal Matters" on pages 37 and 38 of the 1999 Annual Report to Stockholders,
provides information on certain litigation in which the Company is involved.
There have been no material developments to these matters, except as described
below.

On March 31, 2000, in the gender discrimination class action against Dominick's,
the court held a fairness hearing in connection with the settlement agreement
executed by the parties and granted final approval of the settlement.


9
10

SAFEWAY INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS

Safeway's net income was $241.9 million ($0.48 per share) for the first quarter
ended March 25, 2000, compared to $205.8 million ($0.40 per share) for the first
quarter of 1999.

First-quarter sales increased 15.9% to $7.1 billion in 2000 from $6.1 billion in
1999, primarily because of the Randall's and Carrs Acquisitions. As expected,
sales during the first two weeks of the quarter were soft because many customers
stocked up at the end of 1999 due to Y2K concerns. For the final 10 weeks of the
quarter, comparable-store sales increased 3.3% and identical-store sales (which
exclude replacement stores) increased 2.7%. For the full quarter,
comparable-store sales increased 2.4%, while identical store sales increased
1.8%.

In September 1999, Safeway acquired Randall's Food Markets, Inc. (the "Randall's
Acquisition"). In April 1999, Safeway acquired Carr-Gottstein Foods Co. (the
"Carrs Acquisition"). In order to facilitate an understanding of the Company's
operations, the following discussions of gross profit and operating and
administrative expense include certain pro forma information based on the 1999
combined historical financial statements as if the Randall's and Carrs
Acquisitions had been effective as of the beginning of 1999.

Safeway's continued improvement in buying practices and product mix helped
increase gross profit to 29.77% of sales in the first quarter of 2000 from
29.46% on a pro forma basis in the first quarter of 1999. Gross profit decreased
slightly on a historical basis from 29.80% in the first quarter of 1999.

Operating and administrative expense, including goodwill amortization, declined
to 22.51% of sales in the first quarter of 2000 from 22.84% in 1999 on a
historical basis and 22.87% on a pro forma basis, reflecting increased sales,
ongoing efforts to reduce or control expenses and gains on the sale of certain
non-operating store properties in the first quarter of 2000.

Interest expense increased to $109.8 million in the first quarter of 1999 from
$73.3 million in the first quarter of 1999. This increase was primarily due to
debt incurred to finance the Randall's and Carrs Acquisitions and the repurchase
of Safeway stock during the fourth quarter of 1999. Despite the increase in
interest expense, the interest coverage ratio (operating cash flow divided by
interest expense) remains very strong at 7.10 times over the last four quarters.
Operating cash flow (defined on page 11) as a percentage of sales reached 9.49%
over the last four quarters compared to 9.37% one year ago.

Equity in earnings of Casa Ley, Safeway's unconsolidated affiliate, was $7.1
million for the first quarter of 2000, compared to $8.0 million in 1999. Casa
Ley operates 88 food and general merchandise stores in western Mexico.

ACQUISITION OF CARR-GOTTSTEIN FOODS CO. ("CARRS")

In April 1999, Safeway completed its acquisition of all of the outstanding
shares of Carrs for approximately $106 million in cash (the "Carrs
Acquisition"). On the acquisition date, Carrs operated 49 stores. The Carrs
Acquisition was accounted for as a purchase. Safeway funded the acquisition, and
subsequent repayment of approximately $239 million of Carrs' debt, with the
issuance of commercial paper.

ACQUISITION OF RANDALL'S FOOD MARKETS, INC. ("RANDALL'S")

In September 1999, Safeway acquired all of the outstanding shares of Randall's
in exchange for $1.3 billion consisting of $754 million of cash and 12.7 million
shares of Safeway stock (the "Randall's Acquisition"). On the acquisition date,
Randall's operated 117 stores in Texas. The Randall's Acquisition was accounted
for as a purchase. Safeway funded the cash portion of the acquisition and
subsequent repayment of approximately $403 million in Randall's debt, through
the issuance of senior notes.


10
11

SAFEWAY INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND FINANCIAL RESOURCES

Cash flow from operations was $168.5 million in the first quarter of 2000
compared to cash flow from operations of $169.6 million in the first quarter of
1999. This change is primarily due to improved results of operations and changes
in working capital. Working capital (excluding cash and debt) at March 25, 2000
was $157.5 million compared to a deficit of $124.3 million at March 27, 1999.

Cash flow used by investing activities for the first quarter of the year was
$126.5 million in 2000 compared to $126.8 million in 1999, primarily due to
higher proceeds from property sales in 1999 offset by increased capital
expenditures.

Cash flow used by financing activities was $77.2 million in the first quarter of
2000 and $43.6 million in 1999, primarily due to the repayment of debt.

