Reconciliations and Financial Slides

from Safeway Investor Conference

December 4, 2008

Exhibit 99.2

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*

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2

Reconciliation_InvestorConferences_Dec08

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,

total

debt

and

debt

reduction,

Lifestyle

stores,

and

other

related

subjects.

These

statements

are

based

on

Safeway’s

current

plans

and

expectations

and

are

subject

to

risks

and

uncertainties

that

could

cause

actual

events

and

results

to

vary

significantly

from

those

implied

by

such

statements.

We

ask

you

to

refer

to

Safeway’s

reports

and

filings

with

the

SEC

for

a

further

discussion

of

these

risks

and

uncertainties.

Safe Harbor Language

3

Reconciliation_InvestorConferences_Dec08

$ Millions

7.6x

$2,953.3

8.9

(8.7)

-

-

27.1

48.4

13.9

1,071.2

388.9

515.2

$888.4

Add (subtract):

-

-

-

9.0

Dividend received from unconsolidated affiliate

729.1

-

-

-

Goodwill impairment charges

7.1

(12.6)

(15.8)

(21.1)

Equity in (earnings) losses of unconsolidated affiliates

$2,537.5

$2,111.3

$2,306.9

$2,707.0

Total Adjusted EBITDA

10.6

-

-

-

Miscellaneous equity investment impairment charge

344.9

39.4

78.9

39.2

Property impairment charges

863.6

894.6

932.7

991.4

Depreciation

(1.3)

(15.2)

(0.2)

1.2

LIFO expense (income)

-

-

59.7

51.2

Stock option expense

5.7x

5.1x

5.7x

6.8x

Adjusted EBITDA as a multiple of interest expense

442.4

411.2

402.6

396.1

Interest expense

310.9

233.7

287.9

369.4

Income taxes

$(169.8)

$560.2

$561.1

$870.6

Net income (loss)

2003

2004

2005

2006

Reconciliation of Net Income to Adjusted                  

EBITDA (Interest Coverage)

2007

4

Reconciliation_InvestorConferences_Dec08

Reconciliation of Net Cash Flow from Operating Activities

to Adjusted EBITDA

$Millions

-

-

-

-

(5.3)

Amortization of deferred finance cost

-

-

-

-

38.3

Excess tax benefit from exercise of                     

stock options

12.1

15.1

18.1

29.2

33.0

Contribution to pension plans

$2,953.3

(6.9)

(45.6)

42.3

5.8

(72.1)

(130.8)

388.9

515.2

$2,190.5

2007

$2,537.5

$2,111.3

$2,306.9

$2,707.0

Total adjusted EBITDA

(8.2)

(14.5)

(14.4)

(4.1)

Other

263.0

(538.2)

(310.9)

(181.4)

Changes in working capital items

13.4

(20.6)

(13.6)

17.8

Gain (loss) on property retirements  

and lease exit activities, net

(52.7)

(118.1)

(44.1)

(10.8)

Accrued claims and other liabilities

Add (subtract):

442.4

411.2

402.6

396.1

Interest expense

(130.9)

(112.9)

(115.6)

(83.1)

Net pension expense

77.9

29.2

215.9

(1.1)

Deferred income taxes  

310.9

233.7

287.9

369.4

Income taxes

$1,609.6

$2,226.4

$1,881.0

$2,175.0

Net cash flow from operating activities

2003

2004

2005

2006

5

Reconciliation_InvestorConferences_Dec08

$ Millions

8.4x

$3,088.4

-

3.1

37.7

55.6

30.2

1,114.0

366.6

552.6

$928.6

(A+B-C)

Rolling

Four Quarters

Sept 6, 2008

Add (subtract):

8.9

-

8.9

Dividend received from unconsolidated

affiliate

(10.5)

1.3

(8.7)

