Amendment No. 3 to Form S-1 Tabk of Contents SAFEWAY INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Also included in Other Securities are exchange-traded derivatives that are valued based on quoted prices in an active market for identical derivatives; assets and liabilities. Non-exchange-traded derivatives are valued using industry valuation models, which maximize observable inputs, such as interest-rate yield curve data, foreign exchange rates and applicable spot and forward rates. See Note I for a discussion of levels. A reconciliation of the beginning and ending balances for Level 3 assets for the year ended January 3, 2015 follows (in millions): Fair Value Measured Using Significant Unobservable Inputs (Level 3) Total Corporate bonds U.S. government securities Other securities Balance, beginning of year $ 7.9 $ — $ 0.1 $ 7.8 Purchases, sales, settlements, net 19.7 0.7 - 19.0 Unrealized gains (2.3) - - (2.3) Balance, end of year $25.3 $ 0.7 $ 0.1 $ 24.5 The fair value of Safeway's pension plan assets at December 28, 2013, excluding pending transactions of $37.2 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) $ 30.2 $ 29.0 $ 1.2 $ - Short-term investment collective trust(2) 18.2 — 18.2 — Common and preferred stock:(3) Domestic common and preferred stock 270.4 269.9 0.5 — International common stock 38.5 38.5 — — Common collective trust funds(2) 611.2 - 611.2 — Corporate bonds(4) 101.1 - 101.1 — Mortgage- and other asset-backed securities(5) 62.3 — 62.3 — Mutual funds(6) 183.8 5.9 177.9 U.S. government securities(7) 335.8 — 335.7 0.1 Other securities(8) 29.9 3.1 19.0 7.8 Total $1,681.4 346.4 $ 1,327.1 7.9 (1)