Net cash flow from operations as presented in the Condensed Consolidated
Statements of Cash Flows is an important measure of cash generated by the
Company's operating activities. Operating cash flow, as defined below, is
similar to net cash flow from operations because it excludes certain noncash
items. However, operating cash flow also excludes interest expense and income
taxes. Management believes that operating cash flow is relevant because it
assists investors in evaluating Safeway's ability to service its debt by
providing a commonly used measure of cash available to pay interest, and it
facilitates comparisons of Safeway's results of operations with those of
companies having different capital structures. Other companies may define
operating cash flow differently, and as a result, such measures may not be
comparable to Safeway's operating cash flow. Safeway's computation of operating
cash flow is as follows:


<TABLE>
<CAPTION>
12 Weeks Ended
------------------------------
(Dollars in millions) March 25, 2000 March 27, 1999
-------------- --------------
<S> <C> <C>
Income before income taxes $413.5 $361.1
Interest expense 109.8 73.3
Depreciation and amortization 189.7 144.0
LIFO expense -- 2.3
Equity in earnings of unconsolidated affiliate (7.1) (8.0)
------ ------
Operating cash flow $705.9 $572.7
====== ======
As a percent of sales 9.96% 9.37%

As a multiple of interest expense 6.43x 7.81x
</TABLE>

Based upon the current level of operations, Safeway believes that operating cash
flow and other sources of liquidity, including borrowings under Safeway's
commercial paper program and the bank credit agreement, will be adequate to meet
anticipated requirements for working capital, capital expenditures, interest
payments and scheduled principal payments for the foreseeable future. There can
be no assurance, however, that the Company's business will continue to generate
cash flow at or above current levels. The bank credit agreement is used
primarily as a backup facility to the commercial paper program.

CAPITAL EXPENDITURE PROGRAM

During the first quarter of 1999, Safeway invested $178.9 million in capital
expenditures (as defined on page 15 of the Company's 1999 Annual Report to
Stockholders). The Company opened 14 new stores and closed 10 stores The Company
expects to spend approximately $1.6 billion in 2000 while opening 70 to 75 new
stores and completing approximately 250 remodels.


11
12

SAFEWAY INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD -LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Such statements relate to, among other things, capital expenditures,
acquisitions, operating improvements and cost reductions, and are indicated by
words or phrases such as "continuing," "on-going," "expects," and similar words
or phrases. The following factors are among the principal factors that could
cause actual results to differ materially from the forward-looking statements:
general business and economic conditions in our operating regions, including the
rate of inflation, population, employment and job growth in our markets; pricing
pressures and other competitive factors, which could include pricing strategies,
store openings and remodels; results of our program to reduce costs; the ability
to integrate and achieve operating improvements at companies we acquire;
increases in labor costs and deterioration in relations with the union
bargaining units representing the our employees; opportunities or acquisitions
that the we pursue; and the availability and terms of financing. Consequently,
actual events and results may vary significantly from those included in or
contemplated or implied by such statements.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes regarding the Company's market risk position
from the information provided under the caption "Market Risk from Financial
Instruments" on page 16 of the Company's 1999 Annual Report to Stockholders.


12
13

SAFEWAY INC. AND SUBSIDIARIES

PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

Note K to the Company's consolidated financial statements, under the caption
"Legal Matters" on pages 37 and 38 of the 1999 Annual Report to Stockholders,
provides information on certain litigation in which the Company is involved.
There have been no material developments to these matters, except as described
below.

On March 31, 2000, in the gender discrimination class action against Dominick's,
the court held a fairness hearing in connection with the settlement agreement
executed by the parties and granted final approval of the settlement.


ITEM 6(a). EXHIBITS

<TABLE>
<S> <C>
Exhibit 2.1 Agreement and Plan of Merger dated as of July 22, 1999,
among Safeway, Inc., SI Merger Sub, Inc. and Randall's Food
Markets Inc. (incorporated by reference to Exhibit 2 to the
Registrant's Form 8-K dated August 3, 1999).

Exhibit 3.1 Restated Certificate of Incorporation of the Company and
Certificate of Amendment of Restated Certificate of
Incorporation by the Company (incorporated by reference to
Exhibit 3.1 to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended June 15, 1996) and
Certificate of Amendment of Restated Certificate of
Incorporation of Safeway Inc. (incorporated by reference to
Exhibit 3.1 to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended June 20, 1998).

Exhibit 3.2 Form of By-laws of the Company as amended and restated
(incorporated by reference to Exhibit 3.2 to Registrant's
Form 10-K for the year ended January 1, 2000).

Exhibit 4.(i).1 First Amendment to the Credit Agreement dated as of
March 19, 1999 and Second Amendment to the Credit Agreement
dated as of March 9, 2000 to the Credit Agreement dated as
of April 8, 1997.

Exhibit 11.1 Computation of Earnings Per Share.

Exhibit 12.1 Computation of Ratio of Earnings to Fixed Charges.

Exhibit 27.1 Financial Data Schedule (electronic filing only).
</TABLE>


ITEM 6(b). REPORTS ON FORM 8-K


The Company filed no Current Reports on Form 8-K during the first quarter of
2000.


13
14

SAFEWAY INC. AND SUBSIDIARIES

SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.



Date: May 9, 2000 \s\ Steven A. Burd
------------------------------------
Steven A. Burd
Chairman, President
and Chief Executive Officer

Date: May 9, 2000 \s\ David G. Weed
------------------------------------
David G. Weed
Executive Vice President
and Chief Financial Officer


14
15

SAFEWAY INC. AND SUBSIDIARIES

EXHIBIT INDEX



LIST OF EXHIBITS FILED WITH FORM 10-Q FOR THE PERIOD
ENDED MARCH 25, 2000



<TABLE>
<S> <C>
Exhibit 4.(i).1 First Amendment to the Credit Agreement dated as of
March 19, 1999 and Second Amendment to the Credit Agreement
dated as of March 9, 2000 to the Credit Agreement dated as
of April 8, 1997.

Exhibit 11.1 Computation of Earnings Per Share

Exhibit 12.1 Computation of Ratio of Earnings to Fixed Charges

Exhibit 27.1 Financial Data Schedule (electronic filing only)
</TABLE>




15