Lowe's 2001 Annual Report Download - page 26

Lo we’s Co mpanies, Inc. 24
MARKET RI SK
The Co mpany’s majo r market risk expo sure is the po tential lo ss aris-
ing fro m the impact of changing interest rates o n lo ng- term debt.
The Co mpany’s po licy is to manage interest rate risks by maintain-
ing a co mbinatio n of fixed and variable rate financial instruments.
The fo llo wing tables summarize the Co mpany’s market risks asso ci-
ated with lo ng- term debt, excluding capitalized leases. The tables
present principal cash o utflo ws and related interest rates by year
of maturity, excluding unamo rtized o riginal issue disco unts, as of
February 1, 2002 and February 2, 2001. The fair values included
below were determined using quo ted market rates o r interest rates
that are currently available to the Co mpany o n debt with similar
terms and remaining maturities.
LONG-TERM DEBT MATURI TI ES BY
FI SCAL YEAR
Long-Term Debt Maturities by Fiscal Year
February 1, 2002
Average Average
Fixed Interest Variable Interest
( Dollars in Millio ns) Rate Rate Rate Rate
2002 $ 40.2 7.65% $ 0.1 1.55%
2003 8. 7 7.66 0. 1 1. 55
2004 55.6 7.98 0.1 1.55
2005 608.9 7.32 0.1 1.55
2006 7.7 7.70 –NA
Thereafter 3, 102.7 4.54% 2.1 1.65%
To tal $ 3, 823.8 $ 2.5
Fair Value $ 3, 811.3 $ 2.5
Long-Term Debt Maturities by Fiscal Year
February 2, 2001
Average Average
Fixed Interest Variable Interest
( Dollars in Millio ns) Rate Rate Rate Rate
2001 $ 26.1 7.58% $ 0.1 4.60%
2002 43.2 7.63 0.1 4.60
2003 11.9 7.58 0.1 4.60
2004 59.1 7.95 0.1 4.60
2005 612.7 7.32 0.1 4.60
Thereafter 1, 534.0 7.30% 2.1 4.27%
To tal $ 2, 287.0 $ 2.6
Fair Value $ 2, 269.1 $ 2.6
RECENT ACCOUNTI NG PRONOUNCEMENTS
In Octo ber 2001, the Financial Acco unting Standards Bo ard ( FASB)
issued SFAS No . 144, “Acco unting fo r the Impairment o r Dispo sal
of Long- Lived Assets,” which supersedes SFAS No. 121,
“Acco unting fo r the Impairment o r Dispo sal of Long-Lived Assets
and fo r Lo ng- Lived Assets to be Dispo sed o f,” but retains many o f
its fundamental pro visio ns. Additio nally, this statement expands
the sco pe of disco ntinued o peratio ns to include mo re dispo sal
transactio ns. SFAS No . 144 will be effective fo r the Co mpany fo r
the fiscal year beginning February 2, 2002. In June 2001, the FASB
issued SFAS No . 143, “Acco unting fo r Obligations Asso ciated with
the Retirement of Long- Lived Assets.” SFAS No . 143 will require the
accrual, at fair value, o f the estimated retirement o bligation fo r
tangible lo ng- lived assets if the co mpany is legally o bligated to
perfo rm retirement activities at the end o f the related asset's life.
SFAS No . 143 is effective fo r the Co mpany fo r the fiscal year begin-
ning February 1, 2003. Management do es no t believe that the ini-
tial ado ptio n of these standards will have a material impact o n the
Co mpany's financial statements.