Safeway 2006 Annual Report Download - page 65

SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note D: Financing
Notes and debentures were composed of the following at year end (in millions):
2006 2005
Commercial paper $– $–
Bank credit agreement, unsecured 52.3 47.5
Other bank borrowings, unsecured 5.3 6.5
Mortgage notes payable, secured 18.1 22.4
9.30% Senior Secured Debentures due 2007 24.3 24.3
6.15% Senior Notes due 2006, unsecured –700.0
4.80% Senior Notes due 2007, unsecured 480.0 480.0
7.00% Senior Notes due 2007, unsecured 250.0 250.0
4.125% Senior Notes due 2008, unsecured 300.0 300.0
4.45% Senior Notes due 2008, unsecured 257.8 259.7
6.50% Senior Notes due 2008, unsecured 250.0 250.0
7.50% Senior Notes due 2009, unsecured 500.0 500.0
Floating Rate Notes due 2009, unsecured (interest at 5.71% as of December 30, 2006) 250.0 –
4.95% Senior Notes due 2010, unsecured 500.0 500.0
6.50% Senior Notes due 2011, unsecured 500.0 500.0
5.80% Senior Notes due 2012, unsecured 800.0 800.0
5.625% Senior Notes due 2014, unsecured 250.0 250.0
7.45% Senior Debentures due 2027, unsecured 150.0 150.0
7.25% Senior Debentures due 2031, unsecured 600.0 600.0
9.875% Senior Subordinated Debentures due 2007, unsecured 24.2 24.2
Other notes payable, unsecured 7.4 10.8
5,219.4 5,675.4
Less current maturities (790.7) (714.2)
Long-term portion $4,428.7 $4,961.2
Commercial Paper The amount of commercial paper borrowings is limited to the unused borrowing capacity under
the bank credit agreement. Commercial paper is classified as long term because the Company intends to and has the
ability to refinance these borrowings on a long-term basis through either continued commercial paper borrowings or
utilization of the bank credit agreement, which matures in 2011. The weighted-average interest rate on commercial
paper borrowings during 2006 was 5.25%. There was no commercial paper outstanding at year-end 2006 and 2005.
Bank Credit Agreement On June 1, 2005, the Company entered into a $1,600.0 million credit agreement (the
“Credit Agreement”) with a syndicate of banks. On June 15, 2006, the Company amended the Credit Agreement to
extend the termination date for an additional year to June 1, 2011. The Credit Agreement, as amended, provides
(1) to Safeway a $1,350.0 million, five-year, revolving credit facility (the “Domestic Facility”), (2) to Safeway and
Canada Safeway Limited, a Canadian facility of up to $250.0 million for U.S. Dollar and Canadian Dollar advances and
(3) to Safeway a $400.0 million sub-facility of the Domestic Facility for issuance of standby and commercial letters of
credit. The Credit Agreement also provides for an increase in the credit facility commitments up to an additional
$500.0 million, subject to the satisfaction of certain conditions. The restrictive covenants of the Credit Agreement limit
Safeway with respect to, among other things, creating liens upon its assets and disposing of material amounts of
assets other than in the ordinary course of business. As of December 30, 2006, the Company was in compliance with
the covenant requirements. As of December 30, 2006, outstanding borrowings and letters of credit were $52.3 million
and $44.7 million, respectively, under this agreement. Total unused borrowing capacity under the Credit Agreement
was $1,502.9 million as of December 30, 2006.
U.S. borrowings under the Credit Agreement carry interest at one of the following rates selected by the Company:
(1) the prime rate; (2) a rate based on rates at which Eurodollar deposits are offered to first-class banks by the lenders
in the bank credit agreement plus a pricing margin based on the Company’s debt rating or interest coverage ratio (the
“Pricing Margin”); or (3) rates quoted at the discretion of the lenders. Canadian borrowings denominated in U.S.
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