SEGMENTS

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

The seven operating segments have been aggregated into one reportable segment called Safeway, 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 Blackhawk initial public offering of its Class A common stock in 2013, the Company presents Blackhawk as a separate reportable segment. Because Safeway did not distribute the Blackhawk shares until after the end of the first quarter of 2014, Blackhawk is still included as a separate reportable segment in continuing operations until the second quarter of 2014 when it will be reclassified as a discontinued operation. Blackhawk is a leading prepaid payment network utilizing proprietary technology to offer a broad range of gift cards, other prepaid products and payment services. Blackhawk’s payment network supports its three primary constituents: consumers who purchase the products and services Blackhawk offers, content providers who offer branded products that are redeemable for goods and services, and distribution partners who sell those products. Blackhawk’s product offerings include gift cards, prepaid telecom products and prepaid financial services products, including general purpose reloadable ("GPR") cards and Blackhawk’s reload network. In the fourth quarter of 2013, Blackhawk acquired InteliSpend Prepaid Solutions TM, a leader in the corporate incentives and consumer promotions marketplace, and Retailo AG, a leading third-party gift card distribution network in Germany, Austria and Switzerland.

The following tables present information about the Company by segment (in millions):



	12 Weeks Ended
	March 22, 2014			March 23, 2013
Safeway
Sales and other revenue	$	8,029.5		$	7,993.4
Operating profit	60.6			114.2
(Loss) income before income taxes	(130.0		)	56.0
Blackhawk*
Sales and other revenue	$	231.4		$	183.5
Operating (loss) profit	(5.9		)	0.3
(Loss) income before income taxes	(5.8		)	0.6
Total
Sales and other revenue	$	8,260.9		$	8,176.9
Operating profit	54.7			114.5
(Loss) income before income taxes	(135.8		)	56.6
*Does not reflect noncontrolling interests in Blackhawk

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



	12 Weeks Ended
	March 22, 2014				March 23, 2013
Non-perishables ⁽¹⁾	$	3,392.0	41.1	%	$	3,378.0	41.3	%
Perishables ⁽²⁾	3,000.2		36.3		2,910.1		35.6
Fuel	877.4		10.6		959.0		11.7
Pharmacy	617.1		7.5		617.6		7.6
Blackhawk	231.4		2.8		183.5		2.2
Other ⁽³⁾	142.8		1.7		128.7		1.6
Total sales and other revenue	$	8,260.9	100.0	%	$	8,176.9	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.