Safeway 2002 Annual Report Download - page 41

SAFEWAY INC. 2002 ANNUAL REPORT 39
The following schedule shows the composition of total
rental expense for all operating leases (in millions). In general,
contingent rentals are based on individual store sales.
2002 2001 2000
Property leases:
Minimum rentals $343.1 $324.8 $282.3
Contingent rentals 16.9 16.5 16.8
Less rentals from subleases (29.0) (31.7) (25.6)
331.0 309.6 273.5
Equipment leases 25.0 30.1 30.1
$356.0 $339.7 $303.6
NOTE G: INTEREST EXPENSE
Interest expense consisted of the following (in millions):
2002 2001 2000
Commercial paper $ 32.0 $ 61.3 $138.8
Bank credit agreement 3.1 6.8 7.7
9.30% Senior Secured Debentures 2.3 2.3 2.3
6.85% Senior Notes 13.7 13.7 13.7
7.00% Senior Notes 17.5 17.5 17.5
7.45% Senior Debentures 11.2 11.2 11.2
3.80% Senior Notes 3.3 ––
4.80% Senior Notes 10.5 ––
5.80% Senior Notes 17.7 ––
5.75% Senior Notes –– 19.9
5.875% Senior Notes –20.3 23.5
6.05% Senior Notes 21.2 21.2 21.2
6.50% Senior Notes 16.3 16.3 16.3
7.00% Senior Notes 29.4 42.0 42.0
7.25% Senior Notes 29.0 29.0 29.0
7.50% Senior Notes 37.5 37.5 37.5
6.15% Senior Notes 43.1 35.5 –
6.50% Senior Notes 32.5 26.8 –
7.25% Senior Debentures 43.5 39.8 –
3.625% Senior Notes 14.5 2.2 –
10.00% Senior Subordinated Notes –7.2 8.0
9.65% Senior
Subordinated Debentures 7.8 7.8 7.8
9.875% Senior
Subordinated Debentures 2.4 2.4 2.4
10.00% Senior Notes 0.5 0.6 0.6
Mortgage notes payable 4.2 6.0 6.7
Other notes payable 1.7 3.0 7.1
Medium-term notes 1.4 1.4 1.6
Short-term bank borrowings –0.9 3.9
Obligations under capital leases 57.0 50.1 48.3
Amortization of deferred finance costs 7.8 8.0 7.0
Interest rate swap and cap agreements 0.7 1.8 0.2
Capitalized interest (31.0) (25.7) (17.0)
$430.8 $446.9 $457.2
Less amount allocated to, and
included in, discontinued operations (62.2) (80.8) (93.6)
$368.6 $366.1 $363.6
Interest expense of $62.2 million in 2002, $80.8 million in
2001 and $93.6 million in 2000 was allocated to, and is
included in, loss on discontinued operations. Interest expense
was allocated based on the ratio of Dominick’s net assets to
total Safeway net assets.
NOTE H: CAPITAL STOCK
SHARES AUTHORIZED AND ISSUED Authorized preferred
stock consists of 25 million shares of which none were out-
standing during 2002, 2001 or 2000. Authorized common
stock consists of 1.5 billion shares at $0.01 par value.
Common stock outstanding at year-end 2002 was 441.0 mil-
lion shares (net of 132.0 million shares of treasury stock) and
488.1 million shares at year-end 2001 (net of 82.7 million
shares of treasury stock).
STOCK OPTION PLANS Under Safeway’s 1999 Equity
Participation Plan (the “1999 Plan”), the Company may
grant incentive and non-qualified options to purchase com-
mon stock at an exercise price equal to or greater than the
fair market value at the grant date, as determined by the
Compensation and Stock Option Committee of the Board
of Directors, as well as other stock-based awards. Options
generally vest over five or seven years. Vested options are
exercisable in part or in full at any time prior to the expira-
tion date of 10 to 15 years from the date of the grant.
Options to purchase approximately 5.0 million shares were
available for grant under the 1999 Plan at year-end 2002.
On July 31, 2002, the Board of Directors adopted the
2002 Equity Incentive Plan of Safeway Inc. (the “2002
Plan”), under which awards of non-qualified stock options
and stock-based awards may be made. There are 2.0 mil-
lion shares of common stock authorized for issuance pur-
suant to grants under the 2002 Plan. At year-end 2002, no
awards had been made.