Macy's 2014 Annual Report Download - page 32

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27
Contractual Obligations and Commitments
At January 31, 2015, the Company had contractual obligations (within the scope of Item 303(a)(5) of Regulation S-
K) as follows:
Obligations Due, by Period
Total Less than
1 Year 1 – 3
Years 3 – 5
Years More than
5 Years
(millions)
Short-term debt ...................................................................... $ 75 $ 75 $ — $ — $ —
Long-term debt....................................................................... 7,090 — 948 47 6,095
Interest on debt....................................................................... 5,165 394 729 653 3,389
Capital lease obligations ........................................................ 58 3 6 6 43
Operating leases..................................................................... 3,567 260 510 446 2,351
Letters of credit...................................................................... 2929———
Other obligations.................................................................... 4,809 3,101 486 268 954
$ 20,793 $ 3,862 $ 2,679 $ 1,420 $ 12,832
“Other obligations” in the foregoing table includes post employment and postretirement benefits, self-insurance
reserves, group medical/dental/life insurance programs, merchandise purchase obligations and obligations under
outsourcing arrangements, construction contracts, energy and other supply agreements identified by the Company and
liabilities for unrecognized tax benefits that the Company expects to settle in cash in the next year. The Company's
merchandise purchase obligations fluctuate on a seasonal basis, typically being higher in the summer and early fall and
being lower in the late winter and early spring. The Company purchases a substantial portion of its merchandise inventories
and other goods and services otherwise than through binding contracts. Consequently, the amounts shown as “Other
obligations” in the foregoing table do not reflect the total amounts that the Company would need to spend on goods and
services in order to operate its businesses in the ordinary course.
The Company has not included in the contractual obligations table $155 million of long-term liabilities for
unrecognized tax benefits for various tax positions taken or $49 million of related accrued federal, state and local interest
and penalties. These liabilities may increase or decrease over time as a result of tax examinations, and given the status of
examinations, the Company cannot reliably estimate the period of any cash settlement with the respective taxing
authorities. The Company has included in the contractual obligations table $11 million of liabilities for unrecognized tax
benefits that the Company expects to settle in cash in the next year.
Liquidity and Capital Resources Outlook
Management believes that, with respect to the Company's current operations, cash on hand and funds from
operations, together with its credit facility and other capital resources, will be sufficient to cover the Company's reasonably
foreseeable working capital, capital expenditure and debt service requirements and other cash requirements in both the near
term and over the longer term. The Company's ability to generate funds from operations may be affected by numerous
factors, including general economic conditions and levels of consumer confidence and demand; however, the Company
expects to be able to manage its working capital levels and capital expenditure amounts so as to maintain sufficient levels
of liquidity. To the extent that the Company's cash balances from time to time exceed amounts that are needed to fund its
immediate liquidity requirements, the Company will consider alternative uses of some or all of such excess cash. Such
alternative uses may include, among others, the redemption or repurchase of debt, equity or other securities through open
market purchases, privately negotiated transactions or otherwise, and the funding of pension related obligations. Depending
upon its actual and anticipated sources and uses of liquidity, conditions in the capital markets and other factors, the
Company will from time to time consider the issuance of debt or other securities, or other possible capital markets
transactions, for the purpose of raising capital which could be used to refinance current indebtedness or for other corporate
purposes including the redemption or repurchase of debt, equity or other securities through open market purchases,
privately negotiated transactions or otherwise, and the funding of pension related obligations.
The Company intends from time to time to consider additional acquisitions of, and investments in, retail businesses
and other complementary assets and companies. Acquisition transactions, if any, are expected to be financed from one or
more of the following sources: cash on hand, cash from operations, borrowings under existing or new credit facilities and
the issuance of long-term debt or other securities, including common stock.