Nordstrom 2001 Annual Report Download - page 33

Notes to Consolidated Financial Statements
NORDSTROM INC. AND SUBSIDIARIES 3 1
The following provides a reconciliation of benefit obligations,
funded status of the SERP, as well as a summary of significant
assumptions:
January 31, 2 0 0 2 2001
Change in benefit obligation:
Benefit obligation at beginning of year $23,543 $23,645
Service cost 1,0 9 2 630
Interest cost 2 ,6 6 8 2,044
Amortization of adjustments 1 , 8 2 1 688
Change in additional minimum liability 7,3 0 8 (1,519)
Distributions (2 ,0 2 1 ) (1,945)
Benefit obligations at end of year $ 3 4 , 4 1 1 $23,543
Funded status of plan:
Under funded status $ ( 3 9,5 4 7 ) $(28,964)
Unrecognized transitional obligation 324 648
Unrecognized prior service cost 6 ,3 9 6 240
Unrecognized loss 6 ,9 8 3 5,792
Accrued pension cost $(25,844) $(22,284)
Balance sheet amounts:
Additional minimum liability $ ( 8 ,5 6 7 ) $(1,259)
Intangible asset 6 ,7 2 0 888
The components of SERP expense are as follows:
January 31, 2 0 0 2 2001 2000
Service cost $ 1,0 9 2 $630 $906
Interest cost 2 ,6 6 8 2,044 1,952
Amortization of adjustments 1 , 8 2 1 688 1,013
Total SERP expense $ 5 ,5 81 $3,362 $3,871
Assumption percentages:
Discount rate 7.2 5 % 7.50% 6.50%
Rate of compensation increase 5.00% 5.00% 5.00%
Note 16 : Supplementary Cash Flow Information
The Company capitalizes certain property, plant and equipment
during the construction period of commercial buildings which are
subsequently derecognized and leased back. During the year ended
January 31, 2002, the noncash activity related to the derecognition
of new stores that qualified as sale and leaseback were $75,555.
Supplementary cash f low information includes the following:
Year ended January 31, 2 0 0 2 2001 2000
Cash paid during the year for:
Interest (net of
capitalized interest) $ 7 7,0 2 5 $58,190 $54,195
Income taxes 8 0 ,6 8 9 88,911 129,566
Note 17 : Segment Reporting
The Company has three reportable segments that have been
identified based on differences in products and services offered
and regulatory conditions: the Retail Stores, Credit Operations,
and Catalog/Internet segments. The Retail Stores segment derives
its revenues from sales of high-quality apparel, shoes and
accessories. It includes the Company’s product development
group, which coordinates the design and production of private
label merchandise sold in the Company’s retail stores. The Credit
Operations segment revenues consist primarily of finance charges
earned through issuance of the Nordstrom proprietary and VISA
credit cards. The Catalog/Internet segment generates revenues
from direct mail catalogs and the Nordstrom.com website.
The measurements used to compute net earnings for reportable
segments are consistent with those used to compute net earnings
for the Company. The accounting policies of the operating
segments are the same as those described in the summary of
significant accounting policies in Note 1.
The following tables set forth the information for the Company’s
reportable segments and a reconciliation to the consolidated totals:
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