Safeway (SWY)

Income Taxes

As a result of the goodwill impairment charge, the company recognized an income tax benefit of $33.7 million in the fourth quarter of 2009. Excluding the impairment charge, income tax expense was 36.9% of pre-tax income in the fourth quarter of 2009 compared to 32.9% in the fourth quarter of 2008. The income tax rate in 2008 was lower due to a reduction in a reserve on charitable contribution carryforwards and the favorable resolution of other tax items.

Income Taxes

The Company provides income tax expense or benefit in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes.” Deferred income taxes represent future net tax effects resulting from temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Accrued interest on tax deficiencies and refunds is included in the income tax expense or benefit.

Income Taxes

The Company provides income tax expense or benefit in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes.” Deferred income taxes represent future net tax effects resulting from temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Accrued interest on tax deficiencies and refunds is included in the income tax expense or benefit.