Walgreens 2004 Annual Report Download - page 31

Download and view the complete annual report

Please find page 31 of the 2004 Walgreens annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 53

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53

31
Rental expense was as follows (In Millions):
2004 2003 2002
(Restated-See Restatement Note on Pages 29-30)
Minimum rentals $1,152.1
$1,017.4
$890.9
Contingent rentals 20.3
22.1
23.6
Less: Sublease rental income (11.9)
(12.1)
(11.1)
$1,160.5
$1,027.4
$903.4
Income Taxes
The provision for income taxes consists of the following (In Millions):
2004 2003 2002
(Restated - See Restatement Note on Pages 29-30)
Current provision -
Federal $632.5
$574.0
$510.2
State 111.4
80.1
85.0
743.9
654.1
595.2
Deferred provision -
Federal 65.3
42.5
17.7
State .7
10.0
(1.6)
66.0
52.5
16.1
$809.9
$706.6
$611.3
The deferred tax assets and liabilities included in the Consolidated Balance Sheets consist of the following (In
Millions):
2004 2003
(Restated - See Restatement Note
on Pages 29-30)
Deferred tax assets -
Employee benefit plans $212.0
$181.3
Accrued rent 106.0
103.4
Insurance 136.0
108.0
Inventory 39.6
29.1
Bad debt 15.4
10.2
Other 29.4
34.7
538.4
466.7
Deferred tax liabilities -
Accelerated depreciation 621.5
486.2
Inventory 115.1
103.0
Other 18.6
28.3
755.2
617.5
Net deferred tax liabilities $216.8
$150.8
Income taxes paid were $734.1 million, $625.2 million and $528.0 million during the fiscal years ended August 31, 2004, 2003 and
2002, respectively. The difference between the statutory income tax rate and the effective tax rate is principally due
to state income
tax provisions.
Short-Term Borrowings
The company had no short-term borrowings in fiscal 2004 or 2003. At August 31, 2004, the company had a syndicated
bank line of credit facility of $200 million to support the company’ s short-term commercial paper program. The company
pays a nominal facility fee to the financing bank to keep this line of credit facility active.