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FINANCIALS
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Notes to Consolidated Financial Statements

 

NOTE >7 > LEASE AND SERVICE AGREEMENTS

The Company leases certain stores, office facilities, warehouses, computers and transportation equipment.

Operating and capital lease obligations are based upon contractual minimum rates and, for certain stores, amounts in excess of these minimum rates are payable based upon specified percentages of sales. Contingent rent is accrued over the lease term, provided that the achievement of the specified sales level that triggers the contingent rental is probable. Certain leases include renewal or purchase options. Operating lease rentals were $399, $431 and $439 million, including contingent rentals of $52, $55 and $57 million in 1999, 1998 and 1997, respectively.

Minimum lease obligations, excluding taxes, insurance and other expenses payable directly by the Company, for leases in effect as of January 1, 2000, are as follows:

The Company has committed to purchase data and voice networking and information processing services of at least $216 million annually through 2004 from a third-party provider. Total expenses incurred by the Company for these services during 1999, 1998 and 1997 were $318, $355 and $361 million, respectively. The Company may also be responsible for certain stores leases that have been assigned.


  Annual Report 1999 

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1999 Sears, Roebuck and Co. - www.sears.com