Costco 2001 Annual Report Download - page 33

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COSTCO WHOLESALE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share data)
Note 2—Debt (Continued)
Maturities of long-term debt during the next five fiscal years and thereafter are as follows:
2002 ................................................... $ 16,677
2003 ................................................... 3,880
2004 ................................................... 1,218
2005 ................................................... 301,344
2006 ................................................... 1,486
Thereafter ............................................... 551,465
Total ............................................... $876,070
Note 3—Leases
The Company leases land and/or warehouse buildings at 71 of the 345 warehouses open at Septem-
ber 2, 2001, and certain other office and distribution facilities under operating leases with remaining terms
ranging from 1 to 30 years. These leases generally contain one or more of the following options which the
Company can exercise at the end of the initial lease term: (a) renewal of the lease for a defined number of
years at the then fair market rental rate; (b) purchase of the property at the then fair market value; or
(c) right of first refusal in the event of a third party purchase offer. Certain leases provide for periodic
rental increases based on the price indices and some of the leases provide for rents based on the greater of
minimum guaranteed amounts or sales volume. Contingent rents have not been material.
Additionally, the Company leases certain equipment and fixtures under short-term operating leases
that permit the Company to either renew for a series of one-year terms or to purchase the equipment at
the then fair market value.
Aggregate rental expense for fiscal 2001, 2000, and 1999, was $70,394, $67,886, and $59,263, respec-
tively. Future minimum payments during the next five fiscal years and thereafter under non-cancelable
leases with terms in excess of one year, at September 2, 2001, were as follows:
2002 ................................................... $ 70,936
2003 ................................................... 69,329
2004 ................................................... 67,380
2005 ................................................... 66,331
2006 ................................................... 65,827
Thereafter ............................................... 639,547
Total minimum payments ................................. $979,350
Note 4—Stock Options
The Company’s 1993 Combined Stock Grant and Stock Option Plan (the New Stock Option Plan)
provides for the issuance of up to 60 million shares of its common stock upon the exercise of stock options
and up to 3,333,332 shares through stock grants. Prior to the merger of The Price Company and Costco
Wholesale Corporation, various incentive and non-qualified stock option plans existed which allowed
certain key employees and directors to purchase or be granted common stock of The Price Company and
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