Best Buy 2000 Annual Report Download - page 46

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44
$ in thousands, except per share amounts
Future minimum lease obligations by year (not including percentage rentals) for all operating leases at
February 26, 2000, were as follows:
Fiscal Year
2001 $ 243,000
2002 237,000
2003 219,000
2004 208,000
2005 208,000
Thereafter 1,792,000
7. Benefit Plans
The Company has a retirement savings plan for employees meeting certain age and service requirements.
The plan provides for a Company-matching contribution, which is subject to annual approval by the
Company’s Board of Directors. The matching contribution was $4,600, $3,100 and $2,100 in fiscal 2000,
1999 and 1998, respectively.
The Company also has a deferred compensation plan for certain management employees. The liability for
compensation deferred under this plan was $18,900 and $8,400 at February 26, 2000 and February 27, 1999,
respectively, and is included in long-term liabilities. The Company has elected to match its liability under
the plan through the purchase of life insurance. The cash value of the insurance, which includes funding
for future deferrals, was $26,500 and $14,200 in fiscal 2000 and 1999, respectively, and is included in other
assets. Both the asset and the liability are carried at market value.
8. Income Taxes
The following is a reconciliation of income tax expense to the federal statutory tax rate:
2000 1999 1998
Federal income tax
at the statutory rate $ 196,899 $ 123,087 $ 46,691
State income taxes,
net of federal benefit 22,503 14,206 4,986
Tax-exempt interest (5,592) (3,232) (1,038)
Other 1,690 1,334 826
Income tax expense $ 215,500 $ 135,395 $ 51,465
Effective tax rate 38.3% 38.5% 38.6%
Notes to Consolidated Financial Statements