content_image/25576.jpg content_image/25570.jpg content_image/25578.jpg content_image/25577.jpg content_image/25571.jpg
$400 million matured in 2002. We also terminated an interest rate swap with a notional amount of $500 million, resulting in a gain of $19 million that will be amortized into income over the life of the hedged debt. In 2003 and 2002, the gains amortized into income were not material to our results of operations. 

Prior to 2003, we entered into rate lock agreements to hedge the exposure to variability in future cash flows of forecasted debt transactions. During 2002, transactions contemplated by these agreements occurred and the gain or loss was recorded as a component of other comprehensive income. The gain or loss will be reclassified into earnings in the periods during which the designated hedged cash flows affect earnings. These amounts are reflected in the Consolidated Statements of Financial Position. Cash flows from these hedging transactions are classified with the item being hedged. 

## Interest Rate Swaps Outstanding at Year-end 

<img src='content_image/25576.jpg'>

* Reflects floating interest rate accrued at the end of the year. 

## Leases 

Assets held under capital leases are included in property and equipment and are charged to depreciation and interest over the life of the lease. Operating leases are not capitalized and lease rentals are expensed. Rent expense on buildings, classified in selling, general and administrative expense, includes percentage rents that are based on a percentage of retail sales over stated levels. Total rent expense was $183 million in 2003, $179 million in 2002 and $171 million in 2001. Most of the long-term leases include options to renew, with terms varying from one to 30 years. Certain leases also include options to purchase the property. 

Future minimum lease payments required under noncancelable lease agreements existing at January 31, 2004, were: 

## Future Minimum Lease Payments 

<img src='content_image/25570.jpg'>

* Calculated using the interest rate at inception for each lease (the weighted average interest rate was 8.6 percent). 

**Includes current portion of $9 million. 

## Income Taxes 

Reconciliation of tax rates is as follows: 

## Tax Rate Reconciliation 

<img src='content_image/25578.jpg'>

The components of the provision for income taxes were: 

## Income Tax Provision: Expense 

<img src='content_image/25577.jpg'>

The components of the net deferred tax asset/(liability) were: 

## Net Deferred Tax Asset/(Liability) 

<img src='content_image/25571.jpg'>

## Other Long-term Liabilities 

In addition to deferred taxes discussed above, the major components of other long-term liabilities at January 31, 2004 and February 1, 2003 included obligations for deferred compensation plan liabilities, workersGLYPH<213> compensation/general liability costs, property related liabilities and postretirement health care benefits. The increase in the other long-term liability balance primarily represents increases in deferred compensation plan liabilities and workersGLYPH<213> compensation/ general liability costs of $127 million and $34 million, respectively, 

