Nordstrom 2001 Annual Report Download - page 24

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20200324 NORDSTROM
2001 Annual Report • VERSION
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Notes to Consolidated Financial Statements
22 NORDSTROM INC. AND SUBSIDIARIES
Note 2: Acquisition
In 2000, the Company acquired Façonnable, S.A. ("Façonnable"),
of Nice, France, a designer, wholesaler and retailer of high quality
men’s and women’s apparel and accessories. The Company paid
$87,685 in cash and issued 5,074,000 shares of common stock of
the Company for a total consideration of $168,868. The purchase
also provides for a contingent payment to one of the previous owners
that may be paid after five years from the acquisition date. If the
previous owner continues to have active involvement in the business
and performance targets are met, the contingent payment would
approximate $10,000. Since the contingent payment is
performance based, the actual amount paid will likely vary from
this amount and will be expensed when it becomes probable that
the targets will be met.
Note 3: Employee Benefits
The Company provides a profit sharing plan and 401(k) plan for
employees. The profit sharing plan is non-contributory and is fully
funded by the Company. The Board of Directors establishes the
Company’s contribution to the profit sharing plan each year.
The 401(k) plan is funded by voluntary employee contributions.
In addition, the Company provides matching contributions up to
a stipulated percentage of employee contributions. The Company’s
matching contributions to the 401(k) plan and contributions to the
profit sharing plan totaled $28,525, $29,113 and $47,500 in 2001,
2000 and 1999.
Note 4: Interest Expense, Net
The components of interest expense, net are as follows:
Year ended January 31, 2002 2001 2000
Short-term debt $3,741 $12,682 $2,584
Long-term debt 83,225 58,988 56,831
Total interest expense 86,966 71,670 59,415
Less: Interest income (1,545) (1,330) (3,521)
Capitalized interest (10,383) (7,642) (5,498)
Interest expense, net $75,038 $62,698 $50,396
Note 5: Income Taxes
Income tax expense consists of the following:
Year ended January 31, 2002 2001 2000
Current income taxes:
Federal $58,122 $79,778 $130,524
State and local 6,142 11,591 21,835
Total current
income taxes 64,264 91,369 152,359
Deferred income taxes:
Current (7,217) (11,215) (18,367)
Non-current 22,753 (15,054) (4,492)
Total deferred income taxes 15,536 (26,269) (22,859)
Total income taxes $79,800 $65,100 $129,500
A reconciliation of the statutory Federal income tax rate to the
Company’s effective tax rate is as follows:
Year ended January 31, 2002 2001 2000
Statutory rate 35.00% 35.00% 35.00%
State and local
income taxes, net of
Federal income taxes 3.93 3.93 4.06
Other, net .09 .05 (.06)
Effective tax rate 39.02% 38.98% 39.00%