Costco 2008 Annual Report Download - page 71

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Maturities of long-term debt during the next five fiscal years and thereafter are as follows:
2009 .................................................... $ 6,003
2010 .................................................... 69,352
2011 .................................................... 1,297
2012 .................................................... 898,495
2013 .................................................... 242
Thereafter ................................................ 1,236,566
Total ................................................ $2,211,955
Note 4—Leases
The Company leases land and/or buildings at 110 of the 512 warehouses open at August 31, 2008,
and certain other office and distribution facilities under operating leases. These leases expire at
various dates through 2048, with the exception of one lease in the Company’s United Kingdom
subsidiary, which expires in 2151. 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 or rate stipulated in the lease agreement;
(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.
The Company accounts for its lease expense with free rent periods and step-rent provisions on a
straight-line basis over the original term of the lease. 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.
Aggregate rental expense for 2008, 2007 and 2006 was $167,185, $143,448 and $134,406,
respectively.
The Company has sub-leases related to certain of its operating lease agreements. During 2008, 2007
and 2006, the Company recognized sub-lease income of $9,711, $9,008 and $9,425, respectively,
which is included in interest income and other in the consolidated statements of income.
Future minimum payments, net of sub-lease income of $149,468 for all years combined, during the
next five fiscal years and thereafter under non-cancelable leases with terms of at least one year, at
August 31, 2008, were as follows:
2009 .................................................... $ 139,916
2010 .................................................... 141,655
2011 .................................................... 136,230
2012 .................................................... 124,475
2013 .................................................... 123,159
Thereafter ................................................ 1,438,390
Total minimum payments ............................... $2,103,825
Note 5—Stockholders’ Equity
Dividends
In 2008, the Company paid quarterly cash dividends totaling $0.61 per share. In 2007, the Company
paid quarterly cash dividends totaling $0.55 per share. The Company’s current quarterly dividend rate
is $0.16 per share or $0.64 per share on an annualized basis.
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