Safeway 2002 Annual Report Download - page 17

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SAFEWAY INC. 2002 ANNUAL REPORT 15
Safeway invested $1.4 billion in cash capital expenditures
in 2002 and opened 71 stores and remodeled 191 stores. In
2003, Safeway expects to spend between $1.1 billion and
$1.3 billion in cash capital expenditures and open 50 to
55 new stores and complete between 100 and 125 remodels.
PERFORMANCE-BASED COMPENSATION
The Company has performance-based compensation
plans that cover more than 21,000 management and pro-
fessional employees. Performance-based compensation
plans set overall bonus levels based upon operating
results and working capital management. Individual
bonuses are based on job performance. Certain employ-
ees are covered by capital investment bonus plans that
measure the performance of capital projects based on
The table below presents principal amounts and related weighted average rates by year of maturity for the Company’s debt
obligations at year-end 2002 (dollars in millions):
December 28, 2002 2003 2004 2005 2006 2007 Thereafter Total Fair value
Commercial paper:
Principal $ – $ – $ – $1,744.1 $ – $ – $1,744.1 $1,744.1
Weighted average interest rate – – – 1.62% – – 1.62%
Bank borrowings:
Principal $ – $ – $ – $ 25.3 $ – $ – $ 25.3 $ 25.3
Weighted average interest rate – – – 2.91% – – 2.91%
Long-term debt:(1)
Principal $780.3 $ 699.6 $ 232.5 $ 710.3 $ 785.0 $2,812.4 $6,020.1 $6,483.3
Weighted average interest rate 4.86% 7.38% 3.87% 6.14% 5.78% 6.69% 4.60%
(1) Primarily fixed-rate debt
operating performance over several years, and other
employees are covered by supply division results.
MARKET RISK FROM
FINANCIAL INSTRUMENTS
Safeway manages interest rate risk through the strategic use of
fixed and variable interest rate debt and, from time to time,
interest rate swaps. As of year-end 2002, the Company did
not have any outstanding interest rate swap agreements.
The Company does not utilize financial instruments for
trading or other speculative purposes, nor does it utilize lever-
aged financial instruments. The Company does not consider
the potential losses in future earnings, fair values and cash
flows from reasonably possible near-term changes in interest
rates and exchange rates to be material.