SAFEWAY INC. AND SUBSIDIARIES In the Core portfolio are the Safeway brands, Lucerne, Refreshe, the Snack Artist and Pantry Essentials. The Safeway brand is now a family of four brands: Safeway Farms, Safeway Kitchens, Safeway Home and Safeway Care. The Lucerne brand has been producing quality dairy products for over 100 years. The Refreshe label was re-branded in 2010 to include all 14 private-label beverage brands.The Snack Artist offers highquality and great value snacks in a variety of categories such as chips, snacking nuts, cookies and frozen categories in whimsical, resealable packaging, a unique feature in the category. Pantry Essentials was launched in 2011 as a value line, offering basic items across several categories, including dairy, meat, canned vegetables and paper goods, to name just a few. During 2012, Safeway continued to roll out the just for U™ personalized pricing and digital marketing program in U.S. markets. This program downloads personalized pricing and digital coupons to the Safeway Club Card. Manufacturing and Wholesale The principal function of manufacturing operations is to manufacture and process private-label merchandise sold in stores operated by Safeway. As measured by sales dollars, 13% of Safeway’s private-label merchandise is manufactured in Company-owned plants, and the remainder is purchased from third parties. Safeway’s Canadian subsidiary has a wholesale operation that distributes both national brands and privatelabel products to independent grocery stores and institutional customers. Safeway operated the following manufacturing and processing facilities at year-end 2012: U.S. 6 6 2 — 4 1 1 — 20 Milk plants Bakery plants Ice cream plants Cheese and meat packing plants Soft drink bottling plants Fruit and vegetable processing plants Cake commissary Sandwich commissary Total Canada 3 2 2 1 — 3 — 1 12 In addition, the Company operates laboratory facilities for quality assurance and research and development in certain plants and at its corporate offices. Distribution Safeway has 17 distribution/warehousing centers (13 in the United States and four in Canada), which collectively provide the majority of all products to Safeway’s 11 retail operating areas. This includes one distribution center in British Columbia which is owned and operated by a third party. The distribution center in Maryland is also operated by a third party. 7