Lowe's 2007 Annual Report Download - page 44

42 |LOWE’S 2007 ANNUAL REPORT
A Company subsidiary, Lowe’s HIW, Inc., is a defendant in a lawsuit,
Cynthia Parris, et al. v. Lowe’s HIW, Inc., alleging failure to pay overtime wages
pursuant to the requirements of the California Labor Code.This case is similar
to litigation filed against other employers in California. This case was filed on
October 29, 2001 in Los Angeles Superior Court on behalf of a class of all non-
exempt hourly employees who, since October 11, 1997, have been employed or
are currently employed in California by Lowe’s HIW,Inc.As a result of a California
appellate court decision, the case is now proceeding in the trial court asa class
action seeking monetary and other relief. Lowe’s HIW,Inc. believes that its com-
pensation practices comply with California law and is vigorously defending
this lawsuit. Because this lawsuit is in the very early stages of class action
proceedings, the Company cannot reasonably estimate the range of loss that
may arise from this claim.
As of February 1, 2008, the Company had non-cancelable commitments
related to purchases of merchandise inventory, property and construction of
buildings, as well as commitments related to certain marketing and information
technology programs of $1.8 billion. Payments under these commitments are
scheduled to be made as follows: 2008, $1.0 billion; 2009,$411 million; 2010,
$402 million; 2011, $4 million; 2012, $2 million; thereafter, $11 million.
NOTE 14 RELATED PARTIES
A brother-in-law of the Company’s Executive Vice President of Business
Development is a senior officer of a vendor that provides millwork and other
building products to the Company. In both 2007 and 2006, the Company
purchased products in the amount of $101 million from this vendor,while in
2005 the Company purchased products in the amount of $84 million from this
vendor.Amounts payable to this vendor were insignificant at February 1, 2008
and February 2, 2007.
NOTE 15 OTHER INFORMATION
Net interest expense is comprised of the following:
(In millions) 2007 2006 2005
Long-term debt $247 $183 $171
Capitalized leases 32 34 39
Interest income (45) (52) (45)
Interest capitalized (65) (32) (28)
Other 25 21 21
Net interest expense $194 $154 $158
Supplemental disclosures of cash flow information:
(In millions) 2007 2006 2005
Cash paid for interest,
net of amount capitalized $ 198 $ 179 $ 173
Cash paid for income taxes $1,725 $2,031 $1,593
Noncash investing and financing activities:
Noncash fixed asset acquisitions, including
assets acquired under capital lease $ 99 $ 159 $ 175
Conversions of long-term debt to equity $ 13 $ 82 $ 565
Sales by Product Category:
(Dollars in millions) 2007 2006 2005
Product Total Total Total
Category Sales % Sales % Sales %
Appliances $ 4,325 9% $ 4,138 9% $ 3,872 9%
Lumber 3,646 7 3,691 8 3,687 9
Flooring 3,292 7 3,213 7 2,923 7
Paint 3,256 7 3,078 7 2,772 6
Millwork 3,250 7 3,273 7 3,081 7
Fashion plumbing 2,764 6 2,637 6 2,386 5
Building materials 2,727 6 2,861 6 2,579 6
Lighting 2,705 5 2,571 5 2,402 5
Tools 2,597 5 2,567 5 2,417 5
Lawn & landscape
products 2,446 5 2,266 5 2,002 5
Hardware 2,434 5 2,293 5 2,116 5
Seasonal living 2,266 5 2,228 5 1,997 5
Cabinets &
countertops 2,178 4 2,154 4 1,991 5
Home style &
organization 2,110 4 2,101 4 2,007 5
Rough plumbing 1,867 4 1,665 3 1,408 3
Outdoor power
equipment 1,838 4 1,806 4 1,799 4
Nursery 1,583 3 1,472 3 1,289 3
Rough electrical 1,490 3 1,484 3 1,204 3
Home environment 1,217 3 1,200 3 1,073 2
Other 292 1 229 1 238 1
Totals $48,283 100% $46,927 100% $43,243 100%