Nordstrom 2000 Annual Report Download - page 20

Cyan Mag Yelo Blk
20100444 Nordstrom
2001 Annual Report • 44pgs. + 4 covers pg. 18
8.375 x 10.875 • PDF • 150 lpi
PMS
5773
PMS
5503
18
NORDSTROM, INC. AND SUBSIDIARIES
credit facility of the limited partnership of which $53 million
is outstanding as of January 31, 2001 and included in other
long-term debt.
The holders of the minority interest of Nordstrom.com, LLC,
through their ownership interests in its managing member
Nordstrom.com, Inc., have the right to sell their shares of
Nordstrom.com, Inc. to the Company for the greater of the
fair value of the shares or $80 million in the event that
certain events do not occur. This put right will terminate
without any further action by either party if the Company
provides at least $100 million in additional funding to
Nordstrom.com, Inc. prior to July 1, 2002 or if
Nordstrom.com, Inc. completes an initial public offering of
its common stock prior to September 1, 2002. If, and when,
redemption of these securities becomes probable, the
Company would begin to accrete the difference between the
fair value of the securities and its redemption amount over
the period remaining prior to redemption.
The Board of Directors has authorized an aggregate of $1.1
billion of share repurchases since May 1995. As of January
31, 2001, the Company had repurchased approximately 39
million shares of its common stock for approximately $1.0
billion pursuant to these authorizations, and had remaining
share repurchase authority of approximately $100 million.
Share repurchases have been financed, in part, through
additional borrowings, resulting in a planned increase in the
Company’s debt to capital ratio. At January 31, 2001, the
Company’s debt to capital ratio was .49.
In October 2000, the Company issued $300 million of
8.95% Senior Notes due in 2005. These proceeds were
used to reduce short-term indebtedness, to fund the
acquisition of Façonnable, and for general corporate
purposes. A substantial portion of the Company’s total debt
of $1.2 billion at January 31, 2001 finances the Company’s
credit card portfolio, which aggregated $716 million at that
date. In January 1999, the Company issued $250 million of
5.625% Senior Notes due in 2009, the proceeds of which
were used to repay short-term debt and for general corporate
purposes.
Recent Accounting Pronouncements
Statement of Financial Accounting Standards ("SFAS") No.
133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by SFAS No. 137 and 138, requires
the Company to recognize all derivatives as either assets or
liabilities in the statement of financial position and to
measure those instruments at fair value. Adoption of this
standard in the fiscal year beginning February 1, 2001, did
not have a material impact on the Company’s consolidated
financial statements.
In September 2000, the FASB issued SFAS No. 140,
"Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities", a replacement of SFAS
No. 125 with the same title. It revises the standards for
securitizations and other transfers of financial assets and
collateral and requires certain additional disclosures, but
otherwise retains most of SFAS No. 125’s provisions. SFAS
No. 140 is effective for transfers after March 31, 2001, with
certain disclosures required for periods ending on or after
December 31, 2000. Adoption of this standard is not
expected to have a material impact on the Company’s
consolidated financial statements.
The Company adopted Emerging Issues Task Force Issue No.
00-10 "Accounting for Shipping and Handling Fees and
Costs" ("EITF No. 00-10") in the fourth quarter of fiscal
2000. EITF No. 00-10 addresses the income statement
classification for shipping and handling fees and costs.
Adoption of this issue did not have a material impact on the
Company’s consolidated financial statements for the fiscal
year ended January 31, 2001.
In May 2000, the Emerging Issues Task Force reached a
consensus on Issue No. 00-14 "Accounting for Certain Sales
Incentives" ("EITF No. 00-14"). This EITF addresses the
recognition, measurement and income statement
classification for certain sales incentives. The Company’s
adoption of this EITF during the fourth quarter of fiscal
2000 did not have a material impact on the Company’s
consolidated financial statements for the fiscal year ended
January 31, 2001.