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At investor conference, Safeway outlines dividend plan


PLEASANTON, Calif. — Safeway on Tuesday said that it expects to earn $1.60 to $1.80 per diluted share during the quarter, after the company's board approved a $1.1 billion dividend from Canada to the United States.

The dividend, Safeway said during its 2011 investor conference, will be used to pay off $600 million of U.S. debt, and the company will use the remainder of the dividend for share repurchases.

The company also noted that the dividend is expected to reduce 2011 earnings per diluted share by 15 cents due to tax expense (22 cents per diluted share) and will be partially offset by share repurchases (6 cents per diluted share) and lower interest expense (1 cent per diluted share). The combined impact of the dividend and related share repurchases is expected to be accretive to earnings per diluted share in 2012 and beyond.

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