EFTA01382494.pdf

Amendment No. 3 to Form S-1 Tahk of Contents SAFEWAY INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The fair value of Safeway's pension plan assets at January 3, 2015, excluding pending transactions of $41.5 million, by asset category are as follows (in millions): Fair Value Measurements Quoted prices In active markets for Significant Significant Identical observable unobservable assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Asset category: Cash and cash equivalents(1) $ 9.6 $ 1.3 $ 8.3 $ — Short-term investment collective trust(2) 47.5 — 47.5 — Common and preferred stock:(3) Domestic common and preferred stock 293.6 293.5 0.1 International common stock 34.6 34.6 — Common collective trust funds(2) 523.6 — 523.6 — Corporate bonds(4) 121.3 — 120.6 0.7 Mortgage- and other asset-backed securities(5) 63.4 — 63.4 — Mutual funds(6) 183.2 34.2 149.0 - U.S. government securities(7) 263.8 — 263.7 0.1 Other securities(8) 62.8 0.7 37,6 24.5 Total $1,603.4 $ 364.3 $ 1,213.8 $ 25.3 The carrying value of these items approximates fair value. These investments are valued based on the Net Asset Value (-NAV") of the underlying investments and are provided by the fund issuers. The fair value of common stock is based on the exchange quoted market prices. When quoted prices are not available for preferred stock, an industry standard valuation model is used which maximizes observable inputs. The fair value of corporate bonds is generally based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar bonds, the fair value is based upon an industry valuation model, which maximizes observable inputs. The fair value of mortgage- and other asset-backed securities is generally based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for comparable securities, the fair value is based upon an industry model which maximizes observable inputs. These investments are publicly traded investments which are valued using the NAV. The NAV of the mutual funds is a quoted price in an active market. The NAV is determined once a day after the closing of the exchange based upon the underlying assets in the fund, less the fund's liabilities, expressed on a per-share basis. The fair value of U.S. government securities is based on quoted market prices when available. When quoted prices are not available, the fair value of U.S. government securities is based on yields currently available on comparable securities or on an industry valuation model which maximizes observable inputs. Other securities, which consist primarily of U.S. municipal bonds, foreign government bonds and foreign agency securities are valued based on yields currently available on comparable securities of issuers with similar credit ratings. F-128 (Continued) V.1% V....we go% Arclio.c.: editor data 1646972 000119312515335826'd900395ds Itt.htm110 14'2015 9:03:02 AM1 CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0081878 CONFIDENTIAL SDNY_GM_00228062 EFTA01382494