EFTA01382492.pdf

Amendment No. 3 to Form S-1 Table of Contents SAFEWAY INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Information for Safeway's pension plans, all of which have an accumulated benefit obligation in excess of plan assets as of year- end 2014 and 2013, is shown below (in millions): 2014 2013 Projected benefit obligation $2,244.0 $2,023.4 Accumulated benefit obligation 2,179.6 1,978.3 Fair value of plan assets 1,561.2 1,644.2 The following tables provide the components of net expense for the retirement plans and other changes in plan assets and benefit obligations recognized in other comprehensive income (in millions): Other Post-Retirement Pension Benefits Components of net expense: 2014 2013 2012 2014 2013 2012 Estimated return on plan assets $(119.3) $(107.9) $(101.0) $ — $ — $ — Service cost 42.5 42.0 40.3 0.9 0.7 0.6 Interest cost 96.4 85.4 91.8 3.4 3.2 3.6 Settlement loss — — 5.9 — — — Curtailment loss — — 1.8 — — — Amortization of prior service cost (credit) 9.7 12.8 15.3 (0.1) (0.1) (0.1) Amortization of net actuarial loss 42.3 77.8 70.3 0.4 0.9 0.5 Net expense $ 71.6 $ 110.1 $ 124.4 $ 4.6 $ 4.7 $ 4.6 Changes in plan assets and benefit obligations recognized in other comprehensive income: Net actuarial loss (gain) $ 290.6 $(216.9) $ 97.8 $12.7 $(5.0) $ 6.6 Recognition of net actuarial loss (42.3) (77.8) (76.3) (0.4) (0.9) (0.5) Prior service credit 0.2 0.2 0.5 Recognition of prior service (cost) credit (9.7) (12.8) (17.0) 0.1 0.1 0.1 Changes relating to discontinued operations (55.5) 9.0 (3.0) (5.0) Total recognized in other comprehensive income 238.8 (362.8) 14.0 12.4 (8.8) 1.2 Total net expense and changes in plan assets and benefit obligations recognized in comprehensive income $ 310.4 $(252.7) $ 138.4 $17.0 $(4.1) $ 5.8 Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Actuarial gains and losses are amortized over the average remaining service life of active participants when the accumulation of such gains and losses exceeds 10% of the greater of the projected benefit obligation and the fair value of plan assets. The Company uses its fiscal year- end date as the measurement date for its plans. In 2014, Safeway adopted the Society of Actuaries' 2014 mortality rate table. This had the effect of increasing Safeway's projected benefit obligation by $168 million. F-126 (Continued) hill) MN% V....we go% Archo.e.: editor data 1646972 000119312515335826'd900395dslahtm110 14'2015 9:03:02 AM1 CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0081876 CONFIDENTIAL SDNY_GM_00228060 EFTA01382492