Safeway 2012 Annual Report Download - page 67

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SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
55
These Senior Notes are subject to limited covenants, including limitations on liens and limitations on sale
and leaseback transactions
Mortgage Notes Payable Mortgage notes payable at year-end 2012 have remaining terms ranging from
less than three years to nine years, had a weighted-average interest rate during 2012 of 5.59% and are
secured by properties with a net book value of approximately $92.2 million.
Other Notes Payable Other notes payable at year-end 2012 have remaining terms ranging from two years
to 23 years and had a weighted average interest rate of 6.77% during 2012.
Annual Debt Maturities As of year-end 2012, annual debt maturities (principal payments only) were as
follows (in millions):
2013 $ 294.0
2014 1,170.5
2015 588.2
2016 401.9
2017 501.9
Thereafter 2,169.4
$ 5,125.9
Letters of Credit The Company had letters of credit of $50.9 million outstanding at year-end 2012, of
which $43.6 million were issued under the credit agreement. The letters of credit are maintained primarily
to support performance, payment, deposit or surety obligations of the Company. The Company pays
commissions ranging from 0.15% to 1.10% on the face amount of the letters of credit.
Fair Value At year-end 2012 and year-end 2011, the estimated fair value of debt, including current
maturities, was $5,408.2 million and $5,371.3 million, respectively.
Note E: 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. The Company does not utilize financial instruments for trading or other
speculative purposes, nor does it utilize leveraged financial instruments. At year-end 2012, the Company
had no interest rate swaps outstanding.
Note F: Fair Value Measurements
The accounting guidance for fair value measurements prioritizes the inputs used in measuring fair value into
the following hierarchy:
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2
Inputs other than quoted prices included within Level 1 that are either directly or indirectly
observable;
Level 3
Unobservable inputs in which little or no market activity exists, therefore requiring an entity to
develop its own assumptions about the assumptions that market participants would use in
pricing.