Equity in loss (earnings) of  

unconsolidated affiliate

$1,981.2

$2,116.3

$2,953.3

Adjusted EBITDA

20.9

31.5

27.1

Property impairment charges

728.0

770.8

1,071.2

Depreciation and amortization

6.9

23.2

13.9

LIFO expense

35.2

42.4

48.4

Stock-based employee compensation

Adjusted EBITDA as a multiple of interest

expense

268.5

246.2

388.9

Interest expense

336.1

373.5

515.2

Income taxes

$587.2

$627.4

$888.4

Net income

C

36 Weeks Ended

Sept 8, 2007

B

36 Weeks Ended

Sept 6, 2008

A

Year Ended

Dec 29, 2007

Reconciliation of Net Income to Adjusted                  

EBITDA (Interest Coverage)

6

Reconciliation_InvestorConferences_Dec08

$ Millions

-

(6.4)

(130.8)

(137.2)

Deferred income taxes

(5.1)

(3.2)

(6.9)

(5.0)

Other

$3,088.4

118.7

21.3

(10.9)

35.0

(80.2)

5.2

(5.0)

366.6

552.6

$2,227.3

(A+B-C)

Rolling

Four Quarters

Sept 6, 2008

Add (subtract):

19.4

(1.6)

42.3

Gain (loss) on property retirements and lease

exit costs, net

0.6

(16.1)

5.8

Accrued claims and other liabilities

109.6

273.9

(45.6)

Changes in working capital items

23.5

25.5

33.0

Contributions to pension plans

(3.8)

(3.5)

(5.3)

Amortization of deferred finance costs

34.5

1.4

38.3

Excess tax benefit from exercise of stock

options

(50.1)

(58.2)

(72.1)

Net pension expense

$1,981.2

$2,116.3

$2,953.3

Adjusted EBITDA

268.5

246.2

388.9

Interest expense

336.1

373.5

515.2

Income taxes

$1,248.0

$1,284.8

$2,190.5

Net cash flow from operating activities

C

36 Weeks Ended

Sept 8, 2007

B

36 Weeks Ended

Sept 6, 2008

A

Year Ended

Dec 29, 2007

Reconciliation

of

Net

Cash

Flow

from

Operating            

Activities

to

Adjusted

EBITDA

7

Reconciliation_InvestorConferences_Dec08

Reconciliation of EPS

As Adjusted for Unusual Items

*Adjusted for a two-for-one stock split effected February 25, 1998 and a two-for-one stock split effected January 30, 1996.

2008G

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Low

High

EPS as reported*

$0.09

$0.25

$0.49

$0.67

$0.97

$1.12

$1.59

$1.88

$2.13

$2.44

($1.77)

($0.38)

$1.25

$1.25

$1.94

$1.99

$2.25

$2.35

Adjustments:

Extraordinary loss

$0.06

$0.02

$0.00

$0.13

Cumulative effect of accounting change

$0.06

Dominick's impairment/closures/tax adj.

$2.73

$1.05

$0.06

Randall's impairment

$1.72

$1.00

Randall's store closures

$0.15

Furrs/Homeland lease write-offs

$0.05

Future Beef write-off

$0.06

Restructuring & transition charges

$0.03

$0.02

$0.09

$0.04

Labor buyouts/unusual contributions

$0.06

$0.03

$0.08

Accrual for rent holidays

$0.02

Miscellaneous investment write-offs

$0.04

$0.01

Inventory adjustments

$0.10

Stock option expense

($0.01)

($0.01)

($0.01)

($0.01)

($0.01)

($0.01)

($0.03)

($0.03)

($0.06)

($0.08)

($0.11)

($0.12)

($0.10)

Certain tax adjustments

($0.11)

($0.08)

($0.08)

Tax settlement

($0.14)

53rd week

($0.04)

($0.04)

EPS as adjusted

$0.23

$0.32

$0.50

$0.66

$0.96

$1.24

$1.56

$1.85

$2.07

$2.51

$2.66

$1.70

$1.15

$1.40

$1.72

$1.99

$2.21

$2.31

% change

39.1%

56.3%

32.0%

45.5%

29.2%

25.8%

18.6%

11.9%

21.3%

6.0%

-36.1%

-32.4%

21.7%

22.9%

15.7%

11.1%

16.1%

8

Reconciliation_InvestorConferences_Dec08

Reconciliation of Gross Margin BP Change

Excluding Fuel

(11)

