Macy's 2014 Annual Report Download - page 67

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F-20
On November 20, 2012, the Company issued $750 million aggregate principal amount of 2.875% senior unsecured
notes due 2023 and $250 million aggregate principal amount of 4.3% senior unsecured notes due 2043. This debt was used
to pay for the notes repurchased on November 28, 2012 described above, and to retire $298 million of 5.875% senior
unsecured notes that matured in January 2013.
The following table shows the detail of debt repayments:
2014 2013 2012
(millions)
5.75% Senior notes due 2014................................................................... $ 453 $ — $ —
7.625% Senior debentures due 2013........................................................ — 109 —
7.875% Senior notes due 2015................................................................. 407 — 205
5.35% Senior notes due 2012................................................................... — — 616
5.90% Senior notes due 2016................................................................... — — 400
5.875% Senior notes due 2013................................................................. — — 298
8.0% Senior debentures due 2012............................................................ — — 173
7.45% Senior debentures due 2016.......................................................... — — 64
7.5% Senior debentures due 2015............................................................ — — 31
9.5% amortizing debentures due 2021..................................................... 4 4 4
9.75% amortizing debentures due 2021................................................... 2 2 2
Capital leases and other obligations......................................................... 4 9 10
$ 870 $ 124 $ 1,803
The following summarizes certain components of the Company’s debt:
Bank Credit Agreement
The Company entered into a new credit agreement with certain financial institutions on May 10, 2013 providing for
revolving credit borrowings and letters of credit in an aggregate amount not to exceed $1,500 million (which 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. The agreement is set to expire May 10,
2018 and replaced the prior agreement which was set to expire June 20, 2015.
As of January 31, 2015, and February 1, 2014, there were no revolving credit loans outstanding under these credit
agreements, and there were no borrowings under these agreements throughout all of 2014 and 2013. However, there were
less than $1 million of standby letters of credit outstanding at January 31, 2015 and February 1, 2014. Revolving loans
under the credit agreement bear interest based on various published rates.
The Company's credit agreement, which is an obligation of a 100%-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 2014 was 9.68 and its leverage ratio at January 31, 2015 was 1.83, 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) divided by net interest expense and the leverage ratio is defined as debt divided by
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 is
adjusted to exclude the premium on acquired debt and net interest is adjusted to exclude the amortization of premium on
acquired debt and premium on early retirement of debt.