Safeway 2010 Annual Report - 56

SAFEWAY INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Income tax expense was reduced by $74.9 million in 2009 for previously unrecognized tax benefits and related interest income. The recognition of these items is primarily due to the settlement of a claim with the Internal Revenue Service (“IRS”) with respect to the 2002 and 2003 impairment of the Company’s investment in Dominick’s, and the completion of the IRS examination of the Company’s tax returns for 2004 and 2005. Significant components of the Company’s net deferred tax liability at year end were as follows (in millions): 2010 Deferred tax assets: Pension liability Workers’ compensation and other claims Employee benefits Accrued claims and other liabilities Charitable contribution carryforwards Reserves not currently deductible Operating loss carryforwards Other assets $ 244.1 187.7 175.0 74.1 7.4 43.7 2.3 32.1 $ 766.4 2010 Deferred tax liabilities: Property Inventory Investments in foreign operations Net deferred tax liability Less current portion of net deferred tax liability Noncurrent portion of net deferred tax liability $ 649.5 306.5 60.2 1,016.2 249.8 (96.3) $ 153.5 2009 $ 213.6 181.4 147.1 73.1 34.7 34.9 2.6 26.7 $ 714.1 2009 $ 626.3 286.9 54.5 967.7 253.6 (103.1) $ 150.5

At January 1, 2011, the Company had federal and state charitable contribution carryforwards of $32.6 million which expire from 2012 through 2015. The Company had net operating loss carryforwards for federal income tax purposes of approximately $6.5 million which expire at various dates from 2022 to 2026. The Company also had state tax credit carryforwards of $28.8 million which have no expiration date. At January 1, 2011, certain undistributed earnings of the Company’s foreign operations totaling $2,051.1 million were considered to be permanently reinvested. No deferred tax liability has been recognized for the remittance of such earnings to the U.S., since it is the Company’s intention to utilize those earnings in the foreign operations for an indefinite period of time, or to repatriate such earnings only when tax-efficient to do so. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable; however, unrecognized foreign tax credits may be available to reduce some portion of the U.S. income tax liability.

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Safeway 2010 Annual Report

Table of Contents for the Digital Edition of Safeway 2010 Annual Report

Safeway 2010 Annual Report
FORWARD-LOOKING STATEMENTS
Part I
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Executive Officers of the Registrant
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6. Selected Financial Data
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Part III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accountant Fees and Services
Part IV
Item 15. Exhibits and Financial Statement Schedules
SIGNATURES
Safeway 2010 Annual Report - Safeway 2010 Annual Report
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Safeway 2010 Annual Report - FORWARD-LOOKING STATEMENTS
Safeway 2010 Annual Report - Item 1. Business
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Safeway 2010 Annual Report - Item 1A. Risk Factors
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Safeway 2010 Annual Report - Item 3. Legal Proceedings
Safeway 2010 Annual Report - Executive Officers of the Registrant
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Safeway 2010 Annual Report - Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Safeway 2010 Annual Report - Item 6. Selected Financial Data
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Safeway 2010 Annual Report - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Safeway 2010 Annual Report - Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Safeway 2010 Annual Report - Item 8. Financial Statements and Supplementary Data
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Safeway 2010 Annual Report - Item 9B. Other Information
Safeway 2010 Annual Report - Item 14. Principal Accountant Fees and Services
Safeway 2010 Annual Report - Item 15. Exhibits and Financial Statement Schedules
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Safeway 2010 Annual Report - SIGNATURES
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Safeway 2010 Annual Report - Cover4
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