46

(57)

Basis point change in gross margin, excluding fuel

Fuel

Basis point change in gross margin

Basis

point

(decrease)

increase

over

prior

year:

36 Weeks

Ended           

Sept. 6, 2008

9

Reconciliation_InvestorConferences_Dec08

Excluding Fuel and Unusual Items

(13)

16

-

-

-

-

-

(29)

2007

(26)

34

-

-

-

-

-

(60)

38

39

32

13

Fuel

(29)

(22)

-

-

Vons strike

(9)

-

(7)

15

Labor buyout and health and welfare

contributions

-

-

(15)

-

Stock option expense

98

87

(59)

(36)

Basis point change in operating and 

administrative expense, excluding

fuel and unusual items

(30)

77

13

-

Impairment charges (incl.

Dominick’s)

-

-

(29)

29

Texas store closures

Unusual items:

128

(7)

(53)

(93)

Basis point change in operating and

administrative expense

2003

2004

2005

2006

Reconciliation of Operating &                         

Administrative Expense BP Change

Basis point (decrease)

increase

over prior year:

36 Weeks

Ended           

Sept. 6, 2008

10

Reconciliation_InvestorConferences_Dec08

$ 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 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.

Low

High

Sept 6. 2008

2013F

2012F

2011F

2010F

2009G

2008G

36 Weeks

Ended

2007

2006

2005

Low

High

Low

High

Low

High

Low

High

Low

High

Net cash flow from operating activities

$3,000.0

$3,150.0

$2,800.0

$2,950.0

$2,600.0

$2,750.0

$2,400.0

$2,550.0

$2,200.0

$2,350.0

$2,100.0

$2,250.0

$1,284.8

$2,190.5

$2,175.0

$1,881.0

Decrease in payables related to third party

gift cards, net of receivables

194.6

(84.1)

(71.1)

Interest earned on favorable income tax

settlement, net of tax

(62.6)

Net cash flow from operating activities,

as adjusted

3,000.0

3,150.0

2,800.0

2,950.0

2,600.0

2,750.0

2,400.0

2,550.0

2,200.0

2,350.0

2,100.0

2,250.0

1,479.4

2,106.4

2,041.3

1,881.0

Net

cash

flow

used

by

investing

activities

(1,200.0)

(1,150.0)

(1,200.0)

(1,150.0)

(1,200.0)

(1,150.0)

(1,200.0)

(1,150.0)

(1,200.0)

(1,150.0)

(1,600.0)

(1,550.0)

(980.1)

(1,686.4)

(1,734.7)

(1,313.5)

Cash used to acquire businesses/stores,

net of tax benefits

49.5

Net cash flow used by investing activities,

as adjusted

(1,200.0)

(1,150.0)

(1,200.0)

(1,150.0)

(1,200.0)

(1,150.0)

(1,200.0)

(1,150.0)

(1,200.0)

(1,150.0)

(1,600.0)

(1,550.0)

(980.1)

(1,686.4)

(1,685.2)

(1,313.5)

Free cash flow

$1,800.0

$2,000.0

$1,600.0

$1,800.0

$1,400.0

$1,600.0

$1,200.0

$1,400.0

$1,000.0

$1,200.0

$500.0

$700.0

$499.3

$420.0

$356.1

$567.5

11

Reconciliation_InvestorConferences_Dec08

33

6

15

7

(13)

29

(11)

2005

(204)

Goodwill impairment charges

20

10

10

High

5

10

(5)

Low

35

5

30

High

15

5

10

Low

1

15

4

12

Fuel impact

63

Vons strike

(15)

Labor buyout and health and  

welfare contributions

Stock option expense

(50)

53

25

15

Operating profit margin,                

excluding fuel and unusual items

(77)

Other impairment charges 

(including Dominick’s)                

(29)

Texas store closures

Unusual items:

