Lowe's 2015 Annual Report Download - page 57

48
NOTE 3: Property and Accumulated Depreciation
Property is summarized by major class in the following table:
(In millions)
Estimated
Depreciable
Lives, In Years
January 29,
2016
January 30,
2015
Cost:
Land
N/A
$
7,086
$
7,040
Buildings and building improvements
5-40
17,451
17,247
Equipment
2-15
10,863
10,426
Construction in progress
N/A
513
730
Tota l c o st
35,913
35,443
Accumulated depreciation
(16,336
)
(15,409
)
Property, less accumulated depreciation
$
19,577
$
20,034
Included in net property are assets under capital lease of $617 million, less accumulated depreciation of $400 million, at
January 29, 2016, and $744 million, less accumulated depreciation of $494 million, at January 30, 2015. The related
amortization expense for assets under capital lease is included in depreciation expense.
NOTE 4: Exit Activities
When locations under operating leases are closed, the Company recognizes a liability for the fair value of future contractual
obligations, including future minimum lease payments, property taxes, utilities, common area maintenance and other ongoing
expenses, net of estimated sublease income and other recoverable items. During 2015, the Company closed or relocated two
locations subject to operating leases. In 2014, the Company did not close or relocate any locations subject to operating leases.
In 2013, the Company relocated two locations subject to operating leases.
Subsequent changes to the liabilities, including changes resulting from revisions to either the timing or the amount of estimated
cash flows, are recognized in the period of change. Changes to the accrual for exit activities for 2015, 2014, and 2013 are
summarized as follows:
(In millions)
2015
2014
2013
Accrual for exit activities, balance at beginning of year
$
53
$
54
$
75
Additions to the accrual - net
34
14
11
Cash payments
(20
)
(15
)
(32
)
Accrual for exit activities, balance at end of year
$
67
$
53
$
54
NOTE 5: Short-Term Borrowings and Lines of Credit
The Company has a $1.75 billion unsecured revolving credit agreement (the 2014 Credit Facility) with a syndicate of banks
that expires in August 2019. Subject to obtaining commitments from the lenders and satisfying other conditions specified in
the 2014 Credit Facility, we may increase the aggregate availability by an additional $500 million. The 2014 Credit Facility
supports our commercial paper program and has a $500 million letter of credit sublimit. Letters of credit issued pursuant to the
facility reduce the amount available for borrowing under its terms. Borrowings made are unsecured and are priced at fixed
rates based upon market conditions at the time of funding in accordance with the terms of the facility. The 2014 Credit Facility
contains certain restrictive covenants, which include maintenance of an adjusted debt leverage ratio as defined by the credit
agreement. The Company was in compliance with those covenants at January 29, 2016. As of January 29, 2016, there were
$43 million of outstanding borrowings under the commercial paper program with a weighted average interest rate of 0.60% and
no outstanding borrowings or letters of credit under the 2014 Credit Facility. As of January 30, 2015, there were no outstanding
borrowings under the Company’s commercial paper program and no outstanding borrowings or letters of credit under the credit
facility.