Safeway 2001 Annual Report Download - page 33

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MORTGAGE NOTES PAYABLE Mortgage notes payable at year-
end 2001 have remaining terms ranging from one to 22 years,
have a weighted average interest rate of 8.50% and are secured by
properties with a net book value of approximately $226 million.
OTHER NOTES PAYABLE Other notes payable at year-end 2001
have remaining terms ranging from one to eight years and a
weighted average interest rate of 4.51%.
ANNUAL DEBT MATURITIES As of year-end 2001, annual debt
maturities were as follows (in millions):
2002 $ 642.6
2003 789.2
2004 698.5
2005 6.3
2006 2,429.9
Thereafter 2,312.9
$ 6,879.4
LETTERS OF CREDIT The Company had letters of credit of
$74.6 million outstanding at year-end 2001, of which $37.0
million were issued under the bank credit agreement. The letters
of credit are maintained primarily to support performance, pay-
ment, deposit or surety obligations of the Company. The
Company pays commitment fees ranging from 0.20% to 1.00%
on the outstanding portion of the letters of credit.
Note E: Lease Obligations
Approximately two-thirds of the premises that the Company
occupies are leased. The Company had approximately 1,600
leases at year-end 2001, including approximately 215 that are
capitalized for financial reporting purposes. Most leases have
renewal options, some with terms and conditions similar to the
original lease, others with reduced rental rates during the option
periods. Certain of these leases contain options to purchase the
property at amounts that approximate fair market value.
As of year-end 2001, future minimum rental payments applic-
able to non-cancelable capital and operating leases with remain-
ing terms in excess of one year were as follows (in millions):
Capital Operating
Leases Leases
2002 $ 97.2 $ 384.3
2003 82.8 383.1
2004 89.5 360.8
2005 72.5 351.9
2006 64.6 332.4
Thereafter 617.4 3,035.0
Total minimum lease payments 1,024.0 $ 4,847.5
Less amounts representing interest (503.6)
Present value of net minimum lease payments 520.4
Less current obligations (44.9)
Long-term obligations $ 475.5
Future minimum lease payments under non-cancelable capi-
tal and operating lease agreements have not been reduced by
minimum sublease rental income of $231.1 million.
Amortization expense for property under capital leases was
$38.9 million in 2001, $43.9 million in 2000 and $38.5 million
in 1999. Accumulated amortization of property under capital
leases was $154.3 million at year-end 2001 and $132.2 million
at year-end 2000.
The following schedule shows the composition of total rental
expense for all operating leases (in millions). In general, contin-
gent rentals are based on individual store sales.
2001 2000 1999
Property leases:
Minimum rentals $ 369.0 $ 323.3 $ 280.3
Contingent rentals 16.5 16.7 18.6
Less rentals from subleases (34.1) (27.2) (13.2)
351.4 312.8 285.7
Equipment leases 31.0 31.0 42.9
$ 382.4 $ 343.8 $ 328.6