167

82

21

3

Operating profit margin

2004

2006

2007

2008

Reconciliation of Operating Profit Margin Basis Point

Change Excluding Fuel & Unusual Items

2009G

2008G

36 Weeks

Ended                 

Sept. 6

12

Reconciliation_InvestorConferences_Dec08

2008 Guidance

ID Sales X-Fuel

3.0% -

3.2%

1.0% -

2.0%

²

Operating Margin

15 -

35 bps

NC

Improvement X-Fuel

Cash Capital

$1.70 -

$1.75B

$1.60B

Expenditures

Free Cash Flow

¹

$500 -

$700M

NC

Earnings per Share

$2.25 -

$2.35

NC

Original

Revised

1

Excludes Blackhawk Gift Card payables, net of receivables

2

Revised with Q2 Earnings Release

3

Revised 12/04/08

See website for reconciliation

3

13

Reconciliation_InvestorConferences_Dec08

ID

Sales

X-Fuel

1.0

0.5

1.0

2.0

3.7

4.0

3.0

2.7

3.5

3.7

3.2

3.2

3.7

(0.2)

3.4

2.6

1.6

(0.7)

(0.9)

(0.4)

(1.3)

(0.8)

(1.5)

(2.2)

(2.3)

(2.9)

(2.0)

(1.5)

1Q

02

2

3

4

1Q

03

2

3

4

1Q

04

2

3

4

1Q

05

2

3

4

1Q

06

2

3

4

1Q

07

2

3

4

1Q

08

2

3

4

QTD

1

Excludes

Dominick’s

Q1’03

-

Q3’03,

excludes

Vons

strike

impact

Q403

-

Q105,

adjusted

for

Holiday

impacts

Q1

&

Q2’05,

Q1

&

Q2’06,

Q1’07

Q1’08,

Q2’08

2

Through

Week

48

2

1

14

Reconciliation_InvestorConferences_Dec08

Financial Guidance For 2009

EPS

$2.34 -

$2.44

X-Fuel ID sales

2.0% -

3.0%

Operating profit margin change

5 -

20 bps

Cash capital spending

~ $1.2B

Free cash flow

$1.0 -

$1.2B

1

Excludes Fuel

2

Excludes BHN Gift Card payables, net of receivables

1

2

See website for reconciliation

15

Reconciliation_InvestorConferences_Dec08

Rollout of Lifestyle Stores

91

82

74

59

43

26

8

1

'03

'04

'05

'06

'07

'08E

'09F

'10F

% of Stores Completed

20

144

458

751

1,024

1,280

1,425

1,575

16

Reconciliation_InvestorConferences_Dec08

Current ID Results for Lifestyle Stores

100

41

35

27

13

1st Yr

2nd Yr

3rd Yr

4th Yr

Non-

LS

Store Count

Lifestyle

Non-Lifestyle

Lifestyle Sales Change by Year

35%

65%

Indexed

Adj. for competitive openings

Yr

1

sales

vs.

Proforma

Base,

Yr

2

-

Yr

4

Prior

Year

Yr 2 -

Yr 4 excluding Grand opening Promo Period

Data Incl

thru week 44, 2008

17

Reconciliation_InvestorConferences_Dec08

1.6 - 1.8

1.4 - 1.6

1.2 - 1.4

1.0 - 1.2

0.5 - 0.7

0.4

0.4

0.6

2005

2006

2007

2008G

2009G

2010F

2011F

2012F

Free Cash Flow

$ Billions

1.4

1.7

1.7

1.6

1.2

1.2

1.2

1.2

Capital Spending

See website for reconciliation

Excludes Blackhawk Gift Card payables, net of receivables

18

Reconciliation_InvestorConferences_Dec08

Total Debt

$ Billions

$4.5 - $4.7

$5.4

$8.4

$5.7

$5.9

$6.4

$7.8

$6.8

2002

2003

2004

2005

2006

2007

2008E

2009F

7-year Potential Debt Reduction

$3.7B -

$3.9B

*

*

*

*

*

*

* * * * * * * * * * * *