Macy's 2011 Annual Report Download - page 59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F-19
The following table shows the detail of debt repayments:
2011 2010 2009
(millions)
6.625% Senior notes due 2011........................................................................ $ 330 $ 170 $ —
7.45% Senior debentures due 2011................................................................. 109 41 —
5.35% Senior notes due 2012.......................................................................... — 484 —
8.0% Senior debentures due 2012................................................................... — 27 —
5.875% Senior notes due 2013........................................................................ — 52 —
7.625% Senior debentures due 2013............................................................... — 16 —
5.75% Senior notes due 2014.......................................................................... — 47 —
7.875% Senior notes due 2015........................................................................ — 38 —
5.90% Senior notes due 2016.......................................................................... — 123 —
7.45% Senior debentures due 2016................................................................. — 2 —
10.625% Senior debentures due 2010............................................................. — 150 —
8.5% Senior notes due 2010............................................................................ — 76 —
4.8% Senior notes due 2009............................................................................ — — 600
6.3% Senior notes due 2009............................................................................ — — 350
9.5% amortizing debentures due 2021............................................................ 4 4 4
9.75% amortizing debentures due 2021.......................................................... 2 2 2
Capital leases and other obligations................................................................ 9 13 10
$ 454 $ 1,245 $ 966
The following summarizes certain components of the Company’s debt:
Bank Credit Agreement
The Company entered into a credit agreement with certain financial institutions on June 20, 2011 providing for revolving
credit borrowings and letters of credit in an aggregate amount not to exceed $1,500 million (which amount may be increased to
$1,750 million at the option of the Company, subject to the willingness of existing or new lenders to provide commitments for
such additional financing) outstanding at any particular time. This credit agreement is set to expire June 20, 2015 and replaces a
$2,000 million facility which was set to expire August 30, 2012.
As of January 28, 2012, and January 29, 2011, there were no revolving credit loans outstanding under these credit
agreements. However, there were less than $1 million of standby letters of credit outstanding at January 28, 2012 and
January 29, 2011. There were no borrowings under these agreements throughout all of 2011 and 2010. Revolving loans under
the credit agreement bear interest based on various published rates.
This agreement, which is an obligation of a wholly-owned subsidiary of Macy’s, Inc. (“Parent”), is not secured. However,
Parent has fully and unconditionally guaranteed this obligation, subject to specified limitations.The Company’s interest
coverage ratio for 2011 was 7.44 and its leverage ratio at January 28, 2012 was 2.17, in each case as calculated in accordance
with the credit agreement. The credit agreement requires the Company to maintain a specified interest coverage ratio for the
latest four quarters of no less than 3.25 and a specified leverage ratio as of and for the latest four quarters of no more than 3.75.
The interest coverage ratio is defined as EBITDA (earnings before interest, taxes, depreciation and amortization) over net
interest expense and the leverage ratio is defined as debt over EBITDA. For purposes of these calculations EBITDA is
calculated as net income plus interest expense, taxes, depreciation, amortization, non-cash impairment of goodwill, intangibles
and real estate, non-recurring cash charges not to exceed in the aggregate $400 million and extraordinary losses less interest
income and non-recurring or extraordinary gains. Debt and net interest are adjusted to exclude the premium on acquired debt
and the resulting amortization, respectively.
A breach of a restrictive covenant in the Company’s credit agreement or the inability of the Company to maintain the
financial ratios described above could result in an event of default under the credit agreement. In addition, an event of default
would occur under the credit agreement if any indebtedness of the Company in excess of an aggregate principal amount of $150
million becomes due prior to its stated maturity or the holders of such indebtedness become able to cause it to become due prior