SEGMENTS

Safeway’s retail business operates in the United States. Safeway is organized into eight geographic retail operating segments (Chicago, Denver, Eastern, Northern California, Phoenix, Northwest, Texas and Southern California). Across all eight 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 eight operating 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 the Company 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.

As a result of the recent Blackhawk IPO, the Company is now presenting Blackhawk as a reportable segment. Blackhawk provides gift cards, other prepaid products and payment services to consumers through a network of retail store locations in the United States and 18 other countries and various online channels. Prepaid products include: closed loop cards, open loop cards, financial services products and telecom products. Additionally, Blackhawk provides card production services and a secondary market for prepaid cards.

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



	12 Weeks Ended				24 Weeks Ended
	June 15, 2013		June 16, 2012		June 15, 2013		June 16, 2012
Safeway Retail
Sales and other revenue	$	8,472.4	$	8,645.9	$	16,795.6	$	16,999.9
Operating profit	132.8		130.8		238.7		240.6
Income before income taxes	85.0		61.2		132.5		105.0
Blackhawk*
Sales and other revenue	$	223.7	$	188.0	$	407.2	$	337.9
Operating profit	5.3		7.9		5.6		10.1
Income before income taxes	5.5		8.3		6.1		10.8
Total
Sales and other revenue	$	8,696.1	$	8,833.9	$	17,202.8	$	17,337.8
Operating profit	138.1		138.7		244.3		250.7
Income before income taxes	90.5		69.5		138.6		115.8
*Does not reflect noncontrolling interests in Blackhawk

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



	12 Weeks Ended
	June 15, 2013				June 16, 2012
Non-perishables ⁽¹⁾	$	3,550.1	40.8	%	$	3,555.5	40.2	%
Perishables ⁽²⁾	3,129.7		36.0		3,096.8		35.1
Fuel	1,031.4		11.9		1,199.5		13.6
Pharmacy	634.4		7.3		681.7		7.7
Blackhawk	223.7		2.6		188.0		2.1
Other ⁽³⁾	126.8		1.4		112.4		1.3
Total sales and other revenue	$	8,696.1	100.0	%	$	8,833.9	100.0	%


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


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


(3)	Consists primarily of wholesale sales and other revenue.



	24 Weeks Ended
	June 15, 2013				June 16, 2012
Non-perishables ⁽¹⁾	$	7,089.4	41.2	%	$	7,060.4	40.7	%
Perishables ⁽²⁾	6,175.4		35.9		6,124.8		35.3
Fuel	1,995.9		11.6		2,222.0		12.8
Pharmacy	1,277.1		7.4		1,366.3		7.9
Blackhawk	407.2		2.4		337.9		2.0
Other ⁽³⁾	257.8		1.5		226.4		1.3
Total sales and other revenue	$	17,202.8	100.0	%	$	17,337.8	100.0	%


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


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


(3)	Consists primarily of wholesale sales and other revenue.