Safeway 2000 Annual Report Download - page 40

Safeway Inc. and Subsidiaries
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Significant components of the Company’s net deferred
tax liability at year-end were as follows (in millions):
2000 1999
Deferred tax assets:
Workers’ compensation and other claims $ 122.6 $ 144.7
Reserves not currently deductible 87.1 111.3
Accrued claims and other liabilities 36.9 28.9
Employee benefits 33.7 46.1
Other assets 117.4 112.0
397.7 443.0
Deferred tax liabilities:
Property (445.1) (387.8)
Prepaid pension costs (203.9) (165.4)
Inventory (165.0) (171.3)
Investments in foreign operations (92.4) (97.6)
(906.4) (822.1)
Net deferred tax liability $(508.7) $(379.1)
At December 30, 2000, certain undistributed earnings of
the Company’s foreign operations totaling $676.2 million
were considered to be permanently reinvested. No deferred
tax liability has been recognized for the remittance of such
earnings to the United States since it is the Company’s
intention to utilize those earnings in the foreign operations
for an indefinite period of time, or to repatriate such earn-
ings only when tax efficient to do so. The determination of
the amount of deferred taxes on these earnings is not practi-
cable since the computation would depend on a number of
factors that cannot be known until a decision to repatriate
the earnings is made.
NOTE H: EMPLOYEE BENEFIT PLANS AND
COLLECTIVE BARGAINING AGREEMENTS
RETIREMENT PLANS The Company maintains defined ben-
efit, non-contributory retirement plans for substantially all
of its employees not participating in multi-employer
pension plans.
In connection with the Randall’s Acquisition and the Vons
merger in 1997, the Company assumed the obligations of
Randall’s and Vons’ retirement plans. The actuarial assump-
tions for the existing Randall’s and Vons retirement plans are
comparable to those for the existing plans of the Company.
Randall’s and Vons’ retirement plans have been combined
with Safeway’s for financial statement presentation.
The following tables provide a reconciliation of the
changes in the retirement plans’ benefit obligation and fair
value of assets over the two-year period ending December 30,
2000 and a statement of the funded status as of year-end
2000 and 1999 (in millions):
2000 1999
Change in benefit obligation:
Beginning balance $ 1,119.7 $ 1,165.7
Service cost 47.2 54.4
Interest cost 84.1 81.6
Plan amendments 17.8 17.5
Actuarial loss (gain) 20.0 (129.4)
Acquisition of Randall’s–28.1
Benefit payments (85.1) (87.3)
Transfer of plan liabilities (20.0) –
Curtailment (2.3) –
Change in assumptions 8.3 (23.4)
Currency translation adjustment (7.8) 12.5
Ending balance $ 1,181.9 $ 1,119.7
2000 1999
Change in fair value of plan assets:
Beginning balance $ 2,153.4 $ 1,766.1
Actual (loss) return on plan assets (60.4) 432.4
Acquisition of Randall’s–27.6
Employer contributions 0.6 0.9
Benefit payments (85.1) (87.3)
Transfer of plan assets (43.0) –
Currency translation adjustment (8.8) 13.7
Ending balance $ 1,956.7 $ 2,153.4
2000 1999
Funded status:
Fair value of plan assets $ 1,956.7 $ 2,153.4
Projected benefit obligation (1,181.9) (1,119.7)
Funded status 774.8 1,033.7
Adjustment for difference in book
and tax basis of assets (165.1) (165.1)
Unamortized prior service cost 94.3 97.2
Unrecognized gain (212.5) (560.2)
Prepaid pension cost $ 491.5 $ 405.6