Lowe's 2015 Annual Report Download - page 68

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59
Rental expenses under operating leases were $473 million, $445 million and $421 million in 2015, 2014 and 2013,
respectively, and were recognized within SG&A expense. Excluded from these amounts are rental expenses associated with
closed locations which were recognized as exit costs in the period of closure.
NOTE 13: Commitments and Contingencies
The Company is, from time to time, party to various legal proceedings considered to be in the normal course of business, none
of which, individually or in the aggregate, are expected to be material to the Company’s financial statements. In evaluating
liabilities associated with its various legal proceedings, the Company has accrued for probable liabilities associated with these
matters. The amounts accrued were not material to the Company’s consolidated financial statements in any of the years
presented. Reasonably possible losses for any of the individual legal proceedings which have not been accrued were not
material to the Company’s consolidated financial statements.
As of January 29, 2016, the Company had non-cancelable commitments of $1,046 million related to certain marketing and
information technology programs, and purchases of merchandise inventory. Payments under these commitments are scheduled
to be made as follows: 2016, $718 million; 2017, $115 million; 2018, $58 million; 2019, $54 million; 2020, $57 million;
thereafter, $44 million.
At January 29, 2016, the Company held standby and documentary letters of credit issued under banking arrangements which
totaled $67 million. The majority of the Company’s letters of credit were issued for insurance contracts.
NOTE 14: Related Parties
A member of the Company’s Board of Directors also serves on the Board of Directors of a vendor that provides branded
consumer packaged goods to the Company. The Company purchased products from this vendor in the amount of $153 million
in 2015, $151 million in 2014, and $145 million in 2013. Amounts payable to this vendor were insignificant at January 29,
2016 and January 30, 2015.
A member of the Company’s Board of Directors also serves on the Board of Directors of a vendor that provides certain services
to the Company related to health and welfare benefit plans. The Company made payments to this vendor in the amount of $58
million in 2015, $56 million in 2014, and $15 million in 2013. Amounts payable to this vendor were insignificant at
January 29, 2016 and January 30, 2015.
A brother-in-law of the Company's former Chief Customer Officer was a senior officer and shareholder of a vendor that
provides millwork and other building products to the Company. This was no longer considered a related party relationship in
2015. The Company purchased products from this vendor in the amount of $80 million in 2014 and $70 million in 2013.
Amounts payable to this vendor were $11 million at January 30, 2015.
NOTE 15: Other Information
Net interest expense is comprised of the following:
(In millions)
2015
2014
2013
Long-term debt
$
505
$
470
$
431
Capitalized lease obligations
42
42
40
Interest income
(4
)
(6
)
(4
)
Interest capitalized
(3
)
(2
)
(4
)
Interest on tax uncertainties
(1
)
(1
)
6
Other
13
13
7
Interest - net
$
552
$
516
$
476