Segments

Safeway’s retail business, which represents approximately 98% of consolidated sales and other revenue, operates in the U.S. and Canada. Safeway is organized into 11 geographic retail operating segments (Chicago, Denver, Eastern, Northern California, Phoenix, Northwest, Texas, Vons, Alberta, Vancouver and Winnipeg). Across all 11 retail operating segments, the Company operates primarily one store format, where each store offers the same general mix of products with similar pricing to similar categories of customers. Safeway does not operate supercenters, warehouse formats, combination clothing/grocery stores or discount stores.

These 11 operating segments and other immaterial segments have been aggregated into one reportable segment because, in the Company’s judgment, the operating segments have similar historical economic characteristics and are expected to have similar economic characteristics and similar long-term financial performance in the future. The principal measures and factors we considered in determining whether the economic characteristics are similar are gross margin percentage, operating profit margin, sales growth, capital expenditures, competitive risks, operational risks and challenges, retail store sales, costs of goods sold and employees. In addition, each operating segment has similar products, similar production processes, similar types of customers, similar methods of distribution and a similar regulatory environment. The Company believes that disaggregating its operating segments would not provide material or meaningful additional information.

The following table presents information about the Company by geographic area (in millions):



	U.S.		Canada		Total
2012
Sales and other revenue	$	37,531.5	$	6,675.0	$	44,206.5
Operating profit	741.8		362.3		1,104.1
Income before income taxes	471.5		356.9		828.4
Long-lived assets, net	8,058.1		1,166.5		9,224.6
Total assets	12,535.7		2,121.3		14,657.0
2011
Sales and other revenue	$	36,923.2	$	6,707.0	$	43,630.2
Operating profit	745.5		389.1		1,134.6
Income before income taxes	500.3		381.8		882.1
Long-lived assets, net	8,456.2		1,181.4		9,637.6
Total assets	12,982.1		2,091.5		15,073.6
2010
Sales and other revenue	$	34,782.4	$	6,267.6	$	41,050.0
Operating profit	828.8		330.6		1,159.4
Income before income taxes	549.6		331.6		881.2
Long-lived assets, net	8,607.2		1,303.0		9,910.2
Total assets	12,448.7		2,699.4		15,148.1

The following table presents sales revenue by type of similar product (dollars in millions):



	2012				2011				2010
	Amount		% of total		Amount		% of total		Amount		% of total
Non-perishables ⁽¹⁾	$	17,635.1	39.9	%	$	17,512.9	40.1	%	$	17,364.4	42.3	%
Perishables ⁽²⁾	15,792.7		35.7	%	15,899.6		36.5	%	15,430.8		37.6	%
Fuel	4,974.2		11.2	%	4,596.6		10.5	%	3,187.9		7.8	%
Pharmacy	3,835.1		8.7	%	3,874.8		8.9	%	3,881.0		9.4	%
Other ⁽³⁾	1,969.4		4.5	%	1,746.3		4.0	%	1,185.9		2.9	%
Total sales and other revenue	$	44,206.5	100.0	%	$	43,630.2	100.0	%	$	41,050.0	100.0	%


(1)	Consists primarily of grocery, soft drinks and other beverages, general merchandise, meal ingredients, frozen foods and snacks.


(2)	Consists primarily of produce, meat, dairy, bakery, deli, floral and seafood.

(3)

Consists primarily of wholesale sales, commissions on gift cards and other revenue. Prior to 2011, Safeway recorded Blackhawk Network distribution commissions on the sale of certain gift cards, net of commissions shared with other retailers. In the first quarter of 2011, Safeway determined that these commissions should be reported on a gross basis. This change increased both revenue and cost of goods sold in fiscal 2011 by $413.5 million but had no impact on identical-store sales, gross profit dollars or net income. Previously reported results are not adjusted because the impact is immaterial.