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Financial Condition and Results of Operations of AB Acquisition" and 'Supplemental Management's Discussion and Analysis of Results of Operations of Safeway" included elsewhere in this prospectus and our consolidated financial statements and the related notes. OUR COMPANY We are one of the largest food

tes under 18 well-known banners, including Albertson, Safeway, trans, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market and Carrs. We operate in 121 Metropolitan Statistical Areas in the United States ("MSAs") and are ranked #1 or #2 by market share in 68% of them. We

Star Market banners with SuperValu on a store-by-store basis. We anticipate extending the expansive and high-quality own brand program developed at Safeway across all of our banners. We believe our increased scale will help us to optimize and improve our vendor relationships. We also plan to achieve mar

Amendment No. 3 to Form S-1 Table of Contents wind down our transition services agreement for our Albertsons, Acme, Jewel-Osco, Shaw's and Star Market banners with SuperValu on a store-by-store basis. We anticipate extending the expansive and high-quality own brand program developed at Safeway acr

on to realizing increased sales, profitability and free cash flow through the implementation of our operating playbook, we expect synergies from the Safeway acquisition to enhance our profitability and free cash flow over the next few years. OUR INTEGRATION HISTORY Over the past nine years, we have com

rtsons Stores" and, together with the Legacy Albertsons Stores, the -Albertsons Stores") and stores operating under the Acme, Jewel-Osco. Shaw's and Star Market banners (the "NAI Stores"). In December 2013, we acquired United, a regional grocery chain in North and West Texas. In January 2015, we acquired Sa

isition of the Legacy Albertsons Stores. We plan to complete the transition of our Albertsons and NAI stores, distribution centers and systems onto Safeway's IT systems by mid-2018, but may suffer disruptions as part of that process. In addition, we are dependent upon SuperValu to continue to provide th

es provider for Albertsons and NAI, SuperValu, informed us in the summer of 2014 that it discovered unlawful intrusions to approximately 800 Shaw's, Star Market, Acme, Jewel-Osco and Albertsons banner stores in an attempt to obtain payment card data. We have contacted the appropriate law enforcement authorit

Amendment No. 3 to Form S-1 Table of Contents issuing contingent value rights with an estimated fair value of $1.03 and $0.05 per share relating to Safeway's 49% interest in Casa Ley and deferred considerations related to Safeway's previous sale of the PDC assets, respectively, for an aggregate fair val

was fully paid as of February 20, 2014. At the time of the NAI acquisition, NAI operated 871 retail food stores under its Jewel-Osco, ACME, Shaw's, Star Market and Albertsons banners, primarily located in the Northeast, Midwest, Mid-Atlantic and Western regions of the United States. In addition, we acquired

Amendment No. 3 to Form S-1 Tabk of Contents Safeway We operate 1,247 Safeway stores in 19 states across the Western, Southern and Mid-Atlantic regions of the United States. We operate these stores un

ical store sales growth, from 1.4% in fiscal 2013 to 3.0% in fiscal 2014 and 3.8% in the first quarter of fiscal 2015. Acme, Jewel•Osco, Shaw's and Star Market Under the Acme, Jewel-Osco, Shaw's and Star Market banners, we operate 446 stores. 302 in-store pharmacies and five adjacent fuel centers in 12 sta

local presence and national scale. As of June 20, 2015, we operated 2,205 stores across 33 states under 18 well-known banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randslls, United Supermarkets, Pavilions, Star Market and Carrs. We operate in 121 MSAs and are ranked

tes under 18 well-known banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randslls, United Supermarkets, Pavilions, Star Market and Carrs. We operate in 121 MSAs and are ranked #1 or #2 by market share in 68% of them. We provide our customers with a service-oriented shopping

1.5% of our fiscal 2014 sales on a pro forma basis, including 115 remodel and upgrade projects and excluding approximately $300 million of one-time Safeway-related integration-related capital expenditures in fiscal 2015, in advance of anticipated sales of surplus assets. We expect to incur approximately

nited Supermarkets, Amigos, Market Street, Lucky, Pak'N Save Foods, Vons, Pavilions, Rendes, Tom Thumb, Carrs Quality Centers, ACME, Say-On, Shaw's, Star Market, Super Saver and Jewel-Osco. Seasonality Our business is generally not seasonal in nature. 124 htry,. w c.secgo% ANN% es edgar data' 1646972 000

greements to the Company. The Executive Employment Agreements both currently provide for a term through the third anniversary of the closing of the Safeway acquisition. The Executive Employment Agreements provide for an annual base salary of $700,000 for Mr. Dimond and $750,000 (increased to $800,000 un

r. Sampson entered into an offer letter with Albertson's LLC, dated January 16, 2013. pursuant to which he initially served as President, Shaw's and Star Market. The offer letter provided Mr. Sampson with an initial base salary of $350,000 (increased to $800,000 effective as of April 12, 2015) and a bonus op

posed of retail food businesses and in-store pharmacies with operations primarily located throughout the United States under the banners Albertsons, Safeway, Vons. Pavilions, Randalls, Tom Thumb. Carrs Quality Centers, United Supermarkets, Market Street, Amigos, United Express, Say-On, Jewel-Osco, ACME,

ilions, Randalls, Tom Thumb. Carrs Quality Centers, United Supermarkets, Market Street, Amigos, United Express, Say-On, Jewel-Osco, ACME, Shaw's and Star Market. The Company also owns and operates GroceryWorks.com Operating Company, LLC, an online grocery channel, doing business under the names Safeway.com