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EFTA01382317

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Amendment No. 3 to Form S-1 Table of Contents to hedge against adverse fluctuations in the interest rate on anticipated variable rate debt planned to be incurred to finance the Safeway acquisition. Prior to the Safeway acquisition, the swap was treated as an economic hedge with changes in fair value recorded through earnings. Upon closing of the Safeway acquisition, the interest rate swap was designated as a cash flow hedge, with any subsequent changes in fair market value being marked to market through accumulated other comprehensive income. We did not have Other expense, net in fiscal 2013 or fiscal 2012. Income Taxes Income tax was a benefit of $153.4 million in fiscal 2014, $572.6 million in fiscal 2013 and immaterial in fiscal 2012. A substantial portion of the businesses and assets were held and operated by limited liability companies during these periods, which generally are not subject to entity-level federal or state income taxation. The income tax benefit of $153.4 million in fiscal 2014 is primarily driven by the tax benefits from the operating results of Safeway and NAI, both of which are subject to federal and state income taxes. This income tax benefit was reduced by nondeductible acquisition-related transaction costs and non-cash equity-based compensation. The income tax benefit of $572.6 million in fiscal 2013 is the result of the bargain purchase gain related to the NAI acquisition not being subject to income taxes; the effects of the accounting for income taxes related to the intercompany sale of the Albertsons banners from NAI to Albertson's LLC immediately after the NA] acquisition; and the operating loss of NAI. As part of the IPO-Related Transactions, all of our operating subsidiaries will become subsidiaries of Albertsons Companies, Inc., a Delaware corporation, and, as a result, all of our operations will be taxable as part of a consolidated group for federal and state income tax purposes. The consolidation of our operations

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