Amendment No. 3 to Form S-1 Table of Contents SUPPLEMENTAL MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS OF SAFEWAY The following discussion should be read in conjunction with "Supplemental Selected Historical Financial Information of Safeway' and Safeway's historical consolidated financial statements, and the accompanying notes contained therein, included elsewhere in this prospectus. This discussion contains forward-looking statements. Please see 'Special Note Regarding Forward-Looking Statements" for a discussion of the risks, uncertainties and assumptions relating to these statements. Safeway's last three fiscal years prior to the Safeway acquisition consisted of the 53-week period ended January 3, 2015 ('fiscal 2014" or "2014), the 52-week period ended December 28, 2013 ("fiscal 2013" or '2013") and the 52-week period ended December 29, 2012 ('fiscal 2012" or '2012"). Management Overview of Safeway On January 30. 2015, Albertson's Holdings' wholly-owned subsidiary, Saturn Acquisition Merger Sub. Inc., merged with and into Safeway, with Safeway surviving the merger as a wholly-owned subsidiary of Albertson's Holdings. See "Business—Our Integration History and Banners" and Note V to Safeway's historical consolidated financial statements, included elsewhere in this prospectus, for additional information. On December 23, 2014, Safeway and its wholly-owned real estate development subsidiary, PDC. sold substantially all of the net assets of PDC to Terramar Retail Centers, LLC ('Terramar"), an unrelated party. PDC's assets were comprised of shopping centers that are completed or under development. Most of these centers included a grocery store that was leased back to Safeway. The sale was consummated pursuant to an asset purchase agreement dated as of December 22, 2014 by and among Safeway. PDC and Terramar. See Note D to Safeway's historical consolidated financial statements, included elsewhere in this prospectus, for additional inf