Lowe's 1998 Annual Report Download - page 31

The future minimum rental payments required under capital and operating leases having initial or remaining noncancelable
lease terms in excess of one year are summarized as follows:
Operating Leases Capital Leases
Fiscal Year Real Estate Equipment Real Estate Equipment Total
(In Thousands)
1999 $ 104,771 $1,110 $ 52,945 $291 $ 159,117
2000 108,482 673 52,963 218 162,336
2001 105,759 194 52,981 98 159,032
2002 102,263 43 52,981 98 155,385
2003 101,657 — 52,981 49 154,687
Later Years 1,314,657 — 634,626 — 1,949,283
Total Minimum Lease Payments $1,837,589 $2,020 $899,477 $754 $2,739,840
Total Minimum Capital Lease Payments $900,231
Less Amount Representing Interest 429,951
Present Value of Minimum Lease Payments 470,280
Less Current Maturities 12,952
Present Value of Minimum
Lease Payments, Less Current Maturities $457,328
Rental expenses under operating leases for real estate and equipment were $89.3, $65.4 and $59.2 million in 1998, 1997
and 1996, respectively.
Note 10, Employee Retirement Plans:
The Company’s contribution to its Employee Stock Ownership Plan (ESOP) is determined annually by the Board of
Directors. The ESOP covers all employees after completion of one year of employment and 1,000 hours of service during that
year. Contributions are allocated to participants based on their eligible compensation relative to total eligible compensation.
Contributions may be made in cash or shares of the Company’s common stock and are generally made in the following year.
ESOP expense for 1998, 1997 and 1996 was $80.3, $63.1 and $61.1 million, respectively.
At January 29, 1999, the Employee Stock Ownership Trust held approximately 9.3% of the outstanding common stock of
the Company. Shares allocated to ESOP participants’ accounts are voted by the trustee according to participants’ voting instructions.
The Board of Directors determines contributions to the Company’s Employee Savings and Investment Plan (ESIP) each
year based upon a matching formula applied to employee contributions. All employees are eligible to participate in the ESIP
on the first day of the month following completion of one year of employment. Company contributions to the ESIP for 1998,
1997 and 1996 were $10.6, $8.7 and $7.2 million, respectively. The Company’s common stock is an investment option for
participants in the ESIP. Shares held in the ESIP are voted by the trustee as directed by an administrative committee of the ESIP.
Note 11, Income Taxes:
1998 1997 1996
Statutory Rate Reconciliation
Statutory Federal Income Tax Rate 35.0% 35.0% 35.0%
State Income Taxes – Net of Federal
Tax Benefit 2.4 2.2 1.8
Other, Net (1.0) (1.2) (1.2)
Effective Tax Rate 36.4% 36.0% 35.6%
(In Thousands) Components of Income Tax Provision
Current
Federal $235,827 85.4% $175,649 87.4% $135,075 83.7%
State 25,836 9.4 17,777 8.8 9,338 5.8
Total Current 261,663 94.8 193,426 96.2 144,413 89.5
Deferred
Federal 11,880 4.3 6,328 3.1 14,122 8.7
State 2,457 0.9 1,309 0.7 2,921 1.8
Total Deferred 14,337 5.2 7,637 3.8 17,043 10.5
Total Income Tax Provision $276,000 100.0% $201,063 100.0% $161,456 100.0%
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