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): Asset category: Fair Value Measurements Total Quoted prices In active markets for Identical assets (Level 1) Significant observable Inputs (Level 2) Significant unobservable Inputs (Level 3) 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 qu