Macy's 2011 Annual Report Download - page 60

Download and view the complete annual report

Please find page 60 of the 2011 Macy's annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F-20
to its stated maturity. Upon the occurrence of an event of default, the lenders could, subject to the terms and conditions of the
credit agreement, elect to declare the outstanding principal, together with accrued interest, to be immediately due and payable.
Moreover, most of the Company’s senior notes and debentures contain cross-default provisions based on the non-payment at
maturity, or other default after an applicable grace period, of any other debt, the unpaid principal amount of which is not less
than $100 million that could be triggered by an event of default under the credit agreement. In such an event, the Company’s
senior notes and debentures that contain cross-default provisions would also be subject to acceleration.
Commercial Paper
The Company is a party to a $1,500 million unsecured commercial paper program. The Company may issue and sell
commercial paper in an aggregate amount outstanding at any particular time not to exceed its then-current combined borrowing
availability under the bank credit agreement described above. The issuance of commercial paper will have the effect, while such
commercial paper is outstanding, of reducing the Company’s borrowing capacity under the bank credit agreement by an amount
equal to the principal amount of such commercial paper. The Company had no commercial paper outstanding under its
commercial paper program throughout all of 2011 and 2010.
This program, which is an obligation of a wholly-owned subsidiary of Macy’s, Inc., is not secured. However, Parent has
fully and unconditionally guaranteed the obligations.
Senior Notes and Debentures
The senior notes and the senior debentures are unsecured obligations of a wholly-owned subsidiary of Macy’s, Inc. and
Parent has fully and unconditionally guaranteed these obligations (see Note 17, “Condensed Consolidating Financial
Information”).
Other Financing Arrangements
At January 28, 2012 and January 29, 2011, the Company had dedicated approximately $52 million of cash, included in
prepaid expenses and other current assets, which is used to collateralize the Company’s issuances of standby letters of credit.
There were approximately $34 million and $38 million of other standby letters of credit outstanding at January 28, 2012 and
January 29, 2011, respectively.
8. Accounts Payable and Accrued Liabilities
January 28,
2012 January 29,
2011
(millions)
Accounts payable............................................................................................................. $ 669 $ 559
Gift cards and customer award certificates ..................................................................... 725 654
Accrued wages and vacation ........................................................................................... 317 311
Taxes other than income taxes......................................................................................... 186 195
Lease related liabilities.................................................................................................... 164 168
Current portion of workers’ compensation and general liability reserves....................... 136 144
Current portion of post employment and postretirement benefits................................... 94 88
Accrued interest............................................................................................................... 86 98
Dividends payable ........................................................................................................... 83 —
Allowance for future sales returns................................................................................... 76 67
Severance and relocation................................................................................................. 4 1
Other................................................................................................................................ 248 240
$ 2,788 $ 2,525
Adjustments to the allowance for future sales returns, which amounted to a charge of $9 million for 2011, a charge of $2
million for 2010, and a charge of $6 million for 2009 are reflected in cost of sales.